Common use of Eligible Notes Receivable Clause in Contracts

Eligible Notes Receivable. As to each Note Receivable that is identified by Borrower as an Eligible Note Receivable in the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: (a) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party Originator, (b) such Note Receivable has been transferred to Borrower by sale or contribution and is now owed to Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, (c) such Note Receivable is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority security interest in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Group.

Eligible Notes Receivable. As to each Note Receivable that is identified by Borrower as an An Eligible Note Receivable in shall be a promissory note constituting a negotiable instrument made, executed and delivered to Borrower evidencing bona fide Indebtedness owing to Borrower as a result of a Mortgage Loan made by Borrower to the most recent Borrowing Base Certificate submitted to Agent, as of the date Maker of such certificate: Eligible Note Receivable: (aA) such Evidences a valid and enforceable commercial transaction and was originated and underwritten in accordance with all applicable state and federal laws, rules and regulations (including without limitation all usury laws) and each Eligible Note Receivable and Eligible Mortgage has been delivered in accordance with and is a bona fide existing payment in compliance with all applicable state and federal laws, rules and regulations. (B) Is the legal, valid and binding obligation of the maker Maker thereof enforceable in accordance with its terms. Borrower has reviewed all the documents relating to each Eligible Note Receivable and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. (C) Is secured by a duly recorded validly perfected and enforceable first fee commercial mortgage of marketable fee simple title to premises not subject to the lien of any past due taxes or other municipal charges and which is not occupied by the obligor on such loan (an “Eligible Mortgage”). (D) Is secured by an Eligible Mortgage of premises as to which: (i) there are no delinquent taxes and no delinquent assessment liens at the time of funding. (ii) the improvements thereon are covered by (x) a fully paid, valid and existing hazard policy insuring against loss or damage by fire and hazards, acceptable to Lender and (y) a valid and existing flood insurance policy in accordance with all applicable state and federal laws, rules and regulations, if the premises are in a designated flood hazard area and flood insurance is available for the premises under the National Flood Insurance Act of 1968, as amended. All individual insurance policies contain a standard mortgagee clause naming Borrower, Lender and their respective successors and/or assigns as their interests may appear. (iii) no improvement thereon is in violation of any applicable zoning, planning, or wetland law or regulation. (iv) there is no pending action or proceeding directly involving the compliance with any environmental law, rule or regulation. (v) nothing further remains to be done to satisfy in full all requirements of each law, rule or regulation constituting a prerequisite to residential or other use and enjoyment of such Note Receivable created premises. (vi) an ALTA mortgagee’s title insurance policy is issued by a title insurer acceptable to Lender and qualified to do business in the ordinary course State in which the premises are located, insuring Borrower and its successors and assigns, as to the first priority lien of business the Eligible Mortgage, subject to no encumbrances, in the maximum principal amount of the Eligible Note Receivable. Each such policy shall also be in form and content and issued by Horizon such companies as shall be acceptable to the Lender. (vii) to the best of Borrower’s knowledge, there is no pending action or proceeding in which the compliance with any lead paint law, rule or regulation is an Approved Thirdissue. Nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation that constitutes a prerequisite to the use and enjoyment of such property. (E) Any and all requirements of any federal, state or local law, rule and/or regulation, including, without limitation, usury, truth-Party Originatorin-lending, (b) real estate settlement procedures, consumer credit protection, equal credit opportunity, fair housing, fair lending or disclosure laws applicable to the Eligible Notes Receivable have been complied with. Borrower shall maintain in its possession, available for Lender’s inspection, and shall deliver to Lender upon demand, evidence of compliance with all such Note Receivable has been transferred requirements, to Borrower by sale or contribution and is now owed to Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, (c) such Note Receivable is not excluded as ineligible by virtue the extent compliance requires preparation of one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity documents or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority security interest in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Groupwritings.

