AMENDED AND RESTATED SALE AND SERVICING AGREEMENT among SILVERLEAF FINANCE IV, LLC, as Purchaser, SILVERLEAF RESORTS, INC., as Seller and Servicer, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Backup Servicer, Trustee and Account Intermediary Dated...
AMENDED
AND RESTATED SALE AND SERVICING
AGREEMENT
among
SILVERLEAF
FINANCE IV, LLC, as
Purchaser,
SILVERLEAF
RESORTS, INC., as
Seller
and Servicer,
and
XXXXX
FARGO BANK, NATIONAL ASSOCIATION, as
Backup
Servicer, Trustee and Account Intermediary
Dated
as of
December
22, 2006
TABLE
OF CONTENTS
Article
I DEFINITIONS
|
1
|
|
Section
1.1
|
Definitions
|
1
|
Section
1.2
|
Other
Definitional Provisions
|
1
|
Section
1.3
|
Calculations
|
2
|
Section
1.4
|
Material
Adverse Effect
|
2
|
Article
II CONVEYANCE OF RECEIVABLES
|
2
|
|
Section
2.1
|
Conveyance
of Receivables
|
2
|
Section
2.2
|
Transfers
Intended as Sale
|
5
|
Section
2.3
|
Further
Encumbrance of Receivables and Other Conveyed Property
|
5
|
Article
III THE RECEIVABLES
|
5
|
|
Section
3.1
|
Representations,
Warranties and Certain Covenants of Seller
|
5
|
Section
3.2
|
Repurchases
and Substitutions
|
9
|
Section
3.3
|
Custody
of Timeshare Loan Files
|
12
|
Section
3.4
|
Trustee
to Obtain Fidelity Insurance
|
12
|
Article
IV ADMINISTRATION AND SERVICING OF RECEIVABLES
|
12
|
|
Section
4.1
|
Duties
of the Servicer
|
12
|
Section
4.2
|
Collection
of Receivable Payments; Lockbox Agreements; Other Duties of the
Servicer
|
13
|
Section
4.3
|
Realization
Upon Receivables
|
15
|
Section
4.4
|
[RESERVED]
|
16
|
Section
4.5
|
Maintenance
of Security Interests
|
16
|
Section
4.6
|
Additional
Covenants of Servicer
|
17
|
Section
4.7
|
Purchase
of Receivables Upon Breach of Covenant
|
18
|
Section
4.8
|
Servicing
Fee
|
18
|
Section
4.9
|
Servicer’s
Certificate
|
19
|
Section
4.10
|
Annual
Statement as to Compliance, Notice of Servicer Termination
Event
|
19
|
Section
4.11
|
Independent
Accountants’ Reports
|
19
|
Section
4.12
|
Independent
Accountants’ Review of Receivables File
|
20
|
Section
4.13
|
Report
on Proceedings and Servicer Termination Event
|
20
|
Section
4.14
|
Access
to Certain Documentation and Information Regarding
Receivables
|
20
|
Section
4.15
|
Verification
of Servicer’s Certificate
|
20
|
Section
4.16
|
[RESERVED]
|
22
|
Section
4.17
|
Fidelity
Bond and Errors and Omissions Insurance
|
22
|
Section
4.18
|
Lien
Searches; Opinions as to Transfers and Security Interests
|
22
|
Section
4.19
|
Subservicing
Arrangements
|
23
|
Article
V ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDER
|
23
|
|
Section
5.1
|
Establishment
of Pledged Accounts
|
23
|
Section
5.2
|
[RESERVED]
|
25
|
Section
5.3
|
Certain
Reimbursements to the Servicer
|
25
|
Section
5.4
|
[RESERVED]
|
25
|
Section
5.5
|
Reserve
Account
|
25
|
Section
5.6
|
Additional
Deposits
|
26
|
Section
5.7
|
Distributions
|
26
|
Section
5.8
|
Note
Distribution Account
|
27
|
Section
5.9
|
Statements
to the Noteholder
|
28
|
Article
VI [RESERVED]
|
29
|
|
Article
VII THE PURCHASER
|
29
|
|
Section
7.1
|
Representations
of Purchaser
|
29
|
Article
VIII THE SELLER
|
30
|
iii
Section
8.1
|
Representations
of Seller
|
30
|
Section
8.2
|
Additional
Covenants of the Seller
|
33
|
Section
8.3
|
Liability
of Seller; Indemnities
|
35
|
Section
8.4
|
Merger
or Consolidation of Seller
|
36
|
Section
8.5
|
Limitation
on Liability of Seller and Others
|
36
|
Article
IX THE SERVICER
|
36
|
|
Section
9.1
|
Representations
of Servicer
|
36
|
Section
9.2
|
Liability
of Servicer; Indemnities
|
39
|
Section
9.3
|
Merger
or Consolidation of the Servicer or Backup Servicer, and Assumption
of
the
|
|
Obligations
of the Backup Servicer
|
40
|
|
Section
9.4
|
[RESERVED]
|
40
|
Section
9.5
|
[RESERVED]
|
40
|
Section
9.6
|
Servicer
and Backup Servicer Not to Resign
|
41
|
Section
9.7
|
Reporting
Requirements
|
41
|
Article
X DEFAULT
|
41
|
|
Section
10.1
|
Servicer
Termination Events
|
41
|
Section
10.2
|
Consequences
of a Servicer Termination Event
|
43
|
Section
10.3
|
Appointment
of Successor
|
44
|
Section
10.4
|
Notification
of Termination and Appointment
|
45
|
Section
10.5
|
Waiver
of Past Defaults
|
45
|
Section
10.6
|
Action
Upon Certain Failures of the Servicer
|
45
|
Section
10.7
|
Continued
Errors
|
45
|
Article
XI MISCELLANEOUS PROVISIONS
|
45
|
|
Section
11.1
|
Amendment
|
45
|
Section
11.2
|
Protection
of Title to Property.
(a)
|
46
|
Section
11.4
|
Assignment
|
48
|
Section
11.5
|
Limitations
on Rights of Others
|
48
|
Section
11.6
|
Severability
|
48
|
Section
11.7
|
Separate
Counterparts
|
48
|
Section
11.8
|
Headings
|
48
|
Section
11.9
|
Governing
Law
|
48
|
Section
11.10
|
Assignment
to Trustee
|
48
|
Section
11.11
|
Nonpetition
Covenants
|
48
|
Section
11.12
|
Limitation
of Liability of Trustee
|
49
|
Section
11.13
|
Independence
of the Servicer
|
49
|
Section
11.14
|
No
Joint Venture
|
49
|
Section
11.15
|
Intention
of Parties Regarding Delaware Securitization Act
|
49
|
Section
11.16
|
Special
Supplemental Agreement
|
49
|
Section
11.17
|
Limited
Recourse
|
49
|
Section
11.18
|
Acknowledgement
of Roles
|
50
|
Section
11.19
|
Termination
|
50
|
Section
11.20
|
Submission
to Jurisdiction
|
50
|
Section
11.21
|
Waiver
of Trial by Jury
|
50
|
Section
11.22
|
Process
Agent
|
50
|
Section
11.23
|
No
Set-Off
|
51
|
Section
11.24
|
No
Waiver; Cumulative Remedies
|
51
|
Section
11.25
|
Merger
and Integration
|
51
|
iii
SCHEDULES
Schedule
A
|
-
|
[Intentionally
Omitted]
|
Schedule
B
|
-
|
Location
for Delivery of Timeshare Loan
Files
|
Schedule
C
|
-
|
Form
of Trial Balance Report/Delinquency
Report
|
EXHIBITS |
Exhibit A |
-
|
Form of Servicer’s Certificate |
Exhibit B |
-
|
Eligibility Criteria |
Exhibit C |
-
|
Form of Assignment |
Exhibit D |
-
|
Form of Addition Notice |
Exhibit E |
-
|
ACH Form |
Exhibit F |
-
|
List of Silverleaf Executive Management |
Exhibit G |
-
|
Record Layout |
Exhibit H |
-
|
Servicer’s Monthly Representation Certificate |
Exhibit I |
-
|
Escrow Agent Wiring Instructions |
Exhibit J |
-
|
Form of Waiver Letter |
Exhibit K |
-
|
Credit Policy/Collection Policy |
Exhibit L |
-
|
Form of Notice of Non-Titled Loans |
ANNEXES |
Annex A | - | Amended and Restated Defined Terms |
iv
AMENDED
AND RESTATED SALE AND SERVICING AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “Agreement”) dated as of December 22, 2006,
among SILVERLEAF FINANCE IV, LLC, a Delaware limited liability company (the
“Purchaser”), SILVERLEAF RESORTS, INC., a Texas corporation (in its capacities
as Seller, the “Seller” and as Servicer, the “Servicer,” respectively), XXXXX
FARGO BANK, NATIONAL ASSOCIATION, a national banking association (in its
capacities as Backup Servicer, the “Backup Servicer,” as Trustee, the “Trustee,”
and as Account Intermediary, the “Account Intermediary”).
WHEREAS,
the parties hereto agree to amend and restate in its entirety that certain
Sale
and Servicing Agreement, dated as of March 2, 2006, among the Purchaser, the
Seller, the Servicer, the Backup Servicer, the Trustee and the Account
Intermediary;
WHEREAS,
the Purchaser desires to purchase, from time to time, a portfolio of receivables
arising in connection with the sales of vacation ownership interests by
Silverleaf Resorts, Inc.;
WHEREAS,
the Purchaser intends to finance such purchases by issuing the Note, secured
by
the Receivables and the Other Conveyed Property, pursuant to the Indenture
(as
defined below);
WHEREAS,
the Seller is willing to sell such Receivables and the Other Conveyed Property
to the Purchaser from time to time; and
WHEREAS,
the Servicer is willing to service all such Receivables and related Other
Conveyed Property.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
Capitalized
terms used in this Agreement and not otherwise defined in this Agreement, shall
have the meanings set forth in Annex A attached hereto.
Section
1.2 Other
Definitional Provisions.
(a) All
terms
defined in this Agreement shall have the defined meanings when used in any
instrument governed hereby and in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) Accounting
terms used but not defined or partly defined in this Agreement, in any
instrument governed hereby or in any certificate or other document made or
delivered pursuant hereto, to the extent not defined, shall have the respective
meanings given to them under U.S. generally accepted accounting principles
as in
effect on the date of this Agreement or any such instrument, certificate or
other document, as applicable. To the extent that the definitions of accounting
terms in this Agreement or in any such instrument, certificate or other document
are inconsistent with the meanings of such terms under U.S. generally accepted
accounting principles, the definitions contained in this Agreement or in any
such instrument, certificate or other document shall control.
(c) The
words
“hereof,”
“herein,”
“hereunder”
and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.
(d) Section,
Schedule and Exhibit references contained in this Agreement are references
to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term “including”
shall
mean “including
without limitation.”
1
(e) The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
(f) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as the same may from time to time be amended, modified
or
supplemented and includes (in the case of agreements or instruments) references
to all attachments and instruments associated therewith; all references to
a
Person include its permitted successors and assigns.
Section
1.3 Calculations.
Other
than as expressly set forth herein or in any of the other Basic Documents,
all
calculations of the amount of the Servicing Fee, Backup Servicing Fee and the
Trustee Fee shall be made on the basis of a 360-day year consisting of twelve
30-day months. All calculations of the Commitment Fee and the Noteholder’s
Monthly Interest Distributable Amount shall be made on the basis of the actual
number of days in the Accrual Period or Interest Period, as applicable, and
360
days in the calendar year. All references to the Principal Balance of a
Receivable as of any day shall refer to the close of business on such
day.
Section
1.4 Material
Adverse Effect.
Whenever
a determination is to be made under this Agreement whether a breach of a
representation, warranty or covenant has or could have a material adverse effect
on a Receivable, Other Conveyed Property or the interest therein of the
Purchaser and the Noteholder (or any similar or analogous determination), such
determination shall be made by the Noteholder in its sole and reasonable
discretion.
ARTICLE
II
CONVEYANCE
OF RECEIVABLES
Section
2.1 Conveyance
of Receivables
(a) In
consideration of the Purchaser’s delivery to or upon the order of the Seller on
any Funding Date of the Purchase Price therefor, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Purchaser, without
recourse (subject to the obligations set forth herein) all right, title and
interest of the Seller, whether now existing or hereafter arising, in, to and
under:
(i)the
Receivables listed in the Schedule of Receivables from time to
time;
(ii)Timeshare
Loans relating to the Receivables and all monies received under the Receivables
and the Timeshare Loans on and after the related Cutoff Date and all Net
Liquidation Proceeds received with respect to the Receivables and the Timeshare
Loans after the related Cutoff Date;
(iii)with
respect to any Timeshare Loan, all of the Seller’s interest in the Timeshare
Property arising under or in connection with the related Mortgage, Financing
Agreement, Oak N’ Spruce Certificate and the related Timeshare Loan
Documents;
(iv)all
other
security interests or liens and property subject thereto from time to time
purporting to secure payment of such Timeshare Loan, together with all
mortgages, assignments and financing statements signed by an Obligor describing
any collateral securing such Timeshare Loan;
(v)all
guarantees, insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Timeshare Loan and
all
proceeds thereof (including, but not limited to, any insurance proceeds to
the
extent they are not used to rebuild or repair a Unit);
(vi)Reserved;
2
(vii)the
Timeshare Loan File related to each Receivable and all other security and books,
records and computer tapes relating to the foregoing;
(viii)all
amounts and property from time to time held in or credited to the Collection
Account or the Lockbox Account;
(ix)all
property (including the right to receive future Net Liquidation Proceeds) that
secures a Receivable that has been acquired by or on behalf of the Purchaser
pursuant to a liquidation of such Receivable; and
(x)all
present and future claims, demands, causes and choses in action in respect
of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash
or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other
forms of obligations and receivables, instruments and other property which
at
any time constitute all or part of or are included in the proceeds of any of
the
foregoing.
(b) The
Seller shall transfer to the Purchaser the Receivables and the other property
and rights related thereto described in paragraph
(a)
above
only upon the satisfaction of each of the conditions set forth below on or
prior
to the related Funding Date. In addition to constituting conditions precedent
to
any purchase hereunder and under each Assignment, the following shall also
be
conditions precedent to any Advance on any Funding Date under the terms of
the
Note Purchase Agreement:
(i)the
Seller shall have provided the Purchaser, the Trustee and the Noteholder with
an
Addition Notice substantially in the form of Exhibit
D
hereto
(which shall include supplements to the Schedule of Receivables) not later
than
three Business Days prior to such Funding Date and shall have provided any
information reasonably requested by any of the foregoing with respect to the
Related Receivables;
(ii)the
Seller shall, to the extent required by Section
4.2
of this
Agreement, have deposited in the Collection Account all collections received
after the Cutoff Date in respect of the Related Receivables to be purchased
on
such Funding Date;
(iii)as
of
each Funding Date, (A) the Seller shall not be insolvent and shall not become
insolvent as a result of the transfer of Related Receivables on such Funding
Date, (B) the Seller shall not intend to incur or believe that it shall incur
debts that would be beyond its ability to pay as such debts mature, (C) such
transfer shall not have been made with actual intent to hinder, delay or defraud
any Person and (D) the assets of the Seller shall not constitute unreasonably
small capital to carry out its business as then conducted;
(iv)the
Facility Termination Date shall not have occurred;
(v)the
Servicer shall have established one or more Lockbox Accounts acceptable to
the
Noteholder;
(vi)each
of
the representations and warranties made by the Seller pursuant to Section
3.1
and the
other Basic Documents with respect to the Related Receivables to be purchased
on
such Funding Date shall be true and correct as of the related Funding Date
and
the Seller shall have performed all obligations to be performed by it hereunder
or in any Assignment on or prior to such Funding Date;
3
(vii)the
Seller shall, at its own expense, on or prior to the Funding Date, indicate
in
its computer files that the Related Receivables to be purchased on such Funding
Date have been sold to the Purchaser pursuant to this Agreement or an
Assignment, as applicable;
(viii)the
Seller shall have taken any action required to maintain (i) the first priority
perfected ownership interest of the Purchaser in the Related Receivables and
Other Conveyed Property and (ii) the first priority perfected security interest
of the Trustee in the Collateral;
(ix)no
selection procedures adverse to the interests of the Noteholder shall have
been
utilized in selecting the Related Receivables to be sold on such Funding
Date;
(x)the
addition of any such Related Receivables to be purchased on such Funding Date
shall not result in a material adverse tax consequence to the Noteholder or
the
Purchaser;
(xi)the
Seller shall have delivered to the Noteholder and the Trustee an Officers’
Certificate confirming the satisfaction of each condition precedent specified
in
this paragraph (b);
(xii)no
Funding Termination Event, Servicer Termination Event, Event of Default or
any
event that, with the giving of notice or the passage of time, would constitute
a
Funding Termination Event, or Servicer Termination Event or Event of Default,
shall have occurred and be continuing;
(xiii)the
Custodian shall have confirmed receipt of the related Timeshare Loan File (with
the exception of the original mortgagee title insurance policy or master policy
referencing each Timeshare Loan and covering Silverleaf Resorts, Inc., its
successors and assigns, which shall be delivered by the Escrow Agent within
90
days of the related Funding Date, except with respect to any Non-Titled Loans,
as described in Section
3.1(a)(xxvii)
below),
for each Related Receivable included in the Borrowing Base calculation and
shall
have delivered a copy to the Noteholder, the Servicer and the Trustee of a
Trust
Receipt with respect to the Timeshare Loan Files related to the Related
Receivables to be purchased on such Funding Date;
(xiv)the
Seller shall have filed or caused to be filed all necessary UCC-l financing
statements (or amendments thereto) necessary to maintain (in each case assuming
for purposes of this clause (xiv) that such perfection may be achieved by making
the appropriate filings), or taken any other steps necessary to maintain, (1)
the first, priority, perfected ownership interest of Purchaser and (2) the
first
priority, perfected security interest of the Trustee, with respect to the
Related Receivables and Other Conveyed Property and the Collateral, respectively
to be transferred on such Funding Date;
(xv)the
Seller shall have executed and delivered to the Purchaser and the Noteholder
an
Assignment in the form of Exhibit C;
(xvi)the
Noteholder Excess Principal Event Date shall not have occurred;
(xvii)each
of
the Escrow Agent and Custodian shall have delivered its respective
certifications in accordance with the Escrow Agreement;
(xviii)each
of
the conditions precedent to such Advance set forth in the Indenture and the
Note
Purchase Agreement shall have been satisfied; and
(xix)the
Structuring Fee shall have been paid to the Noteholder in full.
Unless
waived by the Noteholder in writing, the Seller covenants that in the event
any
of the foregoing conditions precedent are not satisfied with respect to any
Related Receivable on the date required as specified above, the Seller will
immediately repurchase such Related Receivable from the Purchaser, at a price
equal to the Purchase Amount thereof, in the manner specified in Section
3.2
and
Section
4.7.
The
Trustee may rely on the accuracy of the Officers’ Certificate delivered pursuant
to item
(xi)
above
without independent inquiry or verification.
4
(c) Payment
of Purchase Price.
In
consideration for the sale of the Related Receivables and Other Conveyed
Property described in Section
2.1(a)
or the
related Assignment, the Purchaser shall, on each Funding Date on which Related
Receivables are transferred hereunder, pay to or upon the order of the Seller
the applicable Purchase Price in the following manner: (i) cash in an amount
equal to the amount of the Advance received by the Purchaser under the Note
on
such Funding Date and (ii) to the extent the Purchase Price for the related
Receivables and Other Conveyed Property exceeds the amount of cash described
in
(i), such excess shall be treated as a capital contribution by the Seller to
the
Purchaser. On any Funding Date on which funds are on deposit in the Principal
Funding Account, the Purchaser may direct the Trustee to withdraw therefrom
an
amount equal to the lesser of (i) the Purchase Price to be paid to the Seller
for Related Receivables and Other Conveyed Property to be conveyed to the
Purchaser and pledged to the Trustee on such Funding Date (or a portion thereof)
and (ii) the amount on deposit in the Principal Funding Account, and, subject
to
the satisfaction of the conditions set forth in Section
2.1(b)
after
giving effect to such withdrawal, in consideration for the sale of the Related
Receivables and Other Conveyed Property on such Funding Date, pay such amount
to
the Escrow Agent pursuant to the wiring instructions set forth on Exhibit
I
(which
wiring instructions may be updated from time to time by the Escrow Agent),
which
amount will be disbursed by the Escrow Agent in accordance with the Escrow
Agreement.
Section
2.2 Transfers
Intended as Sale.
It
is the
intention of the Seller that each transfer and assignment contemplated by this
Agreement and each Assignment shall constitute a sale of the Related Receivables
and Other Conveyed Property from the Seller to the Purchaser free and clear
of
all liens and rights of others and it is intended that the beneficial interest
in and title to the Related Receivables and Other Conveyed Property shall not
be
part of the Seller’s estate in the event of the filing of a bankruptcy petition
by or against the Seller under any bankruptcy law. In the event that,
notwithstanding the intent of the Seller, the transfer and assignment
contemplated hereby or by any Assignment is held not to be a sale, this
Agreement and each Assignment shall constitute a security agreement and a grant
of a security interest in the property referred to in Section
2.1
and each
Assignment to the Purchaser, which security interest has been assigned to the
Trustee, acting on behalf of the Noteholder.
Section
2.3 Further
Encumbrance of Receivables and Other Conveyed Property.
(a) Immediately
upon the conveyance to the Purchaser by the Seller of the Related Receivables
and any item of the related Other Conveyed Property pursuant to Section
2.1
and the
related Assignment, all right, title and interest of the Seller in and to such
Related Receivables and Other Conveyed Property shall terminate, and all such
right, title and interest shall vest in the Purchaser.
(b) Immediately
upon the vesting of any Related Receivables and the related Other Conveyed
Property in the Purchaser, the Purchaser shall have the sole right to pledge
or
otherwise encumber such Related Receivables and the related Other Conveyed
Property. Pursuant to the Indenture, the Purchaser shall grant a security
interest in the Collateral to secure the repayment of the Note.
(c) The
Trustee shall, at such time as (i) the Facility Termination Date has occurred,
(ii) there is no Note outstanding and (iii) all sums due to the Trustee and
the
Noteholder pursuant to the Basic Documents have been paid, release any remaining
portion of the Receivables and the Other Conveyed Property to the
Purchaser.
ARTICLE
III
THE
RECEIVABLES
Section
3.1 Representations,
Warranties and Certain Covenants of Seller.
