FIFTH AMENDED AND RESTATED OPERATING AGREEMENT
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THIS FIFTH AMENDED AND RESTATED OPERATING AGREEMENT ("Agreement") is
made and entered into as of July 14, 1998, by and between FAIRFIELD COMMUNITIES,
INC. ("FCI"), a Delaware corporation, FAIRFIELD MYRTLE BEACH, INC., a Delaware
corporation ("FMB"), SEA GARDENS BEACH AND TENNIS RESORT, INC., a Florida
corporation ("Sea Gardens"), VACATION BREAK RESORTS, INC., a Florida corporation
("VBR"), VACATION BREAK RESORTS AT STAR ISLAND, INC., a Florida corporation
("VBRS"), PALM VACATION GROUP, a Florida general partnership ("PVG"), OCEAN
RANCH VACATION GROUP, a Florida general partnership ("ORVG") (each of Sea
Gardens, VBR, VBRS, PVG and ORVG are hereinafter collectively referred to as the
"VB Subsidiaries"), and each of FCI, FMB and the VB Subsidiaries are hereinafter
referred to as "Originators") and FAIRFIELD ACCEPTANCE CORPORATION - NEVADA, a
Nevada domiciled, Delaware corporation ("FAC-Nevada") and wholly-owed subsidiary
of FCI.
W I T N E S S E T H :
WHEREAS, each Originator is now and will become in the future the owner
of numerous receivables arising out of its sales of houses, condominiums,
townhouses, subdivided lots and timeshare intervals in the normal course of its
business;
WHEREAS, each of FMB and the VB Subsidiaries desire to sell, and FCI
desires to purchase from time to time, receivables generated by FMB and the VB
Subsidiaries;
WHEREAS, pursuant to that certain Fourth Amended and Restated Operating
Agreement (the "Original Agreement"), among the Originators and Fairfield
Acceptance Corporation, an Arkansas domiciled Delaware Corporation and
wholly-owned subsidiary of FCI ("FAC-Arkansas"), FAC-Arkansas (i) purchased from
time to time from FCI receivables which were generated by FCI or the other
Originators and (ii) subcontracted with FCI for FCI to act as its agent to xxxx,
collect, administer and service all receivables owned by FAC-Arkansas or
otherwise required to be administered and serviced by FAC-Arkansas pursuant to
the Securitizations; and
WHEREAS, FAC-Arkansas has engaged in a plan of reorganization of its
operations pursuant to which, among other things, (i) FAC-Arkansas' place of
business was relocated to the State of Nevada by way of a merger of FAC-Arkansas
with and into FAC-Nevada, with FAC-Nevada being the surviving corporation (the
"Merger") and (ii) FAC Nevada, as successor to FAC-Arkansas, has established
substantive servicing and financing operations in the State of Nevada;
WHEREAS, FCI now desires to sell, and FAC-Nevada desires to purchase
from time to time, receivables which are generated by FCI or purchased by FCI
from the other Originators;
WHEREAS, FAC-Nevada, or its subsidiaries will from time to time sell or
pledge receivables pursuant to certain Securitizations ;
WHEREAS, FAC-Nevada will act as servicer and agent to xxxx, collect,
administer and service the portfolio of receivables owned by FCI and the
Originators or otherwise sold or pledged pursuant to the Securitizations;
WHEREAS, FAC-Nevada desires to contract with FCI to provide it and its
subsidiaries with certain accounting and computer support services; and
WHEREAS, FCI and FAC-Nevada desire to enter into this Agreement in
amendment and restatement of, and in substitution for, the Original Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. Definitions. For the purposes of this Agreement, the following
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definitions are used:
(a) "Assigned Base Contract" means any Base Contract (and
related Transferred Assets) which, as of any date, FCI sells to
FAC-Nevada (or previously sold to FAC-Arkansas prior to the Merger),
including any Base Contract subsequently pledged or sold by FAC-Nevada,
or its subsidiaries, pursuant to a Securitization.
(b) "Base Contract" has the meaning set forth in the FAC
Credit Agreement.
(c) "Base Contract Completion" means full performance by an
Originator of all of its duties and obligations to the Obligor under a
Base Contract, including, but not limited to, completion of
improvements or amenities relating to the subject Properties and
delivery of certain services.
(d) "Business Day" means any day on which banking institutions
in Boston, Massachusetts are open for the transaction of banking
business.
(e) "Collections" has the meaning set forth in the FCI
Security Agreement.