Eligible Notes Receivable. As With respect to each Note Receivable that is identified by Borrower as an Eligible Note Receivable or otherwise included in the calculation of the Borrowing Base on the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: Certificate: (a) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party Originator, arises under Eligible Loan Paper; (b) such Note Receivable arose in the ordinary course of Borrower’s business from the lending of money to the related Account Debtor and is evidenced by a promissory note that has been transferred duly authorized by the related Account Debtor and that, together with the related Loan Paper, is in full force and effect; (c) such Note Receivable and the related Loan Paper: (i) are bona fide existing, full recourse payment obligations of the related Account Debtor created and entered into by Borrower in the ordinary course of its business; (ii) constitute the legal, valid and binding obligation of the Account Debtor on such Note Receivable to Borrower by sale or contribution pay the stated amount of the Note Receivable and is now owed to Borrower interest thereon; and (iii) are enforceable against such Account Debtor, without any known defenses, disputessetoffs, offsetsclaims, counterclaims, rights or rescission, rights of cancellationcancellation (whether actual or alleged), in accordance with their respective terms; (i) there are no facts, events or occurrences that in any way impair the validity, collectability or enforceability of such Note Receivable or tend to reduce the amount payable thereunder as reflected on the invoices, statements schedules delivered to Agent with respect thereto, or that might result in any material adverse change in the financial condition of the related Account Debtor or the collectability thereof; (ii) the outstanding amount of such Note Receivable and all information delivered to Agent or the Pledgeholder with respect to such Note Receivable (including the amounts and dates of payments on such Note Receivable shown on the Books and Records of Borrower) are true, correct and complete; and (iii) the principal amount of such Note Receivable as represented to Agent is actually and absolutely owing to Borrower and is not in any way contingent; (e) such Note Receivable was originated and documented in accordance with the terms of the Credit Policy, and the Account Debtor on such Note Receivable has executed all appropriate documentation required by Borrower, as required by, and in accordance with, the Credit Policy; (f) such Note Receivable, together with the related Loan Paper, was originated in accordance with, and does not contravene in any material respect any Applicable Laws (including, without limitation, laws, rules and regulations relating to usury, credit disclosure, predatory lending, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy); (g) such Note Receivable, together with the Loan Paper related thereto, is a “general intangible,” an “instrument,” a “payment intangible,” or an “account,” within the meaning of the UCC of all jurisdictions that govern the perfection of the security interest granted therein; (h) all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the extension of credit in connection with such Note Receivable have been duly obtained, effected or given and are in full force and effect; (i) such Note Receivable bears some current cash interest, which is due and payable monthly; (j) Borrower is free to assign and pledge such Note Receivable, together with the related Loan Paper and all rights relating thereto, without the giving of notice or the obtaining of consent of any Person, including the applicable Account Debtor or any agent with respect to such Note Receivable (except for such consents which have been obtained prior to inclusion of such Note Receivable in the Borrowing Base); (k) such Note Receivable is not evidenced by a judgment or Chattel Paper; (l) such Note Receivable is not secured by any real property; (m) if an Instrument has been issued in connection therewith, there is only one original of such Instrument representing all or any portion of such Note Receivable, and the original of such Instrument has been delivered to the Agent or the Pledgeholder, duly endorsed as Collateral; (n) such Note Receivable and the Borrower’s interest in all related Account Debtor Collateral are free of any Liens, except for Permitted Liens, and all filings and other actions required to perfect the security interest of the Agent, on behalf of the Lenders, in such Note Receivable and the related Loan Paper have been made or taken; (o) the Account Debtor on such Note Receivable has waived, in writing, all rights of set-off and/or counterclaim against Borrower and its successors and assigns; (p) the Account Debtor on such Note Receivable is not a Person who would cause such Note Receivable to not be an Eligible Note Receivable; (q) the Loan Paper and other documents, instruments and agreements relating to such Note Receivable do not, by their terms, permit the payment obligation of the Account Debtor thereunder to be converted into or exchanged for Stock of such Account Debtor; (r) no payments with respect to such Note Receivable have been or shall be made thereon except payments in accordance with the provisions of Section 3.23; (s) except as permitted in Section 4.3, Borrower has not agreed with the related Account Debtor to: (i) any amendment thereof or waiver of or forbearance with respect to any of the covenants or requirements set forth in the Loan Paper relating thereto; (ii) any deduction therefrom, (ciii) any extension of the time for payment thereof, (iv) any compromise or settlement for less than the full amount thereof, or (v) any release, in whole or in part, of any Person liable therefore; and (t) such Note Receivable is not excluded as ineligible by virtue of not satisfying one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority security interest in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Group.

