Exhibit 10.2


 


EXECUTION VERSION


 




 





U.S.
$34,891,977.97


 


CREDIT
AGREEMENT


 


by and among


 


FCC
FINANCE, LLC,
 as the Servicer


 


FCC
INVESTMENT TRUST I,
 as the Borrower


 


FORTRESS
CREDIT CO LLC,
 as a Lender and as the Administrative Agent


 


U.S. BANK
NATIONAL ASSOCIATION,
 as the Collateral Custodian


 


and


 


LYON
FINANCIAL SERVICES, INC. 

(d/b/a U.S. BANK PORTFOLIO SERVICES),

as the Backup Servicer


 


Dated as of November 10,
2008




 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
  Section 1.1.

  	
  Certain
  Defined Terms

  	
  1

  
	
  Section 1.2.

  	
  Other Terms

  	
  26

  
	
  Section 1.3.

  	
  Computation
  of Time Periods

  	
  26

  
	
  Section 1.4.

  	
  Interpretation

  	
  26

  
	
  ARTICLE II

  	
  THE NOTE

  	
  27

  
	
  Section 2.1.

  	
  The Note

  	
  27

  
	
  Section 2.2.

  	
  [Reserved]

  	
  28

  
	
  Section 2.3.

  	
  Determination
  of Interest

  	
  28

  
	
  Section 2.4.

  	
  Notations on
  the Note

  	
  28

  
	
  Section 2.5.

  	
  Principal
  Repayments

  	
  28

  
	
  Section 2.6.

  	
  Settlement
  Procedures

  	
  29

  
	
  Section 2.7.

  	
  Collections
  and Allocations

  	
  30

  
	
  Section 2.8.

  	
  Payments,
  Computations, Etc

  	
  31

  
	
  Section 2.9.

  	
  [Reserved]

  	
  31

  
	
  Section 2.10.

  	
  Increased
  Costs; Capital Adequacy; Illegality

  	
  31

  
	
  Section 2.11.

  	
  Taxes

  	
  32

  
	
  Section 2.12.

  	
  Assignment
  of the Contractor Sale Agreements

  	
  33

  
	
  ARTICLE III

  	
  CONDITIONS
  TO CLOSING

  	
  34

  
	
  Section 3.1.

  	
  Conditions
  to Closing

  	
  34

  
	
  Section 3.2.

  	
  Permitted
  Investments

  	
  35

  
	
  ARTICLE IV

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  36

  
	
  Section 4.1.

  	
  Representations
  and Warranties of the Borrower

  	
  36

  
	
  Section 4.2.

  	
  Representations
  and Warranties of the Servicer

  	
  41

  
	
  Section 4.3.

  	
  [Reserved]

  	
  43

  
	
  Section 4.4.

  	
  Representations
  and Warranties of the Backup Servicer

  	
  43

  
	
  Section 4.5.

  	
  Representations
  and Warranties of the Collateral Custodian

  	
  44

  
	
  ARTICLE V

  	
  GENERAL
  COVENANTS

  	
  45

  
	
  Section 5.1.

  	
  Affirmative
  Covenants of the Borrower

  	
  45

  
	
  Section 5.2.

  	
  Negative
  Covenants of the Borrower

  	
  48

  
					



 


i

















 


TABLE OF
CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 5.3.

  	
  Affirmative
  Covenants of the Servicer

  	
  51

  
	
  Section 5.4.

  	
  Negative
  Covenants of the Servicer

  	
  54

  
	
  Section 5.5.

  	
  [Reserved]

  	
  55

  
	
  Section 5.6.

  	
  [Reserved]

  	
  55

  
	
  Section 5.7.

  	
  Affirmative
  Covenants of the Backup Servicer

  	
  55

  
	
  Section 5.8.

  	
  Negative
  Covenants of the Backup Servicer

  	
  55

  
	
  Section 5.9.

  	
  Affirmative
  Covenants of the Collateral Custodian

  	
  55

  
	
  Section 5.10.

  	
  Negative
  Covenants of the Collateral Custodian

  	
  56

  
	
  ARTICLE VI

  	
  ADMINISTRATION
  AND SERVICING OF CONTRACTS

  	
  56

  
	
  Section 6.1.

  	
  Designation
  of the Servicer

  	
  56

  
	
  Section 6.2.

  	
  Duties of
  the Servicer

  	
  57

  
	
  Section 6.3.

  	
  Authorization
  of the Servicer

  	
  58

  
	
  Section 6.4.

  	
  Collection
  of Payments; Accounts

  	
  59

  
	
  Section 6.5.

  	
  Realization
  Upon Defaulted Receivables

  	
  61

  
	
  Section 6.6.

  	
  Servicing
  Compensation

  	
  61

  
	
  Section 6.7.

  	
  Payment of
  Certain Expenses by the Servicer

  	
  61

  
	
  Section 6.8.

  	
  Reports

  	
  61

  
	
  Section 6.9.

  	
  Annual
  Statement as to Compliance

  	
  62

  
	
  Section 6.10.

  	
  Reserved

  	
  62

  
	
  Section 6.11.

  	
  The Servicer
  Not to Resign

  	
  62

  
	
  Section 6.12.

  	
  Servicer Defaults

  	
  63

  
	
  Section 6.13.

  	
  Appointment
  of Successor Servicer

  	
  64

  
	
  ARTICLE VII

  	
  THE BACKUP
  SERVICER

  	
  68

  
	
  Section 7.1.

  	
  Designation
  of the Backup Servicer

  	
  68

  
	
  Section 7.2.

  	
  Duties of
  the Backup Servicer

  	
  68

  
	
  Section 7.3.

  	
  Merger or
  Consolidation

  	
  69

  
	
  Section 7.4.

  	
  Backup
  Servicing Compensation

  	
  70

  
	
  Section 7.5.

  	
  Backup
  Servicer Removal

  	
  70

  
	
  Section 7.6.

  	
  Limitation
  on Liability

  	
  70

  
	
  Section 7.7.

  	
  Backup
  Servicer Resignation

  	
  71

  
					



 


ii

















 


TABLE OF
CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  THE
  COLLATERAL CUSTODIAN

  	
  72

  
	
  Section 8.1.

  	
  Designation
  of Collateral Custodian

  	
  72

  
	
  Section 8.2.

  	
  Duties of
  Collateral Custodian

  	
  72

  
	
  Section 8.3.

  	
  Merger or
  Consolidation

  	
  73

  
	
  Section 8.4.

  	
  Collateral
  Custodian Compensation

  	
  73

  
	
  Section 8.5.

  	
  Collateral Custodian
  Removal

  	
  73

  
	
  Section 8.6.

  	
  Limitation
  on Liability

  	
  74

  
	
  Section 8.7.

  	
  The
  Collateral Custodian Not to Resign

  	
  75

  
	
  Section 8.8.

  	
  Release of
  Documents

  	
  75

  
	
  Section 8.9.

  	
  Return of
  Required Receivable Files and Servicing Files

  	
  75

  
	
  Section 8.10.

  	
  Access to
  Certain Documentation and Information Regarding the Collateral; Audits

  	
  76

  
	
  ARTICLE IX

  	
  SECURITY
  INTEREST

  	
  77

  
	
  Section 9.1.

  	
  Grant of
  Security Interest

  	
  77

  
	
  Section 9.2.

  	
  Release of
  Lien on Collateral

  	
  78

  
	
  Section 9.3.

  	
  Further
  Assurances

  	
  78

  
	
  Section 9.4.

  	
  Remedies

  	
  78

  
	
  Section 9.5.

  	
  Waiver of
  Certain Laws

  	
  78

  
	
  Section 9.6.

  	
  Power of
  Attorney

  	
  79

  
	
  ARTICLE X

  	
  EVENTS OF
  DEFAULT

  	
  79

  
	
  Section 10.1.

  	
  Events of
  Default

  	
  79

  
	
  Section 10.2.

  	
  Remedies

  	
  82

  
	
  ARTICLE XI

  	
  INDEMNIFICATION

  	
  83

  
	
  Section 11.1.

  	
  Indemnities
  by the Borrower

  	
  83

  
	
  Section 11.2.

  	
  Indemnities
  by the Servicer

  	
  85

  
	
  ARTICLE XII

  	
  THE
  ADMINISTRATIVE AGENT

  	
  86

  
	
  Section 12.1.

  	
  The
  Administrative Agent

  	
  86

  
	
  ARTICLE XIII

  	
  MISCELLANEOUS

  	
  89

  
	
  Section 13.1.

  	
  Amendments
  and Waivers

  	
  89

  
	
  Section 13.2.

  	
  Notices, Etc

  	
  89

  
					



 


iii

















 


TABLE OF
CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 13.3.

  	
  Ratable
  Payments

  	
  89

  
	
  Section 13.4.

  	
  No Waiver;
  Remedies

  	
  89

  
	
  Section 13.5.

  	
  Binding
  Effect; Benefit of Agreement

  	
  90

  
	
  Section 13.6.

  	
  Term of this
  Agreement

  	
  90

  
	
  Section 13.7.

  	
  Governing
  Law; Consent to Jurisdiction; Waiver of Objection to Venue

  	
  90

  
	
  Section 13.8.

  	
  Waiver of
  Jury Trial

  	
  90

  
	
  Section 13.9.

  	
  Costs,
  Expenses and Taxes

  	
  91

  
	
  Section 13.10.

  	
  No
  Proceedings

  	
  91

  
	
  Section 13.11.

  	
  Recourse
  Against Certain Parties

  	
  91

  
	
  Section 13.12.

  	
  Protection
  of Right, Title and Interest in the Collateral; Further Action Evidencing
  Loans

  	
  92

  
	
  Section 13.13.

  	
  Confidentiality

  	
  93

  
	
  Section 13.14.

  	
  Execution in
  Counterparts; Severability; Integration

  	
  94

  
	
  Section 13.15.

  	
  Waiver of
  Setoff

  	
  95

  
	
  Section 13.16.

  	
  Assignments
  by the Lenders

  	
  95

  
	
  Section 13.17.

  	
  Heading and
  Exhibits

  	
  95

  
				



 


iv

















 


EXHIBITS


 


	
  EXHIBIT A

  	
  Form of
  Borrowing Base Certificate

  	
   

  
	
  EXHIBIT B

  	
  Form of Note

  	
   

  
	
  EXHIBIT C

  	
  Form of
  Servicing Report

  	
   

  
	
  EXHIBIT D

  	
  Form of
  Officer’s Certificate as to Solvency (Borrower)

  	
   

  
	
  EXHIBIT E-1

  	
  Form of
  Officer’s Closing Certificate (Borrower)

  	
   

  
	
  EXHIBIT E-2

  	
  Form of
  Officer’s Closing Certificate (Servicer)

  	
   

  
	
  EXHIBIT F-1

  	
  Form of
  Power of Attorney (Borrower)

  	
   

  
	
  EXHIBIT F-2

  	
  Form of
  Power of Attorney (Servicer)

  	
   

  
	
  EXHIBIT G

  	
  Form of
  Release of Required Receivable File

  	
   

  
	
  EXHIBIT H

  	
  Form of
  Servicer’s Certificate

  	
   

  
	
  EXHIBIT I

  	
  Form of
  Joinder Supplement

  	
   

  
	
  EXHIBIT J

  	
  Form of
  Backup Servicer Monthly Certification

  	
   

  
	
  EXHIBIT K

  	
  [Reserved]

  	
   

  
	
  EXHIBIT L

  	
  [Reserved]

  	
   

  
	
  EXHIBIT M

  	
  [Reserved]

  	
   

  



 


SCHEDULES


 


	
  SCHEDULE I

  	
  Condition
  Precedent Documents

  	
   

  
	
  SCHEDULE II

  	
  [Reserved]

  	
   

  
	
  SCHEDULE III

  	
  Location of
  Required Receivable Files

  	
   

  
	
  SCHEDULE IV

  	
  Receivable
  List

  	
   

  
	
  SCHEDULE V

  	
  Credit and
  Collection Policy

  	
   

  
	
  SCHEDULE VI

  	
  [Reserved]

  	
   

  
	
  SCHEDULE VII

  	
  [Reserved]

  	
   

  
	
  SCHEDULE VIII

  	
  Lockbox
  Accounts

  	
   

  
	
  SCHEDULE IX

  	
  Concentration
  Account

  	
   

  



 


ANNEXES


 


	
  ANNEX A

  	
  Addresses
  for Notices

  	
   

  
	
  ANNEX B

  	
  Lender
  Percentages

  	
   

  



 


v

















 


CREDIT AGREEMENT


 


THIS CREDIT AGREEMENT (as amended, modified, waived, supplemented, restated or replaced
from time to time, this “Agreement”) is made as of this November 10,
2008, by and among:


 


(1)           FCC INVESTMENT TRUST I,
a Delaware statutory trust, as the borrower (together with its successors and
assigns in such capacity, the “Borrower”);


 


(2)           FORTRESS CREDIT CO LLC (“Fortress”),
a Delaware limited liability company, as the administrative agent (together
with its successors and assigns in such capacity, the “Administrative Agent”),
and as a lender (together with its successors and assigns in such capacity, a “Lender”,
and together with such other lenders from time to time party hereto, the “Lenders”);


 


(3)           FCC FINANCE, LLC,  a Delaware limited liability company, as the servicer
(together with its successors and assigns in such capacity, the “Servicer”);


 


(4)           LYON FINANCIAL SERVICES,
INC. (d/b/a U.S. Bank Portfolio Services), a Minnesota corporation,
as the backup servicer (together with its successors and assigns in such
capacity, the “Backup Servicer”); and


 


(5)           U.S. BANK NATIONAL
ASSOCIATION, a national banking association, not in its individual
capacity but as the collateral custodian (together with its successors and
assigns in such capacity, the “Collateral Custodian”).


 


R E C I T A L S


 


WHEREAS, the Borrower has requested the
Lenders, and the Lenders have agreed, subject to the terms and conditions
contained in this Agreement, to extend financing to the Borrower on the terms
and conditions set forth in this Agreement to be secured by the Collateral (as
defined below) during the term of this Agreement.


 


NOW, THEREFORE, based upon the foregoing
Recitals, the mutual premises and agreements contained herein, and other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:


 


ARTICLE I



DEFINITIONS


 


Section 1.1.                                          Certain
Defined Terms.


 


Certain
capitalized terms used throughout this Agreement are defined in this Section 1.1.  As used in this Agreement and its schedules,
exhibits and other attachments, unless the context requires a different
meaning, the following terms shall have the following meanings:


 

















 


“1940 Act”:  The Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder.


 


“Account”:  The Collection Account and any sub-accounts
thereof deemed appropriate or necessary by the Administrative Agent for
convenience in administering such accounts.


 


“Accrual
Period”:  With respect to the Loan, (a) with
respect to the first Payment Date, the period from and including the Closing
Date to and including the last day of the calendar month preceding the first
Payment Date and (b) with respect to any subsequent Payment Date, the
preceding calendar month; provided that
on the date of any repayment in full of the Loan, the final Accrual Period
shall extend to the date of repayment.


 


“Additional
Amount”:  Defined in Section 2.11(a).


 


“Administrative
Agent”:  Defined in the Preamble.


 


“Affiliate”:  With respect to a Person, means any other
Person that, directly or indirectly, controls, is controlled by or is under
common control with such Person.  For
purposes of this definition, “control,” when used with respect to any specified
Person means the possession, directly or indirectly, of the power to vote 25%
or more of the voting securities of such Person or to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.


 


“Aggregate
Outstanding Receivable Balance”:  On
any date of determination, the sum of the Outstanding Receivable Balances of
all Eligible Receivables on such date.


 


“Aggregate
Unpaids”:  At any time, an amount
equal to the sum of the unpaid Outstanding Loan Balance, Interest and all other
amounts owed by the Borrower to the Servicer, the Backup Servicer, the
Collateral Custodian and the Secured Parties hereunder or by the Borrower under
any fee letter delivered in connection with the transactions contemplated by
this Agreement, in each case, whether due or accrued.


 


“Annualized
Default Rate”:  As of any date of
determination, the percentage equivalent of a fraction, (a) the numerator
of which is equal to the product of (i) the Outstanding Receivable Balance
of all Receivables that became Defaulted Receivables during the prior
Collection Period and (ii) 12, and (b) the denominator of which is
the Outstanding Receivable Balance of all Receivables which were Eligible
Receivables as of the first day of such Collection Period.


 


“Applicable
Law”:  For any Person or property of
such Person, all then-existing (as of any date of determination) laws, rules,
regulations (including income tax regulations), statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations
by any Governmental Authority which are applicable to such Person or property
(including, without limitation, predatory lending laws, usury laws, the Federal
Truth in Lending Act, and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System), and applicable judgments, decrees,
injunctions, writs, awards or orders (with respect to the Borrower, since the
Closing Date) of any court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction.


 


2

















 


“Approved
Fund”:  Any Person (other than a
natural person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business, that is managed by: (a) a Lender or (b) an
Affiliate of a Lender.


 


“Available
Funds”:  With respect to any Payment
Date, all amounts on deposit in the Collection Account (including, without
limitation, any Collections).


 


“Backup
Servicer”:  Defined in the Preamble.


 


“Backup
Servicer Fee Letter”:  The Backup
Servicer Fee Letter, dated as of the date hereof, by and between the Borrower,
the Servicer, the Backup Servicer and the Administrative Agent.


 


“Backup
Servicer Monthly Certification”: 
Defined in Section 7.2(b)(iii).


 


“Backup
Servicer Termination Notice”: 
Defined in Section 7.5.


 


“Backup
Servicing Fee”:  The fee set forth as
such in the Backup Servicer Fee Letter.


 


“Backup Servicing
Fee Rate”:  0.0425% or such other
rate consented to in writing by the Borrower, the Backup Servicer and the
Administrative Agent.


 


“Bailee”:  Defined in Section 8.2(b)(i).


 


“Bankruptcy
Code”:  The United States bankruptcy
code, as set forth in Title 11 of the United States Code, as amended from time
to time.


 


“Benefit
Plan”:  Any “employee benefit plan”
as defined in Title IV of ERISA in respect of which the Borrower or any ERISA
Affiliate of the Borrower is, or at any time during the preceding six years
was, an “employer” as defined in Title IV of ERISA.


 


“Borrower”:  Defined in the Preamble.


 


“Borrowing
Base”:  As of any Measurement Date,
an amount equal to the sum of (a) the Maximum Advance and (b)(i) the
amount on deposit on such date in the Collection Account as of the last day of
the related Collection Period, minus (ii) all
accrued but unpaid Interest and fees owed to the Lenders as of the last day of
the related Collection Period minus (iii) without
duplication, all accrued but unpaid Carrying Costs as of the last day of the
related Collection Period.


 


“Borrowing
Base Certificate”:  Each certificate,
in the form of Exhibit A, required to be delivered by the Servicer,
on behalf of the Borrower, on each Measurement Date.


 


“Borrowing
Base Deficiency”:  The amount (if
any) by which the Outstanding Loan Balance exceeds the Borrowing Base.


 


3

















 


“Business
Day”:  Any day (other than a Saturday
or a Sunday) on which banks are not required or authorized to be closed in New
York, New York or Minneapolis, Minnesota.


 


“Carrying
Costs”:  As of any Measurement Date,
for the most recently ended Collection Period, the sum of the following, to the
extent then accrued and unpaid: (a) the Servicing Fee, (b) the Backup
Servicing Fee, (c) the Collateral Custodian Fee and (d) the Owner
Trustee Fee.


 


“Certificated
Security”:  The meaning specified in Section 8-102(a)(4) of
the UCC.


 


“Change of
Control”:  Any of the following:


 


(a)           the failure of CLST to own, directly
or indirectly, 100% of the equity interests in the Borrower free and clear of
any Lien (other than Permitted Liens); or


 


(b)           any change in the management of the
Borrower, or, if Fair is the Servicer, Fair (including by resignation,
termination, disability or death) the result of which is that either John Head
or Rick Snow is no longer under the employ of Fair or fails to provide active
and material participation in the activities of Fair (including, but not
limited to, general management, underwriting and the credit approval process
and credit monitoring activities), for a period of three consecutive calendar
months, and in such event, a reputable, experienced individual(s), reasonably
satisfactory to the Administrative Agent, has not been appointed to fulfill the
duties of the departing executive within 60 days after the end of such
three-month period.


 


“Change of
Tax Law”:  Any change in application
or public announcement of an official position under or any change in or
amendment to the laws (or any regulations or rulings promulgated thereunder) of
any jurisdiction, or any political subdivision or taxing authority of any of
the foregoing, affecting taxation, or any change in the official application,
enforcement or interpretation of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction), or any other action taken by a
taxing authority or court of competent jurisdiction in the relevant
jurisdiction.


 


“Clearing
Agency”:  An organization registered
as a “clearing agency” pursuant to Section 17A of the Exchange Act.


 


“Clearing
Corporation”:  The meaning specified
in Section 8-102(a)(5) of the UCC.


 


“Closing
Date”:  November 10, 2008.


 


“CLST”:  CLST Asset I, LLC, a Delaware limited
liability company.


 


“Code”:  The Internal Revenue Code of 1986, as amended
from time to time.


 


“Collateral”:  All right, title, and interest (whether now
owned or hereafter acquired or arising, and wherever located) of the Borrower
in the property identified in clauses (a) through (c) below
and all accounts, cash and currency, chattel paper, tangible chattel paper,
electronic chattel paper, copyrights, copyright licenses, equipment, fixtures,
contract rights, general intangibles, instruments, certificates of deposit,
certificated securities, uncertificated securities, financial assets,
securities entitlements, commercial tort claims, deposit accounts, inventory,


 


4
















 


investment property, letter-of-credit rights, software, supporting
obligations, accessions, and other property of the Borrower consisting of,
arising out of, or related to any of the following (in each case excluding any
Excluded Amounts):


 


(a)           the Receivables (regardless of
whether any such Receivable has been identified on any Receivables List and
regardless of whether any Required Receivable File with respect thereto have
been delivered to the Collateral Custodian), and all monies due or to become
due in payment under such Receivables, including, but not limited to, all
Collections;


 


(b)           all Related Security with respect to
the Receivables referred to in clause (a); and


 


(c)           all income and Proceeds of the
foregoing;


 


it being understood that (i) “Collateral” does
not include any Related Security to the extent that the grant of a security
interest therein would constitute a violation of any law, regulation, permit,
order or decree of any Governmental Authority or a violation of any restriction
in favor of a third party (such as software licenses), unless and until all
required consents shall have been obtained and (ii) notwithstanding
anything herein to the contrary, no security interest or Lien is created by
this Agreement in any property not included in this definition of “Collateral”.


 


“Collateral
Custodian”:  Defined in the Preamble.


 


“Collateral
Custodian Fee”:  The fee set forth as
such in the Collateral Custodian Fee Letter.


 


“Collateral
Custodian Fee Letter”:  The
Collateral Custodian Fee Letter, dated as of the date hereof, by and among the
Borrower, the Servicer, the Administrative Agent and the Collateral Custodian.


 


“Collateral
Custodian Termination Notice”: 
Defined in Section 8.5.


 


“Collection
Account”:  Defined in Section 6.4(h).


 


“Collection
Date”:  The date on or following the
Termination Date on which the Aggregate Unpaids have been paid in full.


 


“Collection
Period”:  With respect to the first
Payment Date, the period from and including the Closing Date to and including
the last day of the calendar month immediately preceding the calendar month in
which the first Payment Date occurs; and thereafter, the calendar month
immediately preceding the then current Payment Date.


 


“Collections”:  (a) All cash collections and other cash
proceeds of any Receivable, including, without limitation or duplication, any (i) Interest
Collections, (ii) Principal Collections, (iii) amendment fees, late
fees, prepayment fees or waiver fees payable in accordance with the Underlying
Instruments with respect to such Receivable (including all Obligor Charges), (iv) Recoveries,
Insurance Proceeds and Guaranty Amounts or (v) other amounts received in
respect thereof (but excluding any Excluded Amounts), (b) interest
earnings on Permitted Investments or otherwise in any Account, (c) any
cash proceeds or other funds 


 


5

















 


received by the Borrower or the Servicer with respect to any Related
Security (including from any guarantors) and (d) all payments from any
Contractor in connection with its obligations under a Contractor Sale
Agreement.


 


“Completion
Certificate”: A certificate, executed in accordance with the Credit and
Collection Policy, with respect to which the Obligor and the Contractor related
to the applicable Receivable certify, among other things, that the related home
improvement has been fully completed to such Obligor’s satisfaction.


 


“Concentration
Account”:  That separate account
maintained by the Servicer at a Concentration Account Bank, subject to the
Concentration Account Agreement, for the purpose of receiving Collections from
the applicable Lockbox Accounts, the details of which are set forth on Schedule
IX.


 


“Concentration
Account Bank”:  The financial
institution listed as Concentration Account Bank on Schedule IX.


 


“Concentration
Account Agreement”:  That certain
Intercreditor and Concentration Account Administration Agreement, dated as of
the Closing Date, among the Servicer, the Collateral Custodian and such other
parties thereto, which pertains to the Concentration Account maintained by the
Servicer.


 


“Continued
Errors”:  Defined in Section 6.13(g).


 


“Contract”: A Mortgage
Contract, a Non-Mortgage Contract or any other form of retail installment
contract.


 


“Contractor”: The Person
that enters into a Contract with an Obligor to provide the home improvement
services specified therein.


 


“Contractor Sale Agreement”:
A “Continuous Buy-Sell Agreement” entered into by First Consumer Credit, Inc.
(or FCC Finance, LLC as successor thereto) with a Contractor, whereby First
Consumer Credit, Inc. (or FCC Finance, LLC as successor thereto) agreed to
advance the purchase price of a Contract to such Contractor, for the benefit of
the original lender thereunder, together with all schedules, supplements and
amendments thereto and each other document and instrument related thereto.


 


“Contractual
Obligation”:  With respect to any
Person, any material provision of any securities issued by such Person or of
any material indenture, mortgage, deed of trust, contract, undertaking, agreement,
instrument or other document to which such Person is a party or by which it or
any of its property is bound or to which either is subject.


 


“Credit and
Collection Policy”:  With respect to
the initial Servicer, the written credit policies and procedures manual of FCC
Finance, LLC set forth on Schedule V, as such credit and collection
policy may be amended or supplemented from time to time in accordance with Section 5.3(f),
or, with respect to the Backup Servicer or any successor Servicer, the customary
collection policies and procedures of such successor Servicer (including Fair
in such capacity).


 


6

















 


“Current
Bankrupt Receivable”:  An Eligible
Receivable as to which the Obligor thereof is either not Solvent or is subject
to an Insolvency Event but has timely made all Scheduled Payments with respect
to such Receivable.


 


“Cut-Off
Date”:  With respect to any
Receivable, the date on which such Receivable becomes part of the Collateral.


 


“Default
Rate”:  A per annum
interest rate equal to the sum of the applicable LIBOR Rate and 7.00%.


 


“Defaulted
Receivable”:  A Receivable as to
which any of the following has occurred: 
(a) all or any portion of a contractual payment due under such
Receivable is 121 or more days past due, (b) the payment terms
related to such Receivable have been restructured or modified (other than (A) as
permitted by the Credit and Collection Policy or (B) with the consent of
the Administrative Agent, in its sole discretion) in any way due to credit
reasons or for the purpose of preventing such Receivable from becoming a
Defaulted Receivable after the Closing Date or (c) a charge-off has been
taken with respect to such Receivable as a result of a bankruptcy proceeding or
otherwise.


 


“Delinquent
Accounts Ratio”:  As of any date of
determination, the percentage equivalent of a fraction, (a) the numerator
of which is equal to the Outstanding Receivable Balance of all Receivables that
were Delinquent Receivables at such time, and (b) the denominator of which
is equal to the Aggregate Outstanding Receivable Balance.


 


“Delinquent
Receivable”: Any Receivable with respect to which all or any portion of a
required payment thereunder is delinquent more than 30 days from the payment
due date, but in no event more than 120 days after the payment due date.


 


“Dollars”:  Means, and the conventional “$”
signifies, the lawful currency of the United States.


 


“Eligible Obligor”:  On any Measurement Date, any Obligor that:


 


(a)                                  is
a natural person; and


 


(b)                                 is
not an employee, principal, director or equity holder of the Borrower or the
Servicer.


 


“Eligible
Receivable”:  On any Measurement
Date, each Receivable that satisfies each of the following eligibility
requirements (unless otherwise approved by the Administrative Agent in its sole
discretion):


 


(a)           such Receivable, together with the
Underlying Instruments related thereto, (i) is in full force and effect
and constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by Insolvency Laws and by principles of equity
(whether considered in a suit at law or in equity), (ii) is not subject to
any litigation, material dispute or offset and (iii) contains provisions
substantially to the effect that the Obligor’s payment 


 


7

















 


obligations thereunder
are absolute and unconditional without any right of rescission, setoff,
counterclaim or defense for any reason (except as required by Applicable Law)
against the applicable Contractor (if applicable), originator or any assignee
thereof;


 


(b)           such Receivable is denominated and
payable only in Dollars (and not in another currency or in kind) in the United
States and does not permit the currency or country in which such Receivable is
payable to be changed;


 


(c)           such Receivable is not a Defaulted
Receivable;


 


(d)           such Receivable has an original term
to maturity that does not exceed two hundred and forty (240) months;


 


(e)           no participation interests have been
granted to any Person with respect to such Receivable;


 


(f)            such Receivable was originated in
all material respects in compliance with all Applicable Laws and the related
Underlying Instruments comply in all material respects with all Applicable
Laws;


 


(g)           such Receivable is eligible under its
Underlying Instruments (giving effect to the provisions of Sections 9-406 and
9-408 of the UCC) to have a security interest therein granted to the
Administrative Agent, as agent for the Secured Parties, and such Receivable
does not contain any restrictions that would prohibit the further assignment or
transfer of such Receivable by the Borrower;


 


(h)           such Receivable does not contain a
confidentiality provision that restricts or purports to restrict the ability of
any Secured Party to exercise its rights under this Agreement, including,
without limitation, its rights to review the related Servicing File and
Underlying Instruments;


 


(i)            such Receivable provides for (i) periodic
payments of accrued and unpaid interest on a current basis, no less frequently
than monthly and (ii) such Receivable is fully amortizing over its term
and provides for a fixed, non-usurious rate of interest (simple interest);


 


(j)            all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority or any other Person required to be obtained, effected or given in
connection with the making, acquisition, transfer or performance of such
Receivable have, to the Borrower’s knowledge, been duly obtained, effected or
given and are in full force and effect;


 


(k)           since the Closing Date, such
Receivable has not had any of its terms, conditions or provisions amended,
modified or waived in any manner inconsistent with the Credit and Collection
Policy and such Receivable has not been restructured at any time after the
Closing Date other than in accordance with the Credit and Collection Policy;


 


(l)            the related Obligor has been
instructed to make all payments into a Lockbox Account;


 


8

















 


(m)          there are no facts, events or
occurrences existing which materially impair the validity, enforceability or
collectability of such Receivable or reduce the amount payable or delay payment
thereunder;


 


(n)           (i) the Borrower has good and
marketable title to, and is the sole owner of, such Receivable, (ii) the
Borrower has granted to the Administrative Agent a valid first priority
perfected security interest, free and clear of all other Liens (other than
Permitted Liens), in such Receivable and Related Security, for the benefit of
the Secured Parties, and (iii) the Required Receivable File required to be
delivered to the Collateral Custodian, with respect to such Receivable, has
been delivered to the Collateral Custodian;


 


(o)           the Obligor with respect to such
Receivable is an Eligible Obligor;


 


(p)           all information, representations and
warranties provided in writing by the Borrower and the Servicer with respect to
such Receivable are true, correct and complete in all material respects;


 


(q)           the Contract with respect to the
Receivable relates to a property located in one of the states of the United
States or the District of Columbia;


 


(r)            the home improvements related to the
Contract with respect to the Receivable have been fully completed to the
satisfaction of the related Obligor, as evidenced by a Completion Certificate
with respect to such Contract;


 


(s)           the Contract with respect to the
Receivable is not a revolving home equity line of credit;


 


(t)            the proceeds of the Contract with
respect to the Receivable have been fully disbursed and the related Obligor has
no additional right to further fundings thereunder; and


 


(u)           if the Contract with respect to the
Receivable is a Mortgage Contract, the Mortgage related to such Mortgage
Contract creates a valid, subsisting and enforceable first, second, third or
fourth priority lien (as applicable) on the related Mortgaged Property and the
lien created thereby has been or will be duly recorded;


 


provided that
if and for so long as the Drawbridge Special Opportunities Fund LP has not
satisfied its obligation to purchase any Receivable which is determined not to
have been an Eligible Receivable as of its applicable Cut-Off Date in
accordance with Section 2.06 of the Purchase Agreement, the full amount of
such Receivable shall continue to be deemed an Eligible Receivable for purposes
of all representations, warranties, covenants and calculations made or to be
made hereunder or under any other Transaction Document (and, as such, no Event
of Default or Unmatured Event of Default shall result therefrom) from the date
of such determination through the date on which Drawbridge Special
Opportunities Fund LP purchases such Receivable.


