TW HOLDINGS, INC.,
as Seller,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
doing business as SEAFIRST BANK
AND OTHER PURCHASERS NAMED HEREIN,
as Purchasers,
SEAFIRST BANK,
as Agent,
and
TRENDWEST RESORTS, INC.,
as Master Servicer
---------------------------------------------
$93,000,000
SECOND AMENDED AND RESTATED
RECEIVABLES TRANSFER AGREEMENT
Dated as of June 1, 1997
---------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS................................................................. 3
Section 1.1 Certain Defined Terms............................................................ 3
Section 1.2 Usage of Terms................................................................... 23
Section 1.3 Accounting Terms................................................................. 23
ARTICLE 2 THE COMMITMENT; TRANSFER OF RECEIVABLES................................... 24
Section 2.1 The Commitment................................................................... 24
Section 2.2 Certain Purchase Procedures...................................................... 24
Section 2.3 [Reserved]....................................................................... 25
Section 2.4 Conveyance of Receivables........................................................ 25
Section 2.5 Custody of Receivable Files...................................................... 27
Section 2.6 Duties of Master Servicer as Custodian........................................... 28
Section 2.7 Instructions; Authority to Act................................................... 29
Section 2.8 Indemnification by Master Servicer as
Custodian................................................................... 29
Section 2.9 Effective Period and Termination................................................. 29
ARTICLE 3 EARNED YIELD................................................................ 30
Section 3.1 Earned Yield..................................................................... 30
Section 3.2 Selection of Yield............................................................... 30
Section 3.3 Applicable Days for Computation of Yield......................................... 31
Section 3.4 Unavailable LIBOR Rate........................................................... 31
Section 3.5 Yield Protection................................................................. 31
Section 3.6 Funding Losses................................................................... 33
ARTICLE 4 COLLECTIONS AND SETTLEMENTS................................................. 34
Section 4.1 Collections...................................................................... 34
Section 4.2 Reinvestments.................................................................... 34
Section 4.3 Settlement Procedures............................................................ 34
Section 4.4 Deposits to Collection Account to Avoid
Break-Funding Costs......................................................... 35
Section 4.5 Deemed Collections............................................................... 36
Section 4.6 Allocation of Payments and Collections........................................... 36
Section 4.7 Order of Distribution by the Agent............................................... 37
Section 4.8 Collection Account............................................................... 37
Section 4.9 Lock Boxes....................................................................... 38
ARTICLE 5 FEES AND OTHER PAYMENTS..................................................... 39
Section 5.1 Fees............................................................................. 39
Section 5.2 Termination Event Rate Payments.................................................. 40
Section 5.3 Payments......................................................................... 40
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ARTICLE 6 CONDITIONS OF PURCHASES..................................................... 41
Section 6.1 Conditions to Initial Purchase................................................... 41
Section 6.2 Conditions to All Purchases...................................................... 42
ARTICLE 7 REPRESENTATIONS AND WARRANTIES.............................................. 43
Section 7.1 Representations and Warranties as to the
Seller...................................................................... 43
Section 7.2 Representations and Warranties as to the
Receivables................................................................. 46
Section 7.3 Additional Representations and Warranties
as to the Mortgage Loan Receivables......................................... 49
Section 7.4 Repurchase Upon Breach: Optional
Repurchase.................................................................. 52
Section 7.5 Representations and Warranties as a Whole........................................ 53
ARTICLE 8 AFFIRMATIVE COVENANTS....................................................... 54
Section 8.1 Affirmative Covenants of the Seller.............................................. 54
Section 8.2 Affirmative Covenants of TRI..................................................... 57
ARTICLE 9 NEGATIVE COVENANTS.......................................................... 58
Section 9.1 Negative Covenants of the Seller................................................. 58
Section 9.2 Negative Covenants of TRI........................................................ 59
ARTICLE 10 SERVICING, ADMINISTRATION AND COLLECTIONS................................... 60
Section 10.1 Designation of Master Servicer.................................................. 60
Section 10.2 Duties of the Master Servicer:
Subservicers................................................................ 62
Section 10.3 Collection Responsibilities; Receivable
Modifications............................................................... 65
Section 10.4 Maintenance of Insurance........................................................ 66
Section 10.5 Assumption and Substitution Agreements.......................................... 67
Section 10.6 Realization Upon Defaulted Receivables.......................................... 67
Section 10.7 Payment of Fees and Expenses of Agent:
No Offset................................................................... 68
Section 10.8 Servicing Fee................................................................... 68
Section 10.9 Representations and Warranties as to the
Master Servicer............................................................. 69
Section 10.10 Existence; Status as Master Servicer;
Merger...................................................................... 70
Section 10.11 Performance of Obligations.......................................... 71
Section 10.12 Liability of the Master Servicer:
Indemnities................................................................ 71
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ARTICLE 11 TERMINATION EVENTS.......................................................... 72
Section 11.1 Termination Events.............................................................. 72
Section 11.2 Remedies........................................................................ 74
ARTICLE 12 THE AGENT................................................................... 75
Section 12.1 Authorization and Action........................................................ 75
Section 12.2 Duties and obligations.......................................................... 76
Section 12.3 Dealings with the Seller........................................................ 77
Section 12.4 Purchaser Credit Decision....................................................... 77
Section 12.5 Right to Rely on Payments....................................................... 78
Section 12.6 Limitations on Liability;
Indemnification............................................................. 78
Section 12.7 Successor Agent................................................................. 79
Section 12.8 Delegation of Duties............................................................ 80
Section 12.9 Merger of Agent................................................................. 80
ARTICLE 13 ASSIGNMENTS AND PARTICIPATIONS.............................................. 80
Section 13.1 Generally....................................................................... 80
Section 13.2 Assignments..................................................................... 80
Section 13.3 Participations.................................................................. 82
ARTICLE 14 SELLER INDEMNITIES.......................................................... 82
Section 14.1 Indemnities by the Seller....................................................... 82
ARTICLE 15 MISCELLANEOUS............................................................... 84
Section 15.1 Repurchases for Administrative
Convenience................................................................. 84
Section 15.2 Substitution of Receivables..................................................... 85
Section 15.3 No Waiver; Remedies Cumulative.................................................. 85
Section 15.4 Governing Law................................................................... 86
Section 15.5 Notices......................................................................... 86
Section 15.6 Severability.................................................................... 87
Section 15.7 Entire Agreement; Amendment..................................................... 87
Section 15.8 Submission to Jurisdiction: Etc................................................. 87
Section 15.9 Waiver of Jury Trial............................................................ 88
Section 15.10 Captions and Cross-References;
Incorporation by Reference................................................. 88
Section 15.11 Counterparts................................................................... 88
Section 15.12 Confidentiality................................................................ 88
Section 15.13 Resale of Receivables.......................................................... 88
Section 15.14 Oral Agreements Not Enforceable................................................ 89
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SCHEDULES
Schedule 1 Credit and Collection Policy (Right to Use
Receivables
Schedule 2 Credit and Collection Policy (Mortgage Loan
Receivables)
Schedule 3 Schedule of Right to Use Receivables
Schedule 4 Schedule of Mortgage Loan Receivables
Schedule 5 Locations of Receivable Files
EXHIBITS
Exhibit A Form of Purchase Notice
Exhibit B Form of Purchase Certificate
Exhibit C Forms of Right to Use Receivables
Exhibit D [Reserved]
Exhibit E Form of Settlement Statement
Exhibit F Form of Lock Box Notice
Exhibit G Form of Opinion of Washington Counsel
Exhibit H Forms of Opinion of Oregon Counsel
Exhibit I Form of Opinion of Nevada Counsel
iv
RECEIVABLES TRANSFER AGREEMENT
This Second Amended and Restated Receivables Transfer Agreement is made
as of June 1, 1997 (the "Agreement"), among TW HOLDINGS, INC., a Nevada
corporation (the "Seller"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, doing business as SEAFIRST BANK
("Seafirst") and the other Purchasers named herein (collectively, the
"Purchasers"), Seafirst, as agent for the Purchasers (in such capacity, the
"Agent"), and TRENDWEST RESORTS, INC., an [Oregon] corporation ("TRI" or, in its
capacity as Master Servicer, the "Master Servicer").
RECITALS
WHEREAS, the Seller is in the business of purchasing from time to time
certain right to use timeshare receivables (the "Right to Use Receivables") from
TRI and from Eagle Crest, Inc.
("Eagle Crest");
WHEREAS, the Seller was formerly also in the business of purchasing
from time to time from Eagle Crest Partners, Ltd. (together with Eagle Crest and
TRI, the "Originators") certain mortgage loan timeshare receivables (the
"Mortgage Loan Receivables" and, together with the Right to Use Receivables, the
"Receivables");
WHEREAS, the Seller, Seattle-First National Bank (the "Original
Purchaser" and predecessor by merger to Seafirst), Seattle-First National Bank
as agent, and Jeld-Wen, inc. as master servicer executed a receivables transfer
agreement dated as of December 31, 1993 (the "Original Transfer Agreement"),
pursuant to which, among other things, the Original Purchaser provided financing
to enable the Seller to purchase Right to Use Receivables from TRI;
WHEREAS, the parties to the Original Transfer Agreement executed an
amended and restated receivables transfer agreement dated as of June 1, 1994,
pursuant to which, among other things, the Original Purchaser provided financing
to enable the Seller to purchase, not only Right to Use Receivables from TRI,
but also Mortgage Loan Receivables from Eagle Crest Partners, Ltd. (predecessor
to Eagle Crest);
WHEREAS, the amended and restated receivables transfer agreement dated
as of June 1, 1994 (as amended, the "Prior Transfer Agreement") has been amended
by Amendment No. 1 dated as of December 1, 1994, Amendment No. 2, dated as of
March 30, 1995, a letter dated May 26, 1995, Amendment No. 4 dated as of June
30, 1995, Amendment No. 5 dated as of December 11, 1995, and
Amendment No. 6 dated as of June 30, 1996; and the parties desire to restate in
one document so much of the Prior Transfer Agreement as the parties intend to
remain in effect;
WHEREAS, the parties wish to amend the Prior Transfer Agreement in
several ways, including (i) adding Sanwa Bank and Societe Generale as
Purchasers, (ii) allowing TRI to acquire the stock of Seller and Trendwest
Funding I, Inc. and to be substituted for Jeld-Wen, inc., as Master Servicer,
(iii) terminating the financing of additional Mortgage Loan Receivables while
providing for the financing of Right to Use Receivables acquired by the Seller
from Eagle Crest as well as from TRI; (iv) reducing the Margin used in
computation of the Yield Rate to be received by the Purchasers; and (v) changing
the financial reporting obligations of the Seller;
WHEREAS, the Seller has requested that the Purchasers provide financing
to enable the Seller to purchase Right to Use Receivables from TRI and from
Eagle Crest, and the Purchasers are willing to make funds available for such
purpose upon the terms and subject to the conditions contained herein;
WHEREAS, as a result of the foregoing, the Seller has and will have
certain Receivables in which it intends to sell interests (the "Undivided
Interests"), which Undivided Interests shall be purchased by the Purchasers from
time to time upon the terms and subject to the conditions contained herein;
WHEREAS, certain of the collections relating to the Receivables and the
Undivided Interests may be reinvested in additional Receivables upon the terms
and subject to the conditions contained herein;
WHEREAS, the Seller has agreed to secure its obligations hereunder to
the Purchasers in connection with such sale by granting to the Agent (for the
benefit of the Purchasers) a first priority, perfected security interest in all
of the Receivables owned by it;
WHEREAS, the Master Servicer has agreed to undertake certain
responsibilities relating to the servicing of the Receivables;
and
WHEREAS, the parties hereto desire to amend and restate the Prior
Transfer Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agent" means Seafirst, in its capacity as agent for the Purchasers
pursuant to this Agreement, and any successor agent appointed pursuant to
Section 12.7.
"Aggregate Net Investment" means, as of any date, the aggregate amount
of all Purchasers' Investments outstanding as of such date.
"Aggregate Net Investment Limit" means, as of any date, an amount equal
to the lesser of (i) the Commitment Amount or (ii) the sum of (a) 80% of the Net
Pool Balance and (b) amounts deposited in the Collection Account pursuant to
Section 4.4 and not yet disbursed to the Agent pursuant to Section 4.9.
"Aggregate Undivided Interest" means, as of any date, an undivided
floating fractional ownership interest (owned ratably by the Purchasers) in the
Receivables comprising the Receivables Pool, which is equal to a fraction,
expressed as a percentage, the numerator of which is the sum of (i) Aggregate
Net Investment and (ii) 25% of the Aggregate Net Investment and the denominator
of which is the Net Pool Balance; provided that in no event can the Aggregate
Undivided Interest exceed 100%.
"Agreement" means this Agreement and all amendments hereof and
supplements hereto as shall exist from time to time.
"Assigned Collateral" means, as of any date, the Seller's (i) ownership
interest in (a) all of the Receivables comprising the Receivables Pool;
(b) all Related Security with respect to
such Receivables; (c) all collections on or in respect of such Receivables after
the related Cutoff Dates; (d) all related Receivable Documents; and (e) all
proceeds of the foregoing, and (ii) interest in (a) the Facility Documents and
(b) all monies from time to time on deposit in the Collection Account, including
investments of such monies.
"Assignee Purchaser" shall have the meaning set forth in
Section 13.2.
"Assignment" means an assignment of mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction in which a Mortgaged Property is located to reflect of record
the sale of
3
the related Mortgage Note and Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages and Mortgage Notes secured by Mortgaged Properties located in
the same county, if permitted by applicable law and acceptable for recording.
"Associations" means the Eagle Crest Vacation Resort Owners
Association, the Eagle Crest Master Association, the Eagle Crest Estate Homesite
Association, the River View Vista Estates Association and the Fairway Vista
Estates Association.
"Board of Governors" means the Board of Governors of the Federal
Reserve System, and any successor thereto.
"Business Day" means any day other than Saturday, Sunday or another day
on which banks are authorized or obligated to close in Seattle, Washington,
except that in connection with the selection of the LIBOR Rate or the
calculation of the LIBOR Rate for any Yield Period, "Business Day" means any day
other than Saturday or Sunday on which dealings in foreign currencies and
exchanges between banks may be carried on in London, England, New York, New York
and Seattle, Washington.
"Charge-off Rate" means, as of any Settlement Date, the average of the
Monthly Charge-off Rates for the three Collection Periods immediately preceding
the Collection Period in which such Settlement Date occurs.
"Closing Date" means June 30, 1997.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Percentage" means, as of any date, a fraction, expressed as
a percentage, the numerator of which is the Net Pool Balance and the denominator
of which is the Aggregate Net Investment.
"Collected Interest" means all Collections other than
Collected Principal and Miscellaneous Payments.
"Collected Principal" means that portion of Collections
allocable to principal on the Receivables.
"Collection Account" means the account or accounts designated as such
and established and maintained pursuant to Section 4.8.
"Collection Period" means, in the case of (i) the first Settlement
Date, the period of time from the Closing Date to and including the last day of
the month immediately preceding the month in which such Settlement Date occurs
and (ii) any
4
Settlement Date other than the first Settlement Date, the month immediately
preceding the month in which such Settlement Date occurs.
"Collections" means all funds which either (i) are received by the
Seller or the Master Servicer on or after the related Cutoff Date on or in
respect of the Receivables and the other Assigned Collateral or (ii) are deemed
to have been received as Collections pursuant to Section 4.5.
"Commitment" means the several obligations of the Purchasers to make
Purchases pursuant to this Agreement and the Prior Transfer Agreement.
"Commitment Amount" means $93,000,000.
"Commitment Fee" means the fee payable in arrears by the Seller to the
Agent pursuant to Section 5.1 in respect of each day from the Closing Date until
the Commitment Termination Date in an amount equal to the product of (i) 0.25%,
(ii) the excess, if any, of (a) the Commitment Amount on such day over (b) the
Aggregate Net Investment on such day and (iii) 1/360.
"Commitment Termination Date" means June 30, 1998, as such date may be
extended pursuant to Section 2.3.
"Consolidated Defaulted Receivable Amount" means, as of any Settlement
Date, a fraction, expressed as a percentage, the numerator of which is the sum
of (i) the outstanding Principal Balance of all Receivables included in the
Receivables Pool that were Defaulted Receivables and (ii) the outstanding
principal balance of all Originator Receivables that would be Defaulted
Receivables pursuant to the definition thereof, in each case as of the last day
of the related Collection Period, and the denominator of which is the sum of (i)
the Outstanding Principal Balance of all Receivables included in the Receivables
Pool and (ii) the outstanding principal balance of all Originator Receivables,
in each case as of the last day of such Collection Period.
"Consolidated Delinquency Rate Amount" means, as of any Settlement
Date, a fraction, expressed as a percentage, the numerator of which is the sum
of (i) the Outstanding Principal Balance of all Receivables included in the
Receivables Pool in respect of which a payment of Monthly P&I was more than 30
days past due and (ii) the outstanding principal balance of all Originator
Receivables in respect of which a scheduled monthly payment was more than 30
days past due, in each case as of the last day of the related Collection Period,
and the denominator of which is the sum of (i) the Outstanding Principal Balance
of all Receivables included in the Receivables Pool and (ii) the
5
outstanding principal balance of all Originator Receivables, in each case as of
the last day of such Collection Period.
"Consolidated Monthly Charge-off Rate" means, with respect of any
Collection Period, a fraction, expressed as a percentage on a per annum basis,
the numerator of which is the sum of (i) the Outstanding Principal Balance of
all Receivables included in the Receivables Pool that were charged-off and (ii)
the outstanding principal balance of all Originator Receivables that were
charged-off, in each case during such Collection Period, and the denominator of
which is the sum of (i) the average Outstanding Principal Balance of all
Receivables included in the Receivables Pool and (ii) the average outstanding
principal balance of all Originator Receivables, in each case for each day in
such Collection Period.
"Credit and Collection Policy" means those credit and collection
policies described on Schedules 1 and 2 hereto, as the same may be modified from
time to time in accordance with this Agreement.
"Cutoff Date" means, with respect to a Receivable, the Initial Cutoff
Date or the related Subsequent Cutoff Date, as the case may be.
"Defaulted Receivable" means any Receivable comprising part of the
Receivables Pool in respect of which (i) the related obligor has failed to pay
when due any amounts due in respect thereof which failure continues for 90 days
or more; (ii) the Obligor has failed to perform any term or covenant on its part
to be performed under any related Receivable Document which failure continues
for 90 days or more, if the effect of such failure is to accelerate or to permit
(with or without the giving of notice) the acceleration of the maturity of such
Receivable or, if such Receivable is a Mortgage Loan Receivable, the related
Mortgage Note; (iii) the related Obligor is the subject of a petition in
bankruptcy, either voluntary or involuntary, or in any other proceeding under
the federal bankruptcy laws or makes an assignment for the benefit of creditors;
(iv) liquidation or foreclosure proceedings relating to all or any part of the
Related Security have begun; or (v) the Master Servicer has determined, in
accordance with the procedures and standards set forth in this Agreement and in
the related Credit and Collection Policy, that eventual payment in full is
unlikely.
"Defaulted Receivable Amount" means, as of any Settlement Date, a
fraction, expressed as a percentage, the numerator of which is the Outstanding
Principal Balance of all Receivables included in the Receivables Pool that were
Defaulted Receivables as of the last day of the related Collection Period and
the denominator of which is the Outstanding Principal Balance of all
6
Receivables included in the Receivables Pool as of the last day of such
Collection Period.
"Defective Receivable" means any Receivable required to be
repurchased by the Seller pursuant to Section 7.4.
"Delinquency Rate Amount" means, as of any Settlement Date, a fraction,
expressed as a percentage, the numerator of which is the Outstanding Principal
Balance of all Receivables included in the Receivables Pool in respect of which
a payment of Monthly P&I was more than 30 days past due as of the last day of
the related Collection Period and the denominator of which is the Outstanding
Principal Balance of all Receivables (other than Defaulted Receivables) included
in the Receivables Pool as of the last day of such Collection Period.
"Dollar" or "$" means the currency of the United States.
"Due Date" means, with respect to any Receivable, the date upon which
installments of Monthly P&I are required to be paid pursuant to such Receivable
or, if such Receivable is a Mortgage Loan Receivable, pursuant to the related
Mortgage Note, in each case after giving effect to any grace period permitted by
such Receivable or Mortgage Note.
"Eagle Crest" means Eagle Crest, Inc., an Oregon corporation, and any
successor thereto.
"Eagle Crest Master Association" means that certain nonprofit
corporation organized under the laws of the State of Oregon having its principal
place of business at 821 South Sixth Street, Redmond, Oregon 97756, which owns
and operates the common improvements and facilities for the benefit of all
owners of the Mortgaged Properties.
"Eagle Crest Purchase Agreement" means the Amended and Restated
Receivables Purchase Agreement, dated as of the date hereof, between Eagle Crest
and the Seller, and all amendments thereof and supplements thereto as shall
exist from time to time.
"Eagle Crest Vacation Resort Owners Association" means that certain
non-profit corporation organized under the laws of the State of Oregon having
its principal place of business at 821 South Sixth Street, Redmond, Oregon
97756, which owns and operates the facilities identified for the use and benefit
of the
owners of the Timeshare Estates.
"Earned Yield" shall have the meaning set forth in
Section 3.1.
7
"Eligible Assignee" means a commercial bank or other financial
institution formed under the laws of any OECD Country.
"Eligible Receivable" means, as of any date, a Receivable that is
either a Right to Use Receivable or a Mortgage Loan Receivable and:
(i) as to which, at the time of its conveyance to the Seller,
no portion of any payment of Monthly P&I is more than 30 days delinquent and (a)
if the Receivable is a Right to Use Receivable, no portion of any payment of
Monthly P&I has ever been more than 30 days delinquent and (b) if the Receivable
is a Mortgage Loan Receivable, no portion of any payment of Monthly P&I has been
delinquent since January 1, 1994;
(ii) is not a Defaulted Receivable;
(iii) in respect of which at the time when such Receivable
became an Eligible Receivable, four months had elapsed since the related
Origination Date;
(iv) which either constitutes chattel paper under the Nevada
UCC or, if such Receivable is a Mortgage Loan Receivable, the related Mortgage
Note constitutes an instrument under the UCC in effect in the state in which the
related Mortgaged Property is located;
(v) as to which, at the time of (a) its conveyance to the
Seller and (b) as of such date, the related Originator or the Seller, as the
case may be, has or will have good and marketable title thereto free and clear
of all Liens other than (1) the Lien in favor of the Agent for the benefit of
the Purchasers created pursuant to this Agreement, (2) if such Receivable is a
Mortgage Loan Receivable, other than Permitted Encumbrances on the related
Mortgaged Property and (3) if such Receivable is a Right to Use Receivable,
other than Liens in favor of WorldMark;
(vi) as to which a first priority security interest in favor
of the Agent for the benefit of the Purchasers has been perfected (and, if such
Receivable is a Mortgage Loan Receivable, a first priority security interest in
the related Mortgage and Mortgage Note has been so perfected); and
(vii) as to which no Lien exists that is on a parity with the
security interests described in clause (vi) above other than Permitted
Encumbrances on the related Mortgaged Property in the case of a Mortgage Loan
Receivable and Liens in favor of WorldMark in the case of a Right to Use
Receivable.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
8
"Eurodollar Rate" means, with respect to any Yield Period, (i) the
British Bankers' Association interest settlement rate at 11:00 a.m., London
time, on the day that is two Business Days prior to the first date of such Yield
Period, as reported on page 3750 of Telerate Systems, Inc. (or its successor
publication) (or such other page as may replace page 3750 in that service for
the purpose of displaying London interbank offer rates of major banks) under the
U.S. Dollar column, or, if unavailable, (ii) the offered rate for U.S. Dollar
deposits as reported on the Reuters Monitor Money Rates Service or (iii) if no
such rate is available as described in clauses (i) or (ii) above, the arithmetic
mean of the quotations of the rates at which deposits in U.S. Dollars are
offered in the London interbank market by three Reference Banks selected by the
Agent (after consultation with the Seller) and to which a request was made to
the principal London office for a quotation of such rate at approximately 11:00
a.m., London time, on the day that is two Business Days prior to the first date
of such Yield Period to prime banks in the London interbank market for such
Yield Period; provided that the Eurodollar Rate for the initial Yield Period
hereunder shall be determined by interpolation between the reported rates for
periods of 30 and 60 days.