Eligible Notes Receivable. As With respect to each Note Receivable that is identified by Borrower as an Eligible Note Receivable or otherwise included in the calculation of the Borrowing Base on the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: Certificate: (a) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party Originator, arises under Eligible Loan Paper; (b) such Note Receivable arose in the ordinary course of Borrower’s business from the lending of money to the related Account Debtor and is evidenced by a promissory note that has been transferred duly authorized by the related Account Debtor and that, together with the related Loan Paper, is in full force and effect; (c) such Note Receivable and the related Loan Paper: (i) are bona fide existing, full recourse payment obligations of the related Account Debtor created and entered into by Borrower in the ordinary course of its business; (ii) constitute the legal, valid and binding obligation of the Account Debtor on such Note Receivable to Borrower by sale or contribution pay the stated amount of the Note Receivable and is now owed to Borrower interest thereon; and (iii) are enforceable against such Account Debtor, without any known defenses, disputessetoffs, offsetsclaims, counterclaims, rights or rescission, rights of cancellationcancellation (whether actual or alleged), in accordance with their respective terms; (i) there are no facts, events or occurrences that in any way impair the validity, collectability or enforceability of such Note Receivable or tend to reduce the amount payable thereunder as reflected on the invoices, statements schedules delivered to Agent with respect thereto, or that might result in any material adverse change in the financial condition of the related Account Debtor or the collectability thereof; (ii) the outstanding amount of such Note Receivable and all information delivered to Agent or the Pledgeholder with respect to such Note Receivable (including the amounts and dates of payments on such Note Receivable shown on the Books and Records of Borrower) are true, correct and complete; and (iii) the principal amount of such Note Receivable as represented to Agent is actually and absolutely owing to Borrower and is not in any way contingent; (e) such Note Receivable was originated and documented in accordance with the terms of the Credit Policy, and the Account Debtor on such Note Receivable has executed all appropriate documentation required by Borrower, as required by, and in accordance with, the Credit Policy; (f) such Note Receivable, together with the related Loan Paper, was originated in accordance with, and does not contravene in any material respect any Applicable Laws (including, without limitation, laws, rules and regulations relating to usury, credit disclosure, predatory lending, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy); (g) such Note Receivable, together with the Loan Paper related thereto, is a “general intangible,” an “instrument,” a “payment intangible,” or an “account,” within the meaning of the UCC of all jurisdictions that govern the perfection of the security interest granted therein; (h) all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the extension of credit in connection with such Note Receivable have been duly obtained, effected or given and are in full force and effect; (i) such Note Receivable bears some current cash interest, which is due and payable monthly; (j) Borrower is free to assign and pledge such Note Receivable, together with the related Loan Paper and all rights relating thereto, without the giving of notice or the obtaining of consent of any Person, including the applicable Account Debtor or any agent with respect to such Note Receivable (except for such consents which have been obtained prior to inclusion of such Note Receivable in the Borrowing Base); (k) such Note Receivable is not evidenced by a judgment or Chattel Paper; (l) such Note Receivable is not secured by any real property; (m) if an Instrument has been issued in connection therewith, there is only one original of such Instrument representing all or any portion of such Note Receivable, and the original of such Instrument has been delivered to Agent or the Pledgeholder, duly endorsed as Collateral; (n) such Note Receivable and Borrower’s interest in all related Account Debtor Collateral are free of any Liens, except for Permitted Liens, and all filings and other actions required to perfect the security interest of Agent, on behalf of the Lenders, in such Note Receivable and the related Loan Paper have been made or taken; (o) the Account Debtor on such Note Receivable has waived, in writing, all rights of set-off and/or counterclaim against Borrower and its successors and assigns; (p) the Account Debtor on such Note Receivable is not a Person who would cause such Note Receivable to not be an Eligible Note Receivable; (q) the Loan Paper and other documents, instruments and agreements relating to such Note Receivable do not, by their terms, permit the payment obligation of the Account Debtor thereunder to be converted into or exchanged for Stock of such Account Debtor; (r) no payments with respect to such Note Receivable have been or shall be made thereon except payments in accordance with the provisions of Section 3.23; (s) except as permitted in Section 4.3, Borrower has not agreed with the related Account Debtor to: (i) any amendment thereof or waiver of or forbearance with respect to any of the covenants or requirements set forth in the Loan Paper relating thereto; (ii) any deduction therefrom, (ciii) any extension of the time for payment thereof, (iv) any compromise or settlement for less than the full amount thereof, or (v) any release, in whole or in part, of any Person liable therefore; and (t) such Note Receivable is not excluded as ineligible by virtue of not satisfying one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority security interest in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Group.

