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INDENTURE
among
TRI FUNDING II, INC.
("Issuer")
and
TRENDWEST RESORTS, INC.
("Servicer")
and
LASALLE NATIONAL BANK
("Trustee")
Dated as of March 1, 1998
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
Parties 1
Preliminary Statement.......................................................1
Granting Clause.............................................................1
ARTICLE ONE DEFINITIONS...............................................2
Section 1.01 Definitions..................................................2
ARTICLE TWO NOTE FORM............................................15
Section 2.01 Form........................................................15
ARTICLE THREE THE NOTES............................................15
Section 3.01 Denomination................................................15
Section 3.02 Execution, Authentication, Delivery and Dating..............16
Section 3.03 Notes as Debt...............................................17
Section 3.04 Registration, Registration of Transfer and Exchange.........17
Section 3.05 Limitation on Transfer and Exchange.........................18
Section 3.06 Mutilated, Destroyed, Lost or Stolen Notes..................19
Section 3.07 Payment of Principal and Interest; Principal and Interest Rights
Preserved...................................................20
Section 3.08 Persons Deemed Owner........................................21
Section 3.09 Cancellation................................................21
ARTICLE FOUR ORIGINAL ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL....21
Section 4.01 Conditions to Original Issuance of Notes....................21
Section 4.02 Security for Notes..........................................24
Section 4.03 Substitution and Purchase of Receivables; Upgrade Contracts.24
Section 4.04 Releases....................................................26
Section 4.05 Trust Estate................................................28
Section 4.06 Notice of Release...........................................28
Section 4.07 Opinions as to Trust Estate.................................28
Section 4.08. Classes.....................................................29
ARTICLE FIVE SATISFACTION AND DISCHARGE...........................29
Section 5.01 Satisfaction and Discharge of Indenture.....................29
ARTICLE SIX DEFAULTS AND REMEDIES.................................29
Section 6.01 Events of Default............................................29
Section 6.02 Acceleration of Maturity; Rescission and Annulment...........31
Section 6.03 Collection of Indebtedness and Suits for Enforcement
by Trustee...................................................32
Section 6.04 Remedies.....................................................32
Section 6.05 Optional Preservation of Trust Estate........................33
Section 6.06 Trustee May File Proofs of Claim.............................33
Section 6.07 Trustee May Enforce Claims Without Possession of Notes.......34
Section 6.08 Application of Money Collected...............................34
Section 6.10 Unconditional Right of Noteholders to Receive Principal
and Interest.............................35
Section 6.11 Restoration of Rights and Remedies...........................35
Section 6.12 Rights and Remedies Cumulative...............................36
Section 6.13 Delay or Omission; Not Waiver................................36
Section 6.14 Control by Noteholders.......................................36
Section 6.15 Waiver of Past Defaults......................................37
Section 6.16 Undertaking for Costs........................................37
Section 6.17 Waiver of Stay or Extension Laws.............................37
Section 6.18 Sale of Trust Estate.........................................37
Section 6.19 Action on Notes..............................................38
ARTICLE SEVEN THE TRUSTEE...........................................39
Section 7.01 Certain Duties and Responsibilities..........................39
Section 7.02 Notice of Default............................................41
Section 7.03 Certain Rights of Trustee....................................41
Section 7.04 Not Responsible for Recitals or Issuance of Notes............42
Section 7.05 May Hold Notes...............................................43
Section 7.06 Money Held in Trust..........................................43
Section 7.07 Compensation and Reimbursement...............................43
Section 7.08 Corporate Trustee Required; Eligibility......................44
Section 7.09 Resignation and Removal; Appointment of Successor............45
Section 7.10 Acceptance of Appointment by Successor.......................45
Section 7.11 Merger, Conversion, Consolidation or Succession to Business of
Trustee......................................................46
Section 7.12 Co-Trustees and Separate Trustees............................46
Section 7.13 Rights with Respect to the Servicer..........................47
Section 7.14 Appointment of Authenticating Agent..........................47
Section 7.15 Custodian to Hold Contracts..................................49
ARTICLE EIGHT OPTIONAL PURCHASE OF RECEIVABLES......................49
Section 8.01 Optional Purchase of All Receivables.........................49
ARTICLE NINE SUPPLEMENTAL INDENTURES...............................50
Section 9.01 Supplemental Indentures Without Consent of Noteholders.......50
Section 9.02 Supplemental Indentures with Consent of Noteholders..........51
Section 9.03 Execution of Supplemental Indentures.........................52
Section 9.04 Effect of Supplemental Indentures............................52
Section 9.05 Reference in Notes to Supplemental Indentures................52
ARTICLE TEN REDEMPTION OF NOTES..................................53
Section 10.01 Redemption at the Option of the Issuer; Election to Redeem...53
Section 10.02 Notice to Trustee............................................53
Section 10.03 Notice of Redemption by the Issuer...........................53
Section 10.04 Deposit of the Redemption Price..............................54
Section 10.05 Notes Payable on Redemption Date.............................54
ARTICLE ELEVEN REPRESENTATIONS, WARRANTIES AND COVENANTS.............54
Section 11.01 Representations and Warranties...............................54
Section 11.02 Covenants....................................................58
Section 11.03 Other Matters as to the Issuer...............................64
ARTICLE TWELVE ACCOUNTS AND ACCOUNTINGS..............................64
Section 12.01 Collection of Money..........................................64
Section 12.02 Collection Account...........................................64
Section 12.03 Reserve Accounts............................................66
Section 12.04 Reports by Trustee to Noteholders............................67
ARTICLE THIRTEEN PROVISIONS OF GENERAL APPLICATION..........................67
Section 13.01 Acts of Noteholders..........................................67
Section 13.02 Notices, etc., to Trustee, Issuer, Servicer and the
Rating Agency...............................68
Section 13.03 Notices and Other Documents to Noteholders; Waiver...........69
Section 13.04 Effect of Headings and Table of Contents.....................69
Section 13.05 Successors and Assigns.......................................69
Section 13.06 Separability.................................................69
Section 13.07 Benefits of Indenture........................................69
Section 13.08 Legal Holidays...............................................69
Section 13.09 Governing Law................................................70
Section 13.10 Counterparts.................................................70
Section 13.11 Obligation...................................................70
Section 13.12 Compliance Certificates and Opinions.........................70
Section 13.13 Effective Date of Transactions...............................71
Section 13.14. Duties of the Parties.......................................71
Signatures..................................................................72
EXHIBIT A Form of Investment Letter
EXHIBIT B Form of Supplement for Grant of Substitute
Contracts and Upgrade Contracts
EXHIBIT C Form of Certificate of Issuer and Servicer
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INDENTURE, dated as of March 1, 1998 (herein, as amended and
supplemented from time to time as permitted hereby, called this "Indenture"),
among TRI FUNDING II, INC., a Delaware corporation (herein, together with its
permitted successors and assigns, called the "Issuer"), TRENDWEST RESORTS, INC.,
an Oregon corporation, as servicer, and LASALLE NATIONAL BANK, a nationally
chartered bank, as trustee.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Issuer's notes
(hereinafter called the "Notes"), issuable in one or more series as provided in
this Indenture, and each Series of which shall be limited as to principal amount
as set forth in the related Series Supplement. All covenants and agreements made
by the Issuer, the Servicer and the Trustee herein are for the benefit and
security of the Holders of the Notes. The Issuer, the Servicer and the Trustee
are entering into this Indenture, and the Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer, the Servicer and the Trustee in accordance with its terms have been
done.
GRANTING CLAUSE
To secure the payment of the principal of and interest on the Notes of
each Series in accordance with their terms, the payment of all of the sums
payable under this Indenture and the performance of the covenants contained in
this Indenture, the Issuer hereby Grants to the Trustee, solely in trust and as
collateral security as provided in this Indenture, for the benefit of the
Holders of the Notes of each Series in so far as the following, in each case,
relates to the Receivables and other interests, rights and properties granted
pursuant to the Series Supplement with respect to such Series, all of the
Issuer's rights, title and interest in and to the following whether now owned or
hereafter acquired and any and all benefits accruing to the Issuer from: (a) the
Receivables Purchase Agreement; (b) the Sale Agreement; (c) the Servicing
Agreement; (d) the Clearing Account; and (e) proceeds of the foregoing
(including, but not by way of limitation, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every
kind, and other forms of obligations and receivables which at any time
constitute all or part or are included in the proceeds of any of the foregoing).
In addition, the Issuer will Grant to the Trustee additional interests, rights
and properties pursuant to the Series Supplement relating to each Series (which,
for each Series, together with the interests, rights and properties Granted
above, shall be referred to as the "Series Collateral" or the "Series Trust
Estate").
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein
required to the best of its ability to the end that the interests of the
Noteholders may be adequately and effectively protected.
ARTICLE ONE DEFINITIONS
Section 1.01 Definitions. Except as otherwise expressly provided
herein or unless the context otherwise requires, the following terms have the
respective meanings set forth below for all purposes of this Indenture, and the
definitions of such terms are equally applicable both to the singular and plural
forms of such terms.
"Acquisition Consideration": The meaning specified in the Receivables
Purchase Agreement.
"Act": With respect to any Noteholder, the meaning specified in Section
13.01.
"Affiliate": At any time, and with respect to any Person, (a) any other
Person that at such time directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of such
first mentioned Person or any Person of which such first mentioned Person
beneficially owns or holds, in the aggregate, directly or indirectly, 10% or
more of any class of voting or equity interests. As used in this definition,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Aggregate Collateral Value": With respect to any Series and as of any
date, the sum of the aggregate of the Collateral Values of the Contracts pledged
by the Issuer to the Trustee to support the Notes of such Series outstanding at
such date; provided, however, that the Collateral Value of any Defaulted
Contract shall not be included in the calculation of Aggregate Collateral Value
in any Due Period after the Due Period in which such Contract became a Defaulted
Contract.
"Asset Assignment": The meaning specified in the Receivables Purchase
Agreement.
"Assignment": The meaning specified in the Sale Agreement.
"Authenticating Agent": With respect to each Series, any entity appointed
by the Trustee pursuant to Section 7.14 hereof.
"Board of Directors": Either the board of directors of the Issuer or of the
Servicer, as the context requires, or any duly authorized committee of such
Board.
"Board Resolution": A copy of a resolution delivered to the Trustee and
certified by the Secretary or an Assistant Secretary of the Servicer or the
Issuer, as the case may be, to have been duly adopted by its respective Board of
Directors and to be in full force and effect on the date of such certification.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee is located are authorized or obligated by
law or executive order to close.
"Calculation Date": The last day of a Due Period.
"Cash Accumulation Event": With respect to any Series, the meaning set
forth in the related Series Supplement.
"Class": With respect to any Series of Notes, any class of Notes of such
Series established pursuant to a Series Supplement.
"Clearing Account": The meaning specified in the Servicing Agreement.
"Closing Date": March 12, 1998, the date that the Transaction Documents are
originally executed and delivered by the parties thereto.
"Club" or "WorldMark": WorldMark, the Club, a California nonprofit mutual
benefit corporation, and its successors in interest.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral Value": With respect to each Receivable as of any
Calculation Date, the amount of principal outstanding with respect to such
Receivable at the end of such Calculation Date (without giving effect to any
write-off or writedown of such Receivable).
"Collection Account": With respect to each Series, the account or accounts
created and maintained pursuant to Section 12.02 hereof.
"Collection Account Bank": The meaning specified in the Servicing
Agreement.
"Competitor" shall mean any Person which is engaged in the vacation time
share business.
"Contract Files": The meaning specified in the Sale Agreement.
"Contracts": The retail installment contracts (and all rights with respect
thereto, including all guaranties and other agreements or arrangements of
whatever character from time to time supporting or securing payment of any such
contract and all rights with respect to the Credits to the extent specifically
related to any such contract), certain interests in which are acquired by the
Issuer from time to time pursuant to the Sale Agreement and identified on the
Contract Schedule attached to the applicable Series Supplement as Schedule A,
including Substitute Contracts and Upgrade Contracts, and any amendments, riders
and annexes thereto; provided that, from and after the date on which a
Receivable relating to a Contract is purchased or substituted by the Issuer, TFI
or Trendwest in accordance with Section 4.03 hereof, such Contract shall no
longer constitute a "Contract" for purposes of the Transaction Documents.
"Controlling Class": With respect to each Series, the meaning set forth in
the related Series Supplement.
"Corporate Trust Office": The principal corporate trust office of the
Trustee located at 135 South LaSalle Street, Suite 1625, Chicago, Illinois
60674, Attention: Asset Backed Securities Trust Services Group--Trendwest
Funding II [specify Series], or at such other address as the Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or the
principal corporate trust office of any successor Trustee.
"Credits": The vacation credits financed by an Obligor pursuant to a
Contract.
"Custodian": With respect to each Series, Sage Systems, Inc., a Washington
corporation, and its permitted successors and assigns.
"Custodian Files": The meaning set forth in the Sale Agreement.
"Default": Any occurrence or circumstance which with notice or the
lapse of time or both would become an Event of Default.
"Default Rate": With respect to any Series for any Due Period, the sum of
the Collateral Values as of the Calculation Date occurring in such Due Period of
all Contracts supporting such Series that became Defaulted Contracts in such Due
Period and remained Defaulted Contracts as of such Calculation Date divided by
the Aggregate Collateral Value for such Series on the Calculation Date
immediately preceding such Due Period.
"Defaulted Contract": A Contract shall become a Defaulted Contract at the
earliest of (i) the date on which the Servicer receives notice that the related
Obligor has (or, if a Contract has two Obligors, both Obligors have) become the
subject of bankruptcy proceedings, (ii) the Calculation Date on which any
portion of the related Receivable would (if such Receivable were owned by
Trendwest) be written off Trendwest's financial statements or books of account
or would otherwise be deemed uncollectible in the normal course of business (for
reasons other than disputes of amounts owed with respect to such Receivable),
(iii) the Calculation Date on which all or part of any Scheduled Payment with
respect to such Contract has not been received and remains unpaid for a period
of 180 or more days as of such Calculation Date or (iv) the date on which the
related Obligor has (or, if a Contract has two Obligors, both Obligors have)
given notice to the Servicer, or the Servicer otherwise has reason to believe,
that the related Receivable will not be paid (for reasons other than disputes of
amounts owed with respect to such Receivable).
"Delinquent Contract": As of any Calculation Date, a Contract (a) as to
which a Scheduled Payment was not received by or on behalf of the Issuer within
60 days of when such Scheduled Payment was due and remains unpaid as of such
Calculation Date and (b) is not a Defaulted Contract.
"Delinquency Level": With respect to any Series for any Due Period, the
sum of the Collateral Values as of the Calculation Date occurring in such Due
Period of all Delinquent Contracts supporting such Series as of such Calculation
Date, divided by the Aggregate Collateral Value of such Series on the
Calculation Date immediately preceding such Due Period.
"Delivery Date": The date on which a Note is issued in accordance with this
Indenture.
"Determination Date": The fifth day preceding each Payment Date or, if such
day is not a Business Day, the next succeeding Business Day.
"Distribution Account": With respect to each Series, the trust account
created and maintained pursuant to Section 12.02 hereof.
"Due Date": With respect to each Receivable, the date of the month on which
payment is due thereunder.
"Due Period": As to any Determination Date or Payment Date, as the case
may be, the period beginning on and including the first day and ending at the
end of the last day of the calendar month preceding the month in which such
Determination Date or Payment Date, as the case may be, occurs.
"Eligible Account": A segregated account, which may be an account
maintained with the Trustee, which is maintained with a depository institution
or trust company whose long term unsecured debt obligations are rated at least
A-1 by Fitch, (or, if not rated by Fitch, an equivalent rating from S&P or
Moody's).
"Eligible Investments": Any and all of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit
of, banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any State thereof and
subject to supervision and examination by federal and/or state
authorities, so long as at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company has a short term unsecured debt rating of F1+ (or its
equivalent) of Fitch, (or, if not rated by Fitch, an equivalent rating
from S&P or Moody's) and provided that each such investment has an
original maturity of no more than 180 days, and (B) any other demand or
time deposit or deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(iii) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any State thereof which has a long term unsecured debt
rating in the highest available rating category of Fitch (or, if not
rated by Fitch, an equivalent rating from S&P or Moody's) at the time
of such investment;
(iv) commercial paper having, or demand notes constituting an
investment vehicle in commercial paper having, an original maturity of
less than 180 days and issued by an institution having a short term
unsecured debt rating in the highest available rating category of Fitch
(or, if not rated by Fitch, an equivalent rating from S&P or Moody's)
at the time of such investment (the issuer of any demand notes under
this paragraph (iv) must also be an institution that satisfies the
unsecured debt rating test specified in this paragraph (iv));
(v) a guaranteed investment contract issued by an insurance
company or other corporation having a long term unsecured debt rating
or a claims paying ability rated in the highest available rating
category of Fitch (or, if not rated by Fitch, an equivalent rating from
S&P or Moody's) at the time of such investment; and
(vi) money market funds having ratings in the highest or
second highest available rating category of Fitch (or, if not rated by
Fitch, an equivalent rating from S&P or Moody's) at the time of such
investment which invest only in other Eligible Investments; any such
money market funds which provide for demand withdrawals being
conclusively deemed to satisfy any maturity requirement for Eligible
Investments set forth in this Indenture.
Any Eligible Investments may be purchased by or through the Trustee or any of
its Affiliates.
"Event of Default": The meaning specified in Section 6.01 hereof.
"Final Due Date": With respect to each Receivable, the last Due Date
specified in the related Contract.
"Final Payment Date": With respect to each Series, the date on which
the final principal payment on the Notes of such Series becomes due and payable
as therein or herein provided, whether at the Stated Maturity or by acceleration
or redemption.
"Fitch": Fitch IBCA, Inc. and its successors in interest.
"Grant": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over and confirm. A Grant of the
Receivables, the related Contracts or of any instrument shall include all
rights, powers and options (but none of the obligations) of the Granting party
thereunder, including, without limitation, the immediate and continuing right to
claim, collect, receive and receipt for payments in respect of the Contracts and
the Receivables, or any other payment due thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring proceedings in the name of the
Granting party or otherwise, and generally to do and receive anything which the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.
"Guaranty Amounts": Any and all amounts paid by a guarantor, if any,
indicated on the applicable Contract.
"Holder" or "Noteholder": The person in whose name a Note is registered in
the Note Register.
"Indenture" or "this Indenture": This instrument as originally executed
as from time to time supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
as so supplemented or amended. All references in this Indenture to designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
Indenture as originally executed, or if amended or supplemented, as so amended
and supplemented. The words "herein," "hereof," "hereunder" and other words of
similar import, when not related to a specific subdivision of this Indenture,
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"Independent": When used with respect to any specified Person means
such a Person, who (1) is in fact independent of the Issuer, (2) does not have
any direct financial interest or any material indirect financial interest in the
Issuer or in any Affiliate of the Issuer, (3) is not connected with the Issuer
as an officer, employee, promoter, underwriter, Trustee, partner, director, a
person performing similar functions and (4) is not a brother, sister, spouse,
parent or child of any Person listed in clauses (2) and (3) above. Whenever it
is herein provided that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such Person shall be appointed by a Issuer Order and
approved by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Initial Aggregate Collateral Value": The meaning set forth in the related
Series Supplement.
