Exhibit 10.12

EXECUTION COPY

SIXTH OMNIBUS AMENDMENT

(Apple Ridge)

THIS Sixth Omnibus Amendment (this “Agreement”) is entered into this 6th day of
June, 2007 for the purpose of making amendments to the documents described in
this Agreement.

WHEREAS, this Agreement is among (i) Cartus Corporation, a Delaware corporation
(“Cartus”), (ii) Cartus Financial Corporation, a Delaware Corporation (“CFC”),
(iii) Apple Ridge Services Corporation, a Delaware corporation (“ARSC”),
(iv) Apple Ridge Funding LLC, a limited liability company organized under the
laws of the State of Delaware (the “Issuer”), (v) Realogy Corporation, a
Delaware Corporation (“Realogy” or the “Performance Guarantor”), (vi) The Bank
of New York, as successor to JPMorgan Chase Bank, N.A., a banking corporation
organized and existing under the laws of New York, as successor Indenture
Trustee. (the “Indenture Trustee”), (vii) The Bank of New York, a New York state
banking corporation (the “Paying Agent”), as paying agent, authentication agent
and transfer agent and registrar, (vii) the Conduit Purchasers, Committed
Purchasers and Managing Agents party to the Note Purchase Agreement defined
below, and (ix) Calyon New York Branch (“Calyon”), as Administrative Agent and
Lead Arranger (the “Administrative Agent”).

WHEREAS, this Agreement relates to the following documents (as such documents
have previously been amended):

—Purchase Agreement dated as of April 25, 2000 (the “Purchase Agreement”) by and
between Cartus and CFC;

—Receivables Purchase Agreement dated as of April 25, 2000 (the “Receivables
Purchase Agreement”) by and between CFC and ARSC;

—Master Indenture dated as of April 25, 2000 (the “Master Indenture”) among the
Issuer, the Indenture Trustee and the Paying Agent;

—Transfer and Servicing Agreement dated as of April 25, 2000 (the “Transfer and
Servicing Agreement”) by and between ARSC, as transferor, Cartus, as originator
and servicer, CFC, as originator, the Issuer, as transferee and the Indenture
Trustee;

—Performance Guaranty dated as of May 12, 2006 executed by Realogy in favor of
CFC and the Issuer (the “Performance Guaranty”).

WHEREAS, the Purchase Agreement, the Receivables Purchase Agreement, the Master
Indenture, the Transfer and Servicing Agreement and the Performance Guaranty
are, in this Agreement, collectively the “Affected Documents”;

 

 

* The term “Confidential” indicates material that has been omitted and for which
confidential treatment has been requested. All such omitted material has been
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.

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WHEREAS, terms used in this Agreement and not defined herein shall have the
meanings assigned to such terms in the Purchase Agreement, and, if not defined
therein, as defined in the Master Indenture.

NOW, THEREFORE, the parties hereto hereby recognize and agree as follows:

 

1. Amendments to Transfer and Servicing Agreement. Effective as of the date
hereof, the Purchase Agreement is hereby amended as follows:

 

  a. The definition of “Required Marketing Expenses Account Amount” is hereby
amended to add, at the conclusion thereof, the following: “provided, that if a
Weekly Reporting Event has occurred and is continuing, the Required Marketing
Expenses Account Amount shall be the greater of the amount otherwise required
above and $250,000.”

 

  b. Section 3.07(c) is hereby amended to add at the conclusion thereof: “In
addition to the foregoing, so long as the Series 2007-1 Notes are outstanding,
if a Weekly Reporting Event has occurred and is continuing, the Servicer will
deliver to the the Administrative Agent for the Series 2007-1 Noteholders (the
“Series 2007-1 Agent”), concurrently with each such Receivables Activity Report,
a computer tape or diskette, in an electronically readable format mutually
acceptable to the Servicer and the Series 2007-1 Agent, containing the
underlying data from which the Servicer prepared such Receivables Activity
Report.”

 

  c. Section 9.05(a) is hereby amended to delete the first sentence thereof and
substitute therefor the following: “If (i) Cartus is the Servicer, and
(ii) either (x) the “Average Days in Inventory” (as defined below) is more than
120 days or (y) a Weekly Reporting Event has occurred, the Issuer will be
obligated to establish an account (the “Marketing Expenses Account”) to be
established with, and pledged to, the Indenture Trustee and maintain on deposit
therein, an amount at least equal to the Required Marketing Expenses Account
Amount described below.

 

2. Acceptance of Conformed Copies. Each of the parties hereto acknowledges that
the “Conformed Copies” of the Affected Documents attached hereto as Exhibits A-1
through A-5 (the “Conformed Copies”) properly reflect all amendments to the
Affected Documents executed through and including the date hereof, including the
correction of mutual mistakes and the incorporation of the amendments to the
Transfer and Servicing Agreement set forth hereinabove, and, from and after the
date hereof, such copies shall constitute the definitive versions of the
Affected Documents to the same extent as if such Affected Documents were amended
and restated to conform in their entirety to such Conformed Copies.

 

3. Conditions Precedent. This Agreement shall be effective when the Indenture
Trustee shall have received (a) counterparts of the signature pages hereto
executed by all parties hereto and (b) the consent of the Managing Agents
representing the Majority Investors to the execution of this Agreement, which
consent shall be evidenced by their execution of the signature pages attached to
this Agreement.

 

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4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING §5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.

 

5. Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.

 

6. References to and Effect on Affected Documents. Upon the effectiveness of
this Agreement: (i) all references in any Affected Document to “this Agreement”,
“hereof”, “herein” or words of similar effect referring to such Affected
Document shall be deemed to be references to such Affected Document as amended
by this Agreement; (ii) each reference in any of the Affected Documents to any
other Affected Document and each reference in any of the other Transaction
Documents to any of the Affected Documents shall each mean and be a reference to
such Affected Document as amended by this Agreement; and (iii) each reference in
any Transaction Document to any of the terms or provisions of an Affected
Document which are redefined or otherwise modified hereby shall mean and be a
reference to such terms or provisions as redefined or otherwise modified by this
Agreement; provided, that, notwithstanding the foregoing or any other provisions
of this Agreement , the amendments contained in this Agreement shall not be
effective to (x) modify on a retroactive basis any representations or warranties
previously made under any Affected Document with respect to Receivables
transferred or purported to have been transferred prior to the date hereof,
which representations and warranties shall continue to speak as of the dates
such Receivables were transferred and based on the terms and provisions of the
Affected Documents as in effect at such time or (y) otherwise modify the terms
of any transfer or purported transfer of any Receivable transferred or purported
to be transferred pursuant to an Affected Document prior to the date herein.

 

7. No Waiver. This Agreement shall not be deemed, either expressly or impliedly,
to waive, amend or supplement any provision of the Affected Documents other than
as set forth herein, each of which Affected Document, as modified hereby,
remains in full force and effect and is hereby reaffirmed, ratified and
confirmed.

 

8.

Direction to Indenture Trustee. By its signature hereto each of Calyon, Atlantic
Asset Securitization LLC and LaFayette Asset Securitization LLC (collectively,
the “Investor Parties”) hereby represent that: (i) they constitute all of the
Managing Agents and the Investors in Series 2007-1, respectively, and therefore
that, upon the execution of this Agreement by each such Investor Party, the
“Rating Agency Condition” under the Series 2007-1 Supplement has been satisfied
for the execution

 

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and delivery of this Agreement and the Series 2007-1 Supplement. Each Investor
Party further represents, based on the Issuer’s representations in paragraph 9
below, that they constitute the “Majority Investors” for purposes of authorizing
any amendment or supplemental indentures under Section 10.02 of the Indenture.
Accordingly, each Investor Party hereby requests and directs the Indenture
Trustee to agree, consent to and accept this Agreement and to execute and
deliver the Series 2007-1 Supplement. For the purposes of the signature pages
hereto, the term “Investor” is synonymous with the term “Noteholder” as defined
in the Master Indenture. Each Conduit Purchaser party hereto further represents
and warrants that (i) it is the beneficial owner of the Series 2007-1 Notes
currently outstanding issued in its favor; (ii) it is duly authorized to consent
to this Agreement and to direct the Indenture Trustee as set forth herein; and
(iii) its authorization has not been granted or assigned to any other person or
entity.

 

9. Issuer Representations re Outstanding Series. The Issuer represents and
warrants that the Series 2007-1 Notes are the only Notes outstanding under the
Master Indenture, and the Issuer hereby requests and directs the Indenture
Trustee to agree, consent to and accept this Agreement and to execute and
deliver the Amended and Restated Series 2007-1 Supplement dated as of July 6,
2007.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above
written.

 

CARTUS CORPORATION By:  

/s/ Eric Barnes

Name:   Eric Barnes Title:   SVP, CFO CARTUS FINANCIAL CORPORATION By:  

/s/ Eric Barnes

Name:   Eric Barnes Title:   SVP, CFO APPLE RIDGE SERVICES CORPORATION By:  

/s/ Eric Barnes

Name:   Eric Barnes Title:   SVP, CFO APPLE RIDGE FUNDING LLC By:  

/s/ Eric Barnes

Name:   Eric Barnes Title:   SVP, CFO REALOGY CORPORATION By:  

/s/ Anthony E. Hull

Name:   Anthony E. Hull Title:   CFO

 

S-1

Signature Page to Sixth Omnibus Amendment

June 2007

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THE BANK OF NEW YORK, as Successor Indenture Trustee and Paying Agent By:  

/s/ Amy Suzanne Keith

Name:   Amy Suzanne Keith Title:   Assistant Vice President

 

S-2

Signature Page to Sixth Omnibus Amendment

June 2007

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CALYON NEW YORK BRANCH, as Administrative Agent and a Managing Agent and as a
Committed Purchaser By:  

/s/ Sam Pilcer

Name:   Sam Pilcer Title:   Managing Director By:  

/s/ Kostantina Kourmpetis

Name:   Sam Pilcer Title:   Managing Director ATLANTIC ASSET SECURITIZATION LLC,
as a Conduit Purchaser By:  

/s/ Sam Pilcer

Name:   Sam Pilcer Title:   Managing Director By:  

/s/ Kostantina Kourmpetis

Name:   Sam Pilcer Title:   Managing Director LAFAYETTE ASSET SECURITIZATION
LLC, as a Conduit Purchaser By:  

/s/ Sam Pilcer

Name:   Sam Pilcer Title:   Managing Director By:  

/s/ Kostantina Kourmpetis

Name:   Sam Pilcer Title:   Managing Director

 

S-3

Signature Page to Sixth Omnibus Amendment

June 2007

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Exhibit A-1

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CONFORMED COPY

 

AS AMENDED BY:

 

1. Omnibus Amendment, Agreement and Consent dated December 20, 2004.

 

2. Second Omnibus Amendment dated January 31, 2005

 

3. Third Omnibus Amendment, Agreement and Consent dated May 12, 2006

 

4. Fifth Omnibus Amendment dated April 10, 2007

PURCHASE AGREEMENT

Dated as of April 25, 2000

by and between

CARTUS CORPORATION

as Originator

and

CARTUS FINANCIAL CORPORATION

as Buyer

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TABLE OF CONTENTS

 

          Page ARTICLE I DEFINITIONS ARTICLE II SALE AND PURCHASE OF ASSETS

Section 2.1

   Sale and Purchase    1

Section 2.2

   Purchases    3

Section 2.3

   No Assumption    3

Section 2.4

   No Recourse    4

Section 2.5

   True Sales    4

Section 2.6

   Servicing of Cartus Purchased Assets    4

Section 2.7

   Financing Statements    4 ARTICLE III CALCULATION OF CFC PURCHASE PRICE

Section 3.1

   Calculation of the CFC Purchase Price.    5 ARTICLE IV PAYMENT OF CFC
PURCHASE PRICE

Section 4.1

   CFC Purchase Price Payments    5

Section 4.2

   The CFC Subordinated Note    6

Section 4.3

   Originator Adjustments.    6

Section 4.4

   Payments and Computations, Etc    7 ARTICLE V CONDITIONS PRECEDENT

Section 5.1

   Conditions Precedent to Sales and Purchases    7

Section 5.2

   Conditions Precedent to CFC Subordinated Loans    7

 

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TABLE OF CONTENTS

(continued)

 

          Page ARTICLE VI REPRESENTATIONS AND WARRANTIES

Section 6.1

   Representations and Warranties of the Originator    8

Section 6.2

   Representations and Warranties of the Buyer    14 ARTICLE VII GENERAL
COVENANTS

Section 7.1

   Affirmative Covenants of the Originator    14

Section 7.2

   Reporting Requirements    18

Section 7.3

   Negative Covenants of the Originator    19

Section 7.4

   Affirmative Covenants of the Buyer    22 ARTICLE VIII ADDITIONAL RIGHTS AND
OBLIGATIONS IN RESPECT OF THE Cartus PURCHASED ASSETS

Section 8.1

   Rights of the Buyer.    23

Section 8.2

   Responsibilities of the Originator    24

Section 8.3

   Further Action Evidencing Purchases    25

Section 8.4

   Cartus Collections; Rights of the Buyer and its Assignees.    25 ARTICLE IX
TERMINATION

Section 9.1

   CFC Purchase Termination Events    26

Section 9.2

   Purchase Termination    28 ARTICLE X INDEMNIFICATION; SECURITY INTEREST

Section 10.1

   Indemnities by the Originator    28

Section 10.2

   Security Interest    30

 

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TABLE OF CONTENTS

(continued)

 

          Page ARTICLE XI MISCELLANEOUS

Section 11.1

   Amendments; Waivers, Etc.    31

Section 11.2

   Notices, Etc    31

Section 11.3

   Cumulative Remedies    31

Section 11.4

   Binding Effect; Assignability; Survival of Provisions    32

Section 11.5

   Governing Law    32

Section 11.6

   Costs, Expenses and Taxes    32

Section 11.7

   Submission to Jurisdiction    33

Section 11.8

   Waiver of Jury Trial    33

Section 11.9

   Integration    34

Section 11.10

   Captions and Cross References    34

Section 11.11

   Execution in Counterparts    34

Section 11.12

   Acknowledgment and Consent.    34

Section 11.13

   No Partnership or Joint Venture    35

Section 11.14

   No Proceedings    35

Section 11.15

   Severability of Provisions    35

Section 11.16

   Recourse to the Buyer    35

Section 11.17

   Confidentiality    36

Section 11.18

   Conversion    36

 

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APPENDIX

APPENDIX A

   Definitions SCHEDULES

SCHEDULE 2.1

   List of Pool Relocation Management Agreements

SCHEDULE 6.1(n)

   Principal Place of Business and Chief Executive Office of the Originator and
List of Offices Where the Originator Keeps Cartus Records

SCHEDULE 6.1(s)

   List of Legal Names for Cartus Corporation

SCHEDULE 11.2

   Notice Addresses EXHIBITS

EXIBIT 2.1

   Form of Notice of Additional Pool Relocation Management Agreements

EXHIBIT 4.2

   Form of CFC Subordinated Note

EXHIBIT 6.1(u)

   Credit and Collection Policy

EXHIBIT 7.3(j)

   Form of Acknowledgment Letter

EXHIBIT C

   Forms of Relocation Management Agreements

 

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PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (this “Agreement”) dated as of April 25, 2000 made by
and between CARTUS CORPORATION, a Delaware corporation, as originator (the
“Originator”) and Cartus Financial Corporation, a Delaware corporation, as buyer
(the “Buyer”).

WHEREAS, the Originator wishes to sell Receivables and Related Assets that it
now owns and Receivables and Related Assets that it from time to time hereafter
will own to the Buyer, and the Buyer is willing to purchase such Receivables and
Related Assets from the Originator from time to time, on the terms and subject
to the conditions contained in this Agreement; and

WHEREAS, the Buyer intends to transfer the Cartus Purchased Assets, together
with additional Receivables and Related Assets that the Buyer from time to time
hereafter will own, to Apple Ridge Services Corporation (“ARSC”) from and after
the Closing Date pursuant to the terms of the Receivables Purchase Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used and not otherwise defined in this Agreement have the
meanings specified in Part A of Appendix A. In addition, this Agreement shall be
interpreted in accordance with the conventions set forth in Parts B, C and D of
Appendix A.

ARTICLE II

SALE AND PURCHASE OF ASSETS

Section 2.1 Sale and Purchase.

(a) Agreement. Upon the terms and subject to the conditions hereof, the Buyer
agrees to buy, and the Originator agrees to sell, all of the Originator’s right,
title and interest in and to the following:

(i) all Receivables owned by the Originator at the close of business on the
Business Day preceding the Closing Date or thereafter created and arising
(collectively, the “Originator Receivables”);

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(ii) all Related Property with respect to the Originator Receivables
(collectively, the “Originator Related Property”);

(iii) all Cartus Collections;

(iv) all proceeds of and earnings on any of the foregoing; and

(v) all of the right, title and interest, if any, Cartus has in, to or under the
CFC Designated Receivables, including all Related Property with respect thereto,
rights, if any, to reimbursement of, or interest on, such CFC Designated
Receivables and all proceeds thereof;

it being understood and agreed that the Originator does not hereby sell,
transfer or convey any of its right, title or interest in any Excluded Assets or
Excluded Contracts.

The items listed above in clauses (ii), (iii) and (iv), whenever and wherever
arising, are collectively referred to herein as the “Originator Related Assets.”
The Originator Receivables and the Originator Related Assets are sometimes
collectively referred to herein as the “Originator Assets.”

It is the intent of the parties hereto that Cartus not have any right, title, or
interest in, to, or under the CFC Designated Receivables or the other property
listed in clause (v) above, and such CFC Designated Receivables and other
property is included in the property being sold hereunder solely in case it
should be determined, contrary to the intent of the parties hereto, that Cartus
does have any right, title, or interest in the CFC Designated Receivables or the
other property listed in clause (v) above.

As used herein, “Cartus Receivables” means Originator Receivables that are being
Purchased or have been Purchased by the Buyer hereunder; “Cartus Related
Property” means Originator Related Property that is being Purchased or has been
Purchased by the Buyer hereunder; “Cartus Related Assets” means Originator
Related Assets that are being Purchased or have been Purchased by the Buyer
hereunder; and “Cartus Purchased Assets” means Originator Assets that are being
Purchased or have been Purchased by the Buyer hereunder.

Schedule 2.1 sets forth a list of all Relocation Management Agreements subject
to this Agreement (each, a “Pool Relocation Management Agreement”) as of the
Closing Date. Each new Relocation Management Agreement that is not an Excluded
Contract and that is entered into by the Originator during any month shall be
added to the Pool Relocation Management Agreements on or after the last day of
such month by delivering a written notice in the form of Exhibit 2.1 to the
Buyer or its designee, whereupon Schedule 2.1 shall be amended by the Originator
to add such new Relocation Management Agreement to the list of Pool

 

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Relocation Management Agreements set forth therein. A copy of such Exhibit 2.1
appended to the Receivables Activity Report for such month, upon delivery to the
Indenture Trustee, shall be sufficient evidence of inclusion. On or prior to the
date of the delivery of any such notice, the Originator shall indicate, or cause
to be indicated, in its computer files, books and records that the Cartus
Receivables and other Cartus Purchased Assets then existing and thereafter
created pursuant to or in connection with each such Pool Relocation Management
Agreement are being transferred to the Buyer pursuant to this Agreement.

(b) Treatment of Certain Receivables and Related Assets. It is expressly
understood that (i) each Cartus Receivable sold to the Buyer hereunder, together
with all Cartus Related Assets then existing or thereafter created and arising
with respect thereto, will thereafter be the property of the Buyer (or its
assignees), without the necessity of any further purchase or other action by the
Buyer (other than satisfaction of the conditions set forth herein) and (ii) the
change of a Receivable’s status from that of Unsold Home Receivable to Unbilled
Receivable or from Unbilled Receivable to Billed Receivable shall not be deemed
the creation of a new Receivable for any purpose.

Section 2.2 Purchases. On the Closing Date, the Buyer shall purchase all of the
Originator’s right, title and interest in and to all Originator Assets and any
property described in clause (v) of Section 2.1(a) existing as of the close of
business on the immediately preceding Business Day. On each Business Day
thereafter until the Termination Date, the Buyer shall purchase all of the
Originator’s right, title and interest in and to all Originator Assets and any
property described in clause (v) of Section 2.1(a) existing as of the close of
business on the immediately preceding Business Day that were not previously
purchased by the Buyer hereunder. Notwithstanding the foregoing, if an
Insolvency Proceeding is pending with respect to either the Originator or the
Buyer prior to the Termination Date, the Originator shall not sell, and the
Buyer shall not buy, any Originator Assets hereunder unless and until such
Insolvency Proceeding is dismissed or otherwise terminated.

Section 2.3 No Assumption. The sales and Purchases of Cartus Purchased Assets do
not constitute and are not intended to result in a creation or an assumption by
the Buyer or its successors and assigns of any obligation of the Originator or
any other Person in connection with the Cartus Purchased Assets (other than any
such obligations as may arise from the ownership of Cartus Receivables) or under
the related Contracts or any other agreement or instrument relating thereto,
including without limitation any obligation to any Obligors or Transferred
Employees. None of the Servicer, the Buyer or the Buyer’s assignees shall have
any obligation or liability to any Obligor, Transferred Employee or other
customer or client of the Originator (including without limitation any
obligation to perform any of the obligations of the Originator under any
Relocation Management Agreement, Cartus Home Purchase Contract, Cartus Related
Property or any other agreement), except such obligations as may arise from the
ownership of the Cartus Receivables. Except as expressly provided in
Section 3.05(k) of the Transfer and Servicing Agreement, no such obligation or
liability to any Obligor, Transferred Employee or other customer or client of
the Originator is intended to be assumed by the Servicer or its successors and
assigns hereunder or under the Transfer and Servicing Agreement, and any such
assumption is expressly disclaimed.

 

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Section 2.4 No Recourse. Except as specifically provided in this Agreement, the
sale and Purchase of the Cartus Purchased Assets and any interest of Cartus in
and to the CFC Designated Receivables and other property described in clause
(v) of Section 2.1(a) under this Agreement shall be without recourse to the
Originator; provided, however, that the Originator shall be liable to the Buyer
for all representations, warranties, covenants and indemnities made by it
pursuant to the terms of this Agreement (it being understood that such
obligations of the Originator will not arise solely on account of the
credit-related inability of an Obligor to pay a Receivable).

Section 2.5 True Sales. The Originator and the Buyer intend the transfers of
Cartus Purchased Assets hereunder to be true sales by the Originator to the
Buyer that are absolute and irrevocable and to provide the Buyer with the full
benefits of ownership of the Cartus Purchased Assets, and neither the Originator
nor the Buyer intends the transactions contemplated hereunder to be, or for any
purpose to be characterized as, loans from the Buyer to the Originator, secured
by the Cartus Purchased Assets.

Section 2.6 Servicing of Cartus Purchased Assets. Consistent with the Buyer’s
ownership of all Cartus Purchased Assets and subject to the terms of the Pool
Relocation Management Agreements, as between the parties to this Agreement, the
Buyer shall have the sole right to service, administer and collect all Cartus
Purchased Assets, to assign such right and to delegate such right to others. In
consideration of the Buyer’s purchase of the Cartus Purchased Assets and as more
fully set forth in Section 11.12, the Originator hereby acknowledges and agrees
that the Buyer intends to assign for the benefit of ARSC and its successors and
assigns the rights and interests granted by the Originator to the Buyer
hereunder, and agrees to cooperate fully with the Issuer and its successors and
assigns in the exercise of such rights.

Section 2.7 Financing Statements. In connection with the transfer described
above, the Originator agrees, at its expense, to record and file financing
statements (and continuation statements when applicable) with respect to the
Cartus Purchased Assets conveyed by the Originator meeting the requirements of
applicable law in such manner and in such jurisdictions as are necessary to
perfect and maintain the perfection of the transfer and assignment of its
interest in the Cartus Purchased Assets to the Buyer, and to deliver a file
stamped copy of each such financing statement or other evidence of such filing
to the Buyer as soon as practicable after the Closing Date; provided, however,
that prior to recordation pursuant to Section 8.3 or the sale of a Cartus Home
to an Ultimate Buyer, record title to such Cartus Home may remain in the name of
the related Transferred Employee and no recordation in real estate records of
the conveyance pursuant to the related Cartus Home Purchase Contract or Cartus
Home Sale Contract shall be made except as otherwise required or permitted under
Section 2.01(d)(i) of the Transfer and Servicing Agreement.

 

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ARTICLE III

CALCULATION OF CFC PURCHASE PRICE

Section 3.1 Calculation of the CFC Purchase Price.

(a) Intentionally Omitted

(b) With respect to the Purchase of any Cartus Purchased Assets by the Buyer
from the Originator pursuant to Article II, (i) on the Closing Date, the Buyer
shall pay to the Originator a purchase price equal to $654,199,874, and
(ii) thereafter the Buyer shall pay to the Originator, as provided in
Section 4.1, a purchase price (each such purchase price, the “CFC Purchase
Price”) in an amount that the Originator and the Buyer mutually agree is the
fair market value of such Cartus Purchased Assets. The sale of the property
described in clause (v) of Section 2.1(a) is in consideration of CFC funding the
CFC Designated Receivables or the obligation of the Issuer to reimburse the
Servicer for advances in respect to such CFC Designated Receivables.

ARTICLE IV

PAYMENT OF CFC PURCHASE PRICE

Section 4.1 CFC Purchase Price Payments. On the terms and subject to the
conditions of this Agreement, the Buyer shall pay to the Originator on the
Closing Date the CFC Purchase Price for the Cartus Purchased Assets sold on such
date, by paying such CFC Purchase Price to the Originator in cash. On each other
Business Day in each Monthly Period, on the terms and subject to the conditions
of this Agreement, the Buyer shall pay to the Originator in cash an amount
mutually agreed upon by the Originator and the Buyer on account of the CFC
Purchase Price for the Cartus Purchased Assets purchased by the Buyer during
such Monthly Period. Within seven Business Days after the end of each Monthly
Period, the Originator shall deliver to the Buyer an accounting with respect to
all Purchases of Cartus Purchased Assets that were made during such Monthly
Period and the aggregate CFC Purchase Price for all the Cartus Purchased Assets
that were purchased by the Buyer during such Monthly Period. If the payments on
account of the CFC Purchase Price for such Monthly Period exceed the aggregate
CFC Purchase Price set forth in such report minus the aggregate Originator
Adjustments for such Monthly Period calculated pursuant to Section 4.3(c), then
the Originator shall promptly pay such excess to the Buyer in cash and if the
payments on account of the CFC Purchase Price for such Monthly Period are less
than the aggregate CFC Purchase Price set forth in such report minus the
aggregate Originator Adjustments for such Monthly Period calculated pursuant to
Section 4.3(c), then the Buyer shall promptly pay such deficiency to the
Originator in cash.

 

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Section 4.2 The CFC Subordinated Note. On the Closing Date, the Buyer shall
deliver to the Originator the CFC Subordinated Note in the form set forth as
Exhibit 4.2. Subject to the limitations set forth in the CFC Subordinated Note,
the Originator irrevocably agrees to make each advance (each, a “CFC
Subordinated Loan”) requested by the Buyer on or prior to the Termination Date
for the sole purposes of acquiring CFC Homes pursuant to CFC Home Purchase
Contracts (including the making of Equity Payments), making Mortgage Payoffs and
Mortgage Payments with respect to CFC Homes and making Seller Adjustments under
the Receivables Purchase Agreement. No advance shall be made under the CFC
Subordinated Note on any date if the aggregate principal amount outstanding
thereunder on such date, after giving effect to such advance, would exceed an
amount equal to five times the net worth of the Buyer (such maximum amount
required to be advanced at any time, the “CFC Subordinated Note Cap”). The CFC
Subordinated Loans shall be evidenced by, and shall be payable as provided in,
the CFC Subordinated Note. Notwithstanding any other provision of this
Agreement, under no circumstances shall funds borrowed under the CFC
Subordinated Note be used for the purpose of paying the CFC Purchase Price for
the Cartus Purchased Assets.

Section 4.3 Originator Adjustments.

(a) With respect to any Cartus Receivable purchased by the Buyer from the
Originator, if on any day the Buyer (or its assigns), the Servicer or the
Originator determines that (i) such Cartus Receivable (A) was not identified by
the Originator in the Daily Originator Report as other than an Eligible
Receivable on the Business Day such Cartus Receivable was sold hereunder or
(B) was otherwise treated as or represented to be an Eligible Receivable in any
Receivables Activity Report, but was not in fact an Eligible Receivable on such
date or (ii) any of the representations or warranties set forth in
Section 6.1(d) or 6.1(k) was not true when made with respect to such Cartus
Receivable or the related Cartus Related Assets (each such Cartus Receivable
described in clause (i) or clause (ii), a “Cartus Noncomplying Asset”), then the
Originator shall pay the aggregate Unpaid Balance of such Cartus Receivables
(such payment, a “Cartus Noncomplying Asset Adjustment”) to the Buyer in
accordance with Section 4.3(c).

(b) If on any day the Unpaid Balance of any Cartus Receivable (i) is reduced as
a result of any cash discount or any adjustment by the Originator or any
Affiliate of the Originator (other than the Buyer, ARSC or the Issuer), (ii) is
subject to reduction on account of any offsetting account payable of the
Originator to an Obligor or is reduced or cancelled as a result of a set-off in
respect of any claim by, or defense or credit of, the related Obligor against
the Originator or any Affiliate of the Originator (other than the Buyer, ARSC or
the Issuer) (whether such claim, defense or credit arises out of the same or a
related or an unrelated transaction) or (iii) is reduced on account of the
obligation of the Originator to pay to the related Obligor any rebate or refund
(each of the reductions and cancellations described above in clauses (i) through
(iii), an “Originator Dilution Adjustment”), then the Originator shall pay such
Originator Dilution Adjustment to the Buyer in accordance with Section 4.3(c).

(c) Within seven Business Days after the end of each Monthly Period, the
Originator shall pay to the Buyer, in accordance with Section 4.4 and as
provided in Section 4.1,

 

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an amount (an “Originator Adjustment”) equal to the sum of (A) the aggregate
Originator Dilution Adjustments, if any, owing on account of each day during
such Monthly Period plus (B) the aggregate Cartus Noncomplying Asset
Adjustments, if any, owing on account of each day during such Monthly Period.
The Cartus Receivables that gave rise to any Originator Dilution Adjustment and
any related Cartus Related Assets shall remain the property of the Buyer. From
and after the day on which any Cartus Noncomplying Asset Adjustment is made, any
collections received by the Buyer that are identified as proceeds of the
Receivables that gave rise to such Cartus Noncomplying Asset Adjustment and any
Related Property with respect to such Receivable shall be promptly returned to
the Originator.

Section 4.4 Payments and Computations, Etc. All amounts to be paid by the
Originator to the Buyer hereunder shall be paid in accordance with the terms
hereof no later than 11:00 a.m. (New York time) on the day when due in United
States dollars in immediately available funds to an account specified in writing
from time to time by the Buyer or its designee. Payments received by the Buyer
after such time shall be deemed to have been received on the next Business Day.
If any payment becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. The Originator shall
pay to the Buyer, on demand, interest on all amounts not paid when due hereunder
at a rate equal to the Prime Rate plus 2% per annum; provided, however, that
such interest rate shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days elapsed (including
the first day but excluding the last day). All payments made under this
Agreement shall be made without set-off or counterclaim.

ARTICLE V

CONDITIONS PRECEDENT

Section 5.1 Conditions Precedent to Sales and Purchases. No Purchase of Cartus
Purchased Assets shall be made hereunder on any date on which the Buyer does not
have sufficient funds available to pay the CFC Purchase Price in cash.

Section 5.2 Conditions Precedent to CFC Subordinated Loans. The Originator’s
obligation to make each CFC Subordinated Loan under this Agreement shall be
subject to the conditions precedent that on the date of such CFC Subordinated
Loan:

(a) the CFC Subordinated Note shall have been duly executed and delivered by the
Buyer and shall be in full force and effect;

(b) no Event of Bankruptcy shall have occurred and be continuing with respect to
the Buyer; and

 

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(c) after giving effect to such CFC Subordinated Loan, the aggregate outstanding
principal amount of the CFC Subordinated Note shall not exceed the CFC
Subordinated Note Cap.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Section 6.1 Representations and Warranties of the Originator. In order to induce
the Buyer to enter into this Agreement and to make Purchases hereunder, the
Originator hereby makes the representations and warranties set forth in this
Section 6.1, in each case as of the date hereof, as of the Closing Date, as of
the date of each Purchase hereunder and as of any other date specified in such
representation and warranty.

(a) Organization and Good Standing. The Originator is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware and has full power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted. The Originator had at all relevant times, and now has, all
necessary power, authority and legal right to own and sell the Cartus Purchased
Assets.

(b) Due Qualification. The Originator is duly qualified to do business, is in
good standing as a foreign corporation, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals and in which the failure so to qualify or to obtain such licenses and
approvals or to preserve and maintain such qualification, licenses or approvals
could reasonably be expected to give rise to a Material Adverse Effect.

(c) Power and Authority: Due Authorization. The Originator (i) has all necessary
corporate power and authority (A) to execute and deliver this Agreement, the
Contracts and the other Transaction Documents to which it is a party, (B) to
perform its obligations under this Agreement, the Contracts and the other
Transaction Documents to which it is a party and (C) to sell and assign the
Cartus Purchased Assets transferred hereunder on and after such date, on the
terms and subject to the conditions herein and therein provided and (ii) has
duly authorized by all necessary corporate action such sale and assignment and
the execution, delivery and performance of, and the consummation of the
transactions provided for in, this Agreement, the Contracts and the other
Transaction Documents to which it is a party.

(d) Valid Sale; Binding Obligations. This Agreement constitutes a valid sale,
transfer, set-over and conveyance to the Buyer of all of the Originator’s right,
title and interest in, to and under the Cartus Receivables transferred hereunder
on such date, which is perfected and of first priority (subject to Permitted
Liens and Permitted Exceptions) under the UCC and other applicable law,
enforceable against creditors of, and purchasers from, the Originator, free and
clear of any Lien (other than Permitted Liens); and this Agreement constitutes,
and each other

 

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Transaction Document to which the Originator is a party when duly executed and
delivered will constitute, a legal, valid and binding obligation of the
Originator, enforceable against the Originator in accordance with its terms,
except (i) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (ii) as such enforceability may
be limited by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law. The Originator
has no right, title or interest in or to any CFC Home, CFC Home Purchase
Contract or any Receivable created or arising under any CFC Home Purchase
Contract.

(e) No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents to be signed by the Originator, and the fulfillment
of the terms hereof and thereof, will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under (A) the certificate of
incorporation or the by-laws of the Originator or (B) any material indenture,
loan agreement, mortgage, deed of trust or other material agreement or
instrument to which the Originator is a party or by which it or any of its
properties is bound, (ii) result in the creation or imposition of any Lien on
any of the Cartus Purchased Assets pursuant to the terms of any such material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument other than this Agreement and the other Transaction Documents or
(iii) conflict with or violate any federal, state, local or foreign law or any
decision, decree, order, rule or regulation applicable to the Originator or of
any federal, state, local or foreign regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Originator,
which conflict or violation described in this clause (iii), individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

(f) Litigation and Other Proceedings. (i) There is no action, suit, proceeding
or investigation pending, or to the best knowledge of the Originator threatened,
against the Originator before any court, arbitrator, regulatory body,
administrative agency or other tribunal or governmental instrumentality and
(ii) the Originator is not subject to any order, judgment, decree, injunction,
stipulation or consent order of or with any court or other government authority
that, in the case of either of the foregoing clauses (i) or (ii), (A) asserts
the invalidity of this Agreement or any other Transaction Document, (B) seeks to
prevent the sale of any Cartus Purchased Asset by the Originator to the Buyer,
the creation of a material amount of Cartus Receivables or the consummation of
any of the transactions contemplated by this Agreement or any other Transaction
Document, (C) seeks any determination or ruling that, in the reasonable judgment
of the Originator, would materially and adversely affect the performance by the
Originator of its obligations under this Agreement or any other Transaction
Document to which it is a party or the validity or enforceability of this
Agreement or any other Transaction Document to which it is a party or
(D) individually or in the aggregate for all such actions, suits, proceedings
and investigations could reasonably be expected to have a Material Adverse
Effect.

(g) Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a

 

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Material Adverse Effect, (i) all authorizations, consents, orders and approvals
of, or other actions by, any Governmental Authority that are required to be
obtained by the Originator in connection with the conveyance of the Cartus
Purchased Assets transferred hereunder on and after such date, or the due
execution, delivery and performance by the Originator of this Agreement or any
other Transaction Document to which it is a party and the consummation of the
transactions contemplated by this Agreement or any other Transaction Documents
to which it is a party have been obtained or made and are in full force and
effect and (ii) all filings with any Governmental Authority that are required to
be obtained in connection with such conveyance and the execution and delivery by
the Originator of this Agreement have been made; provided, however, that prior
to recordation pursuant to Section 8.3 or the sale of a Home to an Ultimate
Buyer, record title to such Home may remain in the name of the related
Transferred Employee and no recordation in real estate records of the conveyance
pursuant to the related Home Purchase Contract or Home Sale Contract shall be
made except as otherwise required or permitted under Section 2.01(d)(i) of the
Transfer and Servicing Agreement.

(h) Margin Regulations. The Originator is not engaged, principally or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meanings of Regulations T, U and
X of the Board of Governors of the Federal Reserve System). The Originator has
not taken and will not take any action to cause the use of proceeds of the sales
hereunder to violate said Regulations T, U or X.

(i) Taxes. The Originator has filed (or there have been filed on its behalf as a
member of a consolidated group) all tax returns and reports required by law to
have been filed by it and has paid all taxes, assessments and governmental
charges thereby shown to be owing by it, other than any such taxes, assessments
or charges (i) that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens) or (ii) the amount of which, either singly or in the aggregate,
would not have a Material Adverse Effect.

(j) Solvency. After giving effect to the conveyance of Cartus Purchased Assets
hereunder on such date, the Originator is solvent and able to pay its debts as
they come due and has adequate capital to conduct its business as presently
conducted.

(k) Quality of Title/Valid Transfers.

(i) Immediately before the Purchase to be made by the Buyer hereunder on such
date, each Cartus Purchased Asset to be sold to the Buyer shall be owned by the
Originator free and clear of any Lien (other than any Permitted Lien), and the
Originator shall have made all filings and shall have taken all other action
under applicable law in each relevant jurisdiction in order to protect and
perfect the ownership interest of the Buyer and its successors and assigns in
such Cartus Purchased Assets against all creditors of, and purchasers from, the
Originator (subject to Permitted Exceptions).

 

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(ii) With respect to each Cartus Receivable transferred hereunder on such date,
the Buyer shall acquire a valid and (subject to Permitted Exceptions) perfected
ownership interest in such Cartus Receivable and any identifiable proceeds
thereof, free and clear of any Lien (other than any Permitted Liens).

(iii) Immediately prior to the sale of a Cartus Purchased Asset hereunder on
such date, no effective financing statement or other instrument similar in
effect that covers all or part of any Cartus Purchased Asset or any interest
therein is on file in any recording office except such as may be filed (A) in
favor of the Originator in accordance with the Pool Relocation Management
Agreements, (B) in favor of the Buyer pursuant to this Agreement, (C) in favor
of the Buyer’s successors and assigns pursuant to the Receivables Purchase
Agreement, the Transfer and Servicing Agreement or the Indenture or otherwise
filed by or at the direction of the Buyer’s successors and assigns or (D) to
evidence any Mortgage on a Cartus Home created by a Transferred Employee.

(iv) The CFC Purchase Price constitutes reasonably equivalent value for the
Cartus Purchased Assets conveyed in consideration therefor on such date, and no
purchase of an interest in such Cartus Purchased Assets by the Buyer from the
Originator constitutes a fraudulent transfer or fraudulent conveyance under the
United States Bankruptcy Code or applicable state bankruptcy or insolvency laws
or is otherwise void or voidable or subject to subordination under similar laws
or principles or for any other reason.

(l) Eligible Receivables. Each Cartus Receivable included in the Cartus
Purchased Assets transferred hereunder on such date, unless otherwise identified
to the Buyer and its assignees by the Originator in the related Daily Originator
Report, is an Eligible Receivable on such date.

(m) Accuracy of Information. All written information furnished by the Originator
to the Buyer or its successors and assigns pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein with
respect to the Cartus Purchased Assets transferred hereunder on such date is
true and correct in all material respects on such date.

(n) Offices. The principal place of business and chief executive office of the
Originator is located, and the offices where the Originator keeps all Cartus
Records (and all original documents relating thereto) are located, at the
addresses specified in Schedule 6.1(n), except that (i) Home Deeds and related
documents necessary to close Cartus Home sale transactions, including powers of
attorney, may be held by local attorneys or escrow agents acting on behalf of
the Originator in connection with the sale of Cartus Homes to Ultimate Buyers,
so long as such local attorneys are notified of the interest of the Buyer and
the Buyer’s assignees therein and (ii) Cartus Records relating to any Pool
Relocation Management Agreement and the Receivables arising thereunder or in
connection therewith may be maintained at the offices of the related Employer.

 

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(o) Payment Instructions to Obligors. The Originator has instructed (i) all
Obligors to remit all payments on the Cartus Purchased Assets directly to one of
the Lockboxes or Lockbox Accounts, (ii) all Lockbox Banks to deposit all Cartus
Collections remitted to a Lockbox directly to the related Lockbox Account and
(iii) all Persons receiving Cartus Home Sale Proceeds to deposit such Cartus
Home Sale Proceeds in one of the Lockboxes or Lockbox Accounts within two
Business Days after receipt, except to the extent a longer escrow period is
required under applicable law, in which case such Cartus Home Sale Proceeds
shall be deposited into one of the Lockboxes or Lockbox Accounts within one
Business Day after the expiration of such period.

(p) Investment Company Act. The Originator is not, and is not controlled by, an
“investment company” registered or required to be registered under the
Investment Company Act.

(q) Accounting for Certain Assets. (i) If the Cartus Receivables sold on such
date hereunder had not been sold to the Buyer hereunder, and if interests
therein had not been transferred by the Buyer in accordance with the Transaction
Documents, all Cartus Receivables would have been and at all times would be
represented in the financial statements and records of the Originator as
accounts receivable or amounts owed from Obligors in accordance with GAAP
consistently applied by the Originator and (ii) in accordance with GAAP
consistently applied, upon the sale of any Cartus Home to an Ultimate Buyer, any
such obligation relating to any Equity Payment, Mortgage Payoff or Mortgage
Payment with respect to such Cartus Home would be reduced by the amount of the
cash proceeds of the sale of such Cartus Home (in some cases, net of certain
Direct Expenses relating to such Cartus Home).

(r) ERISA. Each Plan is in compliance with all applicable material provisions of
ERISA, and the Originator or the relevant ERISA Affiliate has received a
favorable determination letter from the Internal Revenue Service that each Plan
intended to be qualified under Section 401(a) of the Code is so qualified. No
Plan has incurred an “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived. Neither
the Originator nor any ERISA Affiliate (i) has incurred or expects to incur any
liability under Title IV of ERISA with respect to any Plan that could give rise
to a lien in favor of the PBGC other than liability for the payment of premiums,
all of which have been timely paid when due in accordance with Section 4007 of
ERISA, (ii) has incurred or expects to incur any withdrawal liability within the
meaning of Section 4201 of ERISA, (iii) is subject to any lien under
Section 412(n) of the Code or Sections 302(f) or 4068 of ERISA or arising out of
any action brought under Sections 4070 or 4301 of ERISA or (iv) is required to
provide security to a Plan under Section 401(a)(29) of the Code. The PBGC has
not instituted proceedings to terminate any Plan or to appoint a trustee or
administrator of any such Plan, and no circumstances exist that constitute
grounds under Section 4042 of ERISA to commence any such proceedings.

(s) Legal Names. Except as described in Schedule 6.1(s), since January 1, 1995,
the Originator (i) has not been known by any legal name other than its corporate
name as

 

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of the date hereof, except as otherwise permitted pursuant to Section 7.3(d),
(ii) has not been the subject of any merger or other corporate reorganization
that resulted in a change of name, identity or corporate structure and (iii) has
not used any trade names other than its actual corporate name.

(t) Compliance with Applicable Laws. The Originator is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all
Governmental Authorities (federal, state, local or foreign, including without
limitation Environmental Laws), a violation of any of which, individually or in
the aggregate for all such violations, is reasonably likely to have a Material
Adverse Effect.

(u) Credit and Collection Policy. The copy of the Credit and Collection Policy
of the Originator attached as Exhibit 6.1(u) to this Agreement is a true and
complete copy thereof. As of the date each Cartus Purchased Asset is transferred
hereunder, the Originator has complied in all applicable material respects with
the Credit and Collection Policy with respect to such Cartus Purchased Asset
transferred on such date and the related Contract. There has been no change to
the Credit and Collection Policy that would be reasonably likely to adversely
affect the collectibility of any material portion of the Cartus Receivables or
other Cartus Purchased Assets or to decrease the credit quality of any newly
created Cartus Receivables or other Cartus Purchased Assets.

(v) Environmental. On such date, to the best knowledge of the Originator,
(i) there are no (A) pending or threatened claims, complaints, notices or
requests for information received by the Originator with respect to any alleged
violation of any Environmental Law in connection with any Cartus Home relating
to any Cartus Receivable transferred hereunder on such date or (B) pending or
threatened claims, complaints, notices or requests for information received by
the Originator regarding potential liability under any Environmental Law in
connection with any Cartus Home relating to any Cartus Receivable transferred
hereunder on such date and (ii) the Originator is in material compliance with
all permits, certificates, approvals, licenses and other authorizations relating
to environmental matters, if any, that are required to be held by it under
applicable law in connection with any Cartus Homes relating to any Cartus
Receivable transferred hereunder on such date, other than those that, in the
case of either clause (i) or (ii), singly or in the aggregate, are not
reasonably likely to have a Material Adverse Effect.

(w) Pool Relocation Management Agreements. The Pool Relocation Management
Agreements include all Relocation Management Agreements to which the Originator
is a party except for Excluded Contracts.

(x) Indebtedness for Borrowed Money. As of the Closing Date, the Originator has
no Indebtedness for Borrowed Money.

 

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Section 6.2 Representations and Warranties of the Buyer. The Buyer hereby
represents and warrants, on and as of the date hereof and on and as of the
Closing Date, that (a) this Agreement has been duly authorized, executed and
delivered by the Buyer and constitutes the Buyer’s valid, binding and legally
enforceable obligation, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) as such
enforceability may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
(b) the execution, delivery and performance of this Agreement does not violate
any federal, state, local or foreign law applicable to the Buyer or any
agreement to which the Buyer is a party and (c) all of the outstanding capital
stock of the Buyer is directly or indirectly owned by the Originator, and all
such capital stock is fully paid and nonassessable.

ARTICLE VII

GENERAL COVENANTS

Section 7.1 Affirmative Covenants of the Originator. From the Closing Date until
the termination of this Agreement in accordance with Section 11.4, the
Originator hereby agrees that it will perform the covenants and agreements set
forth in this Section 7.1.

(a) Compliance with Laws, Etc. The Originator will comply in all material
respects with all applicable laws, rules, regulations, judgments, decrees and
orders (including without limitation those relating to the Cartus Receivables,
Cartus Home Purchase Contracts, Cartus Related Assets and all Environmental Laws
affecting any Cartus Home), in each case to the extent that any such failure to
comply, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

(b) Preservation of Corporate Existence. The Originator (i) will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation (other than any change in corporate status by
reason of a merger or consolidation permitted by Section 7.3(c)) and (ii) will
qualify and remain qualified in good standing as a foreign corporation in each
jurisdiction in which the failure to preserve and maintain such qualification as
a foreign corporation could reasonably be expected to have a Material Adverse
Effect.

(c) Keeping of Records and Books of Account. The Originator will maintain and
implement administrative and operating procedures (including without limitation
an ability to recreate records evidencing the Cartus Purchased Assets in the
event of the destruction of the originals thereof) and will keep and maintain
all documents, books, records and other information that are necessary or
advisable, in the reasonable determination of the Buyer, for the collection of
all amounts due under any or all Cartus Purchased Assets. Upon the reasonable
request of the Buyer or its assignees made at any time after the occurrence and
continuance of an

 

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Unmatured Servicer Default or a Servicer Default, the Originator will deliver
copies of all Cartus Records maintained pursuant to this Section 7.1(c) to the
Buyer or its designee. The Originator will maintain at all times accurate and
complete books, records and accounts relating to the Cartus Purchased Assets and
all Cartus Collections, in which timely entries will be made. The Originator’s
master data processing records will be marked to indicate the sales of all
Cartus Purchased Assets to the Buyer hereunder and will include without
limitation all payments received and all credits and extensions granted with
respect to the Cartus Purchased Assets.

(d) Location of Records and Offices. The Originator will keep its principal
place of business and chief executive office and the offices where it keeps all
Cartus Records (and all original documents relating thereto other than those
Cartus Records that are maintained with local attorneys or escrow agents or at
the offices of the relevant Employer as described in Section 6.1(n)) at the
addresses specified in Schedule 6.1(n) or, upon not less than 30 days’ prior
written notice given by the Originator to the Buyer and its assignees, at such
other locations in jurisdictions in the United States of America where all
action required by Section 8.3 has been taken and completed.

(e) Separate Corporate Existence of the Buyer. The Originator hereby
acknowledges that the parties to the Transaction Documents are entering into the
transactions contemplated by the Transaction Documents in reliance on the
Buyer’s identity as a legal entity separate from the Originator and the other
Cartus Persons. From and after the date hereof until the Final Payout Date, the
Originator will, and will cause each other Cartus Person to, take such actions
on the part of the Originator or such Cartus Person as shall be required in
order that:

(i) The Buyer’s operating expenses will not be paid by any Cartus Person, except
that certain organizational expenses of the Buyer and expenses relating to
creation and initial implementation of the Transaction Documents have been or
will be paid by the Originator;

(ii) Any financial statements of any Cartus Person that are consolidated to
include the Buyer will contain appropriate footnotes clearly stating that
(A) all of the Buyer’s assets are owned by the Buyer and (B) the Buyer is a
separate corporate entity with its own separate creditors that will be entitled
to be satisfied out of the Buyer’s assets prior to any value in the Buyer
becoming available to the Buyer’s equity holders;

(iii) Any transaction between the Buyer and a Cartus Person will be fair and
equitable to the Buyer, will be the type of transaction that would be entered
into by a prudent Person in the position of the Buyer with a Cartus Person and
will be on terms that are at least as favorable as may be obtained from a Person
that is not a Cartus Person; and

(iv) No Cartus Person will be, or will hold itself out to be, responsible for
the debts of the Buyer.

(f) Payment Instruction to Obligors. The Originator will (i) instruct all
Obligors to submit all payments on the Cartus Purchased Assets either (A) to one
of the

 

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Lockboxes maintained at the Lockbox Banks for deposit in a Lockbox Account or
(B) directly to one of the Lockbox Accounts and (ii) instruct all Persons
receiving Home Sale Proceeds to deposit such Home Sale Proceeds in one of the
Lockboxes or Lockbox Accounts within two Business Days after such receipt,
except to the extent a longer escrow period is required under applicable law, in
which case such Home Sale Proceeds will be deposited into one of the Lockboxes
or Lockbox Accounts within one Business Day after the expiration of such period.
The Originator will direct all Obligors with respect to receivables and related
assets that are not Cartus Receivables or CFC Receivables to deposit all
collections in respect of such receivables and related assets in an account that
is not a Lockbox or Lockbox Account and will take such other steps as the Buyer
reasonably may request to ensure that all collections on such receivables and
related assets will be segregated from Cartus Collections and CFC Collections.

(g) Segregation of Collections. The Originator will use reasonable efforts to
minimize the deposit of any funds other than Cartus Collections or CFC
Collections into any of the Lockbox Accounts and, to the extent that any such
funds are deposited into any of such Lockbox Accounts, promptly will identify
any such funds or will cause such funds to be so identified to the Servicer, it
being understood and agreed that the Originator does not hereby assume any
affirmative duty to re-direct Obligors to remit funds to alternate locations.

(h) Identification of Eligible Receivables. The Originator will (i) establish
and maintain necessary procedures for determining whether each Cartus
Receivable, as of the date it is sold hereunder, qualifies as an Eligible
Receivable, and for identifying all Cartus Receivables sold to the Buyer that
are not Eligible Receivables on the date sold and (ii) will provide to the
Servicer in a timely manner (i.e., no less frequently than the date on which the
Servicer needs such information to prepare its next Receivables Activity Report
or Weekly Activity Report, as applicable) information that shows whether, and to
what extent, the Cartus Receivables sold to the Buyer hereunder were not
Eligible Receivables on the date sold.

(i) Payment of Taxes. The Originator will file (or there will be filed on its
behalf as a member of a consolidated group) all tax returns and reports required
by law to be filed by it and will pay all taxes, assessments and governmental
charges thereby shown to be owing by it, except for any such taxes, assessments
or charges (i) that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens) or (ii) the amount of which, either singly or in the aggregate,
would not have a Material Adverse Effect.

(j) Accounting for Certain Assets. To the extent permitted by applicable law and
GAAP, the Originator will (i) prepare all financial statements that account for
the transactions contemplated hereby as a sale of the Cartus Purchased Assets by
the Originator to the Buyer and, in all other respects, will account for and
treat the transactions contemplated hereby (including but not limited to
accounting and (to the extent taxes are not consolidated) for tax reporting
purposes) as a sale of the Cartus Purchased Assets by the Originator to the
Buyer and (ii) maintain and prepare its financial statements and records in
accordance with GAAP, applied in accordance with the representation contained in
Section 6.1(q).

 

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(k) Receivables Reviews. Upon reasonable prior notice, the Originator will
permit the Buyer or its assignees (or other Persons designated by the Buyer from
time to time) or their agents or representatives (including without limitation
certified public accountants or other auditors), at the expense of the
Originator and during regular business hours, (i) to examine and make copies of
and abstracts from, and to conduct accounting reviews of, all Cartus Records in
the possession or under the control of the Originator, including without
limitation the related Contracts, invoices and other documents related thereto
and (ii) to visit the offices and properties of the Originator for the purpose
of examining any materials described in the preceding clause (i) and to discuss
matters relating to the Cartus Receivables or the other Cartus Purchased Assets
or the performance by the Originator of its obligations under any Transaction
Document to which it is a party with any Authorized Officers of the Originator
having knowledge of such matters or with the Originator’s certified public
accountants or other auditors; provided, however, that all such reviews will
occur no more frequently than twice per year (with only the first such review in
any year being at the Originator’s expense) unless (i) Cartus is the Servicer
and a Servicer Default has occurred and is continuing or (ii) the Buyer or its
successor or assignee has given advance written notice to the Originator that it
believes the composition and/or performance of the Cartus Purchased Assets have
deteriorated in a manner materially adverse to the interests of the Buyer or its
assignees.

(l) Computer Software, Hardware and Services. The Originator will provide the
Buyer and its assignees with such licenses, sublicenses and/or assignments of
contracts as the Servicer, the Buyer or the Buyer’s assignees require with
respect to all services and computer hardware or software that relate to the
servicing of the Cartus Receivables or the other Cartus Purchased Assets;
provided, however, that with respect to any computer software licensed from a
third party, the Originator will be required to provide such licenses,
sublicenses and/or assignments of such software only to the extent that
provision of the same would not violate the terms of any contracts of the
Originator with such third party.

(m) Environmental Claims. The Originator will use commercially reasonable
efforts to promptly cure and have dismissed with prejudice to the satisfaction
of the Buyer any actions and any proceedings relating to compliance with
Environmental Laws relating to any Cartus Home, but only to the extent that the
conditions that gave rise to such proceedings were in existence as of the date
on which the Buyer acquired the related Cartus Receivable.

(n) Turnover of Collections. If the Originator or any of its agents or
representatives at any time receives any cash, checks or other instruments
constituting Cartus Collections or CFC Collections, such recipient will
segregate and hold such payments in trust for, and in a manner acceptable to,
the Servicer and will, promptly upon receipt (and in any event within one
Business Day following receipt) remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to a Lockbox
Account.

(o) Performance and Compliance by Originator with Relocation Management
Agreements. The Originator will, at its expense, timely and fully perform and
comply with all provisions, covenants and other promises required to be observed
by it under the Pool Relocation Management Agreements, the Cartus Home Purchase
Contracts and other Contracts related to the Cartus Purchased Assets.

 

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(p) Compliance with Credit and Collection Policy. The Originator will comply in
all applicable material respects with the Credit and Collection Policy with
respect to each Cartus Purchased Asset and will not take any action in violation
of the Credit and Collection Policy with respect to any other ARSC Purchased
Asset.

Section 7.2 Reporting Requirements. From the Closing Date until the termination
of this Agreement in accordance with Section 11.4, the Originator agrees that it
will furnish to the Buyer or its assignees:

(a) Annual Financial Statements. As soon as available and in any event within 95
days after the end of each fiscal year of the Performance Guarantor and the
Originator, as applicable, copies of (i) the consolidated balance sheet of the
Performance Guarantor and its consolidated subsidiaries as at the end of such
fiscal year and the related statements of earnings and cash flows and
stockholders’ equity of the Performance Guarantor and its consolidated
subsidiaries for such fiscal year, setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year and prepared in
accordance with GAAP applied consistently throughout the periods reflected
therein, certified by Deloitte & Touche (or such other independent certified
public accountants of nationally recognized standing in the United States of
America as shall be selected by the Performance Guarantor) and (ii) copies of
the statements of earnings of the Originator on a consolidated basis for such
fiscal year, setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year and certified by the chief financial
officer, chief accounting officer or controller of the Originator (it being
understood and agreed that such statements of earnings will be prepared in
accordance with the Originator’s customary management accounting practices as in
effect on the date hereof and need not be prepared in accordance with GAAP);

(b) Material Adverse Effect. Promptly and in any event within two Business Days
after the president, chief financial officer, controller or treasurer of the
Originator has actual knowledge thereof, written notice that describes in
reasonable detail any event or occurrence with respect to Cartus that,
individually or in the aggregate for all such events or occurrences, has had, or
that such Authorized Officer in its reasonable good faith judgment determines
could reasonably be expected to have, a Material Adverse Effect (as defined in
the Indenture);

(c) Proceedings. Promptly and in any event within five Business Days after an
Authorized Officer of the Originator has knowledge thereof, written notice of
(i) any litigation, investigation or proceeding of the type described in
Section 6.1(f) not previously disclosed to the Buyer, (ii) any material adverse
development that has occurred with respect to any such previously disclosed
litigation, investigation or proceeding or (iii) any CFC Purchase Termination
Event or event which, with the giving of notice or passage of time or both,
would constitute a CFC Purchase Termination Event;

 

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(d) ERISA Event. (i) As soon as possible and in any event within 30 days after
the Originator or any ERISA Affiliate knows or has reason to know that a
“reportable event” (as defined in Section 4043 of ERISA) has occurred with
respect to any Plan, a statement of an Authorized Officer of the Originator
setting forth details as to such reportable event and the action that the
Originator or an ERISA Affiliate proposes to take with respect thereto, together
with a copy of the notice of such reportable event, if any, given to the PBGC,
the Internal Revenue Service or the Department of Labor; (ii) promptly and in
any event within 10 Business Days after receipt thereof, a copy of any notice
the Originator or any ERISA Affiliate receives from the PBGC relating to the
intention of the PBGC to terminate any Plan or to appoint a trustee to
administer any such Plan; (iii) promptly and in any event within 10 Business
Days after a filing with the PBGC pursuant to Section 412(n) of the Code of a
notice of failure to make a required installment or other payment with respect
to a Plan, a statement of the chief financial officer of the Originator setting
forth details as to such failure and the action that the Originator or an ERISA
Affiliate proposes to take with respect thereto, together with a copy of such
notice given to the PBGC; and (iv) promptly and in any event within 30 Business
Days after receipt thereof by the Originator or any ERISA Affiliate from the
sponsor of a multiemployer plan (as defined in Section 3(37) of ERISA), a copy
of each notice received by the Originator or any ERISA Affiliate concerning the
imposition of withdrawal liability or a determination that a multiemployer plan
is, or is expected to be, terminated or reorganized;

(e) Environmental Claims. Promptly and in any event within five Business Days
after receipt thereof, notice and copies of all written claims, complaints,
notices, actions, proceedings, requests for information or inquiries relating to
the condition of any Cartus Homes or compliance with Environmental Laws relating
to the Cartus Homes, other than those received in the ordinary course of
business and that, singly or in the aggregate, do not represent events or
conditions that would cause the representation set forth in Section 6.1(v) to be
incorrect; and

(f) Other. Promptly, from time to time, such other information, documents,
records or reports with respect to the Cartus Purchased Assets or the condition
or operations, financial or otherwise, of the Originator as the Buyer or its
assignees may from time to time reasonably request in order to protect the
interests of the Buyer or such assignees under or as contemplated by this
Agreement and the other Transaction Documents, including timely delivery of all
such information required under any Enhancement Agreement.

Section 7.3 Negative Covenants of the Originator. From the Closing Date until
the termination of this Agreement in accordance with Section 11.4, the
Originator agrees that it will not:

(a) Sales, Liens, Etc. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien (other than
Permitted Liens) of anyone claiming by or through it on or with respect to, any
ARSC Purchased Asset or Excluded Asset or any interest therein or any Lockbox or
Lockbox Account, other than (i) sales of Cartus Purchased Assets pursuant to
this Agreement, (ii) sales of Cartus Homes in accordance with the applicable
Contracts and (iii) transfers of Excluded Assets where the transferee has
executed and delivered to the Indenture Trustee an Acknowledgement Letter;

 

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(b) Change in Business or Credit and Collection Policy. (i) Make any material
change in the Credit and Collection Policy or (ii) make any material change in
the character of its employee relocation business or engage in any business
unrelated to such business as currently conducted that, in either case,
individually or in the aggregate with all other such changes, would be
reasonably likely to have a material adverse effect on the composition or
performance of the Cartus Purchased Assets;

(c) No Mergers, Etc. Consolidate with or merge with or into any other Person or
convey, transfer or sell all or substantially all of its properties and assets
to any Person, unless:

(i)(A) the Originator is the surviving entity thereof or, if the Originator is
not the surviving entity thereof, (x) the Person formed by such consolidation or
into which the Originator is merged or the Person that acquires by conveyance,
transfer or sale all or substantially all of the properties and assets of the
Originator (any such Person, the “Surviving Entity”) is an entity organized and
existing under the laws of the United States of America or any State thereof,
(y) such Surviving Entity expressly assumes, by an agreement supplemental hereto
in form and substance satisfactory to the Buyer and its assignees, performance
of every covenant and obligation of the Originator hereunder and under the other
Transaction Documents to which the Originator is a party and (z) such Surviving
Entity delivers to the Buyer and its assignees an opinion of counsel that such
Surviving Entity is duly organized and validly existing under the laws of its
organization, has duly executed and delivered such supplemental agreement, and
such supplemental agreement is a valid and binding obligation of such Surviving
Entity, enforceable against such Surviving Entity in accordance with its terms
(subject to customary exceptions relating to bankruptcy and equitable
principles) and covering such other matters as the Buyer or its assignees may
reasonably request;

(ii) all actions necessary to maintain the perfection of the security interests
or ownership interests of the Buyer in the Cartus Purchased Assets in connection
with such consolidation, merger, conveyance or transfer have been taken, as
evidenced by an opinion of counsel reasonably satisfactory to the Buyer and its
assignees;

(iii) so long as the Originator is the Servicer, no Servicer Default or
Unmatured Servicer Default is then occurring or would result from such merger,
consolidation, conveyance or transfer; and

(iv) any necessary consents of each applicable Series Enhancer have been
obtained.

 

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(d) Change in Name. Change its corporate name or the name under or by which it
conducts its core relocation business or the jurisdiction in which it is
incorporated unless the Originator has given the Buyer and its assignees and
each rating agency then rating any Series of Notes at least 30 days’ prior
written notice thereof and unless, prior to any such change in name or
jurisdiction of incorporation, the Originator has taken and completed all action
required by Section 8.3;

(e) Home Deeds. Record any Home Deeds with respect to any Homes except at the
direction of the Buyer or its assignees or as permitted by Section 8.3 hereof or
by Section 2.01(d)(i) of the Transfer and Servicing Agreement; and

(f) Termination of Relocation Management Agreements. Terminate any Pool
Relocation Management Agreement, Cartus Home Purchase Contract, Cartus Home Sale
Contract, Cartus Equity Loan Note or Cartus Equity Loan Agreement except in
accordance with the Credit and Collection Policy.

(g) Extension or Amendment. Extend, amend or otherwise modify the terms of any
Receivable included in the ARSC Purchased Assets, or amend, modify or waive any
material term or condition related thereto, except in accordance with
Section 3.10 of the Transfer and Servicing Agreement.

(h) Change in Payment Instruction to Obligors. Make any change in its
instructions to Obligors or other Persons regarding payments to be made to the
Originator or payments to be made to any Lockbox Account (except for a change in
instructions solely for the purpose of directing such Obligors or other Persons
to make such payments to another existing Lockbox Account), unless (i) the
Indenture Trustee has received copies of a Lockbox Agreement with each new
Lockbox Bank duly executed by the Originator, the Buyer, the Issuer, the
Indenture Trustee and such Lockbox Bank and (ii) in the case of any termination,
the Buyer or its successors and assigns have received evidence to their
satisfaction that the Obligors that were making payments into a terminated
Lockbox Account have been instructed in writing to make payments into another
Lockbox Account then in use.

(i) Home Purchase Contracts. Purchase any Home or make any Equity Payments,
Mortgage Payoffs, or Mortgage Payments on or after the Closing Date other than
Equity Payments, Mortgage Payoffs and Mortgage Payments with respect to Cartus
Homes.

(j) Indebtedness for Borrowed Money. Create, incur, guarantee or permit to exist
any Indebtedness for Borrowed Money, except for (A) any such Indebtedness owed
on an intercompany basis to the Performance Guarantor or any Affiliate thereof
and (B) any such Indebtedness the terms of which include acknowledgment
provisions in substantially the form of Exhibit 7.3(j) hereto.

 

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Section 7.4 Affirmative Covenants of the Buyer. From the Closing Date until the
termination of this Agreement in accordance with Section 11.4, the Buyer hereby
agrees that it will perform the covenants and agreements set forth in this
Section 7.4.

(a) The Buyer hereby acknowledges that the parties to the Transaction Documents
are entering into the transactions contemplated by the Transaction Documents in
reliance upon the Buyer’s identity as a legal entity separate from the
Originator and the other Cartus Persons. From and after the date hereof until
one year and one day after the Final Payout Date, the Buyer will take such
actions as shall be required in order that:

(i) The Buyer will conduct its business in office space allocated to it and for
which it pays an appropriate rent and overhead allocation;

(ii) The Buyer will maintain corporate records and books of account separate
from those of each Cartus Person and telephone numbers and stationery that are
separate and distinct from those of each Cartus Person;

(iii) The Buyer’s assets will be maintained in a manner that facilitates their
identification and segregation from those of any Cartus Person;

(iv) The Buyer will strictly observe corporate formalities in its dealings with
the public and with each Cartus Person, and funds or other assets of the Buyer
will not be commingled with those of any Cartus Person, except as expressly
permitted by the Transaction Documents. The Buyer will at all times, in its
dealings with the public and with each Cartus Person, hold itself out and
conduct itself as a legal entity separate and distinct from each Cartus Person.
The Buyer will not maintain joint bank accounts or other depository accounts to
which any Cartus Person (other than the Originator in its capacity as Servicer
under the Transfer and Servicing Agreement) has independent access;

(v) The duly elected board of directors of the Buyer and duly appointed officers
of the Buyer will at all times have sole authority to control decisions and
actions with respect to the daily business affairs of the Buyer;

(vi) Not less than one member of the Buyer’s board of directors will be an
Independent Director. The Buyer will observe those provisions in its certificate
of incorporation that provide that the Buyer’s board of directors will not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Buyer unless the Independent Director and all other
members of the Buyer’s board of directors unanimously approve the taking of such
action in writing prior to the taking of such action;

(vii) The Buyer will compensate each of its employees, consultants and agents
from the Buyer’s own funds for services provided to the Buyer;

 

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(viii) The Buyer will not hold itself out to be responsible for the debts of any
Cartus Person; and

(ix) The Buyer will take all actions necessary on its part to be taken in order
to ensure that the facts and assumptions relating to the Buyer set forth in the
opinions of Orrick, Herrington & Sutcliffe LLP dated as of July 31, 2006
relating to true sale matters with respect to the Purchase of the Cartus
Purchased Assets hereunder and substantive consolidation matters with respect to
the Originator and the Buyer will be true and correct at all times.

(b) The Buyer assumes no obligations of the Originator under the Pool Relocation
Management Agreements with respect to any Cartus Home Purchase Contracts,
including without limitation the obligations of the Originator to make Equity
Payments, Mortgage Payoffs and Mortgage Payments with respect to Cartus Homes.
The Buyer will enter into all Home Purchase Contracts under the Pool Relocation
Management Agreements in its own name and will make all Equity Payments,
Mortgage Payoffs and Mortgage Payments from and after the Closing Date other
than Equity Payments, Mortgage Payoffs and Mortgage Payments with respect to
Cartus Homes.

ARTICLE VIII

ADDITIONAL RIGHTS AND OBLIGATIONS IN

RESPECT OF THE CARTUS PURCHASED ASSETS

Section 8.1 Rights of the Buyer.

(a) Subject to Section 8.4(b), the Originator hereby authorizes the Buyer and
its assignees and designees to take any and all steps in the Originator’s name
and on behalf of the Originator that the Buyer, the Servicer and/or their
respective designees determine are reasonably necessary or appropriate to
collect all amounts due under any and all Cartus Purchased Assets, including
without limitation endorsing the name of the Originator on checks and other
instruments representing Cartus Collections and enforcing such Cartus Purchased
Assets.

(b) The Buyer shall have no obligation to account for, to replace, to substitute
or to return any Cartus Purchased Asset to the Originator, except as provided in
Section 4.3(c).

(c) The Buyer shall have the unrestricted right to further assign, transfer,
deliver, hypothecate, subdivide or otherwise deal with the Cartus Purchased
Assets and all of the Buyer’s right, title and interest in, to and under this
Agreement on whatever terms the Buyer determines, pursuant to the Receivables
Purchase Agreement or otherwise.

 

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(d) As between the Originator and the Buyer, the Buyer shall have the sole right
to retain any gains or profits created by buying, selling or holding the Cartus
Purchased Assets.

Section 8.2 Responsibilities of the Originator. Anything herein to the contrary
notwithstanding:

(a) The Originator agrees to deliver directly to the Servicer (for the Buyer’s
account), within one Business Day after receipt thereof, any Cartus Collections
or CFC Collections that it receives, in the form so received, and agrees that
all such Cartus Collections and CFC Collections will be deemed to be received in
trust for the Buyer and its assignees and will be maintained and segregated
separate and apart from all other funds and moneys of the Originator until
delivery of such Cartus Collections and CFC Collections to the Servicer; and

(b) The Originator hereby grants to the Buyer an irrevocable power of attorney,
with full power of substitution, coupled with an interest, to take in the name
of the Originator all steps necessary or advisable to endorse, negotiate or
otherwise realize on any writing or other right of any kind held or transmitted
by the Originator or transmitted or received by the Buyer (whether or not from
the Originator) in connection with any Cartus Purchased Asset (which power of
attorney may be exercised by the Buyer’s successors and assigns in accordance
with Section 8.4 and Section 11.12(b)).