Eligible Notes Receivable. As to Those Pledged Notes Receivable -------------------------- which satisfy each of the following criteria: (i) The Note Receivable that is identified shall arise from the sale by Borrower as an Eligible Note Receivable in the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: a Lot; (aii) such The Note Receivable is secured by a bona fide existing payment obligation recorded Deed of Trust on the purchased Lot, constituting a first priority Lien thereon, as evidenced by a Title Policy; (iii) Principal and interest payments shall be payable in legal tender of the maker United States to Collection Agent pursuant to the Lockbox Agreement; (iv) In the case of such an interest bearing Note Receivable, the remaining term of the Note Receivable created is one hundred and twenty (120) months or less, payable in equal monthly payments of principal and interest. Notwithstanding the foregoing, up to twenty percent (20%) of the total Pledged Notes Receivable may include interest bearing Notes Receivable with a maximum term of up to one hundred and forty four (144) months, provided that such Notes Receivable otherwise meet the other criteria set forth in this Section 1.1(s); (v) The Purchaser shall have previously paid to the Borrower, in connection with the execution and delivery of the Note Receivable related to such Pledged Notes Receivable a down payment (prior to all discounts not offered to purchasers generally in the ordinary course of business of the Borrower) of not less than ten percent (10%) of the actual purchase price (as set forth in such purchase contracts related to such Pledged Notes Receivable) of the Purchaser's Lot being so purchased by Horizon Purchaser provided that notwithstanding subsection (viii) herein, Pledged Notes Receivable evidencing 0% or an Approved Third-Party Originator5% interest for terms of 24 or 36 months respectively, (b) such Note Receivable shall be acceptable provided Purchaser has been transferred paid to Borrower by sale or contribution 50% of such purchase price and is now owed to Borrower without any known defenses, disputes, offsets, counterclaims, or rights such Pledged Notes Receivable do not exceed 30% of cancellation, the aggregate principal balance of all Pledged Notes Receivable outstanding at the time of such determinations; (cvi) such No installment on the Note Receivable is not excluded as ineligible by virtue of one more than sixty (60) days contractually past due or more than thirty (30) days contractually past due at the time of the excluding criteria Advance with respect thereto; (vii) The rate of interest payable on the unpaid balance of the Note Receivable is at least ten percent (10%) per annum, however, (i) up to thirty percent (30%) of the total Eligible Notes Receivable may have zero (0%) or five (5%) percent interest rates provided that a fifty percent (50%) cash down payment has been received by Borrower from the Purchaser and the original term is twenty four (24) months or less with respect to a 0% interest rate or the original term is thirty six (36) months or less with respect to a 5% interest rate; and (ii) the weighted average interest rate on all Eligible Notes Receivable must be a minimum of eleven percent (11%) per annum; (viii) The creditworthiness of the Purchaser meets Borrower's credit standards, as set forth in Schedule 3.4 hereof; ------------ (ix) The Purchaser has fee title and access to the definition Lot described in the Purchaser's Deed of Eligible Notes Trust at the time the Note Receivable is assigned to Lender, which Lot has been developed, to the satisfaction of Lender, with street and utility access and such other specifications provided in the Purchaser's purchase contract and related documents or provisions for such development have been made to Lender's satisfaction; and such Lot is free of all Hazardous Materials; (x) The Purchaser is not affiliated in any way, related to, or employed by Borrower or Guarantor or any of the shareholders of Borrower or Guarantor; (xi) The Purchaser has no claim against Borrower and no defense, set-off or counterclaim with respect to its Note Receivable; (xii) The Purchaser has no right to rescind the purchase of the Lot purchased in connection with the execution of its Note Receivable; (xiii) The Note Receivable shall have been endorsed to Lender as required by Section 3.2, and Lender shall have received all of the items described in Section 5.1(c) hereof with respect to the Note Receivable; (dxiv) All documents relating to the original amount ofNote Receivable shall have been executed and delivered to Borrower or the Purchaser, as the unpaid balance ofcase may be, and the amount and dates of payments on such original executed Note Receivable shown on shall have been delivered to Lender, or if directed by Lender, to the Books Custodian, and copies of Borrower and all other documents shall be readily available to Lender in the schedules files of same delivered to Agent are true and correct, Borrower; (exv) Borrower has no knowledge The terms of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority security interest and all instruments related thereto shall comply in favor of Agent, (g) such Note Receivable complies all respects with all applicable federal and state laws in all material respectsand the regulations promulgated thereunder, including, without limitation, the provisions of the Federal Consumer Credit Protection Act, as amended, the Federal Interstate Land Sales Full Disclosure Act, as amended ("ILSFDA"), and Regulation Z of the Federal Reserve Board, as amended; (hxvi) since delivery to Agent, such The maximum principal balance of the Note Receivable has shall not been amended nor any material requirements relating thereto waived exceed $35,000.00 without the prior written consent approval of AgentLender; (xvii) The maker of the Note Receivable shall be a U.S. resident, other than an extension, modification or waiver in accordance with except that up to ten percent (10%) of the Required Procedures then in effect. The portfolio outstanding balance of all Pledged Notes Receivable held may represent the obligations of Canadian residents; (xviii) The Lot being financed by Borrowersuch Note Receivable shall not be subject to any Lien not previously consented to by Lender; and (xix) At the time of the pledging of such Note Receivable and after giving effect thereto and assuming that it otherwise qualifies as an Eligible Note Receivable, as opposed to Horizon or any other Subsidiary or Affiliate the aggregate outstanding principal balances of Horizon, has all Eligible Notes Receivable of the Account Debtor of such Note Receivable and/or affiliate of such Account Debtor shall not been selected in a manner adverse to Borrower or the Lender Groupexceed $35,000.00.

