EXHIBIT 10.24
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RECEIVABLES PURCHASE AGREEMENT
among
TRENDWEST RESORTS, INC.
("Trendwest")
and
TW HOLDINGS III, INC.
("TWH III")
and
TRI FUNDING V, INC.
(the "Issuer")
Dated as of August 1, 2001
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE 1 DEFINITIONS............................................................................2
Section 1.01. Defined Terms..........................................................................2
ARTICLE 2 ACQUISITION OF ASSETS..................................................................5
Section 2.01. Initial Acquisition....................................................................5
Section 2.02. Subsequent Acquisitions................................................................5
Section 2.03. Delivery of Contracts; Filing of Financing Statements..................................5
Section 2.04. Servicing of Contracts and Related Security............................................6
Section 2.05. Review of Contracts....................................................................6
ARTICLE 3 REPRESENTATIONS AND WARRANTEES.........................................................6
Section 3.01. Representations and Warranties of the Sellers..........................................6
Section 3.02. Representations and Warranties the Issuer.............................................16
Section 3.03. Purchase or Substitution Required upon Breach of Certain Representations
and Warranties.......................................................................17
Section 3.04. Requirements for Purchase or Substitution of Contracts; Upgrades......................18
ARTICLE 4 SELLER COVENANTS......................................................................19
Section 4.01. Seller Covenants......................................................................19
Section 4.02. Issuer Covenants......................................................................23
Section 4.03. Assignment of Assets..................................................................23
ARTICLE 5 CONDITIONS PRECEDENT..................................................................24
Section 5.01. Conditions to Issuer's Initial Obligations............................................24
Section 5.02. Conditions to the Sellers' Obligations................................................25
ARTICLE 6 TERM AND TERMINATION..................................................................26
Section 6.01. Term26
Section 6.02. Default by Sellers....................................................................26
ARTICLE 7 MISCELLANEOUS.........................................................................26
Section 7.01. Amendments............................................................................26
Section 7.02. Governing Law.........................................................................26
Section 7.03. Notices...............................................................................26
Section 7.04. Separability Clause...................................................................27
Section 7.05. Assignment............................................................................27
Section 7.06. Further Assurances....................................................................27
Section 7.07. No Waivers; Cumulative Remedies.......................................................27
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Section 7.08. Binding Effect; Third Party Beneficiaries.............................................27
Section 7.09. Set-Off...............................................................................27
Section 7.10. Sellers Will Not Institute Insolvency Proceedings.....................................28
Section 7.11. Counterparts..........................................................................28
Signature Page...................................................................................................29
ANNEX A -- FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS AND UPGRADE
CONTRACTS
EXHIBIT A -- FORMS OF CONTRACT
EXHIBIT B -- FORM OF ASSET ASSIGNMENT
EXHIBIT C -- FORM OF SUBSEQUENT ASSET ASSIGNMENT
EXHIBIT D -- FORM OF SUBORDINATED NOTE
SCHEDULE 1 -- CONTRACTS NOT ORIGINATED BY TRENDWEST
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THIS
RECEIVABLES PURCHASE AGREEMENT, dated as of August 1, 2001 (this
"Agreement"), by and among TRENDWEST RESORTS, INC., an Oregon corporation
(herein, together with its permitted successors and assigns, "Trendwest"), TW
HOLDINGS III, INC., a Delaware corporation (herein, together with its permitted
successors and assigns, "TWH III"), and TRI FUNDING V, INC., a Delaware
corporation (herein, together with its permitted successors and assigns, the
"Issuer").
PRELIMINARY STATEMENT
The Issuer has entered into an Indenture, dated as of August 1, 2001
(as amended and supplemented from time to time, the "Indenture"), with Xxxxx
Fargo Bank Minnesota, National Association, as trustee (herein, together with
its permitted successors and assigns, the "Trustee"), and Trendwest, as servicer
(herein, together with its permitted successors and assigns, the "Servicer"),
pursuant to which the Issuer intends to issue its notes, as provided in the
Indenture (the "Notes"), limited as to principal amount.
In furtherance thereof, Trendwest and TWH III (collectively, the
"Sellers") and the Issuer have entered into this Agreement to provide for, among
other things, the acquisition and purchase by the Issuer of all of the right,
title and interest in and to certain Assets (as defined herein). The Issuer will
be pledging and granting to the Trustee a security interest in the Issuer's
interest in the Assets, as security for the Notes. As a precondition to the
effectiveness of this Agreement, the Issuer, the Trustee and the Servicer will
enter into the Servicing Agreement, dated as of August 1, 2001 (as amended and
supplemented from time to time, the "Servicing Agreement"), to provide for the
administration and servicing of the Assets. In connection with the issuance of
the Notes and pursuant to this Agreement, the Sellers on the Closing Date, and
one or both Sellers on each Subsequent Transfer Date (as defined herein), will
sell the Assets to the Issuer. Such sales shall be effected on the Closing Date
by this Agreement and an Asset Assignment (as defined herein) among Trendwest,
TWH III and the Issuer, and on each Subsequent Transfer Date by this Agreement
and the applicable Subsequent Asset Assignment (as defined herein) among
Trendwest and TWH III, as applicable, and the Issuer, and the list of Contracts
so conveyed shall be listed on Schedule I to the Asset Assignment or the
applicable Subsequent Asset Assignment.
In order to further secure the Notes, the Issuer simultaneously will
grant to the Trustee pursuant to the Indenture, a security interest in, among
other things, the Issuer's rights derived under this Agreement, and the Sellers
agree that all representations, warranties, covenants and agreements made by
them in this Agreement with respect to the Assets shall also be for the benefit
and security of the Trustee and all holders from time to time of the Notes. In
consideration for the Assets and its representations, warranties, covenants and
other agreements under this Agreement, on the Closing Date TWH III will receive
cash, and Trendwest will receive from the Issuer cash, a Subordinated Note (as
defined herein) and all of the common stock of the Issuer. One each Subsequent
Transfer Date, TWH will receive cash and Trendwest will receive cash and an
increase in the principal amount of the Subordinate Note in exchange for the
Assets sold by such Seller on such date.
ARTICLE 1
DEFINITIONS
Section 1.01. Defined Terms. For purposes of this Agreement the
following terms shall have the meanings specified herein. Capitalized terms used
herein but not otherwise defined shall have the respective meanings assigned to
such terms in the Indenture.
"Acquisition Consideration" shall mean, with respect to any Contracts
and the related Receivables, the cash which shall be paid by the Issuer to TWH
III on the Closing Date and each applicable Subsequent Transfer Date, and, with
respect to Trendwest, cash and all of the stock of the Issuer, the Subordinated
Note and cash on the Closing Date and cash and an increase in the principal
balance of the Subordinated Note on each applicable Subsequent Transfer Date.
"Asset Assignment" shall mean the Asset Assignment, substantially in
the form attached hereto as Exhibit B, which shall be entered into in connection
with the conveyance of Assets from the Sellers to the Issuer on the Closing
Date.
"Assets" shall mean all of the Sellers' right, title and interest in
and to (a) the Contracts and the related Receivables, including the proceeds of
the Contracts and the related Receivables and all payments received on or with
respect to the Contracts and the related Receivables and due after the
applicable Cut-Off Date, (b) the Contract Files and the Custodian Files, (c) the
Sellers' rights and interests in the Related Security, (d) the Servicing Charges
with respect to the Contracts and (e) all income and proceeds of the foregoing
or relating thereto.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including any comfort letter, operating agreement, take-or-pay
contract or application for a letter of credit.
"Contract File" shall mean, with respect to each Contract and Mortgage
Loans, the following documents:
(i) a copy of the Loan Documents, as applicable;
(ii) notice of assignment; and
(iii) any other documents or papers relating to servicing
the Receivables.
"Custodian" shall mean Xxxxx Fargo and its permitted successors and
assigns.
"Custodian File" shall mean, with respect to each Contract and Mortgage
Loan, the following documents:
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(i) the originally executed Loan Documents, as
applicable;
(ii) notice of assignment; and
(iii) if the Contract relates to a Fractional Interest, (a) the
originally executed related Mortgage, (b) the originally executed
related Mortgage Note, (c) Title Policy, and (d) originally executed
Assignments of the Mortgage, executed in blank, assigning the related
Mortgage from the Seller to the Issuer and from the Issuer to the
Trustee.
"Cut-Off Date" shall have the meaning set forth in the Indenture.
"Electronic Ledgers" shall mean the electronic master records of all
contracts of the Sellers or the Issuer similar to and including the Contracts.
"Eligible Contract" shall mean a Contract that satisfies the
representations and warranties set forth in Section 3.01(a) hereof.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authorities, in each case
relating to environmental, health, safety and land use matters.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations,
and (viii) liabilities in respect of unfunded vested benefits under plans
covered by Title IV of the Employee Retirement Income Security Act of 1974, as
amended.
"Indenture" shall mean the Indenture, dated as of August 1, 2001, by
and among the Issuer, the Trustee and the Servicer, as amended and supplemented
from time to time.
"Issuer Address" shall mean 0000 Xxxxxxxx Xxxx., Xxxxxxx Xxxxx, Xxxxxx
00000.
"Loan Document" shall mean (i) with respect to Receivables relating to
Vacation Credits, the related Contract, and (ii) with respect to Receivables
relating to Fractional Interests, each of the related Contract, the related
Mortgage and the related Mortgage Note.
"Permitted Encumbrances" means with respect to a Mortgage the following
liens and encumbrances against a Fractional Interest: (i) the interest therein
of the Obligor, (ii) the lien of unbilled and unpaid assessments payable to the
applicable condominium association, (iii) the lien of unpaid real property taxes
and assessments which are not yet delinquent, (iv) covenants, conditions and
restrictions, rights of way, easements and other matters of public record, such
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exception appearing of record being matters to which properties of the same type
as such Fractional Interest are commonly subject and which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage or being matters specifically disclosed in the applicable land sales
registrations filed with the applicable regulatory agencies, and (v) other
matters to which timeshare interests are commonly subject and which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage.