(a) The
Seller makes the following representations and warranties as to the Receivables
and the Other Conveyed Property to the Purchaser and to the Trustee for the
benefit of the Noteholder on which the Purchaser relies in acquiring the
Receivables and the Other Conveyed Property and on which the Noteholder has
relied in purchasing the Note and will rely in paying the Advance Amount to
the
Purchaser. Such representations and warranties speak as of the Closing Date
and
as of each Funding Date; provided
that to
the extent such representations and warranties relate to the Related Receivables
conveyed on any Funding Date, such representations and warranties shall speak
as
of the related Funding Date, but shall survive the sale, transfer and assignment
of such Related Receivables to the Purchaser and the pledge thereof by the
Purchaser to the Trustee for the benefit of the Noteholder pursuant to the
Indenture.
5
(i)Characteristics
of Receivables.
Each
Receivable is related to, and payable pursuant to, an Eligible Timeshare
Loan.
(ii)Additional
Receivables Characteristics.
As of
the related Funding Date, as applicable:
(A) after
the
pledge of each Related Receivable pursuant to the Indenture, the Net Spread
shall not be less than 5.0%;
(B) after
the
pledge of each Related Receivable pursuant to the Indenture, the weighted
average Timeshare Loan Rate of all the Eligible Timeshare Loans shall be no
less
than 15% and the weighted average original term to maturity of all the Eligible
Timeshare Loans shall not exceed 108 months; and
(C) after
the
pledge of each Related Receivable pursuant to the Indenture, the Aggregate
Principal Balance of Eligible Timeshare Loans with a related Obligor having
a
FICO score of greater than or equal to 500 and less than 600 as of the date
of
origination of such Timeshare Loan shall not exceed 20% of the Aggregate
Principal Balance of all Eligible Receivables.
(iii)Schedule
of Receivables.
The
information with respect to the Related Receivables set forth in Schedule A
to
the related Assignment is true and correct in all material respects as of the
close of business on the related Cutoff Date, and no selection procedures
adverse to the Noteholder have been utilized in selecting the Related
Receivables to be sold hereunder.
(iv)No
Government Obligor.
None of
the Related Receivables are due from the United States of America or any State
or from any agency, department, or instrumentality of the United States of
America or any State.
(v)Security
Interest.
Immediately subsequent to the sale, assignment and transfer thereof to the
Purchaser, each Related Receivable shall be secured by a validly perfected
first
priority security interest in the related Timeshare Property in favor of the
Seller as secured party which has been validly assigned to the Purchaser, and
such assigned security interest is prior to all other liens upon and security
interests in such Timeshare Property which now exist or may hereafter arise
or
be created.
(vi)Servicemembers.
No
Related Receivable has been modified as a result of application of the
Servicemembers Civil Relief Act, as amended.
(vii)Title.
It is
the intention of the Seller that each transfer and assignment herein
contemplated constitutes a sale of the Related Receivables and the related
Other
Conveyed Property from the Seller to the Purchaser and that the beneficial
interest in and title to such Related Receivables and related Other Conveyed
Property not be part of the Seller’s estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. No
Related Receivable or related Other Conveyed Property has been sold,
transferred, assigned, or pledged by the Seller to any Person other than the
Purchaser and by the Purchaser to any Person other than the Trustee. Immediately
prior to each transfer and assignment herein contemplated, the Seller had good
and marketable title to each Related Receivable and related Other Conveyed
Property and was the sole owner thereof, free and clear of all liens, claims,
encumbrances, security interests, and rights of others, and, immediately upon
the transfer thereof to the Purchaser and the concurrent pledge to the Trustee
under the Indenture, the Trustee for the benefit of the Noteholder shall have
a
valid and enforceable first priority security interest in the Collateral, free
and clear of all liens, encumbrances, security interests, and rights of others,
and such transfer has been perfected under the UCC and all other applicable
law.
(viii)Lawful
Assignment.
No
Related Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of such Related
Receivable under this Agreement or pursuant to transfers of the Note shall
be
unlawful, void, or voidable. None of the Seller or any Affiliate thereof has
entered into any agreement with any account debtor that prohibits, restricts
or
conditions the assignment of any portion of the Related
Receivables.
6
(ix)All
Filings Made.
All
filings (including, without limitation, UCC filings or other actions) necessary
in any jurisdiction to give: (a) the Purchaser a first priority perfected
ownership interest in the Receivables and the Other Conveyed Property,
including, without limitation, the proceeds of the Receivables (to the extent
that the Purchaser can obtain such first priority perfected security interest
pursuant to one or more filings) and (b) the Trustee, for the benefit of the
Noteholder, a first priority perfected security interest in the Collateral
have
been made, taken or performed.
(x)Timeshare
Loan File; One Original.
The
Seller has delivered to the Trustee, at the location specified in Schedule
B
hereto,
a complete Timeshare Loan File with respect to each Related Receivable, and
the
Custodian has delivered to the Trustee, the Servicer, the Purchaser and the
Noteholder a copy of the Trust Receipt therefor. There is only one original
executed copy of each Timeshare Loan Document.
(xi)Post-Office
Box.
On or
prior to the next billing period after the related Cutoff Date, the Servicer
will notify each Obligor to make payments with respect to its respective Related
Receivables after the related Cutoff Date directly to the Post-Office Box,
and
will provide each Obligor with a monthly statement in order to enable such
Obligor to make payments directly to the Post-Office Box.
(xii)No
Impairment.
Neither
Seller nor the Purchaser has done anything to convey any right to any Person
that would result in such Person having a right to payments due under any
Related Receivables, related Other Conveyed Property or otherwise to impair
the
rights of the Purchaser, the Trustee or the Noteholder in any Related
Receivable, related Other Conveyed Property or the proceeds
thereof.
(xiii)Creation
of Security Interest.
This
Agreement creates a valid and continuing security interest (as defined in the
UCC) in the Receivables and the Other Conveyed Property in favor of the
Purchaser, which security interest is prior to all other Liens and is
enforceable as such as against creditors of and purchasers from the
Seller.
(xiv)Perfection
of Security Interest in the Receivables and Other Conveyed
Property.
The
Seller has caused the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law
in
order to perfect the security interest in the Receivables and the Other Conveyed
Property granted to the Purchaser hereunder pursuant to Section
2.1
and the
related Assignment.
(xv)No
Other Security Interests.
Other
than the security interest granted to the Purchaser pursuant to Section
2.1
and the
related Assignment, the Seller has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Receivables or the Other
Conveyed Property, other than such security interests as are released at or
before the conveyance thereof. The Seller has not authorized the filing of
and
is not aware of any financing statements filed against the Seller that include
a
description of collateral covering any portion of the Receivables and the Other
Conveyed Property other than any financing statement relating to the security
interest granted to the Purchaser hereunder or that has been terminated or
released as to the Receivables and the Other Conveyed Property. The Seller
is
not aware of any judgment or tax lien filings against the Seller.
7
(xvi)Notations
on Contracts; Financing Statement Disclosure.
The
Timeshare Loan Files that constitute or evidence the Receivables do not have
any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Purchaser and/or the Trustee for the
benefit of the Noteholder. All financing statements filed or to be filed against
the Seller in favor of the Purchaser in connection herewith describing the
Receivables and the Other Conveyed Property contain a statement to the following
effect: “A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the secured party.”
(xvii)Records.
On or
prior to each Funding Date, the Seller will have caused its records (including
electronic ledgers) relating to each Related Receivable and Other Conveyed
Property to be conveyed by it on such Funding Date to be clearly and
unambiguously marked to reflect that such Related Receivable and Other Conveyed
Property was conveyed by it to the Purchaser.
(xviii)Computer
Information.
The
computer diskette, computer tape or other electronic transmission made available
by the Seller to the Purchaser on each Funding Date is, as of the related Cutoff
Date, complete and accurate and includes a description of the same Receivables
described in Schedule A to the related Assignment.
(xix)Timeshare
Loan Documents.
All of
the documents evidencing each of the Receivables and the Other Conveyed Property
are in a form determined to be valid, binding and enforceable in the applicable
state by the corresponding local counsel opinion issued by (I) Xxxxxxxxx &
Xxxxx, P.C. dated as of March 2, 2006 pertaining to Georgia law matters, (II)
Xxxxxxx, Xxxxxxxxxx and Xxxxxxx, LLP dated as of March 2, 2006 pertaining to
Massachusetts law matters, (III) Xxxxxxx Xxxxxxxx Xxxxxx LLP dated as of March
2, 2006 pertaining to Missouri law matters, (IV) Mayer, Brown, Xxxx & Maw
LLP dated as of March 2, 2006 pertaining to Illinois law matters, (V) Meadows,
Owens, Collier, Reed, Cousins & Blau, L.L.P. dated as of March 2, 2006
pertaining to Texas law matters and (VI) Holland & Knight LLP dated as of
March 2, 2006 pertaining to Florida law matters (collectively, the “Local
Counsel Opinions”).
(xx)Timeshare
Marketing Materials and Disclosure Statements.
The
Seller has provided each of the law firms issuing the Local Counsel Opinions
all
of the existing marketing materials and disclosure statements in connection
with
the respective Resort. Moreover, no other marketing materials and disclosure
statements exist except for those provided to the respective law firm issuing
the Local Counsel Opinion.
(xxi)Local
Counsel Opinions.
The
facts regarding the Seller, the Resorts, the Receivables, the Timeshare Loans,
the Other Conveyed Property and related matters set forth or assumed in the
Local Counsel Opinions are true and correct in all material
respects.
(xxii)Bankruptcy
Opinion.
The
facts regarding the Seller, the Issuer, the Resorts, the receivables, the
Timeshare Loans, the Other Conveyed Property and related matters set forth
or
assumed in the opinion issued by Mayer, Brown, Xxxx & Maw LLP dated as of
March 2, 2006, and the update of such opinion issued by Mayer, Brown, Xxxx
&
Maw LLP dated as of December 22, 2006, pertaining to bankruptcy law matters
are
true and correct in all material respects.
8
(xxiii)Custodial
Files.
The
Seller shall, prior to the Closing Date and each Funding Date, in accordance
with this Agreement and the Custodial Agreement, have delivered or caused the
delivery to the Custodian a Timeshare Loan File for each Timeshare Loan, which
Timeshare Loan File shall be complete and verified by the Custodian in
accordance with the Custodial Agreement.
(xxiv)No
Conveyance.
The
Seller agrees not to convey and to ensure no party under its control conveys
any
interest in a Resort relating to a Receivable without obtaining the written
consent of the Noteholder prior to such conveyance if such conveyance is
reasonably likely to have a material adverse effect on the performance or value
of such Receivable or related Timeshare Loan.
(xxv)Escrow
Documents and Oak N’ Spruce Financing Documents.
Originator shall, on or prior to the ninetieth day following the date of the
Escrow Agreement and on or prior to the ninetieth day following each Funding
Date, deliver or cause the delivery to the Custodian the following: (I) with
respect to a Mortgage Loan, an original recorded Assignment of Mortgage (which
may be a part of a blanket assignment of more than one Mortgage Loan), showing
a
complete chain of title from the Seller to the Trustee on behalf of the
Noteholder signed by an Authorized Officer of the Seller and each intervening
party with evidence of proper recordation; (II) with respect to an Oak N’ Spruce
Loan (pre-July 2004), an original recorded Mortgage and Assignment of Beneficial
Interest with Property Description Addendum or Assignment of Beneficial Interest
with Property Description Addendum (which may be a part of a blanket assignment
of more than one Oak N’ Spruce Loan), showing a complete chain of title from the
Seller to the Trustee on behalf of the Noteholder signed by an Authorized
Officer of the Seller and each intervening party with evidence of proper
recordation or evidence from a third party that submitted such assignment for
recording that such assignment has been submitted for recordation; (III) with
respect to an Oak N’ Spruce Loan (post-July 2004), a file stamped Oak N’ Spruce
Financing Statement evidencing
the security interest of the Trustee and its assigns in the Receivables and
related other Conveyed Property in respect of such Oak N’ Spruce Loan by naming
the Obligor with respect to the related Oak N’ Spruce Loan as debtor and by
naming the Trustee on behalf of the Noteholder as the secured party/assignee,
which
document is authorized and completed; (IV) Title Policies (except with respect
to the Non-Titled Loans, as set forth below in sub-section (xxvii)); and (V)
all
other recorded and/or filed documents provided under the Escrow
Agreement.
(xxvi)Prior
Secured Parties’ Documents.
In
accordance with the Escrow Agreement, the Seller shall deliver or cause the
delivery of (I) the Escrow Documents for each of the respective Prior Secured
Parties to the Escrow Agent and (II) the Oak N’ Spruce Financing Documents for
each of the respective Prior Secured Parties to the Custodian.
(xxvii)Non-Titled
Loans.
With
respect to up to $10,000,000 in Aggregate Principal Amount of Mortgage Loans,
the Seller may deliver or cause the delivery to the Custodian of Title
Commitments within 45 days of the related Funding Date (such loans, the
“Non-Titled Loans”); provided,
however,
that
following such Funding Date, the Seller shall have delivered or caused the
delivery to the Custodian of Title Policies as follows:
(A) With
respect to any Non-Titled Loans relating to a Resort located in the State of
Texas, the Seller shall deliver or cause the delivery to the Custodian of a
Title Policy with respect to each such Non-Titled Loan within 60 days of
delivery of the related Title Commitment; and
(B) With
respect to any Non-Titled Loans relating to a Resort in any state other than
the
State of Texas, the Seller shall deliver or cause the delivery to the Custodian
of a Title Policy with respect to each such Non-Titled Loan within 90 days
of
delivery of the related Title Commitment.
9
Upon
the
Custodian’s receipt of the Title Policies, such documents shall be incorporated
and treated as part of the Timeshare Loan Files.
(xxviii)Notice
of Non-Titled Loans.
On or
prior to each Funding Date, the Seller shall deliver or cause the delivery
to
the Custodian, the Trustee and the Noteholder of a notice, substantially in
the
form of Exhibit
L
hereto,
setting forth each Non-Titled Loan conveyed to the Purchaser as of such Funding
Date.
Section
3.2 Repurchases
and Substitutions.
(a) Mandatory
Repurchases and Substitutions for Breach of Representations and
Warranties.
(i)
The
Seller, the Servicer, the Noteholder or the Trustee, as the case may be, shall
inform the other parties to this Agreement (and the Noteholder, if it is not
the
notifying party) promptly, in writing, upon the discovery of any breach of
the
Seller’s representations, warranties or covenants made pursuant to Section
3.1
(without
regard to any limitations therein as to the Seller’s knowledge). Except with
respect to any breach of Section
3.1(a)(xxvii)
above
(which breach shall be treated as set forth in Section
3.2(e)
below),
unless the breach shall have been cured by the last day of the next Accrual
Period following the earlier of the discovery thereof by the Seller or receipt
by the Seller of notice of such breach, if the value of such Receivable is
materially and adversely affected by the breach the Seller shall, on or prior
to
such last day of the next Accrual Period, either (i) repurchase such Receivable
and related Other Conveyed Property from the Purchaser or its assignee for
the
Purchase Amount or (ii) provide one or more Qualified Substitute Timeshare
Receivables and related Other Conveyed Property and pay the related Substitution
Shortfall Amounts, if any. In consideration of the repurchase or substitution
of
any such Receivable, the Seller shall remit the Purchase Amount or the
Substitution Shortfall Amount, as applicable, in the manner specified in
Section
5.6.
The
sole remedy of the Purchaser, the Trustee or the Noteholder with respect to
a
breach of representations, warranties or covenants pursuant to Section
3.1
shall be
to enforce the Seller’s obligation to purchase or substitute such Receivables;
provided,
however,
that
the Seller shall indemnify the Trustee, the Backup Servicer, the Purchaser
and
the Noteholder against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out
of
the events or facts giving rise to such breach. Upon receipt of the Purchase
Amount or a Qualified Substitute Timeshare Receivable and the related
Substitution Shortfall Amount, as applicable, in respect of any Defective
Receivables and written instructions from the Servicer, the Trustee shall
release to the Seller or its designee the related Timeshare Loan File and shall
execute and deliver all reasonable instruments of transfer or assignment,
without recourse, as are prepared by the Seller and delivered to the Trustee
and
necessary to vest in the Seller or such designee title to such Defective
Receivables.
(ii) Prior
to
the related date of substitution (the “Substitution
Date”)
in
accordance with clause (a) above, the Purchaser hereby directs and the Seller
hereby agrees to deliver or to cause the delivery of the Timeshare Loan Files
of
the related Qualified Substitute Timeshare Receivables to the Custodian, in
accordance with the provisions of the Indenture, the Custodial Agreement and
the
Escrow Agreement, as applicable. As of such related Substitution Date, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to
the
Issuer, without recourse (subject to the obligation set forth herein), all
right, title and interest of the Seller, whether then existing or thereafter
arising, in, to and under (i) each Qualified Substitute Timeshare Receivable
conveyed to the Purchaser on such Substitution Date and all amounts due
thereunder after the related Cutoff Date, (ii) the related Qualified Substitute
Timeshare Loans, (iii) the related Timeshare Loan Documents (excluding any
rights as developer or declarant under the Timeshare Declaration, the Timeshare
Program Consumer Documents or the Timeshare Program Governing Documents), (iv)
all Other Conveyed Property in respect of such Qualified Substitute Timeshare
Receivables, and (v) all income, payments, proceeds and other benefits and
rights related to any of the foregoing. Upon such sale and/or contribution,
the
ownership of each Qualified Substitute Timeshare Receivable and all collections
allocable to principal and interest thereon since the related Cutoff Date and
all other property interests or rights conveyed pursuant to and referenced
in
this Section
3.2(a)
shall
immediately vest in the Purchaser, its successors and assigns. The Seller shall
not take any action inconsistent with such ownership nor claim any ownership
interest in any Qualified Substitute Timeshare Receivable or related Other
Conveyed Property for any purpose whatsoever other than consolidated financial
and federal and state income tax reporting. The Seller agrees that such
Qualified Substitute Timeshare Receivables shall be subject to the provisions
of
this Agreement.
10
(iii) The
Seller shall, on each related Substitution Date, certify in writing to the
Purchaser and the Trustee that each new Timeshare Loan meets all the criteria
of
the definition of “Qualified Substitute Timeshare Loan” and that (i) the
Timeshare Loan Files for such Qualified Substitute Timeshare Loans have been
delivered to the Custodian, and (ii) the Timeshare Loan Servicing Files for
such
Qualified Substitute Timeshare Loans have been delivered to the
Servicer.
(b) Mandatory
Repurchases of Upgraded Timeshare Loans.
With
respect to Upgraded Timeshare Loans, on any date, the Seller shall prepay such
Upgraded Timeshare Loan on behalf of the related Obligor by depositing the
related Upgrade Purchase Price in the Collection Account as set forth in
Section
5.6
hereof.
(c) Optional
Purchases of Defaulted Timeshare Loans.
With
respect to any Defaulted Timeshare Loans, on any date, the Seller shall have
the
option, but not the obligation, to purchase the Defaulted Timeshare Loan at
the
Default Purchase Price for such Defaulted Timeshare Loan; provided,
however,
that
the option to purchase a Defaulted Timeshare Loan is limited on any date to the
Optional Purchase Limit. If the Seller shall purchase Defaulted Timeshare Loans
as provided herein, the Seller shall deposit the related Default Purchase Price
in the Collection Account as set forth in Section
5.6
hereof.
The Seller may irrevocably waive the Seller’s option to purchase a Defaulted
Timeshare Loan by delivering or causing to be delivered to the Trustee a Waiver
Letter in the form of Exhibit
J
attached
hereto. The Noteholder may at any time direct the Trustee, in connection with
any subsequent purchases of Defaulted Timeshare Loans by the Seller, to require
the Seller to conduct a public auction in respect of any such Defaulted
Timeshare Loan in accordance with the provisions of Section
4.3(d)-(f)
below.
Upon receipt of the Default Purchase Price in respect of any Defaulted Timeshare
Loan and written instructions from the Servicer, the Trustee shall release
to
the Seller or its designee the related Timeshare Loan File and shall execute
and
deliver all reasonable instruments of transfer or assignment, without recourse,
as are prepared by the Seller and delivered to the Trustee and necessary to
vest
in the Seller or such designee title to such Defaulted Timeshare Loan and to
release the security interest of the Trustee in such Defaulted Timeshare Loan
and all related collateral.
(d) Optional
Sales of Timeshare Loans by Purchaser.
In
addition to the provisions providing for repurchase, substitution, and optional
purchase contained in Sections 3.2(a)-(c)
above
and e
below,
the Purchaser, acting through the Servicer, shall have the right at any time
to
sell any Timeshare Loans which are neither Defaulted Timeshare Loans nor relate
to Delinquent Receivables to either an unrelated third party or to the Seller,
for a cash purchase price that is no less than the Upgrade Purchase Price;
provided, however, that (x) the Purchaser may not sell any Timeshare Loans
to
the Seller if the cash purchase price to be paid for the Timeshare Loans, when
added to the cash purchase price paid for all other Timeshare Loans previously
sold by the Purchaser to the Seller under this Section 3.2(d)
exceeds
the lesser of 7.5% of the Maximum Invested Amount or 10% of the average monthly
Aggregate Principal Balance of all Receivables held in the Trust Estate during
the twelve month period immediately preceding the proposed date of sale and
(y)
the Seller shall be under no obligation to purchase any Timeshare Loans which
the Purchaser determines to sell under this Section
3.2(d).
If the
Purchaser sells any Timeshare Loans as provided herein, the Purchaser shall
deposit the related purchase price in the Collection Account as set forth in
Section
5.6
hereof.
Notwithstanding the foregoing, the Issuer may only exercise its right pursuant
to this Section
3.2(d)
so long
as immediately prior to each such sale and immediately after such sale, no
Event
of Default, Servicer Termination Event or Noteholder Excess Principal Event
shall have occurred and be continuing and no Borrowing Base Deficiency shall
exist. Upon receipt of the Upgrade Purchase Price in respect of any Timeshare
Loan sold by the Purchaser, and written instructions from the Servicer, the
Trustee shall release to the purchaser the related Timeshare Loan File and
shall
execute and deliver all reasonable instruments of transfer or assignment,
without recourse, as are prepared by the Servicer and delivered to the Trustee
and necessary to vest in such purchaser title to such Timeshare Loan and to
release the security interest of the Trustee in such Timeshare Loan and all
related collateral.
11
(e) Mandatory
Repurchase of Non-Titled Loans.