(c) The Originator shall perform all of its obligations hereunder and under the
Pool Relocation Management Agreements and other Contracts related to the Cartus
Purchased Assets to which it is a party (other than those obligations undertaken
by the Buyer as provided in Section 7.4(b)) to the same extent as if such Cartus
Purchased Assets had not been sold hereunder, and the exercise by the Buyer or
its designee or assignee of the Buyer’s rights hereunder or in connection
herewith shall not relieve the Originator from any of its obligations under any
such Pool Relocation Management Agreements or Contracts related to the Cartus
Purchased Assets to which it is a party. Notwithstanding the foregoing, the
Originator acknowledges that the Buyer or its designees are entitled to perform
such obligations to the extent permitted under the Transaction Documents.

 

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Section 8.3 Further Action Evidencing Purchases. The Originator agrees that from
time to time, at its expense and upon reasonable request, it will promptly
execute and deliver all further instruments and documents and take all further
action as is reasonably necessary to perfect, protect or more fully evidence the
Purchase of the Cartus Purchased Assets by the Buyer hereunder, or to enable the
Buyer or its assignees to exercise or enforce any of its rights hereunder or
under any other Transaction Document to which the Originator is a party;
provided, however, that the Originator will not file or record any Home Deeds
except (i) in its capacity as the Servicer pursuant to the Transfer and
Servicing Agreement and in accordance with the terms thereof and (ii) at any
time, to the extent such recordation is required by local law, regulation or
custom. No Home Deeds or Home Purchase Contracts may be recorded in the name of
the Originator other than Home Deeds relating to Cartus Homes and Cartus Home
Purchase Contracts. Without limiting the generality of the foregoing, the
Originator shall:

(a) upon the Buyer’s request, execute and file such financing or continuation
statements or amendments thereto or assignments thereof and such other
instruments or notices as the Buyer or its assignees may reasonably determine to
be necessary or appropriate; and

(b) mark the master data processing records evidencing the Cartus Purchased
Assets and, if requested by the Buyer or its assignees, legend the related Pool
Relocation Management Agreements and Cartus Home Purchase Contracts to reflect
the sale of the Cartus Purchased Assets to the Buyer pursuant to this Agreement.

The Originator hereby authorizes the Buyer and its assignees to file one or more
financing or continuation statements and amendments thereto and assignments
thereof with respect to all or any of the Cartus Purchased Assets, in each case
whether now existing or hereafter generated by the Originator. If (i) the
Originator fails to perform any of its agreements or obligations under this
Agreement and does not remedy such failure within the applicable cure period, if
any, and (ii) the Buyer or its assignees in good faith reasonably believes that
the performance of such agreements and obligations is necessary or appropriate
to protect the interests of the Buyer or its assignees under this Agreement,
then the Buyer or its assignees may (but shall not be required to) perform or
cause performance of such agreement or obligation, and the reasonable expenses
of the Buyer or its assignees incurred in connection with such performance shall
be payable by the Originator as provided in Section 10.1.

Section 8.4 Cartus Collections; Rights of the Buyer and its Assignees.

At any time following the designation of a Servicer other than the Originator
pursuant to the Transfer and Servicing Agreement:

(a) The Buyer or its assignees may direct the Obligors of Cartus Receivables, or
any of them, to pay all amounts payable under any Cartus Receivable directly to
the Buyer or its assignees;

 

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(b) At the request of the Buyer or its assignees and at the Originator’s
expense, the Originator shall give notice of such ownership to each said Obligor
and direct that payments be made directly to the Buyer or its assignees;

(c) At the request of the Buyer or its assignees and at the Originator’s
expense, the Originator shall (A) assemble all of the Cartus Records, to the
extent such Cartus Records are in its possession, and make the same available at
a place selected by the Buyer or its successors and assigns, or instruct any
escrow agents holding any such documents, instruments and other records on its
behalf to make the same available and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Cartus Collections or
CFC Collections in a manner reasonably acceptable to the Buyer or its assignees
and, promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Buyer or its
assignees; and

(d) The Originator hereby authorizes the Buyer or its assignees to take any and
all steps in the Originator’s name and on behalf of the Originator that are
necessary or desirable, in the reasonable determination of the Buyer or its
assignees, to collect all amounts due under any and all Cartus Purchased Assets,
including without limitation endorsing the Originator’s name on checks and other
instruments representing Cartus Collections and enforcing the Cartus Purchased
Assets.

ARTICLE IX

TERMINATION

Section 9.1 CFC Purchase Termination Events. The following events shall be “CFC
Purchase Termination Events”:

(a) The occurrence of an Event of Default or an Amortization Event with respect
to all outstanding Series of Notes; or

(b) Any representation or warranty made by the Originator under any of the
Transaction Documents, any Receivables Activity Report or other information or
report delivered by the Originator (including in its capacity as Servicer) with
respect to the Originator or the Cartus Purchased Assets shall prove to have
been untrue or incorrect in any material respect when made or deemed to have
been made, and such failure could be reasonably expected to have a Material
Adverse Effect and such occurrence remains unremedied for 30 days; provided,
however, that any such incorrect representation relating to a Cartus Receivable
with respect to which the Originator has made a Cartus Noncomplying Asset
Adjustment pursuant to Section 4.3(a) shall not constitute a CFC Purchase
Termination Event; or

 

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(c) (i) The Originator shall fail to perform or observe, as and when required,
any term, covenant or agreement contained in this Agreement or any of the other
Transaction Documents to which it is a party or any Contract required on its
part to be performed or observed, and such failure shall remain unremedied for:
(A) in the case of a failure to deliver any Daily Originator Report pursuant to
Section 3.1(a), ten calendar days (provided, however, that such ten-day period
may be extended for an additional three days if such failure to deliver a Daily
Originator Report is due to computer failure); (B) in the case of a failure to
provide payment instructions to Obligors pursuant to Section 7.1(f), a failure
to segregate Cartus Collections or CFC Collections pursuant to Section 7.1(g), a
failure to provide records pursuant to Section 7.1(k), a failure to provide
required notices pursuant to Section 7.2(c), a failure to provide any required
monthly report or a breach of any of the negative covenants of the Originator
set forth in Section 7.3, ten calendar days; or (C) in the case of any other
failure to perform or observe, as and when required, any term, covenant or
agreement, which failure could be reasonably expected to have a Material Adverse
Effect, 30 days or (ii) the Performance Guarantor shall fail to make any
required payment under its Performance Guaranty and such failure shall remain
unremedied for one Business Day or (iii) the Performance Guarantor shall
otherwise fail to perform under its Performance Guaranty; or

(d) An Event of Bankruptcy shall have occurred with respect to the Originator or
the Performance Guarantor; or

(e) The representation and warranty in Section 6.1(k) shall not be true at any
time with respect to a substantial portion of the Cartus Purchased Assets; or

(f) Either (i) the Internal Revenue Service shall file notice of a Lien pursuant
to Section 6323 of the Internal Revenue Code with respect to any of the Cartus
Receivables or the Cartus Related Assets and such Lien shall not have been
released within five days or, if released, proved to the satisfaction of the
rating agencies then rating each Series of Notes or (ii) the PBGC shall file, or
shall indicate its intention to file, notice of a Lien pursuant to Section 4068
of the Employee Retirement Income Security Act of 1974 with respect to any of
the Cartus Receivables or the Cartus Related Assets; or

(g) This Agreement or the Performance Guaranty shall cease to be in full force
and effect for any reason other than in accordance with its terms; or

(h) An ARSC Purchase Termination Event or Transfer Termination Event shall have
occurred.

If a CFC Purchase Termination Event occurs, the Originator shall promptly give
notice to the Buyer and its assignees of such CFC Purchase Termination Event.

 

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Section 9.2 Purchase Termination. (a) On the Termination Date, the Originator
shall cease transferring Cartus Purchased Assets to the Buyer, provided that any
right, title and interest of the Originator in and to any CFC Designated
Receivables arising from any Servicer Advances made thereafter, including any
Related Property relating thereto and proceeds thereof, shall continue to be
transferred. Notwithstanding any cessation of the transfer to the Buyer of
additional Cartus Purchased Assets, Cartus Purchased Assets transferred to the
Buyer prior to the Termination Date and Cartus Collections in respect of such
Cartus Purchased Assets and the related Finance Charges, whenever accrued in
respect of such Cartus Receivables, shall continue to be property of the Buyer
available for transfer by the Buyer pursuant to the Receivables Purchase
Agreement. Nothing in this Section 9.2 shall be deemed to prohibit the Buyer
from funding CFC Designated Receivables from and after the Termination Date.

(b) Upon the occurrence of a CFC Purchase Termination Event, the Buyer and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of a CFC Purchase
Termination Event shall not deny to the Buyer or its assignees any remedy in
addition to termination of its obligation to make Purchases hereunder to which
the Buyer or its assignees may be otherwise appropriately entitled, whether by
statute or applicable law, at law or in equity.

ARTICLE X

INDEMNIFICATION; SECURITY INTEREST

Section 10.1 Indemnities by the Originator. Without limiting any other rights
that any Cartus Indemnified Party may have hereunder or under applicable law,
the Originator agrees to indemnify the Buyer and each of its successors,
permitted transferees and assigns, and all officers, directors, shareholders,
controlling Persons, employees and agents of any of the foregoing (each of the
foregoing Persons, a “Cartus Indemnified Party”), from and against any and all
damages, losses, claims (whether on account of settlements or otherwise),
actions, suits, demands, judgments, liabilities (including penalties),
obligations or disbursements of any kind or nature and related costs and
expenses (including reasonable attorneys’ fees and disbursements) awarded
against or incurred by any of them, arising out of or as a result of any of the
following (all of the foregoing, collectively, “Cartus Indemnified Losses”):

(a) any representation or warranty made by the Originator under any of the
Transaction Documents to which it is a party, any Receivables Activity Report or
any other information or report delivered by the Originator (including in its
capacity as Servicer) with respect to the Originator or the Cartus Purchased
Assets, having been untrue or incorrect in any respect when made or deemed to
have been made; provided, however, that the Originator’s obligation to make a
Cartus Noncomplying Asset Adjustment pursuant to Section 4.3(a) with respect to
any representation made in Section 6.1(1) as to Eligible Receivables having been
incorrect when made shall be the only remedy available to the Buyer or its
assignees relating to such incorrect representation;

 

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(b) the failure by the Originator to comply with any material applicable law,
rule or regulation applicable to the Originator with respect to any Cartus
Purchased Asset or any failure of a Cartus Purchased Asset to comply with any
such law, rule or regulation as of the date of sale of such Cartus Purchased
Asset hereunder;

(c) the failure to vest and maintain in the Buyer a valid ownership interest in
the Cartus Purchased Assets, free and clear of any Lien arising through the
Originator or anyone claiming through or under the Originator (including without
limitation any such failure arising from a circumstance described in the
definition of Permitted Exceptions);

(d) any failure of the Originator to perform its duties or obligations in
accordance with the provisions of the Transaction Documents or any Contract, in
each case to which it is a party;

(e) the failure to file, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to the transfer of any Cartus Purchased
Assets to the Buyer, whether at the time of any sale or at any subsequent time;

(f) the failure by the Originator to pay when due any taxes owing by it
(including sales, excise or property taxes) payable in connection with the
Cartus Purchased Assets, other than any such taxes, assessments or charges that
are being diligently contested in good faith by appropriate proceedings, for
which adequate reserves in accordance with GAAP have been set aside on its books
and that have not given rise to any Liens (other than Permitted Liens);

(g) any reduction in the Unpaid Balance of any Receivable included in the ARSC
Purchased Assets as a result of (i) any cash discount or any adjustment by the
Originator, (ii) any offsetting account payable of the Originator to an Obligor,
(iii) a set-off in respect of any claim by, or defense or credit of, the related
Obligor against the Originator (whether such claim, defense or credit arises out
of the same or a related or an unrelated transaction) or (iv) the obligation of
the Originator to pay to the related Obligor any rebate or refund;

(h) any product liability or personal injury claim in connection with the
service that is the subject of any Cartus Purchased Asset; and

(i) any investigation, litigation or proceeding related to any use by Cartus of
the proceeds of any Purchase made hereunder.

Notwithstanding anything to the contrary in this Agreement, any representations,
warranties and covenants made by the Originator in this Agreement or the other
Transaction

 

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Documents that are qualified by or limited to events or circumstances that have,
or are reasonably likely to have, given rise to a Material Adverse Effect shall
(solely for purposes of the indemnification obligations set forth in this
Section 10.1) be deemed not to be so qualified or limited.

Notwithstanding the foregoing (and with respect to clause (ii) below, without
prejudice to the rights that the Buyer may have pursuant to the other provisions
of this Agreement or the provisions of any of the other Transaction Documents),
in no event shall any Cartus Indemnified Party be indemnified for any Cartus
Indemnified Losses (i) resulting from negligence or willful misconduct on the
part of such Cartus Indemnified Party, (ii) to the extent the same includes
losses in respect of Cartus Purchased Assets and reimbursement therefor that
would constitute credit recourse to the Originator for the amount of any Cartus
Receivable not paid by the related Obligor or (iii) resulting from the action or
omission of the Servicer (unless the Servicer is the Originator or an Affiliate
thereof (other than the Buyer, ARSC or the Issuer)).

If for any reason the indemnification provided in this Section 10.1 is
unavailable to an Cartus Indemnified Party or is insufficient to hold an Cartus
Indemnified Party harmless, then the Originator shall contribute to the maximum
amount payable or paid to such Cartus Indemnified Party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by such Cartus Indemnified Party on the
one hand and the Originator on the other hand, but also the relative fault of
such Cartus Indemnified Party and the Originator, and any other relevant
equitable considerations.

Section 10.2 Security Interest. Without prejudice to the provisions of
Section 2.1 providing for the absolute transfer of the Originator’s interest in
the Cartus Purchased Assets and the proceeds thereof and any interest of the
Originator in the other property described in clause (v) of Section 2.1(a) to
the Buyer, in order to secure the prompt payment and performance of all
obligations of the Originator to the Buyer arising in connection with this
Agreement, whether now or hereafter existing, due or to become due, direct or
indirect, or absolute or contingent, the Originator hereby assigns and grants to
the Buyer a first priority security interest in the Originator’s right, title
and interest, if any, in, to and under all of the Cartus Purchased Assets and
the proceeds thereof and any interest of the Originator in the other property
described in clause (v) of Section 2.1(a), whether now or hereafter existing.

 

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ARTICLE XI

MISCELLANEOUS

Section 11.1 Amendments; Waivers, Etc.

(a) The provisions of this Agreement may be amended, modified or waived from
time to time if such amendment, modification or waiver is in writing and signed
by the Originator and the Buyer and its assignees. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.

(b) No failure or delay on the part of the Buyer or its assignees, or any Cartus
Indemnified Party, or any other third party beneficiary referred to in
Section 11.12(a) in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to, or demand on, the Originator shall entitle
it in any case to any notice or demand in similar or other circumstances. No
waiver or approval by the Buyer or its assignees under this Agreement shall,
except as may otherwise be stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval under this Agreement shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.

Section 11.2 Notices, Etc. Unless otherwise stated herein, all notices, demands,
consents, approvals and other communications provided for hereunder shall be in
writing (including via telecopier) and shall be personally delivered or sent by
certified mail, return receipt requested, postage prepaid, by telecopier or by
overnight courier to the intended party at the address or telecopier number of
such party set forth on Schedule 11.2 hereof, or at such other address or
telecopier number as shall be designated by such party in a written notice to
the other party hereto given in accordance with this Section 11.2. Copies of all
notices and other communications provided for hereunder shall be delivered to
ARSC and the Issuer at their respective addresses for notices set forth in the
Receivables Purchase Agreement. All notices and communications provided for
hereunder shall be effective when received.

Section 11.3 Cumulative Remedies. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

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Section 11.4 Binding Effect; Assignability; Survival of Provisions. This
Agreement shall be binding upon, and inure to the benefit of, the Buyer and the
Originator and their respective successors and assigns. Except as permitted
pursuant to Section 7.3(c), the Originator may not assign any of its rights
hereunder or any interest herein without the prior written consent of the Buyer
and its assignees. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until terminated pursuant hereto. Such termination
shall not occur prior to the Final Payout Date. The rights and remedies with
respect to any breach of any representation and warranty made by the Originator
pursuant to Article VI and the indemnification and payment provisions of Article
X and Section 11.6 and the provisions of Section 11.14 and Section 11.16 shall
be continuing and shall survive any termination of this Agreement.

Section 11.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING §5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.

Section 11.6 Costs, Expenses and Taxes. In addition to the obligations of the
Originator under Article X, the Originator agrees to pay on demand:

(a) all reasonable costs and expenses incurred by the Buyer and its assignees in
connection with the negotiation, preparation, execution and delivery of, the
administration (including periodic auditing), the preservation of any rights
under, or the enforcement of, or any breach of, this Agreement (including any
amendment, supplement or modification hereto), including without limitation
(i) the reasonable fees, expenses and disbursements of counsel to any such
Persons incurred in connection with any of the foregoing or in advising such
Persons as to their respective rights and remedies under this Agreement and
(ii) all reasonable out-of-pocket expenses (including reasonable fees and
expenses of independent accountants) incurred in connection with any review of
the Originator’s books and records either prior to the execution and delivery
hereof or pursuant to Section 7.1(k), and

(b) all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement
or any amendment, supplement or modification thereto, and agrees to indemnify
each Cartus Indemnified Party against any liabilities with respect to, or
resulting from, any delay in paying or omission to pay such taxes and fees.

 

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Section 11.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW YORK, OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY
(a) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT;
(b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; AND (c) IRREVOCABLY APPOINTS CORPORATION SERVICE COMPANY (THE
“PROCESS AGENT”), WITH AN OFFICE ON THE DATE HEREOF AT 80 STATE STREET, ALBANY,
NEW YORK, NEW YORK 12207, UNITED STATES OF AMERICA, AS ITS AGENT TO RECEIVE ON
BEHALF OF IT AND ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND
ANY OTHER PROCESS THAT MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS IN CARE OF
THE PROCESS AGENT AT THE PROCESS AGENT’S ABOVE ADDRESS, AND EACH PARTY HERETO
HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. EACH PARTY HERETO AGREES TO ENTER INTO ANY AGREEMENT
RELATING TO SUCH APPOINTMENT THAT THE PROCESS AGENT MAY CUSTOMARILY REQUIRE AND
TO PAY THE PROCESS AGENT’S CUSTOMARY FEES UPON DEMAND. AS AN ALTERNATIVE METHOD
OF SERVICE, EACH PARTY HERETO ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY
AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF
SUCH PROCESS TO SUCH PARTY AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION 11.2.
NOTHING IN THIS SECTION 11.7 SHALL AFFECT THE RIGHT OF EITHER PARTY HERETO TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
EITHER PARTY HERETO TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY
HERETO OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.

Section 11.8 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR
RELATING TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO OR ANY
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.

 

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Section 11.9 Integration. This Agreement contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement between the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.

Section 11.10 Captions and Cross References. The various captions (including
without limitation the table of contents) in this Agreement are provided solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Agreement.

Section 11.11 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.

Section 11.12 Acknowledgment and Consent.

(a) The Originator acknowledges that, from time to time prior to the Termination
Date, the Buyer intends to sell all of the Buyer’s right, title and interest in,
to and under the Cartus Purchased Assets, this Agreement and all of the other
Transaction Documents pursuant to the Receivables Purchase Agreement, and that
the interests of the Buyer hereunder will be further assigned pursuant to the
Transfer and Servicing Agreement and the Indenture. The Originator acknowledges
and agrees to each such sale by the Buyer and consents to the sale and
assignment by the Buyer of all or any portion of its right, title and interest
in, to and under the Cartus Purchased Assets, this Agreement and the other
Transaction Documents and all of the Buyer’s rights, remedies, powers and
privileges and all claims of the Buyer against the Originator under or with
respect to this Agreement and the other Transaction Documents (whether arising
pursuant to the terms of this Agreement or otherwise available at law or in
equity), including without limitation (whether or not an Unmatured Servicer
Default or a Servicer Default has occurred and is continuing) (i) the right of
the Buyer at any time to enforce this Agreement against the Originator and the
obligations of the Originator hereunder and (ii) the right at any time to give
or withhold any and all consents, requests, notices, directions, approvals,
demands, extensions or waivers under or with respect to this Agreement, any
other Transaction Document or the obligations in respect of the Originator
thereunder, all of which rights, remedies, powers, privileges and claims may be
exercised and/or enforced by the Buyer’s successors ands assigns to the same
extent as the Buyer may do. Each of the parties hereto acknowledges and agrees
that the Buyer’s successors and assigns are third party beneficiaries of this
Agreement, including without limitation the rights of the Buyer arising
hereunder, and may rely on the Originator’s representations and warranties made
herein as if made directly to them. The Originator hereby acknowledges and
agrees that, except with respect to its rights under Section 4.3, it has no
claim to or interest in any of the Lockbox Accounts.

(b) The Originator hereby agrees to execute all agreements, instruments and
documents and to take all other actions that the Buyer or its assignees
determines are necessary

 

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or appropriate to evidence its consent described in Section 11.12(a). The
Originator hereby acknowledges and agrees that the Buyer in all of its
capacities may assign to the Buyer’s successors and assigns such powers of
attorney and other rights and interests granted by the Originator to the Buyer
hereunder and agrees to cooperate fully with the Buyer’s successors and assigns
in the exercise of such rights.

(c) The Originator hereby acknowledges that the Buyer’s successors and assigns
are entering into the Transaction Documents in reliance on the Buyer’s identity
as a legal entity separate from the Originator.

Section 11.13 No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.

Section 11.14 No Proceedings. The Originator hereby agrees that it will not
institute against the Buyer or its successors or join any other Person in
instituting against the Buyer or its successors any Insolvency Proceeding so
long as there shall not have elapsed one year plus one day since the Final
Payout Date. The foregoing shall not limit the right of the Originator to file
any claim in or otherwise take any action with respect to any Insolvency
Proceeding that was instituted against the Buyer or its successors by any Person
other than the Originator or any other Cartus Person.

Section 11.15 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement are 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.

Section 11.16 Recourse to the Buyer. Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of the Buyer under the
Transaction Documents to which it is a party are solely the obligations of the
Buyer, and no recourse shall be had for payment of any fee payable by or other
obligation of or claim against the Buyer that arises out of any Transaction
Document to which the Buyer is a party against any director, officer or employee
of the Buyer. The provisions of this Section 11.16 shall survive the termination
of this Agreement.

 

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Section 11.17 Confidentiality. The Buyer agrees to maintain the confidentiality
of any information regarding the Originator or Realogy obtained in accordance
with the terms of this Agreement that is not publicly available; provided
however, that the Buyer may reveal such information (a) as necessary or
appropriate in connection with the administration or enforcement of this
Agreement or its funding of Purchases under this Agreement or (b) as required by
law, government regulation, court proceeding or subpoena. Notwithstanding
anything herein to the contrary, neither the Originator nor Realogy shall have
any obligation to disclose to the Buyer or its assignees any personal or
confidential information relating to a Transferred Employee.

Section 11.18 Conversion. Notwithstanding any covenants in this Agreement
requiring Cartus, CFC or ARSC to maintain its “corporate existence”, such entity
may elect to convert their status from that of a Delaware corporation to that of
a Delaware limited liability company, either by filing a certificate of
conversion with the Delaware Secretary of State or by merging with and into a
newly formed Delaware limited liability company(such conversion or merger, as
applicable, being herein called a “Conversion”) subject to the conditions that:

(a)(x) the Person formed by such Conversion (any such Person, the “Surviving
Entity”) is an entity organized and existing under the laws of the United States
of America or any State thereof, (y) such Surviving Entity expressly assumes, by
an agreement in form and substance satisfactory to the applicable transferee and
its assignees, performance of every covenant and obligation of such Person under
the Transaction Documents to which such Person is a party and (z) such Surviving
Entity delivers to the other parties to the Fifth Omnibus Amendment hereto dated
as of April 10, 2007 (such parties, the “Amendment Parties”) an opinion of
counsel that such Surviving Entity is duly organized and validly existing under
the laws of its organization, has duly executed and delivered such supplemental
agreement, and such supplemental agreement is a valid and binding obligation of
such Surviving Entity, enforceable against such Surviving Entity in accordance
with its terms (subject to customary exceptions relating to bankruptcy and
equitable principles) and covering such other matters as the Amendment Parties
may reasonably request;

(b) all actions necessary to maintain the perfection of the security interests
or ownership interests created by such Person under the Transaction Documents to
which such Person is a party in connection with such Conversion shall have been
taken, as evidenced by an opinion of counsel reasonably satisfactory to the
Amendment Parties;

(c) so long as such Person is the Servicer, no Servicer Default or Unmatured
Servicer Default is then occurring or would result from such Conversion;

(d) in the case of a Conversion of CFC or ARSC, (x) the organizational documents
of any Surviving Entity with respect to CFC or ARSC shall contain limitations on
its business activities and requirements for independent directors or managers
substantially equivalent to those set forth in its current organizational
documents, and (y) Orrick Herrington & Sutcliffe shall have delivered an opinion
of counsel reasonably satisfactory to the Amendment Parties that such Conversion
will not, in and of itself, alter the conclusions set forth in its opinions
previously issued in connection with the Transaction Documents with respect to
true sale matters, substantive consolidation matters and bankruptcy issues
relating to “home sale proceeds” (to the extent such opinions relate to such
Person); and

 

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(e) each Amendment Party shall have received such other documents as such
Amendment Party may reasonably request.

In connection with any such Conversion and the resulting change in name of such
entity, Cartus, CFC and/or ARSC, as applicable, shall be required to comply with
the name change covenants in the Transaction Documents, except that to the
extent 30 days prior written notice of the name change is required, such notice
period shall be reduced to five Business Days.

From and after any such Conversion effected in compliance with the above
conditions, (a) all references in the Transaction Documents to any Person which
has altered its corporate structure to become a limited liability company shall
be deemed to be references to the Surviving Entity as successor to such Person,
(b) all representations, warranties and covenants in the Transaction Documents
which state that any of Cartus, CFC or ARSC is or is required to be a
corporation shall be deemed to permit and require the Surviving Entity to be a
limited liability company, (c) all references to such Person’s certificate of
incorporation, other organizational documents, capital stock, corporate action
or other matters relating to its corporate form will be deemed to be references
to the organizational documents and analogous matters relating to limited
liability companies, (d) all references to such Person’s directors or
independent directors will be deemed to be references to the Surviving Entity’s
directors, independent directors, managers or independent managers, as the case
may be and (e) no representation, warranty or covenant in any Transaction
Document shall be deemed to be breached or violated solely as a result of the
fact that the Surviving Entity in any Conversion may be disregarded as a
separate entity for state, local or federal income tax purposes.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above
written.

 

CARTUS CORPORATION By:  

 

Name:   Title:   CARTUS FINANCIAL CORPORATION By:  

 

Name:   Title:  

[Signature Page to Purchase Agreement]

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APPENDIX A

DEFINITIONS

 

  A. Defined Terms. As used in this Agreement, the following terms have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):

“Acknowledgment Letter” shall mean a letter substantially in the form attached
hereto as Exhibit 7.3(j).

“Advance Billing Receivable” shall mean a Billed Receivable for Advance Payments
owed by an Obligor.

“Advance Payment” shall mean an amount paid by an Obligor pursuant to a Pool
Relocation Management Agreement or otherwise for application to existing or
future Receivables (other than existing Billed Receivables), including without
limitation any payments of anticipated fees and expenses under a Pool Relocation
Management Agreement.

“Affiliate” shall mean, when used with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person. As used in this definition of Affiliate, the term “control” means
the power, directly or indirectly, to direct or cause the direction of the
management and policies of a Person, whether through the ownership of such
Person’s voting securities, by contract or otherwise, and the terms
“affiliated,” “controlling” and “controlled” have correlative meanings.

“Aggregate Employer Balance” shall have the meaning set forth in the Indenture.

“Aggregate Receivable Balance” shall have the meaning set forth in the Indenture
as in effect on January 31, 2005.

“Amortization Event” shall have the meaning provided in the Indenture.

“ARSC” shall have the meaning set forth in the Preliminary Statement to this
Agreement.

“ARSC Purchased Assets” shall have the meaning set forth in the Receivables
Purchase Agreement.

“Authorized Officer” shall mean, with respect to any Transaction Party, the
President, the Chief Financial Officer, the Controller, the Treasurer, any
Assistant Treasurer, any Senior Vice President, any Vice President, the
Secretary or any Assistant Secretary of such Transaction Party.

“Average Days Outstanding” shall have the meaning set forth in the Indenture.

 

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“Bankruptcy Code” shall mean the United States Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).

“Billed Receivable” shall mean any Cartus Receivable or CFC Receivable that has
been billed to an Obligor.

“Business Day” shall mean a day (other than a Saturday or Sunday) on which
commercial banks in New York, New York and Chicago, Illinois are not authorized
or required to be closed.

“Buyer” shall mean Cartus Financial Corporation, in its capacity as the buyer
under this Agreement.

“Cartus” shall mean Cartus Corporation, a Delaware corporation.

“Cartus Collections” shall mean all funds that are received on account of or
otherwise in connection with any Cartus Purchased Asset, including without
limitation all funds received (a) from or on behalf of any Obligor in payment of
or otherwise in respect of any Cartus Receivable included in the Cartus
Purchased Assets (including without limitation funds received in respect of
Advance Payments, but only including any such Advance Payments to the extent
necessary to reduce the Aggregate Employer Balance of Receivables with respect
to the related Employer to zero), (b) from or on behalf of any Ultimate Buyer or
any other Person in respect of Cartus Home Sale Proceeds, (c) from any other
Person to the extent such funds were applied, or should have been applied,
pursuant to any Contract to repay or discharge any Cartus Receivable or Cartus
Related Asset included in the Cartus Purchased Assets (including without
limitation insurance payments that any Transaction Party applies in the ordinary
course of its business to amounts owed in respect of such Cartus Purchased
Assets and the amount of any Equity Payments applied to repayment of Equity
Loans), (d) from the Originator in respect of Originator Adjustments under this
Agreement or any other obligation of the Originator hereunder, (e) if the
Servicer is Cartus, from the Servicer in respect of Servicer Dilution
Adjustments with respect to Cartus Purchased Assets under Section 3.10(a) of the
Transfer and Servicing Agreement and (f) from the Performance Guarantor in
respect of any payments made by the Performance Guarantor as guarantor of the
obligations of Cartus under the Performance Guaranty executed by it; provided,
however, that any proceeds of Receivables that gave rise to Cartus Noncomplying
Asset Adjustments that have been paid as provided in Section 4.3 hereof and any
Related Property with respect to such Receivables shall not constitute Cartus
Collections and shall be promptly returned to the Originator as provided in
Section 4.3 hereof.

“Cartus Equity Loan” shall mean an Equity Loan made by the Originator.

“Cartus Equity Loan Agreement” shall mean a loan agreement entered into by the
Originator and a Transferred Employee in connection with a Cartus Equity Loan.

“Cartus Equity Loan Note” shall mean a promissory note executed to evidence a
Cartus Equity Loan.

 

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“Cartus Home” shall mean any Home subject to a Cartus Home Purchase Contract.

“Cartus Home Purchase Contract” shall mean any Home Purchase Contract that was
executed, and pursuant to which Cartus purchased a Home, prior to the Closing
Date and that relates to a Receivable included in the Cartus Purchased Assets.

“Cartus Home Sale Contract” shall mean any Home Sale Contract with respect to a
Cartus Home.

“Cartus Home Sale Proceeds” shall mean any Home Sale Proceeds arising under a
Cartus Home Sale Contract.

“Cartus Indemnified Losses” shall have the meaning set forth in Section 10.1.

“Cartus Indemnified Party” shall have the meaning set forth in Section 10.1.

“Cartus Noncomplying Asset” shall have the meaning set forth in Section 4.3(a).

“Cartus Noncomplying Asset Adjustment” shall have the meaning set forth in
Section 4.3(a).

“Cartus Person” shall mean the Originator and each of its Subsidiaries and
Affiliates other than CFC, ARSC or the Issuer.

“Cartus Purchased Assets” shall have the meaning set forth in Section 2.1(a).

“Cartus Receivable” shall have the meaning set froth in Section 2.1(a).

“Cartus Records” shall mean all Records maintained by the Originator with
respect to the Cartus Purchased Assets, the Pool Assets and/or the related
Obligors.

“Cartus Related Assets” shall have the meaning set forth in Section 2.1(a).

“Cartus Related Property” shall have the meaning set forth in Section 2.1(a).

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

“CFC Collections” shall have the meaning set forth in the Receivables Purchase
Agreement.

“CFC Designated Receivable” shall mean any Receivable arising from an amount
advanced by CFC or the Servicer on behalf of CFC in respect of Equity Payments,
Mortgage Payoffs, Direct Expenses, Mortgage Payments or Other Reimbursable
Expenses, even though such amounts may be advanced after the Termination Date.

 

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“CFC Home” shall have the meaning set forth in the Receivables Purchase
Agreement.

“CFC Home Purchase Contract” shall have the meaning set forth in the Receivables
Purchase Agreement.

“CFC Home Sale Contract” shall have the meaning set forth in the Receivables
Purchase Agreement.

“CFC Purchase Price” shall have the meaning set forth in Section 3.1(b).

“CFC Purchase Termination Event” shall have the meaning set forth in
Section 9.1.

“CFC Receivable” shall have the meaning set forth in the Receivables Purchase
Agreement.

“CFC Subordinated Loan” shall have the meaning set forth in Section 4.2.

“CFC Subordinated Note” shall mean the CFC Subordinated Note dated the Closing
Date, made by the Buyer and payable to the order of the Originator substantially
in the form of Exhibit 4.2, as such note may be amended, supplemented, otherwise
modified or replaced from time to time.

“CFC Subordinated Note Cap” shall have the meaning set forth in Section 4.2.

“Closing Date” shall mean April 25, 2000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Contract” shall mean a Pool Relocation Management Agreement and any other
related contract entered into pursuant thereto or in connection therewith,
pursuant to or under which any Person (other than a Transaction Party) is
obligated to make payments from time to time, including as the context may
require any Equity Loan Note, Equity Loan Agreement, Home Purchase Contract or
Home Sale Contract.

“Credit and Collection Policy” shall mean those credit and collection policies
and practices of the Originator relating to the Contracts and Receivables
described in Exhibit 6.1(u), as such credit and collection policies may be
modified from time to time in accordance with Section 7.3(b).

“Cut-Off Date” shall mean the last day of any Monthly Period.

“Defaulted Receivable” shall mean any Receivable that:

(a) has been or should have been written off as uncollectible in conformity with
the Credit and Collection Policy; or

 

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(b) is owed by an Obligor who is in Insolvency Proceedings or with respect to
which an Event of Bankruptcy has occurred; or

(c) has been billed and remains unpaid more than 120 days after the due date
thereof.

“Direct Expenses” shall mean, with respect to any Home, any costs attributable
to the provision of services to a Transferred Employee, including without
limitation appraisals, broker’s market analyses and inspections, brokerage
commissions, title and title search fees, transfer taxes, mortgage payments,
mortgage interest (or interest on the mortgage payments at the mortgage interest
rate), insurance premiums, property taxes, cost of establishment and maintenance
of appropriate files, overnight delivery charges, wire transfer fees, cost of
interest in the manner specified in the related Contract, cost of improvements,
cost of removal and mitigation of Hazardous Materials or gases (such as removal
of asbestos, lead paint, radon gas or urea formaldehyde insulation) and
reinsulation with suitable replacement materials, repair and maintenance costs,
utilities, sales loss on resale, buyer incentive costs and real estate closing
costs.

“Eligible Contract” shall mean:

(a) a Relocation Management Agreement (i) that has been duly executed and
delivered by an Employer that is an Eligible Obligor and is in full force and
effect, (ii) (A) the rights to payment under which are assignable without the
consent of the Employer party thereto or any other Person (other than the
Originator), other than any such consent that has been obtained and remains in
effect, or (B) which, if subject to any restriction on assignment of rights to
payment, is in effect on April 10, 2007 and such restriction is not effective
under Section 9-406 or Section 9-408 of the UCC, as applicable, (iii) that
provides for the payment in full by the Employer of all Direct Expenses, Service
Fees and Other Reimbursable Expenses and any loss sustained with respect to a
Home covered thereby following the sale of such Home (less any Advance Payment
with respect to such Home and after giving effect to the application of the Home
Sale Proceeds with respect to such Home) (it being understood that any Contract
that permits an Employer to approve any expenses or the price at which any Home
is sold shall not, for that reason alone, fail to qualify as an Eligible
Contract), (iv) that was originated in accordance with the Credit and Collection
Policy, (v) the Receivables under which, once billed, are required to be paid
within 90 days of the original invoice date and (vi) that is substantially in
the form of Relocation Management Agreement attached as Exhibit C, with such
Permitted Changes to such form as may be made by the Originator in the ordinary
course of its business (or such other form as has been approved in writing by
the Buyer and its successors and assigns);

(b) an Equity Loan Agreement or Equity Loan Note (i) that has been duly executed
and delivered by a Transferred Employee that is an Eligible Obligor and that is
an employee of an Employer that is a party to a Pool Relocation Management
Agreement (which Pool Relocation Management Agreement is then an Eligible
Contract), (ii) that is

 

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substantially in the form of Equity Loan Agreement attached as Exhibit C or the
form of Equity Loan Note attached as Exhibit C, as applicable, with such
Permitted Changes to such forms as may be made by the Originator in the ordinary
course of its business (or, in either case, such other form as has been approved
in writing by the Buyer and its successors and assigns) and (iii) the
obligations of the Transferred Employee under which are fully covered by the
Guaranty or loss indemnity of the related Employer or Employer-purchased
insurance policy under the applicable Pool Relocation Management Agreement;

(c) a Home Purchase Contract that (i) has been duly executed and delivered by a
Transferred Employee of an Employer that is a party to a Pool Relocation
Management Agreement (which Pool Relocation Management Agreement is then an
Eligible Contract) and (ii) is substantially in the form of Home Purchase
Contract attached as Exhibit C, with such Permitted Changes to such form as may
be made by the Originator in the ordinary course of its business (or such other
form as has been approved in writing by the Buyer and its successors and
assigns); or

(d) a Home Sale Contract that (i) was entered into under or in connection with a
Pool Relocation Management Agreement (which Pool Relocation Management Agreement
is then an Eligible Contract), (ii) has been duly executed and delivered by the
applicable Ultimate Buyer and is in full force and effect and (iii) is
substantially in the form of the contract of purchase and sale used in the area
where the property is located, or on a form prescribed by the Originator for
that area, with such amendments and additions as may be reasonably negotiated to
efficiently sell the Home (or such other form as has been approved in writing by
the Buyer and its assignees and assigns).

“Eligible Governmental Obligor” shall mean the Federal Deposit Insurance
Corporation, the United States Postal Service, and any other governmental
obligor which is party to a Guaranteed Government Contract and is specifically
approved in writing by the Buyer, the Issuer and the Majority Investors as an
“Eligible Governmental Obligor”.

“Eligible Home” shall mean a Home (a) that is located within the United States,
(b) record title for which is not in the name of any Transaction Party or any
Affiliate of a Transaction Party and (c) that satisfies the requirements
specified in the definition of “Home” in the applicable Pool Relocation
Management Agreement or, if such term is not defined therein, in the applicable
Home Sale Service Supplement; provided, however, that a Home that does not
satisfy the requirement specified in clause (b) may nonetheless be treated as an
Eligible Home if and to the extent that either (i) title is recorded on terms
and conditions reasonably satisfactory to the Buyer and its assignees or
(ii) the aggregate Unpaid Balance of all Eligible Unsold Home Receivables that
do not satisfy the requirement specified in clause (b) would not exceed 10% of
the aggregate Unpaid Balance of all Eligible Unsold Home Receivables; and
provided, further, that a Home that does not satisfy the requirements specified
in clause (c) may nonetheless constitute an Eligible Home if and to the extent
that (i) the applicable Employer has acknowledged in writing that such property
constitutes a “Special Home Transaction” within the meaning of the applicable
Home Sale Service Supplement and (ii) the Originator and its

 

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Affiliates followed all necessary procedures and obtained all necessary
approvals with respect to such Home (including without limitation approvals of
the applicable Employer) as may be required by the Credit and Collection Policy
and the customary practices of the Originator with respect to such Homes.

“Eligible Obligor” shall mean an Obligor that:

(a) is a United States resident (which term includes a United States division or
branch of an entity organized in a jurisdiction outside of the United States, so
long as such division or branch maintains a place of business in the United
States to which all Receivables are billed);

(b) is not the United States of America, any state or local government or any
agency or instrumentality of any of the foregoing unless such Obligor qualifies
as an Eligible Governmental Obligor;

(c) is not an Affiliate of the Originator or the Buyer;

(d) is not the subject of an Insolvency Proceeding; and

(e) has been instructed by the Originator to remit all payments on the Cartus
Purchased Assets directly to one of the Lockboxes or Lockbox Accounts.

“Eligible Receivable” shall mean any Receivable:

(a) the Obligor of which is an Eligible Obligor;

(b) that is denominated and payable only in U.S. dollars;

(c) that was generated in the ordinary course of the Originator’s business;

(d) either (1) with respect to which all of the Originator’s right, title and
interest has been (or will be, at the time such Receivable becomes included in
the Cartus Purchased Assets) validly transferred to the Buyer under and in
accordance with the terms of this Agreement; or (2) with respect to any CFC
Receivable only, that arose out of or with respect to an Equity Payment,
Mortgage Payment or Mortgage Payoff made by the Buyer in respect of a CFC Home
Purchase Contract;

(e) that arises under or in connection with a Pool Relocation Management
Agreement that is then an Eligible Contract, and with respect to which any Home
Sale Contract, Home Purchase Contract, Equity Loan Agreement or Equity Loan Note
relating to such Receivable is also an Eligible Contract;

(f) that is not a Defaulted Receivable;

 

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(g) that is an “eligible asset” within the meaning of Rule 3a-7 promulgated
under the Investment Company Act of 1940, as amended;

(h) that constitutes an “account” or a “general intangible” or “chattel paper”
and not an “instrument” (except in the case of an Equity Loan, to the extent the
same is evidenced by an Equity Loan Note), in each case within the meaning of
the New York UCC;

(i) the transfer of which (including without limitation the sale by the
Originator to the Buyer or by the Buyer to ARSC) does not contravene or conflict
with any law, rule or regulation or any contractual or other restriction,
limitation or encumbrance that applies to the Originator (or, with respect to
any CFC Receivable only, the Buyer) (including without limitation the related
Contract), and the sale, assignment or transfer of which, and the granting of a
security interest in which, does not require the consent of the Obligor thereof
or any other Person other than any such consent that has been previously
obtained and is in effect; provided, however, that a Receivable arising out of a
Relocation Management Agreement that is subject to a restriction on assignment
may nonetheless be an Eligible Receivable hereunder if such restriction is not
effective under Section 9-406 or Section 9-408 of the UCC, as applicable;

(j) that has not been compromised, adjusted, amended or otherwise modified
(including by extension of time for payment or the granting of any discounts,
allowances or credits) except in a manner that is expressly permitted under
Section 3.10(b) of the Transfer and Servicing Agreement;

(k) that, together with the Contracts related thereto, conforms in all material
respects with all applicable laws, rules, regulations, orders, judgments,
decrees and determinations of all courts and other Governmental Authorities
(whether federal, state, local or foreign and including without limitation usury
laws);

(l) that is not subject to an asserted reduction (other than any reduction on
account of any offsetting account payable of the Originator or the Buyer to an
Obligor or any Advance Payment made by the related Obligor so long as such
reduction is either included in the determination of the Aggregate Employer
Balance with respect to the related Obligor, or, in the case of any Advance
Payment, subtracted in the determination of the Aggregate Receivable Balance)
cancellation, rebate or refund or any dispute, offset, counterclaim, lien or
defense whatsoever;

(m) with respect to which the representations and warranties of the Originator
in Section 6.1(k) of this Agreement (or with respect to any CFC Receivable only,
of the Buyer in Section 6.1(k) of the Receivables Purchase Agreement) are true
and correct;

(n) that represents a bona fide obligation arising under a Contract that has
been duly authorized and that, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of the
Obligor of such Receivable,

 

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enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and general principles of equity;

(o) that, in the case of a Receivable arising on account of any Equity Payment,
Mortgage Payoff, Mortgage Payment, Direct Expenses or any Service Fee or Finance
Charge arising in connection with any of the foregoing, relates to an Eligible
Home as to which (i) a Home Purchase Contract has been executed and delivered by
the related Homeowner and the Originator or the Buyer, as applicable and, to the
best knowledge of the Originator (or the Buyer, with respect to CFC Homes only),
constitutes the legal, valid and binding obligation of such Homeowner, (ii) a
Home Deed has been executed and delivered by the related Homeowner naming the
Originator or the Buyer, as applicable, as transferee or with the transferee’s
name blank, (iii) such Home Purchase Contract and Home Deed have been delivered
to and are then in the possession of the agent of Cartus (with respect to Cartus
Homes) or the agent of CFC (with respect to CFC Homes) and (iv) either no
Mortgage is outstanding or, if a Mortgage is outstanding, no more than one
monthly payment on such Mortgage is past due;

(p) that, in the case of a Receivable that arises from an Equity Loan, arose
under an Equity Loan Agreement and an Equity Loan Note, each of which are
Eligible Contracts and are then in the possession of the Servicer;

(q) that, in the case of an Unbilled Receivable, represents the right to payment
for services rendered; and

(r) that, in the case of a Billed Receivable (other than an Advance Billing
Receivable), has been fully earned by performance.

“Eligible Unsold Home Receivable” shall mean an Unsold Home Receivable that is
an Eligible Receivable.

“Employer” shall mean a customer of the Originator that has executed a
Relocation Management Agreement with the Originator.

“Enhancement Agreement” shall have the meaning provided in the Indenture.

“Environmental Laws” shall mean all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.

“Equity Loan” shall mean an advance of all or a portion of the Equity Payment to
be made to a Homeowner prior to the execution of the Home Purchase Contract by
such Homeowner.

 

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“Equity Loan Agreement” shall mean a loan agreement entered into by a
Transferred Employee in connection with an Equity Loan or a proposed Equity
Loan.

“Equity Loan Note” shall mean a promissory note made by a Transferred Employee
to evidence the Transferred Employee’s obligations in respect of an Equity Loan,
which may be included in the same document as an Equity Loan Agreement.

“Equity Payment” shall mean, with respect to any Homeowner, a payment or credit
(other than an Equity Loan) made to such Homeowner at the time of, or following
the execution of, the related Home Purchase Contract by such Homeowner in
respect of its equity interest in a Home as determined pursuant to the
applicable Home Purchase Contract.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, each as amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that is treated as a single employer with the Originator under Section 414 of
the Code.

“Event of Bankruptcy” shall be deemed to have occurred with respect to a Person
if either:

(a) a case or other proceeding has been commenced in any court without the
application or consent of such Person, seeking the liquidation, reorganization,
debt arrangement, dissolution, winding up or composition or readjustment of
debts of such Person, the appointment of a trustee, receiver, custodian,
liquidator, assignee, sequestrator or the like for such Person or any
substantial part of its assets, or any similar action with respect to such
Person under any law (foreign or domestic) relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts and such case
or proceeding continues undismissed or unstayed and in effect for a period of 60
days; or an order for relief with respect to such Person has been entered in an
involuntary case under the Bankruptcy Code or other similar laws (foreign or
domestic) now or hereafter in effect; or

(b) such Person has commenced a voluntary case or other proceeding under any
applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution
or other similar law now or hereafter in effect or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall admit in writing its inability to, pay
its debts generally as they become due.

“Excluded Asset” shall mean any receivable or related asset that arises under or
relates to an Excluded Contract.

“Excluded Contract” shall mean (a) any of the following, to the extent that
either the same have not been identified as Pool Relocation Management
Agreements or all Cartus

 

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Receivables and CFC Receivables arising thereunder have been the subject of a
Cartus Noncomplying Asset Adjustment or CFC Noncomplying Asset Adjustment that
has been fully paid: (i) if the Originator merges with any other Person that is
engaged in the relocation management business, any agreement for relocation
management services originated by such other Person prior to the date of such
merger and, so long as such business is maintained and operated as a separate
division of the Originator, any additional agreements for relocation management
services originated by such division, (ii) any agreement for relocation
management services that is not an Eligible Contract or (iii) any agreement for
relocation management services the receivables arising under which would not be
Eligible Receivables because the Employer party thereto is not obligated to
provide reimbursement for losses on resale of homes or because the homes
relating to such agreement would be located solely outside of the United States
and (b) any home purchase contract, home sale contract, equity loan note, equity
loan agreement or similar agreement entered into pursuant to any agreement
referred to in clause (a) above.

“Final Payout Date” shall mean the earlier of the date after the satisfaction
and discharge of the Indenture pursuant to Article IV thereof on which either
(i) all of the Notes have been paid in full or (ii) the Unpaid Balance of all
outstanding Cartus Receivables has been reduced to zero; provided that for
purposes of this definition of Final Payout Date, the Unpaid Balance of a
Defaulted Receivable shall be deemed to be outstanding until all Homes related
thereto have been sold and such Receivable has been written off as
uncollectible.

“Finance Charge” shall mean any interest, late payment fee or other finance
charge with respect to a Receivable or other Related Property, including without
limitation any interest accrued or to accrue on an Equity Loan, Equity Payment,
Mortgage Payoff or Mortgage Payment under the terms of the applicable Contract
or Contracts.

“GAAP” shall mean generally accepted accounting principles, including the
opinions, statements and pronouncements of the American Institute of Certified
Public Accountants, the Financial Accounting Standards Board and the Securities
and Exchange Commission, as in effect from time to time.

“Governmental Authority” shall mean the United States of America, any State or
other political subdivision thereof and any entity in the United States of
America or any applicable foreign jurisdiction that exercises executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

“Guaranteed Government Contract” shall mean any Relocation Management Agreement
between Cartus and an Eligible Governmental Obligor which qualifies as an
Eligible Contract and which has been designated as a Pool Relocation Management
Agreement under the Purchase Agreement.”

“Guaranty” shall mean any agreement, undertaking or arrangement by which any
Person guarantees, endorses, agrees to purchase or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss)

 

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the indebtedness, obligation or any other liability of any other Person (other
than by endorsements of instruments in the course of collection), or guarantees
the payment of dividends or other distributions on the shares of any other
Person.

“Hazardous Material” shall mean (a) any “hazardous substance” as defined under
CERCLA, (b) any “hazardous waste” as defined under the Resource Conservation and
Recovery Act, 42 U.S.C. Section 690, et seq., as amended, (c) any petroleum
product or (d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any Environmental Laws.

“Home” shall mean a family residence or other improved real estate that is the
subject of any services provided under a Pool Relocation Management Agreement,
including without limitation any Home or property subject to a “Special Home
Transaction” within the meaning of the applicable Home Sale Service Supplement.

“Home Deed” shall mean, with respect to any Home, a deed or other instrument of
conveyance executed by the related Homeowner that effects the conveyance of such
Home pursuant to the related Home Purchase Contract.

“Home Purchase Contract” shall mean the contract by which a Home is purchased
from a Homeowner pursuant to, or in connection with, a Pool Relocation
Management Agreement.

“Home Sale Contract” shall mean, with respect to any Home, the contract by which
such Home is sold to an Ultimate Buyer.

“Home Sale Proceeds” shall mean, with respect to any Home, the cash sale
proceeds received upon the sale of such Home to an Ultimate Buyer, net of any
unpaid mortgage loan amounts, closing costs, brokerage costs, commissions owed
to third parties and any other amounts payment of which are necessary to clear
title to such Home.

“Home Sale Service Supplement” shall mean a supplement to a Pool Relocation
Management Agreement substantially in the form attached as Exhibit C.

“Homeowner” shall mean, with respect to any Home, the Transferred Employee and
any other homeowner of record with respect to such Home.

“Indebtedness” of any Person shall mean, in the aggregate, without duplication,
(i) all indebtedness, obligations and other liabilities of such Person and its
Subsidiaries that are, at the date as of which Indebtedness is to be determined,
includable as liabilities in a consolidated balance sheet of such Person and its
Subsidiaries, other than (x) accounts payable and accrued expenses, (y) advances
from clients obtained in the ordinary course of the relocation management
services business of any such Person and (z) current and deferred income taxes
and other similar liabilities, (ii) the maximum aggregate amount of all
liabilities of such Person or any of its Subsidiaries under any Guaranty,
indemnity or similar undertaking given or assumed of or in respect of, the
indebtedness, obligations or other liabilities, assets, revenues, income or
dividends of any Person other than such Person or one of its Subsidiaries and
(iii) all other obligations or

 

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liabilities of such Person or any of its Subsidiaries with respect to the
discharge of the obligations of any Person other than itself or one of its
Subsidiaries. For purposes of the Transaction Documents, the Indebtedness of any
Person includes the Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer.

“Indebtedness for Borrowed Money” shall mean, with respect to any Person,
(i) any Indebtedness of such Person, contingent or otherwise, in respect of
borrowed money including all principal, interest, fees and expenses with respect
thereto (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), or evidenced by bonds, notes,
acceptances, debentures or other instruments or letters of credit (or
reimbursement obligations with respect thereto) but excluding capitalized lease
obligations and excluding obligations representing the deferred and unpaid
purchase price of any property.

“Indenture” shall mean the Indenture dated as of April 25, 2000 by and between
the Issuer and the Indenture Trustee.

“Indenture Supplement” shall have the meaning set forth in the Indenture.

“Indenture Trustee” shall mean The Bank of New York, as successor to JPMorgan
Chase Bank, N.A., as indenture trustee under the Indenture, and any successor
thereto.

“Independent Director” shall mean, with respect to the Buyer, ARSC or the
Issuer, an individual who is an Independent Director as defined in the
organizational documents of such entity as in effect on the date of this
Agreement.

“Insolvency Proceeding” shall mean, with respect to any Person, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
Federal or state bankruptcy or similar law or any other proceeding of the type
described in the definition of Event of Bankruptcy, whether voluntary or
involuntary.

“Issuer” shall mean Apple Ridge Funding LLC, a Delaware limited liability
company.

“Lien” shall mean, when used with respect to any Person, any interest in any
real or personal property, asset or other right held, owned or being purchased
or acquired by such Person for its own use, consumption or enjoyment in its
business that secures payment or performance of any obligation, and includes any
mortgage, lien, pledge, encumbrance, charge, retained security title of a
conditional vendor or lessor or other security interest of any kind, whether
arising under a security agreement, mortgage, deed of trust, chattel mortgage,
assignment, pledge, retention of security title, financing or similar statement
or notice or arising as a matter of law, judicial process or otherwise.

“Lockbox” shall mean any post office box to which the Obligors remit Cartus
Collections established pursuant to the Transfer and Servicing Agreement.

“Lockbox Account” shall mean any lockbox account, concentration account,
depositary account or similar account (including any associated demand deposit
account) established pursuant to the Transfer and Servicing Agreement, in which
any Cartus Collections or CFC Collections are collected or deposited.

 

A-13

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“Lockbox Agreement” shall have the meaning provided in the Transfer and
Servicing Agreement.

“Lockbox Bank” shall mean any institution at which a Lockbox or Lockbox Account
is maintained.

“Material Adverse Effect” shall mean, with respect to any event or circumstance,
a material adverse effect on (a) the business, financial condition, operations
or assets of the Originator, (b) the ability of the Originator to perform its
obligations under any Transaction Document or all or any substantial portion of
the Contracts, (c) the validity or enforceability of, or collectibility of,
amounts payable by the Originator under any Transaction Document, (d) the
status, existence, perfection or priority of the interest of the Buyer (and its
assignees) in the Cartus Purchased Assets, taken as a whole, in each case free
and clear of any Lien (other than Permitted Liens) or (e) the validity,
enforceability or collectibility of all or any substantial portion of the ARSC
Purchased Assets.

“Monthly Period” shall mean (i) a calendar month or (ii) with respect to the
initial Monthly Period for any Series, the period commencing on the closing date
with respect to such Series and ending on the last day of the same month, or
such other period set forth in the related Indenture Supplement.

“Mortgage” shall mean, with respect to a Home, either or both of (a) any
indebtedness of the relevant Homeowner secured by a mortgage, deed of trust or
other Lien on such Home and (b) such mortgage, deed of trust or other Lien, as
the context may require.

“Mortgage Payment” shall mean, with respect to any Home, any payment actually
made under any Mortgage on such Home (other than a Mortgage Payoff), including
without limitation payments of principal and interest and for taxes and
insurance.

“Mortgage Payoff” shall mean, with respect to any Home, the amount, if any, paid
to retire the entire remaining principal balance of any Mortgage on such Home,
together with interest accrued thereon to the date of payment.

“Notes” shall have the meaning set forth in the Indenture.

“Obligor” shall mean, with respect to any Contract, the Person or Persons
obligated to make payments in respect of Receivables arising thereunder,
including without limitation (i) with respect to any Equity Payment, Mortgage
Payoff or Mortgage Payment, the related Employer, (ii) with respect to any
Equity Loan, both the Transferred Employee and the related Employer and
(iii) with respect to any Unsold Home Receivable, the Employer party to the
related Relocation Management Agreement.

“Originator” shall mean Cartus and its successors and permitted assigns.

 

A-14

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“Originator Adjustment” shall have the meaning set forth in Section 4.3(c).

“Originator Assets” shall have the meaning set forth in Section 2.1(a).

“Originator Dilution Adjustment” shall have the meaning set forth in
Section 4.3(b).

“Originator Receivables” shall have the meaning set forth in Section 2.1(a).

“Originator Related Assets” shall have the meaning set forth in Section 2.1(a).

“Originator Related Property” shall have the meaning set forth in
Section 2.1(a).

“Other Reimbursable Expense” shall mean a cost or expense that is incurred and
paid in connection with services under a Pool Relocation Management Agreement or
reimbursable by the Obligor under the applicable Pool Relocation Management
Agreement, and that is not included in the calculation of Direct Expenses
thereunder.

“PBGC” shall mean the Pension Benefit Guaranty Corporation and any successor
thereto.

“Performance Guaranty” shall mean that certain performance guarantee dated as of
May 12, 2006, executed by the Performance Guarantor in favor of the Buyer and
the Issuer.

“Performance Guarantor” shall mean Realogy.

“Permitted Change” shall mean, with respect to any Contract the form of which is
attached hereto in Exhibit C, any revisions or modifications to such form that
(i) are made by the Originator in the ordinary course of its business consistent
with the Credit and Collection Policy, (ii) do not, individually or in the
aggregate, materially adversely affect the collectibility of the Cartus
Receivables or any Receivables arising under or in connection with any CFC Home
Purchase Contract, (iii) do not, individually or in the aggregate, materially
alter (in a manner adverse to the Originator or any of its assigns) the
reimbursement or indemnification obligations of such Obligor thereunder or the
composition of the losses, costs or expenses to which such reimbursement or
indemnification obligations pertain, (iv) would not cause such Contract to cease
to be an Eligible Contract or the Receivables arising thereunder to cease to be
Eligible Receivables and (v) do not violate any of the terms and provisions of
this Agreement.

“Permitted Exception” shall mean that, with respect to any representation,
warranty or covenant with respect to the interest of the Buyer and its assignees
in the ARSC Purchased Assets or any Servicer Default, that (i) prior to
recordation (A) pursuant to Section 8.3 of this Agreement and/or
Section 2.01(d)(i) of the Transfer and Servicing Agreement or (B) upon the sale
of a Home to an Ultimate Buyer, record title to such Home may remain in the name
of the related Transferred Employee, and no recordation in real estate records
of any mortgage or any conveyance pursuant to the related Home Purchase Contract
or Home Sale Contract in favor of any Transaction Party or any of the Buyer’s
assignees and assigns pursuant to the Receivables Purchase Agreement will be
made except as otherwise permitted under Section 2.01(d)(i) of the Transfer and
Servicing Agreement and (ii) no delivery of any Home Purchase Contracts, Home
Deeds and Equity Loan Notes to any custodian will be required.

 

A-15

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“Permitted Lien” shall mean:

(a) with respect to any Home, the related Receivables or Related Property with
respect thereto, (i) an inchoate Lien on the Home for real estate taxes not yet
due and payable, (ii) a Mortgage on the Home created by the related Transferred
Employee and (iii) any Lien that is fully covered by the terms of the indemnity
provisions of the applicable Pool Relocation Management Agreement and that
arises in the ordinary course of the Originator’s business;

(b) with respect to any Cartus Purchased Asset, any Lien in favor of the Buyer
pursuant to this Agreement; and

(c) with respect to any ARSC Purchased Asset, any Lien created pursuant to the
Transaction Documents.

“Person” shall mean an individual, partnership, corporation (including a
business trust), joint stock company, trust, limited liability company,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.

“Plan” shall mean each employee benefit plan (as defined in Section 3(3) of
ERISA) currently sponsored, maintained or contributed to by the Originator or
any ERISA Affiliate or with respect to which the Originator or any ERISA
Affiliate has any liability.

“Pool Relocation Management Agreement” shall have the meaning set forth in
Section 2.1(a).

“Prime Rate” shall mean the Prime Rate as most recently published in The Wall
Street Journal in New York City.

“Purchase” shall mean each purchase of Cartus Receivables and other Cartus
Purchased Assets by the Buyer from the Originator hereunder.

“Realogy” shall mean Realogy Corporation, a Delaware corporation, and any
successors thereto.

“Receivable” shall mean any right arising under a Contract to receive any
payment or any funds from or on behalf of an Obligor, whether or not earned by
performance and whether constituting an account, chattel paper, instrument,
general intangible or otherwise. The term “Receivable” includes without
limitation rights to payment (whether matured or unmatured and whether absolute
or contingent) arising out of or with respect to Equity Loans, Equity Payments,
Direct Expenses, Mortgage Payments, Mortgage Payoffs, Service Fees and Other
Reimbursable Expenses and the right to payment of any and all Finance Charges
with respect to any of the foregoing, whether such amounts are owed by an
Employer, a Transferred Employee, an Ultimate Buyer or any other Obligor. The
change of a Receivable’s status from that of Unsold Home Receivable to Unbilled
Receivable or from Unbilled Receivable to Billed Receivable shall not be deemed
the creation of a new Receivable for any purpose hereunder.

 

A-16

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“Receivables Activity Report” shall have the meaning provided in the Transfer
and Servicing Agreement.

“Receivables Purchase Agreement” shall mean the receivables purchase agreement
dated as of April 25, 2000, by and between CFC and ARSC.1

“Records” shall mean all Contracts, purchase orders, invoices, customer lists,
credit files and other agreements, documents, books, records and other media for
the storage of information (including without limitation tapes, disks, punch
cards, computer software and databases and related property) with respect to the
Receivables, the Related Property and/or the related Obligors.

“Related Property” shall mean, with respect to any Receivable, (i) all security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to the related Relocation
Management Agreement or any other Contract related to such Receivable or
otherwise; (ii) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable,
(iii) all rights under warranties, indemnities or insurance with respect to such
Receivable, related Contracts, Cartus Related Assets (with respect to Cartus
Receivables) or CFC Related Assets (with respect to the CFC Receivables),
(iv) all rights to the Cartus Home Sale Proceeds arising out of or with respect
to any Cartus Homes and CFC Home Sale Proceeds arising out of or with respect to
any CFC Homes under the related Relocation Management Agreement and (v) all
Records.

“Relocation Management Agreement” shall mean an agreement pursuant to which the
Originator agrees to provide employee relocation, asset management or other
services, as the same may be amended, restated or otherwise modified from time
to time, including any and all supplements thereto, and any similar agreement,
howsoever denominated, and any agreement for intercultural services.

“Self-Funding Obligor” shall mean an Employer that deposits funds with the
Originator in order to fund Equity Payments, Other Reimbursable Expenses or
other payments made to or on behalf of the Transferred Employees of such
Employer under the terms of the Employer’s Relocation Management Agreement.

“Seller Adjustment” shall have the meaning set forth in the Receivables Purchase
Agreement.

“Series” shall have the meaning set forth in the Indenture.

“Series Enhancer” shall have the meaning set forth in the Indenture.

 

 

1

Definition missing in actual documents

 

A-17

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“Service Fee” shall mean any fee payable by an Employer under a Pool Relocation
Management Agreement, including without limitation any fee payable with respect
to the marketing and sale of a particular Home or otherwise in connection with
any employee relocation services or asset management services performed under or
in connection with such Pool Relocation Management Agreement.

“Servicer” shall mean the Originator, in its capacity as the Servicer under the
Transfer and Servicing Agreement, and any successor thereto in such capacity
appointed pursuant to Article IX of the Transfer and Servicing Agreement.

“Servicer Default” shall have the meaning set forth in the Transfer and
Servicing Agreement.

“Servicer Dilution Adjustment” shall have the meaning set forth in the Transfer
and Servicing Agreement.

“Subsidiary” shall mean, with respect to any Person, any corporation or other
entity of which more than 50% of the outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors of such corporation (notwithstanding that at the time capital
stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency) or other persons performing
similar functions is at the time directly or indirectly owned by such Person.

“Surviving Entity” shall have the meaning provided in Section 7.3(c)(i).

“Termination Date” shall mean the date specified by the Indenture Trustee
following the occurrence of a CFC Purchase Termination Event; provided, however,
that if an Event of Bankruptcy has occurred with respect to either the
Originator or the Buyer, the Termination Date shall be deemed to have occurred
automatically without any such notice.

“Transaction Documents” shall mean, collectively, this Agreement, the
Receivables Purchase Agreement, the Transfer and Servicing Agreement, the
Performance Guaranty, the CFC Subordinated Note, the Lockbox Agreements and all
agreements, instruments, certificates, reports and documents (other than any of
the Contracts) executed and delivered or to be executed and delivered under or
in connection with any of the foregoing, as any of the foregoing may be amended,
supplemented, restated or otherwise modified from time to time.

“Transaction Party” shall mean the Buyer, the Originator, ARSC, the Issuer or
the Servicer (so long as the Servicer is the Originator or an Affiliate
thereof).

“Transfer and Servicing Agreement” shall mean the transfer and servicing
agreement dated as of April 25, 2000 by and between the Originator, the Buyer,
ARSC, the Servicer and the Issuer.

 

A-18

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“Transferred Employee” shall mean an individual designated by an authorized
representative of an Employer pursuant to the applicable Relocation Management
Agreement as a person entitled to the benefits of such Relocation Management
Agreement.

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.

“Ultimate Buyer” shall mean the buyer of a Home from the Originator (or from the
Buyer or its assignee, as the case may be).

“Unbilled Receivable” shall mean any Cartus Receivable or CFC Receivable (other
than any Unsold Home Receivable) that has not yet been billed to the related
Obligor.

“Unmatured Servicer Default” shall have the meaning set forth in the Transfer
and Servicing Agreement.

“Unpaid Balance” of any Receivable shall mean at any time the unpaid amount
thereof at such time; provided, however, that the Unpaid Balance of Unsold Home
Receivables with respect to any Home shall be the aggregate amount (without
duplication) of Receivables arising from Equity Payments, Mortgage Payoffs,
Mortgage Payments and Equity Loans in respect of such Home.

“Unsold Home Receivable” shall mean any Cartus Receivable or CFC Receivable,
including any Finance Charges in respect thereof, incurred in respect of an
Equity Loan, Equity Payment, Mortgage Payoff or Direct Expenses on a Home that
has not yet been sold to an Ultimate Buyer (or the sale of which has not been
closed or the Home Sale Proceeds of which have not been received).

B. Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP or with United States generally accepted
regulatory principles, as applicable. To the extent that the definitions of
accounting terms in this Agreement are inconsistent with the meanings of such
terms under GAAP or regulatory accounting principles, the definitions contained
in this Agreement shall control. All terms used in Article 9 of the UCC in the
State of New York and not specifically defined herein are used herein as defined
in such Article 9.

C. Computation of Time Periods. Unless otherwise stated in this Agreement with
respect to computation of a period of time from a specified date to a later
specified date, the word “from” means “from and including” and each of the words
‘to” and “until’ means “to but excluding”.

D. Reference. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and references to “Section”,
“subsection”, “Appendix”, “ Schedule” and “Exhibit” in this Agreement are
references to Sections, subsections, Appendices, Schedules and Exhibits in or to
this Agreement unless otherwise specified in this Agreement. References herein
to this Agreement, the Receivables Purchase

 

A-19

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Agreement, the Transfer and Servicing Agreement, the Indenture and the
Performance Guaranty shall mean and be references to each such document as
amended and modified by that certain Omnibus Amendment, Agreement and Consent
dated December 20, 2004, that certain Second Omnibus Amendment dated January 31,
2005, that certain Amendment, Agreement and Consent dated January 30, 2006, that
certain Third Omnibus Amendment, Agreement and Consent dated May 12, 2006, that
certain Fourth Omnibus Amendment dated November 29, 2006 and that certain Fifth
Omnibus Amendment dated April 10, 2007.

 

A-20

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SCHEDULE 2.1

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

List of Pool Relocation Management Agreements

Attached.

 

S-2.1-1

--------------------------------------------------------------------------------

SCHEDULE 6.1(n)

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

Principal Place of Business

and Chief Executive Office of the Originator

Cartus Corporation

40 Apple Ridge Road

Danbury, Connecticut 06810

List of Offices Where

the Originator Keeps Cartus Records

Cartus Corporation

40 Apple Ridge Road

Danbury, CT 06810

Cartus Corporation

8081 Royal Ridge Parkway

Suite 200

Irving, TX 75063

Cartus Corporation

27271 Las Ramblas

Mission Viejo, CA 92691

 

S-6.1(n)-1

--------------------------------------------------------------------------------

SCHEDULE 6.1(s)

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

List of Legal Names for Cartus Corporation

Cendant Mobility Services Corporation

Coldwell Banker Moving Services, Inc.

Coldwell Banker Relocation Services, Inc.

Executrans, Inc.

HFS Mobility Services, Inc.

PHH Homequity Corporation

PHH Real Estate Services Corporation

Relocation 1, Inc.

Worldwide Relocation Management Inc.

 

S-6.1(s)-1

--------------------------------------------------------------------------------

SCHEDULE 11.2

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

Notice Addresses

Cartus Corporation

40 Apple Ridge Road

Danbury, Connecticut 06810

Fax: (203) 749-8763

Cartus Financial Corporation

40 Apple Ridge Road

Suite 4C45

Danbury, CT 06810

Fax: 203-205-6575

 

S-11.2-1

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EXHIBIT 2.1

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

FORM OF NOTICE OF ADDITIONAL

POOL RELOCATION MANAGEMENT AGREEMENTS

[DATE]

Cartus Financial Corporation

40 Apple Ridge Road

Suite 4C45

Danbury, CT 06810

Fax: 203-205-6575

 

  Re: Additional Pool Relocation Management Agreements

Dear Sir or Madam:

Reference is made to the Purchase Agreement, dated as of April 25, 2000 (the
“Purchase Agreement”), between Cartus Corporation and Cartus Financial
Corporation. Capitalized terms used herein and not defined herein shall have the
meanings assigned to them in the Purchase Agreement.

Pursuant to Section 2.1 of the Purchase Agreement, we are required to deliver a
notice to you on the last of day of each month setting forth the new Relocation
Management Agreements which were executed during such month. Attached hereto is
a list of Pool Relocation Management Agreements that were executed during
[Month/Year]. Pursuant to Section 2.1 of the Purchase Agreement, Schedule 2.1 to
the Purchase Agreement is hereby amended to include the Relocation Management
Agreements attached hereto.