"Initial Payment Date": With respect to the Notes of any Series, the
first Payment Date following the related Series Closing Date, as specified in
such Notes and in the related Series Supplement.
"Institutional Investor": Any original purchaser of a Note, any holder
of a Note holding more than 5% of the aggregate principal amount of the Notes
Outstanding of any Series and any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any similar financial
institution or entity, regardless of legal form, or any other Person more than
50% of the ownership interests of which are owned by one or more Persons
previously described in this definition.
"Issuer": TRI Funding II, Inc., a Delaware corporation, until a
successor Person shall have become the Issuer pursuant to the applicable
provisions of this Indenture, and thereafter "Issuer" shall mean such successor
Person.
"Issuer Order" and "Issuer Request": A written order or request signed
in the name of the Issuer by the Chairman of the Board, President, a Vice
President, the Treasurer or Secretary of the Issuer, and delivered to the
Trustee.
"Lien": Any mortgage, deed of trust, pledge, hypothecation, assignment,
participation or equity interest, deposit arrangement, encumbrance, charge, lien
(statutory or other), preferences priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing.
"Monthly Servicer's Report": For each Series, the report prepared by the
Servicer pursuant to Section 4.01 of the Servicing Agreement.
"Moody's: Moody's Investors Service, Inc. and its successors in interest.
"Note" or "Notes": Any note or notes authenticated and delivered under this
Indenture and the related Series Supplement.
"Noteholder" or "Holder": The Person in whose name a Note is registered in
the Note Register.
"Note Interest Rate": With respect to the Notes of any Class of any
Series, the rate per annum at which such Notes accrue interest, as specified in
such Notes and the related Series Supplement.
"Note Purchase Agreements": Each of the note purchase agreements, if
any, entered into with respect to the initial issuance of any Class of any
Series of Notes, as specified in the related Series Supplement.
"Note Register" and "Note Registrar": The respective meanings specified in
Section 3.04 hereof.
"Obligor": The borrower under each related Contract, including any
guarantor of such borrower, and their respective successors and assigns.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, the Controller, an
Assistant Controller or the Secretary of the company on whose behalf the
certificate is delivered, and delivered to the Trustee, which certificate shall
comply with the applicable requirements of Section 13.12 hereof. Unless
otherwise specified, any reference in this Indenture to an Officer's Certificate
shall be to an Officer's Certificate of the Issuer.
"Opinion of Counsel": A written opinion of counsel who must be
Independent of the Issuer and its Affiliates and who shall be reasonably
satisfactory to the Trustee and which opinion shall comply with the applicable
requirements of Section 13.12 hereof.
"Outstanding": With respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to the
Note Registrar for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture,
unless proof satisfactory to the Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided, however, that for purposes of determining whether the Holders of the
requisite principal amount of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Issuer or any other obligor upon such Notes, any Affiliate of the
Issuer or Trendwest shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, or
waiver, only Notes which the Trustee knows to be so owned shall be so
disregarded.
"Overdue Payment": With respect to a Due Period and a Delinquent
Contract, all payments due in a prior Due Period that the Servicer receives from
or on behalf of an Obligor during the related Due Period on such Delinquent
Contract, including any Servicing Charges.
"Paying Agent": The Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 7.08 hereof and is
authorized by the Issuer pursuant to Section 11.02(o) hereof to pay the
principal of, or interest on, any Notes on behalf of the Issuer.
"Payment Date": With respect to the Notes of any Series, the fifteenth
day of each calendar month (or if such day is not a Business Day, the next
succeeding Business Day) commencing on the Initial Payment Date for such Notes.
"Permitted Institutional Investor" means (a) any original purchaser of
a Note and (b) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any other similar financial institution or
entity, regardless of legal form.
"Person": Any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Placement Agent": SPP Hambro & Co., LLC or its successors in interest.
"Principal Distribution Amount": With respect to any Class of any
Series of Notes, the monthly principal distribution for such Class of such
Series set forth in the related Series Supplement.
"Principal Shortfall Amount": With respect to any Class of any Series
of Notes and any Payment Date, an amount equal to the aggregate amount of
principal payments on such Class that were owed on prior Payment Dates but not
made to the Holders of such Class prior to such Payment Date.
"Principal Terms": The meaning specified in Section 3.01 hereof.
"Prior Issuer": TRI Funding Company I, L.L.C., and its successors in
interest.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase and Substitution Limit": With respect to the Contracts
supporting any Series of Notes, 10% of the Initial Aggregate Collateral Value of
such Series.
"Purchase Price": With respect to any Contract or interest therein
repurchased by the Issuer, TFI or Trendwest, as the case may be, pursuant to
Section 3.03 of the Receivables Purchase Agreement, Section 3.03 of the Sale
Agreement, Section 4.03 hereof or Section 3.10(b) of the Servicing Agreement,
the sum of (i) the Collateral Value of related Receivable on the Calculation
Date on or immediately succeeding the date when the Receivable is repurchased
and (ii) any interest portion of Scheduled Payments with respect to such
Receivable due on or prior to such Calculation Date but not received through
such Calculation Date.
"Rating Agency": Fitch.
"Receivables": With respect to any Contract, all of, and the right to
receive all of (i) the Scheduled Payments, (ii) any Guaranty Amounts, (iii) any
Residual Proceeds, (iv) any Recoveries and (v) any Servicing Charges.
"Receivables Purchase Agreement": The Receivables Purchase Agreement,
dated as of March 1, 1998, by and among TFI, the Prior Issuer, Trendwest and TW
Holdings, as amended and supplemented from time to time, together with the Asset
Assignment and each Subsequent Asset Assignment, if any, executed in connection
therewith.
"Receivables Transfer Agreement": The Second Amended and Restated
Receivables Transfer Agreement, dated as of June 1, 1997, as amended, among TW
Holdings, as Seller, Bank of America National Trust and Savings Association
d/b/a SeaFirst Bank, as agent for the purchasers named therein, and Trendwest
Resorts, Inc.
"Record Date": The close of business on the last day of the month
preceding the applicable Payment Date, whether or not a Business Day, except
with respect to the Initial Payment Date for the Notes of any Series, the Record
Date shall be the related Series Closing Date.
"Recoveries": For any Due Period occurring during or after the date on
which any Contract becomes a Defaulted Contract and with respect to such
Defaulted Contract, all payments that the Servicer received from or on behalf of
an Obligor during such Due Period in respect of such Defaulted Contract or from
liquidation or reselling the related Credits (including purchases by Trendwest
pursuant to Section 3.10(e) of the Servicing Agreement), including but not
limited to Scheduled Payments, Overdue Payments and Guaranty Amounts, as reduced
by any reasonably incurred out-of-pocket expenses incurred by the Servicer in
enforcing such Defaulted Contract.
"Redemption Date": With respect to any Note, a date fixed pursuant to
Section 10.01 hereof.
"Redemption Price": With respect to any Note, and as of any Redemption
Date, the Outstanding principal amount of such Note, together with interest
accrued thereon through the Redemption Date at the related Note Interest Rate
(exclusive of installments of interest and principal maturing on or prior to the
related Redemption Date, payment of which shall have been made or duly provided
for to the Holder of such Note on the applicable Record Date or as otherwise
provided in this Indenture).
"Redemption Record Date": With respect to any redemption of any Note, a
date fixed pursuant to Section 10.01 hereof.
"Registered Holder": The Person whose name appears on the Note Register
on the applicable Record Date or Redemption Record Date.
"Reinvestment Income": With respect to any Series, any interest or
other earnings earned on all or part of the related Series Trust Estate.
"Remittance Date": The Business Day immediately preceding each Payment
Date.
"Reserve Account": With respect to each Series, the trust account created
and maintained pursuant to Section 12.03 hereof.
"Reserve Account Required Balance": With respect to any Series, the meaning
set forth in the related Series Supplement.
"Residual Proceeds": With respect to a Contract that is not a Defaulted
Contract and the related Credits, the net proceeds of any resale or other
disposition of such Credits.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Asset Backed Securities Trust Services Department (or
any successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, Assistant Secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this Indenture, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Restricted Investor" means (a) any investment company or pension plan
(other than a pension plan held or managed by an insurance company) that,
directly or indirectly through any subsidiary or through any parent corporation
is engaged in the vacation time share business and (b) any other Person that is
not a Permitted Institutional Investor that, directly or indirectly through any
subsidiary or through any parent corporation is engaged in the vacation time
share business.
"S&P": Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.,
and its successors in interest.
"Sale": The meaning specified in Section 6.18 hereof.
"Sale Agreement": The Purchase and Sale Agreement, dated as of March 1,
1998, by and among TFI, Trendwest and the Issuer, as amended and supplemented
from time to time, together with the Assignment and each Subsequent Assignment,
if any, executed in connection therewith.
"Scheduled Payment": With respect to a Payment Date and a Contract, the
periodic payment set forth in such Contract due from the Obligor in the related
Due Period. Scheduled Payments shall not include any membership dues or other
housekeeping payments relating to the use of the Club.
"Series": Any series of Notes established pursuant to a Series Supplement.
"Series Closing Date": With respect to any Series, the date of the initial
issuance of the Notes of such Series.
"Series Collateral": The meaning specified in the Granting Clause of this
Indenture.
"Series Contract Schedule": With respect to any Series, the listing of
Contracts and Receivables on Schedule A to the related Series Supplement, as
amended from time to time pursuant to Section 4.03, which shall include with
respect to each Contract listed on such schedule: (a) a number identifying such
Contract, (b) the Collateral Value of the related Receivable as of the date of
execution and as of the Series Cut-Off Date, (c) the Obligor, (d) the date
entered into, (e) the original term and the number of payments made as of the
Series Cut-Off Date, (f) the Scheduled Payment, (g) the interest rate and (h)
the number of Credits financed, as such schedule may be amended upon any
purchase or substitution of Contracts made in accordance with the terms of the
Transaction Documents.
"Series Cut-Off Date": With respect to the Contracts identified on any
Series Contract Schedule, the cut-off date specified in the related Series
Supplement, and, with respect to any Substitute Contract or Upgrade Contract,
the date on which such Contract is pledged to the Trustee by the Issuer.
"Series Supplement": With respect to any Series, an indenture
supplemental to this Indenture establishing such Series of Notes, executed and
delivered pursuant to Section 4.01 hereof, and all amendments thereof and
supplements thereto.
"Series Trust Estate": The meaning specified in the Granting Clause of this
Indenture.
"Servicer": With respect to each Series, Trendwest Resorts, Inc., an
Oregon corporation, and any successor Servicer appointed pursuant to Section
6.02 of the Servicing Agreement.
"Servicer Fee": With respect to each Series, on each Payment Date, an
amount equal to the product of (i) one-twelfth of 1.75% and (ii) the sum of the
Aggregate Collateral Values of such Series of Notes Outstanding on the preceding
Payment Date, after distributions made on such date.
"Servicing Agreement": The Servicing Agreement, dated as of March 1,
1998, by and among the Issuer, the Servicer, the Subservicer and the Trustee, as
amended or supplemented from time to time.
"Servicing Charges": The sum of (i) all late payment charges paid by
Obligors on Delinquent Contracts after payment in full of any Scheduled Payments
due in a prior Due Period and Scheduled Payments for the related Due Period and
(ii) any other incidental charges or fees received from an Obligor, including,
but not limited to, late fees, collection fees and bounced check charges.
"Servicing Officers": The meaning set forth in the Servicing Agreement.
"State": Any state of the United States of America and, in addition, the
District of Columbia and Puerto Rico.
"Stated Maturity": With respect to the Notes of any Series, the date
specified in such Notes and the related Series Supplement as the "Stated
Maturity."
"Subordinated Note": With respect to any Series, the subordinated note
dated as of the related Series Closing Date, made by the Issuer to TFI as a part
of the consideration for the Purchased Assets related to such Series and the
payments of which are subordinated as set forth in the related Series
Supplement. The form of the Subordinated Note is attached to the Sale Agreement
as Exhibit D.
"Subsequent Assignment": The meaning specified in the Sale Agreement.
"Subservicer": With respect to each Series, Sage Systems, Inc. and its
permitted successors and assigns. This Indenture has been drafted assuming that
at all times one Person shall serve as Subservicer for all Series Outstanding.
"Substitute Contract": The meaning specified in the Sale Agreement.
"Substitute Receivable": The meaning specified in the Sale Agreement.
"Substitution Limit": With respect to the Contracts supporting any
Series of Notes, 1.5% of the Initial Aggregate Collateral Value of such Series.
"TFI": Trendwest Funding II, Inc., a Delaware corporation, and its
permitted successors and assigns.
"Transaction Documents": This Indenture, each Series Supplement, the Note
Purchase Agreements, the Servicing Agreement, the Receivables Purchase
Agreement, the Custodian Agreement, the Sale Agreement and the Notes.
"Trendwest": Trendwest Resorts, Inc., an Oregon corporation, and its
permitted successors and assigns.
"Trigger Event": With respect to any Series, the meaning specified in the
related Series Supplement.
"Trustee": With respect to each Series, LaSalle National Bank, until a
successor Person shall have become the Trustee for such Series pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Person.
"Trustee Fee": With respect to each Series, the fee payable on each
Payment Date to the Trustee in consideration for the Trustee's performance of
its duties with respect to such Series pursuant to this Indenture as Trustee, in
an amount equal to the product of (i) one-twelfth of the Trustee Fee Rate and
(ii) he aggregate principal amount of Notes Outstanding of such Series on the
preceding Payment Date after giving effect to distributions on such date (or, in
the case of the Initial Payment Date, the initial aggregate principal amount of
the Notes of such Series).
"Trustee Fee Rate": 0.04% per annum.
"TW Holdings": TW Holdings, Inc., a Nevada corporation, and its permitted
successors and assigns.
"UCC": The Uniform Commercial Code as it may from time to time be in effect
in the applicable State.
"Upgrade": The prepayment of a Contract and entry into a new contract
by an Obligor, WorldMark and Trendwest, pursuant to which the Obligor purchases
additional Credits in exchange for an increase in the principal balance owed by
the Obligor.
"Upgrade Contract": The new contract entered into by an Obligor,
Trendwest and the Club related to an Upgrade by such Obligor. The Receivable
relating to each Upgrade Contract shall be pledged to the Trustee pursuant to
Section 4.03(g) hereof.
"Vice President": With respect to the Issuer or the Trustee, any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
"WorldMark" or the "Club": WorldMark, the Club, a California nonprofit
mutual benefit corporation, and its successors in interest.
ARTICLE TWO NOTE FORM
Section 2.01 Form. The Notes of each Series, together with the
certificates of authentication, shall be in substantially the forms set forth in
the related Series Supplement, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or the related Series Supplement, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon, as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any manner acceptable to the Trustee and the initial purchasers of the Notes,
all as determined by the officers executing such Notes, as evidenced by their
execution of such Notes.
ARTICLE THREE THE NOTES
Section 3.01 Denomination. The aggregate principal amount of Notes
of all Series which may be authenticated and delivered under this Indenture is
not limited, except as may be otherwise provided in the related Series
Supplement (except for Notes authenticated and delivered upon registration of
transfer or in exchange for or in lieu of, other Notes pursuant to Sections
3.04, 3.05, 3.06 or 9.05 hereof). The Notes shall be issuable only as registered
Notes without coupons in the denominations of at least $100,000; provided,
however, that the foregoing shall not restrict or prevent the transfer in
accordance with Sections 3.04 and 3.05 hereof of any Note with a remaining
balance of less than $100,000.
The Notes may be issued in one or more Series and, within each Series,
in one or more Classes. With respect to the Notes of any Series, there shall be
established in the related Series Supplement prior to the issuance of the Notes
of such Series (collectively, the "Principal Terms"):
(a) the title of the Notes and the Series and the Class or Classes in which
such Notes shall be included;
(b) the limit, if any, upon the aggregate principal amount of the Notes of
such title and the Notes of each Class of such Series which may be authenticated
and delivered under this Indenture (except for Notes of such Series
authenticated and delivered upon registration of transfer or in exchange for or
in lieu of, other Notes of such Series pursuant to Sections 3.04, 3.05, 3.06 or
9.05 hereof);
(c) the Stated Maturity of such Notes;
(d) the Note Interest Rate at which such Notes shall bear interest;
(e) the Series Closing Date and the Initial Payment Date with respect to
such Notes;
(f) any additional covenants of the Issuer relating to such Notes; and
(g) any other terms of such Notes (which terms shall control to the extent
they are inconsistent with the provisions of this Indenture).
Section 3.02 Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by the President, one of the Vice
Presidents or the Treasurer of the Issuer. The signature of these officers on
the Notes must be manual.
Notes bearing the manual signatures of individuals who were at any time the
proper officers of the Issuer shall bind the Issuer, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication or delivery of such Notes or did not hold offices at the date of
authentication or delivery of such Notes.
Each Note shall bear on its face the appropriate Delivery Date and be dated
as of the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee or by any Authenticating Agent by the manual signature of one of its
authorized officers, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 3.03 Notes as Debt. For all federal, State, local and
foreign tax purposes, all Noteholders shall treat the Notes of each Class of
each Series as debt of the Issuer.
Section 3.04 Registration, Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept initially at the Corporate Trust Office of
the Trustee a register (the "Note Register"), in which, subject to such
reasonable regulations as it may prescribe, the Issuer shall provide for the
registration of Notes and the registration of transfers of Notes. LaSalle
National Bank, 135 South LaSalle Street, Suite 1625, Chicago, Illinois 60674,
Attention: Asset Backed Securities, TRI Funding II [specify Series] is hereby
appointed "Note Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided. The Trustee shall have the right to rely conclusively
upon a certificate of the Note Registrar as to the names and addresses of the
holders of the Notes and the principal amounts and numbers of such Notes as
held. Upon request of any Holder, the Trustee shall, to the extent it may
lawfully do so, furnish such Holder with a list of the names and addresses of
all Holders entered on the Note Register indicating the principal amount and
serial number, if any, of each Note held by each Holder.
(b) Only upon surrender for registration of transfer of any Note at
the office or agency of the Issuer to be maintained as provided in Section
11.02(n) hereof and subject to the conditions set forth in Section 3.05 and
Section 3.06 hereof, the Issuer shall execute, and the Trustee or its agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations of such
Series and, if applicable, such Class, and of a like aggregate principal amount
and Stated Maturity.
(c) At the option of the Holder, Notes may be exchanged for other
Notes of the same Class and Series of any authorized denominations and of a like
aggregate principal amount and Stated Maturity, only upon surrender of the Notes
to be exchanged at such office or agency, subject to Section 3.06 hereof.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Trustee or its agent shall authenticate and deliver, the Notes which the
Noteholder making the exchange is entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of such transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Note Registrar) be duly
endorsed or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Issuer and the Note Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 3.04 or 9.05 hereof not involving any registration
of transfer.
Notwithstanding anything else to the contrary contained in this
Indenture, the obligation of the Issuer to pay the principal of and interest on
the Notes of each Series is not a general obligation of the Issuer, but is
limited solely to the amounts available out of the related Series Collateral
pledged to the Trustee under this Indenture.