With
respect to any breach of Section
3.1(a)(xxvii)
above
in respect of any Non-Titled Loan, including without limitation any Non-Titled
Loan in respect of which: (i) no Title Commitment is delivered within 45 days
of
the related Funding Date upon which such Non-Titled Loan was conveyed to the
Purchaser, (ii) no Title Policy is delivered within 60 days of delivery of
the
related Title Commitment, if such Non-Titled Loan relates to a Resort located
in
the State of Texas; or (iii) no Title Policy is delivered within 90 days of
delivery of the related Title Commitment, if such Non-Titled Loan relates to
a
Resort located in any state other than the State of Texas, the Seller shall,
within 5 Business Days, repurchase the Receivable and related Other Conveyed
Property relating to such Non-Titled Loan from the Purchaser or its assignee
for
the Purchase Amount. In consideration of the repurchase of any such Receivable,
the Seller shall remit the Purchase Amount in the manner specified in
Section
5.6.
The
sole remedy of the Purchaser, the Trustee or the Noteholder with respect to
a
breach of the Seller’s representations pursuant to Section
3.1(a)(xxvii)
shall
be to enforce the Seller’s obligation to purchase such Receivables; provided,
however,
that
the Seller shall indemnify the Trustee, the Backup Servicer, the Purchaser
and
the Noteholder against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out
of
the events or facts giving rise to such breach. Upon receipt of the Purchase
Amount in respect of any Defective Receivables relating to Non-Titled Loans
and
written instructions from the Servicer, the Trustee shall release to the Seller
or its designee the related Timeshare Loan File and shall execute and deliver
all reasonable instruments of transfer or assignment, without recourse, as
are
prepared by the Seller and delivered to the Trustee and necessary to vest in
the
Seller or such designee title to such Defective Receivables.
Section
3.3 Custody
of Timeshare Loan Files.
(a) In
connection with each sale, transfer and assignment of Receivables and related
Other Conveyed Property to the Purchaser pursuant to this Agreement and each
Assignment, and each pledge thereof by the Purchaser to the Trustee pursuant
to
the Indenture, the Purchaser shall deliver the related Timeshare Loan Files
to
the Custodian before the Closing Date or the related Funding Date in accordance
with the Custodial Agreement.
(b) Upon
payment in full of any Receivable, the Servicer will notify the Trustee and
the
Custodian pursuant to a certificate of a Servicing Officer and shall request
delivery of the related Timeshare Loan File to the Servicer in accordance with
the Custodial Agreement.
Section
3.4 Trustee
to Obtain Fidelity Insurance.
The
Trustee shall maintain a fidelity bond in the form and amount as is customary
for entities acting as a trustee of funds and documents in respect of consumer
contracts on behalf of institutional investors.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF RECEIVABLES
Section
4.1 Duties
of the Servicer.
The
Servicer, as agent for the Purchaser and the Noteholder shall manage, service,
administer and make collections on the Receivables and the Other Conveyed
Property in accordance with the Servicing Standard. In performing such duties,
the Servicer shall comply with its current servicing policies and procedures,
as
such servicing policies and procedures may be amended from time to time, so
long
as such amendments will not materially adversely affect the interests of the
Noteholder, or otherwise with the prior written consent of the Noteholder (which
consent shall not be unreasonably withheld), and notice of such amendments
is
given to the Noteholder prior to the effectiveness thereof. The Servicer’s
duties shall include collection and posting of all payments, responding to
inquiries of Obligors on such Receivables, investigating delinquencies, sending
payment statements to Obligors, reporting tax information to Obligors,
accounting for collections, furnishing monthly and annual statements to the
Trustee and the Noteholder with respect to distributions. Without limiting
the
generality of the foregoing, and subject to the servicing standards set forth
in
this Agreement including, without limitation, the restrictions set forth in
Section
4.6,
the
Servicer is authorized and empowered by the Purchaser to execute and deliver,
on
behalf of itself, the Purchaser or the Noteholder, any and all instruments
of
satisfaction or cancellation, or partial or full release or discharge, and
all
other comparable instruments, with respect to such Receivables. If the Servicer
shall commence a legal proceeding to enforce a Receivable, the Purchaser shall
thereupon be deemed to have automatically assigned, solely for the purpose
of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal
proceeding it shall be held that the Servicer may not enforce a Receivable
on
the ground that it shall not be a real party in interest or a holder entitled
to
enforce such Receivable, the Purchaser shall, at the Servicer’s expense and
direction, take steps to enforce such Receivable, including bringing suit in
its
name or the name of the Noteholder. The Servicer shall prepare and furnish,
and
the Trustee shall execute, any powers of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing
and
administrative duties hereunder.
12
Section
4.2 Collection
of Receivable Payments; Lockbox Agreements; Other Duties of the
Servicer.
(a) Consistent
with the Servicing Standard, the Servicer shall collect all payments called
for
under the terms and provisions of the Receivables and the related Other Conveyed
Property as and when the same shall become due; provided, however, that promptly
after the Closing Date (or the related Funding Date, as applicable) the Servicer
shall notify and direct each Obligor to make all payments with respect to the
Receivables to the applicable Post-Office Box. The Servicer shall provide each
Obligor with a monthly statement in order to notify such Obligors to make
payments directly to the applicable Post-Office Box.
(b) The
Servicer shall establish a Lockbox Account in the name of the Purchaser for
the
benefit of the Trustee, acting on behalf of the Noteholder. Pursuant to a
Lockbox Agreement, the Trustee has authorized the Servicer to direct
dispositions of funds on deposit in the Lockbox Account to the Collection
Account (but not to any other account), and no other Person, except the Lockbox
Processor and the Trustee, shall have authority to direct disposition of funds
on deposit in the Lockbox Account. However, the Lockbox Agreement shall provide
that the Lockbox Bank will comply with instructions originated by the Trustee
relating to the disposition of the funds in the Lockbox Account without further
consent by the Seller, the Servicer or the Purchaser. The Trustee shall have
no
liability or responsibility with respect to the Lockbox Processor’s directions
or activities as set forth in the preceding sentence. The Lockbox Account shall
be established pursuant to and maintained in accordance with the Lockbox
Agreement and shall be a demand deposit account initially established and
maintained with JPMorgan Chase Bank, N.A., or at the request of the Noteholder
an Eligible Account satisfying clause (i) of the definition thereof; provided,
however, that the Trustee shall give the Servicer prior written notice of any
change made at the request of the Noteholder in the location of the Lockbox
Account. The Trustee shall establish and maintain each Post-Office Box at a
United States Post Office Branch in the name of the Purchaser for the benefit
of
the Noteholder.
(c) Notwithstanding
the Lockbox Agreement, or any of the provisions of this Agreement relating
to
the Lockbox Agreement, the Servicer shall remain obligated and liable to the
Purchaser, the Trustee and the Noteholder for servicing and administering the
Receivables and the Other Conveyed Property in accordance with the provisions
of
this Agreement without diminution of such obligation or liability by virtue
thereof.
(d) In
the
event the Seller shall for any reason no longer be acting as the Servicer
hereunder, the Backup Servicer or a successor Servicer shall thereupon assume
all of the rights and obligations of the outgoing Servicer under the Lockbox
Agreement. In such event, the Backup Servicer or a successor Servicer shall
be
deemed to have assumed all of the outgoing Servicer’s interest therein and to
have replaced the outgoing Servicer as a party to the Lockbox Agreement to
the
same extent as if the Lockbox Agreement had been assigned to the Backup Servicer
or a successor Servicer, except that the outgoing Servicer shall not thereby
be
relieved of any liability or obligations on the part of the outgoing Servicer
to
the Lockbox Bank under the Lockbox Agreement. The outgoing Servicer shall,
upon
request of the Trustee, but at the expense of the outgoing Servicer, deliver
to
the Backup Servicer or a successor Servicer all documents and records relating
to the Lockbox Agreement and an accounting of amounts collected and held by
the
Lockbox Bank and otherwise use its best efforts to effect the orderly and
efficient assignment of the Lockbox Agreement to the Backup Servicer or a
successor Servicer. In the event that the Noteholder shall elect to change
the
identity of the Lockbox Bank, the Servicer, at its expense, shall cause the
Lockbox Bank to deliver, at the direction of the Noteholder, to the Trustee
or a
successor Lockbox Bank, all documents and records relating to the Receivables
and all amounts held (or thereafter received) by the Lockbox Bank (together
with
an accounting of such amounts) and shall otherwise use its best efforts to
effect the orderly and efficient transfer of the Lockbox
arrangements.
13
(e) On
each
Business Day, pursuant to the Lockbox Agreement, the Lockbox Processor will
transfer any payments from Obligors received in the Post-Office Box to the
Lockbox Account. The Servicer shall cause the Lockbox Bank to transfer all
collections in respect of the Receivables and the Other Conveyed Property from
the Lockbox Account to the Collection Account within two Business Days after
receipt thereof. In addition, the Servicer shall remit all payments by or on
behalf of the Obligors received by the Servicer with respect to the Receivables
(other than Purchased Receivables) and the Other Conveyed Property, all Net
Liquidation Proceeds, Liquidation Expenses as provided in Section
4.3
hereof,
any amounts in respect of any insurance policies which are not payable to the
Obligor and any amounts remitted to the Servicer by the Hedge Counterparty
pursuant to the Hedge Agreement no later than two Business Days following
receipt directly (without deposit into any intervening account) into the Lockbox
Account or the Collection Account. The Servicer shall not commingle its assets
and funds with those on deposit in the Lockbox Account.
(f) In
addition to any other customary services which the Servicer may perform or
may
be required to perform hereunder, the Servicer shall perform or cause to be
performed through sub-servicers, the following servicing and collection
activities in accordance with the Servicing Standard:
(i)perform
standard accounting services and general record keeping services with respect
to
the Timeshare Loans;
(ii)respond
to telephone or written inquiries of Obligors concerning the Timeshare
Loans;
(iii)keep
Obligors informed of the proper place and method for making payment with respect
to the Timeshare Loans;
(iv)contact
Obligors to effect collections and to discourage delinquencies in the payment
of
amounts owed under the Timeshare Loans and doing so by any lawful
means;
(v)report
tax information to Obligors and taxing authorities to the extent required by
law;
(vi)take
such
other action as may be necessary or appropriate in the discretion of the
Servicer for the purpose of collecting and transferring to the Trustee for
deposit into the Collection Account all payments received by the Servicer or
remitted to the Lockbox Account in respect of the Timeshare Loans (except as
otherwise expressly provided herein), and to carry out the duties and
obligations imposed upon the Servicer pursuant to the terms of this
Agreement;
(vii)arranging
for Liquidations of Timeshare Properties related to Defaulted Timeshare Loans
and the remarketing of such Timeshare Properties as provided in Section
4.3
below;
(viii)use
reasonable best efforts to enforce the purchase and substitution obligations
of
the Seller under this Agreement;
(ix)refrain
from modifying, waiving or amending the terms of any Timeshare Loan; provided,
however, the Servicer may modify, waive or amend a Timeshare Loan for which
a
default on such Timeshare Loan has occurred or is imminent and such
modification, amendment or waiver will not (i) materially alter the interest
rate on or the principal balance of such Timeshare Loan, (ii) shorten the final
maturity of, lengthen the timing of payments of either principal or interest,
or
any other terms of, such Timeshare Loan in any manner which would have a
material adverse effect on the Noteholders, (iii) adversely affect the Timeshare
Property underlying such Timeshare Loan or (iv) reduce materially the likelihood
that payments of interest and principal on such Timeshare Loan shall be made
when due; provided, further, the Servicer may grant extensions of the final
maturity of any Timeshare Loan if the Servicer, in its good faith reasonable
discretion, determines that (A) such Timeshare Loan is in default or a default
on such Timeshare Loan is likely to occur in the foreseeable future and (B)
the
value of such Timeshare Loan will be enhanced by such extension; provided,
however, that no more than two (2) such extensions may be granted during the
term of such Timeshare Loan and no more than one (1) such extension may be
granted during any twelve (12) month period; and provided, further, the Servicer
shall not be permitted to modify, waive or amend the terms of any Timeshare
Loan
if the sum of the Principal Balance of the related Receivable as of the related
Cutoff Date and the Principal Balances of all other Receivables as of their
related Cutoff Dates for which the Servicer has modified, waived or amended
the
terms thereof exceeds 10% of the Aggregate Principal Balance as of any date
of
determination.
14
(x)work
with
Obligors in connection with any transfer of ownership of a Timeshare Property
by
an Obligor to another Person (to the extent permitted), whereby the Servicer
may
consent to the assumption by such Person of the Timeshare Loan related to such
Timeshare Property (to the extent permitted); provided, however, in connection
with any such assumption, the rate of interest borne by, the maturity date
of,
the principal amount of, the timing of payments of principal and interest in
respect of, and all other material terms of, the related Timeshare Loan shall
not be changed other than as permitted in clause (ix) above;
(xi)deliver
such information and data to the Backup Servicer as is required pursuant to
this
Agreement;
(xii)deliver
any new or amended ACH Forms executed by an Obligor to the Custodian to be
held
as part of the related Timeshare Loan File;
(xiii)(A)
to
cause each Resort to be insured in the event of fire, earthquake, or other
casualty for the full replacement value thereof and if the Resort is located
in
a designated flood plain, to maintain flood insurance in an amount not less
than
the maximum level available under the National Flood Insurance Act of 1968,
as
amended; (B) in respect of each Resort, to maintain general liability insurance
in such amounts generally acceptable in the industry; (C) to cause each Resort’s
insurance policies to remain in full force and effect with a generally
acceptable insurance carrier; and (D) to monitor the maintenance of the
insurance coverage described in (A), (B), and (C) above with respect to each
Resort and promptly obtain notice and otherwise acquire Knowledge of any lapse,
cessation, decrease or other change in any such insurance coverage;
and
(xiv)to
the
extent it receives any amounts in respect of any insurance policies which are
not payable to the Obligor or any other collections relating to the Receivables
or the Other Conveyed Property, it shall deposit such amounts to the Collection
Account within two (2) Business days of receipt thereof (unless otherwise
expressly provided herein).
Section
4.3 Realization
Upon Receivables.
Upon
a
Receivable becoming a Defaulted Receivable, the Servicer shall, in accordance
with the Servicing Standard, promptly institute collection procedures, which
may
include, but are not limited to, cancellation, forfeiture, termination or
foreclosure proceedings or obtaining a deed-in-lieu of foreclosure in respect
of
the related Timeshare Property (each, a “Foreclosure
Property”).
Upon
the Timeshare Property becoming a Foreclosure Property, the Servicer shall
promptly attempt to liquidate such Foreclosure Property. The Servicer shall
select the liquidation option reasonably anticipated to produce the highest
Net
Liquidation Proceeds, giving effect to the gross price obtainable, broker’s
commissions, foreclosure costs, fees and marketing expenses and other factors.
The Servicer shall be entitled to reimbursement of Liquidation Expenses out
of
Liquidation Proceeds. Any Liquidation Expenses later recovered by the Servicer
shall be deposited by the Servicer in the Collection Account in accordance
with
Section
4.2(e)
hereof.
15
(a) To
the
extent that the Seller or an Affiliate thereof is selected to remarket a
Foreclosure Property, the Servicer shall cause the Seller or Affiliate thereof
to agree that it will remarket such Foreclosure Property in accordance with
the
Servicing Standard.
(b) The
Servicer (if Silverleaf or its Affiliate is acting as Servicer) on behalf of
the
Purchaser and the Trustee shall take all necessary steps to have the record
title of the applicable Timeshare Properties subject to the Defaulted Timeshare
Loans relating to such Defaulted Receivables continue to be held by the Trustee.
In such event, the Servicer shall exercise, directly or through its agents,
the
remedies provided for in the Oak N’ Spruce Trust Agreement, in the Mortgage Note
or in the other documents with respect to such Defaulted Timeshare Loans and
the
Obligors thereunder, and the related Timeshare Property shall be remarketed
with
the purpose of obtaining the maximum Net Liquidation Proceeds in respect of
such
Defaulted Timeshare Loans.
(c) The
Servicer shall reserve its rights under the Oak N’ Spruce Trust Agreement and/or
the applicable Mortgages to obtain, at any time, record title and all beneficial
interests in respect of the Timeshare Properties related to Defaulted Timeshare
Loans. All actions taken by the Servicer in respect of any Defaulted Timeshare
Loans shall, at all times, be carried out in a manner such that none of the
Purchaser, the Trustee or the Noteholder shall, under applicable law, be deemed
to be the developer or declarant of any Resort.
(d) The
Servicer may elect to liquidate at a public auction any Defaulted Timeshare
Loans or related Timeshare Properties foreclosed upon or otherwise reacquired
on
behalf of the Trustee from the Obligors of the Defaulted Timeshare Loans. In
the
event the Servicer elects to so liquidate Defaulted Timeshare Loans or the
related Timeshare Properties securing these Defaulted Timeshare Loans, the
Seller may bid on such Defaulted Timeshare Loans or related Timeshare Properties
so long as the Seller pays an amount at least equal to the net fair market
value
of each related Timeshare Property, as determined by the Seller in its
commercially reasonable judgment, which shall in no event be less than fifteen
percent (15%) of the original acquisition price paid for the Timeshare Property
by the Obligor under the Defaulted Timeshare Loan. Publication of notice of
such
auction in a newspaper published daily in Dallas, Texas shall be sufficient
notice of such auction.
(e) The
Servicer agrees that it shall require that any Liquidation Proceeds be in the
form of cash only.
(f) The
Servicer may not sell any of the Defaulted Receivables and the related Defaulted
Timeshare Loans that are included in the Collateral except for or as
specifically permitted by this Agreement.
Section
4.4 [RESERVED]
Section
4.5 Maintenance
of Security Interests.
(a) Each
of
the Seller, the Servicer and the Purchaser agrees that, from time to time,
it
shall promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or appropriate, or that the
Noteholder may request, in order to perfect, protect or more fully evidence
the
security interest in the Receivables and the Other Conveyed Property or to
enable the Trustee to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Purchaser will, or will cause
the
Servicer to, without the necessity of a request and upon the request of the
Trustee at the direction of the Noteholder, execute or authorize and file or
record (or cause to be executed or authorized and filed or recorded) such
Assignments of Mortgage, financing or continuation statements, or amendments
hereto or assignments thereof, and such other instruments or notices, as may
be
necessary or appropriate to create and maintain in the Trustee a first priority
perfected security interest, at all times, in the Collateral, including, without
limitation, recording and filing UCC-1 financing statements, amendments or
continuation statements prior to the effective date of any change of the name,
identity or structure or relocation of its chief executive office or any change
which could affect the perfection pursuant to any financing statement or
continuation statement or assignment previously filed or make any UCC-1 or
continuation statement previously filed pursuant to this Agreement or the
Indenture seriously misleading within the meaning of applicable provisions
of
the UCC (and the Purchaser shall, or shall cause the Servicer to, give the
Trustee at least thirty (30) Business Days prior notice of the expected
occurrence of any such circumstance). The Issuer shall, or shall cause the
Servicer to, deliver promptly to the Trustee file-stamped copies of any such
filings.
16
(b) (i)
The
Purchaser hereby grants to each of the Servicer and the Trustee a power of
attorney to execute all documents including, but not limited to, Assignments
of
Mortgage, UCC-l financing statements, amendments or continuation statements,
on
behalf of the Issuer as may be necessary or desirable to effectuate the
foregoing and (ii) the Servicer hereby grants to the Trustee a power of attorney
to execute all documents on behalf of the Servicer as may be necessary or
desirable to effectuate the foregoing; provided, however, that such grant shall
not create a duty on the part of the Trustee to file, prepare, record or
monitor, or any responsibility for the contents or adequacy of, any such
documents.
(c) Upon
the
occurrence of a Servicer Termination Event, the Trustee and the Servicer, at
the
direction of the Noteholder, shall take or cause to be taken such action as
may
be reasonably necessary or otherwise desirable to perfect or re-perfect the
security interests in the Receivables and the Other Conveyed Property in the
name of the Trustee on behalf of the Noteholder. The Seller hereby agrees to
pay
all expenses related to such perfection or re-perfection and to take all action
necessary therefor.
Section
4.6 Additional
Covenants of Servicer.
(a) The
Servicer shall not release the Timeshare Property securing each Receivable
from
the security interest granted by such Receivable in whole or in part except
in
the event of payment in full by the Obligor thereunder or liquidation of the
Timeshare Property, nor shall the Servicer impair the rights of the Noteholder
in such Receivables or related Other Conveyed Property, nor shall the Servicer
amend or otherwise modify a Receivable or any of the related Other Conveyed
Property, except as permitted in accordance with Section
4.2.
(b) The
Servicer shall obtain and/or maintain all necessary licenses, approvals,
authorizations, orders or other actions of any person, corporation or other
organization, or of any court, governmental agency or body or official, required
in connection with the execution, delivery and performance of this Agreement
and
the other Basic Documents.
(c) The
initial Servicer shall not make any material changes to its Collection Policy
unless the Noteholder expressly consents in writing prior to such changes (which
consent shall not be unreasonably withheld).
(d) The
Servicer shall provide written notice to the Noteholder and the Trustee of
any
Default, Event of Default or Servicer Termination Event under this transaction
or a similar event under any other warehouse financing facility or
securitization that has occurred and which Default, Event of Default or Servicer
Termination Event (or similar event) shall not have been waived or otherwise
cured within the applicable cure period.
(e) For
so
long as Silverleaf or any of its Affiliates controls the Resorts, the Servicer
shall use commercially reasonable efforts to maintain or cause the Resorts
to be
maintained in good repair, working order and condition (ordinary wear and tear
excepted).
(f) For
so
long as Silverleaf or any of its Affiliates controls the Association for a
Resort, and Silverleaf or an Affiliate thereof is the manager, the related
management contract may not be amended or modified if such amendment or
modification is reasonably likely to have a material adverse effect on the
interests of the Noteholder, except with the prior written consent of the
Noteholder, which consent shall not be unreasonably withheld or
delayed.
17
(g) In
the
event any Lien (other than a Permitted Lien) attaches to any Receivable or
Other
Conveyed Property or related collateral from any Person claiming from or through
Silverleaf or one of its Affiliates which materially adversely affects the
Purchaser’s or the Noteholder’s interest in such Receivable or Other Conveyed
Property, Silverleaf shall, within the earlier to occur of ten (10) Business
Days after such attachment or the respective lienholders’ action to foreclose on
such lien, either (a) cause such Lien to be released of record, (b) provide
the
Trustee with a bond in accordance with the applicable laws of the state in
which
the Timeshare Property is located, issued by a corporate surety acceptable
to
the Trustee, in an amount and in form reasonably acceptable to the Trustee
or
(c) provide the Trustee with such other security as the Trustee may reasonably
require.