 

Very truly yours, CARTUS CORPORATION By:       Name:   Title:

 

E-2.1-1

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EXHIBIT 4.2

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

FORM OF CFC SUBORDINATED NOTE

April 25, 2000

1. Note. FOR VALUE RECEIVED, the undersigned, CARTUS FINANCIAL CORPORATION, a
Delaware corporation (the “Buyer”), hereby unconditionally promises to pay to
the order of CARTUS CORPORATION, a Delaware corporation (the “Originator”), in
lawful money of the United States of America and in immediately available funds,
on the day following the Final Payout Date, the aggregate unpaid principal sum
outstanding of all “CFC Subordinated Loans” made from time to time by the
Originator to the Buyer pursuant to and in accordance with the terms of that
certain Purchase Agreement dated as of April 25, 2000, between the Originator
and the Buyer (as amended, restated, supplemented, or otherwise modified from
time to time, the “Purchase Agreement”). Reference to Sections 4.2 and 5.2 of
the Purchase Agreement is hereby made for a statement of the terms and
conditions under which the loans evidenced hereby have been and will be made.
All capitalized terms used herein that are not otherwise specifically defined
herein shall have the meanings given to such terms in the Purchase Agreement. No
advance shall be made hereunder on any date if the aggregate principal amount
outstanding hereunder on such date after giving effect to such advance, plus the
aggregate amount then outstanding under the Notes, would exceed an amount equal
to five times the net worth of CFC. Proceeds of amounts advanced hereunder shall
not be used for any purpose except to purchase CFC Homes (including the making
of Equity Payments), to make Mortgage Payments and Mortgage Payoffs with respect
to CFC Homes and to pay Seller Adjustments.

2. Interest. The Buyer further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to LIBOR plus 2.25%; provided, however, that if the Buyer
defaults in the payment of any principal hereof, the Buyer promises to pay, on
demand, interest at the Prime Rate plus 2.00% per annum on any such unpaid
amounts, accrued with respect to each Interest Period from the date such payment
is due to the date of actual payment. LIBOR shall be determined on each LIBOR
Determination Date on the basis of the rate for deposits in United States
dollars for a one-month period which appears on Telerate Page 3750 as of 11:00
a.m., London time, on such date. If such rate does not appear on Telerate Page
3750, the rate for that LIBOR Determination Date shall be determined on the
basis of the rates quoted by the four major banks in the London interbank market
selected by the Paying Agent to the Paying Agent as the rates at which deposits
in United States dollars are offered by such banks in the London interbank
market at approximately 11:00 a.m., London time, on that day to prime banks in
the London interbank market for a one-month period. Notwithstanding the
foregoing, interest shall accrue at a rate equal to 8.46% per annum

 

E-4.2-1

--------------------------------------------------------------------------------

during the first Interest Period. Interest shall be payable on the Distribution
Date in each month in arrears. The outstanding principal of any loan made under
this CFC Subordinated Note shall be due and payable on the day after the Final
Payout Date, and may be repaid or prepaid at any time without premium or
penalty.

LIBOR Determination Date means the second London Business Day prior to the
commencement of the second and each subsequent Interest Period. A London
Business Day is any Business Day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market and banking institutions in London
are not authorized or obligated by law or regulation to close. An Interest
Period is the period beginning on and including the Distribution Date
immediately preceding such Distribution Date and ending on and excluding such
Distribution Date; provided that the first Interest Period shall begin on and
include April 25, 2000 and end on and exclude June 15, 2000. A Distribution Date
means June 15, 2000 and the fifteenth day of each calendar month thereafter, or
if such fifteenth day is not a Business Day, the next succeeding Business Day.

3. Principal Payments. The Originator is authorized and directed by the Buyer to
enter in its books and records the date and amount of each loan made by it that
is evidenced by this CFC Subordinated Note and the amount of each payment of
principal made by the Buyer and, absent manifest error, such entries shall
constitute prima facie evidence of the accuracy of the information so entered;
provided that neither the failure of the Originator to make any such entry or
any error therein shall expand, limit or affect the obligations of the Buyer
hereunder.

4. Subordination. The indebtedness evidenced by this CFC Subordinated Note is
subordinated to the prior payment in full of all of the Buyer’s recourse
obligations under the Receivables Purchase Agreement. The subordination
provisions contained herein are for the direct benefit of, and may be enforced
by, the Buyer’s successors and assigns and/or any of their respective assignees
(collectively, the “Senior Claimants”) under the Receivables Purchase Agreement.
Until the date after the Final Payout Date on which all advances outstanding
under the Receivables Purchase Agreement have been repaid in full and all other
obligations of the Buyer thereunder (all such obligations, collectively, the
“Senior Claims”) have been indefeasibly paid and satisfied in full, the
Originator shall not demand, accelerate, sue for, take, receive or accept from
the Buyer, directly or indirectly, in cash or other property or by set-off or
any other manner (including without limitation from or by way of collateral) any
payment or security of all or any of the indebtedness under this CFC
Subordinated Note or exercise any remedies or take any action or proceeding to
enforce the same; provided, however, that (i) the Originator hereby agrees that
it will not institute against the Buyer any Insolvency Proceeding unless and
until a period of one year and one day has elapsed after the Final Payout Date
and (ii) nothing in this paragraph shall restrict the Buyer from paying, or the
Originator from requesting, any payments under this CFC Subordinated Note so
long as the Buyer is not required under the Receivables Purchase Agreement to
set aside the funds used for such payments for the benefit of, or otherwise pay
over to, any of the Senior Claimants; and provided, further, that the making of
such payment would not otherwise violate the terms and provisions of the
Receivables Purchase Agreement. Should any payment, distribution or security or
proceeds thereof be received by the Originator in

 

E-4.2-2

--------------------------------------------------------------------------------

violation of the immediately preceding sentence, the Originator agrees that such
payment shall be segregated, received and held in trust for the benefit of, and
deemed to be the property of, and shall be immediately paid over and delivered
to the Indenture Trustee for the benefit of the Senior Claimants.

5. Bankruptcy; Insolvency. Upon the occurrence of any Insolvency Proceeding
involving the Buyer as debtor, then and in any such event the Senior Claimants
shall receive payment in full of all amounts due under the Receivables Purchase
Agreement (whether or not any or all of such amount is an allowable claim in any
such proceeding) before the Originator is entitled to receive payment on account
of this CFC Subordinated Note and, to that end, any payment or distribution of
assets of the Buyer of any kind or character, whether in cash, securities or
other property in any applicable Insolvency Proceeding which would otherwise be
payable to, or deliverable upon or with respect to, any or all indebtedness
under this CFC Subordinated Note, is hereby assigned to and shall be paid or
delivered by the Person making such payment or delivery (whether a trustee in
bankruptcy, a receiver, custodian or liquidating trustee or otherwise) pursuant
to the Receivables Purchase Agreement for application to, or as collateral for
the payment of, the Senior Claim until such Senior Claim shall have been paid in
full and satisfied.

6. GOVERNING LAW. THIS CFC SUBORDINATED NOTE SHALL BE INTERPRETED AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND
DECISIONS OF THE STATE OF NEW YORK. WHEREVER POSSIBLE EACH PROVISION OF THIS CFC
SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND
VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS CFC SUBORDINATED NOTE
SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
CFC SUBORDINATED NOTE.

7. Waivers. All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
Originator additionally expressly waives all notice of the acceptance by any
Senior Claimant of the subordination and other provisions of this CFC
Subordinated Note and expressly waives reliance by any Senior Claimant upon the
subordination and other provisions herein provided.

8. Assignment. Prior to the satisfaction and discharge of the Indenture pursuant
to Article IV thereof, this CFC Subordinated Note may not be assigned, pledged
or otherwise transferred to any party other than Originator except in accordance
with the Receivables Purchase Agreement.

 

E-4.2-3

--------------------------------------------------------------------------------

Cartus Financial Corporation By:       Name:   Title:

 

E-4.2-4

--------------------------------------------------------------------------------

EXHIBIT 6.1(u)

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

CREDIT AND COLLECTION POLICY

Attached.

 

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EXHIBIT 7.3(j)

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

FORM OF ACKNOWLEDGMENT LETTER

For purposes of this Section         , capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Transfer and Servicing Agreement, dated April 25, 2000, among Apple Ridge
Services Corporation (“ARSC”), Cartus Corporation (“Cartus”), Cartus Financial
Corporation (“CFC”), Apple Ridge Funding LLC (“ARF”) and The Bank of New York
(the “Indenture Trustee”), or, if not defined therein, as assigned to such terms
in the “Purchase Agreement” or “Receivables Purchase Agreement” referred to
therein, in each case as each such agreement has been amended by (i) that
certain Amendment, Agreement and Consent dated December 20, 2004, (ii) that
certain Second Omnibus Amendment dated January 31, 2005, (iii) that certain
Amendment, Agreement and Consent dated January 30, 2006, (iv) that certain Third
Omnibus Amendment, Agreement and Consent dated May 12, 2006, (v) that certain
Fourth Omnibus Amendment dated November 29, 2006 and (vi) that certain Fifth
Omnibus Amendment dated April 10, 2007. Subsequent references in this Section
         to ARSC, Cartus and CFC below shall mean and be references to such
corporations as they currently exist but shall also include references to any
limited liability companies which succeed to the assets and liabilities of such
companies in connection with a conversion of any such corporation into a limited
liability company.

The Collateral Agent acknowledges and agrees, and each Secured Party by its
execution of the Credit Agreement (or its Assignment and Acceptance) and/or its
acceptance of the benefits of this Agreement acknowledges and agrees, as
follows, solely in its capacity as a Secured Party:

Each Secured Party hereby acknowledges that (i) CFC is a limited purpose
corporation whose primary activities are restricted in its certificate of
incorporation to purchasing Cartus Purchased Assets (originally referred to as
CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making
Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on
behalf of employees or otherwise purchasing Homes in connection with the Pool
Relocation Management Agreements, funding such activities through the sale of
CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such
other activities as it deems necessary or appropriate in connection therewith,
(ii) ARSC is a limited purpose corporation whose primary activities are
restricted in its certificate of incorporation to purchasing from CFC all CFC
Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding
such acquisitions through the sale of the CFC Receivables to ARF and such other
activities as it deems necessary or appropriate to carry out such activities,
and (iii) ARF is a limited purpose limited liability company whose activities
are limited in its limited liability company agreement to purchasing the Pool
Receivables from ARSC, funding such acquisitions through the issuance of the
Notes, pledging such Pool Receivables to the Indenture Trustee and such other
activities as it deems necessary or appropriate to carry out such activities.

 

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Each Secured Party hereby acknowledges and agrees that (i) the foregoing
transfers are intended to be true and absolute sales as a result of which Cartus
has no right, title and interest in and to any of the Cartus Purchased Assets,
any Homes acquired by CFC in connection therewith or any CFC Receivables,
including any Related Property relating thereto, any proceeds thereof or
earnings thereon (collectively, the “Pool Assets”), (ii) none of CFC, ARSC or
ARF is a Loan Party, (iii) such Secured Party is not a creditor of, and has no
recourse to, CFC, ARSC or ARF pursuant to the Credit Agreement or any other Loan
Document, and (iv) such Secured Party has no lien on or claim, contractual or
otherwise, arising under the Credit Agreement or any other Loan Document to the
Pool Assets (whether now existing or hereafter acquired and whether tangible or
intangible); provided that nothing herein shall limit any rights the Secured
Parties may have to any proceeds or earnings which are transferred from time to
time to Cartus by CFC, ARSC or ARF.

No Secured Party will institute against or join any other Person in instituting
against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in
soliciting, cooperate with or encourage any motion in support of, any insolvency
proceeding involving CFC, ARSC or ARF until one year and one day after the
payment in full of all Notes; provided, that the foreoging shall not limit the
right of any Secured Party to file any claim in or otherwise take any action
(not inconsistent with the provisions of this Section         ) permitted or
required by applicable laws with respect to any insolvency proceeding instituted
against CFC, ARSC or ARF by any other person.

Without limiting the foregoing, in the event of any voluntary or involuntary
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any Federal or state bankruptcy or similar law involving Cartus, CFC,
ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured
Parties agree that if, notwithstanding the intent of the parties, Cartus is
found to have a property interest in the Pool Assets, then, in such event, CFC
and its assigns, including the Indenture Trustee, shall have a first and prior
claim to the Pool Assets, and any claim or rights the Secured Parties may have
to the Pool Assets, contractual or otherwise, shall be subject to the prior
claims of the Indenture Trustee and the Noteholders until all amounts owing
under the Indenture shall have been paid in full, and the Secured Parties agree
to turn over to the Indenture Trustee any amounts received contrary to the
provisions of this clause (d).

Each Secured Party hereby covenants and agrees that it will not agree to any
amendment, supplement or other modification of this Section          without the
prior written consent of the Indenture Trustee. Each Secured Party further
agrees that the provisions of this Section          are made for the benefit of,
and may be relied upon and enforced by, the Indenture Trustee and that the
Indenture Trustee shall be a third party beneficiary of this Section         .

 

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EXHIBIT C

to

PURCHASE AGREEMENT

Dated as of April 25, 2000

FORMS OF RELOCATION MANAGEMENT AGREEMENTS

Attached.

 

C-1

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Exhibit A-2

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CONFORMED COPY

AS AMENDED BY:

 

 

1. Omnibus Amendment, Agreement and Consent dated December 20, 2004.

 

2. Second Omnibus Amendment dated January 31, 2005

 

3. Third Omnibus Amendment, Agreement and Consent dated May 12, 2006

 

4. Fifth Omnibus Amendment dated April 10, 2007

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 25, 2000

by and between

CARTUS FINANCIAL CORPORATION

as originator and seller,

and

APPLE RIDGE SERVICES CORPORATION

as buyer

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TABLE OF CONTENTS

 

          Page ARTICLE I DEFINITIONS ARTICLE II SALE AND PURCHASE OF ASSETS

Section 2.1

   Sale and Purchase    1

Section 2.2

   Purchases    3

Section 2.3

   No Assumption    3

Section 2.4

   No Recourse    3

Section 2.5

   True Sales    3

Section 2.6

   Servicing of ARSC Purchased Assets    4

Section 2.7

   Financing Statements    4 ARTICLE III CALCULATION OF ARSC PURCHASE PRICE

Section 3.1

   Calculation of the ARSC Purchase Price    4 ARTICLE IV PAYMENT OF ARSC
PURCHASE PRICE

Section 4.1

   ARSC Purchase Price Payments    5

Section 4.2

   The ARSC Subordinated Note    5

Section 4.3

   Seller Adjustments; Originator Adjustments    5

Section 4.4

   Payments and Computations, Etc.    6 ARTICLE V CONDITIONS PRECEDENT

Section 5.1

   Conditions Precedent to Sales and Purchases    7

Section 5.2

   Conditions Precedent to ARSC Subordinated Loans    7 ARTICLE VI
REPRESENTATIONS AND WARRANTIES

Section 6.1

   Representations and Warranties of the Seller    7

 

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Section 6.2

   Representations and Warranties of ARSC    12 ARTICLE VII GENERAL COVENANTS

Section 7.1

   Affirmative Covenants of the Seller    12

Section 7.2

   Reporting Requirements    16

Section 7.3

   Negative Covenants of the Seller    17

Section 7.4

   Affirmative Covenants of ARSC    19 ARTICLE VIII ADDITIONAL RIGHTS AND
OBLIGATIONS IN RESPECT OF THE ARSC PURCHASED ASSETS

Section 8.1

   Rights of ARSC    20

Section 8.2

   Responsibilities of the Seller    21

Section 8.3

   Further Action Evidencing Purchases    21

Section 8.4

   Collections; Rights of ARSC and its Assignees    22 ARTICLE IX TERMINATION

Section 9.1

   ARSC Purchase Termination Events    23

Section 9.2

   Purchase Termination    24 ARTICLE X INDEMNIFICATION; SECURITY INTEREST

Section 10.1

   Indemnities by the Seller    24

Section 10.2

   Security Interest    26 ARTICLE XI MISCELLANEOUS

Section 11.1

   Amendments; Waivers, Etc.    27

Section 11.2

   Notices, Etc.    27

Section 11.3

   Cumulative Remedies    27

Section 11.4

   Binding Effect; Assignability; Survival of Provisions    27

Section 11.5

   Governing Law    28

Section 11.6

   Costs, Expenses and Taxes    28

 

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Section 11.7

   Submission to Jurisdiction    28

Section 11.8

   Waiver of Jury Trial    29

Section 11.9

   Integration    29

Section 11.10

   Captions and Cross References    29

Section 11.11

   Execution in Counterparts    29

Section 11.12

   Acknowledgment and Consent    29

Section 11.13

   No Partnership or Joint Venture    30

Section 11.14

   No Proceedings    30

Section 11.15

   Severability of Provisions    31

Section 11.16

   Recourse to the Seller    31

Section 11.17

   Recourse to ARSC    31

Section 11.18

   Confidentiality    31

Section 11.19

   Conversion    31

Section 11.20

   Inclusion of Receivables Assigned from Kenosia Funding LLC and Cartus
Relocation Corporation    33

 

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APPENDIX

 

APPENDIX A

     Definitions

SCHEDULES

 

SCHEDULE 2.1

   List of CFC Home Purchase Contracts

SCHEDULE 6.1(n)

   Principal Place of Business and Chief Executive Office of the Seller and   
List of Offices Where the Seller Keeps CFC Records

SCHEDULE 6.1(q)

   List of Legal Names for Cartus Financial Corporation

SCHEDULE 11.2

   Notice Addresses

EXHIBITS

 

EXHIBIT 2.1

     Form of Notice of Additional CFC Home Purchase Contracts

EXHIBIT 4.2

     Form of ARSC Subordinated Note

 

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RECEIVABLES PURCHASE AGREEMENT

THIS RECEIVABLES PURCHASE AGREEMENT (this “Agreement”) dated as of April 25,
2000 made by and between CARTUS FINANCIAL CORPORATION, a Delaware corporation,
as originator and seller (the “Seller”) and APPLE RIDGE SERVICES CORPORATION, a
Delaware Corporation, as buyer (“ARSC”).

WHEREAS, the Seller has purchased certain Receivables and Related Assets from
Cartus Corporation (“Cartus”) and from time to time hereafter will create, and
will purchase from Cartus, additional Receivables and Related Assets; and

WHEREAS, the Seller wishes to sell Receivables and Related Assets that it now
owns and Receivables and Related Assets that it from time to time hereafter will
own to ARSC, and ARSC is willing to purchase such Receivables and Related Assets
from the Seller from time to time, on the terms and subject to the conditions
contained in this Agreement; and

WHEREAS, ARSC intends to transfer the ARSC Purchased Assets to the Issuer from
and after the Closing Date pursuant to the terms of the Transfer and Servicing
Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used and not otherwise defined in this Agreement have the
meanings specified in Part A of Appendix A or as specified in Appendix A of the
Purchase Agreement. In addition, this Agreement shall be interpreted in
accordance with the conventions set forth in Parts B, C and D of Appendix A.

ARTICLE II

SALE AND PURCHASE OF ASSETS

Section 2.1 Sale and Purchase.

(a) Agreement. Upon the terms and subject to the conditions hereof, ARSC agrees
to buy, and the Seller agrees to sell, all of the Seller’s right, title and
interest in and to the following:

(i) all Cartus Purchased Assets owned by the Seller on the Closing Date or
thereafter purchased, and all rights of the Seller under the Purchase Agreement
and the Performance Guaranty with respect to the Cartus Purchased Assets
(collectively, the “Seller Purchased Assets”);

 

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(ii) all Receivables arising out of or with respect to Equity Payments, Mortgage
Payments and Mortgage Payoffs made by the Seller in respect of Home Purchase
Contracts to which CFC is a party from and after the Closing Date and all
Governmental Receivables acquired by the Seller from Kenosia and/or CRC
(collectively, the “Seller Receivables”);

(iii) all Related Property with respect to the Seller Receivables (collectively,
the “Seller Related Property”);

(iv) all CFC Collections;

(v) all proceeds of and earnings on any of the foregoing; and

(vi) all of the right, title and interest (if any) CFC has in, to or under CFC
Designated Receivables, including all Related Property with respect thereto and
all proceeds thereof, including all rights, if any, to reimbursement of, or
interest on, such CFC Designated Receivables.

The items listed above in clauses (iii), (iv) and (v), whenever and wherever
arising, are collectively referred to herein as the “Seller Related Assets.” The
Seller Purchased Assets, the Seller Receivables and the Seller Related Assets
are sometimes collectively referred to herein as the “Seller Assets.”

As used herein, “CFC Purchased Assets” means Seller Purchased Assets that are
being purchased or have been Purchased by ARSC hereunder; “CFC Receivables”
means Seller Receivables that are being purchased or have been Purchased by ARSC
hereunder; “CFC Related Property” means Seller Related Property that is being
purchased or has been Purchased by ARSC hereunder; “CFC Related Assets” means
Seller Related Assets that are being purchased or have been Purchased by ARSC
hereunder; and “ARSC Purchased Assets” means Seller Assets that are being
purchased or have been Purchased by ARSC hereunder.

Schedule 2.1 sets forth a list of all CFC Home Purchase Contracts as of the
Closing Date. Each new Home Purchase Contract that is not an Excluded Contract
and that is entered into by the Seller on any day in a month shall be added to
the CFC Home Purchase Contracts and shall be reported on the last day of such
month by delivering a notice as set forth in Exhibit 2.1 to ARSC or its
designee, whereupon Schedule 2.1 shall be amended by the Seller to add such new
Home Purchase Contract to the list of CFC Home Purchase Contracts set forth
therein. On or prior to the date of the delivery of any such notice, the Seller
shall indicate, or cause to be indicated, in its computer files, books and
records that the CFC Receivables and other ARSC Purchased Assets then existing
and thereafter created pursuant to or in connection with each such CFC Home
Purchase Contract are being transferred to ARSC pursuant to this Agreement.

(b) Treatment of Certain Receivables and CFC Related Assets. It is expressly
understood that (i) each Pool Receivable sold to ARSC hereunder, together with
all other Cartus

 

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Purchased Assets and all CFC Related Assets then existing or thereafter created
and arising with respect thereto, will thereafter be the property of ARSC (or
its assignees), without the necessity of any further purchase or other action by
ARSC (other than satisfaction of the conditions set forth herein) and (ii) the
change of a Receivable’s status from that of Unsold Home Receivable to Unbilled
Receivable or from Unbilled Receivable to Billed Receivable shall not be deemed
the creation of a new Receivable for any purpose.

Section 2.2 Purchases. On the Closing Date, ARSC shall purchase all of the
Seller’s right, title and interest in and to all Seller Assets and in any
property described in clause (vi) of Section 2.1 existing as of the close of
business on the immediately preceding Business Day. On each Business Day
thereafter until the ARSC Termination Date, ARSC shall purchase all of the
Seller’s right, title and interest in and to all Seller Assets and in any
property described in clause (vi) of Section 2.1 existing as of the close of
business on the immediately preceding Business Day that were not previously
purchased by ARSC hereunder. Notwithstanding the foregoing, if an Insolvency
Proceeding is pending with respect to either the Seller or ARSC prior to the
Termination Date, the Seller shall not sell and ARSC shall not buy any ARSC
Purchased Assets hereunder unless and until such Insolvency Proceeding is
dismissed or otherwise terminated.

Section 2.3 No Assumption. The sales and Purchases of ARSC Purchased Assets do
not constitute and are not intended to result in a creation or an assumption by
ARSC or its successors and assigns of any obligation of Cartus, the Seller or
any other Person in connection with the ARSC Purchased Assets (other than such
obligations as may arise from the ownership of the Pool Receivables) or under
the related Contracts or any other agreement or instrument relating thereto,
including without limitation any obligation to any Obligors or Transferred
Employees. None of the Servicer, ARSC or ARSC’s assignees shall have any
obligation or liability to any Obligor, Transferred Employee or other customer
or client of Cartus (including without limitation any obligation to perform any
of the obligations of Cartus under any Relocation Management Agreement, Cartus
Home Purchase Contract, Cartus Related Property or any other agreement or any
obligation of the Seller under any CFC Home Purchase Contract), except such
obligations as may arise from the ownership of the Pool Receivables. Except as
expressly provided in Section 3.05(j) of the Transfer and Servicing Agreement,
no such obligation or liability to any Obligor, Transferred Employee or other
customer or client of Cartus is intended to be assumed by the Servicer or its
successors and assigns hereunder or under the Transfer and Servicing Agreement,
and any such assumption is expressly disclaimed.

Section 2.4 No Recourse. Except as specifically provided in this Agreement, the
sale and Purchase of the ARSC Purchased Assets and any other property described
in clause (vi) of Section 2.1 (a) under this Agreement shall be without recourse
to the Seller; provided, however, that the Seller shall be liable to ARSC and
its successors and assigns for all representations, warranties, covenants and
indemnities made by it pursuant to the terms of this Agreement (it being
understood that such obligations of the Seller will not arise solely on account
of the credit-related inability of an Obligor to pay a Receivable).

Section 2.5 True Sales. The Seller and ARSC intend the transfers of ARSC
Purchased Assets hereunder to be true sales by the Seller to ARSC that are
absolute and irrevocable and to provide ARSC with the full benefits of ownership
of the ARSC Purchased

 

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Assets, and neither the Seller nor ARSC intends the transactions contemplated
hereunder to be, or for any purpose to be characterized as, loans from ARSC to
the Seller, secured by the ARSC Purchased Assets.

Section 2.6 Servicing of ARSC Purchased Assets. Consistent with ARSC’s ownership
of all ARSC Purchased Assets and subject to the terms of the Pool Relocation
Management Agreements, as between the parties to this Agreement, ARSC shall have
the sole right to service, administer and collect all ARSC Purchased Assets, to
assign such right and to delegate such right to others. In consideration of
ARSC’s purchase of the ARSC Purchased Assets and as more fully set forth in
Section 11.12, the Seller hereby acknowledges and agrees that ARSC intends to
assign for the benefit of the Issuer and its successors and assigns the rights
and interests granted by the Seller to ARSC hereunder, and agrees to cooperate
fully with the Issuer and its successors and assigns in the exercise of such
rights.

Section 2.7 Financing Statements. In connection with the transfer described
above, the Seller agrees, at its expense, to record and file financing
statements (and continuation statements when applicable) with respect to the
ARSC Purchased Assets conveyed by the Seller meeting the requirements of
applicable law in such manner and in such jurisdictions as are necessary to
perfect and maintain the perfection of the transfer and assignment of its
interest in the ARSC Purchased Assets to ARSC, and to deliver a file stamped
copy of each such financing statement or other evidence of such filing to ARSC
as soon as practicable after the Closing Date; provided, however, that prior to
recordation pursuant to Section 8.3 or the sale of a Home to an Ultimate Buyer,
record title to such Home may remain in the name of the related Transferred
Employee and no recordation in real estate records of the conveyance pursuant to
the related Home Purchase Contract or Home Sale Contract shall be made except as
otherwise required or permitted under Section 2.01(d)(i) of the Transfer and
Servicing Agreement.

ARTICLE III

CALCULATION OF ARSC PURCHASE PRICE

Section 3.1 Calculation of the ARSC Purchase Price.

(a) Intentionally Omitted

(b) With respect to the Purchase of any ARSC Purchased Assets by ARSC from the
Seller pursuant to Article II, (i) on the Closing Date, ARSC shall pay to the
Seller a purchase price equal to $653,974,274, and (ii) thereafter ARSC shall
pay to the Seller, as provided in Section 4.1, a purchase price (each such
purchase price, the “ARSC Purchase Price”) in an amount that the Seller and ARSC
mutually agree is the fair market value of such ARSC Purchased Asset.

 

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ARTICLE IV

PAYMENT OF ARSC PURCHASE PRICE

Section 4.1 ARSC Purchase Price Payments. On the terms and subject to the
conditions of this Agreement, ARSC shall pay to the Seller on the Closing Date
the ARSC Purchase Price for the ARSC Purchased Assets sold on such date, by
paying such ARSC Purchase Price to the Seller in cash. On each other Business
Day in each Monthly Period, on the terms and subject to the conditions of this
Agreement, ARSC shall pay to the Seller in cash an amount mutually agreed upon
by the Seller and ARSC on account of the ARSC Purchase Price for the ARSC
Purchased Assets purchased by ARSC during such Monthly Period. Within seven
Business Days after the end of each Monthly Period, the Seller shall deliver to
ARSC an accounting with respect to all Purchases of ARSC Purchased Assets that
were made during such Monthly Period and the aggregate ARSC Purchase Price for
all the ARSC Purchased Assets that were purchased by ARSC during such Monthly
Period. If the payments on account of the ARSC Purchase Price for such Monthly
Period exceed the aggregate ARSC Purchase Price set forth in such report minus
the aggregate Originator Adjustments for such Monthly Period calculated pursuant
to Section 4.3(c), then the Seller shall promptly pay such excess to ARSC in
cash and if the payments on account of the ARSC Purchase Price for such Monthly
Period are less than the aggregate ARSC Purchase Price set forth in such report
minus the aggregate Originator Adjustments for such Monthly Period calculated
pursuant to Section 4.3(c), then ARSC shall promptly pay such deficiency to the
Seller in cash.

Section 4.2 The ARSC Subordinated Note. On the Closing Date, ARSC shall deliver
to Cartus the ARSC Subordinated Note in the form set forth as Exhibit 4.2.
Pursuant to the terms of, and subject to the limitations set forth in, the ARSC
Subordinated Note, CFC will request from Cartus an advance (each, an “ARSC
Subordinated Loan”) on or prior to the ARSC Termination Date for the purpose of
purchasing ARSC Purchased Assets hereunder. Pursuant to the terms of the ARSC
Subordinated Note, ARSC shall not request or receive any advance thereunder on
any date if the aggregate principal amount outstanding thereunder on such date,
after giving effect to such advance, would exceed an amount equal to five times
the net worth of ARSC (such maximum amount required to be advanced at any time,
the “ARSC Subordinated Note Cap”). The ARSC Subordinated Loans shall be
evidenced by, and shall be payable in accordance with the terms and provisions
of, the ARSC Subordinated Note. Notwithstanding any other provision of this
Agreement, ARSC shall not use funds borrowed under the ARSC Subordinated Note
for any purpose other than paying the ARSC Purchase Price.

Section 4.3 Seller Adjustments; Originator Adjustments

(a) With respect to any CFC Receivable created by the Seller, if on any day ARSC
(or ARSC’s assignee), the Servicer or the Seller determines that (i) any CFC
Receivable that (A) was not identified by or on behalf of the Seller in the
Daily Seller Report as other than an Eligible Receivable on the Business Day
such CFC Receivable was sold hereunder or (B) was otherwise treated as or
represented to be an Eligible Receivable in any Receivables Activity Report, was
not in fact an Eligible Receivable on such date or (ii) any of the
representations or warranties set forth in Section 6.1(d) or 6.1(k) was not true
when made with respect to such CFC Receivable or the related CFC Related Asset
(each such CFC Receivable described in clause (i)

 

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or clause (ii), a “CFC Noncomplying Asset”), then the Seller shall pay the
aggregate Unpaid Balance of such CFC Receivables (such payment, the “CFC
Noncomplying Asset Adjustment”) to ARSC in accordance with Section 4.3(c).

(b) If on any day the Unpaid Balance of any CFC Receivable (i) is reduced as a
result of any cash discount or any adjustment by the Seller, (ii) is subject to
reduction on account of any offsetting account payable of the Seller to an
Obligor or is reduced or cancelled as a result of a set-off in respect of any
claim by, or defense or credit of, the related Obligor against the Seller
(whether such claim, defense or credit arises out of the same or a related or an
unrelated transaction) or (iii) is reduced on account of the obligation of the
Seller to pay to the related Obligor any rebate or refund (each of the
reductions and cancellations described above in clauses (i) through (iii), a
“Seller Dilution Adjustment”), then the Seller shall pay such Seller Dilution
Adjustment to ARSC in accordance with Section 4.3(c).

(c) Within seven Business Days after the end of each Monthly Period, the Seller
shall pay to ARSC, in accordance with Section 4.4 and as provided in
Section 4.1, an amount (an “Originator Adjustment”) equal to the sum of (A) the
aggregate Originator Dilution Adjustments, if any, owing on account of each day
during such Monthly Period plus (B) the aggregate CFC Noncomplying Asset
Adjustments, if any, owing on account of each day during such Monthly Period.
The CFC Receivables that gave rise to any CFC Noncomplying Asset Adjustment
shall remain the property of ARSC. From and after the day on which any Cartus
Noncomplying Asset Adjustment or CFC Noncomplying Asset Adjustment is made, any
collections received by ARSC that are identified as proceeds of the Receivables
that gave rise to such Cartus Noncomplying Asset Adjustment or CFC Noncomplying
Asset Adjustment and any Related Property with respect to such Receivable shall
be promptly returned to the Seller.

(d) The Seller shall pay to ARSC in cash, on the date of receipt by the Seller,
any payment in respect of Originator Adjustments relating to the ARSC Purchased
Assets made by Cartus to the Seller pursuant to the Purchase Agreement. The
Seller shall instruct Cartus to deposit all payments in respect of such
Originator Adjustments directly in the Collection Account.

Section 4.4 Payments and Computations, Etc. All amounts to be paid by the Seller
to ARSC hereunder shall be paid in accordance with the terms hereof no later
than 11:00 a.m. (New York time) on the day when due in United States dollars in
immediately available funds to an account specified in writing from time to time
by ARSC or its designee. Payments received by ARSC after such time shall be
deemed to have been received on the next Business Day. If any payment becomes
due on a day that is not a Business Day, then such payment shall be made on the
next succeeding Business Day. The Seller shall pay to ARSC, on demand, interest
on all amounts not paid when due hereunder at a rate equal to the Prime Rate
plus 2% per annum; provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. All computations of
interest payable hereunder shall be made on the basis of a year of 360 days for
the actual number of days elapsed (including the first day but excluding the
last day). All payments made under this Agreement shall be made without set-off
or counterclaim.

 

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ARTICLE V

CONDITIONS PRECEDENT

Section 5.1 Conditions Precedent to Sales and Purchases. No Purchase of ARSC
Purchased Assets shall be made hereunder on any date on which ARSC does not have
sufficient funds available to pay the ARSC Purchase Price in cash (including
cash made available to ARSC under the ARSC Subordinated Loan).

Section 5.2 Conditions Precedent to ARSC Subordinated Loans. ARSC shall not
request any ARSC Subordinated Loan under the ARSC Subordinated Note unless the
following conditions precedent have been satisfied on the date of such ARSC
Subordinated Loan:

(a) the ARSC Subordinated Note shall have been duly executed and delivered by
ARSC and shall be in full force and effect;

(b) no Event of Bankruptcy shall have occurred and be continuing with respect to
ARSC; and

(c) after giving effect to such ARSC Subordinated Loan, the aggregate
outstanding principal amount of the ARSC Subordinated Note shall not exceed the
ARSC Subordinated Note Cap.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Section 6.1 Representations and Warranties of the Seller. In order to induce
ARSC to enter into this Agreement and to make Purchases hereunder, the Seller
hereby makes the representations and warranties set forth in this Section 6.1,
in each case as of the date hereof, as of the Closing Date, as of the date of
each Purchase hereunder and as of any other date specified in such
representation and warranty.

(a) Organization and Good Standing. The Seller is a corporation duly organized
and validly existing in good standing under the laws of the State of Delaware
and has full power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted. The Seller had at all relevant times, and now has, all necessary
power, authority and legal right to own and sell the ARSC Purchased Assets.

(b) Due Qualification. The Seller is duly qualified to do business, is in good
standing as a foreign corporation, and has obtained (or has filed all necessary
applications for and will obtain within 60 days of the Closing Date) all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such qualification,
licenses or approvals and in which the failure so to qualify or to obtain such
licenses and approvals or to preserve and maintain such qualification, licenses
or approvals could reasonably be expected to give rise to a Material Adverse
Effect.

 

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(c) Power and Authority; Due Authorization. The Seller (i) has all necessary
corporate power and authority (A) to execute and deliver this Agreement, the
Contracts and the other Transaction Documents to which it is a party, (B) to
perform its obligations under this Agreement, the Contracts and the other
Transaction Documents to which it is a party and (C) to sell and assign the ARSC
Purchased Assets transferred hereunder on and after such date, on the terms and
subject to the conditions herein and therein provided and (ii) has duly
authorized by all necessary corporate action such sale and assignment and the
execution, delivery and performance of, and the consummation of the transactions
provided for in, this Agreement, the Contracts and the other Transaction
Documents to which it is a party.

(d) Valid Sale; Binding Obligations. This Agreement constitutes a valid sale,
transfer, set-over and conveyance to ARSC of all of the Seller’s right, title
and interest in, to and under the Pool Receivables transferred hereunder on such
date, which is perfected and of first priority (subject to Permitted Liens and
Permitted Exceptions) under the UCC and other applicable law, enforceable
against creditors of, and purchasers from, the Seller, free and clear of any
Lien (other than Permitted Liens); and this Agreement constitutes, and each
other Transaction Document to which the Seller is a party when duly executed and
delivered will constitute, a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

(e) No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents to be signed by the Seller, and the fulfillment of
the terms hereof and thereof, will not (i) conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under (A) the certificate of
incorporation or the by-laws of the Seller or (B) any material indenture, loan
agreement, mortgage, deed of trust or other material agreement or instrument to
which the Seller is a party or by which it or any of its properties is bound,
(ii) result in the creation or imposition of any Lien on any of the ARSC
Purchased Assets pursuant to the terms of any such material indenture, loan
agreement, mortgage, deed of trust or other material agreement or instrument
other than this Agreement and the other Transaction Documents or (iii) conflict
with or violate any federal, state, local or foreign law or any decision,
decree, order, rule or regulation applicable to the Seller or of any federal,
state, local or foreign regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller, which conflict
or violation described in this clause (iii), individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

(f) Litigation and Other Proceedings. (i) There is no action, suit, proceeding
or investigation pending, or to the best knowledge of the Seller threatened,
against the Seller before any court, arbitrator, regulatory body, administrative
agency or other tribunal or

 

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governmental instrumentality and (ii) the Seller is not subject to any order,
judgment, decree, injunction, stipulation or consent order of or with any court
or other government authority that, in the case of either of the foregoing
clauses (i) or (ii), (A) asserts the invalidity of this Agreement or any other
Transaction Document, (B) seeks to prevent the sale of any ARSC Purchased Asset
by the Seller to ARSC, the creation of a material amount of CFC Receivables or
the consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (C) seeks any determination or ruling that, in
the reasonable judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Agreement or any other
Transaction Document to which it is a party or the validity or enforceability of
this Agreement or any other Transaction Document to which it is a party or
(D) individually or in the aggregate for all such actions, suits, proceedings
and investigations could reasonably be expected to have a Material Adverse
Effect.

(g) Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a Material Adverse Effect, (i) all authorizations, consents,
orders and approvals of, or other actions by, any Governmental Authority that
are required to be obtained by the Seller in connection with the conveyance of
the ARSC Purchased Assets transferred hereunder on and after such date, or the
due execution, delivery and performance by the Seller of this Agreement or any
other Transaction Document to which it is a party and the consummation of the
transactions contemplated by this Agreement or any other Transaction Documents
to which it is a party have been obtained or made and are in full force and
effect and (ii) all filings with any Governmental Authority that are required to
be obtained in connection with such conveyance and the execution and delivery by
the Seller of this Agreement have been made; provided , however, that prior to
recordation pursuant to Section 8.3 or the sale of a Home to an Ultimate Buyer,
record title to such Home may remain in the name of the related Transferred
Employee and no recordation in real estate records of the conveyance pursuant to
the related Home Purchase Contract or Home Sale Contract shall be made except as
otherwise required or permitted under Section 2.01(d)(i) of the Transfer and
Servicing Agreement.

(h) Margin Regulations. The Seller is not engaged, principally or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meanings of Regulations T, U and
X of the Board of Governors of the Federal Reserve System). The Seller has not
taken and will not take any action to cause the use of proceeds of the sales
hereunder to violate said Regulations T, U or X.

(i) Taxes. The Seller has filed (or there have been filed on its behalf as a
member of a consolidated group) all tax returns and reports required by law to
have been filed by it and has paid all taxes, assessments and governmental
charges thereby shown to be owing by it, other than any such taxes, assessments
or charges (i) that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens) or (ii) the amount of which, either singly or in the aggregate,
would not have a Material Adverse Effect.

 

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(j) Solvency. After giving effect to the conveyance of ARSC Purchased Assets
hereunder on such date, the Seller is solvent and able to pay its debts as they
come due and has adequate capital to conduct its business as presently
conducted.

(k) Quality of Title/Valid Transfers.

(i) Immediately before the Purchase to be made by ARSC hereunder on such date,
each ARSC Purchased Asset to be sold to ARSC shall be owned by the Seller free
and clear of any Lien (other than any Permitted Lien), and the Seller shall have
made all filings and shall have taken all other action under applicable law in
each relevant jurisdiction in order to protect and perfect the ownership
interest of ARSC and its successors and assigns in such ARSC Purchased Assets
against all creditors of, and purchasers from, the Seller (subject to Permitted
Exceptions).

(ii) With respect to each Pool Receivable transferred hereunder on such date,
ARSC shall acquire a valid and (subject to Permitted Exceptions) perfected
ownership interest in such Pool Receivable and any identifiable proceeds
thereof, free and clear of any Lien (other than any Permitted Liens).

(iii) Immediately prior to the sale of an ARSC Purchased Asset hereunder on such
date, no effective financing statement or other instrument similar in effect
that covers all or part of any ARSC Purchased Asset or any interest therein is
on file in any recording office except such as may be filed (A) in favor of
Cartus in accordance with the Pool Relocation Management Agreements, (B) in
favor of the Seller in accordance with the Purchase Agreement, (C) in favor of
ARSC pursuant to this Agreement, (D) in favor of ARSC’s successors and assigns
pursuant to the Transfer and Servicing Agreement or the Indenture or otherwise
filed by or at the direction of ARSC’s successors and assigns or (E) to evidence
any Mortgage on a Cartus Home or CFC Home created by a Transferred Employee.

(iv) The ARSC Purchase Price constitutes reasonably equivalent value for the
ARSC Purchased Assets conveyed in consideration therefor on such date, and no
purchase of an interest in such ARSC Purchased Assets by ARSC from the Seller
constitutes a fraudulent transfer or fraudulent conveyance under the United
States Bankruptcy Code or applicable state bankruptcy or insolvency laws or
subject to subordination under similar laws or principles or for any other
reason.

(l) Eligible Receivables. Each CFC Receivable included in the ARSC Purchased
Assets transferred hereunder on such date, unless otherwise identified to ARSC
and its assignees by the Seller in the related Daily Seller Report, is an
Eligible Receivable on such date.

(m) Accuracy of Information. All written information furnished by the Seller to
ARSC or its successors and assigns pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein with
respect to the ARSC Purchased Assets transferred hereunder on such date is true
and correct in all material respects on such date.

 

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(n) Offices. The principal place of business and chief executive office of the
Seller is located, and the offices where the Seller keeps all CFC Records (and
all original documents relating thereto) are located, at the addresses specified
in Schedule 6.1(n), except that (i) Home Deeds and related documents necessary
to close CFC Home sale transactions, including powers of attorney, may be held
by local attorneys or escrow agents acting on behalf of the Seller in connection
with the sale of CFC Homes to Ultimate Buyers, so long as such local attorneys
are notified that such Home Deeds constitute property of CFC and also are
notified of the interest of ARSC’s assignees therein and (ii) CFC Records
relating to the ARSC Purchased Assets arising under or in connection with any
Pool Relocation Management Agreement may be maintained at the offices of the
related Employer.

(o) Payment Instructions to Obligors. The Seller has instructed (i) all Obligors
to remit all payments on the ARSC Purchased Assets directly to one of the
Lockboxes or Lockbox Accounts, (ii) all Lockbox Banks to deposit all Pool
Collections remitted to a Lockbox directly to the related Lockbox Account and
(iii) all Persons receiving Home Sale Proceeds to deposit such Home Sale
Proceeds in one of the Lockboxes or Lockbox Accounts within two Business Days
after receipt, except to the extent a longer escrow period is required under
applicable law, in which case such Home Sale Proceeds shall be deposited into
one of the Lockboxes or Lockbox Accounts within one Business Day after the
expiration of such period.

(p) Investment Company Act. The Seller is not, and is not controlled by, an
“investment company” registered or required to be registered under the
Investment Company Act.

(q) Legal Names. Except as described in Schedule 6.1(q), since January 1, 1995,
the Seller (i) has not been known by any legal name other than its corporate
name as of the date hereof, (ii) has not been the subject of any merger or other
corporate reorganization that resulted in a change of name, identity or
corporate structure and (iii) has not used any trade names other than its actual
corporate name.

(r) Compliance with Applicable Laws. The Seller is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all
Governmental Authorities (federal, state, local or foreign, including without
limitation Environmental Laws), a violation of any of which, individually or in
the aggregate for all such violations, is reasonably likely to have a Material
Adverse Effect.

(s) Credit and Collection Policy. As of the date each CFC Receivable is
transferred hereunder, the Seller has complied in all applicable material
respects with the Credit and Collection Policy with respect to such CFC
Receivable transferred on such date and the related Contract.

(t) Environmental. On such date, to the best knowledge of Seller, (i) there are
no (A) pending or threatened claims, complaints, notices or requests for
information received by Seller with respect to any alleged violation of any
Environmental Law in connection with any CFC Home relating to any CFC Receivable
transferred hereunder on such date or (B) pending or threatened claims,
complaints, notices or requests for information received by Seller regarding
potential liability under any Environmental Law in connection with any CFC Home
relating to

 

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any CFC Receivable transferred hereunder on such date and (ii) the Seller is in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters, if any, that are
required to be held by it under applicable law in connection with any CFC Homes
relating to any CFC Receivable transferred hereunder on such date, other than
those that, in the case of either clause (i) or (ii), singly or in the
aggregate, are not reasonably likely to have a Material Adverse Effect.

(u) Business and Indebtedness of Seller. The Seller has no Indebtedness for
Borrowed Money except as permitted under this Agreement. The Seller has not
engaged in any business other than the Purchase of Cartus Receivables and other
Cartus Purchased Assets under the Purchase Agreement, the sale of ARSC Purchased
Assets under this Agreement and the purchase and sale of CFC Homes and creation
of CFC Receivables pursuant to related Equity Payments, Mortgage Payments and
Mortgage Payoffs, and incidental activities related thereto.

Section 6.2 Representations and Warranties of ARSC. ARSC hereby represents and
warrants, on and as of the date hereof and on and as of the Closing Date, that
(a) this Agreement has been duly authorized, executed and delivered by ARSC and
constitutes ARSC’s valid, binding and legally enforceable obligation, except
(i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law, (b) the execution, delivery and
performance of this Agreement does not violate any federal, state, local or
foreign law applicable to ARSC or any agreement to which ARSC is a party and
(c) all of the outstanding capital stock of ARSC is directly or indirectly owned
by the Seller, and all such capital stock is fully paid and nonassessable.

ARTICLE VII

GENERAL COVENANTS

Section 7.1 Affirmative Covenants of the Seller. From the Closing Date until the
termination of this Agreement in accordance with Section 11.4, the Seller hereby
agrees that it will perform the covenants and agreements set forth in this
Section 7.1.

(a) Compliance with Laws, Etc. The Seller will comply in all material respects
with all applicable laws, rules, regulations, judgments, decrees and orders
(including without limitation those relating to the CFC Receivables, CFC Home
Purchase Contracts, CFC Related Assets and all Environmental Laws affecting any
CFC Home), in each case to the extent that any such failure to comply,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

(b) Preservation of Corporate Existence. The Seller (i) will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation and (ii) will qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction in which the failure
to preserve and maintain such qualification as a foreign corporation could
reasonably be expected to have a Material Adverse Effect.

 

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(c) Keeping of Records and Books of Account. The Seller will maintain and
implement administrative and operating procedures (including without limitation
an ability to recreate records evidencing the CFC Receivables and the related
CFC Related Assets in the event of the destruction of the originals thereof) and
will keep and maintain all documents, books, records and other information that
are necessary or advisable, in the reasonable determination of ARSC, for the
collection of all amounts due under any or all CFC Receivables and the related
CFC Related Assets. Upon the reasonable request of ARSC or its assignees made at
any time after the occurrence and continuance of an Unmatured Servicer Default
or a Servicer Default, the Seller will deliver copies of all CFC Records
maintained pursuant to this Section 7.1(c) to ARSC or its designee. The Seller
will maintain at all times accurate and complete books, records and accounts
relating to the CFC Receivables and the related CFC Related Assets, in which
timely entries will be made. The Seller’s computer files, books and records will
be marked to indicate the sales of all ARSC Purchased Assets to ARSC hereunder
and will include without limitation all payments received and all credits and
extensions granted with respect to the ARSC Purchased Assets.

(d) Location of Records and Offices. The Seller will keep its principal place of
business and chief executive office and the offices where it keeps all CFC
Records (and all original documents relating thereto other than those CFC
Records that are maintained with local attorneys or escrow agents or at the
offices of the relevant Employer as described in Section 6.1(n)) at the
addresses specified in Schedule 6.1(n) or, upon not less than 30 days’ prior
written notice given by the Seller to ARSC and its assignees, at such other
locations in jurisdictions in the United States of America where all action
required by Section 8.3 has been taken and completed.

(e) Separate Corporate Existence of the Seller. The Seller hereby acknowledges
that the parties to the Transaction Documents are entering into the transactions
contemplated by the Transaction Documents in reliance upon the Seller’s identity
as a legal entity separate from Cartus and the other Cartus Persons. From and
after the date hereof until the Final Payout Date, the Seller will take such
actions as shall be required in order that:

(i) The Seller will conduct its business in office space allocated to it and for
which it pays an appropriate rent and overhead allocation;

(ii) The Seller will maintain corporate records and books of account separate
from those of each Cartus Person and telephone numbers and stationery that are
separate and distinct from those of each Cartus Person;

(iii) The Seller’s assets will be maintained in a manner that facilitates their
identification and segregation from those of any Cartus Person;

(iv) The Seller will strictly observe corporate formalities in its dealings with
the public and with each Cartus Person, and funds or other assets of the Seller
will not be commingled with those of any Cartus Person. The Seller will at all
times, in its dealings with the public and with each Cartus Person, hold itself
out and conduct itself as a legal entity separate and distinct from each Cartus
Person. The Seller will not maintain joint bank accounts or other depository
accounts to which any Cartus Person (other than the Servicer) has independent
access;

 

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(v) The duly elected board of directors of the Seller and duly appointed
officers of the Seller will at all times have sole authority to control
decisions and actions with respect to the daily business affairs of the Seller;

(vi) Not less than one member of the Seller’s board of directors will be an
Independent Director. The Seller will observe those provisions in its
certificate of incorporation that provide that the Seller’s board of directors
will not approve, or take any other action to cause the filing of, a voluntary
bankruptcy petition with respect to the Seller unless the Independent Director
and all other members of the Seller’s board of directors unanimously approve the
taking of such action in writing prior to the taking of such action;

(vii) The Seller will compensate each of its employees, consultants and agents
from the Seller’s own funds for services provided to the Seller; and

(viii) The Seller will not hold itself out to be responsible for the debts of
any Cartus Person.

(f) Payment Instruction to Obligors. The Seller will (or will cause the Servicer
to) (i) instruct all Obligors to submit all payments on the Pool Receivables
either (A) to one of the Lockboxes maintained at the Lockbox Banks for deposit
in a Lockbox Account or (B) directly to one of the Lockbox Accounts and
(ii) instruct all Persons receiving Home Sale Proceeds to deposit such Home Sale
Proceeds in one of the Lockboxes or Lockbox Accounts within two Business Days
after such receipt, except to the extent a longer escrow period is required
under applicable law, in which case such Home Sale Proceeds will be deposited
into one of the Lockboxes or Lockbox Accounts within one Business Day after the
expiration of such period.

(g) Segregation of Collections. The Seller will use reasonable efforts to
minimize the deposit of any funds other than Pool Collections into any of the
Lockbox Accounts and, to the extent that any such funds are deposited into any
of such Lockbox Accounts, promptly will identify any such funds or will cause
such funds to be so identified to the Servicer, it being understood and agreed
that the Seller does not hereby assume any affirmative duty to re-direct
Obligors to remit funds to alternate locations.

(h) Identification of Eligible Receivables. The Seller will (or will cause the
Servicer to) (i) establish and maintain necessary procedures for determining, no
less frequently than each date on which the Servicer needs such information to
prepare its next Receivables Activity Report or Weekly Activity Report, as
applicable, whether each Receivable qualifies as an Eligible Receivable, and for
identifying on any such date all CFC Receivables to be sold to ARSC on that date
that are not Eligible Receivables and (ii) will provide to the Servicer in a
timely manner information that shows whether, and to what extent, the CFC
Receivables described in such Receivables Activity Report or Weekly Activity
Report are Eligible Receivables.

 

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(i) Payment of Taxes. The Seller will file (or there will be filed on its behalf
as a member of a consolidated group) all tax returns and reports required by law
to be filed by it and will pay all taxes, assessments and governmental charges
thereby shown to be owing by it, except for any such taxes, assessments or
charges (i) that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens) or (ii) the amount of which, either singly or in the aggregate,
would not have a Material Adverse Effect.

(j) Receivables Reviews. Upon reasonable prior notice, the Seller will permit
ARSC or its assignees (or other Persons designated by ARSC from time to time) or
their agents or representatives (including without limitation certified public
accountants or other auditors), at the expense of the Seller and during regular
business hours, (i) to examine and make copies of and abstracts from, and to
conduct accounting reviews of, all CFC Records in the possession or under the
control of the Seller, including without limitation the related Contracts,
invoices and other documents related thereto and (ii) to visit the offices and
properties of the Seller for the purpose of examining any materials described in
the preceding clause (i) and to discuss matters relating to the CFC Receivables
or the other ARSC Purchased Assets or the performance by the Seller of its
obligations under any Transaction Document to which it is a party with any
Authorized Officers of the Seller having knowledge of such matters or with the
Seller’s certified public accountants or other auditors; provided, however, that
all such reviews will occur no more frequently than twice per year (with only
the first such review in any year being at the Seller’s expense) unless (i) a
Servicer Default has occurred and is continuing or (ii) ARSC or its successor or
assignee has given advance written notice to the Seller that it believes the
composition and/or performance of the ARSC Purchased Assets have deteriorated in
a manner materially adverse to the interests of ARSC or its assignees.

(k) Environmental Claims. The Seller will use commercially reasonable efforts to
promptly cure and have dismissed with prejudice to the satisfaction of ARSC any
actions and any proceedings relating to compliance with Environmental Laws
relating to any CFC Home, but only to the extent that the conditions that gave
rise to such proceedings were in existence as of the date on which ARSC acquired
the related CFC Receivable.

(l) Turnover of Collections. If the Seller or any of its agents or
representatives at any time receives any cash, checks or other instruments
constituting Pool Collections, such recipient will segregate and hold such
payments in trust for, and in a manner acceptable to, the Servicer and will,
promptly upon receipt (and in any event within one Business Day following
receipt) remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to a Lockbox Account.

(m) Performance and Compliance by Seller with CFC Home Purchase Contracts and
other Contracts. The Seller will, at its expense, timely and fully perform and
comply with, or cause to be timely and fully performed and complied with all
provisions, covenants and other promises required to be observed by it under the
CFC Home Purchase Contracts and other Contracts related to the CFC Receivables.

 

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(n) Compliance with Credit and Collection Policy. The Seller will (or will cause
the Servicer to) comply in all material respects with the Credit and Collection
Policy with respect to each CFC Receivable and the related Contract.

(o) Home Purchase Contracts. From and after the Closing Date, the Seller will
enter into, and purchase the related Homes pursuant to, all Home Purchase
Contracts relating to the Pool Relocation Management Agreements and will make
all Equity Payments, Mortgage Payments and Mortgage Payoffs to be made in
connection therewith in accordance with the Pool Relocation Management
Agreements.

Section 7.2 Reporting Requirements. From the Closing Date until the termination
of this Agreement in accordance with Section 11.4, the Seller agrees that it
will furnish to ARSC or its assignees:

(a) Annual Financial Statements. As soon as available and in any event within 95
days after the end of each fiscal year of the Performance Guarantor and the
Seller, as applicable, copies of (i) to the extent received by the Seller
pursuant to Section 7.2(a) of the Purchase Agreement, the consolidated balance
sheet of the Performance Guarantor and its consolidated subsidiaries as at the
end of such fiscal year and the related statements of earnings and cash flows
and stockholders’ equity of the Performance Guarantor and its consolidated
subsidiaries for such fiscal year and (ii) copies of the statements of earnings
of the Seller on a consolidated basis for such fiscal year, setting forth in
each case in comparative form the corresponding figures for the preceding fiscal
year and certified by the chief financial officer, chief accounting officer or
controller of the Seller (it being understood and agreed that such statements of
earnings will be prepared in accordance with the Seller’s customary management
accounting practices as in effect on the date hereof and need not be prepared in
accordance with GAAP);

(b) Material Adverse Effect. Promptly and in any event within two Business Days
after the president, chief financial officer, controller or treasurer of the
Seller has actual knowledge thereof, written notice that describes in reasonable
detail any event or occurrence that, individually or in the aggregate for all
such events or occurrences, has had, or that such Authorized Officer in its
reasonable good faith judgment determines could reasonably be expected to have,
a Material Adverse Effect (as defined in the Indenture);

(c) Proceedings. Promptly and in any event within five Business Days after an
Authorized Officer of the Seller has knowledge thereof, written notice of
(i) any litigation, investigation or proceeding of the type described in
Section 6.1(f) not previously disclosed to ARSC, (ii) any material adverse
development that has occurred with respect to any such previously disclosed
litigation, investigation or proceeding or (iii) any CFC Purchase Termination
Event or ARSC Purchase Termination Event or event that, with the giving of
notice or passage of time or both, would constitute an ARSC Purchase Termination
Event;

(d) ERISA Event. (i) As soon as possible and in any event within 30 days after
the Seller knows or has reason to know that a “reportable event” (as defined in
Section 4043 of ERISA) has occurred with respect to any Plan, a statement of an
Authorized Officer of the Seller setting forth details as to such reportable
event and the action that the Seller or an

 

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ERISA Affiliate proposes to take with respect thereto, together with a copy of
the notice of such reportable event, if any, given to the PBGC, the Internal
Revenue Service or the Department of Labor; (ii) promptly and in any event
within 10 Business Days after receipt thereof (or knowledge of the receipt by an
ERISA Affiliate thereof), a copy of any notice the Seller receives relating to
the intention of the PBGC to terminate any Plan or to appoint a trustee to
administer any such Plan; (iii) promptly and in any event within 10 Business
Days after a filing with the PBGC pursuant to Section 412(n) of the Code of a
notice of failure to make a required installment or other payment with respect
to a Plan, a statement of the chief financial officer of the Seller setting
forth details as to such failure and the action that the Seller proposes to take
(or knows will be taken) with respect thereto, together with a copy of such
notice given to the PBGC; and (iv) promptly and in any event within 30 Business
Days after receipt thereof by the Seller from the sponsor of a multiemployer
plan (as defined in Section 3(37) of ERISA), a copy of each notice received by
the Seller concerning the imposition of withdrawal liability or a determination
that a multiemployer plan is, or is expected to be, terminated or reorganized;

(e) Environmental Claims. Promptly and in any event within five Business Days
after receipt thereof, notice and copies of all written claims, complaints,
notices, actions, proceedings, requests for information or inquiries relating to
the condition of any CFC Homes or compliance with Environmental Laws relating to
the CFC Homes, other than those received in the ordinary course of business and
that, singly or in the aggregate, do not represent events or conditions that
would cause the representation set forth in Section 6.1(t) to be incorrect; and

(f) Other. Promptly, from time to time, such other information, documents,
records or reports with respect to the ARSC Purchased Assets or the condition or
operations, financial or otherwise, of the Seller as ARSC or its assignees may
from time to time reasonably request in order to protect the interests of ARSC
or such assignees under or as contemplated by this Agreement and the other
Transaction Documents, including timely delivery of all such information
required under any Enhancement Agreement.

Section 7.3 Negative Covenants of the Seller. From the Closing Date until the
termination of this Agreement in accordance with Section 11.4, the Seller agrees
that it will not:

(a) Sales, Liens, Etc. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien (other than
Permitted Liens) of anyone claiming by or through it on or with respect to, any
ARSC Purchased Asset or any interest therein or any Lockbox or Lockbox Account,
other than (i) sales of ARSC Purchased Assets pursuant to this Agreement and
(ii) sales of Homes in accordance with the applicable Contracts;

(b) No Mergers, Etc. Consolidate with or merge with or into any other Person or
convey, transfer or sell all or substantially all of its properties and assets
to any Person;

(c) Change in Name. Change its corporate name or the name under or by which it
conducts its business or the jurisdiction in which it is incorporated unless the
Seller has given ARSC and its assignees and the rating agencies then rating each
Series of Notes at least 30 days’ prior written notice thereof and unless, prior
to any such change in name or jurisdiction of incorporation, the Seller has
taken and completed all action required by Section 8.3;

 

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(d) Home Deeds. Record any Home Deeds with respect to any Homes except at the
direction of ARSC or its assignees or as permitted by Section 8.3 hereof or by
Section 2.01 (d) of the Transfer and Servicing Agreement; and

(e) Extension or Amendment of ARSC Purchased Assets. Extend, amend or otherwise
modify the terms of any CFC Receivable included in the ARSC Purchased Assets, or
amend, modify or waive any material term or condition related thereto, except in
accordance with Section 3.10 of the Transfer and Servicing Agreement.

(f) Change in Payment Instruction to Obligors. Make any change in its
instructions to Obligors or other Persons regarding payments to be made to the
Seller or payments to be made to any Lockbox Account (except for a change in
instructions solely for the purpose of directing such Obligors or other Persons
to make such payments to another existing Lockbox Account), unless (i) the
Indenture Trustee has received copies of a Lockbox Agreement with each new
Lockbox Bank duly executed by the Originator, the Seller, the Issuer, the
Indenture Trustee and such Lockbox Bank and (ii) in the case of any termination,
ARSC or its successors and assigns have received evidence to their satisfaction
that the Obligors that were making payments into a terminated Lockbox Account
have been instructed in writing to make payments into another Lockbox Account
then in use.

(g) Indebtedness. Create, incur or permit to exist, or give any guarantee or
indemnity in respect of, any Indebtedness except for (A) liabilities created or
incurred by the Seller pursuant to the Transaction Documents to which it is a
party or contemplated by such Transaction Documents and (B) other reasonable and
customary operating expenses.

(h) Amendments, Etc. Permit the validity or effectiveness of any Transaction
Document to which it is a party or the rights and obligations created thereby or
pursuant thereto to be amended, terminated, postponed or discharged, or permit
any amendment to any Transaction Document to which it is a party without the
consent of the Issuer and the Indenture Trustee, or permit any person whose
obligations form part of the ARSC Purchased Assets to be released from such
obligations, except in accordance with the terms of such Transaction Document.

(i) Capital Expenditures. Incur or make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personalty).

(j) Limitation on Business. Engage in any business other than financing,
purchasing, owning and selling and managing the ARSC Purchased Assets and the
CFC Homes in the manner contemplated by the Transaction Documents and all
activities incidental thereto, or enter into or be a party to any agreement or
instrument other than any Transaction Document or documents and agreements
incidental thereto. Notwithstanding the foregoing, Seller shall be allowed to
acquire Governmental Receivables from Kenosia and CRC, so long as (i) any such
acquisition is pursuant to an assignment agreement which is in form and
substance reasonably satisfactory to the Buyer and its assigns, including the
Issuer and the Majority Investors and (ii) on or prior to the date of such
acquisition, all UCC financing statements filed against the Seller shall be
amended to reflect the inclusion of such Governmental Receivables in the Seller
Receivables.

 

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(k) Capital Contributions. Except as contemplated by the Transaction Documents,
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another’s payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.

(l) Charter Amendments. Amend any provision of its certificate of incorporation
or by-laws unless (a) (i) ARSC shall have received not less than five Business
Days’ prior written notice thereof and (ii) the certificate of incorporation of
the Seller, as in effect on the date hereof, provides that such amendment can be
made without the vote of the Seller’s Independent Directors or (b) the Majority
Investors have consented to such amendment.

(m) Net Worth Requirements. Declare or pay any distributions on any of its
common stock or make any purchase, redemption or other acquisition of, any of
its common stock if, after giving effect thereto, (i) the aggregate principal
amount outstanding under the CFC Subordinated Note would exceed five times the
net worth of the Seller or (ii) the net worth of the Seller would be less than
$8,000,000.

Section 7.4 Affirmative Covenants of ARSC. From the Closing Date until the
termination of this Agreement in accordance with Section 11.4, ARSC hereby
agrees that it will perform the covenants and agreements set forth in this
Section 7.4.

(a) ARSC hereby acknowledges that the parties to the Transaction Documents are
entering into the transactions contemplated by the Transaction Documents in
reliance upon ARSC’s identity as a legal entity separate from Cartus and the
other Cartus Persons. From and after the date hereof until one year and one day
after the Final Payout Date, ARSC will take such actions as shall be required in
order that:

(i) ARSC will conduct its business in office space allocated to it and for which
it pays an appropriate rent and overhead allocation;

(ii) ARSC will maintain corporate records and books of account separate from
those of each Cartus Person and telephone numbers and stationery that are
separate and distinct from those of each Cartus Person;

(iii) ARSC’s assets will be maintained in a manner that facilitates their
identification and segregation from those of any Cartus Person;

(iv) ARSC will strictly observe corporate formalities in its dealings with the
public and with each Cartus Person, and funds or other assets of ARSC will not
be commingled with those of any Cartus Person, except as expressly permitted by
the Transaction Documents. ARSC will at all times, in its dealings with the
public and with each Cartus Person, hold itself out and conduct itself as a
legal entity separate and distinct from each Cartus Person. ARSC will not
maintain joint bank accounts or other depository accounts to which any Cartus
Person (other than Cartus in its capacity as Servicer under the Transfer and
Servicing Agreement) has independent access;

 

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(v) The duly elected board of directors of ARSC and duly appointed officers of
ARSC will at all times have sole authority to control decisions and actions with
respect to the daily business affairs of ARSC;

(vi) Not less than one member of ARSC’s board of directors will be an
Independent Director. ARSC will observe those provisions in its certificate of
incorporation that provide that ARSC’s board of directors will not approve, or
take any other action to cause the filing of, a voluntary bankruptcy petition
with respect to ARSC unless the Independent Director and all other members of
ARSC’s board of directors unanimously approve the taking of such action in
writing prior to the taking of such action;

(vii) ARSC will compensate each of its employees, consultants and agents from
ARSC’s own funds for services provided to ARSC;

(viii) ARSC will not hold itself out to be responsible for the debts of any
Cartus Person; and

(ix) ARSC will take all actions necessary on its part to be taken in order to
ensure that the facts and assumptions relating to ARSC set forth in the opinion
of Orrick, Herrington & Sutcliffe LLP dated as of July 31, 2006 relating to
substantive consolidation matters with respect to Cartus and CFC will be true
and correct at all times.

(b) ARSC assumes no obligations of the Originator under the Pool Relocation
Management Agreements with respect to any Home Purchase Contracts, including
without limitation the obligations of the Originator to make Equity Payments,
Mortgage Payoffs and Mortgage Payments with respect to Cartus Homes or of the
Seller to make Equity Payments, Mortgage Payoffs and Mortgage Payments with
respect to CFC Homes.

ARTICLE VIII

ADDITIONAL RIGHTS AND OBLIGATIONS

IN RESPECT OF THE ARSC PURCHASED ASSETS

Section 8.1 Rights of ARSC.

(a) Subject to Section 8.4(b), the Seller hereby authorizes ARSC and its
assignees and designees to take any and all steps in the Seller’s name and on
behalf of the Seller that ARSC, the Servicer and/or their respective designees
determine are reasonably necessary or appropriate to collect all amounts due
under any and all ARSC Purchased Assets, including without limitation endorsing
the name of the Seller on checks and other instruments representing Pool
Collections and enforcing such ARSC Purchased Assets.

(b) ARSC shall have no obligation to account for, to replace, to substitute or
to return any ARSC Purchased Asset to the Seller, except as provided in
Section 4.3(c).

 

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(c) ARSC shall have the unrestricted right to further assign, transfer, deliver,
hypothecate, subdivide or otherwise deal with the ARSC Purchased Assets and all
of ARSC’s right, title and interest in, to and under this Agreement on whatever
terms ARSC determines, pursuant to the Transfer and Servicing Agreement or
otherwise.

(d) As between the Seller and ARSC, ARSC shall have the sole right to retain any
gains or profits created by buying, selling or holding the ARSC Purchased
Assets.

Section 8.2 Responsibilities of the Seller. Anything herein to the contrary
notwithstanding:

(a) The Seller agrees to deliver directly to the Servicer (for ARSC’s account),
within one Business Day after receipt thereof, any Pool Collections that it
receives, in the form so received, and agrees that all such Pool Collections
shall be deemed to be received in trust for ARSC and its assignees and shall be
maintained and segregated separate and apart from all other funds and moneys of
the Seller until delivery of such Pool Collections to the Servicer; and

(b) The Seller hereby grants to ARSC an irrevocable power of attorney, with full
power of substitution, coupled with an interest, to take in the name of the
Seller all steps necessary or advisable to endorse, negotiate or otherwise
realize on any writing or other right of any kind held or transmitted by the
Seller or transmitted or received by ARSC (whether or not from the Seller) in
connection with any ARSC Purchased Asset (which power of attorney may be
exercised by ARSC’s successors and assigns in accordance with Section 8.4 and
Section 11.12(b)).

(c) The Seller shall perform, or cause to be performed, all of its obligations
hereunder and under the CFC Home Purchase Contracts and other Contracts related
to the CFC Receivables to which it is a party to the same extent as if such CFC
Receivables had not been sold hereunder, and the exercise by ARSC or its
designee or assignee of ARSC’s rights hereunder or in connection herewith shall
not relieve the Seller from any of its obligations under any such CFC Home
Purchase Contracts or Contracts related to the CFC Receivables.

Section 8.3 Further Action Evidencing Purchases. The Seller agrees that from
time to time, at its expense and upon reasonable request, it will promptly
execute and deliver all further instruments and documents and take all further
action as is reasonably necessary to perfect, protect or more fully evidence the
Purchase of the ARSC Purchased Assets by ARSC hereunder, or to enable ARSC or
its assignees to exercise or enforce any of its rights hereunder or under any
other Transaction Document to which the Seller is a party; provided, however,
that the Seller will not file or record any Home Deeds except to the extent such
recordation is required by local law, regulation or custom. Without limiting the
generality of the foregoing, the Seller shall:

(a) upon ARSC’s request, execute and file such financing or continuation
statements or amendments thereto or assignments thereof and such other
instruments or notices as ARSC or its assignees may reasonably determine to be
necessary or appropriate; and

(b) mark the master data processing records evidencing the ARSC Purchased Assets
and, if requested by ARSC or its assignees, legend (or cause the Servicer to
legend) the CFC Home Purchase Contracts to reflect the sale of the ARSC
Purchased Assets to ARSC pursuant to this Agreement.

 

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The Seller hereby authorizes ARSC and its assignees to file one or more
financing or continuation statements and amendments thereto and assignments
thereof with respect to all or any of the ARSC Purchased Assets, in each case
whether now existing or hereafter purchased or generated by the Seller. If
(i) the Seller fails to perform any of its agreements or obligations under this
Agreement and does not remedy such failure within the applicable cure period, if
any, and (ii) ARSC or its assignees in good faith reasonably believes that the
performance of such agreements and obligations is necessary or appropriate to
protect the interests of ARSC or its assignees under this Agreement, then ARSC
or its assignees may (but shall not be required to) perform or cause performance
of such agreement or obligation, and the reasonable expenses of ARSC or its
assignees incurred in connection with such performance shall be payable by the
Seller as provided in Section 10.1.

Section 8.4 Collections; Rights of ARSC and its Assignees.