Section 3.05 Limitation on Transfer and Exchange. The Notes will
not be registered or qualified under the Securities Act of 1933, as amended (the
"1933 Act"), or the securities laws of any State. No transfer of any Note shall
be made unless that transfer is made in a transaction which does not require
registration or qualification under the 1933 Act or under applicable State
securities laws. In the event that a transfer is to be made without registration
or qualification, such Noteholder's prospective transferee shall either (i)
deliver to the Trustee an investment letter substantially in the form set forth
on Exhibit A hereto (the "Investment Letter") or (ii) deliver to the Trustee an
opinion of counsel that the transfer is exempt from the 1933 Act and will not
result in the Issuer being required to register as an "investment company" under
the Investment Company Act of 1940, as amended. Such opinion may be given by an
attorney that is an employee or officer of such transferee. Neither the Issuer
nor the Trustee is obligated to register or qualify the Notes under the 1933 Act
or any other securities law.
Each prospective transferee acquiring a Note and each prospective owner
of a beneficial interest in a Note acquiring such beneficial interest (the
prospective transferee and the prospective owner of a beneficial interest,
collectively, the "Prospective Owner") shall represent and warrant, in writing,
to the Issuer, TFI, the Servicer, the Trustee and any of their successors that
(A) the Prospective Owner (1) is not an "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or a "plan" within the meaning of Section 4975(e)(1) of
the Code (each a "Plan") and (2) is not acquiring (or considered to be
acquiring) the Note with the assets of any entity whose underlying assets
include the assets of a Plan by reason of such a Plan's investment in such
entity, or (B) the Prospective Owner is an insurance company that is acquiring
the Note for its own account, with its general corporate assets and not with the
assets of a "separate account" within the meaning of Section 3(17) of ERISA and
the conditions of Prohibited Transaction Class Exemption 83-1 and/or Class
Exemption 95-60 have been satisfied by such Prospective Owner, or (C) the
Prospective Owner is an insurance company that is acquiring the Note with the
assets of a separate account within the meaning of Section 3(17) of ERISA and
the conditions of Prohibited Transaction Class Exemption 90-1 have been
satisfied by such Prospective Owner, or (D) the Prospective Owner is a bank
collective investment fund and the conditions of Prohibited Transaction Class
Exemption 91-38 have been satisfied by such Prospective Owner.
The Trustee shall have no liability to any Series Trust Estate or any
Noteholder arising from a transfer of any such Note in reliance upon a
certification or opinion described in this Section 3.05.
Each Holder, by acceptance of any Note, agrees that such Holder will
not offer, sell or transfer any Note to a Restricted Investor. Notwithstanding
the foregoing restrictions on the offer, transfer or sale of the Notes, any
Noteholder may offer, sell or transfer any of its Notes to any Permitted
Institutional Investor (other than a Restricted Investor) holding securities in
a Competitor as part of its investment portfolio. In determining whether a
transferee is a Restricted Investor, a Noteholder shall be entitled to rely on a
certificate to that effect executed by an authorized officer of such Person.
Section 3.06 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Note Registrar, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such destruction, loss, theft
or mutilation), and (ii) there is delivered to the Trustee such security or
indemnity as may be required by the Trustee to save the Issuer and the Trustee
or any agent of any of them harmless, then, in the absence of notice to the
Issuer or the Note Registrar that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and, upon its request, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Note of the same tenor, initial principal
amount, Series, Class and Stated Maturity, bearing a number not
contemporaneously outstanding. If the Holder of such Note is, or is a nominee
for, an original purchaser of the Notes or another Holder with a minimum net
worth of at least $50,000,000, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory for the purposes of clause (ii)
above. If after the delivery of such new Note, a bona fide purchaser of the
original Note in lieu of which such new Note was issued presents for payment
such original Note, the Issuer and the Trustee shall be entitled to recover such
new Note from the person to whom it was delivered or any person taking
therefrom, except a bona fide purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Issuer or the Trustee or any agent of any of
them in connection therewith. If any such mutilated, destroyed, lost or stolen
Note shall have become or shall be about to become due and payable, or shall
have become subject to redemption in full, instead of issuing a new Note, the
Issuer may pay such Note without surrender thereof, except that any mutilated
Note shall be surrendered.
Upon the issuance of any new Note under this Section 3.06, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 3.06, in lieu of any
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes of the same Class and Series duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07 Payment of Principal and Interest; Principal and
Interest Rights Preserved. (a) The Notes of each Class of each Series shall bear
interest on the unpaid principal amount thereof from and including the related
Series Closing Date at the applicable Note Interest Rate (calculated on the
basis of a 360-day year consisting of 12 months of 30 days each) through the day
immediately preceding the Initial Payment Date for such Series and thereafter,
monthly from and including the most recent Payment Date through the day
immediately preceding the applicable Payment Date and (to the extent that the
payment of such interest shall be legally enforceable) on any overdue
installment of principal or interest from the date such principal or interest
became due and payable until fully paid. Interest shall be due and payable in
arrears on each Payment Date, with each payment of interest calculated as
described above on the unpaid principal amount of the Outstanding Notes of each
Class of each Series on the day immediately preceding such Payment Date or, with
respect to interest payable on the Initial Payment Date for such Series, on the
principal amount of the Outstanding Notes on the related Series Closing Date;
provided, however, that in making any interest payment, if the interest
calculation with respect to any Note shall result in a portion of such payment
being less than $.01, then such payment shall be decreased to the nearest whole
cent, and no subsequent adjustment shall be made in respect thereof.
(b) The principal of each Note shall be payable in installments
ending no later than the Stated Maturity thereof unless such Note becomes due
and payable at an earlier date by declaration of acceleration or automatic
acceleration, call for redemption or otherwise. All reductions in the principal
amount of any Note effected by payments of installments of principal made on any
Payment Date shall be binding upon all future Holders of such Note, and of any
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment is noted on such Note. Each
installment of principal payable on the Notes of each Class of each Series shall
be in an amount equal to the Principal Distribution Amount applicable to such
Class. The principal payable on the Notes of each Series shall be paid on each
Payment Date beginning on the Initial Payment Date for such Series and ending on
the Final Payment Date for such Series on a pro rata basis based upon the face
amount of each Note of each Class of such Series; provided, however, that if as
a result of such proration a portion of such principal would be less than $.01,
then such payment shall be decreased to the nearest whole cent, and such portion
shall be applied to the next succeeding principal payment.
(c) The principal of and interest on the Notes are payable by check
mailed by first-class mail to the Person whose name appears as the Registered
Holder of such Note on the Note Register at the address of such Person as it
appears on the Note Register or, if requested by such Registered Holder, by wire
transfer in immediately available funds to the account specified in writing to
the Trustee by such Registered Holder at least five Business Days prior to the
Record Date for the Payment Date on which wire transfers will commence, in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts; provided, however,
that the Trustee shall, unless and until otherwise instructed by such
Noteholder, pay each initial Noteholder via wire transfer in immediately
available funds to the accounts specified, if any, in the related Note Purchase
Agreement. All payments on the Notes shall be paid without any requirement of
presentment. The Issuer shall notify the Trustee at the close of business on the
Record Date next preceding the Payment Date on which the Issuer expects that the
final installment of principal of such Note will be paid that the Issuer expects
that such final installment will be paid on such Payment Date. Notice of final
payment on any Note shall be mailed by the Trustee to the Holder of such Note in
accordance with Section 12.04(a) hereof. Funds representing any such checks
returned undeliverable shall be held in accordance with Section 11.02(o). Upon
payment in full of all amounts owed to the Noteholders under the Notes, the
Notes shall be void and the Noteholders shall use reasonable efforts to return
their Notes to the Trustee at the Corporate Trust Office for cancellation upon
written request of the Trustee or the Issuer. In the event a Noteholder cannot
return its Note to the Trustee within 60 days following payment in full of the
Note, it shall send the Trustee an affidavit certifying such loss upon request.
Section 3.08 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee shall treat the Person in whose name any Note is
registered as the owner of such Note for the purpose of receiving payments of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
Section 3.09 Cancellation. All Notes surrendered to the Trustee for
payment, registration of transfer or exchange (including Notes surrendered to
any Person other than the Trustee which shall be delivered to the Trustee) shall
be promptly canceled by the Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section 3.09, except
as expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be disposed of by the Trustee as is customary with its standard practice.
ARTICLE FOUR ORIGINAL ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL
Section 4.01 Conditions to Original Issuance of Notes. (a) The
Issuer may from time to time direct the Trustee to authenticate one or more new
Series of Notes, with or without Classes within such Series. The Notes of each
Series shall be payable only out of the Series Trust Estate with respect to such
Series and in accordance with the Transaction Documents. The Receivables and any
collections relating thereto that the Issuer pledged to the Trustee in
connection with the issuance of a Series shall not be available to pay amounts
owed under the Notes of any other Series unless the Trustee has specifically
released a Receivable from the Lien created by this Indenture and the Issuer
subsequently pledges such Receivable to the Trustee in support of another
Series.
(b) The Trustee shall, upon receipt of an Issuer Order and upon the
satisfaction of the conditions set forth below, authenticate and deliver the
Notes of a Series on the related Series Closing Date. The Outstanding Notes of
each Class of each Series shall be equally and ratably entitled, with all other
Notes of such Class as provided herein, to the benefits of this Indenture
without preference, priority or distinction, all in accordance with the terms
and provisions of this Indenture and the related Series Supplement.
(c) On or before the Series Closing Date relating to any new Series,
the parties hereto will execute and deliver a Series Supplement which shall
specify the Principal Terms of such new Series. The terms of such Series
Supplement may modify or amend the terms of this Indenture solely as applied to
such new Series. The obligation of the Trustee to authenticate, execute and
deliver the Notes of each Series and to execute and deliver the related Series
Supplement is subject to the satisfaction of the following conditions:
(i) the Issuer shall have executed the Notes to be
authenticated and delivered on the related Series Closing Date and
shall have delivered such Notes to the Trustee on or prior to the
related Series Closing Date;
(ii) the Issuer shall have delivered to the Custodian on or
prior to the related Series Closing Date the original executed
counterpart of each Contract (and the rest of the contents of the
related Custodian File) identified in the related Series Contract
Schedule on such Series Closing Date, and the Trustee shall have
received a receipt from the Custodian evidencing such delivery;
(iii) the Issuer and the Servicer shall have delivered to the
Trustee on or prior to the related Series Closing Date an Officer's
Certificate dated as of such Series Closing Date of each of the Issuer
and the Servicer, stating, as applicable, that (A) such Person is not
in Default under this Indenture or the Servicing Agreement and that the
issuance of the Notes of such Series will not result in any breach of
any of the terms, conditions or provisions of, or constitute a default
under, such Person's certificate of incorporation, by-laws or other
organizational documents, as applicable, or any material indenture,
mortgage, deed of trust or other agreement or instrument to which such
Person is a party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which such Person is
a party or by which it may be bound or to which it may be subject; and
(B) that all conditions precedent provided in this Indenture relating
to the authentication and delivery of the Notes of such Series have
been complied with;
(iv) each of the Issuer, TFI, the Custodian and the Servicer
shall have delivered to the Trustee on or prior to the related Series
Closing Date a Board Resolution of its board of directors authorizing,
as applicable, the execution, delivery and performance of this
Indenture, the related Series Supplement and the other Transaction
Documents and the transactions contemplated hereby and thereby,
certified by an officer of the Issuer, TFI, the Custodian or the
Servicer, as applicable;
(v) each of the Issuer, TFI, the Custodian and the Servicer
shall have delivered to the Trustee on or prior to the related Series
Closing Date a copy of an officially certified document, dated not more
than 30 days prior to such Series Closing Date, evidencing its due
organization and good standing;
(vi) each of the Issuer, TFI, the Custodian and the Servicer
shall have delivered to the Trustee on or prior to the related Series
Closing Date copies of its charter and by-laws certified by its
Secretary or an Assistant Secretary;
(vii) the Issuer shall have delivered, or cause to be
delivered, to the Trustee, on or prior to the related Series Closing
Date, evidence of filing (a) with the Secretary of State of the State
of the Issuer's chief executive office, UCC-1 financing statements
executed by the Issuer, as debtor, and naming the Trustee for the
benefit of the Noteholders of such Series as secured party, and the
Series Trust Estate of such Series as collateral; and (b) with the
Secretary of State of the States in which the chief executive office of
each of Trendwest, TW Holdings and TFI and is located, UCC-1 financing
statements executed by the applicable transferor as debtor and naming
the applicable transferee as secured party and naming as collateral the
collateral transferred by each transferor;
(viii) the Servicer shall have delivered to the Trustee on or
prior to the related Series Closing Date a certificate listing the
Servicing Officers of the Servicer as of such Series Closing Date and
setting forth specimen signatures of such Servicing Officers;
(ix) the Issuer shall have delivered to the Trustee on or
prior to the related Series Closing Date an executed copy of the
Servicing Agreement, the Receivables Purchase Agreement and the Sale
Agreement and all amendments and supplements thereto;
(x) TFI shall have delivered to the Trustee on or prior to
the related Series Closing Date an executed copy of the Receivables
Purchase Agreement and the Sale Agreement and all amendments and
supplements thereto;
(xi) the Custodian shall have delivered to the Trustee on or
prior to the related Series Closing Date an Officer's Certificate dated
as of such Series Closing Date stating that (A) the execution, delivery
and performance of the Custodian Agreement will not result in a breach
of any of the terms, conditions, provisions of, or constitute a default
under, the Custodian's certificate of incorporation or by-laws or any
material indenture, mortgage, deed of trust or other agreement or
instrument to which such Person is a party or by which it is bound, or
any order of any court or administrative agency entered into in any
proceeding to which the Custodian is a party or by which it may be
bound or to which it may be subject;
(xii) the Rating Agency shall have delivered written
confirmation that, with respect to each existing rated Class of each
Series Outstanding, the issuance of Notes on such Series Closing Date
will not result in a downgrade or withdrawal of such existing Classes
or Series of Notes; and
(xiii) the senior Class of the Notes issued on such Series
Closing Date must constitute more than 50% of the aggregate principal
balance of Notes of such Series and must be rated at least investment
grade by the Rating Agency.
The Issuer shall deliver the written confirmation specified in clause (xii)
above and the letter of the Rating Agency contemplated in clause (xiii) above to
the Noteholders of each Series Outstanding prior to such Series Closing Date
promptly upon receipt of such documents.
Section 4.02 Security for Notes. (a) Filing. The Issuer shall file
UCC-1 financing statements described in Section 4.01(c)(vii) hereof in
accordance with such Section 4.01(c)(vii). From time to time, the Servicer shall
take or cause to be taken such actions and execute such documents as are
necessary or deemed by the Trustee to be appropriate to perfect the Trustee's
interests in the Receivables and protect the Trustee's interest in the related
Contracts and Credits against all other Persons, including, without limitation,
the filing of financing statements, amendments thereto and continuation
statements, the execution of transfer instruments and the making of notations on
or taking possession of all records or documents of title.
(b) Name Change or Relocation. If any change in the Issuer's name,
identity, structure or the location of its principal place of business or chief
executive office occurs, then the Issuer shall deliver 30 days' prior written
notice of such change or relocation to the Servicer, the Trustee, the Rating
Agency and the Noteholders and no later than the effective date of such change
or relocation, the Servicer shall file such amendments or statements as may be
required to preserve and protect the Trustee's interests in each Series Trust
Estate.
(c) Chief Executive Office. During the term of this Indenture, the Issuer
will maintain its chief executive office and principal place of business in one
of the States of the United States.
(d) Costs and Expense. The Servicer agrees to pay all reasonable
costs and disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Trustee's right, title and
interest in and to each Series Trust Estate.
Section 4.03 Substitution and Purchase of Receivables; Upgrade
Contracts. (a) If at any time the Issuer or the Trustee obtains knowledge
(within the meaning of 7.01(e) hereof), discovers or is notified by the Servicer
that any of the representations and warranties of Trendwest or TFI in the Sale
Agreement or Trendwest, the Prior Issuer or TW Holdings in the Receivables
Purchase Agreement were incorrect at the time as of which such representations
and warranties were made, then the Person discovering such defect, omission, or
circumstance shall promptly notify the other parties to this Indenture, the
Noteholders and Trendwest.
(b) In the event any representation or warranty of Trendwest or TFI
in the Sale Agreement or Trendwest, the Prior Issuer or TW Holdings in the
Receivables Purchase Agreement is incorrect and materially and adversely affects
the value of a Contract, the related Receivable or the related Credits, or the
interests of the Holders of the Notes, or in the event of any breach of any of
the representations and warranties set forth in Sections 3.01(a)(v),
3.01(a)(vi), 3.01(a)(vii), 3.01(a)(xiii), 3.01(a)(xiv), 3.01(a)(xvi),
3.01(a)(xxii) or 3.01(a)(xxiii) of each of the Sale Agreement or the Receivables
Purchase Agreement, then the Issuer shall require TFI or Trendwest, pursuant to
the Sale Agreement or the Receivables Purchase Agreement, as applicable, to
eliminate or otherwise cure the circumstance or condition which has caused such
representation or warranty to be incorrect within 30 days of discovery or notice
thereof. If TFI or Trendwest fails or is unable to cure such circumstance or
condition in accordance with the Sale Agreement or the Receivables Purchase
Agreement, as applicable, then the Issuer shall require TFI or Trendwest to
substitute or purchase pursuant to the Sale Agreement or the Receivables
Purchase Agreement, as applicable, any Receivable related to any Contract as to
which such representation or warranty is incorrect within the time specified in
Section 3.03 of the Sale Agreement or the Receivables Purchase Agreement. The
Servicer shall remit the proceeds of a purchase to the Subservicer for deposit
into the Clearing Account upon receipt of such amounts by the Servicer pursuant
to Section 3.03 of the Sale Agreement or Section 3.03 of the Receivables
Purchase Agreement, as applicable.
(c) If the Issuer fails to enforce the purchase or substitution
obligation of TFI or Trendwest under the Sale Agreement or the Receivables
Purchase Agreement, the Trustee is hereby appointed attorney-in-fact to act on
behalf of and in the name of the Issuer to require such purchase or
substitution.
(d) With respect to any Defaulted Contract or Delinquent Contract,
the Issuer shall be entitled to purchase the Receivable related to such Contract
or to deliver a Substitute Receivable meeting the same requirements as those
specified in Section 3.04 of each of the Sale Agreement or the Receivables
Purchase Agreement for substitutions and purchases by TFI or Trendwest upon
breaches of a representation or warranty by TFI, Trendwest, the Prior Issuer or
TW Holdings thereunder; provided, however, that the cumulative Collateral Value
of Defaulted Contracts and Delinquent Contracts which are purchased or
substituted by the Issuer with respect to the Receivables supporting any Series
of Notes (measured as of the date of substitution) shall not exceed the Purchase
and Substitution Limit; provided, further, that the aggregate Collateral Value
of all Substitute Receivables with respect to any Series in any calendar year
cannot exceed the Substitution Limit.
(e) The Issuer shall provide to the Trustee, or with respect to item
(ii) below the Custodian, on the date of delivery of any Substitute Contract the
items listed in (i) and (ii) below.