"Seller Address" shall mean (i) with respect to Trendwest, shall mean
0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000, and (ii) with respect to TWH III
shall mean 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000.
"Subordinated Note" shall mean the subordinated note, substantially in
the form of Exhibit D hereto, that is part of the consideration paid by the
Issuer to Trendwest for the Assets.
"Subsequent Asset Assignment" shall mean each Subsequent Asset
Assignment, substantially in the form attached hereto as Exhibit C, which shall
be entered to in connection with the conveyance of Assets from one or more of
Trendwest and TWH III, as applicable, to the Issuer on each Subsequent Transfer
Date.
"Subsequent Contract" shall mean a Contract that a Seller sells to the
Issuer pursuant to this Agreement on the related Subsequent Transfer Date during
the Prefunding Period and identified on Schedule I to the related Subsequent
Asset Assignment.
"Subsequent Transfer Date" shall mean any Business Day during the
Prefunding Period on which the applicable Sellers sells Assets to the Issuer
pursuant to this Agreement and the related Subsequent Asset Assignment.
"Substitute Contract" shall have the meaning set forth in Section
3.04(b) hereof.
"Substitute Receivable" shall mean the Receivable related to a
Substitute Contract.
"Substitution Criterion" shall have the meaning set forth in Section
3.04(b) hereof.
"Transfer Date" shall mean the Closing Date or a Subsequent Transfer
Date, as applicable, related to an Asset.
"Xxxxx Fargo" shall mean Xxxxx Fargo Bank Minnesota, National
Association, and its permitted successors and assigns.
ARTICLE 2
ACQUISITION OF ASSETS
Section 2.01. Initial Acquisition. In return for the Acquisition
Consideration with respect to the Assets transferred on the Closing Date and
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other rights created by this Agreement, each of Trendwest and TWH III hereby
transfers, assigns, sells and grants to the Issuer, without recourse except as
provided in Section 3.03 of this Agreement, on the Closing Date any and all of
such Seller's respective right, title and interest in and to all of such Assets
relating to the Contracts set forth on Schedule I to the Asset Assignment. Each
of the Sellers hereby acknowledges that its transfer of such Assets to the
Issuer is absolute and irrevocable, without reservation or retention of any
interest whatsoever by such Seller (except as set forth in Section 3.03 hereof).
Section 2.02. Subsequent Acquisitions. TWH III and/or Trendwest in
exchange for cash shall transfer, assign, sell and grant to the Issuer, without
recourse except as provided in Section 3.03 of this Agreement, on each
Subsequent Transfer Date, any and all of such Seller's right, title and interest
in and to all of the Assets relating to the Contracts set forth on Schedule I to
the related Subsequent Asset Assignment. Each of Trendwest, and TWH III
acknowledges that its transfer of such Assets to the Issuer will be absolute and
irrevocable, without reservation or retention of any interest whatsoever by it.
Section 2.03. Delivery of Contracts; Filing of Financing Statements. (a)
In connection with the Issuer's acquisition of the Assets, Trendwest, on behalf
of the Sellers and the Issuer, shall deliver, or cause the delivery of, the
original Loan Documents and Assignments of Mortgage to the Custodian so that the
Custodian may retain possession, as agent of the Trustee thereof as provided in
the Transaction Documents. In addition, the Sellers agree to execute, and
Trendwest agrees to record and file prior to the related Transfer Date for such
assets at its own expense, financing statements (and thereafter timely
continuation statements with respect to such financing statements) with respect
to the Assets transferred on such date, in accordance with Section 3.01(a)(viii)
and Section 4.01(c) hereof.
(b) In connection with each acquisition, each of the Sellers shall
promptly, at its own expense, cause any Electronic Ledger maintained by it to be
marked to show which Assets have been acquired by the Issuer in accordance with
this Agreement and transferred to the Issuer and pledged by the Issuer to the
Trustee in accordance with the Transaction Documents.
(c) It is the intention of the Sellers and the Issuer that the Issuer
acquire full and absolute title to the Assets. If it is determined, however,
that the Sellers have transferred to the Issuer a security interest in the
Assets, then this Agreement shall constitute a security agreement under
applicable law, and each of the Sellers shall be deemed to have granted to the
Issuer, as of the date hereof, a first priority perfected security interest in
such Seller's right, title and interest in the Assets.
Section 2.04. Servicing of Contracts and Related Security. The Servicer
shall service the Contracts and the other Assets for the benefit of the Issuer
(and its successors and assigns) in accordance with the terms and conditions of
the Transaction Documents. Notwithstanding the foregoing, Trendwest acknowledges
and agrees that its obligations under this Agreement are independent of any
obligations it may have as Servicer and that its obligations under this
Agreement will continue in full force and effect, whether or not it is acting as
Servicer, until termination of this Agreement in accordance with Section 6.01
hereof, unless otherwise provided herein.
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Section 2.05. Review of Contracts. If any of the Sellers or the
Custodian (who shall thereupon notify the Issuer, Trendwest and the Trustee)
discovers that any Loan Document, Contract File or Custodian File is missing or
defective (that is, mutilated, damaged, defaced, incomplete, improperly dated,
forged or otherwise physically altered) in any material respect, Trendwest shall
correct or cure such omission, defect or other irregularity within 30 days from
the date Trendwest discovered such omission or defect, or from the date
Trendwest is notified by the Custodian or another Seller of such omission or
defect. In the event Trendwest is unable to correct or cure such omission,
defect or irregularity within the 30-day period described in the preceding
sentence, Trendwest shall purchase or replace such Contract from the Issuer in
accordance with Section 3.03 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTEES
Section 3.01. Representations and Warranties of the Sellers. Each of
Trendwest, with respect to all of the Contracts and related Receivables and
information with respect to WorldMark, and TWH III, with respect to the
Contracts and related receivables transferred by TWH III, hereby and by the
Asset Assignment and each Subsequent Asset Assignment, hereby makes the
following representations and warranties to the Issuer and for the benefit of
the Issuer, the Trustee and Holders of Notes, on which the Issuer relies in
acquiring the Assets and on which the Holders rely in purchasing such Notes.
Such representations and warranties speak as of the Transfer Date for such
Assets and as of the date of the related transfer of such Assets under the
Indenture and shall survive any subsequent transfer, assignment, contribution or
conveyance of the Contracts and related Receivables and interest in the related
Vacation Credits and any issuance of Notes.
(a) As to each Contract:
(i) The information set forth in the Contract
Schedule is true and correct as of the related Cut-Off Date.
(ii) The rights with respect to each Loan Document
are assignable by the lender thereunder and its successors and
assigns without the consent of any Person.
(iii) The applicable Seller has heretofore provided to
the Custodian the sole original counterpart of the applicable
Loan Documents, together with any and all amendments, waivers
and modifications thereto, except for any original executed
counterparts which have been marked to show that they have
been pledged by the Issuer to the Trustee under the Indenture,
and the terms of such Loan Documents have not been further
amended, waived or modified subsequent to the above being
provided to the Custodian.
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(iv) The Electronic Ledgers have been marked as
provided in Section 2.03(b) hereof.
(v) The Contract was not originated in, nor is it
subject to the laws of, any jurisdiction, the laws of which
would make unlawful the sale, transfer or assignment of such
document under any of the Transaction Documents, including any
repurchase in accordance with the Transaction Documents.
(vi) Each related Loan Document is in full force and
effect in accordance with its respective terms, and none of
the Sellers or any Obligor has or will have suspended or
reduced any payments or obligations due or to become due
thereunder by reason of a default by the other party to such
Loan Document; as of the applicable Cut-Off Date, no Scheduled
Payment with respect to such Loan Document has not been
received and remains unpaid for a period of 30 or more days
(without regard to advances, if any, made by the Servicer),
and there are no proceedings pending, or to the best of the
knowledge of any Seller, threatened asserting insolvency of
such Obligor; there has been no other default, breach or
violation of such Loan Document; there are no proceedings
pending, or to the best of the knowledge of any Seller,
threatened, wherein such Obligor or any governmental agency
has alleged that such Loan Document is illegal or
unenforceable; and none of the related Scheduled Payments are
subject to any set-off or credit of any kind.
(vii) Each related Loan Document is the valid, binding
and legally enforceable obligation of the parties thereto,
enforceable in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability
relating to or affecting creditors' rights generally and to
general principles of equity regardless of whether enforcement
is sought in a court of law or equity.
(viii) All actions, filings (including UCC filings) and
recordings as are required by the Indenture and that may be
necessary to perfect, with respect to the Trust Estate, a
first priority security interest of the Issuer and the Trustee
in, and the sale by the applicable Seller to the Issuer of,
the Loan Documents and the related Receivables, being acquired
and the transfer of the security interest in the Related
Security hereunder have been accomplished and are in full
force and effect.
(ix) The Contract is identical to one of the form
contracts attached as Exhibit A hereto, except for either (i)
such immaterial modifications or deviations from the form
contract which appear in such Contract, which immaterial
modifications or deviations will not have a material adverse
effect on the Holders of the Notes or (ii) such modifications
or deviations as set forth on Schedule I to the Asset
Assignment or Subsequent Asset Assignment, as the case may be,
related to such Contract.
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(x) Except for the Contracts originated listed on
Schedule 1 hereto, the Contract was originated by Trendwest in
Trendwest's ordinary course of business and meets Trendwest's
qualifications for originating vacation credit installment
contracts. The origination and collection practices used by
Trendwest and the applicable Seller with respect to such
Contract have been in all respects legal, proper, prudent and
customary in the vacation credit financing and servicing
business.