(f) "Contract File" has the meaning set forth in the FCI
Security Agreement.
(g) "Contract Settlement Date" has the meaning as set forth in
the FAC Credit Agreement.
(h) "Determination Date" has the meaning as set forth in the
FCI Credit Agreement.
(i) "Document of Sale" means one of the following agreements:
(A) with respect to Base Contracts (and related
Transferred Assets) sold to (i) FCI by an Originator (other
than FCI) from time to time or (ii) FAC-Nevada by FCI from
time to time pursuant to Section 2(a) hereof, the Sale and
Assignment of Contracts and Assignment of Mortgages executed
by FCI, the other Originators and FAC-Nevada, which shall be
in substantially the form of "Exhibit A" attached hereto;
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(B) with respect to Base Contracts (and related
Transferred Assets) sold to (i) FCI by FAC-Nevada from time to
time pursuant to Section 2(g) hereof or repurchased by FCI
from FAC-Nevada pursuant to Section 4 hereof or (ii) an
Originator (other than FCI) by FCI, the Sale and Assignment of
Contracts and Assignment of Mortgages executed by FAC-Nevada,
FCI, and the other Originators, as applicable, which shall be
in substantially the form of "Exhibit B" attached hereto;
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(j) "Effective Date" shall mean the effective date of this
Agreement, as stated above.
(k) "Fairshare Plus Program" has the meaning set forth in the
FCI Security Agreement.
(l) "FCI Credit Agreement" means that certain Amended and
Restated Revolving Credit Agreement, dated as of January 15, 1998,
executed by and among FCI and BankBoston, N.A., individually and as
agent for the benefit of itself and the other financial institutions
who now or may become lenders thereunder, as amended by Amendment No. 1
thereto, dated as of July 13, 1998, as the same may be further amended
or otherwise modified from time to time.
(m) "FCI Security Agreement" means the Amended and Restated
Security Agreement, dated as of January 15, 1998, between FCI and
BankBoston, N.A., as collateral agent.
(n) "FAC Credit Agreement" means that certain Amended and
Restated Revolving Credit Agreement, dated as of January 15, 1998,
executed by and among FAC-Arkansas and BankBoston, N.A, individually
and as agent for the benefit of itself and the other financial
institutions who now are or may become lenders thereunder, as amended
by Amendment No. 1 thereto which, among other things, replaces
FAC-Arkansas with FAC-Nevada as the "Borrower" thereunder, as the same
may be further amended or otherwise modified from time to time.
(o) "Insurance Policy" has the meaning set forth in the FCI
Security Agreement.
(p) "Lots" has the meaning set forth in the FCI Security
Agreement.
(q) "Mortgage" has the meaning set forth in the FCI Security
Agreement.
(r) "Obligor" means the person or persons obligated to make
payments under a Base Contract.
(s) "Originator" shall have the meaning set forth in the
recitals to this Agreement and shall include any Subsidiary which
hereafter sells Base Contracts to FCI pursuant to this Agreement;
whereupon, and by reason of such sale, such Subsidiary shall therefore
be deemed to have become a party hereto and shall become subject to all
of the obligations and have all of the rights of an Originator
hereunder with respect to such Base Contracts.
(t) "Payment" has the meaning set forth in the FCI Security
Agreement.
(u) "POA" has the meaning set forth in the FCI Security
Agreement.
(v) "Properties" means houses, condominiums, townhouses,
subdivided lots and fixed or undivided interest timeshare intervals
sold under Base Contracts.
(w) "Records" has the meaning set forth in the FCI Security
Agreement.
(x) "Reservation System" has the meaning set forth in the FCI
Security Agreement.
(y) "Repurchase Default" has the meaning set forth in the FAC
Credit Agreement.
(z) "Security Interests" means any security interests, liens
or other encumbrances on the Assigned Base Contracts in favor of any
third party.
(aa) "Securitization(s)" has the meaning set forth in the FAC
Credit Agreement.
(bb) "Subsidiary" means a corporation or partnership more than
fifty percent (50%) of the voting capital stock or voting interests of
which are owned directly or indirectly by FCI, but does not include
FAC-Nevada.
(cc) "Transferred Assets" has the meaning set forth in Section
2(h) hereof.
(dd) "Title Clearing Agreement" has the meaning set forth in the
FCI Security Agreement.