(i) a supplement to the Sale Agreement substantially in the
form of Annex A to the Sale Agreement and Exhibit B hereto, subjecting
such Substitute Contract to the provisions thereof and hereof, amending
the Series Contract Schedule for the applicable Series and providing
with respect to such Substitute Contract the information set forth in
the Contract Schedule; and
(ii) the original executed counterpart of the Contract and the Custodian
File relating to such Substitute Contract.
(f) If a Contract becomes a Defaulted Contract, the Issuer may
purchase such Contract by paying to the Trustee out of the amount paid to the
Issuer pursuant to Section 5.01 of the applicable Series Supplement the Purchase
Price for such Defaulted Contract; provided, however, the Issuer cannot purchase
a Defaulted Contract if the Collateral Value of all such Defaulted Contracts so
purchased would exceed the amount paid to the Issuer pursuant to Section 5.01 of
such Series Supplement; further provided, that the purchases pursuant to this
Section 4.03(f) shall be deemed to be purchases subject to the Purchase and
Substitution Limit as if repurchased pursuant to Section 4.03(b).
(g) If an Obligor desires to enter into an Upgrade Contract and the
Issuer purchases the Receivable relating to such Upgrade Contract from TFI
pursuant to Section 3.04(e) of the Sale Agreement, then the Servicer shall cause
Trendwest to deliver such Upgrade Contract to the Issuer immediately upon
execution by Trendwest, WorldMark and the Obligor, and the Issuer shall pledge
the Receivable relating to such Upgrade Contract to the Trustee immediately upon
such execution by delivering (i) to the Trustee a supplemental grant in the form
of Annex A to the Sale Agreement and Exhibit B hereto, subjecting such Upgrade
Contract and the related Receivable to the provisions thereof and hereof,
amending the Series Contract Schedule for the applicable Series and providing
with respect to such Upgrade Contract the information set forth in the Contract
Schedule and (ii) to the Custodian the original executed counterpart of the
Upgrade Contract and the rest of the contents of the related Custodian File.
Section 4.04 Releases. (a) The Issuer shall be entitled to obtain a
release from the lien of this Indenture for any Contract, the related Receivable
and the related Credits at any time (i) after a payment by TFI or Trendwest of
the Purchase Price of the Receivable, (ii) after a Substitute Contract is
substituted for such Contract, or (iii) upon the purchase of a Contract in
accordance with Section 3.10(b) of the Servicing Agreement, if the Issuer
delivers to the Trustee an Officer's Certificate (A) identifying the Receivable
and the related Contract and the related Credits to be released, (B) requesting
the release thereof, (C) setting forth the amount deposited in the Clearing
Account with respect thereto, in the event a Contract, the related Receivable
and the related Credits are being released from the lien of this Indenture
pursuant to (i) or (iii) above, and (D) certifying that the amount deposited in
the Clearing Account equals (x) the Purchase Price of the Receivable related to
such Contract, in the event a Contract, the related Receivable and the related
Credits are being released from the lien of this Indenture pursuant to (i) above
or (y) the entire amount set forth in Section 3.10(b) of the Servicing Agreement
with respect to such Contract, the related Receivable and related Credits in the
event of a release from the lien of this Indenture pursuant to (iii) above;
provided, however, that upon the termination of a Contract, any residual
proceeds from the related Credits shall be placed in the Clearing Account prior
to the Trustee or the Issuer releasing the related Credits from the security
interest granted to the Trustee by the Issuer pursuant to this Indenture or to
the Issuer by TFI pursuant to the Sale Agreement.
(b) Upon satisfaction of the conditions specified in subsection (a)
above or upon the satisfaction of the conditions in Section 4.03(e) or the
remittance of the Purchase Price by the Issuer pursuant to Section 4.03(d) or
Section 4.03(f) hereof and Section 3.04 of the Sale Agreement with respect to a
Contract, the Trustee shall release from the lien of this Indenture the
Contract, the related Receivable and the related Credits described in the
Issuer's request for release and shall deliver, or instruct the Custodian to
deliver, to or upon the order of the Issuer such Contract and the related
Custodian File.
(c) In connection with the issuance of a new Series of Notes, the
Trustee, without the consent of the Holders of Notes of any Series, shall, upon
Issuer Order, on a Series Closing Date release to the Issuer Receivables (which
shall be specified in such Issuer Order) from the Series Collateral supporting
any existing Series of Notes but only if the following conditions are met (as
certified by the Issuer and the Servicer to the Trustee in writing in a
certificate substantially in the form of Exhibit C hereto): (i) there is
currently no Default, Event of Default, Trigger Event or Cash Accumulation Event
that has occurred and is continuing (nor has any Default, Event of Default or
Cash Accumulation Event existed for a period of 90 consecutive days immediately
preceding such proposed release nor is a Trigger Event Period continuing on the
date of such release) with respect to the Series related to any Receivable that
the Issuer desires to have released from the Lien of the Trustee with respect to
such Series; (ii) with respect to each Series from which Receivables are
proposed to be released, after giving effect to such release, (A) the Aggregate
Collateral Value of such Series (including only Receivables which, on the date
of such release, satisfy all of the representations and warranties set forth in
paragraphs (a) and (b) of Section 3.01 of the Sale Agreement as if such
representations and warranties were made as of the date of such release) must be
greater than or equal to the product of (x) the aggregate principal balance of
all Notes Outstanding of such Series on such date and (y) a fraction the
numerator of which is the Initial Aggregate Collateral Value for such Series and
the denominator of which is the initial aggregate principal balance of the Notes
of such Series as of the Series Closing Date of such Series (the Issuer Order
shall specify the minimum Collateral Value required for each such Series to
satisfy this condition), and (B) the amount in the Reserve Account is equal to
the Reserve Account Required Balance for such Series; (iii) simultaneous with
such release, the Issuer pledges all of such released Receivables to the Trustee
in connection with the issuance of a new Series of Notes in accordance with the
terms of the Transaction Documents and (iv) the Independent Accountants
specified in Section 4.03 of the Servicing Agreement have delivered, at the sole
expense of the Issuer, the agreed-upon procedures letter, in substantially the
form attached as Exhibit A to the Servicing Agreement, to the Trustee, with
respect to such release (which indicates that the Series Trust Estate for such
Series contains the minimum Collateral Value necessary to satisfy clause (ii)(A)
above). If a release occurs prior to the Payment Date in any given month, the
calculations of Aggregate Collateral Value and the principal balance of the
Notes Outstanding for any Series made pursuant to this section 4.04(c) may be
made as of such Payment Date (after giving effect to the distributions made on
such Payment Date) instead of as of the date of the proposed release; provided,
that, the appropriate amounts for such distribution are being held in the
Collection Account or the Distribution Account for each applicable Series;
otherwise, the calculations shall be made as of the immediately preceding
Payment Date. The Issuer shall deliver (1) the certification of the Issuer and
the Servicer and (2) the agreed-upon procedures letter to each Noteholder of
each applicable Series promptly after each such release.
Section 4.05 Trust Estate. When required by the provisions of
Articles Four, Six and Twelve hereof, the Trustee for a Series shall execute
instruments to release property from the lien of this Indenture and the related
Series Supplement, or convey such Trustee's interest in the same, in a manner
and under circumstances which are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by such Trustee as
provided in this Article Four shall be bound to ascertain such Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
Section 4.06 Notice of Release. The Trustee shall be entitled to
receive at least 10 days' notice of any action to be taken pursuant to Section
4.04(a) hereof, accompanied by copies of any instruments involved.
Section 4.07 Opinions as to Trust Estate. (a) On each Series
Closing Date, the Issuer shall furnish to the Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any UCC financing statements and continuation
statements, as are necessary to (x) perfect the transfers from and grants of
security interests by, (i) Trendwest, the Prior Issuer and TW Holdings to TFI
and (ii) TFI to the Issuer, and (y) perfect and make effective the first
priority lien and security interest in favor of the Trustee, for the benefit of
the Noteholders of the related Series, created by this Indenture and reciting
the details of such action, or stating that, in the opinion of such counsel, no
such action is necessary to make such lien and security interest effective.
(b) With respect to each Series, on or before each anniversary of the
related Series Closing Date, the Issuer shall furnish to the Trustee (with a
copy to each of the Noteholders) an Opinion of Counsel with respect to each
jurisdiction in which a UCC financing statement has been filed against each of
TFI, the Prior Issuer, Trendwest, TW Holdings and the Issuer with respect to
such Series either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
this Indenture and the related Series Supplement, any indentures supplemental
hereto and thereto and any other requisite documents and with respect to the
execution and filing of any UCC financing statements and continuation statements
as is necessary to maintain the first priority lien and security interest
created by this Indenture and the Series Supplement with respect to such Series,
and the security interest, if applicable, created by the Sale Agreement or the
Receivables Purchase Agreement with respect to such Series and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, the related Series Supplement, any indentures supplemental
hereto and thereto and any other requisite documents and the execution and
filing of any UCC financing statements and continuation statements that will, in
the opinion of such counsel, be required to maintain the lien and security
interest of this Indenture and the related Series Supplement and the security
interest, if applicable, created by the Sale Agreement or the Receivables
Purchase Agreement with respect to such Series until the next date a
continuation statement must be filed to maintain the Trustee's interest in the
related Series Collateral.
Section 4.08. Classes. This Indenture has been drafted assuming that
each Series will be made up of more than one Class of Notes. If the Issuer
issues a Series that is not comprised of Classes of Notes, the Notes of such
Series shall be deemed to comprise one Class of the Notes for the purposes of
this Indenture.
ARTICLE FIVE SATISFACTION AND DISCHARGE
Section 5.01 Satisfaction and Discharge of Indenture. (a) Following
payment in full of (i) the Notes of any Series, (ii) the fees and charges of the
Trustee related to such Series and (iii) all other obligations of the Issuer
with respect to such Series under this Indenture and the related Series
Supplement, and the release by the Trustee of the related Series Trust Estate in
accordance with Section 5.01(b) hereof, this Indenture and the related Series
Supplement shall be discharged with respect to such Series.
(b) In connection with the discharge of this Indenture and the
related Series Supplement and the release of the related Series Trust Estate,
the Trustee shall release from the lien of this Indenture and the related Series
Supplement and shall deliver, or instruct the Custodian to deliver, to or upon
the order of the Issuer all property remaining in the related Series Trust
Estate and shall execute and file, at the expense of the Issuer, UCC financing
statements evidencing such discharge and release.
ARTICLE SIX DEFAULTS AND REMEDIES
Section 6.01 Events of Default. "Event of Default" wherever used herein
means any one of the following events:
(1) default in the payment of any interest upon any Note of a Series within
one Business Day after the same becomes due and payable; or
(2) default in the payment of any principal of any Note of a Series within
one Business Day after the same becomes due and payable; or
(3) default in the observance or performance of any covenant or agreement
of the Issuer made in this Indenture, any Series Supplement, the Note Purchase
Agreements, the Sale Agreement, the Custodian Agreement or the Servicing
Agreement (other than a covenant or warranty default, the observance or
performance of which is elsewhere in this Section 6.01 specifically dealt with),
or any representation or warranty of the Issuer made in this Indenture, any
Series Supplement, the Note Purchase Agreements, the Sale Agreement, the
Custodian Agreement, the Servicing Agreement or in any certificate or other
writing delivered pursuant hereto or thereto or in connection herewith or
therewith proving to have been incorrect in any material respect as of the time
when the same shall have been made and such default shall continue or not be
cured, or the circumstance or condition in respect of which such representation
or warranty was incorrect shall not have been eliminated or otherwise cured, for
a period of 30 days (except for defaults relating to Sections 4.03 and 11.02(a),
(b), (i), (j), (l), (q) and (s) hereof, which shall have no grace period) from
the earlier of the Issuer obtaining actual knowledge of, or receiving from the
Trustee or any Holder notice of, such default or incorrect representation or
warranty; or
(4) the Issuer becomes subject to registration as an "investment company"
under the Investment Company Act of 1940, as amended; or
(5) the filing of a petition or the entry of a decree or order for relief
by a court having jurisdiction in the premises in respect of the Issuer under
the Federal Bankruptcy Code or any other applicable federal or State bankruptcy,
insolvency, reorganization, liquidation or other similar law now or hereafter in
effect or any arrangement with creditors or appointing a receiver, liquidator,
assignee, trustee, or sequestrator (or other similar official) for the Issuer or
for any substantial part of its property in an involuntary case, or ordering the
winding up or liquidation of the Issuer's affairs, and the continuance of any
such petition undismissed or of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
(6) the institution by the Issuer of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Issuer to the institution of
bankruptcy or insolvency proceedings against the Issuer, or the filing by the
Issuer of a petition or answer or consent seeking reorganization or relief under
the Federal Bankruptcy Code or any other applicable federal or State bankruptcy,
insolvency, reorganization, liquidation or other similar law now or hereafter in
effect, or the consent by the Issuer to the filing of any such petition or to
the appointment of or possession by a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or other similar official) of the Issuer or of any
substantial part of the Issuer's property, or the making by the Issuer of any
assignment for the benefit of creditors, or the admission by either in writing
of its inability, or the failure by it generally, to pay its debts as they
become due, or the taking of corporate action by the Issuer in furtherance of
any such action; or
(7) (i) the impairment of the validity of any security interest of the
Trustee in the Trust Estate, except as expressly permitted, or (ii) creation of
any encumbrance not otherwise permitted which is not stayed or released within
10 days of the Issuer having knowledge of its creation; or
(8) a default in the observance or performance by both TFI and Trendwest of
their repurchase obligations pursuant to Section 3.03 of the Sale Agreement or
by Trendwest of its repurchase obligations under Section 3.03 of the Receivable
Purchase Agreement;
provided, however, that to the extent that the occurrence of the events in
clauses (3), (7) or (8) above do not affect the rights of the Holders of all
Series of Notes, then such events shall be an Event of Default only with respect
to the Series so affected; provided, further, that the occurrence of the events
in clauses (1) and (2) above shall only be an Event of Default with respect to
the Series so affected.
Section 6.02 Acceleration of Maturity; Rescission and Annulment. If
an Event of Default with respect to the Notes of any Series at the time
Outstanding occurs and is continuing, then Holders of not less than 66-2/3% in
aggregate principal amount of the Controlling Class of the Notes Outstanding of
such Series may declare, by notice in writing to the Trustee and the Issuer, or
may direct the Trustee to declare, by notice in writing to the Issuer, the
principal of all the Notes of such Series to be immediately due and payable, and
upon any such declaration, such principal shall become immediately due and
payable without any presentment, demand, protest or other notice of any kind
(except such notices as shall be expressly required by the provisions of this
Indenture), all of which are hereby expressly waived; provided, however, that if
an Event of Default under paragraph (5) or (6) of Section 6.01 hereof occurs
with respect to the Issuer, the Notes of all Series shall automatically become
due and payable without any declaration notice to the Issuer or the Trustee. The
Trustee shall send a copy of any such notice to the Rating Agency.
At any time after such a declaration of acceleration has been made, or
after such acceleration has automatically become effective, with respect to any
Series of Notes but before any Sale of the related Series Trust Estate has been
made or a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than 66-2/3% in aggregate principal amount of the Controlling Class of Notes
Outstanding of such Series, by written notice to the Issuer and the Trustee, may
rescind and annul such declaration or automatic acceleration and its
consequences (except that in the case of a payment default on the Notes of any
Series, the consent of not less than 66-2/3% in aggregate principal amount of
the Controlling Class of Notes Outstanding of such Series shall be required to
rescind and annul such declaration or automatic acceleration and its
consequences) if:
(1) the Issuer has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue installments of interest on all Notes of such Series,
(B) the principal of any Notes of such Series which
has become due otherwise than by such declaration of
acceleration or automatic acceleration and interest thereon at
the rate borne by such Notes from the time such principal
first became due until the date when paid, and
(C) all sums paid or advanced, together with
interest thereon, by the Trustee or any Holder of the Notes of
such Series hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee and such
Noteholders, their agents and counsel incurred in connection
with the enforcement of this Indenture to the date of such
payment or deposit; and
(2) all Events of Default, other than the nonpayment of the
principal of the Notes which have become due solely by such declaration
of acceleration or by automatic acceleration, have been cured or waived
as provided in Section 6.15 hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 6.03 Collection of Indebtedness and Suits for Enforcement
by Trustee. The Issuer covenants that if an Event of Default shall occur and be
continuing with respect to any Series of Notes and such Notes have been
declared, or automatically become, due and payable and such declaration or
automatic acceleration has not been rescinded and annulled, the Issuer will,
upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders
of such Notes, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal and overdue interest at
the applicable Note Interest Rate and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Issuer fails to pay such amount forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust may, institute
Proceedings for the collection of the sums so due and unpaid, and prosecute such
Proceeding to judgment or final decree, and enforce the same against the Issuer
and collect the monies adjudged or decreed to be payable in the manner provided
by law out of the property of the Issuer, wherever situated.
If an Event of Default occurs and is continuing with respect to the
Notes of any Series, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of such Notes by such
appropriate Proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
Section 6.04 Remedies. If an Event of Default shall have occurred
and be continuing with respect to the Notes of any Series, the Trustee may do
one or more of the following:
(a) institute Proceedings for the collection of all amounts
then due and payable on such Notes or under this Indenture, whether by
declaration, automatic acceleration or otherwise, enforce any judgment
obtained, and collect from the Issuer the monies adjudged due;
(b) take possession of and sell the related Series Trust
Estate securing such Notes or any portion thereof or rights or interest
therein, at one or more Sales called and conducted in any manner
permitted by law;
(c) institute any Proceedings from time to time for the
complete or partial foreclosure of the lien created by this Indenture
with respect to the related Series Trust Estate securing such Notes;
(d) during the continuance of a default under a Contract, exercise any of
the rights of the lender under such Contract; and
(e) exercise any remedies of a secured party under the UCC or
any applicable law and take any other appropriate action to protect and
enforce the rights and remedies of the Trustee or the Holders of such
Notes hereunder;
provided, however, that without the consent of the Holders of not less than
66-2/3% in principal amount of the Controlling Class of Notes Outstanding of
such Series, the Trustee may not sell or otherwise liquidate any portion of the
related Series Trust Estate unless the proceeds of such Sale or liquidation
distributable to the Holders of the Notes of such Series are sufficient to
discharge in full the amounts then due and unpaid upon such Notes for principal
and interest.
Section 6.05 Optional Preservation of Trust Estate. If (i) an Event
of Default shall have occurred and be continuing with respect to the Notes of
any Series and (ii) no Notes of such Series have been declared, or have
automatically become, due and payable, or such declaration or automatic
acceleration and its consequences have been annulled and rescinded, the Trustee,
upon request from the Holders of a majority in principal amount of the
Controlling Class of the Notes Outstanding of such Series, may elect, by giving
written notice of such election to the Issuer, to take possession of and retain
the portion of the related Series Trust Estate securing such Notes intact,
collect or cause the collection of the proceeds thereof and make and apply all
payments and deposits and maintain all accounts in respect of such Notes in
accordance with the provisions of Article Twelve of this Indenture. If the
Trustee is unable to or is stayed from giving such notice to the Issuer for any
reason whatsoever, such election shall be effective as of the time of such
determination or request, as the case may be, notwithstanding any failure to
give such notice, and the Trustee shall give such notice upon the removal or
cure of such inability or stay (but shall have no obligation to effect such
removal or cure). Any such election may be rescinded with respect to any portion
of the Series Trust Estate securing such Notes remaining at the time of such
rescission by written notice to the Trustee and the Issuer from the Holders of a
majority in principal amount of the Controlling Class of Notes Outstanding of
such Series.