(xi) The related Receivable is owing under a Contract
that has a term to the last Scheduled Payment Date of (a) not
more than 84 months if the Contract relates to Vacation
Credits and not more than 120 months if the Contract relates
to Fractional Interests and (b) not less than one month.
(xii) The Contract obligates the related Obligor to
make all Scheduled Payments thereunder in full notwithstanding
the collection by Trendwest of a security deposit with respect
thereto. The calculation of the Collateral Value of the
related Receivable does not include any security deposits or
similar payments collected by or on behalf of Trendwest which
are applied to Scheduled Payments.
(xiii) All requirements of applicable federal, State
and local laws, and regulations thereunder, including, without
limitation, usury laws, if any, in respect of the Contract
have been complied with in all material respects, and such
Contract complied in all material respects at the time it was
originated or made and now complies in all material respects
with all legal requirements of the jurisdiction in which it
was originated.
(xiv) Each of the Contract and the related Mortgage
Note, if any, is not and will not be subject to any right of
rescission, set-off, counterclaim or defense, including the
defense of usury, whether arising out of transactions
concerning such Contract or Mortgage Note or otherwise, and
the operation of any of the terms of such Contract or Mortgage
Note or the exercise by the applicable Seller or the Obligor
of any right under such Contract or Mortgage Note will not
render such Contract or Mortgage Note unenforceable in whole
or in part, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect
thereto, except that certain rights or defenses may exist
under applicable law which, individually or in the aggregate,
do not make the remedies available to the Seller with respect
to such Contract or Mortgage Note inadequate for the practical
realization of the benefits provided thereby.
(xv) Each of the Sellers has duly fulfilled all
obligations on the lender's part to be fulfilled under or in
connection with the related Loan Documents, including, without
limitation, giving any notices or consents necessary to effect
the acquisition of the Assets by the Issuer and has done
nothing to impair the rights of the Issuer in such Loan
Documents or payments with respect thereto.
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(xvi) The related Loan Documents, the related
Receivable and the related Seller's interest in the Related
Security have not been sold, transferred, assigned or pledged
by such Seller to any Person other than the Issuer (except for
such interests in the Assets which shall be terminated on or
prior to the applicable Transfer Date, and upon execution and
delivery hereof and of the Asset Assignment by the related
Seller and the payment by the Issuer of the related
Acquisition Consideration, the Issuer will have all of the
right, title and interest in and to such Seller's interest in
the Assets, free and clear of all liens and encumbrances,
except for the interests of the Obligor pursuant to the
related Loan Documents.
(xvii) The Seller has no specific knowledge that the
related Loan Documents will not be fully performed in
accordance with their terms.
(xviii) The Obligor has made payments at least equal to
two Scheduled Payments (which payments may be advance payments
under such Contract) due under the related Loan Documents
within the time set forth in such Loan Documents.
(xix) The related Obligor is a resident of the
United States of America or Canada (other than the
Province of Quebec), and the related Scheduled Payments are
payable in U.S. dollars.
(xx) The related Scheduled Payments were
established at the time such Contract was originated.
(xxi) There are no unpaid brokerage or other fees
owed to third parties relating to the origination of the
Contract.
(xxii) The Contract cannot be rescinded pursuant to
applicable consumer finance laws.
(xxiii) The contract was originated in compliance with
the requirements of all federal, state and local laws, rules
and regulations applicable to the origination of the Contract
(including, without limitation, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z," the Soldiers' and Sailors' Civil
Relief Act of 1940, and any other federal, state and local
laws relating to interest, usury, consumer credit, equal
credit opportunity, fair credit reporting, privacy, consumer
protection, false or deceptive trade practices and disclosure,
the Mail Fraud statute and any timeshare disclosure),
non-compliance with which could have a material adverse effect
on the enforceability or value of the Contract.
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(xxiv) All Scheduled Payments are due and payable on a
monthly basis, and such Scheduled Payments are level payments
throughout the terms of the Contract.
(xxv) With respect to a Contract relating to
Fractional Interests:
(A) The related Fractional Interest
mortgaged by the related Obligor constitutes a fee
simple interest in real property and improvements at
the applicable Resort. The related Mortgage has been
duly filed and recorded with all appropriate
governmental authorities in all jurisdictions in
which such Mortgage is required to be filed and
recorded to create a legal, valid, binding and
enforceable first Lien on the related Fractional
Interest, and such Mortgage creates a legal, valid
and binding first Lien on the related Fractional
Interest, enforceable in accordance with its terms,
subject only to Permitted Encumbrances. The
Assignments of Mortgage of such related Mortgage from
the Seller to the Issuer and each related endorsement
of the related Mortgage Note constitutes a duly
executed, legal, valid, binding and enforceable sale,
assignment or endorsement, as the case may be, of
such related Mortgage and related Mortgage Note, and
all monies due or to become due thereunder, and all
proceeds thereof. The Seller has executed and
delivered or within five Business Days of the
applicable Transfer Date, will have executed and
delivered each Assignment of Mortgage from the Seller
to the Issuer of such related Mortgage, endorsed such
related Mortgage Note, and delivered it to the Issuer
or, at the Issuer's instruction, the Custodian as
required by Section 2.03 hereof.
(B) The related Mortgage contains customary
and enforceable provisions so as to render the rights
and remedies of the holder thereof adequate for the
realization against the related Fractional Interest
of the benefits of the security interests intended to
be provided thereby.
(C) The related Mortgage Loan is or will be
within sixty (60) days of the related Cut-Off Date
covered by a title policy issued by a title insurer
qualified to do business in the jurisdiction where
the related Fractional Interest is located in a form
generally acceptable to prudent originators of
similar mortgage loans, insuring Trendwest and its
successors and assigns, as to the first priority
mortgage Lien of the related Mortgage in an amount
equal to the original principal balance of such
Mortgage Loan. Upon issuance of the title policy,
such title policy is or will be in full force and
effect and is enforceable by the Servicer without the
consent of or any notification to the insurer except
as set forth in the form of policy. No claims have
been made under such title policy, and no prior
holder of such Mortgage Loan has done or omitted to
do anything which would impair the coverage of such
title policy. Full premiums for such title policy,
endorsements or all special endorsements have been
paid.
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(D) The Seller has not taken (or omitted to
take), and has no knowledge that the related Obligor
has taken (or omitted to take), any action that would
impair in any material respect or invalidate the
coverage provided by any hazard insurance, title
policy or any other insurance policy relating to the
related Mortgage Loan or the related Fractional
Interest.
(E) All applicable intangible taxes and
documentary stamp taxes were paid as to the related
Mortgage Note and the related Mortgage.
(F) The proceeds of the related Mortgage
Loan have been fully disbursed, there is no
obligation to make future advances or to lend
additional funds under the mortgagee's commitment or
the documents and instruments evidencing or securing
such Mortgage Loan and no such advances or loans have
been made since the origination of such Mortgage
Loan.
(G) Neither the related Mortgagor nor any
other Person has the right, by statute, contract or
otherwise, to seek the partition of the related
Fractional Interest.
(H) The related Mortgage Note conveyed
hereunder has been endorsed and assigned in a manner
that satisfies all requirements of endorsement and
assignment, in order to transfer all right, title and
interest of the applicable Seller in such Mortgage
Note to the Issuer.
(xxvi) The related Loan Documents have not been
satisfied, subordinated or rescinded.
(xxvii) The related Obligor has paid, in the aggregate,
an amount not less than 10% of the original purchase price of
the Vacation Credits or Fractional Interest, as applicable.
(b) As to the aggregate pool of Contracts transferred to the
Issuer on each Transfer Date no Seller used any selection procedures
that identified the Contracts and Mortgage Loans as being less
desirable or valuable than other comparable vacation credit installment
contracts or fractional interest mortgage loans owned by such Seller.
(c) As to each Seller and WorldMark (to the extent
specific reference to WorldMark is made) as of each Transfer Date:
(i) Such Seller has been duly organized and is
validly existing and in good standing as a corporation under
the laws of the State in which such Seller was organized with
corporate power and authority to own its properties and to
transact the business in which it is now engaged, and such
Seller is duly qualified to do business in and is in good
standing under the laws of each State in which its business is
located or is not required under applicable law to effect such
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qualification, except where failure to so qualify would not
have a material adverse effect on the ability of such Seller
to perform its obligations under the Transaction Documents or
on any of the Loan Documents, the Receivables or the Related
Security or on the ability of such Seller, the Issuer or the
Trustee to realize upon or enforce the same.
(ii) The performance of the obligations of such
Seller under this Agreement and the other Transaction
Documents and the consummation of the transactions herein and
therein contemplated will not conflict with or result in any
breach of any of the terms or provisions of, or constitute
with or without notice, lapse of time or both, a default under
the certificate of incorporation, articles of incorporation
and bylaws, as applicable, of such Seller, or any material
indenture, agreement, mortgage, deed of trust or other
instrument to which such Seller is a party or by which it is
bound, or result in the creation or imposition of any lien,
charge or encumbrance (except the lien created by the
Transaction Documents) upon any of the property or assets of
such Seller pursuant to the terms of such indenture, mortgage,
deed of trust, or other agreement or instrument to which such
Seller is a party or by which such Seller is bound or to which
any of such Seller's property or assets is subject, nor will
such action result in any violation of the provisions of such
Seller's Certificate of Incorporation, Articles of
Incorporation and By-laws, as applicable, or any statute or
any order, rule or regulation of any court or any regulatory
authority or other governmental agency or body having
jurisdiction over such Seller or any of its properties; and no
consent, approval, authorization, order, registration or
qualification of or with or other action of any court, or any
such regulatory authority or other governmental agency or body
is required for consummation of the transactions contemplated
by this Agreement and the other Transaction Documents except
such consents, approvals and authorizations which have been
obtained or such registrations or qualifications which have
been made.