(h) The
Servicer shall: (a) promptly notify the Trustee of (i) any claim, action or
proceeding which may be reasonably expected to have a material adverse effect
on
the Receivables or any Other Conveyed Property, or any material part thereof,
and (ii) any action, suit, proceeding, order or injunction of which the Servicer
becomes aware after the date hereof pending or threatened against or affecting
the Servicer or any Affiliate which may be reasonably expected to have a
material adverse effect on the Receivables or any Other Conveyed Property or
the
Servicer’s ability to service the same; (b) at the request of Trustee with
respect to a claim or action or proceeding which arises from or through the
Servicer or one of its Affiliates, appear in and defend, at Servicer’s expense,
any such claim, petition or proceeding which would have a material adverse
effect on the Receivables or any Other Conveyed Property or the Servicer’s
ability to service the same; and (c) comply in all respects, and shall cause
all
Affiliates to comply in all respects, with the terms of any orders imposed
on
such Person by any governmental authority the failure to comply with which
would
have a material adverse effect on the Receivables or any Other Conveyed Property
or the Servicer’s ability to service the same.
(i) Except
as
contemplated by the Basic Documents, the Servicer (for so long as Silverleaf
or
any Affiliate thereof is the Servicer hereunder, otherwise Silverleaf in its
individual capacity) shall not, and shall not permit the Managing Entity to,
encumber, pledge or otherwise xxxxx x xxxx or security interest in and to the
Reservation System (including, without limitation, all hardware, software and
data in respect thereof) and furthermore agrees, and shall cause the Managing
Entity, to use commercially reasonable efforts to keep the Reservation System
operational, not to dispose of the same and to allow the members of each
Association the use of, and access to, the Reservation System in accordance
with
the terms of the Management Agreement.
(j) For
so
long as Silverleaf or any Affiliate thereof is the Servicer, it shall comply
in
all material respects with the Collection Policy in effect on the Closing Date
(or, as amended from time to time with the consent of the Noteholder) and with
the terms of the Timeshare Loans.
(k) With
respect to any Receivable (including but not limited to any Receivable which
becomes a Defaulted Receivable) and its related Timeshare Loan, the Servicer
shall, in accordance with the Servicing Standard, promptly institute collection
procedures, which may include, but are not limited to, cancellation, forfeiture,
termination or foreclosure proceedings or obtaining a deed-in-lieu of
foreclosure in respect of the related Timeshare Property, prior to the
initiation of any proceedings in respect of such Receivable and related
Timeshare Loan by any other Person, including but not limited to the Managing
Entity.
Section
4.7 Purchase
of Receivables Upon Breach of Covenant.
Upon
discovery by any of the Servicer, the Purchaser or the Trustee of a breach
of
any of the covenants of the Servicer set forth in Sections
4.2(a),
4.2(f),
4.4,
4.5
or
4.6,
the
party discovering such breach shall give prompt written notice to the others
and
the Noteholder; provided, however, that the failure to give any such notice
shall not affect any obligation of the Servicer under this Section
4.7.
Unless
the breach shall have been cured by the last day of the next Accrual Period
following such discovery, the Servicer shall, on or prior to such last day
of
the next Accrual Period, purchase any Receivable materially and adversely
affected by such breach and the related Other Conveyed Property. In
consideration of the purchase of such Receivable, the Servicer shall remit
the
Purchase Amount for such Receivable in the manner specified in Section
5.6.
The
sole remedy of the Trustee, the Purchaser or the Noteholder with respect to
a
breach of Sections
4.2(a),
4.2(f),
4.4,
4.5
or
4.6
shall be
to require the Servicer to repurchase Receivables and the related Other Conveyed
Property pursuant to this Section
4.7;
provided,
however,
that
the Servicer shall indemnify the Trustee, the Backup Servicer, the Purchaser
and
the Noteholder against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out
of
the events or facts giving rise to such breach.
18
Section
4.8 Servicing
Fee.
The
“Servicing Fee” for each Settlement Date shall be equal to the product of (i)
one twelfth, (ii) the Servicing Fee Percentage and (iii) the daily average
of
the Net Eligible Receivable Balance during the related Accrual Period. The
Servicing Fee shall also include all late fees, prepayment charges, and other
administrative fees or similar charges allowed by applicable law with respect
to
Receivables, collected (from whatever source) on the Receivables. If the Backup
Servicer becomes the successor Servicer, it
shall
be entitled to receive the Servicing Fee and not the Backup Servicing
Fee.
Section
4.9 Servicer’s
Certificate.
No
later
than 12:00 noon New York City time on each Determination Date, the Servicer
shall deliver (facsimile delivery being acceptable) to the Trustee, the Rating
Agency, the Noteholder and the Purchaser, a certificate substantially in the
form of Exhibit A hereto (a “Servicer’s Certificate”) containing among other
things, (i) all information necessary to enable the Trustee to make any
withdrawal and deposit required by Section
5.5
and to
make the distributions required by Section
5.7,
(ii)
all information necessary for the Trustee to send or make available statements
to the Noteholder pursuant to Section
5.8(b)
and
5.9,
(iii) a
listing of all Purchased Receivables purchased as of the related Accounting
Date, identifying the Receivables so purchased, (iv) the calculation of the
Borrowing Base, and (v) all information necessary to enable the Backup Servicer
to verify the information specified in Section
4.15(e)
and to
complete the accounting required by Section
5.9.
Each
such
Servicer’s Certificate shall be accompanied by an Officer’s Certificate of the
Servicer in the form of Exhibit
H
hereto,
certifying the accuracy of the computations reflected in such Servicer’s
Certificate.
Section
4.10 Annual
Statement as to Compliance, Notice of Servicer Termination Event.
(a) The
Servicer shall deliver to the Purchaser, to the Trustee for delivery to the
Noteholder, the Backup Servicer and each Rating Agency, on or before March
31 of
each year beginning March 31, 2007, an Officer’s Certificate, dated as of
December 31 of the preceding year, stating that (i) a review of the activities
of the Servicer during the preceding 12-month period (or, in the case of the
first such certificate, the period from the Cutoff Date with respect to
Receivables transferred to the Purchaser on the initial Funding Date to December
31, 2006) and of its performance under this Agreement has been made under such
officer’s supervision and (ii) to the best of such officer’s knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year (or, in the case of the first such certificate, such
shorter period), or, if there has been a default in the fulfillment of any
such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The
Servicer shall deliver to the Trustee, the Noteholder, the Backup Servicer
and
each Rating Agency, promptly after having obtained Knowledge thereof, but in
no
event later than two (2) Business Days thereafter, written notice in an
Officer’s Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section
10.1.
Section
4.11 Independent
Accountants’ Reports.
The
Servicer shall cause a firm of nationally recognized independent certified
public accountants (the “Independent
Accountants”),
who
may also render other services to the Servicer or to the Purchaser, to deliver
to the Trustee, the Backup Servicer, the Noteholder and each Rating Agency,
on
or before April 30 of each year beginning April 30, 2007, a report dated as
of
December 31 of the preceding year in form and substance reasonably acceptable
to
the Noteholder (the “Accountants’
Report”)
and
reviewing the Servicer’s activities during the preceding 12-month period (or, in
the case of the first such report, the period from the Cutoff Date with respect
to Receivables transferred to the Purchaser on the initial Funding Date to
December 31, 2006), addressed to the Board of Directors of the Servicer, to
the
Trustee, the Backup Servicer and to the Noteholder, to the effect that such
firm
has examined the financial statements of the Servicer and issued its report
therefor and that such examination (1) was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances; (2) included tests relating to timeshare loans
serviced for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the “Program”),
to
the extent the procedures in the Program are applicable to the servicing
obligations set forth in this Agreement; (3) included an examination of the
delinquency and loss statistics relating to the Servicer’s portfolio; and (4)
except as described in the report, disclosed no exceptions or errors in the
records relating to timeshare loans serviced for others that, in the firm’s
opinion, paragraph four of the Program requires such firm to report. The
accountant’s report shall further state that (1) such firm has examined and
audited the Servicer’s servicing controls and procedures for the previous
calendar year and that such independent public accountants have examined certain
documents and records (including computer records) and servicing procedures
of
the Servicer relating to the Receivables and the Other Conveyed Property, (2)
they have examined the most recent Servicer’s Certificate prepared by the
Servicer and three other Servicer’s Certificates chosen at random by such firm
and compared such Servicer’s Certificates with the information contained in such
documents and records, (3) their examination included such tests and procedures
as they considered necessary in the circumstances, (4) their examinations and
comparisons described under clauses (1) and (2) above disclosed no exceptions
which, in their opinion, were material, relating to such Receivables and Other
Conveyed Property or such Servicer’s Certificates, or, if any such exceptions
were disclosed thereby, setting forth such exceptions which, in their opinion,
were material, (5) on the basis of such examinations and comparison, such firm
is of the opinion that the Servicer has, during the relevant period, serviced
the Receivables and Other Conveyed Property in compliance with this Agreement
and the other Basic Documents in all material respects and that such documents
and records have been maintained in accordance with this Agreement and the
other
Basic Documents in all material respects, except in each case for (A) such
exceptions as such firm shall believe to be immaterial and (B) such other
exceptions as shall be set forth in such written report. In the event such
firm
requires the Trustee and/or the Backup Servicer to agree to the procedures
performed by such firm, the Servicer shall direct the Trustee and/or the Backup
Servicer, as applicable, in writing to so agree; it being understood and agreed
that the Trustee and/or the Backup Servicer will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and neither
the Trustee nor the Backup Servicer makes any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. The Report will
also indicate that the firm is independent of the Servicer within the meaning
of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants.
19
Section
4.12 Independent
Accountants’ Review of Receivables File.
Commencing
on January 31, 2007 and thereafter each year on or before January 31 (or upon
the date of the closing of Seller’s next occurring term securitization
transaction, provided that such review is not made more than 365 days after
the
immediately preceding review) prior to the Final Scheduled Settlement Date,
the
Seller at its own expense shall cause Independent Accountants reasonably
acceptable to the Noteholder to conduct a post-funding review of the Seller’s
compliance with its stated underwriting policies and verify certain
characteristics of the Receivables and the Other Conveyed Property as of each
Funding Date. If the cost to the Seller of any such review is greater than
$30,000 (other than a review conducted in connection with a securitization
transaction, as described above), the Noteholder in its sole discretion may
elect to pay the amount in excess of $30,000 or to waive the performance of
such
review. If such review is performed in connection with a securitization
transaction, the Seller shall pay the entire cost of the review, including
any
amount in excess of $30,000. The Independent Accountants shall within ten
Business Days complete such physical inspection and limited review and execute
and deliver to Seller, the Servicer, the Trustee and the Noteholder a report
summarizing the findings, which report shall be delivered in any case within
365
days of the previous report delivered in accordance with this Section
4.12.
If such
review reveals, in the Noteholder’s reasonable opinion, an unsatisfactory number
of exceptions, the Noteholder, in its reasonable discretion, may require a
full
review of a larger sample of the Receivables and the Other Conveyed Property
by
the Independent Accounts at the expense of the Seller.
Section
4.13 Report
on Proceedings and Servicer Termination Event.
(i)
Promptly upon a Responsible Officer of the Servicer’s obtaining Knowledge of any
proposed or pending investigation of it by any Governmental Authority or any
court or administrative proceeding which involves or is reasonably likely to
involve the possibility of materially and adversely affecting the properties,
business, prospects, profits or conditions (financial or otherwise) of the
Servicer and its subsidiaries, as a whole, the Servicer shall send written
notice specifying the nature of such investigation or proceeding and what action
the Servicer is taking or proposes to take with respect thereto and evaluating
its merits, or (ii) immediately upon obtaining Knowledge of the existence of
any
condition or event which constitutes a Servicer Termination Event, the Servicer
shall send written notice to the Purchaser, the Trustee and the Noteholder
describing its nature and period of existence and what action the Servicer
is
taking or proposes to take with respect thereto.
20
Section
4.14 Access
to Certain Documentation and Information Regarding Receivables.
The
Servicer shall provide to representatives of the Trustee, the Backup Servicer
and the Noteholder reasonable access to the documentation regarding the
Receivables and the Other Conveyed Property. In each case, such access shall
be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation
of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute
a
breach of this Section.
Section
4.15 Verification
of Servicer’s Certificate.
On
Friday
of each week (or, if such day is not a Business Day, then on the next Business
Day), the Servicer shall prepare and deliver to the Backup Servicer the
following:
(i)a
computer file or files stored on diskette, magnetic tape, or provided
electronically to Backup Servicer prepared in accordance with the four-page
“Record Layout” for data conversion attached hereto as Exhibit G and made a part
hereof. Such files shall contain all information with respect to the Receivables
and the Other Conveyed Property as of the close of business on the prior
Business Day of Servicer necessary to store the appropriate data in Backup
Servicer’s system from which Backup Servicer will be capable of preparing a
weekly trial balance relating to the data; and
(ii)together
with the file(s) described above, an initial trial balance showing balances
of
the Receivables as of the last Business Day corresponding to the date of the
aforesaid initial file.
(b) In
the
event the Servicer modifies its Record Layout after the initial conversion,
Servicer shall advise Backup Servicer in writing and agrees to pay Backup
Servicer for any additional programming and other work required as a result
of
such changes.
(c) The
Backup Servicer shall use the aforesaid files and initial trial balance
described above to store the data thereon in its computer system and run a
weekly trial balance report and shall provide such report to the Trustee, the
Servicer and the Noteholder. The Backup Servicer shall receive data on diskette,
tape or other acceptable electronic medium on Friday of each week (or, if such
day is not a Business Day, then on the next Business Day), perform conversion
of
data onto its system on a weekly basis to produce a weekly trial balance report
and a summary delinquency report in the form attached hereto as Schedule C,
and
shall provide such report to the Trustee, the Servicer and the Noteholder no
later than 3 Business Days after receiving the required data from the Servicer,
provided the data described in the diskettes or tapes is in a form that enables
the Backup Servicer to do so.
(d) Concurrently
with the delivery by the Servicer of the Servicer’s Certificate each month, the
Servicer will deliver to the Trustee, the Noteholder and the Backup Servicer
a
computer diskette (or other electronic transmission) in a format acceptable
to
the Trustee, the Noteholder and the Backup Servicer containing information
with
respect to the Receivables and the Other Conveyed Property as of the close
of
business on the last day of the preceding Interest Period which information
is
necessary for preparation of the Servicer’s Certificate. The Backup Servicer
shall use such computer diskette (or other electronic transmission) to verify
certain information specified in Section
4.15(e)
contained in the Servicer’s Certificate delivered by the Servicer, and the
Backup Servicer shall notify the Servicer and the Noteholder of any
discrepancies on or before the second Business Day following the Determination
Date. In the event that the Backup Servicer reports any discrepancies, the
Servicer and the Backup Servicer shall attempt to reconcile such discrepancies
by the related Settlement Date, but in the absence of a reconciliation, the
Servicer’s Certificate shall control for the purpose of calculations and
distributions with respect to the related Settlement Date. In the event that
the
Backup Servicer and the Servicer are unable to reconcile discrepancies with
respect to a Servicer’s Certificate by the related Settlement Date, the Backup
Servicer shall notify the Noteholder thereof in writing and the Servicer shall
cause a firm of Independent Accountants, at the Servicer’s expense, to audit the
Servicer’s Certificate and, prior to the fifth day of the following calendar
month, reconcile the discrepancies. The effect, if any, of such reconciliation
shall be reflected in the Servicer’s Certificate for such next succeeding
Determination Date. Other than the duties specifically set forth in this
Agreement, the Backup Servicer shall have no obligations hereunder, including,
without limitation, to supervise, verify, monitor or administer the performance
of the Servicer. The Backup Servicer shall have no liability for any actions
taken or omitted by the Servicer. The duties and obligations of the Backup
Servicer shall be determined solely by the express provisions of this Agreement
and no implied covenants or obligations shall be read into this Agreement
against the Backup Servicer.
21
(e) The
Backup Servicer shall review each Servicer’s Certificate delivered pursuant to
Section
4.15(d)
and
shall:
(i)confirm
that such Servicer’s Certificate is complete on its face;
(ii)load
the
computer diskette (which shall be in a format acceptable to the Backup Servicer)
received from the Servicer pursuant to Section
4.15(d)
hereof,
confirm that such computer diskette is in a readable form and calculate and
confirm the Aggregate Principal Balance of the Receivables for the most recent
Settlement Date and reconcile (A) the number of accounts currently being
serviced comprising the Receivables and (B) the trial balance and summary
delinquency information with the corresponding information in the Servicer’s
Certificate; and
(iii)confirm
that Available Funds, the Noteholder’s Principal Distributable Amount, the
Noteholder’s Interest Distributable Amount, the Servicing Fee, the Backup
Servicing Fee, the Trustee Fee, Leverage Ratio, Delinquency Ratio, Serviced
Receivables Delinquency Ratio, Default Ratio, Serviced Receivables Default
Ratio, the Net Spread, the Three Month Rolling Average of Delinquency Ratios,
the Three Month Rolling Average of Serviced Receivables Delinquency Ratios,
the
Three Month Rolling Average of Default Ratios, the Three Month Rolling Average
of Serviced Receivables Default Ratios, the Three Month Rolling Average of
Net
Spread, and the percentage of Aggregate Principal Balance of Eligible Timeshare
Loans with a related Obligor having a FICO score of greater than or equal to
500
and less than 600 as of the date of origination of such Timeshare Loan in the
Servicer’s Certificate are accurate based solely on the recalculation of the
Servicer’s Certificate.
(f) Within
90
days of the Closing Date, the Backup Servicer will data map to its servicing
system all servicing/loan file information, including all relevant borrower
contact information such as address and phone numbers as well as loan balance
and payment information, including comment histories and collection notes.
On or
before the fifth calendar day of each month, the Servicer will provide to the
Backup Servicer an electronic transmission of all servicing/loan information,
including all relevant borrower contact information such as address and phone
numbers as well as loan balance and payment information, including comment
histories and collection notes, and the Backup Servicer will review each file
to
ensure that it is in readable form and verify that the data balances conform
to
the trial balance reports received from the Servicer. Additionally, the Backup
Servicer shall store each such file.
Section
4.16 [RESERVED].
Section
4.17 Fidelity
Bond and Errors and Omissions Insurance.
The
Servicer shall maintain a fidelity bond and errors and omissions insurance
in
such form and amount as is customary for entities acting as custodian of funds
and documents in respect of consumer contracts on behalf of institutional
investors; provided that such insurance shall be in a minimum amount of
$1,000,000 per policy and shall name the Trustee as an additional insured.
No
provision of this Section
4.17
requiring such fidelity bond or errors and omissions insurance shall diminish
or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. Upon a request of the Trustee or the Noteholder, the Servicer shall
deliver to the Trustee, a certification evidencing coverage under such fidelity
bond and the errors and omissions insurance. Any such fidelity bond or errors
and omissions insurance policy shall not be canceled or modified in a materially
adverse manner without ten (10) Business Days’ prior written notice to the
Trustee and the Noteholder.
22
Section
4.18 Lien
Searches; Opinions as to Transfers and Security Interests.
The
Servicer shall, as a condition precedent to the extension of the Scheduled
Maturity Date and renewal of the Indenture by the Noteholder pursuant to
Section
2.3
thereof,
deliver (or cause to be delivered) to the Trustee and the Noteholder an Opinion
of Counsel, in form and substance satisfactory to the Noteholder, with respect
to (a) the “true sale” nature of the transfers of Receivables and, to the extent
applicable, related Other Conveyed Property hereunder and under each related
Assignment, (b) the “backup security interest” with respect to the transfers of
Receivables and, to the extent applicable, related Other Conveyed Property
hereunder and under each related Assignment, (c) the validity of the security
interest in connection with the pledge of Collateral to the Trustee under the
Indenture on each Funding Date and (d) the perfection and first priority of
the
transfers and pledges referred to in clauses (a)-(c) above. To the extent each
such Opinion of Counsel is in any manner reliant on UCC lien searches, each
such
UCC lien search shall be dated no earlier than ten Business Days prior to the
date of each such related Opinion of Counsel, and shall be accompanied by
officer’s certificates from the appropriate parties certifying that no filings
subsequent to the date of such lien searches have been made. Such Opinion of
Counsel shall state, among other things, that, in the opinion of such counsel,
either (A) all financing statements and continuation statements have been
authorized and filed that are necessary to perfect the interest of the Purchaser
and the Trustee in the Receivables, and reciting the details of such filings
or
referring to prior Opinions of Counsel in which such details are given, or
(B)
no such action shall be necessary to preserve and protect such interest. The
Opinion of Counsel referred to in this Section
4.18
shall
specify any action necessary (as of the date of such opinion) to be taken to
preserve and protect such interest.
Section
4.19 Subservicing
Arrangements.
The
Servicer may arrange for the subservicing of all or any portion of the
Receivables and the Other Conveyed Property by a subservicer; provided, however,
that such subservicing arrangement must provide for the servicing of such
Receivables and Other Conveyed Property in a manner consistent with the
servicing arrangements contemplated hereunder; provided, further, that any
such
subservicing arrangement with a Person that is not an Affiliate of Silverleaf
shall require the prior written consent of the Noteholder. Unless the context
otherwise requires, references in this Agreement to actions taken or to be
taken
by the Servicer in servicing the Receivables include actions taken or to be
taken by a subservicer on behalf of the Servicer. Notwithstanding the provisions
of any subservicing agreement, any of the provisions of this Agreement relating
to agreements or arrangements between the Servicer and a subservicer or
reference to actions taken through a subservicer or otherwise, the Servicer
shall remain obligated and liable to the Purchaser, the Trustee, the Backup
Servicer and the Noteholder for the servicing and administration of the
Receivables and the Other Conveyed Property in accordance with the provisions
of
this Agreement without diminution of such obligation or liability by virtue
of
such subservicing agreements or arrangements or by virtue of indemnification
from the subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables and the Other Conveyed Property. All actions of each subservicer
performed pursuant to a subservicing arrangement shall be performed as an agent
of the Servicer with the same force and effect as if performed directly by
the
Servicer. The subservicer under each subservicing arrangement shall be engaged
by the Servicer upon terms consistent with the engagement of the Servicer
hereunder. Each subservicer shall be simultaneously terminated in the event
that
the Servicer is terminated hereunder. The fees paid by the Servicer to the
related subservicer under each subservicing arrangement shall not exceed the
Servicing Fees paid to the Servicer hereunder.
ARTICLE
V
ACCOUNTS;
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDER
Section
5.1 Establishment
of Pledged Accounts.