"Eurodollar Reserves" means a fraction, expressed as a four digit
decimal, the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the minimum reserve percentages
(including, without limitation, any special, supplemental, marginal or emergency
reserves), expressed as a four digit decimal, established by the Board of
Governors or any other banking authority to which the Purchasers are subject for
Eurocurrency Liability (as such term is defined in Regulation D). For all
purposes of this Agreement, Eurodollar Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage and
shall apply to all Yield Periods commencing after the effective date of such
change.
"Facility Documents" means this Agreement, the Purchase Agreements,
each Subservicing Agreement, if any, and all reports, statements, financing
statements, instruments and other documents delivered in connection herewith or
therewith or in connection with the transactions contemplated hereby or thereby.
"Fairway Vista Estates Association" means that certain nonprofit
corporation organized under the laws of the State of Oregon having its principal
place of business at 821 South Sixth Street, Redmond, Oregon 97756, which owns
and operates the facilities identified for the use and benefit of certain owners
of the Fractional Ownership Interests.
9
"Federal Funds Rate" means, with respect to any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates displayed on such days as the federal funds effective rate
on the display page designed as "Page 12011 on the Dow Jones Telerate Service
(or such other page as may replace that page on that service, or such other
service as may be designated as the information source by Agent for the purpose
of determining the daily effective federal funds rate for federal funds
transactions between members of the Federal Reserve System).
"Fee Letter" means that certain letter, dated the Closing Date, from
the Agent to the Seller, and all amendments thereof and supplements thereto as
shall exist from time to time.
"FHLMC" means the Federal Home Loan Mortgage Association and
its successors.
"Filing Assets" means, with respect to any Receivable acquired by the
Seller on or after the Closing Date, (i) such Receivable; (ii) all Related
Security with respect to such Receivable; (iii) all Collections with respect to
such Receivable; (iv) all related Receivable Documents; (v) the Seller's rights
under the related Purchase Agreement; and (vi) all proceeds of the foregoing.
"Fractional Ownership Interest" means a fee simple ownership interest
in common with other owners in a single-family residential home or townhouse
entitling the owner thereof to the exclusive use of such home or townhouse for
four, five or ten weeks, together with access to the accompanying facilities of
the Project.
"Governmental Authority" means the government of the United States or
any state, county or municipality or any foreign country or any political
subdivision of any of the foregoing or any branch, department, agency,
instrumentality, court, tribunal or regulatory authority which constitutes a
part or exercises any sovereign power of any of the foregoing.
"Indebtedness" means, with respect to the Seller, all (i) obligations
for borrowed money; (ii) obligations representing the deferred purchase price of
property other than accounts receivable or accounts payable arising in the
ordinary course of the business of the Seller on terms customary in the trade;
(iii) obligations, whether or not assumed, secured by Liens or payable out of
the proceeds or production from property now or hereafter owned or acquired by
the Seller; (iv) obligations which are evidenced by notes, acceptances or other
instruments; (v) obligations under leases which would be capitalized on the
balance sheet of the Seller prepared in accordance with generally
10
accepted accounting principles; and (vi) obligations for which
the Seller is obligated pursuant to a guarantee.
"Indemnified Amounts" shall have the meaning specified in
Section 14.1.
"Indemnified Parties" shall have the meaning specified in
Section 14.1.
"Independent Director" means a director of the Seller who shall at no
time be, and has not been a director or officer of, or be employed by any direct
or ultimate parent, or Affiliate of the parent, of the Seller, and who shall at
no time hold any beneficial interest in the Seller or any Affiliate of the
Seller; provided, however, that the Independent Director may serve in similar
capacities for other "special purpose corporations" formed by the parent of the
Corporation and its Affiliates. "Affiliate" means, with respect to any Person,
any officer, director, or holder of 5% or more of the voting power of the
Seller, or any brother, sister, spouse, parent or child of any such person, and
any other entity other than the Seller, controlling or controlled by or under
common control with such entity, and "control" means the power to direct the
management and policies of such entity, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.
"Initial Cutoff Date" means June 30, 1997.
"Initial Receivables" means the Receivables comprising the
Receivables Pool as of the Closing Date.
"Interest Rate Protection Date" means the second consecutive Settlement
Date in respect of which the difference between (i) the weighted average
Receivable Interest Rate of the Receivables comprising the Receivables Pool
during the related Collection Period and (ii) 30-day LIBOR is less than or equal
to 8%.
"Interest Rate Protection" means a transaction governed by an ISDA
Master Agreement pursuant to which a counterparty will ensure for a three year
period commencing on the related Interest Rate Protection Date, on an amount at
least equal to 60% of the Aggregate Net Investment as of such Interest Rate
Protection Date, the 30-day Eurodollar Rate will be less than or equal to the
sum of (i) the 30-day Eurodollar Rate in effect on such Interest Rate Protection
Date and (ii) 4%.
"Investment Company Act" means the Investment Company Act of
1940, as amended.
11
"IRS" means the Internal Revenue Service, and any successor
thereto.
"LIBOR Rate" means, with respect to any Tranche for any Yield Period,
an interest rate per annum equal to the sum of (i) the Margin and (ii) the
product of (a) the Eurodollar Rate in effect for such Yield Period and (b) the
Eurodollar Reserves in effect on the first day of such Yield Period. For all
purposes of this Agreement, each Tranche accruing a yield at the LIBOR Rate
shall be deemed to constitute a Eurocurrency Liability and to be subject to the
reserve requirements of Regulation D, without benefit of credit or proration,
exemptions or offsets which might otherwise be available to the Purchasers from
time to time under Regulation D.
"Lien" means, with respect to any Person, any security interest, lien,
charge, claim, pledge, equity or encumbrance of any kind upon or affecting the
revenues of such Person or any real or personal property in which such Person
has or hereafter acquires any interest, other than Tax liens, mechanics, liens
and any liens that attach by operation of law.
"Liquidation Expenses" means, with respect to the liquidation of any
Defaulted Receivable, all reasonable out-of-pocket expenses (including all
reasonable sales and marketing expenses, but not including overhead) incurred by
the Master Servicer in connection with such liquidation.
"Liquidation Proceeds" means, with respect to the liquidation of any
Defaulted Receivable, amounts actually received in connection with such
liquidation.
"Lock Box" means each post office box or bank box to be included in the
Lock Box Network as to which the Seller has notified the Agent that collections
will be remitted to pursuant to Section 4.9 following a Termination Event.
"Lock Box Account" means each account maintained by the Seller as a
part of the Lock Box Network and (i) as to which the Seller has notified the
Agent that Collections will be deposited therein and (ii) with respect of which
the Agent shall have received an undated executed copy of a Lock Box Notice
addressed to the related Lock Box Bank.
"Lock Box Agreement" means each agreement between the Seller and a Lock
Box Bank relating to a Lock Box and a Lock Box Account, which agreement shall be
in form and substance satisfactory to the Agent.
"Lock Box Bank" means each of the banks or depository institutions
added as a lock box bank pursuant to Section 4.9.
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"Lock Box Network" means one or more post office boxes and/or bank
boxes and accounts maintained by the Seller for the sole purpose of receiving
Collections and in connection with which a collecting bank is exclusively
authorized and directed to collect and process mail and Collections remitted to
each such post office box or bank box and to deposit such Collections into the
Collection Account, directly or through a Lock Box Account.
"Lock Box Notice" means, with respect to each Lock Box and Lock Box
Account, a letter in substantially the form of Exhibit F hereto from the Seller
to each Lock Box Bank.
"Margin" means, in the case of any Yield Period (or portion thereof)
1.25%, and after the Commitment Termination Date, provided that no Notice Date
has occurred, 2%.
"Master Servicer" means TRI, in its capacity as Master Servicer
hereunder, and any successor Master Servicer designated by the Agent pursuant to
Section 10.1, including any Person assuming the duties of the Master Servicer
under Article 10 after being designated in a Successor Notice.
"Maturing Tranches" means, as of any Settlement Date, those Tranches
for which such Settlement Date is the last day of the applicable Payment Period.
"Miscellaneous Payments" means, with respect to any Receivable, any
amounts received from or on behalf of the related Obligor representing
assessments and payments relating to real property taxes, insurance premiums,
transfer fees, late fees and service charges, annual dues payable to WorldMark
and condominium or homeowners, association fees.
"Monthly Charge-off Rate" means, with respect to any Collection Period,
a fraction, expressed as a percentage on a per annum basis, the numerator of
which is the Outstanding Principal Balance of all Receivables included in the
Receivables Pool that were charged-off by the Seller during such Collection
Period and the denominator of which is the average Outstanding Principal Balance
of all Receivables included in the Receivables Pool for each day in such
Collection Period.
"Monthly P&I" means, with respect to any Receivable, the scheduled
payment of principal and interest due in each Collection Period pursuant to such
Receivable (which payment, if such Receivable is a Mortgage Loan Receivable, is
set forth in the related Mortgage Note).
"Mortgage" means the mortgage, deed of trust or other instrument
creating a first lien on the Mortgaged Property securing a Mortgage Note.
13
"Mortgage Loan Receivables" means such of the mortgage loans originated
by Eagle Crest Partners, Ltd., acquired by the Seller and included in the
Receivables Pool pursuant to the Prior Transfer Agreement, which mortgage loans
are identified in the Schedule of Mortgage Loan Receivables.
"Mortgage Note" means the promissory note or other evidence of
indebtedness executed by an obligor that evidences the indebtedness of such
obligor under a Mortgage Loan Receivable.
"Mortgaged Property" means the property securing a Mortgage Note, which
may be either a Timeshare Estate or a Fractional Ownership Interest consisting
of a fee simple estate in real property located at the Project.
"Net Pool Balance" means, as of any date, the aggregate Outstanding
Principal Balance of all Eligible Receivables included in the Receivables Pool
as of such date.
"Net Worth" means an amount equal to the tangible shareholders' equity
of the Seller (as such term is defined in accordance with generally accepted
accounting principles) minus the fair market value of any securities owned by
the Seller prior to the Closing Date (other than investment of monies on deposit
in the Collection Account).
"New Lock Box Accounts" shall have the meaning specified in Section
4.9.
"New Lock Boxes" shall have the meaning specified in Section
4.9.
"Notice Date" means the day on which the Agent, pursuant to Section
11.2, delivers or is deemed to have delivered to the Seller a notice of the
occurrence of a Termination Event and declaration that the Commitment is
terminated and all Obligations are due and payable (from Collections or
otherwise).
"Obligations" means (i) all obligations of the Seller to the Agent, the
Purchasers and their respective successors, permitted transferees and assigns
arising under or in connection with the Facility Documents, and (ii) all
obligations of the Seller to any Indemnified Party arising under Section 14.1,
in each case however created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due.
"Obligor" means any Person obligated to make payments on or in respect
of a Receivable, whether as a direct obligor or as a guarantor thereof.
14
"OECD Country" means a country which is a member of the grouping of
countries that are full members of the Organization of Economic Cooperation and
Development, plus countries that have concluded special lending arrangements
with the International Monetary Fund associated with its General Arrangements to
Borrow.
"Officer's Certificate" means a certificate signed by the president,
any vice president, the treasurer, the assistant treasurer, the secretary or the
assistant secretary of the Seller or the Master Servicer, as the case may be,
and delivered to the Agent.
"Original Principal Balance" means, with respect to any Receivable, the
amount set forth in such Receivable or, in the case of a Mortgage Loan
Receivable, on the related Mortgage Note, as the original principal balance of
such Receivable.
"Origination Date" means, with respect to any Receivable, the date
specified as the Origination Date on the related Schedule of Receivables, such
date being represented to be (i) in the case of a Mortgage Loan Receivable, the
date on which the related Mortgage was recorded in the public records in the
jurisdiction in which the related Mortgaged Property is located and (ii) in the
case of a Right to Use Receivables, the date of origination of such Right to Use
Receivable.
"Originator" means TRI or Eagle Crest or Eagle Crest Partners, Ltd., as
the case may be.
"Originator Receivables" means, as of any time, all right to use
timeshare receivables and mortgage loan timeshare receivables originated by the
related Originator, other than the Receivables, that have not been paid in full
or charged off.
"Outstanding Principal Balance" means, with respect to any Receivable
as of any date, its Original Principal Balance less all payments received on or
in respect of such Receivable on or prior to such date and allocable to
principal.
"Participant" shall have the meaning set forth in
Section 13.3.
"Payment Period" means (i) for any Tranche for which the Earned Yield
is calculated at the LIBOR Rate, the Yield Period, provided, that if a Notice
Date shall occur prior to the end of such Yield Period, the Payment Period for
such Tranche shall end on the Settlement Date next succeeding such Notice Date;
(ii) for any Tranche for which the Earned Yield is calculated at the Reference
Rate, that period commencing on the next day after the last day of the
immediately preceding Payment Period for such Tranche (or applicable portion
thereof) or if there has been no
15
such preceding Payment Period, the date the Purchasers' Investment in such
Tranche was initially made by the Purchasers and, in either case, continuing
through and including the next succeeding Settlement Date; and (iii) for any
Tranche for which the Earned Yield is calculated at the Termination Event Rate,
that period commencing on (a) the next day after the last day of the immediately
preceding Payment Period for such Tranche (or applicable portion thereof), or
(b) if there has been no such preceding Payment Period, the date the Purchasers'
Investment in such Tranche (or applicable portion thereof) was initially made by
the Purchasers and, in either case, continuing through and including the
immediately succeeding Settlement Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means, with respect to any Mortgaged Property,
(i) all Liens and encumbrances identified in the related Mortgage and (ii) all
other mortgages, deeds of trust or other security instruments on such Mortgaged
Property to the extent that such mortgages, deeds of trust or other security
instruments and the related promissory note or other evidence of indebtedness
are substantially similar to the Mortgages and Mortgage Notes, respectively, and
relate to mortgage loan timeshare receivables which are substantially similar to
the Mortgage Loan Receivables and have been transferred to the Agent for the
benefit of the Purchasers.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Portfolio Yield" means, as of any Settlement Date, the difference
between (i) the product of (a) the amount of Collected Interest collected during
the related Collection Period and (b) the Purchasers' Interest for such
Collection Period, and (ii) the sum of (a) the Earned Yield in respect of such
Collection Period, whether or not paid, and (b) the product of (1) the
Purchasers' Interest for such Collection Period and (2) the sum of the Servicing
Fee payable in respect of such Collection Period, the Outstanding Principal
Balance of all Receivables that were charged-off by the Seller during such
Collection Period and the Program Costs in respect of such Collection Period,
whether or not paid.
"Prior Transfer Agreement" shall have the meaning defined in the
recitals to this Agreement.
"Pro Rata Share" shall mean for each Purchaser the percentage set forth
opposite its name below.
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Purchaser Pro Rata Share
Seafirst Bank 21.51%
First National Bank of Chicago 16.13
Societe Generale 16.13
The Bank of Tokyo-Mitsubishi 10.75
Key Bank National Association 10.75
Sanwa Bank California 10.75
First Security of Idaho, N.A. 8.60
U. S. Bank 5.38
"Program Costs" means, in respect of any Collection Period, all
expenses and fees of the Seller payable during such Collection Period (other
than the Servicing Fee and Earned Yield), including but not limited to, fees
payable pursuant to Section 5.1.
"Project" means the respective land, buildings and appurtenant rights
which comprise the Eagle Crest Resort, Redmond, Oregon, within which each
Mortgaged Property is located.
"Purchase" means any purchase by the Purchasers of an Undivided
Interest from the Seller and includes, without limitation, Reinvestments.
"Purchase Agreements" means the Eagle Crest Purchase
Agreement and the TRI Purchase Agreement.
"Purchase Certificate" shall have the meaning set forth in
Section 6.2(c).
"Purchase Notice" shall have the meaning set forth in
Section 2.2(a).
"Purchase Price" means, with respect to any Defective Receivable, an
amount equal to the Outstanding Principal Balance of such Receivable as of the
last day of the Collection Period immediately preceding the Collection Period in
which such Receivable is being repurchased, together with interest thereon at
the applicable Receivable Interest Rate from the end of such immediately
preceding Collection Period through the current Collection Period.
17
"Purchase and Sale Agreement" means, with respect to any
Mortgage Loan Receivable, the related Eagle Crest Vacation Resort
Ownership Purchase and Sale Agreement, Escrow Instructions and
Buyer's Receipt for Documents.
"Purchasers" means each of the Persons identified as a "Purchaser" in
the definition of "Pro Rata Share" and any of their respective successors.
"Purchasers' Interest" means, with respect to any Collection Period, a
fraction, the numerator of which is the average Aggregate Net Investment for
each day in such Collection Period and the denominator of which is the average
outstanding Principal Balance of the Receivables comprising the Receivables Pool
for each day in such Collection Period.
"Purchasers' Investment" in any Undivided Interest means an amount
equal to the original amount paid to the Seller for such Undivided Interest at
the time of its initial acquisition by the Purchasers, as such amount may be
reduced from time to time by Collections received and distributed pursuant to
Sections 4.3 and 4.7. The Purchasers' Investment shall not be considered reduced
by any distribution of any portion of Collections if at any time such
distribution is rescinded or otherwise must be returned for any reason nor shall
the Purchasers' Investment be reduced or increased by any Reinvestment.
"Purchasers' Share" of any Collections means, (i) on any day on or
before the Commitment Termination Date, if no Notice Date shall have occurred,
the product of such amount and the Aggregate Undivided Interest on such day;
(ii) on any day after the Commitment Termination Date, if no Notice Date shall
have occurred on or before the Commitment Termination Date, the product of such
amount and the Aggregate Undivided Interest as of the Commitment Termination
Date; and (iii) if a Notice Date shall have occurred on or before the Commitment
Termination Date, the product of such amount and the Aggregate Undivided
Interest as of such Notice Date.
"Receivable Documents" means, with respect to any Receivable, all loan
agreements, security agreements, guarantees, pledges, mortgages, deeds of trust,
financing statements, certificates, instruments, agreements and other related
documents executed in connection with such Receivable (including, if such
Receivable is a Mortgage Loan Receivable, the related Mortgage, Mortgage Note
and Warranty Deed) or in connection with the Related Security.
"Receivable Files" means the documents in respect of the
Receivables specified in Section 2.5.
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"Receivable Interest Rate" means, with respect to a Receivable, the per
annum rate of interest or finance charge borne by such Receivable.
"Receivables" means the Right to Use Receivables and the Mortgage Loan
Receivables included in the Receivables Pool, and all proceeds thereof and
payments thereunder on and after the related Cutoff Date, which Receivables are
identified in the related Schedule of Receivables. Once so designated, a
Receivable shall continue to be a Receivable for all purposes hereunder until
(i) its Outstanding Principal Balance has been reduced to zero, (ii) the Seller
repurchases such Receivable pursuant to Section 7.4 or 15.1 or (iii) the Seller
substitutes a new Receivable for such Receivable therefor pursuant to Section
15.2.
"Receivables Pool" means at any time all Receivables
outstanding at such time.
"Reference Bank" means a major bank selected from time to time by the
Agent that is active in the London interbank market.
"Reference Rate" means on any day the greater of the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America National Trust and Savings Association ("BofA") in San Francisco,
California as its "reference rate" and (ii) the sum of (a) the Federal Funds
Rate and (b) 0.50%. The BofA "reference rate" is a rate set by BofA based upon
various factors, including its costs and desired return, general economic
conditions, and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below the announced rate. Any change in
the reference rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of the change.
"Regulation D" means Regulation D promulgated by the Board of Governors
of the Federal Reserve System, as amended.
"Reinvestment" means any Purchase made pursuant to
Section 4.2.
"Related Security" means, with respect to any Receivable, all security,
guarantees and other collateral securing the obligations of the related Obligor
under such Receivable, including, if such Receivable is a Mortgage Loan
Receivable, the related Mortgaged Property.
"Required Purchasers" means, unless otherwise indicated, at any time
Purchasers having an aggregate Purchasers' Investment of at least 66%.
19
"Right to Use Receivable" means such of the right to use receivables
originated by TRI or Eagle Crest (forms of which are attached hereto as Exhibit
C), acquired by the Seller and included in the Receivables Pool pursuant to
either this Agreement or the Prior Transfer Agreement, which right to use
receivables are identified in the Right to Use Receivables Schedule.
"River View Vista Estates Association" means that certain non-profit
corporation organized under the laws of the State of Oregon having its principal
place of business at 821 South Sixth Street, Redmond, Oregon 97756, which owns
and operates the facilities identified for the use and benefit of certain owners
of the Fractional Ownership Interests.
"Schedule of Mortgage Loan Receivables" means the schedule or schedules
of Mortgage Loan Receivables attached hereto as Schedule 4, as the same may be
amended from time to time. The Mortgage Loan Receivable Schedule shall set forth
the following information as to each Mortgage Loan Receivable: (i) its
identifying number; (ii) the name of and the mailing address for the related
Obligor; (iii) the street address of the related Mortgaged Property; (iv) the
original number of months to maturity; (v) the number of months to maturity as
of the related Cutoff Date; (vi) its Origination Date; (vii) its Receivable
Interest Rate; (viii) its Due Date; (ix) its original Principal Balance; (x) its
Outstanding Principal Balance as of the related Cutoff Date; (xi) whether the
related Mortgaged Property is a Fractional Ownership Interest or a Timeshare
Estate; and (xii) the address at which the related Receivable File is
maintained. Every list submitted to the Agent purporting to identify such
Receivables conveyed or to be conveyed to the Agent pursuant to this Agreement
shall be deemed an amendment or supplement to such schedule regardless of
whether the list is accurate or complete or complies with the requirements of
the preceding sentence.
"Schedule of Receivables" means the Schedule of Right to Use
Receivables or the Schedule of Mortgage Loan Receivables.
"Schedule of Right to Use Receivables" means the schedule of Right to
Use Receivables attached hereto as Schedule 3, as the same may be amended or
supplemented from time to time. The Right to Use Receivable Schedule shall set
forth the following information as to each Right to Use Receivable: (i) its
identifying number; (ii) the name of and mailing address for the related
Obligor; (iii) the original number of months to maturity; (iv) the number of
months to maturity as of the related Cutoff Date; (v) its Receivable Interest
Rate; (vi) its Due Date; (vii) its Original Principal Balance; (viii) its
Outstanding Principal Balance as of the related Cutoff Date; (ix) its
20
Origination Date; and (x) the address at which the related Receivable File is
maintained. Every list submitted to the Agent purporting to identify such
Receivables conveyed or to be conveyed to the Agent pursuant to this Agreement
shall be deemed an amendment or supplement to such schedule regardless of
whether the list is accurate or complete or complies with the requirements of
the preceding sentence.