(iii) This Agreement and any other Transaction
Document to which such Seller is a party have been duly
authorized, executed and delivered by such Seller by all
necessary corporate action and such agreements are the valid
and legally binding obligations of such Seller, enforceable
against such Seller in accordance with their respective terms,
subject as to enforcement to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights
generally and to general principles of equity regardless of
whether enforcement is sought in a court of law or equity.
(iv) The relevant Seller Address is the chief
executive office, principal place of business and the office
where such Seller keeps its records concerning the Contracts,
Receivables and the related Vacation Credits. Such Seller has
not used any address other than its Seller Address or 00000
X.X. 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, in the previous
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five-year period. Such Seller's legal name is as set forth in
this Agreement. Such Seller has not used or done business
under any other name in the previous six-year period.
(v) Such Seller does not have knowledge of, nor
should it reasonably know of, any fact that would render it
unable to perform each and every covenant contained in this
Agreement.
(vi) The transactions contemplated by the Transaction
Documents are being consummated by such Seller in furtherance
of its ordinary business purposes, with no contemplation of
insolvency and with no intent to hinder, delay or defraud any
of its present or future creditors.
(vii) The consideration received by such Seller
pursuant to this Agreement is fair consideration having value
reasonably equivalent to or in excess of the value of the
performance of such Seller's obligations hereunder and is
reasonably equivalent to amount that could be obtained from an
unaffiliated third party in an arm's-length transaction.
(viii) 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 such Seller:
(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 such Seller will be an unreasonably
small capital or the remaining assets of such Seller
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. Such Seller's assets and cash flow enable
it to meet its present obligations in the ordinary
course of business as they become due.
(ix) Both immediately before and after the
transactions contemplated by the Transaction Documents (a) the
present fair salable value of such Seller's assets was or will
be in excess of the amount that will be required to pay its
probable liabilities as they then exist and as they become
absolute and matured; and (b) the sum of such Seller's assets
was or will be greater than the sum of its debts, valuing its
assets at a fair salable value.
(x) The acquisition of the Assets by the Issuer
pursuant to this Agreement is not subject to the bulk transfer
or any similar statutory provisions in effect in any
applicable jurisdiction.
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(xi) There are no proceedings or investigations
pending or, to the knowledge of such Seller, threatened
against or affecting such Seller in or before any court,
governmental authority or agency or arbitration board or
tribunal which, individually or in the aggregate, involve the
possibility of materially and adversely affecting the
properties, business, prospects, profits or condition
(financial or otherwise) of such Seller or WorldMark, or the
ability of such Seller to perform its obligations under this
Agreement or the other Transaction Documents. Such Seller is
not in default with respect to any order of any court,
governmental authority or agency or arbitration board or
tribunal.
(xii) All tax returns or extensions required to be
filed by such Seller in any jurisdiction have in fact been
filed, and all taxes, assessments, fees and other governmental
charges upon such Seller, 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. All such tax
returns are true and correct, and such Seller 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 such Seller are in accordance with
generally accepted accounting principles.
(xiii) Such Seller (i) is not in violation of any laws,
ordinances, governmental rules or regulations to which it is
subject, (ii) has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to
the ownership of its property or to the conduct of its
business, and (iii) is not in violation in any material
respect of any term of any agreement, charter instrument,
bylaw or instrument to which it is a party or by which it may
be bound which violation or failure to obtain might materially
adversely affect the business or condition (financial or
otherwise) of such Seller.
(xiv) It is the intention of such Seller that the
Assets are being or have been acquired by the Issuer and that
the beneficial interest in and title to the Assets are not
part of such Seller's estate in the event of the filing of a
bankruptcy petition by or against such Seller under any
bankruptcy law.
(xv) Immediately prior to the transfer of Assets by
such Seller to the Issuer pursuant to this Agreement, such
Seller was the sole owner of such Assets at such time and had
good and marketable title to such Assets, free and clear of
all liens, claims and encumbrances (except for the Acquisition
Consideration and security interests in such Assets, if
applicable, which shall be terminated on or prior to the
related Transfer Date).
(xvi) Such Seller will treat the transfer of the
Assets as a sale to the Issuer for federal, State and local
income tax reporting and accounting purposes.
(xvii) The sale of the Assets pursuant to this
Agreement constitutes the valid sale by such Seller to the
Issuer of all of such Seller's right, title and interest in
the Assets.
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(xviii) Such Seller has valid business reasons for
selling the Assets to the Issuer pursuant to this Agreement
rather than obtaining a loan secured by the Assets.
(xix) Such Seller will be operated generally so
as to not be substantively consolidated with the Issuer
for bankruptcy purposes.
(xx) No event has occurred that adversely affects
such Seller's ability to perform the transactions contemplated
by the Transaction Documents.
(xxi) Each pension plan or profit sharing plan to
which such Sellers is a party has been fully funded in
accordance with the obligations of such Seller as set forth in
such plan.
(xxii) Neither the acquisition nor the holding of the
Contracts and the related Receivables violates any federal or
State law, rule or regulation the non-compliance with which
could have a material adverse effect on the value of the
Contracts or the related Receivables.
(d) Liabilities of WorldMark. WorldMark:
(i) has not voluntarily incurred or at any time
become voluntarily liable for any Indebtedness;
(ii) has not voluntarily allowed its property to
become subject to any Liens, nor is any of its property
subject to any Liens, other than (A) utility or other
easements or licenses unrelated to any debt of WorldMark or
(B) Liens that do not exceed, in the aggregate, $100,000; and
(iii) has not involuntarily incurred and is not
involuntarily liable for any debt, nor is any of its property
involuntarily subject to any Liens (other than utility or
similar easements or licenses unrelated to any debt of
WorldMark) that individually or in the aggregate (with respect
to all such debt and the obligations secured by all such
Liens) exceed $1,000,000.
(e) Environmental Matters. The Sellers have conducted their
operations and kept and maintained their property in compliance with
all Environmental Laws. Trendwest has performed its duties under its
management agreement with WorldMark in material compliance with all
Environmental Laws.
Section 3.02. Representations and Warranties of the Issuer. The Issuer
hereby makes the following representations and warranties for the benefit of the
Trustee and Holders of the Notes, on which the Sellers rely in entering into
this Agreement with the Issuer and on which the Holders of the Notes rely in
purchasing the Notes; such representations and warranties speak as of each
Transfer Date and the date of the related transfer of the Assets under the
Indenture unless otherwise indicated, but shall survive any subsequent transfer,
assignment, contribution or conveyance of the Assets or any part thereof:
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(a) The Issuer has been duly organized and is validly
existing in good standing as a corporation under the laws of the State
of Delaware, with corporate power and authority to own its properties,
perform its obligations under the Transaction Documents and to transact
the business in which it is now engaged or in which it proposes to
engage; the Issuer is duly qualified to do business and is in good
standing in each State in which the nature of its business requires it
to be so qualified, except where failure to so qualify would not have a
material adverse effect on the ability of the Issuer to perform its
obligations under the Transaction Documents.
(b) The transfer to and receipt by the Issuer of the Sellers'
interest in the Loan Documents, the Receivables and the Related
Security pursuant to this Agreement and the consummation of the
transactions contemplated herein and in the Transaction Documents will
not conflict with or result in breach of any of the terms or provisions
of, or constitute (with or without notice, lapse of time or both) a
default under the certificate of incorporation or by-laws 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
result in the creation or imposition of any lien, charge or encumbrance
(except for the lien created by the Indenture) upon any of the property
or assets of the Issuer pursuant to the terms of, such indenture,
mortgage, deed of trust, or other agreement or instrument to which the
Issuer is a party or by which it is bound or to which any of the
property or assets of the Issuer is subject, nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of the Issuer or any statute or any order,
rule or regulation of any court or regulatory authority or other
governmental agency or body having jurisdiction over the Issuer or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with or other action of any court
or any such regulatory authority or other governmental agency or body
is required for the acquisition of the Assets hereunder.
(c) The Transaction Documents to which the Issuer is a party
have been duly authorized, executed and delivered by the Issuer by all
necessary corporate action and constitute valid and legally binding
obligations of the Issuer enforceable against the Issuer in accordance
with their terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating
to or affecting creditors' rights generally and to general principles
of equity regardless of whether enforcement is sought in a court of
equity or law.
(d) There are no proceedings or investigations to which the
Issuer is a party pending or, to the knowledge of the Issuer,
threatened, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (a) asserting the
invalidity of this Agreement, (b) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated
by this Agreement, 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
Agreement.
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(e) 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 Agreement, have been or will be taken or obtained on or prior to
the Closing Date.
(f) The Issuer Address is the principal place of business
and chief executive office of the Issuer.
Section 3.03. Purchase or Substitution Required upon Breach of Certain
Representations and Warranties. Upon discovery by the Issuer or any of the
Sellers of the breach of any representations or warranties set forth in Section
3.01 or 3.02 hereof which materially and adversely affects the value of a
Contract, Receivable, the Related Security, or the interests of the Holders of
the Notes, or a 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) hereof, the party discovering such
breach shall give prompt written notice to the other parties. Trendwest shall,
within 30 days from the date it was notified of, or otherwise discovers, such
breach, cure such breach, or, (1) if the breach relates to a particular
Contract, Receivable or Related Security and is not cured, either (a) purchase
the Issuer's interest in such Loan Document and the related Receivable and
Related Security from the Issuer at the Purchase Price or (b) provide a
Substitute Contract or (2) if the breach relates to a representation or warranty
(as set forth in Section 3.01(a) herein) regarding the Contracts as a whole and
is not cured by Trendwest, either (a) purchase the Issuer's interest in such
non-conforming Contract or Contracts and the related Receivables from the Issuer
or (b) provide Substitute Contracts as set forth above, so that the
representations and warranties (as set forth in Section 3.01(a) herein) are
correct, as evidenced by a certificate of an officer of Trendwest to the
Trustee. The Purchase Price for a purchased Contract shall be paid, and any
Substitute Contract shall be delivered, by Trendwest to the Issuer in accordance
with Section 3.04(c) hereof. It is understood and agreed that the obligation of
Trendwest to cure or purchase or replace any Contract as to which such a breach
has occurred shall constitute the sole remedy respecting such breach available
to the Issuer, the Holders of Notes or the Trustee on behalf of such Holders
(except for any indemnities provided under Section 4.01(j) hereof or any
obligations under the Indenture) for any losses, claims, damages and liabilities
arising from the Issuer's interest in such Contract or the inclusion of the
Issuer's interest in such Contract in the Trust Estate.
