Exhibit 10.21
SERVICING AGREEMENT
This SERVICING AGREEMENT (the "Agreement") is made and entered into as of
September 30, 1999, by and between RESORT FUNDING, INC., a Delaware corporation
(hereinafter referred to as "Borrower" in its capacity as borrower hereunder and
hereinafter referred to as "Servicer" in its capacity as servicing agent
hereunder), and FINOVA Capital Corporation, a Delaware corporation ("Lender").
WITNESSETH:
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WHEREAS, Borrower and Lender are parties to that certain Loan and Security
Agreement of even date herewith (the "Loan Agreement"), pursuant to which Lender
has agreed to make a loan to Borrower in the maximum principal amount of TWENTY
MILLION DOLLARS ($20,000,000) in accordance with the terms, provisions, and
conditions of the Loan Agreement and the other Loan Documents; and
WHEREAS, Borrower has agreed to secure the Loan and the other Obligations
by, among other things, granting to Lender a continuing first priority Lien and
security interest in and to all of Borrower's right, title, and interest in and
to certain Pledged Notes Receivable, Applicable Mortgages (if any), Pledged
Consumer Notes Receivable, and Interval Mortgages, together with the proceeds
thereof, all in connection with certain Applicable Underlying Loans.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound, hereby agree as follows:
1. TERMS AND DEFINITIONS. Except as otherwise expressly provided herein to the
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contrary, all capitalized terms used herein shall have the meanings ascribed to such
terms in the Loan Agreement. In addition:
1.1 "Loan File" shall mean, for each Applicable Underlying Loan, a
file containing true copies of the Pledged Note Receivable, Pledged Put and
Reserve Agreements, the Applicable Mortgage (if any), and all other Applicable
Underlying Loan Documents, together with any other information reasonably
requested by Servicer or Lender. For each loan evidenced by a Pledged Consumer
Note Receivable (an "Applicable Consumer Loan"), the Loan File shall contain a
credit report on the Purchaser or other obligor and true copies of the Pledged
Consumer Note Receivable, the Interval Mortgage, and all related documents and
instruments, together with any other information reasonably requested by
Servicer or Lender. At the request of Lender, Servicer shall provide Lender with
written acknowledgment of Servicer's receipt of each Loan File.
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1.1.415280-3
1.2 "Loan Servicing" shall mean the servicing of the Pledged Notes
Receivable, Pledged Consumer Notes Receivable, and, if applicable, the Pledged
Put and Reserve Agreements conducted by Servicer under this Agreement.
1.3 "Pool of Loans" shall mean all those Applicable Underlying Loans
and Applicable Consumer Loans at any time being serviced by Servicer under this
Agreement.
2. APPOINTMENT OF SERVICER. Servicer is an independent contractor that has
been retained for the sole purpose of performing the Loan Servicing under this
Agreement, and Servicer hereby agrees to perform the Loan Servicing pursuant to
the terms and conditions set forth below.
3. TERM OF AGREEMENT.
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3.1 Term. The parties agree that the term of this Agreement shall
expire on the date as of which all of Borrowers Obligations under the Loan
Documents have been satisfied in full, unless earlier terminated in accordance
with Section 3.2 below.
3.2 Termination Rights. Either Servicer or Borrower (with Lenders
written consent) may terminate this Agreement at any time upon thirty (30) days'
prior written notice to each of the other parties hereto. In addition, upon any
breach by Servicer of any of its obligations hereunder, or any Default or Event
of Default pursuant to the Loan Documents, Lender shall have the right to
terminate this Agreement immediately upon delivery of written notice thereof to
Servicer. Within five (5) Business Days of the termination of this Agreement,
Servicer shall deliver all Loan Files and other documents in its possession,
custody, or control relating to the Applicable Underlying Loans, the Applicable
Consumer Loans, and/or any Collateral therefor to Lender or such other Person as
Lender may designate in writing. This Section shall survive the termination of
this Agreement.