(a) The Seller hereby transfers to ARSC the ownership of, and the exclusive
dominion and control over, each of the Lockboxes and Lockbox Accounts owned by
the Seller, and the Seller hereby agrees to take any further action that ARSC or
its assignees may reasonably request in order to effect or complete such
transfer.

(b) At any time following the designation of a Servicer other than Cartus
pursuant to the Transfer and Servicing Agreement:

(i) ARSC or its assignees may direct the Obligors of Pool Receivables, or any of
them, to pay all amounts payable under any Pool Receivable directly to ARSC or
its assignees;

(ii) At the request of ARSC or its assignees and at the Seller’s expense, the
Seller shall give notice of such ownership to each said Obligor and direct that
payments be made directly to ARSC or its assignees;

(iii) At the request of ARSC or its assignees and at the Seller’s expense, the
Seller shall (A) assemble all of the CFC Records, to the extent such CFC Records
are in its possession, or instruct any escrow agents holding any such documents,
instruments and other records on its behalf to make the same available and
(B) segregate all cash, checks and other instruments received by it from time to
time constituting Pool Collections in a manner reasonably acceptable to ARSC or
its assignees and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to
ARSC or its assignees; and

(iv) The Seller hereby authorizes ARSC or its assignees to take any and all
steps in the Seller’s name and on behalf of the Seller that are necessary or
desirable, in the reasonable determination of ARSC or its assignees, to collect
all amounts due under any and all ARSC Purchased Assets, including without
limitation endorsing the Seller’s name on checks and other instruments
representing Pool Collections and enforcing the ARSC Purchased Assets.

 

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ARTICLE IX

TERMINATION

Section 9.1 ARSC Purchase Termination Events. The following events shall be
“ARSC Purchase Termination Events”:

(a) The occurrence of an Event of Default or an Amortization Event with respect
to all outstanding Series of Notes; or

(b) Any representation or warranty made by the Seller under any of the
Transaction Documents, any Daily Seller Report or other information or report
delivered by the Seller with respect to the Seller or the ARSC Purchased Assets
shall prove to have been untrue or incorrect in any material respect when made
or deemed to have been made, such failure could reasonably be expected to have a
Material Adverse Effect and such occurrence remains unremedied for 30 days;
provided, however, that any such incorrect representation relating to a CFC
Receivable with respect to which the Seller has made a CFC Noncomplying Asset
Adjustment pursuant to Section 4.3(a) of this Agreement shall not constitute an
ARSC Purchase Termination Event; or

(c) (i) The Seller shall fail to perform or observe, or cause to be performed or
observed, as and when required, any term, covenant or agreement contained in
this Agreement or any of the other Transaction Documents to which it is a party,
or any CFC Home Purchase Contract to which it is a party required on its part to
be performed or observed, and such failure shall remain unremedied for: (A) in
the case of a failure to maintain its separate corporate existence pursuant to
Section 7.1(p), a failure to provide payment instructions to Obligors pursuant
to Section 7.1(f), a failure to segregate Pool Collections pursuant to
Section 7.1(g), a failure to provide access to records and required reports
pursuant to Section 7.1(j), or a breach of any of the negative covenants of the
Seller set forth in Section 7.3, ten calendar days or (B) in the case of any
other failure to perform or observe, as and when required, any term, covenant or
agreement, which failure could reasonably be expected to have a Material Adverse
Effect, 30 days or (iii) the Performance Guarantor shall fail to make any
required payment under its Performance Guaranty and such failure shall remain
unremedied for one Business Day or (iv) the Performance Guarantor shall
otherwise fail to perform under its Performance Guaranty; or

(d) An Event of Bankruptcy shall have occurred with respect to the Seller,
Cartus or the Performance Guarantor; or

(e) The representation and warranty in Section 6.1(k) shall not be true at any
time with respect to a substantial portion of the ARSC Purchased Assets; or

(f) Either (i) the Internal Revenue Service shall file notice of a Lien pursuant
to Section 6323 of the Internal Revenue Code with respect to any of the ARSC
Purchased Assets and such Lien shall not have been released within five days or
if released, proved to the satisfaction of the rating agencies then rating each
Series of Notes or (ii) the PBGC shall file, or shall indicate its intention to
file, notice of a Lien pursuant to Section 4068 of the Employee Retirement
Income Security Act of 1974 with respect to any of the ARSC Purchased Assets; or

 

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(g) This Agreement, the Purchase Agreement or the Performance Guaranty shall
cease to be in full force and effect for any reason other than in accordance
with its terms; or

(h) A CFC Purchase Termination Event or Transfer Termination Event shall have
occurred.

If an ARSC Purchase Termination Event occurs, the Seller shall promptly give
notice to ARSC and its assignees of such ARSC Purchase Termination Event.

Section 9.2 Purchase Termination.

(a) On the ARSC Termination Date, the Seller shall cease transferring ARSC
Purchased Assets to ARSC, provided that any right, title and interest of the
Seller in and to any CFC Designated Receivables arising from any Servicer
Advances made thereafter, including any Related Property relating thereto and
proceeds thereof, shall continue to be transferred. Notwithstanding any
cessation of the transfer to ARSC of additional ARSC Purchased Assets, ARSC
Purchased Assets transferred to ARSC prior to the Termination Date and Pool
Collections in respect of such ARSC Purchased Assets and the related Finance
Charges, whenever accrued in respect of such ARSC Purchased Assets, shall
continue to be property of ARSC available for transfer by ARSC pursuant to the
Transfer and Servicing Agreement.

(b) Upon the occurrence of an ARSC Purchase Termination Event, ARSC and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of an ARSC Purchase
Termination Event shall not deny to ARSC or its assignees any remedy in addition
to termination of its obligation to make Purchases hereunder to which ARSC or
its assignees may be otherwise appropriately entitled, whether by statute or
applicable law, at law or in equity.

ARTICLE X

INDEMNIFICATION; SECURITY INTEREST

Section 10.1 Indemnities by the Seller. Without limiting any other rights that
any CFC Indemnified Party may have hereunder or under applicable law, the Seller
agrees to indemnify ARSC and each of its successors, permitted transferees and
assigns, and all officers, directors, shareholders, controlling Persons,
employees and agents of any of the foregoing (each of the foregoing Persons, a
“CFC Indemnified Party”), from and against any and all damages, losses, claims
(whether on account of settlements or otherwise), actions, suits, demands,
judgments, liabilities (including penalties), obligations or disbursements of
any kind or nature and related costs and expenses (including reasonable
attorneys’ fees and disbursements) awarded against or incurred by any of them,
arising out of or as a result of any of the following (all of the foregoing,
collectively, “CFC Indemnified Losses”):

(a) any representation or warranty made by the Seller under any of the
Transaction Documents, any Daily Seller Report or any other information or
report delivered by the Seller with respect to the Seller or the ARSC Purchased
Assets, having been untrue or incorrect in any respect when made or deemed to
have been made; provided, however, that the Seller’s obligation to make a CFC
Noncomplying Asset Adjustment pursuant to Section 4.3(a) with respect to any
representation made in Section 6.1(l) as to Eligible Receivables having been
incorrect when made shall be the only remedy available to ARSC or its assignees
relating to such incorrect representation;

 

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(b) the failure by the Seller to comply with any material applicable law, rule
or regulation applicable to the Seller with respect to any ARSC Purchased Asset
or any failure of a ARSC Purchased Asset to comply with any such law, rule or
regulation as of the date of the sale of such ARSC Purchased Asset hereunder;

(c) the failure to vest and maintain in ARSC a valid ownership or security
interest in the ARSC Purchased Assets, free and clear of any Lien arising
through the Seller or anyone claiming through or under the Seller (including
without limitation any such failure arising from a circumstance described in the
definition of Permitted Exceptions);

(d) any failure of the Seller to perform its duties or obligations in accordance
with the provisions of the Transaction Documents or any Contract, in each case
to which it is a party;

(e) the failure to file, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to the transfer of any ARSC Purchased Assets
to ARSC, whether at the time of any sale or at any subsequent time;

(f) the failure by the Seller to pay when due any taxes owing by it (including
sales, excise or property taxes) payable in connection with the ARSC Purchased
Assets, other than any such taxes, assessments or charges that are being
diligently contested in good faith by appropriate proceedings, for which
adequate reserves in accordance with GAAP have been set aside on its books and
that have not given rise to any Liens (other than Permitted Liens);

(g) any reduction in the Unpaid Balance of any CFC Receivable included in the
ARSC Purchased Assets as a result of (i) any cash discount or any adjustment by
the Seller or any Affiliate of the Seller (other than Cartus, the Issuer or
ARSC), (ii) any offsetting account payable of the Seller to an Obligor, (iii) a
set-off in respect of any claim by, or defense or credit of, the related Obligor
against the Seller or any Affiliate of the Seller (other than Cartus, the Issuer
or ARSC) (whether such claim, defense or credit arises out of the same or a
related or an unrelated transaction) or (iv) the obligation of the Seller to pay
to the related Obligor any rebate or refund;

(h) any product liability or personal injury claim in connection with the
service which is the subject of any CFC Receivable or CFC Related Property; and

 

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(i) any investigation, litigation or proceeding related to any use by the Seller
of the proceeds of any Purchase made hereunder.

Notwithstanding anything to the contrary in this Agreement, any representations,
warranties and covenants made by the Seller in this Agreement or the other
Transaction Documents that are qualified by or limited to events or
circumstances that have, or are reasonably likely to have, given rise to a
Material Adverse Effect, shall (solely for purposes of the indemnification
obligations set forth in this Section 10.1) be deemed not to be so qualified or
limited.

Notwithstanding the foregoing, no indemnification payments shall be payable by
the Seller pursuant to this Section 10.1 until all amounts owing by the Issuer
under the Indenture have been paid in full and all amounts payable by the Seller
to Cartus under the CFC Subordinated Note have been paid in full.

Notwithstanding the foregoing (and with respect to clause (ii) below, without
prejudice to the rights that ARSC may have pursuant to the other provisions of
this Agreement or the provisions of any of the other Transaction Documents), in
no event shall any CFC Indemnified Party be indemnified for any CFC Indemnified
Losses (i) resulting from negligence or willful misconduct on the part of such
CFC Indemnified Party, (ii) to the extent the same includes losses in respect of
ARSC Purchased Assets and reimbursement therefor that would constitute credit
recourse to the Seller for the amount of any ARSC Purchased Asset not paid by
the related Obligor or (iii) resulting from the action or omission of the
Servicer.

If for any reason the indemnification provided in this Section 10.1 is
unavailable to a CFC Indemnified Party or is insufficient to hold a CFC
Indemnified Party harmless, then the Seller shall contribute to the maximum
amount payable or paid to such CFC Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by such CFC Indemnified Party on the one
hand and the Seller on the other hand, but also the relative fault of such CFC
Indemnified Party and the Seller, and any other relevant equitable
considerations.

Section 10.2 Security Interest. Without prejudice to the provisions of
Section 2.1 providing for the absolute transfer of the Seller’s interest in the
ARSC Purchased Assets and the proceeds thereof and any interest of the Seller in
the other property described in clause (vi) of Section 2.1(a) to ARSC in order
to secure the prompt payment and performance of all obligations of the Seller to
ARSC arising in connection with this Agreement, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
the Seller hereby assigns and grants to ARSC a first priority security interest
in the Seller’s right, title and interest, if any, in, to and under all of the
ARSC Purchased Assets and the proceeds thereof and any interest of the Seller in
the other property described in clause (vi) of Section 2.1(a), whether now or
hereafter existing.

 

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ARTICLE XI

MISCELLANEOUS

Section 11.1 Amendments; Waivers, Etc.

(a) The provisions of this Agreement may be amended, modified or waived from
time to time if such amendment, modification or waiver is in writing and signed
by the Seller and ARSC and its assignees; provided, however, that no amendment,
modification or waiver of this Agreement shall be effective unless the Indenture
Trustee shall consent to such amendment, modification or waiver in writing and
the rating agencies then rating each Series of Notes shall have been notified of
such amendment, modification or waiver. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

(b) No failure or delay on the part of ARSC or its assignees, or any CFC
Indemnified Party, or any other third party beneficiary referred to in
Section 11.12(a) in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to, or demand on, the Seller shall entitle it in
any case to any notice or demand in similar or other circumstances. No waiver or
approval by ARSC or its assignees under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.

Section 11.2 Notices, Etc. Unless otherwise stated herein, all notices, demands,
consents, approvals and other communications provided for hereunder shall be in
writing (including via telecopier) and shall be personally delivered or sent by
certified mail, return receipt requested, postage prepaid, by telecopier or by
overnight courier to the intended party at the address or telecopier number of
such party set forth on Schedule 11.2 hereof, or at such other address or
telecopier number as shall be designated by such party in a written notice to
the other party hereto given in accordance with this Section 11.2. Copies of all
notices and other communications provided for hereunder shall be delivered to
the Issuer at its address for notices set forth in the Transfer and Servicing
Agreement. All notices and communications provided for hereunder shall be
effective when received.

Section 11.3 Cumulative Remedies. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

Section 11.4 Binding Effect; Assignability; Survival of Provisions. This
Agreement shall be binding upon, and inure to the benefit of, ARSC and the
Seller and their respective successors and assigns. The Seller may not assign
any of its rights hereunder or any interest herein without the prior written
consent of ARSC and its assignees. This Agreement shall create and constitute
the continuing obligations of the parties hereto in accordance with its terms
and shall remain in full force and effect until terminated pursuant hereto. Such
termination shall not occur prior to the Final Payout Date. The rights and
remedies with respect to any

 

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breach of any representation and warranty made by the Seller pursuant to Article
VI and the indemnification and payment provisions of Article X and Section 11.6
and the provisions of Section 11.14, Section 11.16 and Section 11.17 shall be
continuing and shall survive any termination of this Agreement.

Section 11.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING § 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

Section 11.6 Costs, Expenses and Taxes. In addition to the obligations of the
Seller under Article X, the Seller agrees to pay on demand:

(a) all reasonable costs and expenses incurred by ARSC and its assignees in
connection with the negotiation, preparation, execution and delivery of, the
administration (including periodic auditing), the preservation of any rights
under, or the enforcement of, or any breach of, this Agreement (including any
amendment, supplement or modification hereto), including without limitation
(i) the reasonable fees, expenses and disbursements of counsel to any such
Persons incurred in connection with any of the foregoing or in advising such
Persons as to their respective rights and remedies under this Agreement and
(ii) all reasonable out-of-pocket expenses (including reasonable fees and
expenses of independent accountants) incurred in connection with any review of
the Seller’s books and records either prior to the execution and delivery hereof
or pursuant to Section 7.1(h), and

(b) all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement
or any amendment, supplement or modification thereto, and agrees to indemnify
each CFC Indemnified Party against any liabilities with respect to, or resulting
from, any delay in paying or omission to pay such taxes and fees.

Section 11.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW YORK, OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY
(a) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT;
(b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; AND (c) IRREVOCABLY APPOINTS CORPORATION SERVICE COMPANY (THE
“PROCESS AGENT”), WITH AN OFFICE ON THE DATE HEREOF AT 80 STATE STREET, ALBANY,
NEW YORK 12207, UNITED STATES OF AMERICA, AS ITS AGENT TO RECEIVE ON BEHALF OF
IT AND ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS THAT MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE
MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS IN CARE OF THE PROCESS
AGENT AT THE PROCESS AGENT’S ABOVE

 

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ADDRESS, AND EACH PARTY HERETO HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. EACH PARTY HERETO AGREES TO
ENTER INTO ANY AGREEMENT RELATING TO SUCH APPOINTMENT THAT THE PROCESS AGENT MAY
CUSTOMARILY REQUIRE AND TO PAY THE PROCESS AGENT’S CUSTOMARY FEES UPON DEMAND.
AS AN ALTERNATIVE METHOD OF SERVICE, EACH PARTY HERETO ALSO IRREVOCABLY CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PARTY AT ITS ADDRESS SPECIFIED
PURSUANT TO SECTION 11.2. NOTHING IN THIS SECTION 11.7 SHALL AFFECT THE RIGHT OF
EITHER PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF EITHER PARTY HERETO TO BRING ANY ACTION OR PROCEEDING
AGAINST THE OTHER PARTY HERETO OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY
OTHER JURISDICTION.

Section 11.8 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR
RELATING TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO OR ANY
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.

Section 11.9 Integration. This Agreement contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement between the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.

Section 11.10 Captions and Cross References. The various captions (including
without limitation the table of contents) in this Agreement are provided solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Agreement.

Section 11.11 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.

Section 11.12 Acknowledgment and Consent.

(a) The Seller acknowledges that, from time to time prior to the Termination
Date, ARSC intends to sell all of ARSC’s right, title and interest in, to and
under the ARSC Purchased Assets, this Agreement and all of the other Transaction
Documents pursuant to the Transfer and Servicing Agreement and that the
interests of ARSC hereunder will be further assigned pursuant to the Indenture.
The Seller acknowledges and agrees to each such sale by

 

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ARSC and consents to the sale and assignment by ARSC of all or any portion of
its right, title and interest in, to and under the ARSC Purchased Assets, this
Agreement and the other Transaction Documents and all of ARSC’s rights,
remedies, powers and privileges and all claims of ARSC against the Seller under
or with respect to this Agreement and the other Transaction Documents (whether
arising pursuant to the terms of this Agreement or otherwise available at law or
in equity), including without limitation (whether or not an Unmatured Servicer
Default or a Servicer Default has occurred and is continuing) (i) the right of
ARSC at any time to enforce this Agreement against the Seller and the
obligations of the Seller hereunder and (ii) the right at any time to give or
withhold any and all consents, requests, notices, directions, approvals,
demands, extensions or waivers under or with respect to this Agreement, any
other Transaction Document or the obligations in respect of the Seller
thereunder, all of which rights, remedies, powers, privileges and claims may be
exercised and/or enforced by ARSC’s successors ands assigns to the same extent
as ARSC may do. Each of the parties hereto acknowledges and agrees that ARSC’s
successors and assigns are third party beneficiaries of this Agreement,
including without limitation the rights of ARSC arising hereunder, and may rely
on the Seller’s representations and warranties made herein as if made directly
to them. The Seller hereby acknowledges and agrees that, except with respect to
its rights under Section 4.3, it has no claim to or interest in any of the
Lockbox Accounts.

(b) The Seller hereby agrees to execute all agreements, instruments and
documents and to take all other actions that ARSC or its assignees determines
are necessary or appropriate to evidence its consent described in
Section 11.12(a). The Seller hereby acknowledges and agrees that ARSC in all of
its capacities may assign to ARSC’s successors and assigns such powers of
attorney and other rights and interests granted by the Seller to ARSC hereunder
and agrees to cooperate fully with the Indenture Trustee in the exercise of such
rights.

Section 11.13 No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.

Section 11.14 No Proceedings.

(a) The Seller hereby agrees that it will not institute against ARSC or join any
other Person in instituting against ARSC any Insolvency Proceeding so long as
the Final Payout Date shall not have occurred or there shall not have elapsed
one year plus one day since the Final Payout Date. The foregoing shall not limit
the right of the Seller to file any claim in or otherwise take any action with
respect to any Insolvency Proceeding that was instituted against ARSC or its
successors by any Person other than the Seller.

(b) ARSC hereby agrees that it will not institute against the Seller or join any
other Person in instituting against the Seller any Insolvency Proceeding so long
as the Final Payout Date shall not have occurred or there shall not have elapsed
one year plus one day since the Final Payout Date. The foregoing shall not limit
the right of ARSC to file any claim in or otherwise take any action with respect
to any Insolvency Proceeding that was instituted against the Seller or its
successors by any Person other than ARSC.

 

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Section 11.15 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement are 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.

Section 11.16 Recourse to the Seller. Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of the Seller under the
Transaction Documents to which it is a party are solely the obligations of the
Seller, and no recourse shall be had for payment of any fee payable by or other
obligation of or claim against the Seller that arises out of any Transaction
Document to which the Seller is a party against any director, officer or
employee of the Seller. The provisions of this Section 11.16 shall survive the
termination of this Agreement.

Section 11.17 Recourse to ARSC. Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of ARSC under the
Transaction Documents to which it is a party are solely the obligations of ARSC,
and no recourse shall be had for payment of any fee payable by or other
obligation of or claim against ARSC that arises out of any Transaction Document
to which ARSC is a party against any director, officer or employee of ARSC. The
provisions of this Section 11.17 shall survive the termination of this
Agreement.

Section 11.18 Confidentiality. ARSC agrees to maintain the confidentiality of
any information regarding Cartus, the Seller, and Realogy obtained in accordance
with the terms of this Agreement that is not publicly available; provided,
however, that ARSC may reveal such information (a) as necessary or appropriate
in connection with the administration or enforcement of this Agreement or its
funding of Purchases under this Agreement or (b) as required by law, government
regulation, court proceeding or subpoena. Notwithstanding anything herein to the
contrary, none of Cartus, the Seller or Realogy shall have any obligation to
disclose to ARSC or its assignees any personal and confidential information
relating to a Transferred Employee.

Section 11.19 Conversion. Notwithstanding any covenants in this Agreement
requiring Cartus, CFC or ARSC to maintain its “corporate existence”, such entity
may elect to convert their status from that of a Delaware corporation to that of
a Delaware limited liability company, either by filing a certificate of
conversion with the Delaware Secretary of State or by merging with and into a
newly formed Delaware limited liability company(such conversion or merger, as
applicable, being herein called a “Conversion”) subject to the conditions that:

(a) (x) the Person formed by such Conversion (any such Person, the “Surviving
Entity”) is an entity organized and existing under the laws of the United States
of America or any State thereof, (y) such Surviving Entity expressly assumes, by
an agreement in form and substance satisfactory to the applicable transferee and
its assignees, performance of every covenant and obligation of such Person under
the Transaction Documents to which such Person is a party and (z) such Surviving
Entity delivers to the other parties to the Fifth Omnibus Amendment hereto dated
as of April 10, 2007 (such parties, the “Amendment Parties”) an opinion of
counsel that such Surviving Entity is duly organized and validly existing under
the laws of its organization, has duly executed and delivered such supplemental
agreement, and such

 

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supplemental agreement is a valid and binding obligation of such Surviving
Entity, enforceable against such Surviving Entity in accordance with its terms
(subject to customary exceptions relating to bankruptcy and equitable
principles) and covering such other matters as the Amendment Parties may
reasonably request;

(b) all actions necessary to maintain the perfection of the security interests
or ownership interests created by such Person under the Transaction Documents to
which such Person is a party in connection with such Conversion shall have been
taken, as evidenced by an opinion of counsel reasonably satisfactory to the
Amendment Parties;

(c) so long as such Person is the Servicer, no Servicer Default or Unmatured
Servicer Default is then occurring or would result from such Conversion;

(d) in the case of a Conversion of CFC or ARSC, (x) the organizational documents
of any Surviving Entity with respect to CFC or ARSC shall contain limitations on
its business activities and requirements for independent directors or managers
substantially equivalent to those set forth in its current organizational
documents, and (y) Orrick Herrington & Sutcliffe shall have delivered an opinion
of counsel reasonably satisfactory to the Amendment Parties that such Conversion
will not, in and of itself, alter the conclusions set forth in its opinions
previously issued in connection with the Transaction Documents with respect to
true sale matters, substantive consolidation matters and bankruptcy issues
relating to “home sale proceeds” (to the extent such opinions relate to such
Person); and

(e) each Amendment Party shall have received such other documents as such
Amendment Party may reasonably request.

In connection with any such Conversion and the resulting change in name of such
entity, Cartus, CFC and/or ARSC, as applicable, shall be required to comply with
the name change covenants in the Transaction Documents, except that to the
extent 30 days prior written notice of the name change is required, such notice
period shall be reduced to five Business Days.

From and after any such Conversion effected in compliance with the above
conditions, (a) all references in the Transaction Documents to any Person which
has altered its corporate structure to become a limited liability company shall
be deemed to be references to the Surviving Entity as successor to such Person,
(b) all representations, warranties and covenants in the Transaction Documents
which state that any of Cartus, CFC or ARSC is or is required to be a
corporation shall be deemed to permit and require the Surviving Entity to be a
limited liability company, (c) all references to such Person’s certificate of
incorporation, other organizational documents, capital stock, corporate action
or other matters relating to its corporate form will be deemed to be references
to the organizational documents and analogous matters relating to limited
liability companies, (d) all references to such Person’s directors or
independent directors will be deemed to be references to the Surviving Entity’s
directors, independent directors, managers or independent managers, as the case
may be and (e) no representation, warranty or covenant in any Transaction
Document shall be deemed to be breached or violated solely as a result of the
fact that the Surviving Entity in any Conversion may be disregarded as a
separate entity for state, local or federal income tax purposes.

 

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Section 11.20 Inclusion of Receivables Assigned from Kenosia Funding LLC and
Cartus Relocation Corporation. The parties hereto acknowledge and agree that the
definition of “Seller Receivables” in this Agreement may include certain
Receivables (the “Acquired Receivables’) which were neither sold by Cartus to
CFC under the Purchase Agreement nor originated by CFC. The parties hereto
acknowledge and agree that, for all purposes of the Transaction Documents,
(i) the Acquired Receivables shall be considered to be CFC Receivables
originated by CFC, and shall be deemed to be included in the ARSC Purchased
Assets transferred to the Issuer and (ii), notwithstanding anything to the
contrary in the Transaction Documents, CFC shall be allowed to enter into an
assignment agreement with each of Cartus, Kenosia and CRC, the form of which has
been approved in writing by the Majority Investors, and to consummate the
transfer of the Acquired Receivables along with the Related Property relating to
such Acquired Receivables (collectively, the “Acquired Assets”) on the terms and
conditions set forth therein. Such conditions shall include evidence of
compliance with the Federal Assignment of Claims Act and confirmation from the
Rating Agencies that the commercial paper ratings of the Conduit Purchasers
under the Note Purchase Agreement will not be reduced or withdrawn by reason of
such transaction. The parties hereto further acknowledge and agree that, so long
as such Acquired Receivables satisfy all other criteria set forth in the
definition of “Eligible Receivable”, such Acquired Receivables shall constitute
Eligible Receivables within the meaning of the Receivables Purchase Agreement,
the Transfer and Servicing Agreement and the Indenture notwithstanding the fact
that such Acquired Receivables were neither sold to CFC under the Purchase
Agreement nor otherwise originated by CFC.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above
written.

 

CARTUS FINANCIAL CORPORATION By:       Name: Dennis O’Gara   Title: Sup. CFO
APPLE RIDGE SERVICES CORPORATION By:       Name: Eric J. Barnes   Title: VP.
Controller

[Signature Page to Receivables Purchase Agreement]

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APPENDIX A

DEFINITIONS

A. Defined Terms. Capitalized terms used in this Agreement but not defined
herein shall have the meanings assigned to them in the Purchase Agreement. As
used in this Agreement, the following terms have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):

“ARSC” shall mean Apple Ridge Services Corporation, a Delaware corporation.

“ARSC Purchase Price” shall have the meaning set forth in Section 3.1(b).

“ARSC Purchase Termination Event” shall have the meaning set forth in
Section 9.1.

“ARSC Purchased Assets” shall have the meaning set forth in Section 2.1(a).

“ARSC Subordinated Loan” shall have the meaning set forth in Section 4.2.

“ARSC Subordinated Note” shall mean the ARSC Subordinated Note dated the Closing
Date, made by ARSC and payable to the order of Cartus substantially in the form
of Exhibit 4.2, as such note may be amended, supplemented, otherwise modified or
replaced from time to time.

“ARSC Subordinated Note Cap” shall have the meaning set forth in Section 4.2.

“ARSC Termination Date” shall mean the date specified by the Indenture Trustee
following the occurrence of an ARSC Purchase Termination Event; provided,
however, that if an Event of Bankruptcy has occurred with respect to either the
Seller or ARSC, the ARSC Termination Date shall be deemed to have occurred
automatically without any such notice.

“CFC Collections” shall mean all funds that are received on account of or
otherwise in connection with any CFC Pool Asset, including without limitation
all funds received (a) from or on behalf of any Obligor in payment of or
otherwise in respect of any CFC Receivable included in the CFC Pool Assets
(including without limitation funds received in respect of Advance Payments to
the extent necessary to reduce the Aggregate Employer Balance of Receivables
with respect to that Employer to zero), (b) from or on behalf of any Ultimate
Buyer in respect of CFC Home Sale Proceeds, (c) from any other Person to the
extent such funds were applied, or should have been applied, pursuant to any
Contract to repay or discharge any CFC Receivable or CFC Related Asset included
in the CFC Pool Assets (including without limitation insurance payments that any
Transaction Party applies in the ordinary course of its business to amounts owed
in respect of such CFC Pool Assets), (d) from the Seller in respect of Seller
Adjustments with respect to the ARSC Purchased Assets under this Agreement or
any other obligation of the Seller hereunder, (e) from the Originator in respect
to Originator Adjustments with respect to the ARSC Purchased Assets under
Section 4.3 (c) of the Purchase Agreement, (f) from the Servicer in respect of
Servicer Dilution Adjustments with respect to the

 

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ARSC Purchased Assets under Section 3.10(a) of the Transfer and Servicing
Agreement and (g) from the Performance Guarantor in respect of any payments made
by the Performance Guarantor as guarantor of the obligations of the Originator
or the Servicer under the Performance Guaranty executed by it.

“CFC Home” shall mean any Home subject to a CFC Home Purchase Contract.

“CFC Home Purchase Contract” shall mean any Home Purchase Contract that was
executed, and pursuant to which CFC purchases a Home, on or after the Closing
Date, and that relates to a Receivable included in the ARSC Purchased Assets.

“CFC Home Sale Contract” shall mean any Home Sale Contract with respect to a CFC
Home.

“CFC Home Sale Proceeds” shall mean any Home Sale Proceeds arising under a CFC
Home Sale Contract.

“CFC Indemnified Losses” shall have the meaning set forth in Section 10.1.

“CFC Indemnified Party” shall have the meaning set forth in Section 10.1.

“CFC Noncomplying Asset” shall have the meaning set forth in Section 4.3(a).

“CFC Noncomplying Asset Adjustment” shall have the meaning set forth in
Section 4.3(a).

“CFC Pool Asset” shall mean, collectively, all of the following assets and
interests in property, whether now existing or hereafter arising and wheresoever
located:

(a) all CFC Receivables, all CFC Related Assets, all CFC Collections and all
proceeds of the foregoing;

(b) the Performance Guaranty;

(c) all rights to payment due or to become due from the Seller under the
Transaction Documents and all other rights and interests of ARSC under this
Agreement and the other Transaction Documents;

(d) all Lockboxes and Lockbox Accounts and all funds on deposit therein and
certificates and instruments, if any, from time to time evidencing such accounts
and funds on deposit therein, all investments made with such funds, all claims
thereunder or in connection therewith and all interest, dividends, monies,
instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the foregoing; and

(e) all moneys due or to become due and all amounts received or receivable with
respect to any of the foregoing and all proceeds of, and earnings on the
foregoing.

 

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“CFC Purchased Assets” shall have the meaning set forth in Section 2.1(a).

“CFC Receivable” shall have the meaning set forth in Section 2.1(a).

“CFC Records” shall mean all Records maintained by the Seller with respect to
the CFC Receivables and CFC Related Assets.

“CFC Related Assets” shall have the meaning set forth in Section 2.1(a).

“CFC Related Property” shall have the meaning set forth in Section 2.1(a).

“Collection Account” shall have the meaning provided in the Transfer and
Servicing Agreement.

“CRC” shall mean Cartus Relocation Corporation, a wholly-owned subsidiary of
Cartus.

“Daily Seller Report” shall have the meaning set forth in Section 3.1.

“Eligible Receivable” shall mean any Eligible Receivable as defined in the
Purchase Agreement that has been (or will be at the time such Receivable becomes
included in the ARSC Purchased Assets) validly transferred to ARSC by CFC under
and in accordance with this Agreement. The term “Eligible Receivable” shall also
include each Governmental Receivable which (i) is acquired by Seller from
Kenosia and CRC pursuant to documentation which is in form and substance
reasonably satisfactory to the Buyer, and its assigns, including the Issuer and
the Majority Investors, (ii) is in existence on the date the related Guaranteed
Government Contract became a Pool Relocation Management Agreement and
(iii) would qualify as an Eligible Receivable but for the fact that such
Governmental Receivable was not acquired by Seller from the Originator under the
Purchase Agreement and, in the case of any Governmental Receivable arising out
of or with respect to Equity Payments, Mortgage Payments and Mortgage Payoffs,
such Receivable was originated by CRC and not by Seller

“Final Payout Date” shall mean the earlier of the date after the satisfaction
and discharge of the Indenture pursuant to Article IV thereof on which either
(i) all of the Notes have been paid in full or (ii) the Unpaid Balance of all
outstanding Pool Receivables has been reduced to zero; provided that for
purposes of this definition of Final Payout Date, the Unpaid Balance of a
Defaulted Receivable shall be deemed to be outstanding until all Homes related
thereto have been sold and such Receivable has been written off as
uncollectible.

“Government Receivable” shall mean any Receivable arising under or in connection
with a Government Guaranteed Contract.

“Independent Director” shall mean an individual who is an Independent Director
as defined in the Certificate of Incorporation of ARSC as in effect on the date
of this Agreement.

“Kenosia” shall mean Kenosia Funding, LLC, a wholly-owned subsidiary of CRC.

 

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“Material Adverse Effect” shall mean, with respect to any event or circumstance,
a material adverse effect on (a) the business, financial condition, operations
or assets of the Seller, (b) the ability of the Seller to perform its
obligations under any Transaction Document or all or any substantial portion of
the Contracts, (c) the validity or enforceability of, or collectibility of,
amounts payable by the Seller under any Transaction Document, (d) the status,
existence, perfection or priority of the interest of ARSC (and its assigns) in
the ARSC Purchased Assets, taken as a whole, in each case free and clear of any
Lien (other than Permitted Liens) or (e) the validity, enforceability or
collectibility of all or any substantial portion of the ARSC Purchased Assets.

“Permitted Exception” shall mean that, with respect to any representation,
warranty or covenant with respect to the interest of ARSC and its assignees in
the ARSC Purchased Assets or any Servicer Default, that (i) prior to recordation
(A) pursuant to Section 8.3 of this Agreement and/or Section 2.01(d)(i) of the
Transfer and Servicing Agreement or (B) upon the sale of a Home to an Ultimate
Buyer, record title to such Home may remain in the name of the related
Transferred Employee, and no recordation in real estate records of any mortgage
or any conveyance pursuant to the related Home Purchase Contract or Home Sale
Contract in favor of any Transaction Party, the Issuer or any of ARSC’s
assignees and assigns pursuant to the Transfer and Servicing Agreement will be
made except as otherwise permitted under Section 2.01(d)(i) of the Transfer and
Servicing Agreement and (ii) no delivery of any Home Purchase Contract, Home
Deed or Equity Loan Note to any custodian will be required.

“Pool Collections” shall mean, collectively and without duplication, the Cartus
Collections and the CFC Collections; provided, however, that any proceeds of
Receivables that gave rise to CFC Noncomplying Asset Adjustments that have been
paid as provided in Section 4.3 hereof or Cartus Noncomplying Asset Adjustments
that have been paid as provided in Section 4.3 of the Purchase Agreement and any
Related Property with respect to such Receivable shall not constitute Pool
Collections and shall be promptly returned to CFC as provided in Section 4.3
hereof.

“Pool Receivables” shall mean, collectively, the Cartus Receivables and the CFC
Receivables.

“Purchase” shall mean each purchase of Receivables, Related Assets and other
ARSC Purchased Assets by ARSC from the Seller hereunder.

“Purchase Agreement” shall mean the Purchase Agreement dated as of the date
hereof by and between Cartus and the Seller.

“Seller” shall mean Cartus Financial Corporation.

“Seller Adjustment” shall have the meaning set forth in Section 4.3(c).

“Seller Assets” shall have the meaning provided in Section 2.1(a).

“Seller Dilution Adjustment” shall have the meaning set forth in Section 4.3(b).

 

A-4

--------------------------------------------------------------------------------

“Seller Person” means the Seller and each of its Subsidiaries and Affiliates
other than Cartus, ARSC and the Issuer.

“Seller Purchased Assets” shall have the meaning provided in Section 2.1(a).

“Seller Receivables” shall have the meaning provided in Section 2.1(a).

“Seller Related Assets” shall have the meaning provided in Section 2.1(a).

“Seller Related Property” shall have the meaning provided in Section 2.1(a).

“Transaction Documents” means, collectively, this Agreement, the Purchase
Agreement, the Transfer and Servicing Agreement, the Performance Guaranty, the
ARSC Subordinated Note, the Lockbox Agreements and all agreements, instruments,
certificates, reports and documents (other than any of the Contracts) executed
and delivered or to be executed and delivered by ARSC under or in connection
with any of the foregoing, as any of the foregoing may be amended, supplemented,
restated or otherwise modified from time to time.

“Transaction Party” means ARSC, Cartus, the Seller, the Issuer or the Servicer
(so long as the Servicer is Cartus or an Affiliate thereof).

B. Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP or with United States generally accepted
regulatory principles, as applicable. To the extent that the definitions of
accounting terms in this Agreement are inconsistent with the meanings of such
terms under GAAP or regulatory accounting principles, the definitions contained
in this Agreement shall control. All terms used in Article 9 of the UCC in the
State of New York and not specifically defined herein are used herein as defined
in such Article 9.

C. Agreements, Representations and Warranties. The agreements, representations
and warranties of ARSC and Cartus Financial Corporation in this Agreement in
each of their respective capacities as buyer, Seller and originator shall be
deemed to be the agreements, representations and warranties of ARSC and Cartus
Financial Corporation solely in each such capacity for so long as ARSC and
Cartus Financial Corporation act in each such capacity under this Agreement,
provided that nothing in this paragraph shall be deemed to limit the survival of
such agreements, representations and warranties.

D. Computation of Time Periods. Unless otherwise stated in this Agreement with
respect to computation of a period of time from a specified date to a later
specified date, the word “from” means “from and including” and each of the words
“to” and “until” means “to but excluding”.

E. Reference. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and references to “Section”,
“subsection”, “Appendix”, “Schedule” and “Exhibit” in this Agreement are
references to Sections, subsections, Appendices, Schedules and Exhibits in or to
this Agreement unless otherwise specified in this Agreement. References herein
to this Agreement, the Purchase Agreement, the Transfer and Servicing Agreement,
the Indenture and the Performance Guaranty shall mean and be references to each
such document as amended and modified by that certain Omnibus Amendment,
Agreement and Consent dated December 20, 2004 to which the Originator and the
Buyer are a party, that certain Second Omnibus Amendment dated January 31, 2005
to which the Originator and the Buyer are a party, that certain Third Omnibus
Amendment, Agreement and Consent dated May 12, 2006 to which the Originator and
the Buyer are a party and that certain Fifth Omnibus Amendment dated April 10,
2007 to which the Originator and the Buyer are a party.

 

A-5

--------------------------------------------------------------------------------

SCHEDULE 2.1

to

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 25, 2000

List of CFC Home Purchase Contracts

Sent directly to Apple Ridge Services Corporation.

 

S-2.1-1

--------------------------------------------------------------------------------

SCHEDULE 6.1(n)

to

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 25, 2000

Principal Place of Business

and Chief Executive Office of the Seller

Cartus Financial Corporation

40 Apple Ridge Road

Suite 4C45

Danbury, CT 06810

Fax: 203-205-6575

List of Offices Where

the Seller Keeps CFC Records

Cartus Corporation

40 Apple Ridge Road

Danbury, CT 06810

Cartus Corporation

8081 Royal Ridge Parkway

Suite 200

Irving, TX 75063

Cartus Corporation

27271 Las Ramblas

Mission Viejo, CA 92691

 

S-6.1(n)-1

--------------------------------------------------------------------------------

SCHEDULE 6.1(q)

to

RECEIVABLES PURCHASE AGREEMENT

Dated as April 25, 2000 as amended by the THIRD OMNIBUS AMENDMENT, AGREEMENT

AND CONSENT Dated May 12, 2006

List of Legal Names for Cartus Financial Corporation

Cartus Financial Corporation

Cendant Mobility Financial Corporation

 

S-6.1(q)-1

--------------------------------------------------------------------------------

SCHEDULE 11.2

to

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 25, 2000

Notice Addresses

Cartus Financial Corporation

40 Apple Ridge Road

Suite 4C45

Danbury, CT 06810

Fax: 203-205-6575

Apple Ridge Services Corporation

40 Apple Ridge Road

Suite 4C45

Danbury, CT 06810

Fax: (203) 205-1335

 

S-11.2-1

--------------------------------------------------------------------------------

EXHIBIT 2.1

to

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 25, 2000

FORM OF NOTICE OF ADDITIONAL

CFC HOME PURCHASE CONTRACTS

[DATE]

Apple Ridge Services Corporation

40 Apple Ridge Road

Suite 4C45

Danbury, CT 06810

Fax: 203-205-1335

 

  Re: Additional CFC Home Purchase Contracts

Dear Sir or Madam:

Reference is made to the Receivables Purchase Agreement, dated as of April 25,
2000 (the “Receivables Purchase Agreement”), between Cartus Financial
Corporation and Apple Ridge Services Corporation. Capitalized terms used herein
and not defined herein shall have the meanings assigned to them in the
Receivables Purchase Agreement.

Pursuant to Section 2.1 of the Receivables Purchase Agreement, we are required
to deliver a notice to you on the last of day of each month setting forth the
new Home Purchase Contracts which were executed during such month. Attached
hereto is a list of CFC Home Purchase Contracts that were executed during
[Month/Year]. Pursuant to Section 2.1 of the Receivables Purchase Agreement,
Schedule 2.1 to the Receivables Purchase Agreement is hereby amended to include
the Home Purchase Contracts attached hereto.

 

Very truly yours, CARTUS FINANCIAL CORPORATION By:       Name:   Title:

 

E-2.1-1

--------------------------------------------------------------------------------

EXHIBIT 4.2

to

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 25, 2000

FORM OF ARSC SUBORDINATED NOTE

April 25, 2000

1. Note. FOR VALUE RECEIVED, the undersigned, APPLE RIDGE SERVICES CORPORATION,
a Delaware corporation (“ARSC”), hereby unconditionally promises to pay to the
order of CENDANT MOBILITY SERVICES CORPORATION, a Delaware corporation (“CMSC”),
in lawful money of the United States of America and in immediately available
funds, on the day following the Final Payout Date, the aggregate unpaid
principal sum outstanding of all “ARSC Subordinated Loans” made from time to
time by CMSC to ARSC pursuant to and in accordance with the terms of that
certain Receivables Purchase Agreement dated as of April 25, 2000, between the
Seller and ARSC (as amended, restated, supplemented, or otherwise modified from
time to time, the “Receivables Purchase Agreement”). Reference to Sections 4.2
and 5.2 of the Receivables Purchase Agreement is hereby made for a statement of
the terms and conditions under which the loans evidenced hereby have been and
will be made. All capitalized terms used herein that are not otherwise
specifically defined herein shall have the meanings given to such terms in the
Receivables Purchase Agreement. No advance shall be made hereunder on any date
if the aggregate principal amount outstanding hereunder on such date, after
giving effect to such advance, plus the aggregate amount then outstanding under
the Notes, would exceed an amount equal to five times the net worth of ARSC.
Proceeds of any loan hereunder shall be used solely for the purposes of paying
the Purchase Price of the ARSC Purchased Assets.

2. Agreement to Make Advances. Subject to the limitations set forth herein and
the following limitations set forth in Section 5.2 of the Receivables Purchase
Agreement: (a) this ARSC Subordinated Note has been duly executed and delivered
by ARSC and is in full force and effect, (b) no Event of Bankruptcy has occurred
and is continuing with respect to ARSC and (c) after giving effect to the ARSC
Subordinated Loan, the aggregate outstanding principal amount of this ARSC
Subordinated Note does not exceed the ARSC Subordinated Note Cap, CMSC
irrevocably agrees to make each ARSC Subordinated Loan requested by ARSC on or
prior to the Termination Date for the sole purpose of purchasing ARSC Purchased
Assets under the Receivables Purchase Agreement.

3. Interest. ARSC further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full hereof at a
rate equal to LIBOR plus 2.25%; provided, however, that if ARSC defaults in the
payment of any principal hereof, ARSC promises to pay, on demand, interest at
the Prime Rate plus 2.00% per annum on any such unpaid amounts, accrued with
respect to each Interest Period from the date such payment is due to the date of
actual payment. LIBOR shall be determined on each LIBOR

 

S-11.2-1

--------------------------------------------------------------------------------

Determination Date on the basis of the rate for deposits in United States
dollars for a one-month period which appears on Telerate Page 3750 as of 11:00
a.m., London time, on such date. If such rate does not appear on Telerate Page
3750, the rate for that LIBOR Determination Date shall be determined on the
basis of the rates quoted by the four major banks in the London interbank market
selected by the Paying Agent to the Paying Agent as the rates at which deposits
in United States dollars are offered by such banks in the London interbank
market at approximately 11:00 a.m., London time, on that day to prime banks in
the London interbank market for a one-month period. Notwithstanding the
foregoing, interest shall accrue at a rate equal to 8.46% per annum during the
first Interest Period. Interest shall be payable on the Distribution Date in
each month in arrears. The outstanding principal of any loan made under this
ARSC Subordinated Note shall be due and payable on the day after the Final
Payout Date, and may be repaid or prepaid at any time without premium or
penalty.

LIBOR Determination Date means the second London Business Day prior to the
commencement of the second and each subsequent Interest Period. A London
Business Day is any Business Day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market and banking institutions in London
are not authorized or obligated by law or regulation to close. An Interest
Period is the period beginning on and including the Distribution Date
immediately preceding such Distribution Date and ending on and excluding such
Distribution Date; provided that the first Interest Period shall begin on and
include April 25, 2000 and end on and exclude June 15, 2000. A Distribution Date
means June 15, 2000 and the fifteenth day of each calendar month thereafter, or
if such fifteenth day is not a Business Day, the next succeeding Business Day.

4. Principal Payments. CMSC is authorized and directed by ARSC to enter in its
books and records the date and amount of each loan made by it that is evidenced
by this ARSC Subordinated Note and the amount of each payment of principal made
by ARSC and, absent manifest error, such entries shall constitute prima facie
evidence of the accuracy of the information so entered; provided that neither
the failure of CMSC to make any such entry or any error therein shall expand,
limit or affect the obligations of ARSC hereunder.

5. Subordination. The indebtedness evidenced by this ARSC Subordinated Note is
subordinated to the prior payment in full of all of ARSC’s recourse obligations
under the Transfer and Servicing Agreement. The subordination provisions
contained herein are for the direct benefit of, and may be enforced by, ARSC’s
successors and assigns and/or any of their respective assignees (collectively,
the “Senior Claimants”) under the Transfer and Servicing Agreement. Until the
date after the Final Payout Date on which all advances outstanding under the
Transfer and Servicing Agreement have been repaid in full and all other
obligations of ARSC thereunder (all such obligations, collectively, the “Senior
Claims”) have been indefeasibly paid and satisfied in full, CMSC shall not
demand, accelerate, sue for, take, receive or accept from ARSC, directly or
indirectly, in cash or other property or by set-off or any other manner
(including without limitation from or by way of collateral) any payment or
security of all or any of the indebtedness under this ARSC Subordinated Note or
exercise any remedies or take any action or proceeding to enforce the same;
provided, however, that (i) CMSC hereby agrees that it will not institute
against ARSC any Insolvency Proceeding unless and until a period of one year and
one day has elapsed after the Final Payout Date and (ii) nothing in this
paragraph shall

 

S-11.2-1

--------------------------------------------------------------------------------

restrict ARSC from paying, or CMSC from requesting, any payments under this ARSC
Subordinated Note so long as ARSC is not required under the Transfer and
Servicing Agreement to set aside the funds used for such payments for the
benefit of, or otherwise pay over to, any of the Senior Claimants; and provided,
further, that the making of such payment would not otherwise violate the terms
and provisions of the Transfer and Servicing Agreement. Should any payment,
distribution or security or proceeds thereof be received by CMSC in violation of
the immediately preceding sentence, CMSC agrees that such payment shall be
segregated, received and held in trust for the benefit of, and deemed to be the
property of, and shall be immediately paid over and delivered to the Indenture
Trustee for the benefit of the Senior Claimants.

6. Bankruptcy; Insolvency. Upon the occurrence of any Insolvency Proceeding
involving ARSC as debtor, then and in any such event the Senior Claimants shall
receive payment in full of all amounts due under the Transfer and Servicing
Agreement (whether or not any or all of such amount is an allowable claim in any
such proceeding) before CMSC is entitled to receive payment on account of this
ARSC Subordinated Note and, to that end, any payment or distribution of assets
of ARSC of any kind or character, whether in cash, securities or other property
in any applicable Insolvency Proceeding which would otherwise be payable to, or
deliverable upon or with respect to, any or all indebtedness under this ARSC
Subordinated Note, is hereby assigned to and shall be paid or delivered by the
Person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) pursuant to the
Transfer and Servicing Agreement for application to, or as collateral for the
payment of, the Senior Claim until such Senior Claim shall have been paid in
full and satisfied.

7. GOVERNING LAW. THIS ARSC SUBORDINATED NOTE SHALL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
LAWS AND DECISIONS OF THE STATE OF NEW YORK. WHEREVER POSSIBLE EACH PROVISION OF
THIS ARSC SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS ARSC
SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH
PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS
OF THIS ARSC SUBORDINATED NOTE.

8. Waivers. All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
CMSC additionally expressly waives all notice of the acceptance by any Senior
Claimant of the subordination and other provisions of this ARSC Subordinated
Note and expressly waives reliance by any Senior Claimant upon the subordination
and other provisions herein provided.

9. Assignment. Prior to the satisfaction and discharge of the Indenture pursuant
to Article IV thereof, this ARSC Subordinated Note may not be assigned, pledged
or otherwise transferred to any party other than Originator except in accordance
with the Transfer and Servicing Agreement.

 

S-11.2-1

--------------------------------------------------------------------------------

APPLE RIDGE SERVICES CORPORATION By:       Name:   Title:

 

Acknowledged and agreed: CENDANT MOBILITY SERVICES CORPORATION By:       Name:  
Title:

 

S-11.2-1

--------------------------------------------------------------------------------

Exhibit A-3

--------------------------------------------------------------------------------

  

CONFORMED COPY

  

AS AMENDED BY:

  

1. Omnibus Amendment, Agreement and Consent dated December 20, 2004.

  

2. Second Omnibus Amendment dated January 31, 2005

  

3. Third Omnibus Amendment, Agreement and Consent dated May 12, 2006

  

4. Fourth Omnibus Amendment dated November 29, 2006

  

5. Fifth Omnibus Amendment dated April 10, 2007

  

6. Sixth Omnibus Amendment dated June 26, 2007

 

 

 

TRANSFER AND SERVICING AGREEMENT

Dated as of April 25, 2000

by and between

APPLE RIDGE SERVICES CORPORATION

as transferor,

CARTUS CORPORATION

as originator and servicer,

CARTUS FINANCIAL CORPORATION

as originator,

APPLE RIDGE FUNDING LLC

as transferee

and

THE BANK OF NEW YORK

as Indenture Trustee

 

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page ARTICLE I    DEFINITIONS   

Section 1.01

  

Definitions

   1

Section 1.02

  

Other Definitional Provisions

   9 ARTICLE II    SALE AND PURCHASE OF ASSETS   

Section 2.01

  

Sale and Purchase

   11

Section 2.02

  

Representations and Warranties of the Transferor

   13

Section 2.03

  

Representations and Warranties of the Issuer

   18

Section 2.04

  

No Assumption of Obligations Relating to Transferred Assets; Excess Home Sale
Proceeds

   18

Section 2.05

  

Affirmative Covenants of the Transferor

   18

Section 2.06

  

Negative Covenants of the Transferor

   21 ARTICLE III    ADMINISTRATION AND SERVICING OF RECEIVABLES   

Section 3.01

  

Acceptance of Appointment and Other Matters Relating to the Servicer

   24

Section 3.02

  

Duties of the Servicer and the Issuer

   24

Section 3.03

  

Servicing Compensation

   27

Section 3.04

  

Representations and Warranties of the Servicer

   27

Section 3.05

  

Affirmative Covenants of Servicer

   30

Section 3.06

  

Negative Covenants of Servicer

   32

Section 3.07

  

Records of the Servicer and Reports to be Prepared by the Servicer

   33

Section 3.08

  

Annual Certificate of Servicer

   36

 

- i -

--------------------------------------------------------------------------------

Section 3.09

  

Annual Servicing Report of Independent Public Accountants; Copies of Reports
Available

   36

Section 3.10

  

Adjustments; Modifications

   36

Section 3.11

  

Escrow Agents

   37

Section 3.12

  

Servicer Advances

   37

Section 3.13

  

Calculations

   38

Section 3.14

  

Application of Collections

   38 ARTICLE IV    ACCOUNTS AND POOL COLLECTIONS   

Section 4.01

  

Establishment of Collection Account

   39

Section 4.02

  

Pool Collections and Allocations

   40

Section 4.03

  

Withdrawals from the Collection Account

   40 ARTICLE V    SECURITY INTEREST   

Section 5.01

  

Security Interest

   41

Section 5.02

  

Enforcement of Rights

   41 ARTICLE VI    OTHER MATTERS RELATING TO THE TRANSFEROR   

Section 6.01

  

Liability of the Transferor

   42

Section 6.02

  

Indemnification by the Transferor

   42 ARTICLE VII    OTHER MATTERS RELATING TO THE SERVICER   

Section 7.01

  

Liability of the Servicer

   45

Section 7.02

  

Merger or Consolidation of, or Assumption of the Obligations of, the Servicer

   45

Section 7.03

  

Limitation on Liability of the Servicer and Others

   46

 

ii

--------------------------------------------------------------------------------

Section 7.04

  

Indemnification by the Servicer

   46

Section 7.05

  

Resignation of the Servicer

   47

Section 7.06

  

Access to Certain Documentation and Information Regarding the Receivables

   47 ARTICLE VIII    TERMINATION   

Section 8.01

  

Transfer Termination Events

   48

Section 8.02

  

Transfer Termination

   49 ARTICLE IX    SERVICER DEFAULTS   

Section 9.01

  

Servicer Defaults

   50

Section 9.02

  

Performance by Issuer

   52

Section 9.03

  

Indenture Trustee To Act; Appointment of Successor

   52

Section 9.04

  

Notification to Holders

   54

Section 9.05

  

Marketing Expenses Account

   54

Section 9.06

  

Lockbox Agreements

   55 ARTICLE X    TERMINATION   

Section 10.01

  

Termination

   56 ARTICLE XI    MISCELLANEOUS PROVISIONS   

Section 11.01

  

Amendment

   57

Section 11.02

  

Governing Law

   58

Section 11.03

  

Notices; Payments

   58

Section 11.04

  

Severability of Provisions

   58

 

iii

--------------------------------------------------------------------------------

Section 11.05

  

Further Assurances

   58

Section 11.06

  

Nonpetition Covenant

   58

Section 11.07

  

No Waiver; Cumulative Remedies

   60

Section 11.08

  

Counterparts

   60

Section 11.09

  

Third-Party Beneficiaries

   60

Section 11.10

  

Merger and Integration

   60

Section 11.11

  

Headings

   60

Section 11.12

  

Confidentiality

   60

Section 11.13

  

Costs, Expenses and Taxes

   60

Section 11.14

  

Submission to Jurisdiction

   61

Section 11.15

  

Waiver of Jury Trial

   62

Section 11.16

  

Acknowledgment and Consent

   62

Section 11.17

  

No Partnership or Joint Venture

   62

Section 11.18

  

Conversion

   62

Section 11.19

  

Inclusion of Receivables Assigned from Kenosia Funding LLC and Cartus Relocation
Corporation

   64

 

iv

--------------------------------------------------------------------------------

APPENDIX

APPENDIX A

   Definitions    SCHEDULES

SCHEDULE 2.1

   List of CFC Home Purchase Contracts   

SCHEDULE 6.l(n)

   Principal Place of Business and Chief Executive Office of the Seller and List
of Offices Where the Seller Keeps CFC Records   

SCHEDULE 6.1(q)

   List of Legal Names for Cartus Financial Corporation   

SCHEDULE 11.2

   Notice Addresses    EXHIBITS

EXHIBIT 2.1

   Form of Notice of Additional CFC Home Purchase Contracts   

EXHIBIT 4.2

   Form of ARSC Subordinated Note   

 

v

--------------------------------------------------------------------------------

THIS TRANSFER AND SERVICING AGREEMENT (this “Agreement”) dated as of April 25,
2000 is made by and between APPLE RIDGE SERVICES CORPORATION, a Delaware
corporation, as transferor, CARTUS CORPORATION, a Delaware corporation, as
originator and servicer (“Cartus” or the “Servicer”), CARTUS FINANCIAL
CORPORATION, a Delaware corporation, as originator (“CFC”), APPLE RIDGE FUNDING
LLC, a Delaware limited liability company (the “Issuer”), as transferee, and THE
BANK OF NEW YORK, as successor to JPMorgan Chase Bank, N.A., as successor
Indenture Trustee.

In consideration of the mutual agreements herein contained, each party agrees as
follows for the benefit of the other parties, the Indenture Trustee and the
holders of any Notes issued by the Issuer from time to time under the Indenture
to the extent provided herein:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Capitalized terms used in this Agreement but not
defined herein shall have the meanings assigned to them in the Receivables
Purchase Agreement or Purchase Agreement, as applicable. Whenever used in this
Agreement, the following words and phrases shall have the following meanings,
and the definitions of such terms are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine and
neuter genders of such terms.

“Agreement” shall mean this Transfer and Servicing Agreement and all amendments
hereof and supplements hereto.

“ARF Purchase Price” shall have the meaning set forth in Section 2.01(i).

“ARSC Indemnified Losses” shall have the meaning set forth in Section 6.02.

“ARSC Indemnified Party” shall have the meaning set forth in Section 6.02.

“Asset Deficiency” shall have the meaning set forth in the Indenture.

“Cash Equivalents” shall mean (i) investments in commercial paper maturing in
not more than 270 days from the date of issuance which at the time of
acquisition is rated at least A-1 or the equivalent thereof by Standard & Poor’s
or P-1 or the equivalent thereof by Moody’s, (ii) investments in direct
obligations or obligations that are guaranteed or insured by the United States
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having a maturity of
not more than three years from the date of acquisition, (iii) investments in
certificates of deposit maturing not more than one year from the date of origin
issued by a bank or trust company organized or licensed under the laws of the
United States or any state or territory thereof having capital, surplus and
undivided profits aggregating at least $500,000,000 and rated A or better by
Standard & Poor’s or A2 or better by Moody’s, (iv) money market mutual funds
having assets in excess of $2,000,000,000, (v) investments in asset-backed or
mortgage-backed securities, including investments in collateralized, adjustable
rate mortgage securities and those mortgage-backed securities that are

 

1

--------------------------------------------------------------------------------

rated at least AA by Standard & Poor’s or Aa by Moody’s or are of comparable
quality at the time of investment and (vi) banker’s acceptances maturing not
more than one year from the date of origin issued by a bank or trust company
organized or licensed under the laws of the United States or any state or
territory thereof and having capital, surplus and undivided profits aggregating
at least $500,000,000, and rated A or better by Standard & Poor’s or A2 or
better by Moody’s.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collection Account” shall have the meaning provided in Section 4.01.

“Distribution Date” shall mean, with respect to any Series, the date specified
in the applicable Supplement for payments to holders of the Notes of that
Series.

“Dollars,” “$” or “U.S. $” shall mean United States dollars.

“Eligible Account” shall mean an account that is (i) maintained with a
depository institution whose short-term debt obligations at the time of any
deposit therein are rated in the highest short-term debt rating categories by
Moody’s and Standard & Poor’s, (ii) one or more accounts maintained with a
depository institution, which accounts are fully insured by the FDIC, with a
minimum long-term unsecured debt rating of “A3” by Moody’s and “BBB+” by
Standard & Poor’s, (iii) a segregated trust account maintained with the
corporate trust office of the Indenture Trustee or an Affiliate of the Indenture
Trustee, in either case in its fiduciary capacity or (iv) an account otherwise
acceptable to each Rating Agency as evidenced by the delivery of a rating letter
by each Rating Agency on the Closing Date.

“Eligible Investments” shall mean the following instruments, investment
property, or other property, other than securities issued by or obligations of
Cartus or any of its Affiliates:

(a) direct obligations of, or obligations fully guaranteed as to timely payment
by, the United States of America;

(b) demand deposits, time deposits or certificates of deposit (having original
maturities of no more than 365 days) of depository institutions or trust
companies incorporated under the laws of the United States of America or any
state thereof, including the District of Columbia (or domestic branches of
foreign banks) and subject to supervision and examination by federal or state
banking or depository institution authorities, provided that, at the time of the
Issuer’s investment or contractual commitment to invest therein, the short-term
debt rating of such depository institution or trust company shall be A-1+ by
Standard & Poor’s and P-1 by Moody’s;

(c) commercial paper (having original or remaining maturities of no more than 30
days) having, at the time of the Issuer’s investment or contractual commitment
to invest therein, a short-term debt rating of A-1+ by Standard & Poor’s and P-1
by Moody’s;

 

2

--------------------------------------------------------------------------------

(d) demand deposits, time deposits and certificates of deposit that are fully
insured by the FDIC having, at the time of the Issuer’s investment therein, a
short-term debt rating of A-1+ by Standard & Poor’s and P-1 by Moody’s;

(e) bankers’ acceptances (having original maturities of no more than 365 days)
issued by any depository institution or trust company referred to in clause
(b) above;

(f) money market funds having, at the time of the Issuer’s investment therein, a
rating of AAAm or AAAm-G by Standard & Poor’s or Aaa by Moody’s (including funds
for which the Indenture Trustee or any of its Affiliates is investment manager
or advisor);

(g) time deposits and eurodollar deposits (having maturities not later than the
succeeding Distribution Date) other than as referred to in clause (d) above,
with a Person the commercial paper of which has a credit rating of at least A-1+
by Standard & Poor’s and P-1 by Moody’s; or

(h) any other investment of a type or rating that satisfies the Rating Agency
Condition.

“Eligible Receivables” shall have the meaning provided in the Receivables
Purchase Agreement.

“Eligible Servicer” shall mean Cartus or, if Cartus is not acting as Servicer,
an entity that, at the time of its appointment as Servicer, (a) is servicing a
portfolio of relocation services accounts and is acceptable to the Indenture
Trustee, each Series Enhancer and the Rating Agencies, (b) is legally qualified
and has the capacity to service the Receivables, (c) in the determination of the
Majority Investors, has demonstrated the ability to service professionally and
competently a portfolio of similar accounts in accordance with high standards of
skill and care, (d) is qualified to use the software that is then being used to
service the Receivables or obtains the right to use or has its own software that
is adequate to perform its duties under this Agreement and (e) has a net worth
of at least $ 25,000,000 as of the end of its most recent fiscal quarter (or
such lesser net worth as may be approved by the Majority Investors).

“FDIC” shall mean the Federal Deposit Insurance Corporation or any successor.

“Final Stated Maturity Date” shall have the meaning set forth in the Indenture.

“Home Purchase Price” shall mean, with respect to any Home, the appraised or
other value set forth in the related Home Purchase Contract as the purchase
price for such Home.

“Indebtedness” shall mean, with respect to any Person, in the aggregate, without
duplication, (i) all indebtedness, obligations and other liabilities of such
Person that are, at the date as of which Indebtedness is to be determined,
includable as liabilities in a balance sheet of such Person, other than
(x) accounts payable and accrued expenses and (y) current and deferred income
taxes and other similar liabilities, (ii) the maximum aggregate amount of all
liabilities of such Person or under any Guaranty, indemnity or similar
undertaking given or assumed of or in

 

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respect of, the indebtedness, obligations or other liabilities, assets,
revenues, income or dividends of any Person other than such Person and (iii) all
other obligations or liabilities of such Person with respect to the discharge of
the obligations of any Person other than itself. For purposes of the Transaction
Documents, the Indebtedness of any Person includes the Indebtedness of any
partnership or joint venture in which such Person is a general partner or a
joint venturer.

“Indenture” shall mean the master indenture dated as of April 25, 2000, by and
between the Issuer, the Indenture Trustee and The Bank of New York, as Paying
Agent, Authentication Agent and Transfer Agent and Registrar.

“Indenture Trustee” shall mean The Bank of New York, as successor to JPMorgan
Chase Bank, N.A., acting in its capacity as Indenture Trustee under the
Indenture.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended.

“Leverage Ratio” shall mean on any date, the ratio of (a) Total Senior Secured
Net Debt as of such date to (b) EBITDA for the period of four consecutive fiscal
quarters of the Borrower most recently ended as of such date, all determined on
a consolidated basis in accordance with GAAP; provided, that EBITDA shall be
determined for the relevant Test Period on a Pro Forma Basis. Capitalized Terms
used in this definition shall have the meaning set forth in the Realogy Credit
Agreement as in effect on April 10, 2007, without giving effect to any
subsequent amendments.

“Lockbox” shall mean any post office box to which the Obligors remit Pool
Collections.

“Lockbox Account” shall mean each lockbox account and associated demand deposit
account established pursuant to the Lockbox Agreement and such other lockbox
accounts and associated demand deposit accounts that the Servicer may establish
from time to time pursuant to a Lockbox Agreement.

“Lockbox Agreement” shall mean each lockbox agreement attached as Exhibit B and
any other lockbox agreement pursuant to which the Servicer establishes a Lockbox
Account in the name of the Indenture Trustee.

“Lockbox Bank” shall mean any institution at which a Lockbox or Lockbox Account
is maintained.

“Majority Investors” shall have the meaning set forth in the Indenture.

“Marketing Expenses Account” shall mean the account established pursuant to
Section 9.05.

“Material Adverse Effect” shall mean, with respect to any Person and any event
or circumstance, a material adverse effect on (a) the business, financial
condition, operations or assets of such Person, (b) the ability of such Person
to perform its obligations under any

 

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Transaction Document to which it is a party or, if applicable, all or any
substantial portion of the Contracts, (c) the validity or enforceability of, or
collectibility of, amounts payable by such Person under any Transaction Document
to which it is a party, (d) the status, existence, perfection or priority of the
interest of the Issuer and its assignees in the Transferred Assets, taken as a
whole, in each case free and clear of any Lien (other than a Permitted Lien) or
(e) the validity, enforceability or collectibility of all or any substantial
portion of the Transferred Assets.

“Moody’s” shall mean Moody’s Investors Service or its successor.

“Nonrecoverable Advance” shall mean any Servicer Advance previously made in
respect of a Home the Receivable arising from which has become a Defaulted
Receivable.

“Note” shall have the meaning provided in the Indenture.

“Officer’s Certificate” shall mean, unless otherwise specified in this
Agreement, a certificate delivered as provided herein, signed:

(a) by the President, any Vice President or the chief financial officer of the
Transferor or the Servicer, as the case may be, or

(b) by the President, any Vice President or the financial controller of any
Successor Servicer

(or by an officer holding an office with equivalent or more senior
responsibilities or, in the case of the Servicer or Successor Servicer, a
Servicing Officer, and, in the case of the Transferor, any executive of the
Transferor designated in writing by a Vice President or more senior officer of
the Transferor for this purpose).

“Opinion of Counsel” shall mean a written opinion of counsel, who may be counsel
for, or an employee of, the Person providing the opinion and who shall be
reasonably acceptable to the Issuer and the Indenture Trustee.

“Outstanding” shall have the meaning set forth in the Indenture.

“Outstanding Amount” shall have the meaning set forth in the Indenture.

“Possession Date” shall have, with respect to any Home, the meaning provided in
the related Home Purchase Contract.

“Purchase” shall mean each purchase of Receivables, Related Assets and other
ARSC Purchased Assets by the Issuer from ARSC hereunder.

“Purchase Agreement” shall mean the purchase agreement dated as of April 25,
2000, between Cartus and CFC, as amended from time to time.

 

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“Rating Agency” shall mean, with respect to any outstanding Series, each rating
agency, if any, specified in the applicable Supplement, selected by the Issuer
to rate the Notes of such Series.

“Rating Agency Condition” shall mean, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer, the Indenture
Trustee and the Issuer in writing that such action will not result in a
reduction, qualification or withdrawal of the then existing rating of any
outstanding Series with respect to which it is a Rating Agency (or, in the case
of any Series covered by a financial insurance policy or surety bond, the
reduction, qualification or withdrawal of the then existing rating of such
Series without giving effect to such insurance policy or surety bond, with such
notice also addressed to the issuer of the applicable insurance policy or surety
bond) or, with respect to any outstanding Series not rated by any Rating Agency,
the required consent specified in the Supplement for such Series.

“Realogy Credit Agreement” shall mean that certain Credit Agreement dated as of
April 10, 2007 among Domus Intermediate Holdings Corp., Realogy, the lenders and
other financial institutions party thereto and JP Morgan Chase Bank, N.A., as
Administrative Agent.

“Realogy Indebtedness” shall mean (i) all indebtedness, obligations and other
liabilities of Realogy and its Consolidated Subsidiaries that are, at the date
as of which Realogy Indebtedness is to be determined, includable as liabilities
in a consolidated balance sheet of Realogy and its Consolidated Subsidiaries,
other than (x) accounts payable and accrued expenses, (y) advances from clients
obtained in the ordinary course of the relocation management services business
of Realogy and its Consolidated Subsidiaries and (z) current and deferred income
taxes and other similar liabilities, plus (ii) without duplicating any items
included in Realogy Indebtedness pursuant to the foregoing clause (i), the
maximum aggregate amount of all liabilities of Realogy or any of its
Consolidated Subsidiaries under any guaranty, indemnity or similar undertaking
given or assumed of, or in respect of, the indebtedness, obligations or other
liabilities, assets, revenues, income or dividends of any person other than
Realogy or one of its Consolidated Subsidiaries and (iii) all other obligations
or liabilities of Realogy or any of its Consolidated Subsidiaries in relation to
the discharge of the obligations of any Person other than Realogy or one of its
Consolidated Subsidiaries.

“Receivables Activity Report” shall have the meaning provided in
Section 3.07(c).

“Receivables Purchase Agreement” shall mean the receivables purchase agreement
dated as of April 25, 2000, between CFC and the Transferor, as amended from time
to time.

“Required Marketing Expenses Account Amount” shall mean, on any Distribution
Date, an amount equal to:

(i) zero, if the average number of days the Homes relating to outstanding Pool
Receivables have been owned by Cartus and CFC (excluding any such Homes relating
to Self-Funding Obligors) as of the close of business on the last Business Day
of the immediately preceding Monthly Period was 120 days or less;

 

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(ii) 2.5% of the aggregate Home Purchase Price for all Homes owned by Cartus and
CFC (excluding any Homes relating to Self-Funding Obligors) as of the close of
business on the last Business Day of the immediately preceding Monthly Period,
if the average number of days such Homes have been owned by Cartus and CFC as of
the close of business on the last day of the immediately preceding Monthly
Period was greater than 120 days but less than or equal to 130 days;

(iii) 3.0% of the aggregate Home Purchase Price for all Homes owned by Cartus
and CFC (excluding any Homes relating to Self-Funding Obligors) as of the close
of business on the last Business Day of the immediately preceding Monthly
Period, if the average number of days such Homes have been owned by Cartus and
CFC as of the close of business on the last day of the immediately preceding
Monthly Period was greater than 130 days but less than or equal to 140 days;

(iv) 4.0% of the aggregate Home Purchase Price for all Homes owned by Cartus and
CFC (excluding any Homes relating to Self-Funding Obligors) as of the close of
business on the last Business Day of the immediately preceding Monthly Period,
if the average number of days such Homes have been owned by Cartus and CFC as of
the close of business on the last day of the immediately preceding Monthly
Period was greater than 140 days but less than or equal to 150 days; and

(v) 5.0% of the aggregate Home Purchase Price for all Homes owned by Cartus and
CFC (excluding any Homes relating to Self-Funding Obligors) as of the close of
business on the last Business Day of the immediately preceding Monthly Period,
if the average number of days such Homes have been owned by Cartus and CFC as of
the close of business on the last day of the immediately preceding Monthly
Period was greater than 150 days;

provided, that if a Weekly Reporting Event has occurred and is continuing, the
Required Marketing Expenses Account Amount shall be the greater of the amount
otherwise required above and $250,000.