 


“Eligible
Repurchase Obligations”:  Repurchase
obligations with respect to any security that is a direct obligation of, or
fully guaranteed by, the United States or any agency or instrumentality thereof
the obligations of which are backed by the full faith and credit of the 


 


9

















 


United States, in either case entered into with a depository
institution or trust company (acting as principal).


 


“Entitlement
Holder”:  The meaning specified in Section 8-102(a)(7) of
the UCC.


 


“Environmental
Laws”:  Any and all federal, state
and local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities,
relating to the protection of the environment, including, but not limited to,
requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.  Environmental Laws include, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. § 331 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. §
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. § 300, et seq.), the
Environmental Protection Agency’s regulations relating to underground storage
tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act
(29 U.S.C. § 651 et seq.), and the rules and regulations
thereunder, each as amended or supplemented from time to time.


 


“ERISA”:  The United States Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.


 


“ERISA
Affiliate”:  (a) Any corporation
that is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower, (b) a
trade or business (whether or not incorporated) under common control (within
the meaning of Section 414(c) of the Code) with the Borrower, or (c) a
member of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in clause (a) above
or any trade or business described in clause (b) above.


 


“Errors”:  Defined in Section 6.13(g).


 


“Eurocurrency
Liabilities”:  Defined in Regulation
D of the Board of Governors of the Federal Reserve System, as in effect from
time to time.


 


“Event of
Default”:  Defined in Section 10.1.


 


“Excepted
Persons”:  Defined in Section 13.13(a).


 


“Excess
Spread”:  With respect to any
calendar month, a per annum rate expressed as a
percentage equal to (a) the Weighted Average APR of all Eligible
Receivables expressed as a percentage minus (b) the
Interest Rate hereunder for such month.


 


“Exchange
Act”:  The United States Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


 


10

















 


“Excluded
Amounts”:  (a) Any amount
received in a Lockbox Account with respect to any Receivable, which amount is
attributable to the payment of any tax, fee or other charge imposed by any
Governmental Authority on such Receivable and (b) any amount received in a
Lockbox Account or other Account representing (i) a reimbursement of
insurance premiums and (ii) any escrows relating to taxes, insurance and
other amounts in connection with Receivables which are held in an escrow
account for the benefit of the Obligor (or its client) and the secured party
pursuant to escrow arrangements under the Underlying Instruments.


 


“Facility
Amount”:  $34,891,977.97.


 


“Fair”:
Fair Finance Company, an Ohio Corporation.


 


“Fair
Servicing Condition”:  A condition
that is satisfied if no “default”, “event of default”, or analogous event
exists with respect to Fair as borrower or servicer under any credit facility
to which Fortress or any of its Affiliates is a party and no Change of Control
of Fair has occurred.


 


“FCC
Finance Change of Control”: Any Person other than Fortress, Fair, any of
their respective Affiliates, or Jim Borschow is or becomes, directly or
indirectly, the owner of  at least a
majority of the equity interests in FCC Finance, LLC.


 


“FDIC”:
The Federal Deposit Insurance Corporation, and any successor thereto.


 


“Finance
Charges”:  With respect to any
Receivable, any interest or finance charges payable by an Obligor pursuant to
or with respect to such Receivable.


 


“Financial
Asset”:  The meaning specified in Section 8-102(a)(9) of
the UCC.


 


“Fitch”:  Fitch, Inc. or any successor thereto.


 


“Fortress”:  Defined in the Preamble.


 


“GAAP”:  Generally accepted accounting principles as
in effect from time to time in the United States.


 


“Governmental
Authority”:  With respect to any
Person, any nation or government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory authority)
thereof, any body or entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator having jurisdiction over such Person.


 


“Guaranty
Amounts”: Any and all amounts paid by any guarantor with respect to the
applicable Contract.


 


“Hazardous
Materials”: All materials subject to any Environmental Law, including,
without limitation, materials listed in 49 C.F.R. § 172.010, materials defined
as hazardous pursuant to § 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, flammable,
explosive or radioactive materials, hazardous or 


 


11

















 


toxic wastes or substances, lead-based materials, petroleum or
petroleum distillates or asbestos or material containing asbestos,
polychlorinated biphenyls, radon gas, urea formaldehyde and any substances
classified as being “in inventory”, “usable work in process” or similar
classification that would, if classified as unusable, be included in the
foregoing definition.


 


“Hedge
Breakage Costs”:  With respect to any
applicable Interest Rate Hedge Transaction, the net amount, if any, payable by
the Borrower to the Hedge Counterparty for the early termination of that
Interest Rate Hedge Transaction or any portion thereof.


 


“Hedge
Counterparty”: A hedge counterparty acceptable to the Administrative Agent
in its reasonable discretion.


 


“Hedging
Agreement”:  Each agreement between
the Borrower and a Hedge Counterparty that governs one or more Interest Rate
Hedge Transactions entered into by the Borrower and such Hedge Counterparty,
which agreement shall consist of a “Master Agreement” in a form published by
the International Swaps and Derivatives Association, Inc., together with a
“Schedule” thereto in such form as the Administrative Agent shall have approved
in writing (such approval not to be unreasonably withheld), and each “Confirmation”
thereunder confirming the specific terms of each such Interest Rate Hedge
Transaction.


 


“Highest
Required Investment Category”:  (a) 
With respect to ratings assigned by Moody’s, “Aa2” or “P-1” for one month
instruments, “Aa2” or “P-1” for three-month instruments, “Aa3” or “P-1” for
six-month instruments and “Aa2” or “P-1” for instruments with a term in excess
of six months, (b) with respect to ratings assigned by S&P, “A-1” for
short-term instruments and “A” for long-term instruments, and (c) with
respect to ratings assigned by Fitch (if such investment is rated by Fitch), “F-1+”
for short-term instruments and “AAA” for long-term instruments.


 


“Increased
Costs”:  Any amounts required to be
paid by the Borrower to a Lender pursuant to Section 2.10.


 


“Indebtedness”:  With respect to any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than liabilities incurred in the ordinary
course of business and payable in accordance with customary trade practices) or
that is evidenced by a note, bond, debenture or similar instrument or other
evidence of indebtedness customary for indebtedness of that type, (b) all
obligations of such Person under leases that have been or should be, in
accordance with GAAP, recorded as capital leases, (c) all obligations of
such Person in respect of acceptances issued or created for the account of such
Person and all letters of credit for which such Person is the account party, (d) all
liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof, (e) all net obligations or liabilities of that Person in respect
of derivatives, and (f) all obligations under direct or indirect guaranties
in respect of obligations (contingent or otherwise) to purchase or otherwise
acquire, or to otherwise assure a creditor against loss in respect of,
indebtedness or obligations of others of the kind referred to in clauses (a) through
(e) above.


 


“Indemnified
Amounts”:  Defined in Section 11.1.


 


12

















 


“Indemnified
Parties”:  Defined in Section 11.1.


 


“Indorsement”:  The meaning specified in Section 8-102(a)(11)
of the UCC, and “Indorsed” has a corresponding meaning.


 


“Insolvency
Event”:  With respect to a specified
Person, (a) the filing of a decree or order (i) for relief by a court
having jurisdiction over such Person or any substantial part of its property in
an involuntary case under any applicable Insolvency Law now or hereafter in
effect, or (ii) appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or (iii) ordering the winding-up or
liquidation of such Person’s affairs, provided that such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days, (b) the
commencement by such Person of a voluntary case under any applicable Insolvency
Law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, (c) the
consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, (d) the
failure by such Person generally to pay its debts as such debts become due, or (e) the
taking of action by such Person in furtherance of any of the foregoing.


 


“Insolvency
Laws”:  The Bankruptcy Code and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of
payments, or similar debtor relief laws from time to time in effect affecting
the rights of creditors generally.


 


“Insolvency
Proceeding”:  Any case, action or
proceeding before any court or other Governmental Authority relating to any
Insolvency Event.


 


“Instrument”:  The meaning specified in Section 9-102(a)(47)
of the UCC.


 


“Insurance
Proceeds”: The proceeds of any insurance policies maintained by an Obligor
or a Contractor with respect to a Receivable.


 


“Interest”:  For each Accrual Period, the sum of the
products (for each day during such Accrual Period) of:


 





 


where:


 


IR            =              the
Interest Rate applicable on such day;


 


P              =              the
principal amount of the Loan on such day; and


 


D             =              360;


 


13

















 


provided that
(a) no provision of this Agreement shall require the payment or permit the
collection of Interest in excess of the maximum permitted by Applicable Law and
(b) Interest shall not be considered paid by any distribution if at any
time such distribution is rescinded or must otherwise be returned for any
reason.


 


“Interest
Collections”:  Any and all amounts
received with respect to the Collateral other than Principal Collections that
are deposited into the Collection Account, or received by or on behalf of the
Borrower or the Servicer in respect of a Receivable whether in the form of
cash, checks, wire transfers, electronic transfers or any other form of cash
payment.


 


“Interest
Rate”:  A per annum
interest rate equal to the sum of the LIBOR Rate and 5.00%.


 


“Interest Rate
Hedge Transaction”:  Each interest
rate hedge transaction between the Borrower and a Hedge Counterparty under a
Hedging Agreement, including, for the avoidance of doubt, any interest rate
swap and interest rate cap.


 


“Investment”:  With respect to any Person, any direct or
indirect loan, advance or investment by such Person in any other Person,
whether by means of share purchase, capital contribution, loan or otherwise.


 


“Joinder
Supplement”:  An agreement among the
Borrower, a Lender and the Administrative Agent in the form of Exhibit I
to this Agreement (appropriately completed) delivered in connection with a
Person becoming a Lender hereunder after the Closing Date, as contemplated by Section 13.16.


 


“Key
Employees”:  Each of John Head and
Rick Snow and each replacement thereof approved in accordance with the
definition of “Change of Control”.


 


“Lender”:  Defined in the Preamble.


 


“LIBOR Rate”:  For any day during any Accrual Period and the
Loan, or portion thereof, a per annum
interest rate equal to:


 


(a)           the posted rate for one-month
deposits in United States Dollars appearing on the Bloomberg-BBAM page, or any
successor page thereto, as of 11:00 a.m. (London time) on the
Business Day which is the second Business Day preceding the Closing Date (with respect
to the initial Accrual Period for the Loan) and as of the second Business Day
preceding the first day of the applicable Accrual Period (with respect to all
subsequent Accrual Periods for the Loan); or


 


(b)           if no such rate appears on the
Bloomberg-BBAM page, or any successor page thereto, at such time and day,
then the LIBOR Rate shall be the arithmetic mean of the offered rates for
one-month deposits in Dollars appearing on the Reuters Screen LIBOR01 Page as
of 11:00 a.m. (London time) on the Business Day which is the second
Business Day preceding the Closing Date (with respect to the initial Accrual
Period for the Loan) and as of the second Business Day preceding the first day
of the applicable Accrual Period (with respect to all subsequent Accrual Periods
for the Loan);


 


14
















 


provided that in the
event that the Administrative Agent determines in its reasonable discretion
that (i) the LIBOR Rate is not capable of being established as set for
above, or (ii) the use of the LIBOR Rate is no longer feasible as a “base”
rate of a Lender’s cost of funds hereunder, then the “LIBOR Rate” shall be
equal to the Prime Rate minus
2.00%.


 


“Lien”:  Any mortgage, lien, pledge, charge, right,
claim, security interest or encumbrance of any kind of or on any Person’s
assets or properties in favor of any other Person (including any UCC financing
statement or any similar instrument filed against such Person’s assets or
properties).


 


“Liquidation
Expenses”:  With respect to any
Receivable, the aggregate amount of all out-of-pocket expenses reasonably
incurred by the Servicer in accordance with the Servicer’s customary procedures
in connection with the repossession, refurbishing and disposition of any
Receivable or Related Security, upon or after the expiration or earlier
termination of such Receivable (including without limitation any brokerage or
legal fees), and other out-of-pocket costs related to the liquidation of any
such assets, including the attempted collection of any amount owing under such
Receivable, as documented by the Servicer upon the request of the
Administrative Agent, in writing providing a breakdown of the Liquidation
Expenses for such Receivable, along with any supporting documentation therefor.


 


“Loan”:  The loan made by the Lender (or, if
applicable, Lenders) to the Borrower hereunder on the Closing Date.


 


“Lockbox
Accounts”:  Each of the separate
lockbox accounts or blocked accounts maintained at the applicable Lockbox
Account Bank for the purpose of receiving Collections, the details of which are
set forth on Schedule VIII, as such schedule may be amended from time to
time.


 


“Lockbox
Account Banks”:  The financial
institutions listed as Lockbox Account Banks on Schedule VIII, and such
other financial institutions that may from time to time become Lockbox Account
Banks hereunder.


 


“Margin
Stock”:  “Margin Stock” as defined
under Regulation U.


 


“Material
Adverse Effect”:  With respect to any
event or circumstance and any Person, means a material adverse effect on (a) the
business, financial position, results of operations, performance or properties
of such Person, (b) the validity or enforceability of this Agreement or
any other Transaction Document against such Person or the validity,
enforceability or collectibility of the Collateral taken as a whole or any
material portion of the Collateral, (c) the rights and remedies of the
Secured Parties with respect to matters arising under this Agreement or any
other Transaction Document, (d) the ability of such Person to perform its
obligations under this Agreement or any other Transaction Document, or (e) the
status, existence, perfection, priority or enforceability of the Administrative
Agent’s lien on a material portion of the Collateral, taken as a whole.


 


“Maturity
Date”:  November 10, 2013, as
such date may be extended pursuant to Section 2.1(c).


 


15

















 


“Maximum
Advance”:  On any Measurement Date,
an amount equal to the sum for each Eligible Receivable of the product of (a) 85%,
(b) the Outstanding Receivable Balance of such Receivable on such
Measurement Date and (c) the applicable percentage for such Receivable set
forth below determined as of the Closing Date.


 




	
  Receivable Type

  	
   

  	
  Applicable Percentage

  
	
   

  	
   

  	
   

  
	
  Payments current

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  
	
  31-60 days delinquent

  	
   

  	
  80%

  
	
   

  	
   

  	
   

  
	
  61-90 days delinquent

  	
   

  	
  50%

  
	
   

  	
   

  	
   

  
	
  91-120 days delinquent

  	
   

  	
  30%

  
	
   

  	
   

  	
   

  
	
  Current Bankrupt Receivable

  	
   

  	
  90%

  
	
   

  	
   

  	
   

  
	
  “Same as Cash” Receivable

  	
   

  	
  95%

  






 


“Maximum
Lawful Rate”:  Defined in Section 2.3(b).


 


“Maximum
Outstanding Loan Amount”:  As of any
Measurement Date, an amount equal to the lesser of (a) the Facility
Amount, and (b) the Borrowing Base.


 


“Measurement
Date”:  Each of the following:  (a) the Closing Date; (b) the last
day of each calendar month; and (c) the date as of which any Servicing
Report, as provided for in Section 6.8(a), is calculated.


 


“Moody’s”:  Moody’s Investors Service, Inc., and any
successor thereto.


 


“Mortgage”:
Any mortgage, deed of trust or other instrument creating a first, second or
other lien on a fee simple estate in the Mortgaged Property securing a Mortgage
Contract.


 


“Mortgage
Contract”: A retail installment contract between a Contractor and one or
more Obligors which (a) evidences the obligations of such Obligors to pay
for the home improvements sold and/or installed by such Contractor and (b) is
secured by a Mortgage on the related Mortgaged Property, together with all
schedules, supplements and amendments thereto and each other document and
instrument related thereto.


 


“Mortgaged
Property”: The property which is subject to a Mortgage (including, without
limitation, all buildings, improvements and fixtures thereon and all additions,
alterations and replacements made at any time with respect to the foregoing)
securing a Mortgage Contract.


 


“Multiemployer
Plan”:  A “multiemployer plan” as
defined in Section 4001(a)(3) of ERISA that is or was at any time
during the current year or the preceding five (5) years contributed to by
the Borrower or any ERISA Affiliate on behalf of its employees.


 


16

















 


“Non-Mortgage
Contract”: A retail installment contract between a Contractor and one or
more Obligors which is not secured by a Mortgage and evidences the obligations
of such Obligors to pay for the home improvements sold and/or installed by such
Contractor, together with all schedules, supplements and amendments thereto and
each other document and instrument related thereto.


 


“Note”:  Defined in Section 2.1(a).


 


“Obligor”:  With respect to any Receivable, any Person or
Persons obligated to make payments under such Receivable, including any
guarantor thereof.


 


“Obligor
Charges”: All late payment charges and any other incidental charges or fees
received from an Obligor, including, but not limited to, late fees, collection
fees and bounced check charges.


 


“Officer’s
Certificate”:  A certificate signed
by a Responsible Officer of the Person providing the applicable certification
(or, in the case of the Borrower, by its authorized representative).


 


“Opinion of
Counsel”:  A written opinion of
counsel, which opinion and counsel are acceptable to the Administrative Agent
in its reasonable discretion.


 


“Outstanding
Loan Balance”:  On any day, the
aggregate principal amount of the Loan outstanding on such day, after giving
effect to all repayments of the Loan on such day.


 


“Outstanding
Receivable Balance”:  As of any
Measurement Date, with respect to any Receivable, the outstanding principal
balance for such Receivable as of the Closing Date (equal to the outstanding “Amount
Financed” for such Receivable), minus the sum
of (a) the principal portion of the Scheduled Payments on such Receivable
received during each Collection Period ending prior to the most recent Payment
Date, and (b) all other Principal Collections on such Receivable, to the
extent deposited by the Servicer in the Collection Account.  The Outstanding Receivable Balance of any
Prepaid Receivable which has been prepaid in full shall equal $0.


 


“Owner Trustee”:  U.S. Bank Trust National Association,
together with its successors and assigns in such capacity.


 


“Owner
Trustee Fee”:  The fee set forth as
such in the Owner Trustee Fee Letter.


 


“Owner
Trustee Fee Letter”:  The Owner
Trustee Fee Letter, dated as of the date hereof, by and among the Borrower and
U.S. Bank Trust National Association, in its capacity as owner trustee.


 


“Payment
Date”:  Monthly on the 20th day of
each calendar month, or, if such day is not a Business Day, the next succeeding
Business Day, commencing December 22, 2008.


 


“Payment
Duties”:  Defined in Section 8.2(b).


 


17

















 


“Permitted
Investments”:  Means negotiable
instruments or securities or other investments that (i) except in the case
of demand or time deposits, investments in money market funds and Eligible
Repurchase Obligations, are represented by instruments in bearer or registered
form or ownership of which is represented by book entries by a Clearing Agency
or by a Federal Reserve Bank in favor of depository institutions eligible to
have an account with such Clearing Agency or such Federal Reserve Bank who hold
such investments on behalf of their customers, (ii) except in the case of
demand or time deposits, investments in money market funds and Eligible
Repurchase Obligations, as of any date of determination, mature by their terms
on or prior to the Business Day preceding the next Payment Date, and (iii) consist
of:


 


(a)                                  direct
obligations of, and obligations fully guaranteed as to full and timely payment
by, the United States (or by any agency thereof to the extent such obligations
are backed by the full faith and credit of the United States);


 


(b)                                 demand
deposits, time deposits or certificates of deposit of depository institutions
or trust companies incorporated under the laws of the United States or any
state thereof and subject to supervision and examination by federal or state
banking or depository institution authorities; provided
that either the depository institution is Key Bank, N.A. or, at the
time of the Borrower’s investment or contractual commitment to invest therein,
the commercial paper, if any, and short-term unsecured debt obligations (other
than such obligation whose rating is based on the credit of a Person other than
such institution or trust company) of such depository institution or trust
company shall have a credit rating from each Rating Agency in the Highest
Required Investment Category granted by such Rating Agency;


 


(c)                                  commercial
paper, or other short term obligations, having, at the time of the Borrower’s
investment or contractual commitment to invest therein, a rating in the Highest
Required Investment Category granted by each Rating Agency;


 


(d)                                 demand
deposits, time deposits or certificates of deposit that are fully insured by
the FDIC;


 


(e)                                  notes
that are payable on demand or bankers’ acceptances issued by any depository
institution or trust company referred to in clause (b) above;


 


(f)                                    investments
in taxable money market funds or other regulated investment companies having,
at the time of the Borrower’s investment or contractual commitment to invest
therein, a rating of the Highest Required Investment Category from each Rating
Agency; any such fund may be managed by the Collateral Custodian or its
Affiliates;


 


(g)                                 time
deposits (having maturities of not more than 90 days) by an entity the
commercial paper of which has, at the time of the Borrower’s investment or
contractual commitment to invest therein, a rating of the Highest Required
Investment Category granted by each Rating Agency; or


 


(h)                                 Eligible
Repurchase Obligations with a rating acceptable to the Rating Agencies, which
in the case of S&P, shall be “A-1” and in the case of Moody’s shall be “P-1”.


 


18

















 


“Permitted
Liens”:  Liens granted pursuant to or
by the Transaction Documents, Liens to secure any Interest Rate Hedge
Transaction and Liens for Taxes less than thirty (30) days overdue provided an
adequate reserve for such Taxes has been established on the books of the
Borrower in accordance with GAAP.


 


“Person”:  An individual, partnership, corporation,
limited liability company, joint stock company, trust (including a statutory or
business trust), unincorporated association, sole proprietorship, joint
venture, government (or any agency or political subdivision thereof) or other
entity.


 


“Predecessor
Servicer Work Product”:  Defined in Section 6.13(g).


 


“Prepaid
Receivable”:  Any Receivable (other
than a Defaulted Receivable) that has been terminated or has been prepaid in
full or in part prior to its scheduled expiration date.


 


“Prime Rate”
shall mean, for any day, the rate set forth in Telerate Z opposite the caption “Bank
Prime Loan” for such day.  If the Prime
Rate is not published in Telerate Z, then the Prime Rate will be determined by
calculating the arithmetic mean of the rates of interest publicly announced by
each bank named on Telerate under the heading “Prime Rate Top 30 U.S. Banks,”
currently at page 38, as such bank’s U.S. dollar prime rate or base
lending rate as in effect on such day at 3:30 p.m. (New York City
time).  If fewer than four such rates
appear on Telerate for such day, then the Prime Rate shall be the arithmetic
mean of the rate of interest publicly announced by three major banks in New
York City, selected by the Lender in good faith, as their U.S. dollar prime
rate or base lending rate as in effect for such day.


 


“Principal
Collections”:  Any and all amounts of
Collections received in respect of any principal due and payable under the
Receivables, from or on behalf of Obligors that are deposited into the
Collection Account (including, without limitation, the principal portion of any
Scheduled Payment), or received by or on behalf of the Borrower by the Servicer
in respect of a Receivable and all Recoveries, whether in the form of cash,
checks, wire transfers, electronic transfers or any other form of cash payment.


 


“Pro Rata
Share”:  With respect to any Lender, (a) as
of the Closing Date, the percentage set forth on Annex B hereto, and (b) after
the Closing Date, the percentage obtained by dividing the portion of the Loan
funded by such Lender by the aggregate Outstanding Loan Balance.


 


“Proceeds”:  With respect to any Collateral, all property
that is receivable or received when such Collateral is collected, sold,
liquidated, foreclosed, exchanged, or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes all rights to payment
with respect to any insurance relating to such Collateral.


 


“Purchase
Agreement”:  The Purchase Agreement
between Drawbridge Special Opportunities Fund LP and CLST, dated as of November 10,
2008, as amended from time to time.


 


“Rating
Agency”:  Each of S&P and Moody’s.


 


19

















 


“Receivables”:  The rights to all payments from an Obligor
under, or related to, a Contract including, without limitation, any right to the
payment with respect to (a) Scheduled Payments, (b) any prepayments
or overdue payments made with respect to such Scheduled Payments, (c) any
Guaranty Amounts, (d) any Insurance Proceeds, (e) any Obligor Charges
and (f) any Recoveries.


 


“Receivables
List”:  A list of Receivables in the
form of Schedule IV hereto or such other form as the Administrative
Agent may approve in writing (which list may be provided to the Administrative
Agent in electronic form), that identifies each (a) Obligor name, (b) original
principal balance (or “Amount Financed”) of the Receivable, (c) contract
number or other identifying number, (d) the applicable Contractor name,
and (e) whether such Receivable is related to a Non-Mortgage Contract or
Mortgage Contract, as such list may be amended, supplemented or modified from
time to time in accordance with this Agreement.


 


“Records”:  All documents relating to the Receivables,
including books, records and other information executed in connection with the
origination or acquisition of the Receivables and Related Security or
maintained with respect to the Receivables and Related Security and the related
Obligors that the Borrower or the Servicer have generated, in which the
Borrower has acquired an interest or in which the Borrower or the Servicer have
otherwise obtained an interest.


 


“Recoveries”:  With respect to any Defaulted Receivable, the
proceeds from the sale or other disposition of such Receivable (including any
amounts received from any applicable guarantor or from the applicable
Contractor under the applicable Contractor Sale Agreement), any other
recoveries with respect to such Defaulted Receivable, the Related Security and
amounts representing late fees and penalties; provided
that such amounts shall be net of Liquidation Expenses and amounts, if any,
received that are required under such Defaulted Receivable, to be refunded to
the related Obligor.


 


“Regulation
U”:  Regulation U of the Board of
Governors of the Federal Reserve System, 12 C.F.R. §221, or any successor
regulation.


 


“Related
Security”:  As used in this
Agreement, all right, title and interest of the Borrower in and to the
following:


 


(a)                                  any
and all Recoveries related to a Receivable, all payments paid in respect
thereof and all monies due, to become due and paid in respect thereof and all
liquidation proceeds;


 


(b)                                 the
Required Receivable Files and Servicing Files related to any Receivable, any
Records, and the documents, agreements, and instruments included in the
Servicing File or Records;


 


(c)                                  all
Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank
accounts and property subject thereto from time to time purporting to secure or
support payment of any Receivable (including any applicable Mortgages),
together with all UCC financing statements, mortgages or similar filings signed
or authorized by an Obligor relating thereto;


 


20

















 


(d)                                 the
Accounts, the Concentration Account and the Lockbox Accounts, to the extent
amounts on deposit therein or credited thereto relate to the Collateral,
together with all cash and investments in each of the foregoing other than
amounts earned on investments therein (excluding any Excluded Amounts that may
be on deposit therein);


 


(e)                                  the
Contractor Sale Agreements and the assignment of such Contractor Sale
Agreements;


 


(f)                                    all
records (including computer records) with respect to the foregoing; and


 


(g)                                 all
collections, income, payments, proceeds and other benefits of each of the
foregoing.


 


“Reporting
Date”:  The date that is five (5) Business
Days prior to each Payment Date.


 


“Required
Lenders”:  As of any date, the
Lenders holding an aggregate of more than 66.67% of the Outstanding Loan
Balance as of such date.


 


“Required
Receivable File”:  For each
Receivable, a file containing each of the following items:


 


(a)                                  if
such Receivable is related to a Non-Mortgage Contract:


 


(i)                                     an
executed copy of the commitment letter issued by First Consumer Credit, Inc.
(or FCC Finance, LLC) to the applicable Contractor relating to such
Non-Mortgage Contract;


 


(ii)                                  the
sole original, executed copy of the related Non-Mortgage Contract (including
any amendments, extensions, modifications or waivers with respect thereto) with
original assignments of such Contract showing a complete chain of assignments
from the applicable Contractor to the Borrower and from the Borrower to the
Administrative Agent;


 


(iii)                               an
executed copy of the Completion Certificate related to such Non-Mortgage
Contract;


 


(iv)                              a
copy of the original credit application of the Obligor related to such
Contract; and


 


(v)                                 true
and complete copies of all other agreements, documents, any insurance policies
and instruments evidencing, securing or guarantying, or required by applicable
law with respect to, such Non-Mortgage Contract, as reasonably determined from
time to time by the Administrative Agent, upon prior written notice to the
Collateral Custodian and the Borrower; and


 


(b)                                 if
such Receivable is related to a Mortgage Contract:


 


21

















 


(i)                                     an
executed copy of the commitment letter issued by First Consumer Credit, Inc.
(or FCC Finance, LLC) to the applicable Contractor relating to such Mortgage
Contract;


 


(ii)                                  the
sole original, executed copy of the related Mortgage Contract (including any
amendments, extensions, modifications or waivers with respect thereto) with
original assignments of such Contract showing a complete chain of assignments
from the applicable Contractor to the Borrower and from the Borrower to the
Administrative Agent;


 


(iii)                               a
copy of the Mortgage related to such Mortgage Contract (together with evidence
of transmittal of such Mortgage to the appropriate recording office, evidence
that all related mortgage taxes have been paid and, promptly after receipt
thereof by the Servicer and, in any case, within 365 days of the date of such
Mortgage Contract, evidence, in form satisfactory to the Administrative Agent,
of recordation of such Mortgage at the appropriate recording office) and
original assignments of such Mortgage showing a complete chain of assignments
of such Mortgage from origination to the Administrative Agent (in each case,
together with evidence of transmittal of such assignments of mortgage to the
appropriate recording office, evidence that all related mortgage tax has been
paid and, promptly after receipt thereof by the Servicer and, in any case,
within 365 days of the pledge of such Mortgage Contract hereunder, evidence, in
form satisfactory to the Administrative Agent, of recordation of such
assignments of mortgage at the appropriate recording office);


 


(iv)                              a
copy of the title report related to the Underlying Collateral related to such
Mortgage Contract;


 


(v)                                 a
copy of the original credit application of the Obligor related to such
Contract; and


 


(vi)                              true
and complete copies of all other agreements, documents, any insurance policies
and instruments evidencing, securing or guarantying, or required by applicable
law with respect to, such Mortgage Contract, as reasonably determined from time
to time by the Administrative Agent, upon prior written notice to the
Collateral Custodian and the Borrower.


 


“Required
Reduction Amount”:  As of any
Measurement Date, an amount equal to the positive difference, if any, of (a) the
Outstanding Loan Balance on such date over (b) the Maximum Outstanding
Loan Amount.