Section 6.06 Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
Proceeding relating to the Issuer or any other obligor upon any of the Notes of
any Series or the property of the Issuer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration, automatic
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Issuer for the payment of overdue principal or interest)
shall be entitled and empowered to intervene in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of
the Notes issued hereunder and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof) and of the
Noteholders allowed in such judicial Proceeding, and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such Proceeding.
Section 6.07 Trustee May Enforce Claims Without Possession of
Notes. (a) In all Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of the Transaction Documents to
which the Trustee shall be a party), the Trustee shall be held to represent all
of the Noteholders, and it shall not be necessary to make any Noteholder a party
to any such Proceedings.
(b) All rights of actions and claims under the Transaction Documents
or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceedings instituted by the Trustee shall be
brought in its own name as Trustee of an express trust, and any recovery whether
by judgment, settlement or otherwise shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the benefit of the Holders of the Notes
and shall be distributed as set forth in Section 6.08 hereof.
Section 6.08 Application of Money Collected. If the Notes of any
Series have been declared, have automatically become, or otherwise become due
and payable following an Event of Default and such declaration or automatic
acceleration has not been rescinded or annulled, any money collected by the
Trustee with respect to such Notes pursuant to this Article Six or otherwise and
any other money that may be held thereafter by the Trustee as security for such
Notes, including without limitation the amounts in the Reserve Account related
to such Series, shall be applied as set forth, for each Series, in the related
Series Supplement, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, without
presentation of any Notes of such Series.
Section 6.09 Limitation on Suits. No Holder of any Note of any
Series shall have any right to institute any Proceeding, judicial or otherwise,
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(2) the Holders of not less than 66-2/3% in principal amount
of the Outstanding Notes of the applicable Series shall have made
written request to the Trustee to institute Proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice, request and
offer of security or indemnity has failed to institute any such Proceedings; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 30-day period by the Holders of
not less than 66-2/3% or more in principal amount of the Outstanding
Notes of the applicable Series;
it being understood and intended that no one or more Holders of Notes of any
Class of any Series shall have any right in any manner whatever by virtue of, or
by availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Notes of such Class or any other Series, or
to obtain or to seek to obtain priority or preference over any other Holders of
Notes of such Class or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the Holders
of Notes of such Class.
Section 6.10 Unconditional Right of Noteholders to Receive
Principal and Interest. Notwithstanding any other provision in this Indenture,
the Holders of Notes of each Series shall have the right, which is absolute and
unconditional, to receive payment of the principal, interest, and premium, if
any, on such Note as such principal, interest, and premium, if any, becomes due
and payable and to institute any Proceeding for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Noteholder.
Section 6.11 Restoration of Rights and Remedies. If the Trustee or
any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such
Noteholder, then, and in every case, the Issuer, the Trustee and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 6.12 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes in the last paragraph of Section 3.06 hereof, no right or
remedy herein conferred upon or reserved to the Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.13 Delay or Omission; Not Waiver. No delay or omission of
the Trustee or of any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Article Six or by law to the Trustee or to
the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Noteholders, as the case may be.
Section 6.14 Control by Noteholders. The Holders of not less than
66-2/3% in principal amount of the Controlling Class of Notes Outstanding of
each affected Series, shall have the right to direct the time, method and place
of conducting any Proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture including, without limitation, any provision
hereof which expressly provides for greater percentage of principal of
Outstanding Notes of a Series;
(2) any direction to the Trustee by the Holders of Notes of a
Series to undertake a private Sale of the portion of the related Series
Trust Estate shall be by the Holders of not less than 66-2/3% in
principal amount of the Controlling Class of Notes Outstanding of such
Series unless the condition set forth in Section 6.18(b)(ii) hereof is
met;
(3) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction; provided,
however, that, subject to Section 7.01 hereof, the Trustee need not
take any action which a Responsible Officer or Officers of the Trustee
in good faith determines might involve it in personal liability or be
unjustly prejudicial to the Noteholders of such Series not consenting;
and
(4) the Trustee has been furnished reasonable indemnity
against costs, expenses and liabilities which it might incur in
connection therewith as provided in Section 7.01(f) hereof; provided,
that the unsecured agreement to indemnify the Trustee by any Holder
(or, in the case of any Note held in nominee name, the principal of
such nominee) that is an Institutional Investor that has a minimum net
worth of at least $50,000,000 shall be deemed to be satisfactory.
Section 6.15 Waiver of Past Defaults. The Holders of not less than
66-2/3% in principal amount of the Controlling Class of Notes Outstanding of a
Series may on behalf of the Holders of all the Notes of such Series waive any
past Default with respect to such Series hereunder and its consequences, except
a Default:
(1) in the payment of the principal of, or premium, if any, or interest on
any Note of such Series, or a Default described in Sections 6.01(5) and (6)
hereof, or
(2) in respect of a covenant or provision hereof which under
Article Nine hereof cannot be modified or amended without the consent
of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.16 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but notwithstanding such assessment, the provisions of this
Section 6.16 shall not apply to any suit instituted by the Trustee, or to any
suit instituted by any Noteholder or group of Noteholders of a Series, holding
in the aggregate more than 50% in principal amount of the Outstanding Notes of
such Series, or to any suit instituted by any Noteholder for the enforcement of
the payment of the principal of or interest on any Note on or after the Stated
Maturity provided that such suit is not deemed to be frivolous under the
applicable rules of civil procedure by such court.
Section 6.17 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not, at any time, insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of the
Transaction Documents; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 6.18 Sale of Trust Estate. (a) The power to effect any sale
(a "Sale") of any portion of any Series Trust Estate pursuant to Section 6.04
hereof shall not be exhausted by any one or more Sales as to any portion of such
Series Trust Estate remaining unsold, but shall continue unimpaired until the
entire Series Trust Estate securing such Series shall have been sold or all
amounts payable on the Notes of such Series and under this Indenture with
respect thereto shall have been paid. The Trustee may from time to time postpone
any Sale by public announcement made at the time and place of such Sale.
(b) To the extent permitted by applicable law, the Trustee shall not,
in any private Sale, sell to a third party the Series Trust Estate of any
Series, or any portion thereof unless:
(i) the Holders of not less than 66-2/3% in principal amount
of the Controlling Class of Notes Outstanding of the affected Series,
consent to or direct the Trustee to make such Sale; or
(ii) the proceeds of such Sale would not be less than the sum
of all amounts due to the Trustee hereunder and the entire unpaid
principal amount of the Notes of such Series and interest due or to
become due thereon on the Payment Date next succeeding such Sale.
(c) The Trustee or the Noteholders may bid for and acquire any
portion of a Series Trust Estate in connection with a public Sale thereof, and
in lieu of paying cash therefor, any Noteholder may make settlement for the
purchase price by crediting against amounts owing on the Notes of such Holder or
other amounts owing to such Holder secured by this Indenture, that portion of
the net proceeds of such Sale to which such Holder would be entitled in
accordance with the priorities set forth in Section 6.08 and the related Series
Supplement, after deducting the reasonable costs, charges and expenses incurred
by the Trustee or the Noteholders in connection with such Sale. Such Notes need
not be produced in order to complete any such Sale, or in order for the net
proceeds of such Sale to be credited against such Notes. The Trustee or such
Noteholders may hold, lease, operate, manage or otherwise deal with any property
so acquired in any manner permitted by law.
(d) The Trustee shall execute and deliver an appropriate instrument
of conveyance transferring its interest in any portion of any Series Trust
Estate in connection with a Sale thereof. In addition, the Trustee is hereby
irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer
and convey its interest in any portion of such Series Trust Estate in connection
with a Sale thereof, and to take all action necessary to effect such Sale. No
purchaser or transferee at such a sale shall be bound to ascertain the Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(e) The method, manner, time, place and terms of any Sale of all or
any portion of any Series Trust Estate shall be commercially reasonable.
Section 6.19 Action on Notes. The right of a Trustee for a Series
to seek and recover judgment on the Notes of such Series or under this Indenture
shall not be affected by the seeking, obtaining or application of any other
relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Trustee or the Noteholders of any
Series shall be impaired by the recovery of any judgment by the Trustee against
the Issuer or by the levy of any execution under such judgment upon any portion
of the related Series Trust Estate or upon any of the assets of the Issuer.
ARTICLE SEVEN THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities. (a) With respect
to each Series of Notes, except during the continuance of an Event of Default
relating to such Series known to the Trustee as provided in subsection (e)
below:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith or negligence on its part,
the Trustee may conclusively rely as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions,
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
and to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default relating to a Series known to the
Trustee as provided in subsection (e) below has occurred and is continuing, with
respect to such Series and the related portion of the related Series Trust
Estate, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and shall use the same degree of care and skill in its exercise,
as a reasonable person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit the effect of
subsection (a) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction the Holders of a majority (or other such percentage
as may be required by the terms hereof) in principal amount of the
Controlling Class of Notes Outstanding of an affected Series in
accordance with Section 6.14 hereof relating to the time, method and
place of conducting any Proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture, the Sale Agreement or the Servicing Agreement;
and
(iv) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
(e) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default described in Section
6.01(4), 6.01(5) or 6.01(6) hereof, any Default described in Section 6.01(3)
hereof or Section 4.03(a) hereof unless a Responsible Officer has actual
knowledge thereof or unless written notice of any event which is in fact such an
Event of Default or Default is received by the Trustee at the Corporate Trust
Office, and such notice references the Notes generally, the Issuer, a Series
Trust Estate or this Indenture.
(f) The Trustee shall be under no obligation to institute any suit,
or to take any remedial proceeding under this Indenture, or to enter any
appearance or in any way defend in any suit in which it may be made defendant,
or to take any steps in the execution of the trusts hereby created or in the
enforcement of any rights and powers hereunder until it shall be indemnified to
its reasonable satisfaction against any and all costs and expenses, outlays and
counsel fees and other reasonable disbursements and against all liability,
except liability resulting from the Trustee's negligence or willful misconduct
as adjudicated, in connection with any action so taken; provided, that the
unsecured agreement to indemnify the Trustee by any Holder (or, in the case of
any Note held in nominee name, the principal of such nominee) that is an
Institutional Investor that has a minimum net worth of at least $50,000,000
shall be deemed to be satisfactory.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Issuer in and to all or a portion of any Series Trust Estate following an
Event of Default and a consequent declaration of acceleration or automatic
acceleration of the maturity of one or more Series of Notes, whether such
extinguishment occurs through a Sale of such Series Trust Estate to another
person, the acquisition of the relevant portion of such Series Trust Estate by
the Trustee with respect to such Series Trust Estate (or the proceeds thereof)
and the Noteholders and the rights of the Noteholders shall continue to be
governed by the terms of this Indenture.
(h) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) through (g), inclusive, of this Section 7.01 shall
be subject to the provisions of subsections (a) through (c), inclusive, of this
Section 7.01.
(i) The Trustee shall provide the reports and accountings as required
pursuant to Section 12.04 hereof.
(j) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture. The Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, no implied covenant shall be read into
this Indenture and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely on the truth of the statements and corrections of
the opinions furnished to the Trustee.
Section 7.02 Notice of Default. Promptly after the occurrence of
any Default known to the Trustee (within the meaning of Section 7.01(e) hereof)
which is continuing, the Trustee shall transmit by mail to the Rating Agency and
all Holders of Notes of each affected Series, as their names and addresses
appear on the Note Register, notice of such Default hereunder known to the
Trustee.
Section 7.03 Certain Rights of Trustee. Except as otherwise provided in
Section 7.01,
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other obligation, paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel selected by the Trustee with due care or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
provided, that the unsecured agreement to indemnify the Trustee by any
Holder (or, in the case of any Note held in nominee name, the principal
of such nominee) that is an Institutional Investor that has a minimum
net worth of at least $50,000,000 shall be deemed to be satisfactory.
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuer, upon
reasonable notice and at reasonable times personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney,
appointed with due care by it hereunder.
Section 7.04 Not Responsible for Recitals or Issuance of Notes. (a)
The recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or condition of any Series Trust Estate or
any part thereof, or as to the title of the Issuer thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of any
securities at any time pledged and deposited with the Trustee hereunder or as to
the validity or sufficiency of this Indenture or of the Notes. The Trustee shall
not be accountable for the use or application by the Issuer of Notes or the
proceeds thereof or of any money paid to the Issuer or upon Issuer Order under
any provisions hereof.
(b) Except as otherwise expressly provided herein and without
limiting the generality of the foregoing, the Trustee shall have no
responsibility or liability for or with respect to the existence or validity of
any of the Credits or Contracts, the perfection of any security interest
(whether as of the date hereof or at any future time), the maintenance of or the
taking of any action to maintain such perfection, the validity of the assignment
of any portion of any Series Trust Estate to the Trustee or of any intervening
assignment, the review of any Contract (it being understood that the Trustee has
not reviewed and does not intend to review the substance or form of any such
Contract), the performance or enforcement of any Contract, the compliance by the
Issuer, Trendwest, TFI or the Servicer with any covenant or the breach by the
Issuer, Trendwest, TFI or the Servicer of any warranty or representation made
hereunder or in any related document or the accuracy of any such warranty or
representation, any investment of monies in any Collection Account or any
Reserve Account or any loss resulting therefrom, the acts or omissions of the
Issuer, Trendwest, TFI, the Servicer or any Obligor, any action of the Servicer
taken in the name of the Trustee, or the validity of the Servicing Agreement,
the Sale Agreement or the Receivables Purchase Agreement.
(c) The Trustee shall not have any obligation or liability under any
Contract by reason of or arising out of this Indenture or the granting of a
security interest in such Contract hereunder or the receipt by the Trustee of
any payment relating to any Contract pursuant hereto, nor shall the Trustee be
required or obligated in any manner to perform or fulfill any of the obligations
of the Seller under or pursuant to any Contract, or to make any payment, or to
make any inquiry as to the nature or the sufficiency of any payment received by
it, or the sufficiency of any performance by any party, under any Contract.
Section 7.05 May Hold Notes. The Trustee, the Servicer, any Paying
Agent, the Note Registrar, any Authenticating Agent or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes, and if operative, may otherwise deal with the Issuer with the same
rights it would have if it were not Trustee, Servicer, Paying Agent, Note
Registrar, Authenticating Agent or such other agent.
Section 7.06 Money Held in Trust. Money and investments held in
trust by the Trustee or any Paying Agent hereunder shall be held in one or more
trust accounts hereunder but need not be segregated from other funds except to
the extent required herein or required by law. The Trustee or any Paying Agent
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Issuer or otherwise specifically provided
herein.
Section 7.07 Compensation and Reimbursement. The Issuer agrees:
(i) to pay the Trustee monthly its fee for all services
rendered by it hereunder as Trustee for any Series, in the amount of
the Trustee Fee related to such Series (which compensation shall not
otherwise be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or the Servicing
Agreement (including the reasonable compensation and the expenses and
disbursements of the Trustee's agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, bad faith or willful misconduct; and
(iii) to indemnify and hold harmless each Series Trust Estate
and the Trustee from and against any loss, liability, expense, damage
or injury sustained or suffered pursuant to this Indenture by reason of
any acts, omissions or alleged acts or omissions arising out of
activities of such Series Trust Estate or the Trustee (including
without limitation any violation of any applicable laws by the Issuer
as a result of the transactions contemplated by this Indenture),
including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other expenses incurred in connection
with the defense of any actual or threatened action, proceeding or
claim; provided that the Issuer shall not indemnify the Trustee if such
loss, liability, expense, damage or injury is due to the Trustee's
negligence or willful misconduct, willful misfeasance or bad faith in
the performance of duties. Any indemnification pursuant to this Section
7.07 shall only be payable from the assets of the Issuer and shall not
be payable from the assets of any Series Trust Estate. The provisions
of this indemnity shall run directly to and be enforceable by an
injured person subject to the limitations hereof and this
indemnification agreement shall survive the termination of this
Indenture.
Upon the occurrence of an Event of Default with respect to any Series
resulting in an acceleration of maturity of the Notes of such Series that has
not been rescinded and annulled, the Trustee shall have, as security for the
performance of the Issuer under this Section 7.07, a lien ranking senior to the
lien of the Notes of such Series with respect to which any claim of the Trustee
under this Section 7.07 arose upon all property and funds held or collected as
part of the related Series Trust Estate by the Trustee in its capacity as
Trustee for such Series. The Trustee shall not institute any Proceeding seeking
the enforcement of such lien against any Series Trust Estate unless (i) such
Proceeding is in connection with a proceeding in accordance with Article Six
hereof for enforcement of the lien of this Indenture for the benefit of the
Holders of the Notes secured by such Series Trust Estate after the occurrence of
an Event of Default (other than an Event of Default due solely to a breach of
this Section 7.07) and a resulting declaration of acceleration or automatic
acceleration of maturity of such Notes that has not been rescinded and annulled,
or (ii) such Proceeding does not result in or cause a Sale or other disposition
of such Series Trust Estate. All monies so collected by the Trustee shall be
applied in accordance with Section 6.08 hereof, and the Trustee shall receive
amounts pursuant to Section 6.08 hereof only to the extent that payment thereof
will not result in a subsequent Event of Default caused by such payments to the
Trustee.
Section 7.08 Corporate Trustee Required; Eligibility. There shall
at all times be a trustee for each Series hereunder which shall be a corporation
or association organized and doing business under the laws of the United States
of America or of any State, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $100,000,000, or
be a member of a consolidated bank holding company with a combined capital and
surplus of at least $100,000,000, subject to supervision or examination by
Federal or state authority and having an office within the United States of
America, and, except with respect to the initial Trustee hereunder, which shall
have a commercial paper or other short-term rating of the highest short term
rating categories by Fitch (or, if not rated by Fitch, by S&P or Moody's) or
otherwise acceptable to the Holders of not less than 66-2/3% in principal amount
of the Controlling Class of the Notes Outstanding of each affected Series. If
any such entity publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 7.08, the combined capital and surplus of
each such entity shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee for a Series shall cease to be eligible in accordance with the
provisions of this Section 7.08, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article Seven.
Section 7.09 Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee for any Series and no appointment of a
successor Trustee pursuant to this Article Seven shall become effective until
the acceptance of appointment by the successor Trustee for such Series under
Section 7.10 hereof.
(b) The Trustee may resign at any time by giving 60 days' written
notice thereof to the Issuer and to each Noteholder. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 60 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor Trustee.
(c) The Trustee for any Series may be removed with or without cause
by the Act of the Holders of not less than 66-2/3% in principal amount of the
Controlling Class of Outstanding Notes of such Series by notice to the Trustee
at any time.
(d) If the Trustee for any Series shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause with respect to the Notes of such Series, the Holders of not less
than 66-2/3% in principal amount of the Controlling Class of Notes Outstanding
of such Series or the Issuer, with the written consent of Holders of not less
than 66-2/3% in principal amount of the Controlling Class of Notes Outstanding
of such Series, may appoint a successor Trustee.