(ee) "Title Documents" means any deeds, mortgages, deeds of
trust, vendors' liens or other document evidencing liens or
encumbrances on the Properties securing the respective interests of
each Originator, FAC-Nevada, the Obligors or any third parties.
(ff) "VOIs" has the meaning set forth in the FCI Security
Agreement.
2. Sale and Ownership of Base Contracts.
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(a) Subject to the terms hereof, Section 8.16 of the FAC
Credit Agreement and Section 9.5.2(ii) of the FCI Credit Agreement, FCI
and FAC-Nevada hereby agree that FCI may sell to FAC-Nevada and
FAC-Nevada may purchase, as hereinafter provided and as provided in the
FAC Credit Agreement, all of FCI's right, title and interest in and to
such Base Contracts (and related Transferred Assets) as shall be
described in the particular Document of Sale executed by FCI in
connection with each such sale.
(b) Sales of Base Contracts (and related Transferred Assets)
from FCI to FAC under this Agreement shall be accomplished by (i)
FAC-Nevada's compliance with the requirements of Section 8.16 of the
FAC Credit Agreement and FCI's compliance with Section 9.5.2(ii) of the
FCI Credit Agreement, (ii) in connection with each sale, the delivery
to and acceptance by FAC-Nevada of a Document of Sale executed by FCI,
and (iii) in connection with each sale, the satisfaction of all other
requirements of this Agreement.
(c) Concurrently with the sale to FAC-Nevada pursuant to
Section 2(a) hereof of any Base Contract that was originated by an
Originator (other than FCI), each such Originator shall execute and
deliver to FCI a Document of Sale which evidences the transfer, sale
and assignment of all of such Originator's right, title and interest in
and to such Base Contract.
(d) Each group of Base Contracts which are sold by FCI to
FAC-Nevada from time to time shall be of a quality with respect to
credit worthiness of the Obligors and collection experience at least
equivalent to the quality of the aggregate portfolio of the Base
Contracts held by FCI and the other Originators at the time of such
sale. All such purchases by FAC-Nevada shall be subject to all
conditions and stipulations, and shall otherwise be in compliance with
all terms and provisions, of the FAC Credit Agreement.
(e) FCI shall be obligated to repurchase Assigned Base
Contracts from FAC-Nevada pursuant to Section 4 of this Agreement.
(f) No Originator shall be obligated to sell, nor shall
FAC-Nevada be obligated to purchase, any Base Contracts (and related
Transferred Assets) under this Agreement.
(g) Subject to the terms of Sections 8.16(d) and 9.5.2(i) of
the FAC Credit Agreement, FCI and FAC-Nevada hereby agree that
FAC-Nevada may sell to FCI, and FCI may purchase all of FAC-Nevada's
right, title and interest in and to such Base Contracts (and related
Transferred Assets) as shall be described in the particular Document of
Sale executed by FAC-Nevada in connection with each such sale.
(h) Any sale and purchase of a Base Contract between (i) any
Originator (other than FCI) and FCI and (ii) FCI and FAC-Nevada, shall
be evidenced by a Document of Sale and shall be deemed to include the
transfer from such parties of all of the applicable assignors' right,
title and interest in (A) such Base Contract, (B) all Payments, other
Collections and other funds received with respect to the such Base
Contracts on or after the effective date of such Document of Sale, (C)
the VOIs and Lots relating to such Base Contracts, and the Title
Clearing Agreements and the FairShare Plus Program insofar as they
relate to such VOIs or Lots, (D) any Mortgages relating to such Base
Contracts, (E) any Insurance Policies relating to such Base Contracts,
and (F) the Contract Files and other Records relating to such Base
Contracts and any interest in or other proceeds from any of the
foregoing, and any security therefor ((a)-(f) being collectively
referred to as the "Transferred Assets").
(i) In the event any Mortgage being transferred in conjunction
with an Assigned Base Contract pursuant to the terms of this Agreement
has not been filed of record in the appropriate county in which the
underlying Property relating to the Base Contract is located, then as a
condition subsequent to the effectiveness of such transfer, either FCI
or the Originator of such Assigned Base Contract, as appropriate, shall
cause such Mortgage to be so filed promptly following the date upon
which the underlying Property is deeded to the Obligor under such Base
Contract.
3. Purchase Price for Base Contracts.
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(a) The purchase price for any Base Contract (and related
Transferred Assets) purchased by FCI from FMB or any VB Subsidiary will
be equal to one hundred percent (100%) of the outstanding principal
balance remaining of such Base Contract at the time of purchase by FCI,
plus all accrued and unpaid interest thereon.