Eligible Notes Receivable. As to Those Pledged Notes Receivable which satisfy each Note Receivable that is identified of the following criteria: (i) Borrower shall be the sole payee; (ii) it arises from a bona fide sale by Borrower as of one or more Intervals; (iii) the Interval sale from which it arises shall not have been cancelled by Purchaser, and any statutory or other applicable cancellation or rescission period shall have expired and the Interval sale is otherwise in compliance with this Agreement; (iv) it is secured by a Mortgage on the purchased Interval; (v) principal and interest payments on it are payable to Borrower in legal tender of the United States; (vi) payments of principal and interest on it are payable in equal monthly installments; (vii) it shall have an original term of no more than one hundred twenty (120) months; (viii) a cash down payment has been received from Purchaser or the maker in an amount equal to at least ten percent (10%) of the actual purchase price of each Interval, and Purchaser shall have received no cash or other rebates of any kind; (ix) no monthly installment is more than thirty (30) days contractually past due at the time of an Advance in respect of such Eligible Note Receivable, or more than sixty (60) days contractually past due at any time; (x) the rate of interest payable on the unpaid balance is at least the rate required so that when the Advance is made in respect of such Eligible Note Receivable the average interest rate on all Eligible Notes Receivable in respect of which Advances are outstanding shall not be less than twelve and one-half percent (12.5%) per annum at any time; (xi) Purchaser of the related Interval has immediate access, for the timeshare “unit week” related to such purchase, to the Interval described in the most recent Borrowing Base Certificate submitted Mortgage securing such Eligible Note Receivable, which Interval has been completed, developed, and furnished in accordance with the specifications provided in the Purchaser’s purchase contract, public offering statement and other Timeshare Documents; and Purchaser has, subject to Agent, as the terms of the date Declaration, purchase contract, public offering statement and other Timeshare Documents, complete and unrestricted access to the related Interval and the Resort; (xii) neither Purchaser of such certificate: the related Interval or any other maker of the Note is an Affiliate of, or related to, or employed by Borrower; (axiii) Purchaser or other maker has no claim against Borrower and no defense, set-off or counterclaim with respect to the Note Receivable; (xiv) the maximum remaining principal balance of any such Note Receivable is a bona fide existing payment obligation shall not exceed $35,000 and the total maximum remaining principal balance of the Notes Receivable executed by any one Purchaser or other maker shall not exceed $60,000 in the aggregate (or such greater amount as may be approved in writing in advance by Agent); (xv) it is executed by a U.S. or Canadian resident; provided, however, that no more than ten percent (10%) of the outstanding principal balance of all Eligible Notes Receivable shall at any time be comprised of Notes Receivable executed by Canadian residents, and, to the extent such outstanding principal balance of such Note Receivable created in Notes exceeds ten percent (10%), they shall not be considered Eligible Notes Receivable; (xvi) the ordinary course original of business by Horizon or an Approved Third-Party Originator, (b) such Note Receivable has been transferred endorsed to Borrower Agent and delivered to the Custodian as provided in this Agreement, and the terms thereof and all instruments related thereto shall comply in all respects with all applicable federal and state laws and the regulations promulgated thereunder; (xvii) the Unit in which the timeshare Interval being financed or evidenced by sale or contribution and is now owed to Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, (c) such Note Receivable is located, shall not excluded be subject to any Lien which is not previously consented to in writing by Agent; and (xviii) If the loan is a newly originated Eligible Note Receivable which is replacing an existing Eligible Note Receivable pledged as ineligible Collateral under the Agreement and the proceeds have been used to finance the purchase of an Interval which is being upgraded by virtue the Purchaser to a more expensive Interval: (1) the principal balance of one the existing Eligible Note Receivable which is being upgraded may still be included for purposes of calculating the Borrowing Base for a period of time expiring on the earlier to occur of (i) the 31st day after the consumer documents effecting the upgrade have been executed or (ii) the date on which any payment on such Eligible Note Receivable becomes thirty (30) or more days past due; (2) on or before the second business day after the expiration of the excluding criteria set forth statutory rescission period in connection with any consumer documents executed effecting any upgrade involving an Eligible Note Receivable and in any event within ten (10) days of such upgrade, the definition of Eligible Notes Receivable, (d) Borrower shall deliver to the Agent or its designee the original amount ofof the new promissory note, comparable instrument or installment sale contract executed in connection with such upgrade duly endorsed in blank by the unpaid balance of, Borrower and the amount and dates of Borrower will cause all payments on made with respect to such new promissory note, comparable instrument or installment sale contract to be forwarded to the lockbox; and (3) any new upgraded Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such involving a prior Eligible Note Receivable is subject to a first-priority security interest in favor shall only be included as part of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such the Borrowing Base if the prior Eligible Note Receivable has not been amended nor any material requirements relating thereto waived without removed from the prior written consent of Agent, other than Borrowing Base and the new upgraded Note Receivable satisfies all conditions for an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender GroupEligible Note Receivable.