 


“Required
Reports”:  Collectively, the
Servicing Report, the Servicer’s Certificate required pursuant to Section 6.8,
and the annual statements as to compliance required pursuant to Section 6.9.


 


“Responsible
Officer”:  With respect to any
Person, any duly authorized officer of such Person with direct responsibility
for the administration of this Agreement and also, with respect to a particular
matter, any other duly authorized officer of such Person to whom such matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject and, for purposes of the Borrower, the Responsible Officers
shall be the Key Employees, Keith Schaffter and Doug DeRose.


 


22

















 


“S&P”:  Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.


 


“Scheduled
Payment”:  Each scheduled payment of
principal and/or interest required to be made by an Obligor on the related
Receivable, as adjusted pursuant to the terms of the related Required
Receivable File.


 


“Secured
Party”:  Each Lender, each Hedge
Counterparty and the Administrative Agent.


 


“Securities
Account”:  The meaning specified in Section 8-501
of the UCC.


 


“Securities
Account Control Agreement”:  The
Securities Account Control Agreement, dated as of the date hereof, among the
Borrower, the Servicer, the Administrative Agent, and the Collateral Custodian,
as the Securities Intermediary.


 


“Securities
Intermediary”:  (a) A Clearing
Corporation; or (b) a Person, including a bank or broker, that in the
ordinary course of its business maintains Securities Accounts for others and is
acting in that capacity.


 


“Security”:  The meaning specified in Section 9-102(a)(15)
of the UCC.


 


“Security
Certificate”:  The meaning specified
in Section 8-102(a)(16) of the UCC.


 


“Security
Entitlement”:  The meaning specified
in Section 8-102(a)(17) of the UCC.


 


“Servicer”:  Defined in the Preamble.


 


“Servicer
Default”:  Defined in Section 6.12.


 


“Servicer
Termination Notice”:  Defined in Section 6.12.


 


“Servicer’s
Certificate”:  Defined in Section 6.8(b).


 


“Servicing
Fee”:  The servicing fee payable to
the Servicer or the successor Servicer on each Payment Date in arrears in
respect of each Collection Period, which fee shall be equal to (a) in the
case of the Backup Servicer if appointed as successor Servicer hereunder, the
Successor Servicer Administration Fee (as defined in the Backup Servicer Fee
Letter) or (b) in the case of any other Servicer, the product of (i) the
Servicing Fee Rate, (ii) the Aggregate Outstanding Receivable Balance as
of the first Business Day of the related Collection Period and (iii) the
actual number of days in such Collection Period divided by 360.


 


“Servicing
Fee Rate”:  1.50% per annum or such
other rate consented to in writing by the Borrower, the Servicer and the
Administrative Agent.


 


“Servicing
File”:  For each Receivable, (a) copies
(as opposed to originals) of each of the documents included in the Required
Receivable File definition, (b) to the extent applicable for the related
Receivable, the original executed (i) guaranty, (ii) credit
agreement, (iii) loan agreement, (iv) note purchase agreement, (v) promissory
note, (vi) acquisition agreement (or 


 


23

















 


similar
agreement), (vii) security agreement and (viii) UCC financing
statement(s), in each case as set forth on the Receivables List, (c) a
copy of each Contractor Sale Agreement related to such Receivable, and (d) true
and complete copies of all other agreements, documents and instruments
evidencing, securing or guarantying, or required by applicable law with respect
to any Contractor Sale Agreement related to such Receivable, as reasonably
determined from time to time by the Administrative Agent, upon prior written
notice to the Collateral Custodian and the Borrower.


 


“Servicing
Report”:  Defined in Section 6.8(a).


 


“Servicing
Standard”:  With respect to any
Receivables, to service and administer such Receivables in accordance with the
Underlying Instruments and all customary and usual servicing practices (a) which
are consistent with the higher of:  (i) the
customary and usual servicing practices that a prudent loan lender would use in
servicing loans like the Receivables for its own account, and (ii) the
same care, skill, prudence and diligence with which the Servicer services and
administers loans for its own account or for the account of others; (b) with
a view to maximize the value of the Receivables; and (c) without regard
to:  (i) any relationship that the
Servicer or any Affiliate of the Servicer may have with any Obligor or any
Affiliate of any Obligor, (ii) the Servicer’s obligations to incur
servicing and administrative expenses with respect to a Receivable, (iii) the
Servicer’s right to receive compensation for its services hereunder or with
respect to any particular transaction, (iv) the ownership by the Borrower
of any Receivables, (v) the ownership, servicing or management for others
by the Servicer of any other loans or property by the Servicer or (vi) any
relationship that the Servicer or any Affiliate of the Servicer may have with
any holder of other loans of the Obligor with respect to such Receivables; provided that, with respect to any successor Servicer, the “Servicing
Standard” shall be the higher of the same care, skill and diligence with which
such successor Servicer services and administers loans for its own account or
for the account of others.


 


“Solvent”:  As to any Person at any time, having a state
of affairs such that all of the following conditions are met:  (a) the fair value of the property of
such Person is greater than the amount of such Person’s liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (b) the present fair saleable value of the property of
such Person in an orderly liquidation of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts and other liabilities as they become absolute and matured; (c) such
Person is able to realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated liabilities) as
they mature in the normal course of business; (d) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature; and (e) such
Person is not engaged in a business or a transaction, and does not propose to
engage in a business or a transaction, for which such Person’s property would
constitute unreasonably small capital.


 


“Subsidiary”:  As to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person.


 


24
















 


“Successor
Servicer”:  Defined in Section 6.13(a).


 


“Tape”:  Defined in Section 7.2(b).


 


“Taxes”:  Any present or future taxes, levies, imposts,
duties, charges, assessments or fees of any nature (including interest,
penalties, and additions thereto) that are imposed by any Governmental
Authority.


 


“Termination
Date”:  The earliest of (a) the
Business Day designated by the Borrower to the Administrative Agent as the
Termination Date at any time following two Business Days’ prior written notice
thereof to the Administrative Agent, (b) the Maturity Date or such other
date to which such date is extended in accordance with Section 2.1(c),
and (c) the date of the declaration of the Termination Date or the date of
the automatic occurrence of the Termination Date pursuant to Section 10.2(a) as
a result of an Event of Default.


 


“Transaction
Documents”:  This Agreement, the
Securities Account Control Agreement, the Concentration Account Agreement, the
Note, any Joinder Supplement, the Trust Agreement, the Purchase Agreement, the
Backup Servicer Fee Letter, the Collateral Custodian Fee Letter, the Owner
Trustee Fee Letter and any additional document the execution of which is
necessary or incidental to carrying out the terms of the foregoing documents.


 


“Transition
Expenses”:  The reasonable costs
(including reasonable attorneys’ fees) of the Backup Servicer incurred in
connection with transferring the servicing obligations under this Agreement and
amending this Agreement to reflect such transfer.


 


“Trust
Agreement”:  The Amended and Restated
Trust Agreement, dated as of November 10, 2008, by and among U.S. Bank
Trust National Association, as the owner trustee, CLST, as the owner
participant, and Drawbridge Special Opportunities Fund LP, as amended from time
to time.


 


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


 


“Uncertificated
Security”:  The meaning specified in Section 8-102(a)(l8)
of the UCC.


 


“Underlying
Collateral”: With respect to Mortgage Contracts, the Mortgaged Property and
all other property serving as collateral for the obligations of the Obligor
under the related Mortgage Contract and with respect to Non-Mortgage Contracts,
the property purchased pursuant to the related Non-Mortgage Contract serving as
collateral for the obligations of the Obligor under the related Non-Mortgage
Contract.


 


“Underlying
Instruments”:  The Mortgage Contract
or Non-Mortgage Contract and each other agreement that governs the terms of or
secures the obligations represented by such Receivable or of which the holders
of such Receivable are the beneficiaries.


 


“United
States”:  The United States of
America.


 


25

















 


“Unmatured
Event of Default”:  Any event that,
solely with the giving of notice or the lapse of time, or both, would become an
Event of Default.


 


“Weighted
Average APR”: With respect to any Eligible Receivables at any time, an
amount equal to the weighted average (weighted solely based on the Outstanding
Receivable Balance of such Receivables at such time) of the interest rates set
forth in the Contracts related to such Receivables.


 


Section 1.2.                                          Other
Terms.


 


All accounting
terms used but not specifically defined herein shall be construed in accordance
with GAAP.  All terms used in Article 9
of the UCC in the State of New York, and used but not specifically defined
herein, are used herein as defined in such Article 9.


 


Section 1.3.                                          Computation
of Time Periods.


 


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


 


Section 1.4.                                          Interpretation.


 


In each Transaction Document, unless a contrary
intention appears:


 


(a)                                  the
singular number includes the plural number and vice versa;


 


(b)                                 reference
to any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by the Transaction Documents;


 


(c)                                  reference
to any gender includes each other gender;


 


(d)                                 reference
to day or days without further qualification means calendar days;


 


(e)                                  reference
to any time means New York City time;


 


(f)                                    reference
to any agreement (including any Transaction Document), document or instrument
means such agreement, document or instrument as amended, modified, waived,
supplemented, restated or replaced and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the other
Transaction Documents, and reference to any promissory note includes any
promissory note that is an extension or renewal thereof or a substitute or
replacement therefor; and


 


(g)                                 reference
to any Applicable Law means such Applicable Law as amended, modified, codified,
replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and reference to
any Section or other provision of any Applicable Law means that provision
of such Applicable Law from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or reenactment
of such Section or other provision.


 


26

















 


ARTICLE II


 


THE NOTE


 


Section 2.1.                                        The
Note.


 


(a)                                  On
the terms and conditions hereinafter set forth, the Borrower shall deliver on
the Closing Date to the Administrative Agent, on behalf of the Lenders, one
duly executed promissory note in substantially the form of Exhibit B
(the “Note”) dated as of the date of this Agreement, and otherwise duly
completed.  The face amount and maximum
principal balance of the Note shall be $34,891,977.97.


 


(b)                                 At
least two Business Days prior to the Closing Date, the Borrower (or the
Servicer on its behalf) will provide the Administrative Agent with a wire
disbursement and authorization form instructing the Administrative Agent of the
account where the Borrower requests the Loan be funded.  On the Closing Date, and subject to the terms
and conditions hereinafter set forth and the satisfaction of all conditions
precedent in Article III, each Lender shall fund its Pro Rata Share
of the Loan to the Borrower, in immediately available funds via wire transfer,
in accordance with the written instructions of the Borrower, provided that the
amount of the Loan funded shall not exceed the Maximum Outstanding Loan Amount.


 


(c)                                  The
Borrower may, within 90 days but not less than 30 days prior to the Maturity
Date, by written notice to the Administrative Agent, make a request for each
Lender to extend the Maturity Date for an additional period of 364 days.  The Administrative Agent shall promptly
notify each Lender of receipt of such notice. 
The Administrative Agent and each Lender shall make a determination, in
their sole discretion, within 15 days of the date of the Borrower’s request for
such extension, as to whether or not it will agree to the applicable extension
requested.  The failure of the
Administrative Agent and each Lender to provide timely notice of its decision
to the Borrower shall be deemed to constitute a refusal by the Administrative
Agent and each Lender to extend the applicable date.  The Borrower confirms that the Administrative
Agent and each Lender, in their sole and absolute discretion, without regard to
the value or performance of the Collateral or any other factor, may elect not
to extend the Maturity Date.  The
Borrower shall give prompt notice to the Backup Servicer and the Collateral
Custodian as to whether or not the Maturity Date has been extended.  In the event the Maturity Date has not been
extended the Borrower may repay the Outstanding Loan Balance and all other
Aggregate Unpaids in accordance with Section 2.6 by transferring
the remaining Collateral to an Affiliate (including, but not limited to, the
existing financing facility between the Administrative Agent and Fair Facility
I, LLC, subject to the availability and terms of such facility); provided that if the Borrower chooses not to exercise such
option then the Borrower shall pay all amounts necessary to reduce the
Outstanding Loan Balance to $0 pursuant to Section 2.6.


 


27

















 


Section 2.2.                                          [Reserved]


 


Section 2.3.                                          Determination
of Interest.


 


(a)                                  The
Administrative Agent shall determine, in accordance with the terms of this
Agreement, the Interest Rate and the Interest (including unpaid Interest
related thereto, if any, due and payable on a prior Payment Date) to be paid by
the Borrower with respect to the Loan on each Payment Date for the related
Accrual Period and shall advise the Borrower, the Servicer and each Lender
thereof not later than 2:00 p.m. on the third Business Day following the
end of each Collection Period.  The
Borrower shall pay all Interest due for each applicable Accrual Period pursuant
to Section 2.6.


 


(b)                                 Anything
in this Agreement or the other Transaction Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person
under this Agreement and the Transaction Documents exceeds the highest rate of
interest permissible under Applicable Law (the “Maximum Lawful Rate”), then, so
long as the Maximum Lawful Rate would be exceeded, the rate of interest under
this Agreement and the Transaction Documents shall be equal to the Maximum
Lawful Rate.  If at any time thereafter
the rate of interest payable under this Agreement and the Transaction Documents
is less than the Maximum Lawful Rate, such Person shall continue to pay
interest under this Agreement and the Transaction Documents at the Maximum Lawful
Rate until such time as the total interest received from such Person is equal
to the total interest that would have been received had Applicable Law not
limited the interest rate payable under this Agreement and the Transaction
Documents.  In no event shall the total
interest received by a Lender under this Agreement and the Transaction
Documents exceed the amount that such Lender could lawfully have received, had
the interest due under this Agreement and the Transaction Documents been
calculated since the Closing Date at the Maximum Lawful Rate.


 


Section 2.4.                                          Notations
on the Note.


 


The
Administrative Agent is hereby authorized to enter on a schedule attached to
the Note a notation (which may be computer generated) or to otherwise record in
its internal books and records or computer system with respect to the Loan (a) the
date of the funding of the Loan and principal amount thereof and (b) each
repayment of principal thereof.  Any such
recordation shall, absent manifest error, constitute prima facie evidence of
the Outstanding Loan Balance under the Note. 
The failure of the Administrative Agent to make any such notation on the
schedule attached to the Note shall not limit or otherwise affect the
obligation of the Borrower to repay the Loan in accordance with the terms set
forth herein.


 


Section 2.5.                                          Principal
Repayments.


 


(a)                                  Unless
sooner prepaid pursuant to Section 2.6, the Outstanding Loan
Balance shall be repaid in full on the Termination Date.


 


(b)                                 If
as of any Measurement Date the Outstanding Loan Balance exceeds the Maximum
Outstanding Loan Amount (including as a result of an Eligible Receivable
becoming a Defaulted Receivable), the Borrower shall within five (5) Business
Days of the actual knowledge thereof by a Responsible Officer deposit the Required
Reduction Amount into the Collection Account.


 


28

















 


Section 2.6.                                          Settlement
Procedures.


 


On each
Payment Date, the Servicer shall direct the Collateral Custodian to pay
pursuant to the Servicing Report (and the Collateral Custodian shall make such
payment from the Collection Account to the extent of Available Funds in
reliance on the information set forth in such Servicing Report) to the
following Persons, the following amounts in the following order of priority:


 


(a)                                  to
each Hedge Counterparty, if applicable, pro rata, based
on the respective amounts owed under all Interest Rate Hedge Transactions
related thereto, including any unpaid Hedge Breakage Costs with respect
thereto;


 


(b)                                 to
the Servicer, in an amount equal to any accrued and unpaid Servicing Fees and
any reimbursable expenses of any successor Servicer;


 


(c)                                  pro  rata in
accordance with the amounts due under this clause and to the extent not paid by
the Borrower, to the Backup Servicer and the Collateral Custodian, pro rata, in an amount equal to (i) any accrued and
unpaid Backup Servicing Fees, Collateral Custodian Fees, Owner Trustee Fees and
Transition Expenses, and (ii) incurred but unreimbursed reasonable
third-party, out-of-pocket expenses relating to their respective duties as
Backup Servicer, Collateral Custodian or Owner Trustee hereunder, in respect of
which the Backup Servicer, the Collateral Custodian or the Owner Trustee, as
applicable, has provided prior written notice setting forth such expenses in
reasonable detail to the Servicer and the Administrative Agent, for the payment
thereof, provided that amounts payable pursuant
to this clause (ii) shall not exceed $5,000 for any Payment Date;


 


(d)                                 to
the Administrative Agent, on behalf of the Lenders, in an amount equal to any
accrued and unpaid Interest and any other fees or expenses due and payable to
the Lenders hereunder;


 


(e)                                  to
the Administrative Agent, for the account of each applicable Lender in
reduction of the Outstanding Loan Balance, an amount equal to the Required
Reduction Amount, if any;


 


(f)                                    pro rata in accordance with the amounts due under this
clause to the Administrative Agent, any applicable Lender, the Backup Servicer,
the Collateral Custodian, any successor Servicer, the Indemnified Parties or
the Secured Parties, all other amounts, including any expenses, Increased
Costs, Taxes or Indemnified Amounts due from the Borrower, but other than the
principal and interest of the Outstanding Loan Balance, then due under this Agreement;


 


(g)                                 after
the occurrence and during the continuance of an Event of Default, to the
Administrative Agent, for the account of each applicable Lender, all amounts
necessary to reduce the Outstanding Loan Balance to $0; and


 


(h)                                 any
remaining amounts shall be distributed to the Borrower (and the Borrower shall
be permitted to, among other things, further distribute such amounts to its
Affiliates or its members at its discretion); provided
that the Borrower may at its discretion direct 


 


29

















 


the Collateral Custodian
to pay any portion of the remaining amounts to the Administrative Agent, on
behalf of the Lenders, in reduction of the Outstanding Loan Balance.


 


Section 2.7.                                          Collections
and Allocations.


 


(a)                                  Collections.  The Servicer shall direct each Obligor on the
Receivables to make payments only to one of the Lockbox Accounts listed on Schedule
VIII, as such Schedule VIII may be amended from time to time.  The Borrower and the Servicer shall transfer,
or cause to be transferred (whether by wire transfer or other electronic means,
which shall not include ACH transfers), to the Concentration Account by the
close of business on each Business Day, all Collections constituting collected
or available funds received in the Lockbox Accounts or received directly by
them.  Pursuant to the Concentration
Account Agreement, the Servicer shall cause the applicable Collections to be
transferred from the Concentration Account to the Collection Account within one
(1) Business Day of deposit therein. 
The Servicer shall further include a statement as to the amount of
Collections on deposit in the Collection Account on each Reporting Date in the
Servicing Report delivered pursuant to Section 6.8(a).


 


(b)                                 Excluded
Amounts.  With the prior written
consent of the Administrative Agent which consent may be given by an e-mail
transmittal, the Servicer may withdraw from the Collection Account (not more
than once per week) any deposits thereto constituting Excluded Amounts if the
Servicer has, prior to such withdrawal and consent, delivered to the
Administrative Agent a report (a copy of which (together with the written
consent of the Administrative Agent) will be provided by the Servicer to the
Backup Servicer and Collateral Custodian) setting forth the calculation of such
Excluded Amounts in form and substance reasonably satisfactory to the
Administrative Agent.


 


(c)                                  Initial
Deposits.  On the Closing Date, the
Servicer will direct the Collateral Custodian in writing to deposit into the Collection
Account all Collections received in respect of Receivables after the applicable
cutoff date established in connection with the acquisition thereof (if other
than the Closing Date) and delivered to the Collateral Custodian.


 


(d)                                 Investment
of Funds.  Prior to the occurrence
and continuance of an Event of Default, to the extent there are uninvested
amounts deposited in the Collection Account, all such amounts shall be invested
in Permitted Investments selected by the Servicer in written instructions
delivered to the Collateral Custodian (which may be in the form of standing
instructions); during the continuance of an Event of Default, to the extent
there are uninvested amounts in the Collection Account, all such amounts may be
invested in Permitted Investments selected by the Servicer and approved in
writing by the Administrative Agent (such approval not to be unreasonably
withheld or delayed).  All earnings (net
of losses and investment expenses) thereon shall be retained or deposited into
the Collection Account and shall be applied on each Payment Date pursuant to
the provisions of Section 2.6. 
All investments shall be subject to availability.  Absent receipt of instructions as
contemplated herein, the Collateral Custodian shall have no obligation to
invest any funds.  Each Permitted
Investment may be purchased by or through the Collateral Custodian or its
Affiliates.  The Collateral Custodian
shall have no responsibility for the performance of any Permitted
Investment.  It is understood and
acknowledged that the Backup Servicer, if appointed as Servicer hereunder,
shall not be required to select Permitted Investments.


 


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Section 2.8.                                          Payments,
Computations, Etc.


 


(a)                                  Unless
otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower or the initial Servicer hereunder shall be paid or deposited in
accordance with the terms hereof no later than 2:00 p.m. on the day when
due in lawful money of the United States in immediately available funds and any
amount not received by such time shall be deemed received on the next Business
Day.  All computations of interest and
other fees hereunder shall be made on the basis of a year consisting of 360
days for the actual number of days elapsed.


 


(b)                                 Whenever
any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of Interest or any fee payable hereunder, as the case may be.


 


Section 2.9.                                          [Reserved]


 


Section 2.10.                                   Increased
Costs; Capital Adequacy; Illegality.


 


(a)                                  If
after the Closing Date or with respect to a particular Lender, the date such
Lender joins this Agreement pursuant to Section 13.16 either (i) the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any Applicable Law or (ii) the compliance by a Lender with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), shall (A) subject a Lender to
any Tax (except net income, gross income or franchise and similar taxes imposed
on any Lender by a taxing jurisdiction in which any such Person is organized,
conducts business or is paying taxes (as the case may be)), duty or other
charge with respect to any interest in the Collateral, or any right or
obligation to make the Loan hereunder, or on any payment made hereunder, (B) impose,
modify or deem applicable any reserve requirement (including, without
limitation, any reserve requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve requirement, if any, included
in the determination of Interest), special deposit or similar requirement
against assets of, deposits with or for the amount of, or credit extended by,
any Lender under this Agreement or any other Transaction Document or (C) impose
any other condition affecting the ownership or security interest in the
Collateral conveyed to the Lenders hereunder or any Lender’s rights hereunder
or under any other Transaction Document, the result of which is to increase the
cost to any Lender or to reduce the amount of any sum received or receivable by
a Lender under this Agreement or under any other Transaction Document, then on
the Payment Date following demand by such Lender (or the next Payment Date, if
such demand is given less than five (5) days prior to a Payment Date)
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis for such demand), the Borrower shall pay directly to such
Lender such additional amount or amounts as will compensate such Lender for
such additional or increased cost incurred or such reduction suffered.


 


(b)                                 If
either (i) the introduction of or any change in or in the interpretation
of any law, guideline, rule, regulation, directive or request or (ii) compliance
by any Lender with any law, guideline, rule, regulation, directive or request
from any central bank or other 


 


31

















 


governmental authority or
agency (whether or not having the force of law), including, without limitation,
compliance by a Lender with any request or directive regarding capital
adequacy, has or would have the effect of reducing the rate of return on the
capital of any Lender as a consequence of its obligations hereunder or arising
in connection herewith to a level below that which any such Lender could have
achieved on the date it became a Lender, and to such extent, but for such
introduction, change or compliance (taking into consideration the policies of
such Lender with respect to capital adequacy) by a material amount, then from
time to time, on the Payment Date following demand by such Lender (or the next
Payment Date, if such demand is given less than five (5) days prior to a
Payment Date) (which demand shall be accompanied by a statement setting forth
in reasonable detail the basis for such demand), the Borrower shall pay
directly to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.  For the
avoidance of doubt, if the issuance of any amendment or supplement to
Interpretation No. 46 or to Statement of Financial Accounting Standards No. 140
by the Financial Accounting Standards Board or any other change in accounting
standards or the issuance of any other pronouncement, release or
interpretation, causes or requires the consolidation of all or a portion of the
assets and liabilities of the Borrower with the assets and liabilities of any
Lender or shall otherwise impose any loss, cost, expense, reduction of return
on capital or other loss or any Lender, such event shall constitute a circumstance
on which such Lender may base a claim for reimbursement under this Section 2.10.


 


(c)                                  In
determining any amount provided for in this Section 2.10, the
Lender may use any reasonable averaging and attribution methods.  Any Lender making a claim under this Section 2.10
shall submit to the Servicer and the Borrower a written description in
reasonable detail as to such additional or increased cost or reduction and the
calculation thereof, which written description shall be conclusive absent
manifest error.


 


(d)                                 Failure
or delay on the part of any Lender to demand compensation pursuant to this Section 2.10
shall not constitute a waiver of such Lender’s right to demand or receive such
compensation.  The Borrower shall not be
required to compensate a Lender for any loss, cost or expense under this Section unless
a claim therefor has been made within 180 days of knowledge thereof by such
Lender.


 


Section 2.11.                                   Taxes.


 


(a)                                  All
payments made by the Borrower or the Servicer (on behalf of the Borrower) under
this Agreement will be made free and clear of and without deduction or
withholding for or on account of any Taxes. 
If any Taxes are required to be withheld from any amounts payable
hereunder, then the amount payable to such Person will be increased (the amount
of such increase, the “Additional Amount”) such that every net payment
made under this Agreement after withholding for or on account of any Taxes
(including, without limitation, any Taxes on such increase) is not less than
the amount that would have been paid had no such deduction or withholding been
made; provided that no Additional Amount shall
be payable hereunder to any Person to the extent such amount is payable as a
result of the failure of such Person to comply with Section 2.11(d).  The foregoing obligation to pay Additional
Amounts with respect to payments required to be made by the Borrower under this
Agreement will not, however, apply with respect to net income, gross income or
franchise and similar taxes imposed on the Administrative Agent or any Lender.


 


32

















 


(b)                                 The
initial Servicer will indemnify (and to the extent the indemnification provided
by the initial Servicer is insufficient, the Borrower will indemnify) each
Lender for the full amount of Taxes payable by such Persons in respect of
Additional Amounts and any liability (including interest and expenses) arising
therefrom or with respect thereto; provided that
no indemnification shall be payable hereunder to any Person to the extent such
amount is payable as a result of the failure of such Person to comply with Section 2.11(d).  All payments in respect of this
indemnification shall be made on the Payment Date following the date a written
invoice therefor setting forth in reasonable detail the basis and calculation
of such amounts is delivered to the Borrower. 
In the event any Secured Party receives a refund of any amount paid by
the Borrower or the initial Servicer pursuant to this Section 2.11,
as long as no Event of Default has occurred and is continuing, such Secured
Party shall promptly remit such refunded amount to the Borrower or the initial
Servicer, as applicable.


 


(c)                                  Within
thirty (30) days after the date of any payment by the Borrower of any Taxes,
the Borrower will furnish to the Administrative Agent appropriate evidence of
payment thereof.


 


(d)                                 If
any Lender is not created or organized under the laws of the United States or a
political subdivision thereof, such Lender (or the Administrative Agent on the
Lender’s behalf) shall deliver to the Borrower, with a copy to the
Administrative Agent, the Collateral Custodian and the Servicer, (i) within
fifteen (15) days after the date such Lender becomes party to the applicable
Transaction Documents, two (or such other number as may from time to time be
prescribed by Applicable Law) duly completed copies of IRS Form W-8BEN or Form W-8ECI
(or any successor forms or other certificates or statements that may be
required from time to time by the relevant United States taxing authorities or
Applicable Law), as appropriate, to permit the Borrower to make payments
hereunder for the account of such Lender without deduction or withholding of
United States federal income or similar Taxes and (ii) upon the
obsolescence of or after the occurrence of any event requiring a change in, any
form or certificate previously delivered pursuant to this Section 2.11(d),
copies (in such numbers as may from time to time be prescribed by Applicable
Law or regulations) of such additional, amended or successor forms, certificates
or statements as may be required under Applicable Law to permit the Borrower to
make payments hereunder for the account of such Lender without deduction or
withholding of United States federal income or similar Taxes (and, in either
case, the Borrower shall be permitted to withhold, without penalty or
liability, amounts it deems reasonably necessary if such documentation is not
delivered hereunder).  Notwithstanding
the foregoing, any additional costs or expenses that are due to the fact that a
Lender is not created or organized in the United States shall not be passed
through to the Borrower.


 


(e)                                  Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower and the Servicer contained in this Section 2.11
shall survive the termination of this Agreement.


 


Section 2.12.                                   Assignment
of the Contractor Sale Agreements.


 


The Borrower
hereby assigns to the Administrative Agent, for the ratable benefit of the
Secured Parties hereunder, all of the Borrower’s right, title and interest in
and to, but none of its obligations under the Contractor Sale Agreements
(including all buyback obligations of the 


 


33

















 


applicable
Contractors) and any UCC financing statements filed under or in connection
therewith.  The Borrower confirms that at
any time during the continuance of an Event of Default, upon ten (10) days
written notice to the Borrower and the Servicer, the Administrative Agent, on
behalf of the Secured Parties, shall have the sole right to enforce the
Borrower’s rights and remedies under the Contractor Sale Agreements for the
benefit of the Secured Parties.


 


ARTICLE III



CONDITIONS TO CLOSING


 


Section 3.1.                                          Conditions
to Closing.


 


No Lender
shall be obligated to make the Loan hereunder until the following conditions
have been satisfied in the sole discretion of, or waived in writing by, the
Administrative Agent:


 


(a)                                  The
Borrower and the Servicer have each provided evidence satisfactory to the
Administrative Agent that each such entity has been duly organized, and is
validly existing in good standing, under the laws of the state of its
formation, with all requisite power and authority to own or lease its
properties and conduct its business as such business is presently conducted,
and had at all relevant times and now has all necessary power, authority and
legal right to acquire, own, sell and pledge the Receivables, as applicable;


 


(b)                                 Each
Transaction Document shall have been duly executed by, and delivered to, the
parties thereto, and the Administrative Agent shall have received such other
documents, instruments, agreements, financing statements, control agreements,
security agreements, insurance certificates and legal opinions as the
Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement, including, without limitation, all
those specified in the schedule of condition precedent documents attached
hereto as Schedule I, in each such case in form and substance reasonably
satisfactory to the Administrative Agent;


 


(c)                                  The
Administrative Agent shall have received (i) reasonably satisfactory
evidence that the Borrower and the Servicer each have obtained all required
consents and approvals of all Persons, including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Transaction Documents to which each is a party and the consummation
of the transactions contemplated hereby or thereby or (ii) an Officer’s
Certificate from each of the Borrower and the Servicer in form and substance
reasonably satisfactory to the Administrative Agent affirming that no such
consents or approvals are required;


 


(d)                                 The
Borrower and the Servicer shall each be in compliance in all material respects
with all Applicable Laws and shall have delivered to the Administrative Agent
as to this and other closing matters a certification in the form of Exhibits E-1
and E-2, as applicable;


 


(e)                                  The
Borrower and the Servicer shall have delivered to the Administrative Agent duly
executed Powers of Attorney in the form of Exhibits F-1 and F-2,
as applicable;


 


34
















 


(f)                                    The
Borrower shall have delivered to the Administrative Agent a certificate as to
Solvency in the form of Exhibits D;


 


(g)                                 The
Administrative Agent shall have received a duly executed copy of the Note, in a
principal amount equal to the Facility Amount;


 


(h)                                 The
Borrower shall have delivered to the Administrative Agent fully-executed copies
of the Securities Account Control Agreement (with respect to the Collection
Account);


 


(i)                                     The
Backup Servicer has taken, and the Servicer has permitted, all necessary action
to obtain access and the information from the Servicer’s servicing system to
perform its responsibilities hereunder;


 


(j)                                     All
fees and expenses due and payable by the Borrower as of the Closing Date
pursuant to the Transaction Documents shall have been received by the
applicable party;


 


(k)                                  The
Servicer shall have delivered a sample Servicing File to the Administrative
Agent which shall be reasonably satisfactory to the Administrative Agent;


 


(l)                                     There
shall be no material pending claim, investigation or litigation with respect to
the Borrower or the Servicer by any state or federal governmental entity except
as disclosed in writing to the Administrative Agent prior to the Closing Date;


 


(m)                               The
representations and warranties of the Borrower contained in Article IV
are true and correct as of the Closing Date; and


 


(n)                                 The
Administrative Agent shall have received and reviewed such financial and other
information as it may reasonably request.