(b) The purchase price for any Base Contract (and related
Transferred Assets) purchased by FAC-Nevada from FCI will be equal to
one hundred percent (100%) of the outstanding principal balance
remaining of such Base Contract at the time of purchase by FAC-Nevada,
plus all accrued and unpaid interest thereon.
4. Obligation to Repurchase
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In the event an Assigned Base Contract owned by FAC-Nevada is in
Repurchase Default, FCI shall be obligated to repurchase such Assigned Base
Contract as follows:
(a) Upon the request of FAC-Nevada (and in any event no later
than the date upon which such Assigned Base Contract is to be
cancelled) FCI shall repurchase such Assigned Base Contract from
FAC-Nevada by payment of a purchase price in the amount of one hundred
percent 100% of the principal balance remaining unpaid under such
Assigned Base Contract (the repurchase price determined in such manner
being hereinafter referred to as the "Default Repurchase Price"); and
(b) FCI shall be obligated to repurchase Assigned Base
Contracts in Repurchase Default pursuant to this Section 4 of this
Agreement regardless of whether a Default or Event of Default may have
occurred and be continuing under the FAC Credit Agreement.
5. Documents.
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(a) Whenever Base Contracts (and related Transferred Assets)
are sold under this Agreement, the party selling such Base Contracts
(and related Transferred Assets) shall make available to the other
party, at its request and for its inspection and copying, the
following:
(i) Documents, if any, evidencing such Base Contracts
and any Title Documents or releases of Security Interests
relating thereto and any evidence of filing or recording
thereof.
(ii) A listing showing the original amount of the
Base Contracts and the amount remaining unpaid thereon if less
than the face amount.
(iii) Such other financial information then possessed
by the seller of the Base Contracts regarding the Obligors'
financial condition as the purchaser of such Base Contracts
may from time to time request.
(b) Nothing contained in this Agreement shall require any
party hereunder to give, unless otherwise required by applicable law,
notice to any Obligor that a Base Contract has been sold pursuant to
the terms hereof.
6. Settlement. At the close of each Contract Settlement Date, the
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balance due between the parties shall thereupon be settled by payment in cash or
in such other manner as may be agreed upon between the parties. Each transfer at
the time of the settlement on a Contract Settlement Date shall for the purposes
hereof be deemed to have been made as of the end of such Contract Settlement
Date.
7. Representations, Warranties and Covenants. In connection with (i)
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the sale of Base Contracts (and related Transferred Assets) pursuant to Section
2(a) hereof, FCI hereby represents and warrants to FAC-Nevada, and (ii) the sale
of Base Contracts (and related Transferred Assets) pursuant to Section 2(a)
hereof that were originated by an Originator (other
than FCI), each Originator (other than FCI) hereby represents and warrants to
each of FCI and FAC-Nevada, as follows:
(a) The figures set forth in each Document of Sale and
settlement statement delivered to FCI or FAC-Nevada, as applicable,
will be true and correct as of the time made;
(b) At the time of sale of any Base Contracts, such Base
Contracts and Title Documents relating thereto will be valid and
legally enforceable in accordance with their respective terms;
(c) At the time of sale of any Base Contracts, beneficial
ownership in the Base Contracts will not have been conveyed or assigned
by FCI or any other Originator to a third party;
(d) Each Document of Sale executed and delivered to FCI or
FAC-Nevada, as applicable, hereunder will vest in FCI or FAC-Nevada, as
applicable, all right, title and interest in and to the Base Contracts
and all related property described by such Document of Sale;
(e) At the time of sale of Base Contracts to FAC-Nevada, such
Base Contracts will be free and clear of all liens, encumbrances,
setoffs, counterclaims or other rights or defenses except as
specifically provided for under the terms of the Base Contracts, or as
permitted by the FAC Credit Agreement and Title Documents relating to
the Properties, the sale of which gave rise to the Base Contracts;
(f) At the time of sale of Base Contracts to FCI, such Base
Contracts will be free and clear of all liens, encumbrances, setoffs,
counterclaims or other rights and defenses except as specifically
provided for under the terms of the Base Contracts, or as permitted by
the FCI Credit Agreement and Title Documents relating to the
Properties, the sale of which gave rise to the Base Contracts;
(g) At the time of sale of any Base Contracts, such Base
Contracts will comply with any and all applicable laws and regulations;
(h) Each Originator, as applicable, shall at all times remain
solely responsible for Base Contract Completion and shall fully perform
its duties and obligations to the Obligors under the Base Contracts
originated by it in accordance with the terms thereof.