"Seafirst" means Bank of America National Trust and Savings
Association, a national banking association doing business as Seafirst Bank, and
any successor thereto.
"Section 4.4 Deposits" shall have the meaning specified in
Section 4.8.
"Seller" means TW Holdings, Inc., and any successor thereto.
"Servicing Fee" means the fee to be paid to the Master Servicer for
services rendered during each Collection Period, determined pursuant to Section
10.8.
"Settlement Date" means the tenth day of each month or, if such day is
not a Business Day, the immediately succeeding Business Day, commencing July 10,
1994.
"Subsequent Cutoff Date" means the date specified by the Seller in the
related Schedule of Receivables after which all payments owing under a
Subsequent Receivable shall be paid to or upon the order of the Agent as
directed pursuant to this Agreement.
"Subsequent Receivables" means any Receivable transferred to
the Seller after the Closing Date.
"Subservicer" means any subservicer engaged by the Master Servicer to
subservice a Receivable pursuant to Section 10.2.
"Subservicing Agreement" means an agreement between the Master Servicer
and a Subservicer relating to the servicing of one or more of the Receivables,
and all amendments thereof and supplements thereto as shall exist from time to
time.
"Subsidiary" shall mean any corporation of which a majority (by number
of shares or by number of votes) of any class of outstanding capital stock
normally entitled to vote for the election of one or more directors (regardless
of any contingency which does or may suspend or dilute the voting rights of such
class) is at such time owned directly or indirectly by the Seller or TRI, as the
case may be, or by one or more of their respective Subsidiaries; provided that
notwithstanding the foregoing, any entity that is consolidated on the balance
sheet of another
21
entity shall be a Subsidiary of the second entity for purposes of
this definition.
"Successor Notice" shall have the meaning specified in
Section 10.1.
"Tax" means, with respect to any Person, any tax, assessment, duty,
levy, impost or other charge imposed by any Governmental Authority on such
Person or on any property, revenue, income or franchise of such Person and any
interest or penalty with respect to any of the foregoing.
"Termination Event" shall have the meaning set forth in
Section 11.1.
"Termination Event Rate" means a per annum rate equal to 1.5% above the
related Yield Rate in effect from time to time.
"Timeshare Estate" means a timeshare interval fee simple ownership
interest in a timeshare unit located in the Project which secures a Mortgage
Loan Receivable and which entitles the owner thereof to occupy a unit at the
Project for a particular interval, together with access to the accompanying
facilities at the Project.
"Tranche" means any portion of the Aggregate Net Investment (expressed
in dollars) accruing a yield at the same rate, and, in the case of portions of
the Aggregate Net Investment accruing a yield at the same LIBOR Rate, for the
same Yield Period.
"Transfer Date" means the date as of which a Receivable is
acquired by the Purchaser.
"TRI" means Trendwest Resorts, Inc., an Oregon corporation,
and any successor thereto.
"TRI Purchase Agreement" means the Amended and Restated Receivables
Purchase Agreement dated as of June 1, 1994, between TRI and the Seller, and all
amendments thereof and supplements thereto as shall exist from time to time.
"TW HOLDINGS" means TW Holdings, Inc., a Nevada corporation,
and its successors.
"UCC" means the Uniform Commercial Code as in effect in the
related jurisdiction.
"Undivided Interest" means, as of any date, for each Purchasers'
Investment, an undivided fractional ownership interest (owned ratably by the
Purchasers) equal to (i) the sum
22
of (a) the Purchasers' Investment plus (b) 25% of the Purchasers, Investment,
divided by (ii) the Net Pool Balance.
"Upfront Fee" shall equal the product of .0025 multiplied by the
Commitment Amount; the Upfront Fee to be received by each Purchaser upon making
or increasing its investment shall equal the product of that Purchaser's
Pro-Rata Share (or so much thereof as represents its increased investment)
multiplied by .0025 and the Commitment Amount.
"Unmatured Termination Event" means any event which with the giving of
notice, the passage of time or both would constitute a Termination Event.
"WorldMark" means WorldMark, The Club, a California nonprofit mutual
benefit corporation, and its successors.
"Yield Notice" shall have the meaning set forth in Section
3.2.
"Yield Period" means with respect to any Tranche for which the LIBOR
Rate has been selected as the Yield Rate, the period commencing on the first
date the Seller elects to have such LIBOR Rate apply (which date must be a
Settlement Date or such other date as agreed to by all Purchasers named herein)
and ending on the Settlement Date closest to a date one, two or three months
thereafter as specified in a Yield Notice given pursuant to Section 3.2,
provided that the initial Yield Period hereunder shall end on August 10, 1997.
"Yield Rate" for any portion of the Purchasers' Investment means the
Reference Rate unless the Seller has made an effective selection of a LIBOR Rate
pursuant to Section 3.2, in which case, "Yield Rate,, for such portion of the
Purchasers' Investment means such LIBOR Rate.
Section 1.2 Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
Section 1.3 Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be
construed, and all accounting procedures shall be performed, in
23
accordance with generally accepted accounting principles in the United States
consistently applied.
ARTICLE 2
THE COMMITMENT; TRANSFER OF RECEIVABLES
Section 2.1 The Commitment. On the terms and subject to the conditions
set forth in this Agreement, and in reliance upon the representations and
warranties herein set forth, each Purchaser, severally and for itself alone,
agrees to purchase from time to time prior to the Commitment Termination Date,
pro rata shares of Undivided Interests from the Seller, each of which shall be
in an amount equal to such Purchaser's Pro Rata Share of the aggregate amount of
the requested Purchase; provided, however, that under no circumstances will any
Purchaser be obligated to make any Purchase to the extent that, after giving
effect to such Purchase, (i) the Aggregate Net Investment would exceed the
Aggregate Net Investment Limit, (ii) such Purchaser's Pro Rata Share of the
Aggregate Net Investment would exceed the amount of its Pro Rata Share of the
Commitment Amount or (iii) the Collateral Percentage as of the date of the
proposed Purchase (after giving effect to such Purchase and all Purchases to be
made on or prior to such date) would be less than 125%.
Section 2.2 Certain Purchase Procedures.
(a) Purchases Other Than Reinvestments. Except in the case of
a Purchase that is a Reinvestment, the Seller shall deliver to the Agent a
notice setting forth the details of each proposed Purchase, substantially in the
form of Exhibit A hereto (a "Purchase Notice"), no later than 11:00 a.m.,
Seattle time, on the Business Day immediately preceding the date of the proposed
Purchase; provided, however, if the Seller shall select the LIBOR Rate as the
initial Yield Rate for such proposed Purchase, the Purchase Notice shall be
delivered to the Agent prior to 11:00 a.m., Seattle time, at least three
Business Days before the date of such proposed Purchase. Notwithstanding the
foregoing, in the case of the initial Purchase to be made on the Closing Date,
the related Purchase Notice can be delivered to the Agent on the Closing Date.
Except as otherwise provided in the immediately preceding sentence, Purchase
Notices received after 11:00 a.m., Seattle time, on any Business Day will be
deemed received on the immediately succeeding Business Day. Each Purchase Notice
shall set forth the proposed amount of the Purchase, which shall be an integral
multiple of $100,000 and not less than $1,000,000, and the proposed date of
Purchase, which, except for the initial Purchase on the Closing Date, shall be a
Settlement Date occurring prior to the Commitment Termination Date. Such notice
shall be irrevocable and shall be deemed to constitute a representation and
warranty by the Seller that as of
24
the date of the Purchase Notice, all of the representations and warranties of
the Seller set forth in Article 7 are true and correct and that no Unmatured
Termination Event or Termination Event has occurred and is continuing. Upon
receipt of a Purchase Notice, the Agent shall promptly notify each Purchaser by
telephone (confirmed by facsimile transmission), or facsimile transmission of
the date and time of the proposed Purchase. Each Purchaser shall before 11:00
a.m., Seattle time, on the date of such Purchase (other than a Reinvestment),
remit an amount equal to the lesser of (i) such Purchaser's Pro Rata Share of
the amount of the Purchase identified in the Purchase Notice or (ii) the maximum
amount such Purchaser is committed to pay pursuant to Section 2.1, in
immediately available funds to the Agent at its Commercial Loan Service Center,
Seattle, Washington. Upon fulfillment to the Agent's satisfaction of the
applicable conditions set forth in Article 6, and after receipt by the Agent of
such funds, the Agent will promptly make such immediately available funds
available to the Seller by depositing them to an ordinary checking account
maintained for such purpose by the Seller with the Agent.
(b) Reinvestments. Reinvestments shall be made by permitting
the Master Servicer to apply each Purchaser's Pro Rata Share of the Purchasers'
Share of Collected Principal towards the purchase of additional Undivided
Interests pursuant to Section 4.2.
Section 2.3 [Reserved]
Section 2.4 Conveyance of Receivables.
(a) In consideration of the obligation of the Purchasers to
make purchases from time to time pursuant to this Agreement, on each Transfer
Date, the Seller does hereby transfer, assign and otherwise convey to the Agent
for the benefit of the Purchasers, without recourse (subject to the obligations
of the Seller herein), all of its right, title and interest in, to and under the
Assigned Collateral obtained by the Seller on such Transfer Date (or all
Assigned Collateral owned as of the Closing Date in the case of the first
Transfer Date).
(b) In connection with each transfer and assignment described
in Section 2.4(a), on or prior to the related Transfer Date the Seller will (i)
deliver to the Agent (A) a revised Schedule of Mortgage Loan Receivables and/or
a revised Schedule of Right to Use Receivables, as the case may be, listing all
of the Receivables being conveyed on the related Transfer Date and all of the
related Receivables previously conveyed pursuant to this Agreement, and (B) an
Officer's Certificate of the Seller to the effect that the related Receivable
Files have been delivered to or upon the order of the Master Servicer, as
custodian for the
25
Agent, and that the following legend (or the substantive equivalent thereof) has
been placed on each of the above-referenced files, on each of the data
processing reports that the Master Servicer, the Seller or either Originator
generates which are of the type which a potential purchaser or lender would
reasonably be expected to review to evaluate the Receivables: "Undivided
Interests in the Receivable(s) described herein have been sold to various
Purchasers pursuant to a Second Amended and Restated Receivables Transfer
Agreement, dated as of June 1, 1997, among TW Holdings, Inc., the Purchasers
named therein, Seafirst Bank, as Agent, and Trendwest Resorts, Inc. as Master
Servicer" and (ii) file in the appropriate offices in the jurisdictions where
filing of a UCC-1 financing statement is necessary or appropriate, such UCC-1
financing statements shall be executed by the Seller as debtor, naming the
Agent, acting on behalf of the Purchasers, as secured party and listing the
related Assigned Collateral as collateral. In connection with such filing, the
Seller agrees that it shall cause to be filed all necessary continuation
statements and to take or cause to be taken such actions and execute such
documents as are necessary to perfect the interests of the Purchasers in such
Assigned Collateral. File-stamped copies of each such financing statement or
continuation statement shall be delivered to the Agent as soon they are received
by the Seller.
(c) In connection with the first transfer and assignment
hereunder of Right to Use Receivables pursuant to Section 2.4(a), the Seller
will deliver to the Agent an opinion of counsel to the effect that the Agent
will have a first perfected security interest in such Receivables, all
Collections on or in respect of such Receivables after the related Cutoff Date
and all proceeds of the foregoing.
(d) On the Closing Date and each anniversary of the first
Settlement Date, the Seller will deliver to the Agent an opinion of counsel to
the effect that in respect of all Receivables transferred and assigned pursuant
to Section 2.4(a) since the first such transfer and assignment (or, in the case
of each anniversary of the first Settlement Date after the first such
anniversary, Receivables so transferred and assigned during the past year) the
Agent has a first perfected security interest in such Receivables, all
Collections on or in respect of such Receivables after the related Cutoff Dates
and all proceeds of the foregoing.
(e) It is the intention of the Seller and the other parties to
this Agreement that the transfers and assignments contemplated by this Agreement
shall constitute a sale of Receivables in an aggregate principal amount up to
the Commitment Amount from the Seller to the Agent, on behalf of the Purchasers,
and the beneficial interest in and title to such Receivables
26
shall not be part of the Seller's estate in the event of the filing or a
bankruptcy petition by or against the Seller under any bankruptcy law. In the
event that the transfers and assignments contemplated by this Agreement are
deemed to be other than a sale, this Agreement shall be deemed to be and in such
event hereby is the grant of a security interest from the Seller to the Agent in
the Assigned Collateral and the Agent, on behalf of the Purchasers, shall have
all the rights, powers and privileges of a secured party under the UCC. In such
event, the Seller agrees to take such action and execute such documents as the
Agent shall reasonably request in order fully to realize the benefits of such
secured party status, including, without limitation, powers of attorney,
financing statements, notices of lien or other instruments or documents.
Section 2.5 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Agent, upon
the execution and delivery of this Agreement, revocably appoints the Master
Servicer, and the Master Servicer accepts such appointment, to act as the agent
of the Agent as custodian of the following documents or instruments, directly or
through one or more Subservicers, which are hereby constructively delivered to
the Agent, and of which the Master Servicer shall acknowledge receipt thereof,
with respect to each Receivable assigned and transferred on the related Transfer
Date:
(i) the fully executed original of the Receivable;
(ii) documents evidencing or relating to any insurance policy
relating to such Receivable, the related Obligor and, if such Receivable is a
Mortgage Loan Receivable, the related Mortgaged Property;
(iii) in the case of a Mortgage Loan Receivable, the original
Mortgage Note endorsed (which endorsement may be by manual or facsimile
signature) by the Seller without recourse to the order of the Agent in the
following form: "Without recourse, pay to the order of Seattle-First National
Bank, as Agent of the Purchasers under the Amended and Restated Receivables
Transfer Agreement, dated as of June 1, 1994, among TW Holdings, Inc., the
Agent, the Purchasers and JELD-WEN, inc.";
(iv) in the case of a Mortgage Loan Receivable, a recorded
Assignment to the Agent, acting on behalf of the Purchasers, of the related
Mortgage or, if the Seller provides the Agent with an opinion of counsel
admitted to practice law in the state in which the related Mortgaged Property is
located to the effect that recordation is not necessary to secure the interest
in such Mortgaged Property in the name of the Agent, an assignment in recordable
form;
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(v) in the case of a Mortgage Loan Receivable,
originals or recorded copies of all intervening Assignments with
evidence of recording indicated thereon;
(vi) in the case of a Mortgage Loan Receivable, the
related Mortgage, with evidence of recording indicated thereon;
(vii) originals of all assumption, modification and substitution
agreements where the terms or provisions of such Receivable and, if such
Receivable is a Mortgage Loan Receivable, the related Mortgage or Mortgage Note,
have been modified or such Receivable, Mortgage or Mortgage Note has been
assumed; and
(viii) copies of all other Receivable Documents and any and all
other documents that the Seller, the related Obligor, the related Originator or
the Master Servicer, as the case may be, shall keep on file, in accordance with
its customary procedures, relating to such Receivable, the related Obligor and,
if such Receivable is a Mortgage Loan Receivable, the related Mortgaged
Property.
Section 2.6 Duties of Master Servicer as Custodian.
(a) The Master Servicer, in its capacity as custodian, shall
hold the Receivable Files on behalf of the Agent for the use and benefit of all
Purchasers, and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable. The Receivable Files will be
marked and physically separated from the files relating to all other right to
use timeshare receivables and mortgage loan timeshare receivables that the
Master Servicer services on behalf of itself or others. In performing its duties
as custodian, the Master Servicer shall act with reasonable care, using that
degree of skill and attention that it exercises with respect to comparable
receivables that it services for itself or others. The Master Servicer shall
conduct, or cause to be conducted, periodic reviews of the files of all
receivables owned or serviced by it which shall include the Receivable Files
held by it under this Agreement, and of the related accounts, records and
computer systems, in such a manner as shall enable the Agent to verify the
accuracy of the Master Servicer's record keeping. The Master Servicer shall
promptly report to the Agent any failure on its part to hold the Receivable
Files and maintain its accounts, records and computer systems as herein provided
and promptly take appropriate action to remedy any such failure.
(b) The Master Servicer shall maintain each Receivable
File at one of the locations set forth in Schedule 5 hereto, or
at such other location or locations as shall be specified to the
Agent by 30 days' prior written notice (and each such location
shall be added to a revised Schedule 5). The Master Servicer
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shall make available to the Agent or its duly authorized representatives,
attorneys or auditors the Receivable Files and the related accounts, records and
computer systems maintained by the Master Servicer at such times as the Agent
may reasonably request.
(c) Upon instruction from the Agent, the Master Servicer shall
release any document in the Receivable Files to the Agent or its agent or
designee, as the case may be, at such place or places as the Agent may
designate, as soon as practicable. The Master Servicer shall not be responsible
for any loss occasioned by the failure of the Agent to return any document or
any delay in doing so.
Section 2.7 Instructions; Authority to Act. The Master Servicer shall
be deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by an authorized officer
of the Agent. A certified copy of a bylaw or of a resolution of the Board of
Directors of the Agent shall constitute conclusive evidence of the authority of
any such authorized officer to act and shall be considered to be in full force
and effect until receipt by the Master Servicer of written notice to the
contrary is given by the Agent.
Section 2.8 Indemnification by Master Servicer as Custodian. The Master
Servicer, as custodian, shall indemnify the Agent and the Purchasers for any and
all liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred or asserted
against the Agent and the Purchasers as the result of any improper act or
omission in any way relating to the maintenance and custody by the Master
Servicer, as custodian, of the Receivable Files; provided, however, that the
Master Servicer shall not be liable for any portion of any such amount resulting
from the willful misfeasance, bad faith or negligence of the Agent, any
Purchaser or any successor Master Servicer.
Section 2.9 Effective Period and Termination. The Master Servicer's
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect until terminated pursuant to this Section. If,
pursuant to Section 10.1, the Master Servicer shall resign as Master Servicer or
if all of its rights and obligations have been terminated, the appointment of
the Master Servicer as custodian shall be terminated by the Agent (acting upon
the direction of the Required Purchasers), in the same manner as the Agent or
such Purchasers may terminate the rights and obligations of the Master Servicer
pursuant to Section 10.1. The Agent may terminate the Master Servicer's
appointment as custodian, with cause at any time upon written notice to the
Master Servicer, and without cause upon
29
30 days' prior written notice to the Master Servicer. As soon as practicable
after any termination of such appointment, the Master Servicer shall deliver the
Receivable Files to or upon the order of the Agent at such place or places as
the Agent may reasonably designate. Notwithstanding the termination of the
Master Servicer as custodian, the Agent agrees that upon any such termination,
the Agent shall provide, or cause its agent to provide, access to the Receivable
Files to the Master Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
ARTICLE 3
EARNED YIELD
Section 3.1 Earned Yield. The Purchasers shall be entitled to receive,
and the Seller agrees to cause the Master Servicer to pay to the Agent, out of
Collections, for the account of each Purchaser, an amount (the "Earned Yield")
equal to the product of (i) the Aggregate Net Investment from the date an
Undivided Interest was first purchased until the Aggregate Net Investment is
reduced to zero on a day following the Commitment Termination Date and (ii)(A)
the applicable Yield Rate at all times prior to a Notice Date or (B) the
Termination Event Rate at all times on and after a Notice Date.
Section 3.2 Selection of Yield. The Seller may, subject to the
requirements of this Section, on at least three Business Days, prior written
notice, select the LIBOR Rate as the Yield Rate for all or any portion of the
Aggregate Net Investment for any applicable Yield Period. Such notice (a "Yield
Notice") shall be deemed delivered on receipt by the Agent except that any Yield
Notice received by the Agent after 11:00 a.m., Seattle time, on any day, shall
be deemed to have been received on the immediately succeeding Business Day. Each
Yield Notice shall identify, subject to the conditions of this Section, the
dollar amount of the Tranche for which the LIBOR Rate is to apply and the Yield
Period selected by the Seller. Such Yield Notice shall be irrevocable and shall
constitute a representation and warranty by the Seller that as of the date of
such Yield Notice, the representations and warranties of the Seller set forth in
Article 7 are true and correct and that no Unmatured Termination Event or
Termination Event has occurred and is continuing. Upon receipt of a Yield
Notice, the Agent shall promptly notify each Purchaser by telephone (confirmed
by facsimile transmission) of the information set forth therein. The Seller's
right to select the LIBOR Rate as the Yield Rate for all or any portion of the
Aggregate Net Investment shall be subject to the following conditions: (i) the
amount of any Tranche for which the yield is to be calculated at a particular
LIBOR Rate for the same Yield Period shall be an integral multiple of not less
than $100,000;
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(ii) a LIBOR Rate may not be selected for all or any portion of a Tranche which
is already accruing interest at a LIBOR Rate unless such selection is only to
become effective at the maturity of the Yield Period then in effect; (iii) the
Agent or any Purchaser shall not have given notice pursuant to Section 3.4 that
the LIBOR Rate is not available; and (iv) no Unmatured Termination Event or
Termination Event shall have occurred and be continuing. Any Yield Notice which
specifies a LIBOR Rate but which fails to specify a Yield Period shall be deemed
to have specified a Yield Period ending on a Settlement Date nearest to the date
one month after the first day of such Yield Period. The Yield Notice may be
given with and contained in any Purchase Notice. In the absence of an effective
request for the application of a LIBOR Rate for all or any portion of the
Aggregate Net Investment, the Yield Rate for the Aggregate Net Investment (or
portion thereof) shall be the Reference Rate.
Section 3.3 Applicable Days for Computation of Yield. Computations of
Earned Yield based on (i) the LIBOR Rate shall be made on the basis of a year of
360 days, and (ii) the Reference Rate shall be made on the basis of a year of
365 or 366 days, as the case may be, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such Earned Yield is payable.
Section 3.4 Unavailable LIBOR Rate. If in the reasonable judgment of
any Purchaser, for any reason fair and adequate means do not exist for
establishing a particular LIBOR Rate or that obtaining a yield on any Tranche at
a LIBOR Rate by such Purchaser has become unlawful, such Purchaser may give
notice thereof to the Agent and the Seller. After such notice has been given and
until such Purchaser notifies the Seller and the Agent that the circumstances
giving rise to such notice no longer exist, the LIBOR Rate shall no longer be
available. Thereafter, any attempt by the Seller to select the LIBOR Rate as the
Yield Rate shall be ineffective. If the circumstances giving rise to the notice
described herein no longer exist, the Purchaser shall notify the Seller and
Agent in writing, and the Seller shall then once again become entitled to select
the LIBOR Rate as the Yield Rate in accordance with Section 3.2.