Eligible Notes Receivable. As to each Note Receivable that is identified by Borrower as an Eligible Note Receivable in the most recent a Borrowing Base Certificate submitted by or on behalf of Borrower to Agent, as of the date of such certificate: (aa)(i) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party OriginatorBorrower’s business, (bii) such Note Receivable has been transferred to Borrower by sale or contribution and is now owed to Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, and (ciii) such Note Receivable is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, ; (db) such Note Receivable has been documented on the Approved Forms in accordance with the Required Procedures and all Applicable Laws; (c) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct; (d) neither Servicer nor Borrower has received notice of (i) actual bankruptcy, insolvency, or material impairment of the financial condition of any Account Debtor obligated on any Eligible Notes Receivable, (ii) any actual litigation regarding the validity or enforceability of any Eligible Notes Receivable or (iii) any lien on other collateral securing any Eligible Notes Receivable; (e) neither Servicer nor Borrower has no knowledge of any other fact (which shall not include general economic conditions) which that is reasonably likely to impair the validity or collectability collectibility of such Note Receivable, ; (f) such Note Receivable is subject to a first-priority security interest in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery of such report to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, extension or modification or waiver in accordance with the Required Procedures then in effect. The portfolio of ; (g) financing statements naming the applicable Account Debtor as debtor have been duly filed in all applicable jurisdictions and for those Notes Receivable held secured by BorrowerEquipment that consists of motorized vehicles in whole or in part, as opposed to Horizon or any other Subsidiary or Affiliate a certificate of Horizon, has not been selected in a manner adverse to title for such Equipment naming Borrower or the Lender Groupnominee designated in the Vehicle Lienholder Nominee Agreement as first lienholder has been delivered to Custodian or Agent, except with respect to Note Receivables covering Equipment with an original cost less than $25,000; (h) Borrower is the sole legal and beneficial owner of each Note Receivable identified to Agent as an Eligible Note Receivable, and all related documents and Books, and no participation interest or other ownership interest (legal, beneficial or otherwise) has been sold or is otherwise outstanding with respect thereto; (i) the Original Contract delivered to Custodian is the one and only original of the Note Receivable; and (j) such Note Receivable and all related Contract Assets are subject to a first priority security interest in favor of Agent.

Eligible Notes Receivable. As to each Note Receivable that is identified by Borrower as an Eligible Note Receivable in the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: (a) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party OriginatorBorrower’s business, (b) such Note Receivable has been transferred to Borrower by sale or contribution to, and is now owed to by Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, (c) such Note Receivable is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority or second priority security interest interest, as applicable, in favor of Agent, (g) such Note Receivable and all collateral therefor complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, extension or modification or waiver in accordance with the Borrower’s Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Group.

Eligible Notes Receivable. As to each Note Receivable that is identified by Borrower as an Eligible Note Receivable in the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: (a) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party OriginatorBorrower’s business, (b) such Note Receivable has been transferred to Borrower by sale or contribution to, and is now owed to by Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, (c) such Note Receivable is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority or second priority security interest interest, as applicable, in favor of AgentAgent (subject to Permitted Liens), (g) such Note Receivable and all collateral therefor complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, extension or modification or waiver in accordance with the Borrower’s Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Group.

Eligible Notes Receivable. As to Those Pledged Notes Receivable which satisfy each Note Receivable that is identified of the following criteria: (i) Borrower shall be the sole payee; (ii) it arises from a bona fide sale by Borrower as of one or more Intervals; (iii) the Interval sale from which it arises shall not have been cancelled by Purchaser, and any statutory or other applicable cancellation or rescission period shall have expired and the Interval sale is otherwise in compliance with this Agreement; (iv) it is secured by a Mortgage on the purchased Interval; (v) principal and interest payments on it are payable to Borrower in legal tender of the United States; (vi) payments of principal and interest on it are payable in equal monthly installments; (vii) it shall have an original term of no more than one hundred twenty (120) months; (viii) a cash down payment has been received from Purchaser or the maker in an amount equal to at least ten percent (10%) of the actual purchase price of each Interval, and Purchaser shall have received no cash or other rebates of any kind; (ix) the average number of consecutive monthly payments made by all Purchasers pursuant to all Eligible Notes Receivable pledged hereunder and under the Existing Credit Facilities shall at all times be at least seven (7) consecutive monthly payments; (x) no monthly installment is more than thirty (30) days contractually past due at the time of an Advance in respect of such Eligible Note Receivable, or more than sixty (60) days contractually past due at