(a) The
Trustee, on behalf of the Noteholder, shall establish and maintain in its own
name an Eligible Account (the “Collection
Account”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Trustee on behalf of the Noteholder. The Collection
Account shall initially be established with the Trustee.
(b) The
Trustee, on behalf of the Noteholder, shall establish and maintain in its own
name an Eligible Account (the “Note
Distribution Account”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Trustee on behalf of the Noteholder. The Note
Distribution Account shall initially be established with the
Trustee.
23
(c) The
Trustee, on behalf of the Noteholder shall establish and maintain in its own
name an Eligible Account (the “Principal
Funding Account”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Trustee on behalf of the Noteholder. The Principal
Funding Account shall initially be established with the Trustee.
(d) The
Trustee, on behalf of the Noteholder shall establish and maintain in its own
name an Eligible Account (the “Reserve
Account”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Trustee on behalf of the Noteholder. The Reserve
Account shall initially be established with the Trustee.
(e) Funds
on
deposit in the Collection Account, the Principal Funding Account, the Reserve
Account and the Note Distribution Account (collectively, the “Pledged
Accounts”)
shall
be invested by the Trustee (or any custodian with respect to funds on deposit
in
any such account) in Eligible Investments selected in writing by the Servicer
or, after the resignation or termination of Silverleaf as Servicer, by the
Noteholder (pursuant to standing instructions or otherwise). All such Eligible
Investments shall be held by or on behalf of the Trustee for the benefit of
the
Noteholder. Other than as permitted by the Rating Agency and the Noteholder,
funds on deposit in any Pledged Account shall be invested in Eligible
Investments that will mature so that such funds will be available at the close
of business on the Business Day immediately preceding the following Settlement
Date. Funds deposited in a Pledged Account on the day immediately preceding
a
Settlement Date upon the maturity of any Eligible Investments are not required
to be invested overnight. All Eligible Investments will be held to
maturity.
(f) All
investment earnings of moneys deposited in the Pledged Accounts shall be
deposited (or caused to be deposited) by the Trustee in the Collection Account
for distribution pursuant to Section
5.7(a),
and any
loss resulting from such investments shall be charged to such account. The
Servicer shall not direct the Trustee to make any investment of any funds held
in any of the Pledged Accounts unless the security interest granted and
perfected in such account will continue to be perfected in such investment,
in
either case without any further action by any Person, and, in connection with
any direction to the Trustee to make any such investment, if requested by the
Trustee, the Servicer shall deliver to the Trustee an Opinion of Counsel,
acceptable to the Trustee, to such effect.
(g) The
Trustee shall not in any way be held liable by reason of any insufficiency
in
any of the Pledged Accounts resulting from any loss on any Eligible Investment
included therein except for losses attributable to the Trustee’s negligence, bad
faith or willful misconduct or its failure to make payments on such Eligible
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as Trustee, in accordance with their terms.
(h) If
(i)
the Servicer or the Noteholder, as applicable, shall have failed to give
investment directions for any funds on deposit in the Pledged Accounts to the
Trustee by 1:00 p.m. Eastern Time (or such other time as may be agreed by the
Purchaser and Trustee) on any Business Day; or (ii) an Event of Default shall
have occurred and be continuing with respect to the Note but the Note shall
not
have been declared due and payable, or, if the Note shall have been declared
due
and payable following an Event of Default, amounts collected or receivable
from
the Receivables and the Other Conveyed Property are being applied as if there
had not been such a declaration; then the Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Pledged Accounts in an Eligible
Investment described in paragraph (f) of the definition thereof.
(i) The
Trustee shall possess all right, title and interest in all funds on deposit
from
time to time in the Pledged Accounts and in all proceeds thereof (including
all
Investment Earnings on the Pledged Accounts) and all such funds, investments,
proceeds and income shall be part of the Other Conveyed Property. Except as
otherwise provided herein, the Pledged Accounts shall be under the sole dominion
and control of the Trustee for the benefit of the Noteholder. If at any time
any
of the Pledged Accounts ceases to be an Eligible Account, the Servicer with
the
consent of the Noteholder shall within five Business Days establish a new
Pledged Account as an Eligible Account and shall transfer any cash and/or any
investments to such new Pledged Account. The Servicer shall promptly notify
the
Rating Agency, the Trustee and the Noteholder of any change in the location
of
any of the aforementioned accounts. In connection with the foregoing, the
Servicer agrees that, in the event that any of the Pledged Accounts are not
accounts with the Trustee, the Servicer shall notify the Trustee and the
Noteholder in writing promptly upon any of such Pledged Accounts ceasing to
be
an Eligible Account.
24
(j) The
parties agree that each Pledged Account is a “securities account” within the
meaning of Article 8 of the UCC and that all property (including without
limitation all uninvested funds, securities and other investment property)
at
any time deposited in or carried in or credited to the Pledged Accounts shall
be
treated as “financial assets” within the meaning of Article 8 of the UCC. The
Account Intermediary agrees that (i) it is a “securities intermediary” within
the meaning of Article 8 of the UCC and will at all times act in such capacity
with respect to the Pledged Accounts and (B) the Trustee is the entitlement
holder of the Pledged Accounts. The parties agree that the Account Intermediary
shall follow all “entitlement orders” (as such term is defined in Article 8 of
the UCC) originated by the Trustee with respect to the Pledged Accounts and
all
financial assets deposited or carried in or credited to any Pledged Account.
Notwithstanding anything to the contrary herein or in any other document
relating to a Pledged Account, the “securities intermediary’s jurisdiction”
(within the meaning of Section 8-110 of the UCC) with respect to each Pledged
Account and any security entitlements to financial assets credited thereto
shall
be the State of New York.
(k) With
respect to the Pledged Account Property, the Trustee agrees that:
(i)any
Pledged Account Property that is held in deposit accounts shall be held solely
in an Eligible Account; and, except as otherwise provided herein, each such
Eligible Account shall be subject to the exclusive custody and control of the
Trustee and the Trustee shall have sole signature authority with respect
thereto;
(ii)any
Pledged Account Property shall be delivered to the Trustee in accordance with
the definition of “Delivery”;
and
(iii)the
Servicer shall have the power, revocable by the Noteholder to instruct the
Trustee to make withdrawals and payments from the Pledged Accounts for the
purpose of permitting the Servicer and the Trustee to carry out their respective
duties hereunder.
Section
5.2 [RESERVED]
Section
5.3 Certain
Reimbursements to the Servicer.
The
Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to an Accrual Period for amounts previously
deposited in the Collection Account but later determined by the Servicer to
have
resulted from mistaken deposits or postings or checks returned for insufficient
funds. The amount to be reimbursed hereunder shall be paid to the Servicer
on
the related Settlement Date pursuant to Section
5.7(a)(iv)
upon
certification by the Servicer of such amounts and the provision of such
information to the Trustee and the Noteholder as may be necessary in the opinion
of the Noteholder to verify the accuracy of such certification; provided,
however, that the Servicer must provide such certification within three months
of it becoming aware of such mistaken deposit, posting or returned check. In
the
event that the Noteholder has not received evidence satisfactory to it of the
Servicer’s entitlement to reimbursement pursuant to this Section, the Noteholder
shall give the Trustee notice to such effect, following receipt of which the
Trustee shall not make a distribution to the Servicer in respect of such amount
pursuant to Section
5.7,
or if
prior thereto the Servicer has been reimbursed pursuant to Section
5.7,
the
Trustee shall withhold such amounts from amounts otherwise distributable to
the
Servicer on the next succeeding Settlement Date.
Section
5.4 [RESERVED]
Section
5.5 Reserve
Account.
(a) The
Reserve Account will be held for the benefit of the Noteholder. On or prior
to
the Closing Date, the Purchaser shall deposit or cause to be deposited into
the
Reserve Account an amount equal to the Required Reserve Account Amount. On
each
Funding Date, the Purchaser shall deposit a portion of the related Advance
into
the Reserve Account until the amount on deposit in the Reserve Account equals
the Required Reserve Account Amount.
25
(b) In
the
event that the Servicer’s Certificate with respect to any Determination Date
shall state that the Available Funds with respect to the related Settlement
Date
are insufficient to make the payments required to be made on the related
Settlement Date pursuant to Sections
5.7(a)(i)
through
(ix)
(such
deficiency being a “Deficiency
Claim Amount”),
then
on the Deficiency Claim Date, the Trustee shall deliver to the Noteholder and
the Servicer, by hand delivery or facsimile transmission, a written notice
(a
“Deficiency
Notice”)
specifying the Deficiency Claim Amount for such Settlement Date. The Trustee
shall withdraw an amount equal to such Deficiency Claim Amount from the Reserve
Account (to the extent of the funds available on deposit therein) for deposit
in
the Collection Account on the related Settlement Date and distribution pursuant
to Sections
5.7(a)(i)
through
(ix),
as
applicable.
(c) Any
Deficiency Notice shall be delivered by 10:00 a.m., New York City time, on
the
Deficiency Claim Date. The amounts distributed to the Trustee pursuant to a
Deficiency Notice shall be deposited by the Trustee into the Collection Account
pursuant to Section
5.6.
(d) Following
the Facility Termination Date, all amounts, or any portion thereof, on deposit
in the Reserve Account will be deposited into the Collection Account for
distribution pursuant to Section
5.7.
(e) On
any
Settlement Date prior to the Facility Termination Date on which, after all
distributions required to be made on such Settlement Date pursuant to
Section
5.7(a)
have
been made, the amount on deposit in the Reserve Account exceeds the Required
Reserve Account Amount, the Trustee shall withdraw such excess (as indicated
on
the Servicer’s Certificate) and distribute the same to the Purchaser or its
designee in accordance with Section
5.7(a)(xiv).
Section
5.6 Additional
Deposits.
The
Servicer or the Seller, as the case may be, shall deposit or cause to be
deposited in the Collection Account (i) the aggregate Purchase Amount with
respect to Purchased Receivables, (ii) the Upgrade Purchase Price with respect
to the prepayment of any Upgraded Timeshare Loan, (iii) the Upgrade Purchase
Price with respect to the sale of any Timeshare Loan pursuant to Section 3.2(d)
hereof, (iv) the Default Purchase Price with respect to the optional purchase
of
any Defaulted Timeshare Loan, and (v) all Substitution Shortfall Amounts with
respect to substituted Receivables. All such deposits shall be made, in
immediately available funds, on the Business Day preceding the related
Determination Date. On the Deficiency Claim Date, the Trustee shall remit to
the
Collection Account any amounts withdrawn from the Reserve Account pursuant
to
Section
5.5.
Section
5.7 Distributions.
(a) On
each
Settlement Date, the Trustee (based on the information contained in the
Servicer’s Certificate delivered on the related Determination Date) shall make
the following distributions in the following order of priority from amounts
on
deposit in the Collection Account:
(i)to
the
Noteholder, any payments from the Hedge Counterparty to the extent they are
due
and payable in an amount equal to the excess, if any, of the Noteholder’s
Monthly Interest Distributable Amount over Capped Monthly Interest, in respect
of the Noteholder’s Interest Distributable Amount;
(ii)to
the
Hedge Counterparty, from Available Funds and any amounts deposited in the
Collection Account pursuant to Section
5.5(b)
and
Section
5.5(d)
in
respect of Hedge Counterparty Scheduled Fees;
(iii)to
the
Trustee, from Available Funds and any amounts deposited in the Collection
Account pursuant to Section
5.5(b)
and
Section
5.5(d),
the
Trustee Fee, any accrued and unpaid Trustee Fees from prior Settlement Dates
and
all reasonable out-of-pocket expenses (including reasonable counsel fees and
expenses) from prior Accrual Periods; provided however,
that
any reasonable out-of-pocket expenses payable to the Trustee pursuant to this
clause (iii) that are incurred and not reimbursed in connection with the
Trustee’s obligations and duties under the Basic Documents shall be limited to
$10,000 per Settlement Date;
26
(iv)to
the
Servicer, from Available Funds and any amounts deposited in the Collection
Account pursuant to Section
5.5(b)
and
Section
5.5(d),
in
respect of the Servicing Fee and all unpaid Servicing Fees from prior Accrual
Periods, all reimbursements to which the Servicer is entitled pursuant to
Section
5.3
and, if
the Servicer is a successor Servicer, to the extent not previously paid by
the
predecessor Servicer pursuant to this Agreement, reasonable transition expenses
(up to a maximum of $100,000 in the aggregate over the term of this Agreement)
incurred in becoming the successor Servicer;
(v)to
the
Backup Servicer, from Available Funds and any amounts deposited in the
Collection Account pursuant to Section 5.5(b)
and
Section
5.5(d),
in
respect of the Backup Servicing Fee (so long as the Backup Servicer is not
acting as successor Servicer), and all reasonable out-of-pocket expenses (other
than expenses incurred in connection with transitioning the servicing to the
Backup Servicer) thereof (including reasonable counsel fees and expenses) and
all accrued and unpaid Backup Servicing Fees (so long as the Backup Servicer
is
not acting as successor Servicer) from prior Settlement Dates; provided,
however,
that
any reasonable out-of-pocket expenses payable to the Backup Servicer pursuant
to
this clause
(v)
that
are incurred and not reimbursed in connection with the Backup Servicer’s
obligations and duties under the Basic Documents shall be limited to a total
of
$10,000 per annum;
(vi)to
the
extent not paid by the Servicer, to the Custodian, the Custodian Fee, plus
any
accrued and unpaid Custodian Fees with respect to prior Settlement
Dates;
(vii)to
the
extent not paid by the Servicer, to the Lockbox Bank, the Lockbox Fee, plus
any
accrued and unpaid Lockbox Fees from prior Settlement Dates;
(viii)to
the
Note Distribution Account, from Available Funds and any amounts deposited in
the
Collection Account pursuant to Section
5.5(b)
and
Section
5.5(d),
the
remaining Noteholder’s Interest Distributable Amount after giving effect to
Section
5.7(a)(i)
hereof
and the unused facility fee payable pursuant to Section
3.02(b)
of the
Note Purchase Agreement;
(ix)to
the
Note Distribution Account, from Available Funds and any amounts deposited in
the
Collection Account pursuant to Section
5.5(b)
and
Section
5.5(d),
the
Noteholder’s Principal Distributable Amount for such Accrual
Period;
(x)to
the
Trustee, for deposit in the Reserve Account, from Available Funds, an amount
equal to the excess of (A) the Required Reserve Account Amount for such
Settlement Date over (B) the amount on deposit in the Reserve
Account;
(xi)to
the
Note Distribution Account, from Available Funds, to the Noteholder in respect
of
any amounts owed to the Noteholder pursuant to Sections
3.03
and
3.04
of the
Note Purchase Agreement;
(xii)to
the
Hedge Counterparty, from Available Funds and any amounts deposited in the
Collection Account pursuant to Section
5.5(d),
in
respect of Hedge Counterparty Termination Fees;
(xiii)to
the
Trustee and the Backup Servicer from Available Funds and any amounts deposited
in the Collection Account pursuant to Section
5.5(d),
in
respect of reasonable out-of-pocket expenses thereof (including reasonable
counsel fees and expenses) and reasonable out-of-pocket expenses (including
reasonable counsel fees and expenses) from prior Accrual Periods to the extent
not paid thereto pursuant to Section
5.7(a)(iii)
and
(v)
above;
and
27
(xiv)to
the
Purchaser, the remaining Available Funds, if any, and any amounts deposited
in
the Collection Account pursuant to Section
5.5(d) and
any
amounts released from the Reserve Account pursuant to Section
5.5(e).
(b) In
the
event that the Collection Account is maintained with an institution other than
the Trustee, the Servicer shall instruct and cause such institution to make
all
deposits and distributions pursuant to Section
5.7(a)
on the
related Settlement Date.
Section
5.8 Note
Distribution Account.
(a) On
each
Settlement Date (based solely on the information contained in the Servicer’s
Certificate), the Trustee shall distribute all amounts on deposit in the Note
Distribution Account to the Noteholder in respect of the Note to the extent
of
amounts due and unpaid on the Note for principal and interest in the following
amounts and in the following order of priority:
(i)to
the
Noteholder, the Noteholder’s Interest Distributable Amount; provided that if
there are not sufficient funds in the Note Distribution Account to pay the
entire amount then due on the Note, the amount in the Note Distribution Account
shall be applied to the payment of such interest pro rata among the Holders
of
the Note;
(ii)to
the
Noteholder, in reduction of the Invested Amount, the Noteholder’s Principal
Distributable Amount to pay principal on the Note until the outstanding
principal amount of the Note has been reduced to zero; provided
that if
there are not sufficient funds in the Note Distribution Account to pay the
entire amount then due on the Note, the amount in the Note Distribution Account
shall be applied to the payment of such principal pro rata among the Holders
of
the Note;
(iii)to
the
Noteholder, any other amounts due the Noteholder pursuant to the Basic
Documents.
(b) On
each
Settlement Date, the Trustee shall provide or make available electronically
in
accordance with Section
5.9(c)
(or,
upon written request, by first class mail or facsimile) to the Noteholder the
statement or statements provided to the Trustee by the Servicer pursuant to
Section
5.9
hereof
on such Settlement Date; provided however,
the
Trustee shall have no obligation to provide such information described in this
Section
5.8(b)
until
it has received the requisite information from the Servicer.
Section
5.9 Statements
to the Noteholder.
(a) On
each
Determination Date (in accordance with Section
4.9),
the
Servicer shall provide to the Trustee, the Rating Agency and the Noteholder
as
of the related Record Date a copy of the Servicer’s Certificate substantially in
the form attached hereto as Exhibit
A.
(b) Within
60
days after the end of each calendar year, commencing February 28, 2007, the
Servicer shall deliver to the Trustee, and the Trustee shall, provided it has
received the necessary information from the Servicer, promptly thereafter
furnish to the Noteholder (a) a report (prepared by the Servicer) as to the
aggregate of the amounts reported pursuant to Sections I, IV, V and VII of
the
Servicer’s Certificate for such preceding calendar year, and (b) such
information as may be reasonably requested by the Noteholder or required by
the
Code and regulations thereunder, to enable the Noteholder to prepare its Federal
and State income tax returns. The obligation of the Trustee set forth in this
paragraph shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Servicer to the
Noteholder pursuant to any requirements of the Code.
28
(c) The
Trustee may make available to the Noteholder and the Rating Agency via the
Trustee’s Internet Website, all statements described herein and, with the
consent or at the direction of the Seller, such other information regarding
the
Note and/or the Receivables as the Trustee may have in its possession, but
only
with the use of a password provided by the Trustee. The Trustee will make no
representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefore. The Trustee’s Internet
Website shall be initially located at xxx.XXXXxxx.xxx
or at
such other address as shall be specified by the Trustee from time to time in
writing to the Noteholder. In connection with providing access to the Trustee’s
Internet Website, the Trustee may require registration and the acceptance of
a
disclaimer. The Trustee shall not be liable for the dissemination of information
in accordance with this Agreement.
ARTICLE
VI
[RESERVED]
ARTICLE
VII
THE
PURCHASER
Section
7.1 Representations
of Purchaser.
The
Purchaser makes the following representations on which the Noteholder shall
be
deemed to have relied in purchasing the Note. The representations speak as
of
the execution and delivery of this Agreement, as of the Closing Date and as
of
each Funding Date, and shall survive the sale of the Receivables and the Other
Conveyed Property to the Purchaser and the pledge thereof by the Purchaser
to
the Trustee pursuant to the Indenture.
(a) Organization
and Good Standing.
The
Purchaser has been duly formed and is validly existing as a limited liability
company solely under the laws of the state of Delaware and is in good standing
under the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted, and had at all relevant times, and
now
has, power, authority and legal right to acquire, own and pledge the Receivables
and the Other Conveyed Property pledged to the Trustee.
(b) Due
Qualification.
The
Purchaser is duly qualified to do business as a foreign limited liability
company in good standing, and has obtained all necessary licenses and approvals
in all jurisdictions in which the ownership or lease of property or the conduct
of its business shall require such qualifications.
(c) Power
and Authority.
The
Purchaser has the power (corporate and other) and authority to execute and
deliver this Agreement and the other Basic Documents to which it is a party
and
to carry out its terms and their terms, respectively; the Purchaser has full
power and authority to pledge the Collateral to be pledged to the Trustee by
it
pursuant to the Indenture and has duly authorized such pledge to the Trustee
by
all necessary corporate action; and the execution, delivery and performance
of
this Agreement and the Basic Documents to which the Purchaser is a party have
been duly authorized by the Purchaser by all necessary action.
(d) Valid
Sale; Binding Obligations.
This
Agreement effects a valid sale of the Receivables and the Other Conveyed
Property, enforceable against the Seller and creditors of and purchasers from
the Seller, and this Agreement and the other Basic Documents to which the
Purchaser is a party, when duly executed and delivered, shall constitute legal,
valid and binding obligations of the Purchaser enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of
creditors’ rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered
in a
proceeding in equity or at law.
(e) No
Violation.
The
consummation of the transactions contemplated by this Agreement and the other
Basic Documents and the fulfillment of the terms of this Agreement and the
other
Basic Documents shall not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice, lapse of time
or
both) a default under the Limited Liability Company Agreement of the Purchaser,
or any indenture, agreement, mortgage, deed of trust or other instrument to
which the Purchaser is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than the Basic Documents, or violate any law, order, rule
or
regulation applicable to the Purchaser of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or any of its properties.
29
(f) No
Proceedings.
There
are no proceedings or investigations pending or, to the Purchaser’s knowledge,
threatened against the Purchaser, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Purchaser or its properties (A) asserting the invalidity
of this Agreement, the Note or any of the Basic Documents, (B) seeking to
prevent the issuance of the Note or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Agreement or any of the Basic Documents, or (D) relating
to the Purchaser and which might adversely affect the federal or state income,
excise, franchise or similar tax attributes of the Note.
(g) No
Consents.
No
consent, approval, authorization or order of or declaration or filing with
any
governmental authority is required for the issuance or sale of the Note or
the
consummation of the other transactions contemplated by this Agreement, except
such as have been duly made or obtained or as may be required by the Basic
Documents.
(h) Tax
Returns.
The
Purchaser has filed all federal and state tax returns which are required to
be
filed and paid all taxes, including any assessments received by it, to the
extent that such taxes have become due. Any taxes, fees and other governmental
charges payable by the Purchaser in connection with consummation of the
transactions contemplated by this Agreement and the other Basic Documents to
which the Purchaser is a party and the fulfillment of the terms of this
Agreement and the other Basic Documents to which the Purchaser is a party have
been paid or shall have been paid at or prior to the Closing Date and as of
each
Funding Date.