“Series Account” shall mean any account or accounts established pursuant to the
Supplement for any Series of Notes.

“Service Transfer” shall have the meaning specified in Section 9.01.

“Servicer” shall mean Cartus, in its capacity as the Servicer under this
Agreement, and any successor thereto in such capacity appointed pursuant to
Article IX of this Agreement.

“Servicer Advance” shall mean any out-of-pocket payments made by the Servicer
with respect to a CFC Home, including but not limited to maintenance, repairs,
utilities, insurance, taxes, assessments, Mortgage Payoffs, Mortgage Payments,
Other Reimbursable Expenses, homeowners or association dues and other costs of
ownership.

 

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“Servicer Default” shall have the meaning set forth in Section 9.01.

“Servicer Dilution Adjustment” shall have the meaning set forth in
Section 3.10(a).

“Servicing Fee” shall have the meaning specified in Section 3.03.

“Servicing Officer” shall mean any officer of the Servicer or an
attorney-in-fact of the Servicer who in either case is involved in, or
responsible for, the administration and servicing of the Receivables and whose
name appears on a list of servicing officers furnished to the Issuer and the
Indenture Trustee by the Servicer, as such list may from time to time be
amended. The initial list of Servicing Officers is set forth in Exhibit C.

“Standard & Poor’s” shall mean Standard & Poor’s Ratings Services or its
successor.

“Sub-Servicer” shall have the meaning set forth in Section 3.01(b).

“Successor Servicer” shall have the meaning provided in Section 9.03(a).

“Supplement” shall mean, with respect to any Series, a supplement to the
Indenture, executed and delivered in connection with the original issuance of
the Notes of such Series, including all amendments thereof and supplements
thereto.

“Termination Notice” shall have the meaning set forth in Section 9.01.

“Transfer Termination Date” shall mean the date specified by the Indenture
Trustee at the direction of the Majority Investors following the occurrence of a
Transfer Termination Event; provided, however, that if an Event of Bankruptcy
has occurred with respect to either ARSC or the Issuer, the Transfer Termination
Date shall be deemed to have occurred automatically without any such notice.

“Transfer Termination Event” shall have the meaning set forth in Section 8.01.

“Transferor” shall mean Apple Ridge Services Corporation, a wholly owned special
purpose subsidiary of CFC incorporated in the State of Delaware, or its
successor under this Agreement.

“Transferred Assets” shall have the meaning set forth in Section 2.01(a).

“Unmatured Servicer Default” shall mean any event that, with the giving of
notice or lapse of time, or both, would become a Servicer Default.

“Weekly Activity Report” shall have the meaning provided in Section 3.07(d).

 

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“Weekly Reporting Event” shall mean that, commencing with the quarter ending
June 30, 2007, the Leverage Ratio as of the end of such fiscal quarter exceeds
the applicable ratio set forth below:

 

Fiscal Quarter Ending

   Senior
Secured
Leverage
Ratio

June 30, 2007

   6.00:1.00

September 30, 2007

   6.00:1.00

December 31, 2007

   6.00:1.00

March 31, 2008

   5.35:1.00

June 30, 2008

   5.35:1.00

September 30, 2008

   5.10:1.00

December 31, 2008

   5.10:1.00

March 31, 2009

   5.10:1.00

June 30, 2009

   5.10:1.00

September 30, 2009

   4.75:1.00

December 31, 2009

   4.75:1.00

March 31, 2010

   4.75:1.00

June 30, 2010

   4.75:1.00

September 30, 2010

   4.75:1.00

December 31, 2010

   4.75:1.00

March 31, 2011 and thereafter

   4.50:1.00

Section 1.02 Other Definitional Provisions.

(a) All terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.

(b) Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP or with United States generally accepted
regulatory accounting principles, as applicable. To the extent that the
definitions of accounting terms in this Agreement are inconsistent with the
meanings of such terms under GAAP or regulatory accounting principles, the
definitions contained in this Agreement shall control. All terms used in Article
9 of the UCC in the State of New York and not specifically defined herein are
used herein as defined in such Article 9.

 

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(c) Agreements, Representations and Warranties. The agreements, representations
and warranties of ARSC and Cartus in this Agreement in each of their respective
capacities as Transferor and Servicer shall be deemed to be the agreements,
representations and warranties of ARSC and Cartus solely in each such capacity
for so long as ARSC and Cartus act in each such capacity under this Agreement,
provided that nothing in this paragraph shall be deemed to limit the survival of
such agreements, representations and warranties.

(d) Computation of Time Periods. Unless otherwise stated in this Agreement with
respect to computation of a period of time from a specified date to a later
specified date, the word “from” means “from and including” and each of the words
“to” and “until” means “to but excluding”.

(e) References to Amounts. Unless otherwise specified, references to any amount
as on deposit or outstanding on any particular date shall mean such amount at
the close of business on such day.

(f) Reference. The word “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and references to “Section”,
“subsection”, “Appendix”, “Schedule” and “Exhibit” in this Agreement are
references to Sections, subsections, Appendices, Schedules and Exhibits in or to
this Agreement unless otherwise specified in this Agreement. References herein
to this Agreement, the Purchase Agreement, the Receivables Purchase Agreement,
the Indenture and the Performance Guaranty shall mean and be references to each
such document as amended and modified by that certain Omnibus Amendment,
Agreement and Consent dated December 20, 2004, that certain Second Omnibus
Amendment dated January 31, 2005, that certain Amendment, Agreement and Consent
dated January 30, 2006, that certain Third Omnibus Amendment, Agreement and
Consent dated May 12, 2006, that certain Fourth Omnibus Amendment dated
November 29, 2006 and that certain Fifth Omnibus Amendment dated April 10, 2007.

[END OF ARTICLE I]

 

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ARTICLE II

SALE AND PURCHASE OF ASSETS

Section 2.01 Sale and Purchase.

(a) Agreement. Upon the terms hereof, the Issuer agrees to buy, and the
Transferor agrees to sell, all of the Transferor’s right, title and interest in
and to the following:

(i) all Pool Receivables and other ARSC Purchased Assets owned by the Transferor
on the Closing Date or thereafter purchased, or any other Receivables purchased
under the Receivables Purchase Agreement, and all rights of the Transferor under
the Receivables Purchase Agreement with respect to the ARSC Purchased Assets;

(ii) all Pool Collections; and

(iii) all proceeds of and earnings on the foregoing.

The Pool Receivables and all other property described in the foregoing sentence
are sometimes collectively referred to herein as the “Transferred Assets.”

(b) Treatment of Certain Receivables and Related Property. It is expressly
understood that each Pool Receivable sold to the Issuer hereunder, together with
all other Transferred Assets then existing or thereafter created and arising
with respect thereto, will thereafter be the property of the Issuer (or its
assignees), without the necessity of any further purchase or other action by the
Issuer (other than satisfaction of the conditions set forth herein).

(c) No Recourse. Except as specifically provided in this Agreement, the sale and
purchase of the Transferred Assets under this Agreement shall be without
recourse. Cartus acknowledges that its representations, warranties, covenants
and indemnities as originator pursuant to the terms of the Purchase Agreement
have been assigned to the Issuer hereunder, and CFC acknowledges that its
representations, warranties, covenants and indemnities as originator pursuant to
the terms of the Receivables Purchase Agreement have been assigned to the Issuer
hereunder.

(d) Financing Statements. In connection with the transfer described above, the
Transferor agrees, at the expense of the Transferor:

(i) to record and file financing statements (and continuation statements when
applicable) with respect to the Transferred Assets conveyed by the Transferor
meeting the requirements of applicable law in such manner and in such
jurisdictions as are necessary to perfect and maintain the perfection of the
transfer and assignment of its interest in the Transferred Assets to the Issuer,
and to deliver a file stamped copy of each such financing statement or other
evidence of such filing to the Issuer and the Indenture Trustee as soon as
practicable after the Closing Date. Notwithstanding the other provisions of this
Section 2.01(d), the Transferor shall not, and shall not cause the Servicer to,
record any Home

 

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Deeds or any documents evidencing the conveyance of Home Purchase Contracts in
the applicable real estate records; provided, however, that the Transferor (or
the Servicer on its behalf) may record Home Deeds and/or Home Purchase Contracts
in such manner and in the names of Cartus (but only with respect to Cartus
Homes) or CFC, as applicable, or such transferees and in such capacities as the
Issuer may require (w) upon request by the relevant Obligor to record such Home
Deeds and/or Home Purchase Contracts, (x) upon or after the lapse of one year
from the Possession Date under the related Home Purchase Contract, (y) upon the
bankruptcy or insolvency of the relevant Obligor or (z) otherwise as required or
as deemed advisable in the judgment of the Servicer in the best interests of the
Issuer and its assignees; and

(ii) to promptly execute and deliver (or cause the Servicer or the related
Sub-Servicer to execute and deliver) all further instruments and documents, and
take all further action, that the Indenture Trustee may reasonably request in
order to perfect, protect or more fully evidence the conveyances hereunder, or
to enable the Indenture Trustee to exercise or enforce any of its rights under
the Indenture.

The Servicer shall record and file financing statements, cause Home Deeds and
Home Purchase Contracts to be recorded and deliver other instruments and
documents pursuant to this Section 2.01(d) at the direction of the Transferor.

(e) True Sales. The Transferor and the Issuer intend the transfers of
Transferred Assets hereunder to be true sales by the Transferor to the Issuer
that are absolute and irrevocable and to provide the Issuer with the full
benefits of ownership of the Transferred Assets, and neither the Transferor nor
the Issuer intends the transactions contemplated hereunder to be characterized
as loans from the Issuer to the Transferor secured by the Transferred Assets;
provided, that, notwithstanding the foregoing, the Transferor and the Issuer
acknowledge and agree that such sales may not be recognized for accounting
purposes in any financial statements including the Transferor and the Issuer due
to the application of GAAP.

(f) Marking of Records. In connection with the transfer described herein,
(i) the Transferor agrees to indicate clearly and unambiguously in its computer
files, books and records on or prior to the Closing Date that the Pool
Receivables and other Transferred Assets have been conveyed to the Issuer
pursuant to this Agreement by so marking such computer files, books and records,
and (ii) the Servicer agrees to indicate clearly and unambiguously in its
computer files, books and records on or prior to the Closing Date that the Pool
Receivables and other Transferred Assets have been conveyed to the Issuer
pursuant to this Agreement by so marking such computer files, books and records,
including the master data processing records evidencing the Transferred Assets.

(g) Adjustments. The Transferor shall pay to the Issuer in cash, on the date of
receipt by the Transferor, any payment received by the Transferor in respect of
Originator Adjustments made by Cartus to CFC pursuant to the Purchase Agreement
or Seller Adjustments made by CFC to the Transferor pursuant to the Receivables
Purchase Agreement. The Transferor shall instruct Cartus and CFC to deposit all
payments in respect of Originator Adjustments and Seller Adjustments directly in
the Collection Account.

 

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(h) Purchases. On the Closing Date, the Issuer shall purchase all of the
Transferor’s right, title and interest in and to all Pool Receivables existing
at the close of business on the immediately preceding Business Day, together
with all other Transferred Assets related thereto. On each Business Day
thereafter, until the Transfer Termination Date, the Issuer shall purchase all
of the Transferor’s right, title and interest in and to all Pool Receivables
existing as of the close of business on the immediately preceding Business Day
and all Transferred Assets related thereto that were not previously purchased by
the Issuer hereunder. Notwithstanding the foregoing, if an Insolvency Proceeding
is pending with respect to either the Transferor or the Issuer prior to the
Transfer Termination Date, the Transfer shall not sell, and the Issuer shall not
buy, any Transferred Assets hereunder unless and until such Insolvency
Proceeding is dismissed or otherwise terminated.

(i) Payment of ARF Purchase Price. With respect to the Purchase of any
Transferred Assets by the Issuer from the Transferor pursuant to this Article
II, the Issuer shall pay to the Transferor an agreed purchase price (the “ARF
Purchase Price”). The ARF Purchase Price paid by the Issuer on the Closing Date
and on each subsequent Business Day on which any Transferred Assets are
purchased by the Issuer shall be paid (i) by paying such amount in cash or
(ii) by means of capital contributed by the Transferor to the Issuer in the form
of a contribution of the Transferred Assets. To the extent funds are released to
it from the Collection Account, the Issuer agrees that it will use such released
funds to the extent necessary to pay the ARF Purchase Price.

Section 2.02 Representations and Warranties of the Transferor. The Transferor
hereby makes the representations and warranties set forth in this Section 2.02,
in each case as of the date hereof, as of the Closing Date, as of the date of
each transfer by the Transferor of the Transferred Assets hereunder and as of
any other date specified in such representation or warranty.

(a) Organization and Good Standing. The Transferor is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware and has full power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted. The Transferor had at all relevant times, and now has, all
necessary power, authority and legal right to own and sell the Transferred
Assets.

(b) Due Qualification. The Transferor is duly qualified to do business, is in
good standing as a foreign corporation, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals and in which the failure so to qualify or to obtain such licenses and
approvals or to preserve and maintain such qualification, licenses or approvals
could reasonably be expected to give rise to a Material Adverse Effect with
respect to the Transferor.

 

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(c) Power and Authority: Due Authorization. The Transferor (i) has all necessary
corporate power and authority (A) to execute and deliver this Agreement and the
other Transaction Documents to which it is a party, (B) to perform its
obligations under this Agreement and the other Transaction Documents to which it
is a party and (C) to sell and assign the Transferred Assets on the terms and
subject to the conditions herein and therein provided and (ii) has duly
authorized by all necessary corporate action such sale and assignment and the
execution, delivery and performance of, and the consummation of the transactions
provided for in, this Agreement and the other Transaction Documents to which it
is a party.

(d) Valid Sale; Binding Obligations. This Agreement constitutes either a valid
sale, transfer, set-over and conveyance, or the grant of a first perfected
security interest, to the Issuer of all of the Transferor’s right, title and
interest in, to and under the Transferred Assets, which is perfected and of
first priority (subject to Permitted Liens and Permitted Exceptions) under the
UCC and other applicable law, enforceable against creditors of, and purchasers
from, the Transferor, free and clear of any Lien (other than Permitted Liens);
and this Agreement constitutes, and each other Transaction Document to which the
Transferor is a party when duly executed and delivered will constitute, a legal,
valid and binding obligation of the Transferor, enforceable against the
Transferor in accordance with its terms, except (i) as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) as such enforceability may be limited by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.

(e) No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents to be signed by the Transferor, and the fulfillment
of the terms hereof and thereof, will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under (A) the certificate of
incorporation or the by-laws of the Transferor or (B) any material indenture,
loan agreement, mortgage, deed of trust or other material agreement or
instrument to which the Transferor is a party or by which it or any of its
properties is bound, (ii) result in the creation or imposition of any Lien on
any of the Transferred Assets pursuant to the terms of any such material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument other than this Agreement and the other Transaction Documents or
(iii) conflict with or violate any federal, state, local or foreign law or any
decision, decree, order, rule or regulation applicable to the Transferor or of
any federal, state, local or foreign regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Transferor,
which conflict or violation described in this clause (iii), individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Transferor.

(f) Litigation and Other Proceedings. (i) There is no action, suit, proceeding
or investigation pending, or to the best knowledge of the Transferor threatened,
against the Transferor before any court, arbitrator, regulatory body,
administrative agency or other tribunal or governmental instrumentality and
(ii) the Transferor is not subject to any order, judgment,

 

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decree, injunction, stipulation or consent order of or with any court or other
Government Authority that, in the case of either of the foregoing clauses (i) or
(ii), (A) asserts the invalidity of this Agreement or any other Transaction
Document, (B) seeks to prevent the sale of any Transferred Asset by the
Transferor to the Issuer, the creation of a material amount of Pool Receivables
or the consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (C) seeks any determination or ruling that, in
the reasonable judgment of the Transferor, would materially and adversely affect
the performance by the Transferor of its obligations under this Agreement or any
other Transaction Document to which it is a party or the validity or
enforceability of this Agreement or any other Transaction Document to which it
is a party or (D) individually or in the aggregate for all such actions, suits,
proceedings and investigations could reasonably be expected to have a Material
Adverse Effect with respect to the Transferor.

(g) Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a Material Adverse Effect with respect to the Transferor,
(i) all authorizations, consents, orders and approvals of, or other actions by,
any Governmental Authority that are required to be obtained by the Transferor in
connection with the conveyance of the Transferred Assets or the due execution,
delivery and performance by the Transferor of this Agreement or any other
Transaction Document to which it is a party and the consummation of the
transactions contemplated by this Agreement have been obtained or made and are
in full force and effect and (ii) all filings with any Governmental Authority
that are required to be obtained in connection with such conveyances and the
execution and delivery by the Transferor of this Agreement have been made;
provided, however, that prior to recordation pursuant to Section 2.01(d)(i) or
upon the sale of a Home to an Ultimate Buyer, record title to such Home may
remain in the name of the related Transferred Employee and no recordation in
real estate records of the conveyance of the related Home Purchase Contract or
Home Sale Contract shall be made except as otherwise required or permitted under
Section 2.01(d)(i).

(h) Margin Regulations. The Transferor is not engaged, principally or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meanings of Regulations T, U and
X of the Board of Governors of the Federal Reserve System). The Transferor has
not taken and will not take any action to cause the use of proceeds of the sales
hereunder to violate said Regulations T, U or X.

(i) Taxes. The Transferor has filed (or there have been filed on its behalf as a
member of a consolidated group) all tax returns and reports required by law to
have been filed by it and has paid all taxes, assessments and governmental
charges thereby shown to be owing by it, other than any such taxes, assessments
or charges (i) that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens) or (ii) the amount of which, either singly or in the aggregate,
would not have a Material Adverse Effect with respect to the Transferor.

 

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(j) Solvency. After giving effect to each conveyance of Transferred Assets
hereunder, the Transferor is solvent and able to pay its debts as they come due,
and has adequate capital to conduct its business as presently conducted.

(k) Quality of Title/Valid Transfers.

(i) Immediately before each transfer hereunder to the Issuer, each Transferred
Asset to be sold to the Issuer shall be owned by the Transferor free and clear
of any Lien (other than any Permitted Lien), and the Transferor shall have made
all filings and shall have taken all other action under applicable law in each
relevant jurisdiction in order to protect and perfect the ownership or security
interest of the Issuer and its assignees in such Transferred Assets against all
creditors of, and purchasers from, the Transferor (subject to Permitted
Exceptions).

(ii) With respect to each Pool Receivable transferred hereunder on such date,
the Issuer shall acquire a valid and (subject to Permitted Exceptions) perfected
ownership or security interest in such Pool Receivable and any identifiable
proceeds thereof, free and clear of any Lien (other than any Permitted Liens).

(iii) As of the date of transfer of a Transferred Asset to the Issuer, no
effective financing statement or other instrument similar in effect that covers
all or part of such Transferred Asset or any interest therein is on file in any
recording office except such as may be filed (A) in favor of Cartus in
accordance with the Pool Relocation Management Agreements, (B) in favor of CFC
pursuant to the Purchase Agreement, (C) in favor of the Transferor pursuant to
the Receivables Purchase Agreement, (D) in favor of the Issuer pursuant to this
Agreement or otherwise filed by or at the direction of the Issuer, (E) in favor
of the Indenture Trustee under the Indenture and (F) to evidence any Mortgage on
a Home created by a Transferred Employee.

(l) Accuracy of Information. All written information furnished by the Transferor
to the Issuer or its successors and assigns pursuant to or in connection with
any Transaction Documents or any transaction contemplated herein or therein with
respect to the Transferred Assets transferred hereunder on such date is true and
correct in all material respects on such date.

(m) Offices. The principal place of business and chief executive office of the
Transferor is located, and the offices where the Servicer keeps all Records
related to the Transferred Assets (and all original documents relating thereto)
are located at the addresses specified in Schedule 2.02(m), except that (i) Home
Deeds and related documents necessary to close Home sale transactions, including
powers of attorney, may be held by local attorneys or escrow agents acting on
behalf of CFC (with respect to CFC Homes) or Cartus (with respect to Cartus
Homes) in connection with the sale of Homes to Ultimate Buyers, so long as such
local

 

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attorneys are notified of the interest of the Issuer, the Indenture Trustee and
the holders of any Notes therein and (ii) Records relating to any Pool
Relocation Management Agreement and the Transferred Assets arising thereunder or
in connection therewith may be maintained at the offices of the related
Employer.

(n) Investment Company Act. The Transferor is not, and is not controlled by, an
“investment company” registered or required to be registered under the
Investment Company Act.

(o) Legal Names. Except as otherwise set forth in Schedule 2.02(o), since
January 1, 1995, the Transferor (i) has not been known by any legal name other
than its corporate name as of the date hereof, (ii) has not been the subject of
any merger or other corporate reorganization that resulted in a change of name,
identity or corporate structure and (iii) has not used any trade names other
than its actual corporate name.

(p) Compliance with Applicable Laws. The Transferor is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all
governmental authorities (federal, state, local or foreign, including without
limitation Environmental Laws), a violation of any of which, individually or in
the aggregate for all such violations, is reasonably likely to have a Material
Adverse Effect with respect to the Transferor.

(q) Business and Indebtedness of Transferor. The Transferor has no Indebtedness
except as contemplated by Section 4.2 of the Receivables Purchase Agreement and
under this Agreement. The Transferor has not engaged in any business other than
the Purchase of Pool Receivables and other ARSC Purchased Assets under the
Receivables Purchase Agreement and the transfer of Pool Receivables and other
Transferred Assets under this Agreement.

The representations and warranties set forth in this Section 2.02 shall survive
the transfers and assignments of the Pool Receivables and other Transferred
Assets to the Issuer and the issuance of the Notes under the Indenture. Upon
discovery by the Transferor, the Servicer or the Issuer of a breach of any of
the representations and warranties set forth in this Section 2.02, the party
discovering such breach shall give notice to the other parties within three
Business Days following such discovery, provided that the failure to give notice
within three Business Days shall not preclude subsequent notice.

 

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Section 2.03 Representations and Warranties of the Issuer. The Issuer hereby
represents and warrants, on and as of the date hereof and on and as of the
Closing Date, that (a) this Agreement has been duly authorized, executed and
delivered by the Issuer and constitutes the Issuer’s valid, binding and legally
enforceable obligation, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) as such
enforceability may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
(b) the execution, delivery and performance of this Agreement does not violate
any federal, state, local or foreign law applicable to the Issuer or any
agreement to which the Issuer is a party and (c) all of the membership interests
of the Issuer are directly or indirectly owned by the Transferor, and all such
membership interests are fully paid and nonassessable.

Section 2.04 No Assumption of Obligations Relating to Transferred Assets; Excess
Home Sale Proceeds.

(a) The sales and Purchases of Transferred Assets do not constitute and are not
intended to result in a creation or an assumption by the Issuer, the Indenture
Trustee or any holder of the Notes of any obligation of Cartus, CFC, the
Transferor or any other Person in connection with the Pool Receivables or the
other Transferred Assets or under the related Contracts or any other agreement
or instrument relating thereto, including without limitation any obligation to
any Obligors or Transferred Employees. None of the Issuer, the Indenture Trustee
or any holder of the Notes shall have any obligation or liability to any
Obligor, Transferred Employee or other customer or client of Cartus (including
without limitation any obligation to perform any of the obligations of Cartus or
CFC under any Relocation Management Agreement, Home Purchase Contract, Related
Property or any other agreement). Except as expressly provided in
Section 3.05(j), no such obligation or liability is intended to be assumed by
the Servicer or its successors and assigns.

(b) Notwithstanding Section 2.04(a), upon a reasonable showing by Cartus or CFC
that any Home Sale Proceeds received by the Servicer must be returned to the
related Obligor pursuant to the related Pool Relocation Management Agreement,
the Servicer shall turn over to the applicable Obligor such Home Sale Proceeds.
Each such payment pursuant to this Section 2.04(b) shall be made pursuant to
Section 4.03.

Section 2.05 Affirmative Covenants of the Transferor. From the Closing Date
until the termination of this Agreement in accordance with Section 10.01, the
Transferor hereby agrees that it will perform the covenants and agreements set
forth in this Section 2.05.

(a) Compliance with Laws, Etc. The Transferor will comply in all material
respects with all applicable laws, rules, regulations, judgments, decrees and
orders (including without limitation those relating to the Pool Receivables and
all Environmental Laws), in each case to the extent that the failure to comply,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect with respect to the Transferor.

 

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(b) Preservation of Corporate Existence. The Transferor (i) will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation and (ii) will qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction in which the failure
to preserve and maintain such qualification as a foreign corporation could
reasonably be expected to have a Material Adverse Effect with respect to the
Transferor.

(c) Keeping of Records and Books of Account. The Transferor will maintain at all
times accurate and complete books, records and accounts relating to the
Transferred Assets and all Pool Collections thereon in which timely entries will
be made. The Transferor’s master data processing records will be marked to
indicate the sales of all Transferred Assets hereunder.

(d) Location of Records and Offices. The Transferor will keep its principal
place of business and chief executive office at the addresses specified in
Schedule 2.02(m) or, upon not less than 30 days’ prior written notice given by
the Transferor to the Issuer, at such other locations in jurisdictions in the
United States of America where all action required by Section 2.01(d) has been
taken and completed.

(e) Separate Corporate Existence of the Transferor. The Transferor hereby
acknowledges that the parties to the Transaction Documents are entering into the
transactions contemplated by the Transaction Documents in reliance on the
Transferor’s identity as a legal entity separate from Cartus and the other
Cartus Persons. From and after the date hereof until one year and one day after
the Final Payout Date:

(i) The Transferor will conduct its business in office space allocated to it and
for which it pays an appropriate rent and overhead allocation;

(ii) The Transferor will maintain corporate records and books of account
separate from those of Cartus and each other Cartus Person and telephone numbers
and stationery that are separate and distinct from those of Cartus and each
other Cartus Person;

(iii) The Transferor’s assets will be maintained in a manner that facilitates
their identification and segregation from those of Cartus and any other Cartus
Person;

(iv) The Transferor will strictly observe corporate formalities in its dealings
with the public and with Cartus and each other Cartus Person, and funds or other
assets of the Transferor will not be commingled with those of Cartus or any
other Cartus Person. The Transferor will at all times, in its dealings with the
public and with Cartus and each other Cartus Person, hold itself out and conduct
itself as a legal entity separate and distinct from Cartus and each other Cartus
Person. The Transferor will not maintain joint bank accounts or other depository
accounts to which Cartus or any other Cartus Person (other than the Servicer)
has independent access;

 

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(v) The duly elected board of directors of the Transferor and duly appointed
officers of the Transferor will at all times have sole authority to control
decisions and actions with respect to the daily business affairs of the
Transferor;

(vi) Not less than one member of the Transferor ‘s board of directors will be an
Independent Director. The Transferor will observe those provisions in its
certificate of incorporation that provide that the Transferor’s board of
directors will not approve, or take any other action to cause the filing of, a
voluntary bankruptcy petition with respect to the Transferor unless the
Independent Director and all other members of the Transferor’s board of
directors unanimously approve the taking of such action in writing prior to the
taking of such action;

(vii) The Transferor will compensate each of its employees, consultants and
agents from its own funds for services provided to the Transferor; and

(viii) The Transferor will not hold itself out to be responsible for the debts
of Cartus or any other Cartus Person.

(ix) The Transferor will take all actions necessary on its part to be taken in
order to ensure that the facts and assumptions relating to the Transferor set
forth in the opinion of Orrick, Herrington & Sutcliffe LLP dated May 12, 2006
relating to substantive consolidation matters with respect to Cartus and the
Transferor will be true and correct at all times.

(f) Segregation of Collections. To the extent that any funds other than Pool
Collections are deposited into any of the Lockbox Accounts, the Transferor
promptly will identify any such funds or will cause such funds to be so
identified to the Servicer.

(g) Computer Software, Hardware and Services. The Transferor will provide the
Issuer and its successors with such licenses, sublicenses and/or assignments of
contracts as the Servicer, the Issuer or its successors require with respect to
all services and computer hardware or software that relate to the servicing of
the Pool Receivables or the other Transferred Assets; provided, however, that
with respect to any computer software licensed from a third party, the
Transferor will be required to provide such licenses, sublicenses and/or
assignments of such software only to the extent that provision of the same would
not violate the terms of any contracts of Cartus or the Transferor with such
third party.

(h) Environmental Claims. The Transferor will use commercially reasonable
efforts to promptly cure and have dismissed with prejudice to the satisfaction
of the Issuer any actions and any proceedings relating to compliance with
Environmental Laws relating to any Home, but only to the extent that the
conditions that gave rise to such proceedings were in existence as of the date
on which the Issuer acquired the related Pool Receivable.

(i) Turnover of Collections. If the Transferor or any of its agents or
representatives at any time receives any cash, checks or other instruments
constituting Pool

 

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Collections, such recipient will segregate and hold such payments in trust for,
and in a manner acceptable to, the Servicer and will, promptly upon receipt (and
in any event within one Business Day following receipt) remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of
transfer, to a Lockbox Account.

(j) Maintenance of Property. The Transferor will not sell, lease or otherwise
transfer, directly or indirectly, all or substantially all of the property of
the Transferor, other than any such sale, lease or transfer in the ordinary
course of business and the transfer of the Transferred Assets as contemplated by
the Transaction Documents.

(k) Performance of Obligations. The Transferor will timely and fully perform and
comply with all provisions, covenants and other promises required to be observed
by it under the Transaction Documents to which it is a party.

(l) Filing of Tax Returns and Payment of Taxes and Other Liabilities. The
Transferor will file (or will cause to be filed on its behalf as a member of a
consolidated group) all tax returns and reports required by law to be filed by
it and will pay all taxes, assessments and governmental charges shown to be
owing by it, except for any such taxes, assessments or charges (i) that are
being diligently contested in good faith by appropriate proceedings, for which
adequate reserves in accordance with GAAP have been set aside on its books and
that not have given rise to any Liens (other than Permitted Liens) or (ii) the
amount of which, either singly or in the aggregate, would not have a Material
Adverse Effect with respect to the Transferor.

Section 2.06 Negative Covenants of the Transferor. From the Closing Date until
the termination of this Agreement in accordance with Section 10.01, the
Transferor agrees that it will not:

(a) Changes in Accounting Treatment and Reporting Practices. Change or permit
any change in accounting principles or financial reporting practices applied to
the Transferor, except in accordance with GAAP, if such change would have a
Material Adverse Effect with respect to the Transferor.

(b) Indebtedness. Create, incur or permit to exist any Indebtedness or other
liabilities or give any guarantee or indemnity in respect of any Indebtedness,
except for (i) liabilities created or incurred by the Transferor pursuant to the
Transaction Documents to which it is a party or contemplated by such Transaction
Documents and (ii) other reasonable and customary operating expenses;

(c) Sales, Liens, Etc. Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien (other than
Permitted Liens) of anyone claiming by or through it on or with respect to, any
Transferred Asset or any interest therein, any Lockbox or Lockbox Account, other
than sales of Transferred Assets pursuant to this Agreement;

(d) No Mergers, Etc. Consolidate with or merge with or into any other Person or
convey, transfer or sell all or substantially all of its properties and assets
to any Person;

 

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(e) Limitations on Agreements. Permit the validity or effectiveness of any
Transaction Document to which it is a party or the rights and obligations
created thereby or pursuant thereto to be amended, terminated, postponed or
discharged, or permit any amendment to any Transaction Document to which it is a
party without the consent of the Issuer and the Indenture Trustee, or permit any
Person whose obligations form part of the Transferred Assets to be released from
such obligations, except in accordance with the terms of such Transaction
Document;

(f) Change in Name. Change its corporate name or the name under or by which it
does business or the jurisdiction in which it is incorporated unless the
Transferor has given the Issuer and its successors at least 30 days’ prior
written notice thereof and unless, prior to any such change, the Transferor has
taken and completed all action required by Section 2.01(d);

(g) Charter Amendments. Amend any provision of its certificate of incorporation
or by-laws unless (i) the Issuer shall have received not less than five Business
Days’ prior written notice thereof and (ii) the certificate of incorporation of
the Transferor, as in effect on the date hereof, provides that such amendment
can be made without the vote of the Transferor’s Independent Directors;

(h) Capital Expenditures. Make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty);

(i) No Other Business or Agreements. Engage in any business other than
financing, purchasing, owning and selling and managing the Transferred Assets in
the manner contemplated by this Agreement and the other Transaction Documents
and all activities incidental thereto, or enter into or be a party to any
agreement or instrument other than any Transaction Document or documents and
agreements incidental thereto;

(j) Guarantees, Loans, Advances and other Liabilities. Except as contemplated by
this Agreement or the other Transaction Documents, incur any Indebtedness or
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another’s payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person;

(k) Payment Instructions to Obligors. Give any payment instructions to Obligors
except through the Servicer as contemplated by Section 3.05(f); or

 

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(l) Extension or Amendment of Transferred Assets. Extend, amend or otherwise
modify the terms of any Receivable included in the Transferred Assets, or amend,
modify or waive any material term or condition related thereto, except in
accordance with Section 3.10.

(m) Dividend Restrictions. Declare or pay any distributions on any of its common
stock or make any purchase redemption or other acquisition of, any common stock
if, after giving effect thereto, (i) the aggregate principal amount outstanding
under the ARSC Subordinated Note would exceed five times the net worth of the
Transferor or (ii) the net worth of the Transferor would be less than
$40,000,000.

[END OF ARTICLE II]

 

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ARTICLE III

ADMINISTRATION AND SERVICING

OF RECEIVABLES

Section 3.01 Acceptance of Appointment and Other Matters Relating to the
Servicer.

(a) The servicing, administration and collection of the Pool Receivables and the
other Transferred Assets shall be conducted by the Person designated as the
Servicer hereunder from time to time in accordance with this Section 3.01. Until
the Indenture Trustee gives a Termination Notice to Cartus pursuant to
Section 9.01, Cartus is hereby designated, and Cartus hereby agrees to act, as
the Servicer under this Agreement and the other Transaction Documents with
respect to the Pool Receivables and the other Transferred Assets, and each of
Cartus, CFC, the Transferor, and the Issuer consents to Cartus acting as the
Servicer.

(b) In the ordinary course of business, the Servicer, with prior written notice
to the Indenture Trustee, may at any time delegate part or all of its duties
hereunder with respect to the Receivables and the other Transferred Assets to
any Affiliates of Realogy that agree to conduct such duties in accordance with
the Credit and Collection Policy and this Agreement. Each such Subsidiary to
whom any such duties are delegated in accordance with this Section 3.01(b) is
referred to herein as a “Sub-Servicer.” Notwithstanding any such delegation by
the Servicer, the Servicer shall remain liable for the performance of all duties
and obligations of the Servicer pursuant to the terms of this Agreement and the
other Transaction Documents, and such delegation shall not relieve the Servicer
of its liability and responsibility with respect to such duties. The fees and
expenses of any such Sub-Servicers shall be as agreed between the Servicer and
such Sub-Servicers from time to time, and none of the Issuer, the Indenture
Trustee or the holders of any Notes issued by the Issuer under the Indenture
shall have any responsibility therefor. Upon any termination of a Servicer
pursuant to Section 9.01, all Sub-Servicers designated pursuant to this
Section 3.01(b) by such Servicer also shall be automatically terminated.

(c) The designation of the Servicer (and each Sub-Servicer) under this Agreement
(and, in the case of any Sub-Servicer, under the agreement or other document
pursuant to which the Servicer makes a delegation of servicing duties to such
Sub-Servicer) shall automatically cease and terminate on the Final Payout Date.

Section 3.02 Duties of the Servicer and the Issuer.

(a) Each of Cartus, CFC, the Transferor, the Issuer and the Indenture Trustee
hereby appoints the Servicer from time to time designated pursuant to
Section 3.01(a) as Servicer hereunder to take all actions authorized below or
elsewhere in this Agreement and to enforce its respective rights and interests
in and under the Pool Receivables and the other Transferred Assets.

 

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(b) As Servicer hereunder, the Servicer shall service and administer the Pool
Receivables and the other Transferred Assets, shall collect and deposit into the
Collection Account payments due under the Pool Receivables and shall charge-off
as uncollectible Pool Receivables, all in accordance with its customary and
usual servicing procedures and the Credit and Collection Policy. As Servicer
hereunder, the Servicer shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all things
it may deem necessary or appropriate in connection with such servicing and
administration. Cartus, CFC, the Issuer, the Transferor and the Indenture
Trustee shall furnish the Servicer with any documents necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder. The Servicer shall exercise the same care and apply the same policies
with respect to the collection, administration and servicing of the Pool
Receivables and other Transferred Assets that it would exercise and apply if it
owned such Pool Receivables and other Transferred Assets, all in substantial
compliance with applicable law and in accordance with the Credit and Collection
Policy. The Servicer shall take or cause to be taken all such actions as it
deems necessary or appropriate to collect each Pool Receivable and other
Transferred Asset (and shall cause each Sub-Servicer, if any, to take or cause
to be taken all such actions as the Servicer deems necessary or appropriate to
collect each Pool Receivable and other Transferred Asset for which such
Sub-Servicer is responsible in its capacity as Sub-Servicer) from time to time,
all in accordance with applicable law and in accordance with the Credit and
Collection Policy.

(c) Without limiting the generality of the foregoing and subject to
Section 3.02(e) and Section 9.01, each of Cartus, CFC, the Transferor, the
Issuer and the Indenture Trustee hereby authorizes and empowers the Servicer or
its designee as follows, except to the extent any such power and authority is
revoked or limited by the Indenture Trustee on account of the occurrence of an
Unmatured Servicer Default or a Servicer Default or otherwise pursuant to
Section 9.01:

(i) to give instructions to the Indenture Trustee for withdrawals and payments
from the Collection Account and to take any other action necessary or
appropriate to service the Pledged Assets as set forth in the Indenture,

(ii) to enter into Home Sale Contracts and all related documents, instruments
and agreements on behalf of Cartus (with respect to Cartus Homes) and on behalf
of CFC (with respect to CFC Homes) and to take all necessary actions, including
with respect to the maintenance and marketing of the related Homes, to carry out
the terms of such Home Sale Contracts and related agreements; provided, however,
that the Servicer shall not be a party to any Home Sale Contract or any other
document, instrument, or agreement relating to the sale by CFC of a Home, unless
it is expressly disclosed on the face of such document, instrument, or agreement
that the Servicer is acting as Servicer for CFC,

(iii) to execute and deliver any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Pool Receivables and the other
Transferred Assets on the Issuer’s behalf,

 

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(iv) after the delinquency of any Pool Receivable or any default in connection
with any other Transferred Asset and to the extent permitted under and in
compliance with the Credit and Collection Policy and with all applicable laws,
rules, regulations, judgments, orders and decrees of courts and other
Governmental Authorities and all other tribunals, to commence or settle
collection proceedings with respect to such Pool Receivable or other Transferred
Asset and otherwise to enforce the rights and interests of the Issuer in, to and
under such Pool Receivable or other Transferred Asset (as applicable), unless
the Indenture Trustee otherwise revokes such authority in writing,

(v) to make all filings and take all other actions necessary for the Issuer to
maintain a perfected security and/or ownership interest in the Pool Receivables
(subject to Permitted Exceptions) have been taken or made,

(vi) to determine on each Business Day whether any funds in the Lockbox Accounts
represent collections on Cartus Noncomplying Assets or CFC Noncomplying Assets
and to promptly return such funds to Cartus or CFC, as applicable, and

(vii) to determine on each day whether each CFC Receivable being conveyed to
ARSC on such day is an Eligible Receivable and to identify on such day all CFC
Receivables sold to ARSC on such date that are not Eligible Receivables.

provided, however, that:

(A) following the appointment of a Servicer other than Cartus, or when a
Servicer Default has occurred and is continuing, the Indenture Trustee on behalf
of the Issuer shall have the absolute and unlimited right to direct the Servicer
to commence or settle any legal action to enforce collection of, or otherwise
exercise rights with respect to, any Pool Receivable transferred to the Issuer
or to foreclose upon or repossess or otherwise exercise rights with respect to,
any other Transferred Assets transferred to the Issuer, and

(B) the Servicer shall not, under any circumstances, be entitled to make the
Issuer or any assignee thereof a party to any litigation without the prior
written consent of the Issuer or such assignee, as applicable.

(d) The Servicer shall pay out of its own funds, without reimbursement, all
expenses incurred in connection with its servicing activities hereunder,
including expenses related to enforcement of the Pool Receivables, fees and
disbursements of its outside counsel and independent accountants and all other
fees and expenses, including the costs of filing UCC continuation statements.

(e) In addition to its other obligations provided for hereunder, the Servicer
shall hold and maintain all Records in trust, for the benefit of the Issuer, the
Indenture Trustee and the holders of the Notes, which Records shall be held
separate and apart from the other property of the Servicer and maintained in
files marked to show that such Records have been pledged to the Indenture
Trustee pursuant to the Indenture; provided, however, that the Servicer

 

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shall be entitled (i) to release any Equity Loan Notes that have been, or
concurrent with such release will be, repaid, satisfied or otherwise cancelled
and (ii) to release any Home Purchase Contracts and Home Deeds for Homes with
respect to which a Home Sale Contract has been executed in order to facilitate
the prompt closing thereof, including without limitation by delivery of such
documents to escrow agents (with a notice to such escrow agents of the interest
of the Issuer and the Indenture Trustee therein).

Section 3.03 Servicing Compensation. The Issuer hereby agrees to pay to the
Servicer, as full compensation for its servicing activities hereunder and under
the other Transaction Documents and as reimbursement for any expense incurred by
it in connection therewith, a servicing fee (the “Servicing Fee”) with respect
to each Monthly Period, payable in arrears on the related Distribution Date, in
an amount equal to the product of 0.75% multiplied by the weighted average over
such Monthly Period of the daily sums of the Aggregate Employer Balances for
each Employer under the Pool Relocation Management Agreements, subject to
adjustment at the direction of the Indenture Trustee (upon satisfaction of the
Rating Agency Condition) to provide additional servicing compensation to any
Successor Servicer if necessary to reflect then-current market rates for
servicing of comparable receivables at any time that Cartus is replaced as
Servicer hereunder. The share of the Servicing Fee allocable to the holders of
the Notes issued from time to time by the Issuer under the Indenture with
respect to any Monthly Period shall be set forth in the Indenture. The Servicing
Fee shall be payable solely out of Pool Collections available for such purpose
pursuant to, and subject to the priority of payments set forth in, the
Indenture. Notwithstanding the preceding sentence, the portion of the Servicing
Fee with respect to any Monthly Period not payable out of the Pool Collections
allocated to the holders of the Notes shall be payable out of the Pool
Collections allocable to the Issuer on the related Distribution Date as set
forth in the Indenture or by the Issuer, and in no event shall the holders of
the Notes be liable for the share of the Servicing Fee with respect to any
Payment Period to be payable out of the Pool Collections allocable to the Issuer
or by the Issuer. The Servicer shall pay the fees and expenses of, and agrees to
indemnify the Indenture Trustee, the Paying Agent, the Authentication Agent and
the Transfer Agent and Registrar out of the Servicing Fee in accordance with the
terms of the Indenture.

Section 3.04 Representations and Warranties of the Servicer. Cartus, as initial
Servicer, hereby makes, and any Successor Servicer by its appointment hereunder
shall make with respect to itself, on the Closing Date (and on the date of any
such appointment), on the date of each issuance of Notes by the Issuer and on
the date of any increases in Outstanding Amount of any Series of Notes, the
following representations, warranties and covenants, on which the Issuer, the
Transferor, Cartus and CFC shall be deemed to have relied:

(a) Organization and Good Standing. The Servicer is a corporation duly organized
and validly existing in good standing under the laws of the State of its
incorporation and has full power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted.

(b) Due Qualification. The Servicer is duly qualified to do business, is in good
standing as a foreign corporation, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business

 

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requires such qualification, licenses or approvals and in which the failure so
to qualify or to obtain such licenses and approvals or to preserve and maintain
such qualification, licenses or approvals could reasonably be expected to give
rise to a Material Adverse Effect with respect to the Servicer.

(c) Power and Authority; Due Authorization. The Servicer (i) has all necessary
corporate power and authority (A) to execute and deliver this Agreement and the
other Transaction Documents to which it is a party and (B) to perform its
obligations under this Agreement and the other Transaction Documents to which it
is a party and (ii) has duly authorized by all necessary corporate action the
execution, delivery and performance of, and the consummation of the transactions
provided for in, this Agreement and the other Transaction Documents to which it
is a party.

(d) Binding Obligations. This Agreement constitutes, and each other Transaction
Document to which the Servicer is a party when duly executed and delivered will
constitute, a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

(e) No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents to which the Servicer is a party, and the
fulfillment of the terms hereof and thereof, will not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under (A) the
certificate of incorporation or the by-laws of the Servicer or (B) any material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument to which the Servicer is a party or by which it or any of its
respective properties is bound, (ii) result in the creation or imposition of any
Lien on any of the Transferred Assets pursuant to the terms of any such material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument, other than this Agreement and the other Transaction Documents to
which the Servicer is a party or (iii) conflict with or violate any federal,
state, local or foreign law or any decision, decree, order, rule or regulation
applicable to the Servicer or of any federal, state, local or foreign regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer, which conflict or violation described in this
clause (iii), individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect with respect to the Servicer.

(f) Litigation and Other Proceedings. (i) There is no action, suit, proceeding
or investigation pending, or to the best knowledge of the Servicer threatened,
against the Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality and (ii) the Servicer is not
subject to any order, judgment, decree, injunction, stipulation or consent order
of or with any court or other Governmental Authority that, in the

 

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case of either of the foregoing clauses (i) and (ii), (A) asserts the invalidity
of this Agreement or any other Transaction Document to which the Servicer is a
party, (B) seeks any determination or ruling that, in the reasonable judgment of
the Servicer, would materially and adversely affect the performance by the
Servicer of its obligations under this Agreement or any other Transaction
Document to which the Servicer is a party or the validity or enforceability of
this Agreement or any other Transaction Document to which the Servicer is a
party or (C) individually or in the aggregate for all such actions, suits,
proceedings and investigations could reasonably be expected to have a Material
Adverse Effect with respect to the Servicer.

(g) Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a Material Adverse Effect with respect to the Servicer, all
authorizations, consents, orders and approvals of, or other actions by, any
Governmental Authority that are required to be obtained by the Servicer in
connection with the due execution, delivery and performance by the Servicer of
this Agreement or any other Transaction Document to which it is a party and the
consummation of the transactions contemplated by this Agreement have been
obtained or made and are in full force and effect; provided, however, that prior
to recordation pursuant to Section 2.01(d)(i) or upon the sale of a Home to an
Ultimate Buyer, record title to such Home may remain in the name of the related
Transferred Employee and no recordation in real estate records of the conveyance
of the related Home Purchase Contract or Home Sale Contract shall be made except
as otherwise required under Section 2.01(d)(i).

(h) Taxes. The Servicer has filed (or there have been filed on its behalf as a
member of a consolidated group) all tax returns and reports required by law to
have been filed by it and has paid all taxes, assessments and governmental
charges thereby shown to be owing by it, except for any such taxes, assessments
or charges (i) that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens) or (ii) the amount of which, either singly or in the aggregate,
would not have a Material Adverse Effect with respect to the Servicer.

(i) Accuracy of Information. All written information furnished by the Servicer
to Cartus, CFC or the Issuer pursuant to or in connection with any Transaction
Document or any transaction contemplated herein or therein with respect to the
Servicer is true and correct in all material respects on such date.

(j) Offices. The principal place of business and chief executive office of the
Servicer is located at the address specified in Schedule 2.02(m).

(k) Compliance with Applicable Laws. The Servicer is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all
Governmental Authorities (federal, state, local or foreign, including without
limitation Environmental Laws), a violation of any of which, individually or in
the aggregate for all such violations, is reasonably likely to have a Material
Adverse Effect with respect to the Servicer.

 

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(l) Lockbox Banks. The names and addresses of all Lockbox Banks, together with
the account numbers of the Lockbox Accounts at such Lockbox Banks into which the
Pool Collections are paid, are accurately set forth in Schedule 3.04(l). Each
Lockbox and each Lockbox Account is subject to a Lockbox Agreement duly executed
and delivered by the parties thereto.

Section 3.05 Affirmative Covenants of Servicer. As long as it is the Servicer
hereunder, the Servicer hereby agrees that it will perform the covenants and
agreements set forth in this Section 3.05.

(a) Compliance with Laws, Etc. The Servicer will comply in all material respects
with all applicable laws, rules, regulations, judgments, decrees and orders
(including without limitation those relating to the Pool Receivables, Home
Purchase Contracts and Related Assets and all Environmental Laws), in each case
to the extent that the failure to comply, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect with respect to
the Servicer.

(b) Preservation of Corporate Existence. The Servicer (i) will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, other than any change in corporate status by
reason of a merger or consolidation permitted by Section 7.02 and (ii) will
qualify and remain qualified in good standing as a foreign corporation in each
jurisdiction in which the failure to preserve and maintain such qualification as
a foreign corporation could reasonably be expected to have a Material Adverse
Effect with respect to the Servicer.

(c) Keeping of Records and Books of Account. The Servicer will maintain and
implement administrative and operating procedures (including without limitation
an ability to recreate records evidencing the Transferred Assets in the event of
the destruction of the originals thereof), and will keep and maintain all
documents, books, records and other information that are necessary or advisable,
in the reasonable determination of Cartus, CFC, the Transferor, the Issuer or
the Indenture Trustee, for the collection of all amounts due under any or all
Transferred Assets. Upon the reasonable request of the Issuer or the Indenture
Trustee made at any time after the occurrence and continuance of a Servicer
Default, the Servicer will deliver copies of all Records in its possession or
under its control to the Issuer or its designee. The Servicer will maintain at
all times accurate and complete books, records and accounts relating to the
Transferred Assets and all Pool Collections thereon in which timely entries will
be made.

(d) Location of Records and Offices. The Servicer will keep its principal place
of business and chief executive office at the address specified in Schedule
2.02(m) or, upon not less than 30 days’ prior written notice given by the
Servicer to the Transferor, the Issuer and the Indenture Trustee, at other
locations in jurisdictions in the United States.

 

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(e) Separate Corporate Existence of the Transferor. The Servicer hereby
acknowledges that the parties to the Transaction Documents are entering into the
transactions contemplated by the Transaction Documents in reliance upon the
Transferor’s identity as a legal entity separate from the Servicer. As long as
it is the Servicer hereunder, the Servicer will take such actions as shall be
required in order that:

(i) The Transferor’s operating expenses will not be paid by the Servicer, except
that certain organizational expenses of the Transferor and the Issuer and
expenses relating to creation and initial implementation of the Transaction
Documents have been or will be paid by Cartus;

(ii) Any financial statements of the Servicer that are consolidated to include
the Transferor will contain appropriate footnotes clearly stating that (A) all
of the Transferor’s assets are owned by the Transferor and (B) the Transferor is
a separate corporate entity with its own separate creditors that will be
entitled to be satisfied out of the Transferor’s assets prior to any value in
the Transferor becoming available to the Transferor’s equity holders;

(iii) Any transaction between the Transferor and the Servicer will be fair and
equitable to the Transferor, will be the type of transaction that would be
entered into by a prudent Person in the position of the Transferor with the
Servicer, and will be on terms that are at least as favorable as may be obtained
from a Person that is not a Cartus Person; and

(iv) The Servicer will not be, or will not hold itself out to be, responsible
for the debts of the Transferor.

(f) Payment Instruction to Obligors. The Servicer will (i) instruct all Obligors
to submit all payments on the Transferred Assets either (A) to one of the
Lockboxes maintained at the Lockbox Banks for deposit in a Lockbox Account or
(B) directly to one of the Lockbox Accounts and (ii) instruct all Persons
receiving Home Sale Proceeds to deposit such Home Sale Proceeds in one of the
Lockbox Accounts within two Business Days after such receipt, except to the
extent a longer escrow period is required under applicable law, in which case
such Home Sale Proceeds will be deposited into one of the Lockbox Accounts
within one Business Day after the expiration of such period. The Servicer will
direct all Obligors with respect to any receivables and related assets that are
not included in the Transferred Assets to deposit all collections in respect of
such receivables and related assets to an account that is not a Lockbox or
Lockbox Account and will take such other steps as the Issuer reasonably may
request to ensure that all collections on such receivables and related assets
will be segregated from Pool Collections on Transferred Assets.

(g) Segregation of Collections. The Servicer will use reasonable efforts to
minimize the deposit of any funds other than Pool Collections into any of the
Lockbox Accounts and, to the extent that any such funds nevertheless are
deposited into any of such Lockbox Accounts, will promptly identify any such
funds.

(h) Computer Software, Hardware and Services. The Servicer will provide the
Issuer with such licenses, sublicenses and/or assignments of contracts as the
Issuer requires

 

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with regard to all services and computer hardware or software that relate to the
servicing of the Pool Receivables or the other Transferred Assets; provided,
however, that with respect to any computer software licensed from a third party,
the Servicer will be required to provide such licenses, sublicenses and/or
assignments of such software only to the extent that provision of the same would
not violate the terms of any contracts of the Servicer with such third party.

(i) Turnover of Collections. If the Servicer or any of its agents or
representatives at any time receives any cash, checks or other instruments
constituting Pool Collections, such recipient will segregate and hold such
payments in trust for, and in a manner acceptable to, the Issuer and will,
promptly upon receipt (and in any event within one Business Day following
receipt) remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to a Lockbox Account or the Collection
Account.

(j) Performance of Obligations. The Servicer will, at its expense, market the
Cartus Homes and CFC Homes and pay the related expenses of such marketing and of
the sale of Cartus Homes and CFC Homes to Ultimate Buyers in accordance with the
practices of Cartus in effect on the Closing Date (as such practices have been
modified either (x) in the ordinary course of Cartus’s business or (y) with the
prior written consent of the Issuer).

(k) Billing of Receivables. The Servicer will bill all Receivables (i) in the
case of Receivables with respect to a Home purchased under a Home Purchase
Contract, within 60 days (on average) of the sale of the related Home to an
Ultimate Buyer and (ii) in the case of all other Receivables, within 60 days (on
average) after the Receivable arises.

(l) Filing of Tax Returns and Payment of Taxes and Other Liabilities. The
Servicer will file (or will cause to be filed on its behalf as a member of a
consolidated group) all tax returns and reports required by law to be filed by
it and will pay all taxes, assessments and governmental charges shown to be
owing by it, except for any such taxes, assessments or charges (i) that are
being diligently contested in good faith by appropriate proceedings, for which
adequate reserves in accordance with GAAP shall have been set aside on its books
and that shall not have given rise to any Liens (other than Permitted Liens) or
(ii) the amount of which, either singly or in the aggregate, shall not have a
Material Adverse Effect with respect to the Servicer.

(m) Notification of Asset Amount Deficiency or Amortization Event. The Servicer
shall promptly notify the Issuer of any Asset Deficiency or Amortization Event
(as each such term is defined in the Indenture) with respect to any Series of
which the Servicer has actual knowledge.

Section 3.06 Negative Covenants of Servicer. As long as it is the Servicer
hereunder, the Servicer hereby covenants that the Servicer shall not:

(a) Changes in Accounting Treatment and Reporting Practices. Change or permit
any change in any accounting principles or financial reporting practices applied
to the Servicer, except in accordance with GAAP, if such change would have a
Material Adverse Effect with respect to the Servicer;

 

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(b) Change in Credit and Collection Policy. (i) Make any material change in the
Credit and Collection Policy or (ii) make any material change in the character
of its business or engage in any business unrelated to such business as
currently conducted that, in either case, individually or in the aggregate with
all other such changes, would be reasonably likely to have a material adverse
effect on the performance of the ARSC Purchased Assets;

(c) Change in Name. Change its corporate name or the name under or by which it
does business unless the Servicer has given Cartus, CFC, the Transferor, the
Issuer and the Issuer’s successors and assigns at least 30 days’ prior written
notice thereof;

(d) Change in Payment Instruction to Obligors. Make any change in the
instructions to Obligors or other Persons regarding payments to be made to it or
payments to be made to any Lockbox Account, which payments relate to the
Transferred Assets, unless the Servicer has given the Issuer and its successors
and assigns prior written notice thereof, and then only in compliance with
Section 3.05(f) or add or terminate any bank as a Lockbox Bank from those listed
in Schedule 3.04(l) unless (i) the Indenture Trustee has received copies of a
Lockbox Agreement with each new Lockbox Bank duly executed by the parties
thereto and (ii) in the case of any termination, the Issuer or its successors
and assigns have received evidence to their satisfaction that the Obligors that
were making payments into a terminated Lockbox Account have been instructed in
writing to make payments into another Lockbox Account then in use;

(e) Home Deeds. Record any Home Deeds except as permitted by Section 2.01(d)(i);

(f) Establishment of Lockbox Accounts. Enter into a Lockbox Agreement (other
than as set forth in Exhibit B) without the prior written consent of the Issuer
and the Indenture Trustee; or

(g) Instructions to Indenture Trustee. Instruct the Indenture Trustee to release
any Pool Collections to the Issuer pursuant to Section 8.07 of the Indenture on
any day on which an Asset Deficiency exists.

Section 3.07 Records of the Servicer and Reports to be Prepared by the Servicer.

(a) The Servicer shall maintain at all times accurate and complete books,
records and accounts relating to the Pool Receivables, the other Transferred
Assets and the Pool Relocation Management Agreements and all Pool Collections
thereon, in which timely entries shall be made. The Servicer shall maintain and
implement administrative and operating procedures (including without limitation
an ability to recreate Records evidencing Pool Receivables and the other
Transferred Assets in the event of the destruction of the originals thereof),
and shall keep and maintain all documents, books, records and other information
that the Servicer deems reasonably necessary for the identification of Eligible
Receivables and for the collection of all Pool Receivables and other Transferred
Assets. Upon the reasonable request of

 

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the Indenture Trustee or the Issuer after the occurrence and continuance of an
Unmatured Servicer Default or a Servicer Default or other termination under
Section 9.01, the Servicer will deliver copies of all books and records
maintained pursuant to this Section 3.07(a) to the Indenture Trustee.

(b) During regular business hours upon reasonable prior notice, the Servicer
shall permit Cartus, CFC, the Issuer, the Transferor, the Indenture Trustee (or
such other Person whom the Indenture Trustee or the Issuer may designate from
time to time), or their agents or representatives (including without limitation
certified public accountants or other auditors), at the expense of the Servicer
and to the extent reasonably necessary to protect the interests of the holders
of the Notes, (i) to examine and make copies of and abstracts from, and to
conduct accounting reviews of, all Records in the possession or under the
control of the Servicer, including without limitation the related Contracts,
invoices and other documents related thereto, and (ii) to visit the offices and
properties of the Servicer for the purpose of examining the materials described
in clause (i) above, and to discuss matters relating to the Pool Receivables or
the other Transferred Assets or the performance by the Servicer of its
obligations under any Transaction Document to which it is a party with any
Authorized Officer of the Servicer having knowledge of such matters and with its
certified public accountants or other auditors. The Indenture Trustee may
conduct, or cause its agents or representatives to conduct, reviews of the types
described in this Section 3.07(b) whenever the Indenture Trustee reasonably
deems any such review appropriate, and the Indenture Trustee shall conduct, or
cause its agents or representatives to conduct, such a review if requested by
the Issuer.

(c) No later than two Business Days prior to the Distribution Date with respect
to any Outstanding Series, the Servicer shall prepare and deliver to Cartus,
CFC, the Transferor, the Issuer, the Indenture Trustee, each Rating Agency and
each Series Enhancer a report with respect to the Monthly Period then most
recently ended and such Outstanding Series of Notes, substantially in the form
provided in the related Supplement or in such other form as is reasonably
acceptable to the Issuer (each such report, a “Receivables Activity Report”).
Such Receivables Activity Report shall include (i) a certification that, to the
best of the Servicer’s knowledge, no Unmatured Servicer Default or Servicer
Default has occurred and is continuing and (ii) a listing of all new Pool
Relocation Management Agreements as identified pursuant to Section 2.1(a) of the
Purchase Agreement. In addition to the foregoing, so long as the Series 2007-1
Notes are outstanding, if a Weekly Reporting Event has occurred and is
continuing, the Servicer will, upon the request of the Administrative Agent for
the Series 2007-1 Noteholders (the “Series 2007-1 Agent”), deliver to the Series
2007-1 Agent, concurrently with each such Receivables Activity Report, a
computer tape or diskette, in an electronically readable format mutually
acceptable to the Servicer and the Series 2007-1 Agent, containing the
information from which the Servicer prepared such Receivables Activity Report.

(d) If as of the end of any fiscal quarter a Weekly Reporting Event has
occurred, the Servicer shall, commencing on the applicable “Weekly Reporting
Commencement Date” specified below and continuing until no such Weekly Reporting
Event exists for two consecutive fiscal quarters, prepare and deliver to Cartus,
CFC, the Transferor, the Issuer, the Indenture Trustee, each Series Enhancer and
each Administrative Agent under any Series of

 

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Variable Funding Notes, on or before the fifth Business Day of each calendar
week, a report with respect to the last Business Day of the preceding week,
substantially in the form provided in the related Supplement or in such other
form as is reasonably acceptable to the Issuer (each such report, a “Weekly
Activity Report”). Such Weekly Activity Report shall include (i) a certification
that, to the best of the Servicer’s knowledge, no Unmatured Servicer Default or
Servicer Default has occurred and is continuing or, if any such event has
occurred and is continuing, a description of such event and the action, if any,
that the Servicer proposes to take with respect thereto and (ii) a calculation
of the Adjusted Aggregate Receivable Balance based on the most recently
available interim reporting derived from financial system-generated data in the
Servicer’s financial records. As used herein, the “Weekly Reporting Commencement
Date” shall mean: (1) with respect to any Weekly Reporting Event which occurs
during calendar year 2007 or if the first such Weekly Reporting Event occurs as
of the end of a fiscal year, the week immediately following the 135th calendar
day after the end of the relevant fiscal quarter; (2) with respect to any other
Weekly Reporting Event occurring as of the end of a fiscal year or if the first
such Weekly Reporting Event occurs as of the end of any fiscal quarter after
calendar year 2007, the week immediately following the 90th calendar day after
the end of the relevant fiscal quarter and (3) otherwise, the week immediately
following the 45th calendar day after the end of the relevant fiscal quarter.

 

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Section 3.08 Annual Certificate of Servicer. The Servicer shall deliver to
Cartus, CFC, the Issuer, the Indenture Trustee, each Rating Agency and any
Series Enhancer on or before April 30 of each calendar year, beginning with
April 30, 2001, an Officer’s Certificate substantially in the form of Exhibit A.

Section 3.09 Annual Servicing Report of Independent Public Accountants; Copies
of Reports Available. On or before April 30 of each calendar year, beginning
with April 30, 2001, the Servicer shall cause Protiviti (or such other auditor
acceptable to the financial institution acting as administrative agent for the
Majority Investors) to furnish a report (addressed to the Issuer and any Series
Enhancer) to Cartus, CFC, the Issuer, the Transferor, the Indenture Trustee and
any Series Enhancer to the effect that they have applied certain procedures
agreed upon with the Servicer and substantially in the form previously provided
to the Rating Agencies and examined certain documents and records relating to
the servicing of the Receivables and other Transferred Assets under this
Agreement and that, on the basis of such agreed-upon procedures, nothing has
come to the attention of such accountants that caused them to believe that the
servicing (including the allocation of Pool Collections) has not been conducted
in compliance with the terms and conditions as set forth in Articles III and IV
of this Agreement, other than such exceptions as they believe to be immaterial
and such other exceptions as shall be set forth in such statement. Such report
shall set forth the agreed-upon procedures performed. Notwithstanding the
foregoing, so long as the Series 2007-1 Notes are the only Notes issued under
the Indenture and the Servicer complies with the audit provisions set forth in
Section 5.01(g) of the related Note Purchase Agreement, the Servicer shall not
be required to comply with the foregoing provisions of this Section 3.09.

Section 3.10 Adjustments; Modifications.

(a) If on any day the Unpaid Balance of any Pool Receivable is reduced by the
Servicer as a result of any incorrect billings, allowances, chargebacks, credits
or any other reductions or cancellations, in each case that result from the acts
or omissions of the Servicer, that are unrelated to the ability of the related
Obligor to pay such Pool Receivable (each such reduction, a “Servicer Dilution
Adjustment”), then the Servicer shall deposit the amount of such Servicer
Dilution Adjustment in cash in the Collection Account and shall report such
amount on the next Receivables Activity Report and Weekly Activity Report, if
applicable.

(b) So long as no Unmatured Servicer Default or Servicer Default shall have
occurred and be continuing, the Servicer may adjust, and may permit each
Sub-Servicer appointed by it pursuant to Section 3.01(b) to adjust, the
outstanding unpaid balance of any Pool Receivable in accordance with the Credit
and Collection Policy and the terms of this Agreement, provided that (i) such
adjustment would not cause or result in an Eligible Receivable becoming
ineligible and (ii) either the Servicer makes the related Servicer Dilution
Adjustment payment pursuant to this Section 3.10 or Cartus or CFC makes the
related Originator Adjustment payment pursuant to Section 4.3(b) of the Purchase
Agreement or Section 4.3(b) of the Receivables Purchase Agreement, as
applicable. The Servicer shall, or shall cause the applicable Sub-Servicer to,
write off Pool Receivables from time to time in accordance with the terms of
this Agreement and the terms of the Credit and Collection Policy, and such a
write-off shall not give rise to any obligation to make a Servicer Dilution
Adjustment. Notwithstanding the foregoing,

 

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the maturity date of an Equity Loan may be extended beyond the original due date
in accordance with the Credit and Collection Policy, and such Equity Loan shall,
notwithstanding clause (j) of the definition of Eligible Receivable, be an
Eligible Receivable so long as (i) such extension was made for reasons unrelated
to the creditworthiness of the Obligor, (ii) the extension period ends not later
than (A) the time of sale or (B) the expiration of the offering period for the
Homeowner’s acceptance of an offer for sale or (C) the date that is 12 months
prior to the Final Stated Maturity Date, whichever first occurs, and (iii) all
other requirements for such Receivable to be an Eligible Receivable are
satisfied.

(c) If (i) the Servicer makes a deposit into the Collection Account in respect
of a collection of a Pool Receivable and such collection was received by the
Servicer in the form of a check that is not honored for any reason or (ii) the
Servicer makes an error with respect to the amount of any Pool Collection and
deposits an amount that is less than or more than the actual amount of such Pool
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or error.
Any Pool Receivable in respect of which a dishonored check is received shall be
deemed not to have been paid. Notwithstanding the first two sentences of this
paragraph, adjustments made pursuant to this Section 3.10(c) shall not require
any change in any report previously delivered pursuant to Section 3.07(c).

(d) The Servicer shall not extend, amend or otherwise modify the terms of any
Pool Receivable, or amend, modify or waive any material term or condition
related thereto, except as provided in this Section 3.10.

Section 3.11 Escrow Agents. The Servicer shall cause all Home Purchase Contracts
and Home Deeds to be delivered to an escrow agent in the applicable
jurisdiction, with a notice to such agent of the interests of the Issuer and
Indenture Trustee therein.

Section 3.12 Servicer Advances.

(a) In accordance with the Credit and Collection Policy, the Servicer shall make
Servicer Advances in connection with the maintenance and marketing of Homes the
Receivables relating to which are included in the Transferred Assets, but only
to the extent that the Servicer has determined in its reasonable judgment that
such advances will be recoverable out of Pool Collections on the Receivable
arising as a result of such Servicer Advance.

(b) All Servicer Advances, the Receivables arising from which have not been sold
to CFC under the Purchase Agreement, shall be reimbursable in the first instance
from Pool Collections relating to the Homes with respect to which such Servicer
Advances were made (provided that Home Sale Proceeds will only be applied to
reimburse Servicer Advances consistent with Cartus’s practices as of the Closing
Date) and, further, to the extent such Servicer Advance has been determined to
be a Nonrecoverable Advance, as provided in Section 4.03 of this Agreement and
Section 8.04(c)(i) of the Indenture. In consideration of the Issuer’s obligation
to reimburse the Servicer from Pool Collections for Servicer Advances, the
Receivables arising under the Pool Relocation Management Agreements in respect
of such Servicer Advances which have not been sold to CFC under the Purchase
Agreement shall be automatically conveyed by the Servicer to the Issuer and
included in the Pool Receivables and the Transferred Assets.

 

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Section 3.13 Calculations. Without limiting the generality of the foregoing
provisions of this Article III, the Servicer shall perform all calculations
necessary in order to determine payments to be made to holders of Notes and
deposits to be made to reserves and other Series Accounts in accordance with the
Indenture and any Supplement. For the purposes of such calculations, on each
Business Day the Servicer shall calculate the Aggregate Employer Balance for
each Employer by determining the aggregate Unpaid Balance of the Pool
Receivables due from such Employer and then reducing such amount (without
duplication) by the amounts described in the definition of Aggregate Employer
Balance, including the total amount of Advance Payments received from such
Employer, regardless of whether such Advance Payment is related to a Pool
Receivable.

Section 3.14 Application of Collections. (a) In accordance with the Credit and
Collection Policy, the Servicer shall apply all monies received by or on behalf
of any Employer in accordance with the directions of such Employer. The Servicer
shall contact the Employer if necessary to obtain such directions, or if such
directions cannot be obtained, the Servicer shall apply Pool Collections of such
Employer in the order that such Pool Receivables were originated, with the
oldest Pool Receivable being paid first. The Servicer shall allocate any
collections received under a single Billed Receivable that contains both
Receivables included in the Transferred Assets and other amounts owed to Cartus
first, to amounts owed in respect of Transferred Assets and then to other
receivables.

(b) If at any time the Servicer shall determine that any amount on deposit in
the Collection Account does not constitute Pool Collections or the proceeds
thereof, the Servicer shall instruct the Indenture Trustee to withdraw such
amounts from the Collection Account and to pay such amounts to the Person that
the Servicer determines is the Person entitled thereto, as provided in
Section 8.04 of the Indenture.

[END OF ARTICLE III]

 

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ARTICLE IV

ACCOUNTS AND POOL COLLECTIONS

Section 4.01 Establishment of Collection Account. The Servicer, for the benefit
of the Indenture Trustee and the holders of the Notes, shall establish and
maintain an Eligible Account (including any subaccount thereof) in the name of
the Indenture Trustee, bearing a designation clearly indicating that the funds
and other property credited thereto are held for the benefit of the Indenture
Trustee and the holders of the Notes (the “Collection Account”).

The Collection Account shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the holders of the Notes. Except as
expressly provided in this Agreement or the Indenture, the Servicer agrees that
it shall have no right of setoff or banker’s lien against, and no right to
otherwise deduct from, any funds held in the Collection Account for any amount
owed to it by the Issuer, Cartus, CFC, the Indenture Trustee or any holder of
the Notes. If the Collection Account at any time ceases to be an Eligible
Account then, within 10 Business Days of the Issuer’s or Servicer’s knowledge
thereof, the Issuer or the Servicer shall establish a new Collection Account
meeting the conditions specified above, transfer any monies, documents,
instruments, investment property, certificates of deposit and other property to
such new Collection Account and from the date such new Collection Account is
established, it shall be the Collection Account. Pursuant to the authority
granted to the Servicer in Section 3.02, the Servicer shall have the power,
revocable by the Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Collection Account for the purposes of
carrying out the Servicer’s duties hereunder.