4. PERFORMANCE AND DUTIES OF SERVICER.
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4.1 General Requirements of Servicer. Servicer shall maintain a loan
processing database and shall service each Applicable Underlying Transaction and
Applicable Consumer Loan in accordance with generally accepted Loan Servicing
standards and practices for the type(s) of loans in question. In the performance
of its duties for Lender and Borrower, unless otherwise specifically provided
herein, Servicer shall comply fully with the terms of all Pledged Notes
Receivable, Pledged Put and Reserve Agreements, Pledged Consumer Notes
Receivable, Applicable Mortgages (if any), Interval Mortgages, and other
Applicable Underlying Loan Documents. Servicer shall send monthly billing
statements to all Applicable Underlying Borrowers within five (5) days after the
end of the calendar month with respect to which payments of interest, principal,
and/or other amounts are due and shall collect and process all principal and
interest payments, including, without limitation, Release Fees (if any), and
other amounts due Borrower or an Applicable Underlying Borrower. Servicer shall
at all times during the term hereof perform all activities deemed reasonably
necessary or appropriate to collect all amounts due and owing under the Pledged
Notes Receivable, Pledged Consumer Notes Receivable, Pledged Put and Reserve
Agreements, Applicable Mortgages (if any), Interval Mortgages, and other
Applicable Underlying Transaction Documents. Servicer shall also provide Lender
and Borrower with monthly reports of all cash flow (including any delinquencies
or checks returned for insufficient funds), together with such other information
as may reasonably be requested by Lender or Borrower.
4.2 Servicer as Independent Contractor. Servicer shall have the
status of an independent contractor, and nothing herein contained shall be
considered to create a partnership or joint venture between Lender and Servicer.
Servicer is not to be considered an agent or employee of Lender for any purpose,
and the employees of Servicer are not entitled to any of the benefits that
Lender provides to its employees.
4.3 Standard of Performances. Servicer shall at all times act in
good faith and in the best interests of Borrower and Lender, act as a fiduciary
with respect to the Applicable Underlying Loans and the proceeds thereof, and
use its best efforts and exercise sound business judgment in performing its
duties under this Agreement.
4.4 Lockbox. All payments received from Applicable Underlying
Borrowers, Applicable Underlying Guarantors, and Purchasers and other obligors
under the Pledged Consumer Notes Receivable and/or the Pledged Put and Reserve
Agreements shall be paid to Lockbox Agent and deposited into the Lockbox Account
in the name of Lender, all pursuant to the terms, provisions, and conditions of
the Loan Agreement and the Lockbox Agreement. Servicer shall receive evidence of
all deposits made to the Lockbox Account and shall post them, on a daily basis,
to the appropriate Applicable Underlying Loans and Applicable Consumer Loans
upon receipt.
4.5 Receipt of Payments by Servicer. Any payments received by
Servicer directly shall be held in trust for Lender and delivered to Lockbox
Agent for deposit into the Lockbox Account within two (2) Business Days of
Servicer's receipt thereof. Servicer shall receive and account for all Release
Fees (if any) remitted by the Applicable Underlying Borrowers or, if applicable,
escrow agents, resulting from the sale of Intervals at Applicable Resorts.
4.6 Description of Reports. For each calendar month (unless
requested by Lender on a more frequent basis) during the term of this Agreement,
Servicer shall prepare the following standard industry reports and submit them
to Lender and Borrower by no later than the fifteenth (15th) day of the
succeeding calendar month:
(a)...Title: Trial/Aging Balance Report
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Purpose: Numerical listings of all Applicable
Underlying Transaction and Applicable
Consumer Loans indicating the outstanding
principal balance thereof and the aggregate
outstanding principal balance of all
Applicable Underlying Transaction and
Applicable Consumer Loans.
(b)...Title: New Loans Report
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Purpose: Numerical listings of all Applicable Underlying
Transactions and Applicable Consumer Loans added to
the Pool of Loans during such month.
(c)...Title: Cash Receipts Report
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Purpose: Numerical listings of all Applicable Underlying
Transactions and Applicable Consumer Loans showing
the following with respect to each and totals with
respect to all Applicable Underlying Transactions and
Applicable Consumer Transactions: (i) payments
received, including a breakdown of principal,
interest, and other amounts received; and (ii)
payments returned for non-sufficient funds.
(d)...Title: Delinquency Report
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Purpose: Numerical listings of all Applicable
Underlying Transactions and Applicable
Consumer Loans showing delinquencies, broken
down into columns indicating the length of
such delinquencies at thirty (30) days,
sixty (60) days, and ninety (90) or more
days.
(e)...Title: Cancellation, Prepayment, and Payoff Report
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Purpose: Numerical listings of all Applicable Underlying
Transactions and Applicable Consumer Loans that were
canceled, paid off in their entirety, or the subject
of a prepayment.