(i) Chief
Executive Office.
The
chief executive office of the Purchaser is at 0000 Xxxxx Xxxx Xxxxx, Xxxxx
000,
Xxxxxx, Xxxxx 00000.
ARTICLE
VIII
THE
SELLER
Section
8.1 Representations
of Seller.
The
Seller makes the following representations on which the Purchaser is deemed
to
have relied in acquiring the Receivables and the Other Conveyed Property and
on
which the Noteholder is deemed to have relied in purchasing the Note. The
representations speak as of the execution and delivery of this Agreement, as
of
the Closing Date and as of each Funding Date, and shall survive the sale of
the
Receivables and the Other Conveyed Property to the Purchaser and the pledge
thereof by the Purchaser to the Trustee pursuant to the Indenture.
(a) Organization
and Good Standing.
The
Seller has been duly organized and is validly existing as a corporation solely
under the laws of the State of Texas and is in good standing under the laws
of
the State of Texas, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business
is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the
Other
Conveyed Property transferred to the Purchaser and to perform its other
obligations under this Agreement and any other Basic Documents to which it
is a
party.
30
(b) Due
Qualification.
The
Seller is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of
its
business (including the origination, sale and servicing of the Receivables
and
the Other Conveyed Property as required by this Agreement) shall require such
qualifications.
(c) Power
and Authority.
The
Seller has the power (corporate and other) and authority to execute and deliver
this Agreement and the other Basic Documents to which it is a party and to
carry
out its terms and their terms, respectively; the Seller has full power and
authority to sell and assign the Receivables and the Other Conveyed Property
to
be sold and assigned to and deposited with the Purchaser by it and has duly
authorized such sale and assignment to the Purchaser by all necessary corporate
action; and the execution, delivery and performance of this Agreement and the
other Basic Documents to which the Seller is a party have been duly authorized
by the Seller by all necessary corporate action.
(d) Valid
Sale; Binding Obligations.
This
Agreement effects a valid sale, transfer and assignment of the Receivables
and
the Other Conveyed Property to the Purchaser, is enforceable against the Seller
and creditors of and purchasers from the Seller; and this Agreement and the
other Basic Documents to which the Seller is a party, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the Seller
enforceable in accordance with their respective terms, except as enforceability
may be limited, by bankruptcy, insolvency, reorganization or other similar
laws
affecting the enforcement of creditors’ rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether
such
enforceability is considered in a proceeding in equity or at law.
(e) No
Violation.
The
consummation of the transactions contemplated by this Agreement and the other
Basic Documents and the fulfillment of the terms of this Agreement and the
other
Basic Documents does not and will not conflict with, result in any breach of
any
of the terms and provisions of or constitute (with or without notice, lapse
of
time or both) a default under the certificate of incorporation or by-laws of
the
Seller, or any indenture, agreement, mortgage, deed of trust or other instrument
to which the Seller is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than the Basic Documents, or violate any law (including any
bulk transfer laws), judgment, decree, writ, injunction, award, determination,
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or any of its
properties.
(f) No
Proceedings.
There
are no proceedings or investigations pending or, to the Seller’s knowledge,
threatened against the Seller, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having jurisdiction
over the Seller or its properties (A) asserting the invalidity of this
Agreement, the Note or any of the other Basic Documents, (B) seeking to prevent
the issuance of the Note or the consummation of any of the transactions
contemplated by this Agreement or any of the other Basic Documents, (C) seeking
any determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or any of the other Basic Documents, (D)
relating to the Seller and which might adversely affect the federal or state
income, excise, franchise or similar tax attributes of the Note, or (E) that
if
decided adversely, would materially and adversely affect its ability to
foreclose or otherwise enforce the Liens of the Timeshare Loans, or any
Timeshare Loan or title of any Obligor to any related Timeshare
Property.
(g) No
Consents.
No
consent, approval, authorization or order of or declaration or filing with
any
governmental authority is required for the issuance or sale of the Note or
the
consummation of the other transactions contemplated by this Agreement and the
other Basic Documents or the execution and delivery thereof, except such as
have
been duly made or obtained.
(h) Financial
Condition.
The
Seller has a positive net worth and is able to and does pay its liabilities
as
they mature. The Seller is not in default under any obligation to pay money
to
any Person except for matters being disputed in good faith which do not involve
an obligation of the Seller on a promissory note. The Seller will not use the
proceeds from the transactions contemplated by the Basic Documents to give
any
preference to any creditor or class of creditors, and this transaction will
not
render the Seller insolvent and will not leave the Seller with remaining assets
which are unreasonably small compared to its ongoing operations.
31
(i) Fraudulent
Conveyance.
The
Seller is not selling the Receivables and the Other Conveyed Property to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
the
Seller will not be rendered insolvent as a result of the sale of the Receivables
and the Other Conveyed Property to the Purchaser.
(j) Tax
Returns.
The
Seller has filed all material federal and state tax returns which are required
to be filed and paid all material taxes, including any assessments received
by
it, to the extent that such taxes have become due (other than taxes, the amount
or validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been
provided on the books of the Seller). Any taxes, fees and other governmental
charges payable by the Seller in connection with consummation of the
transactions contemplated by this Agreement and the other Basic Documents to
which the Seller is a party and the fulfillment of the terms of this Agreement
and the other Basic Documents to which the Seller is a party have been paid
or
shall have been paid as of each Funding Date.
(k) Chief
Executive Office.
The
Seller has more than one place of business, and the chief executive office
of
the Seller is at 0000 Xxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and
its
organizational number is 00-0000000.
(l) Certificate,
Statements and Reports.
The
officer’s certificates, statements, reports and other documents prepared by
Seller and furnished by Seller to the Purchaser, the Trustee or the Noteholder
pursuant to this Agreement or any other Basic Document to which it is a party,
and in connection with the transactions contemplated hereby or thereby, when
taken as a whole, do not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
herein or therein not misleading. There are no facts known to the Seller which,
individually or in the aggregate, materially adversely affect, or which (aside
from general economic trends) may reasonably be expected to materially adversely
affect in the future, its financial condition or assets or business, or which
may impair its ability to perform its obligations under this Agreement or any
other Basic Document, which have not been disclosed herein or therein or in
the
certificates and other documents furnished to the Noteholder by or on its behalf
specifically for use in connection with the transactions contemplated hereby
or
thereby.
(m) Legal
Counsel, etc.
Seller
consulted with its own legal counsel and independent accountants to the extent
it deems necessary regarding the tax, accounting and regulatory consequences
of
the transactions contemplated hereby, Seller is not participating in such
transactions in reliance on any representations of any other party, their
affiliates, or their counsel with respect to tax, accounting and regulatory
matters.
(n) No
Material Adverse Change.
No
Material Adverse Change has occurred with respect to the Seller since the end
of
the quarter reported on in the Seller’s Form 10-Q filed with the Commission on
November 10, 2005.
(o) No
Default.
The
Seller is not in default in the performance, observance or fulfillment of any
of
the obligations, covenants or conditions contained in, and is not otherwise
in
default under (i) any law or statute applicable to it, including, without
limitation, any Consumer Law, (ii) any judgment, decree, writ, injunction,
order, award or other action of any court or governmental authority or
arbitrator or any order, rule or regulation of any federal, state, county,
municipal or other governmental or public authority or agency having or
asserting jurisdiction over it or any of its properties or (iii) (x) any
indebtedness or any instrument or agreement under or pursuant to which any
such
indebtedness has been, or could be, issued or incurred or (y) any other
instrument or agreement to which it is a party or by which it is bound or any
of
its properties is affected, including, without limitation, the Basic Documents,
which either individually or in the aggregate, (A) could reasonably be expected
to result in a Material Adverse Change with respect to the Seller, or in any
impairment of the right or ability of the Seller to carry on its business
substantially as now conducted or (B) could reasonably be expected to materially
and adversely affect the Seller’s performance of its obligations hereunder, or
the validity or enforceability of this Agreement or the other Basic
Documents.
32
(p) Possession
of Licenses, Certificates, Franchises and Permits.
The
Seller holds all licenses, certificates, franchises and permits from all
governmental authorities necessary for the conduct of its business, except
where
the failure to hold such licenses, certificates, franchises and permits would
not materially and adversely affect its ability to perform its obligations
under
this Agreement or any other Basic Document to which it is a party or under
the
transactions contemplated hereunder or thereunder or the validity or
enforceability of the Receivables or the Timeshare Loans, and has received
no
notice of proceedings relating to the revocation of any such license,
certificate, franchise or permit, which singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect its ability to perform its obligations under this Agreement
or
any other Basic Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of the
Receivables or the Timeshare Loans.
(q) Foreign
Tax Liability.
The
Seller is not aware of any Obligor under a Timeshare Loan who has withheld
any
portion of payments due under such Timeshare Loan because of the requirements
of
a foreign taxing authority, and no foreign taxing authority has contacted it
concerning a withholding or other foreign tax liability.
(r) No
Deficiency Accumulation.
The
Seller is not aware of any outstanding “accumulated funding deficiency” (as such
term is defined under ERISA and the Code) with respect to any “employee benefit
plan” (as such term is defined under ERISA) sponsored by it.
(s) Securities
Laws.
The
Seller is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended. No portion of the Purchase Price for each of the Receivables and
the
Other Conveyed Property will be used by it to acquire any security in any
transaction which is subject to Section 13 or Section 14 of the Securities
Exchange Act of 1934, as amended.
(t) Transactions
in Ordinary Course.
The
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller.
(u) Name.
The
legal name of the Seller is as set forth in the signature page of this Agreement
and the Seller does not have any tradenames, fictitious names, assumed names
or
“doing business as” names.
Section
8.2 Additional
Covenants of the Seller.
(a) Sale.
The
Seller agrees to treat the conveyances hereunder for all purposes (including
without limitation tax and financial accounting purposes) as sales on all
relevant books, records, tax returns, financial statements and other applicable
documents.
(b) Non-Petition.
In the
event of any breach of a representation and warranty made by the Purchaser
hereunder, the Seller covenants and agrees that it will not take any action
to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which the Note issued
by
the Purchaser has been paid in full. The Purchaser and the Seller agree that
damages will not be an adequate remedy for breach of this covenant and that
this
covenant may be specifically enforced by the Purchaser, and by the Trustee
on
behalf of the Noteholder.
33
(c) Changes
to Credit Policy.
The
Seller covenants that it will not make, or permit to be made, any material
changes to the Credit Policy unless (i) the Noteholder expressly consents in
writing prior to such changes (such consent not to be unreasonably withheld)
and
(ii) after giving effect to any such changes, the Rating Agency Condition is
satisfied.
(d) Compliance
with Laws.
The
Seller shall comply with all applicable laws, rules, regulations and orders
applicable to it and its business and properties except where the failure to
comply will not have a material adverse effect on its business or its ability
to
perform its obligations under this Agreement or any other Basic Document to
which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of the Receivables and the Other
Conveyed Property.
(e) Maintain
of Existence.
The
Seller shall preserve and maintain for itself its existence (corporate or
otherwise), rights, franchises and privileges in the jurisdiction of its
organization and except where the failure to so preserve and maintain will
not
have a material adverse effect on its business or its ability to perform its
obligations under this Agreement or any other Basic Document to which it is
a
party or under the transactions contemplated hereunder or thereunder or the
validity of enforceability of the Receivables and the Other Conveyed
Property.
(f) Ownership
Inquiries.
The
Seller shall respond to any inquiries with respect to ownership of a Receivable
and the related Other Conveyed Property by stating that such Receivable and
the
related Other Conveyed Property has been sold to the Purchaser and that the
Purchaser is the owner of such Receivable and the related Other Conveyed
Property.
(g) Change
of Name.
Any
change in the legal name of the Seller and any use by it of any tradename,
fictitious name, assumed name or “doing business as” name occurring after the
Closing Date shall be promptly disclosed to the Purchaser, the Trustee and
the
Noteholder in writing.
(h) Maintain
Principal Place of Business.
The
Seller shall keep its principal place of business and chief executive office
and
the office where it keeps its records concerning the Receivables or the Other
Conveyed Property at the address of the Seller listed herein.
(i) Payment
of Taxes.
In the
event that the Seller or the Purchaser or any assignee of the Purchaser should
receive actual notice of any transfer taxes arising out of the transfer,
assignment and conveyance of a Receivable or related Other Conveyed Property
from the Seller to the Purchaser, on written demand by the Purchaser or its
assignee, or upon the Seller otherwise being given notice thereof, the Seller
shall pay, and otherwise indemnify and hold the Purchaser, and any subsequent
assignee harmless, on an after-tax basis, from and against any and all such
transfer taxes.
(j) Filing
Continuation Statements.
The
Seller authorizes the Purchaser and the Trustee to file continuation statements,
and amendments thereto, relating to the Receivables and the Other Conveyed
Property and all payments made with regard thereto without the signature of
the
Seller where permitted by law. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law.
The Seller confirms that it is not its present intention to file a photocopy
or
other reproduction of this Agreement as a financing statement.
(k) Accounting
for Transfer.
The
Seller shall not prepare any financial statements or other statements (including
any tax filings) which shall account for the transactions contemplated by this
Agreement in any manner other than as the sale of, or a capital contribution
of,
the Receivables and the Other Conveyed Property by the Seller to the
Purchaser.
(l) Effect
on Purchaser.
The
Seller shall not take any action or fail to take any action if, as a result
of
such action or failure to act, the Purchaser, in its capacity as Purchaser
hereunder or as the Issuer under the Indenture or any other Basic Document,
will
be, or is reasonably likely to be, in breach of any of its representations,
warranties or covenants under any Basic Documents or otherwise unable to perform
any of its obligations thereunder.
34
(m) Waiver
of Stay or Extension Laws.
The
Seller covenants (to the extent it may lawfully do so) that it will not at
any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time
hereafter in force, that may affect the covenants or the performance of this
Agreement; and the Seller (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it
will not hinder, delay or impede the execution of any power and any right of
the
Seller to take such action shall be suspended.
(n) Substantive
Consolidation.
The
Seller shall not take any action or fail to take any action if, as a result
of
such action or failure to act, the Purchaser, in its capacity as Purchaser
hereunder or as the Issuer under the Indenture or any other Basic Document,
will
be, or is reasonably likely to be, substantively consolidated with the Seller.
Section
8.3 Liability
of Seller; Indemnities.
Subject
to the limitation of remedies set forth in Section
3.2
hereof
with respect to a breach of any representations, warranties or covenants
contained in Section
3.1
hereof,
the Seller shall indemnify the Purchaser, the Servicer (so long as it is a
party
other than Silverleaf) the Backup Servicer, the Trustee, the Custodian, the
Noteholder and their respective officers, directors, agents and employees
(collectively, the “Indemnified
Parties”)
for
any and all costs, expenses, losses, damages, claims and liabilities (including
reasonable legal fees and related costs), that any of the Indemnified Parties
may sustain arising out of or as a result of the failure of a Receivable or
related Timeshare Loan to be originated in compliance with all requirements
of
law and for any breach of any of its representations, warranties, covenants
or
other agreements contained herein or in the other Basic Documents to which
it is
a party.
(a) The
Seller shall defend, indemnify, and hold harmless the Indemnified Parties from
and against any and all costs, expenses, losses, damages, claims, and
liabilities (including reasonable legal fees and related costs), arising out
of
or resulting from the use, ownership, or operation by the Seller, any Affiliate
thereof or any of their respective agents or subcontractors, of a Resort or
Timeshare Property, or out of non-compliance by the Seller or any Affiliate
thereof with any applicable laws, rules or regulations relating thereto or
relating to origination of Timeshare Loans or the documentation in connection
therewith.
(b) The
Seller shall indemnify, defend and hold harmless the Indemnified Parties from
and against any taxes that may at any time be asserted against any such Person
with respect to the transactions contemplated in this Agreement and any of
the
other Basic Documents (except any income taxes arising out of fees paid to
the
Trustee and the Backup Servicer and except any taxes to which the Trustee may
otherwise be subject), including without limitation any sales, gross receipts,
general corporation, tangible personal property, privilege or license taxes
(but, in the case of the Purchaser, not including any taxes asserted with
respect to federal or other income taxes arising out of distributions on the
Note) and costs and expenses in defending against the same.
(c) The
Seller shall indemnify, defend and hold harmless the Indemnified Parties, from
and against any and all costs, expenses, losses, damages and liabilities
(including reasonable legal fees and related costs) incurred by reason of (i)
the Seller’s willful misfeasance, bad faith or negligence in the performance of
its duties under this Agreement or any of the other Basic Documents, or by
reason of reckless disregard of its obligations and duties under this Agreement
and/or (ii) the Seller’s or the Purchaser’s violation of Federal or state
securities laws in connection with the offering and sale of the
Note.
(d) The
Seller shall indemnify, defend and hold harmless the Trustee and the Backup
Servicer and its officers, directors, employees and agents from and against
any
and all costs, expenses, losses, damages, claims and liabilities (including
reasonable legal fees and related costs), arising out of, or incurred in
connection with the acceptance or performance of the trusts and duties set
forth
herein and in the other Basic Documents except to the extent that such cost,
expense, loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Trustee or the Backup Servicer.
35
Indemnification
under this Section shall survive the resignation or removal of the Servicer
or
the Trustee and the termination of this Agreement and the other Basic Documents,
as applicable, and shall include reasonable fees and expenses of counsel and
other expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others,
such
Person shall promptly repay such amounts to the Seller, without
interest.
Notwithstanding
any provision of this Section
8.3
or any
other provision of this Agreement, nothing herein shall be construed as to
require the Seller to provide any indemnification hereunder or under any other
Basic Document for any costs, expenses, losses, claims, damages or liabilities
arising out of, or incurred in connection with, credit losses with respect
to
the Receivables.
Section
8.4 Merger
or Consolidation of Seller.
Seller
shall not merge or consolidate with any other person, convey, transfer or lease
substantially all its assets as an entirety to another Person, or permit any
other Person to become the successor to Seller’s business unless, after the
merger, consolidation, conveyance, transfer, lease or succession, the Seller
is
the surviving entity and shall be capable of fulfilling its duties contained
in
this Agreement and the other Basic Documents. Nothing contained herein shall
be
deemed to release Seller or Servicer from any obligation. Seller shall provide
notice of any merger, consolidation or succession pursuant to this Section
to
the Trustee, the Noteholder and each Rating Agency. Notwithstanding the
foregoing, Seller shall not merge or consolidate with any other Person or permit
any other Person to become a successor to Seller’s business, unless (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section
8.1
shall
have been breached (for purposes hereof, such representations and warranties
shall be deemed made as of the date of the consummation of such transaction)
and
no event that, after notice or lapse of time, or both, would become an Event
of
Default shall have occurred and be continuing, (y) Seller shall have delivered
to the Trustee, the Rating Agency and the Noteholder an Officer’s Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession comply with this Section and that all conditions precedent, if any,
provided for in this Agreement and the other Basic Documents relating to such
transaction have been complied with, and (z) Seller shall have delivered to
the
Trustee, the Rating Agency and the Noteholder an Opinion of Counsel, stating
in
the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been authorized and filed
that are necessary to preserve and protect the interest of the Purchaser and
the
Trustee, respectively, in the Receivables and the Other Conveyed Property and
reciting the details of the filings or (B) no such action shall be necessary
to
preserve and protect such interest.
Section
8.5 Limitation
on Liability of Seller and Others.
The
Seller and any director or officer or employee or agent of the Seller may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document.
ARTICLE
IX
THE
SERVICER
Section
9.1 Representations
of Servicer.
The
initial Servicer makes the following representations on which the Purchaser
is
deemed to have relied in acquiring the Receivables and the Other Conveyed
Property and on which the Noteholder is deemed to have relied in purchasing
the
Note. The representations speak as of the execution and delivery of this
Agreement, as of the Closing Date and as of each Funding Date, and shall survive
the sale of the Receivables and the Other Conveyed Property to the Purchaser
and
the pledge thereof by the Purchaser to the Trustee pursuant to the
Indenture.
(a) Organization
and Good Standing.
The
Servicer has been duly organized and is validly existing as a corporation and
in
good standing under the laws of the State of Texas (or, in the case of a
successor Servicer, it is a validly existing entity in good standing in its
jurisdiction of organization), with power, authority and legal right to own
its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
shall have, power, authority and legal right to acquire, own and service the
Receivables and the Other Conveyed Property.
36
(b) Due
Qualification.
The
Servicer is duly qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the conduct of
its
business (including the servicing of the Receivables as required by this
Agreement) requires or shall require such qualification except where the failure
to so qualify or obtain such licenses or consents could not reasonably be
expected to result in a material adverse effect with respect to it or to the
Receivables or the Other Conveyed Property.
(c) Power
and Authority.
The
Servicer has the power and authority to execute and deliver this Agreement
and
the other Basic Documents to which it is a party and to carry out its terms
and
their terms, respectively, and the execution, delivery and performance of this
Agreement and the other Basic Documents to which it is a party have been duly
authorized by the Servicer by all necessary corporate action.
(d) Binding
Obligation.
This
Agreement and the other Basic Documents to which the Servicer is a party shall
constitute legal, valid and binding obligations of the Servicer enforceable
in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, or other similar laws affecting
the
enforcement of creditors’ rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability
is
considered in a proceeding in equity or at law.
(e) No
Violation.
The
consummation of the transactions contemplated by this Agreement and the other
Basic Documents to which to the Servicer is a party, the execution and delivery
thereof and the fulfillment of the terms of this Agreement and the other Basic
Documents to which the Servicer is a party, does not and will not conflict
with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Servicer, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or by which
it is bound or any of its properties are subject, or result in the creation
or
imposition of any Lien upon any of its properties pursuant to the terms of
any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than the Basic Documents, or violate any law, judgment, decree, writ,
injunction, award, determination, order, rule or regulation applicable to the
Servicer of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Servicer or any of its properties.
(f) No
Proceedings.
There
are no proceedings or investigations pending or, to the Servicer’s knowledge,
threatened against the Servicer, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Servicer or its properties (A) asserting the invalidity
of
this Agreement or any of the other Basic Documents, (B) seeking to prevent
the
issuance of the Note or the consummation of any of the transactions contemplated
by this Agreement or any of the other Basic Documents, or (C) seeking any
determination or ruling that might materially and adversely affect the validity
or enforceability of this Agreement, the Note or any of the other Basic
Documents or (D) relating to the Servicer and which might adversely affect
the
federal or state income, excise, franchise or similar tax attributes of the
Note.
(g) No
Consents.