Section 3.5 Yield Protection. In the event that after the date hereof
any change occurs in any applicable law, regulation, guideline, treaty or
directive or interpretation thereof by any authority charged with the
administration or interpretation thereof, or any condition is imposed by any
authority after the date hereof or any change occurs in any condition imposed by
any authority on or prior to the date hereof which:
(i) subjects any Purchaser to any Tax, or changes the
basis of taxation of any payments to any Purchaser made under any
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Facility Document with respect to any Undivided Interest owned by it or with
respect to its obligation or right to make Purchases (other than a change in the
rate of tax based solely on the overall net or gross income of such Purchaser);
(ii) imposes, modifies or determines applicable any reserve,
deposit, assessment or similar requirement against any assets held by, deposits
with or for the account of, or credit extended by, any office of any Purchaser;
(iii) affects the amount of capital required or expected to be
maintained by any Purchaser or any corporation controlling such Purchaser with
respect to any Undivided Interest owned by it or with respect to its obligation
or right to make Purchases; or
(iv) imposes upon any Purchaser any other condition with
respect to any Undivided Interest owned by it or with respect to its obligation
or right to make Purchases; and, the result thereof is, or would be, (a) to
increase the cost to such Purchaser in respect of making, issuing, maintaining
or committing to make, issue or maintain any Undivided Interest (other than any
Undivided Interest to the extent that the Reference Rate is applicable thereto),
(b) to reduce the amount of any sum received or receivable by such Purchaser
under any Facility Document or (c) in the reasonable determination of such
Purchaser, to reduce the rate of return on such Purchaser's capital as a
consequence of its obligations hereunder or arising in connection herewith to a
level below that which such Purchaser would otherwise have achieved, then, upon
demand by such Purchaser, the Seller shall immediately pay to such Purchaser
additional amounts which shall be sufficient to compensate it for such increased
costs incurred or reduced receipts suffered thereby for a period not to exceed
90 days prior to the date of such demand.
A certificate of a Purchaser as to such increased costs incurred or
reduced receipts suffered as a result of any event mentioned in clause (i)
through (iv) above submitted to the Seller specifying the event causing such
increased cost or reduced receipt and setting forth in reasonable detail the
calculation made to determine the amount of such increased cost or reduced
receipt and the assumptions used in calculating such amount shall be
presumptively correct as to the amount thereof, if such assumptions are
reasonable and there are not demonstrable errors in such calculation. Each
Purchaser shall exercise reasonable efforts to minimize such increased costs or
reduced receipts.
The protection of this Section shall be available to each Purchaser
regardless of any possible contention of invalidity or inapplicability of the
relevant law, regulation, guideline,
32
treaty, directive, condition or interpretation thereof. In the event that the
Seller pays any Purchaser the amount necessary to compensate such Purchaser for
any charge, deduction or payment incurred or made by it as provided in this
Section, and such charge, deduction or payment or any part thereof is
subsequently returned to such Purchaser as a result of the final determination
of the invalidity or inapplicability of the relevant law, regulation, guideline,
treaty, directive or condition, then such Purchaser shall remit to the Seller
the amount paid by the Seller which has actually been returned to such Purchaser
(together with any interest actually paid to Purchaser on such returned amount)
less such Purchaser's costs and expenses incurred in connection with such
governmental regulation or any challenge made by such Purchaser with respect to
its validity or applicability.
Section 3.6 Funding Losses. In the event that any Purchaser shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Purchaser to finance a portion of the Aggregate Net Investment for which Earned
Yield was or was to be calculated at the LIBOR Rate) as a result of
(i) any payment in respect of any Tranche made on a date other
than the Settlement Date initially established for such Tranche (to the extent
that the Earned Yield related thereto was initially calculated by reference to
the LIBOR Rate) whether voluntary, involuntary, the result of the collection
efforts of the Agent or one or more Purchasers, or the result of any change in a
Payment Period following a Notice Date;
(ii) any repurchase of all or any portion of a Tranche
pursuant to Section 15.1 on a day other than a Settlement Date for such Tranche
(to the extent that the Earned Yield related to such Tranche was calculated by
reference to the LIBOR Rate); or
(iii) any Purchase (in connection with which a Yield Notice
selecting a LIBOR Rate was delivered) not being made in accordance with the
Purchase Notice therefor;
such Purchaser shall give the Seller and the Agent written notice of such event
specifying the amount that will, in the reasonable opinion of such Purchaser,
reimburse it for such loss or expense and setting forth in reasonable detail the
calculation made to determine the amount of such loss or expense and the
assumptions used in calculating such amount shall be presumptively correct as to
the amount thereof, if such assumptions are reasonable and there are not
demonstrable errors in such calculation. The Seller shall, within five Business
Days after the receipt of such notice, pay such amount to such Purchaser.
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ARTICLE 4
COLLECTIONS AND SETTLEMENTS
Section 4.1 Collections. On each day during each Collection Period, the
Master Servicer shall collect the Purchasers' Share of Collected Principal and
the Purchasers, Share of Collected Interest received or deemed received on such
day and shall hold such funds in trust for the benefit of the Purchasers and
shall collect all other Collected Principal and Collected Interest so received
or deemed received and shall hold such funds in trust for the benefit of the
Seller. Collections received by the Master Servicer shall at all times be
segregated from other funds of the Master Servicer. In the event that the Seller
receives any payments on or in respect of a Receivable subsequent to the related
Transfer Date, the Seller shall remit such amount to the Master Servicer within
two Business Days of receipt.
Section 4.2 Reinvestments. Subject to the satisfaction of the
conditions set forth in Section 6.2, the Seller's right to make a contrary
election pursuant to Section 4.3(a)(ii) and subject to Section 4.3(b)(ii),
provided that no Notice Date shall have occurred, on each Settlement Date on or
prior to the Commitment Termination Date, the Master Servicer shall be deemed to
have reinvested (for the benefit of the Purchasers) the Purchasers' Share of
Collected Principal received during the related Collection Period in additional
Undivided Interests in the Receivables Pool. In the event any such funds cannot
be reinvested on the date received because the conditions set forth in Section
6.2 have not been satisfied, they shall be deemed reinvested on the first day
thereafter on which such conditions shall be satisfied unless sooner paid to the
Agent on any Settlement Date. Neither the Purchasers' Investment, the Earned
Yield thereon nor any Obligation shall be deemed reduced or paid on account of
such unreinvested Collections until such amount is paid to the Agent on a
Settlement Date.
Section 4.3 Settlement Procedures.
(a) Prior to Termination Event. Subject to Section 4.4 and
except as otherwise provided in Section 4.3(b), on each Settlement Date which is
the last day of a Payment Period, the Seller shall cause the Master Servicer to
pay to the Agent:
(i) from the Collected Interest collected since
the last Settlement Date on which any payment was due under this Section and
from the Collected Interest collected prior thereto and allocated but unpaid
with respect to the Earned Yield on the Aggregate Net Investment (as Collected
Interest has been reduced to pay the Servicing Fee, including any unpaid
Servicing Fee in respect of one or more prior Collection Periods, to the Master
Servicer pursuant to Section 10.8), the lesser of (A) the unpaid
34
Earned Yield on the Purchasers' Investment in each Maturing Tranche accrued to
(but excluding) such Settlement Date, or (B) the amount of the Purchasers' Share
of Collected Interest collected since the last Settlement Date on which any
payment was due under this Section plus the amount of the Purchasers' Share of
Collected Interest collected prior thereto and allocated but unpaid with respect
to the Earned Yield on the Aggregate Net Investment (as Collected Interest has
been so reduced); and
(ii) from the Collected Principal collected since
the last Settlement Date on which any payment was due under this Section, the
amount of the Purchasers' Share of Collected Principal so collected less any
amounts that the Master Servicer has been deemed to have reinvested from such
Collections pursuant to Section 4.2; provided, that notwithstanding the terms of
Section 4.2, if on any Settlement Date which is the last day of a Payment
Period, the Seller so notifies the Agent in writing, the Master Servicer shall
pay to the Agent any amount selected by the Seller up to the amount of the
Purchasers' Share of Collected Principal collected since the last Settlement
Date on which any payment was due under this Section. If the Seller elects to
cause the Master Servicer to make such a payment, the amount so paid shall be
deemed not to have been reinvested pursuant to Section 4.2.
(b) Subsequent to Termination Event. If a Notice Date shall
have occurred on or before any Settlement Date, in addition to all other
remedies provided for herein, on such Settlement Date the Seller shall cause the
Master Servicer to pay to the Agent:
(i) to the extent of the Purchasers' Share of
such Collected Interest, all Collected Interest collected since the last
Settlement Date on which any payment was due under this Section (as Collected
Interest has been reduced to pay the Servicing Fee, including any unpaid
Servicing Fee in respect of one or more prior Collection Periods); and
(ii) to the extent of the Purchasers' Share of
such Collected Principal, all Collected Principal collected since the last
Settlement Date on which any payment was due under this Section, the amount of
the Purchasers' Share of Collected Principal so collected; provided, that to the
extent that pursuant to Section 4.2, the Master Servicer would have been deemed
to have reinvested some or all of the Purchasers' Share of Collected Principal
which the Seller is required to pay to the Agent pursuant to Section 4.3(b),
such reinvestment shall be deemed not to have occurred.
Section 4.4 Deposits to Collection Account to Avoid Break-
Funding Costs. In the event that on any Settlement Date the
35
Seller would, pursuant to Section 4.3(a)(ii), be required to disburse principal
payments to the Agent for a Tranche for which the LIBOR Rate was selected as the
Yield Rate prior to the last day of the applicable Payment Period for such
Tranche, in order to avoid possible funding losses which could result from such
accelerated payment, on such Settlement Date the Seller shall deposit to the
Collection Account, in lieu of paying such amount to the Agent pursuant to
Section 4.3(a)(ii), an amount equal to (a) such amount less (b) the sum of (i)
the Dollar amount of all then Maturing Tranches for which the Earned Yield is
calculated based on the LIBOR Rate and (ii) the Dollar amount of all Tranches
(whether Maturing Tranches or not) for which the Earned Yield is calculated
based on the Reference-Rate. Neither the Purchasers' Investment, the Earned
Yield thereon nor any Obligation shall be deemed reduced or paid on account of
the deposit of such amounts to the Collection Account.
Section 4.5 Deemed Collections. If on any day, any of the Seller's
representations or warranties set forth in Sections 7.1, 7.2 or 7.3 shall prove
to have been untrue when made with respect to any Receivable in the Receivables
Pool or the Seller shall be in breach of its obligations under Sections 8.1(d),
8.1(e), 8.1(f) or 9.1 in respect of any Receivable in the Receivables Pool, then
the Seller shall be deemed to have received on such day a Collection of such
Receivable in full, and the Seller shall transfer to the Master Servicer an
amount equal to the Outstanding Principal Balance of such Receivable, together
with interest thereon at the related Receivable Interest Rate through the last
day of the Collection Period in which deemed Collection occurs. The Master
Servicer shall reinvest and distribute each such payment pursuant to Sections
4.2, 4.3 and 4.4, as the case may be, as if such payment actually had been
received by the Seller on such day from the Obligor of such Receivable. Payments
under this Section shall not constitute a payment under the indemnity provisions
of Article 14.
Section 4.6 Allocation of Payments and Collections.
(a) Except as otherwise required by law or the related
Receivable Documents and subject to the provisions of Section 4.6(b), all
amounts collected on or in respect of each Receivable shall be applied first
against fees, expenses and indemnities due in respect of such Receivable,
second, against interest due in respect of such Receivable and thereafter
against the obligations of the related Obligor to repay the principal amount
thereof.
(b) On each Settlement Date, Collections (other than
Collections reinvested pursuant to Section 4.2) shall be applied by the Master
Servicer in the following amounts and in the following order of priority:
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(i) to the Master Servicer, an amount equal to
the Servicing Fee in respect of the related Collection Period and any unpaid
Servicing Fee in respect of one or more prior Collection Periods;
(ii) to the Agent, any amount payable pursuant to
Section 4.3;
(iii) to the Agent, an amount equal to all
Program Costs due to the Agent payable during the related
Collection Period; and
(iv) any remaining Collections shall be paid to
the Seller, free and clear of all Liens.
Section 4.7 Order of Distribution by the Agent. On each Settlement Date
on which the Agent receives any payments pursuant to Sections 4.3 or 4.8, the
Agent shall distribute such funds to the Purchasers first in payment of the
unpaid Earned Yield on the Purchasers' Investment in the Maturing Tranche
accrued to (but excluding) such Settlement Date, and thereafter in reduction of
the Aggregate Net Investment, in each case until reduced to zero.
Section 4.8 Collection Account.
(a) On or prior to the Closing Date, the Seller shall
establish an account with the Agent in the name of the Agent for the benefit of
the Agent and the Purchasers (the "Collection Account") which account, together
with all monies on deposit therein and investments thereof, shall be under the
exclusive dominion and control of the Agent (for the benefit of the Purchasers).
Monies shall be deposited in the Collection Account from time to time as
described in Sections 4.4 and 4.9. Neither the Seller nor the Master Servicer
shall have any right to make withdrawals or distributions from the Collection
Account nor shall any additional amounts be deposited to or commingled with
amounts in the Collection Account except as provided in Section 4.4, 4.5 and
this Section.
(b) on any Settlement Date which is the last day of a Payment
Period, if a Notice Date shall not have occurred and if any amounts have been
deposited to the Collection Account pursuant to Section 4.4 which have not yet
been disbursed to the Agent ("Section 4.4 Deposits"), the Agent shall withdraw
such monies, to the extent that such monies, together with all amounts payable
under Section 4.3(a)(ii) on such Settlement Date, do not exceed the sum of (i)
the amount of all then Maturing Tranches for which the Earned Yield is
calculated based on the LIBOR Rate and (ii) the amount of all Tranches (whether
Maturing Tranches or not) for which the Earned Yield is calculated based on the
Reference Rate. Section 4.4 Deposits withdrawn by the Agent
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hereunder shall be applied as if they had been received in payment from the
Seller on the date withdrawn pursuant to Section 4.3(a)(ii).
(c) If a Notice Date shall have occurred and the Agent has
delivered notice to the Seller that all Collections should thereafter be
deposited through the Lock Box Network, the Master Servicer shall cause to be
deposited into the Collection Account (i) all Collections received by it or a
Subservicer within two Business Days of receipt and (ii) all monies on deposit
in the Lock Box Accounts and any New Lock Box Accounts on the Business Day
immediately preceding the last day of each Collection Period and on each other
Business Day or Business Days during each Collection Period as selected by the
Agent (acting upon instructions of the Required Purchasers). On the related
Settlement Date, such monies will be applied in the same manner and to the same
extent as the Seller would otherwise be obligated to pay and apply pursuant to
Section 4.3(b). The balance of the amounts on deposit in the Collection Account,
if any, shall be applied against accrued but unpaid obligations and after such
unpaid Obligations are satisfied, delivered to the Seller on such Settlement
Date.
(d) The Agent shall invest and reinvest monies on deposit in
the Collection Account in short-term, high-quality investments acceptable to the
Agent pursuant to instructions given by the Seller; provided, that (i) the Agent
and the Purchasers shall not be liable in any manner for any reason for any loss
of or on account of such investments and (ii) the Agent shall at all times be a
pledgee in possession of such investments. Interest accruing on and income
earned in respect of amounts and investments in the Collection Account shall be
retained in the Collection Account and shall be applied against accrued but
unpaid Obligations and after such unpaid Obligations are satisfied, delivered to
the Seller on each Settlement Date. The Seller agrees that all income earned on
amounts in the Collection Account shall be earned by the Seller and reported on
its tax returns. To the extent that the Agent is otherwise liable for the
payment of any Taxes in respect of monies on deposit from time to time in the
Collection Account, the Seller shall indemnify the Agent in respect thereof and
shall promptly reimburse the Agent for any such Taxes paid.
Section 4.9 Lock Boxes. After a Termination Event has occurred and the
Agent has delivered notice to the Seller and the Master Servicer that all
Collections should thereafter be deposited through the Lock Box Network, the
Seller shall instruct or otherwise cause all Obligors to make all payments under
the Receivables directly to a Lock Box and shall instruct the applicable Lock
Box Bank to deposit all cash, checks and drafts received therein directly to a
Lock Box Account. The Seller
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shall not add any bank as a Lock Box Bank, any post office or bank box as a Lock
Box, or any account as a Lock Box Account (including, without limitation, the
addition of any such Lock Box Bank, Lock Box or Lock Box Account in connection
with the establishment of a Lock Box Network) unless (a) the Agent shall have
received five days' prior written notice of such addition, (b) the Agent shall
have received a copy of any new Lock Box Agreement and (c) the Agent shall have
received undated executed copies of Lock Box Notices substantially in the form
of Exhibit F to each Lock Box Bank for each Lock Box and Lock Box Account. The
Seller shall not terminate any bank as a Lock Box Bank, any post office or bank
box as a Lock Box or any account as a Lock Box Account unless the Agent shall
have received 15 days' prior written notice of such termination. After the
occurrence of a Termination Event, and after the Agent has delivered notice to
the Seller that all Collections should thereafter be deposited through the Lock
Box Network, (i) upon receipt of notice from the Agent, the Seller shall
instruct the Lock Box Banks to segregate all Collections from all other
collections received in such Lock Box and to deposit such Collections into an
account designated by the Agent, (ii) the Agent is hereby authorized, whether or
not it is then serving as Collection Agent, to date and deliver to the Lock Box
Banks the Lock Box Notices delivered to the Agent hereunder and (iii) upon the
receipt of notice from the Agent, the Seller shall (A) establish and maintain at
its expense new Lock Boxes (the "New Lock Boxes") into which only Collections
will be received, (B) open new Lock Box Accounts (the "New Lock Box Accounts")
into which only Collections on or in respect of the Assigned Collateral will be
deposited and (C) notify the Obligors that all future payments by such Obligors
under the Receivables are to be made to such new Lock Boxes. The Seller hereby
agrees that the Agent (for the benefit of the Purchasers) shall have the
exclusive ownership and control of the New Lock Boxes and the New Lock Box
Accounts, and shall take any further action, including, without limitation,
executing additional Lock Box Notices, to transfer or establish such control. In
case any authorized signatory of the Seller whose signature shall appear on any
Lock Box Notice shall cease to have such authority before the delivery of such
Lock Box Notice, such signature shall nevertheless be valid and sufficient for
all purposes as if such authority had remained in force at the time of such
delivery. Monies on deposit in the Lock Box Accounts and any New Lock Box
Accounts will be withdrawn therefrom and deposited into the Collection Account
pursuant to Section 4.8(c).
ARTICLE 5
FEES AND OTHER PAYMENTS
Section 5.1 Fees. The Seller shall pay, pursuant to Section 4.6(b), to the
Agent the following amounts: (i) on each
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Settlement Date and on the Commitment Termination Date, the Commitment Fee, (ii)
on the Closing Date, the Upfront Fee and (iii) on each day specified in the Fee
Letter, the related fees and expenses specified therein.
Section 5.2 Termination Event Rate Payments. The Seller or the Master
Servicer, as the case may be, shall pay to the Agent (for the benefit of the
Agent and the Purchasers, as the case may be) interest on all obligations not
paid when due under any Facility Document at the Termination Event Rate, which
interest shall be payable on demand.
Section 5.3 Payments.
(a) All payments of the Commitment Fees and the Upfront Fee
(including interest thereon accruing under Section 5.2), all payments of Earned
Yield and all amounts paid to the Agent for the repayment of the Purchasers'
Investment shall be made for the ratable account of the Purchasers.
(b) All amounts to be paid to the Agent by the Seller or the
Master Servicer under any Facility Document shall be paid to the Agent at its
Commercial Loan Service Center, Seattle, Washington or deposited to the
Collection Account in accordance with the terms hereof no later than 11:00 a.m.,
Seattle time, on the day when due in immediately available funds payable in
Dollars.
(c) If any Purchaser shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of or forbearance to
exercise, set off or otherwise) on account of the Aggregate Net Investment,
Earned Yield or otherwise (other than pursuant to Sections 3.5 and 3.6) in
excess of such Purchaser's Pro Rata Share of payments then or therewith obtained
by all Purchasers, such Purchaser shall purchase from the other Purchasers such
participations in the interests held by them as shall be necessary to cause such
purchasing Purchaser to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing
Purchaser, the purchase shall be rescinded and each Purchaser that has sold a
participation to the purchasing Purchaser shall repay to the purchasing
Purchaser the purchase price (without interest) to the ratable extent of such
recovery. The Seller agrees that any Purchaser so purchasing a participation
from another Purchaser pursuant to this clause may, to the fullest extent
permitted by law, exercise all its rights of set off with respect to such
participation as fully as if such Purchaser were the direct Purchaser from the
Seller in the amount of such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Purchaser receives a secured
40
claim in lieu of a set off to which this clause would apply, such Purchaser
shall, to the extent practicable, exercise its rights in respect of such secured
claim and share the benefits thereof in such a manner that the remaining
Purchasers will receive the same benefits as they would otherwise have been
entitled to receive under this clause if a set off had been permitted.
(d) When any payment made pursuant to this Agreement is due on
a day that is not a Business Day, such payment shall be made on the immediately
succeeding Business Day, and such extension of time shall be included in the
computation of interest or fees, as the case may be.
ARTICLE 6
CONDITIONS OF PURCHASES
Section 6.1 Conditions to Initial Purchase. The obligation of each
Purchaser to make the initial Purchase hereunder on the Closing Date is subject
to the satisfaction of the conditions specified in Section 6.2 and to the
delivery to the Agent of the following:
(a) certified copies of the articles of incorporation and
by-laws of each of the Seller, TRI and Eagle Crest and certified copies of
resolutions adopted by their respective Boards of Directors authorizing the
execution, delivery and performance of the Facility Documents to which such
entity is a party, together with evidence of the authority and specimen
signatures of the individuals who signed this Agreement and the other Facility
Documents on behalf of such entity;
(b) certified copies of the articles of incorporation
and by-laws of WorldMark;
(c) a written search report from a Person satisfactory to the
Agent listing all effective financing statements that name the Seller or either
Originator as "debtor" or "assignor" covering the States of Washington and
Oregon and such other jurisdictions as the Agent may require, together with
copies of such financing statements; and no such financing statements shall
cover any portion of the Assigned Collateral;
(d) copies of all financing statements on Form UCC-3,
with evidence of filing thereon, releasing the interest of any
Person in the Assigned Collateral;
(e) evidence satisfactory to the Agent that the assignment of
the Undivided Interests and the grant of a security interest in the Assigned
Collateral has been duly perfected by the filing of all such UCC financing
statements and the taking of
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all such other or additional acts as may be necessary, or in the Agent's
opinion, desirable to perfect the ownership interests of the Purchasers in the
Undivided Interests and security interest in the Assigned Collateral in all
jurisdictions, including, in the case of the Mortgage Loan Receivables, the
recorded Mortgage Notes, Mortgages and Assignments required pursuant to Section
2.5;
(f) all fees payable to the Agent on or prior to the
Closing Date pursuant to Section 5.1;
(g) the opinion of Washington counsel to the Seller, TRI, and
Eagle Crest, dated the Closing Date and addressed to the Agent and the
Purchasers, substantially in the form attached hereto as Exhibit G;
(h) the opinion of Oregon counsel to the Seller, TRI and Eagle
Crest dated the Closing Date and addressed to the Agent and the Purchasers,
substantially in the form attached hereto as Exhibit H;
(i) the opinion of Nevada counsel to the Seller, dated
the Closing Date, substantially in the form attached hereto as
Exhibit I;
(j) such other documents, certificates and opinions as
the Agent or any Purchaser may reasonably request.