Section 3.04. Requirements for Purchase or Substitution of Contracts;
Upgrades. (a) If Trendwest is required to purchase the Issuer's interest in any
Contract and the related Receivables, under Section 3.03 hereof or if the Issuer
is required or elects to purchase the Trustee's interest in any Contract and the
related Receivables under Section 3.10 of the Servicing Agreement, such Contract
and related Receivables shall be purchased by Trendwest at the Purchase Price.
All purchases shall be accomplished at the times specified in subsection (c)
below.
(b) If Trendwest is required to substitute any Contract under Section
3.03 hereof, each such contract (a "Substitute Contract") shall (i) be an
Eligible Contract; (ii) be written on one of the standard forms attached as
Exhibit A to this Agreement; (iii) be accompanied by a supplement to this
Agreement substantially in the form of Annex A hereto subjecting such Contract
to the provisions hereof and providing with respect to such Substitute Contract
17
the information required in the Contract Schedule; (iv) not have been selected
using procedures that identified the Contracts as being less desirable or
valuable than other comparable vacation credit installment contracts owned by
Trendwest; and (v) not have any Scheduled Payments that are due after the date
that is six months prior to the Stated Maturity of the Notes supported by such
Contract. In addition, (i) such Substitute Contracts shall have an aggregate
Collateral Value at least equal to and not substantially greater than the
aggregate Collateral Value of the Contracts being withdrawn as of the date of
withdrawal (the "Substitution Criterion"), (ii) such Substitute Contract will
have an interest rate that is not 1% less than the original Contract and (iii)
the representations and warranties set forth in Sections 3.01 and 3.02 shall be
true and correct with respect to such Substitute Contract and the aggregate pool
of Contracts as of the date such Substitute Contract is conveyed to the Issuer.
Upon the substitution of any Substitute Contract pursuant to the
provisions of this Section 3.04(b), Trendwest hereby agrees that such Substitute
Contract will be subject to all the terms and provisions of this Agreement, the
Servicing Agreement, the Custodian Agreement and the Indenture just as if such
Substitute Contract had been one of the original Contracts acquired on the
Closing Date. Upon the substitution of a Substitute Contract pursuant to this
Section 3.04(b), the Issuer and Trendwest shall also comply with the provisions
and limitations set forth in the Indenture. All substitutions shall be
accomplished at the time specified in subsection (c) below.
(c) Any purchase or substitution of a Contract by Trendwest in
accordance with Section 3.03 hereof or this Section 3.04 shall be made either by
remittance of the Purchase Price to the Servicer for deposit into the Clearing
Account in accordance with Section 3.03(a) of the Servicing Agreement or by
substitution of a Substitute Contract, as applicable, within one Business Day
following the expiration of the cure period set forth in Section 3.03 hereof.
(d) If an Obligor notifies Trendwest of its intent to enter into an
Upgrade Contract, Trendwest, as Servicer, shall inform the Issuer of such fact.
In such events, the Issuer will purchase the receivable related to such Upgrade
and Trendwest will transfer the related Upgrade Contract to the Issuer in
exchange for the existing Contract with such Obligor and an amount equal to the
difference in the principal balance between the existing Contract and the
Upgrade Contract (which amount shall be paid to Trendwest out of funds
distributed to the Issuer pursuant to Section 12.02(d) of the Indenture or by
increasing the amount owed by the Issuer under the Subordinated Note); provided,
however, that (i) such Upgrade Contract must have an interest rate that is not
more than 1.0% per annum lower than the interest rate on the Contract that is
being replaced, (ii) each Scheduled Payment under the Upgrade Contract must be
the equal to or greater than the Scheduled Payments on the existing Contract,
(iii) such Obligor must have made all Scheduled Payments within the time periods
required by the related Contract which were due on or before the date of such
Upgrade, (iv) such Upgrade Contract must be written on one of the standard forms
attached as Exhibit A to this Agreement, (v) the Upgrade Contract is an Eligible
Contract, (vi) simultaneous with the execution of the Upgrade Contract,
Trendwest shall have executed a form of assignment to the Issuer attached to
such Upgrade Contract and the Issuer will pledge such Receivable to the Trustee
pursuant to the Indenture, (vii) such Upgrade Contract shall be delivered by
18
Trendwest to the Custodian immediately after execution of such contract by the
Obligor, WorldMark and Trendwest (and, in any event, prior to the release of the
original Contract), (viii) any applicable rescission period has expired and (ix)
clauses (i)-(viii) above shall be representations and warranties of Trendwest,
and Trendwest shall be obligated to purchase from the Issuer any Upgrade
Contract that does not comply with such representations and warranties.
Simultaneous with the delivery of such Upgrade Contract to the Custodian,
Trendwest shall deliver to the Trustee a supplement to this Agreement
substantially in the form of Annex A hereto subjecting such Contract to the
provisions hereof and providing with respect to such Upgrade Contract the
information required on the Contract Schedule.
Upon the acquisition by the Issuer of any Upgrade Contract pursuant to
the provisions of this Section 3.04(d) (and the subsequent transfer of the
related Receivable to the Issuer), Trendwest hereby agrees that such Upgrade
Contract and the related Receivable, as applicable, will be subject to all the
terms and provisions of this Agreement and the Indenture just as if such Upgrade
Contract had been one of the original Contracts acquired on the Closing Date.
ARTICLE 4
SELLER COVENANTS
Section 4.01. Seller Covenants. Each Seller hereby covenants and agrees
with the Issuer as follows:
(a) Except as hereinafter provided, such Seller will keep in
full effect its existence, rights and franchises as a corporation 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
Agreement or any of the Loan Documents and to perform its duties
hereunder. Any person into which such Seller may be merged or
consolidated, or to whom such Seller has sold substantially all of its
assets, or any corporation resulting from any merger, conversion or
consolidation to which such Seller shall be a party, or any Person
succeeding to the business of such Seller shall be the successor of
such Seller hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that (w)
immediately after giving effect to such transaction, no representation
or warranty made pursuant to Section 3.01(c) hereof shall have been
breached, (x) such successor executes an agreement of assumption, in
form reasonably satisfactory to the Trustee, to perform every
obligation under this Agreement, (y) such Seller shall have delivered
to the Issuer a certificate of an officer of such Seller and an Opinion
of Counsel each stating that such consolidation, merger, or succession
and such agreement of assumption complies with this Section 4.01 and
that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and (z) such
Seller shall have delivered to the Issuer an Opinion of Counsel either
(1) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been
executed and filed that are necessary fully to preserve and protect the
interest of the Issuer in the Contracts and reciting the details of
such filings, or (2) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interest.
19
(b) Neither such Seller nor any of the members, directors,
officers, employees or agents of such Seller shall be under any
liability to the Issuer, the Trustee or the Holders of Notes for any
action taken or for refraining from the taking of any action in good
faith pursuant to this Agreement, or for errors in judgment not
involving recklessness or negligence; provided, however, that this
provision shall not protect such Seller against any breach of
warranties or representations made herein, or failure to perform its
obligations in strict compliance with this Agreement, or any liability
which would otherwise be imposed by reason of any breach of the terms
and conditions of this Agreement. Such Seller, and any member,
director, officer, employee or agent of such Seller, may rely in good
faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. Such
Seller shall not be under any obligation to appear in, prosecute, or
defend any legal action that is not incidental to its obligations as
the seller of the Assets under this Agreement and that in its opinion
may involve it in any expense or liability.
(c) Such Seller will from time to time, at its own expense,
execute and file such additional financing statements (including
continuation statements) as may be necessary or which the Trustee may
deem appropriate to preserve the security interests and liens described
in Section 3.01(a)(viii) hereof and are reasonably satisfactory in form
and substance to the Issuer.
(d) Such Seller will not change its name, identity or
corporate structure in any manner that would, could, or might make any
financing statement or continuation statement misleading within the
meaning of sections 9-506 and 9-507 of the UCC, unless it shall have
given the Issuer and the Trustee at least 30 days' prior written notice
thereof.
(e) Such Seller will give the Issuer and the Trustee at least
30 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new
financing statement.
(f) Such Seller will duly fulfill all obligations on its part
to be fulfilled under or in connection with each Loan Document, will
not change or modify the terms of the Loan Documents (and shall prevent
any third party originator that still owns any Loan Document from
changing or modifying the terms of any such contract) except as
expressly permitted by the terms of the Transaction Documents and will
do nothing to impair the rights of the Issuer or the Trustee in the
Assets. In the event that the rights of such Seller under any Loan
Document or any guaranty of the related Obligor's obligations under any
Loan Document are not assignable to the Issuer, such Seller will
enforce such rights on behalf of the Issuer; the Seller is not aware of
any such inability to assign any Loan Documents.