At the written direction of the Servicer, funds on deposit in the Collection
Account shall be invested in Eligible Investments selected by the Servicer. All
such Eligible Investments shall be held by the Indenture Trustee for the benefit
of the holders of the Notes. Investments of funds representing Pool Collections
collected during any Monthly Period shall be invested in Eligible Investments
that will mature so that such funds will be available no later than the close of
business on the day preceding the monthly Distribution Date following such
Monthly Period, in amounts sufficient to the extent of such funds to make the
required distributions on such Distribution Date. On each Distribution Date, all
interest and other investment earnings (net of losses and investment expenses)
on funds on deposit in the Collection Account shall be paid to the Servicer as
additional servicing compensation. The Servicer shall bear no responsibility or
liability for any losses resulting from investment or reinvestment of any funds
in accordance with this Section 4.01 or for the selection of Eligible
Investments in accordance with the provisions of this Agreement.

 

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Section 4.02 Pool Collections and Allocations. The Servicer shall instruct the
Indenture Trustee to apply all funds on deposit in the Collection Account as
described in the Indenture and each Supplement. Except as otherwise provided
below, the Servicer shall transfer all Pool Collections and other Transferred
Assets consisting of cash or cash equivalents from the Lockbox Accounts into the
Collection Account as promptly as possible after the date of receipt of such
Pool Collections, but in no event later than the second Business Day following
the date of receipt.

Section 4.03 Withdrawals from the Collection Account. On each day the Servicer
shall determine the amounts payable to it as reimbursement of any Nonrecoverable
Advances pursuant to Section 3.12(b) and the Servicer shall instruct the
Indenture Trustee to pay such amounts over to the Servicer pursuant to
Section 8.07 of the Indenture. The determination by the Servicer that it has
made a Nonrecoverable Advance shall be evidenced by an Officer’s Certificate of
the Servicer delivered to the Indenture Trustee and the Issuer. The Indenture
Trustee shall be entitled to conclusively rely on the Servicer’s determination
that a Servicer Advance is a Nonrecoverable Advance.

[END OF ARTICLE IV]

 

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ARTICLE V

SECURITY INTEREST

Section 5.01 Security Interest. Without prejudice to the provisions of
Section 2.01 providing for the absolute transfer of the Transferor’s interest in
the Pool Receivables and other Transferred Assets to the Issuer, the Transferor
hereby assigns and grants to the Issuer a first priority security interest in
the Transferor’s right, title and interest, if any, in, to and under all of the
following, whether now or hereafter existing: all Pool Receivables, all other
Transferred Assets and all proceeds thereof.

Section 5.02 Enforcement of Rights. The Transferor acknowledges that the
Transferred Assets include all rights acquired by the Transferor under the
Receivables Purchase Agreement. Accordingly, the Transferor agrees that the
Issuer and its assigns (including without limitation the Indenture Trustee)
shall have the sole right to enforce the Transferor’s rights and remedies under
the Receivables Purchase Agreement (including the rights and remedies of CFC
under the Purchase Agreement and the Performance Guaranty).

[END OF ARTICLE V]

 

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ARTICLE VI

OTHER MATTERS RELATING TO THE TRANSFEROR

Section 6.01 Liability of the Transferor. The Transferor shall be liable for all
obligations, covenants, representations and warranties of the Transferor arising
under or related to this Agreement. Except as provided in the preceding
sentence, the Transferor shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as a Transferor.

Section 6.02 Indemnification by the Transferor. Without limiting the foregoing
and any other rights that any ARSC Indemnified Party may have hereunder or under
applicable law, the Transferor hereby agrees to indemnify the Issuer, each
holder of the Notes, the Indenture Trustee and each of the successors, permitted
transferees and assigns of the foregoing, and all officers, directors,
shareholders, controlling Persons, employees and agents of any of the foregoing
(each of the foregoing Persons, an “ARSC Indemnified Party”), from and against
any and all damages, losses, claims (whether on account of settlements or
otherwise, and whether or not the applicable ARSC Indemnified Party is a party
to any action or proceeding that gives rise to any ARSC Indemnified Losses),
actions, suits, demands, judgments, liabilities (including penalties),
obligations or disbursements of any kind or nature and related costs and
expenses (including reasonable attorneys’ fees and disbursements) awarded
against or incurred by any of them arising out of or as a result of any of the
following (all of the foregoing, collectively, “ARSC Indemnified Losses”):

(a)(i) any representation or warranty made or deemed made by the Transferor (or
any of its respective Authorized Officers) (whether or not made or delivered to
the ARSC Indemnified Party) under any of the Transaction Documents contains any
untrue statement of a material fact or omits to state material facts necessary
to make the statements made, in the light of the circumstances under which such
statements were made, not misleading;

(b) the failure by the Transferor to comply with any law, rule or regulation
applicable to it with respect to any Transferred Asset;

(c) the failure to vest and maintain vested in the Issuer a first priority
perfected ownership or security interest in the Transferred Assets, free and
clear of any Lien (other than any Permitted Lien), whether existing at the time
of the sale of such Transferred Asset or at any time thereafter;

(d) any failure of the Transferor to perform its duties or obligations in
accordance with the provisions of the Transaction Documents;

(e) the failure to file, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to the transfer of any Transferred Asset to
the Issuer, whether at the time of any sale or at any subsequent time;

 

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(f) any tax or governmental fee or charge (other than franchise taxes and taxes
on or measured by the net income of any holder of the Notes issued by the Issuer
under the Indenture), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses (including the reasonable fees
and expenses of counsel in defending against the same) that arise by reason of
the purchase or ownership of the Transferred Assets;

(g) any investigation, litigation or proceeding related to any use of the
proceeds of any purchase made hereunder; and

(h) any investigation or defense of, or participation in, any legal proceeding
relating to the execution, delivery, enforcement, performance or administration
of the Transaction Documents or any other document related thereto (whether or
not such ARSC Indemnified Party is a party thereto).

Notwithstanding anything to the contrary in this Agreement, any representations,
warranties and covenants made by the Transferor in this Agreement or the other
Transaction Documents that are qualified by or limited to events or
circumstances that have, or are reasonably likely to have, given rise to a
Material Adverse Effect (or words of like import) shall (solely for purposes of
the indemnification obligations set forth in this Section 6.01) be deemed not to
be so qualified or limited.

If for any reason the indemnification provided in this Section 6.02 is
unavailable to an ARSC Indemnified Party or is insufficient to hold an ARSC
Indemnified Party harmless, then the Transferor shall contribute to the amount
paid by such ARSC Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such ARSC Indemnified Party on the one hand, and the
Transferor on the other hand, but also the relative fault (if any) of such ARSC
Indemnified Party and the Transferor and any other relevant equitable
considerations.

Notwithstanding the foregoing, no indemnification payments shall be payable by
the Transferor pursuant to this Section 6.02 until all amounts owing by the
Issuer under the Indenture have been paid in full and all amounts payable by the
Transferor to Cartus under the ARSC Subordinated Note have been paid in full.

Notwithstanding the foregoing, and without prejudice to the rights that the
Issuer may have pursuant to the other provisions of this Agreement or the
provisions of any of the other Transaction Documents, in no event shall any ARSC
Indemnified Party be indemnified for any ARSC Indemnified Losses (i) resulting
from negligence or willful misconduct on the part of such ARSC Indemnified Party
(or the negligence or willful misconduct on the part of any of such ARSC
Indemnified Party’s officers, directors, employees or agents) or (ii) to the
extent the same includes ARSC Indemnified Losses in respect of Transferred
Assets and reimbursement therefor that would constitute credit recourse to the
Transferor, Cartus or CFC (without limiting any rights under the Purchase
Agreement) for the amount of any Receivable or other Transferred Asset not paid
by the related Obligor.

 

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[END OF ARTICLE VI]

 

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ARTICLE VII

OTHER MATTERS RELATING TO THE SERVICER

Section 7.01 Liability of the Servicer. The Servicer shall be liable under this
Article VII only to the extent of the obligations specifically undertaken by the
Servicer in its capacity as Servicer.

Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer. The Servicer shall not consolidate with or merge into any other
Person or convey, transfer or sell its properties and assets substantially as an
entirety to any Person, unless:

(a)(i) the corporation formed by such consolidation or into which the Servicer
is merged or the Person that acquires by conveyance, transfer or sale the
properties and assets of the Servicer substantially as an entirety is, if the
Servicer is not the surviving entity, a corporation organized and existing under
the laws of the United States of America or any State or the District of
Columbia, and, if the Servicer is not the surviving entity, such corporation
expressly assumes, by an agreement supplemental hereto, executed and delivered
to the Issuer and the Transferor, in form satisfactory to the Issuer, the
performance of every covenant and obligation of the Servicer hereunder;

(ii) the Servicer has delivered to the Issuer and the Transferor an Officer’s
Certificate stating that such consolidation, merger, conveyance, transfer or
sale complies with this Section 7.02 and that all conditions precedent herein
provided for relating to such transaction have been complied with;

(iii) the Servicer has given the Issuer, the Transferor, CFC, Cartus, and the
Indenture Trustee notice of such consolidation, merger or transfer of assets;

(iv) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.04 has been breached in any material
respect; and

(v) no Unmatured Servicer Default or Servicer Default has occurred and is
continuing or would result from the contemplated transaction; and

(vi) any necessary consents of each applicable Series Enhancer have been
obtained.

(b) the corporation formed by such consolidation or into which the Servicer is
merged or the Person that acquires by conveyance or transfer the properties and
assets of the Servicer substantially as an entirety is an Eligible Servicer.

 

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Section 7.03 Limitation on Liability of the Servicer and Others. Except as
provided in Section 7.04, neither the Servicer nor any of the directors,
officers, employees or agents of the Servicer in its capacity as Servicer shall
be under any liability to the Transferor, the Issuer, the Indenture Trustee, the
holders of the Notes or any other Person for any action taken or for refraining
from the taking of any action in good faith in its capacity as Servicer pursuant
to this Agreement; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability that otherwise would be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than the Servicer) with
respect to any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties as Servicer in accordance with this Agreement and that
in its reasonable judgment may involve it in any expense or liability. Subject
to the terms of the Transaction Documents, the Servicer may, in its sole
discretion, undertake any such legal action that it may deem necessary or
desirable for the benefit of the holders of the Notes with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the holders of the Notes issued by the Issuer under the Indenture.

Section 7.04 Indemnification by the Servicer. The Servicer shall indemnify and
hold harmless each of Cartus, CFC, the Transferor, the Issuer, the Indenture
Trustee and its directors, officers, employees and agents from and against any
and all loss, liability, claim, expense, actions, suits, demands, damage or
injury suffered or sustained by reason of (i) any representation or warranty
made by the Servicer under any of the Transaction Documents, any Receivables
Activity Report, Weekly Activity Report or any other information or report
delivered by the Servicer with respect to the Servicer or the Transferred Assets
having been untrue or incorrect in any material respect when made or deemed to
have been made; or (ii) any acts or omissions of the Servicer pursuant to this
Agreement (other than such as may arise from the negligence or willful
misconduct of Cartus, CFC, the Transferor, the Issuer and the Indenture Trustee,
respectively, and their respective directors, officers, employees and agents),
including any judgment, award, settlement, reasonable attorneys’ fees and other
costs or expenses incurred in connection with the defense of any action,
proceeding or claim, that in each case arises from or relates to a breach by the
Servicer of its representations, warranties, covenants or agreements hereunder;
or (iii) any reduction in the Unpaid Balance of any Pool Receivable as a result
of any cash discount or any adjustment by the Servicer, including any such
adjustment that gives rise to a Servicer Dilution Adjustment (but not including
any write-off of any Receivable) or (iv) any failure of the Servicer to comply
with any material applicable law, rule or regulation applicable to it and which
relates to the servicing or administration of the Transferred Assets.
Indemnification pursuant to this Section 7.04 shall not be payable from the
Transferred Assets. The Servicer’s obligations under this Section 7.04 shall
survive the termination of this Agreement, the resignation or removal of the
Indenture Trustee or the earlier removal or resignation of the Servicer.

 

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Section 7.05 Resignation of the Servicer. The Servicer shall not resign from the
obligations and duties hereby imposed on it except (a) upon determination that
(i) the performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action that the Servicer could
take to make the performance of its duties hereunder permissible under
applicable law or (b) upon the assumption, by an agreement supplemental hereto,
executed and delivered to the Issuer and the Transferor, in form satisfactory to
the Issuer and the Majority Investors, of the obligations and duties of the
Servicer hereunder by (i) any of its Affiliates that is a direct or indirect
wholly owned subsidiary of the Performance Guarantor, subject to reaffirmation
by the Performance Guarantor of the Performance Guaranty with respect to such
Successor Servicer, or (ii) with the consent of the Majority Investors, by any
other entity that qualifies as an Eligible Servicer. Any determination
permitting the resignation of the Servicer shall be evidenced as to clause
(a) above by an Opinion of Counsel to such effect delivered to the Issuer, the
Indenture Trustee and the Transferor. No resignation shall become effective
until a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 9.02. If, as of the date
of the determination that the Servicer may no longer act as Servicer under
clause (a) above, the Issuer is unable to appoint a Successor Servicer, the
Indenture Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, if it is legally unable so to act, the Indenture Trustee shall
petition a court of competent jurisdiction to appoint any Eligible Servicer as
the Successor Servicer hereunder.

Section 7.06 Access to Certain Documentation and Information Regarding the
Receivables. In addition to the access rights provided under Section 3.07(b),
the Servicer shall provide to the Issuer and the Indenture Trustee access to the
documentation regarding the Lockbox Accounts and the Pool Receivables if the
Issuer or the Indenture Trustee is required in connection with the enforcement
of the rights of holders of the Notes or by applicable statutes or regulations
to review such documentation, such access being afforded without charge but only
(a) upon reasonable request (but in no event less than five Business Days),
(b) during normal business hours, (c) subject to the Servicer’s normal security
and confidentiality procedures and (d) at reasonably accessible offices in the
continental United States designated by the Servicer. Nothing in this
Section 7.06 shall derogate from the obligation of Cartus, CFC, the Transferor,
the Issuer, the Indenture Trustee and the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Transferred Employees, and
the failure of the Servicer to provide access as provided in this Section 7.06
as a result of such obligation shall not constitute a breach of this
Section 7.06.

[END OF ARTICLE VII]

 

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ARTICLE VIII

TERMINATION

Section 8.01 Transfer Termination Events. The following events shall be
“Transfer Termination Events”:

(a) The occurrence of an Event of Default or an Amortization Event with respect
to all Series of Notes; or

(b) Any representation or warranty made by the Transferor under any of the
Transaction Documents shall prove to have been untrue or incorrect in any
material respect when made or deemed to have been made, such failure could
reasonably be expected to have a Material Adverse Effect with respect to the
Transferor or the interest of the Issuer or its assigns in the Transferred
Assets and such failure remains unremedied for 30 days; or

(c) The Transferor shall fail to perform or observe, as and when required,
(i) any term, covenant or agreement contained in this Agreement or any of the
other Transaction Documents to which it is a party, and such failure shall
remain unremedied for: in the case of a failure to maintain its separate
corporate existence pursuant to Section 2.05(e), the covenant to segregate Pool
Collections pursuant to Section 2.05(f), the covenant to provide records
pursuant to Section 7.1(k), the covenant to file financing or continuation
statements pursuant to Section 2.01(d) or the negative covenants of the
Transferor set forth in Section 2.06, ten days, or (ii) any other term, covenant
or agreement contained in this Agreement or any of the other Transaction
Documents to which it is a party, which failure could reasonably be expected to
have a Material Adverse Effect with respect to the Transferor or the interest of
the Issuer or its assigns in the Transferred Assets, 30 days; or

(d) An Event of Bankruptcy shall have occurred with respect to the Transferor;
or

(e) The Transferor’s representation and warranty in Section 2.02(k) shall not be
true at any time with respect to a substantial portion of the Transferred
Assets; or

(f) Either (i) the Internal Revenue Service shall file notice of a Lien pursuant
to Section 6323 of the Code with respect to any of the Transferred Assets and
such Lien shall not have been released within five days or, if released, proved
to the satisfaction of the Rating Agencies or (ii) the PBGC shall, or shall
indicate its intention to, file notice of a Lien pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974 with respect to any of the
Transferred Assets; or

(g) A CFC Purchase Termination Event or an ARSC Purchase Termination Event shall
have occurred; or

(h) This Agreement shall cease to be in full force and effect for any reason
other than in accordance with its terms.

 

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If a Transfer Termination Event occurs, the Transferor shall promptly give
notice to the Issuer and the Indenture Trustee of such Transfer Termination
Event.

Section 8.02 Transfer Termination. (a) On the Transfer Termination Date, the
Transferor shall cease transferring Pool Receivables to the Issuer, provided
that any right, title and interest of the Transferor in and to any CFC
Designated Receivables arising from any Servicer Advances made thereafter,
including any Related Property relating thereto and proceeds thereof, shall
continue to be transferred. Notwithstanding any cessation of the transfer to the
Issuer of additional Pool Receivables, Pool Receivables transferred to the
Issuer prior to the Termination Date and Pool Collections in respect of such
Pool Receivables and the related Finance Charges, whenever accrued in respect of
such Pool Receivables, shall continue to be property of the Issuer available for
pledge by the Issuer under the Indenture.

(b) Upon the occurrence of a Transfer Termination Event, the Issuer and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of a Transfer
Termination Event shall not deny to the Issuer or its assignees any remedy in
addition to termination of its obligation to make Purchases hereunder to which
the Issuer or its assignees may be otherwise appropriately entitled, whether by
statute or applicable law, at law or in equity.

[END OF ARTICLE VIII]

 

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ARTICLE IX

SERVICER DEFAULTS

Section 9.01 Servicer Defaults. If any one of the following events (a “Servicer
Default”) shall occur and be continuing:

(a) any failure on the part of the Servicer to deliver the Receivables Activity
Reports or Weekly Activity Report, if applicable required under Section 3.07(c),
to make any payment, transfer or deposit, or to give instructions or to give
notice to the Issuer or the Indenture Trustee to make such payment, transfer or
deposit on or before the date occurring five Business Days after the date such
payment, transfer or deposit or such instruction or notice is required to be
made or given, as the case may be, under the terms of this Agreement;

(b)(i) failure on the part of the Servicer duly to observe and perform its
covenants to give payment instructions to Obligors pursuant to Section 3.05(f);
to segregate Pool Collections pursuant to Section 3.05(g), to provide records
pursuant to Section 3.07, to file financing or continuation statements provided
to it pursuant to Section 3.02, or breach by the Servicer of any of its negative
covenants set forth in Section 3.06, which failure or breach continues
unremedied for ten calendar days, or (ii) failure on the part of the Servicer
duly to observe or perform in any material respect any other covenants or
agreements of the Servicer set forth in this Agreement, which failure has a
Material Adverse Effect on the rights of the holders of any Series of Notes
(determined without giving effect to any third-party credit enhancement) and
continues unremedied for a period of 30 days, in each case, after the date on
which written notice of such failure, requiring the same to be remedied, has
been given to the Servicer by the Issuer, or to the Servicer and the Issuer on
behalf of the Majority Investors, or the Servicer shall assign or delegate its
duties under this Agreement except as permitted by Sections 3.01(b) and 7.02;

(c) any representation, warranty or certification made by the Servicer in this
Agreement or in any other Transaction Document or in any certificate delivered
pursuant to this Agreement proves to have been incorrect in any material respect
when made, which failure has a Material Adverse Effect on the rights of the
holders of any Series of Notes (determined without giving effect to any
third-party credit enhancement) and which failure continues unremedied for a
period of 30 days after the date on which notice thereof, requiring the same to
be remedied, has been given to the Servicer by the Issuer, or to the Servicer
and the Issuer on behalf of the Majority Investors; or

(d) an Event of Bankruptcy occurs with respect to the Servicer;

(e) the Performance Guaranty shall cease to be in full force and effect for any
reason other than in accordance with its terms; or

(f)(i) Failure of the Servicer or the Performance Guarantor to pay any principal
and/or interest in respect of any Indebtedness under the Realogy Credit
Agreement or under any other indenture or agreement governing any Indebtedness
the principal amount of

 

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which exceeds $25,000,000 and such failure shall continue beyond the applicable
grace period, if any, specified in the agreement or instrument governing such
Indebtedness; or (ii) the default by the Servicer or the Performance Guarantor
in the performance of any term, provision or condition contained in any
agreement described in clause (i) above, or the existence of any event or
condition with respect to any Indebtedness arising under any such agreement, if
the effect of such default, event or condition is to cause, or permit the holder
of such Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity, including without limitation the occurrence of any “Event of
Default” under the Realogy Credit Agreement; or (iii) any Indebtedness of the
Servicer or the Performance Guarantor in a principal amount exceeding
$25,000,000 shall be declared to be due and payable or is required to be prepaid
(other than by a regularly scheduled payment or a mandatory redemption or
prepayment provision) prior to the scheduled date of maturity thereof;

then, in the event of any such Servicer Default, so long as the Servicer Default
shall not have been remedied the Indenture Trustee may, or at the direction of
the Majority Investors, the Indenture Trustee shall, by written notice then
given to the Servicer (and to the Indenture Trustee if given by the Majority
Investors) (a “Termination Notice”), terminate all or any part of the rights and
obligations of the Servicer as Servicer under this Agreement. Notwithstanding
the foregoing, a delay in or failure of performance referred to in clause (a),
(b) or (c) for a period of 10 Business Days after the applicable grace period
shall not constitute a Servicer Default if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Servicer and such delay
or failure was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes not within
the Servicer’s control. The preceding sentence does not relieve the Servicer
from using all commercially reasonable efforts to perform its obligations in a
timely manner in accordance with the terms of this Agreement; or

After receipt by the Servicer of a Termination Notice, and on the date that a
Successor Servicer is appointed by the Indenture Trustee pursuant to
Section 9.03, all authority and power of the Servicer under this Agreement (or,
in the case of a partial transfer, such authority and power and a proportional
portion of the Servicing Fee as is described in the Termination Notice) shall
pass to and be vested in the Successor Servicer (a “Service Transfer”); and the
Indenture Trustee is hereby authorized and empowered, upon the failure of the
Servicer to cooperate, to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments and to do and
accomplish all other acts or things necessary or appropriate to effect the
purposes of such Service Transfer. The Servicer agrees to cooperate with the
Indenture Trustee and such Successor Servicer in effecting the termination of
the responsibilities and rights of the Servicer to conduct servicing hereunder,
including the transfer to such Successor Servicer of authority of the Servicer
to service the Pool Receivables provided for under this Agreement, including (to
the extent transferred) all authority over all Pool Collections that on the date
of transfer are held by the Servicer for deposit, or which have been deposited
by the Servicer in the Collection Account, or which thereafter are received with
respect to the Receivables, and in assisting the Successor Servicer. The
Servicer shall within 20 Business Days of such Termination Notice transfer its
electronic records relating to the Pool Receivables to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records,

 

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correspondence and documents necessary for the continued servicing of the
Receivables in the manner and at such times as the Successor Servicer shall
reasonably request. To the extent that compliance with this Section 9.01
requires the Servicer to disclose to the Successor Servicer information of any
kind that the Servicer deems to be confidential, the Successor Servicer shall be
required to enter into such customary licensing and confidentiality agreements
as the Servicer deems reasonably necessary to protect its interests. The
Servicer being terminated (or replaced in part) shall bear all costs of the
appointment of a Successor Servicer hereunder, including but not limited to
those of the Indenture Trustee reasonably allocable to specific employees and
overhead, legal fees and expenses, accounting and financial consulting fees and
expenses, and costs of amending the Transaction Documents, if necessary.

Section 9.02 Performance by Issuer. If (i) the Transferor or the Servicer fails
to perform any of its agreements or obligations under any Transaction Document
to which it is a party and does not remedy such failure within the applicable
cure period, if any, and (ii) the Issuer in good faith reasonably believes that
the performance of such agreements and obligations is necessary or appropriate
to protect the interests of the holders of the Notes issued by the Issuer under
the Indenture, then the Issuer or its designee shall have the right to perform,
or cause performance of, such agreement or obligation, and the reasonable
expenses of the Issuer or its designee incurred in connection therewith shall be
payable by the Servicer as provided in Section 7.04 (if the Servicer has failed
to perform its obligations) or by the Transferor as provided in Section 6.04 (if
the Transferor has failed to perform its obligations). If the Transferor or the
Servicer fails to file at any time any financing statement or continuation
statement or amendment thereto or assignment thereof that it is required to file
pursuant to this Agreement or any of the other Transaction Documents to which it
is a party, the Issuer or its assigns shall have the right to file, and the
Transferor and the Servicer hereby authorize the Issuer or its assigns to file,
at the expense of the Transferor, such financing or continuation statements and
amendments thereto and assignments thereof with respect to all or any of the
Receivables or the other Transferred Assets now existing or hereafter arising in
the name of the Transferor.

Section 9.03 Indenture Trustee To Act; Appointment of Successor.

(a) On and after the receipt by the Servicer of a Termination Notice pursuant to
Section 9.01, the Servicer shall continue to perform all servicing functions
under this Agreement until the date specified in the Termination Notice or
otherwise specified by the Indenture Trustee or until a date mutually agreed
upon by the Servicer and Indenture Trustee. The Issuer shall select, as promptly
as possible after the giving of a Termination Notice, and the Indenture Trustee
shall appoint, an Eligible Servicer as a successor servicer (the “Successor
Servicer”), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Issuer. If a Successor Servicer
has not been appointed or has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Indenture Trustee without further action
automatically shall be appointed the Successor Servicer. Notwithstanding the
foregoing, the Issuer shall, if the Indenture Trustee is legally unable so to
act, petition at the expense of the Servicer a court of competent jurisdiction
to appoint any established institution qualifying as an Eligible Servicer as the
Successor Servicer hereunder.

 

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(b) Upon its appointment, the Successor Servicer shall be the successor in all
respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer. Notwithstanding the foregoing, or anything in
this Section 9.03 to the contrary, the Successor Servicer shall have no
responsibility or obligation (i) for any representation or warranty of the
predecessor Servicer or any other Successor Servicer hereunder or (ii) for any
act or omission of either a predecessor or any other Successor Servicer. The
Indenture Trustee may conduct any activity required of it as Servicer hereunder
through an Affiliate or through an agent. Neither the Indenture Trustee nor any
other Successor Servicer shall be deemed to be in default hereunder due to any
act or omission of a predecessor Servicer, including but not limited to failure
to timely deliver to the Indenture Trustee any instructions pursuant to
Section 4.02, any funds required to be deposited with or transferred to the
Indenture Trustee, or any breach of its duty to cooperate with a Service
Transfer.

(c) All authority and power granted to the Servicer under this Agreement shall
automatically cease and terminate upon termination of this Agreement pursuant to
Section 10.01, and shall pass to and be vested in the Transferor, and the
Transferor is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Servicer agrees to cooperate with the Transferor in effecting the termination of
the responsibilities and rights of the Servicer to conduct servicing of the
Receivables and the other Transferred Assets. The Servicer shall transfer its
electronic records relating to the Receivables and the other Transferred Assets
to the Transferor or its designee in such electronic form as it may reasonably
request and shall transfer all other records, correspondence and documents to it
in the manner and at such times as it shall reasonably request.

(d) Power of Attorney. The Transferor hereby irrevocably appoints the Issuer to
act as the Transferor’s attorney-in-fact, with full authority in the place and
stead of the Transferor and in the name of the Transferor or otherwise, from
time to time after the occurrence and during the continuance of an Unmatured
Servicer Default or a Servicer Default or other termination of the Servicer
under Section 9.01 or a Transfer Termination Event, to take at the direction of
the Issuer any action and to execute any instrument or document that the Issuer
may deem necessary to accomplish the purposes of this Agreement including
without limitation:

(i) to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any Pool Receivable or any other Transferred Asset;

(ii) to receive, endorse, and collect any drafts or other instruments, documents
and chattel paper, in connection with clause (i) above;

(iii) to file any claims or take any action or institute any proceedings that
the Issuer in its reasonable determination deems necessary or appropriate for
the collection of any of the Pool Receivables or any other Transferred Asset or

 

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otherwise to enforce the rights of the Issuer and the holders of the Notes
issued by the Issuer under the Indenture with respect to any of the Pool
Receivables or any other Transferred Asset;

(iv) to perform affirmative obligations of the Transferor under any Transaction
Document; and

(v) to enforce the rights and remedies of the Transferor under any Transaction
Document.

The Transferor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section 9.03(d) is irrevocable and coupled
with an interest. The Transferor further agrees that the Issuer may delegate to
the Indenture Trustee any of the above-referenced powers to the extent the
Issuer, in its sole and absolute discretion, without liability, deems advisable
and, upon such delegation, the Indenture Trustee shall, to the extent of any
power so delegated, be entitled to exercise the powers herein granted to the
Issuer.

Section 9.04 Notification to Holders. Within five Business Days after the
Servicer becomes aware of any Servicer Default, the Servicer shall give notice
thereof to Cartus, CFC, the Transferor, the Issuer, the Indenture Trustee and
any Series Enhancer. Upon any termination or appointment of a Successor Servicer
pursuant to this Article IX, the Indenture Trustee shall give prompt notice
thereof to the holders of the Notes, Cartus, CFC, the Transferor and the Issuer.

Section 9.05 Marketing Expenses Account. (a) If (i) Cartus is the Servicer, and
(ii) either (x) the “Average Days in Inventory” (as defined below) is more than
120 days or (y) a Weekly Reporting Event has occurred, the Issuer will be
obligated to establish an account (the “Marketing Expenses Account”) to be
established with, and pledged to, the Indenture Trustee and maintain on deposit
therein, an amount at least equal to the Required Marketing Expenses Account
Amount described below. On any day that the amount on deposit in the Marketing
Expenses Account is less than the Required Marketing Expenses Account Amount,
the Issuer will be required to deposit an amount into the Marketing Expenses
Account equal to such shortfall. On any Distribution Date that the amount on
deposit in the Marketing Expenses Account exceeds the Required Marketing
Expenses Account Amount, the Issuer will be permitted to withdraw such excess,
and any amount so withdrawn shall be transferred to the Collection Account.

(b) The Indenture Trustee will be permitted to withdraw funds from the Marketing
Expenses Account (i) if Cartus is the Servicer, to pay for the cost of
maintaining and marketing the Homes to the extent that Cartus as Servicer has
failed to pay such costs, (ii) to reimburse a successor Servicer for the cost of
maintaining and marketing the Homes, but only to the extent such costs were
actually incurred, but not paid, by Cartus while acting as the Servicer or to
the extent that such costs are attributable to Cartus’ breach of its duties as
the Servicer prior to the appointment of a successor Servicer and (iii) to cover
the costs of transition of servicing from Cartus to such successor Servicer.
Payment of such costs from the Marketing Expenses

 

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Account shall not be deemed to be payment by the Servicer and shall not relieve
the Servicer from any liability therefor under the other provisions of this
Agreement.

Section 9.06 Lockbox Agreements. If a Servicer Default has occurred and is
continuing, or to the extent set forth in any Supplement, upon the occurrence of
an Amortization Event with respect to any Series of Notes, the Indenture
Trustee, as assignee of the Transferor and the Issuer with respect to the
Lockboxes, may give Termination Notices to the Lockbox Banks under the Lockbox
Agreements in order to terminate the Servicer’s ability to instruct the Lockbox
Banks as to the transfers of funds from the Lockbox Accounts and to instruct the
Lockbox Banks to follow the directions of the Indenture Trustee as to all such
transfers. In the event the Indenture Trustee gives such Termination Notices,
all such transfers from the Lockbox Accounts must be made directly to the
Collection Account or, to the extent otherwise permitted under the Indenture or
an applicable Supplement, to such other accounts established under the Indenture
and/or any Supplement for the benefit of the Noteholders.

[END OF ARTICLE IX]

 

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ARTICLE X

TERMINATION

Section 10.01 Termination. This Agreement and the respective obligations and
responsibilities of Cartus, CFC, the Transferor, the Servicer, the Issuer and
the Indenture Trustee created hereby shall terminate, except with respect to the
duties described in Section 6.03, Section 7.04 and Section 11.06, on the Final
Payout Date.

[END OF ARTICLE X]

 

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ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.01 Amendment.

(a) The provisions of this Agreement may be amended, modified or waived from
time to time by the parties hereto, by a written instrument signed by each of
them. Notwithstanding the preceding sentence, this Agreement shall be amended by
the parties hereto at the direction of the Transferor without the consent of any
of the holders of the Notes issued by the Issuer under the Indenture to add,
modify or eliminate such provisions as may be necessary or advisable in order to
enable all or a portion of the Transferred Assets (i) to qualify as, and to
permit an election to be made to cause the Issuer to be treated as, a “financial
asset securitization investment trust” as described in the provisions of
Section 860L of the Code, and (ii) to avoid the imposition of state or local
income or franchise taxes imposed on the Issuer’s property or its income,
provided that (i) the Transferor delivers to the Issuer an Officer’s Certificate
to the effect that the proposed amendments meet the requirements set forth in
this Section 11.01(a) and (ii) such amendment does not affect the rights, duties
or obligations of the Issuer hereunder.

(b) Promptly after the execution of any such amendment or consent, the Issuer
shall furnish notification of the substance of such amendment to each Rating
Agency.

 

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Section 11.02 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING § 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PRINCIPLES.

Section 11.03 Notices; Payments. All demands, notices, instructions, directions
and communications under this Agreement shall be in writing and shall be deemed
to have been duly given if personally delivered at, mailed by certified mail,
return receipt requested, or sent by facsimile transmission (i) in the case of
Cartus or CFC, to the address provided in the Purchase Agreement or the
Receivables Purchase Agreement, respectively, (ii) in the case of the
Transferor, to 40 Apple Ridge Road, Suite 4C45, Danbury, Connecticut 06810
(telecopier no. (203) 205-1335), (iii) in the case of the Servicer, to 40 Apple
Ridge Road, Danbury Connecticut 06810, Attention: Chief Financial Officer
(telecopier no. (203) 205-8136), (iv) in the case of the Issuer, 40 Apple Ridge
Road, Suite 4C45, Danbury, Connecticut 06810, Attention: Chief Financial Officer
(telecopier no. (203) 205-1335), (v) in the case of the Indenture Trustee 101
Barclay Street, 4W, New York, New York 10286 (telecopier no. (212) 815-2493) and
(vi) to any other Person as specified in any Supplement; or, as to each party,
at such other address or facsimile number as shall be designated by such party
in a written notice to each other party.

Section 11.04 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such provisions shall be deemed severable from
the remaining provisions of this Agreement and shall in no way affect the
validity or enforceability of the remaining provisions or of the rights of the
parties to the Transaction Documents.

Section 11.05 Further Assurances. The parties hereto agree to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Issuer or any other party
hereto more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables and the other Transferred Assets for filing under the provisions of
the UCC or other applicable law of any applicable jurisdiction.

Section 11.06 Nonpetition Covenant. (a) Notwithstanding any prior termination of
this Agreement, Cartus, CFC, the Indenture Trustee, the Servicer, the Transferor
and any assignee of the Issuer shall not, prior to the date that is one year and
one day after the termination of this Agreement with respect to the Issuer,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any Governmental Authority for the purpose of commencing or
sustaining a case against the Issuer under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property or ordering the winding-up or liquidation of
the affairs of the Issuer.

(b) Notwithstanding any prior termination of this Agreement, Cartus, CFC, the
Servicer, the Indenture Trustee, the Issuer and any assignee of the Issuer shall
not, prior to the date that is one year and one day after the termination of
this Agreement with respect to the Transferor, acquiesce, petition or otherwise
invoke or cause the Transferor to invoke the process

 

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of any Governmental Authority for the purpose of commencing or sustaining a case
against the Transferor under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Transferor or any substantial part
of its property or ordering the winding-up or liquidation of the affairs of the
Transferor.

 

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Section 11.07 No Waiver; Cumulative Remedies. No failure to exercise, and no
delay in exercising, any right, remedy, power or privilege on the part of any
party under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement, preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not exhaustive of
any rights, remedies, powers and privileges provided by law.

Section 11.08 Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.

Section 11.09 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the holders of the Notes and
their respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person will have any right or obligation
hereunder.

Section 11.10 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived or supplemented except as provided herein.

Section 11.11 Headings. The headings herein are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any provision
hereof.

Section 11.12 Confidentiality. The Issuer and the Transferor each agree to
maintain the confidentiality of any information regarding Cartus Corporation,
Cartus and Realogy obtained in accordance with the terms of this Agreement that
is not publicly available; provided, however, that the Issuer or the Transferor
may reveal such information (a) as necessary or appropriate in connection with
the administration or enforcement of this Agreement or the Issuer’s issuance of
Notes under the Indenture or (b) as required by law, government regulation,
court proceeding or subpoena. Notwithstanding anything herein to the contrary,
none of Cartus Corporation, Cartus nor Realogy shall have any obligation to
disclose to the Issuer or its assignees and assigns any personal and
confidential information relating to a Transferred Employee.

Section 11.13 Costs, Expenses and Taxes. In addition to the obligations of the
Transferor under Article VI, the Transferor agrees to pay on demand:

(a) all reasonable costs and expenses incurred by the Issuer and its assignees
in connection with the negotiation, preparation, execution and delivery of, the
administration (including periodic auditing), the preservation of any rights
under, or the enforcement of, or any breach of, this Agreement (including any
amendment, supplement or modification hereto), including without limitation
(i) the reasonable fees, expenses and

 

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disbursements of counsel to any such Persons incurred in connection with any of
the foregoing or in advising such Persons as to their respective rights and
remedies under this Agreement and (ii) all reasonable out-of-pocket expenses
(including reasonable fees and expenses of independent accountants) incurred in
connection with any review of the Transferor’s books and records prior to the
execution and delivery hereof, and

(b) all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement
or any amendment, supplement or modification thereto, and agrees to indemnify
each ARSC Indemnified Party against any liabilities with respect to, or
resulting from, any delay in paying or omission to pay such taxes and fees.

Section 11.14 Submission to Jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW YORK, OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY
(a) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT;
(b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; AND (c) IRREVOCABLY APPOINTS CORPORATION SERVICE COMPANY (THE
“PROCESS AGENT”), WITH AN OFFICE ON THE DATE HEREOF AT 80 STATE STREET, ALBANY,
NEW YORK 12207, UNITED STATES OF AMERICA, AS ITS AGENT TO RECEIVE ON BEHALF OF
IT AND ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS THAT MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE
MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS IN CARE OF THE PROCESS
AGENT AT THE PROCESS AGENT’S ABOVE ADDRESS, AND EACH PARTY HERETO HEREBY
IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON
ITS BEHALF. EACH PARTY HERETO AGREES TO ENTER INTO ANY AGREEMENT RELATING TO
SUCH APPOINTMENT THAT THE PROCESS AGENT MAY CUSTOMARILY REQUIRE AND TO PAY THE
PROCESS AGENT’S CUSTOMARY FEES UPON DEMAND. AS AN ALTERNATIVE METHOD OF SERVICE,
EACH PARTY HERETO ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO SUCH PARTY AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION 11.03.
NOTHING IN THIS SECTION 11.14 SHALL AFFECT THE RIGHT OF EITHER PARTY HERETO TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
EITHER PARTY HERETO TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY
HERETO OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.

 

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Section 11.15 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR RELATING TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO
OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

Section 11.16 Acknowledgment and Consent.

(a) The Transferor acknowledges that, from time to time prior to the Termination
Date, the Issuer intends to pledge the Transferred Assets to the Indenture
Trustee pursuant to the Indenture. The Transferor acknowledges and agrees to
each such pledge by the Issuer and consents to the assignment by the Issuer of
all or any portion of its right, title and interest in, to and under the
Transferred Assets, this Agreement and the other Transaction Documents and all
of the Issuer’s rights, remedies, powers and privileges and all claims of the
Issuer against the Transferor under or with respect to this Agreement and the
other Transaction Documents (whether arising pursuant to the terms of this
Agreement or otherwise available at law or in equity), including without
limitation (whether or not an Unmatured Servicer Default or a Servicer Default
has occurred and is continuing) (i) the right of the Issuer at any time to
enforce this Agreement against the Transferor and the obligations of the
Transferor hereunder and (ii) the right at any time to give or withhold any and
all consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect to this Agreement, any other Transaction Document
or the obligations in respect of the Transferor thereunder, all of which rights,
remedies, powers, privileges and claims may be exercised and/or enforced by the
Issuer’s successors ands assigns to the same extent as the Issuer may do.

Section 11.17 No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
Person to create the relationship of principal and agent or of partnership or of
joint venture.

Section 11.18 Conversion. Notwithstanding any covenants in this Agreement
requiring Cartus, CFC or ARSC to maintain its “corporate existence”, such entity
shall be allowed to effect a Conversion subject to the conditions that:

(a)(x) the Person formed by such Conversion (any such Person, the “Surviving
Entity”) is an entity organized and existing under the laws of the United States
of America or any State thereof, (y) such Surviving Entity expressly assumes, by
an agreement in form and substance satisfactory to the applicable transferee and
its assignees, performance of every covenant and obligation of such Person under
the Transaction Documents to which such Person is a party and (z) such Surviving
Entity delivers to the other parties hereto an opinion of counsel that such
Surviving Entity is duly organized and validly existing under the laws of its

 

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organization, has duly executed and delivered such supplemental agreement, and
such supplemental agreement is a valid and binding obligation of such Surviving
Entity, enforceable against such Surviving Entity in accordance with its terms
(subject to customary exceptions relating to bankruptcy and equitable
principles) and covering such other matters as the parties hereto may reasonably
request;

(b) all actions necessary to maintain the perfection of the security interests
or ownership interests created by such Person under the Transaction Documents to
which such Person is a party in connection with such Conversion shall have been
taken, as evidenced by an opinion of counsel reasonably satisfactory to the
parties hereto;

(c) so long as such Person is the Servicer, no Servicer Default or Unmatured
Servicer Default is then occurring or would result from such Conversion;

(d) in the case of a Conversion of CFC or ARSC, (x) the organizational documents
of any Surviving Entity with respect to CFC or ARSC shall contain limitations on
its business activities and requirements for independent directors or managers
substantially equivalent to those set forth in its current organizational
documents, and (y) Orrick Herrington & Sutcliffe shall have delivered an opinion
of counsel reasonably satisfactory to the other parties hereto that such
Conversion will not, in and of itself, alter the conclusions set forth in its
opinions previously issued in connection with the Transaction Documents with
respect to true sale matters, substantive consolidation matters and bankruptcy
issues relating to “home sale proceeds” (to the extent such opinions relate to
such Person); and

(e) each party hereto shall have received such other documents as such party may
reasonably request.

In connection with any such Conversion and the resulting change in name of such
entity, Cartus, CFC and/or ARSC, as applicable, shall be required to comply with
the name change covenants in the Transaction Documents, except that to the
extent 30 days prior written notice of the name change is required, such notice
period shall be reduced to five Business Days.

From and after any such Conversion effected in compliance with the above
conditions, (a) all references in the Transaction Documents to any Person which
has altered its corporate structure to become a limited liability company shall
be deemed to be references to the Surviving Entity as successor to such Person,
(b) all representations, warranties and covenants in the Transaction Documents
which state that any of Cartus, CFC or ARSC is or is required to be a
corporation shall be deemed to permit and require the Surviving Entity to be a
limited liability company, (c) all references to such Person’s certificate of
incorporation, other organizational documents, capital stock, corporate action
or other matters relating to its corporate form will be deemed to be references
to the organizational documents and analogous matters relating to limited
liability companies, (d) all references to such Person’s directors or
independent directors will be deemed to be references to the Surviving Entity’s
directors, independent directors, managers or independent managers, as the case
may be and (e) no representation, warranty or covenant in any Transaction
Document shall be deemed to be breached or violated solely as a result of the
fact that the Surviving Entity in any Conversion may be disregarded as a
separate entity for state, local or federal income tax purposes.

 

63

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Section 11.19 Inclusion of Receivables Assigned from Kenosia Funding LLC and
Cartus Relocation Corporation. The parties hereto acknowledge and agree that the
definition of “Seller Receivables” in the Receivables Purchase Agreement may
include certain Receivables (the “Acquired Receivables’) which were neither sold
by Cartus to CFC under the Purchase Agreement nor originated by CFC. The parties
hereto acknowledge and agree that, for all purposes of the Affected Documents,
(i) the Acquired Receivables shall be considered to be CFC Receivables
originated by CFC, and shall be deemed to be included in the ARSC Purchased
Assets transferred to the Issuer and (ii), notwithstanding anything to the
contrary in the Affected Documents, CFC shall be allowed to enter into an
assignment agreement with each of Cartus, Kenosia and CRC, the form of which has
been approved in writing by the Majority Investors, and to consummate the
transfer of the Acquired Receivables along with the Related Property relating to
such Acquired Receivables (collectively, the “Acquired Assets”) on the terms and
conditions set forth therein. Such conditions shall include evidence of
compliance with the Federal Assignment of Claims Act and confirmation from the
Rating Agencies that the commercial paper ratings of the Conduit Purchasers
under the Note Purchase Agreement will not be reduced or withdrawn by reason of
such transaction. The parties hereto further acknowledge and agree that, so long
as such Acquired Receivables satisfy all other criteria set forth in the
definition of “Eligible Receivable”, such Acquired Receivables shall constitute
Eligible Receivables within the meaning of the Receivables Purchase Agreement,
the Transfer and Servicing Agreement and the Indenture notwithstanding the fact
that such Acquired Receivables were neither sold to CFC under the Purchase
Agreement nor otherwise originated by CFC.

[END OF ARTICLE XI]

 

64

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IN WITNESS WHEREOF, the Transferor, Cartus, CFC, the Servicer, the Indenture
Trustee and the Issuer have caused this Transfer and Servicing Agreement to be
duly executed by their respective officers as of the day and year first above
written.

 

APPLE RIDGE SERVICES CORPORATION,
as Transferor,

by       Name:   Title:

CARTUS CORPORATION,
as originator and Servicer,

by       Name:   Title:

CARTUS FINANCIAL CORPORATION,
as originator,

by       Name:   Title:

APPLE RIDGE FUNDING LLC,
as transferee,

by       Name:   Title:

[Signature page to Transfer and Servicing Agreement]

--------------------------------------------------------------------------------

THE BANK OF NEW YORK,
as Indenture Trustee,

by       Name:   Title:

[Signature page to Transfer and Servicing Agreement]

--------------------------------------------------------------------------------

SCHEDULE 2.02(m)

to

TRANSFER AND SERVICING AGREEMENT

Dated as of April 25, 2000

Principal Place of Business and

Chief Executive Office of the Transferor

Apple Ridge Services Corporation

40 Apple Ridge Road, Suite 4C45

Danbury, CT 06810

Fax: 203-205-1335

List of Offices Where

the Servicer Keeps Records

Cartus Corporation

40 Apple Ridge Road

Danbury, CT 06810

Cartus Corporation

8081 Royal Ridge Parkway

Suite 200

Irving, TX 75063

Cartus Corporation

27271 Las Ramblas

Mission Viejo, CA 92691

 

S-2.02(m)-1

--------------------------------------------------------------------------------

SCHEDULE 2.02(o)

to

TRANSFER AND SERVICING AGREEMENT

Dated as of April 25, 2000

List of Legal Names

None.

 

S-2.02(o)-1

--------------------------------------------------------------------------------

SCHEDULE 3.04(l)

to

TRANSFER AND SERVICING AGREEMENT

Dated as of April 25, 2000

List of Lockbox Banks

The Bank of New York

Attn.: Suzanne Keith

Corporate Trust-Structured Finance Services

The Bank of New York

101 Barclay Street, 4W

New York, NY 10286

Demand Deposit Account Number and Associated Lockbox Numbers

DDA No.: 52-69938                    Lockbox Nos.: 93358/73049

Mellon Bank, N.A.

Document Control Manager

Three Mellon Bank Center

Room 3119

Pittsburgh, PA 15259

Demand Deposit Account Number and Associated Lockbox Number

 

1.    DDA No.: *CONFIDENTIAL    Lockbox No.: *CONFIDENTIAL 2.    DDA No.:
*CONFIDENTIAL    Lockbox No.: *CONFIDENTIAL

 

* The term “Confidential” indicates material that has been omitted and for which
confidential treatment has been requested. All such omitted material has been
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.

 

S-3.04(1)-1

--------------------------------------------------------------------------------

EXHIBIT A

to

TRANSFER AND SERVICING AGREEMENT

Dated as of April 25, 2000

FORM OF ANNUAL SERVICER’S CERTIFICATE

(To be delivered on or before April 30 of

each calendar year beginning with April 30, 2001

pursuant to Section 3.09 of the Transfer and

Servicing Agreement referred to below)

CARTUS CORPORATION

The undersigned, a duly authorized representative of Cartus Corporation, as
Servicer (“Cartus”), pursuant to the Transfer and Servicing Agreement dated as
of April 25, 2000 (as amended and supplemented, the “Agreement”), by and between
Apple Ridge Services Corporation as Transferor, Cartus as originator and
Servicer, Cartus Financial Corporation as originator, Apple Ridge Funding, LLC
as transferee, and Bank One, National Association, as Indenture Trustee does,
hereby certify that:

1. Cartus is, as of the date hereof, the Servicer under the Agreement.

2. The undersigned is a Servicing Officer who is duly authorized pursuant to the
Agreement to execute and deliver this Certificate to the Issuer.

3. A review of the activities of the Servicer during the year ended December 31,
            , and of its performance under the Agreement was conducted under my
supervision.

4. Based on such review, the Servicer has, or has caused to be, to the best of
my knowledge, performed its obligations under the Agreement in all material
respects throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 5
below.

5. The following is a description of each default in the performance of the
Servicer’s obligations under the provisions of the Agreement known to me to have
been made by the Servicer during the year ended December 31,              which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by the Servicer, if any, to remedy each such default and (iii) the current
status of each such default: [If applicable, insert “None.”]

Capitalized terms used in this Certificate have their respective meanings as set
forth in the Agreement.

 

E-A-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this     
day of                     , 20        .

 

CARTUS CORPORATION,

as Servicer,

By       Name:   Title:

 

E-A-2

--------------------------------------------------------------------------------

EXHIBIT B

to

TRANSFER AND SERVICING AGREEMENT

Dated as of April 25, 2000

FORMS OF LOCKBOX AGREEMENTS

 

E-B-1

--------------------------------------------------------------------------------

EXHIBIT C

SERVICING OFFICERS

Eric Barnes

Anthony Hull

Michael Muller

Paula Wiltshire

 

-i-

--------------------------------------------------------------------------------

Exhibit A-4

--------------------------------------------------------------------------------

CONFORMED COPY

AS AMENDED BY:

 

 

1. Omnibus Amendment, Agreement and Consent dated December 20, 2004.

 

2. Second Omnibus Amendment dated January 31, 2005

 

3. Amendment, Agreement and Consent dated January 30, 2006

 

4. Third Omnibus Amendment, Agreement and Consent dated May 12, 2006

 

5. Fourth Omnibus Amendment dated November 29, 2006

 

6. Fifth Omnibus Amendment dated April 10, 2007

 

 

 

MASTER INDENTURE

 

 

APPLE RIDGE FUNDING LLC

as Issuer,

THE BANK OF NEW YORK

as Indenture Trustee,

and

THE BANK OF NEW YORK

as Paying Agent, Authentication Agent and

Transfer Agent and Registrar

MASTER INDENTURE

Dated as of April 25, 2000

 

 

 

--------------------------------------------------------------------------------

ARTICLE I    DEFINITIONS    Section 1.01.    Definitions    2 Section 1.02.   
Other Definitional Provisions    15 ARTICLE II    THE NOTES    Section 2.01.   
Form Generally    16 Section 2.02.    Denominations    16 Section 2.03.   
Execution, Authentication and Delivery    16 Section 2.04.    Authentication
Agent    17 Section 2.05.    Registration of and Limitations on Transfer and
Exchange of Notes    18 Section 2.06.    Mutilated, Destroyed, Lost or Stolen
Notes    20 Section 2.07.    Persons Deemed Owners    20 Section 2.08.    Paying
Agent    21 Section 2.09.    Cancellation    22 Section 2.10.    New Issuances
   22 Section 2.11.    Book-Entry Notes    24 Section 2.12.    Notices to
Clearing Agency or Foreign Clearing Agency    25 Section 2.13.    Definitive
Notes    25 Section 2.14.    Global Note; Euro-Note Exchange Date    26 Section
2.15.    Representations and Covenants of Paying Agent, Authentication Agent and
Transfer Agent and Registrar    26 ARTICLE III    REPRESENTATIONS AND COVENANTS
OF THE ISSUER    Section 3.01.    Representations and Warranties of the Issuer
   26 Section 3.02.    Affirmative Covenants of the Issuer    29 Section 3.03.
   Negative Covenants of the Issuer.. From the Effective Date until the
termination of this Indenture, the Issuer hereby agrees that it shall not:    31
Section 3.04.    Protection of Pledged Assets    33 Section 3.05.    Opinions as
to Pledged Assets    33

--------------------------------------------------------------------------------

Section 3.06.    Obligations Regarding Servicing of Receivables    34
Section 3.07.    Separate Corporate Existence of the Issuer    35 ARTICLE IV   
SATISFACTION AND DISCHARGE    Section 4.01.    Satisfaction and Discharge of
this Indenture    36 Section 4.02.    Application of Trust Money    37 ARTICLE V
   EVENTS OF DEFAULT AND REMEDIES    Section 5.01.    Events of Default    37
Section 5.02.    Acceleration of Maturity; Rescission and Annulment    38
Section 5.03.    Collection of Indebtedness and Suits for Enforcement by the
Indenture Trustee    39 Section 5.04.    Remedies; Priorities    41
Section 5.05.    Sale of Assets    42 Section 5.06.    Limitations on Suits   
43 Section 5.07.    Unconditional Right of Noteholders to Receive Principal and
Interest    44 Section 5.08.    Restoration of Rights and Remedies    44
Section 5.09.    Rights and Remedies Cumulative    44 Section 5.10.    Delay or
Omission Not a Waiver    44 Section 5.11.    Control by Noteholders    44
Section 5.12.    Waiver of Past Defaults    45 Section 5.13.    Undertaking for
Costs    46 Section 5.14.    Waiver of Stay or Extension Laws    46
Section 5.15.    Action on Notes    46 ARTICLE VI    THE INDENTURE TRUSTEE   
Section 6.01.    Duties of the Indenture Trustee    47 Section 6.02.    Notice
of Event of Default    48 Section 6.03.    Rights of Indenture Trustee    49
Section 6.04.    Not Responsible for Recitals or Issuance of Notes    50

 

ii

--------------------------------------------------------------------------------

Section 6.05.    May Hold Notes    50 Section 6.06.    Money Held in Trust    50
Section 6.07.    Compensation, Reimbursement and Indemnification    50
Section 6.08.    Replacement of Indenture Trustee    51 Section 6.09.   
Successor Indenture Trustee by Merger    52 Section 6.10.    Appointment of
Co-Indenture Trustee or Separate Indenture Trustee    52 Section 6.11.   
Eligibility; Disqualification    53 Section 6.12.    Representations and
Covenants of the Indenture Trustee    54 Section 6.13.    Custody of Pledged
Assets and Other Collateral    54 ARTICLE VII    NOTEHOLDERS’ LIST AND REPORTS
BY INDENTURE TRUSTEE    Section 7.01.    Issuer to Furnish Indenture Trustee
Names and Addresses of Noteholders    55 Section 7.02.    Preservation of
Information    55 ARTICLE VIII    ALLOCATION AND APPLICATION OF POOL COLLECTIONS
   Section 8.01.    Collection of Money    55 Section 8.02.    Rights of
Noteholders    56 Section 8.03.    Establishment of Accounts    56 Section 8.04.
   Pool Collections and Allocations    57 Section 8.05.    Release of Pledged
Assets    58 Section 8.06.    Officer’s Certificate    58 Section 8.07.    Money
for Note Payments to Be Held in Trust    58 ARTICLE IX    DISTRIBUTIONS AND
REPORTS TO NOTEHOLDERS    ARTICLE X    SUPPLEMENTAL INDENTURES    Section 10.01.
   Supplemental Indentures Without Consent of Noteholders    59 Section 10.02.
   Supplemental Indentures with Consent of Noteholders    61 Section 10.03.   
Execution of Supplemental Indentures    62

 

iii

--------------------------------------------------------------------------------

Section 10.04.    Effect of Supplemental Indenture    63 Section 10.05.   
Reference in Notes to Supplemental Indentures    63 ARTICLE XI    DEFEASANCE   
Section 11.01.    Defeasance    63 ARTICLE XII    MISCELLANEOUS    Section
12.01.    Compliance Certificates and Opinions, etc.    65 Section 12.02.   
Form of Documents Delivered to Indenture Trustee    66 Section 12.03.    Acts of
Noteholders    67 Section 12.04.    Notices to Issuer, Indenture Trustee, Paying
Agent, Authentication Agent and Transfer Agent and Registrar    68 Section
12.05.    Notices to Noteholders; Waiver    68 Section 12.06.    Alternate
Payment and Notice Provisions    69 Section 12.07.    Effect of Headings and
Table of Contents    69 Section 12.08.    Successors and Assigns    69 Section
12.09.    Separability    69 Section 12.10.    Benefits of Indenture    69
Section 12.11.    Legal Holidays    70 Section 12.12.    GOVERNING LAW    70
Section 12.13.    Counterparts    70 Section 12.14.    No Petition    70 Section
12.15.    Provision of Information to Rating Agencies    70 Section 12.16.   
Conversion    71 Section 12.17.    Inclusion of Receivables Assigned from
Kenosia Funding LLC and Cartus Relocation Corporation    72

 

iv

--------------------------------------------------------------------------------

This MASTER INDENTURE, dated as of April 25, 2000 (as amended, modified or
supplemented from time to time, the “Indenture”), by and between APPLE RIDGE
FUNDING LLC, a limited liability company organized under the laws of the State
of Delaware (together with its permitted successors and assigns, the “Issuer”),
THE BANK OF NEW YORK, as successor to JPMorgan Chase Bank, N.A., as indenture
trustee (herein, together with its successors in the trusts hereunder, the
“Indenture Trustee”), and THE BANK OF NEW YORK, a New York state banking
corporation, as paying agent, authentication agent and transfer agent and
registrar (together with its permitted successors and assigns, “BNY”). This
Indenture may be supplemented at any time and from time to time by an indenture
supplement in accordance with Article X hereof (each, an “Indenture
Supplement”). If a conflict exists between the terms and provisions of this
Indenture and any Indenture Supplement, the terms and provisions of the
Indenture Supplement shall be controlling with respect to the related Series.

PRELIMINARY STATEMENT

The Issuer has duly authorized the execution and delivery of this Indenture to
provide for issuances from time to time of its asset backed notes as provided in
this Indenture. All covenants and agreements made by the Issuer herein are for
the benefit and security of the Noteholders. The Issuer is entering into this
Indenture, and the Indenture Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.

Simultaneously with the delivery of this Indenture the Issuer is entering into
the Transfer and Servicing Agreement (the “Transfer and Servicing Agreement”)
with Apple Ridge Service Corporation, a Delaware corporation, as transferor (the
“Transferor”), Cartus Financial Corporation (“CFC”), a Delaware corporation, as
an originator, and Cartus Corporation (“Cartus”), a Delaware corporation, as an
originator and as servicer (in such capacity, the “Servicer”), pursuant to which
(a) the Transferor will convey to the Issuer all of its right, title and
interest in, to and under the Pledged Assets and (b) the Servicer will agree to
service the Pledged Assets and make collections thereon on behalf of the
Noteholders. The Pledged Assets were, and in the future will be, originated by
either Cartus or Cartus Financial Corporation (each an “Originator”). The
Pledged Assets originated by Cartus will be purchased by CFC pursuant to the
Purchase Agreement. The Pledged Assets originated by CFC, together with those
originated by Cartus and purchased by CFC, will be purchased by the Transferor
pursuant to the Receivables Purchase Agreement.

Under the Transfer and Servicing Agreement, additional Pledged Assets from time
to time will automatically be conveyed thereunder to the Issuer without any
further action by either Originator or the Transferor.

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Trustee, for the benefit of the
Holders of the Notes, all of the Issuer’s right, title and interest, whether now
owned or hereafter acquired, in,

--------------------------------------------------------------------------------

to and under all of the following: (i) all Receivables; (ii) all Related
Property; (iii) all Pool Collections; (iv) the Collection Account (excluding any
subaccount of the Collection Account established pursuant to an Indenture
Supplement), the Distribution Account, and all money, instruments, investment
property and other property credited to or deposited in such accounts; (v) the
Performance Guaranty, the Transfer and Servicing Agreement, the Receivables
Purchase Agreement and the Purchase Agreement; (vi) all accounts, money, chattel
paper, investment property, instruments, documents, deposit accounts,
certificates of deposit, letters of credit, advices of credit, general
intangibles and goods consisting of, arising from or relating to any of the
foregoing; (vii) all other property of the Issuer; and (viii) all proceeds of
the foregoing (collectively, the “Pledged Assets”); provided, however, that
(1) the Pledged Assets shall not include the following, and the following shall
not be subject to the lien of this Indenture: (a) Liquidated Receivables,
(b) any Receivable as to which Cartus or CFC has paid a Cartus Noncomplying
Asset Adjustment or a CFC Noncomplying Asset Adjustment, as applicable, and all
proceeds thereof, (c) any amounts paid to the Issuer pursuant to Section 8.04(d)
and (d) all proceeds of clauses (a) through (c) of this proviso. Notwithstanding
any other provision of this Indenture, the property described in the preceding
proviso and the release thereof to the Issuer shall not be subject to the
provisions of Section 8.05 or 12.01(b).

ARTICLE I

DEFINITIONS

Section 1.01. Definitions.

Whenever used in this Agreement, the following words and phrases shall have the
following meanings, and the definitions of such terms are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.

“Act” shall have the meaning specified in Section 12.03(a).

“Adjusted Aggregate Receivable Balance” shall mean, as of any date of
determination, the excess of (a) the Aggregate Receivable Balance on such date
over (b) the Aggregate Adjustment Amount on such date.

“Affiliate” shall mean, when used with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. As used in this definition of Affiliate, the term “control” means
the power, directly or indirectly, to direct or cause the direction of the
management and policies of a Person, whether through ownership of such Person’s
voting securities, by contract or otherwise, and the terms “affiliated,”
“controlling” and “controlled” have correlative meanings.

 

2

--------------------------------------------------------------------------------

“Aggregate Adjustment Amount” shall mean, as of any date of determination, an
amount equal to the sum of (a) the Overconcentration Amount, (b) the Excess
Longer Term Receivable Amount, (c) the Excess Special Homes Receivables Amount,
(d) the amount, if any, by which the aggregate Unpaid Balance of all Eligible
Receivables relating to Homes that have been owned by CFC which are more than
450 but less than 540 days exceeds 1.50% of the sum of the Aggregate Employer
Balances of all Eligible Receivables (other than Defaulted Receivables) as of
the last day of the Monthly Period immediately preceding the date of calculation
plus (e) the amount by which (i) the aggregate Unpaid Balance of all Eligible
Receivables relating to Homes that have been owned by CFC which are more than
365 but less than 540 days, less the amount calculated under clause (d) above,
exceeds (ii) 5.00% of the sum of the Aggregate Employer Balances of all Eligible
Receivables (other than Defaulted Receivables) as of the last day of the Monthly
Period immediately preceding the date of calculation plus (f) the aggregate
Unpaid Balance of all Eligible Receivables relating to Homes that have been
owned by CFC more than 540 days as of the last day of the Monthly Period
immediately preceding the date of calculation.

“Aggregate Employer Balance” shall mean, with respect to any Employer at any
time, the aggregate Unpaid Balance of the Pool Receivables of such Employer,
calculated in the following manner: the Unpaid Balance will be reduced (without
duplication), by (a) in the case of any Receivables of such Employer, the amount
of any funds received on account of or otherwise in connection therewith,
excluding the amount of any Advance Payment made by such Employer with respect
to such Receivables or any other obligations of such Employer, and the amount of
Home Sale Proceeds received with respect to the related Home (to the extent that
they have not previously been applied to reduce the Unpaid Balance of the
related Receivable) and (b) in the case of any Receivables of such Employer
(including without limitation any Self-Funding Obligor), the amount of any net
gains on sales of Homes or other amounts (including without limitation rebates
for referral fees, if any, and if allowed by law) that have not yet been
remitted to such Employer. For the avoidance of doubt, the Aggregate Employer
Balance with respect to any Employer shall include the aggregate Unpaid Balance
of any Advance Billing Receivables of such Employer.

“Aggregate Receivable Balance” shall mean, as of any date of determination, the
sum of the Aggregate Employer Balances with respect to each Employer under the
Pool Relocation Agreements, minus the aggregate Unpaid Balance of all Pool
Receivables that are not Eligible Receivables, minus the aggregate Unpaid
Balance of all Defaulted Receivables in each case to only the extent such
amounts have not already been subtracted in calculating the Aggregate Employer
Balances, minus the aggregate dollar amount of Advance Payments made by each
such Employer minus the aggregate Unpaid Balance of any Advance Billing
Receivables of such Employer plus the amount, if any, (such amount, the “Net
Credit Balance”) by which (x) the sum of (i) the outstanding Advance Payments
received by any Employer with respect to Receivables or any other obligations of
such Employer and (ii) the Unpaid Balance of any Advance Billing Receivables of
such Employer exceeds (y) the Aggregate Employer Balance with respect to such
Employer.

“Aggregate Required Asset Amount” shall mean, on any date of determination, the
sum of the Required Asset Amounts with respect to each Series of Notes.

 

3

--------------------------------------------------------------------------------

“Amortization Event” with respect to each Series of Notes shall be specified in
the related Indenture Supplement.

“Amortization Period” shall mean, with respect to any Series, a period following
the Revolving Period during which Pool Collections are distributed to
Noteholders, which shall be a controlled amortization period, a rapid
amortization period or other amortization period, in each case as defined with
respect to such Series in the related Indenture Supplement.

“Applicable Series Enhancer” means each Series Enhancer except to the extent
otherwise provided in the relevant Indenture Supplement.

“Asset Deficiency” shall mean, on any date of determination, the amount, if any,
by which the Aggregate Required Asset Amount as of such date exceeds the
Adjusted Aggregate Receivable Balance as of such date.

“Authentication Agent” shall mean BNY and any successor thereto.

“Authorized Officer” shall mean:

(a) with respect to the Issuer, any officer of the Issuer who is authorized to
act for the Issuer in matters relating to the Issuer and who is identified on
the list of Authorized Officers (containing the specimen signature of each such
Person) delivered by the Issuer to the Indenture Trustee on the initial Closing
Date (as such list may be modified or supplemented from time to time
thereafter); or

(b) with respect to the Servicer, any officer of the Servicer who is authorized
to act for the Servicer in matters relating to the Servicer and who is
identified on the list of Authorized Officers (containing the specimen signature
of each such Person) delivered by the Servicer to the Indenture Trustee on the
initial Closing Date (as such list may be modified or supplemented from time to
time thereafter).

“Beneficial Owner” shall mean, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency or Foreign Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency or Foreign Clearing Agency (directly as a
Clearing Agency Participant or as an Indirect Participant, in accordance with
the rules of such Clearing Agency or Foreign Clearing Agency).

“BNY” shall have the meaning set forth in the Preliminary Statement.

“Book-Entry Notes” shall mean beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency or
Foreign Clearing Agency as described in Section 2.11.

“Clearstream Banking” shall mean Clearstream Banking, société anonyme, a
professional depository incorporated under the laws of Luxembourg, and its
successors.

 

4

--------------------------------------------------------------------------------

“Clearing Agency” shall mean an organization registered as a “clearing agency”
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
serving as clearing agency for a Series of Book-Entry Notes.

“Clearing Agency Participant” shall mean a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.

“Closing Date” shall mean, with respect to any Series, the closing date
specified in the related Indenture Supplement.

“Cartus” shall have the meaning set forth in the preliminary statement to this
Indenture.

“CFC” shall have the meaning set forth in the preliminary statements to this
Indenture.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Commission” shall mean the Securities and Exchange Commission and its
successors in interest.

“Corporate Trust Office” shall mean the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office on the date of the execution of this Agreement is
located at The Bank of New York, Corporate Trust ABS-NY, 101 Barclay Street, 4W,
New York, NY 10286, Attn: Greg Weachock or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Issuer, or the principal corporate trust office of any successor
Indenture Trustee (of which address any successor Indenture Trustee shall notify
the Noteholders and the Issuer).

“Date of Processing” shall mean, with respect to any transaction, the date on
which such transaction is first recorded on the Servicer’s computer master file
maintained for the purpose of recording Pool Collections.

“Default” shall mean any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.

“Defeasance” shall have the meaning specified in Section 11.01(a).

“Defeased Series” shall have the meaning specified in Section 11.01(a).

“Definitive Notes” shall mean Notes in definitive, fully registered form.

“Deposit Date” shall mean each day on which the Servicer deposits Pool
Collections in the Collection Account in accordance with Section 3.02 of the
Transfer and Servicing Agreement.

 

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“Distribution Account” shall have the meaning specified in Section 8.03(b).

“Distribution Date” shall mean, with respect to any Series, the date specified
in the applicable Indenture Supplement.

“Dollars,” “$” or “U.S. $” shall mean United States dollars.

“DTC” shall mean The Depository Trust Company.

“Eligible Receivable” shall have the meaning specified in the Receivables
Purchase Agreement.

“Enhancement Agreement” shall mean any agreement, instrument or document
governing the terms of any Series Enhancement or pursuant to which any Series
Enhancement is issued or outstanding.

“Euroclear Operator” shall mean Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.

“Event of Default” shall have the meaning specified in Section 5.01.

“Excess Longer Term Receivable Amount” shall mean, as of any date of
determination, an amount equal to the excess, if any, of (a) the aggregate
Unpaid Balance of all Billed Receivables that are payable more than 60 days
after the original invoice date of such Billed Receivable as of the last day of
the Monthly Period immediately preceding the first day of the Interest Period in
which such date occurs over (b) an amount equal to 40% of the aggregate Unpaid
Balance of all Billed Receivables included in the Aggregate Receivable Balance
as of such last day of such Monthly Period.

“Excess Special Homes Receivable Amount” shall mean, as of any date of
determination, an amount equal to the excess, if any, of (a) the aggregate
Unpaid Balance of all Eligible Receivables arising from Equity Payments or
Mortgage Payoffs relating to any Home that qualifies as a “Special Home
Transaction” (as such term is defined in the applicable Home Sale Service
Supplement), reduced by any Advance Payments identified as relating to such
Homes, as of the close of business on the last day of the Monthly Period
immediately preceding the first day of the Interest Period in which such date
occurs over (b) an amount equal to 10% of the Aggregate Receivable Balance as of
such last day of such Monthly Period.

“Foreign Clearing Agency” shall mean Clearstream Banking and the Euroclear
Operator.

“Global Note” shall have the meaning specified in Section 2.14.

“Grant” shall mean to mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Pledged Assets or of any other agreement or
instrument shall include all rights, powers and

 

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options (but none of the obligations) of the Granting party thereunder,
including the immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of the Pledged
Assets and all other moneys payable thereunder, to give and receive notices and
other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the Granting party or
otherwise and generally to do and receive anything that the Granting party is or
may be entitled to do or receive thereunder or with respect thereto.

“Indenture” shall have the meaning set forth in the introductory paragraph to
this Indenture.

“Indenture Supplement” shall have the meaning set forth in the introductory
paragraph to this Indenture.