Section 6.2 Conditions to All Purchases. The obligation of each
Purchaser to make any Purchase hereunder (including the initial Purchase) is
subject to the satisfaction of the conditions set forth in Section 2.1 and the
fulfillment of the following further conditions precedent:
(a) a Commitment Termination Date shall not have
occurred;
(b) except in the case of a Reinvestment, the Agent
shall have received a duly executed Purchase Notice;
(c) except in the case of a Reinvestment, the Agent shall have
received a certificate from the Master Servicer substantially in the form
attached hereto as Exhibit B (each, a "Purchase Certificate") one Business Day
prior to the date of such proposed Purchase containing a calculation of (i) the
Net Pool Balance, (ii) the amount of Section 4.4 Deposits which have not yet
been disbursed to the Agent pursuant to Section 4.8(b) and (iii) the Aggregate
Net Investment (after giving effect, on a pro forma basis, to such proposed
Purchase);
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(d) except in the case of a Reinvestment, the Agent shall have
received an Officer's Certificate of the Seller to the effect that (i) the
representations and warranties of the Seller contained in this Agreement, any
other Facility Document to which the Seller is a party or in any certificates
delivered to the Agent or any Purchaser by or on behalf of the Seller in
connection with such Purchase are true and correct on and as of the date of such
Purchase, with the same force and effect as though made on and as of such day,
and (ii) to the best of the knowledge and information of such officer, no event
has occurred and is continuing, or would result from such Purchase, that
constitutes or would constitute an Unmatured Termination Event or Termination
Event;
(e) except in the case of a Reinvestment, the Agent shall have
received an Officer's Certificate of the Master Servicer to the effect that the
representations and warranties of the Master Servicer contained in this
Agreement, any other Facility Document to which the Master Servicer is a party
or in any certificates delivered to the Agent or any Purchaser by or on behalf
of the Master Servicer in connection with such Purchase are true and correct on
and as of the date of such Purchase, with the same force and effect as though
made on and as of such day; and
(f) the Agent and the Purchasers have received such
other documents, certificates and opinions as the Agent or any
Purchaser may reasonably request.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties as to the Seller. The Seller
shall make the following representations and warranties on which the Agent shall
rely in accepting the Receivables on behalf of itself and the Purchasers and on
which the Agent and the Purchasers may rely in making Purchases. The
representations and warranties shall speak as of the date of execution and
delivery of this Agreement, each Transfer Date and on each date on which a
Purchase is made, but in each case shall survive the repayment in full of all
Purchases and Obligations and the termination of this Agreement.
(a) Organization and Good Standing. The Seller shall have been
duly organized and shall be validly existing as a corporation in good standing
under the laws of the State of Nevada, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant
43
times, and shall now have, power, authority and legal right to acquire, own and
sell the Receivables.
(b) Due Qualification. The Seller shall be duly qualified to
do business as a foreign corporation in good standing, and shall have obtained
all necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business shall require such
qualifications, except where the failure to so qualify or to have obtained such
licenses and approvals would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Seller.
(c) Power and Authority. The Seller shall have the power and
authority to execute, deliver and perform its obligations under the Agreement
and each other Facility Document to which it is a party and to carry out their
respective terms; the Seller shall have full power and authority to sell the
Receivables to be sold to the Purchasers and shall have duly authorized such
sale by all necessary corporate action; and the execution, delivery and
performance of this Agreement and each other Facility Document to which it is a
party shall have been duly authorized by the Seller by all necessary corporate
action.
(d) Licenses. The Seller holds, and at all times during the
term of this Agreement will hold, all material licenses, certificates,
franchises and permits from all Governmental Authorities necessary for the
conduct of its business and has received no notice of proceedings relating to
the revocation of any such license, certificate, franchise or permit, which
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect its ability to perform its
obligations under this Agreement or any other Facility Document to which it is a
party or the validity or enforceability of any of the Receivables.
(e) Valid Sale: Binding obligations. This Agreement together
with the Prior Transfer Agreement shall evidence a valid sale, transfer and
assignment of Receivables having an aggregate outstanding Principal Balance up
to but not exceeding the Commitment Amount, enforceable against creditors of and
purchasers from the Seller; and shall constitute a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors, rights in general and by general principles of equity.
44
(f) No Violation. The consummation of the transactions
contemplated by, and the fulfillment of the terms of, this Agreement and the
other Facility Documents to which the Seller is a party shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Seller, or conflict with or violate any of the
terms or provisions of, or constitute (with or without notice or lapse of time)
a default under, any material indenture, agreement or other instrument to which
the Seller is a party or by which it shall be bound; nor, except as otherwise
provided in this Agreement, result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; nor violate any law or, to the best of the
Seller's knowledge, any order, rule or regulation applicable to the Seller of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller or its
properties; which breach, default, conflict, Lien or violation would have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Seller.
(g) No Proceedings. There are no proceedings or investigations
pending, or to the best knowledge of the Seller, threatened, before any court,
regulatory body, administrative agency or other Governmental Authority having
jurisdiction over the Seller or its properties: (i) asserting the invalidity of
this Agreement or any other Facility Document to which the Seller is a party,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by the Facility Documents to which the Seller is a party or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by, the Seller of its obligations under, or the validity or
enforceability of, such Facility Agreement.
(h) Government Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Seller of this
Agreement and the other Facility Documents to which it is a party or in
connection with the transactions contemplated hereby or thereby, except such as
have been obtained prior to the date of this Agreement and are in full force and
effect.
(i) Margin and Other Regulations. No use of any funds acquired
by the Seller under this Agreement will conflict with or contravene any Federal
Reserve Regulation including, without limitation, Federal Reserve Regulations G,
T, U and X.
45
(j) Taxes. The Seller has filed all tax returns and reports
required of it and has paid all Taxes which are due and payable and has provided
adequate reserves for payment of any Tax whose payment is being contested and
there are no material questions or disputes between the Seller and any
Governmental Authority with respect to any Taxes.
(k) Investment Company Act. The Seller is not
required to be registered as an "investment company" under in the
Investment Company Act.
(l) Capital Stock. All of the issued and outstanding capital
stock of the Seller has been duly authorized, validly issued and is fully paid
and non-assessable, free and clear of Liens; all of such stock is owned
beneficially and of record by TRI.
(m) Associations; WorldMark. Each Association and WorldMark
shall have been duly organized and shall be validly existing as a corporation in
good standing under the laws of the state of its incorporation; no practice,
procedure or policy employed by the Association or WorldMark violates any law,
regulation or agreement which, if enforced, could be reasonably expected to have
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Association or
WorldMark, as the case may be, or constitute grounds for the revocation of any
license, charter or permit that is material to the conduct of its business.
Section 7.2 Representations and Warranties as to the Receivables. The
Seller shall make the following representations and warranties as to the
Receivables on which the Agent shall rely in accepting the Receivables on behalf
of itself and the other Purchasers and on which the Agent and the Purchasers may
rely in making Purchases. Except as otherwise provided herein, such
representations and warranties shall speak as of the Transfer Date relating to
each such Receivable, and on each date on which a Purchase is made pursuant to
this Agreement, but in each case shall survive the repayment in full of all
Purchases and Obligations And the termination of this Agreement.
(a) Origination; General Terms and Form. Each Receivable (i)
shall be an Eligible Receivable, (ii) shall have been originated in the United
States by an Originator in the ordinary course of its business and in accordance
with its customary underwriting and origination criteria, shall have been fully
and properly executed by the parties thereto and shall have been acquired by the
Seller from such Originator pursuant to the related Purchase Agreement; (iii)
shall be assignable, and shall be so assigned, by the Seller to the Agent (for
the benefit of
46
the Purchasers); (iv) shall, except as otherwise provided in this Agreement,
provide for level payments of Monthly P&I (provided that (A) the payment in the
first or last month in the life of such Receivable may be minimally different
from the level payment) that fully amortizes its Original Principal Balance by
maturity and provides for a fixed finance charge or yields a fixed rate of
interest at its Receivable Interest Rate; (v) shall provide for, in the event
that such Receivable is prepaid, a prepayment that fully pays such Original
Principal Balance and includes accrued but unpaid interest at least through the
date of prepayment in an amount calculated by using an interest rate at least
equal to its Receivable Interest Rate; (vi) shall have had a down payment made
by the related obligor in an amount at least equal to 10% of such Original
Principal Balance; (vii) shall be payable in Dollars; (viii) shall have an
original scheduled term of seven years or less if a Right to Use Receivable or
ten years or less if a Mortgage Loan Receivable; (ix) if such Receivable is a
Right to Use Receivable, it shall be substantially in one of the forms attached
hereto as Exhibit C; and (x) if such Receivable is a Mortgage Loan Receivable,
each of the related Mortgage and Mortgage Note shall be substantially in one of
the forms attached as Exhibit D to the Prior Transfer Agreement.
(b) Compliance with Consumer Protection Laws. Each Receivable
shall have complied at the time it was originated, and shall comply at the time
of making of such representation and warranty, in all material respects with all
requirements of applicable federal, state and local laws, and regulations
thereunder, including usury and consumer protection laws.
(c) One Original; Enforceability. There is only one original
of each Receivable (and, if such Receivable is a Mortgage Loan Receivable, one
original of the related Mortgage Note and Mortgage) and such Receivable (and, if
such Receivable is a Mortgage Loan Receivable, the related Mortgage Note) shall
constitute the legal, valid and binding payment obligation in writing of the
related Obligor, enforceable by the holder thereof in accordance with its terms,
except as enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity.
(d) United States Obligors; No Bankrupt or Governmental
Obligors. To the best knowledge of the Seller, the Obligor is a citizen or
resident of, and making payments from, the "United States" (as such term is
defined in Section 7701(a)(9) of the Code) and the Receivable is not due from
(i) an Obligor who is currently the subject of a bankruptcy proceeding or is
bankrupt or insolvent or (ii) the United States, any state thereof or any local
government or municipality therein or from any agency, department or
instrumentality of the United States,
47
any state thereof or any local government or municipality therein.
(e) Employee Obligors. Based on the Outstanding Principal Balance,
less than 10% of the Receivables comprising the Receivables Pool have Obligors
who are employees of either Originator, the Seller or any of their respective
affiliates.
(f) Modifications. The Receivable has not been satisfied, subordinated
or rescinded and no provision thereof has been waived in such a manner that it
fails to meet all of the other representations and warranties with respect to
such Receivable, and each such amendment or waiver has been reduced to writing
and has been included in the related Receivable File.
(g) No Setoffs, Breaches or Unmatured Termination Events. No facts
shall be known to the Seller which would give rise to any right of rescission,
setoff, counterclaim or defense, nor shall the same have been asserted or
threatened, with respect to the Receivable; no default, breach, violation or
event permitting acceleration under the terms of such Receivable shall have
occurred as of the related Cutoff Date or Transfer Date, as the case may be; no
continuing condition that with notice or the lapse of time would constitute a
default or event of default or breach, violation or event permitting
acceleration under the terms of such Receivable shall have arisen; and the
Seller shall not have waived any of the foregoing.
(h) Title to and Security Interest in Receivables. No provision of
such Receivable shall have been waived, except as provided in clause (f) above;
immediately prior to the transfer and assignment of such Receivable, the Seller
had good and marketable title to such Receivable free and clear of Liens (other
than Permitted Encumbrances on the related Mortgaged Property if such Receivable
is a Mortgage Loan Receivable and Liens of WorldMark in the case of Right to Use
Receivables) or rights of others; immediately upon the transfer and assignment
thereof, the Agent for the benefit of the Purchasers shall have good and
marketable title to such Receivable, free and clear of all Liens (other than
Permitted Encumbrances on the related Mortgaged Property if such Receivable is a
Mortgage Loan Receivable and Liens of WorldMark in the case of Right to Use
Receivables) and rights of others; all filings and recordings (including UCC
filings) necessary in any jurisdiction to give the Agent a first priority
perfected security interest in the Receivable (and, if such Receivable is a
Mortgage Loan Receivable, in the related Mortgage Note) shall have been made;
and the Agent's security interest in such Receivable (and, if such Receivable is
a Mortgage Loan Receivable, in the related Mortgage Note) is and will be prior
to any Lien (including, without limitation, any Lien of any homeowners,
association or
48
condominium association) on, or other interests relating to, such Receivable
(and, if such Receivable is a Mortgage Loan Receivable, in the related Mortgage
Note) except for (i) such Liens and claims which have been satisfied or
otherwise released in full as of the related Transfer Date, (ii) Liens for
municipal or other local taxes if such taxes shall not at the time be due and
payable or if the Seller shall currently be contesting the validity of such
taxes in good faith by appropriate proceedings, (iii) if such Receivable is a
Mortgage Loan Receivable, Permitted Encumbrances on the related Mortgaged
Property and (iv) if such Receivable is a Right to Use Receivable, Liens of
WorldMark.
(i) No Adverse Selection. In connection with the transactions
contemplated by this Agreement and the Purchase Agreements, the Receivable meets
the criteria set forth in this Section (and if such Receivable is a Mortgage
Loan Receivable, the criteria set forth in Section 7.3) and no selection
procedures adverse to the interests of the Agent and the Purchasers were used in
connection with such selection.
(j) Schedule of Receivables. The information set forth in the related
Schedule of Receivables with respect to such Receivable shall be true and
correct in all material respects.
Section 7.3 Additional Representations and Warranties as to the
Mortgage Loan Receivables. In addition to the representations and warranties in
Section 7.2, the Seller shall make the following representations and warranties
on which the Agent shall rely in accepting the Receivables that are Mortgage
Loan Receivables on behalf of itself and the Purchasers and on which the Agent
and the Purchasers may rely in making Purchases. The representations and
warranties shall speak as of each Transfer Date and on each date on which a
Purchase is made, but in each case shall survive the repayment in full of all
Purchases and Obligations and the termination of this Agreement.
(a) Characterization of Interest. The timeshare estate
mortgaged by the related obligor constitutes a fee interest in real property at
Eagle Crest; the related Mortgage has been duly filed and recorded with all
appropriate Governmental Authorities in all jurisdictions in which such Mortgage
is required to be filed and recorded to create a valid, binding and enforceable
first Lien on the related Mortgaged Property and such Mortgage creates a valid,
binding and enforceable first Lien on such Mortgaged Property; Eagle Crest, to
the extent applicable, is in compliance with all permitted encumbrances
respecting the right to the use of such Mortgaged Property; each of the
assignment of such Mortgage from the Seller to the Agent and each related
endorsement of the Mortgage Note constitutes an endorsement of the Seller, of
such Mortgage and Mortgage Note, all monies due or to become due thereunder and
all
49
proceeds thereof; and the execution and delivery of an Assignment of such
Mortgage from the Seller to the Agent (and the recording thereof in the
appropriate jurisdiction), and the endorsement and delivery of such Mortgage
Note by the Seller, constitute all actions required to be taken by the Seller to
fully perfect the ownership interest of the Agent in such Mortgage and Mortgage
Note.
(b) Title to Mortgaged Property; Disbursement of Receivable
Proceeds. At the related Origination Date, the Obligor had good and marketable
fee simple title to the related Mortgaged Property, free and clear of all Liens,
except for Permitted Encumbrances, and the proceeds of such Mortgage Loan
Receivable have been fully disbursed.
(c) The Mortgages Generally. The related Mortgage contains
customary and enforceable provisions so as to render the rights and remedies of
the holder thereof adequate for the practical realization against the related
Mortgaged Property of the benefits of the security interests intended to be
provided thereby, including by judicial foreclosure; there is no exemption
available to the related Obligor which would interfere with the mortgagee's
right to foreclose such Mortgage, other than that which may be available under
applicable bankruptcy, debt relief or homestead statutes; any applicable
intangibles taxes and documentary sales taxes have been paid; and such Mortgage
gives the mortgagee the right to receive and direct the application of insurance
and condemnation proceeds received in respect of such Mortgaged Property.
(d) The Mortgage Notes Generally. The related Mortgage Note is
not and has not been secured by any collateral except the Lien of the related
Mortgage; the amount financed by such Mortgage Note did not include any portion
of the related down payment or homeowners' association payments; such Mortgage
Note does not by its terms provide for the capitalization of interest or the
forbearance of interest; any applicable intangibles taxes and documentary sales
taxes have been paid; and such Mortgage Note evidences a fully amortizing debt
obligation which bears a fixed rate of interest, provides for level monthly
payments of principal and interest and is payable in Dollars.
(e) No Impairment of Insurance Coverage. The Seller has not
taken (or omitted to take), and has no notice that the related Obligor has taken
(or omitted to take), any action that would impair or invalidate the coverage
provided by any hazard, title or other insurance policy relating to such
Mortgage Loan Receivable or the related Mortgaged Property.
(f) Assignability of Mortgaged Property. The related
Mortgaged Property is assignable to and by the mortgagee without
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the consent of the related Association or any other Person and there are no
other restrictions on resale thereof (other than the obligation to notify such
homeowners, association of any such assignment).
(g) Associations. Eagle Crest manages, through Country Club
Management, Inc., the related Mortgaged Property and performs services, pursuant
to a management agreement between Eagle Crest and the related Association which
is in full force and effect and a copy of which has been delivered to the Agent;
and to the best knowledge of the Seller, all obligations under such agreement
have been performed and there is no material default under such agreement.
(h) Insurance; Damage to Project. The Project in which the
related Mortgaged Property is located is insured through the related homeowners,
association in the event of fire or other casualty for the full replacement
value thereof, and in the event that such Mortgaged Property should suffer any
loss covered by casualty or other insurance, upon receipt of any insurance
proceeds such homeowners, association is required, during the time such
Mortgaged Property is covered by such insurance, under its applicable governing
instruments either to repair or rebuild the portions of the Project in which
such Mortgaged Property is located or to pay such proceeds to the holder of the
related Mortgage secured by a timeshare estate in the portions of the Project in
which such Mortgaged Property is located; and such Project is not located in a
designated flood plain.
(i) No Amounts Outstanding. There are no delinquent or unpaid
taxes, ground rents, water charges, sewer rents or assessments outstanding with
respect to the related Mortgaged Property, nor any other material outstanding
Liens other than Permitted Encumbrances affecting such Mortgaged Property that
would materially affect the interests of the Purchasers in the related Mortgage
Loan Receivable.
(j) No Damage. To the best knowledge of the Seller, the
related Mortgaged Property and the Project in which such Mortgaged Property is
located is in good repair and condition, excepting ordinary wear and tear, and
there is no proceeding pending or threatened for the total or partial
condemnation or taking of such Mortgaged Property or any part of such Project by
eminent domain.
(k) Recreational Facilities. The portions of the
Project in which the related Mortgaged Property which represents
the recreational facilities are in good repair and condition,
ordinary wear and tear excepted.
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(l) No Rights of Partition. Neither the Mortgagor nor any
other Person has the right, by statute, contract or otherwise, to seek the
partition of the Mortgaged Property, except for failed timeshare provisions
under Section 94.775 of the Oregon Revised Statutes.
(m) Compliance with Laws. The Project in which the related
Mortgaged Property is located is in compliance with any applicable zoning,
building or environmental law or regulation and all inspections, licenses,
special use permits and certificates required, whether by law, regulation or
insurance standards to be made or issued with respect to the Project and with
respect to the use and occupancy of the same for the purpose for which it is
currently used, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or issued by the appropriate
governmental, quasigovernmental or other authorities; neither the Seller nor
Eagle Crest has received notice of any outstanding violations (i) of the
Department of Environmental Quality Water Pollution Control Facility permit,
(ii) with respect to the operation of the septic tank system or (iii) of any
material legal requirement with respect to the use and occupancy of such
Project; neither the Seller nor Eagle Crest has received notice from the
Department of Environmental Quality Central Region office, Deschutes County
agencies or any other Governmental Authority of any spills or releases of, or
the presence of, hazardous substances on the Project and neither the Seller nor
Eagle Crest has knowledge of any such hazardous substances; and such Project has
been completed within the meaning of any applicable state statute.
(n) Compliance as to Environmental Matters. The Project in which
the related Mortgaged Property is located is in compliance with all
environmental laws, ordinances, rules, regulations and orders of federal and
state governmental authorities relating thereto; and such Project is not now and
has never been used to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce, process or in any manner deal with gasoline,
petroleum products, explosives, radioactive materials, hazardous materials,
hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or
related or similar materials, asbestos or any material containing asbestos, or
any other substance or material as may be defined as a hazardous or toxic
substance by any federal, state or local environmental law, ordinance, rule or
regulation which might reasonably be expected to have a material adverse impact
on such Project or constitute grounds for the revocation of any license,
charter, permit or registration which is material to the continued operation of
such Project.
Section 7.4 Repurchase Upon Breach: Optional Repurchase.
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(a) Each of the parties hereto shall inform the other parties
promptly in writing upon the discovery of any breach of the Seller's
representations and warranties pursuant to Sections 7.2 or 7.3 which materially
and adversely affects any Receivable. Unless the breach shall have been cured in
all material respects by the 60th day following its discovery, the Seller shall
repurchase such Receivable. Additionally, in the case of Mortgage Loan
Receivables, if the Seller does not deliver to the Agent within 90 days after
the related Transfer Date either an opinion of counsel pursuant to Section
2.5(a)(iv) or a recorded Assignment of the related mortgage with evidence of
recording thereon to or upon the order of the Agent, the Seller shall repurchase
the related Mortgage Loan Receivable. if necessary, the Seller shall enforce the
obligation of the related Originator under the related Purchase Agreement to
repurchase any such Receivable required to be repurchased as described above. In
consideration of the purchase of any such Receivable, the Seller shall remit an
amount equal to the Purchase Amount to the Master Servicer. The sole remedy of
the Agent, acting on behalf of the Purchasers, with respect to a breach of the
foregoing representations and warranties which materially and adversely affects
any Receivable shall be to require the Seller to repurchase Receivables pursuant
to this Section and to enforce the related Originator's obligation to the Seller
to repurchase such Receivable pursuant to the related Purchase Agreement.
(b) In connection with any transfer of ownership of a
Mortgaged Property by the related obligor, the Seller may, if the Master
Servicer is required to enforce a due-on-sale clause contained in the related
Mortgage Note, in its discretion, repurchase the related Mortgage Loan
Receivable in order to avoid the required enforcement of such due-on-sale
clause. In consideration of the purchase of any such Mortgage Loan Receivable,
the Seller shall remit an amount equal to the Purchase Price to the Master
Servicer.
(c) Upon the payment by the Seller of the Purchase Price for
any Receivable repurchased pursuant to Section 7.4(a) or 7.4(b), the Agent shall
deliver to the Seller such instruments as may be necessary to assign and
transfer, without recourse or warranty of any kind, such Receivable and the
Related Security and Receivable Documents.
Section 7.5 Representations and Warranties as a Whole. This Agreement,
the other Facility Documents and all other instruments, documents, certificates
and statements furnished to the Agent or any Purchaser by the Seller or on the
Seller's behalf pursuant to the Facility Documents, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
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ARTICLE 8
AFFIRMATIVE COVENANTS
Section 8.1 Affirmative Covenants of the Seller. From the date hereof
until the first day following the Commitment Termination Date on which (i) the
Aggregate Undivided Interest shall be reduced to zero and (ii) all Obligations
shall have been finally paid and performed, the Seller shall do all of the
following unless the Agent (acting upon the direction of the Required
Purchasers) shall otherwise consent in writing:
(a) The Seller shall comply with all applicable laws, rules,
regulations and orders that are material to it, including but not limited to all
applicable laws, rules, regulations and orders with respect to the Assigned
Collateral and will take all actions necessary to ensure that all Taxes, pension
obligations and other governmental claims in respect of its operations, business
and assets are promptly paid when due.