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(g) Such Seller will comply, in all material respects, with
all material acts, rules, regulations, orders, decrees and directions
of any governmental authority applicable to the Assets or any part
thereof; provided, however, that such Seller may contest any act,
regulation, order, decree or direction in any reasonable manner which
shall not materially and adversely affect the rights of the Issuer or
the Trustee in the Assets.
(h) Such Seller will advise the Issuer and the Trustee
promptly, in reasonable detail, of the occurrence of any breach by such
Seller following discovery by such Seller of such breach of any of its
representations, warranties and covenants contained herein.
(i) Such Seller will execute or endorse, acknowledge, and
deliver to the Issuer and the Trustee from time to time such schedules,
confirmatory assignments, conveyances, and other reassurances or
instruments and take such further similar actions relating to the
Assets, and the rights covered by the Transaction Documents, as the
Issuer or the Trustee may reasonably request to preserve and maintain
title to the Assets and the rights of the Trustee and the Holders of
Notes therein against the claims of all persons and parties.
(j) Trendwest agrees to indemnify, defend and hold the Issuer
harmless from and against any and all loss, liability, damage,
judgment, claim, deficiency or expense (including interest, penalties,
reasonable attorney's fees and amounts paid in settlement) that is
caused by (i) a material breach at any time by any Seller of the
representations, warranties and covenants contained in Section 3.01
hereof or this Section 4.01 or (ii) any material information furnished
by any Seller which is set forth in any schedule delivered hereunder,
being untrue in any material respect when any such representation was
made or schedule delivered, provided that Trendwest shall not have any
liability with respect to a representation or warranty as to any
specific Loan Document, Receivable or the Related Security other than
to purchase such Contract or substitute for such Contract in accordance
with Section 3.03 hereof unless such breach of representation or
warranty is the result of a Seller's fraud, negligence, bad faith or
willful misconduct. Trendwest shall also indemnify the Issuer, the
Trustee and the Servicer for any cost or expenses incurred by them in
the enforcement of this Agreement. The obligations of Trendwest under
this Section 4.01(j) shall be considered to have been relied upon by
the Issuer and shall survive the execution, delivery and performance of
this Agreement, regardless of any investigation made by or on behalf of
the Issuer, until termination of the Indenture. If Trendwest has made
any indemnity payments pursuant to this Section 4.01(j) and thereafter
the recipient collects any of such amounts from others, such party will
promptly repay the amount collected to Trendwest, without interest.
(k) Such Seller will do nothing to disturb or impair the
acquisition hereunder by the Issuer of all of such Seller's right,
title and interest in the Assets.
(l) Such Seller (i) will (A) maintain its books and records
separate from the books and records of the Issuer and (B) maintain bank
accounts separate from those of the Issuer and (ii) will not (x) take,
prior to the complete payment of the Notes, any action that would cause
21
the dissolution or liquidation of the Issuer, (y) guarantee (directly
or indirectly), endorse or otherwise become contingently liable
(directly or indirectly) for the obligations of the Issuer or (z)
institute against the Issuer, or join any other person in instituting
against the Issuer, any case, proceeding or other action under any
existing or future bankruptcy, insolvency or similar laws.
(m) Such Seller shall notify the Issuer and the Trustee
promptly after becoming aware of any Lien on any Asset, and Trendwest
shall not allow to suffer any lien on any asset.
(n) On each date as of which Trendwest substitutes a
Substitute Contract in accordance with Section 3.03 hereof, Trendwest
shall provide to the Issuer a supplement to this Agreement
substantially in the form of Annex A hereto subjecting such Substitute
Contract to the provisions hereof and providing with respect to such
Substitute Contract the information required in the Contract Schedule.
(o) The annual financial statements of such Seller will
disclose the effects of the transactions contemplated by the
Transaction Documents in accordance with generally accepted accounting
principles. The financial statements of such Seller and the Issuer will
also disclose that the assets of the Issuer are not available to pay
creditors of such Seller. The resolutions, agreements and other
instruments underlying the Transaction Documents will be continuously
maintained by such Seller as official records.
(p) Such Seller will, at its own cost and expense, (i) retain
the Electronic Ledger as a master record of the Loan Documents and the
Related Security and copies of all documents relating to each Contract
(other than the original executed Contracts) as custodian for the
Issuer and other Persons, if any, with interests in the Loan Documents
and the Related Security and (ii) xxxx the Contracts and the Electronic
Ledger to the effect that the Loan Documents and such Seller's interest
in the Related Security have been acquired by the Issuer and a security
interest in the Loan Documents and the Related Security have been
granted by such Seller to the Issuer and that such security interests
and rights have been pledged, transferred and assigned to the Trustee
by the Issuer pursuant to the Indenture.
(q) Such Seller will perform the transactions contemplated by
this Agreement in a manner that is consistent with the Issuer's
ownership interest in the Assets. Such Seller will respond to all third
party inquiries confirming the transfer of the Assets to the Issuer.
(r) Such Seller shall immediately transfer to the Servicer
for deposit in the Clearing Account any payment it receives relating to
the Assets.
(s) Environmental Laws. Each Seller shall conduct its
operations and keep and maintain its property in compliance with
all Environmental Laws. Trendwest shall perform its duties under its
management agreement with WorldMark in compliance with all
Environmental Laws.
22
Section 4.02. Issuer Covenants. The Issuer hereby covenants and agrees
with the Sellers as follows:
(a) The Issuer hereby acknowledges and agrees that its rights
in the Related Security are expressly subject to the rights of the
related Obligors in such Related Security pursuant to the applicable
Loan Documents.
(b) On each date as of which any interest in any Contract or
Mortgage Loan is to be purchased or replaced by Trendwest pursuant to
Section 3.03 hereof, the Issuer shall submit to Trendwest an instrument
of assignment assigning the Issuer's interest in such Contract or
Mortgage Loan and the Related Security to Trendwest, signed by the
president, senior vice president or any vice president of the Issuer.
Each such assignment shall operate as an assignment, without recourse,
representation, or warranty, to Trendwest of all of the Issuer's right,
title, and interest in and to such Contract or Mortgage Loan, the
related Receivable and the Related Security and any security documents
relating thereto, such assignment being an assignment outright and not
for security, and upon payment of the Purchase Price or delivery of a
Substitute Contract, Trendwest will thereupon own such interest in the
Contract or Mortgage Loan, as applicable and all such security and
documents, free of any further obligation to the Issuer with respect
thereto. If in any enforcement suit or legal proceeding it is held that
Trendwest may not enforce a Contract on the ground that it is not a
real party in interest or holder entitled to enforce the Contract, the
Issuer shall, at the Issuer's expense, take such steps as the Issuer
deems necessary to enforce the Contract, including bringing suit in the
Issuer's name.
(c) The Issuer warrants that, except as contemplated by the
Transaction Documents, it will have a valid security interest in the
Related Security. The Issuer shall not assign, sell, pledge, or
exchange, or in any way encumber or otherwise dispose of the Related
Security, except as contemplated by or permitted under the Transaction
Documents.
Section 4.03. Assignment of Assets. The Sellers understand that the
Issuer will assign to and grant to the Trustee a security interest in the Assets
(including but not limited to the Receivables, Loan Documents and the Related
Security). The Sellers consent to such assignments and grants and further agree
that all representations, warranties, covenants and agreements the Sellers made
herein shall also be for the benefit of and inure to the Issuer, the Trustee and
all Holders from time to time of the Notes.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.01. Conditions to Issuer's Initial Obligations. The
obligations of the Issuer to execute and deliver the Asset Assignment to the
Sellers on the Closing Date and the applicable Subsequent Asset Assignments to
the applicable Sellers on each Subsequent Transfer Date pursuant to, and perform
its obligations pursuant to, this Agreement shall be subject to the satisfaction
of the following conditions:
23
(a) All representations and warranties of the Sellers
contained in Sections 3.01(b) and 3.01(c) hereof and all information
provided in the Contract Schedule shall be true and correct on the
Closing Date, and, of each applicable Seller and with respect to each
Subsequent Contract, on each related Subsequent Transfer Date, with the
same effect as though such representations and warranties had been made
on such date, and on the Transfer Date the Sellers shall have delivered
to the Issuer, the Trustee and the Initial Purchaser an Officer's
Certificate to such effect;
(b) All representations and warranties of the Sellers
contained in Section 3.01(a) hereof shall be true and correct on the
Closing Date with respect to the Contracts listed on the Contract
Schedule delivered on the Closing Date and on the related Subsequent
Transfer Date with respect to the Subsequent Contracts listed on the
schedules to the related Subsequent Asset Assignments, with the same
effect as though such representations and warranties had been made on
such date, and on the Transfer Date the Sellers shall have delivered to
the Issuer, the Trustee and the Initial Purchaser of the Notes an
Officer's Certificate to such effect;
(c) The Sellers shall have delivered all other information
theretofore required or reasonably requested by the Issuer to be
delivered by the Sellers hereunder, duly certified by an officer of
each of the Sellers, and the Sellers shall have substantially performed
all other obligations required to be performed each Transfer Date by
the provisions of this Agreement;
(d) On or prior to each Transfer Date, Trendwest, on behalf
of the Sellers shall have delivered, or caused the delivery of, the
Custodian File related to the Contracts identified in the Contract
Schedule to the Custodian or its agent and the Trustee shall have
received a receipt from the Custodian evidencing such delivery and,
subject to Section 2.04 hereof, there shall have been made all filings,
recordings and/or registrations, and there shall have been given, or
taken, any notice or any other similar action, as may be necessary in
the opinion of the Issuer, in order to establish and preserve the
right, title and interest of the Issuer in such Contract and the other
Assets;
(e) On or before the Closing Date, the Issuer, the
Servicer and the Trustee shall have entered into the Servicing
Agreement;
(f) The Notes shall be issued and sold on the Closing Date,
the Issuer shall receive the full consideration due it upon the
issuance of such Notes, the Issuer shall have applied such
consideration, to the extent necessary, to pay the related
consideration to the Sellers on such date;
(g) Each applicable Seller shall have executed and
delivered the Asset Assignment or a Subsequent Asset Assignment,
as applicable;
24
(h) The Prefunding Period shall not have terminated;
(i) The Servicer shall have delivered to the Trustee on or
prior to the Transfer Date an Officer's Certificate of the Servicer
dated as of such date, stating, as applicable, that (A) the Servicer is
not in Default under the Indenture or the Servicing Agreement and (B)
that all conditions precedent provided in the Indenture relating to the
pledge and delivery of the applicable Contracts have been complied
with; and
(j) none of the ratings from either Xxxxx'x or Fitch, as
applicable, shall have been reduced or withdrawn.