Lender may, from time to time, in its reasonable discretion, modify the
foregoing reporting requirements and add reports required to be prepared on a
weekly, monthly, or such other periodic basis as Lender shall reasonably
request, which Servicer shall complete in a timely fashion, at Borrower's sole
cost and expense. All reports sent to Lender shall remain confidential in
nature.
4.7 Notification to Obligors. Pursuant to the terms and provisions of the
Lockbox Agreement, by no later than the date of closing of each Applicable
Underlying Transactions, Borrower shall have (a) directed or otherwise caused
the Applicable Underlying Borrower, the Applicable Underlying Guarantor(s), and
all Purchasers and other obligors in respect of each Pledged Consumer Note
Receivable to remit directly to Lockbox Account all interest, principal, Release
Fees (if any), prepayments (both voluntary and mandatory), and other amounts of
any and every description payable to Borrower, the Applicable Underlying
Borrower, or their respective assignees by or on behalf of such Applicable
Underlying Borrower, Purchasers, or other obligors, pursuant to the Applicable
Underlying Transactions Documents, the Pledged Consumer Notes Receivable, and
the Interval Mortgages; and (b) provided Lender with written evidence of such
notification in form and content reasonably acceptable to Lender.
5. BOOKS AND RECORDS.
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5.1 General. At all times during the term of this Agreement,
Servicer shall maintain complete and accurate files and records pertaining to
each Applicable Underlying Loan and Applicable Consumer Loan and of all business
activities and operations conducted by Servicer in connection with its
performance under this Agreement, including, without limitation, all payments
received, costs incurred, and other information reasonably necessary or
appropriate to give accurate and complete accountings of the Applicable
Underlying Transactions, Applicable Consumer Loans, and all amounts paid or to
be paid thereunder. All such files and records that pertain to an Applicable
Underlying Transaction or an Applicable Consumer Loan that has not been repaid
in full shall be delivered to Lender or Lender's designee upon termination of
this Agreement.
5.2 Right to Examine Books and Records. At all times during the term
of this Agreement, Lender and Borrower and their duly authorized agents and
representatives may, during normal business hours, inspect, audit, and make
copies (at Borrower's expense) of any of Servicer's records, files, reports, and
related materials pertaining to the Applicable Underlying Loans, the Applicable
Consumer Loans, and to Servicer's performance hereunder.
5.3 Facilities and Staff. Servicer agrees to maintain adequate
facilities and staff for the proper performance of all services required of
Servicer hereunder.
6. INDEMNIFICATION.
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6.1 Servicer's Indemnity. Servicer agrees to indemnify and hold
Lender and all of its officers, directors, employees, independent contractors,
and other representatives harmless from and against any and all claims, losses,
penalties, fines, forfeitures, amounts paid in settlement, judgments, reasonable
attorneys' fees and related litigation costs, fees, and expenses that result
from: (a) any action taken by or on behalf of Servicer relating to any
Applicable Underlying Transaction or Applicable Consumer Loan that is not
permitted by or pursuant to the terms of this Agreement, (b) any illegal act or
omission by Servicer; or (c) any act or omission constituting negligence,
willful misconduct, or breach of fiduciary duty by any officer, director,
employee, independent contractor, or other representative of Servicer in
connection with Servicer's performance under this Agreement.
6.2 Borrower's Indemnity. Borrower agrees to indemnify and hold
harmless Lender and all of its officers, directors, employees, independent
contractors, and other representatives from and against any and all claims,
losses, penalties, fines, forfeitures, amounts paid in settlement, judgments,
reasonable attorneys' fees and related litigation costs, fees, and expenses
incurred in connection with third party claims against Servicer or Lender that
result from:
(a) Any act or omission by or on behalf of Servicer in connection
with Servicer's actions within the scope of its duties under this Agreement,
unless (i) such act or omission constitutes negligence, willful misconduct, or
breach of a fiduciary duty; or (ii) such losses are covered by insurance, in
which event Servicer shall be indemnified only to the extent of any uninsured
losses;
(b) Any act or omission constituting negligence or breach of duty by
an officer, director, employee, independent contractor, or other representative
of Borrower in connection with this Agreement.
7. MISCELLANEOUS
7.1 If any provision of this Servicing Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Servicing
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof, and the remaining
provisions of this Servicing Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance therefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Servicing Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable.
7.2 This Servicing Agreement and the other Loan Documents (except as
may be expressly provided therein to the contrary) shall be governed by and
construed in accordance with the laws of the State of Arizona, exclusive of its
choice of laws principles.