(b) The Seller shall preserve and maintain its corporate
existence, rights, franchises and privileges in the State of Nevada, and qualify
and remain qualified in good standing as a foreign corporation in each State
where such qualification is necessary or advisable in view of its operations,
business and assets.
(c) From time to time during regular business hours, after
receipt of at least three days, prior notice from the Agent or the related
Purchaser, the Seller shall permit the Agent, any Purchaser and their respective
agents and representatives (i) to examine and make copies of and abstracts from
all books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Seller and (ii) to
visit the offices and properties of the Seller for the purpose of examining such
materials and to discuss matters relating to the Receivables, its performance
under any Facility Document to which the Seller is a party or its affairs,
finances and accounts generally with any of its officers, directors or
employees.
(d) The Seller shall maintain and implement or cause to be
maintained and implemented administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the Receivables
and the Receivable Documents in the event of the destruction of the originals
thereof), and keep and maintain or cause to be kept and maintained (i) all
documents, books, records and other information reasonably necessary or
advisable for the collection of the Receivables (including, without limitation,
records adequate to permit the daily identification of each new receivable and
all Collections
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of and adjustments to each existing Receivable) and (ii) adequate records and
books of account in which complete entries will be made in accordance with
generally accepted accounting principles, consistently applied, reflecting all
financial transactions of the Seller (except that transfers of Receivables
regardless of the date of transfer may be accounted for in accordance with the
rules in effect prior to January 1, 1997).
(e) The Seller shall (i) keep its principal place of business
and its chief executive office at the address set forth in Section 15.5 unless
it shall have provided 60 days' prior written notice of any intended move to the
Agent, (ii) maintain a fiscal year ending on December 31 and shall not make any
significant change-in accounting policies or reporting practices other than
changes required by generally accepted accounting principles or otherwise
required by law and (iii) comply in all material respects with the Credit and
Collection Policy in connection with each Receivable, and each Receivable
Document related thereto.
(f) The Seller will deliver to the Agent as soon as reasonably
possible and in any event within 60 days after the close of each fiscal quarter
(90 days-after the close of the fourth quarter), its in-house prepared (A)
balance sheet as at the end of such fiscal quarter setting forth in comparative
form the corresponding figures as at the end of the preceding fiscal quarter,
and (B) statement of income for such fiscal quarter setting forth in comparative
form the corresponding figures for the previous fiscal quarter, with
transactions and account balances accounted for in conformity with generally
accepted accounting principles applied on a basis consistent with that of the
preceding quarter (except that transfers of Receivables, regardless of the date
of transfer, may be accounted for in accordance with the rules in effect prior
to January 1, 1997) or containing disclosure of the effect on financial position
or results of operations of any change in the application of accounting
principles during the quarter, together with an Officer's Certificate certifying
as to such financial statements and that the signer thereof has obtained no
knowledge of any Unmatured Termination Event or Termination Event.
(g) Promptly after learning thereof, the Seller will notify
the Agent of (i) the details of any action, proceeding, investigation or claim
against or affecting the Seller instituted before any court, arbitrator or
Governmental Authority or, to the Seller's knowledge threatened to be
instituted, which, if determined adversely would be likely to have a material
adverse effect on (A) the performance by the Seller, TRI, Eagle Crest or the
Master Servicer of their respective obligations under any Facility Document to
which it is a party or by which it is bound, (B) the validity or enforceability
of any Facility Document,
55
(C) the validity or enforceability of any Receivable (or any Receivable Document
related thereto), (D) the Purchasers, first priority security interest in the
Assigned Collateral or (E) the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Seller, TRI, Eagle
Crest, WorldMark or the Master Servicer and (ii) the occurrence of any Unmatured
Termination Event or Termination Event.
(h) From time to time, the Seller will (i) pay or reimburse
the Agent for all reasonable expenses, including legal fees, incurred by the
Agent in connection with the preparation of this Agreement and the other
Facility Documents, the making of any Purchase, and the perfection of the
Purchasers, interests in the Assigned Collateral; (ii) obtain and promptly
furnish to the Agent evidence of all such government approvals as may be
required to enable the Seller to comply with its obligations under the Facility
Documents to which it is party; (iii) execute and deliver all such instruments
(such as UCC continuation statements) and perform all such other acts as may be
necessary to maintain the Purchasers, interests continuously perfected as a
first priority interest in the Assigned Collateral; (iv) execute and deliver all
such other instruments and perform all such other acts as the Agent or any
Purchaser may reasonably request to carry out the transactions contemplated by
this Agreement and the other Facility Documents; and (v) comply in all material
respects with the Seller's obligations under the Facility Documents to which the
Seller is a party or by which it is bound and not take any action which would
permit or cause the Seller, the Master Servicer or any Subservicer to have the
right to refuse to perform any of their respective obligations under any
Facility Documents.
(i) The purpose of the Seller shall be limited to the
following purposes, and activities incident to and necessary or convenient to
accomplish the following purposes or to fulfill the Seller's obligations under
contracts in effect on the Closing Date: to acquire from time to time
Receivables and other Assigned Collateral from TRI and Eagle Crest pursuant to
the Purchase Agreements, and to sell, dispose, pledge, transfer and assign to
the Agent and the Purchasers pursuant to this Agreement such Receivables and
Assigned Collateral, together with Mortgage Loan Receivables previously acquired
by the Seller from Eagle Crest Partners, Ltd. and transferred to the Agent and
the Purchasers pursuant to the Prior Transfer Agreement.
(j) The Seller will deliver to the Agent copies of the annual
financial statements of each Association and WorldMark within 120 days of each
fiscal year end.
(k) The Seller will within ten Business Days following
an Interest Rate Protection Date obtain Interest Rate Protection.
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Section 8.2 Affirmative Covenants of TRI. From the date hereof until
the first day following the Commitment Termination Date on which (i) the
Aggregate Undivided Interest shall be reduced to zero and (ii) all obligations
shall have been fully paid and performed, TRI shall, unless the Agent (acting
upon the direction of the Required Purchasers) otherwise consents in writing,
(i) notify the Agent if TRI or any of its Subsidiaries allows their respective
obligations under ERISA to become delinquent; (ii) deliver to the Agent as soon
as reasonably possible and in any event within 60 days after the close of each
fiscal quarter (or within 90 days after the close of the fourth quarter), its
in-house prepared (A) balance sheet as at the end of such fiscal quarter setting
forth in comparative form the corresponding figures as at the end of the
preceding fiscal quarter, and (B) statement of income for such fiscal quarter
setting forth in comparative form the corresponding figures for the previous
fiscal quarter, with transactions and account balances accounted for in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding quarter or containing disclosure of the
effect on financial position or results of operations of any change in the
application of accounting principles during the quarter, together with an
Officer's Certificate certifying as to such financial statements and that the
signer thereof has obtained no knowledge of any Unmatured Termination Event or
Termination Event; and (iii) deliver to the Agent as soon as reasonably possible
and in any event within 120 days after the close of each fiscal year, its (A)
balance sheet as at the end of such fiscal year setting forth in comparative
form the corresponding figures at the end of the preceding fiscal year, and (B)
statements of income, retained earnings and changes in financial position for
such fiscal year setting forth in comparative form the corresponding figures for
the previous fiscal year, prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that of the preceding
year or containing disclosure of the effect on financial position or results of
operations of any change in the application of accounting principles during the
year which consolidated balance sheet and income statements shall be accompanied
by an unqualified report and opinion of independent public accountants of
recognized standing approved by the Agent, which report and opinion shall be in
accordance with generally accepted auditing standards relating to reporting or,
if qualified, the opinion shall not be qualified due to any limitation in scope
of the examination or due to any departure from any generally accepted
accounting principles, and shall be accompanied by a statement of such
accountants that, in making the audit necessary for the certification of such
financial statements and such report, such accountants have obtained no
knowledge of any Unmatured Termination Event or Termination Event or under any
other evidence of indebtedness or, if in the opinion of such accountants any
such Unmatured Termination Event or
57
Termination Event shall have occurred and be continuing, shall include a
statement as to the nature and status thereof.
ARTICLE 9
NEGATIVE COVENANTS
Section 9.1 Negative Covenants of the Seller. From the date hereof
until the first day following the Commitment Termination Date on which (i) the
Aggregate Undivided Interest shall be reduced to zero and (ii) all Obligations
shall have been finally paid and performed, unless the Agent (acting upon the
direction of the Required Purchasers) shall otherwise consent in writing:
(a) The Seller shall not, except as otherwise provided herein,
(i) sell, transfer, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Lien upon or with respect to any
Assigned Collateral (other than Permitted Encumbrances on the Mortgaged
Properties in the case of Mortgage Loan Receivables and Liens of WorldMark in
the case of Right to Use Receivables) or any other property now owned or
hereafter acquired by the Seller (other than Liens arising by operation of law
or arising in connection with court proceedings), (ii) assign any right to
receive any income or proceeds in respect thereof or (iii) create, incur, assume
or cause to exist any indebtedness, whether current or funded, or any liability
other than (A) liabilities payable to the Purchasers, (B) liabilities for
services supplied or furnished to the Seller including, but not limited to, the
reasonable fees of accountants, attorneys or other professionals required by the
Seller for the normal operation of its business, and (C) liabilities payable to
TRI in respect of items described in clause (B) above, payments in respect of
which shall be subordinated to amounts owed by the Seller under this Agreement.
(b) The Seller shall not (i) issue any additional shares of
its capital stock to any Person other than TRI, (ii) permit the transfer, sale
or pledge of any shares of its outstanding capital stock, (iii) amend its
articles of incorporation or bylaws or (iv) have any Subsidiaries.
(c) Notwithstanding the provisions of Section 9.1(b), so long
as no Unmatured Termination Event or Termination Event has occurred and is
continuing, the Seller can (i) pay dividends on its outstanding shares of Class
A common stock so long as the amount of such dividends, within any 12 month
period, do not exceed 12% per annum or $480,000, and (ii) make permitted
payments in respect of liabilities permitted under Section 9.1(a).
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(d) The Seller shall not (i) engage in any business or
activity other than those permitted by Section 8.1(i), (ii) make any material
change in the character of its business, enter into a new business, enter into
any material agreement other than as contemplated by the Facility Documents or
(iii) merge or consolidate with any other corporation, company or entity or sell
all or substantially all of its assets or acquire all or substantially all of
the assets or capital stock or other ownership interest of any other
corporation, company or entity.
(e) The Seller shall not, except as described in Section
9.1(c)(ii) and (c)(iii), (i) make loans to any Person, (ii) advance credit or
enter into any agreement whereby the Seller is contingently liable for the debts
of another, (iii) guarantee the indebtedness of other parties or (iv) make
capital expenditures.
(f) The Seller shall not, without the prior consent of the
Independent Director and the affirmative vote of all members of the board of
directors, (i) institute proceedings to be adjudicated bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against it,
or file a petition or consent to a petition seeking reorganization or relief
under any applicable federal or state law relating to bankruptcy or insolvency,
or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Seller, or a substantial part of
its property, or make any assignment for the benefit of creditors, or, except as
required by law, admit in writing its inability to pay its debts generally as
they become due, or take any corporate action in furtherance of any such action;
(ii) dissolve or liquidate, in whole or in part; (iii) merge or consolidate with
or into any other entity, or convey or transfer all or substantially all of its
properties and assets to any other entity; (iv) incur, assume or guarantee any
indebtedness for borrowed money or for the deferred purchase price of goods or
services other than those contemplated by this Agreement; or (v) engage in any
other action that bears upon whether the separate identity of the Seller and its
parent will be respected, or the assets of the Seller will be consolidated with
those of its parent under applicable federal or state bankruptcy or insolvency
law.
Section 9.2 Negative Covenants of TRI. From the date hereof until the
first day following the Commitment Termination Date on which (i) the Aggregate
Undivided Interest shall be reduced to zero and (ii) all Obligations shall have
been finally paid and performed, unless the Agent (acting upon direction of the
Required Purchasers) shall otherwise consent in writing:
59
(a) TRI shall not, except as otherwise provided herein, sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Lien upon or with respect to any of the capital stock of the
Seller.
(b) TRI shall not allow its payment or funding obligations under
ERISA to become delinquent.
(c) TRI shall not make any material change in the character or
conduct of its business as it is conducted as of the Closing Date or enter into
any new businesses.
ARTICLE 10
SERVICING, ADMINISTRATION AND COLLECTIONS
Section 10.1 Designation of Master Servicer.
(a) The servicing, administering and collection of the
Receivables shall be conducted by the Master Servicer designated from time to
time in accordance with this Section. Until the Agent (acting upon the direction
of the Required Purchasers) gives notice (the "Successor Notice") to the Seller
and the Master Servicer of the designation of a new Master Servicer, TRI is
hereby designated as, and hereby agrees to perform the duties and obligations
of, Master Servicer in accordance with the terms of this Agreement. The Agent
and the Purchasers agree not to provide the Seller and the Master Servicer with
a Successor Notice unless (i) a Termination Event shall have occurred and be
continuing or (ii) the Seller or the Master Servicer, as the case may be, shall
fail to perform or observe any term, covenant or agreement contained in Sections
8.1, 8.2, 9.1 or 9.2 or this Article and such failure shall remain unremedied
for five Business Days after written notice thereof shall have been given to the
Seller and the Master Servicer by the Agent.
(b) Upon receipt of a Successor Notice or upon resignation of
the Master Servicer pursuant to Section 10.1(c), the Master Servicer will take
such actions as are necessary to best facilitate the transition of the
performance of the Master Servicer's activities to the new Master Servicer and
the Seller and Master Servicer shall use their best efforts to assist the new
Master Servicer to assume and perform the duties of the Master Servicer
hereunder. Without limiting the foregoing, the Master Servicer agrees that:
(i) the Agent may direct some or all of the
Obligors to make payment of all amounts payable under any Receivables directly
to the Agent, to the new Master Servicer or through the Lock Box Network;
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(ii) the Master Servicer shall, at the Agent's
request and at the Master Servicer's expense, give notice of the Purchasers'
ownership of the Receivables to each obligor and direct that payments be made
directly to the Agent, to the new Master Servicer or through the Lock Box
Network;
(iii) the Master Servicer shall, at the Agent's
request, (A) assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks) in its
possession which evidence the Receivables, the related Receivable Documents and
the Related Security, or which are otherwise necessary or desirable to collect
such Receivables, and shall make the same available to the Agent or the new
Master servicer at a place selected by the Agent, (B) segregate all cash, checks
and other instruments received by it from time to time constituting Collections
in a manner acceptable to the Agent and shall, promptly upon receipt, remit all
such cash, checks and instruments, duly indorsed or with duly executed
instruments of transfer, to the Agent, the new Master Servicer or the Collection
Account, as the case may be, and (C) permit the successor Master Servicer and
its agents, employees and assignees access to its facilities and its books,
records, documents and instruments (including, without limitation, computer
programs, tapes and disks) related to the Receivables; and
(iv) the Agent or any new Master Servicer is
authorized to take any and all steps in the Seller's name and on behalf of the
Seller necessary or desirable, in the Agent's determination, to collect all
amounts due under the Receivables (including, in the case of the Mortgage Loan
Receivables, amounts due under the related Mortgage Notes), including, without
limitation, endorsing the Seller's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Receivable Documents.
(c) The Master Servicer's authorization to act as servicer of
the Receivables under this Agreement shall terminate on the first day following
the Commitment Termination Date on which (i) the Aggregate Undivided Interest
shall be reduced to zero and (ii) all obligations shall have been fully paid and
performed.
(d) TRI acknowledges that the Agent and the Purchasers have
relied on TRI's agreement to act as the initial Master Servicer hereunder in
their respective decisions to execute and deliver the Facility Documents. TRI
agrees not to resign as Master Servicer and that until any Successor Notice
shall have been delivered to TRI, it shall continue to perform all of the duties
of the Master Servicer hereunder unless it shall have determined that the
performance of such duties shall no longer be permitted by applicable law.
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Section 10.2 Duties of the Master Servicer: Subservicers.
(a) The Master Servicer, acting alone and/or through one or
more Subservicers as provided in this Section, shall, as agent for the Agent and
the Purchasers, manage, service, administer and make collections on or in
respect of the Receivables. The Master Servicer agrees that its servicing of the
Receivables shall be carried out in accordance with customary and usual
procedures of institutions which service unsecured timeshare receivables and
timeshare receivables secured by mortgages and, to the extent more exacting, the
procedures used by the Master Servicer in respect of the foregoing timeshare
receivables serviced by it for its own account. The duties of the Master
Servicer shall include collection and posting of all payments, responding to
inquiries of obligors on the Receivables, investigating delinquencies, sending
payment coupons to Obligors, reporting tax information to obligors, accounting
for collections and furnishing monthly statements to the Agent and the
Purchasers substantially in the form of Exhibit E hereto, which statements shall
be delivered no later than the Settlement Date in each month. Each monthly
statement shall be accompanied by a current certificate from each Subservicer
(and from the Master Servicer with respect to any portion of the Receivables
Pool serviced by the Master Servicer itself) stating that to the best of the
knowledge and information of such Subservicer (or of the Master Servicer, if
applicable) after examination of relevant books and records, the Seller has not
sold except to the Agent, or granted a security interest in, any Receivable
comprised in that portion of the Receivables Pool serviced by such Subservicer
(or by the Master Servicer, if applicable). The Master Servicer shall have,
subject to the terms of this Agreement, full power and authority, acting alone
and subject only to the specific requirements and prohibitions of this
Agreement, to do any and all things in connection with such managing, servicing,
administration and collection that it may deem necessary or desirable. Without
limiting the generality of the foregoing, but subject to the other provisions of
this Agreement, the Master Servicer is authorized and empowered by the Agent,
acting on behalf of the Purchasers, to execute and deliver, on behalf of itself,
the Agent, the Purchasers or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all comparable instruments, with respect to the Receivables and, in the case of
Mortgage Loan Receivables, the related Mortgaged Properties. The Agent shall
furnish the Master Servicer with all powers of attorney or other documents
necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder.
(b) The Master Servicer may enter into Subservicing
Agreements with one or more Subservicers approved by the Agent
for the servicing and administration of certain of the
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Receivables. The Master Servicer shall notify the Agent promptly if a
Subservicer is hired. References in this Agreement to actions taken or to be
taken by the Master Servicer in servicing the Receivables include actions taken
or to be taken by a Subservicer on behalf of the Master Servicer and the Agent.
Each Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Master Servicer and the Subservicer
have agreed. With the approval of the Master Servicer and the Agent, a
Subservicer may delegate its servicing obligations to third-party servicers, but
such Subservicer will remain obligated under the related Subservicing Agreement.
The Master Servicer and a Subservicer may enter into amendments thereto or
different forms of Subservicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Agreement or materially adversely affect the rights of the
Agent or the Purchasers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the related Subservicer, the Master Servicer
shall either act directly as servicer of the related Receivables or enter into a
Subservicing Agreement with a successor Subservicer approved by the Agent which
will be bound by the terms of the related Subservicing Agreement.
Notwithstanding any Subservicing Agreement, any of the provisions of
the Agreement relating to agreements or arrangements between the Master Servicer
or a Subservicer or reference to actions taken through such Persons or
otherwise, the Master Servicer shall remain obligated and liable to the Agent
and the Purchasers for the servicing and administering of the Receivables in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Subservicing Agreement or arrangements
or by virtue of indemnification from a Subservicer and to the same extent and
under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Receivables. The Master Servicer shall be
entitled to enter into any agreement with a Subservicer for indemnification of
the Master Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.
Any Subservicing Agreement that may be entered into and any other
transactions or servicing arrangements relating to the Receivables involving a
Subservicer or an affiliate of the Master Servicer in its capacity as such shall
be deemed to be between the Subservicer or other affiliate of the Master
Servicer, as the
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case may be, and the Master Servicer alone, and the Agent and the Purchasers
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in the immediately succeeding paragraph; provided that the Agent and the
Purchasers may rely upon all representations and warranties of the Subservicer
contained therein.
In the event the Master Servicer shall for any reason no longer be
servicing any of the Receivables (including, but not limited to, by reason of a
Termination Event), the Agent or its designee may, at the sole discretion of the
Agent, thereupon assume all of the rights and obligations of such Master
Servicer under each Subservicing Agreement selected by the Agent in its sole
discretion. In such event, the Agent, its designee or the successor servicer for
the Agent shall be deemed to have assumed all of the Master Servicer's interest
therein and to have replaced the Master Servicer as a party to each such
Subservicing Agreement to the same extent as if such Subservicing Agreement had
been assigned to the assuming party except that the Master Servicer shall not
thereby be relieved of any liability or obligations under the Subservicing
Agreement. The Master Servicer shall, upon request of the Agent but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each such Subservicing Agreement and the Receivables then
being serviced and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the Subservicing Agreement to the assuming party.
The Master Servicer shall retain all data (including, without
limitation, computerized records) relating directly to or maintained in
connection with the servicing of the Receivables at the address of the Master
Servicer set forth in Section 15.5, at one of the addresses listed on Schedule 5
hereto, at the office of any Subservicer or, upon 15 days' notice to the Agent,
at such other place where the servicing offices of the Master Servicer are
located, and shall give the Agent access to all data at all reasonable times,
and, during the continuation of a Termination Event, the Master Servicer shall,
on demand of the Agent, deliver or cause to be delivered to the Agent all data
(including, without limitation, computerized records and, to the extent
transferable, related operating software) necessary for the servicing of the
Receivables and all monies collected by it and required to be deposited in or
credited to the Collection Account.
(c) The Master Servicer may, from time to time and with the
consent of the Agent, make changes to the Credit and Collection Policies,
provided that no such change can materially impair the collectibility of any
Receivable. Copies of each such
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revised Credit and Collection Policies shall replace the version existing as
Schedule 1 or 2, as the case may be.
(d) All expenses incurred by the Master Servicer, including
expenses incurred by any Subservicer, in performing their obligations hereunder
shall be for the account of the Master Servicer, and the Purchasers and the
Agent shall have no obligations to make any payments in respect thereof.
(e) No later than one Business Day prior to each Settlement
Date, the Master Servicer shall prepare and forward to the Agent by telecopier
and to each Purchaser by overnight courier service for delivery on the
immediately succeeding Business Day, a settlement certificate, certified by an
officer of the Master Servicer, substantially in the form attached hereto as
Exhibit E.
Section 10.3 Collection Responsibilities; Receivable
Modifications.
(a) The Master Servicer shall, on behalf of the Agent, collect
all payments made under each Receivable and shall use its reasonable efforts to
collect from each Obligor all payments on or in respect of such Receivable after
the related Cutoff Date. The Master Servicer may in its discretion waive any
assumption fees, late payment charges, charges for checks returned for
insufficient funds, prepayment fees, if any, or other fees which may be
collected in the ordinary course of servicing the Receivables. Notwithstanding
anything to the contrary in this Agreement, neither the Master Servicer nor the
Agent shall modify, waive or amend the terms of any Mortgage Loan Receivable
unless a default thereon has occurred or is imminent or unless such
modification, amendment or waiver shall not (i) alter the interest rate on, the
principal amount of, or the timing of payments of interest and principal in
respect of, such Mortgage Loan Receivable, (ii) materially impair the related
Mortgaged Property or (iii) reduce materially the likelihood that payments of
interest and principal on such Mortgage Loan Receivable shall be made when due;
provided, however, that the Master Servicer shall not reschedule the payment of
delinquent payments more than one time in any 12 consecutive months with respect
to any obligor.