(e) The Issuer shall give notice to the Servicer, the Custodian and
the Noteholders of such Series in the manner provided in Section 13.03 hereof of
each resignation and each removal of the Trustee of such Series and each
appointment of a successor Trustee with respect to the Notes of such Series.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office.
Section 7.10 Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Issuer, each Noteholder of each affected Series and the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee for each affected
Series, but, on request of the Issuer or the successor Trustee, such retiring
Trustee shall, upon payment of its reasonable out-of-pocket costs and expenses,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee with respect to such Series,
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee with respect to such Series
hereunder, subject nevertheless to its lien, if any, provided for in Section
7.07 hereof. Upon request of any such successor Trustee, the Issuer shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts with
respect to such Series.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article
Seven.
Section 7.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any Person into which the Trustee for any Series may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any entity succeeding to all or substantially all of the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article Seven, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Notes have been
authenticated, but not delivered, by the related Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Notes so authenticated with the
same effect as if such successor Trustee had itself authenticated such Notes.
Section 7.12 Co-Trustees and Separate Trustees. At any time or
times, for the purpose of meeting the legal requirements of any jurisdiction in
which any portion of any Series Trust Estate may at the time be located, the
Issuer, and the Trustee for such Series shall have power to appoint, and, upon
the written request of such Trustee, or of the Holders representing at least 25%
of the aggregate principal amount of the Controlling Class of Notes Outstanding
of such Series, the Issuer shall for such purpose join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by such Trustee, either to
act as co-Trustee, jointly with such Trustee of all or any part of such Series
Trust Estate for such Series, or to act as separate Trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.12. If the Issuer does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default has occurred and is continuing with respect to such
Series, the Trustee for such Series alone shall have power to make such
appointment.
Should any written instrument from the Issuer be reasonably required by
any co-Trustee or separate Trustee so appointed for more fully confirming to
such co-Trustee or separate Trustee such property, title, right or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Issuer.
Every co-Trustee or separate Trustee for any Series shall, to the
extent permitted by law, but to such extent only, be appointed subject to the
following terms:
(i) the Notes of such Series shall be authenticated and
delivered by, and all rights, powers, duties and obligations hereunder
in respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with, the
Trustee of such Series hereunder, shall be exercised solely by such
Trustee;
(ii) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee of such Series in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by such Trustee or by such Trustee and such
co-Trustee or separate Trustee jointly, as shall be provided in the
instrument appointing such co-Trustee or separate Trustee, except to
the extent that under any law of any jurisdiction in which any
particular act is to be performed, such Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-Trustee or separate Trustee;
(iii) the Trustee for any Series at any time, by an instrument
in writing executed by it, with the concurrence of the Issuer evidenced
by a Board Resolution, may accept the resignation of or remove any
co-Trustee or separate Trustee for such Series, appointed under this
Section 7.12, and, in case an Event of Default has occurred and is
continuing, such Trustee shall have power to accept the resignation of,
or remove, any such co-Trustee or separate Trustee without the
concurrence of the Issuer. Upon the written request of such Trustee,
the Issuer shall join with such Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-Trustee
or separate Trustee that has so resigned or been removed may be
appointed in the manner provided in this Section 7.12;
(iv) no co-Trustee or separate Trustee for any Series
hereunder shall be personally liable by reason of any act or omission
of the Trustee for such Series or any other such Trustee hereunder nor
shall the Trustee for any Series be liable by reason of any act or
omission of any co-Trustee or separate Trustee selected by such Trustee
with due care or appointed in accordance with directions to such
Trustee pursuant to Section 6.14 hereof; and
(v) any Act of Noteholders for any Series delivered to the
Trustee for such Series shall be deemed to have been delivered to each
the co-Trustee and separate Trustee for any Series.
Section 7.13 Rights with Respect to the Servicer. The rights and
obligations of the Trustee for any Series with respect to the Servicer for any
Series shall be governed by the Servicing Agreement.
Section 7.14 Appointment of Authenticating Agent. The Trustee for
any Series may appoint an Authenticating Agent or Agents with respect to the
Notes of such Series which shall be authorized to act on behalf of such Trustee
to authenticate Notes of such Series issued upon original issue or upon
exchange, registration of transfer or pursuant to Section 3.06 hereof, and Notes
of such Series so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by such Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Notes by the Trustee or the Trustee's certificate
of authentication or the delivery of Notes to the Trustee for authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent and delivery of the
Notes to the Authenticating Agent on behalf of the Trustee. Each Authenticating
Agent shall be acceptable to the Issuer and a majority in principal amount
Outstanding of the Noteholders and shall at all times be an entity having a
combined capital and surplus of not less than the equivalent of $50,000,000 and
subject to supervision or examination by Federal or state authority or the
equivalent foreign authority, in the case of an Authenticating Agent who is not
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 7.14, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 7.14, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 7.14.
Any entity into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any entity succeeding to the corporate agency or entity trust
business of such Authenticating Agent, shall continue to be an Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee or such Authenticating Agent; provided, such entity shall be
otherwise eligible under this Section 7.14.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Issuer. The Trustee for any Series may at any
time terminate the agency of an Authenticating Agent for such Series by giving
written notice thereof to such Authenticating Agent and to the Issuer. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 7.14, such Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Notes for such Series, if any, with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the Note
Register. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 7.14.
The Trustee for each Series agrees to pay to each Authenticating Agent
for such Series from time to time reasonable compensation for its services under
this Section 7.14, but each Trustee shall not be entitled to be reimbursed for
such payments.
If an appointment is made pursuant to this Section 7.14, the Notes of
each Series may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
This is one of the Notes described in the within-mentioned Series
Supplement.
[NAME OF TRUSTEE], as Trustee
By
As Authenticating Agent
By
Authorized Officer
Section 7.15 Custodian to Hold Contracts. The Custodian, as agent
(solely for the purpose of perfecting the security interest of the Trustee of
each Series in the Contracts and the related Custodian Files) and bailee of the
Trustee of each Series, shall hold each Contract, together with any documents
relating thereto that may from time to time be delivered to the Custodian, until
such time as such Contract is released from the lien of this Indenture pursuant
to the terms hereof. Within 10 days of the related Series Closing Date, the
Custodian will review each Custodian File related to such Series to determine
whether or not such file is complete, and it shall file an exception report with
the Issuer, the Trustee, the Servicer and each Noteholder of the related Series
within such time period. If an exception is not cured within 40 days of the
related Series Closing Date, the related Contract must be repurchased by
Trendwest within 30 days of the end of such 40-day period. The Trustee for such
Series shall have no responsibility or liability for the actions or inactions of
the Custodian.
The Trustee of each Series shall be under no duty or obligation to
inspect, review or examine the Contracts or the related Custodian Files for any
purpose, including, without limitation, to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
ARTICLE EIGHT OPTIONAL PURCHASE OF RECEIVABLES
Section 8.01 Optional Purchase of All Receivables; Liquidation of
Trust Estate. On the Business Day immediately preceding any Payment Date after
the aggregate principal amount of the then Outstanding Notes of any Series is
less than 10% of the original aggregate principal amount of the Notes of such
Series, the initial Servicer and TFI each shall have the option to purchase all
of the Series Collateral related to such Series; provided, however, that the
amount to be paid for such purchase (as set forth in the following sentence)
shall be sufficient to pay any amounts then due and payable with respect to such
Series to the Trustee and the Servicer, and the full amount of principal,
premium, if any, and interest then due and payable on the Notes of such Series,
and the Issuer shall redeem the Notes of such Series on such Payment Date
pursuant to Article X hereof. To exercise such option, the initial Servicer or
TFI, as the case may be, shall pay the aggregate Purchase Price for all of the
Receivables supporting the Notes of such Series and shall succeed to all
interests in and to the Series Collateral supporting such Series. The party
exercising such option to repurchase shall deposit the aggregate Purchase Price
for such Receivables into the Collection Account for such Series, and the
Trustee shall distribute the amounts so deposited in accordance with Section
12.02.
ARTICLE NINE SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of
Noteholders. (a) The Issuer, the Servicer and the Trustee, without the consent
of the Holders of any Notes, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes, provided that any such amendment, as
evidenced by an Opinion of Counsel, will not have a material adverse effect on
Noteholders:
(1) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property; or
(2) to evidence the succession of another Person to the
Issuer, and the assumption by such successor of the covenants of the
Issuer herein and in the Notes contained, in accordance with Section
11.02(q) hereof; or
(3) to add to the covenants of the Issuer, for the benefit of the Holders
of all Notes of one or more Series, or to surrender any right or power herein
conferred upon the Issuer; or
(4) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee for the benefit of the Noteholders; or
(5) to evidence the succession of the Trustee pursuant to Article Seven
hereof.
No supplemental indenture that permits the issuance of the Notes in
coupon form will be of any force and effect unless the Trustee and the Issuer
shall have received an Opinion of Counsel to the effect that such amendment will
not adversely affect the Issuer's ability to deduct the interest paid on the
Notes. The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Promptly after the execution by the Issuer, the Servicer and the
Trustee of any supplemental indenture pursuant to this Section 9.01, the Issuer
shall mail to each Noteholder and to the Rating Agency a copy of such
supplemental indenture.
(b) The Issuer, the Servicer and the Trustee, without the consent of
the Holders of the Notes Outstanding, at any time and from time to time, may
enter into one or more Series Supplements, in form satisfactory to the Trustee,
for the purpose of issuing a new Series of Notes in accordance with the terms
hereof. Any Series Supplement may supplement or modify the terms of this
Indenture, but such supplements or modifications shall only affect the Notes
issued pursuant to such Series Supplement.
Section 9.02 Supplemental Indentures with Consent of Noteholders.
With the consent of the Holders of not less than 66-2/3% in principal amount of
the Controlling Class of the Notes Outstanding of each affected Series, by Act
of said Holders delivered to the Issuer and the Trustee, the Issuer, the
Servicer and the Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture relating to such Series or
of modifying in any manner the rights of the Holders of the Notes of such Series
under this Indenture; provided, however, that the number of Holders of any
Series required for any supplemental indenture may be modified as set forth in
the related Series Supplement; provided, further, that no such supplemental
indenture shall, without the consent of the Holders of each Outstanding Note of
each Series affected thereby:
(1) change the Stated Maturity of any Note or the due date of
any installment of principal of, or any installment of interest on, any
Note, or reduce the principal amount thereof or the Note Interest Rate
or change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment; or
(2) reduce the percentage in principal amount of the
Outstanding Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with certain provisions of
this Indenture or Events of Default or their consequences; or
(3) impair or adversely affect the related Series Trust Estate except as
otherwise permitted herein; or
(4) modify or alter the provisions of the proviso to the definition of the
term "Outstanding"; or
(5) modify any of the provisions of this Section 9.02, except
to increase the percentage of Holders of the Outstanding Notes of one
or more Series required for any modification or waiver or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Note
affected thereby; or
(6) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
related Series Trust Estate or terminate the lien of this Indenture on
any property at any time subject hereto or deprive the Holder of any
Note of the security afforded by the lien of this Indenture; or
(7) modify any of Sections 6.01(l) or (2), 6.02, 6.03, 6.08, 6.18, or
12.02(d) hereof.
It shall be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture.
Promptly after the execution by the Issuer, the Servicer and the
Trustee of any supplemental indenture pursuant to this Section 9.02, the Issuer
shall mail to the Holders of the Notes and the Placement Agent a copy of such
supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive upon request, and (subject to Section 7.01 hereof) shall be fully
protected in relying in good faith upon, an Opinion of Counsel reasonably
acceptable to the Trustee stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own duties or immunities under this Indenture or
otherwise.
Section 9.04 Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article Nine, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.05 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article Nine may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
ARTICLE TEN REDEMPTION OF NOTES
Section 10.01 Redemption at the Option of the Issuer; Election to
Redeem. The Issuer shall have the option to redeem the Notes of any Series, in
whole but not in part, as to the then Outstanding Notes of such Series, on any
Payment Date (the "Redemption Date") after the aggregate principal amount of the
then Outstanding Notes of such Series is less than 10% of the original aggregate
principal amount of the Notes of such Series, at the applicable Redemption Price
plus any fees due hereunder.
The Issuer shall set the Redemption Date and the Redemption Record Date
for any such Series and give notice thereof to the Trustee pursuant to Section
10.02 hereof.
Installments of interest and principal due on or prior to a Redemption
Date for a Series shall continue to be payable to the Holders of Notes of such
Series called for redemption as of the relevant Record Dates according to their
terms and the provisions of Section 3.07 hereof. The election of the Issuer to
redeem the Notes of any Series pursuant to this Section 10.01 shall be evidenced
by a Board Resolution directing the Trustee to make the payment of the
applicable Redemption Price on all of the Notes of such Series to be redeemed
from monies deposited with the Trustee pursuant to Section 10.04 hereof.
Section 10.02 Notice to Trustee. In the case of any redemption
pursuant to Section 10.01 hereof, the Issuer shall, at least 15 days prior to
the Redemption Date, notify the Trustee of such Redemption Date.
Section 10.03 Notice of Redemption by the Issuer. Upon receipt of
such notice and such deposit set forth in Section 10.02 above, the Trustee shall
provide notice of redemption pursuant to Section 10.01 hereof by first-class
mail, postage prepaid, mailed no later than the Business Day following the
Calculation Date on which such deposit was made, to each Holder of Notes whose
Notes are to be redeemed, at his address in the Note Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price; and
(3) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Note, and that interest thereon
shall cease to accrue on the Redemption Date if the Redemption Price is
paid on such date.
Notice of redemption of the Notes of any Series shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note selected for
redemption shall not impair or affect the validity of the redemption of any
other Note.
Section 10.04 Deposit of the Redemption Price. On or before the
Business Day next preceding any Redemption Date, the Issuer shall deposit with
the Trustee or, if there is a Paying Agent, with the Paying Agent an amount of
monies sufficient to pay the Redemption Price of all Notes which are to be
redeemed on such Redemption Date plus any fees due hereunder.
Section 10.05 Notes Payable on Redemption Date. Notice of redemption
having been given as provided in Section 10.03 hereof, the Notes of each Series
being redeemed shall, on the applicable Redemption Date, become due and payable
at the applicable Redemption Price and on such Redemption Date (unless the
Issuer shall default in the payment of such Redemption Price) such Notes shall
cease to bear interest. The Holders of such Notes shall be paid the applicable
Redemption Price by the Paying Agent on behalf of the Issuer; provided, however,
that installments of principal and interest which are due on or prior to such
Redemption Date shall be payable to the Holders of the Notes of such Series
registered as such on the relevant Record Dates according to their terms and the
provisions of Section 3.07 hereof.
If the Holders of any Note called for redemption shall not be so paid,
the principal and premium, if any, shall, until paid, bear interest from the
applicable Redemption Date at the applicable Note Interest Rate.
ARTICLE ELEVEN REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 11.01 Representations and Warranties. The Issuer hereby
makes the following representations and warranties for the benefit of the
Trustee and the Noteholders of a Series on which the Trustee relies in accepting
the related Series Trust Estate in trust and in authenticating the Notes of each
Series. Such representations and warranties are made as of each Series Closing
Date (and only on the related Series Closing Date with respect to the Note
Purchase Agreements and each Series Supplement), but shall survive the transfer,
grant and assignment of the related Series Trust Estate to the Trustee.
(a) Organization and Good Standing. The Issuer is a corporation duly
organized, validly existing and in good standing under the law of the State of
Delaware and each other State where the nature of its business requires it to
qualify, except to the extent that the failure to so qualify would not in the
aggregate materially adversely affect the ability of the Issuer to perform its
obligations under this Indenture, each Series Supplement, the Notes, the Note
Purchase Agreements, the Custodian Agreement or the Sale Agreement.
(b) Authorization. The Issuer has the power, authority and legal
right to execute, deliver and perform this Indenture, each Series Supplement,
the Notes, the Note Purchase Agreements, the Custodian Agreement and the Sale
Agreement and the execution, delivery and performance of this Indenture, each
Series Supplement, the Notes, the Note Purchase Agreements, the Custodian
Agreement and the Sale Agreement have been duly authorized by the Issuer by all
necessary action.
(c) Binding Obligation. This Indenture, each Series Supplement, the
Notes, the Note Purchase Agreements, the Custodian Agreement and the Sale
Agreement have been duly executed and delivered by the Issuer, and each of this
Indenture and each Series Supplement, assuming due authorization, execution and
delivery by the Trustee and the Servicer, the Sale Agreement, assuming due
authorization, execution and delivery by TFI and Trendwest, each Note Purchase
Agreement, assuming due authorization, execution and delivery by each initial
purchaser of related Notes, and the Custodian Agreement, assuming due
authorization, execution and delivery by the Trustee, the Custodian and the
Servicer, each constitutes a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms except that (A) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws (whether statutory, regulatory or decisional) now or
hereafter in effect relating to creditors' rights generally and (B) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to certain equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought, whether a proceeding at law
or in equity.
(d) No Violation. The consummation of the transactions contemplated
by the fulfillment of the terms of this Indenture, each Series Supplement, the
Notes, the Note Purchase Agreements, the Custodian Agreement and the Sale
Agreement will not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice, lapse of time or both) a
default under the organizational documents or bylaws of the Issuer, or any
material indenture, agreement, mortgage, deed of trust or other instrument to
which the Issuer is a party or by which it is bound, or in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of such
indenture, agreement, mortgage, deed of trust or other such instrument, other
than any Lien created or imposed pursuant to the terms of this Indenture, each
Series Supplement or the Sale Agreement, or violate any law or, to the best of
the Issuer's knowledge, after due inquiry, any material order, rule or
regulation applicable to the Issuer of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Issuer or any of its properties.
(e) No Proceedings. There are no Proceedings or investigations to
which the Issuer, or any of the Issuer's Affiliates, is a party pending, or, to
the knowledge of Issuer, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A)
asserting the invalidity of this Indenture, any Series Supplement, the Sale
Agreement, the Receivables Purchase Agreement, the Note Purchase Agreements, the
Custodian Agreement or the Notes, (B) seeking to prevent the issuance of the
Notes of any Series or the consummation of any of the transactions contemplated
by the Sale Agreement, the Receivables Purchase Agreement, this Indenture, any
Series Supplement, the Note Purchase Agreements, the Custodian Agreement or the
Notes of any Series or (C) seeking any determination or ruling that would
materially and adversely affect the performance by the Issuer of its obligations
under, or the validity or enforceability of, this Indenture, any Series
Supplement, the Sale Agreement, the Receivables Purchase Agreement, the Note
Purchase Agreements, the Custodian Agreement or the Notes.
(f) Approvals. All approvals, authorizations, consents, orders or
other actions of any Person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Indenture, each Series Supplement, the Note Purchase Agreements, the Custodian
Agreement or the Sale Agreement and with the valid and proper authorization,
issuance and sale of the Notes of each Series pursuant to this Indenture and the
related Series Supplement and the related Note Purchase Agreements (except
approvals of State securities officials under the Blue Sky laws), have been or
will be taken or obtained on or prior to the applicable Series Closing Date.
(g) Name and Place of Business. The Issuer's legal name is as set
forth in this Indenture. The Issuer has not used or done business under any
other name in the previous five-year period. The Issuer's principal place of
business and chief executive office is located at 3250 Lakeport Boulevard,
Klamath Falls, Oregon 97601, or at such other location where all action required
by Section 11.02(f) hereof shall have been taken place with respect to the
related Series Trust Estate. The Issuer has not used any other address in the
previous five-year period.