Section 5.02. Conditions to the Sellers' Obligations. The obligations of
each of the Sellers to execute and deliver to the Issuer the Asset Assignment or
a Subsequent Asset Assignment, as applicable, and perform its obligations
pursuant to this Agreement on the Closing Date and each applicable Subsequent
Transfer Date shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of the Issuer
contained in this Agreement shall be true and correct as of such
Transfer Date with the same effect as though such representations and
warranties had been made on such date;
(b) The Issuer shall have executed and delivered the
applicable Asset Assignment or a Subsequent Asset Assignment, as
applicable; and
(c) All corporate and legal proceedings and all instruments
in connection with the transactions contemplated by this Agreement
shall be satisfactory in form and substance to such Seller, and such
Seller shall have received from the Issuer copies of all documents
(including, without limitation, records of corporate proceedings)
relevant to the transactions herein contemplated as such Seller may
reasonably have requested.
Trendwest's obligation to repurchase the Contracts pursuant to this
Agreement shall not be affected by any failure of the Issuer to comply with
clause (a) of this Section 5.02 subsequent to the Closing Date.
ARTICLE 6
TERM AND TERMINATION
Section 6.01. Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue in full force and effect until
the later of (i) payment with respect to the last Asset or (ii) termination of
the Indenture.
Section 6.02. Default by Sellers. If any Seller shall be in default
under this Agreement and such default shall not have been cured for a period of
60 days, or if such Seller shall become insolvent or make an assignment for the
benefit of its creditors or have a receiver appointed for all or substantially
25
all of its properties, or if any proceedings commenced, or consented to, by such
Seller are not stayed or dismissed within 90 days after being commenced against
such Seller under any bankruptcy, insolvency or other law for the relief of
debtors, the Issuer shall have the right, in addition to any other rights it may
have under any applicable law, to terminate this Agreement with respect to such
Seller upon 30 days' prior written notice to such Seller; provided that any
termination of this Agreement shall not release such Seller from any obligation
under this Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Amendments. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally but only by an instrument in
writing signed by the party against which enforcement is sought. This Agreement
may be amended by the Issuer and the Sellers only with the prior written consent
of the Holders of 66-2/3% in principal amount of the Outstanding Notes of the
Controlling Class.
Section 7.02. Governing Law. This Agreement shall be construed in
accordance with the internal laws of the State of
New York, without regard to
choice of law principles.
Section 7.03. Notices. All demands, notices and communications hereunder
shall be in writing and shall be delivered personally, mailed by registered or
certified United States mail, postage prepaid, or sent via overnight air courier
or facsimile communication and addressed, in the case of the Sellers, to the
Seller Address, and in the case of the Issuer, to the Issuer Address. All
notices and demands shall be deemed to have been given either at the time of the
delivery thereof to any officer of the Person entitled to receive such notices
and demands at the address of such Person for notices hereunder, or on the third
day after the mailing thereof to such address, as the case may be. Any Person
may change the address for notices hereunder by giving notice of such change to
the other Person.
Section 7.04. Separability Clause. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.05. Assignment. Except as provided in Section 4.01(a), this
Agreement may not be assigned or delegated by any Seller without the prior
written consent of the Issuer, the Trustee and the Holders of 66-2/3% in
principal amount of the Outstanding Notes of the Controlling Class and may not
be assigned or delegated by the Issuer without the prior written consent of each
of the Sellers, the Trustee and the Holders of 66-2/3% in principal amount of
the Outstanding Notes of the Controlling Class.
26
Section 7.06. Further Assurances. Each of the Sellers and the Issuer
agrees to do such further acts and things and to execute and deliver to the
Trustee such additional assignments, agreements, powers and instruments as are
required by the Trustee to carry into effect the purposes of this Agreement or
to better assure and confirm unto the Trustee or the Holders of the Notes their
rights, powers or remedies hereunder. If any Obligor shall be in default under
any Contract, upon reasonable request from the Servicer, the applicable Seller
will take all reasonable steps to assist in enforcing such Contract and
preserving and maintaining title to the Assets and the rights of the Trustee and
the Holders of the Notes therein against the claims of all persons and parties
to the extent the applicable Seller is capable of performing such requested
steps and the Servicer reasonably determines that the assistance of the
applicable Seller is necessary to effect the intent and purposes hereof.
Section 7.07. No Waivers; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Issuer or the Sellers, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise of any right, remedy, or privilege hereunder
preclude any other or further exercise hereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 7.08. Binding Effect; Third Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties hereto, the Holders
of Outstanding Notes, and their respective successors and permitted assigns.
Section 7.09. Set-Off. (a) Each of the Sellers hereby irrevocably and
unconditionally waives all right of set-off that it may have under contract
(including this Agreement), applicable law or otherwise with respect to any
funds or monies of the Issuer at any time held by or in the possession of such
Seller.
(b) The Issuer shall have the right to set-off against each Seller any
amounts to which such Seller may be entitled and to apply such amounts to any
claims the Issuer may have against such Seller from time to time under this
Agreement. Upon any such set-off the Issuer shall give notice of the amount
thereof and the reasons therefor.
Section 7.10. Sellers Will Not Institute Insolvency Proceedings. During
the term of this Agreement and for one year and one day after the termination
hereof, none of the parties hereto or any Affiliate thereof or any Holder of
Outstanding Notes (and each Holder of Outstanding Notes so agrees by acceptance
of a Note) will file any involuntary petition or otherwise institute any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceeding under any federal or state bankruptcy or similar law against
the Issuer.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts all of which together shall constitute one original document.
27
IN WITNESS WHEREOF, the Sellers and the Issuer have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the date and year first above written.
TRENDWEST RESORTS, INC.
By
Name:
Title:
TW HOLDINGS III, INC.
By
Name:
Title:
TRI FUNDING V, INC.
By
Name:
Title:
28
ANNEX A
FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
Pursuant to Section 3.04(b) and Section 3.04(d) of the
Receivables
Purchase Agreement dated as of August 1, 2001 (the "Agreement"), among Trendwest
Resorts, Inc. ("Trendwest"), TW Holdings III, Inc. and TRI Funding V, Inc. (the
"Issuer"), attached as Schedule I hereto is a Supplemental Contract Schedule,
which includes information regarding Assets that are hereby sold, assigned,
transferred and delivered by Trendwest to the Issuer in accordance with the
Agreement and the Asset Assignment and setting forth the Collateral Value of any
Contract being sold to the Issuer by Trendwest pursuant to an Upgrade or
exchanged pursuant to a substitution.
TRENDWEST RESORTS, INC.
By
Name:
Title:
ANNEX A - 1
SCHEDULE I
SUPPLEMENTAL CONTRACT SCHEDULE FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
SCH 1 - 1
EXHIBIT A
FORM OF CONTRACT
A-1
EXHIBIT B
FORM OF ASSET ASSIGNMENT
This Asset Assignment ("Assignment") is made as of August __, 2001 (the
"Closing Date"), by and among Trendwest Resorts, Inc., an Oregon corporation
("Trendwest"), TW Holdings III, Inc., a Delaware corporation (together with
Trendwest, the "Assignors" and each an "Assignor") and TRI Funding V, Inc., a
Delaware corporation ("Assignee"), with reference to the following facts:
RECITALS:
A. In connection with the sale of certain assets of the Assignors in
conjunction with the issuance of notes on the date hereof by TRI Funding V,
Inc., Assignee and the Assignors have executed the
Receivables Purchase
Agreement dated as of August 1, 2001 (the "Agreement").
B. In connection with the Agreement, each of the Assignors desires to
assign and transfer to Assignee all of such Assignor's right, title and interest
in and to each of the assets described in Schedule I hereto, and the
corresponding paragraphs below (the "Assigned Interests").
C. Assignee desires to accept this Assignment and transfer of the
Assigned Interests and assume all duties and obligations attendant thereto,
accruing after the Closing Date.
D. Terms used but not defined herein have the meanings ascribed to them
in the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the mutual
covenants set forth herein, the Assignors and Assignee hereby agree as follows:
1. Assignment. Each Assignor hereby assigns, conveys, grants and
transfers, without recourse except as provided in the Agreement, to Assignee
(and the successors and assigns of Assignee) the following property:
1.1. Such Assignor's right, title and interest in and to the Loan
Documents and related Receivables described and listed on Schedule I hereto.
1.2. Such Assignor's security interest in the vacation credits and
fractional interests subject to each such Contract and Mortgage Loan (the
"Related Security").
1.3. All other Assets relating to such Loan Documents.
B-1
2. Assumption. Assignee hereby accepts the foregoing assignment and
hereby assumes all of the indebtedness, if any, duties and obligations incident
hereto and thereto, subject to the terms and conditions of the Agreement.
3. Further Assurance. The Assignors and Assignee each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or appropriate to consummate and
effectuate this Assignment.