7.3 This Servicing Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Servicing Agreement shall not be assignable by Borrower or Servicer without the
prior written consent of Lender. Lender may, without the consent of the other
parties to this Servicing Agreement, assign its interest in this Servicing
Agreement, in whole or in part; and in the event of such an assignment, Lender
shall promptly give notice thereof to Borrower and Servicer.
7.4 All notices, requests or demands required or permitted to be
given under the Loan Documents shall be in writing, and shall be deemed
effective (a) upon hand delivery, if hand delivered; (b) one (1) Business Day
after such are deposited for delivery via Federal Express or other nationally
recognized overnight courier service; or (c) three (3) Business Days after such
are deposited in the United States mails, certified or registered mail, all with
delivery charges and/or postage prepaid, addressed to the address specified
below, or to such other address as the party being notified may have designated
in a notice given to the other party. Written notice may be given by telecopy to
the telecopier number specified below or to such other telecopier number as the
party being notified may have designated in a notice given to the other party,
which notice shall be effective on the day of receipt if received during the
recipient's normal business hours on the day of receipt or otherwise on the next
Business Day; provided that such notice shall not be deemed effective unless not
later than the next Business Day, a copy of the such notice is hand delivered or
deposited for delivery via courier or in the United States mails in accordance
with the requirements set forth above.
If to Borrower: Resort Funding, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Vice President
Telecopy No.: (___) _______________
If to Lender: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Vice President - Resort Finance
Telecopy No.: (000) 000-0000
If to Servicer: Resort Funding, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Comptroller
7.5 This Servicing Agreement may not be modified or amended, and no
term, provision, or condition hereof may be waived, except by a written
instrument signed by all of the parties hereto.
7.6 This Servicing Agreement may be executed in counterparts, each
of which shall be deemed an original document but all of which, collectively,
shall constitute a single document.
7.7 Borrower agrees to pay all costs and expenses reasonably
incurred by Lender in connection with the evaluation, protection, assertion, and
enforcement of Lender's rights hereunder, including, without limitation, court
costs, audit expenses, collection charges, and attorneys' and paralegals' fees
and disbursements.
7.8 This Servicing Agreement has been duly executed and delivered by
Servicer, Borrower, and Lender and constitutes a legal, valid, and binding
obligation of each such party, enforceable in accordance with its terms.
7.9 EACH OF BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS SERVICING AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREIN OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY PARTY. EACH OF
BORROWER, SERVICER, AND LENDER FURTHER WAIVES ANY RIGHT IT MAY HAVE TO SEEK TO
CONSOLIDATE ANY SUCH LITIGATION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. FURTHER,
BORROWER AND SERVICER HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER,
INCLUDING LENDER'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER
WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT
TO JURY TRIAL PROVISION. BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS
SECTION ARE A MATERIAL INDUCEMENT TO LENDER'S ACCEPTANCE OF THIS SERVICING
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
7.10 EACH OF BORROWER AND LENDER: (A) HEREBY IRREVOCABLY SUBMITS
ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF
ARIZONA, MARICOPA COUNTY, AND THE PROCESS, JURISDICTION, AND VENUE OF THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT,
ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO ANY DOCUMENT OF THE
SUBJECT MATTER THEREOF, OR, IF LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH
LENDER SHALL INITIATE SUCH ACTION, AND THE CHOICE OF SUCH VENUE SHALL IN ALL
INSTANCES BE AT LENDER'S ELECTION; AND (B) WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, HEREBY WAIVES AND AGREES NOT ASSERT BY WAY OF MOTION, DEFENSE OR
OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH OF
BORROWER, GUARANTOR AND LENDER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK
ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.
7.11 To the extent reasonably practicable, the parties hereto shall
cooperate with and assist each other in carrying out their respective
obligations hereunder and, in connection therewith, shall execute and deliver
such documents and instruments and shall take such action as may be necessary or
appropriate in furtherance thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Servicing
Agreement to be duly executed on its behalf by persons thereunto duly authorized
as of the day and year first written above.
RESORT FUNDING, INC.
Witness
By: /s/
Xxxxxx X. Xxxxxx
Printed Name Its: Senior Vice President
FINOVA CAPITAL CORPORATION, a Delaware
corporation
Witness
By: /s/
Xxxxx X. XxXxxxxx
Printed Name Its: Vice President
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