 


Section 3.2.                                          Permitted
Investments.


 


Each time that
the Borrower (or the initial Servicer on behalf of the Borrower) shall direct
or cause the acquisition of any Permitted Investment, the Borrower shall (or
the initial Servicer on behalf of the Borrower), if such Permitted Investment
has not already been transferred or credited to the Collection Account, cause
all Permitted Investments acquired by the Borrower to be transferred to the
Collateral Custodian for credit to the appropriate Account, in each case for
the benefit of the Administrative Agent by one of the following means (and
shall take any and all other actions necessary to create in favor of the
Administrative Agent a valid, perfected, first priority security interest
(subject to Permitted Liens) in each Permitted Investment granted to the
Administrative Agent under laws and regulations (including, without limitation,
Articles 8 and 9 of the UCC, as applicable) in effect at the time of such
grant):


 


(a)                                  in
the case of an Instrument or a Certificated Security represented by a Security
Certificate in registered form by having it specially Indorsed to the
Administrative Agent or in blank by an effective Indorsement or registered in
the name of the Administrative Agent and by (A) delivering such Instrument
or Security Certificate to the Collateral Custodian at the address specified in
Schedule III hereto and (B) causing the Collateral Custodian to


 


35

















 


maintain (on behalf of
the Administrative Agent) continuous possession of such Instrument or Security
Certificate at the address specified in Schedule III hereto;


 


(b)                                 in
the case of an Uncertificated Security, by (i) causing the Administrative
Agent to become the registered owner of such Uncertificated Security and (ii) cooperating
in causing such registration to remain effective and not take any action to the
contrary; provided that in any such case, adequate
notation shall be made in the books and records of the Administrative Agent
regarding the beneficial ownership of the Uncertificated Security in question by
the Borrower, and the Administrative Agent shall have no right to substitute
any other security for the Uncertificated Security in question;


 


(c)                                  in
the case of any Security Entitlement, by causing the Administrative Agent to
become the Entitlement Holder of such Security Entitlement; or


 


(d)                                 in
the case of general intangibles (including any loan not evidenced by an
Instrument) by filing, maintaining and continuing the effectiveness of
financing statements naming the Borrower as debtor and the Administrative Agent
as secured party and describing the Permitted Investment as the collateral at
the filing office of the Secretary of State for the State of Delaware (in the
case of Borrower).


 


ARTICLE IV


 


REPRESENTATIONS AND WARRANTIES


 


Section 4.1.                                          Representations
and Warranties of the Borrower.


 


The Borrower
represents and warrants as follows as of the Closing Date and as of each
Measurement Date (in each and every case solely with respect to the period
since the Closing Date and with respect to developments since the Closing
Date):


 


(a)                                  Organization
and Good Standing.  The Borrower is
validly existing as a statutory trust in good standing, under the laws of the
State of Delaware, with all requisite power and authority to own or lease its
properties and conduct its business as such business is presently conducted,
and has all necessary power, authority and legal right to acquire, own, sell
and pledge the Collateral.


 


(b)                                 Due
Qualification.  The Borrower is duly
qualified to do business as a statutory trust, and has obtained all necessary
qualifications, licenses and approvals, in all jurisdictions in which the
conduct of its business requires such qualifications, licenses or approvals
except to the extent that failure to obtain all necessary qualifications, licenses,
or approvals could not reasonably be expected to have a Material Adverse
Effect.


 


(c)                                  Power
and Authority; Due Authorization; Execution and Delivery.  The Borrower (i) has all necessary
power, authority and legal right to (A) execute and deliver this Agreement
and the other Transaction Documents to which it is a party, and (B) carry
out the terms of the Transaction Documents to which it is a party, and (ii) has
duly authorized by all necessary organizational action, the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party and the assignment of a security interest


 


36

















 


in the Collateral on the
terms and conditions herein provided. 
This Agreement and each other Transaction Document to which the Borrower
is a party have been duly executed and delivered by the Borrower.


 


(d)                                 Binding
Obligation.  This Agreement and each
other Transaction Document to which the Borrower is a party constitutes a
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its respective terms, except as such enforceability
may be limited by Insolvency Laws and by general principles of equity (whether
considered in a suit at law or in equity).


 


(e)                                  No
Violation.  The consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
to which it 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 default under, the Trust Agreement or any Contractual Obligation of the
Borrower, (ii) result in the creation or imposition of any Lien (other
than Permitted Liens) upon any of the Borrower’s properties pursuant to the
terms of any such Contractual Obligation, other than this Agreement, or (iii) violate
any Applicable Law applicable to the Borrower, in each case except to the
extent that such conflict, breach, default, creation, imposition, or violation
could not reasonably be expected to have a Material Adverse Effect.


 


(f)                                    No
Proceedings.  There is no litigation,
proceeding or investigation pending or, to the best knowledge of the Borrower,
threatened against the Borrower in writing, before any Governmental Authority (i) asserting
the invalidity of this Agreement or any other Transaction Document to which the
Borrower is a party, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or any other Transaction
Document to which the Borrower is a party or (iii) seeking any
determination or ruling that could reasonably be expected to have a Material
Adverse Effect.


 


(g)                                 Consents.  All approvals, authorizations, consents,
orders, licenses or other actions of any Person or of any Governmental
Authority (if any) required to be made or obtained by the Borrower as of the
Closing Date for the due execution, delivery and performance by the Borrower of
this Agreement and any other Transaction Document to which the Borrower is a
party have been obtained except to the extent that any such failure to acquire
such approvals, authorizations, consents, orders or licenses, or take such
other actions, could not reasonably be expected to have a Material Adverse
Effect.


 


(h)                                 Solvency.  The Borrower is not the subject of any
Insolvency Proceedings or Insolvency Event. 
The transactions under this Agreement and any other Transaction Document
to which the Borrower is a party do not and will not render the Borrower not
Solvent.


 


(i)                                     Taxes.  The Borrower has filed or caused to be filed
all tax returns required to be filed by it (or has been granted appropriate
extensions) and has paid or made adequate provisions for the payment of all
Taxes and all assessments made against it or any of its property (other than (i) any
amount of Tax the validity or amount of which is currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
accordance with GAAP have been provided on the books of the Borrower, (ii) any
Tax less than 


 


37

















 


thirty (30) days overdue
and (iii) any filings that the failure to so file could not reasonably be
expected to have a Material Adverse Effect), and no tax lien has been filed
and, to the Borrower’s knowledge, no claim is being asserted, with respect to
any such Tax or assessment.


 


(j)                                     Exchange
Act Compliance; Regulations T, U and X. 
None of the transactions contemplated herein or in the other Transaction
Documents will cause the Borrower to violate or result in a violation by the
Borrower of Section 7 of the Exchange Act, or any regulations issued
pursuant thereto, including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.  The Borrower does not own or intend to carry
or purchase, and no proceeds from the Loans will be used to carry or purchase,
any “margin stock” within the meaning of Regulation U or to extend “purpose
credit” within the meaning of Regulation U.


 


(k)                                  Security
Interest.


 


(i)                                     This
Agreement creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral in favor of the Administrative Agent, on
behalf of the Secured Parties, which security interest is prior to all other
Liens (except for Permitted Liens);


 


(ii)                                  the
Receivables and Related Security constitute “instruments”, “general intangibles”,
“tangible chattel paper” or “accounts” (each as defined in the applicable UCC);


 


(iii)                               with
respect to any part of the Collateral that constitute “security entitlements”:


 


(A)                              all
of such security entitlements have been credited to one of the Accounts and
pursuant to the Securities Account Control Agreement the securities
intermediary for each Account has agreed to treat all assets credited to such
Account as “financial assets” within the meaning of the applicable UCC;


 


(B)                                pursuant
to the Securities Account Control Agreement the securities intermediary has
agreed to identify in its records the Administrative Agent as the Person having
a security interest in such entitlement; and


 


(C)                                such
security entitlements are not in the name of any Person other than the Borrower
or the Administrative Agent.  The
Borrower has not authorized or allowed the securities intermediary of any
securities entitlements to comply with the entitlement order of any Person
other than the Administrative Agent; provided that
until the Administrative Agent delivers a notice of exclusive control under the
Securities Account Control Agreement, the Borrower and the Servicer may cause
cash proceeds of the security entitlements to be invested in Permitted
Investments;


 


(iv)                              all
Accounts constitute “securities accounts” as defined in the applicable UCC;


 


38

















 


(v)                                 at
all times the Borrower will own and have good and marketable title to the
Collateral, free and clear of any Lien (other than Permitted Liens) of any
Person;


 


(vi)                              all
appropriate financing statements have been filed in the proper filing office in
the appropriate jurisdictions under Applicable Law in order to perfect the
security interest granted to the Administrative Agent, on behalf of the Secured
Parties, under this Agreement in the Receivables and in the other Collateral,
to the extent that a security interest in such other Collateral may be
perfected by filing financing statements pursuant to the UCC;


 


(vii)                           other
than the security interest granted to the Administrative Agent, on behalf of
the Secured Parties, pursuant to this Agreement, the Borrower has not pledged,
assigned, sold, granted a security interest in or otherwise conveyed any of the
Collateral.  The Borrower has not
authorized the filing of and is not aware of any financing statements against
the Borrower that include a description of collateral covering the Collateral
other than any financing statement that has been terminated and/or fully and
validly assigned to the Administrative Agent on or prior to the date hereof.  The Borrower is not aware of the filing of
any judgment or tax lien filings against the Borrower;


 


(viii)                        all
original executed copies of each Mortgage Contract or Non-Mortgage Contract
that constitute or evidence each Receivable have been delivered to the
Collateral Custodian;


 


(ix)                                the
Borrower has received, or subject to the delivery requirements contained herein
will receive, a written acknowledgment from the Collateral Custodian that the
Collateral Custodian or its bailee is holding the Mortgage Contract or
Non-Mortgage Contract that constitutes or evidences each Receivable solely on
behalf of and for the benefit of the Secured Parties;


 


(x)                                   none
of the Mortgage Contracts or Non-Mortgage Contracts that constitute or evidence
the Receivables has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the
Administrative Agent, on behalf of the Secured Parties, and other than markings
related to debt paid in full prior to the inclusion of such Receivable in the Collateral;


 


(xi)                                with
respect to Collateral that constitutes a “certificated security,” such
certificated security has been delivered to the Collateral Custodian on behalf
of the Administrative Agent and, if in registered form, has been specially
Indorsed to the Administrative Agent or in blank by an effective Indorsement or
has been registered in the name of the Administrative Agent upon original issue
or registration of transfer by the Borrower of such certificated security.


 


(l)                                     Reports
Accurate.  All Servicing Reports (if
prepared by the Borrower, or to the extent that information contained therein
is supplied by the Borrower), information, exhibits, financial statements,
documents, books, records or reports furnished by the Borrower to the
Administrative Agent, Servicer, Backup Servicer, Collateral Custodian, each or
any Secured Party pursuant to this Agreement are true, complete and correct in
all material respects as of the date of their delivery.


 


39

















 


(m)                               Location
of Offices.  The Borrower’s location
(within the meaning of Article 9 of the UCC) is Delaware.  The office where the Borrower keeps all the
Records is at the address of the Borrower referred to in Annex A hereto
(or at such other locations as to which the notice and other requirements
specified in Section 5.2(g) shall have been satisfied).  The Borrower’s Federal Employee
Identification Number is correctly set forth on Exhibit E-1.


 


(n)                                 Tradenames.  The Borrower has no trade names, fictitious
names, assumed names or “doing business as” names or other names under which it
is doing business.


 


(o)                                 Special
Purpose Entity.  The Borrower has not
breached any of its covenants set forth in Section 5.2(l).


 


(p)                                 Investment
Company Act.  The Borrower is not,
and is not controlled by, an “investment company” within the meaning of the
1940 Act or is exempt from the provisions of the 1940 Act.


 


(q)                                 ERISA.  Neither the Borrower nor any ERISA Affiliate
thereof has any Benefit Plans or Multiemployer Plans.


 


(r)                                    Compliance
with Law.  The Borrower has complied
in all material respects with all Applicable Laws to which it may be subject,
and no item of Collateral contravenes any Applicable Law (including, without
limitation, all applicable predatory and abusive lending laws, laws, rules and
regulations relating to licensing, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy), in each case except to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect.


 


(s)                                  Lockbox
Accounts.  The name and address of
the Lockbox Account Banks, together with the account numbers of the Lockbox
Accounts of the Borrower at the applicable Lockbox Account Banks, is specified
in Schedule VIII.  The Lockbox
Accounts are the only accounts to which Obligors have been directed to send
Collections on the Collateral.  The
Borrower has not granted any Person an interest in the Lockbox Accounts.


 


(t)                                    Amendments.  No Receivable has been amended, modified or
waived following inclusion in the Collateral, except for amendments,
modifications or waivers, if any, to such Receivable otherwise permitted under Section 6.4(a) of
this Agreement and in accordance with the Credit and Collection Policy and the
Servicing Standard.


 


(u)                                 USA
PATRIOT Act.  To the best of the
Borrower’s knowledge, neither the Borrower nor any Affiliate of the Borrower is
(i) a country, territory, organization, person or entity named on an
Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or
has a place of business in a country or territory named on such lists or which
is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task
Force on Money Laundering, or whose subscription funds are transferred from or
through such a jurisdiction; (iii) a “Foreign Shell Bank” within the
meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a
physical presence in any country and that is not affiliated with a bank that
has a physical presence and an acceptable level of regulation and supervision;
or (iv) a person or entity that resides in or is organized under the laws
of a jurisdiction designated by the United States


 


40

















 


Secretary of the Treasury
under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures
due to money laundering concerns.


 


(v)                                 Eligibility
of Collateral.  As of the Closing
Date, (i) the Receivables List is an accurate and complete listing of all
Receivables and the information contained therein with respect to the identity
of such Receivables and the amounts owing thereunder is true, correct and
complete in all material respects, and (ii) each such Receivable included
in the Borrowing Base is an Eligible Receivable.


 


Section 4.2.                                          Representations
and Warranties of the Servicer.


 


The initial
Servicer represents and warrants as follows as of the Closing Date and as of
each Measurement Date:


 


(a)                                  Organization
and Good Standing.  The Servicer has
been duly organized and is validly existing as a limited liability company, in
good standing under the laws of its jurisdiction of organization, with all
requisite organizational power and authority to conduct its business as such
business is presently conducted and to enter into and perform its obligations
pursuant to this Agreement.


 


(b)                                 Due
Qualification.  The Servicer is duly
qualified to do business as a limited liability company and has obtained (or
has made all necessary arrangements to obtain) all necessary licenses and
approvals in all jurisdictions in which the conduct of its business requires
such qualification, licenses or approvals except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.


 


(c)                                  Power
and Authority; Due Authorization; Execution and Delivery.  The Servicer (i) has all necessary
power, authority and legal right to (A) execute and deliver this Agreement
and the other Transaction Documents to which it is a party, (B) carry out
the terms of the Transaction Documents to which it is a party, and (ii) has
duly authorized by all necessary organizational action the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party.  This Agreement and each
other Transaction Document to which the Servicer is a party have been duly
executed and delivered by the Servicer.


 


(d)                                 Binding
Obligation.  This Agreement and each
other Transaction Document to which the Servicer is a party constitutes a
legal, valid and binding obligation of the Servicer enforceable against the
Servicer in accordance with its respective terms, except as such enforceability
may be limited by Insolvency Laws and general principles of equity (whether
considered in a suit at law or in equity).


 


(e)                                  No
Violation.  The consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
to which it 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 default under, the organizational documents or any Contractual Obligation of
the Servicer, or (ii) violate any Applicable Law, in each case except to the
extent that such conflict, breach, default, creation, imposition, or violation
could not reasonably be expected to have a Material Adverse Effect.


 


41

















 


(f)                                    No
Proceedings.  There is no litigation,
proceeding or investigation pending or, to the best knowledge of the Servicer,
threatened against the Servicer, before any Governmental Authority (i) asserting
the invalidity of this Agreement or any other Transaction Document to which the
Servicer is a party, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or any other Transaction
Document to which the Servicer is a party or (iii) seeking any
determination or ruling that could reasonably be expected to have a Material
Adverse Effect.


 


(g)                                 Consents.  All approvals, authorizations, consents,
orders, licenses or other actions of any Person or of any Governmental
Authority (if any) required to be made or obtained by the Servicer for the due
execution, delivery and performance by the Servicer of this Agreement and any
other Transaction Document to which the Servicer is a party have been obtained
(or the Servicer has made all necessary arrangements to obtain) except to the
extent any such failure to acquire such approvals, authorizations, consents,
orders, or licenses, or take such other action could not reasonably be expected
to have a Material Adverse Effect.


 


(h)                                 Reports
Accurate.  All Servicer Certificates,
Servicing Reports, Borrowing Base Certificates and other written or electronic
information, exhibits, financial statements, documents, books, records or
reports furnished by the Servicer to the Administrative Agent or any Lender
pursuant to with this Agreement are true, correct and complete in all material
respects.


 


(i)                                     Credit
and Collection Policy.  The Servicer
has complied in all material respects with the Credit and Collection Policy
with regard to the origination, underwriting and servicing of the Receivables.


 


(j)                                     Solvency.  The Servicer is not the subject of any
Insolvency Proceedings or Insolvency Event. 
The transactions under this Agreement and any other Transaction Document
to which the Servicer is a party do not and will not render the Servicer not
Solvent.


 


(k)                                  Taxes.  The Servicer has filed or caused to be filed
all tax returns that are required to be filed by it (or has been granted
appropriate extensions).  The Servicer
has paid or made adequate provisions for the payment of all Taxes and all
assessments made against it or any of its property (other than (i) any
amount of Tax the validity or amount of which is currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
accordance with GAAP have been provided on the books of the Servicer, (ii) any
Tax less than thirty (30) days overdue and (iii) any filings that the
failure to so file could not reasonably be expected to have a Material Adverse
Effect), and no tax lien has been filed against the Servicer or any of its
property and, to the Servicer’s knowledge, no claim is being asserted, with
respect to any such Tax or assessment.


 


(l)                                     Security
Interest.  The Servicer will
cooperate with the Administrative Agent to ensure that (i) the
Administrative Agent has a security interest (as defined in the UCC) in the Collateral,
which is enforceable in accordance with Applicable Law upon execution and
delivery of this Agreement and (ii) upon the filing of UCC-1 financing
statements naming the Administrative Agent as secured party and the Borrower as
debtor, the Administrative Agent, as agent for the Secured Parties, shall have
a valid and first priority perfected security interest in the


 


42

















 


Receivables and that
portion of the Collateral in which a security interest may be perfected by
filing (except for any Permitted Liens).


 


(m)                               Lockbox
Accounts and Concentration Account. 
The Servicer has sent the name and address of each Lockbox Account Bank,
together with the account number of each Lockbox Account at the applicable
Lockbox Account Bank, and the account number of the Concentration Account, to
the Collateral Custodian, the Backup Servicer and Administrative Agent.  Except for the interest granted to the
Administrative Agent pursuant to the facility with Spinnaker Consumer Receivables
Trust, the Servicer has not granted and shall not grant any Person an interest
in the Lockbox Accounts or the Concentration Account.


 


(n)                                 USA
PATRIOT Act.  To the best of the
Servicer’s knowledge, neither the Servicer nor any Affiliate of the Servicer is
(i) a country, territory, organization, person or entity named on an OFAC
list; (ii) a Person that resides or has a place of business in a country
or territory named on such lists or which is designated as a “Non-Cooperative
Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose
subscription funds are transferred from or through such a jurisdiction; (iii) a
“Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign
bank that does not have a physical presence in any country and that is not
affiliated with a bank that has a physical presence and an acceptable level of
regulation and supervision; or (iv) a person or entity that resides in or
is organized under the laws of a jurisdiction designated by the United States
Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as
warranting special measures due to money laundering concerns.


 


(o)                                 Compliance
with Law.  The Servicer has complied
in all material respects with all Applicable Laws to which it may be subject,
and, to the knowledge of the Servicer, no Receivable in the Collateral
contravenes in any material respect any Applicable Laws, in each case except to
the extent that such lack of compliance or contravention could not reasonably be
expected to have a Material Adverse Effect.


 


Notwithstanding
any other provision of this Agreement to the contrary, the parties hereto
acknowledge and agree that it shall not be a breach of Section 4.2(b) or
(g) hereunder by the Servicer if on the date hereof the Servicer
has not obtained all requisite licenses/registrations if (1) the Servicer
has, in good faith, applied for all such licenses/registrations and obtains
such licenses/registrations in due course and (2) such failure does not
otherwise prevent the Servicer from satisfying in all material respects each of
its other covenants and obligations hereunder; provided
that the Servicer covenants and agrees to indemnify, defend and hold each
Indemnified Party harmless against any and all losses actually incurred in
connection with the failure to obtain such licenses/registrations.


 


Section 4.3.                                          [Reserved].


 


Section 4.4.                                          Representations
and Warranties of the Backup Servicer.


 


The Backup
Servicer in its individual capacity and as Backup Servicer represents and
warrants as follows:


 


(a)                                  Organization;
Power and Authority.  It is a duly
organized and validly existing corporation in good standing under the laws of
the State of Minnesota.  It has full
power,


 


43

















 


authority and legal right
to execute, deliver and perform its obligations as Backup Servicer under this
Agreement.


 


(b)                                 Due
Authorization.  The execution and
delivery of this Agreement and the consummation of the transactions provided
for herein have been duly authorized by all necessary action on its part,
either in its individual capacity or as Backup Servicer, as the case may be.


 


(c)                                  No
Conflict.  The execution and delivery
of this Agreement by the Backup Servicer, the performance by it of the transactions
contemplated hereby and the fulfillment by it of the terms hereof will not
conflict with, result in any breach of its organizational documents or any of
the material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Backup Servicer is a
party or by which it or any of its property is bound.


 


(d)                                 No
Violation.  The execution and
delivery of this Agreement by the Backup Servicer, the performance by it of the
transactions contemplated hereby and the fulfillment by it of the terms hereof
will not conflict with or violate, in any material respect, any Applicable Law.


 


(e)                                  Consents.  All approvals, authorizations, consents,
orders or other actions of any Person or Governmental Authority applicable to
the Backup Servicer, required in connection with the execution and delivery of
this Agreement, the performance by the Backup Servicer of the transactions
contemplated hereby and the fulfillment by the Backup Servicer of the terms
hereof have been obtained.


 


(f)                                    Validity,
Etc.  This Agreement constitutes the
legal, valid and binding obligation of the Backup Servicer, enforceable against
the Backup Servicer in accordance with its terms, except as such enforceability
may be limited by applicable Insolvency Laws or general principles of equity
(whether considered in a suit at law or in equity).


 


Section 4.5.                                          Representations
and Warranties of the Collateral Custodian.


 


The Collateral
Custodian in its individual capacity and as Collateral Custodian represents and
warrants as follows:


 


(a)                                  Organization;
Power and Authority.  It is a duly
organized and validly existing national banking association in good standing
under the laws of the United States.  It
has full power, authority and legal right to execute, deliver and perform its
obligations as Collateral Custodian under this Agreement.


 


(b)                                 Due
Authorization.  The execution and
delivery of this Agreement and the consummation of the transactions provided
for herein have been duly authorized by all necessary action on its part,
either in its individual capacity or as Collateral Custodian, as the case may
be.


 


(c)                                  No
Conflict.  The execution and delivery
of this Agreement by the Collateral Custodian, the performance by it of the
transactions contemplated hereby and the fulfillment by it of the terms hereof
will not conflict with, result in any breach of its organizational documents or
any of the material terms and provisions of, or constitute (with or


 


44
















 


without notice or lapse
of time or both) a default under any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Collateral Custodian is a party
or by which it or any of its property is bound.


 


(d)           No Violation.  The execution and delivery of this Agreement
by the Collateral Custodian, the performance by it of the Transactions
contemplated hereby and the fulfillment by it of the terms hereof will not
conflict with or violate, in any material respect, any Applicable Law.


 


(e)           Consents.  All approvals, authorizations, consents,
orders or other actions of any Person or Governmental Authority applicable to
the Collateral Custodian, required in connection with the execution and
delivery of this Agreement, the performance by the Collateral Custodian of the
transactions contemplated hereby and the fulfillment by the Collateral
Custodian of the terms hereof have been obtained.


 


(f)            Validity, Etc.  The Agreement constitutes the legal, valid
and binding obligation of the Collateral Custodian, enforceable against the
Collateral Custodian in accordance with its terms, except as such
enforceability may be limited by applicable Insolvency Laws and general
principles of equity (whether considered in a suit at law or in equity).


 


ARTICLE V


 


GENERAL COVENANTS


 


Section 5.1.              Affirmative
Covenants of the Borrower.


 


From the date
hereof until the Maturity Date, the Borrower hereby covenants and agrees as
follows:


 


(a)           Compliance with Laws.  The Borrower will comply in all material
respects with all Applicable Laws, including those with respect to the
Collateral or any part thereof, except if the failure to comply could not
reasonably be expected to have a Material Adverse Effect.


 


(b)           Preservation of
Company Existence.  The Borrower will
preserve and maintain its existence, rights, franchises and privileges as a
statutory trust in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a statutory trust, in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises, privileges
and qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.


 


(c)           Performance and
Compliance with Collateral.  The
Borrower will, at its expense, timely and fully perform and comply in all
material respects with all provisions, covenants and other promises required to
be observed by it under the Collateral and all other agreements related to such
Collateral.


 


(d)           Keeping of Records
and Books of Account.  The Borrower
will maintain and implement administrative and operating procedures (including,
without limitation, an ability


 


45

















 


to recreate records
evidencing the Collateral in the event of the destruction of the originals
thereof) and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all or any
portion of the Collateral.


 


(e)           Protection of
Interest in Collateral.  With respect
to the Receivables and Related Security, the Borrower will take all action
necessary to perfect, protect and more fully evidence the Borrower’s ownership
of such Receivables and Related Security free and clear of any Lien other than
the Lien created hereunder and Permitted Liens, including, without limitation, (i) with
respect to the Receivables and that portion of the Collateral in which a
security interest may be perfected by filing, maintaining effective financing
statements in all necessary or appropriate filing offices (including any
amendments thereto or assignments thereof) and filing continuation statements,
amendments or assignments with respect thereto in such filing offices
(including any amendments thereto or assignments thereof), (ii) executing
or causing to be executed such other instruments or notices as may be
reasonably necessary or appropriate, (iii) subject to Section 13.9,
permitting the Administrative Agent or its respective agents or representatives
to visit the offices of the Borrower during normal office hours and upon
reasonable notice examine and make copies of all documents, books, records and
other information concerning the Collateral and discuss matters related thereto
with any of the officers of the Borrower having knowledge of such matters (the
Borrower shall pay the reasonable costs and expenses for all such visits up to
four times each calendar year and at any time during the existence of an Event
of Default or an Unmatured Event of Default), and (iv) taking all
additional action that the Administrative Agent may reasonably request to
perfect, protect and more fully evidence the respective interests of the
parties to this Agreement in the Collateral.


 


(f)            Reserved.


 


(g)           Reserved.


 


(h)           Taxes.  The Borrower will file all appropriate tax
returns and pay any and all required Taxes (other than the amount of any Taxes
the validity or amount of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the Borrower).


 


(i)            Use of Proceeds.  The Borrower will use the proceeds of the
Loan only to acquire Collateral and pay transaction expenses related hereto or
other expenses of the Borrower.


 


(j)            Obligor
Notification Forms.  The Borrower
shall furnish the Administrative Agent with an appropriate power of attorney to
send (at the Administrative Agent’s discretion after the occurrence of an Event
of Default) Obligor notification forms to give notice to the Obligors of the
Secured Parties’ interest in the Collateral and the obligation to make payments
as directed by the Administrative Agent.


 


(k)                                  Notices.  The Borrower will furnish to the
Administrative Agent:


 


(i)            Income Tax
Liability.  Within ten (10) Business
Days after the receipt by a Responsible Officer of revenue agent reports or
other written proposals, determinations or assessments of the Internal Revenue
Service or any other taxing authority which propose, determine or otherwise set
forth positive adjustments to the Tax liability of any


 


46

















 


affiliated group (within
the meaning of Section 1504(a)(l) of the Code) of which Borrower is a
member which equal or exceed $100,000 in the aggregate, telephonic or facsimile
notice (confirmed in writing within five (5) Business Days thereafter)
specifying the nature of the items giving rise to such adjustments and the
amounts thereof;


 


(ii)           Auditors’ Management
Letters.  Promptly after the receipt
thereof, any auditors’ management letters that are received by the Borrower;


 


(iii)          Representations and
Warranties.  Forthwith upon a
Responsible Officer of the Borrower receiving knowledge of the same, the
Borrower shall notify the Administrative Agent if any representation or
warranty set forth in Section 4.1 was incorrect in any material
respect at the time it was given or deemed to have been given and at the same
time deliver to the Administrative Agent a written notice setting forth in
reasonable detail the nature of such facts and circumstances;


 


(iv)          Proceedings.  As soon as possible and in any event within
five (5) Business Days after a Responsible Officer of the Borrower
receives notice or obtains knowledge thereof, notice of any settlement of,
judgment (including a judgment with respect to the liability phase of a
bifurcated trial) in or commencement of any labor controversy, litigation,
action, suit or proceeding before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which could reasonably be expected to have a Material Adverse Effect; provided that notwithstanding the foregoing, any settlement, judgment,
labor controversy, litigation, action, suit or proceeding affecting the
Collateral in an amount in excess of $250,000, the Transaction Documents, the
Secured Parties’ interest in the Collateral or otherwise in an amount in excess
of $250,000 shall be required to be reported;


 


(v)           Notice of Material
Events.  Promptly upon a Responsible
Officer of the Borrower becoming aware thereof, notice of any other event or
circumstances that, in the reasonable judgment of the Borrower, could
reasonably be expected to have a Material Adverse Effect;


 


(vi)          Events of Default.  Prompt (and in any event within one Business
Day) written notice of the occurrence of each Event of Default and each
Unmatured Event of Default of which a Responsible Officer of the Borrower has
knowledge or has received notice (other than any notice from the Administrative
Agent or any Lender).  In addition, no
later than three (3) Business Days following a Responsible Officer of the
Borrower’s knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default, the Borrower will provide to the Administrative
Agent a written statement of a Responsible Officer setting forth the details of
such event and the action that the Borrower proposes to take with respect
thereto; and


 


(vii)         Accounting Changes.  As soon as possible and in any event within
ten (10) Business Days after the effective date thereof, notice of any
material change in the accounting policies of the Borrower.


 


(l)                                     Compliance
With Transaction Documents.  The
Borrower will comply in all respects with the terms of this Agreement and the
other Transaction Documents to which it is a party.