8. Services Provided by FAC-Nevada to FCI. Until a termination pursuant
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to this Section 8(e), the Originators hereby appoint FAC-Nevada to perform the
following services for such Originators, and FCI agrees to pay FAC-Nevada the
reasonable fees and expenses FAC-Nevada incurs in performing such services as
follows:
(a) FAC-Nevada shall xxxx and collect all Base Contracts when
due and with the same diligence and procedures employed by FAC-Nevada
with respect to its Base Contracts utilizing separate lock boxes for
FCI and FAC-Nevada (or any FAC-Nevada Subsidiaries under a
Securitization) as soon as practicable. To the extent payments on the
Base Contracts are mistakenly applied to reduce FAC-Nevada's
indebtedness under the FAC Credit Agreement, FAC-Nevada shall (after
making appropriate adjustments for payments on FAC-Nevada's Base
Contracts mistakenly applied to FCI's indebtedness under the Credit
Agreement) make a settlement and remit all such payments to FCI
together with interest calculated on a daily basis at a rate equivalent
to the interest cost to FCI under the FCI Credit Agreement.
(b) Nothing contained in this Agreement shall in any way
restrict FAC-Nevada at any time from exchanging, renewing, extending or
in any way altering the Base Contracts being serviced by FAC-Nevada,
provided that any such exchange, renewal, extension or alteration shall
be consistent with FCI's and FAC's then existing standard credit
policies. Appropriate adjustment shall be made for any such change,
renewal, extension or alteration on the Contract Settlement Date
immediately following the date such action took place.
(c) FCI shall pay FAC-Nevada for FAC-Nevada's reasonable fees
and expenses for all services provided by FAC-Nevada to the
Originators, provided the amount of such payment and/or reimbursement
shall not in the aggregate exceed three quarters of one percent (.75%)
per annum of the aggregate outstanding principal balance of all Base
Contracts owned by the Originators, and shall be payable monthly in
arrears.
(d) In addition to servicing functions described in paragraph
(a) immediately above, FAC-Nevada shall provide bank reconciliation,
treasury transaction, cash management and other administrative services
to FCI, including reasonable access to the FAC-Nevada personnel
responsible for administering such services. The services to be
provided by FAC-Nevada pursuant to this Section 8(d) are more
specifically described on Exhibit "C-1" hereto. FCI shall pay
FAC-Nevada for its fees and expenses incurred in providing the services
described on Exhibit "C-1" the amounts set forth on Exhibit "C-2"
hereto.
(e) Any Originator may terminate the services of FAC-Nevada
under this Section 8 by providing ninety (90) days prior written notice
of such termination to FAC-Nevada; provided however, that an Originator
may terminate such services at an earlier date if required to do so
under the terms of the FCI Credit Agreement. Such termination shall not
act to terminate any other rights or obligations of the parties under
this Agreement.
9. Services Provided by FCI to FAC-Nevada. Until a termination pursuant
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to Section 9(c), FAC-Nevada appoints FCI to perform the following services for
FAC-Nevada, and
FAC-Nevada agrees to pay FCI for the reasonable fees and expenses FCI incurs in
performing such services as follows:
(a) FCI shall provide payroll, accounts payable, computer and
management information services for FAC-Nevada including reasonable
access to the FCI personnel responsible for administering said
services. The services to be provided by FCI pursuant to the Section
9(a) are more specifically described on Exhibit "D-1" hereto.
FAC-Nevada shall pay FCI for its fees and expenses incurred in
providing the services described on Exhibit "D-1" the amounts set forth
on Exhibit "D-2" hereto.
(c) FAC-Nevada may terminate any one of the services provided
by FCI under this Section 9 by providing ninety (90) days prior written
notice of such termination to FCI; provided however, that FAC-Nevada
may terminate such services at an earlier date if required to do so
under the terms of the FAC Credit Agreement . Such termination as to
any singular service shall not be deemed to terminate any other
services being provided by FCI and shall not act to terminate any other
rights or obligations of the parties under this Agreement.