“Indenture Trustee” shall have the meaning set forth in the introductory
paragraph of this Indenture.

“Independent” shall mean, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Transferor, CFC, Cartus and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the outstanding equity or debt securities of the
Issuer, any such other obligor, the Transferor, CFC, Cartus or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Transferor, CFC, Cartus or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.

“Independent Certificate” shall mean a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.01, made by an
Independent appraiser or other expert, and such opinion or certificate shall
state that the signer has read the definition of “Independent” in this Indenture
and that the signer is Independent within the meaning thereof.

“Independent Director” shall mean an individual who is an Independent Director
as defined in the Limited Liability Company Agreement of the Issuer as in effect
on the date of this Indenture.

“Ineligible Receivable” shall mean any Receivable which is not an Eligible
Receivable.

“Indirect Participant” shall mean Persons such as securities brokers and
dealers, banks and trust companies that clear or maintain a custodial
relationship with a participant of DTC, either directly or indirectly.

 

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“Insolvency Event” shall mean, for any Person:

(a) that such Person shall admit in writing its inability, or fail generally, to
pay its debts as they become due; or

(b)(i) a proceeding shall have been instituted in a court having jurisdiction in
the premises seeking a decree or order for relief in respect of such Person in
an involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its property, or
for the winding-up or liquidation of its affairs and (ii) either such
proceedings shall remain undismissed or unstayed for a period of 60 days or any
of the actions sought in such proceedings shall occur, provided that the grace
period allowed for by this clause (ii) shall not apply to any proceeding
instituted by an Affiliate of such Person in furtherance of any of the actions
set forth in the preceding clause (i); or

(c) the commencement by such Person of a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or such
Person’s consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of such Person or for any substantial part of its
property, or any general assignment for the benefit of creditors; or

(d) if such Person is a corporation or a limited liability company, such Person
or any Subsidiary of such Person shall take any corporate or limited liability
company action in furtherance of any of the actions set forth in the preceding
clause (a), (b) or (c).

“Interest Period” with respect to any Series, shall have the meaning set forth
in the applicable Indenture Supplement.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended.

“Issuer” shall have the meaning set forth in the introductory paragraph to this
Indenture.

“Issuer Order” shall mean a written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee or BNY, as the case may be.

“Liquidated Receivable” shall mean any Receivable the Unpaid Balance of which
has been reduced to zero, whether by payment of a Cartus Noncomplying Asset
Adjustment or a CFC Noncomplying Asset Adjustment or otherwise.

“Majority Investors” shall mean Noteholders holding Notes evidencing more than
50% of the Outstanding Amount.

 

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“Material Adverse Effect” shall mean, with respect to any event or circumstance,
a material adverse effect on (a) the business, financial condition, operations
or assets of the Issuer or any Transaction Party, (b) the ability of the Issuer
or any Transaction Party to perform its obligations under any Transaction
Document to which it is a party, (c) the validity or enforceability of, or
collectibility of, amounts payable by the Issuer or any Transaction Party under
any Transaction Document to which it is a party, (d) the status, existence,
perfection or priority of the interest of the Issuer or any assignee thereof in
the Pledged Assets, taken as a whole, in each case free and clear of any Lien
(other than a Permitted Lien) or (e) the validity, enforceability or
collectibility of all or any substantial portion of the Pledged Assets

“Modified Receivable Balance” shall mean, for any Employer as of any date of
determination, an amount equal to the sum of (a) the product of (i) 50%
multiplied by (ii) the sum of the aggregate Unpaid Balance of all Eligible
Receivables of such Employer included in the Aggregate Employer Balance arising
from (A) Equity Payments plus (B) Mortgage Payoffs plus (C) Mortgage Payments
that are owing by such Employer plus (b) the aggregate Unpaid Balance of each
other Eligible Receivable of such Employer included in the Aggregate Employer
Balance, reduced (without duplication) by any Advance Payments and by the Unpaid
Balance of any Advance Billing Receivables of such Employer.

“Moody’s” shall mean Moody’s Investors Service.

“Monthly Period” shall mean (i) a calendar month or (ii) with respect to the
initial Monthly Period, the period commencing on the Closing Date with respect
to the initial Series of Notes and ending on May 31, 2000.

“New Issuance” shall have the meaning specified in Section 2.10.

“Note Interest Rate” shall mean, as of any date of determination and with
respect to any Series, the rate at which interest accrues on the Notes of such
Series (or formula on the basis of which such rate shall be determined)
specified therefor in the related Indenture Supplement.

“Note Register” shall have the meaning specified in Section 2.05.

“Noteholder” or “Holder” shall mean the Person in whose name a Note is
registered on the Note Register or such other Person deemed to be a “Noteholder”
or “Holder” in any related Indenture Supplement.

“Notes” shall mean all Series of Notes issued by the Issuer pursuant to this
Indenture and the applicable Indenture Supplement.

“NYUCC” shall have the meaning specified in Section 2.05.

“Obligor Limit” shall mean, as of any date of determination, (a) with respect to
each Obligor having an unsecured long-term debt rating (or equivalent shadow
rating) of “A+” or better from S&P and “A1” or better from Moody’s, 6% of the
Aggregate Receivable Balance, (b)

 

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with respect to each Obligor having an unsecured long-term debt rating (or
equivalent shadow rating) of less than “A+” but “BBB” or better from S&P and
less than “A1” but “Baa2” or better from Moody’s, 4% of the Aggregate Receivable
Balance, (c) having an unsecured long-term debt rating (or equivalent shadow
rating) of “BBB-” from S&P or of “Baa3” from Moody’s, 2% of the Aggregate
Receivable Balance and (d) not having an unsecured long-term debt rating (or
equivalent) from S&P or Moody’s or having an unsecured long-term debt rating (or
equivalent shadow rating) of less than “BBB-” from S&P or of less than “Baa3”
from Moody’s, 1% of the Aggregate Receivable Balance; provided, that, for
purposes of calculating the Obligor Limits, an Obligor which has a long-term
debt rating from only one of S&P and Moody’s will be treated as if it was rated
by both agencies at one level below its actual rating; and provided, further
that, to the extent set forth in any Supplement, the Noteholders of such Series
may in their discretion approve any higher Obligor Limit for any Obligor under
such terms and conditions which are acceptable to all Noteholders of such
Series; and provided, further that as long as Lockheed Martin has an unsecured
long-term debt rating (or equivalent shadow rating) of “BBB” or better from S&P
and “Baa2” or better from Moody’s, its Obligor Limit shall be 6% of the
Aggregate Receivable Balance; and provided, further, that notwithstanding the
foregoing, with respect to Accenture Ltd., so long as Accenture Ltd. has (i) an
unsecured long-term debt rating (or equivalent shadow rating) of “A+” or better
from S&P and (ii) either no unsecured long-term rating from Moody’s or an
unsecured long-term rating of “A1” or better from Moody’s, Accenture Ltd. shall
have an Obligor Limit of 6% of the Aggregate Receivable Balance. For purposes of
calculating the Obligor Limits, no Obligor shall be deemed to have a debt rating
based solely on the rating of any Affiliate unless that Affiliate is
contractually obligated on the related Receivable of such Obligor, in which
event that Obligor and such Affiliate shall be treated as a single Obligor. If
an Obligor’s unsecured long–term debt rating (or equivalent shadow rating)
results in two different Obligor Limits (because of differences in the long-term
unsecured debt ratings assigned by each of the Rating Agencies), the Obligor
Limit for such Obligor will be the lower of the two different Obligor Limits.

“Officer’s Certificate” shall mean, unless otherwise specified in this
Agreement, a certificate delivered to the Indenture Trustee or BNY, as the case
may be, signed by any Authorized Officer of the Issuer, the Transferor, CFC or
the Servicer, as applicable, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.01.

“Opinion of Counsel” shall mean a written opinion of counsel, who may be counsel
for, or an employee of, the Person providing the opinion and who shall be
reasonably acceptable to the Indenture Trustee and each Applicable Series
Enhancer, provided that a Tax Opinion shall be an opinion of nationally
recognized tax counsel.

“Originator” shall have the meaning set forth in the preliminary statement to
this Indenture.

 

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“Outstanding” shall mean, with respect to the Notes as of any date of
determination, all Notes authenticated and delivered under this Indenture
except:

(i) Notes previously cancelled by the Transfer Agent and Registrar or delivered
to the Transfer Agent and Registrar for cancellation;

(ii) Notes or portions thereof the payment for which money in the necessary
amount has been previously deposited with the Indenture Trustee or any Paying
Agent in trust for the Holders of such Notes (provided, however, that if such
Notes are to be redeemed, notice of such redemption has been duly given pursuant
to the applicable Indenture Supplement or provision therefor, satisfactory to
the Indenture Trustee, has been made); and

(iii) Notes in exchange for or in lieu of other Notes that have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a
protected purchaser;

provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Issuer, any other
obligor on the Notes, the Transferor, the Servicer or any Affiliate of any of
the foregoing Persons shall be disregarded and deemed not to be Outstanding
(except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that a Responsible Officer of the Indenture Trustee
actually knows to be so owned shall be so disregarded). Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee’s right so
to act with respect to such Notes and that the pledgee is not the Issuer, any
other obligor on the Notes, the Transferor, CFC, the Servicer or any Affiliate
of any of the foregoing Persons. In making any such determination, the Indenture
Trustee may rely on the representations of the pledgee and shall not be required
to undertake any independent investigation.

“Outstanding Amount” shall mean the aggregate Series Outstanding Amount of all
Series of Notes Outstanding at the date of determination.

“Overconcentration Amount” shall mean, as of any date of determination, an
amount equal to the sum of: (a) the greater of: (i) the excess, if any, of
(A) the aggregate Modified Receivable Balances owing by (or, if less, the
Obligor Limits of) the Obligors (excluding Eligible Governmental Obligors) who
are the Obligors in respect of the five largest aggregate Modified Receivable
Balances over (B) an amount equal to 22.5% of the Aggregate Receivable Balance,
and (ii) the excess, if any, of (A) the aggregate Modified Receivable Balances
owing by (or, if less, the Obligor Limits of) the Obligors (excluding Eligible
Governmental Obligors) who are the Obligors in respect of the ten largest
aggregate Modified Receivable Balances over (B) an amount equal to 30% of the
Aggregate Receivable Balance; (b) the sum of the aggregate amount with respect
to each Obligor (excluding Eligible Governmental Obligors) of the excess, if
any, of (i) the aggregate Modified Receivable Balance owing by such Obligor over
(ii) the Obligor Limit with respect to such Obligor and (c) the amount by which
the aggregate Modified Receivable Balances owing by all Eligible Governmental
Obligors exceeds 10% of the Aggregate Receivable Balance.

 

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“Paying Agent” shall mean BNY and any successor thereto.

“Person” shall mean any person or entity, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other entity
of any nature.

“Pledged Assets” shall have the meaning set forth in the granting clause of this
Indenture.

“Pool Collections” shall mean CFC Collections and Cartus Collections.

“Principal Terms” shall mean, with respect to any Series, (a) the name or
designation; (b) the initial principal amount (or method for calculating such
amount) and the Series Outstanding Amount; (c) the Note Interest Rate for the
Notes of such Series (or method for the determination thereof); (d) the payment
date or dates and the date or dates from which interest shall accrue; (e) the
method for allocating Pool Collections to Noteholders and the method by which
the principal amount for the Notes of such Series shall amortize; (f) the
designation of any Series Accounts and the terms governing the operation of any
such Series Accounts; (g) the portion of the Servicing Fee allocable to such
Series; (h) the Series Enhancer and terms of any of Series Enhancement, if
applicable; (i) the terms on which the Notes of such Series may be exchanged for
Notes of another Series, repurchased or redeemed by the Issuer or remarketed to
other investors; (j) the maturity date; (k) the extent to which the Notes of
such Series will be issuable in temporary or permanent global form (and, in such
case, the depositary for such global note or notes, the terms and conditions, if
any, upon which such global note may be exchanged, in whole or in part, for
Definitive Notes, and the manner in which any interest payable on a temporary or
global note will be paid); (l) the priority of such Series with respect to any
other Series; (m) the Distribution Date; and (n) any other terms of such Series.

“Proceeding” shall mean any suit in equity, action at law or other judicial or
administrative proceeding.

“Purchase Agreement” shall mean the purchase agreement dated as of April 25,
2000, between Cartus and CFC, as amended from time to time.

“Qualified Account” shall mean either (a) a segregated account with a Qualified
Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), and acting as a trustee for funds
deposited in such account, so long as any of the unsecured, unguaranteed senior
debt securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic credit rating categories that signifies
investment grade.

“Qualified Institution” shall mean (a) a depository institution, which may
include the Indenture Trustee (if it is a Paying Agent hereunder), organized
under the laws of the United States of America or any one of the States thereof
or the District of Columbia, the deposits in which are insured by the Federal
Deposit Insurance Corporation and that at all times has a short-term unsecured
debt rating of at least A-1 by Standard & Poor’s and P-1 by Moody’s or (b) a
depository institution acceptable to each Rating Agency.

 

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“Rating Agency” shall mean, with respect to any outstanding Series, each rating
agency selected by the Issuer to rate the Notes of such Series, as specified in
the applicable Indenture Supplement.

“Rating Agency Condition” shall mean, with respect to any action, that each
Rating Agency shall have notified the Issuer, the Servicer, any Series Enhancer
and the Indenture Trustee in writing that such action will not result in a
reduction or withdrawal of the then existing rating of any outstanding Series
with respect to which it is a Rating Agency (both with and without giving effect
to any letter of credit, surety bond or insurance policy issued by any Series
Enhancer) or, with respect to any outstanding Series not rated by any Rating
Agency, such written consent as is specified in the Indenture Supplement for
such Series.

“Receivables Purchase Agreement” shall mean the receivables purchase agreement
dated as of April 25, 2000, between CFC and the Transferor, as amended from time
to time.

“Record Date” shall mean, with respect to any Distribution Date, the last
Business Day of the preceding Monthly Period, unless otherwise specified for a
Series in the related Indenture Supplement.

“Redemption Date” shall mean, with respect to any Series, the date the Notes of
any Series are redeemed in accordance with the related Indenture Supplement.

“Required Asset Amount” shall mean, with respect to any Series of Notes, the
required asset amount for such Series of Notes as specified in the related
Indenture Supplement.

“Revolving Period” shall have, with respect to each Series, the meaning
specified in the related Indenture Supplement.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw
Hill Companies, Inc.

“Series” shall mean any series of Notes issued pursuant to this Indenture and
the related Indenture Supplement.

“Series Account” shall mean any deposit, trust, securities, escrow or similar
account maintained for the benefit of the Noteholders of any Series, as
specified in any Indenture Supplement.

“Series Enhancement” shall mean the rights and benefits provided to the Issuer
or the Noteholders of any Series pursuant to any letter of credit, surety bond,
cash collateral account, collateral invested amount, insurance policy, spread
account, reserve account, guaranteed rate agreement, maturity liquidity
facility, tax protection agreement, interest rate swap agreement, interest rate
cap agreement or other similar arrangement. The subordination of any Series to
another Series also shall be deemed to be a Series Enhancement.

 

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“Series Enhancer” shall mean the Person or Persons providing any Series
Enhancement, other than (except to the extent otherwise provided with respect to
any Series in the Indenture Supplement for such Series) the Noteholders of any
Series that is subordinated to another Series.

“Series Issuance Date” shall mean, with respect to any Series, the date on which
the Notes of such Series are to be originally issued in accordance with
Section 2.10 and the related Indenture Supplement.

“Series Outstanding Amount” shall mean, with respect to any Series of Notes, the
amount specified as the “Series Outstanding Amount” in the related Indenture
Supplement.

“Series Percentage” shall mean, with respect to any Series of Notes and for any
date, the percentage specified in the related Indenture Supplement.

“Servicer” shall have the meaning set forth in the preliminary statement to this
Indenture.

“Tax Opinion” shall mean, with respect to any action, an Opinion of Counsel to
the effect that, for federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of the Notes of any
outstanding Series that were characterized as debt at the time of their
issuance, (b) such action will not cause or constitute an event in which gain or
loss would be recognized by any Noteholder and (c) in connection with an
issuance of Notes pursuant to an Indenture Supplement, except as is otherwise
provided in the Indenture Supplement, the Notes of the Series established
pursuant to such Indenture Supplement will be properly characterized as debt.

“Transaction Documents” shall mean, with respect to any Series of Notes, the
Purchase Agreement, the Receivables Purchase Agreement, the Transfer and
Servicing Agreement, the Performance Guaranty, this Indenture, the related
Indenture Supplement and any Enhancement Agreement.

“Transfer Agent and Registrar” shall mean BNY and any successor thereto.

“Transfer and Servicing Agreement” shall mean the Transfer and Servicing
Agreement, dated as of April 25, 2000, among the Transferor, the Servicer, CFC
and the Issuer, as the same may be amended, supplemented or otherwise modified
from time to time.

“Transferor” shall have the meaning set forth in the preliminary statement to
this Indenture.

“Trustee Officer” shall mean, with respect to the Indenture Trustee, any officer
assigned to the Corporate Trust Office, including any officer of the Indenture
Trustee having

 

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direct responsibility for the administration of the applicable Transaction
Documents, and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.

“Unmatured Amortization Event” shall mean any occurrence or event which, with
the giving of notice, the passage of time or both, would constitute an
Amortization Event.

Section 1.02. Other Definitional Provisions.

(a) With respect to any Series, all terms used herein and not otherwise defined
herein shall have meanings ascribed to them in the Purchase Agreement, the
Receivables Purchase Agreement or the Transfer and Servicing Agreement.

(b) All terms defined in this Indenture shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.

(c) As used in this Indenture and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Indenture or in any such certificate or other document, and accounting terms
partly defined in this Indenture or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles and as in effect on the date of this
Indenture. To the extent that the definitions of accounting terms in this
Indenture or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles in the
United States, the definitions contained in this Indenture or in any such
certificate or other document shall control.

(d) Any reference to each Rating Agency shall only apply to any specific rating
agency if such rating agency is then rating any outstanding Series.

(e) Unless otherwise specified, references to any amount as on deposit or
outstanding on any particular date shall mean such amount at the close of
business on such day.

(f) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Indenture shall refer to this Indenture as a whole and not to
any particular provision of this Indenture; references to any subsection,
Section, Schedule or Exhibit are references to subsections, Sections, Schedules
and Exhibits in or to this Indenture unless otherwise specified; and the term
“including” means “including without limitation.”

(g) References herein to the Purchase Agreement, the Receivables Purchase
Agreement, the Transfer and Servicing Agreement, this Indenture and the
Performance Guaranty shall mean and be references to each such document as
amended and modified by that certain Omnibus Amendment, Agreement and Consent
dated December 20, 2004, that certain Second Omnibus Amendment dated January 31,
2005, that certain Amendment, Agreement and Consent dated January 30, 2006, that
certain Third Omnibus Amendment, Agreement and Consent dated May 12, 2006, that
certain Fourth Omnibus Amendment dated November 29, 2006 and that certain Fifth
Omnibus Amendment dated April 10, 2007.

 

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ARTICLE II

THE NOTES

Section 2.01. Form Generally.

Any Series of Notes, together with the Authentication Agent’s certificate of
authentication related thereto, shall be issued in fully registered form without
coupons, and shall be substantially in the form of an exhibit to the related
Indenture Supplement with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or such
Indenture Supplement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
determined by the officers of the Issuer executing such Notes consistently
herewith, as evidenced by their execution of such Notes. Any portion of the text
of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note. The terms of any Notes set forth in
an exhibit to the related Indenture Supplement are part of the terms of this
Indenture, as applicable.

The Definitive Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods, all as determined by the officers
executing such Notes, as evidenced by such officers’ execution of such Notes.

Each Note shall be dated as of the date of its authentication.

Section 2.02. Denominations.

Except as otherwise specified in the related Indenture Supplement, the Notes of
each Series shall be issued in fully registered form in minimum amounts of
$250,000 and in integral multiples of $1,000 in excess thereof (except that one
Note of each Series may be issued in a different amount, so long as such amount
exceeds the applicable minimum denomination for such Series), and shall be
issued upon initial issuance as one or more Notes in an aggregate original
principal amount equal to the initial Series Outstanding Amount for such Series.

Section 2.03. Execution, Authentication and Delivery.

Each Note shall be executed by manual or facsimile signature on behalf of the
Issuer by an Authorized Officer.

Notes bearing the manual or facsimile signature of an individual who was
authorized to sign on behalf of the Issuer at the time when such signature was
affixed shall not be rendered invalid, notwithstanding the fact that such
individual ceased to be so authorized prior to the authentication and delivery
of such Notes or does not hold such office at the date of issuance such Notes.

 

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At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes executed by the Issuer to the
Authentication Agent for authentication and delivery, and the Authentication
Agent shall authenticate and deliver such Notes as provided in this Indenture
(with the designation provided in the related Indenture Supplement) and not
otherwise.

No Note shall be entitled to any benefit under this Indenture or the applicable
Indenture Supplement or be valid or obligatory for any purpose, unless there
appears on such Note a certificate of authentication substantially in the form
provided for herein executed by or on behalf of the Authentication Agent by the
manual signature of a duly authorized signatory, and such certificate of
authentication on any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered under this Indenture.

Section 2.04. Authentication Agent.

(a) The Authentication Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and any Indenture
Supplement and no implied covenants or obligations shall be read into this
Indenture or such Indenture Supplement against the Authentication Agent. The
Issuer may remove the Authentication Agent if the Issuer determines in its sole
discretion that the Authentication Agent shall have failed to perform its
obligations under this Indenture or any Indenture Supplement in any material
respect or for other good reason. The Authentication Agent shall be permitted to
resign upon 30 days’ written notice to the Issuer. Upon the removal or
resignation of the Authentication Agent, the Issuer shall appoint a successor to
act as Authentication Agent. The Issuer shall notify the Indenture Trustee and
the Rating Agencies of the removal or resignation of the Authentication Agent
and the identity and location of the successor Authentication Agent.

(b) Pursuant to the Transfer and Servicing Agreement, the Issuer shall direct
the Servicer to pay to BNY from time to time reasonable compensation for its
services and all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of BNY’s agents, counsel,
accountants and experts. The Issuer shall cause the Servicer to indemnify BNY
against any and all loss, liability or expense (including the fees and expenses
of either in-house counsel or outside counsel, but not both) incurred by it in
connection with the performance of its duties hereunder and under any Indenture
Supplement. BNY shall notify the Issuer and the Servicer promptly of any claim
for which it may seek indemnity. Failure by BNY to so notify the Issuer and the
Servicer shall not relieve the Issuer of its obligations hereunder unless such
loss, liability or expense could have been avoided with such prompt notification
and then only to the extent of such loss, expense or liability which could have
been so avoided. Neither the Issuer nor the Servicer need reimburse any expense
or indemnify against any loss, liability or expense incurred by BNY through
BNY’s own willful misconduct, negligence or bad faith.

 

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(c) The provisions of Sections 6.01, 6.03, 6.04 and 6.05 shall be applicable to
the Authentication Agent.

(d) Pursuant to any appointment made under this Section 2.04, the Notes may have
endorsed thereon, in lieu of or in addition to the Authentication Agent’s
certificate of authentication, an alternative certificate of authentication in
substantially the following form:

“This is one of the Notes described in the within-mentioned Agreement.

 

THE BANK OF NEW YORK,
as Authentication Agent

By:       Authorized Signatory”

Section 2.05. Registration of and Limitations on Transfer and Exchange of Notes.

The Transfer Agent and Registrar shall keep a register (the “Note Register”) in
which the Transfer Agent and Registrar shall provide for the registration of
Notes and the registration of transfers of Notes. Upon any resignation of any
Transfer Agent and Registrar, the Issuer shall promptly appoint a successor or,
if it elects not to make such an appointment, assume the duties of Transfer
Agent and Registrar. The Issuer shall notify the Indenture Trustee of the
identity and location of any successor Transfer Agent and Registrar.

The Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof, and the Indenture Trustee shall
have the right to rely upon a certificate executed on behalf of the Transfer
Agent and Registrar by an officer thereof as to the names and addresses of the
Noteholders and the principal amounts and numbers of such Notes.

Upon surrender for registration of transfer of any Note at the office or agency
of the Transfer Agent and Registrar to be maintained as provided in
Section 3.02(j), if the requirements of Section 8-401(a) of the New York Uniform
Commercial Code (the “NYUCC”) are met and any applicable requirements for
transfer set forth in the related Indenture Supplement are satisfied, the Issuer
shall execute, and upon receipt of such surrendered Note the Authentication
Agent shall authenticate and deliver to the Noteholder, in the name of the
designated transferee or transferees, one or more new Notes (of the same Series)
in any authorized denominations of like aggregate principal amount.

At the option of a Noteholder, Notes may be exchanged for other Notes of the
same Series, in any authorized denominations and of like aggregate principal
amount, upon

 

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surrender of such Notes to be exchanged at the office or agency of the Transfer
Agent and Registrar. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401(a) of the NYUCC are met, the Issuer shall execute,
and upon receipt of such surrendered Note the Authentication Agent shall
authenticate and deliver to the Noteholder, the Notes that the Noteholder making
the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall
evidence the same obligations, evidence the same debt, and be entitled to the
same rights and privileges under this Indenture and the related Indenture
Supplement as the Notes surrendered upon such registration of transfer or
exchange.

Every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed by, or be accompanied by a written instrument of transfer
in a form satisfactory to the Transfer Agent and Registrar duly executed by, the
Noteholder thereof or its attorney-in-fact duly authorized in writing, and by
such other documents as the Transfer Agent and Registrar may reasonably require.

The registration of transfer of any Note shall be subject to the additional
requirements, if any, set forth in the related Indenture Supplement.

No service charge shall be made for any registration of transfer or exchange of
Notes, but the Issuer or the Transfer Agent and Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of such
Notes.

All Notes surrendered for registration of transfer or exchange shall be
cancelled by the Transfer Agent and Registrar and disposed of by the Transfer
Agent and Registrar in accordance with its customary procedures. The Transfer
Agent and Registrar shall dispose of any Global Note upon its exchange in full
for Definitive Notes (of the same Series) in accordance with its customary
procedures.

The preceding provisions of this section notwithstanding, the Issuer shall not
be required to make, and the Transfer Agent and Registrar need not register,
transfers or exchanges of Notes for a period of 20 days preceding the due date
for any payment with respect to the Notes.

If and so long as any Series of Notes are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Transfer Agent and Registrar
shall, at the discretion of the Issuer, appoint a co-transfer agent and
registrar in Luxembourg or another European city. Any reference in this
Agreement to the Transfer Agent and Registrar shall include any such co-transfer
agent and registrar unless the context otherwise requires. The Transfer Agent
and Registrar shall enter into any appropriate agency agreement with any
co-transfer agent and registrar not a party to this Indenture, that will
implement the provisions of this Indenture that relate to such agent.

 

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Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.

If (a) any mutilated Note is surrendered to the Transfer Agent and Registrar, or
the Transfer Agent and Registrar receives evidence to its reasonable
satisfaction of the destruction, loss or theft of any Note and (b) in the case
of a destroyed, lost or stolen Note there is delivered to the Transfer Agent and
Registrar such security or indemnity as may be required by it to hold the Issuer
and the Transfer Agent and Registrar harmless and the requirements of
Section 8-405 of the NYUCC are met, then the Issuer shall execute, and the
Authentication Agent shall authenticate and deliver, a replacement Note of like
tenor (including the same date of issuance) and principal amount, bearing a
number not contemporaneously outstanding in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note; provided, however, that if any such
mutilated, destroyed, lost or stolen Note shall have become, or within seven
days shall be, due and payable, or shall have been selected or called for
redemption, the Issuer may pay such Note without surrender thereof instead of
issuing a replacement Note, except that any mutilated Note shall be surrendered.
After the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, if a protected
purchaser of the original Note in lieu of which such replacement Note was issued
presents such original Note for payment, the Issuer and the Transfer Agent and
Registrar shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person other than a protected purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Transfer Agent and
Registrar in connection therewith.

Upon the issuance of any replacement Note under this Section 2.06, the Issuer or
the Transfer Agent and Registrar may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge that may
be imposed with respect thereto and any other reasonable expenses (including the
fees and expenses of the Transfer Agent and Registrar) in connection therewith.

Every replacement Note issued in replacement of any mutilated, destroyed, lost
or stolen Note pursuant to this Section 2.06 shall constitute complete and
indefeasible evidence of an obligation of the Issuer as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Note shall be found at
any time, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section 2.06 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

Section 2.07. Persons Deemed Owners.

Unless otherwise specified in the applicable Indenture Supplement, prior to due
presentment for registration of transfer of any Note, the Issuer, the Indenture
Trustee, the Paying Agent, the Authentication Agent, the Transfer Agent and
Registrar and any agent of the

 

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foregoing shall treat the Person in whose name any Note is registered as the
owner of such Note for all purposes of this Indenture and the applicable
Indenture Supplement, whether or not such Note is overdue, and neither the
Issuer, the Indenture Trustee, the Paying Agent, the Authentication Agent, the
Transfer Agent and Registrar nor any agent of the foregoing shall be affected by
any notice to the contrary.

Section 2.08. Paying Agent.

(a) The Paying Agent shall have the revocable power to withdraw funds and make
distributions to Noteholders from the appropriate account or accounts maintained
for the benefit of Noteholders as specified in this Indenture or the related
Indenture Supplement for any Series. The Issuer may revoke such power and remove
the Paying Agent if the Issuer determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Indenture in any
material respect or for other good cause. The Paying Agent shall be permitted to
resign upon 30 days’ written notice to the Issuer. Upon the removal or
resignation of the Paying Agent, the Issuer shall appoint a successor to act as
Paying Agent (which successor shall be a bank or trust company). Any reference
in this Indenture to the Paying Agent shall include any co-paying agent unless
the context requires otherwise. The Issuer shall notify the Indenture Trustee,
each Applicable Series Enhancer and the Rating Agencies of the removal or the
resignation of any Paying Agent and the identity and location of the successor
Paying Agent.

(b) If and so long as any Series of Notes are listed on the Luxembourg Stock
Exchange or other stock exchange and such exchange shall so require, the Paying
Agent shall, at the discretion of the Issuer, appoint a co-paying agent in
Luxembourg or other city or country as may be required by such other stock
exchange. The Paying Agent shall enter into an appropriate agency agreement with
any co-paying agent not a party to this Indenture, which will implement the
provisions of this Indenture that relate to such agent.

(c) The Paying Agent agrees that it will:

(i) hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
pay such sums to such Persons as herein provided;

(ii) give the Indenture Trustee notice of any default by the Issuer (or any
other obligor upon the Notes) of which it has actual knowledge in the making of
any payment required to be made with respect to the Notes;

(iii) at any time during the continuance of any such default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture Trustee all
sums so held in trust by such Paying Agent; and

(iv) comply with all requirements of the Code with respect to the withholding
from any payments made by it on any Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith.

 

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(d) The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
the Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent and, upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.

Section 2.09. Cancellation.

All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Transfer Agent and
Registrar, be delivered to the Transfer Agent and Registrar and shall be
promptly cancelled by it. The Issuer may at any time deliver to the Transfer
Agent and Registrar for cancellation any Notes previously authenticated and
delivered hereunder that the Issuer may have acquired in any lawful manner
whatsoever, and all Notes so delivered shall be promptly cancelled by the
Transfer Agent and Registrar. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 2.09, except as
expressly permitted by this Indenture. All cancelled Notes held by the Transfer
Agent and Registrar shall be disposed of by the Transfer Agent and Register in
accordance with its customary procedures.

Section 2.10. New Issuances.

(a) Pursuant to one or more Indenture Supplements, the Issuer may from time to
time issue one or more new Series of Notes (a “New Issuance”). The Notes of all
outstanding Series shall be equally and ratably entitled to the benefits of this
Indenture without preference, priority or distinction, all in accordance with
the terms and provisions of this Indenture and the applicable Indenture
Supplement, except as provided in the related Indenture Supplement with respect
to any Series. Interest on the Notes of all outstanding Series shall be paid on
each Distribution Date therefor as specified in the Indenture Supplement
relating to such outstanding Series. Principal of the Notes of each outstanding
Series shall be paid as specified in the Indenture Supplement relating to such
outstanding Series.

(b) On or before the Series Issuance Date for any new Series of Notes, the
parties hereto shall execute and deliver an Indenture Supplement specifying the
Principal Terms of such Series. The terms of such Indenture Supplement may
modify or amend the terms of this Indenture solely as applied to such new
Series. The obligation of the Authentication Agent to authenticate and deliver
the Notes of any Series to or upon the order of the Issuer (other than any
Series issued pursuant to an Indenture Supplement dated as of the date hereof)
and the obligation of the Authentication Agent and the Indenture Trustee to
execute and deliver the related Indenture Supplement is subject to the
satisfaction of the following conditions:

(i) on or before the fifth day immediately preceding the Series Issuance Date,
the Issuer shall have given the Indenture Trustee, the Servicer, the Paying
Agent, the Authentication Agent, the Transfer Agent and Registrar, each
Applicable Series Enhancer and each Rating Agency notice (unless such notice
requirement is otherwise waived) of such issuance and the applicable Series
Issuance Date;

 

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(ii) the Issuer shall have delivered to the Authentication Agent and the
Indenture Trustee any related Indenture Supplement, in form satisfactory to the
Authentication Agent and the Indenture Trustee, executed by each party hereto
other than the Authentication Agent and the Indenture Trustee;

(iii) the Issuer shall have delivered to the Indenture Trustee any related
Enhancement Agreement executed by each of the parties thereto other than the
Indenture Trustee;

(iv) the Rating Agency Condition shall have been satisfied with respect to such
issuance;

(v) there shall have been delivered to the Indenture Trustee (with a copy to
each Rating Agency) (A) the opinion required pursuant to Section 3.05(a) and
(B) a Tax Opinion with respect to such issuance, dated the applicable Series
Issuance Date.

(vi) the Issuer shall have delivered to the Indenture Trustee an Officer’s
Certificate of the Issuer to the effect that on the Series Issuance Date after
giving effect to the issuance of such new Series of Notes, (A) neither an
Amortization Event nor an Unmatured Amortization Event with respect to any
Series of Notes nor an Asset Deficiency is continuing or will occur as the
result of the issuance of such Series of Notes and (B) all conditions precedent
provided in this Indenture and the related Indenture Supplement with respect to
the authentication and delivery of the new Series of Notes have been complied
with; and

(vii) the Issuer shall have delivered to the Authentication Agent a written
order or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Authentication Agent authorizing and directing the
authentication and delivery of the Notes of such Series by the Authentication
Agent.

(c) Upon satisfaction of the above conditions, the Issuer shall execute, and the
Authentication Agent shall authenticate and deliver, the Notes of such Series as
provided in this Indenture and the applicable Indenture Supplement. Neither the
Authentication Agent nor the Indenture Trustee shall be obligated to enter into
any such Indenture Supplement that adversely affects the Authentication Agent’s
or the Indenture Trustee’s own rights, duties or immunities under this
Indenture.

 

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Section 2.11. Book-Entry Notes.

Unless otherwise provided in any related Indenture Supplement, upon original
issuance, each Series of Notes shall be issued in the form of typewritten Notes
representing the Book-Entry Notes to be delivered to the depository specified in
such Indenture Supplement (which shall be the Clearing Agency or Foreign
Clearing Agency), by or on behalf of such Series.

Unless otherwise provided in the related Indenture Supplement, the Notes of each
Series initially shall be registered in the Note Register in the name of the
nominee of the Clearing Agency or Foreign Clearing Agency, as applicable, for
such Book Entry Notes and shall be delivered to the Authentication Agent or,
pursuant to such Clearing Agency’s or Foreign Clearing Agency’s instructions,
held by the Authentication Agent’s agent as custodian for the Clearing Agency or
Foreign Clearing Agency.

Unless and until Definitive Notes are issued under the limited circumstances
described in Section 2.13, no Beneficial Owner shall be entitled to receive a
Definitive Note representing such Beneficial Owner’s interest in such Note.
Unless and until Definitive Notes have been issued to the Beneficial Owners
pursuant to Section 2.13:

(a) the provisions of this Section 2.11 shall be in full force and effect with
respect to each such Series;

(b) the Indenture Trustee shall be entitled to deal with the Clearing Agency or
Foreign Clearing Agency and the Clearing Agency Participants for all purposes of
this Indenture and any related Indenture Supplement (including the payment of
principal of and interest on the Notes of each such Series) as the authorized
representatives of the Beneficial Owners;

(c) to the extent that the provisions of this Section 2.11 conflict with any
other provisions of this Indenture, the provisions of this Section 2.11 shall
control with respect to each such Series;

(d) the rights of Beneficial Owners of each such Series shall be exercised only
through the Clearing Agency or Foreign Clearing Agency and the applicable
Clearing Agency Participants and shall be limited to those established by law
and agreements between such Beneficial Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
depository agreement applicable to a Series, unless and until Definitive Notes
of such Series are issued pursuant to Section 2.13, the initial Clearing Agency
shall make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the Notes to
such Clearing Agency Participants; and

(e) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of the Holders of Notes evidencing a specified
percentage of the Outstanding Amount, the Clearing Agency or Foreign Clearing
Agency shall be deemed to represent such percentage only to the extent that it
has received instructions to such effect from the Beneficial Owners and/or
Clearing Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee.

 

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Section 2.12. Notices to Clearing Agency or Foreign Clearing Agency.

Unless and until Definitive Notes shall have been issued to Beneficial Owners
pursuant to Section 2.13, whenever a notice or other communication to the
Noteholders is required under this Indenture, the Indenture Trustee shall give
such notice or communication to the Clearing Agency or Foreign Clearing Agency,
as applicable, for distribution to Beneficial Owners and shall have no
obligation to distribute such notice or other communication directly to the
Beneficial Owners.

Section 2.13. Definitive Notes.

If (i) (a) the Issuer advises the Indenture Trustee in writing that the Clearing
Agency or Foreign Clearing Agency is no longer willing or able to properly
discharge its responsibilities as Clearing Agency or Foreign Clearing Agency
with respect to the Book-Entry Notes of a given Series and (b) the Issuer is
unable to locate and reach an agreement on satisfactory terms with a qualified
successor, (ii) the Issuer, at its option, advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or Foreign Clearing Agency with respect to such Series or (iii) after the
occurrence of an Event of Default, Beneficial Owners aggregating a majority of
the Outstanding Amount of the Notes of such Series advise the Indenture Trustee
and the applicable Clearing Agency or Foreign Clearing Agency through the
applicable Clearing Agency Participants in writing that the continuation of a
book-entry system is no longer in the best interests of the Beneficial Owners of
such Series, the Indenture Trustee shall notify (with a copy to the Transfer
Agent and Registrar) all Beneficial Owners of such Series of the occurrence of
such event and of the availability of Definitive Notes to Beneficial Owners of
such Series requesting the same. Upon surrender to the Transfer Agent and
Registrar of the Notes of such Series accompanied by registration instructions
from the applicable Clearing Agency or Foreign Clearing Agency, the Issuer shall
execute, and the Authentication Agent shall authenticate and deliver, Definitive
Notes of such Series and shall recognize the registered holders of such
Definitive Notes as Noteholders under this Indenture. Neither the Issuer nor the
Indenture Trustee shall be liable for any delay in delivery of such
instructions, and the Issuer and the Indenture Trustee may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes of such Series, all references herein to obligations imposed
upon or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Indenture Trustee
to the extent applicable with respect to such Definitive Notes, and the
Indenture Trustee and the Paying Agent shall recognize the registered holders of
the Definitive Notes of such Series as Noteholders of such Series hereunder.
Definitive Notes will be transferable and exchangeable at the offices of the
Transfer Agent and Registrar.

 

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Section 2.14. Global Note; Euro-Note Exchange Date.

If specified in the related Indenture Supplement for any Series, Notes initially
may be issued in the form of a single temporary Global Note (each, a “Global
Note”) in the denomination of the initial Series Outstanding Amount and
substantially in the form attached to the related Indenture Supplement. Unless
otherwise specified in the related Indenture Supplement, the provisions of this
Section 2.14 shall apply to such Global Note. Global Notes shall be
authenticated by the Authentication Agent upon the same conditions, in
substantially the same manner and with the same effect as the Definitive Notes.
Global Notes may be exchanged in the manner described in the related Indenture
Supplement for Definitive Notes.

Section 2.15. Representations and Covenants of Paying Agent, Authentication
Agent and Transfer Agent and Registrar.

BNY, as Paying Agent, Authentication Agent and Transfer Agent and Registrar,
represents, warrants and covenants that:

(a) BNY is a banking corporation duly organized and validly existing under the
laws of the State of New York;

(b) BNY has full power and authority to deliver and perform this Indenture and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Indenture and any Indenture Supplement; and

(c) Each of this Indenture and other Transaction Documents to which it is a
party has been duly executed and delivered by BNY and constitutes its legal,
valid and binding obligation in accordance with its terms.

ARTICLE III

REPRESENTATIONS AND COVENANTS OF THE ISSUER

Section 3.01. Representations and Warranties of the Issuer. The Issuer hereby
makes the representations and warranties set forth in this Section 3.01, in each
case as of the date hereof, as of the Effective Date, as of each Series Issuance
Date and as of any other date specified in such representation and warranty.

(a) Organization and Good Standing. The Issuer is a limited liability company
duly formed and validly existing in good standing under the laws of the State of
Delaware and has full power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted.

(b) Due Qualification. The Issuer is duly qualified to do business, is in good
standing as a foreign limited liability company and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualification, licenses or
approvals and in which the failure so to qualify or to obtain such licenses and
approvals or to preserve and maintain such qualification, licenses or approvals
could reasonably be expected to give rise to a Material Adverse Effect.

 

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(c) Power and Authority: Due Authorization. The Issuer (i) has all necessary
limited liability company power and authority (A) to execute and deliver this
Indenture and the other Transaction Documents to which it is a party, (B) to
perform its obligations under this Indenture and the other Transaction Documents
to which it is a party and (C) to make a Grant of the Pledged Assets to the
Indenture Trustee on the terms and subject to the conditions herein provided and
(ii) has duly authorized by all necessary action such Grant and the execution,
delivery and performance of, and the consummation of the transactions provided
for in, this Indenture and the other Transaction Documents to which it is a
party.

(d) Binding Obligations. This Indenture (i) constitutes a Grant of a security
interest (as defined in the NYUCC) in all of the Issuer’s right, title and
interest in, to and under the Pledged Assets, free and clear of any Lien (other
than Permitted Liens) to the Indenture Trustee, which is enforceable with
respect to the existing Receivables owned by the Issuer and the proceeds thereof
upon execution and delivery of this Agreement and which will be enforceable with
respect to the Receivables hereafter acquired by the Issuer and the proceeds
thereof upon such acquisition by the Issuer and (ii) constitutes, and each other
Transaction Document to which the Issuer is a party when duly executed and
delivered will constitute, a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms, except (A) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (B) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

(e) No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Indenture and the
other Transaction Documents to be signed by the Issuer, and the fulfillment of
the terms hereof and thereof, will not (i) conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under (A) the certificate of formation
or the limited liability company agreement of the Issuer or (B) any material
indenture, loan agreement, mortgage, deed of trust, or other agreement or
instrument to which the Issuer is a party or by which it or any of its
respective properties is bound, (ii) result in the creation or imposition of any
Lien (other than Permitted Liens) on any of the Pledged Assets pursuant to the
terms of any such material indenture, loan agreement, mortgage, deed of trust,
or other material agreement or instrument other than this Agreement and the
other Transaction Documents or (iii) conflict with or violate any federal,
state, local or foreign law (including without limitation, Environmental Laws)
or any decision, decree, order, rule or regulation applicable to the Issuer or
of any Governmental Authority having jurisdiction over the Issuer, which
conflict or violation described in this clause (iii), individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

(f) Litigation and Other Proceedings. (i) There is no action, suit, proceeding
or investigation pending or, to the best knowledge of the Issuer, threatened,
against the Issuer

 

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before any Governmental Authority and (ii) the Issuer is not subject to any
order, judgment, decree, injunction, stipulation or consent order of or with any
Governmental Authority that, in the case of either of the foregoing clauses
(i) and (ii), (A) asserts the invalidity of this Agreement or any other
Transaction Document, (B) seeks to prevent the Grant of any Pledged Asset by the
Issuer to the Indenture Trustee, the ownership or acquisition by the Issuer of a
material amount of Receivables or the consummation of any of the transactions
contemplated by this Agreement or any other Transaction Document, (C) seeks any
determination or ruling that, in the reasonable judgment of the Issuer, would
materially and adversely affect the performance by the Issuer of its obligations
under this Agreement or any other Transaction Document or the validity or
enforceability of this Agreement or any other Transaction Document or
(D) individually or in the aggregate for all such actions, suits, proceedings
and investigations could reasonably be expected to have a Material Adverse
Effect.

(g) Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a Material Adverse Effect, all authorizations, consents, orders
and approvals of, or other actions by, any Governmental Authority that are
required to be obtained by the Issuer in connection with the Grant of the
Pledged Assets or the due execution, delivery and performance by the Issuer of
this Indenture or any other Transaction Document to which it is a party and the
consummation by the Issuer of the transactions contemplated by this Indenture
and the other Transaction Documents to which it is a party have been obtained or
made and are in full force and effect; provided, however, that prior to
recordation pursuant to Section 8.3 of the Purchase Agreement or the sale of a
Home to an Ultimate Buyer, record title to such Home may remain in the name of
the related Transferred Employee and no recordation in real estate records of
the conveyance of the related Home Purchase Contract or Home Sale Contract shall
be made except as otherwise required under Section 2.01(d)(i) of the Transfer
and Servicing Agreement.

(h) Margin Regulations. The Issuer is not engaged, principally or as one its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meanings of Regulations T, U and
X of the Board of Governors of the Federal Reserve System). The Issuer has not
taken and will not take any action to cause the use of proceeds of the Notes to
purchase or carry margin stock.

(i) Taxes. The Issuer has filed (or there have been filed on its behalf as a
member of a consolidated group) all tax returns and reports required by law to
have been filed by it and has paid all taxes, assessments and governmental
charges thereby shown to be owing by it, other than any such taxes, assessments
or charges that are being diligently contested in good faith by appropriate
proceedings, for which adequate reserves in accordance with GAAP have been set
aside on its books and that have not given rise to any Liens (other than
Permitted Liens); provided, however, that as of the date of this Indenture, the
Issuer is a newly established entity and as such has not been required to file
any tax returns.

(j) Solvency. After giving effect to the transactions contemplated by this
Indenture and the other Transaction Documents, the Issuer is solvent and able to
pay its debts as they come due and has adequate capital to conduct its business
as presently conducted.

 

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(k) Offices. The principal place of business and chief executive office of the
Issuer is located at 40 Apple Ridge Road, Suite 4C45, Danbury, Connecticut
06810.

(l) Investment Company Act. The Issuer is not, and is not controlled by, an
“investment company” registered or required to be registered under the
Investment Company Act.

(m) Accuracy of Financial Information and Other Information. All balance sheets,
all statements of operations and of cash flow and other financial data that have
been or shall hereafter be furnished by the Issuer to the Indenture Trustee
pursuant to Section 3.02 have been prepared in accordance with generally
accepted accounting principles (to the extent applicable) and fairly present the
financial condition of the Issuer as of the dates thereof. All certificates,
reports, statements, documents and other information furnished to the Indenture
Trustee by or on behalf of the Issuer pursuant to any provision of this
Indenture or any other Transaction Document, or in connection with or pursuant
to any amendment or modification of, or waiver under, this Indenture or any
other Transaction Document, shall, at the time the same are so furnished, be
complete and correct in all material respects on the date the same are furnished
to the Indenture Trustee.

(n) Security Interests. No security agreement, financing statement or equivalent
security or lien instrument listing the Issuer as debtor covering all or any
part of the Pledged Assets is on file or of record in any jurisdiction, except
such as may have been filed, recorded or made by the Issuer in favor of the
Indenture Trustee on behalf of the Noteholders in connection with this
Indenture. This Indenture constitutes a valid and continuing Lien on the Pledged
Assets in favor of the Indenture Trustee on behalf of the Noteholders, which
Lien will be prior to all other Liens (other than Permitted Liens), will be
enforceable as such as against creditors of and purchasers from the Issuer in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors’ rights generally or by general equitable
principles, whether considered in a proceeding at law or in equity and by an
implied covenant of good faith and fair dealing. The Issuer has taken all action
necessary to perfect such security interest.

Section 3.02. Affirmative Covenants of the Issuer. From the Effective Date until
the termination of this Indenture, the Issuer hereby agrees that it will perform
the covenants and agreements set forth in this Section 3.02.

(a) Financial Reports by the Issuer. As soon as available, but in any event
within 120 days after the end of each fiscal year of the Issuer, the Issuer
shall deliver to the Indenture Trustee and each Applicable Series Enhancer and
the Indenture Trustee shall forward to each Noteholder a copy of the financial
statements of the Issuer at the end of such year, prepared in accordance with
GAAP.

(b) Books and Records. The Issuer shall keep proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to the Pledged Assets and its business activities in
accordance with generally accepted

 

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accounting principles, and shall permit the Indenture Trustee and each
Applicable Series Enhancer to visit and inspect any of its properties, to
examine and make abstracts from any of its books and records and to discuss its
affairs, finances and accounts with its officers, directors, employees and
independent public accountants, all at such reasonable times upon reasonable
notice and as often as may reasonably be requested.

(c) Notice of Defaults and Events of Default. The Issuer shall give the
Indenture Trustee, each Applicable Series Enhancer and the Rating Agencies
prompt written notice of each Default and Event of Default hereunder and the
occurrence of any Unmatured Amortization Event or Amortization Event with
respect to any Series of Notes and, immediately after obtaining knowledge of any
of the following occurrences, written notice of each default on the part of the
Servicer or the Transferor of its obligations under the Transfer and Servicing
Agreement and each default on the part of Cartus of its obligations under the
Purchase Agreement or CFC of its obligations under the Receivables Purchase
Agreement, as appropriate, and, in each case, the action, if any, being taken
with respect to such default.

(d) Maintenance of Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a limited liability company under the laws
of the State of Delaware (unless it becomes, or any successor Issuer hereunder
is or becomes, organized under the laws of any other State or of the United
States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
shall obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Pledged Assets and each other
related instrument or agreement.

(e) Compliance with Laws. The Issuer will comply with the requirements of all
applicable laws, rules, regulations and orders of all Governmental Authorities
including without limitation Environmental Laws, a violation of which,
individually or in the aggregate for all such violations, is reasonably likely
to have a Material Adverse Effect.

(f) Rule 144A Information. For so long as any of the Notes are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act of
1933, as amended, the Issuer agrees to provide to any Noteholder or Beneficial
Owner, and to any prospective purchaser of Notes designated by such Noteholder
or Beneficial Owner upon the request of such Noteholder or Beneficial Owner or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the conditions set forth in Rule 144A(d)(4)
under the Securities Act of 1933, as amended.

(g) Annual Tax Information. Unless otherwise specified in the related Indenture
Supplement, on or before January 31 of each calendar year, beginning with
calendar year 2001, the Indenture Trustee or the Paying Agent shall furnish to
each Person who at any time during the preceding calendar year was a Noteholder
of a Series of Notes a statement prepared by or on behalf of the Issuer
containing the information that is necessary or desirable to enable the
Noteholders to prepare their tax returns. The obligations of the Issuer to
prepare and the Indenture Trustee or the Paying Agent to distribute such
information shall be deemed to have

 

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been satisfied to the extent that substantially comparable information shall be
provided by the Indenture Trustee or the Paying Agent pursuant to any
requirements of the Code as from time to time in effect.

(h) Statements as to Compliance. The Issuer shall deliver to the Indenture
Trustee, within 120 days after the end of each fiscal year of the Issuer
(commencing within 120 days after the end of the fiscal year 2000), an Officer’s
Certificate stating, as to the Authorized Officer signing such Officer’s
Certificate, that

(i) a review of the activities of the Issuer during the 12-month period ending
at the end of such fiscal year (or in the case of the fiscal year ending
December 31, 2000, the period from the initial Series Issuance Date to
December 31, 2000) and of performance under this Indenture has been made under
such Authorized Officer’s supervision, and

(ii) to the best of such Authorized Officer’s knowledge, based on such review,
the Issuer has complied with all conditions and covenants under this Indenture
throughout such year or, if there has been a default in its compliance with any
such condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.

(i) Maintenance of Office or Agency. The Issuer shall maintain an office or
agency within the Borough of Manhattan, City of New York where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Transfer Agent and Registrar at its office
currently located at 101 Barclay Street, Floor 21 West, New York, New York 10286
(or at such other address as the Transfer Agent and Registrar may designate from
time to time by notice to the Issuer, the Indenture Trustee and the Noteholders)
to serve as its agent for the foregoing purposes.

(j) Further Instruments and Acts. Upon request of the Indenture Trustee, the
Issuer shall execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.

Section 3.03. Negative Covenants of the Issuer. From the Effective Date until
the termination of this Indenture, the Issuer hereby agrees that it shall not:

(a) Amendment of Limited Liability Company Agreement. Amend its limited
liability company agreement unless, prior to such amendment, each Rating Agency
confirms that after such amendment the Rating Agency Condition will be met and
each Applicable Series Enhancer consents thereto;

 

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(b) Change in Location of Chief Executive Office. (a) Change the location of its
chief executive office or principal place of business (within the meaning of the
applicable Uniform Commercial Code) without sixty (60) days’ prior written
notice to the Indenture Trustee or (b) change its name or the jurisdiction of
its formation without prior written notice to the Indenture Trustee sufficient
to allow the Indenture Trustee to execute all filings prepared by the Issuer
(including filings of financing statements on form UCC- 1) and recordings
necessary to maintain the perfection of the interest of the Indenture Trustee on
behalf of the Noteholders in the Pledged Assets pursuant to this Indenture. If
the Issuer desires to so change its office or change its name or the
jurisdiction of its formation, the Issuer will make any required filings and
prior to actually changing its office or its name or the jurisdiction of its
formation the Issuer shall deliver to the Indenture Trustee (i) an Officer’s
Certificate and (ii) copies of all such required filings with the filing
information duly noted thereon by the office in which such filings were made;

(c) Capital Expenditures. Make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty);

(d) No Other Business or Agreements. Engage in any business other than
financing, purchasing, owning and selling and managing the Pledged Assets in the
manner contemplated by this Indenture and the other Transaction Documents and
all activities incidental thereto, or enter into or be a party to any agreement
or instrument other than any Transaction Document or documents and agreements
incidental thereto;

(e) Consolidation, Merger or Other Form of Combination and Sale of Assets. Enter
into any consolidation, merger, joint venture, syndicate or other form of
combination with any Person or sell, lease or transfer of otherwise dispose of
any assets, including without limitation the Pledged Assets, other than as
expressly provided for in the Transaction Documents, or engage in any other
transaction, that would result in a change of control of the Issuer;

(f) Guarantees, Loans, Advances and other Liabilities. Except as contemplated by
this Indenture or the other Transaction Documents, make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having the
effect of assuring another’s payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become contingently
liable, directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree contingently to
do so) any stock, obligations, assets or securities of, or any other interest
in, or make any capital contribution to, any other Person;

(g) Indebtedness. Issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any indebtedness except as expressly provided for
pursuant to the terms of the Transaction Documents and the Notes;

(h) Deduction from Principal and Interest. Claim any credit on, or make any
deduction from, the principal and interest payable in respect of the Notes
(other than amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or former
Noteholder by reason of the payment of any taxes levied or assessed upon any
part of the Pledged Assets;

 

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(i) Effectiveness of Indenture, Liens. (i) Permit the validity or effectiveness
of this Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to the
Notes under this Indenture except as may be expressly permitted hereby,
(ii) permit any Lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on or
extend to or otherwise arise upon or burden the Pledged Assets or any part
thereof or any interest therein or the proceeds thereof or (iii) permit the lien
of this Indenture not to constitute a valid first priority perfected security
interest in the Pledged Assets; or

(j) Dissolve or Liquidate. Dissolve or liquidate in whole or in part.

Section 3.04. Protection of Pledged Assets.

The Issuer shall from time to time prepare (or cause to be prepared), execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and shall take such other action necessary or advisable to:

(a) Grant more effectively all or any portion of the Pledged Assets for the
Notes;

(b) maintain or preserve the lien (and the priority thereof) of this Indenture
or to carry out more effectively the purposes hereof;

(c) perfect, publish notice of, or protect the validity of, any Grant made or to
be made by this Indenture;

(d) enforce any of the Pledged Assets; or

(e) preserve and defend title to the Pledged Assets securing the Notes and the
rights therein of the Indenture Trustee and the Noteholders secured thereby
against the claims of all persons and parties.

The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 3.04.

Section 3.05. Opinions as to Pledged Assets.

(a) On the Series Issuance Date relating to any new Series of Notes, the Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken as is necessary
to perfect the lien and security interest of

 

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this Indenture, including without limitation with respect to the recording and
filing of this Indenture, any indentures supplemental hereto and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, and reciting the details of
such action, or stating that in the opinion of such counsel no such action is
necessary to maintain the perfection of such lien and security interest.

(b) On or before April 30 in each calendar year, beginning in the year 2001, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken as is
necessary to perfect the lien and security interest of this Indenture, including
without limitation with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain the perfection of such lien and security interest. Such
Opinion of Counsel also shall describe the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that, in the opinion of such counsel, will be required
to maintain the perfection of the lien and security interest of this Indenture
until April 30 in the following calendar year.

Section 3.06. Obligations Regarding Servicing of Receivables.

(a) The Issuer shall not take any action, and shall use its best efforts not to
permit any action to be taken by others, that would release any Person from any
of such Person’s material covenants or obligations under any instrument or
agreement included in the Pledged Assets or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and Servicing Agreement, the
Receivables Purchase Agreement, the Purchase Agreement or such other instrument
or agreement.

(b) The Issuer may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by such Person
shall be deemed to be action taken by the Issuer. The Issuer shall cause the
Servicer to comply with all the Servicer’s obligations under the Transaction
Documents to which the Servicer is a party and shall not agree to the
resignation of the Servicer from its obligations and duties imposed by the
Transfer and Servicing Agreement unless the Majority Investors have consented to
such resignation.

(c) The Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the other Transaction Documents and in
the instruments and agreements relating to the Pledged Assets, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Transfer and Servicing Agreement in accordance with and within the time
periods provided for herein and therein.

 

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(d) If a Servicer Default shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Transfer and Servicing
Agreement with respect to the Receivables, the Issuer shall take all reasonable
steps available to it to remedy such failure.

(e) Without derogating from the absolute nature of the assignment granted to the
Indenture Trustee or the rights of the Indenture Trustee under this Indenture,
the Issuer agrees (i) that it will not, without the prior written consent of the
Indenture Trustee and the Majority Investors, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Pledged Assets (except to
the extent otherwise provided in the Transfer and Servicing Agreement) or the
Transaction Documents (except to the extent otherwise provided in the
Transaction Documents), or waive timely performance or observance by the
Servicer or the Transferor of its obligations under the Transfer and Servicing
Agreement, or Cartus of its obligations under the Purchase Agreement or CFC of
its obligations under the Receivables Purchase Agreement or the Performance
Guarantor of its obligations under the Performance Guaranty executed by it; and
(ii) that any such amendment shall not (A) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, Pool Collections of payments on
the Pledged Assets or distributions that are required to be made for the benefit
of the Noteholders or (B) change the definition of Majority Investors, without
the consent of the Holders of all the Outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee and the Majority Investors or the Holders of all the Outstanding Notes,
as required, the Issuer agrees to execute and deliver, in its own name and at
its own expense, such agreements, instruments, consents and other documents as
the Indenture Trustee may deem necessary or appropriate in the circumstances.

Section 3.07. Separate Corporate Existence of the Issuer. The Issuer hereby
acknowledges that the parties to the Transaction Documents are entering into the
transactions contemplated by the Transaction Documents in reliance on the
Issuer’s identity as a legal entity separate from the Originator, the Transferor
and the other Cartus Persons. From and after the date hereof until the date of
which there are no Notes of any Series Outstanding, the Issuer shall take such
actions as shall be required in order that:

(a) The Issuer will conduct its business in office space allocated to it and for
which it pays an appropriate rent and overhead allocation;

(b) The Issuer will maintain corporate records and books of account separate
from those of each Cartus Person and telephone numbers and stationery that are
separate and distinct from those of each Cartus Person;

(c) The Issuer’s assets will be maintained in a manner that facilitates their
identification and segregation from those of any Cartus Person;

(d) The Issuer will strictly observe limited liability company formalities in
its dealings with the public and with each Cartus Person, and funds or other
assets of the Issuer will not be commingled with those of any Cartus Person,
except as may be permitted by the Transaction Documents. The Issuer will at all
times, in its dealings with the public and with each

 

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Cartus Person, hold itself out and conduct itself as a legal entity separate and
distinct from each Cartus Person. The Issuer will not maintain joint bank
accounts or other depository accounts to which any Cartus Person (other than the
Servicer) has independent access;

(e) The duly admitted members of the Issuer and duly appointed managers or
officers of the Issuer will at all times have sole authority to control
decisions and actions with respect to the daily business affairs of the Issuer;

(f) Not less than two members of the Issuer’s board of directors will be an
Independent Director. The Issuer will observe those provisions in its limited
liability company agreement that provide that the Issuer’s board of directors
will not approve, or take any other action to cause the filing of, a voluntary
bankruptcy petition with respect to the Issuer unless each Independent Director
and all other members of the Issuer’s board of directors unanimously approve the
taking of such action in writing prior to the taking of such action;

(g) The Issuer will compensate each of its employees, consultants and agents
from the Issuer’s own funds for services provided to the Issuer; and

(h) The Issuer will not hold itself out to be responsible for the debts of any
Cartus Person.

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 4.01. Satisfaction and Discharge of this Indenture.

This Indenture shall cease to be of further effect with respect to the Notes
(except as to (a) rights of registration of transfer and exchange,
(b) substitution of mutilated, destroyed, lost or stolen Notes, (c) the rights
of Noteholders to receive payments of principal thereof and interest thereon,
(d) Sections 3.02(j), 3.03, 3.05, 3.06 and 12.14, (e) the rights and immunities
of the Indenture Trustee hereunder, including the rights of the Indenture
Trustee under Section 6.07 and the obligations of the Indenture Trustee under
Section 4.02, the rights and immunities of BNY hereunder, including the rights
of BNY under Section 2.04(b) and the obligations of BNY under Section 2.05,
2.06, 2.08 and 2.09 and (g) the rights of Noteholders as beneficiaries hereof
with respect to the property so deposited with the Indenture Trustee and payable
to all or any of them) and the Indenture Trustee, on demand of and at the
expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes when:

(i) either

(A) all Notes theretofore authenticated and delivered (other than (1) Notes that
have been destroyed, lost or stolen and that have been replaced, or paid as
provided in Section 2.06 and (2) Notes for whose full payment money has
theretofore been

 

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deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in Section 8.07)
have been delivered to the Indenture Trustee for cancellation; or

(B) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:

(1) have become due and payable; or

(2) will become due and payable at the maturity date for such Series of Notes;

(ii) the Issuer has paid or caused to be paid all other sums payable hereunder
by the Issuer;

(iii) the Issuer has delivered to the Indenture Trustee an Officer’s
Certificate, an Opinion of Counsel and (if required by the Indenture Trustee) an
Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 12.01(a) and each stating that
all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with; and

(iv) the Rating Agency Condition is satisfied with respect to each Series of
Outstanding Notes.

Section 4.02. Application of Trust Money.

All monies deposited with the Indenture Trustee pursuant to Section 4.01 shall
be held in trust and applied by it in accordance with the provisions of the
Notes, this Indenture and the applicable Indenture Supplement, to make payments,
through the Paying Agent, to the Noteholders and for the payment in respect of
which such monies have been deposited with the Indenture Trustee, of all sums
due and to become due thereon for principal and interest; but such monies need
not be segregated from other funds except to the extent required herein or
required by law.

ARTICLE V

EVENTS OF DEFAULT AND REMEDIES

Section 5.01. Events of Default.

Each of the following events shall be an “Event of Default” with respect to any
Series of Notes hereunder:

(a) The Issuer shall fail to make any payment of interest on any Note of such
Series when due (without giving effect to payments under any Series Enhancement
that is a letter of credit, surety bond or financial guaranty insurance policy)
and such failure shall remain unremedied for five Business Days; or

 

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(b) The Issuer shall fail to make any payment of the principal of any Note of
such Series when due (without giving effect to any payments under any Series
Enhancement that is a letter of credit, surety bond or financial guaranty
insurance policy); or

(c)(i) The Issuer shall fail to perform or observe, as and when required, any
term, covenant or agreement contained in this Indenture or any of the other
Transaction Documents on its part to be performed or observed (other than as
referred to in Section 5.01(a) or (b) above), (ii) such failure materially and
adversely affects the rights of the Noteholders of such Series (determined
without giving effect to any Series Enhancement) and (iii) such failure shall
remain unremedied for 30 days after written notice thereof (specifying such
failure and requiring it to be remedied and stating that such notice is a
“Notice of Default” hereunder) shall have been given (A) to the Issuer by the
Indenture Trustee or (B) to the Issuer and the Indenture Trustee by Noteholders
of such Series holding Notes evidencing at least 25% of the Series Outstanding
Amount of such Series; or

(d)(i) any representation or warranty made by the Issuer in this Indenture or
any of the other Transaction Documents shall prove to have been untrue and
incorrect in any material respect when made or deemed to have been made,
(ii) such occurrence materially and adversely affects the rights of the
Noteholders of such Series (determined without giving effect to any Series
Enhancement) and (iii) such occurrence remains unremedied for 30 days after
written notice thereof (specifying such failure and requiring it to be remedied
and stating that such notice is a “Notice of Default” hereunder) shall have been
(A) given to the Issuer by the Indenture Trustee or (B) to the Issuer and the
Indenture Trustee by Noteholders of such Series holding Notes evidencing at
least 25% of the Series Outstanding Amount of such Series; or

(e) An Insolvency Event shall have occurred with respect to the Issuer; or

(f) The Commission or other regulatory body having jurisdiction reaches a final
determination that the Issuer is required to be registered under the Investment
Company Act.

The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer’s Certificate of
any event that with the giving of notice and the lapse of time would become an
Event of Default, its status and what action the Issuer is taking or proposes to
take with respect thereto.

Section 5.02. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default referred to in clause (e) or (f) of Section 5.01 has
occurred, the unpaid principal amount of all Series of Notes, together with
interest accrued but unpaid thereon, and all other amounts due to the
Noteholders under this Agreement shall immediately

 

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and without further act become due and payable. If an Event of Default referred
to in clause (a), (b), (c) or (d) of Section 5.01 shall occur and be continuing
with respect to any Series of Notes, then and in every such case the Indenture
Trustee or Noteholders holding Notes evidencing a majority of the Series
Outstanding Amount of such Series of Notes may declare all the Notes of such
Series to be immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by the Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.

Section 5.03. Collection of Indebtedness and Suits for Enforcement by the
Indenture Trustee.

The Issuer covenants that if (i) a default occurs in the payment of any interest
on any Note when the same becomes due and payable, and such default continues
for a period of five Business Days or (ii) a default is made in the payment of
the principal of any Note when the same becomes due and payable, by acceleration
or at stated maturity, the Issuer will, upon demand of the Indenture Trustee,
pay to the Indenture Trustee, for the benefit of the Holders of such Notes, the
entire amount then due and payable on such Notes for principal and interest,
with interest on the overdue principal, and to the extent payment at such rate
of interest shall be legally enforceable, on overdue installments of interest,
at the Note Interest Rate borne by the Notes and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.

If the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and on behalf of the Noteholders of such
Series, may institute a proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer the moneys
adjudged or decreed to be payable.

If an Event of Default occurs and is continuing, the Indenture Trustee may in
its discretion, as more particularly provided in Section 5.04, proceed to
protect and enforce its rights and the rights of the Noteholders by such
appropriate proceedings as the Indenture Trustee deems most effective to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or any Indenture Supplement or in aid of
the exercise of any power granted herein or therein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture, any Indenture Supplement or by law.

If there shall be pending, relative to the Issuer or any Person having or
claiming an ownership interest in the Pledged Assets, proceedings under the
Bankruptcy Code or any other applicable Federal or State bankruptcy, insolvency
or other similar law, or in case a receiver, assignee or trustee in bankruptcy
or reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in the event of any other comparable judicial proceedings
relative to the Issuer or to the creditors or property of the Issuer, then the
Indenture Trustee shall be entitled and

 

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empowered, by intervention in such proceedings or otherwise and whether or not
the principal of any Notes shall then be due and payable as therein expressed or
by declaration or otherwise and whether or not the Indenture Trustee shall have
made any demand pursuant to the provisions of this Section 5.03:

(i) to file and prove a claim or claims for the whole amount of principal and
interest owing and unpaid in respect of the Notes and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred and all advances made by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence, bad faith or
willful misconduct) and of the Noteholders allowed in such proceedings;

(ii) unless prohibited by applicable law and regulations, to vote on behalf of
the Holders of the Notes in any election of a trustee, a standby trustee or
person performing similar functions in any such proceedings;

(iii) to collect and receive any moneys or other property payable or deliverable
on any such claims and to distribute all amounts received with respect to the
claims of the Noteholders and of the Indenture Trustee on their behalf; and

(iv) to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee or
the Holders of the Notes allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, if the Indenture Trustee consents to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.

Nothing herein contained shall be deemed to authorize the Indenture Trustee to
authorize or consent to, or vote for or accept or adopt on behalf of any
Noteholder, any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such
proceeding except to vote for the election of a trustee in bankruptcy or similar
person as aforesaid.

All rights of action and of asserting claims under this Indenture or any
Indenture Supplement or under any of the Notes may be enforced by the Indenture
Trustee without the

 

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possession of any of the Notes or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of the
Holders of the Notes.

In any proceedings brought by the Indenture Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture or any Indenture
Supplement to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes, and it shall
not be necessary to make any Noteholder a party to any such proceedings.

Section 5.04. Remedies; Priorities.

(a) If an Event of Default shall have occurred and be continuing with respect to
any Series of Outstanding Notes and such Series of Notes has been accelerated
under Section 5.02, the Indenture Trustee may institute proceedings to enforce
the obligations of the Issuer hereunder and under the Indenture Supplement with
respect to such Series of Notes in its own name and on behalf of the Noteholders
of such Series for the collection of all amounts then payable on the Notes of
such Series or under this Indenture or such Indenture Supplement with respect
thereto, whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer moneys adjudged due.

(b) If an Event of Default shall have occurred and be continuing with respect to
all Series of Outstanding Notes and all Series of Outstanding Notes have been
accelerated under Section 5.02, the Indenture Trustee may or, if so directed by
the Majority Investors, the Indenture Trustee shall, do one or more of the
following:

(i) institute proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Pledged Assets;

(ii) exercise any remedies of a secured party under the NYUCC and take any other
appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee and the Holders of the Notes; and

(iii) in the case of an Event of Default referred to in clause (a) or (b) of
Section 5.01, sell the Pledged Assets or rights or interest therein, at one or
more public or private sales called and conducted in accordance with
Section 5.05;

provided that the Indenture Trustee may not sell or otherwise liquidate the
Pledged Assets following an Event of Default referred to in clause (a) or (b) of
Section 5.01 unless (A) the proceeds of the sale or liquidation of the Pledged
Assets are sufficient to discharge in full all amounts due and unpaid with
respect to the Notes, (B) if the Indenture Trustee has determined that the
Pledged Assets will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes, Holders of Notes evidencing 66 2/3% of
the Outstanding Amount,

 

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voting as a single class, consent to such sale or liquidation or (C) Holders of
Notes evidencing 100% of the Outstanding Amount consent to such sale or
liquidation. In determining such sufficiency or insufficiency with respect to
clause (A) and (B), the Indenture Trustee may, but is not required to, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Pledged Assets for such purpose.