 


47

















 


(m)          Hedging.  If for any calendar month the Excess Spread
is less than 4.00% and the Administrative Agent provides notice that hedging
shall be required, the Borrower shall be required to enter into Hedge
Transactions, in form and substance (and with counterparties) acceptable to and
as specified by the Administrative Agent in its reasonable discretion, within
30 Business Days of the date of such notice from the Administrative Agent.


 


(n)           Financial Statements.
The Borrower will submit to the Administrative Agent (i) within thirty
(30) days after the end of each of its fiscal months and quarters (excluding
the fiscal quarter ending on the date specified in subclause (ii) below),
commencing November 30, 2008, unaudited financial statements of the
Borrower for the most recent fiscal month or quarter, as applicable, and (ii) within
one hundred twenty (120) days after the end of each fiscal year, commencing
with the fiscal year ended December 31, 2008, unaudited financial
statements of the Borrower prepared by a firm of nationally recognized
independent public accountants.


 


(o)           Other.  The Borrower will furnish to the
Administrative Agent promptly, from time to time, such other information,
documents, records or reports respecting the Collateral or the condition or
operations, financial or otherwise, of the Borrower as the Administrative Agent
may from time to time reasonably request in order to protect the interests of
the Secured Parties under or as contemplated by this Agreement.


 


Section 5.2.              Negative
Covenants of the Borrower.


 


From the date
hereof until the Collection Date, the Borrower hereby covenants and agrees as
to itself and the Collateral as follows:


 


(a)           Other Business.  The Borrower will not (i) engage in any
business other than the transactions contemplated by the Transaction Documents
or reasonable extensions thereof, (ii) incur any Indebtedness, other than
pursuant to or permitted by this Agreement or under the other Transaction
Documents, or (iii) form any Subsidiary or make any Investment in any
other Person (other than Permitted Investments).


 


(b)           Collateral Not to be
Evidenced by Instruments.  The
Borrower will take no action to cause any Receivable that is not, as of the
Closing Date, evidenced by an Instrument, to be so evidenced except in
connection with the enforcement or collection of such Receivable.


 


(c)           Security Interests.  Except as permitted by the Transaction
Documents, the Borrower will not sell, pledge, assign or transfer, or grant,
create, incur, assume or suffer to exist any Lien (except for Permitted Liens)
on, any Collateral, whether now existing or hereafter transferred hereunder, or
any interest therein, to any other Person. 
The Borrower will promptly notify the Administrative Agent of the
existence of any Lien (other than Permitted Liens) on any Collateral and the
Borrower shall defend the right, title and interest of the Administrative
Agent, as agent for the Secured Parties in, to and under the Collateral against
all claims of third parties.


 


(d)           Mergers,
Acquisitions, Sales, etc.  The
Borrower will not be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets, any stock of any
class of, or any partnership or joint venture interest in, any other Person, or
sell, transfer, convey or lease any of its assets, or sell or assign with or
without recourse any


 


48

















 


Collateral or any
interest therein (in each case other than as expressly permitted pursuant to the
Transaction Documents or in the ordinary course of business).


 


(e)           Deposits to
Collection Account.  The Borrower
will not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to the Collection Account cash or cash proceeds other than
Collections in respect of the Collateral.


 


(f)            Restricted Payments.  The Borrower shall not declare or pay any
dividends or distributions (i) except as permitted under its
organizational documents, and (ii) at any time when an Event of Default or
Unmatured Event of Default has occurred and is continuing or would result
therefrom.


 


(g)           Change of Name or
Location of Servicing Files.  The
Borrower shall not (i) change its name, move the location of its principal
place of business and chief executive office, change the offices where it keeps
the records from the location referred to on Annex A hereto, or change
the jurisdiction of its organization, or (ii) move, or consent to the
Collateral Custodian or Servicer moving, the Required Receivable Files or the
Servicing Files from the location thereof on the Closing Date, unless in each
case the Borrower has given at least ten (10) days’ written notice to the
Administrative Agent and has taken all actions required under the UCC of each
relevant jurisdiction in order to continue the first priority perfected
security interest (subject to Permitted Liens) of the Administrative Agent, as
agent for the Secured Parties, in the Collateral.


 


(h)           ERISA Matters.  The Borrower will not establish any Benefit
Plan or Multiemployer Plan.


 


(i)            Organizational
Documents.  The Borrower will not
amend its organizational documents without the prior written consent of the
Administrative Agent (such consent not to be unreasonably withheld).


 


(j)            Changes in Payment
Instructions to Obligors.  The
Borrower will not add or terminate any bank as a Lockbox Account Bank or any
Lockbox Account listed in Schedule VIII or make any change, or permit
the Servicer to make any change, in its instructions to Obligors regarding
payments to be made with respect to the Collateral to the applicable Lockbox
Account, unless the Administrative Agent has consented to such addition,
termination or change and the Borrower has notified the Collateral Custodian.


 


(k)           Extension or
Amendment of Collateral.  The Borrower
will not, except as otherwise permitted in Section 6.4(a), extend,
amend or otherwise modify, or permit the Servicer to extend, amend or otherwise
modify, the material terms of any Receivable (including the Related Security).


 


(l)            Special
Purpose Entity.  The Borrower will
not:


 


(i)            engage in any business
or activity other than the purchase and receipt of Receivables and related
assets, the pledge of Collateral under the Transaction Documents, and such
other activities as are incidental thereto;


 


49

















 


(ii)           acquire or own any
material assets other than (A) the Receivables and rights in the Related
Security and (B) incidental property as may be necessary for the operation
of the Borrower and the performance of its obligations under the Transaction
Documents;


 


(iii)          merge into or
consolidate with any Person or dissolve, terminate or liquidate in whole or in
part, transfer or otherwise dispose of all or substantially all of its assets
or change its legal structure, without in each case first obtaining the consent
of the Administrative Agent, except as otherwise provided by the Transaction
Documents;


 


(iv)          fail to preserve its
existence as a Delaware statutory trust, validly existing and in good standing
under the laws Delaware, or, without the prior written consent of the
Administrative Agent, make any material amendment or modification, or terminate
or fail to comply with the material provisions of the Trust Agreement, or fail
to observe statutory trust formalities;


 


(v)           own any Subsidiary or
make any Investment in any Person without the consent of the Administrative
Agent;


 


(vi)          except as permitted by
the Transaction Documents, commingle its assets or liabilities with the assets
or liabilities of any of its Affiliates or any other Person;


 


(vii)         incur any debt, secured
or unsecured, direct or contingent (including guaranteeing any obligation),
other than indebtedness to the Secured Parties hereunder or in conjunction with
a repayment of all Aggregate Unpaids owed hereunder, except for trade payables
in the ordinary course of its business; provided that such debt is not evidenced by a
note and is paid within thirty (30) days (or longer if in the normal course
such debt is paid on terms greater than 30 days) of when due (unless otherwise
contested in good faith by appropriate proceedings) and as otherwise permitted
by the Transaction Documents;


 


(viii)        become insolvent or fail
to pay its debts and liabilities from its assets as the same shall become due
(unless otherwise contested in good faith by appropriate proceedings);


 


(ix)           fail to maintain its
records, books of account and bank accounts separate and apart from those of
any other Person;


 


(x)            enter into any
contract or agreement with any Person, except upon terms and conditions that
are commercially reasonable and substantially similar to those that would be
available on an arms-length basis with third parties other than such Person in
the reasonable judgment of the Borrower;


 


(xi)           seek its dissolution or
winding up in whole or in part;


 


(xii)          fail to correct any
known misunderstandings regarding the separate identity of the Borrower and
Fair or any other Person;


 


50

















 


(xiii)         make any loan or advances
to any third party, including any principal or Affiliate, or hold evidence of
indebtedness issued by any other Person (other than the Receivables, cash and
Permitted Investments and as otherwise permitted by the Transaction Documents);


 


(xiv)        fail to file its own
separate tax return, or file a consolidated federal income tax return with any
other Person, except as may be required by the Code and regulations;


 


(xv)         actively hold itself out
to the public such to represent that it is not a legal entity separate and
distinct from any other Person or to suggest that it is responsible for the
debts of any third party (including any of its principals or Affiliates);


 


(xvi)        fail to maintain adequate
capital for the reasonably foreseeable obligations of its business and
contemplated business operations;


 


(xvii)       file or consent to the
filing of any petition, either voluntary or involuntary, to take advantage of
any applicable insolvency, bankruptcy, liquidation or reorganization statute,
or make an assignment for the benefit of creditors;


 


(xviii)      permit any transfer (whether
in any one or more transactions) of any direct or indirect ownership interest
in the Borrower to the extent it has the ability to control the same, unless
the Borrower delivers to the Administrative Agent an acceptable
non-consolidation opinion and the Administrative Agent consents to such
transfer;


 


(xix)         fail to pay the salaries
of its own employees, if any, in light of its contemplated business operations;


 


(xx)          acquire the securities
of its Affiliates;


 


(xxi)         fail to allocate fairly
and reasonably any overhead expenses that are shared with an Affiliate,
including paying for office space and services performed by any employee of an
Affiliate;


 


(xxii)        fail to use separate
invoices bearing its own name;


 


(xxiii)       pledge or permit the pledge
of its assets for the benefit of any other Person, other than with respect to
payment of the indebtedness to the Secured Parties hereunder; and


 


(xxiv)       take or refrain from
taking, as applicable, each of the activities specified in the
non-consolidation opinion of Jackson Walker L.L.P., dated as of the date
hereof, upon which the conclusions expressed therein are based.


 


Section 5.3.          Affirmative
Covenants of the Servicer.


 


From the date
hereof until the Collection Date, the Servicer hereby covenants and agrees as
follows:


 


51

















 


(a)           Compliance with Law.  The Servicer will comply in all material
respects with all Applicable Laws, including those with respect to the
Collateral or any part thereof, except if the failure to comply could not
reasonably be expected to have a Material Adverse Effect.


 


(b)           Preservation of
Company Existence.  The Servicer will
preserve and maintain its organizational existence, rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a limited liability company (or other applicable
entity in the case of a successor Servicer), in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises, privileges
and qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.


 


(c)           Obligations and
Compliance with Collateral.  The
Servicer will duly fulfill and comply with all obligations on the part of the
Borrower to be fulfilled or complied with under or in connection with the
Collateral and will do nothing to impair the rights of the Administrative
Agent, as agent for the Secured Parties, in, to and under the Collateral except
as otherwise permitted in the Transaction Documents.


 


(d)           Keeping of Records
and Books of Account.


 


(i)            The Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Collateral in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection and the identification of the Collateral.


 


(ii)           Subject to Section 13.9,
the Servicer shall permit the Administrative Agent, the Backup Servicer, each
Lender or their respective agents or representatives, to visit the offices of
the Servicer during normal office hours and upon reasonable notice and examine
and make copies of all documents, books, records and other information
concerning the Collateral and discuss matters related thereto with any of the
officers or executive employees of the Servicer having knowledge of such
matters; the Servicer shall pay the reasonable costs and expenses (including
all direct and indirect costs and expenses) for all such visits up to four
times each calendar year and at any time during the existence of an Event of
Default or Unmatured Event of Default; provided that
any successor Servicer shall not be required to pay any such costs and
expenses, shall be given five Business Days notice of any such visit and shall
be subject to only two visits per calendar year.


 


(iii)          The initial Servicer
will on or prior to the date hereof, mark its master data processing records
and other books and records relating to the Collateral with a legend,
acceptable to the Administrative Agent, describing the grant of a security
interest by the Borrower to the Administrative Agent as agent for the Secured
Parties hereunder.


 


(e)           [Reserved].


 


(f)            Credit and
Collection Policy.  The Servicer will
(i) comply in all material respects with the Credit and Collection Policy
in regard to the Collateral, and (ii) furnish to the Administrative Agent,
prior to its effective date, written notice of any proposed changes in the


 


52

















 


Credit and Collection
Policy.  The Servicer will not agree to
or otherwise permit to occur any material change in the Credit and Collection
Policy without the prior written consent of the Administrative Agent and the
Borrower; provided that no consent shall be
required from the Administrative Agent in connection with any change mandated
by Applicable Law or a Governmental Authority as evidenced by an Opinion of Counsel
to that effect delivered to the Administrative Agent.


 


(g)           Events of Default.  The Servicer will provide the Administrative
Agent and the Borrower with prompt (and in any event within one Business Day)
written notice of the occurrence of each Event of Default and each Unmatured
Event of Default of which a Responsible Officer of the Servicer has knowledge
or has received notice (other than any knowledge obtained from or any notice
from the Administrative Agent or a Lender). 
In addition, no later than three (3) Business Days following a
Responsible Officer of the Servicer’s knowledge or notice of the occurrence of
any Event of Default or Unmatured Event of Default, the Servicer will provide
to the Administrative Agent and the Borrower a written statement of the chief
financial officer or chief accounting officer of the Servicer setting forth the
details of such event and the action that the Servicer proposes to take with
respect thereto.


 


(h)           Taxes.  The Servicer will file all appropriate tax
returns and pay any and all required Taxes (other than the amount of any Taxes
the validity or amount of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the Servicer).


 


(i)            Other.  The Servicer will promptly furnish to the
Administrative Agent and the Borrower such other information, documents,
records or reports respecting the Collateral or the condition or operations,
financial or otherwise, of the Borrower or the Servicer as the Administrative
Agent or the Borrower may from time to time reasonably request in order to
protect the interests of the Borrower, the Administrative Agent and the Secured
Parties under or as contemplated by this Agreement.


 


(j)            Proceedings.  As soon as possible and in any event within
five (5) Business Days after a Responsible Officer of the Servicer
receives notice or obtains knowledge thereof, the Servicer will furnish to the
Administrative Agent and the Borrower notice of any settlement of, judgment
(including a material judgment with respect to the liability phase of a
bifurcated trial) in or commencement of any labor controversy, litigation,
action, suit or proceeding before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, in each case,
relating to the Servicer, which could reasonably be expected to have a Material
Adverse Effect.


 


(k)           Deposit of
Collections.  The Servicer shall
direct each Obligor to make payments directly to the applicable Lockbox Account
and shall promptly (but in no event later than one (1) Business Day after
receipt) deposit into the Concentration Account any and all Collections
received directly by it or by the Borrower (in the case of the initial
Servicer, in which case the initial Servicer will be acting on the Borrower’s
behalf).


 


(l)            Change of Control.  Upon the occurrence of a Change of Control of
the Servicer, the Servicer shall provide the Borrower, the Administrative
Agent, the Backup Servicer


 


53

















 


and each Lender with
written notice of such Change of Control within two (2) Business Days
after the occurrence of the same.


 


(m)          Special Purpose
Entity Requirements.  The Servicer
shall take such actions as are necessary to cause the Borrower to be in
compliance with the Special Purpose Entity requirements set forth in Section 4.1(o) (for
purposes of this clause (m), “Servicer” shall only apply to any Servicer
that is an Affiliate of the Borrower).


 


(n)           Servicing System
Changes.  As soon as possible and in
any event within five (5) Business Days after the effective date thereof,
the Servicer will provide the Backup Servicer and the Borrower notice of any
material changes to the Servicer’s servicing systems.


 


(o)           Notices.  The Servicer will furnish to the Borrower,
the Administrative Agent and the Backup Servicer prior written notice of any
changes to its name or location of its principal place of business or chief
executive office.


 


Section 5.4.          Negative Covenants of
the Servicer.


 


From the date
hereof until the Collection Date, the Servicer hereby covenants and agrees as
follows:


 


(a)           Deposits to
Collection Account.  The Servicer
will not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to the Collection Account cash or cash proceeds other than
Collections in respect of the Collateral.


 


(b)           Mergers,
Acquisition, Sales, etc.  The initial
Servicer will not consolidate with or merge into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless the Servicer is the surviving entity and unless:


 


(i)            the initial Servicer
has delivered to the Administrative Agent and the Borrower an Officer’s
Certificate stating that any such consolidation, merger, conveyance or transfer
and any supplemental agreement executed in connection therewith comply with
this Section 5.4 and that all conditions precedent herein provided
for relating to such transaction have been complied with and, in the case of a
supplemental agreement, the delivery of an Opinion of Counsel stating that such
supplemental agreement is legal, valid and binding with respect to the Servicer
and such other matters as the Administrative Agent may reasonably request;


 


(ii)           the initial Servicer
shall have delivered notice of such consolidation, merger, conveyance or
transfer to the Administrative Agent and the Borrower and obtained the consent
of the Administrative Agent and the Borrower (such consent not to be unreasonably
withheld); and


 


(iii)          after giving effect
thereto, no Servicer Default, Unmatured Event of Default or Event of Default
shall exist.


 


(c)           Change of Location
of Servicing Files.  The Servicer
shall not (i) change the offices where it keeps records concerning the
Collateral from the location referred to on Annex A hereto, or (ii) move,
or consent to the Collateral Custodian moving, the Required


 


54
















 


Receivable Files or
Servicing Files from the location thereof on the Closing Date, unless the
Servicer has given at least ten (10) days’ written notice to the
Administrative Agent and the Borrower.


 


(d)                                 Change
in Payment Instructions to Obligors. 
The Servicer will not add or 
terminate any bank as a Lockbox Account Bank or any Lockbox Account
listed in Schedule VIII or make any change in its instructions to
Obligors regarding payments to be made to the applicable Lockbox Account,
unless the Administrative Agent and the Borrower have consented to such
addition, termination or change and the Collateral Custodian has been notified.


 


(e)                                  Extension
or Amendment of Receivables.  The
Servicer will not, except as otherwise permitted in Section 6.4(a),
extend, amend or otherwise modify the terms of any Receivable (including the
Related Security).


 


Section 5.5.                                          [Reserved].


 


Section 5.6.                                          [Reserved].


 


Section 5.7.                                          Affirmative
Covenants of the Backup Servicer.


 


From the date
hereof until the Collection Date, the Backup Servicer hereby covenants and
agrees as follows:


 


(a)                                  Compliance
with Law.  The Backup Servicer will
comply with all Applicable Law.


 


(b)                                 Preservation
of Existence.  The Backup Servicer
will preserve and maintain its existence, rights, franchises and privileges in
the jurisdiction of its formation, and qualify and remain qualified in good
standing in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification has had, or could
reasonably be expected to have, a Material Adverse Effect.


 


Section 5.8.                                          Negative
Covenants of the Backup Servicer.


 


From the date
hereof until the Collection Date, the Backup Servicer will not make any changes
to the Backup Servicing Fee set forth in the Backup Servicer Fee Letter without
the prior written approval of the Administrative Agent.


 


Section 5.9.                                          Affirmative
Covenants of the Collateral Custodian.


 


From the date
hereof until the Collection Date, the Collateral Custodian hereby covenants and
agrees as follows:


 


(a)                                  Compliance
with Law.  The Collateral Custodian
will comply in all material respects with all Applicable Law.


 


(b)                                 Preservation
of Existence.  The Collateral
Custodian will preserve and maintain its existence, rights, franchises and
privileges in the jurisdiction of its formation and


 


55

















 


qualify and remain
qualified in good standing in each jurisdiction where failure to preserve and
maintain such existence, rights, franchises, privileges and qualification has
had, or could reasonably be expected to have, a Material Adverse Effect.


 


(c)                                  Location
of Required Receivable Files. 
Subject to Section 8.8, the Required Receivable Files shall
remain at all times in the possession of the Collateral Custodian at the
address set forth on Annex A to this Agreement unless notice of a
different address is given in accordance with the terms hereof or unless the
Administrative Agent agrees to allow certain Required Receivable Files to be
released to the Servicer on a temporary basis in accordance with the terms
hereof, except as such Required Receivable Files may otherwise be released
pursuant to this Agreement.


 


Section 5.10.                                   Negative
Covenants of the Collateral Custodian.


 


From the date
hereof until the Collection Date, the Collateral Custodian hereby covenants and
agrees as follows:


 


(a)                                  Required
Receivable Files.  The Collateral
Custodian will not dispose of any Required Receivable File documents in any
manner that is inconsistent with the performance of its obligations as the
Collateral Custodian pursuant to this Agreement and will not dispose of any
Collateral except as contemplated by this Agreement.


 


(b)                                 No
Changes to Collateral Custodian Fee. 
The Collateral Custodian will not make any changes to the Collateral Custodian
Fee set forth in the Collateral Custodian Fee Letter without the prior written
approval of the Administrative Agent.


 


ARTICLE VI


 


ADMINISTRATION AND SERVICING OF
CONTRACTS


 


Section 6.1.                                          Designation
of the Servicer.


 


(a)                                  Initial
Servicer.  The servicing,
administering and collection of the Collateral shall be conducted by the Person
designated as the Servicer hereunder from time to time in accordance with this Section 6.1.  Until the Administrative Agent gives to the
Borrower and FCC Finance, LLC a Servicer Termination Notice, FCC Finance, LLC
is hereby appointed as, and hereby accepts such appointment and agrees to
perform the duties and responsibilities of, the Servicer pursuant to the terms
hereof.


 


(b)                                 Successor
Servicer.  Upon the Borrower’s and the
Servicer’s receipt of a Servicer Termination Notice from the Administrative
Agent pursuant to Section 6.12, the Servicer agrees that it will
terminate its activities as Servicer hereunder in a manner that will facilitate
the transition of the performance of such activities to a successor Servicer,
as reasonably determined by the Borrower and the Administrative Agent, and the
successor Servicer shall assume each and all of the Servicer’s obligations to
service and administer the Collateral, on the terms and subject to the
conditions herein set forth, and the Servicer shall use its best efforts to
assist the successor Servicer in assuming such obligations.


 


56

















 


(c)                                  Subcontracts.  The Servicer may, with the prior written
consent of the Borrower and approval of the Administrative Agent (such approval
not to be unreasonably withheld) and with notice to the Backup Servicer,
subcontract with any other Person for servicing, administering or collecting
the Collateral; provided that the Servicer shall remain
liable for the performance of the duties and obligations of the Servicer
pursuant to the terms hereof without regard to any subcontracting arrangement.


 


(d)                                 Servicing
Programs.  In the event that the
initial Servicer uses any software program in servicing the Collateral that it
licenses from a third party, the initial Servicer shall use commercially
reasonable efforts to obtain, either before the Closing Date or as soon as
possible thereafter, whatever licenses or approvals are necessary to allow the
Administrative Agent and the Backup Servicer to use such program and to allow
the initial Servicer to assign such licenses to the Backup Servicer or to any
other Successor Servicer appointed as provided in this Agreement.


 


Section 6.2.                                          Duties
of the Servicer.


 


(a)                                  Appointment.  The Borrower hereby appoints the Servicer as
its agent, as from time to time designated pursuant to Section 6.1,
to service the Collateral and enforce the Borrower’s rights in, to and under
such Collateral.  The Servicer hereby
accepts such appointment and agrees to perform the duties and obligations with
respect thereto as set forth herein.  The
Servicer and the Borrower hereby acknowledge that the Administrative Agent and
the other Secured Parties are third party beneficiaries of the obligations
undertaken by the Servicer hereunder.


 


(b)                                 Duties.  The Servicer shall take or cause to be taken
all such actions as may be reasonably necessary or advisable to collect on the
Collateral from time to time, all in accordance with Applicable Law, the Credit
and Collection Policy and the Servicing Standard.  Without limiting the foregoing, the duties of
the Servicer  shall include the following:


 


(i)                                     preparing
and submitting claims to, and acting as post-billing liaison with, Obligors on
each Receivable;


 


(ii)                                  maintaining
all reasonably necessary servicing records with respect to the Collateral and
providing such reports, information and servicing records to the Administrative
Agent and Collateral Custodian in respect of the servicing of the Collateral
(including information relating to the Servicer’s performance under this
Agreement) as may be required hereunder or as the Borrower, the Administrative
Agent and the Collateral Custodian may reasonably request;


 


(iii)                               maintaining
and implementing administrative and operating procedures (including, without
limitation, an ability to recreate servicing records evidencing the Collateral
in the event of the destruction of the originals thereof) and keeping and
maintaining all documents, books, records and other information reasonably
necessary or advisable for the collection of the Collateral;


 


(iv)                              identifying
each Receivable clearly and unambiguously in its servicing records to reflect
that such Receivable is owned by the Borrower and that the Borrower 


 


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has granted a security
interest therein to the Administrative Agent for the benefit of the Secured
Parties pursuant to this Agreement;


 


(v)                                 notifying
the Borrower and the Administrative Agent of any material action, suit,
proceeding, dispute, offset, deduction, defense or counterclaim (A) that
is, or to the Servicer’s knowledge threatened to be, asserted by an Obligor
with respect to any Receivable (or portion thereof) of which it has knowledge
or has received notice; and (B) that could reasonably be expected to have
a Material Adverse Effect;


 


(vi)                              providing
written notice to the Borrower and the Administrative Agent, prior to the
effective date thereof, of any material proposed changes in the Credit and
Collection Policy;


 


(vii)                           maintaining
the first priority perfected security interest (subject to Permitted Liens) of
the Administrative Agent, as agent for the Secured Parties, in the Collateral;
and


 


(viii)                        maintaining
the Servicing Files with respect to Receivables; and


 


(ix)                                directing
the Collateral Custodian to make payments pursuant to the terms of the
Servicing Report in accordance with Section 2.6.


 


(c)                                  Notwithstanding
anything to the contrary contained herein, the exercise by the Secured Parties
of their rights hereunder shall not release the Servicer or the Borrower from
any of their duties or responsibilities with respect to the Collateral.  The Secured Parties, the Backup Servicer and
the Collateral Custodian shall not have any obligation or liability with
respect to any Collateral (except as otherwise provided herein in the case of
the Collateral Custodian and the Backup Servicer), nor shall any of them be
obligated to perform any of the obligations of the Servicer hereunder.


 


(d)                                 Any
payment by an Obligor in respect of any indebtedness owed by it to the Borrower
shall, except as otherwise specified by such Obligor or otherwise required by
contract or law and unless otherwise instructed by the Administrative Agent, be
applied as a collection of a payment by such Obligor (starting with the oldest
such outstanding payment due) to the extent of any amounts then due and payable
thereunder before being applied to any other receivable or other obligation of
such Obligor.


 


Section 6.3.                                Authorization
of the Servicer.


 


(a)                                  Each
of the Borrower and the Administrative Agent hereby authorizes the Servicer
(including any successor thereto) to take any and all reasonable steps in the
Borrower’s name and on the Borrower’s behalf necessary or desirable in the
determination of the Servicer and not inconsistent with the pledge by the
Borrower to the Administrative Agent, on behalf of the Secured Parties,
hereunder, to collect all amounts due under any and all Collateral, including,
without limitation, endorsing any of their names on checks and other
instruments representing Collections, executing and delivering 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 Collateral
and, after the delinquency of any Collateral and to the extent permitted under
and in


 


58

















 


compliance with
Applicable Law, to commence proceedings with respect to enforcing payment
thereof.  The Borrower and the
Administrative Agent, on behalf of the Secured Parties, shall furnish the
Servicer (and any successors thereto) with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder, and shall cooperate with the
Servicer to the fullest extent in order to ensure the collectibility of the
Collateral.  In no event shall the
Servicer be entitled to make the Borrower, any Secured Party, the Backup
Servicer, the Collateral Custodian or the Administrative Agent a party to any
litigation without such party’s express prior written consent, or to make the
Borrower a party to any litigation (other than any routine foreclosure or
similar collection procedure) without the Administrative Agent’s consent.


 


(b)                                 After
the declaration of the Termination Date, at the direction of the Administrative
Agent (with notice to the Borrower), the Servicer shall take such action as the
Administrative Agent may reasonably deem necessary or advisable to enforce
collection of the Collateral; provided that the Administrative Agent may,
at any time that an Event of Default has occurred and is continuing, notify any
Obligor with respect to any Collateral of the pledge of such Collateral to the
Administrative Agent, on behalf of the Secured Parties, and direct that
payments of all amounts due or to become due be made directly to the
Administrative Agent or any servicer, collection agent or account designated by
the Administrative Agent and, upon such notification and at the expense of the
Borrower, the Administrative Agent may enforce collection of any such
Collateral, and adjust, settle or compromise the amount or payment thereof.


 


Section 6.4.                                          Collection
of Payments; Accounts.


 


(a)                                  Collection
Efforts, Modification of Collateral. 
The Servicer will use commercially reasonable efforts to collect, or
cause to be collected, all payments called for under the terms and provisions
of the Receivables included in the Collateral as and when the same become due
in accordance with the Credit and Collection Policy and the Servicing
Standard.  The Servicer may not waive,
modify or otherwise vary any provision of an item of Collateral in a manner
that would impair the collectibility of the Collateral or in any manner
contrary to the Credit and Collection Policy and the Servicing Standard.


 


(b)                                 Prepaid
Receivable.  The Servicer may not
consent to a Receivable becoming a Prepaid Receivable, in whole or in part,
unless such prepayment (plus any concurrent deposits made by the Servicer) (i) will
not result in the Collection Account receiving an amount less than the sum of (A) the
Outstanding Receivable Balance (or portion thereof to be prepaid) on the date
of such payment, and (B) any accrued and unpaid interest thereon (such
sum, the “Prepayment Amount”) or (ii) is in compliance with the
Underlying Instruments for the applicable Receivable and such prepayment is
consented to by the Servicer in accordance with the Servicing Standard.


 


(c)                                  Acceleration.  If required by the Credit and Collection
Policy or if consistent with the Servicing Standard and the related Underlying
Instruments, the Servicer shall accelerate the maturity of all or any Scheduled
Payments and other amounts due under any Receivable promptly after such
Receivable becomes a Defaulted Receivable.


 


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(d)                                 Taxes
and other Amounts.  The Servicer will
use commercially reasonable efforts in accordance with the Servicing Standard
to collect all payments with respect to amounts due for Taxes, assessments and
insurance premiums relating to each Receivable to the extent required to be
paid to the Borrower for such application under the Underlying Instrument and
remit such amounts to the appropriate Governmental Authority or insurer as
required by the Underlying Instruments.


 


(e)                                  Payments
to Lockbox Account.  On or before the
Closing Date, the Servicer shall have instructed all Obligors to make all
payments in respect of the Collateral directly to the applicable Lockbox
Account.


 


(f)                                    Accounts.  Each of the parties hereto hereby agrees that
(i) each Account shall be deemed to be a Securities Account and (ii) except
as otherwise expressly provided herein, the Administrative Agent shall be
exclusively entitled to exercise the rights that comprise each Financial Asset
held in each Account.  Each of the
parties hereto hereby agrees to cause the Collateral Custodian or any other
Securities Intermediary that holds any money or other property for the Borrower
in an Account to agree with the parties hereto that (A) the cash and other
property (subject to Section 6.4(g) below with respect to any
property other than investment property, as defined in Section 9-102(a)(49)
of the UCC) is to be treated as a Financial Asset under Article 8 of the
UCC and (B) the “securities intermediary’s jurisdiction” (within the
meaning of Section 8-110 of the UCC) for that purpose shall be the State
of New York.  In no event may any
Financial Asset held in any Account be registered in the name of, payable to
the order of, or specially Indorsed to, the Borrower, unless such Financial
Asset has also been Indorsed in blank or to the Collateral Custodian or other
Securities Intermediary that holds such Financial Asset in such Account.