10. Indemnification.
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(a) FCI agrees to indemnify FAC-Nevada against, and hold
FAC-Nevada harmless from, any and all liabilities, losses, damages,
costs and expenses arising out of claims asserted against FAC-Nevada by
any third party relating to (i) any wrongful or negligent act of, or
omission to act, by FCI, in performing any of the services which FCI is
required to perform for or furnish to FAC-Nevada pursuant to the
provisions of this Agreement, (ii) any breaches by FCI or any other
Originator of the representations and warranties in Section 7, and
(iii) any failures by FCI or any other Originator to timely and fully
perform all of its covenants to the Obligors under the Base Contracts,
including, but not limited to, those duties and obligations of an
Originator relating to Base Contract Completion; provided however,
FAC-Nevada shall promptly notify FCI in writing of each such claim made
or suit therein instituted against FAC-Nevada and the details thereof,
and shall not pay or compromise any such claim or suit without the
written approval of FCI, and FCI shall be permitted to assume and
direct the defense of any such suit by counsel of its own choosing and
at its own expense.
(b) FAC-Nevada agrees to indemnify the Originators against,
and hold harmless said Originators from, any and all liabilities,
losses, damages, costs and expenses arising out of claims asserted
against the Originators which relate to or were caused by FAC-Nevada's
intentional willful misconduct or gross negligence, in performing, or
failing to perform, any of the services which FAC-Nevada is required to
perform on behalf of or furnish to the Originators pursuant to this
Agreement.
11. Records. FAC-Nevada, FCI and the other Originators mutually agree
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to:
(a) Safely maintain such documents as may be required for the
collection of Base Contracts.
(b) Keep such accounts and other records as will enable
FAC-Nevada and FCI to determine at any time the status of all Base
Contracts, including whether such Base Contracts are in Repurchase
Default.
(c) Permit FAC-Nevada or FCI, as applicable, on reasonable
notice at any time during normal business hours to inspect, audit,
check and make abstracts from accounts, records, correspondence and
other papers pertaining to Base Contracts.
(d) Deliver to FCI or FAC-Nevada, as applicable, upon its
request and at its expense, any of said accounts, records,
correspondence and other papers as the other party may deem reasonably
essential to enable it to enforce its rights, if then being challenged,
with respect to Base Contracts. The books and records of each
Originator and FAC-Nevada will be made to reflect the sale of Base
Contracts pursuant to this Agreement.
12. Waivers. Each Originator and FAC hereby waive any failure or delay
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on the part of the other party in asserting or enforcing any of its rights or in
making any claims or demands hereunder.
13. Termination; Amendment. This Agreement may not be terminated,
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amended or modified except upon the written consent thereto of each Originator
and FAC-Nevada, which will not be unreasonably withheld; provided that FCI and
FAC-Nevada agree not to terminate, amend or modify this Agreement to the extent
that such action would be inconsistent with the terms of the FCI Credit
Agreement or FAC Credit Agreement or any agreement entered into by FAC in
connection with Securitizations.
14. Software.
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(a) Subject to paragraph (b) below, FCI and each Originator
hereby grants a royalty free, perpetual, irrevocable, non-exclusive
license to FAC-Nevada and its successors and assigns (which for all
purposes of this license shall include, without limitation, any secured
party which enforces its rights against FAC-Nevada or any transferee of
any such secured party which acquires rights in connection with or
subsequent to such enforcement) in, to and under all rights of FCI and
each Originator in or to all intellectual property (including, without
limitation, computer software, tapes, disks and other electronic media,
books, records and documents) relating to the Assigned Base Contracts
(or Base Contracts owned by FCI and each Originator which are being
serviced by FAC-Nevada pursuant to Section 8 hereof); including,
without limitation, all rights of FCI and each Originator in, to or
under any such software, electronic media, books, records and documents
used
(i) to account for and service Base Contracts
(including the Assigned Base Contracts) and
related assets (including the Transferred
Assets);
(ii) in the management of any VOI resorts, and
the VOIs and Lots located within such VOI
resorts;
(iii) in the monitoring of accounts receivables
and third party contracts relating to the
management of properties located within any
VOI resort;
(iv) in managing and operating the FairShare
Plus Program;
(v) in managing and operating the Reservation
System; and
(vi) in managing and operating the Fairfield
Destinations Vacation Club.