(h) Transfer and Assignment. Upon the delivery to the Custodian of
the Contracts and the filing of the UCC financing statements described in
Sections 4.01(c)(vii) and 4.02(a) hereof, the Trustee for the benefit of the
Noteholders of any Series shall have a first priority perfected security
interest in the Receivables, the Contracts and in the proceeds thereof
supporting such Series, except for Liens permitted under Section 11.02(a) and
limited to the extent set forth in Section 9-306 of the UCC as in effect in the
applicable jurisdiction. All filings (including, without limitation, UCC
filings) as are necessary in any jurisdiction to perfect the interest of the
Trustee in the related Series Trust Estate (other than the Credits), including
the transfer of the Contracts and the payments to become due thereunder, have
been made.
(i) Stockholders of the Issuer. TFI is the sole holder of all of the
issued and outstanding stock of the Issuer; all of such shares has been fully
paid and are owned of record, free and clear of all mortgages, assignments,
pledges, security interests, warrants, options and rights to purchase. The
Issuer will not permit TFI to transfer such shares of the Issuer without the
consent of the Holders of a majority in principal amount of Notes Outstanding of
each Series.
(j) Sale Agreement. As of the Closing Date, the Issuer has entered
into the Sale Agreement and the Assignment with TFI relating to its acquisition
of the Receivables related to the Contracts identified therein and a security
interest in such Contracts and the related Credits, and the representations and
warranties made by TFI and Trendwest relating to such Contracts, such
Receivables and such interests in the related Credits have been validly assigned
to and are for the benefit of the Issuer, the Trustee and the Noteholders and
such representations and warranties are true and correct in all material
respects.
(k) Bulk Transfer Laws. The transfer, assignment and conveyance of
the Receivables and the grant of a security interest in the related Contracts
and the related Credits by TFI to the Issuer pursuant to the Sale Agreement or
by the Issuer pursuant to this Indenture is not subject to the bulk transfer or
any similar statutory provisions in effect in any applicable jurisdiction.
(l) Solvency. Neither on the date of the transactions contemplated by
the Transaction Documents or immediately before or after such transactions, nor
as a result of the transactions, will the Issuer:
(A) be insolvent such that the sum of its debts is greater than all of its
respective property, at a fair valuation;
(B) be engaged in, or about to engage in, business or a
transaction for which any property remaining with the Issuer will be an
unreasonably small capital or the remaining assets of the Issuer will
be unreasonably small in relation to its respective business or the
transaction; and
(C) have intended to incur, or believed it would incur, debts
that would be beyond its respective ability to pay as such debts mature
or become due. The Issuer's assets and cash flow enable it to meet its
present obligations in the ordinary course of business as they become
due.
(m) Tax Returns. All tax returns or extensions required to be filed
by the Issuer in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon the Issuer, or upon any of
the respective properties, income or franchises shown to be due and payable on
such returns have been, or will be, paid. To the best of the Issuer's knowledge,
all such tax returns are true and correct and the Issuer has no knowledge of any
proposed additional tax assessment against it in any material amount nor of any
basis therefor. The provisions for taxes on the books of the Issuer are in
accordance with generally accepted accounting principles.
(n) Tax Reporting. The Issuer will treat the acquisition of the
Receivables and the security interest in the related Contracts and the related
Credits as a sale to the Issuer for federal, State and local income tax
reporting and accounting purposes.
(o) Subsidiaries. The Issuer has no subsidiaries.
(p) Pension Plans. Each pension plan or profit sharing plan to which
the Issuer is a party has been fully funded in accordance with the obligations
of the Issuer set forth in such plan.
(q) Constituent Documents. The Issuer will not amend its Certificate of
Incorporation or its By-Laws without the consent of the Trustee and the Holders
of a majority in principal amount of the Notes Outstanding of each Series.
(r) Value of Receivables. With respect to each Series, as of the
applicable Series Cut-Off Date, the aggregate principal balance of the related
Receivables equaled the related Initial Aggregate Collateral Value.
(s) Term of Contracts. With respect to each Series, as of the related
Series Closing Date, the Series Contract Schedule accurately reflects the
duration of each related Contract.
Section 11.02 Covenants. The Issuer hereby makes the following
covenants on which the Trustee relies in accepting the Series Trust Estate
related to any Series in trust and in authenticating the Notes of such Series.
Such covenants are made as of the related Series Closing Date, but shall survive
the transfer, grant and assignment of such Series Trust Estate to the Trustee.
(a) No Liens. Except for the conveyances and grant of security
interests hereunder, the Issuer will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
portion of the Series Trust Estate supporting any Series of Notes now existing
or hereafter created, or any interest therein prior to the termination of this
Indenture pursuant to Section 5.01 hereof; the Issuer will notify the Trustee of
the existence of any such Lien immediately upon discovery thereof; and the
Issuer shall defend the right, title and interest of the Trustee in, to and
under each Series Trust Estate now existing or hereafter created, against all
claims of third parties claiming through or under the Issuer; provided, however,
that nothing in this Section 11.02(a) shall prevent or be deemed to prohibit the
Issuer from suffering to exist upon any Series Trust Estate any Liens for
municipal or other local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if the Issuer
shall currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) Delivery of Collections. The Issuer agrees to hold in trust and
promptly pay to the Servicer all amounts received by the Issuer in respect of
each Series Trust Estate (other than amounts distributed to or for the benefit
of the Issuer pursuant to Article Twelve hereof).
(c) Obligations with Respect to Contracts. The Issuer will duly
fulfill all obligations on its part to be fulfilled under or in connection with
each Receivable and will do nothing to impair the rights of the Trustee (for the
benefit of the Noteholders) in the Receivables, the Contracts and any other part
of each Series Trust Estate. As long as there is no event of default under the
applicable Contract, the Issuer will not disturb the Obligor's use of the Club
in accordance with the rules of the Club.
(d) Compliance with Law. The Issuer will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Contracts or any part thereof,
provided, however, that the Issuer may contest any act, regulation, order,
decree or direction in any reasonable manner which shall not materially and
adversely affect the rights of the Trustee (for the benefit of the Noteholders)
in the Receivables, the Contracts and the related Credits. The Issuer will
comply, in all material respects, with all requirements of law applicable to the
Issuer.
(e) Preservation of Security Interest. The Issuer shall execute and
file such continuation statements and any other documents which may be required
by law or which the Trustee deems appropriate to fully preserve and protect the
interest of the Trustee (for the benefit of the Noteholders) in the Series Trust
Estate supporting each such Series of Notes.
(f) Maintenance of Office, etc. The Issuer will not, without
providing 30 days' prior written notice to the Trustee and each Noteholder and
without filing such amendments to any previously filed financing statements as
the Trustee may require or as may be required in order to maintain the Trustee's
perfected security interest in the Series Trust Estate (other than the Credits)
supporting each such Series of Notes, (a) change the location of its chief
executive office, or (b) change its name, identity or corporate structure in any
manner which would make any financing statement or continuation statement filed
by the Issuer in accordance with the Servicing Agreement or this Indenture
seriously misleading within the meaning of Article 9-402(7) of any applicable
enactment of the UCC.
(g) Further Assurances. Except as set forth in Section 11.02(e), the
Issuer will make, execute or endorse, acknowledge, and file or deliver to the
Trustee from time to time such schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such other steps relating to each Series
Trust Estate, as the Trustee may request and reasonably require.
(h) Notice of Liens. The Issuer shall notify the Trustee and each
Noteholder promptly after becoming aware of any Lien on any Series Trust Estate,
except for any Liens for municipal or other local taxes if such taxes shall not
at the time be due or payable without penalty.
(i) Activities of the Issuer. The Issuer (a) shall engage in only (1)
the acquisition, ownership, selling and pledging of the property acquired by the
Issuer pursuant to the Sale Agreement (including the ability to enter into a new
installment contract with an Obligor pursuant to an Upgrade), and causing the
issuance of, receiving and selling the Notes issued pursuant to this Indenture
and (2) the exercise of any powers permitted to corporations under the General
Corporation Law of the State of Delaware which are incidental to the foregoing
or necessary to accomplish the foregoing; (b) will (1) maintain its books and
records separate from the books and records of any other entity, (2) maintain
separate bank accounts and no funds of the Issuer shall be commingled with funds
of any other entity, (3) keep in full effect its existence, rights and
franchises as a corporation under the laws of the State of Delaware, and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture, (4) conduct its
business from an office or office space separate from the office of TFI and
Trendwest and will maintain a telephone number separate from that of TFI and
Trendwest, and (5) operate its business generally so as not to be substantively
consolidated with any of its Affiliates; and (c) will not (1) dissolve or
liquidate in whole or in part, (2) own any subsidiary or lend or advance any
moneys to, or make an investment in, any Person, (3) make any capital
expenditures, (4)(A) commence any case, proceeding or other action under any
existing or future bankruptcy, insolvency or similar law seeking to have an
order for relief entered with respect to it, or seeking reorganization,
arrangement, adjustment, wind-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, (B) seek appointment of a receiver,
trustee, custodian or other similar official for it or any part of its assets,
(C) make a general assignment for the benefit of creditors (other than as
contemplated herein), or (D) take any action in furtherance of, or consenting or
acquiescing in, any of the foregoing, (5) guarantee (directly or indirectly),
endorse or otherwise become contingently liable (directly or indirectly) for the
obligations of, or own or purchase any stock, obligations or securities of or
any other interest in, or make any capital contribution to, any other Person,
(6) merge or consolidate with any other Person, except as permitted pursuant to
Section 11.02(q) hereof, (7) engage in any other action that adversely affects
whether the separate legal identity of the Issuer will be respected, including
without limitation (A) holding itself out as being liable for the debts of any
other party or (B) acting other than in its corporate name and through its duly
authorized officers or agents, or (8) create, incur, assume, or in any manner
become liable in respect of any indebtedness other than that contemplated herein
or trade payables and expense accruals incurred in the ordinary course of
business and which are incidental to its business purpose. The Issuer shall not
amend any article in its Certificate of Incorporation or its By-Laws that deals
with any matter discussed above without the prior written consent of the Holders
of not less than 66-2/3% in aggregate principal amount of the Outstanding Notes.
(j) Directors. The Issuer agrees that at all times at least one
director and one executive officer of the Issuer will not be a director, officer
or employee of any direct or ultimate parent, or Affiliate of such parent or of
the Issuer or a brother, sister, parent, child or spouse of any of the
foregoing; provided, however, that (a) such independent director may also be the
independent officer and (b) such independent director and such independent
officer may serve in similar capacities for other "special purpose corporations"
formed by the Issuer and its Affiliates. The Issuer's Certificate of
Incorporation shall at all times provide that such independent director shall
have a fiduciary duty to the Holders of the Notes.
(k) Consolidated Return. The Issuer is not a member of an affiliated
group with TFI or Trendwest within the meaning of Section 1504 of the Code and
will not file a consolidated return with either of TFI or Trendwest for federal
income tax purposes at any time until after the termination of this Indenture.
(1) Security Interest in the Contracts and the Credits. The Issuer
warrants that it has a valid security interest in the Contracts and the Credits
and that it will defend its security interest in such Contracts and Credits
against all Persons, claims and demands whatsoever. The Issuer shall not assign,
sell, pledge, or exchange, or in any way encumber or otherwise dispose of its
interest in the Contracts and the Credits, except as permitted under this
Indenture.
(m) Taxable Income from the Receivables. The Issuer shall treat the
Receivables as owned by it for federal, State and local income tax purposes, and
any affiliated group of which the Issuer is a member within the meaning of
section 1504 of the Code shall treat the Receivables as owned by the Issuer for
federal, State and local income tax purposes, shall report and include in the
computation of the Issuer's gross income for such tax purposes in its
consolidated or combined return the income from the Receivables and the
Contracts, and shall deduct the interest paid or accrued with respect to the
Notes in accordance with its applicable method of accounting for such purposes.
(n) Maintenance of Office or Agency. The Issuer will maintain an
office or agency within the United States of America where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demand to or upon the
Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Trustee at the Corporate Trust Office for each of
said purposes. The Issuer will give 30 days' prior written notice to the Trustee
and the Noteholders of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Trustee and the Noteholders with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Trustee, and the Issuer hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
(o) Money for Note Payments to Be Held in Trust. The Trustee shall
execute and deliver, and if there is any Paying Agent other than the Trustee,
the Issuer will cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that, subject to the provisions of this Section 11.02, such Paying
Agent will:
(i) hold all sums held by it for the payment of principal of
or interest on Notes in trust for the benefit of the Noteholders
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Trustee notice of any Default by the Issuer (or any other
obligor upon the Notes) in the making of any payment of principal or interest;
and
(iii) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
(p) Enforcement of Servicing Agreement, the Sale Agreement and
Receivables Purchase Agreement. The Issuer will take all actions necessary, and
diligently pursue all remedies available to it, to the extent commercially
reasonable, to enforce the obligations of the Servicer under the Servicing
Agreement, TFI and Trendwest under the Sale Agreement and Trendwest, the Prior
Issuer and TW Holdings under the Receivables Purchase Agreement and to secure
its rights thereunder.
(q) Issuer May Consolidate, etc., Only on Certain Terms. The Issuer
shall not consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger or which acquires by conveyance
or transfer the properties and assets of the Issuer substantially as an
entirety shall be a Person organized and existing as a limited purpose
entity under the laws of the United States of America or any State
thereof and shall have expressly assumed, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the obligation to make due and punctual
payments of the principal of and interest on all of the Notes and to
perform every covenant of this Indenture on the part of the Issuer to
be performed or observed; and
(ii) immediately after giving effect to such transaction, no Event of
Default or Default shall have occurred and be continuing; and
(iii) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article Eleven and that all conditions
precedent herein relating to such transaction have been complied with;
and
(iv) such consolidation, merger, conveyance or transfer shall
be on such terms as shall fully preserve the lien and security hereof,
the perfection and priority thereof and the rights and powers of the
Trustee and the Holders of the Notes hereunder; and
(v) the surviving entity shall be a "special purpose entity";
i.e., shall have an organizational charter substantially similar to the
Certificate of Incorporation and the By-Laws of the Issuer including
specific limitations on the business purposes, and provisions for
independent directors; and
(vi) the Issuer shall have obtained the prior written consent
of the Holders of the Notes, which shall not be unreasonably withheld.
(r) Successor Substituted. Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Issuer substantially
as an entirety in accordance with Section 11.02(q) hereof, the Person formed by
or surviving such consolidation or merger (if other than the Issuer) or the
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the "Issuer" in the first paragraph of this instrument or any successor which
shall theretofore have become such in the manner prescribed in this Article
Eleven shall be released from its liabilities as obligor and maker on all the
Notes and from its obligations under this Indenture and may be dissolved,
wound-up and liquidated at any time thereafter.
(s) Use of Proceeds. The proceeds from the sale of the Notes of each
Series will be used by the Issuer (i) to pay the related Acquisition
Consideration, (ii) to pay the expenses associated with the issuance of such
Notes pursuant to this Indenture and the related Series Supplement and the
transactions contemplated hereby, thereby and by the Sale Agreement, the
Receivables Purchase Agreement and the Servicing Agreement and (iii) for the
Issuer's general business purposes. None of the transactions contemplated in
this Indenture, each Series Supplement, the Sale Agreement, the Receivables
Purchase Agreement or the Servicing Agreement (including the use of the proceeds
from the sale of the Notes) will result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. The Issuer does not own or intend
to carry or purchase any "margin security" within the meaning of said Regulation
G, including margin securities originally issued by it or any "margin stock"
within the meaning of said Regulation U.
(t) Investment Company Act of 1940. The Issuer will at all times
conduct its operations in a manner which will not subject it to registration as
an "investment company" under the Investment Company Act of 1940, as amended.
(u) Transactions with Affiliates. The Issuer will not enter into or
cause, suffer or permit to exist any arrangement or contract with any of its
Affiliates unless such arrangement or contract is fair and equitable to the
Issuer, is commercially reasonable and is an arrangement or contract no less
favorable to the Issuer than generally available on an arms-length basis in
equitable transactions with third parties.
(v) Delivery of Custodian Files. The Issuer shall deliver, or cause
to be delivered, to the Custodian the Custodian Files related to the Contracts
identified on each Series Contract Schedule within 10 days of the related Series
Closing Date in accordance with Section 4.01(c)(ii) hereof.
(w) Rule 144A Transfers. The Issuer will deliver with reasonable
promptness any financial or other information that a Holder may reasonably
request from time to time to permit such Holder to comply with the requirements
of Rule 144A under the Securities Act of 1933, as amended, in connection with
the resale of Notes by such Holder.
(x) The Issuer will not, and will not permit any of its Affiliate to,
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the Notes except in accordance with Article 10 hereof.
(y) The Issuer shall provide to the Trustee or any Noteholder and
their duly authorized representatives, attorneys or accountants access to any
and all documentation and to any existing data processing systems (including,
but not limited to, any data that can reasonably be generated therefrom)
regarding each Series Trust Estate (including the Contract Schedule) that the
Issuer may possess, such access being afforded at no cost to the Issuer (except
during the continuance of an Event of Default hereunder), but only upon
reasonable request and during normal business hours so as not to interfere
unreasonably with the Issuer's normal operations or customer or employee
relations, at offices designated by the Issuer.
Section 11.03 Other Matters as to the Issuer. (a) Limitation on
Liability of Directors, Officers, or Employees of the Issuer. The directors,
officers, or employees of the Issuer shall not be under any liability to the
Trustee, the Noteholders, the Issuer, the Servicer or any other Person hereunder
or pursuant to any document delivered hereunder, it being expressly understood
that all such liability is expressly waived and released as a condition of, and
as consideration for, the execution of this Indenture and the issuance of each
Series of Notes.
(b) Parties Will Not Institute Insolvency Proceedings. So long as
this Indenture is in effect, and for one year and one day following its
termination, none of the parties hereto or any Affiliate thereof will (i) file
any involuntary petition against or by the Issuer or (ii) otherwise institute
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or State bankruptcy or similar
law against or by the Issuer, or (iii) directly or indirectly, collude or act in
concert with, or coerce, entice or provide other encouragement to, the Issuer or
any creditor of the Issuer in connection with any such filing or proceeding
described in clause (i) or clause (ii) of this Section 11.03(b); provided,
however, that the Trustee shall not be prohibited from taking any such actions
after an Event of Default if it is acting at the direction of Holders of not
less than 66-2/3% in principal amount of Notes Outstanding (or, with respect to
an Event of Default that does not affect all Series of Notes Outstanding,
66-2/3% in principal amount of Notes Outstanding of each such affected Series).
ARTICLE TWELVE ACCOUNTS AND ACCOUNTINGS
Section 12.01 Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall hold all
such money and property so received by it as part of the applicable Series Trust
Estate and shall apply it as provided in this Indenture. If any Contract becomes
a Defaulted Contract, the Trustee, upon the written request of the Issuer or the
Servicer may, and upon the request of the Holders of a majority in principal
amount of the Outstanding Notes shall, take such action as may be reasonably
necessary to assist the Servicer to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and to proceed thereafter as provided in Article
Six hereof.