any time; (xi) the rate of interest payable on the unpaid balance is at least the rate required so that when the Advance is made in respect of such Eligible Note Receivable the average interest rate on all Eligible Notes Receivable in respect of which Advances are outstanding shall not be less than twelve and one-half percent (12.5%) per annum at any time; (xii) Purchaser of the related Interval has immediate access, for the timeshare "unit week" related to such purchase, to the Interval described in the most recent Borrowing Base Certificate submitted Mortgage securing such Eligible Note Receivable, which Interval has been completed, developed, and furnished in accordance with the specifications provided in the Purchaser's purchase contract, public offering statement and other Timeshare Documents; and Purchaser has, subject to Agent, as the terms of the date Declaration, purchase contract, public offering statement and other Timeshare Documents, complete and unrestricted access to the related Interval and the Resort; (xiii) neither Purchaser of such certificate: the related Interval or any other maker of the Note is an Affiliate of, or related to, or employed by Borrower; (axiv) Purchaser or other maker has no claim against Borrower and no defense, set-off or counterclaim with respect to the Note Receivable; (xv) the maximum remaining principal balance of any such Note Receivable is a bona fide existing payment obligation shall not exceed $25,000 and the total maximum remaining principal balance of the Notes Receivable executed by any one Purchaser or other maker shall not exceed $25,000 in the aggregate (or such greater amount as may be approved in writing in advance by Lender); (xvi) it is executed by a U.S. or Canadian resident; provided, however, that no more than ten percent (10%) of the outstanding principal balance of all Eligible Notes Receivable shall at any time be comprised of Notes Receivable executed by Canadian residents, and, to the extent such outstanding principal balance of such Note Receivable created in Notes exceeds ten percent (10%), they shall not be considered Eligible Notes Receivable; (xvii) the ordinary course original of business by Horizon or an Approved Third-Party Originator, (b) such Note Receivable has been transferred indorsed to Borrower Lender and delivered to Lender as provided in this Agreement, and the terms thereof and all instruments related thereto shall comply in all respects with all applicable federal and state laws and the regulations promulgated thereunder; and (xviii) the Unit in which the timeshare Interval being financed or evidenced by sale or contribution and is now owed to Borrower without any known defenses, disputes, offsets, counterclaims, or rights of cancellation, (c) such Note Receivable is located, shall not excluded be subject to any Lien which is not previously consented to in writing by Lender. (xix) If the loan is a newly originated Eligible Note Receivable which is replacing an existing Eligible Note Receivable pledged as ineligible Collateral under the Agreement and the proceeds have been used to finance the purchase of an Interval which is being upgraded by virtue the Purchaser to a more expensive Interval: (1) the principal balance of one the existing Eligible Note Receivable which is being upgraded may still be included for purposes of calculating the Borrowing Base for a period of time expiring on the earlier to occur of (i) the 31st day after the consumer documents effecting the upgrade have been executed or (ii) the date on which any payment on such Eligible Note Receivable becomes thirty (30) or more days past due; (2) on or before the second business day after the expiration of the excluding criteria set forth statutory rescission period in connection with any consumer documents executed effecting any upgrade involving an Eligible Note Receivable and in any event within ten (10) days of such upgrade, the definition Borrower shall deliver to the Lender or its designee the original of the new promissory note, comparable instrument or installment sale contract executed in connection with such upgrade duly endorsed in blank by the Borrower and the Borrower will cause all payments made with respect to such new promissory note, comparable instrument or installment sale contract to be forwarded to the lockbox; and (3) any new upgraded Note Receivable involving a prior Eligible Note Receivable shall only be included as part of the Borrowing Base if the prior Eligible Note Receivable has been removed from the Borrowing Base and the new upgraded Note Receivable satisfies all conditions for an Eligible Note Receivable. Notwithstanding anything herein to the contrary, Lender shall be under no obligation to make Advances in respect of: (i) Crown Resorts Notes Receivable (i.e. Notes Receivable relating to intervals at the Crown Resorts listed on Schedule 4.5(c)(iii)) if Advances have already been made under this Loan, the Tranche A Credit Facility and/or the Tranche B Credit Facility, in total, in respect of 681 Crown Resorts Notes Receivable, (d) exclusive of [x] Notes Receivable relating to intervals at the original amount of, the unpaid balance of, Quail Hollow Resort and the amount and dates of payments on such Note [z] any other Crown Resort Notes Receivable shown on the Books of for which Borrower and in the schedules of same shall have delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair Lender an acceptable Mortgagee Title Insurance Policy insuring the validity or collectability of Mortgage securing such Crown Resort Note Receivable; and (ii) Notes Receivable from Oak N' Spruce Resort if any such Advance, (f) such Note Receivable is subject to a first-priority security interest together with any prior Advances made in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio respect of Notes Receivable held by Borrowerfrom Oak N' Spruce under this Loan Agreement, as opposed to Horizon or any other Subsidiary or Affiliate of Horizonthe Tranche A Credit Facility, has not been selected the Tranche B Credit Facility and/or the Inventory Loan would exceed, in a manner adverse to Borrower or the Lender Groupaggregate, $32,000,000.00."