and all rights, title and interest of FCI and each Originator in, to or
under relevant licenses, sublicenses, leases, contracts (including,
without limitation, service and maintenance contracts), warranties and
guaranties relating to any such software, electronic media, books,
records and documents, as the case may be, including without
limitation, all such rights arising under such software, electronic
media, books, records and documents (all of the rights described in
this clause (a) being referred to collectively as the "Licensed
Rights"). FAC-Nevada shall have the right to use all of the Licensed
Rights in connection with the conduct of its business as it deems
necessary or appropriate, including without limitation the right to use
such Licensed Rights for the purposes specified in clauses (a)(i)-(vi)
immediately above and the right to assign, sublicense or otherwise
transfer all or any part of such rights to one or more third parties in
connection with the transfer of all or any part of the Assigned Base
Contracts owned or serviced by FAC-Nevada (including, without
limitation, any such transfer pursuant to or in connection with the
grant by FAC-Nevada of a security interest in any or all of its assets
and/or the enforcement by any such secured party of its interests in
such assets).
(b) The license granted to FAC-Nevada pursuant to clauses
(a)(ii)-(vi) immediately above, shall only be deemed to confer upon
FAC-Nevada, and its respective successors and assigns, the sole right
to sub-license the use of such software, electronic media, books,
records and documents (at no charge, except for reimbursement of
administrative, legal and other expenses associated with such
sublicense) to (i) FCI (as long as FCI or any of its subsidiaries is
manager of the subject POA) or the subject POA (in the event FCI or any
of its subsidiaries is not the manager of such POA) in the case of
clauses (a)(ii)-(iii) above or (ii) FCI (or if applicable any successor
to FCI) under the FairShare Plus Program or Fairfield Destinations Club
in the case of clause (a)(iv)-(vi) above.
(c) All rights and licenses granted under or pursuant to this
clause (b) (the "License") are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code
(the "Code"), licenses to rights in and to "intellectual property" as
defined under the Code. The parties hereto agree that FAC-Nevada, as
licensee of such rights under the License, shall have and retain and
may fully exercise and exploit all of its respective rights under the
Code. The parties hereto further agree that, in the event of the
commencement of bankruptcy proceedings by or against FCI under the
Code, FAC-Nevada, as licensee, shall be entitled to have and retain all
of its rights under the License.
(d) If an Event of Default has occurred and is continuing
under the FAC Credit Agreement, FCI hereby agrees to provide to any of
the persons or entities described in clauses b(i) and (ii) immediately
above, and each of their successors and assigns, immediately upon the
written request of FAC-Nevada, copies of all software (including
without limitation both object code and source code), tapes disks,
other electronic media, books, records, documents and other tangible
embodiments of the Licensed Rights.
15. Notices. Any notice, instruction, request, consent, demand or other
-------
communication required or contemplated by this Agreement to be in writing, shall
be given or made or communicated by United States first class mail, addressed as
follows:
If to an Originator: c/o Fairfield Communities, Inc.
00000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Attention: President
If to FAC-Nevada: Fairfield Acceptance Corporation-Nevada
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: President
16. Successors and Assigns. The covenants, representations, warranties
----------------------
and agreements herein set forth shall be mutually binding upon, and inure to the
mutual benefit of, each Originator and its successors and assigns and FAC-Nevada
and its successors and assigns.
17. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Nevada.
18. ENTIRE AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL, ENTIRE
-----------------
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OF ORAL,
RELATING TO THE SUBJECT
MATTER HEREOF INCLUDING, WITHOUT LIMITATION, THAT CERTAIN FOURTH AMENDED AND
RESTATED OPERATING AGREEMENT DATED AS OF JANUARY 19, 1998, AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
19. Conflict With FAC Credit Agreement. If the terms of this Operating
----------------------------------
Agreement conflict in any manner with the terms and provisions of the FAC Credit
Agreement, the terms and provisions of the FAC Credit Agreement shall control.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have set their hands and have
affixed their corporate seals as of the day and year first above written.
FAIRFIELD COMMUNITIES, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION-NEVADA
By:/s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
FAIRFIELD MYRTLE BEACH, INC.
By:/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SEA GARDENS BEACH AND TENNIS RESORT, INC.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
VACATION BREAK RESORTS, INC.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
VACATION BREAK RESORTS AT STAR ISLAND, INC.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PALM VACATION GROUP, by its General Partners:
VACATION BREAK RESORTS at Palm Aire, Inc.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PALM RESORT GROUP, INC.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
OCEAN RANCH VACATION GROUP, by its General Partners:
VACATION BREAK at OCEAN RANCH, INC.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
OCEAN RANCH DEVELOPMENT, INC.
By:/s/Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