(c) If the Indenture Trustee collects any money or property pursuant to this
Article V, such money or property shall be held by the Indenture Trustee as
additional collateral hereunder and the Indenture Trustee shall pay out such
money or property to the Collection Account for distribution in accordance with
the provisions of Article VIII.

Section 5.05. Sale of Assets.

(a) The method, manner and time, place and terms of any sale of all of the
Pledged Assets pursuant to Section 5.04(b) shall be commercially reasonable. The
Indenture Trustee may from time to time postpone any sale by public announcement
made at the time and place of such sale. The Indenture Trustee hereby expressly
waives its right to any amount fixed by law as compensation for such sale.

(b) In connection with a sale of all of the Pledged Assets pursuant to
Section 5.04(b), any Noteholder may bid for and purchase the property offered
for sale, and upon compliance with the terms of such sale may hold, retain and
possess and dispose of such property, without further accountability, and may,
in paying the purchase money therefor, deliver any Outstanding Notes or claims
for interest thereon in lieu of cash up to the amount that shall, upon
distribution of the net proceeds of such sale, be payable thereon.

(c) The Indenture Trustee may bid for and acquire any portion of the Pledged
Assets securing the Notes in connection with a public sale thereof, and may pay
all or part of the purchase price by crediting against amounts owing to the
Indenture Trustee under this Indenture, including without limitation the costs,
charges and expenses incurred by the Indenture Trustee in connection with such
sale.

(d) The Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Pledged Assets in
connection with a sale thereof. In addition, the Indenture Trustee is hereby
irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer
and convey its interest in any portion of the Pledged Assets in connection with
a sale thereof, and to take all action necessary to effect such sale. No
purchaser or transferee at such a sale shall be bound to ascertain the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.

 

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Section 5.06. Limitations on Suits.

No Noteholder shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture or any Indenture Supplement, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:

(a) such Holder has previously given written notice to the Indenture Trustee of
a continuing Event of Default;

(b) Noteholders holding Notes evidencing at least 25% of the Series Outstanding
Amount of each Series of Outstanding Notes have made written request to the
Indenture Trustee to institute such proceeding in respect of such Event of
Default in its own name as the Indenture Trustee hereunder;

(c) such Noteholder or Noteholders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;

(d) the Indenture Trustee has failed to institute such proceedings for 60 days
after its receipt of such notice, request and offer of indemnity; and

(e) no direction inconsistent with such written request has been given to the
Indenture Trustee during such 60-day period by the Majority Investors;

it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.

If the Indenture Trustee receives conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders holding Notes, each evidencing
less than a majority of the Series Outstanding Amount of each Series of
Outstanding Notes, the Indenture Trustee shall act at the direction of the group
of Noteholders holding Notes evidencing the greater amount of Notes; provided,
however, that, notwithstanding any other provisions of this Indenture, if the
Indenture Trustee receives conflicting or inconsistent requests and indemnity
from two or more groups of Noteholders holding an equal amount of Notes, the
Indenture Trustee in its sole discretion may determine what, if any, action
shall be taken.

 

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Section 5.07. Unconditional Right of Noteholders to Receive Principal and
Interest.

Notwithstanding any other provision of this Indenture, other than provisions
hereof limiting the right to recover amounts due on the Notes to recoveries from
the Pledged Assets, the holder of any Note shall have the absolute and
unconditional right to receive payment of the principal of and interest on such
Note as such principal and interest becomes due and payable and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Noteholder.

Section 5.08. Restoration of Rights and Remedies.

If the Indenture Trustee or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture or any Indenture Supplement and
such Proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.

Section 5.09. Rights and Remedies Cumulative.

No right or remedy herein conferred upon or reserved to the Indenture Trustee or
to the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 5.10. Delay or Omission Not a Waiver.

No delay or omission of the Indenture Trustee or any Noteholder to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the Indenture Trustee or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee
or by the Noteholders, as the case may be.

Section 5.11. Control by Noteholders.

Except as specifically set forth herein, the Majority Investors shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee, provided that

(a) such direction shall not be in conflict with any rule of law or with this
Indenture;

 

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(b) if an Event of Default occurs with respect to less than all Series of
Outstanding Notes, then the Indenture Trustee’s rights and remedies shall be
limited to the rights and remedies pertaining only to those Series of Notes with
respect to which such Event of Default has occurred, and the Indenture Trustee
shall exercise such rights and remedies at the direction of the Noteholders
holding Notes evidencing a majority of the Series Outstanding Amount of all such
Series of Notes;

(c) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction; and

(d) such direction shall be in writing;

and provided, further, that subject to Section 6.01, the Indenture Trustee need
not take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.

Section 5.12. Waiver of Past Defaults.

Prior to the declaration of the acceleration of the maturity of the Notes of any
Series as provided in Section 5.02, Noteholders holding Notes evidencing a
majority of the Series Outstanding Amount of such Series of Notes may, on behalf
of all such Noteholders, waive any past Default or Event of Default with respect
to such Series of Notes and its consequences except a Default (a) in payment of
principal of or interest on any of the Notes of such Series or (b) in respect of
a covenant or provision hereof that cannot be modified or amended without the
consent of the Holder of each Note of such Series. In the event of any such
waiver, the Issuer, the Indenture Trustee and the Noteholders of such
outstanding Series shall be restored to their former positions and rights
hereunder, respectively, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.

Upon any such waiver, such Default shall cease to exist and be deemed to have
been cured and not to have occurred, and any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereto. The Issuer
shall give prompt written notice of any waiver to the Rating Agencies.

 

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Section 5.13. Undertaking for Costs.

All parties to this Indenture agree, and each Noteholder by such Noteholder’s
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as the Indenture Trustee, the filing by any
party litigant in such Proceeding of an undertaking to pay the costs of such
Proceeding, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such
Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided, however, the provisions of this
Section 5.13 shall not apply to (a) any suit instituted by the Indenture
Trustee, (b) any suit instituted by any Noteholder or group of Noteholders, in
each case holding Notes evidencing in the aggregate more than 10% of the Series
Outstanding Amount of any Series of Notes, or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.

Section 5.14. Waiver of Stay or Extension Laws.

The Issuer covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture, and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

Section 5.15. Action on Notes.

The Indenture Trustee’s right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Indenture. Neither the Lien of
this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Pledged Assets or upon any of the assets of the Issuer.

 

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ARTICLE VI

THE INDENTURE TRUSTEE

Section 6.01. Duties of the Indenture Trustee.

(a) If an Event of Default has occurred and is continuing and a Trustee Officer
shall have actual knowledge or written notice of such Event of Default, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the Indenture Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee; and

(ii) in the absence of bad faith or negligence on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions and calculations expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and conforming to
the requirements of this Indenture; provided, however, that the Indenture
Trustee, upon receipt of any resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Indenture
Trustee that are specifically required to be furnished pursuant to any provision
of this Indenture or any Indenture Supplement, shall examine them to determine
whether they substantially conform, without verification of the accuracy of any
computations therein, to the requirements of this Indenture or any Indenture
Supplement. The Indenture Trustee shall give prompt written notice to the
Noteholders and each Rating Agency of any material lack of conformity of any
such instrument to the applicable requirements of this Indenture or any
Indenture Supplement discovered by the Indenture Trustee that would entitle the
Majority Investors to take any action pursuant to this Indenture or any
Indenture Supplement if such lack of conformity cannot be cured.

(c) No provision of this Indenture shall be construed to relieve the Indenture
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:

(i) this Section 6.01(c) shall not be construed to limit the effect of
Section 6.01(a);

(ii) permissive rights of the Indenture Trustee shall not be construed as
duties;

 

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(iii) the Indenture Trustee shall not be liable for any error of judgment made
in good faith by a Trustee Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts;

(iv) the Indenture Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
Indenture and at the direction of the Majority Investors relating to the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or for exercising any trust or power conferred upon the
Indenture Trustee under this Indenture; and

(v) no provision of this Indenture or of any Transaction Document shall require
the Indenture Trustee to be responsible for the acts or omissions of the
Servicer or to act as Successor Servicer until such time as it is required to
act as Successor Servicer under this Indenture.

(d) No provision of this Indenture shall require the Indenture Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

(e) Each provision of this Indenture that in any way relates to the Indenture
Trustee is subject to Sections 6.01(a) and (b).

(f) The Indenture Trustee shall have no responsibility or liability for
investment losses on Eligible Investments, except to the extent that the
institution acting as Indenture Trustee is an obligor on such Eligible
Investment.

(g) The Indenture Trustee shall notify each Rating Agency of any change in any
rating of the Notes of any other Rating Agency of which the Indenture Trustee
has received written notice pursuant to any of the Transaction Documents.

(h) For all purposes under this Indenture, the Indenture Trustee shall not be
deemed to have notice or knowledge of any Event of Default, Servicer Default or
Amortization Event unless a Trustee Officer assigned to and working in the
Corporate Trust Office of the Indenture Trustee has actual knowledge thereof or
has received written notice thereof. For purposes of determining the Indenture
Trustee’s responsibility and liability hereunder, any reference to an Event of
Default, Servicer Default or Amortization Event shall be construed to refer only
to such event of which the Indenture Trustee is deemed to have notice as
described in this Section 6.01(h).

Section 6.02. Notice of Event of Default.

Upon the occurrence of any Event of Default of which a Trustee Officer has
actual knowledge or has received notice, the Indenture Trustee shall transmit by
mail to all Noteholders

 

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as their names and addresses appear on the Note Register and to the Rating
Agencies, notice of such Event of Default known to the Indenture Trustee within
the later of (i) 30 days after such Event of Default occurs or (ii) ten Business
Days after the Indenture Trustee receives such notice or obtains actual notice,
if later.

Section 6.03. Rights of Indenture Trustee.

Except as otherwise provided in Section 6.01:

(a) The Indenture Trustee may conclusively rely and shall fully be protected in
acting or refraining from acting on any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties.

(b) Whenever in the administration of this Indenture the Indenture Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Indenture Trustee may (unless
other evidence be herein specifically prescribed), in the absence of bad faith
on its part, rely on an Officer’s Certificate of the Issuer.

(c) The Indenture Trustee may consult with counsel with respect to any action to
be taken, suffered or omitted by it hereunder and the written advice of such
counsel, obtained in good faith, or any Opinion of Counsel or any Tax Opinion
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith reliance thereon.

(d) The Indenture Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or to honor the request or
direction of any of the Noteholders pursuant to this Indenture, or a Series
Enhancer if so authorized by an Indenture Supplement unless such Noteholders or
Series Enhancer shall have offered to the Indenture Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction.

(e) The Indenture Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document, but the Indenture Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit
and, if the Indenture Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, personally or by agent or attorney.

(f) Subject to Section 6.13 hereof, the Indenture Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents, Affiliates, attorneys, custodians or nominees; provided,
however, that the Indenture Trustee shall continue to be responsible for any
(i) misconduct or negligence on the part of any agent, Affiliates, attorney,
custodians or nominees appointed by it hereunder and (ii) the supervision of
such agents, Affiliates, attorneys, custodians or nominees after such
appointment.

 

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(g) The Indenture Trustee shall not be liable for any actions taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights conferred upon the Indenture Trustee by this Indenture.

(h) If the Indenture Trustee is also acting as Paying Agent, Authentication
Agent and Transfer Agent and Registrar, the rights and protections afforded to
the Indenture Trustee pursuant to this Article VI shall also be afforded to such
Paying Agent, Authentication Agent and Transfer Agent and Registrar.

Section 6.04. Not Responsible for Recitals or Issuance of Notes.

The recitals contained herein and in the Notes shall be taken as the statements
of the Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. The Indenture Trustee makes no representation as to the validity or
sufficiency of this Indenture, the other Transaction Documents, the Pledged
Assets, the Notes or any related document. The Indenture Trustee shall not be
accountable for the use or application by the Issuer of the proceeds from the
Notes.

Section 6.05. May Hold Notes.

The Indenture Trustee and any Affiliates, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Issuer, any Cartus Person and their Affiliates, any Series Enhancer, any
underwriter or any of the other parties to the Transaction Documents with the
same rights it would have if it were not the Indenture Trustee or an Affiliate
of the Indenture Trustee.

Section 6.06. Money Held in Trust.

Money held by the Indenture Trustee in trust hereunder need not be segregated
from other funds held by the Indenture Trustee in trust hereunder except to the
extent required herein or required by law. The Indenture Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed upon in writing by the Indenture Trustee and the Issuer.

Section 6.07. Compensation, Reimbursement and Indemnification.

Pursuant to the Transfer and Servicing Agreement, the Issuer shall direct the
Servicer to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Servicer to reimburse the Indenture

 

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Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee’s agents, counsel,
accountants and experts. The Issuer shall cause the Servicer to indemnify the
Indenture Trustee against any and all loss, liability or expense (including the
fees of either in-house counsel or outside counsel, but not both) incurred by it
in connection with the administration of this trust and the performance of its
duties hereunder and under any other Transaction Document. The Indenture Trustee
shall notify the Issuer and the Servicer promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer of its obligations hereunder unless such
loss, liability or expense could have been avoided with such prompt notification
and then only to the extent of such loss, expense or liability which could have
been so avoided. Neither the Issuer nor the Servicer need reimburse any expense
or indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee’s own willful misconduct, negligence or
bad faith.

When the Indenture Trustee incurs expenses after the occurrence of a Default
specified in subsection 5.02(d) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
similar law.

Section 6.08. Replacement of Indenture Trustee.

No resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section 6.08.
The Indenture Trustee may resign at any time by giving 30 days’ written notice
to the Issuer. The Majority Investors may remove the Indenture Trustee by so
notifying the Indenture Trustee. The Issuer shall remove the Indenture Trustee
if:

(a) the Indenture Trustee fails to comply with Section 6.11;

(b) the Indenture Trustee is adjudged a bankrupt or insolvent; or

(c) the Indenture Trustee otherwise becomes legally unable to act.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee (who satisfies the requirements
of Section 6.11) subject to the consent of the Majority Investors.

A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Issuer and the Servicer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this

 

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Indenture. The successor Indenture Trustee shall mail a notice of its succession
to each Series Enhancer and all Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.

If a successor Indenture Trustee does not take office within 60 days after the
retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Majority Investors may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.

If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.

Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section 6.08, the Issuer’s obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

Section 6.09. Successor Indenture Trustee by Merger.

If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Indenture
Trustee, provided that such corporation or banking association is otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies and each Series Enhancer with prior written notice of any
such transaction.

Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

(a) Notwithstanding any other provisions of this Indenture, for the purpose of
meeting any legal requirement of any jurisdiction in which any part of the
Pledged Assets may at the time be located, the Indenture Trustee shall have the
power and may execute and deliver at any time all instruments to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Pledged Assets, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders, such
title to the Pledged Assets or any part thereof and, subject to the other
provisions of this Section 6.10, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11, and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 but notice shall be given to each Applicable Series
Enhancer.

 

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(b) Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed on the
Indenture Trustee shall be conferred or imposed on, and exercised or performed
by, the Indenture Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Pledged Assets or
any portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;

(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and

(iii) the Indenture Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.

(c) Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.

Section 6.11. Eligibility; Disqualification.

The Indenture Trustee shall at all times be a corporation organized and doing
business under the laws of the United States or any State thereof authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition and having long-term unsecured debt with a rating of
at least Baa3 by Moody’s and BBB- by Standard & Poor’s and subject to
supervision or examination by federal or state authority, and shall satisfy the
requirements for a trustee set forth in paragraph (a)(4)(i) of Rule 3a-7 under
the Investment Company Act.

 

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If at any time the Indenture Trustee ceases to be eligible in accordance with
the provisions of this Section 6.11, the Indenture Trustee shall resign
immediately in the manner and with the effect specified in Section 6.08.

Section 6.12. Representations and Covenants of the Indenture Trustee.

The Indenture Trustee represents, warrants and covenants that:

(a) The Indenture Trustee is duly organized and validly existing under the laws
of the jurisdiction of its organization;

(b) The Indenture Trustee has full power and authority to deliver and perform
this Indenture and has taken all necessary action to authorize the execution,
delivery and performance by it of this Indenture and other Transaction Documents
to which it is a party; and

(c) Each of this Indenture and other Transaction Documents to which it is a
party has been duly executed and delivered by the Indenture Trustee and
constitutes its legal, valid and binding obligation in accordance with its
terms.

Section 6.13. Custody of Pledged Assets and Other Collateral.

The Indenture Trustee shall hold such of the Pledged Assets (and any other
collateral that may be granted to the Indenture Trustee) as consists of
instruments, deposit accounts, negotiable documents, money, goods, letters of
credit, and advices of credit in the State of Illinois. The Indenture Trustee
shall hold such of the Pledged Assets as constitute investment property through
a securities intermediary, which securities intermediary shall agree with the
Indenture Trustee that (a) such investment property shall at all times be
credited to a securities account of the Indenture Trustee, (b) such securities
intermediary shall treat the Indenture Trustee as entitled to exercise the
rights that comprise each financial asset credited to such securities account,
(c) all property credited to such securities account shall be treated as a
financial asset, (d) such securities intermediary shall comply with entitlement
orders originated by the Indenture Trustee without the further consent of any
other person or entity, (e) such securities intermediary will not agree with any
person other than the Indenture Trustee to comply with entitlement orders
originated by such other person, (f) such securities accounts and the property
credited thereto shall not be subject to any lien, security interest, right of
set-off in favor of such securities intermediary or anyone claiming through it
(other than the Indenture Trustee), and (g) such agreement shall be governed by
the laws of the State of New York. Terms used in the preceding sentence that are
defined in the NYUCC and not otherwise defined herein shall have the meaning set
forth in the NYUCC. Except as permitted by this Section 6.13, the Indenture
Trustee shall not hold Pledged Assets through an agent or a nominee.

 

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ARTICLE VII

NOTEHOLDERS’ LIST AND REPORTS BY INDENTURE TRUSTEE

Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders.

The Issuer shall furnish or cause the Transfer Agent and Registrar to furnish to
the Indenture Trustee (a) upon each transfer of a Note, a list of the names,
addresses and taxpayer identification numbers of the Noteholders as they appear
on the Note Register as of such Record Date, in such form as the Indenture
Trustee may reasonably require, and (b) at such other times as the Indenture
Trustee may request in writing, within 10 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that if the
Indenture Trustee is the Transfer Agent and Registrar, the Indenture Trustee
shall furnish to the Issuer such list in the same manner prescribed in clause
(b) above.

Section 7.02. Preservation of Information.

If the Indenture Trustee is not the Transfer Agent and Registrar, the Indenture
Trustee shall preserve the names, addresses and taxpayer identification numbers
of the Noteholders contained in the most recent list furnished to the Indenture
Trustee as provided in Section 7.01. The Indenture Trustee may destroy any list
furnished to it as provided in Section 7.01 upon receipt of a new list so
furnished.

ARTICLE VIII

ALLOCATION AND APPLICATION OF POOL COLLECTIONS

Section 8.01. Collection of Money.

Except as otherwise expressly provided herein and in each related Indenture
Supplement, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall hold all such money and property received by it in trust for the
Noteholders and shall apply it as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under the Transfer and Servicing Agreement
or any other Transaction Document, the Indenture Trustee may, and upon the
request of the Majority Investors shall, take such action

 

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as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings. Any such action shall be
without prejudice to any right to claim an Event of Default under this Indenture
and to proceed thereafter as provided in Article V hereof.

Section 8.02. Rights of Noteholders.

The Notes shall represent limited recourse obligations of the Issuer secured by
the Pledged Assets, including the benefits of any Series Enhancement issued with
respect to any Series of Notes and the right to receive Pool Collections and
other amounts at the times and in the amounts specified in this Article VIII or
in the applicable Indenture Supplement to be deposited in Collection Account and
any Series Accounts (if so specified in the related Indenture Supplement). The
Notes do not represent obligations of, or interests in, Cartus, CFC, the
Transferor or the Servicer. The Notes are limited in right of payment to Pool
Collections on the Pledged Assets and other assets of the Issuer allocable to
the Notes as provided herein and in the applicable Indenture Supplement.

Section 8.03. Establishment of Accounts.

(a) Establishment of Collection Account. The Collection Account shall be
established and maintained in accordance with the provisions of the Transfer and
Servicing Agreement. An Indenture Supplement may establish sub-accounts to the
Collection Account as specified in such Indenture Supplement to effect
allocations to a Series in accordance with such Indenture Supplement. Funds on
deposit in any subaccount of the Collection Account shall not be commingled with
(i) funds on deposit in any other subaccount of the Collection Account or
(ii) funds on deposit in the Collection Account which have not been allocated to
any subaccount of the Collection Account.

(b) Establishment of Distribution Account. The Paying Agent, for the benefit of
the Noteholders, shall cause to be established and maintained with the Paying
Agent, a non-interest bearing segregated trust account that is a Qualified
Account (the “Distribution Account”) bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of
Noteholders. The Paying Agent shall possess all right, title and interest in all
funds on deposit from time to time in the Distribution Account and in all
proceeds thereof. The Distribution Account shall be under the sole dominion and
control of the Paying Agent for the benefit of Noteholders. If the Distribution
Account ceases at any time to be a Qualified Account, the Indenture Trustee
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days) establish a new Distribution Account which is a Qualified Account,
transfer any funds on deposit in the existing Distribution Account to such new
Distribution Account and from the date such new Distribution Account is
established, it shall be the “Distribution Account.”

(c) Establishment of Series Accounts. If so provided in the related Indenture
Supplement, the Issuer, for the benefit of the Noteholders and other Person as
may be identified

 

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in such Indenture Supplement, shall establish and maintain with the Indenture
Trustee or its nominee in the name of the Indenture Trustee one or more Series
Accounts, which Series Accounts also shall be Qualified Accounts (unless such
requirement is waived in the related Indenture Supplement). Each such Series
Account shall bear a designation clearing indicating that the funds deposited
therein are held for the benefit of Noteholders of such Series.

Section 8.04. Pool Collections and Allocations.

(a) The Issuer shall cause the Servicer to deposit Pool Collections into the
Collection Account as promptly as possible after the receipt in a Lockbox
Account of such Pool Collections, but in no event later than the second Business
Day following the receipt in a Lockbox Account of such Pool Collections.

(b) The Issuer agrees that if any Pool Collections are received by the Issuer in
an account other than the Collection Account, such monies, instruments, cash and
other proceeds will not be commingled by the Issuer with any of its other funds
or property, if any, but will be held separate and apart therefrom and will be
held in trust by the Issuer for, and immediately remitted to, the Indenture
Trustee, with any necessary endorsement.

(c) (i) Prior to the allocation of funds as set forth in clause (ii), the
Indenture Trustee shall make the distributions set forth in Sections
3.02(c)(vi), 3.12 and 3.14(b) of the Transfer and Servicing Agreement.

(ii) After making the distributions set forth in clause (i), the Indenture
Trustee shall allocate all funds on deposit in the Collection Account to each
Series based on the Series Percentage of such Series as set forth in the
Indenture Supplement related to such Series. Amounts allocated to any Series
shall not, except as specified in the related Indenture Supplement, be available
to the Noteholders of any other Series. The Indenture Supplement shall specify
how amounts allocated to such Series will be applied.

(d) At any time a Series is in its Amortization Period, the Issuer agrees that
any Pool Collections that would otherwise be released to the Issuer under the
terms of any Indenture Supplement related to any other Series which is not in
its Amortization Period, will be allocated to such amortizing Series and used to
pay the principal of such amortizing Series. To the extent more than one Series
is in its Amortization Period, such funds will be allocated ratably among each
amortizing Series based on their respective Series Percentages. Notwithstanding
anything to the contrary, no Pool Collections that would otherwise be released
to the Issuer shall be paid to an amortizing Series unless the terms of the
related Indenture Supplement specifically require the allocation of such funds
to such amortizing Series.

(e) On each Deposit Date, except as otherwise provided in an Indenture
Supplement, the Indenture Trustee shall pay to the Issuer the remaining funds,
if any, on deposit in the Collection Account on such Deposit Date after giving
effect to transfers to be made pursuant to Section 8.04(c).

 

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(f) Notwithstanding the preceding provisions of this Section 8.04, so long as no
Servicer Default or Event of Default shall have occurred and be continuing and
no Amortization Period for any Series of Notes is then in effect, the Trustee
shall not be required to make the allocations and determinations set forth in
Section 8.04(c) on any date other than a Distribution Date and, so long as no
Asset Deficiency exists or would result therefrom, the Trustee is authorized to
release to the Issuer, without an accounting from the Servicer, all Pool
Collections not required under the terms of any Supplement to be set aside for
the benefit of the Noteholders on any other Deposit Date.

Section 8.05. Release of Pledged Assets.

(a) The Indenture Trustee may, and when required by the provisions of this
Indenture or the other Transaction Documents shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee’s interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture or the Transaction Documents.
No party relying on an instrument executed by the Indenture Trustee as provided
in this Article VIII shall be bound to ascertain the Indenture Trustee’s
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.

(b) The Indenture Trustee shall, at such time as there are no Notes outstanding,
release and transfer, without recourse, representation or warranty, all of the
Pledged Assets that secured the Notes (other than any cash held for the payment
of the Notes pursuant to Section 4.02) to the Issuer.

Section 8.06. Officer’s Certificate.

The Issuer shall provide the Indenture Trustee with at least seven days’ notice
when requesting the Indenture Trustee to take any action pursuant to
Section 8.05(a), which notice shall be accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to such
action, an Officer’s Certificate stating that such action is authorized
hereunder and under the Transaction Documents and will not materially and
adversely impair the security for the Notes or the rights of the Noteholders
under this Indenture. The Indenture Trustee may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.

Section 8.07. Money for Note Payments to Be Held in Trust.

All payments of amounts due and payable with respect to the Notes that are to be
made from amounts withdrawn from the Collection Account shall be made on behalf
of the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so
withdrawn from the Collection Account shall be paid over to or at the direction
of the Issuer except as provided in this Section 8.07, Section 8.04(d) or in the
related Indenture Supplement.

 

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On or before each Distribution Date, in accordance with the instructions of the
Servicer, the Indenture Trustee shall deposit or cause to be deposited in the
Distribution Account for each outstanding Series an aggregate sum sufficient to
pay the amounts then becoming due under the Notes of such outstanding Series,
such sum to be held in trust for the benefit of the Persons entitled thereto.

ARTICLE IX

DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS

Distributions shall be made to, and reports shall be provided to, Noteholders as
set forth in the applicable Indenture Supplement. The identity of the
Noteholders with respect to distributions and reports shall be determined
according to the immediately preceding Record Date.

ARTICLE X

SUPPLEMENTAL INDENTURES

Section 10.01. Supplemental Indentures Without Consent of Noteholders.

(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies and each Applicable Series Enhancer and upon satisfaction of the
Rating Agency Condition with respect to the Notes of all Series, the Issuer, the
Indenture Trustee, the Paying Agent, the Authentication Agent and the Transfer
Agent and Registrar, at any time and from time to time, may enter into an
indenture or indentures supplemental hereto for any of the following purposes:

(i) to correct or amplify the description of any property at any time subject to
the lien of this Indenture, or better to assure, convey and confirm to the
Indenture Trustee any property subject, or required to be subjected, to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;

(ii) to add to the covenants of the Issuer, for the benefit of the Holders of
the Notes, or to surrender any right or power herein conferred upon the Issuer;

(iii) to convey, transfer, assign, mortgage or pledge any property to or with
the consent of the Indenture Trustee;

(iv) to cure any ambiguity, to correct or supplement any provision herein or in
any supplemental indenture that may be inconsistent with any other provision
herein or in any supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture or in any
supplemental indenture;

 

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(v) to evidence and provide for the acceptance of the appointment hereunder by a
successor indenture trustee with respect to the Notes and to add to or change
any of the provisions of this Indenture as shall be necessary to facilitate the
administration of the Pledged Assets hereunder by more than one trustee,
pursuant to the requirements of Article VI;

(vi) to provide for the issuance of one or more new Series of Notes, in
accordance with the provisions of Section 2.10; or

(vii) to provide for the termination of any Series Enhancement in accordance
with the provisions of the related Indenture Supplement; provided, however, that
such action shall not adversely affect in any material respect the interests of
any Noteholder, as evidenced by an Officer’s Certificate of an Authorized
Officer delivered to the Indenture Trustee (at the Issuer’s expense).

The Indenture Trustee, the Paying Agent, the Authentication Agent and the
Transfer Agent and Registrar are hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.

(b) The Issuer, the Indenture Trustee, the Paying Agent, the Authentication
Agent and the Transfer Agent and Registrar also, without the consent of any
Noteholders of any outstanding Series but with prior notice to the Rating
Agencies and each Applicable Series Enhancer and upon satisfaction of the Rating
Agency Condition and the written consent of each Applicable Series Enhancer with
respect to the Notes of all outstanding Series, may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that the Issuer shall have delivered to the
Indenture Trustee, the Paying Agent, the Authentication Agent and the Transfer
Agent and Registrar an Officer’s Certificate, dated the date of any such action,
stating that the Issuer reasonably believes that such action will not have a
Material Adverse Effect. Additionally, notwithstanding the preceding sentence,
the Issuer, the Indenture Trustee, the Paying Agent, the Authentication Agent
and the Transfer Agent and Registrar also, without the consent of any
Noteholders of any outstanding Series, may enter into an indenture or indentures
supplemental hereto to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable the Issuer (i) to qualify as, and to
permit an election to be made to cause the Issuer to be treated as, a “financial
asset securitization investment trust” as described in the provisions of
Section 860L of the Code, (ii) to avoid the imposition of state or local income
or franchise taxes imposed on the Issuer’s property or its income and (iii) to
add, modify or eliminate such provisions as may be necessary and desirable to
implement any revisions to the Uniform Commercial Code as in force in the
applicable jurisdiction; provided, however, that the Issuer, the Indenture
Trustee, the Paying Agent, the Authentication Agent and the Transfer Agent and
Registrar shall not enter into any such indenture or supplement unless (w) the
Issuer delivers to the Indenture Trustee, the Paying Agent, the Authentication
Agent and the Transfer Agent and Registrar and each Applicable Series Enhancer
an Officer’s Certificate dated the date of such

 

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supplemental indenture, stating that the Issuer reasonably believes that such
supplemental indenture will not have a Material Adverse Effect, (x) each Rating
Agency has notified the Issuer, the Servicer, the Indenture Trustee and each
Applicable Series Enhancer in writing that the Rating Agency Condition with
respect to each outstanding Series has been satisfied, (y) such amendment does
not (without the consent of the Indenture Trustee) affect the rights, duties or
obligations of the Indenture Trustee hereunder and (z) such amendment does not
(without the consent of the Paying Agent, the Authentication Agent or the
Transfer Agent and Registrar, as the case may be) affect the rights, duties or
obligations of the Paying Agent, the Authentication Agent or the Transfer Agent
and Registrar, as the case may be hereunder.

Section 10.02. Supplemental Indentures with Consent of Noteholders.

The Issuer, the Indenture Trustee, the Paying Agent, the Authentication Agent
and the Transfer Agent and Registrar also, with prior notice to the Rating
Agencies and with the consent of the Majority Investors, by Act of such Holders
delivered to the Issuer and the Indenture Trustee, may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Noteholders of all Series under
this Indenture. If an indenture or indentures supplemental hereto affects only
the Noteholders of a particular Series of Notes, then the consent of the Holders
of a majority of the Series Outstanding Amount of such Series shall be required
to such indenture or indenture supplemental. Notwithstanding the foregoing, no
supplemental indenture shall, without the consent of Holders of 100% of the
Series Outstanding Amount of the Outstanding Notes affected thereby:

(a) change the due date of any payment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate specified thereon or
the redemption price with respect thereto or change any place of payment where,
or the coin or currency in which, any Note or any interest thereon is payable;

(b) impair the right to institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds available therefor to the
payment of any such amount due on the Notes on or after the respective due dates
thereof, as provided in Article V (or, in the case of redemption, on or after
the Redemption Date);

(c) reduce the percentage that constitutes a majority of the Series Outstanding
Amount of the Notes of any Series the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences as provided for
in this Indenture;

(d) reduce the percentage of the Outstanding Amount of the Notes which is
required to direct the Indenture Trustee to sell or liquidate the Pledged Assets
if the proceeds of such sale would be insufficient to pay the principal amount
and accrued but unpaid interest on the Outstanding Notes;

 

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(e) decrease the percentage of the aggregate principal amount of the Notes
required to amend the sections of this Indenture that specify the applicable
percentage of the aggregate principal amount of the Notes of such Series
necessary to amend the Indenture or any Transaction Documents that require such
consent;

(f) modify or alter the provisions of this Indenture regarding the voting of
Notes held by the Issuer, any other obligor on the Notes, the Transferor, the
Servicer or any Affiliate of any of the foregoing Persons; or

(g) permit the creation of any Lien ranking prior to or on a parity with the
lien of this Indenture with respect to any part of the Pledged Assets for any
Notes or, except as otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any such Pledged Assets at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of this
Indenture.

It shall not be necessary for any Act of Noteholders under this Section 10.02 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer, the Indenture Trustee, the Paying
Agent, the Authentication Agent and the Transfer Agent and Registrar of any
Supplement Indenture pursuant to this Section 10.02, the Paying Agent shall mail
to the Holders of the Notes to which such supplemental indenture relates written
notice setting forth in general terms the substance of such supplement
indenture; provided, however, that any failure of the Paying Agent to mail such
notice, or any defect therein, shall not in any way impair or affect the
validity of any such supplemental indenture.

Section 10.03. Execution of Supplemental Indentures.

In executing, or permitting the additional trusts created by any supplemental
indenture permitted by this Article X or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee, the Paying Agent, the
Authentication Agent and the Transfer Agent and Registrar shall be entitled to
receive, and subject to Section 6.01, shall be fully protected in relying on, an
Officer’s Certificate stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee’s own rights, duties, liabilities or immunities
under this Indenture or otherwise. The Paying Agent, the Authentication Agent
and the Transfer Agent and Registrar, as the case may be, may, but shall not be
obligated to, enter into any such supplemental indenture that affects their
respective rights, duties, liabilities or immunities under this Indenture or
otherwise.

 

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Section 10.04. Effect of Supplemental Indenture.

Upon the execution of any supplemental indenture under this Article X, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.

Section 10.05. Reference in Notes to Supplemental Indentures.

Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article X may, and if required by the Authentication
Agent shall, bear a notation in form approved by the Indenture Trustee and the
Authentication Agent as to any matter provided for in such supplemental
indenture. If the Issuer shall so determine, new Notes modified so as to
conform, in the opinion of the Indenture Trustee and the Authentication Agent
and the Issuer, to any such supplemental indenture may be prepared and executed
by the Issuer and authenticated and delivered by the Authentication Agent in
exchange for the Outstanding Notes.

ARTICLE XI

DEFEASANCE

Section 11.01. Defeasance.

Notwithstanding anything to the contrary in this Indenture or any Indenture
Supplement:

(a) The Issuer may at its option be discharged from its obligations hereunder
with respect to any Series or all outstanding Series (each, a “Defeased Series”)
on the date the applicable conditions set forth in subsection 11.01(c) are
satisfied (a “Defeasance”); provided, however, that the following rights,
obligations, powers, duties and immunities shall survive with respect to each
Defeased Series until otherwise terminated or discharged hereunder: (i) the
rights of the Holders of Notes of the Defeased Series to receive payments in
respect of principal of and interest on such Notes when such payments are due;
(ii) the Issuer’s obligations with respect to such Notes under Sections 2.05 and
2.06; (iii) the rights, powers, trusts, duties, and immunities of the Indenture
Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder; and
(iv) this Section 11.01 and Section 12.14.

(b) Subject to Section 11.01(c), no Pool Collections shall be allocated to any
Defeased Series.

 

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(c) The following shall be the conditions precedent to any Defeasance under
Section 11.01(a):

(i) the Issuer irrevocably shall have deposited or caused to be deposited with
the Indenture Trustee, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Indenture Trustee and any Applicable Series
Enhancer, as trust funds in trust for making the payments described below,
(A) Dollars in an amount equal to, or (B) Eligible Investments which through the
scheduled payment of principal and interest in respect thereof will provide, not
later than the due date of payment thereon, money in an amount equal to, or
(C) a combination thereof, in each case sufficient to pay and discharge, and
which shall be applied by the Indenture Trustee to pay and discharge, all
remaining scheduled interest and principal payments on all Outstanding Notes of
each Defeased Series and all other amounts owing in respect of such Defeased
Series (including all amounts owing under any related Enhancement Agreement to
any Series Enhancer) on the dates scheduled for such payments in this Indenture
and the applicable Indenture Supplements;

(ii) a statement from a firm of nationally recognized independent public
accountants (who also may render other services to the Issuer) to the effect
that such deposit is sufficient to pay the amounts specified in clause
(i) above;

(iii) prior to its first exercise of its right pursuant to this Section 11.01
with respect to a Defeased Series to substitute money or Eligible Investments
for Receivables, the Issuer shall have delivered to the Indenture Trustee an
Opinion of Counsel to the effect that such deposit and termination of
obligations will not result in the Issuer being required to register as an
“investment company” within the meaning of the Investment Company Act;

(iv) the Issuer shall have delivered to the Indenture Trustee and each
Applicable Series Enhancer an Officer’s Certificate of the Issuer stating that
the Issuer reasonably believes that such deposit and termination of obligations
will not, based on the facts known to such officer at the time of such
certification, then cause an Event of Default or Amortization Event with respect
to any Series or any event that, with the giving of notice or the lapse of time,
would result in the occurrence of a Event of Default or Amortization Event with
respect to any Series;

(v) the Rating Agency Condition shall have been satisfied and the Issuer shall
have delivered copies of such written notice to the Servicer, the Indenture
Trustee and each Applicable Series Enhancer; and

(vi) the Issuer shall have delivered to the Indenture Trustee and each
Applicable Series Enhancer a Tax Opinion.

 

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ARTICLE XII

MISCELLANEOUS

Section 12.01. Compliance Certificates and Opinions, etc.

(a) Upon any application or request by the Issuer to the Indenture Trustee to
take any action under any provision of this Indenture or any other Transaction
Document, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section 12.01, except that, in the case of any such
application or request as to which the furnishing of specific documents is
required by any provision of this Indenture, no additional certificate or
opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:

(i) a statement that each signatory of such certificate or opinion has read or
has caused to be read such covenant or condition and the definitions herein
relating thereto;

(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(iii) a statement that, in the opinion of each such signatory, such signatory
has made such examination or investigation as is necessary to enable such
signatory to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(iv) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with.

(b)(i) Prior to the deposit of any Pledged Assets or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 12.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Pledged Assets or other property or securities to be so deposited.

 

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(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (i) above, the Issuer also shall deliver to
the Indenture Trustee an Independent Certificate as to the same matters, if the
fair value to the Issuer of the securities to be so deposited and of all other
such securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii), is 10%
or more of the Outstanding Amount of the Notes, but such a certificate need not
be furnished with respect to any securities so deposited if the fair value
thereof to the Issuer as set forth in the related Officer’s Certificate is less
than 10% of the Outstanding Amount of the Notes.

(iii) Other than as provided in the Granting Clause, whenever any property or
securities are to be released from the lien of this Indenture, the Issuer also
shall furnish to the Indenture Trustee an Officer’s Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the proposed release
will not impair the security under this Indenture in contravention of the
provisions hereof.

(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (iii) above, the Issuer also shall furnish to
the Indenture Trustee an Independent Certificate as to the same matters if the
fair value of the property or securities and of all other property, other than
as provided in the Granting Clause, or securities released from the lien of this
Indenture since the commencement of the then current calendar year, as set forth
in the certificates required by clause (iii) above and this clause (iv), equals
10% or more of the Outstanding Amount of the Notes, but such certificate need
not be furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer’s Certificate is less
than 10% of the then Outstanding Amount of the Notes.

(v) Notwithstanding any provision of this Section 12.01, the Issuer may
(A) collect, liquidate, sell or otherwise dispose of Receivables as and to the
extent permitted or required by the Transaction Documents and (B) make cash
payments out of the Series Accounts as and to the extent permitted or required
by the Transaction Documents, and the provisions of the Granting Clause shall
apply.

Section 12.02. Form of Documents Delivered to Indenture Trustee.

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

 

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Any certificate or opinion of a Responsible Officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer’s certificate or opinion is
based are erroneous. Any such certificate of a Responsible Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Servicer or the Issuer, unless such
Responsible Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

In any case in which any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

Whenever in this Indenture, in connection with any application or certificate or
report to the Indenture Trustee, it is provided that the Issuer shall deliver
any document as a condition of the granting of such application or as evidence
of the Issuer’s compliance with any term hereof, it is intended that the truth
and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

Section 12.03. Acts of Noteholders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Noteholders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by an agent duly appointed in
writing and satisfying any requisite percentages as to the minimum number or
Dollar value of outstanding principal amount represented by such Noteholders;
and except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, and, to the extent hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 12.03.

 

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(b) The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner which the Indenture Trustee deems
sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of every Note issued upon the registration thereof in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.

Section 12.04. Notices to Issuer, Indenture Trustee, Paying Agent,
Authentication Agent and Transfer Agent and Registrar.

All demands, notices and communications hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered at, sent by facsimile
to, sent by courier at or mailed by certified or registered mail, return receipt
requested, to (a) in the case of the Issuer, to 40 Apple Ridge Road, Suite 4C45,
Danbury, Connecticut 06810, Attention: Controller, (b) in the case of the
Indenture Trustee, to the Corporate Trust Office, (c) in the case of the Paying
Agent, the Authentication Agent or the Transfer Agent and Registrar, to 101
Barclay Street, 4W, New York, New York 10286 and (d) in the case of the Rating
Agency for a particular Series, the address, if any, specified in the Indenture
Supplement relating to such Series; or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.

Section 12.05. Notices to Noteholders; Waiver.

In any case in which this Indenture provides for notice to Noteholders or a
Series Enhancer of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed by registered or
certified mail or first class postage prepaid or national overnight courier
service to each Noteholder or Series Enhancer affected by such event, at the
Noteholder’s address as it appears on the Note Register or at the Series
Enhancer’s address for notices set forth in the relevant agreement relating to
Series Enhancement, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. If notice to
Noteholders or a Series Enhancer is given by mail, neither the failure to mail
such notice nor any defect in any notice so mailed to any particular Person
shall affect the sufficiency of such notice with respect to other Persons, and
any notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.

In any case in which this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee (with a copy to the Paying Agent), but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.

 

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If, by reason of the suspension of regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of any
event to Noteholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee or the Paying Agent, as the case may be,
shall be deemed to be a sufficient giving of such notice.

Section 12.06. Alternate Payment and Notice Provisions.

Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer, with the consent of the Paying Agent, may enter into any
agreement with any Holder of a Note providing for a method of payment, or notice
by the Indenture Trustee or any Paying Agent to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer shall furnish to the Indenture Trustee or/and the Paying Agent a copy
of each such agreement and the Paying Agent or the Indenture Trustee, as the
case may be, shall cause payments to be made and notices to be given in
accordance with such agreements.

Section 12.07. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section 12.08. Successors and Assigns.

All covenants and agreements in this Indenture by the Issuer shall bind its
successors and assigns, whether so expressed or not.

Section 12.09. Separability.

If any provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

Section 12.10. Benefits of Indenture.

Nothing in this Indenture or in the Notes, express or implied, shall give to any
Person other than the parties hereto and their successors hereunder, any Series
Enhancer and the Noteholders, any benefit.

 

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Section 12.11. Legal Holidays.

If the date on which any payment is due shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date on which nominally
due, and no interest shall accrue for the period from and after any such nominal
date.

Section 12.12. GOVERNING LAW.

THE INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, INCLUDING §5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

Section 12.13. Counterparts.

This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

Section 12.14. No Petition.

The Indenture Trustee, the Paying Agent, the Authentication Agent and the
Transfer Agent and Registrar, by entering into this Indenture, and each
Noteholder, by accepting a Note, hereby covenant and agree that they will not at
any time institute against the Issuer, the Transferor or CFC, or join in any
institution against the Issuer, the Transferor or CFC, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Transaction Documents until the expiration of one year and one day after
payment in full of the latest maturing Note issued by the Issuer under this
Indenture. This Section shall survive termination of the Indenture.

Section 12.15. Provision of Information to Rating Agencies.

At the request of a Rating Agency, the Indenture Trustee will provide such
Rating Agency with any reports and other written information it has received
from the Servicer for distribution to Noteholders.

 

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Section 12.16. Conversion. Notwithstanding any covenants in this Agreement
requiring Cartus, CFC or ARSC to maintain its “corporate existence”, such entity
may elect to convert their status from that of a Delaware corporation to that of
a Delaware limited liability company, either by filing a certificate of
conversion with the Delaware Secretary of State or by merging with and into a
newly formed Delaware limited liability company(such conversion or merger, as
applicable, being herein called a “Conversion”) subject to the conditions that:

(a)(x) the Person formed by such Conversion (any such Person, the “Surviving
Entity”) is an entity organized and existing under the laws of the United States
of America or any State thereof, (y) such Surviving Entity expressly assumes, by
an agreement in form and substance satisfactory to the applicable transferee and
its assignees, performance of every covenant and obligation of such Person under
the Transaction Documents to which such Person is a party and (z) such Surviving
Entity delivers to the other parties to the Fifth Omnibus Amendment hereto dated
as of April 10, 2007 (such parties, the “Amendment Parties”) an opinion of
counsel that such Surviving Entity is duly organized and validly existing under
the laws of its organization, has duly executed and delivered such supplemental
agreement, and such supplemental agreement is a valid and binding obligation of
such Surviving Entity, enforceable against such Surviving Entity in accordance
with its terms (subject to customary exceptions relating to bankruptcy and
equitable principles) and covering such other matters as the Amendment Parties
may reasonably request;

(b) all actions necessary to maintain the perfection of the security interests
or ownership interests created by such Person under the Transaction Documents to
which such Person is a party in connection with such Conversion shall have been
taken, as evidenced by an opinion of counsel reasonably satisfactory to the
Amendment Parties;

(c) so long as such Person is the Servicer, no Servicer Default or Unmatured
Servicer Default is then occurring or would result from such Conversion;

(d) in the case of a Conversion of CFC or ARSC, (x) the organizational documents
of any Surviving Entity with respect to CFC or ARSC shall contain limitations on
its business activities and requirements for independent directors or managers
substantially equivalent to those set forth in its current organizational
documents, and (y) Orrick Herrington & Sutcliffe shall have delivered an opinion
of counsel reasonably satisfactory to the Amendment Parties that such Conversion
will not, in and of itself, alter the conclusions set forth in its opinions
previously issued in connection with the Transaction Documents with respect to
true sale matters, substantive consolidation matters and bankruptcy issues
relating to “home sale proceeds” (to the extent such opinions relate to such
Person); and

(e) each Amendment Party shall have received such other documents as such
Amendment Party may reasonably request.

In connection with any such Conversion and the resulting change in name of such
entity, Cartus, CFC and/or ARSC, as applicable, shall be required to comply with
the name change covenants in the Transaction Documents, except that to the
extent 30 days prior written notice of the name change is required, such notice
period shall be reduced to five Business Days.

 

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From and after any such Conversion effected in compliance with the above
conditions, (a) all references in the Transaction Documents to any Person which
has altered its corporate structure to become a limited liability company shall
be deemed to be references to the Surviving Entity as successor to such Person,
(b) all representations, warranties and covenants in the Transaction Documents
which state that any of Cartus, CFC or ARSC is or is required to be a
corporation shall be deemed to permit and require the Surviving Entity to be a
limited liability company, (c) all references to such Person’s certificate of
incorporation, other organizational documents, capital stock, corporate action
or other matters relating to its corporate form will be deemed to be references
to the organizational documents and analogous matters relating to limited
liability companies, (d) all references to such Person’s directors or
independent directors will be deemed to be references to the Surviving Entity’s
directors, independent directors, managers or independent managers, as the case
may be and (e) no representation, warranty or covenant in any Transaction
Document shall be deemed to be breached or violated solely as a result of the
fact that the Surviving Entity in any Conversion may be disregarded as a
separate entity for state, local or federal income tax purposes.

Section 12.17. Inclusion of Receivables Assigned from Kenosia Funding LLC and
Cartus Relocation Corporation. The parties hereto acknowledge and agree that the
definition of “Seller Receivables” in the Receivables Purchase Agreement may
include certain Receivables (the “Acquired Receivables’) which were neither sold
by Cartus to CFC under the Purchase Agreement nor originated by CFC. The parties
hereto acknowledge and agree that, for all purposes of the Affected Documents,
(i) the Acquired Receivables shall be considered to be CFC Receivables
originated by CFC, and shall be deemed to be included in the ARSC Purchased
Assets transferred to the Issuer and (ii), notwithstanding anything to the
contrary in the Affected Documents, CFC shall be allowed to enter into an
assignment agreement with each of Cartus, Kenosia and CRC, the form of which has
been approved in writing by the Majority Investors, and to consummate the
transfer of the Acquired Receivables along with the Related Property relating to
such Acquired Receivables (collectively, the “Acquired Assets”) on the terms and
conditions set forth therein. Such conditions shall include evidence of
compliance with the Federal Assignment of Claims Act and confirmation from the
Rating Agencies that the commercial paper ratings of the Conduit Purchasers
under the Note Purchase Agreement will not be reduced or withdrawn by reason of
such transaction. The parties hereto further acknowledge and agree that, so long
as such Acquired Receivables satisfy all other criteria set forth in the
definition of “Eligible Receivable”, such Acquired Receivables shall constitute
Eligible Receivables within the meaning of the Receivables Purchase Agreement,
the Transfer and Servicing Agreement and the Indenture notwithstanding the fact
that such Acquired Receivables were neither sold to CFC under the Purchase
Agreement nor otherwise originated by CFC.

 

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IN WITNESS WHEREOF, the Issuer, the Indenture Trustee, the Paying Agent, the
Authentication Agent and the Transfer Agent and Registrar have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized and attested, all as of the day and year first above written.

 

APPLE RIDGE FUNDING LLC,
as Issuer

By:       Name:   Title:

THE BANK OF NEW YORK,
as Indenture Trustee

By:       Name:   Title:

THE BANK OF NEW YORK,
as Paying Agent, Authentication Agent and Transfer Agent and Registrar

By:       Name:   Title:

[Signature Page to Master Indenture]

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DISTRICT OF COLUMBIA    )       )    ss.: COUNTY OF __________    )   

BEFORE ME, the undersigned authority, a Notary Public in and for said County and
State, on this day personally appeared                                         
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said Delaware limited liability company and that she/he executed the same as the
corporation for the purpose and consideration therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this          day of
                    , 2000.

 

   Notary Public   [Seal]

 

My commission expires:   

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STATE OF NEW YORK    )       )    ss.: COUNTY OF NEW YORK    )   

BEFORE ME, the undersigned authority, a Notary Public in and for said County and
State, on this day personally appeared Steve M. Husbands known to me to be the
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said national banking
organization and that she/he executed the same as the corporation for the
purpose and consideration therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this          day of
                    , 2000.

 

   Notary Public   [Seal]

 

My commission expires:   

 

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STATE OF NEW YORK    )       )    ss.: COUNTY OF _______    )   

BEFORE ME, the undersigned authority, a Notary Public in and for said County and
State, on this day personally appeared known to me to be the person and officer
whose name is subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said New York banking corporation and that she/he
executed the same as the corporation for the purpose and consideration therein
stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this          day of
                    , 2000.

 

   Notary Public   [Seal]

 

My commission expires:   

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Exhibit A-5

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CONFORMED COPY

AS AMENDED BY:

Fifth Omnibus Amendment dated April 10, 2007

PERFORMANCE GUARANTY

This Performance Guaranty (this “Guaranty”), dated as of May 12, 2006 and
effective on and after the Effective Date (as defined herein), is executed by
Realogy Corporation, a Delaware corporation (the “Performance Guarantor”) in
favor of Cartus Financial Corporation, a Delaware corporation (“CFC”), and Apple
Ridge Funding LLC, a Delaware limited liability company, as Issuer (the
“Issuer”) under the Master Indenture dated as of April 25, 2000 (as amended by
that certain Omnibus Amendment dated December 20, 2004, that certain Second
Omnibus Amendment dated January 31, 2005, that certain Amendment, Agreement and
Consent dated January 30, 2006, that certain Third Omnibus Amendment, Agreement
and Consent dated May 12, 2006 and as such may be amended, restated,
supplemented or otherwise modified from time to time, the “Indenture”) among the
Issuer, JPMorgan Chase Bank, National Association (successor by merger to Bank
One, NA), a national banking association, as indenture trustee and The Bank of
New York, as paying agent. Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings ascribed to them in the
Indenture or that certain Purchase Agreement dated as of April 25, 2000 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Purchase Agreement”) between CFC and Cartus Corporation, a Delaware corporation
(“Cartus”).

WHEREAS, Cartus on the Effective Date will be a wholly-owned Subsidiary of the
Performance Guarantor and the Performance Guarantor is expected to receive
substantial direct and indirect benefits from the transactions contemplated in
the Purchase Agreement, the Receivables Purchase Agreement, the Transfer and
Servicing Agreement and the Indenture;

WHEREAS, as an inducement for (i) CFC to make purchases under the Purchase
Agreement and (ii) the Issuer to acquire the ARSC Purchased Assets under the
Transfer and Servicing Agreement, the Performance Guarantor has agreed to
guaranty the due and punctual payment and performance of Cartus’s obligations,
whether as Originator under the Purchase Agreement or as Servicer under the
Transfer and Servicing Agreement;

NOW, THEREFORE, the Performance Guarantor hereby agrees with CFC and the Issuer
as follows:

§1. Definitions.

As used herein:

“Effective Date” means, the date on which Realogy Corporation and its
subsidiaries cease to be subsidiaries of the entity known on the date of this
Guaranty as Cendant Corporation.

“Obligations” means, collectively, all covenants, agreements, terms, conditions
and other obligations to be performed and observed by Cartus (whether in its
capacity as

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Originator under the Purchase Agreement or as Servicer under the Transfer and
Servicing Agreement) under the Purchase Agreement or the Transfer and Servicing
Agreement, and shall include without limitation the due and punctual payment
when due of all sums that are or may become owing by Cartus under the Purchase
Agreement or the Transfer and Servicing Agreement, whether in respect of fees,
expenses (including counsel fees), indemnified amounts, amounts required to be
paid by Cartus pursuant to Section 4.3 of the Purchase Agreement or Section 3.10
of the Transfer and Servicing Agreement, advances required to be made pursuant
to Section 3.12 of the Transfer and Servicing Agreement or otherwise, including
without limitation any such fees, expenses and other amounts that accrue after
the commencement of any Insolvency Proceeding with respect to Cartus (in each
case whether or not allowed as a claim in such Insolvency Proceeding).

§2. Guaranty of Obligations. The Performance Guarantor on and after the
Effective Date hereby guarantees to CFC and the Issuer (each, a “Guarantied
Party”), the full and punctual payment and performance by Cartus of all of the
Obligations. This Guaranty is, on and after the Effective Date, an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of all of the Obligations and is in no way conditioned upon any
requirement that any Guarantied Party first attempt to collect any amounts owing
by Cartus to such Guarantied Party from Cartus or resort to any collateral
security, any balance of any deposit account or credit on the books of any
Guarantied Party in favor of Cartus or any other Person or other means of
obtaining payment. Should Cartus default in the payment or performance of any of
the Obligations, any Guarantied Party may cause the immediate performance by the
Performance Guarantor of the Obligations and cause any payment Obligations to
become forthwith due and payable to such Guarantied Party, without demand or
notice of any nature (other than as expressly provided herein or in the
Transaction Documents), all of which are expressly waived by the Performance
Guarantor.

§3. Performance Guarantor’s Further Agreements to Pay. The Performance Guarantor
further agrees, as the principal obligor and not as a guarantor only, to pay to
each Guarantied Party, forthwith upon demand in funds immediately available to
such Guarantied Party, all reasonable costs and expenses (including court costs
and legal expenses) incurred or expended by such Guarantied Party in connection
with the Obligations, this Guaranty and the enforcement thereof, together with
interest on amounts recoverable under this Guaranty from the time when such
amounts become due until payment, at a rate of interest (computed for the actual
number of days elapsed based on a 360 day year) equal to the rate or interest
most recently published in The Wall Street Journal as the “Prime Rate” plus 2%.
Changes in the rate payable hereunder shall be effective on each date on which a
change in the “Prime Rate” is published.

§4. Waivers by Performance Guarantor; Freedom to Act. The Performance Guarantor
waives notice of acceptance of this Guaranty, notice of any action taken or
omitted by any Guarantied Party in reliance on this Guaranty, and any
requirement that any Guarantied Party be diligent or prompt in making demands
under this Guaranty, giving notice of any Purchase Termination Event or Servicer
Default (so long as Cartus is the Servicer) or asserting any other rights of any
Guarantied Party under this Guaranty. The Performance Guarantor also irrevocably
waives all defenses that at any time may be available in respect of the
Obligations by virtue of any statute of limitations, valuation, stay, moratorium
law or other similar law now or thereafter in effect. Each Guarantied Party
shall be at liberty, without giving notice to or obtaining the

 

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consent of the Performance Guarantor, to deal with Cartus and with each other
party who now is or after the date hereof becomes liable in any manner for any
of the Obligations, in such manner as such Guarantied Party in its sole
discretion deems fit, and to this end the Performance Guarantor agrees that the
validity and enforceability of this Guaranty, including without limitation the
provisions of Section 7 hereof, shall not be impaired or affected by any of the
following: (a) an amendment or modification of, or supplement to, any
Transaction Document, including without limitation any extension, modification
or renewal of, or indulgence with respect to, or substitution for, the
Obligations or any part thereof at any time; (b) any waiver, consent, extension,
granting of time, forbearance, indulgence or other action or inaction under or
in respect of any Transaction Document or any Obligation (including without
limitation with respect to any Purchase Termination Event or Servicer Default
(so long as Cartus is the Servicer)) or any right, power or remedy with respect
thereto; (c) any Insolvency Proceeding with respect to Cartus or any other
Person; (d) any exercise or non-exercise of any right, power or remedy with
respect to the Obligations or any part thereof or any Transaction Document, or
any collateral securing the Obligations or any part thereof; (e) any law,
regulation or order of any jurisdiction affecting any term of any Obligation or
rights of Cartus with respect thereto; (f) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any other obligation of any person or entity with respect to
the Obligations or any part thereof; (g) any invalidity or any unenforceability
of, or any misrepresentation (other than by CFC or the Issuer), irregularity or
other defect in, any Transaction Document or any Obligation; (h) the existence
of any claim, setoff or other rights that the Performance Guarantor may have at
any time against Cartus in connection herewith or any unrelated transaction;
(i) any failure on the part of Cartus to perform or comply with any term of the
Purchase Agreement, the Transfer and Servicing Agreement or any other
Transaction Document; or (j) any other circumstance that might otherwise
constitute a defense (other than payment and performance) available to, or a
discharge of, a guarantor or Cartus, all whether or not the Performance
Guarantor shall have had notice or knowledge of any event or circumstance
referred to in the foregoing clauses (a) through (j) of this Section 4.

§5. Unenforceability of Obligations Against Cartus. Notwithstanding (a) any
change of ownership of Cartus or any Insolvency Proceeding with respect to
Cartus or any other change in the legal status of Cartus; (b) the change in or
the imposition of any law, decree, regulation or other governmental act that
does or might impair, delay or in any way affect the validity, enforceability or
the payment when due of the Obligations; (c) the failure of Cartus or the
Performance Guarantor to maintain in full force, validity or effect or to obtain
or renew when required all governmental and other approvals, licenses or
consents required in connection with the Obligations or this Guaranty, or to
take any other action required in connection with the performance of all
obligations pursuant to the Obligations or this Guaranty; or (d) if any of the
moneys included in the Obligations have become irrecoverable from Cartus for any
other reason other than final payment in full of the payment Obligations in
accordance with their terms, this Guaranty shall nevertheless be binding on the
Performance Guarantor. This Guaranty shall be in addition to any other guaranty
or other security for the Obligations, and it shall not be rendered
unenforceable by the invalidity of any such other guaranty or security. In the
event of acceleration of the time for payment of any of the Obligations, such
amounts then due and owing under the terms of the Purchase Agreement or the
Transfer and Servicing Agreement in connection with the Obligations shall be
immediately due and payable by the Performance Guarantor.

 

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§6. Representations and Warranties. The Performance Guarantor represents and
warrants that:

(a) Organization and Good Standing. The Performance Guarantor is a corporation
duly organized and validly existing in good standing under the laws of the State
of Delaware and has full power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted.

(b) Due Qualification. The Performance Guarantor is duly qualified to do
business and is in good standing as a foreign corporation, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such qualification,
licenses or approvals and where the failure so to qualify to obtain such
licenses and approvals or to preserve and maintain such qualification, licenses
or approvals could reasonably be expected to give rise to a material adverse
effect with respect to the Performance Guarantor.

(c) Power and Authority; Due Authorization. The Performance Guarantor has
(i) all necessary corporate power and authority to execute and deliver this
Guaranty and to perform all its obligations hereunder and (ii) duly authorized
by all necessary corporate action the execution, delivery and performance of
this Guaranty.

(d) Binding Obligations. This Guaranty constitutes the legal, valid and binding
obligation of the Performance Guarantor, enforceable against the Performance
Guarantor in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.

(e) No Conflict or Violation. The execution, delivery and performance of this
Guaranty, and the fulfillment of the terms hereof, will not (i) conflict with,
violate, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
(A) the certificate of incorporation or the bylaws of the Performance Guarantor
or (B) any indenture, loan agreement, mortgage, deed of trust, or other material
agreement or instrument to which the Performance Guarantor is a party or by
which it or any of its properties is bound or (ii) conflict with or violate any
federal, state, local or foreign law or any decision, decree, order, rule or
regulation applicable to the Performance Guarantor or any of its properties of
any court or of any federal, state, local or foreign regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Performance Guarantor or any of its properties, which conflict or
violation described in this clause (ii), individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the ability of the
Performance Guarantor to perform its obligations under this Guaranty or the
validity of enforceability of this Guaranty.

§7. Subordination. The payment of any amounts due with respect to any
indebtedness of Cartus now or hereafter owed to the Performance Guarantor is
hereby subordinated to the prior payment in full of all the Obligations. The
Performance Guarantor

 

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agrees that, after the occurrence and during the continuation of a Cartus
Purchase Termination Event or a Servicer Default or an Unmatured Servicer
Default (so long as Cartus is the Servicer), the Performance Guarantor will not
demand, sue for or otherwise attempt to collect any such indebtedness of Cartus
to it until all of the Obligations shall have been paid and performed in full.
If, notwithstanding the foregoing sentence, the Performance Guarantor shall
collect, enforce or receive any amounts in respect of such indebtedness while
any Obligations are still unperformed or outstanding, such amounts shall be
collected, enforced and received by the Performance Guarantor as trustee for the
Guarantied Parties and be paid over to the Indenture Trustee on account of the
Obligations without affecting in any manner the liability of the Performance
Guarantor under the other provisions of this Guaranty. The provisions of this
Section 7 shall be supplemental to and not in derogation of any rights and
remedies which any Guarantied Party may at any time and from time to time have
with respect to the Performance Guarantor.

§8. Performance Guarantor’s Acknowledgment and Agreements.

(a) The Performance Guarantor hereby acknowledges that the Guarantied Parties
entered into the transactions contemplated by the Transaction Documents in
reliance upon the identity of ARSC, the Issuer and CFC, as a legal entity
separate from Cartus and the other CMS Persons. Therefore, from and after the
date hereof until one year and one day after the Final Payout Date, the
Performance Guarantor will, and will cause each of its Subsidiaries and
Affiliates (other than CFC, ARSC and the Issuer) to, take such actions as shall
be required in order that the covenants set forth in Section 7.1(e) of the
Purchase Agreement are complied with at all times. The Issuer will become and
then shall be at all times a wholly-owned subsidiary of the Performance
Guarantor.

(b) The Performance Guarantor will make available to Cartus and its subsidiaries
and any successor Servicer appointed pursuant to the Transfer and Servicing
Agreement (each, a “Requesting Person”) all computer equipment services
requested or required by a Requesting Person in order to perform such Requesting
Person’s duties and exercise its rights under the Transaction Documents so long
as such Requesting Person pays the Performance Guarantor a reasonable fee per
annum for the equipment services provided; provided, however, that with respect
to any computer software licensed from a third party, the Performance Guarantor
will be required to make such licenses, sublicenses and/or assignments of such
software available only to the extent that provision of the same would not
violate the terms of any contracts of Cartus or the Performance Guarantor or any
Affiliate thereof with such third party.

(c) The Performance Guarantor agrees that, if at any time after the Effective
Date the Issuer ceases to be a wholly-owned subsidiary of the Performance
Guarantor, then, in such event, the Performance Guarantor shall cause to be
executed a tax sharing agreement between the Issuer and the ultimate parent of
the Issuer, in form and substance satisfactory to the Majority Investors.

(d) The Performance Guarantor covenants and agrees to furnish to the “Managing
Agents” (as defined in the Note Purchase Agreement for Series 2005-1 (such,
agreement, the “Note Purchase Agreement”)) and to the Issuer (i) notice of the
occurrence of

 

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any event which has had or would reasonably be expected to have a material
adverse effect on its condition or operations, financial or otherwise, and
(ii) those financial statements of the Performance Guarantor required by
Sections 5.01(c)(vi) and (vii) of the Note Purchase Agreement.

§9. Termination of Guaranty. The Performance Guarantor’s obligations hereunder
shall continue in full force and effect until the date that is one year and one
day after the Final Payout Date, provided that this Guaranty shall continue to
be effective or shall be reinstated, as the case may be, if at any time payment
or other satisfaction of any of the Obligations is rescinded or must otherwise
be restored or returned in connection with any Insolvency Proceeding with
respect to Cartus or any other Person, or otherwise, as though such payment had
not been made or other satisfaction occurred, whether or not any Guarantied
Party is in possession of this Guaranty. No invalidity, irregularity or
unenforceability by reason of the Bankruptcy Code or any insolvency or other
similar law, or any law or order of any government or agency thereof purporting
to reduce, amend or otherwise affect the Obligations shall impair, affect, be a
defense to or claim against the obligations of the Performance Guarantor under
this Guaranty.

§10. Effect of Bankruptcy. This Guaranty shall survive the occurrence of any
Insolvency Proceeding with respect to Cartus or any other Person. No automatic
stay under the Bankruptcy Code or other federal, state or other applicable
bankruptcy, insolvency or reorganization statutes to which Cartus is subject
shall postpone the obligations of the Performance Guarantor under this Guaranty.

§11. Successors and Assigns. This Guaranty shall be binding upon the Performance
Guarantor and its successors and assigns, and shall inure to the benefit of and
be enforceable by CFC, ARSC, the Issuer, the Indenture Trustee and their
respective successors, transferees and assigns. The Performance Guarantor hereby
acknowledges that this Guaranty will be assigned by the Issuer to the Indenture
Trustee. The Performance Guarantor may not assign or transfer any of its
obligations hereunder without the prior written consent of CFC, the Issuer and
the Indenture Trustee, acting at the direction of the Majority Investors.
Without limiting the generality of the foregoing sentence, each Guarantied Party
may, to the extent permitted by the Transaction Documents, assign or otherwise
transfer all or any portion of its rights and obligations under the Transaction
Documents, or sell participations in any interest therein, to any other entity
or other Person, and such other entity or other Person shall thereupon become
vested, to the extent set forth in the agreement evidencing such assignment,
transfer or participation, with all the rights in respect thereof granted to
such Guarantied Party herein.

§12. Amendments and Waivers. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Performance Guarantor therefrom
shall be effective unless the same shall be in writing and signed by CFC, the
Issuer and the Indenture Trustee, acting at the direction of the Majority
Investors. No failure on the part of any Guarantied Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.

 

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§13. Notices. All notices and other communications called for hereunder shall be
made in writing and, unless otherwise specifically provided herein, shall be
deemed to have been duly made or given when delivered by hand or mailed first
class, postage prepaid, or, in the case of telegraphic, telecopied or telexed
notice, when transmitted, answer back received, addressed as follows: (i) if to
the Performance Guarantor, 1 Campus Drive, Parsippany, New Jersey 07054,
Attention: Treasurer, (ii) if to CFC, at its address for notices set forth in
the Purchase Agreement, (iii) if to the Issuer, to its address for notices set
forth in the Indenture and (iv) if to the Indenture Trustee, to its address for
notices set forth in the Indenture.

§14. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING §5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.

§15. SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW YORK OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER TRANSACTION
DOCUMENT, AND HEREBY (a) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
FEDERAL COURT; (b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; AND (c) IN THE CASE OF THE PERFORMANCE GUARANTOR, IRREVOCABLY
APPOINTS CORPORATION SERVICE COMPANY (THE “PROCESS AGENT”), WITH AN OFFICE ON
THE DATE HEREOF AT 80 STATE STREET, ALBANY, NEW YORK 12207-2543, UNITED STATES
OF AMERICA, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTY SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING
A COPY OF SUCH PROCESS TO THE PERFORMANCE GUARANTOR IN CARE OF THE PROCESS AGENT
AT THE PROCESS AGENT’S ABOVE ADDRESS, AND THE PERFORMANCE GUARANTOR HEREBY
IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON
ITS BEHALF. THE PERFORMANCE GUARANTOR AGREES TO ENTER INTO ANY AGREEMENT
RELATING TO SUCH APPOINTMENT WHICH THE PROCESS AGENT MAY CUSTOMARILY REQUIRE,
AND TO PAY THE PROCESS AGENT’S CUSTOMARY FEES UPON DEMAND. AS AN ALTERNATIVE
METHOD OF SERVICE, THE PERFORMANCE GUARANTOR ALSO IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OF SUCH PROCESS TO THE
PERFORMANCE GUARANTOR AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS SECTION
15 SHALL AFFECT THE RIGHT OF EITHER PARTY HERETO TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF EITHER PARTY HERETO TO
BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY HERETO OR ANY OF ITS
PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.

 

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§16. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO
THIS GUARANTY, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE
PARTIES HERETO OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

§17. Miscellaneous. This Guaranty constitutes the entire agreement of the
Performance Guarantor with respect to the matters set forth herein. No failure
on the part of any Guarantied Party to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies herein
provided are cumulative and not exclusive of any remedies provided by law or any
other agreement, and this Guaranty shall be in addition to any other guaranty of
or collateral security for any of the Obligations. The provisions of this
Guaranty are severable, and in any action or proceeding involving any state
corporate law, or any state or federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of the
Performance Guarantor hereunder would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of the Performance
Guaranty, the amount of such liability shall, without any further action by the
Performance Guarantor, CFC or the Issuer be automatically limited and reduced to
the highest amount that is valid and enforceable as determined in such action or
proceeding. The invalidity or unenforceability of any one or more sections of
this Guaranty shall not affect the validity or enforceability of its remaining
provisions. Captions are for ease of reference only and shall not affect the
meaning of the relevant provisions. The meanings of all defined terms used in
this Guaranty shall be equally applicable to the singular and plural forms of
the terms defined.

 

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IN WITNESS WHEREOF, the Performance Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.

 

REALOGY CORPORATION By:    

Name:

Title:

 

 

Acknowledged and Accepted as

of this          day of May, 2006

 

CARTUS FINANCIAL CORPORATION

By    

Name:

Title:

 

 

APPLE RIDGE FUNDING LLC,

as Issuer

By    

Name:

Title:

 

Signature Page to Performance Guaranty