Section 12.02 Collection Account; Distribution Account. (a) Prior to
each Series Closing Date, the Trustee shall open and maintain an account for
such Series (which shall be comprised of a depository account and a daily
investment account (collectively, for each Series, the "Collection Account")),
which at all times shall be an Eligible Account and which may be established at
the Collection Account Bank, for the benefit of the Noteholders of such Series,
for the receipt of (i) amounts deposited by the Subservicer into the Clearing
Account attributable to such Series and (ii) any Reinvestment Income on such
account. Funds in each Collection Account shall not be commingled with any other
monies. All monies deposited from time to time in the Collection Account for a
Series pursuant to this Indenture shall be held in the name of the Trustee as
part of the related Series Trust Estate as herein provided. The fees relating to
each Collection Account shall be paid out of the investment income of such
Collection Account, and the Servicer and the Issuer shall be responsible for
paying any fees or expenses not paid out of such investment income. The Trustee
shall not be responsible for paying such fees and expenses.
Prior to each Series Closing Date, the Trustee shall open and maintain
a trust account for such Series (for each Series, the "Distribution Account"),
which at all times shall be an Eligible Account for the benefit of the
Noteholders of such Series, for the receipt of (i) amounts transferred from the
Collection Account for such Series pursuant to Section 12.02(d) hereof, and (ii)
amounts transferred from the Reserve Account for such Series in accordance with
Section 12.03 hereof and the applicable Series Supplement. Funds in each
Distribution Account shall not be commingled with any other monies. All payments
to be made from time to time by the Issuer to the Noteholders of a Series out of
funds in the related Distribution Account pursuant to this Indenture shall be
made by the Trustee or the Paying Agent of the Issuer. All monies deposited from
time to time in each Distribution Account pursuant to this Indenture shall be
held by the Trustee as part of the related Series Trust Estate as herein
provided. Amounts deposited in each Distribution Account shall remain
uninvested; provided, however, that if the Trustee has actual knowledge that any
such amounts will remain in the Distribution Account for any Series more than
one Business Day after the day amounts are deposited in such account, such
amounts shall be deposited in Eligible Investments, and any earnings thereon
shall be remitted by the Trustee to the Collection Account for such Series.
(b) Upon Issuer Order, the Trustee shall direct the depository
institution or trust company holding any Collection Account to invest the funds
in such Collection Account in Eligible Investments. The Issuer Order shall
specify the Eligible Investments in which such amounts shall be invested, shall
state that the same are Eligible Investments and shall further specify the
percentage of funds to be invested in each Eligible Investment. No such Eligible
Investment shall mature later than the Business Day preceding the next following
Remittance Date and shall not be sold or disposed of prior to its maturity. In
the absence of an Issuer Order, the Trustee shall invest funds in such
Collection Account in Eligible Investments described in clause (vi) of the
definition thereof. Eligible Investments shall be made in the name of the
Trustee for the benefit of the Noteholders of the related Series. The Trustee
shall have no responsibility for verifying that any investments directed by the
Issuer are Eligible Investments.
(c) Any income or other gain from investments in Eligible Investments
as outlined in (b) above shall be credited to the applicable Collection Account
and any loss resulting from such investments shall be charged to such account;
provided, however, that the Issuer shall make or cause to be made no later than
the applicable Payment Date a deposit to the applicable Collection Account to
the extent of any losses therein caused as a result of the Issuer's investment
instructions provided for herein. The Trustee shall not be liable for any loss
incurred on any funds invested in Eligible Investments pursuant to the
provisions of this Section 12.02.
(d) On each Payment Date, the Trustee shall pay amounts out of the
Collection Account for each Series as set forth in the related Series
Supplement.
(e) Upon the Issuer's or the Trustee's obtaining actual knowledge of
the occurrence of any Trigger Event with respect to any Series, the Issuer or
the Trustee, as the case may be, shall within two Business Days of obtaining
such actual knowledge notify the Noteholders of such Series of such occurrence.
Section 12.03 Reserve Accounts (a) Prior to the Closing Date, the
Trustee shall open and maintain a trust account for each Series (with respect to
each Series, the "Reserve Account"), which at all times will be an Eligible
Account, for the benefit of the Noteholders of such Series, for the receipt of
the deposit of the initial Reserve Account Required Balance for such Series by
Issuer and of deposits pursuant to Section 5.01 of the applicable Series
Supplement. The Issuer agrees to deposit the initial Reserve Account Required
Balance for each Series in the related Reserve Account on or prior to the
related Series Closing Date. Monies received in the Reserve Account for any
Series will be invested at the written direction of the Issuer in Eligible
Investments during the term of this Indenture, and any income or other gain
realized from such investment, shall be held by the Trustee in such Reserve
Account as part of the related Series Trust Estate as security for the Notes
subject to disbursement and withdrawal as herein provided. Unless otherwise set
forth in the applicable Series Supplement, monies shall be subject to withdrawal
in accordance with Section 12.03(d) hereof.
(b) Upon Issuer Order all or a portion of each Reserve Account shall
be invested and reinvested at TFI's written direction in one or more Eligible
Investments. In the absence of an Issuer Order, the Trustee shall invest funds
in any Reserve Account in Eligible Investments described in clause (vi) of the
definition thereof. All income or other gain from such investments shall be
credited to the applicable Reserve Account and any loss resulting from such
investments shall be charged to the applicable Reserve Account; provided,
however, that the Issuer shall make or cause to be made on any Remittance Date a
deposit to the applicable Reserve Account to the extent of any losses therein
caused as a result of the Issuer's investment instructions. No Eligible
Investment shall mature later than the Business Day preceding the next following
Payment Date and shall not be sold or disposed of prior to its maturity.
Eligible Investments shall be made in the name of the Trustee for the benefit of
the Noteholders of the applicable Series. The Trustee shall provide to the
Servicer a monthly account statement showing deposits and withdrawals in such
month and listing such investments, describing the Eligible Investments in which
such amounts have been invested.
(c) If any amounts invested as provided in Section 12.03(b) hereof
shall be needed for disbursement from any Reserve Account as set forth in
Section 12.03(d) hereof, the Trustee shall cause such investments of such
Reserve Account to be sold or otherwise converted to cash to the credit of such
Reserve Account. The Trustee shall not be liable for any investment loss
resulting from investment of money in any Reserve Account in any Eligible
Investment in accordance with the terms hereof (other than in its capacity as
obligor under any Eligible Investment).
(d) Disbursements from the Reserve Account relating to each Series
shall be made, to the extent funds therefor are available, only as set forth in
the related Series Supplement.
Section 12.04 Reports by Trustee to Noteholders. (a) On each Payment
Date, the Servicer, on behalf of the Trustee, shall account to the Holders of
Notes of each Series and to Fitch on which payments of principal and interest
are then being made the amount which represents principal and the amount which
represents interest, and shall contemporaneously advise the Issuer of all such
payments. The Servicer, on behalf of the Trustee, may satisfy its obligations
under this Section 12.04 by delivering the Monthly Servicer's Report to each
such Noteholder, Fitch and the Issuer. On or before the 10th day prior to the
Final Payment Date for a Series, the Trustee shall provide notice to Fitch and
to the Holders of the Notes of such Series of such Final Payment Date. Such
notice shall include a statement that if the Notes of such Series are paid in
full on such Final Payment Date, interest shall cease to accrue as of the last
day preceding the date on which such Final Payment Date occurs.
(b) The Issuer shall, on a monthly basis beginning on the first
Calculation Date, confirm the credit rating or, if more than one credit rating
has been assigned, each such credit rating of each institution in which funds
are invested pursuant to clause (vi) of the definition of Eligible Investments
and shall promptly notify the Trustee and the Noteholders if any such credit
rating has been lowered.
(c) At least annually, the Trustee shall distribute to Noteholders
any Form 1099 or similar information returns required by applicable tax law to
be distributed to the Noteholders and received in accordance with the next
sentence. The Trustee shall prepare or cause to be prepared all such information
for distribution by the Trustee to the Noteholders.
ARTICLE THIRTEEN PROVISIONS OF GENERAL APPLICATION
Section 13.01 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the
manner provided in this Section 13.01.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
(e) The Holders of not less than 66-2/3% in principal amount of the
Controlling Class of Notes Outstanding of a Series may on behalf of the Holders
of all the Notes of such Series waive any Cash Accumulation Event or Trigger
Event that occurs with respect to such Series.
Section 13.02 Notices, etc., to Trustee, Issuer, Servicer and the
Rating Agency. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with any party hereto
shall be sufficient for every purpose hereunder if in writing and telecopied or
mailed, first-class postage prepaid and addressed to the appropriate address
below:
(a) to the Trustee at 135 South LaSalle Street, Suite 1625,
Chicago, Illinois 60674 (facsimile number (312) 904-2084), Attention:
Asset Backed Securities Trust Services, TRI Funding II [specify
Series], or at any other address previously furnished in writing to the
Issuer, the Noteholders and the Servicer; or
(b) to the Issuer at TRI Funding II, Inc., 3250 Lakeport
Boulevard, Klamath Falls, Oregon 97601 (facsimile number (503)
885-7454), Attention: Treasurer, or at any other address previously
furnished in writing to the Trustee, the Noteholders and the Servicer
by the Issuer; or
(c) to the Servicer at Trendwest Resorts, Inc., 12301 N.E. 10th Place,
Bellevue, Washington 98005 (facsimile number (425) 990-2302), Attention:
Executive Vice President, or at any other address previously furnished in
writing to the Trustee, the Noteholders and the Issuer; or
(d) to Fitch at One State Street Plaza, New York, New York
10004 (facsimile number (212) 480-4438), Attention: Asset-Backed
Securities, or at any other address previously furnished in writing to
the Trustee , the Noteholders or the Issuer.
Section 13.03 Notices and Other Documents to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of any event, such
notice shall be in writing and sent (i) by telefacsimile if the sender on the
same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), or (ii) by registered or certified mail with
return receipt requested (postage prepaid), or (iii) by a recognized overnight
delivery service (with charges prepaid). Any such notice to a Noteholder or its
nominee must be sent (i) to such Person at the address specified for such
communications in the Note Register, or at such other address as the Noteholder
shall have specified to the Trustee in writing and (ii) if specified, to such
other Person as shall be identified in writing to the Trustee by each Noteholder
or its nominee.
Notice under this Section 13.03 will be deemed to be given only when
actually received.
(b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
(c) Any reports, documents or other communications other than notices
to be sent to Noteholders may be telecopied or mailed, first-class postage
prepaid and shall be addressed to the Noteholders and their nominees and
designees, if applicable, as set forth in paragraph (a) above.
Section 13.04 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 13.05 Successors and Assigns. All covenants and agreements
in this Indenture by the Issuer shall bind its successors and assigns, whether
so expressed or not.
Section 13.06 Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or unpaired thereby.
Section 13.07 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, the Noteholders, and any Paying Agent which may be appointed pursuant to
the provisions hereof, and any of their successors hereunder, any benefit or any
legal or equitable right, remedy or claim under this Indenture or under the
Notes.
Section 13.08 Legal Holidays. In any case in which the date of any
Payment Date or the Stated Maturity of any Note shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment of principal, interest, or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the nominal date of any such Stated Maturity or Payment
Date and, assuming such payment is actually made on such subsequent Business
Day, no additional interest shall accrue on the amount so paid for the period
from and after any such nominal date.
Section 13.09 Governing Law. This Indenture and each Note shall be
construed in accordance with and governed by the internal laws of the State of
New York applicable to agreements made and to be performed therein, without
regard to the conflict of laws provisions of any State.
Section 13.10 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 13.11 Obligation. No recourse may be taken, directly or
indirectly, against any incorporator, subscriber to the capital stock,
stockholder, partner, employee, officer or director of the Issuer or of any
predecessor or successor of the Issuer with respect to the Issuer's obligations
on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith; provided, however, that this Section 13.11
shall not protect any Person from his, her or its own fraud or willful
misconduct or from any liability that such Person may incur in another capacity
under the Transaction Documents.
Section 13.12 Compliance Certificates and Opinions. Upon any
application, order or request by the Issuer or the Servicer to the Trustee to
take any action under any provision of this Indenture for which a specific
request is required under this Indenture, the Issuer or the Servicer, as
applicable, shall furnish to the Trustee an Officer's Certificate of the Issuer
or the Servicer, as applicable, stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, except that in the case of any such application or request as to
which the furnishing of a different certificate is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate
or opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
such individual has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 13.13 Effective Date of Transactions. This Indenture and the
other Transaction Documents shall be deemed to be effective and shall be valid
and enforceable as of the Closing Date, except that each Series Supplement shall
be effective, valid and enforceable as of the related Series Closing Date.
Section 13.14. Duties of the Parties. This Indenture has been drafted
with the intent that one Person shall serve as Servicer, one Person shall serve
as Trustee, and one Person shall serve as Subservicer with respect to all Series
of Notes Outstanding. However, any Series may have a different Person serving as
Servicer, Trustee or Subservicer because of a resignation or removal of such
Person with respect to such Series. References to each of the Servicer, the
Trustee and the Subservicer shall be read so that each such Person shall have
the rights and duties of the Servicer, Trustee or Subservicer, as the case may
be, only with respect to each Series for which such Person serves in such role.
IN WITNESS WHEREOF, the Issuer, the Servicer and the Trustee have
caused this Indenture to be duly executed by the persons thereunto duly
authorized as of the day and year first above written.
TRI FUNDING II, INC., Issuer
By:
Name:
Title:
TRENDWEST RESORTS, INC., Servicer
By:
Name:
Title:
LASALLE NATIONAL BANK, Trustee
By:
Name:
Title:
===============================================================================
===============================================================================
EXHIBIT A
FORM OF INVESTMENT LETTER
_______________, 19__
[Issuer]
[TFI]
[Servicer]
[Trustee]
[Transferor]
Re: TRI Funding II, Inc. Receivables-Backed Notes, Series ___
[Class___] No. R_________ (the "Note")
------------------------------------------- Dear Sirs:
The undersigned hereby certifies with respect to the above-referenced
notes (the "Notes") on behalf of the purchaser named below (the "Purchaser") as
follows:
1. I __________________, am the chief financial officer, a person
fulfilling an equivalent function or other executive officer of the
Purchaser.
2. I am familiar with the provisions of Rule 144A ("Rule
144A") under the Securities Act of 1933, as amended (the "1933 Act")
and Rule 3(c)(7) ("Rule 3(c)(7)") under the Investment Company Act of
1940, as amended (the "1940 Act").
3. The Purchaser is a "qualified institutional buyer," as defined
in Rule 144A, and a "qualified purchaser," as used in Rule 3(c)(7).
4. The Purchaser is aware that the addressees may rely on
the exemption from the registration requirements of the 1933 Act
provided by Rule 144A and on the exemption from the investment company
registration requirements of the 1940 Act provided by Rule 3(c)(7).
5. The Purchaser acknowledges that the Purchaser has (i)
received such information regarding the issuer of the Notes as the
Purchaser may require pursuant to Rule 144A or (ii) the Purchaser has
determined not to request such information.
6. The Purchaser understands that the Notes are being issued
only in transactions not involving any public offering within the
meaning of the 1933 Act.
7. The Purchaser acknowledges that transfer of a Note can
only be effected in accordance with the Indenture executed and
delivered in connection with the issuance of the Notes.
8. The Purchaser warrants and represents to, and covenants
with, TFI, the Servicer, the Trustee and the Issuer that either: (A)
the Purchaser (i) is not an "employee benefit plan" within the meaning
of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or a "plan" within the meaning of section
4975(e)(1) of the Internal Revenue Code of 1986 ("Code") (any such plan
or employee benefit plan, a "Plan"), and (ii) the Purchaser is not
acquiring (or considered to be acquiring) the Note with the assets of
any entity whose underlying assets include the assets of a Plan by
reason of such a Plan's investment in such entity, or (B) the Purchaser
is an insurance company that is acquiring the Note for its own account,
with its general corporate assets and not with the assets of a
"separate account," within the meaning of Section 3(17) of ERISA, or
(B) the Prospective Owner is an insurance company that is acquiring the
Note for its own account, with its general corporate assets and not
with the assets of a "separate account" within the meaning of Section
3(17) of ERISA and the conditions of Prohibited Transaction Class
Exemption 83-1 and/or Class Exemption 95-60 have been satisfied by such
Prospective Owner, or (C) the Prospective Owner is an insurance company
that is acquiring the Note with the assets of a separate account within
the meaning of Section 3(17) of ERISA and the conditions of Prohibited
Transaction Class Exemption 90-1 have been satisfied by such
Prospective Owner, or (D) the Prospective Owner is a bank collective
investment fund and the conditions of Prohibited Transaction Class
Exemption 91-38 have been satisfied by such Prospective Owner.
The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made jointly
and severally.
Executed at _________________________, ____________________, this ____
day of ______________, 19__.
- -------------------------------- ----------------------------------------
Purchaser's Name and Title (Print) Signature of Purchaser
- --------------------------------
Address of Purchaser
- --------------------------------
Purchaser's Taxpayer
Identification or Social
Note Number
==============================================================================
==============================================================================
EXHIBIT B
FORM OF SUPPLEMENT FOR GRANT OF INTERESTS IN
SUBSTITUTE CONTRACTS AND UPGRADE CONTRACTS
Pursuant to Section 4.03(e) and Section 4.03(g) of the Indenture, dated
as of March 1, 1998, among TRI Funding II, Inc. (the "Issuer"), Trendwest
Resorts, Inc. (the "Servicer") and LaSalle National Bank, as Trustee (the
"Trustee"), (such Indenture as amended and supplemented from time to time, the
"Indenture"), attached hereto as Annex I is a supplement to Schedule A of the
Series Supplement for the Issuer's Receivables-Backed Notes, Series ______,
which includes information regarding certain interests in certain Contracts, the
related Receivables and the related Credits that are hereby Granted by the
Issuer to the Trustee in accordance with the Indenture. For purposes of this
Supplement, all defined terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
Dated:
TRENDWEST FUNDING II, INC.
By
Name:
Title:
===============================================================================
-1-
===============================================================================
ANNEX I
SUPPLEMENT FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
===============================================================================
===============================================================================
EXHIBIT C
CERTIFICATE OF ISSUER AND SERVICER
PURSUANT TO SECTION 4.04(C) OF THE INDENTURE
Each of the undersigned hereby certify on behalf of TRI Funding II,
Inc. (the "Issuer") and Trendwest Resorts, Inc. (the "Servicer"), respectively,
I have read Section 4.04(c) of the Indenture dated as of March 1, 1998 (the
"Indenture"), among the Issuer, the Servicer and LaSalle National Bank, as
Trustee (the "Trustee"), together with the definitions contained elsewhere in
the Indenture relating to such Section, and further, as of the date hereof that
all conditions precedent provided in the Section 4.04(c) relating to the release
of collateral from the Series _____ Trust Estate for inclusion in the Series
_____ Trust Estate have been complied with.
IN WITNESS WHEREOF, I have hereunto set my hand, this ____ day of
____________, _______.
TRI FUNDING II, INC., as Issuer
By
Name:_______________________________________________________
Title:______________________________________________________
TRENDWEST RESORTS, INC., as Issuer
By
Name:_______________________________________________________
Title:______________________________________________________