4. Distinct Entities. The Assignors and Assignee hereby acknowledge that
for all purposes each of the Assignors and the Assignee are separate and
distinct legal entities. Accordingly, no Assignor shall be liable to any third
party for the debts, obligations and liabilities of the Assignee; and Assignee
shall not be liable to any third party for the debts, obligations and
liabilities of any Assignor to the extent that such debts, obligations and
liabilities have not been expressly assumed by Assignee hereunder.
5. Governing Law. This Assignment shall be governed by and interpreted
in accordance with the laws of the State of
New York, and the parties hereto
hereby acknowledge and agree that this Assignment and the transactions
contemplated hereunder were negotiated and entered into in the State of
New
York.
6. Authority. Each of the Assignors and the Assignee hereby represent
respectively that they have full power and authority to enter into this
Assignment.
7. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which, taken
together, shall constitute one and the same instrument.
8. Successors and Assigns. Each of the Assignors and the Assignee agree
that this Assignment will be binding and will inure to the benefit of each
Assignor and its successors and assigns and the Assignee and its successors and
assigns.
B-2
IN WITNESS WHEREOF, this Assignment has been executed as of the date
first above written.
TRENDWEST RESORTS, INC., Assignor
By
Name:
Title:
TW HOLDINGS III, INC., Assignor
By
Name:
Title:
TRI FUNDING V, INC., Assignee
By
Name:
Title:
B-3
EXHIBIT C
FORM OF SUBSEQUENT ASSET ASSIGNMENT
This Subsequent Asset Assignment ("Assignment") is made as of
______________, 2001 (the "Subsequent Transfer Date"), by and among
_________________________________ (the "Assignor"), and TRI Funding V, Inc., a
Delaware corporation ("Assignee"), with reference to the following facts:
RECITALS:
A. In connection with the sale of certain assets of the Assignor in
conjunction with the issuance of notes on the date hereof by TRI Funding V,
Inc., Assignee and the Assignor have executed the
Receivables Purchase Agreement
dated as of August 1, 2001 (the "Agreement").
B. In connection with the Agreement, the Assignor desires to assign and
transfer to Assignee all of such Assignor's right, title and interest in and to
each of the assets described in Schedule I hereto, and the corresponding
paragraphs below (the "Assigned Interests").
C. Assignee desires to accept this Assignment and transfer of the
Assigned Interests and assume all duties and obligations attendant thereto,
accruing after the Subsequent Transfer Date.
D. Terms used but not defined herein have the meanings ascribed to them
in the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the mutual
covenants set forth herein, the Assignor and Assignee hereby agree as follows:
1. Assignment. The Assignor hereby assigns, conveys, grants and
transfers, without recourse except as provided in the Agreement, to Assignee
(and the successors and assigns of Assignee) the following property:
1.1. The Assignor's right, title and interest in and to the Loan
Documents and related Receivables described and listed on Schedule I hereto.
1.2. The Assignor's security interest in the vacation credits and the
fractional interests subject to each such Contract and Mortgage Loan (the
"Related Security").
1.3. All other Assets relating to such Contract.
2. Assumption. Assignee hereby accepts the foregoing assignment and
hereby assumes all of the indebtedness, if any, duties and obligations incident
hereto and thereto, subject to the terms and conditions of the Agreement.
C-1
3. Further Assurance. The Assignor and Assignee each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or appropriate to consummate and
effectuate this Assignment.
4. Distinct Entities. The Assignor and Assignee hereby acknowledge that
for all purposes each of the Assignor and the Assignee are separate and distinct
legal entities. Accordingly, the Assignor shall not be liable to any third party
for the debts, obligations and liabilities of the Assignee; and Assignee shall
not be liable to any third party for the debts, obligations and liabilities of
the Assignor to the extent that such debts, obligations and liabilities have not
been expressly assumed by Assignee hereunder.
5. Governing Law. This Assignment shall be governed by and interpreted
in accordance with the laws of the State of
New York, and the parties hereto
hereby acknowledge and agree that this Assignment and the transactions
contemplated hereunder were negotiated and entered into in the State of
New
York.
6. Authority. Each of the Assignor and the Assignee hereby represent
respectively that they have full power and authority to enter into this
Assignment.
7. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which, taken
together, shall constitute one and the same instrument.
8. Successors and Assigns. Each of the Assignor and the Assignee agree
that this Assignment will be binding and will inure to the benefit of the
Assignor and its successors and assigns and the Assignee and its successors and
assigns.
C-2
IN WITNESS WHEREOF, this Assignment has been executed as of the date
first above written.
______________________________, Assignor
By
Name:
Title:
TRI FUNDING V, INC., Assignee
By
Name:
Title:
C-3
SCHEDULE I
CONTRACT SCHEDULE
SCH 1 - 1
EXHIBIT D
FORM OF SUBORDINATED NOTE
$-----------
TRI FUNDING V, INC.
SUBORDINATED NOTE
Date: August __, 2001 Stated Maturity: ______________
TRI FUNDING V, INC., a special purpose corporation duly organized and
existing under the laws of the State of Delaware (the "Issuer," which term
includes any successor entity under the Indenture referred to below), for value
received, hereby promises to pay to Trendwest Resorts, Inc. ("Trendwest"), or
its assigns, the principal sum ___________________ Dollars ($_____________) in
monthly installments beginning on [September 17, 2001] (the "Initial Payment
Date"), and to pay interest monthly in arrears on the unpaid portion of said
principal sum (and, to the extent that the payment of such interest shall be
legally enforceable, on any overdue installment of interest on this Subordinated
Note) on the fifteenth day of each calendar month or, if such fifteenth day is
not a Business Day, the Business Day immediately following (each, a "Payment
Date"), for the period from and including August ___, 2001 through the last day
of the applicable Due Period immediately preceding the Initial Payment Date for
the Notes referred to below, and thereafter, monthly from and including the
first day through the last day of the Due Period immediately preceding the
Payment Date, at the rate of _____% per annum (calculated on the basis of a
360-day year consisting of 12 months of 30 days each). Each monthly installment
of principal payable on this Subordinated Note shall be an amount equal to the
cash available for distribution until the principal amount owed hereunder, as
adjusted as set forth below, is paid in full. Any remaining unpaid portion of
the principal amount of this Subordinated Note shall be due and payable no later
than the Stated Maturity referred to above; provided, however, that if the Notes
(as defined below) are not paid in full on such date, no such amounts shall be
due or payable until the Notes are paid in full. All terms used in this
Subordinated Note which are defined in the Indenture (referred to herein as the
"Indenture"), dated as of August 1, 2001, among the Issuer, Trendwest Resorts,
Inc., as Servicer, and Xxxxx Fargo Bank Minnesota, National Association, as
Trustee shall have the meanings assigned to them in the Indenture.
The principal and interest on this Subordinated Note are payable by
check mailed by first-class mail to Trendwest or its assigns or by wire transfer
in immediately available funds to the account specified in writing to the
D-1
Trustee by Trendwest or its assigns received 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 payment of public and private debts. Funds
represented by checks returned undelivered will be held for payment to the
Person entitled thereto, subject to the terms of the Indenture, at the office or
agency in the United States of America designated as such by the Issuer for such
purpose pursuant to the Indenture.
The principal owed on this Subordinated Note will be increased from
time to time in the event that Trendwest transfers the receivable related to an
Upgrade Contract to the Issuer to be included in the Trust Estate, such amount
to equal the difference between the principal balance of the receivable of
Upgrade Contract as of the date of such Upgrade and the Collateral Value on such
date of the Receivable being replaced.
This Subordinated Note and the Issuer's Receivables-Backed Notes 2001-1
(the "Notes") issued pursuant to the Indenture are secured by certain
Receivables and other Collateral described in the Indenture. The Trust Estate
relating to the Notes also secures the payment of certain other amounts and
certain other obligations as described in the Indenture. Until the Notes are
paid in full and the obligations of the Issuer under the Indenture are
satisfied, (i) the Subordinated Notes are payable only at the time and in the
manner provided in the Indenture and are not redeemable or prepayable at the
option of the Issuer before such time and (ii) the holder of this Subordinated
Note will not cause the filing of a bankruptcy petition against the Issuer for
any reason whatsoever, including, without limitation, the failure of the Issuer
to make any payments of principal of or interest on this Subordinated Note until
after a period equal to 10 days plus the applicable preference period under the
United States Bankruptcy Code has passed since the Notes were paid in full.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the holder of this Subordinated Note under the
Indenture at any time by the Issuer, the Trustee and the Servicer with the
consent of the Holders of not less than 66-2/3% in principal amount of Notes of
the Controlling Class of the Notes Outstanding under the Indenture. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes, at the time Outstanding
under the Indenture, to waive compliance by the Issuer with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. This Subordinated Note shall not be amended without the consent of
Holders of not less than 66-2/3% in principal amount of the Controlling Class of
the Notes Outstanding.
No reference herein to the Indenture and no provision of this
Subordinated Note or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Subordinated Note, but, so long as any Notes are Outstanding,
solely from the Collateral pledged to the Trustee under the Indenture with
respect to the Notes at the times, place and rate, and in the coin or currency,
herein prescribed. Notwithstanding anything else to the contrary contained in
this Subordinated Note or the Indenture, the obligation of the Issuer to pay the
principal of and interest on this Subordinated Note is not a general obligation
of the Issuer, nor its officers or directors, but, so long as any Notes are
Outstanding, is limited solely to the Collateral pledged under the Indenture.
D-2
So long as the Notes are Outstanding, Trendwest shall not transfer this
Subordinated Note to any Person.
This Subordinated Note and the Indenture shall be governed by and
construed in accordance with the internal laws of the State of
New York, without
regard to conflicts of laws principles.
IN WITNESS WHEREOF, TRI Funding V, Inc. has caused this Subordinated
Note to be signed, manually, by its Vice President.
TRI FUNDING V, INC.
By
Name:
Title:
D-3