No
consent, approval, authorization or order of or declaration or filing with
any
governmental authority is required for the issuance or sale of the Note or
the
consummation of the other transactions contemplated by this Agreement or the
other Basic Documents or the execution and delivery thereof, except such as
have
been duly made or obtained.
(h) Taxes.
The
Servicer has filed all federal and state tax returns which are required to
be
filed and paid all taxes, including any assessments received by it, to the
extent that such taxes have become due (other than taxes, the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on
the books of the Servicer). Any taxes, fees and other governmental charges
payable by the Servicer in connection with consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which the
Servicer is a party and the fulfillment of the terms of this Agreement and
the
other Basic Documents to which the Servicer is a party have been paid or shall
have been paid as of the Closing Date and each Funding Date.
37
(i) Chief
Executive Office.
The
Servicer hereby represents and warrants that the Servicer’s principal place of
business and chief executive office is located at 0000 Xxxxx Xxxx Xxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000.
(j) Possession
of Licenses, Certificates, Franchises and Permits.
The
Servicer holds all licenses, certificates, franchises and permits from all
governmental authorities necessary for the conduct of its business, except
where
the failure to hold such licenses, certificates, franchises and permits would
not materially and adversely affect its ability to perform its obligations
under
this Agreement or any other Basic Document to which it is a party or under
the
transactions contemplated hereunder or thereunder or the validity or
enforceability of the Receivables or the Timeshare Loans, and has received
no
notice of proceedings relating to the revocation of any such license,
certificate, franchise or permit, which singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect its ability to perform its obligations under this Agreement
or
any other Basic Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of the
Receivables or the Timeshare Loans.
(k) No
Deficiency Accumulation.
The
Servicer is not aware of any outstanding “accumulated funding deficiency” (as
such term is defined under ERISA and the Code) with respect to any “employee
benefit plan” (as such term is defined under ERISA) sponsored by
it.
(l) Securities
Laws.
The
Servicer is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended. No portion of the Purchase Price for each of the Receivables and
the
Other Conveyed Property will be used by it to acquire any security in any
transaction which is subject to Section 13 or Section 14 of the Securities
Exchange Act of 1934, as amended.
(m) No
Default.
The
Servicer is not in default in the performance, observance or fulfillment of
any
of the obligations, covenants or conditions contained in, and is not otherwise
in default under (i) any law or statute applicable to it, including, without
limitation, any Consumer Law, (ii) any judgment, decree, writ, injunction,
order, award or other action of any court or governmental authority or
arbitrator or any order, rule or regulation of any federal, state, county,
municipal or other governmental or public authority or agency having or
asserting jurisdiction over it or any of its properties or (iii) (x) any
indebtedness or any instrument or agreement under or pursuant to which any
such
indebtedness has been, or could be, issued or incurred or (y) any other
instrument or agreement to which it is a party or by which it is bound or any
of
its properties is affected, including, without limitation, the Basic Documents,
which either individually or in the aggregate, (A) could reasonably be expected
to result in a Material Adverse Change with respect to the Servicer, or in
any
impairment of the right or ability of the Servicer to carry on its business
substantially as now conducted or (B) could reasonably be expected to materially
and adversely affect the Servicer’s performance of its obligations hereunder, or
the validity or enforceability of this Agreement or the other Basic
Documents.
(n) Financial
Condition.
The
Servicer has a positive net worth and is able to and does pay its liabilities
as
they mature. The Servicer is not in default under any obligation to pay money
to
any Person except for matters being disputed in good faith which do not involve
an obligation of the Servicer on a promissory note. The Servicer will not use
the proceeds from the transactions contemplated by the Basic Documents to give
any preference to any creditor or class of creditors, and this transaction
will
not leave the Servicer with remaining assets which are unreasonably small
compared to its ongoing operations.
(o) Certificate,
Statements and Reports.
The
officer’s certificates, statements, reports and other documents prepared by the
Servicer and furnished by Servicer to the Purchaser, the Trustee or the
Noteholder pursuant to this Agreement or any other Basic Document to which
it is
a party, and in connection with the transactions contemplated hereby or thereby,
when taken as a whole, do not and will not contain any untrue statement of
a
material fact or omit to state a material fact necessary to make the statements
contained herein or therein not misleading. There are no facts known to the
Servicer which, individually or in the aggregate, materially adversely affect,
or which (aside from general economic trends) may reasonably be expected to
materially adversely affect in the future, its financial condition or assets
or
business, or which may impair its ability to perform its obligations under
this
Agreement or any other Basic Document, which have not been disclosed herein
or
therein or in the certificates and other documents furnished to the Noteholder
by or on its behalf specifically for use in connection with the transactions
contemplated hereby or thereby.
38
(p) ACH
Form.
The
Servicer has delivered a form of the ACH Form attached to this Agreement to
the
Backup Servicer for its review.
Section
9.2 Liability
of Servicer; Indemnities.
The
Servicer (in its capacity as such) shall be liable hereunder only to the extent
of the obligations in this Agreement and the other Basic Documents to which
it
is a party specifically undertaken by the Servicer and the representations,
warranties, covenants and other agreements made by the Servicer in the Basic
Documents to which it is a party.
(i)The
Servicer shall defend, indemnify and hold harmless the Purchaser, the Trustee,
the Backup Servicer, the Noteholder and their respective officers, directors,
agents and employees from and against any and all costs, expenses, losses,
damages, claims and liabilities (including reasonable legal fees and related
costs), arising out of or resulting from the use, ownership, repossession or
operation by the Servicer or any Affiliate or agent or sub-covenants thereof
of
any Resort or Timeshare Property;
(ii)The
Servicer, so long as Silverleaf is the Servicer, shall indemnify, defend and
hold harmless the Purchaser, the Trustee, the Backup Servicer, the Noteholder
and their respective officers, directors, agents and employees from and against
any taxes that may at any time be asserted against any of such parties with
respect to the transactions contemplated in this Agreement, including, without
limitation, any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but not including any federal or other
income taxes, including franchise taxes asserted with respect to, and as of
the
date of, the sale of the Receivables and the Other Conveyed Property to the
Purchaser, the pledge thereof to the Trustee or the issuance and original sale
of the Note) and costs and expenses in defending against the same;
(iii)The
Servicer shall indemnify, defend and hold harmless the Purchaser, the Trustee,
the Backup Servicer, the Noteholder and their respective officers, directors,
agents and employees from and against any and all costs, expenses, losses,
damages, claims and liabilities (including reasonable legal fees and related
costs) to the extent that such cost, expense, loss, claim, damage, or liability
arose out of, or was imposed upon the Purchaser, the Trustee, the Backup
Servicer or the Noteholder through the negligence, willful misfeasance or bad
faith of the Servicer in the performance of its duties under this Agreement
or
by reason of reckless disregard of its obligations and duties under this
Agreement or as a result of a breach of any representation, warranty, covenant
or other agreement made by the Servicer in this Agreement and the other Basic
Documents to which it is a party; and
(iv)The
Servicer shall indemnify, defend, and hold harmless the Trustee and the Backup
Servicer from and against all costs, expenses, losses, damages, claims and
liabilities (including reasonable legal fees and related costs) arising out
of
or incurred in connection with the acceptance or performance of the trusts
and
duties herein contained, except to the extent that such cost, expense, loss,
claim, damage or liability: (A) shall be due to the willful misfeasance, bad
faith, or negligence (except for errors in judgment) of the Trustee or the
Backup Servicer, as applicable or (B) relates to any tax other than the taxes
with respect to which the Servicer shall be required to indemnify the Trustee
or
the Backup Servicer.
(b) Notwithstanding
the foregoing, the Servicer shall not be obligated to defend, indemnify, and
hold harmless the Noteholder for any losses, claims, damages or liabilities
incurred by the Noteholder arising out of claims, complaints, actions and
allegations relating to Section 406 of ERISA or Section 4975 of the Code as
a
result of the purchase or holding of Note by the Noteholder with the assets
of a
plan subject to such provisions of ERISA or the Code.
39
(c) For
purposes of this Section
9.2,
in the
event of the termination of the rights and obligations of the Servicer (or
any
successor thereto pursuant to Section
9.3)
as
Servicer pursuant to Section
10.1,
or a
resignation by such Servicer pursuant to this Agreement, such Servicer shall
be
deemed to be the Servicer pending appointment of a successor Servicer pursuant
to Section
10.2.
The
provisions of this Section
9.2(c)
shall in
no way affect the survival pursuant to Section
9.2(d)
of the
indemnification by the Servicer provided by Section
9.2(a).
(d) Indemnification
under this Section
9.2
shall
survive the termination of this Agreement and the other Basic Documents and
any
resignation or removal of the Servicer or any successor Servicer as Servicer
and
shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity payments pursuant
to
this Section and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts to the Servicer, without
interest.
Section
9.3 Merger
or Consolidation of the Servicer or Backup Servicer, and Assumption of the
Obligations of the Backup Servicer.
(a) The
Servicer shall not merge or consolidate with any other Person, convey, transfer
or lease all or substantially all of its assets as an entirety to another
Person, or permit any other Person to become the successor to the Servicer’s
business unless, after the merger, consolidation, conveyance, transfer, lease
or
succession, the Servicer shall be the surviving entity and shall be capable
of
fulfilling the duties of the Servicer contained in this Agreement and the other
Basic Documents. Nothing contained herein shall be deemed to release the
Servicer from any obligation. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section to the Trustee, the
Noteholder and each Rating Agency. Notwithstanding the foregoing, the Servicer
shall not merge or consolidate with any other Person or permit any other Person
to become a successor to the Servicer’s business, unless (x) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section
9.1
shall
have been breached (for purposes hereof, such representations and warranties
shall be deemed made as of the date of the consummation of such transaction)
and
no event that, after notice or lapse of time, or both, would become Event of
Default shall have occurred and be continuing, (y) the Servicer shall have
delivered to the Trustee, the Rating Agency and the Noteholder an Officer’s
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession comply with this Section and that all conditions precedent,
if any, provided for in this Agreement relating to such transaction have been
complied with, and (z) the Servicer shall have delivered to the Trustee, the
Rating Agency and the Noteholder an Opinion of Counsel, stating in the opinion
of such counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Purchaser and the Trustee,
respectively, in the Receivables and the Other Conveyed Property and reciting
the details of the filings or (B) no such action shall be necessary to preserve
and protect such interest.
(b) Any
Person (i) into which the Backup Servicer (in its capacity as Backup Servicer
or
successor Servicer) may be merged or consolidated, (ii) resulting from any
merger or consolidation to which the Backup Servicer shall be a party, (iii)
which acquires by conveyance, transfer or lease substantially all of the assets
of the Backup Servicer, or (iv) succeeding to the business of the Backup
Servicer, in any of the foregoing cases shall execute an agreement of assumption
to perform every obligation of the Backup Servicer under this Agreement and
the
other Basic Documents and, whether or not such assumption agreement is executed,
shall be the successor to the Backup Servicer under this Agreement and the
other
Basic Documents without the execution or filing of any paper or any further
act
on the part of any of the parties to this Agreement and the other Basic
Documents, anything in this Agreement and the other Basic Documents to the
contrary notwithstanding; provided, however, that nothing contained herein
shall
be deemed to release the Backup Servicer from any obligation.
40
Section
9.4 [RESERVED]
Section
9.5 [RESERVED]
Section
9.6 Servicer
and Backup Servicer Not to Resign.
Subject
to the provisions of Section
9.3,
neither
the Servicer nor the Backup Servicer shall resign from the obligations and
duties imposed on it by this Agreement or the other Basic Documents to which
it
is a party as Servicer or Backup Servicer except (i) upon a determination that
by reason of a change in legal requirements the performance of its duties under
this Agreement or the other Basic Documents to which it is a party would cause
it to be in violation of such legal requirements in a manner which would have
a
material adverse effect on the Servicer or the Backup Servicer, as the case
may
be, and the Noteholder does not elect to waive the obligations of the Servicer
or the Backup Servicer, as the case may be, to perform the duties which render
it legally unable to act or to delegate those duties to another Person or,
(ii)
in the case of the Backup Servicer, upon the prior written consent of the
Noteholder. Any such determination permitting the resignation of the Servicer
or
Backup Servicer pursuant to clause (i) above shall be evidenced by an Opinion
of
Counsel to such effect delivered and acceptable to the Trustee and the
Noteholder. No resignation of the Servicer shall become effective until the
Backup Servicer or an entity acceptable to the Noteholder shall have assumed
the
responsibilities and obligations of the Servicer. No resignation of the Backup
Servicer shall become effective until an entity acceptable to the Noteholder
shall have assumed the responsibilities and obligations of the Backup Servicer;
provided, however, that in the event a successor Backup Servicer is not
appointed within 60 days after the Backup Servicer has given notice of its
resignation and, if applicable, has provided the Opinion of Counsel required
by
this Section
9.6,
the
Backup Servicer may petition a court for its removal.
Section
9.7 Reporting
Requirements.
(a) The
Servicer shall furnish, or cause to be furnished to the Noteholder:
(a) Audit
Report.
As soon
as available and in any event within 90 days after the end of each fiscal year
of the Servicer, a copy of the consolidated balance sheet of the Servicer and
its Affiliates as at the end of such fiscal year, together with the related
statements of earnings, stockholders’ equity and cash flows for such fiscal
year, prepared in reasonable detail and in accordance with GAAP certified by
Independent Accountants of recognized national standing as shall be selected
by
the Servicer.
(b) Quarterly
Statements.
As soon
as available, but in any event within 45 days after the end of each fiscal
quarter (except the fourth fiscal quarter) of the Servicer, copies of the
unaudited consolidated balance sheet of the Servicer and its Affiliates as
at
the end of such fiscal quarter and the related unaudited statements of earnings,
stockholders’ equity and cash flows for the portion of the fiscal year through
such fiscal quarter (and as to the statements of earnings for such fiscal
quarter) in each case setting forth in comparative form the figures for the
corresponding periods of the previous fiscal year, prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the periods
reflected therein and certified by the chief financial or accounting officer
of
the Servicer as presenting fairly the financial condition and results of
operations of the Servicer and its Affiliates (subject to normal year-end
adjustments).
ARTICLE
X
DEFAULT
Section
10.1 Servicer
Termination Events.
For
purposes of this Agreement, each of the following shall constitute a “Servicer
Termination Event”:
(a) Any
failure by the Servicer to deliver any proceeds or payment required to be so
delivered under this Agreement or any other Basic Document that continues
unremedied for a period of two Business Days after notice (whether written
or
oral) of such failure is provided to Servicer;
41
(b) Failure
by the Servicer to deliver to the Trustee and the Noteholder the Servicer’s
Certificate by 12:00 noon New York City time on the second Business Day after
the date such Servicer’s Certificate is required to be delivered;
(c) Failure
on the part of the Servicer to duly observe or perform any other covenants
or
agreements of the Servicer or the Purchaser, as applicable, set forth in this
Agreement or any other Basic Document to which it is a party, which failure,
except for covenants relating to merger and consolidation or preservation of
ownership or security interests in the Receivables and the Other Conveyed
Property and with respect to the items covered in clause (k) below, continues
unremedied for a period of 30 days (or, if the Servicer shall have provided
evidence satisfactory to the Noteholder that such obligation cannot be cured
in
the 30-day period and that it is diligently pursuing a cure, 60 days), after
the
earlier of (x) the Servicer first acquiring Knowledge thereof and (y) the date
on which written notice of such failure shall have been given to the Servicer;
(d) The
occurrence of an Insolvency Event with respect to the Servicer;
(e) Any
representation, warranty or statement of the Servicer made in this Agreement
or
any other Basic Document to which it is a party or any certificate, report
or
other writing delivered pursuant hereto or thereto shall prove to be incorrect
in any material respect as of the time when the same shall have been made
(excluding, however, any representation or warranty set forth in this Agreement
relating to the characteristics of the Receivables), and the incorrectness
of
such representation, warranty or statement has a material adverse effect on
the
Purchaser or the Noteholder and such breach is not remedied within 30 days
(or,
if the Servicer shall have provided evidence satisfactory to the Noteholder
that
such breach cannot be cured in the 30-day period and that it is diligently
pursuing a cure, 60 days) after the earlier of (x) the Servicer first acquiring
Knowledge thereof and (y) the date on which written notice of such failure
shall
have been given to the Servicer;
(f) So
long
as Silverleaf or an Affiliate thereof is the Servicer, the Leverage Ratio
exceeds 6.0:1;
(g) [Reserved];
(h) An
Event
of Default shall have occurred;
(i) If
Silverleaf is the Servicer, a change occurs of more than 50% of the executive
management of the Servicer as described in Exhibit F hereto, unless Silverleaf
provides written certification to the Trustee (which the Trustee shall promptly
forward to the Noteholder) within 30 days after such change, certifying that
such executive management personnel have been replaced, and setting forth a
description of the replacement personnel’s experience, ability and reputation,
and the Trustee shall not have received an objection to such replacement
personnel from Noteholder within 15 Business Days after sending such certificate
to the Noteholder;
(j) Any
failure by the Servicer to duly observe and perform its obligations under
Section
4.2(f)
hereof,
which failure is not remedied within 30 days (or, if the Servicer shall have
provided evidence satisfactory to the Noteholder that such obligation cannot
be
cured in the 30-day period and that it is diligently pursuing a cure, 60 days),
after the earlier of (x) the Servicer first acquiring Knowledge thereof and
(y)
the date on which written notice of such failure shall have been given to the
Servicer; provided,
however, that with respect to Section
4.2(f)(xiii)
hereof,
the Servicer shall have 2 days to remedy any failure to perform its obligations
thereunder;
(k) So
long
as Silverleaf or an Affiliate thereof is the Servicer, as of any date of
determination, the Tangible Net Worth of Silverleaf is less than the sum of
(1)
$100,000,000, (2) 50% of the cumulative positive net income of the Servicer
(without deduction for negative income) since June 30, 2005 and (3) 50% of
the
net proceeds of any equity issued by Silverleaf since June 30,
2005;
42
(l) So
long
as Silverleaf or an Affiliate thereof is the Servicer, as of any date of
determination, the sum of (1) available cash and (2) borrowing capacity for
working capital, maintained by Silverleaf is less than $5,000,000;
(m) So
long
as Silverleaf or an Affiliate thereof is the Servicer, Silverleaf experiences
a
net loss either in any fiscal year or in any two consecutive fiscal quarters;
or
(n) So
long
as Silverleaf or an Affiliate thereof is the Servicer, as of any date of
determination, the ratio of Silverleaf’s (1) Earnings Before Interest, Taxes,
Deductions and Amortization (EBITDA) to (2) Interest Expense, is less than
1.25:1.
In
the
event that the Servicer, Purchaser or Trustee gains Knowledge of the occurrence
of a Servicer Termination Event, the Servicer, Purchaser or Trustee, as
applicable, shall promptly notify the Noteholder in writing of such occurrence;
provided that the Servicer shall be deemed to satisfy such obligation upon
its
delivery of an Officer’s Certificate in accordance with Section
4.10(b)
hereof.
Section
10.2 Consequences
of a Servicer Termination Event.
If
a
Servicer Termination Event shall occur and be continuing, the Noteholder by
notice given in writing to the Servicer may terminate all of the rights and
obligations of the Servicer under this Agreement; provided that such rights
and
obligations shall be automatically terminated without any further action in
the
case of a Servicer Termination Event described in Section
10.1(d).
The
outgoing Servicer shall be entitled to its pro rata share of the Servicing
Fee
for the number of days in the Accrual Period prior to the effective date of
its
termination. On or after the receipt by the Servicer of such written notice
or
upon termination of the term of the Servicer, all authority, power, obligations
and responsibilities of the Servicer under this Agreement, whether with respect
to the Note or the Receivables and Other Conveyed Property or otherwise,
automatically shall pass to, be vested in and become obligations and
responsibilities of the Backup Servicer (or such other successor Servicer
appointed by the Noteholder under Section
10.3);
provided, however, that the successor Servicer shall have no liability with
respect to any obligation which was required to be performed by the terminated
Servicer prior to the date that the successor Servicer becomes the Servicer
or
any claim of a third party based on any alleged action or inaction of the
terminated Servicer. The successor Servicer is authorized and empowered by
this
Agreement to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments
and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer
and
endorsement of the Receivables and the Other Conveyed Property and related
documents to show the Purchaser as lienholder or secured party, or otherwise.
The terminated Servicer agrees to cooperate with the successor Servicer in
effecting the termination of the responsibilities and rights of the terminated
Servicer under this Agreement, including, without limitation, the transfer
to
the successor Servicer for administration by it of all cash amounts that shall
at the time be held by the terminated Servicer for deposit, or have been
deposited by the terminated Servicer, in the Collection Account or thereafter
received with respect to the Receivables and the Other Conveyed Property and
the
delivery to the successor Servicer of all Timeshare Loan Servicing Files that
shall at the time be held by the terminated Servicer and a computer tape in
readable form as of the most recent Business Day containing all information
necessary to enable the successor Servicer to service the Receivables and the
Other Conveyed Property. All reasonable costs and expenses (including reasonable
attorneys’ fees) incurred in connection with transferring any Timeshare Loan
Servicing Files to the successor Servicer and amending this Agreement to reflect
such succession as Servicer pursuant to this Section
10.2
shall be
paid by the predecessor Servicer upon presentation of reasonable documentation
of such costs and expenses. In addition, any successor Servicer shall be
entitled to payment from the immediate predecessor Servicer for reasonable
transition expenses incurred in connection with acting as successor Servicer,
and to the extent not so paid, such payment shall be made pursuant to
Section
5.7
hereof.
Upon receipt of notice of the occurrence of a Servicer Termination Event, the
Trustee shall give notice thereof to the Rating Agency and the Noteholder.
If
requested by the Noteholder, the successor Servicer shall terminate the Lockbox
Agreements and direct the Obligors to make all payments under the Receivables
and the Other Conveyed Property directly to the successor Servicer (in which
event the successor Servicer shall process such payments in accordance with
Section
4.2(e)),
or to
a lockbox established by the successor Servicer at the direction of the
Noteholder, at the successor Servicer’s expense. The terminated Servicer shall
grant the Trustee, the successor Servicer and the Noteholder reasonable access
to the terminated Servicer’s premises at the terminated Servicer’s
expense.
43
Section
10.3 Appointment
of Successor.