 


(g)                                 Underlying
Instruments.  Notwithstanding any
term hereof (or any term of the UCC that might otherwise be construed to be
applicable to a “securities intermediary” as defined in the UCC) to the
contrary, none of the Collateral Custodian nor any Securities Intermediary
shall be under any duty or obligation in connection with the acquisition by the
Borrower of or the grant by the Borrower to the Administrative Agent of a
security interest in any Receivable to examine or evaluate the sufficiency of
the documents or instruments delivered to it by or on behalf of the Borrower
under the related Underlying Instruments, or otherwise to examine the
Underlying Instruments, in order to determine or compel compliance with any
applicable requirements of or restrictions on transfer (including without
limitation any necessary consents).  The
Collateral Custodian shall hold any Instrument delivered to it evidencing any
Receivable hereunder as custodial agent for the Administrative Agent in
accordance with the terms of this Agreement.


 


(h)                                 Establishment
of the Collection Account.  The
Servicer shall cause to be established, on or before the Closing Date, with the
Collateral Custodian, and maintained in the name of the Borrower, subject to
the Lien of the Administrative Agent, a segregated corporate trust account
entitled “Collection Account for FCC Investment Trust I” (the “Collection
Account”), over which the Administrative Agent as agent for the Secured
Parties, shall have control and from which neither the Servicer nor the
Borrower shall have any right of withdrawal.


 


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(i)                                     Adjustments.  If (i) the Servicer makes a deposit into
the Collection Account in respect of a Collection of a 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 a mistake with respect
to the amount of any Collection and deposits an amount that is less than or
more than the actual amount of such Collection, the Servicer shall
appropriately adjust the amount subsequently deposited into the Collection
Account to reflect such dishonored check or mistake.  Any Scheduled Payment in respect of which a
dishonored check is received shall be deemed not to have been paid.


 


Section 6.5.                                          Realization
Upon Defaulted Receivables.


 


The Servicer
will use commercially reasonable efforts in accordance with the Credit and
Collection Policy and consistent with the Servicing Standard and Applicable Law
in realizing upon each Defaulted Receivable and Related Security, and employ
practices and procedures including commercially reasonable efforts to enforce
all obligations of Obligors.  Without
limiting the generality of the foregoing, the Servicer may (a) unless the
Administrative Agent has specifically given instruction to the contrary, (i) foreclose
upon any property securing the Defaulted Receivable and cause the sale of any
such property, or (ii) turn the Defaulted Receivable over to a collection
agency for collection, or (b) with the consent of the Borrower (other than
during the existence of any Event of Default), sell the Defaulted Receivable
for its fair market value (as determined by the Servicer in good faith) to an
independent third-party purchaser.  The
Servicer will remit to the Collection Account the Recoveries received in
connection with the sale or disposition of a Defaulted Receivable.


 


Section 6.6.                                          Servicing
Compensation.


 


As
compensation for its servicing activities hereunder and reimbursement for its
expenses, the Servicer shall be entitled to receive the Servicing Fee to the
extent of funds available therefor pursuant to the provisions of Section 2.6.


 


Section 6.7.                                          Payment
of Certain Expenses by the Servicer.


 


The Servicer
will be required to pay all expenses incurred by it in connection with its
activities under this Agreement, including fees and disbursements of its
independent accountants, Taxes imposed on the Servicer, expenses incurred by
the Servicer in connection with payments pursuant to this Agreement, and all
other fees and expenses not expressly stated under this Agreement for the
account of the Borrower, but excluding Liquidation Expenses incurred as a
result of activities contemplated by Section 6.5.  The initial Servicer shall be required to pay
such expenses for its own account and shall not be entitled to any payment
therefor other than the Servicing Fee. 
Notwithstanding the foregoing, if the Backup Servicer is appointed
successor Servicer hereunder, it shall be entitled to reimbursement from the
Borrower for all reasonable out-of-pocket expenses incurred by it in connection
with its servicing activities hereunder.


 


Section 6.8.                                          Reports.


 


(a)                                  Servicing
Report.  On each Reporting Date, the
Servicer will provide to the Borrower, the Administrative Agent, the Backup
Servicer and the Collateral Custodian, a monthly statement (a “Servicing
Report”) including (i) a calculation of the Borrowing Base as of


 


61

















 


the most recent date of
determination, with respect to the related calendar month, (ii) an updated
Receivables List, and (iii) such other pool portfolio data and information
as reasonably requested by the Administrative Agent from time to time, signed
by a Responsible Officer of the Servicer and the Borrower and substantially in
the form of Exhibit C.


 


(b)                                 Servicer’s
Certificate.  Together with each
Servicing Report, the Servicer shall submit to the Administrative Agent and the
Borrower (with a copy to the Backup Servicer and the Collateral Custodian) a
certificate substantially in the form of Exhibit H (a “Servicer’s
Certificate”), signed by a Responsible Officer of the Servicer, which shall
include a certification by such Responsible Officer that, to its knowledge, no
Event of Default or Unmatured Event of Default has occurred during the period
between the date of such Servicing Report and the date of the prior Servicing
Report.


 


(c)                                  Financial
Statements.  The initial Servicer
will submit to the Borrower, the Administrative Agent and the Backup Servicer, (i) within
thirty (30) days after the end of each of its fiscal quarters (excluding the
fiscal quarter ending on the date specified in subclause (ii) below),
commencing November 30, 2008, its consolidated unaudited financial
statements for the most recent fiscal quarter and (ii) within one hundred
twenty (120) days after the end of each fiscal year, commencing with the fiscal
year ended December 31, 2008, its consolidated financial statements
audited by a firm of nationally recognized independent public accountants; provided that if Fair becomes the Servicer at any time, such
financial statements may be presented as “reviewed” by such independent public
accountants.  Except as otherwise set
forth herein, the Backup Servicer shall have no duty to review any of the
information set forth in such financial statements.


 


Section 6.9.                                          Annual
Statement as to Compliance.


 


The Servicer
will provide to the Borrower, the Administrative Agent and the Backup Servicer,
within ninety (90) days following the end of each fiscal year of the Servicer,
commencing with the fiscal year ending on December 31, 2008, a fiscal
report signed by a Responsible Officer of the Servicer certifying that (a) a
review of the activities of the Servicer, and the Servicer’s performance
pursuant to this Agreement, for the fiscal period ending on the last day of
such fiscal year has been made under such Person’s supervision and (b) the
Servicer has performed or has caused to be performed in all material respects
all of its obligations under this Agreement throughout such year and no
Servicer Default has occurred during such period (written notice of which has
not otherwise been delivered to the Administrative Agent and the Borrower) or
then exists at the end of such period.


 


Section 6.10.                                   Reserved.


 


Section 6.11.                                   The
Servicer Not to Resign.


 


The Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon the Servicer’s determination that the performance of its duties hereunder
is or has become illegal under Applicable Law. 
Any such determination permitting the resignation of the Servicer shall
be evidenced by an Opinion of Counsel to such effect addressed and delivered to
the Administrative Agent and the Borrower. 
No such resignation shall become effective until a


 


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successor
servicer shall have assumed the responsibilities and obligations of the
Servicer in accordance with Section 6.2.


 


Section 6.12.                                   Servicer
Defaults.


 


If any one of
the following events (a “Servicer Default”) shall occur:


 


(a)                                  any
failure by the Servicer to make any payment, transfer or deposit into the
Collection Account (including, without limitation, with respect to the
remittance of Collections) as required by this Agreement or the other
Transaction Documents which continues unremedied for a period of two (2) Business
Days;


 


(b)                                 any
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 or the other Transaction Documents to which the Servicer is a party
and the same continues unremedied for a period of fifteen (15) Business Days
(if such failure can be remedied) after the earlier to occur of (i) the
date on which written notice of such failure requiring the same to be remedied
shall have been given to a Responsible Officer of the Servicer by the
Administrative Agent, the Borrower or any Lender or (ii) the date on which
a Responsible Officer of the Servicer acquires actual knowledge thereof;


 


(c)                                  (i) the
failure of the initial Servicer to make any payment when due with respect to
any of its debt or other obligations (which payment default relates to debt
facilities or other obligations in excess of $250,000 in the aggregate) or (ii) the
occurrence of any event or condition that would cause or permit acceleration of
such debt or other obligations in excess of $250,000 in the aggregate, unless (A) such
event or condition has been waived and (B) any such debt or other
obligations shall have not been declared to be due and payable or required to
be prepaid (other than by scheduled payment) prior to maturity, in the case of
each of clauses (i) and (i) (x) subject to the initial Servicer’s
right to contest in good faith any claim which could lead to acceleration and (y) after
all applicable cure and grace periods have expired; or


 


(d)                                 an
Insolvency Event with respect to the Servicer;


 


(e)                                  the
Servicer fails in any material respect to comply with the Credit and Collection
Policy and the Servicing Standard regarding the servicing of the Collateral and
the same continues unremedied for a period of ten (10) Business Days (if
such failure can be remedied) after the earlier to occur of (i) the date
on which written notice of such failure requiring the same to be remedied shall
have been given to a Responsible Officer of the Servicer by the Administrative
Agent, the Borrower or any Lender or (ii) the date on which a Responsible
Officer of the Servicer acquires actual knowledge thereof;


 


(f)                                    FCC
Finance, LLC ceases to be the Servicer (other than as provided for under the
terms of this Agreement);


 


(g)                                 the
occurrence or existence of any event which causes a Material Adverse Effect
with respect to the Servicer;


 


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(h)                                 any
failure by the Servicer to deliver any required Servicing Report or other
Required Reports hereunder and the same continues unremedied for a period of
one Business Day after the earlier to occur of (i) the date on which
written notice of such failure shall have been given to a Responsible Officer
of the Servicer by the Administrative Agent, the Borrower or Collateral
Custodian, or (ii) the date on which a Responsible Officer of the Servicer
has actual knowledge thereof;


 


(i)                                     any
representation, warranty or certification made by the Servicer in any
Transaction Document or in any certificate delivered pursuant to any
Transaction Document shall prove to have been incorrect in any material respect
when made and continues to be unremedied for a period of thirty (30) Business
Days after the earlier to occur of (i) the date on which written notice of
such incorrectness requiring the same to be remedied shall have been given to
the a Responsible Officer of Servicer by the Administrative Agent, the Borrower
or any Lender or (ii) the date on which a Responsible Officer of the
Servicer acquires knowledge thereof; or


 


(j)                                     the
occurrence of an FCC Finance Change of Control and the Borrower or the
Administrative Agent makes a determination that such event is reasonably expected
to have a material adverse effect on the ability of FCC Finance, LLC, to
perform its role as Servicer hereunder;


 


then
notwithstanding anything herein to the contrary, the Administrative Agent or
the Borrower, by written notice to the Servicer (with a copy to the Collateral
Custodian, Backup Servicer, the Borrower (in the case of notice by the
Administrative Agent) and the Administrative Agent (in the case of notice by
the Borrower)) (a “Servicer Termination Notice”), may terminate all of
the rights and obligations of the Servicer as Servicer under this Agreement
(other than fees or expenses owed to the Servicer which have accrued or been
incurred prior to the delivery of the Servicer Termination Notice) and appoint
the Backup Servicer (or in the case of notice by the Borrower, Fair) to perform
its duties pursuant to the terms of this Agreement.


 


Section 6.13.                                   Appointment
of Successor Servicer.


 


(a)                                  On
and after the receipt by Administrative Agent or the Borrower, as applicable,
the Servicer and the Backup Servicer of a Servicer Termination Notice pursuant
to Section 6.12, the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in the
Servicer Termination Notice or as otherwise specified by the Administrative
Agent or the Borrower, as applicable, in writing (with a copy to the Borrower
or the Administrative Agent, as applicable) or, if no such date is specified in
such Servicer Termination Notice or otherwise specified by the Administrative
Agent or the Borrower, until a date mutually agreed upon by the Servicer and
the Administrative Agent or the Borrower, as applicable, and shall be entitled
to receive, to the extent of funds available therefor pursuant to Section 2.6,
the Servicing Fee therefor until such date; provided that
any fees or expenses owed to the Servicer attributable to the period prior to
such date shall accrue and remain payable. 
The Administrative Agent or the Borrower, as applicable, may at any time
following delivery of a Servicer Termination Notice, by written notice to the
Borrower or the Administrative Agent, as applicable, and the Backup Servicer,
in its sole discretion and subject to clause (h) below, appoint the
Backup Servicer or Fair as the Servicer hereunder, and the Backup Servicer or
Fair,


 


64
















 


as the case may be, shall
on such date assume all obligations of the Servicer hereunder with respect to
servicing of the Collateral, and all authority and power of the Servicer under
this Agreement shall pass to and be vested in the Backup Servicer.  As compensation therefor, the Backup Servicer
or Fair, as the case may be, shall thereafter be entitled to the Servicing Fee
together with any other rights to reimbursement to which the Servicer is
entitled as specified herein, Transition Expenses and, solely in the case of
the Backup Servicer, the one-time successor servicer fee specified in the
Backup Servicing Fee Letter.  In the
event that the Administrative Agent does not so appoint the Backup Servicer
(which it may or may not do in its discretion), there is no Backup Servicer or
the Backup Servicer is unable to assume such obligations on such date, or the
Borrower does not so appoint Fair (which it may or may not do in its
discretion), or the Fair Servicing Condition is not satisfied, the
Administrative Agent shall as promptly as possible appoint a successor servicer
(the “Successor Servicer”), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Administrative
Agent and each Lender; provided that
if a Servicer Default occurs and the Servicer is not an Affiliate of the
Borrower then the Borrower shall appoint the Successor Servicer with the
written consent of the Administrative Agent (such consent not to be
unreasonably withheld).  In the event
that a Successor Servicer has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Administrative Agent may petition a
court of competent jurisdiction to appoint any established financial
institution, having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of loans, as the Successor Servicer hereunder.


 


(b)                                 The
Backup Servicer as successor Servicer undertakes to perform only such duties
and obligations as are specifically set forth in this Agreement, it being
expressly understood by all parties hereto that there are no implied duties or
obligations of a successor Servicer hereunder.


 


(c)                                  The
Servicer agrees to cooperate and use commercially reasonable efforts in
effecting the transition of the responsibilities and rights of servicing of the
Receivables, including, without limitation, the transfer to the Backup Servicer
as successor Servicer for the administration by it of all cash amounts that
shall at the time be held by Servicer for deposit, or have been deposited by
the Servicer, or thereafter received with respect to the Receivables and the
delivery to the Backup Servicer as successor Servicer in an orderly and timely
fashion of all files and records with respect to the Receivables and a computer
tape in readable form containing all information necessary to enable the Backup
Servicer as successor Servicer to service the Receivables.  In addition, the Servicer agrees to cooperate
and use commercially reasonable efforts in providing at the Servicer’s expense
to the Backup Servicer, as successor Servicer, with a list of key servicing
personnel and contact information, reasonable access (including at the premises
of the Servicer) to the Servicer’s employees, and any and all of the books,
records (in electronic or other form) or other information reasonably requested
by it to enable the Backup Servicer, as a successor Servicer, to assume the
servicing functions hereunder.


 


(d)                                 The
Backup Servicer as a successor Servicer is authorized and empowered to execute
and deliver, on behalf of the Servicer as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do so or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination or to perform the duties of the


 


65

















 


Servicer.  The Servicer will provide the Backup
Servicer, as successor Servicer, with a power of attorney stating such (at such
time as the Backup Servicer becomes successor Servicer).


 


(e)                                  Upon
its appointment, the Backup Servicer (subject to Section 6.13(a))
or the Successor Servicer, as applicable, 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 Backup Servicer or the Successor Servicer, as applicable; provided that the Backup Servicer or Successor Servicer, as applicable,
shall have (i) no liability with respect to any action performed by the
terminated Servicer prior to the date that the Backup Servicer or Successor Servicer,
as applicable, becomes the successor to the Servicer or any claim of a third
party based on any alleged action or inaction of the terminated Servicer, (ii) no
obligation to perform any repurchase or advancing obligations, if any, of the
Servicer unless it elects to in its sole discretion, (iii) no obligation
to pay any taxes required to be paid by the Servicer (provided that the Backup
Servicer or Successor Servicer, as applicable, shall pay any income taxes for
which it is liable), (iv) no obligation to pay any of the fees and
expenses of any other party to the transactions contemplated hereby, (v) no
liability or obligation with respect to any indemnification obligations of any
prior Servicer, (vi) no obligation to make payments with respect to any
losses on investments made by or at the direction of the Servicer, (vii) no
obligation to take any legal action which the Backup Servicer in its reasonable
opinion believes subjects it to any liability in connection with such legal
action unless it shall have been assured to its reasonable satisfaction that it
will be indemnified for such liabilities, and (viii) no liability with
respect to any action performed, or breaches or defaults caused by any prior
Servicer prior to its appointment, or any claim of a third party based on any
alleged action of any prior Servicer. 
The indemnification obligations of the Backup Servicer or the Successor
Servicer, as applicable, upon becoming a successor Servicer, are expressly limited
to those arising on account of its failure to act in good faith and with
reasonable care under the circumstances. 
In addition, the Backup Servicer or Successor Servicer, as applicable,
shall have no liability relating to the representations and warranties of the
initial Servicer contained in Article IV.  In no event shall the Backup Servicer or the
Successor Servicer be liable for any indirect, special or consequential damages
(including lost profits) whether or not it has been advised of the likelihood
of such damages.


 


(f)                                    Upon
the Backup Servicer receiving notice that it is required to serve as the
Servicer hereunder pursuant to the foregoing provisions of this Section 6.13,
the Backup Servicer will promptly begin the transition to its role as
Servicer.  In the event the Backup
Servicer declines to continue to act as Servicer hereunder, the Backup Servicer
shall solicit, by public announcement, bids from banks, specialty finance
companies, asset managers and servicing institutions meeting the qualifications
set forth in Section 6.13(a). 
Such public announcement shall specify that the Successor Servicer shall
be entitled to the full amount of the Servicing Fee as servicing
compensation.  Within thirty (30) days
after any such public announcement, the Backup Servicer shall negotiate and effect
the sale, transfer and assignment of the servicing rights and responsibilities
hereunder to a qualified party acceptable to the Administrative Agent
submitting a qualifying bid.  The Backup
Servicer shall deduct from any sum received by the Backup Servicer from the
successor to the Servicer in respect of such sale, transfer and assignment, all
costs and expenses of any public announcement, of conducting such


 


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sale and of any sale,
transfer and assignment of the servicing rights and responsibilities
hereunder.  After such deductions, the
remainder of such sum shall be paid by the Backup Servicer to the Servicer at
the time of such sale, transfer and assignment to the Servicer’s
successor.  If no bid from a qualified
potential Successor Servicer is received or if no sale, transfer and assignment
of the servicing rights and responsibilities hereunder shall have been
concluded within thirty (30) days after such public announcement, the Backup
Servicer may, in its discretion, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution as the successor
to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. As
compensation, any Successor Servicer (including, without limitation, the
Administrative Agent) so appointed shall be entitled to receive the Servicing
Fee, including, without limitation, Transition Expenses.  The Backup Servicer and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.  No
appointment of a successor to the Servicer hereunder shall be effective until
written notice of such proposed appointment shall have been provided by the
Backup Servicer to the Borrower, the Administrative Agent and each Lender and
the Backup Servicer shall have consented thereto.  The Backup Servicer shall not resign as
Servicer until a Successor Servicer has been appointed and accepted such
appointment.  Notwithstanding anything to
the contrary contained herein, in no event shall the Backup Servicer or
Successor Servicer be liable for any Servicing Fee or for any differential in
the amount of the Servicing Fee paid hereunder and the amount necessary to
induce any Successor Servicer under this Agreement and the transactions set
forth or provided for by this Agreement.


 


(g)                                 Notwithstanding
anything contained in this Agreement to the contrary, any successor Servicer is
authorized to accept and rely on all of the accounting, records (including
computer records) and work of the prior Servicer relating to the Receivables
(collectively, the “Predecessor Servicer Work Product”) without any
audit or other examination thereof, and such successor Servicer shall have no
duty, responsibility, obligation or liability for the acts and omissions of the
prior Servicer.  If any error,
inaccuracy, omission or incorrect or non-standard practice or procedure (collectively,
“Errors”) exists in any Predecessor Servicer Work Product and such
Errors make it materially more difficult to service or should cause or
materially contribute to the successor Servicer making or continuing any Errors
(collectively, “Continued Errors”), such successor Servicer shall have
no duty, responsibility, obligation or liability for such Continued Errors; provided that such successor Servicer agrees to use
commercially reasonable efforts to prevent further Continued Errors.  In the event that the successor Servicer
becomes aware of Errors or Continued Errors, it shall, with the prior consent
of the Borrower or the Administrative Agent, use commercially reasonable
efforts to reconstruct and reconcile such data as is commercially reasonable to
correct such Errors and Continued Errors and to prevent future Continued
Errors.  Such successor Servicer shall be
entitled to recover its costs thereby expended in accordance with Section 2.6.


 


(h)                                 Notwithstanding anything to the contrary in
this Section 6.13, promptly following delivery of a Servicer
Termination Notice but prior to the appointment of the Backup Servicer as
successor Servicer or any other Person as Successor Servicer pursuant to clause
(a) above, the Administrative Agent shall notify Fair of such receipt,
and, if the Fair Servicing Condition is satisfied, Fair may elect to be
appointed as Successor Servicer hereunder by written notice to the
Administrative Agent to such effect within two (2) Business Days of
receipt of such Servicer Termination Notice.


 


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(i)                                     At any time prior to the occurrence of the
Termination Date, upon 90 days’ prior written notice to the Administrative
Agent, the Borrower, the Servicer and the Backup Servicer, if the Fair
Servicing Condition is satisfied, CLST may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement (other than
fees or expenses owed to the Servicer which have accrued or been incurred prior
to the delivery of such notice) and appoint itself as successor Servicer
hereunder.


 


ARTICLE VII


 


THE BACKUP SERVICER


 


Section 7.1.                                          Designation
of the Backup Servicer.


 


(a)                                  Initial
Backup Servicer.  The backup
servicing role with respect to the Collateral shall be conducted by the Person
designated as Backup Servicer hereunder from time to time in accordance with
this Section 7.1.  Until the
Administrative Agent shall give to Lyon Financial Services, Inc. (d/b/a
U.S. Bank Portfolio Services) (with a copy to the Borrower) a Backup Servicer
Termination Notice, Lyon Financial Services, Inc. (d/b/a U.S. Bank
Portfolio Services) is hereby designated as, and hereby agrees to perform the
duties and obligations of, a Backup Servicer pursuant to the terms hereof.


 


(b)                                 Successor
Backup Servicer.  Upon the Backup
Servicer’s and the Borrower’s receipt of Backup Servicer Termination Notice
from the Administrative Agent of the designation of a replacement Backup
Servicer pursuant to the provisions of Section 7.5, the Backup
Servicer agrees that it will terminate its activities as Backup Servicer
hereunder.


 


Section 7.2.                                          Duties
of the Backup Servicer.


 


(a)                                  Appointment.  The Borrower and the Administrative Agent, as
agent for the Secured Parties, each hereby appoints Lyon Financial Services, Inc.
(d/b/a U.S. Bank Portfolio Services) to act as Backup Servicer, for the benefit
of the Secured Parties, as from time to time designated pursuant to Section 7.1.  The Backup Servicer hereby accepts such
appointment and agrees to perform the duties and obligations with respect
thereto set forth herein.


 


(b)                                 Duties.  From the Closing Date and until its removal
pursuant to Section 7.5, the Backup Servicer shall perform, on
behalf of the Administrative Agent and the Secured Parties, the following
duties and obligations:


 


(i)                                     On
or before the Closing Date, the Servicer shall deliver and the Backup Servicer
and the Borrower shall accept from the Servicer delivery of the information
required to be set forth in the Servicing Reports (if any) in hard copy and in Excel® or a comparable format.


 


(ii)                                  Not
later than 12:00 noon on each Reporting Date, the Servicer shall deliver to the
Backup Servicer and the Borrower the loan tape, which shall include but not be
limited to the following information:  (A) for
each Receivable, the name and number of the related Obligor, the collection
status, the loan status, the date of each Scheduled Payment and the


 


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Outstanding Receivable
Balance, (B) the Borrowing Base and (C) the Aggregate Outstanding
Receivable Balance (the “Tape”). 
The Backup Servicer shall accept delivery of the Tape.


 


(iii)                               Prior
to each Payment Date, the Backup Servicer shall review the related Servicing
Report to ensure that it is complete on its face and that the following items
in such Servicing Report have been accurately calculated, if applicable, and
reported:  (A) the Borrowing Base, (B) the
Backup Servicing Fee, (C) the Receivables that are 60+ days past due and (D) the
Aggregate Outstanding Receivable Balance. 
The Backup Servicer shall provide the Administrative Agent, the Borrower
and the Servicer with a monthly certification substantially in the form
attached hereto as Exhibit J (the “Backup Servicer Monthly
Certification”) confirming the accurate calculation of such items in the
Servicing Report and that the Servicing Report is complete on its face.  In the event of any discrepancy with the
Servicing Report based on such review, the Backup Servicer shall notify the
Administrative Agent, the Borrower and the Servicer of such discrepancy not later
than the Business Day preceding such Payment Date; provided
that if the Backup Servicer does not receive the Tape and the Servicing Report
at the times set forth in this Agreement, then the Backup Servicer shall be
given a reasonable amount of additional time after the receipt of the Tape and
the Servicing Report to report any such discrepancies.


 


(iv)                              If
the Servicer disagrees with the report provided under paragraph (iii) above
by the Backup Servicer or if the Servicer has not reconciled any material discrepancy,
the Backup Servicer agrees to confer with the Servicer to resolve such
disagreement on or prior to the next succeeding date of determination and shall
settle such discrepancy with the Servicer if possible, and notify the
Administrative Agent and the Borrower of the resolution thereof.  The Servicer hereby agrees to cooperate at
its own expense with the Backup Servicer in reconciling any discrepancies
herein.  If within twenty (20) days after
the delivery of the report provided under paragraph (iii) above by
the Backup Servicer, such discrepancy is not resolved, the Backup Servicer
shall promptly notify the Administrative Agent and the Borrower of the
continued existence of such discrepancy. 
Following receipt of such notice by the Administrative Agent and the
Borrower, the Servicer shall deliver to the Administrative Agent, the Borrower
and the Backup Servicer no later than the next Payment Date a certificate
describing the nature and amount of such material discrepancies and the actions
the Servicer proposes to take with respect thereto.


 


(c)                                  Reliance
on Tape.  With respect to the duties
described in Section 7.2(b), except as expressly set forth herein,
the Backup Servicer is entitled to rely conclusively, and shall be fully
protected in so relying, on the contents of each Tape, including, but not
limited to, the completeness and accuracy thereof, provided by the Servicer.


 


Section 7.3.                                          Merger
or Consolidation.


 


Any Person (a) into
which the Backup Servicer may be merged or consolidated, (b) that may
result from any merger or consolidation to which the Backup Servicer shall be a
party, or (c) that may succeed to the properties and assets of the Backup
Servicer substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Backup
Servicer hereunder, shall be the successor to the Backup Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement,


 


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provided (i) such
Person is organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), and (ii) (A) has either (1) a long-term unsecured
debt rating of “A” or better by S&P and “A2” or better by Moody’s or (2) a
short-term unsecured debt rating or certificate of deposit rating of “A-1” or
better by S&P or “P-1” by Moody’s, (B) has a parent corporation which
has either (1) a long-term unsecured debt rating of “A” or better by
S&P and “A2” or better by Moody’s or (2) a short-term unsecured debt
rating or certificate of deposit rating of “A-1” or better by S&P and “P-1”
by Moody’s or (C) is otherwise acceptable to the Administrative Agent and,
except following the occurrence of an Event of Default (unless waived in
writing by the Administrative Agent), the Borrower (such consent not to be
unreasonably withheld).


 


Section 7.4.                                          Backup
Servicing Compensation.


 


As compensation for its backup servicing activities hereunder, the
Backup Servicer shall be entitled to receive the Backup Servicing Fee and other
amounts payable in accordance with the Backup Servicer Fee Letter to the extent
of funds available therefor pursuant to Section 2.6.  The Backup Servicer’s entitlement to receive
the Backup Servicing Fee shall cease (excluding any unpaid outstanding amounts
as of that date) on the earliest to occur of: 
(a) it becoming the successor Servicer, (b) its removal as
Backup Servicer pursuant to Section 7.5, or (c) the
termination of this Agreement.  In each
such case, the Backup Servicer shall be entitled to its Backup Servicer Fee
earned and reimbursable expenses incurred through the date of such event.  Upon becoming successor Servicer pursuant to Section 6.13,
the Backup Servicer shall be entitled to the Servicing Fee, Transition Expenses
and reimbursement rights to which the successor Servicer is entitled hereunder.


 


Section 7.5.                                          Backup
Servicer Removal.


 


The Backup
Servicer may be removed, with or without cause, by the Administrative Agent by
notice given in writing to the Backup Servicer (with a copy to the Borrower)
(the “Backup Servicer Termination Notice”); provided that if the Backup
Servicer is removed prior to the first anniversary of the Closing Date it shall
receive the early removal fee specified in the Backup Servicer Fee Letter.  In the event of any such removal, a
replacement Backup Servicer may be appointed by the Administrative Agent, and
except following the occurrence of an Event of Default (unless waived in
writing by the Administrative Agent), with the consent of the Borrower (such
consent not to be unreasonably withheld).


 


Section 7.6.                                          Limitation
on Liability.


 


(a)                                  The
Backup Servicer undertakes to perform only such duties and obligations as are
specifically set forth in this Agreement, it being expressly understood by all
parties hereto that there are no implied duties or obligations of the Backup
Servicer hereunder.  Without limiting the
generality of the foregoing, the Backup Servicer, except as expressly set forth
herein, shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer.  The
Backup Servicer may act through its agents, nominees, attorneys and custodians
in performing any of its duties and obligations under this Agreement, it being
understood by the parties hereto that the Backup Servicer will be responsible
for any bad faith or willful misconduct or gross negligence on the part of such
agents, attorneys or custodians.


 


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Neither the Backup
Servicer nor any of its officers, directors, employees or agents shall be
liable, directly or indirectly, for any damages or expenses arising out of the
services performed under this Agreement other than damages or expenses that
result from the gross negligence, bad faith or willful misconduct of it or
them.  In no event shall the Backup
Servicer be required to expend or risk its own funds or otherwise incur any financial
liability in the performance of its duties hereunder or in the exercise of any
of its rights and powers hereunder if, in its sole judgment, it shall believe
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it.


 


(b)                                 The
Backup Servicer shall not be liable for any obligation of the Servicer
contained in this Agreement or for any errors of the Servicer contained in any
computer tape, certificate or other data or document delivered to the Backup
Servicer hereunder or on which the Backup Servicer must rely in order to
perform its obligations hereunder, and the Secured Parties, the Administrative
Agent and the Collateral Custodian each agree to look only to the Servicer to
perform such obligations.  Except as
expressly set forth herein, the Backup Servicer shall have no responsibility
and shall not be in default hereunder or incur any liability for any failure,
error, malfunction or any delay in carrying out any of its duties under this
Agreement if such failure or delay results from the Backup Servicer acting in
accordance with information prepared or provided by a Person other than the
Backup Servicer or the failure of any such other Person to prepare or provide
such information.  The Backup Servicer
shall have no responsibility, shall not be in default and shall incur no
liability for (i) any act or failure to act of any third party, including
the Servicer, (ii) any inaccuracy or omission in a notice or communication
received by the Backup Servicer from any third party, (iii) the invalidity
or unenforceability of any Collateral under Applicable Law, (iv) the
breach or inaccuracy of any representation or warranty made with respect to any
Collateral, or (v) the acts or omissions of any successor Backup Servicer.