(b) Subject to Section 4.3, the Master Servicer shall remit,
by any commercially acceptable method, to the appropriate party the portion of
such payments representing Miscellaneous Payments, it being understood that such
Miscellaneous Payments may be retained by the Master Servicer or applied on
behalf of obligors, as the case may be; provided, that the Master Servicer shall
remit portions of Miscellaneous Payments constituting homeowners' association
fees and condominium association fees to
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the related condominium association or homeowners, association,
as the case may be.
(c) All Collections shall be segregated from funds of the
Master Servicer and other funds received or collected by the Master Servicer for
Persons other than the Purchasers and, to the extent of the Purchasers' Share
thereof, all Collections shall be held in trust by the Master Servicer for the
exclusive benefit of the Purchasers.
Section 10.4 Maintenance of Insurance.
(a) The Master Servicer shall maintain or cause each
Association to maintain fire insurance with extended coverage on the Project in
an amount which is at least equal to the replacement cost of the improvements
which are a part of such Project, but in no event less than such amount as is
necessary to avoid the application of any co-insurance clause in the related
hazard insurance policy. It is understood and agreed that no earthquake, flood
or other additional insurance is to be required of any Obligor or the
Association other than pursuant to such applicable laws and regulations as shall
at any time be in force and as shall require such additional insurance.
The Master Servicer agrees to prepare and present, or cause the
Association to prepare and present, claims under each insurance policy
maintained pursuant to this Section in a timely fashion in accordance with the
terms of such policy and to take such reasonable steps as are necessary to
enable the Association or the Master Servicer, as appropriate, to receive
payment or to permit recovery thereunder and to restore and repair the Project
and the Mortgaged Property. Each insurance policy maintained under this Section
shall be issued by an issuer with a General Policy Rating of "A" or better in
Best's Key Rating Guide.
(b) The Master Servicer shall cause each Subservicer and any
successor Subservicers to keep in force during the term of this Agreement a
policy or policies of insurance covering errors and omissions in the operation
of such Subservicer's procedures, and a fidelity bond. Such policy or policies
and fidelity bond shall be in such form and amount that would meet the
requirements of FHLMC if it were the purchaser of the Mortgage Loans and the
Subservicer were servicing and administering the Mortgage Loans for FHLMC. In
the event any Subservicing Agreement is terminated and the Master Servicer does
not enter into a subservicing Agreement with a successor Subservicer, the Master
Servicer shall obtain one or more policies of insurance covering errors and
omissions in the operation of the Master Servicer's procedures and one or more
fidelity bonds in such form and amount as specified in the immediately preceding
sentence. The Master Servicer shall be
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deemed to have complied with this provision if an affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Each such errors and omissions policy
and fidelity bond shall not be cancelled without 30 days, prior written notice
to the Agent.
(c) The Master Servicer shall cause each Subservicer and any
successor Subservicer to keep in force during the term of this Agreement
insurance coverage in such amounts as shall be normal and usual in the business.
Section 10.5 Assumption and Substitution Agreements. The Master
Servicer is authorized to take or enter into an assumption or substitution
agreement from or with the Person to whom property subject to a Mortgage has
been or is about to be conveyed. The Master Servicer is also authorized, if
required by law to do so, to release the original Obligor from liability upon
the Mortgage Loan Receivable and substitute the new mortgagor as Obligor
thereon. In connection with such assumption or substitution, the Master Servicer
shall apply such underwriting standards and follow such practices and procedures
as shall be normal and usual and as it applies to mortgage loan timeshare
receivables owed solely by it. Notwithstanding the foregoing, in connection with
any transfer of ownership of a Mortgaged Property by an Obligor to any Person,
the Master Servicer shall not agree to any change in the rate of interest borne
by, the maturity date of, the principal amount of, the timing of payments of
principal and interest in respect of, and all other material terms of, the
related Mortgage Note. The Master Servicer shall notify the Agent that any such
assumption or substitution agreement has been completed and if requested to do
so by the Agent, shall forward to the Agent a copy of such assumption or
substitution agreement for the Agent's review. The original of any assumption or
substitution agreement shall be added to the related Receivable File and shall,
for all purposes, be considered a part of such Receivable File to the same
extent as all other documents and instrument constituting a part thereof. In
connection with any such assumption or substitution agreement, the related
Mortgage Note shall not be changed. Any fee collected by the Master Servicer for
entering into an assumption or substitution agreement will be retained by the
Master Servicer as additional servicing compensation.
Section 10.6 Realization Upon Defaulted Receivables.
(a) The Master Servicer shall foreclose upon or otherwise
comparably convert the ownership of the Mortgaged Properties securing such of
the Mortgage Loan Receivables as come into and continue in default and as to
which no satisfactory
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arrangements can be made for collection of delinquent payments pursuant to
Section 10.2. In connection with such foreclosure or other conversion, the
Master Servicer shall follow such practices and procedures as it shall deem
necessary or advisable and as shall be normal and usual in its general mortgage
servicing activities; provided that if the Master Servicer has actual knowledge
or reasonably believes that any Mortgaged Property is affected by hazardous or
toxic waste or substances, then the Master Servicer need not acquire title to
such Mortgaged Property in a foreclosure or similar proceeding. The foregoing is
subject to the proviso that the Master Servicer shall not be required to expend
its own funds in connection with any foreclosure or to restore any damaged
property unless it shall determine that such foreclosure or restoration will
increase the Liquidation Proceeds available to the Seller after reimbursement to
the Master Servicer for its Liquidation Expenses.
(b) In connection with the foreclosure or liquidation of any
Defaulted Receivable that is a Right to Use Receivable, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in its general servicing activities.
The Master Servicer shall be required to expend its own funds in connection with
the liquidation of any Defaulted Receivable that is a Right to Use Receivable,
if it shall determine that such expenditures will increase the Liquidation
Proceeds available to the Seller after reimbursement to the Master Servicer for
its Liquidation Expenses.
(c) Liquidation Expenses incurred by the Master Servicer can
be repaid to the Master Servicer only from Liquidation Proceeds from sale or
other disposition of the related Defaulted Receivables.
Section 10.7 Payment of Fees and Expenses of Agent: No Offset. Prior to
the termination of this Agreement, the obligations of the Master Servicer under
this Agreement shall not be subject to any counterclaim or right of offset which
the Master Servicer has or may have against the Agent or any Purchaser, whether
in respect of this Agreement, any Receivable or otherwise.
Section 10.8 Servicing Fee. The Seller shall pay to the Master Servicer
out of Collected Interest a fee (the "Servicing Fee") for each day until the
first Business Day after the Commitment Termination Date on which the Aggregate
Undivided Interest shall be reduced to zero and all obligations shall have been
fully paid and performed. The accrued Servicing Fee shall be paid in arrears on
each Settlement Date and on the first Business Day after the Commitment
Termination Date on which the Aggregate Undivided Interest shall be reduced to
zero and all
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obligations shall have been fully paid and performed. The Servicing Fee shall be
calculated for each day as an amount equal to the product of (i) 1.75%, (ii) the
outstanding Principal Balance of the Receivables comprising the Receivables Pool
as of such day and (iii) a fraction, the numerator of which is one and the
denominator of which is 360. In no event shall the Agent or any Purchaser have
any obligation to pay any fee in respect of the services to be provided
hereunder.
Section 10.9 Representations and Warranties as to the Master Servicer.
The Master Servicer represents and warrants to the Agent for the benefit of the
Purchasers that:
(a) Organization and Good Standing. The Master Servicer shall
have been duly organized and shall be validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with power and
authority to own its properties and to conduct its business as such properties
shall be currently owned and such business is presently conducted.
(b) Due Qualification. The Master Servicer shall be duly
qualified to do business as a foreign corporation in good standing, and shall
have obtained all necessary licenses and approvals in all jurisdictions in which
the ownership or lease of property or the conduct of its business shall require
such qualifications, except where the failure to so qualify or to have obtained
such licenses and approvals would not have a material adverse effect on the
ability of the Master Servicer to perform its obligations under this Agreement
or the other Facility Documents to which it is a party.
(c) Power and Authority. The Master Servicer shall have the
power and authority to execute, deliver and perform its obligations under the
Agreement and each other Facility Document to which it is a party and to carry
out their respective terms; and the execution, delivery and performance of this
Agreement and each other Facility Document to which it is a party shall have
been duly authorized by the Master Servicer by all necessary corporate action.
(d) Binding Obligations. This Agreement shall constitute a
legal, valid and binding obligation of the Master Servicer enforceable in
accordance with its terms, except as enforceability may be subject to or limited
by bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors, rights in general and by general principles of equity.
(e) No Violation. The consummation of the
transactions contemplated by this Agreement and the other
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Facility Documents to which the Master Servicer is a party and the fulfillment
of the terms of this Agreement and the other Facility Documents shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Master Servicer, or conflict with or
violate any of the terms or provisions of, or constitute (with or without notice
or lapse of time) a default under, any material indenture, agreement or other
instrument to which the Master Servicer is a party or by which it shall be
bound; nor violate any law or, to the best of the Master Servicer's knowledge,
any order, rule or regulation applicable to the Master Servicer of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Master Servicer or its
properties; which breach, default, conflict or violation would have a material
adverse effect on the ability of the Master Servicer to perform its obligations
under this Agreement or the other Facility Documents to which it is a party.
Section 10.10 Existence; Status as Master Servicer; Merger.
(a) Except as otherwise permitted by Section 10.2(f), the
Master Servicer shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the state of its organization and shall
obtain and preserve its qualification to do business as a foreign corporation,
in each case to the extent necessary to protect the validity and enforceability
of the Receivables (and, in the case of Mortgage Loan Receivables, the related
Mortgage Notes and Mortgages) and this Agreement.
(b) The Master Servicer shall not consolidate with or merge
into any other Person or convey, transfer or lease substantially all of its
assets as an entirety to any Person unless the Person formed by such
consolidation or into which the Master Servicer has been merged or the Person
which acquires substantially all the assets of the Master Servicer as an
entirety is a corporation organized under the laws of a state in the United
States, can lawfully perform the obligations of the Master Servicer hereunder
and executes and delivers to the other parties hereto an agreement, in form and
substance reasonably satisfactory to the Agent (acting upon the direction of the
Purchasers), which contains an assumption by such successor entity of the due
and punctual performance and observance of each covenant and condition to be
performed or observed by the Master Servicer under this Agreement.
(c) From the date hereof until the first day following the
Commitment Termination Date on which (i) the Aggregate Undivided Interest shall
be reduced to zero and (ii) all
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obligations shall have been fully paid and performed, the Master Servicer shall,
promptly after learning thereof, notify the Agent of (i) the details of any
action, proceeding, investigation or claim against or affecting the Master
Servicer instituted before any court, arbitrator or Governmental Authority or,
to its knowledge threatened to be instituted, which, if determined adversely to
the Master Servicer would be likely to have a material adverse effect on the
performance by it of its obligations under any Facility Document to which is a
part or by which it is bound.
Section 10.11 Performance of Obligations. The Master Servicer shall not
take any action or, to the extent within its control, permit any action to be
taken by others, which would excuse any Obligor from any of its covenants or
obligations under any Mortgage Note or Mortgage, or under any other instrument
relating thereto, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any Mortgage Note or Mortgage or any such instrument, without
the written consent of the Agent, except as expressly provided herein and
therein.
Section 10.12 Liability of the Master Servicer: Indemnities. The
Master Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Master Servicer under this Agreement.
Such obligations shall include the following:
(a) The Master Servicer shall indemnify, defend and hold
harmless the Agent and the Purchasers from and against any loss, liability or
expense incurred by reason of the Master Servicer's negligence, willful
misfeasance or bad faith in the performance of its obligations and duties
hereunder, reckless disregard of its obligations and duties hereunder or breach
of any provision hereof.
(b) The Master Servicer shall indemnify, defend and hold
harmless the Agent and the Purchasers from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in connection
with the acceptance or performance of its duties herein contained, except to the
extent that any such cost, expense, loss, claim, damage or liability: (i) shall
be due to the willful misfeasance, bad faith or negligence of the Agent or any
Purchaser or successor Master Servicer, (ii) relates to any Tax other than the
Taxes with respect to which the Master Servicer shall be required to indemnify
the Agent or (iii) shall be one as to which the Seller is required to indemnify
the Agent.
Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses
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of litigation, and appeals therefrom (including, but not limited to, any such
fees and costs incurred in a bankruptcy, receivership or similar proceeding). If
the Master Servicer shall have made any indemnity payments to the Agent pursuant
to this Section and the Agent thereafter shall collect any of such payments from
others, the Agent shall repay such amounts to the Master Servicer, with interest
to the extent collected (which interest shall not be an expense of the Agent or
any Purchaser). The indemnifications under this Section shall survive the
termination of this Agreement and the appointment of any successor Agent.
ARTICLE 11
TERMINATION EVENTS
Section 11.1 Termination Events. Each of the following
events shall constitute a "Termination Event":
(a) The Seller or either Originator shall fail to make any
payment or deposit required under this Agreement or the related Purchase
Agreement, in each case that continues unremedied for three Business Days after
discovery of such failure by an officer of the Seller or the related originator
or written notice of such failure is given to the Seller or such Originator by
the Agent;
(b) Any representation and warranty made by the Seller or
either Originator in this Agreement or any other Facility Document to which it
is a party regarding corporate organization or authority or the enforceability
of this Agreement or any other such Facility Document or any information
required to be given by the Originators to identify the Receivables proves to
have been incorrect in any material respect when made, and which continues to be
incorrect in any material respect for a period of 30 days after written notice
of such incorrectness shall have been given to the Seller or such originator by
the Agent;
(c) Failure of the Seller or either Originator to observe or
perform in any material respect any material covenant or agreement under this
Agreement or any other Facility Document to which it is a party which continues
unremedied for a period of 30 days after written notice is delivered by the
Agent to the Seller or such originator; or failure by the Seller or either
Originator to perform or observe any other term, covenant or agreement contained
in this Agreement or any other Facility Document to which it is a party on its
part to be performed or observed and such failure shall remain unremedied for 30
days after written notice thereof shall have been given to the Seller or such
Originator by the Agent;
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(d) Any Indebtedness of the Seller in excess of $100,000 shall
be declared to be due and payable or required to be prepaid (other than by
regularly scheduled required prepayment) prior to the stated maturity thereof;
(e) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a trustee in bankruptcy, conservator, receiver or liquidator of the Seller,
either Originator, WorldMark or any Association in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of their respective affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 days;
(f) The consent by the Seller, either Originator, WorldMark or
any Association to the appointment of a trustee in bankruptcy, conservator or
receiver or liquidator in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
any of the foregoing entities of or relating to substantially all of their
property; or the Seller, either Originator or WorldMark shall admit in writing
its inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations;
(g) Any judgment shall have been entered (and shall have
remained unsatisfied or unstayed for more than ten Business Days) against either
Originator or the Seller that if levied upon would have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of such Originator or the Seller;
(h) The Seller becomes an "investment company" and is
required to register as such under the Investment Company Act;
(i) The IRS shall file notice of a lien pursuant to Section
6323 of the Code with regard to any Receivable and such lien shall not have been
released within ten Business Days, or the PBGC shall file notice of a lien
pursuant to Section 4068 of ERISA with regard to any Receivable and such lien
shall not have been released within ten Business Days;
(j) If TRI or any Subsidiary other than the Seller shall fail
to pay when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) any Indebtedness in excess of $750,000 and
such failure shall
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continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness;
(k) If, as of any Settlement Date, (i) the Charge-off Rate or
the Consolidated Charge-off Rate exceeds 5% per annum, (ii) the average of the
Delinquency Rate Amounts or the Consolidated Delinquency Rate Amounts, in either
case for the three Collection Periods immediately preceding the Collection
Period in which such Settlement Date occurs exceeds 5%, (iii) the average of the
Defaulted Receivable Amounts or the Consolidated Defaulted Receivable Amounts,
in either case for the three Collection Periods immediately preceding the
Collection Period in which such Settlement Date occurs exceeds 3% or (iv) the
Portfolio Yield is negative;
(l) If the Collateral Percentage falls below 125% and within
five Business Days after the Seller learns of such event or is given notice of
such event by the Agent or the Master Servicer it does not cause the Collateral
Percentage to equal or exceed 125%;
(m) If the Seller has a Net Worth less than an amount
equal to the greater of (i) $22,000,000 or (ii) the product of
0.25 and the Aggregate Net Investment;
(n) WorldMark, on an annual basis, has excess of
revenues over expenses of less than $0; or
(o) Any Association, (i) fails to deliver to the Agent, within
90 days of the end of such Association's fiscal year, a report and an
unqualified opinion of independent public accountants, or (ii) fails to have an
annual replacement reserve report generated (by an independent consultant
acceptable to the Purchasers) and delivered to the Agent within 90 days of the
end of such Associations year end, showing a fund balance (as such fund balances
are shown on the financial statements of each Association) for the current year
of less than zero, or projecting within the next ten years that the fund balance
will equal less than zero.
Section 11.2 Remedies.
(a) Upon the occurrence of (i) a Termination Event described
in Section 11.1(e) or 11.1(f), the Commitment shall be terminated, the Agent
shall have been deemed to have given notice of the occurrence of a Termination
Event to the Seller, and the Obligations shall become due and payable (from
Collections or otherwise), all without further act or notice by the Agent or the
Purchasers, (ii) a Termination Event described in Section 11.1(a), the Agent or
any Purchaser may give notice to the Seller that the Commitment shall be
terminated, the Agent shall have
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been deemed to have given notice of the occurrence of a Termination Event to the
Seller and the Obligations shall become due and payable (from Collections or
otherwise) and (iii) any other Termination Event, the Agent shall, at the
request of the Required Purchasers, immediately terminate the Commitment, give
notice to the Seller of the occurrence of a Termination Event, and declare the
Obligations due and payable (from Collections or otherwise).
(b) Upon any termination of the Commitment pursuant to this
Section, the Agent and the Purchasers shall have, in addition to all other
rights and remedies under this Agreement and the other Facility Documents, all
rights and remedies provided under the UCC of each applicable jurisdiction and
under other applicable laws, which rights shall be cumulative.
ARTICLE 12
THE AGENT
Section 12.1 Authorization and Action. Each Purchaser hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement. The duties of the Agent shall be mechanical and
administrative in nature, it shall not have by reason of this Agreement a
fiduciary relationship in respect of any Purchaser and nothing in this Agreement
or the other Facility Documents, expressed or implied, is intended to or shall
be so construed as to impose upon the Agent any obligations in respect of this
Agreement or the other Facility Documents except as expressly set forth herein
or in such other Facility Documents. As to any matters not expressly provided
for by this Agreement, the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining) upon the
instructions of the Required Purchasers, and such instructions shall be binding
upon all Purchasers, provided that the Agent shall not be required to take any
action which exposes it to personal liability or which is contrary to any
Facility Document or applicable law and provided, further, that without the
prior written consent of all Purchasers, the Agent shall not, nor can the Agent
be instructed to, change or modify (a) any requirement that any particular
action be taken by the Required Purchasers or by all the Purchasers, (b) the
definition of "Required Purchasers," (c) the Commitment Amount or any
Purchasers' Pro Rate Share thereof, (d) the amount of the Commitment Fees or the
Upfront Fee, (e) the Commitment Termination Date (except as provided in Section
2.3), (f) the
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date for payment of any Earned Yield or (g) the amount of the Earned Yield and
provided, further, that the terms of Sections 5.1 and 13.2 and this Article
shall not be amended without the prior written consent of the Agent (acting for
its own account). In the absence of instructions from the Required Purchasers,
the Agent shall have authority (but no obligation), in its sole discretion, to
take or not to take any action, unless this Agreement specifically requires the
consent of all Purchasers or of the Required Purchasers and any such action or
failure to act shall be binding on all the Purchasers. Each Purchaser shall
execute and deliver such additional instruments, including powers of attorney in
favor of the Agent, as may be necessary or desirable to enable the Agent to
exercise its powers hereunder.
Section 12.2 Duties and obligations.
(a) Neither the Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or any of them under or in connection with this Agreement except for its
or their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Agent (i) may treat each Purchaser as the party
entitled to receive payments hereunder except as otherwise provided in Article
13; (ii) may consult with legal counsel (including counsel for the Seller),
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 experts; (iii) makes no warranty or
representation to any Purchaser and shall not be responsible to any Purchaser
for any statements, warranties or representations made in or in connection with
this Agreement or in any instrument or document furnished pursuant hereto; (iv)
shall not have any duty to ascertain or to inquire as to the performance of any
of the terms, covenants or conditions of the Facility Documents on the part of
the Seller or as to the existence or possible existence of any Unmatured
Termination Event or Termination Event; (v) shall not be responsible to any
Purchaser for the due execution, legality, validity, enforceability,
genuineness, effectiveness or value of this Agreement or of any instrument or
document furnished pursuant hereto; and (vi) shall incur no liability under or
in respect to this Agreement by acting upon any oral or written notice, consent,
certificate or other instrument or writing (which may be by telegram, facsimile
transmission, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties or by acting upon any representation or warranty of
the Seller made or deemed to be made hereunder.
(b) The Agent will account to each Purchaser for its Pro Rata
Share of payments made for the ratable account of the Purchasers which are
received by the Agent from the Seller and
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will promptly remit to the Purchasers entitled thereto all such payments. The
Agent will transmit to each Purchaser copies of all documents received from the
Seller pursuant to the requirements of this Agreement other than documents which
by the terms of this Agreement the Seller is obligated to deliver directly to
the Purchasers. The Agent will provide notice to each of the Purchasers within
30 days of any of the following: (i) any Amendment to this Agreement pursuant to
Section 15.7; (ii) the waiver of any of the Seller's covenants as provided in
Section 8.1 and 9.1; (iii) the waiver of any of TRI's covenants as provided in
Sections 8.1 and 9.2; (iv) the designation of a new Master Servicer as provided
in Section 10.1; (v) the termination of the Commitment as provided in Section
11.2(a); (vi) the taking of any other action upon the instructions of the
Required Purchasers as prescribed in Section 12.1; (vii) the removal of the
Agent or the appointment of a Successor Agent by the Required Purchasers as
provided in Section 12.7; (viii) the assignment or delegation by the Seller of
any of its rights or duties as provided in Section 13.1; or (ix) any other
action under any of the Facility Documents requiring the vote of the Required
Purchasers (in which case notice should be received within 30 days prior to such
vote).
(c) Each Purchaser or its assignee shall furnish to the Agent
in a timely fashion such documentation (including, but not by way of limitation,
IRS Forms Nos. 1001, 4224 and W-8) as may be required by applicable law or
regulation or as may reasonably be requested by Agent to establish such
Purchaser's status for tax withholding purposes.