Eligible Notes Receivable. As With respect to each Note Receivable that is identified by Borrower as an Eligible Note Receivable or otherwise included in the calculation of the Borrowing Base on the most recent Borrowing Base Certificate submitted to Agent, as of the date of such certificate: Certificate: (a) such Note Receivable is a bona fide existing payment obligation of the maker of such Note Receivable created in the ordinary course of business by Horizon or an Approved Third-Party Originator, arises under Eligible Loan Paper; (b) such Note Receivable arose in the ordinary course of Borrower’s business from the lending of money to the related Account Debtor and is evidenced by a promissory note that has been transferred duly authorized by the related Account Debtor and that, together with the related Loan Paper, is in full force and effect; (c) such Note Receivable and the related Loan Paper: (i) are bona fide existing, full recourse payment obligations of the related Account Debtor created and entered into by Borrower in the ordinary course of its business; (ii) constitute the legal, valid and binding obligation of the Account Debtor on such Note Receivable to Borrower by sale or contribution pay the stated amount of the Note Receivable and is now owed to Borrower interest thereon; and (iii) are enforceable against such Account Debtor, without any known defenses, disputessetoffs, offsetsclaims, counterclaims, rights or rescission, rights of cancellationcancellation (whether actual or alleged), in accordance with their respective terms; (i) there are no facts, events or occurrences that in any way impair the validity, collectability or enforceability of such Note Receivable or tend to reduce the amount payable thereunder as reflected on the invoices, statements schedules delivered to Agent with respect thereto, or that might result in any material adverse change in the financial condition of the related Account Debtor or the collectability thereof; (ii) the outstanding amount of such Note Receivable and all information delivered to Agent or the Pledgeholder with respect to such Note Receivable (including the amounts and dates of payments on such Note Receivable shown on the Books and Records of Borrower) are true, correct and complete; and (iii) the principal amount of such Note Receivable as represented to Agent is actually and absolutely owing to Borrower and is not in any way contingent; (e) such Note Receivable was originated and documented in accordance with the terms of the Credit Policy, and the Account Debtor on such Note Receivable has executed all appropriate documentation required by Borrower, as required by, and in accordance with, the Credit Policy; (f) such Note Receivable, together with the related Loan Paper, was originated in accordance with, and does not contravene in any material respect any Applicable Laws (including, without limitation, laws, rules and regulations relating to usury, credit disclosure, predatory lending, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy); (g) such Note Receivable, together with the Loan Paper related thereto, is a “general intangible,” an “instrument,” a “payment intangible,” or an “account,” within the meaning of the UCC of all jurisdictions that govern the perfection of the security interest granted therein; (h) all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the extension of credit in connection with such Note Receivable have been duly obtained, effected or given and are in full force and effect; (i) such Note Receivable bears some current cash interest, which is due and payable monthly; (j) Borrower is free to assign and pledge such Note Receivable, together with the related Loan Paper and all rights relating thereto, without the giving of notice or the obtaining of consent of any Person, including the applicable Account Debtor or any agent with respect to such Note Receivable (except for such consents which have been obtained prior to inclusion of such Note Receivable in the Borrowing Base); (k) such Note Receivable is not evidenced by a judgment or Chattel Paper; (l) such Note Receivable is not secured by any real property; (m) if an Instrument has been issued in connection therewith, there is only one original of such Instrument representing all or any portion of such Note Receivable, and the original of such Instrument has been delivered to Agent or the Pledgeholder, duly endorsed as Collateral; (n) such Note Receivable and the Borrower’s interest in all related Account Debtor Collateral are free of any Liens, except for Permitted Liens, and all filings and other actions required to perfect the security interest of Agent, on behalf of the Lenders, in such Note Receivable and the related Loan Paper have been made or taken; (o) the Account Debtor on such Note Receivable has waived, in writing, all rights of set-off and/or counterclaim against Borrower and its successors and assigns; (p) the Account Debtor on such Note Receivable is not a Person who would cause such Note Receivable to not be an Eligible Note Receivable; (q) the Loan Paper and other documents, instruments and agreements relating to such Note Receivable do not, by their terms, permit the payment obligation of the Account Debtor thereunder to be converted into or exchanged for Stock of such Account Debtor; (r) no payments with respect to such Note Receivable have been or shall be made thereon except payments in accordance with the provisions of Section 3.23; (s) except as permitted in Section 4.3, Borrower has not agreed with the related Account Debtor to: (i) any amendment thereof or waiver of or forbearance with respect to any of the covenants or requirements set forth in the Loan Paper relating thereto; (ii) any deduction therefrom, (ciii) any extension of the time for payment thereof, (iv) any compromise or settlement for less than the full amount thereof, or (v) any release, in whole or in part, of any Person liable therefore; and (t) such Note Receivable is not excluded as ineligible by virtue of not satisfying one or more of the excluding criteria set forth in the definition of Eligible Notes Receivable, (d) the original amount of, the unpaid balance of, and the amount and dates of payments on such Note Receivable shown on the Books of Borrower and in the schedules of same delivered to Agent are true and correct, (e) Borrower has no knowledge of any fact (which shall not include general economic conditions) which is reasonably likely to impair the validity or collectability of such Note Receivable, (f) such Note Receivable is subject to a first-priority security interest in favor of Agent, (g) such Note Receivable complies with all applicable laws in all material respects, and (h) since delivery to Agent, such Note Receivable has not been amended nor any material requirements relating thereto waived without the prior written consent of Agent, other than an extension, modification or waiver in accordance with the Required Procedures then in effect. The portfolio of Notes Receivable held by Borrower, as opposed to Horizon or any other Subsidiary or Affiliate of Horizon, has not been selected in a manner adverse to Borrower or the Lender Group.