 


(c)                                  Notwithstanding
anything to the contrary herein, the Backup Servicer shall not be liable for
any delays in performance for causes beyond its control, including, but not
limited to, acts of war or terrorism, powerline failures, fire, flood,
epidemic, acts of the Borrower, the Servicer or the Administrative Agent or
restriction by civil or military authority in their sovereign or contractual
capacities.  In the event of any such
delay, performance shall be extended for so long as such period of delay.


 


Section 7.7.                                          Backup
Servicer Resignation.


 


The Backup
Servicer may resign as Backup Servicer under this Agreement upon not less than
ninety (90) days notice to the Borrower and the Administrative Agent.  In the event of such resignation, the Backup
Servicer shall return to the Servicer any and all documents, materials, work
products and all copies made thereof, which were obtained by the Backup
Servicer from the Servicer (other than such copies that the Backup Servicer is
required to retain by law, rule or regulation) within three (3) Business
Days of its resignation.


 


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ARTICLE VIII


 


THE COLLATERAL CUSTODIAN


 


Section 8.1.                                          Designation
of Collateral Custodian.


 


(a)                                  Initial
Collateral Custodian.  The role of
collateral custodian with respect to the Required Receivable File shall be
conducted by the Person designated as Collateral Custodian hereunder from time
to time in accordance with this Section 8.1.  Until the Administrative Agent shall give to
U.S. Bank National Association (with a copy to the Borrower) a Collateral
Custodian Termination Notice, U.S. Bank National Association  is hereby appointed as, and hereby accepts
such appointment and agrees to perform the duties and obligations of,
Collateral Custodian pursuant to the terms hereof.


 


(b)                                 Successor
Collateral Custodian.  Upon the
Borrower’s and the Collateral Custodian’s receipt of a Collateral Custodian
Termination Notice from the Administrative Agent of the designation of a
successor Collateral Custodian pursuant to the provisions of Section 8.5,
the Collateral Custodian agrees that it will terminate its activities as
Collateral Custodian hereunder.


 


Section 8.2.                                          Duties
of Collateral Custodian.


 


(a)                                  Appointment.  The Borrower and the Administrative Agent
each hereby appoints U.S. Bank National Association to act as Collateral
Custodian, for the benefit of the Administrative Agent, as agent for the
Secured Parties.  The Collateral
Custodian hereby accepts such appointment and agrees to perform the duties and
obligations with respect thereto set forth herein.


 


(b)                                 Duties.  On or before the Closing Date, and until its
removal pursuant to Section 8.5, the Collateral Custodian shall
perform, on behalf of the Administrative Agent and the Secured Parties, the
following duties and obligations:


 


(i)                                     The
Collateral Custodian shall take and retain custody of the Required Receivable
Files in accordance with the terms and conditions of this Agreement, as bailee
for the purposes of the relevant UCC (a “Bailee”), all for the benefit
of the Secured Parties and subject to the Lien thereon in favor of the
Administrative Agent, as agent for the Secured Parties.  The Collateral Custodian shall not have any
responsibility for reviewing, inspecting or examining any Required Receivable
File to determine that the contents thereof are genuine, enforceable or
appropriate for the represented purpose or that they are other than what they
purport to be on their face.


 


(ii)                                  In
taking and retaining custody of the Required Receivable Files, the Collateral
Custodian shall be deemed to be acting as the Bailee of the Secured Parties; provided that the Collateral Custodian makes no representations as to
the enforceability of any Required Receivable File documents or the existence,
perfection or priority of any Lien on the Required Receivable Files or the
instruments therein; and provided further that the Collateral Custodian’s
duties as agent shall be limited to those expressly contemplated herein.


 


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(iii)                               All
Required Receivable File documents that are originals or copies shall be kept
in fire resistant facilities in accordance with the Collateral Custodian’s
customary standards for such custody, at the locations specified on Schedule
III attached hereto, or at such other office as shall be specified to the
Administrative Agent and the Servicer by the Collateral Custodian in a written
notice delivered at least forty-five (45) days prior to such change.  All Required Receivable File documents that
are originals or copies shall be identified using a barcode system and
maintained in such a manner so as to permit retrieval and access.


 


(iv)                              The
Collateral Custodian shall make payments pursuant to the terms of the Servicing
Report in accordance with Section 2.6 (the “Payment Duties”).


 


(v)                                 On
the third Business Day of each month, the Collateral Custodian shall provide to
the Administrative Agent, the Borrower and the Servicer (in a form acceptable
to the Administrative Agent and the Collateral Custodian) an updated list of
Receivables in its possession and an updated exceptions report.


 


(vi)                              In
performing its duties, the Collateral Custodian shall use the same degree of
care and attention as it employs with respect to similar collateral that it
holds as collateral custodian for others.


 


Section 8.3.                                          Merger
or Consolidation.


 


Any Person (a) into
which the Collateral Custodian may be merged or consolidated, (b) that may
result from any merger or consolidation to which the Collateral Custodian shall
be a party, or (c) that may succeed to the properties and assets of the
Collateral Custodian substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Collateral Custodian hereunder, shall be the successor to the Collateral
Custodian under this Agreement without further act of any of the parties to
this Agreement.


 


Section 8.4.                                          Collateral
Custodian Compensation.


 


As
compensation for its collateral custodian activities hereunder, the Collateral
Custodian shall be entitled to a Collateral Custodian Fee and other amounts
payable to it pursuant to the Collateral Custodian Fee Letter and pursuant to
the provision of Section 2.6. 
The Collateral Custodian’s entitlement to receive the Collateral
Custodian Fee and such other amounts shall cease (excluding any outstanding
amounts unpaid as of such date) on the earlier to occur of:  (a) its removal as Collateral Custodian
pursuant to Section 8.5 or (b) the termination of this
Agreement.


 


Section 8.5.                                          Collateral
Custodian Removal.


 


The Collateral
Custodian may be removed, with or without cause, by the Administrative Agent by
notice given in writing to the Collateral Custodian (with a copy to the
Borrower) (the “Collateral Custodian  Termination Notice”); provided that notwithstanding its receipt of a Collateral Custodian
Termination Notice, the Collateral Custodian shall continue to act in such
capacity until a successor Collateral Custodian has been appointed, has agreed
to act as


 


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Collateral
Custodian hereunder, and has received all Required Receivable Files held by the
previous Collateral Custodian.


 


Section 8.6.                                          Limitation
on Liability.


 


(a)                                  The
Collateral Custodian may conclusively rely on and shall be fully protected in
acting upon, and need not verify, any certificate, instrument, opinion, notice,
letter, telegram or other document delivered to it and that in good faith it
reasonably believes to be genuine and that has been signed by the proper party
or parties.  The Collateral Custodian may
rely conclusively on and shall be fully protected in acting upon the written
instructions of any designated officer of the Administrative Agent.


 


(b)                                 The
Collateral Custodian may consult counsel satisfactory to it and the advice or
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.


 


(c)                                  The
Collateral Custodian shall not be liable for any error of judgment, or for any
act done or step taken or omitted by it, in good faith, or for any mistakes of
fact or law, or for anything that it may do or refrain from doing in connection
herewith except, notwithstanding anything to the contrary contained herein, in
the case of its willful misconduct, bad faith or grossly negligent performance
or omission of its duties and in the case of the negligent performance of its
Payment Duties and in the case of its negligent performance of its duties in
taking and retaining custody of the Required Receivable Files.


 


(d)                                 The
Collateral Custodian makes no warranty or representation and shall have no
responsibility (except as expressly set forth in this Agreement) as to the
content, enforceability, completeness, validity, sufficiency, value,
genuineness, ownership or transferability of the Collateral, and will not be
required to and will not make any representations as to the validity or value
of any of the Collateral.  The Collateral
Custodian shall not be obligated to take any legal action hereunder that might
in its judgment involve any expense or liability unless it has been furnished
with an indemnity reasonably satisfactory to it.


 


(e)                                  The
Collateral Custodian shall have no duties or responsibilities except such
duties and responsibilities as are specifically set forth in this Agreement and
no covenants or obligations shall be implied in this Agreement against the
Collateral Custodian.


 


(f)                                    The
Collateral Custodian shall not be required to expend or risk its own funds in
the performance of its duties hereunder.


 


(g)                                 It
is expressly agreed and acknowledged that the Collateral Custodian is not
guaranteeing performance of or assuming any liability for the obligations of
the other parties hereto or any parties to the Collateral.


 


(h)                                 Notwithstanding
anything to the contrary herein, the Collateral Custodian shall not be liable
for any delays in performance for causes beyond its control, including, but not
limited to, acts of war or terrorism, powerline failures, fire, flood,
epidemic, acts of the Borrower, the Servicer or the Administrative Agent or
restriction by civil or military authority in


 


74
















 


their sovereign or
contractual capacities.  In the event of
any such delay, performance shall be extended for so long as such period of
delay.


 


(i)                                     The
Collateral Custodian shall not be responsible for preparing or filing any
reports or returns relating to federal, state or local income taxes with
respect to this Agreement on behalf of the Borrower, the initial Servicer or
the Secured Parties.


 


Section 8.7.                                          The
Collateral Custodian Not to Resign.


 


The Collateral
Custodian shall not resign from the obligations and duties hereby imposed on it
except upon the Collateral Custodian’s determination that (a) the
performance of its duties hereunder is or has become illegal under Applicable
Law and (b) there is no reasonable action that the Collateral Custodian
could take to make the performance of its duties hereunder legal under
Applicable Law.  Any such determination
permitting the resignation of the Collateral Custodian shall be evidenced as to
clause (a) above by an Opinion of Counsel to such effect delivered
to the Administrative Agent.  No such
resignation shall become effective until a successor Collateral Custodian shall
have assumed the responsibilities and obligations of the Collateral Custodian
hereunder.


 


Section 8.8.                                          Release
of Documents.


 


(a)                                  Release
for Servicing.  From time to time and
as appropriate for the enforcement or servicing of any of the Collateral, the
Collateral Custodian is hereby authorized, upon receipt from the Servicer of a
written request for release in the form annexed hereto as Exhibit G
and consented to by the Administrative Agent, to release to the Servicer within
two Business Days of receipt of such request, the related Required Receivable
Files set forth in such request and receipt to the Servicer.  All documents so released to the Servicer
shall be held by the Servicer in trust for the benefit of the Administrative
Agent in accordance with the terms of this Agreement.  The Servicer shall return to the Collateral
Custodian the Required Receivable Files (i) promptly upon the request of
the Administrative Agent, or (ii) when the Servicer’s need therefor in
connection with such foreclosure or servicing no longer exists, unless the
Receivable shall be liquidated, in which case, upon receipt of an additional
request for release of documents and receipt certifying such liquidation from
the Servicer to the Collateral Custodian in the form annexed hereto as Exhibit G,
the Servicer’s request and receipt submitted pursuant to the first sentence of
this subsection shall be released by the Collateral Custodian to the Servicer.


 


(b)                                 Release
for Payment.  Upon receipt by the
Collateral Custodian of the Servicer’s request for release in the form annexed
hereto as Exhibit G (which certification shall include a statement
to the effect that all amounts received in connection with such payment or
repurchase have been credited to the Collection Account as provided in this
Agreement), the Collateral Custodian shall promptly release the related
Required Receivable File to the Servicer.


 


Section 8.9.                                          Return
of Required Receivable Files and Servicing Files.


 


The Borrower
may, with the prior written consent of the Administrative Agent, require that
the Collateral Custodian return each Required Receivable File (a) delivered
to the Collateral Custodian in error, (b) for which the Borrower has paid
all required amounts pursuant to Section 2.13 with respect to the
related Receivables, (c) related to any Receivable for which a 


 


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Substitute Receivable has been substituted in accordance with Section 2.13,
or (d) that is required to be redelivered to the Borrower in connection
with the termination of this Agreement, in each case by submitting to the
Collateral Custodian and the Administrative Agent a written request in the form
of Exhibit G hereto (signed by both the Borrower and the
Administrative Agent) specifying the Collateral to be so returned and reciting
that the conditions to such release have been met (and specifying the Section or
Sections of this Agreement being relied upon for such release).  The Collateral Custodian shall upon its
receipt of each such request for return executed by the Borrower and the
Administrative Agent promptly, but in any event within five (5) Business
Days, return the Required Receivable File so requested to the Borrower.


 


Section 8.10.                                   Access
to Certain Documentation and Information Regarding the Collateral; Audits.


 


The Servicer,
the Borrower and the Collateral Custodian shall provide to the Administrative
Agent access to the Required Receivable Files and all other documentation
regarding the Collateral including in such cases where the Administrative Agent
and each Lender are required in connection with the enforcement of the rights
or interests of the Secured Parties, or by applicable statutes or regulations,
to review such documentation, such access being afforded without charge but
only (a) upon two Business Days’ prior written request, (b) during
normal business hours and (c) subject to the Borrower’s, the Servicer’s
and Collateral Custodian’s normal security and confidentiality procedures.  Periodically at the discretion of the
Administrative Agent, the Administrative Agent may review the Servicer’s
collection and administration of the Collateral in order to assess compliance
by the Servicer with the Credit and Collection Policy and the Servicing
Standard, as well as with this Agreement and may conduct an audit of the
Collateral and Required Receivable Files in conjunction with such a
review.  The Borrower and the Servicer
shall permit the Administrative Agent or its agents or representatives, to
visit the offices of each such Person during normal office hours and upon
reasonable notice to examine and make copies of all documents, books, records
and other information concerning the Collateral and discuss matters related
thereto with any of the officers of the Borrower or the Servicer having
knowledge of such matters, and the Borrower shall pay the costs and expenses
for all such visits, subject to the limitations in Section 13.9; provided that other than during the existence of an Event of
Default or Unmatured Event of Default, such visits shall occur no more than
four times per calendar year. 
Notwithstanding the foregoing, following the appointment of a successor
Servicer to the initial Servicer, any such visits or reviews of the Servicer
shall be at the reviewer’s expense, shall require at least five Business Days’
prior written notice and shall occur no more than twice per calendar year.  Without limiting the foregoing provisions of
this Section 8.10, from time to time on request of the
Administrative Agent, the Collateral Custodian shall permit certified public
accountants or other independent auditors acceptable to the Administrative
Agent to conduct, at the initial Servicer’s expense, a review of the Required
Receivable Files and all other documentation regarding the Collateral.


 


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ARTICLE IX


 


SECURITY INTEREST


 


Section 9.1.                                          Grant
of Security Interest.


 


This Agreement
constitutes a security agreement and the transactions effected hereby
constitute secured loans by the Lenders to the Borrower under Applicable
Law.  For such purpose, the Borrower
hereby transfers, conveys, assigns and grants as of the Closing Date to the
Administrative Agent, as agent for the Secured Parties, a lien and continuing
security interest in all of the Borrower’s right, title and interest in, to and
under (but none of the obligations under) all Collateral and all cash, loans,
securities (whether or not marketable), liquidation proceeds of repossessed
assets, accounts, insurance policies (including any life insurance or
disability insurance policies maintained by obligors) and proceeds thereon,
contract rights, amounts or funds in escrow and accounts thereto, chattel
paper, financial assets, investment property, instruments, general intangibles,
payment intangibles, accounts, deposit accounts, money, documents, agreements,
investments and all other property and assets of any type or nature in which
the Borrower has an interest, whether now existing or hereafter arising or
acquired by the Borrower, and wherever the same may be located, to secure the
prompt and complete payment and performance in full when due, whether by lapse
of time, acceleration or otherwise, of all Aggregate Unpaids arising in
connection with this Agreement and each other Transaction Document, whether now
or hereafter existing, due or to become due, direct or indirect, or absolute or
contingent.  The grant of a security
interest under this Section 9.1 does not constitute and is not
intended to result in a creation or an assumption by any of the Secured Parties
of any obligation of the Borrower or any other Person in connection with any or
all of the Collateral or under any agreement or instrument relating
thereto.  Anything herein to the contrary
notwithstanding, (a) the Borrower shall remain liable under the Collateral
to the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b) the
exercise by the Administrative Agent, as agent for the Secured Parties, of any
of its rights in the Collateral shall not release the Borrower from any of its
duties or obligations under the Collateral, and (c) no Secured Party shall
have any obligations or liability under the Collateral by reason of this
Agreement, nor shall any Secured Party be obligated to perform any of the
obligations or duties of the Borrower thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder. The Borrower
hereby authorizes Mayer Brown LLP to file, on behalf of the Administrative
Agent, a “Record” or “Records” (as such term is defined in the applicable UCC),
including financing or continuation statements, and amendments thereto, in all
jurisdictions and with all filing offices as the Administrative Agent may
determine, in its sole discretion, are necessary or advisable to perfect the
security interests granted to the Administrative Agent in connection herewith.  Such financing statements may describe the
collateral in the same manner as described herein or in any security agreement
or pledge agreement entered into by the parties in connection herewith or may
contain an indication or description of collateral that describes such property
in any other manner as the Administrative Agent may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interests in the Collateral granted to the Administrative Agent in connection
herewith, including describing such property as “all assets” or “all personal
property.”


 


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Section 9.2.                                          Release
of Lien on Collateral.


 


On the date (a) any
Receivable expires by its terms and all amounts in respect thereof have been
paid in full by the related Obligor and deposited in the Collection Account, (b) any
Receivable becomes a Prepaid Receivable and all amounts in respect thereof have
been paid in full by the related Obligor and deposited in the Collection
Account, (c) any Receivable is purchased by Drawbridge Special
Opportunities Fund LP pursuant to the Purchase Agreement, or (d) this
Agreement terminates in accordance with Section 13.6, the
Administrative Agent, as agent for the Secured Parties, shall automatically and
without further action be deemed to transfer, assign and set-over to the
Borrower, without recourse, representation or warranty, all the right, title
and interest of the Administrative Agent, as agent for the Secured Parties in,
to and under such Receivable (or all Receivables in the case of clause (d) above),
all related Collateral and all future monies due or to become due with respect
thereto.  The Administrative Agent, as
agent for the Secured Parties, shall, at the sole expense of the Borrower, (i) execute
such instruments of release in favor of the Borrower with respect to the
portion of the Collateral to be released from the Lien of this Agreement as the
Borrower may reasonably request (in recordable form if necessary), (ii) deliver
any portion of the Collateral to be released from the Lien of this Agreement in
its possession to the Borrower and (iii) otherwise take such actions, and
cause or permit the Collateral Custodian to take such actions, as are necessary
and appropriate to release the Lien of the Administrative Agent and the Secured
Parties on the portion of the Collateral to be released and deliver to the
Borrower such portion of the Collateral to be released to the Borrower.


 


Section 9.3.                                          Further
Assurances.


 


The provisions
of Section 13.12 shall apply to the security interest granted under
Section 9.1 as well as to the Loan hereunder.


 


Section 9.4.                                          Remedies.


 


Subject to the
provisions of Section 10.2, upon the occurrence and continuance of
an Event of Default, the Administrative Agent shall have, with respect to the
Collateral granted pursuant to Section 9.1, and in addition to all
other rights and remedies available to the Administrative Agent and the other
Secured Parties under this Agreement or other Applicable Law, all rights and
remedies of a secured party upon default under the UCC.


 


Section 9.5.                                          Waiver
of Certain Laws.


 


The Borrower
and the Servicer each agree, to the full extent that it may lawfully so agree,
that neither it nor anyone claiming through or under it will set up, claim or
seek to take advantage of any appraisal, valuation, stay, extension or
redemption law now or hereafter in force in any locality where any Collateral
may be situated in order to prevent, hinder or delay the enforcement or foreclosure
of this Agreement or any Transaction Document, or the absolute sale of any of
the Collateral or any part thereof, or the final and absolute putting into
possession thereof, immediately after such sale, of the purchasers thereof, and
each of the Borrower and the Servicer, for itself and all who may at any time
claim through or under it, hereby waives, to the full extent that it may be
lawful so to do, the benefit of all such laws, and any and all right to 


 


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have any of the properties or assets constituting the Collateral
marshaled upon any such sale, and agrees that the Administrative Agent or any
court having jurisdiction to foreclose the security interests granted in this
Agreement may sell the Collateral as an entirety or in such parcels as the
Administrative Agent or such court may determine.


 


Section 9.6.                                          Power
of Attorney.


 


Each of the
Borrower and the initial Servicer hereby irrevocably appoints the
Administrative Agent to act upon and during the continuance of an Event of
Default as its true and lawful attorney (with full power of substitution) in
its name, place and stead and at its expense, in connection with the
enforcement of the rights and remedies provided for in this Agreement, in each
case to the extent so permitted hereunder, including without limitation the
following powers: (a) to give any necessary receipts or acquittance for
amounts collected or received hereunder, (b) to make all necessary
transfers of the Collateral in connection with any sale or other disposition
made pursuant to Section 9.4, (c) to execute and deliver for
value all necessary or appropriate bills of sale, assignments and other
instruments in connection with any such sale or other disposition and (d) to
sign any agreements, orders or other documents in connection with or pursuant
to any Transaction Document, the Borrower and the initial Servicer (as the case
may be) hereby ratifying and confirming all that such attorney (or any
substitute) shall lawfully do hereunder and pursuant hereto.  Nevertheless, if so requested by the
Administrative Agent, the Borrower shall ratify and confirm any such sale or
other disposition by executing and delivering to the Administrative Agent or
such purchaser all proper bills of sale, assignments, releases and other
instruments as may be designated in any such request.


 


ARTICLE X


 


EVENTS OF DEFAULT


 


Section 10.1.                                   Events
of Default.


 


Each of the
following events shall be an Event of Default (an “Event of Default”)
hereunder (for purposes of this Section 10.1, references to the “Servicer”
and “Servicer Default” shall only apply to any Servicer that is an Affiliate of
the Borrower):


 


(a)                                  failure
on the part of the Borrower or the Servicer to make any payment or deposit
(including, without limitation, the payment in full of the Loan and other
Obligations on the Termination Date and any failure to remit Collections or
make any other payment or deposit required to be made by the terms of the
Transaction Documents) required by the terms of any Transaction Document on the
day such payment or deposit is required to be made and the same continues
unremedied for two (2) Business Days; or


 


(b)                                 the
failure of the Borrower or the Servicer to make any payment when due with
respect to any of its debt or other obligations in excess of $250,000, whether
or not such debt or other obligations shall be declared to be due and payable
or required to be prepaid (other than by scheduled payment) prior to maturity;
in each case after all grace and cure periods thereunder have elapsed and
subject to such Person’s right to contest in good faith any claim that could
lead to acceleration; or


 


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(c)                                  a
Borrowing Base Deficiency occurs and the same continues unremedied for five (5) Business
Days; or


 


(d)                                 any
representation, warranty, or certification made by the Borrower or the Servicer
in any Transaction Document or in any certificate delivered pursuant to any
Transaction Document shall prove to have been materially incorrect when made,
and which continues to be unremedied for a period of thirty (30) Business Days
after the earlier to occur of (i) the date on which written notice of such
incorrectness requiring the same to be remedied shall have been given to the
Borrower or the Servicer, as the case may be, by the Administrative Agent or (ii) the
date on which a Responsible Officer of the Borrower or the Servicer, as the
case may be, acquires knowledge thereof; or


 


(e)                                  any
failure on the part of the Borrower or the Servicer duly to observe or perform
in any material respect any of its (x) respective negative covenants or
agreements set forth in this Agreement or the other Transaction Documents,
including without limitation making a material change to the Credit and Collection
Policy or other underwriting guidelines without the prior consent of the
Administrative Agent, and the same continues unremedied for a period of five (5) Business
Days, (y) respective affirmative covenants or agreements set forth in this
Agreement or the other Transaction Documents without the prior consent of the
Administrative Agent, and the same continues unremedied for a period of thirty
(30) Business Days, or (z) in the case of the Borrower, its covenant in Section 5.1(m) with
respect to hedging; in each case after the earlier to occur of (i) the
date on which written notice of such failure requiring the same to be remedied
shall have been given to the Borrower or the Servicer, as the case may be, by
the Administrative Agent or (ii) the date on which a Responsible Officer
of the Borrower or the Servicer, as the case may be, acquires knowledge
thereof; or


 


(f)                                    the
occurrence of an Insolvency Event relating to the Borrower or the Servicer; or


 


(g)                                 the
occurrence of a Servicer Default; or


 


(h)                                 the
rendering of one or more final judgments, decrees or orders by a court or
arbitrator of competent jurisdiction against the Borrower or the Servicer for
the payment of money in excess of all insurance coverage therefor of an amount
greater than $750,000, and the Borrower or the Servicer, as applicable, shall
not have within thirty (30) days of entry thereof either (i) discharged or
provided for the discharge of any such judgment, decree or order in accordance
with its terms or (ii) perfected a timely appeal of such judgment, decree
or order and caused the execution of same to be stayed during the pendency of
the appeal; or


 


(i)                                     (i)                                     any
Transaction Document, or any Lien granted thereunder, shall, in whole or in
material part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of the Borrower or the Servicer; or


 


(ii)                                  the Borrower or the
Servicer, shall, directly or indirectly, contest in any manner the
effectiveness, validity, binding nature or enforceability of any Transaction
Document or any lien or security interest thereunder; or


 


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(iii)                               any
security interest in Collateral securing any obligation under any Transaction
Document shall, in whole or in part, cease, after a cure period of three (3) Business
Days has elapsed, to be a first priority perfected security interest (subject
to Permitted Liens) except as otherwise expressly permitted to be released in
accordance with the applicable Transaction Document or as a result of the
failure by the Administrative Agent to file any continuation statement; or


 


(j)                                     the
occurrence of any event which causes a Material Adverse Effect; or


 


(k)                                  the
occurrence of a Change of Control (without the prior written consent of the
Administrative Agent); or


 


(l)                                     the
Borrower (without the prior written consent of the Administrative Agent) enters
into any transaction or agreement to merge into or consolidate with any Person
in which the Borrower is not the surviving entity, without the prior written
consent of the Administrative Agent; or


 


(m)                               the
annual audited financial statements of the Borrower or the Servicer are
qualified in any manner (other than a qualification which relates solely to (i) the
Borrower’s internal controls or accounting processes and which is, in any
event, not classified as a material weakness or (ii) is based on the lack
of consolidation of the Borrower and its parent entity for purposes of such
audit); or


 


(n)                                 the
three-month rolling average Delinquent Accounts Ratio shall exceed 10.0%; or


 


(o)                                 the
three-month rolling average Annualized Default Rate shall exceed 7.0%; or


 


(p)                                 the
Borrower or the pool of Collateral shall become required to register as an “investment
company” within the meaning of the 1940 Act; or


 


(q)                                 the
Internal Revenue Service shall file notice of a lien pursuant to Section 6323
of the Code with regard to any assets of the Borrower or the Servicer and such
lien shall not have been released within ten (10) Business Days of such
Person obtaining knowledge thereof, or the Pension Benefit Guaranty Corporation
shall file notice of a lien pursuant to Section 4068 of ERISA with regard
to any of the assets of the Borrower or the Servicer and such lien shall not
have been released within ten (10) Business Days of such Person obtaining
knowledge thereof; or


 


(r)                                    with
respect to any calendar month, the Excess Spread is less than 3.0% and the
Borrower has not entered into an Interest Rate Hedge Transaction or other
hedging arrangement in form and with counterparties acceptable to the
Administrative Agent in its reasonable discretion within 10 Business Days of
the end of such calendar month.


 


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Section 10.2.                                   Remedies.


 


(a)                                  Upon
the occurrence of an Event of Default (unless otherwise waived in writing by
the Required Lenders), the Administrative Agent shall, at the request of, or
may, with the consent of, the Required Lenders, by notice to the Borrower (with
copies to the Backup Servicer and the Collateral Custodian), declare the
Termination Date to have occurred and the Note to be immediately due and
payable in full (without presentment, demand, protest or notice of any kind all
of which are hereby waived by the Borrower); provided that
in the case of any event described in Section 10.1(f), the Note
shall be immediately due and payable in full (without presentment, demand,
notice of any kind, all of which are hereby expressly waived by the Borrower)
and the Termination Date shall be deemed to have occurred automatically upon
the occurrence of any such event.


 


(b)                                 On
and after the declaration or occurrence of the Termination Date, all of the
Outstanding Loan Balance and other Aggregate Unpaids shall bear interest at the
Default Rate and the Administrative Agent, for the benefit of the Secured
Parties, 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, and also may require the Borrower and the initial Servicer to, and
the Borrower and the initial Servicer hereby agree that they will at the
initial Servicer’s expense and upon request of the Administrative Agent
forthwith, (i) assemble all or any part of the Collateral as directed by
the Administrative Agent and make the same available to the Administrative
Agent at a place to be designated by the Administrative Agent and (ii) without
notice, except as specified below, sell the Collateral or any part thereof in
one (1) or more tranches at a public or private sale, at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable.  In the event
that the Administrative Agent elects to sell the Collateral or any part
thereof, bids will be accepted for a period of no less than thirty (30) days
and the Collateral shall be sold to the highest bidder, provided
that the Administrative Agent, in its sole discretion, shall have received
adequate assurances of such bidder’s ability to pay the purchase price.  The Borrower agrees that, to the extent
notice of sale shall be required by law, at least thirty (30) days’ notice to
the Borrower of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.  The Administrative Agent shall not be
obligated to make any sale of the Collateral regardless of notice of sale having
been given.  The Administrative Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.  All cash Proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral (after payment of any
amounts incurred in connection with such sale) shall be deposited into the
Collection Account and to be applied pursuant to the settlement procedures set
forth in Section 2.6.


 


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ARTICLE XI


 


INDEMNIFICATION


 


Section 11.1.                                   Indemnities
by the Borrower.