Section 12.3 Dealings with the Seller. With respect to its portion of
the Commitment and the Purchases made by it, the Agent shall have the same
rights and powers under this Agreement as any other Purchaser and may exercise
the same as though it were not the Agent, and the term "Purchaser" shall unless
otherwise expressly indicated include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, act and generally engage in any
kind of business with the Seller and any Person which may do business with the
Seller, all as if the Agent were not the Agent hereunder and without any duty to
account therefor to the Purchasers.
Section 12.4 Purchaser Credit Decision. Each Purchaser acknowledges
that it has, independently and without reliance upon the Agent or any other
Purchaser and based upon such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Purchaser also acknowledges that it will, independently and
without reliance upon the Agent or any other Purchaser and based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking
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or not taking action under this Agreement and the other Facility
Documents.
Section 12.5 Right to Rely on Payments.
(a) Unless the Agent shall have been notified in writing by a
Purchaser by 2:00 p.m., Seattle time, on the day prior to a Purchase (other than
a Reinvestment) that such Purchaser will not make available the amount which
would constitute its Pro Rata Share of the amount to be paid in connection with
such Purchase, the Agent may assume that such Purchaser has made such amount
available to the Agent and, in reliance upon such assumption, make available to
the Seller a corresponding amount. If and to the extent that such Purchaser
shall not have made such amount available to the Agent, such Purchaser and the
Seller severally agree to repay the Agent forthwith on demand such amount
together with interest thereon, for each day from the date the Agent made such
amount available to the Seller to the date such amount is repaid to the Agent,
at the Yield Rate applicable to such Purchase when first made.
(b) Unless the Agent shall have been notified by telephone and
such notice shall have been confirmed in writing by the Master Servicer by 2:00
p.m., Seattle time, on the day prior to the date any payment is due hereunder
that the Master Servicer will not make the full amount of all payments scheduled
to be made by it on such due date, the Agent may assume that the Master Servicer
has made such amount available to the Agent and, in reliance upon such
assumption, make available to itself and the Purchasers their respective shares
of such amount. If the Agent makes any such amount available to any Purchaser,
but such amount was not in fact made available by the Master Servicer to the
Agent on such due date, such Purchaser shall pay to the Agent on demand the
amount previously made available to such Purchaser, together with interest on
such amount at the daily average Federal Funds Rate for the number of days from
and including the date on which such Purchaser received such amount to the date
on which such amount becomes immediately available to the Agent. A statement of
the Agent submitted to any Purchaser with respect to any amounts owing under
this paragraph shall be conclusive and binding in the absence of manifest error.
If such amount is not in fact repaid to the Agent by such Purchaser within two
Business Days after the date on which such Purchaser is informed by the Agent
that such amount was not made available to the Agent by the Purchaser then the
Agent shall be entitled to recover on demand an amount calculated in the manner
specified in the second preceding sentence of this clause (b) after substituting
the term "Reference Rate" for the term "Federal Funds Rate."
Section 12.6 Limitations on Liability; Indemnification.
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(a) Anything herein to the contrary notwithstanding, the Agent
and the Purchasers shall have no obligations or liabilities with respect to any
Assigned Collateral, nor shall any of them be obligated to perform any of the
obligations of the Seller owing to any Obligor under the Receivables or in
respect thereof.
(b) The Purchasers agree to indemnify the Agent (to the extent
not reimbursed by the Seller) ratably according to their respective Pro Rata
Shares from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, Taxes (in the case of Taxes in
respect of earnings or gains from the investment of funds held in the Collection
Account), expenses or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or any other Facility Document or any action
taken or omitted by the Agent under this Agreement or any other Facility
Document, except any such as result from the Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Purchaser agrees to reimburse
the Agent promptly on demand in proportion to its Pro Rata Share for all
reasonable out-of-pocket expenses, including legal fees, incurred by the Agent
in connection with the administration or enforcement of or the preservation of
any rights under this Agreement or any other Facility Document (to the extent
that the Agent is not reimbursed for such expenses by the Seller). The foregoing
indemnities shall survive the termination of this Agreement.
Section 12.7 Successor Agent. So long as the Agent is not concurrently
a Purchaser, the Agent may give written notice of resignation at any time to the
Purchasers and the Seller which resignation shall not be effective until at
least 30 days thereafter, and the Agent may be removed at any time with cause by
the Required Purchasers (such Required Purchasers to be determined, solely for
purposes of this Section, by excluding the Purchasers' Investment relating
solely to Seafirst, so that the Required Purchaser's aggregate Purchasers'
Investment of 66% will be based on the initial acquisition by the Purchasers
excluding, however, the acquisition by Seafirst as Purchaser, and as such amount
may be reduced from time to time by Collections received and distributed
pursuant to Sections 4.3 and 4.7.). Upon any such notice of resignation or
removal, the Required Purchasers shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Purchasers and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation or the removal of the retiring
Agent by the Required Purchasers, then the retiring Agent may on behalf of the
Purchasers, appoint a successor Agent, which shall be a bank organized under the
laws of the United States or of any state thereof, or any affiliate of
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such bank, and having a combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
The retiring Agent, however, would not be released from any liabilities
resulting from such retiring Agent's gross negligence or willful misconduct.
Until the acceptance by such a successor Agent, the retiring Agent shall
continue as "Agent" hereunder. After any retiring Agent's resignation or removal
hereunder as Agent shall become effective, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
Section 12.8 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Facility Document to which it is a
party by or through agents, employees or attorneys-in-fact and shall be entitled
to the advice of counsel concerning all matters pertaining to such duties. The
Agent shall not be held liable to any Purchaser for the negligence or misconduct
of any agent or attorney-in-fact that the Agent selects with reasonable care.
Section 12.9 Merger of Agent. Any Person into which the Agent may be
merged or converted or which it may be consolidated with or any Person resulting
from any merger, conversion or consolidation to which it shall be a party or any
Person to which the Agent may sell or transfer all or substantially all of its
agency relationships shall be the successor to the Agent without the execution
or filing of any paper or further act, anything herein to the contrary
notwithstanding.
ARTICLE 13
ASSIGNMENTS AND PARTICIPATIONS
Section 13.1 Generally. Each Purchaser may assign, or sell
participations in, its share of the Aggregate Net Investment and in the
Commitment to one or more Persons in accordance with this Article. Unless the
Agent (acting upon the direction of the Required Purchasers) shall otherwise
consent in writing, the Seller may not assign or delegate any of its rights or
duties hereunder and any such assignment or delegation purported to be made
shall be void and of no effect.
Section 13.2 Assignments. Any Purchaser, with the prior written consent
(which prior consent from the Seller and Master Servicer shall not be required
if a Termination Event shall have occurred and is continuing or if the
assignment is to an
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affiliate of the Purchaser) of the Seller, the Agent and the Master Servicer
(which consents will not be unreasonably withheld), may at any time assign and
delegate to one or more commercial banks or other financial institutions (each,
an "Assignee Purchaser"), all or any portion of its Pro Rata Share of the
Aggregate Net Investment and its Pro Rata Share of the Commitment (which
assignment and delegation shall be a constant, and not a varying, percentage of
all the assigning Purchasers, share of the Aggregate Net Investment and its
share of the Commitment. Notwithstanding the foregoing, (i) the portion of the
Commitment assigned to any Assignee Purchaser shall not be less than $1,000,000
unless such assignment covers all of the assigning Purchasers' interests and
obligations under all Facility Documents and (ii) any Assignee Purchaser must
purchase interests in the assigning Purchasers' share of the Aggregate Net
Investment and of the Commitment and other obligations in equal proportions.
The Seller, the Master Servicer and the Agent shall be entitled to
continue to deal solely and directly with such assigning Purchaser in connection
with the interests and obligations so assigned and delegated to an Assignee
Purchaser until:
(i) the Agent and Seller shall have approved the
proposed assignment;
(ii) written notice of such assignment and delegation,
together with payment instructions, addresses and related information with
respect to such Assignee Purchaser, shall have been given to the Seller, the
Master Servicer and the Agent by such Purchaser and such Assignee Purchaser;
(iii) such Assignee Purchaser shall have executed and delivered to
the Seller, the Master Servicer and the Agent an agreement pursuant to which
such Assignee Purchaser shall be bound to the terms of this Agreement and the
other Facility Documents in form and substance acceptable to the Agent; and
(iv) the processing fees described below shall have
been paid.
From and after the date that all of the foregoing conditions shall have
been fully satisfied, (A) the Assignee Purchaser shall be deemed automatically
to have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Purchaser in
connection with such assignment, shall have the rights and obligations of a
Purchaser hereunder and under the other Facility Documents and (B) the assigning
Purchaser, to the extent that rights and obligations under the Facility
Documents have been assigned and delegated by
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it, shall be released from its obligations which are not then due and payable
under the Facility Documents.
The assigning Purchaser must pay an administrative processing fee
(which fee shall not be reimbursable by the Seller) to the Agent in an amount of
$1,000. Any attempted assignment and delegation not made in accordance with this
Section shall be null and void.
In connection with each assignment and delegation effected in
accordance with this Section, each of the parties hereto agrees, promptly upon
the Agent's request, to execute and deliver all financing statements and
continuation statements that the Agent deems necessary or appropriate in
connection with such assignment and delegation.
Section 13.3 Participations. Any Purchaser may at any time sell to one
or more commercial banks or other financial institutions (each, a "Participant")
undivided interests in its rights in respect of any Purchases, its portion of
the Commitment or other interests or obligations of such Purchaser hereunder;
provided, however, that no such participation shall relieve such Purchaser from
its portion of the Commitment or its other obligations under the Facility
Documents and the Seller, the Master Servicer and the Agent shall continue to
deal solely and directly with such Purchaser in connection with such Purchasers,
rights and obligations under this Agreement and each of the other Facility
Documents. The Seller acknowledges and agrees that each Participant, for
purposes of Sections 3.5, 3.6, 10.3, 14.1, 15.8 and 15.9 shall be considered a
Purchaser; provided, however, that no Participant shall be entitled to payment
of any amount under such Sections that would not have been payable to the
selling Purchaser had no participation occurred.
ARTICLE 14
SELLER INDEMNITIES
Section 14.1 Indemnities by the Seller. The Seller hereby agrees to
indemnify each of the Agent, the Purchasers, their respective successors,
permitted transferees and assigns and all officers, directors, shareholders,
controlling persons, employees and agents of any of the foregoing (each, an
"Indemnified Party"), forthwith on demand, from and against any and all damages,
losses, claims (whether on account of settlements or otherwise), liabilities and
related costs and expenses, including reasonable attorneys, fees and
disbursements (collectively, the "Indemnified Amounts") awarded against or
incurred by any of them arising out of or as a result of any Facility Document
or the transactions contemplated thereby or the use of proceeds therefrom,
including, without limitation, in respect of the
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ownership of an Undivided Interest or in respect of any Receivable or any
Receivable Document, excluding, however, Indemnified Amounts to the extent
resulting from (a) nonpayment by any Obligor of an amount due and payable with
respect to a Receivable unless such nonpayment results from a dispute, claim,
offset or defense described in Section 14.1(vi) or the noncompliance with
applicable laws, rules or regulations described in Section 14.1(iii), (b)
negligence or willful misconduct on the part of such Indemnified Party or (c)
disputes between assigning Purchasers and Assignee Purchasers, or disputes
between selling Purchasers and Participants, if such disputes relate solely to
the conduct of such Persons and not to the failure of the Seller or the Master
Servicer to perform any Facility Document. Without limiting the foregoing, the
Seller shall indemnify each Indemnified Party for Indemnified Amounts relating
to or resulting from:
(i) the transfer by the Seller of any interest in any
Receivable other than an Undivided Interest;
(ii) the breach of any representation or warranty made by the
Seller under or in connection with any Facility Document, any report or
settlement statement or any other information or report delivered by the Seller
or the Servicer pursuant thereto, which shall have been false or incorrect when
made or deemed made;
(iii) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Receivable or the related Receivable
Documents, or the nonconformity of any Receivable or the related Receivable
Documents with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the
Purchasers' ownership interests in the Undivided Interests, free and clear of
any Lien (other than Permitted Encumbrances on the Mortgaged Properties and any
Lien arising solely as a result of an act of the Purchasers or the Agent,
whether existing at the time of the Purchase of such Undivided Interest or at
any time thereafter);
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC or other
applicable laws with respect to any Receivable, all or any part of the Assigned
Collateral whether at the time of any Purchase or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the obligor to the payment of any Receivable
(including, without limitation, a defense based on the related Receivable or
Receivable Documents not being the legal,
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valid and binding obligations of such obligor enforceable against it in
accordance with its respective terms), or any other claim resulting from the
sale of the services or goods related to such Receivable or the furnishing or
failure to furnish such services or goods;
(vii) any failure of the Seller, as the Servicer or
otherwise, to perform its duties or obligations in accordance
with the provisions of Article 10; and
(viii) any Tax, all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending against the same, which may arise by reason
of the purchase or ownership of any Undivided Interest, or other interest in the
Assigned Collateral or Facility Documents other than Taxes upon or measured by
net income, gross receipts or profits of the Indemnified Party; indemnification
in respect of any such amounts shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the receipt of the indemnity provided hereunder or of any
refund of any Tax previously indemnified hereunder, including the effect of such
tax or refund on the amount of tax measured by net income, gross receipts or
profits which is or was payable by the Indemnified Party.
The indemnities provided herein shall survive the termination of this Agreement.
ARTICLE 15
MISCELLANEOUS
Section 15.1 Repurchases for Administrative Convenience. If on any
Settlement Date, the Aggregate Net Investment is less than or equal to lot of
the maximum Aggregate Net Investment on any date prior to such Settlement Date,
the Seller shall be entitled to repurchase all (but not less than all) of the
Undivided Interests from the Purchasers on such Settlement Date. To effect such
repurchase, the Seller shall give the Agent at least three Business Days, prior
written notice thereof and on the Settlement Date shall tender payment of the
repurchase price calculated as hereinafter provided. The Seller shall pay such
repurchase price in cash to the Agent (for the benefit of the Agent and the
Purchasers) in an amount equal to the sum of (i) unpaid Earned Yield on the
Aggregate Net Investment accrued to and including the date of repurchase, (ii)
the Aggregate Net Investment, (iii) accrued but unpaid Commitment Fees, (iv) all
other Obligations that are then due and payable, including, without limitation,
any Obligations which may arise under
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Section 3.6 as a result of such repurchase and (v) the amount of the Servicing
Fee accrued to and including the date of repurchase (which amount shall be paid
to the Master Servicer). Upon receipt of such funds, the Purchasers shall be
obligated to reconvey their Undivided Interests and all Assigned Collateral to
the Seller pursuant to an assignment in form reasonably acceptable to the
Seller, the Agent and the Purchasers, but without representation or warranty
except for a several representation and warranty from each Purchaser that the
Undivided Interests and all Assigned Collateral assigned are free and clear of
Liens created by or arising under such Purchaser.
Section 15.2 Substitution of Receivables. On any Settlement Date
occurring on or before the Commitment Termination Date, the Seller may remove
any Receivable that is either a Defaulted Receivable or is otherwise no longer
an Eligible Receivable; provided, however, that simultaneously with such
removal, Seller shall substitute a new Receivable which can be either a Right to
Use Receivable or a Mortgage Loan Receivable which is an Eligible Receivable as
of the time of substitution and which has an Outstanding Principal Balance equal
to or greater than the Outstanding Principal Balance of the Receivable being
removed from the Receivables Pool. After the Commitment Termination Date,
provided that no Notice Date has occurred, on any Settlement Date the Seller may
remove any Receivable which is a Defaulted Receivable or which is no longer an
Eligible Receivable from the Receivables Pool; provided, however, that
simultaneously with such removal, the Seller shall substitute a new Receivable
which is an Eligible Receivable as of the time of substitution, which has a
final maturity date not later than the final maturity date of the Receivable
being removed from the Receivables Pool and which has an outstanding Principal
Balance equal to or greater than the Outstanding Principal Balance of the
Receivable being removed from the Receivables Pool. Any new Receivables being
substituted for Receivables being removed from the Receivables Pool shall be
separately identified on the related Settlement Statement.
Section 15.3 No Waiver; Remedies Cumulative. No failure by the Agent or
any Purchaser to exercise, and no delay in exercising, any right, power or
remedy under this Agreement or any other Facility Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
remedy under this Agreement or any other Facility Document preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The exercise of any right, power or remedy shall in no event constitute a cure
or waiver of any Unmatured Termination Event or Termination Event under this
Agreement nor prejudice the right of the Agent or any Purchaser in the exercise
of any right hereunder or under any other Facility Document. The rights and
remedies provided herein and
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therein are cumulative and not exclusive of any right of remedy
provided by law.
Section 15.4 Governing Law. This Agreement and the other Facility
Documents shall be governed by and construed in accordance with the internal
laws of the State of Washington except to the extent that the perfection (and
the effect of perfection or nonperfection) of the interests of the Purchasers in
all or any part of the Assigned Collateral is governed by the laws of a
jurisdiction other than the State of Washington.
Section 15.5 Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, or sent by air courier or by telephonic
facsimile transmission and shall be deemed to have been duly given upon receipt
in the case of:
(i) TW HOLDINGS, INC.
c/o Trendwest Resorts, Inc.
12301 N.E. 10th Place
Bellevue, WA 98005
Attention: Gary A. Florence
Telephone: (206) 990-2300
Telecopier: (206) 990-2302
(ii) Trendwest Resorts, Inc.
12301 N.E. 10th Place
Bellevue, WA 98005
Attention: Gary A. Florence
Telephone: (206) 990-2300
Telecopier: (206) 990-2302
(iii) The Purchasers
c/o Seafirst Bank
701 Fifth Avenue
12th Floor
Seattle, WA 98104
Attention: Gordon H. Gray
Telephone: (206) 358-3012
Telecopier: (206) 358-3113
(iv) Seafirst Bank, as Agent
701 Fifth Avenue
16th Floor
Seattle, WA 98104
Attention: Ken Puro
Telephone: (206) 358-0138
Telecopier: (206) 358-0971
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Any of the foregoing addresses can be changed by written notice to the other
parties to this Agreement.
Section 15.6 Severability. Any provision of this Agreement or any other
Facility Document which is prohibited or unenforce- able in any jurisdiction
shall as to such jurisdiction be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
Section 15.7 Entire Agreement; Amendment. This Agreement, the Fee
Letter and the other Facility Documents to which the Seller is a party comprise
the entire agreement of the parties hereto and may not be amended or modified
except by written agreement of the Seller and the Agent. No provision of this
Agreement may be waived except in writing and then only in the specific instance
and for the specific purpose for which given.
Section 15.8 Submission to Jurisdiction: Etc. Each party hereto hereby
irrevocably (a) submits to the jurisdiction of any Washington State or United
States federal court sitting in Seattle, Washington, over any action or
proceeding arising out of or relating to any Facility Document; (b) agrees that
all claims in respect to such action or proceeding may be heard and determined
in such state or United States federal court; (c) waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding; (d) in the case of the Seller,
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to the Seller at its address provided
in Section 15.5; (e) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law; and (f) in the case
of the Seller, agrees not to institute any legal action or proceeding against
the Agent or the Purchasers or the directors, officers, employees, agents or
property of any thereof, arising out of or relating to any Facility Document, in
any court other than (i) any Washington state or United States federal court
sitting in Seattle, Washington or (ii) in the case of an action against a
particular Purchaser, any court sitting at the location of the Purchasers,
principal place of business. Nothing in this Section shall affect the right of
the Agent or any Purchaser to serve legal process in any other manner permitted
by law or to bring any action or proceeding against the Seller or its property
in the courts of any other jurisdiction.
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Section 15.9 Waiver of Jury Trial. Each party hereto waives any right
to a trial by jury in any action or proceeding to enforce or defend any rights
under or relating to this agreement, any other Facility Document or any
amendment, instrument, document or agreement delivered or which may in the
future be delivered in connection herewith or arising from any relationship
existing in connection with this Agreement or any other Facility Document, and
agrees that (i) any such action or proceeding shall be tried before a court and
not before a jury and (ii) any party hereto may file an original counterpart or
a copy of this Agreement with any court as written evidence of the consent of
any other party or parties hereto to the waiver of its or their right to a trial
by jury.
Section 15.10 Captions and Cross-References; Incorporation by
Reference. The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any Section, Schedule or Exhibit are to such
Section, Schedule or Exhibit of this Agreement, as the case may be. The
Schedules and the Exhibits hereto are hereby incorporated by reference and made
a part of this Agreement.
Section 15.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement.
Section 15.12 Confidentiality. Each party hereto agrees, insofar as it
is legally possible to do so, to use its best efforts to keep in confidence the
terms of this Agreement and all information furnished or which may hereafter be
furnished to it pursuant to the provisions of this Agreement including, without
limitation, information relating to the Receivables; provided, however, that
this Section shall not prohibit disclosure (i) to Purchasers; (ii) required or
requested by any regulatory authority having jurisdiction over such party or
otherwise required by law; (iii) of information otherwise lawfully obtainable
from other sources; (iv) to attorneys and accountants for their review in
connection with the performance of their duties; (v) to any Participant or
prospective Participant or Assignee Purchaser; or (vi) to the extent such duty
of confidentiality is waived by the applicable party hereunder.
Section 15.13 Resale of Receivables. In connection with a
securitization of Receivables, the Agent may from time to time at the request of
the Seller and with prior notice to each Purchaser, resell some or all of the
Receivables at a price equal to the aggregate amount of the Purchasers'
Investment relating to such Receivables, plus the unpaid Earned Yield accrued
thereon to
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the date of Resale. In connection with such resales of Receivables, the Agent is
authorized to disclaim expressly all present and after-acquired rights of the
Agent and Purchasers in and to the resold Receivables. The Agent may enter into
such agreements as it deems necessary or appropriate to effectuate such resales
of Receivables and related disclaimers of interest. The Agent shall promptly
distribute to the Purchasers their Pro Rata Shares of all proceeds of resales of
Receivables and if the distribution occurs before the Commitment Termination
Date, the Commitment Amount shall increase by so much of the distribution as is
attributable to return of the Purchasers' Investment.
Section 15.14 Oral Agreements Not Enforceable. ORAL AGREEMENTS OR
ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
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.
TW HOLDINGS, INC., as Seller
By ____________________________________
Name: _____________________________
Title: _____________________________
TRENDWEST RESORTS, INC., as Master
Servicer
By ____________________________________
Name: _____________________________
Title: _____________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION doing business as
SEAFIRST BANK, as Agent
By ____________________________________
Name: _____________________________
Title: _____________________________
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION doing business as
SEAFIRST BANK, as Purchaser
By ____________________________________
Name: _____________________________
Title: _____________________________
FIRST NATIONAL BANK OF CHICAGO
By ____________________________________
Name: _____________________________
Title: _____________________________
SOCIETE GENERALE
By ____________________________________
Name: _____________________________
Title: _____________________________
THE BANK OF TOKYO-MITSUBISHI, LTD., as
Purchaser
By ____________________________________
Name: _____________________________
Title: _____________________________
KEYBANK NATIONAL ASSOCIATION
By ____________________________________
Name: _____________________________
Title: _____________________________
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SANWA BANK CALIFORNIA
By ____________________________________
Name: _____________________________
Title: _____________________________
FIRST SECURITY BANK OF IDAHO, N.A.
By ____________________________________
Name: _____________________________
Title: _____________________________
U.S. BANK
By ____________________________________
Name: _____________________________
Title: _____________________________
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