 


(a)                                  Without
limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Borrower hereby agrees to indemnify the Backup Servicer,
the Collateral Custodian, any successor Servicer, the Secured Parties and each
of their respective assigns and officers, directors, employees and agents
(collectively, the “Indemnified Parties”), forthwith on demand, from and
against any and all damages (exclusive of consequential damages), losses,
claims, liabilities and related costs and expenses, including reasonable attorneys’
fees and disbursements (all of the foregoing being collectively referred to as
the “Indemnified Amounts”) awarded against or incurred by such
Indemnified Party arising out of or as a result of this Agreement or the other
Transaction Documents or the Collateral or in respect of any Receivable
included in the Collateral, excluding, however, Indemnified Amounts to the
extent resulting from gross negligence, bad faith or willful misconduct on the
part of such Indemnified Party and excluding disputes among the Indemnified
Parties.  Without limiting the foregoing,
the Borrower shall indemnify each Indemnified Party for Indemnified Amounts
relating to or resulting from (for purposes of this Section 11.1,
references to the “Servicer” shall only apply to any Servicer that is an
Affiliate of the Borrower):


 


(i)                                     any
representation or warranty made or deemed made by the Borrower, the Servicer or
any of their respective officers under or in connection with this Agreement or
any other Transaction Document, which shall have been false or incorrect when
made or deemed made or delivered;


 


(ii)                                  the
failure by the Borrower or the Servicer to comply with any term, provision or
covenant contained in this Agreement, any of the other Transaction Documents or
any agreement executed in connection therewith, or with any Applicable Law,
including with respect to any Collateral or the nonconformity of any Collateral
with any such Applicable Law;


 


(iii)                               the
failure to vest and maintain vested in the Administrative Agent, as agent for
the Secured Parties, a perfected security interest in the Collateral, free and
clear of any Lien (other than Permitted Liens) whether existing at the time of
the Loan or at any time thereafter (including, without limitation, as the
result of the failure to file, or any delay in filing, financing statements,
continuation statements or other similar instruments or documents under the UCC
of any applicable jurisdiction or other Applicable Law with respect to any
Collateral);


 


(iv)                              the
failure to maintain, as of the close of business on each Measurement Date prior
to the Termination Date, an amount of Outstanding Loan Balance that is less
than or equal to the Maximum Outstanding Loan Amount on such Business Day;


 


(v)                                 any
dispute, claim, offset or defense (other than the discharge in bankruptcy of
any Obligor) of any Obligor to the payment with respect to any Collateral
(including, without limitation, a defense based on the Collateral not being a
legal, valid and 


 


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binding obligation of
such Obligor enforceable against it in accordance with its terms), or any other
claim related to such Collateral;


 


(vi)                              any
failure of the Borrower or the Servicer to perform its duties under the
Transaction Documents with respect to any Collateral;


 


(vii)                           the
failure of any Lockbox Account Bank or Concentration Account Bank to remit any
amounts held in a Lockbox Account or the Concentration Account pursuant to the
instructions of the Servicer or the Administrative Agent (to the extent such
Person is entitled to give such instructions in accordance with the terms
hereof) whether by reason of the exercise of set-off rights or otherwise;


 


(viii)                        any
inability to obtain any judgment in, or utilize the court or other adjudication
system of, any state in which an Obligor may be located as a result of the
failure of the Borrower to qualify to do business or file any notice or
business activity report or any similar report;


 


(ix)                                any
action taken by the Borrower or the Servicer in the enforcement or collection
of any Collateral;


 


(x)                                   any
claim, suit or action of any kind arising out of or in connection with any
Environmental Laws, including any vicarious liability;


 


(xi)                                the
failure by the Borrower or the Servicer to pay when due any Taxes for which
such Person is liable, including without limitation, sales, excise or personal
property taxes payable in connection with the Collateral;


 


(xii)                             any
repayment by a Secured Party of any amount previously distributed in reduction
of Outstanding Loan Balance or payment of Interest or any other amount due
hereunder or under any other Transaction Document, in each case which amount
such Secured Party believes in good faith is required to be repaid;


 


(xiii)                          except
for as provided in this Agreement, the commingling of Collections by the
Borrower or the Servicer on the Collateral at any time with other funds;


 


(xiv)                         any
investigation, litigation or proceeding related to this Agreement or the use of
proceeds of the Loan or the security interest in the Collateral (other than as
related to the acts of the Administrative Agent, the Secured Parties, the
Backup Servicer or the Collateral Custodian);


 


(xv)                            the
use of the proceeds of the Loan in a manner other than as provided in this
Agreement.


 


(b)                                 Any
amounts subject to the indemnification provisions of this Section 11.1
shall be paid by the Borrower to the Indemnified Party on the Payment Date
following such Person’s written demand therefor to the Borrower setting forth
the basis for such Indemnified Amounts in reasonable detail (such written
demand to be delivered not less than ten (10) Business Days prior to the
applicable Payment Date).


 


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(c)                                  If
for any reason the indemnification provided above in this Section 11.1
is unavailable to the Indemnified Party or is insufficient to hold an
Indemnified Party harmless, then the Borrower shall contribute to the amount
paid or payable by such 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 Indemnified Party on the one hand and
the Borrower on the other hand but also the relative fault of such Indemnified
Party as well as any other relevant equitable considerations.


 


(d)                                 The
obligations of the Borrower under this Section 11.1 shall survive
the resignation or removal of the Administrative Agent, the Servicer, the
Backup Servicer, Successor Servicer or the Collateral Custodian and the
termination of this Agreement.


 


(e)                                  Notwithstanding
the above provisions of this Section 11.1, nothing in this Section shall
be construed to require the Borrower to provide any indemnification under this
Agreement or the other Transaction Documents for any damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys’
fees and disbursements arising out of or in connection with credit losses with
respect to any of the Receivables or any Related Security or the diminution in
market value of the Collateral.


 


(f)                                    If
any Indemnified Party receives any Indemnified Amount from the Borrower and is
subsequently reimbursed for such amounts by another party, such Indemnified
Party hereby agrees to promptly reimburse the Borrower for such reimbursed
amounts.


 


Section 11.2.                                   Indemnities
by the Servicer.


 


(a)                                  Without
limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party,
forthwith on demand, from and against any and all Indemnified Amounts awarded
against or incurred by any such Indemnified Party by reason of any acts or
omissions of the Servicer (other than with respect to disputes among Indemnified
Parties), including, but not limited to (i) any representation or warranty
made by the Servicer under or in connection with any Transaction Document, any
Servicing Report, Servicer’s Certificate or any other information or report
delivered by or on behalf of the Servicer pursuant hereto, which shall have
been false, incorrect or misleading in any respect when made or deemed made, (ii) the
failure by the Servicer to comply with any Applicable Law, (iii) the
failure of the Servicer to comply with its covenants under this Agreement or
the other Transaction Documents, or (iv) any litigation, proceedings or
investigation against the Servicer (other than as related to acts of bad faith,
breach of contract, negligence or willful misconduct of the Administrative
Agent, the Secured Parties or the Collateral Custodian).


 


(b)                                 Any
amounts subject to the indemnification provisions of this Section 11.2
shall be paid by the Servicer to the Indemnified Party within ten (10) Business
Days following such Person’s written demand (setting forth the basis for such
Indemnified Amounts in reasonable detail) therefor to the Servicer.


 


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(c)                                  The
obligations of the Servicer under this Section 11.2 shall survive
the resignation or removal of the Administrative Agent, the Backup Servicer or
Successor Servicer or the Collateral Custodian and the termination of this
Agreement.


 


(d)                                 Any
indemnification payable by the Servicer pursuant to this Section 11.2
shall not be payable from the Collateral.


 


(e)                                  Notwithstanding
the above provisions of this Section 11.1, nothing in this Section shall
be construed to require the Servicer to provide any indemnification under this
Agreement or the other Transaction Documents for any damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys’
fees and disbursements arising out of or in connection with credit losses with
respect to any of the Receivables or any Related Security or the diminution in
market value of the Collateral.


 


(f)                                    If
any Indemnified Party receives any Indemnified Amount from the Servicer and is
subsequently reimbursed for such amounts by another party, such Indemnified
Party hereby agrees to promptly reimburse the Servicer for such reimbursed
amounts.


 


ARTICLE XII


 


THE ADMINISTRATIVE AGENT


 


Section 12.1.                                   The
Administrative Agent.


 


(a)                                  Appointment.  Each Secured Party hereby appoints and
authorizes the Administrative Agent as its agent and bailee for purposes of
perfection pursuant to the applicable UCC and hereby further authorizes the
Administrative Agent to appoint additional agents and bailees to act on its
behalf and for the benefit of each Secured Party.  Each Secured Party further authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Transaction Documents as are
delegated to the Administrative Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto.  In furtherance, and without limiting the
generality, of the foregoing, each Secured Party hereby appoints the
Administrative Agent as its agent to execute and deliver all further
instruments and documents, and take all further action that the Administrative Agent
may deem necessary or appropriate or that a Secured Party may reasonably
request in order to perfect, protect or more fully evidence the security
interests granted by the Borrower hereunder, or to enable any of them to
exercise or enforce any of their respective rights hereunder, including,
without limitation, the execution by the Administrative Agent as secured
party/assignee of such financing or continuation statements, or amendments
thereto or assignments thereof, relative to all or any of the Collateral now
existing or hereafter arising, and such other instruments or notices, as may be
necessary or appropriate for the purposes stated hereinabove.  The Lenders may direct the Administrative
Agent to take any such incidental action hereunder.  With respect to other actions which are
incidental to the actions specifically delegated to the Administrative Agent
hereunder, the Administrative Agent shall not be required to take any such
incidental action hereunder, but shall be required to act or to refrain from
acting (and shall be fully protected in acting or refraining from acting) upon
the direction of the Required Lenders; provided that the Administrative Agent shall
not be required to take any 


 


86

















 


action hereunder if the
taking of such action, in the reasonable determination of the Administrative
Agent, shall be in violation of any Applicable Law or contrary to any provision
of this Agreement or shall expose the Administrative Agent to liability hereunder
or otherwise.  In the event the
Administrative Agent requests the consent of a Lender pursuant to the foregoing
provisions and the Administrative Agent does not receive a consent (either
positive or negative) from such Person within ten Business Days of such Person’s
receipt of such request, then such Lender shall be deemed to have declined to
consent to the relevant action.


 


(b)                                 Standard
of Care.  The Administrative Agent
shall exercise such rights and powers vested in it by this Agreement and the
other Transaction Documents, and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person’s own affairs.


 


(c)                                  Administrative Agent’s Reliance, Etc.  With
respect to the Lenders, neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to any Lender for any
action taken or omitted to be taken by it or them as Administrative Agent under
or in connection with this Agreement or any of the other Transaction Documents,
except for its or their own gross negligence or willful misconduct. Without
limiting the foregoing, the Administrative Agent:  (i) may consult with legal counsel
(including counsel for the Borrower or the Servicer), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with this Agreement; (iii) shall
not have any duty to any Lender to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or any of the other Transaction Documents on the part of the Borrower
or the Servicer or to inspect the property (including the books and records) of
the Borrower or the Servicer; (iv) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any of the other Transaction Documents
or any other instrument or document furnished pursuant hereto or thereto; and (v) shall
incur no liability to any Lender under or in respect of this Agreement or any
of the other Transaction Documents by acting upon any notice (including notice
by telephone), consent, certificate or other instrument or writing (which may
be by facsimile) believed by it to be genuine and signed or sent by the proper
party or parties.


 


(d)                                 Credit
Decision with Respect to the Administrative Agent.  Each Secured Party acknowledges that it has,
independently and without reliance upon the Administrative Agent, or any of the
Administrative Agent’s Affiliates, and based upon such documents and
information as it has deemed appropriate, made its own evaluation and decision
to enter into this Agreement and the other Transaction Documents to which it is
a party.  Each Secured Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, or any of the Administrative Agent’s Affiliates, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
this Agreement and the other Transaction Documents to which it is a party.


 


(e)                                  Indemnification
of the Administrative Agent.  Each
Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower or the initial 


 


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Servicer), ratably in
accordance with its Pro Rata Share from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any of the other Transaction
Documents, or any action taken or omitted by the Administrative Agent hereunder
or thereunder; provided that the Lenders shall
not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent, ratably in accordance with its Pro Rata
Share, promptly upon demand for any out-of-pocket expenses (including counsel
fees) incurred by the Administrative Agent in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and the other Transaction
Documents, to the extent that such expenses are incurred in the interests of or
otherwise in respect of the Lenders hereunder and/or thereunder and to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Borrower or the Servicer.


 


(f)                                    Successor
Administrative Agent.  The
Administrative Agent may resign at any time, effective upon the appointment and
acceptance of a successor Administrative Agent as provided below, by giving at
least ten (10) Business Days written notice thereof to each Lender and the
Borrower and may be removed at any time with cause by the Lenders acting
jointly.  Upon any such resignation or
removal, the Lenders acting jointly shall appoint a successor Administrative
Agent reasonably acceptable to the Borrower. 
Each Lender agrees that it shall not unreasonably withhold or delay its
approval of the appointment of a successor Administrative Agent.  If no such successor Administrative Agent
shall have been so appointed, and shall have accepted such appointment, within
30 days after the retiring Administrative Agent’s giving of notice of
resignation or the removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Secured Parties, appoint a successor
Administrative Agent which successor Administrative Agent shall be either (i) a
commercial bank or other financial institution organized under the laws of the
United States or of any state thereof and have a combined capital and surplus
of at least $250,000,000 or (ii) an Affiliate of such a bank or financial
institution.  Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement.  After any retiring Administrative Agent’s
resignation or removal hereunder as Administrative Agent, the provisions of
this Article XII shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.


 


(g)                                 Payments
by the Administrative Agent.  Unless
specifically allocated to a specific Lender pursuant to the terms of this
Agreement, all amounts received by the Administrative Agent on behalf of the
Lenders shall be paid by the Administrative Agent to the Lenders in accordance
with their related Pro Rata Shares, on the Business Day received by the
Administrative Agent, unless such amounts are received after 12:00 noon on such
Business Day, in which case the Administrative Agent shall use its reasonable
efforts to pay such amounts to 


 


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each Lender on such
Business Day, but, in any event, shall pay such amounts to such Lenders not
later than the following Business Day.


 


ARTICLE XIII


 


MISCELLANEOUS


 


Section 13.1.                                   Amendments
and Waivers.


 


Except as
provided in this Section 13.1, no amendment, waiver or other
modification of any provision of this Agreement shall be effective without the
written agreement of the Borrower, the Servicer, the Administrative Agent and
the Required Lenders; provided that, (a) any
amendment of the Agreement that is solely for the purpose of adding a Lender
may be effected with the written consent of the Administrative Agent and the
Borrower; and (b) no such amendment, waiver or modification adversely
affecting the rights or obligations of the Backup Servicer (in such role or as
successor Servicer), the Collateral Custodian shall be effective without the
written agreement of such Person.  The
Borrower shall deliver promptly to the Backup Servicer and the Collateral
Custodian a copy of any amendment, waiver or other modification of this
Agreement not executed by  such Person in
accordance with this Section.


 


Section 13.2.                                   Notices,
Etc.


 


All notices,
reports and other communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including communication by facsimile copy or
electronic mail) and mailed, e-mailed, faxed, transmitted or delivered, as to
each party hereto, at its address (or specified addresses) set forth on Annex
A to this Agreement or at such other address as shall be designated by such
party in a written notice to the other parties hereto.  All such notices and communications shall be
effective upon receipt, or in the case of (a) notice by e-mail, when
verbal or electronic communication of receipt is obtained, or (b) notice
by facsimile copy, when verbal communication of receipt is obtained.


 


Section 13.3.                                   Ratable
Payments.


 


If any Secured
Party, whether by setoff or otherwise, has payment made to it with respect to
any portion of the Aggregate Unpaids owing to such Secured Party (other than
payments received pursuant to Article XI) in a greater proportion
than that received by any other Secured Party, such Secured Party agrees,
promptly upon demand, to purchase for cash without recourse or warranty a
portion of the Aggregate Unpaids held by the other Secured Parties so that
after such purchase each Secured Party will hold its ratable proportion of the
Aggregate Unpaids; provided that if all or any portion of such
excess amount is thereafter recovered from such Secured Party, such purchase
shall be rescinded and the purchase price restored to the extent of such
recovery, but without interest.


 


Section 13.4.                                   No
Waiver; Remedies.


 


No failure on
the part of the Administrative Agent, the Lenders, the Collateral Custodian,
the Backup Servicer or a Secured Party to exercise, and no delay in exercising,
any right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any 


 


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right or remedy 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 rights and remedies provided by law.


 


Section 13.5.                                   Binding
Effect; Benefit of Agreement.


 


This Agreement
shall be binding upon and inure to the benefit of the parties hereto, the
Secured Parties and their respective successors and permitted assigns.


 


Section 13.6.                                   Term
of this Agreement.


 


This
Agreement, including, without limitation, the Borrower’s and the Servicer’s
representations, warranties and covenants set forth herein, create and
constitute the continuing obligation of the parties hereto in accordance with
its terms, and shall remain in full force and effect until the Collection Date;
provided that the rights and remedies with respect to any breach of any
representation and warranty made or deemed made by the Borrower and the
Servicer, the indemnification and payment provisions of Article XI
and the provisions of Section 13.9, Section 13.10, Section 13.11
and Section 13.13 shall be continuing and shall survive any
termination of this Agreement.


 


Section 13.7.                                   Governing
Law; Consent to Jurisdiction; Waiver of Objection to Venue.


 


THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).  EACH OF THE PARTIES HERETO
HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED
WITHIN THE STATE OF NEW YORK.  EACH OF
THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS,
AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.


 


Section 13.8.                                   Waiver
of Jury Trial.


 


TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.


 


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Section 13.9.                                   Costs,
Expenses and Taxes.


 


(a)                                  In
addition to the rights of indemnification granted to the Indemnified Parties
under Article XI hereof, the Borrower (or, if the Borrower fails to
do so, Fair)  agrees to pay on demand all
reasonable costs and expenses of the Administrative Agent, the Lenders, the
Backup Servicer, the Successor Servicer, the Collateral Custodian and the
Secured Parties incurred in connection with the third party administration
(such term to include, subject to the proviso below, periodic auditing),
renewal, amendment or modification of, or any waiver or consent issued in
connection with, this Agreement and the other documents to be delivered
hereunder or in connection herewith, including, without limitation, reasonable
expenses for travel and lodging, background checks, auditor fees and the
reasonable fees and out-of-pocket expenses of counsel for such Persons with
respect thereto and with respect to advising such Persons as to their
respective rights and remedies under this Agreement and the other documents to
be delivered hereunder or in connection herewith, and all costs and expenses,
if any (including reasonable counsel fees and out-of-pocket expenses), incurred
in connection with the enforcement of this Agreement and the other documents to
be delivered hereunder or in connection herewith; provided that,
prior to an Event of Default or Unmatured Event of Default, any expenses in
connection with periodic audits shall be limited to $25,000 per calendar year; provided further that the Borrower shall not have to pay any
amounts to the Administrative Agent with respect to periodic audits if the
Administrative Agent has previously conducted a periodic audit of an Affiliate
of the Borrower and charged any related costs to such Affiliate or any other
Affiliate of the Borrower.


 


(b)                                 The
Borrower covenants to pay (or, if the Borrower fails to do so, Fair)  on demand any and all stamp, sales, excise and other taxes and
fees payable or determined to be payable to any Governmental Authority in
connection with the execution, delivery, filing and recording of this Agreement
and the other documents to be delivered hereunder.


 


Section 13.10.                            No
Proceedings.


 


Each of the parties
hereto (other than the Administrative Agent) hereby agrees that it will not
institute against, or join any other Person in instituting against, the
Borrower any Insolvency Proceeding so long as there shall not have elapsed one
year and one day (or such longer preference period as shall then be in effect)
since the Collection Date.


 


Section 13.11.                            Recourse
Against Certain Parties.


 


(a)                                  No
recourse under or with respect to any obligation, covenant or agreement of any
party hereto as contained in this Agreement or any other agreement, instrument
or document entered into by it pursuant hereto or in connection herewith shall
be had against any incorporator, affiliate, stockholder, officer, employee or
director of any party hereto, by the enforcement of any assessment or by any
legal or equitable proceeding, by virtue of any statute or otherwise; it
being  expressly  agreed  and  understood that
the agreements of each party hereto contained in this Agreement and all of the
other agreements, instruments and documents entered into by it pursuant hereto
or in connection herewith are, in each case, solely the corporate obligations
of such party hereto, and that no personal liability whatsoever shall attach to
or be incurred by any incorporator, stockholder, affiliate, officer, employee
or director of such party 


 


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under or by reason of any
of the obligations, covenants or agreements of such party hereto contained in
this Agreement or in any other such instruments, documents or agreements, or
that are implied therefrom, and that any and all personal liability of each
incorporator, stockholder, affiliate, officer, employee of such party, or any
of them, for breaches by any party hereto of any such obligations, covenants or
agreements, which liability may arise either at common law or at equity, by
statute or constitution, or otherwise, is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement.  Notwithstanding the foregoing, the Administrative
Agent and the Lenders shall not be deemed to have waived any legal rights which
they may have and, to the extent of such rights, shall have recourse against
any incorporator, affiliate, stockholder, officer, employee or director of
Borrower or the initial Servicer, to the extent of any loss, cost or expense
incurred in whole or in part from any such Person’s (i) willful
misconduct; (ii) fraud; (iii) theft or misappropriation of funds; (iv) criminal
acts; (v) intentional interference with the Administrative Agent’s Lien in
the Collateral or rights with respect thereto (except pursuant to a court order
or otherwise as required by applicable law); (vi) disposition of any
Eligible Receivables or other Collateral in violation of the terms of this Agreement
(except pursuant to a court order or otherwise as required by applicable law); (vii) filing,
initiating or consenting to the filing of an involuntary petition under any
chapter of the Bankruptcy Code with respect to the Borrower; (viii) violation
of the separateness covenants of the Borrower set forth herein and/or the
Borrower’s operating agreement resulting in the consolidation of the Borrower’s
assets with the assets of any other Person; or (ix) voluntarily seeking,
causing or taking any action to effect a dissolution or liquidation of the
Borrower.


 


(b)                                 Notwithstanding
any contrary provision set forth herein, no claim may be made by any party
hereto against any other party hereto or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect to any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each of the parties hereto hereby
waives, releases, and agrees not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected.


 


(c)                                  No
obligation or liability to any Obligor under any of the Receivables is intended
to be assumed by the Secured Parties under or as a result of this Agreement and
the transactions contemplated hereby.


 


Section 13.12.                            Protection
of Right, Title and Interest in the Collateral; Further Action Evidencing Loans.


 


(a)                                  The
Servicer shall cooperate with the Administrative Agent with respect to all
financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Administrative Agent,
as agent for the Secured Parties, to the Collateral to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to
preserve and protect the first priority security interest (subject to Permitted
Liens) of the Administrative Agent, as agent the Secured Parties, hereunder to
all property comprising the Collateral. 
The Servicer shall deliver to the Administrative Agent and the
Collateral Custodian file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as 


 


92

















 


provided above and in the
possession of the Servicer, as soon as available following such recording,
registration or filing.  The Borrower
shall cooperate fully with the Servicer in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this Section 13.12(a).


 


(b)                                 The
Borrower agrees that from time to time, at its expense, it will promptly
authorize, execute and deliver all instruments and documents, and take all
actions, that the Administrative Agent may reasonably request in order to
perfect, protect or more fully evidence the Loan hereunder and the first
priority perfected security interest (subject to Permitted Liens) granted in
the Collateral, or to enable the Administrative Agent or the Secured Parties to
exercise and enforce their rights and remedies hereunder or under any other
Transaction Document.


 


(c)                                  If
the Borrower or the Servicer fails to perform any of its obligations hereunder
with respect to the maintenance of the Administrative Agent’s first priority
perfected security interest in the Collateral (subject to Permitted Liens), the
Administrative Agent or any Secured Party may (but shall not be required to)
perform, or cause performance of, such obligation; and the Administrative Agent’s
or such Secured Party’s costs and expenses incurred in connection therewith
shall be payable by the Borrower.  If the
Borrower or the Servicer fails to perform any of its other obligations
hereunder for 10 days following receipt of notice from any Secured Party, the
Administrative Agent or any Secured Party may (but shall not be required to)
perform, or cause performance of, such obligation; and the Administrative Agent’s
or such Secured Party’s costs and expenses incurred in connection therewith
shall be payable by the Borrower or the initial Servicer, as applicable.  The Borrower irrevocably authorizes the
Administrative Agent and appoints the Administrative Agent as its
attorney-in-fact to act on behalf of the Borrower (i) to execute on behalf
of the Borrower as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s sole discretion to perfect and to
maintain the perfection and priority 
(subject to Permitted Liens) of the interest of the Secured Parties in
the Collateral, including those that describe the Collateral as “all assets,”
or words of similar effect, and (ii) to file a carbon, photographic or
other reproduction of this Agreement or any financing statement with respect to
the Collateral as a financing statement in such offices as the Administrative
Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority (subject to Permitted Liens) of the
interests of the Secured Parties in the Collateral.  This appointment is coupled with an interest
and is irrevocable.


 


Section 13.13.                            Confidentiality.


 


(a)                                  Each
of the Secured Parties, the Servicer, the Collateral Custodian, the Backup
Servicer and the Borrower shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of the Agreement and all
information with respect to the other parties, including all information
regarding the business of the other parties obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that each such party and its directors, officers
and employees may (i) disclose such information to its external
accountants, attorneys, investors, potential investors, credit enhancers and
the agents and advisors of such Persons (“Excepted Persons”); provided that each Excepted Person shall be notified of the
confidentiality restrictions hereof and shall, as a condition to any such
disclosure, agree for the benefit of the parties hereto that such 


 


93

















 


information shall be used
solely in connection with such Excepted Person’s evaluation of, or relationship
with, the Borrower, the Servicer, the Backup Servicer and Collateral Custodian
and their affiliates, (ii) disclose the existence of the Agreement, but
not the financial terms thereof, (iii) disclose such information as is
required by Applicable Law and (iv) disclose the Agreement and such
information in any suit, action, proceeding or investigation (whether in law or
in equity or pursuant to arbitration) involving any of the Transaction
Documents for the purpose of defending itself, reducing its liability, or
protecting or exercising any of its claims, rights, remedies, or interests
under or in connection with any of the Transaction Documents.  It is understood that the financial terms
that may not be disclosed except in compliance with this Section 13.13(a) include,
without limitation, all fees and other pricing terms, and all Events of
Default, Servicer Defaults, and the priority of payment provisions herein.  If any Person discloses any confidential
information with respect to another party pursuant to this Section 13.13(a),
it shall provide prompt notice thereof to such other party with respect to
which such confidential information related.


 


(b)                                 Anything
herein to the contrary notwithstanding, each of the parties hereto hereby
consents to the disclosure of any nonpublic information with respect to it (i) to
the Collateral Custodian, the Backup Servicer or the Secured Parties by each
other, (ii) by the Collateral Custodian, the Backup Servicer and the
Secured Parties to any prospective or actual assignee or participant of any of
them, or (iii) by the Secured Parties to any Rating Agency, any provider
of a surety, guaranty or credit enhancement to any Lender or any Person
providing financing to, or holding equity interests in, any Lender, as
applicable, and to any officers, directors, employees, outside accountants,
advisors and attorneys of any of the foregoing, provided each such Person in
the case of subclauses (ii) and (iii) is informed of
the confidential nature of such information.


 


(c)                                  Notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or becomes
publicly known (other than through the violation of this Agreement), (ii) disclosure
of any and all information (A) if required to do so by any applicable
statute, law, rule or regulation, (B) to any government agency or
regulatory body having or claiming authority to regulate or oversee the disclosing
entity or its affiliates, or (C) pursuant to any subpoena, civil
investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the disclosing entity or an
officer, director, employer, shareholder or affiliate of any of the foregoing
is a party (so long as the disclosing Person provides prompt notice thereof to
the applicable party with respect to which such information relates), or (iii) any
other disclosure authorized by any Borrower or the Servicer in the case of
information with respect to it.


 


Section 13.14.                            Execution
in Counterparts; Severability; Integration.


 


This Agreement
may be executed in any number of counterparts and by different parties hereto
in separate counterparts (including by facsimile), each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. 
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.  This
Agreement and any agreements or letters


 


94
















 


(including fee letters) executed in connection herewith contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof,
superseding all prior oral or written understandings.


 


Section 13.15.                            Waiver
of Setoff.


 


Each of the
parties hereto hereby waives any right of setoff it may have or to which it may
be entitled under this Agreement from time to time against any Lender or its
assets.


 


Section 13.16.                            Assignments
by the Lenders.


 


With the prior
written consent of the Borrower (which consent will not be unreasonably
withheld), any Lender may at any time assign, or grant a security interest or
sell a participation interest in, its rights in the Loan (or portion thereof)
to any Person; provided that (a) no such
consent of the Borrower shall be required during the existence of an Event of
Default, (b) in the case of an assignment of the Loan with respect to such
Lender, the assignee shall execute and deliver to the Borrower, the Servicer
and the Administrative Agent a Joinder Supplement substantially in the form of Exhibit I
hereto, and (c) no Lender shall need prior consent to at any time assign,
or grant a security interest or sell a participation interest in, the Loan (or
portion thereof) to an Affiliate or an Approved Fund.  The parties to any such assignment or sale of
a participation interest by a Lender shall execute and deliver to the
Administrative Agent, for its acceptance and recording in its books and
records, such agreement or document as may be satisfactory to such parties and
the Administrative Agent.  Neither the
Borrower nor the Servicer shall assign or delegate, or grant any interest in,
any of its rights, obligations or duties under this Agreement without the prior
written consent of the Administrative Agent.


 


Section 13.17.                            Heading
and Exhibits.


 


The headings
herein are for purposes of references only and shall not otherwise affect the
meaning or interpretation of any provision hereof.  The schedules and exhibits attached hereto
and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.


 


[Remainder of Page Intentionally Left
Blank]


 


95

















 


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.


 


	
   

  	
  FCC INVESTMENT TRUST I
 as the Borrower

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  U.S. Bank Trust National Association,

  not in its individual capacity but solely

  as statutory trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Diane L. Reynolds

  
	
   

  	
  Name:

  	
  Diane L. Reynolds

  
	
   

  	
  Title:

  	
  Vice President

  



 


Credit Agreement


 

















 


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.


 


	
   

  	
  FCC FINANCE, LLC,

  as the Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jim Berschav

  
	
   

  	
  Name: 

  	
  Jim Berschav

  
	
   

  	
  Title:

  	
  President

  



 


[Signatures
Continued on the Following Page]


 


Credit
Agreement


 

















 


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.


 


	
   

  	
  FORTRESS CREDIT CO LLC,

  as a Lender and as the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Constantine M. Dakoljas

  
	
   

  	
  Name:

  	
  Constantine M. Dakoljas

  
	
   

  	
  Title:

  	
  President

  



 


[Signatures
Continued on the Following Page]


 


Credit
Agreement


 

















 


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


 


	
  THE BACKUP SERVICER:

  	
  LYON FINANCIAL SERVICES, INC.,

  (d/b/a U.S. Bank Portfolio Services),

  not in its individual capacity but

  solely as Backup Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Andries

  
	
   

  	
  Name:

  	
  Joseph Andries

  
	
   

  	
  Title:

  	
  Senior Vice President

  



 


[Signatures
Continued on the Following Page]


 


Credit
Agreement


 

















 


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


 


	
  THE COLLATERAL CUSTODIAN:

  	
  U.S. BANK NATIONAL ASSOCIATION,

  not in its individual capacity but

  solely as Collateral Custodian

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Diane L. Reynolds

  
	
   

  	
  Name:

  	
  Diane L. Reynolds

  
	
   

  	
  Title:

  	
  Vice President

  



 


Credit Agreement


 

















 


Annex A


 


 


FCC FINANCE, LLC
 405 SH 121 Bypass

Building A., Suite 250

Lewisville, Texas 75067

Attention:  James D. Borschow

Facsimile:  (972) 459-9258


 


FORTRESS CREDIT CO LLC

1345 Avenue of the Americas

New York, New York 10105

Attention: Dean Dakolias

Facsimile: (212) 798-6099

Confirmation: (212) 798-6050

E-mail: ddakolias@fortressinv.com


 

















 


Collateral Custodian:


 


U.S. Bank National Association


60 Livingston Avenue


EP-MN-WS3D


St. Paul, MN 
55107


Attn: 
Structured Finance-Fair Finance


Telephone: (651) 495-3923


Facsimile: (866) 831-7910


 


With a copy to:


 


U.S. Bank National Association


1133 Rankin Street, Suite 100


St. Paul, Minnesota  55116


Attn: 
Saah Kemayah


 


Backup Servicer:


 


LYON FINANCIAL SERVICES, INC.

1310 Madrid Street


Marshall, MN 56258


Attn:  Mr. Joe
Andries


Telephone: 
(507) 532-7129


Facsimile: 
(800) 305-6362


 

















 


Annex B


 


LENDER
PERCENTAGES


 


	
  Lender

  	
   

  	
  Lender Percentages

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fortress Credit Co LLC

  	
   

  	
  100%
  $(34,891,977.97)