(a) On
and
after the time (i) the Servicer receives a notice of termination pursuant to
Section
10.2,
(ii)
the Servicer resigns pursuant to Section
9.6,
or
(iii) the Servicer is automatically terminated upon the occurrence of a Servicer
Termination Event described in Section
10.1(d),
the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement as follows: (A) in the case of termination pursuant to
Section
10.2,
the
predecessor Servicer shall only perform its functions as Servicer until the
date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice; (B) in the case of
expiration and non-renewal of the term of the Servicer upon the expiration
of
such term, or resignation of the Servicer, the predecessor Servicer shall only
perform its functions as Servicer until the later of (x) the date 45 days from
the delivery to the Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement
and
(y) the date upon which the predecessor Servicer shall become unable to act
as
Servicer, as specified in the notice of resignation and accompanying Opinion
of
Counsel; and (C) in the case of automatic termination of the Servicer, the
predecessor Servicer shall only perform its functions as Servicer until a
successor Servicer has assumed such duties, obligations, and liabilities;
provided,
however,
that in
no case shall the Servicer be relieved of its duties, obligations and
liabilities as Servicer until a successor Servicer has assumed such duties,
obligations and liabilities. Notwithstanding the preceding sentence, if the
Backup Servicer or any other successor Servicer shall not have assumed the
duties, obligations and liabilities of Servicer within 45 days of the
termination or resignation described in this Section
10.3,
the
Servicer may petition a court of competent jurisdiction to appoint any Eligible
Servicer as the successor to the Servicer. Pending appointment as successor
Servicer, Backup Servicer (or such other Person as shall have been appointed
by
the Noteholder) shall act as successor Servicer unless it is legally unable
to
do so, in which event the outgoing Servicer shall continue to act as Servicer
until a successor has been appointed and accepted such appointment. In the
event
of termination of the Servicer, Xxxxx Fargo Bank, National Association, as
the
Backup Servicer, shall assume the obligations of Servicer hereunder on the
date
specified in such written notice (the “Assumption Date”) pursuant to an
assumption agreement in form and substance acceptable to the Noteholder or,
in
the event that the Noteholder shall have determined that a Person other than
the
Backup Servicer shall be the successor Servicer in accordance with Section
10.2,
on the
date of the execution of a written assumption agreement by such Person to serve
as successor Servicer. Notwithstanding the Backup Servicer’s assumption of, and
its agreement to perform and observe, all duties, responsibilities and
obligations of the Seller as Servicer, or any successor Servicer, under this
Agreement arising on and after the Assumption Date, the Backup Servicer shall
not: (i) be deemed to have assumed or to become liable for, or otherwise have
any liability for any duties, responsibilities, obligations or liabilities
of
(A) the Seller or any other Servicer arising on or before the Assumption Date,
whether provided for by the terms of this Agreement, arising by operation of
law
or otherwise, including, without limitation, any liability for any duties,
responsibilities, obligations or liabilities of the Seller or any other Servicer
arising on or before the Assumption Date under Section
4.7
or
9.2
of this
Agreement, regardless of when the liability, duty, responsibility or obligation
of the Seller or any other Servicer therefor arose, whether provided by the
terms of this Agreement, arising by operation of law or otherwise, or (B) under
Section
9.2(a)(ii),
(iv)
or
(v);
(ii) be
obligated to perform any repurchase or advancing obligations, if any, of the
Servicer; (iii) be obligated to pay any taxes required to be paid by the
predecessor Servicer; or (iv) be obligated to pay any of the fees and expenses
of any other party involved in the transaction, other than any fees or expenses
incurred in connection with its own negligence, willful misfeasance or bad
faith. Notwithstanding the above, if the Backup Servicer shall be legally unable
or unwilling to act as Servicer, the Backup Servicer, the Trustee or the
Noteholder may petition a court of competent jurisdiction to appoint any
Eligible Servicer as the successor to the Servicer. Pending appointment pursuant
to the preceding sentence, the Backup Servicer shall act as successor Servicer
unless it is legally unable to do so, in which event the outgoing Servicer
shall
continue to act as Servicer until a successor has been appointed and accepted
such appointment. Subject to Section
9.6,
no
provision of this Agreement shall be construed as relieving the Backup Servicer
of its obligation to succeed as successor Servicer upon the termination of
the
Servicer pursuant to Section
10.2
or the
resignation of the Servicer pursuant to Section
9.6.
If upon
the termination of the Servicer pursuant to Section
10.2
or the
resignation of the Servicer pursuant to Section
9.6,
the
Noteholder appoints a successor Servicer other than the Backup Servicer, the
Backup Servicer shall not be relieved of its duties as Backup Servicer
hereunder.
(b) Any
successor Servicer shall be entitled to such compensation (whether payable
out
of the Collection Account or otherwise) as the Servicer would have been entitled
to under this Agreement if the Servicer had not resigned or been terminated
hereunder.
44
Section
10.4 Notification
of Termination and Appointment.
Upon
any
termination of, or appointment of a successor to, the Servicer, the Trustee
shall give prompt written notice thereof to the Noteholder and to the Rating
Agency.
Section
10.5 Waiver
of Past Defaults.
The
Noteholder may waive in writing any default by the Servicer in the performance
of its obligations under this Agreement and the consequences thereof. Upon
any
such waiver of a past default, such default shall cease to exist, and any
Servicer Termination Event arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any
subsequent or other default or impair any right consequent thereto.
Section
10.6 Action
Upon Certain Failures of the Servicer.
In
the
event that the Trustee shall have Knowledge of any failure of the Servicer
specified in Section
10.1
which
would give rise to a right of termination under such Section upon the Servicer’s
failure to remedy the same after notice, the Trustee shall give prompt written
notice thereof to the Servicer and the Noteholder. For all purposes of this
Agreement (including, without limitation, Section
6.2(b)
and this
Section
10.6),
the
Trustee shall not be deemed to have Knowledge of any failure of the Servicer
as
specified in Sections
10.1(c)
through
(n)
unless
notified thereof in writing by the Servicer or the Noteholder. The Trustee
shall
be under no duty or obligation to investigate or inquire as to any potential
failure of the Servicer specified in Section
10.1.
Section
10.7 Continued
Errors.
Notwithstanding
anything contained herein to the contrary, if the Backup Servicer becomes
successor Servicer it is authorized to accept and rely on all of the accounting,
records (including computer records) and work of the prior Servicer relating
to
the Receivables (collectively, the “Predecessor Servicer Work Product”) without
any audit or other examination thereof, and the Backup Servicer as successor
Servicer shall have no duty, responsibility, obligation or liability for the
acts and omissions of the prior Servicer. If any error, inaccuracy, omission
or
incorrect or non-standard practice or procedure (collectively, “Errors”) exist
in any Predecessor Servicer Work Product and such Errors make it materially
more
difficult to service or should cause or materially contribute to the Backup
Servicer as successor Servicer making or continuing any Errors (collectively,
“Continued Errors”), the Backup Servicer as successor Servicer shall have no
duty or responsibility, for such Continued Errors; provided, however, that
the
Backup Servicer as successor Servicer agrees to use its best efforts to prevent
further Continued Errors. In the event that the Backup Servicer as successor
Servicer becomes aware of Errors or Continued Errors, the Backup Servicer as
successor Servicer shall, with the prior consent of the Noteholder use its
best
efforts to reconstruct and reconcile such data as is commercially reasonable
to
correct such Errors and Continued Errors and to prevent future Continued Errors.
The Backup Servicer as successor Servicer shall be entitled to recover its
costs
thereby expended in accordance with Section
5.7(a)(iv)
hereof.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.1 Amendment.
(a) This
Agreement may not be waived, amended or otherwise modified except in a writing
signed by the parties hereto and the Noteholder.
(b) Promptly
after the execution of any such amendment or waiver, the Trustee shall furnish
written notification of the substance of such amendment or waiver to the Rating
Agency.
(c) Prior
to
the execution of any amendment, waiver or consent to this Agreement the Trustee
shall be entitled to receive and rely upon (i) an Opinion of Counsel stating
that the execution of such amendment or waiver is authorized or permitted by
this Agreement and (ii) if requested by the Noteholder, the Opinion of Counsel
referred to in Section
11.2(i).
(d) The
Trustee may, but shall not be obligated to, enter into any such amendment or
waiver which affects the Trustee’s own rights, duties or immunities under this
Agreement or otherwise.
45
(e) Upon
the
termination of the Seller as Servicer and the appointment of the Backup Servicer
as Servicer hereunder, all amendments to the terms of this Agreement specified
in an assumption agreement shall become a part of this Agreement, as if this
Agreement was amended to reflect such changes in accordance with this
Section
11.1.
Section
11.2 Protection
of Title to Property.
(a) The
Seller, the Purchaser or Servicer or each of them shall authorize, execute
(if
necessary) and file such financing statements and cause to be authorized,
executed (if necessary) and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Purchaser and the interests of the Trustee
in
the Receivables, the Other Conveyed Property and in the proceeds thereof. The
Seller shall deliver (or cause to be delivered) to the Noteholder and the
Trustee file-stamped copies of, or filing receipts for, any document filed
as
provided above, as soon as available following such filing.
(b) None
of
the Seller, the Purchaser or the Servicer shall change its name, identity,
jurisdiction of organization, form of organization or corporate structure in
any
manner that would, could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-506(a) of the UCC, unless it shall have given
the Noteholder and the Trustee at least thirty days’ prior written notice
thereof and shall have promptly filed appropriate amendments to all previously
filed financing statements or continuation statements. Promptly upon such
filing, the Purchaser, the Seller or the Servicer, as the case may be, shall
deliver an Opinion of Counsel to the Trustee and the Noteholder, in form and
substance reasonably satisfactory to the Noteholder, stating either (A) all
financing statements and continuation statements have been authorized, executed
and filed that are necessary fully to preserve and protect the interest of
the
Purchaser and the Trustee in the Receivables and the Other Conveyed Property,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest.
(c) Each
of
the Seller, the Purchaser and the Servicer shall have an obligation to give
the
Noteholder and the Trustee at least 60 days’ prior written notice of any
relocation of its chief executive office or a change in its jurisdiction of
organization if, as a result of such relocation or change, 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 and shall promptly file any such amendment or new financing statement.
The Servicer shall at all times be organized under the laws of the United States
(or any State thereof), maintain each office from which it shall service
Receivables and Other Conveyed Property, and its chief executive office and
jurisdiction of organization, within the United States of America.
(d) The
Servicer shall maintain accounts and records as to each Receivable and Other
Conveyed Property accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable and Other Conveyed
Property, including payments and recoveries made and payments owing (and the
nature of each) and any Liquidation Expenses or other expenses incurred in
respect of any Receivable and Other Conveyed Property (and the nature of each)
and (ii) reconciliation between payments or recoveries on (or with respect
to)
each Receivable and Other Conveyed Property and the amounts from time to time
deposited in the Collection Account in respect of such Receivable and Other
Conveyed Property.
(e) The
Servicer shall maintain its computer systems so that, from and after the time
of
sale under this Agreement of the Receivables and Other Conveyed Property to
the
Purchaser, the Servicer’s master computer records (including any backup
archives) that refer to a Receivable or Other Conveyed Property shall indicate
clearly the interest of the Purchaser in such Receivable and Other Conveyed
Property and that such Receivable and Other Conveyed Property is owned by the
Purchaser and pledged to the Trustee. Indication of the Purchaser’s and the
Trustee’s interest in a Receivable and the related Other Conveyed Property shall
be deleted from or modified on the Servicer’s computer systems when, and only
when, such Receivable shall have been paid in full or repurchased.
46
(f) If
at any
time the Seller or the Servicer shall propose to sell, grant a security interest
in or otherwise transfer any interest in Receivables or Other Conveyed Property
to any prospective purchaser, lender or other transferee, the Servicer shall
give to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if
they
shall refer in any manner whatsoever to any Receivable or Other Conveyed
Property, shall indicate clearly that such Receivable and the related Other
Conveyed Property has been sold and is owned by the Purchaser and pledged to
the
Trustee.
(g) The
Servicer shall permit the Trustee, the Backup Servicer and the Noteholder and
their respective agents upon reasonable notice and at any time during normal
business hours to inspect, audit, and make copies of and abstracts from the
Servicer’s records regarding any Receivable and the related Other Conveyed
Property.
(h) Upon
request, the Servicer shall furnish to the Noteholder or to the Trustee, within
five Business Days, a list of all Receivables (by contract number and name
of
Obligor) then pledged to the Trustee, together with a reconciliation of such
list to the Schedule of Receivables and to each of the Servicer’s Certificates
furnished before such request indicating removal of Receivables from the lien
of
the Indenture.
(i) The
Servicer shall deliver to the Noteholder and the Trustee:
(1) promptly
after the execution and delivery of this Agreement and, if required pursuant
to
Section
11.1,
of each
amendment, waiver, or consent, an Opinion of Counsel, in form and substance
satisfactory to the Noteholder, stating that in the opinion of such counsel,
either (A) all financing statements and continuation statements have been
authorized, executed and filed that are necessary fully to preserve and protect
the interest of the Purchaser and the Trustee in the Receivables and the Opinion
Collateral and reciting the details of such filings or referring to a prior
Opinion of Counsel in which such details are given, or (B) no such action shall
be necessary to preserve and protect such interest; and
(2) as
a
condition precedent to the renewal of the Indenture by the Noteholder pursuant
to Section
2.3
thereof,
an Opinion of Counsel stating that, in the opinion of such counsel, either
(a)
all financing statements and continuation statements have been authorized,
executed and filed that are necessary fully to preserve and protect the interest
of the Purchaser and the Trustee in the Receivables and the Opinion Collateral,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (b) no such action shall be
necessary to preserve and protect such interest.
Each
Opinion of Counsel referred to in clause (1) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect such interest.
Section
11.3 Notices.
All
demands, notices and communications upon or to the Seller, the Backup Servicer,
the Servicer, the Trustee or the Rating Agency under this Agreement shall be
in
writing, via facsimile (and confirmed by telephone in the case of facsimiles
to
Seller, Servicer and Purchaser), personally delivered, or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given
upon
receipt (a) in the case of the Seller, to Silverleaf Resorts, Inc., 0000 Xxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxx, Chief
Executive Officer, Telecopy: (000) 000-0000; Telephone: (000) 000-0000, ext.
2275; (b) in the case of the Servicer, to Silverleaf Resorts, Inc., 0000 Xxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxx, Chief
Executive Officer, Telecopy: (000) 000-0000; Telephone: (000) 000-0000, ext.
2275; (c) in the case of the Purchaser, to Silverleaf Finance IV, LLC, 0000
Xxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxxx X. Xxxxx,
Xx., Chief Financial Officer, Telecopy: (000) 000-0000; Telephone: (000)
000-0000, ext. 3990; (d) in the case of the Trustee or the Backup Servicer
at
the Corporate Trust Office; Telecopy: (000) 000-0000; (e) in the case of the
Noteholder, to UBS Real Estate Securities Inc., 1285 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Telecopy:
(000)000-0000; Telephone: (000)000-0000; and (f) in the case of Moody’s, to
Xxxxx’x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Telecopy: (000) 000-0000. Any notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Noteholder shall receive such
notice.
47
Section
11.4 Assignment.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Notwithstanding anything
to the contrary contained herein, except as provided in Sections
8.4,
9.3
and this
Section
11.4
and as
provided in the provisions of this Agreement concerning the resignation of
the
Servicer, this Agreement may not be assigned by the Purchaser, the Seller or
the
Servicer without the prior written consent of the Trustee, the Backup Servicer
and the Noteholder; provided that the Purchaser will grant all of its right,
title and interest herein to the Trustee for the benefit of the
Noteholder.
Section
11.5 Limitations
on Rights of Others.
The
provisions of this Agreement are solely for the benefit of the parties hereto
and for the benefit of the Noteholder or its assignee, as a third-party
beneficiary. Nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy
or
claim in the Collateral or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section
11.6 Severability.
Any
provision of this Agreement that is 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
11.7 Separate
Counterparts.
This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
Section
11.8 Headings.
The
headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section
11.9 Governing
Law.
HIS
AGREEMENT (OTHER THAN SECTIONS 2.1(a) AND 2.2 HEREOF) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTIONS 2.1(a) AND 2.2 OF THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER SUCH
SECTIONS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
11.10 Assignment
to Trustee.
The
Seller hereby acknowledges and consents to any mortgage, pledge, assignment
and
grant of a security interest by the Purchaser to the Trustee pursuant to the
Indenture for the benefit of the Noteholder of all right, title and interest
of
the Purchaser in, to and under the Receivables and Other Conveyed Property
and/or the assignment of any or all of the Purchaser’s rights and obligations
hereunder to the Trustee.
Section
11.11 Nonpetition
Covenants.
Notwithstanding
any prior termination of this Agreement, the Servicer and the Seller shall
not,
prior to the date which is one year and one day after the Final Scheduled
Settlement Date, acquiesce, petition or otherwise invoke or cause the Purchaser
to invoke the process of any court or government authority for the purpose
of
commencing or sustaining a case against the Purchaser under any federal or
state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Purchaser or any substantial part of its property, or ordering the winding
up or
liquidation of the affairs of the Purchaser.
48
Section
11.12 Limitation
of Liability of Trustee.
Notwithstanding
anything contained herein to the contrary, this Agreement has been executed
and
delivered by Xxxxx Fargo Bank, National Association, not in its individual
capacity but solely as Trustee and Backup Servicer and in no event shall Xxxxx
Fargo Bank, National Association, have any liability for the representations,
warranties, covenants, agreements or other obligations of the Purchaser
hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Purchaser.
Section
11.13 Independence
of the Servicer.
For
all
purposes of this Agreement, the Servicer shall be an independent contractor
and
shall not be subject to the supervision of the Purchaser, the Trustee and Backup
Servicer with respect to the manner in which it accomplishes the performance
of
its obligations hereunder. Unless expressly authorized by this Agreement, the
Servicer shall have no authority to act for or represent the Purchaser in any
way and shall not otherwise be deemed an agent of the Purchaser.
Section
11.14 No
Joint Venture.
Nothing
contained in this Agreement (i) shall constitute the Servicer and the Purchaser
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
Section
11.15 Intention
of Parties Regarding Delaware Securitization Act.
It
is the
intention of the Purchaser and the Seller that the transfer and assignment
of
the property contemplated by Section
2.1(a)
of this
Agreement shall constitute a sale of property from the Seller to the Purchaser,
conveying good title thereto free and clear of any liens, and the beneficial
interest in and title to such assets shall not be part of the Seller’s estate in
the event of the filing of a bankruptcy petition by or against the Seller under
any bankruptcy or similar law. In addition, for purposes of complying with
the
requirements of the Asset-Backed Securities Facilitation Act of the State of
Delaware, 6 Del. C. § 2701A, et seq. (the “Securitization Act”), each of the
parties hereto hereby agrees that:
(a) any
property, assets or rights purported to be transferred, in whole or in part,
by
the Seller to the Purchaser pursuant to this Agreement shall be deemed to no
longer be the property, assets or rights of the Seller;
(b) none
of
the Seller, its creditors or, in any insolvency proceeding with respect to
the
Seller or the Seller’s property, a bankruptcy trustee, receiver, debtor, debtor
in possession or similar person, to the extent the issue is governed by Delaware
law, shall have any rights, legal or equitable, whatsoever to reacquire (except
pursuant to a provision of this Agreement), reclaim, recover, repudiate,
disaffirm, redeem or recharacterize as property of the Seller any property,
assets or rights purported to be transferred, in whole or in part, by the Seller
to the Purchaser pursuant to this Agreement;
(c) in
the
event of a bankruptcy, receivership or other insolvency proceeding with respect
to the Seller or the Seller’s property, to the extent the issue is governed by
Delaware law, such property, assets and rights shall not be deemed to be part
of
the Seller’s property, assets, rights or estate; and
(d) the
transaction contemplated by this Agreement shall constitute a “securitization
transaction” as such term is used in the Securitization Act.
Section
11.16 Special
Supplemental Agreement.
If
any
party to this Agreement is unable to sign any amendment or supplement due to
its
dissolution, winding up or comparable circumstances, then the consent of the
Noteholder shall be sufficient to amend this Agreement without such party’s
signature.
Section
11.17 Limited
Recourse.
Notwithstanding
anything to the contrary contained in this Agreement, the obligations of the
Purchaser hereunder are solely the obligations of the Purchaser, and shall
be
payable by the Purchaser, solely as provided herein. The Purchaser shall only
be
required to pay (a) any fees, expenses, indemnities or other liabilities that
it
may incur hereunder (i) from funds available pursuant to, and in accordance
with, the payment priorities set forth in Section
5.7(a)
and (ii)
only to the extent the Purchaser receives additional funds for such purposes
or
to the extent it has additional funds available (other than funds described
in
the preceding clause (i)) that would be in excess of amounts that would be
necessary to pay the debt and other obligations of the Purchaser incurred in
accordance with the Purchaser’s limited liability company agreement and all
financing documents to which the Purchaser is a party. In addition, no amount
owing by the Purchaser hereunder in excess of the liabilities that it is
required to pay in accordance with the preceding sentence shall constitute
a
“claim” (as defined in Section 101(5) of the Bankruptcy Code) against it.
49
Section
11.18 Acknowledgement
of Roles.
The
parties expressly acknowledge and consent to Xxxxx Fargo Bank, National
Association acting in the multiple capacities of Backup Servicer and Trustee.
The parties agree that Xxxxx Fargo Bank, National Association in such multiple
capacities shall not be subject to any claim, defense or liability arising
from
its performance in any such capacity based on conflict of interest principles,
duty of loyalty principles or other breach of fiduciary duties to the extent
that any such conflict or breach arises from the performance by Xxxxx Fargo
Bank, National Association of any other such capacity or capacities in
accordance with this Agreement or any other Basic Documents to which it is
a
party.
Section
11.19 Termination.
The
respective obligations and responsibilities of the Seller, the Purchaser, the
Servicer, the Backup Servicer, and the Trustee created hereby shall terminate
on
the Termination Date; provided, however, in any case there shall be delivered
to
the Trustee and the Noteholder an Opinion of Counsel that all applicable
preference periods under federal, state and local bankruptcy, insolvency and
similar laws have expired with respect to the payments pursuant to this
Section
11.19.
The
Servicer shall promptly notify the Trustee, the Seller, the Issuer, each Rating
Agency and the Noteholder of any prospective termination pursuant to this
Section
11.19.
Section
11.20 Submission
to Jurisdiction.
ANY
LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF
OR
ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE
OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
Section
11.21 Waiver
of Trial by Jury.
THE
PARTIES HERETO EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING
OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST THE OTHER PARTY,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES
HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY
A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION
OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS,
IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section
11.22 Process
Agent.
Each
of
Purchaser, Seller, Servicer and Trustee agrees that the process by which any
proceedings in the State of New York are begun may be served on it by being
delivered by certified mail at the chief executive office or corporate trust
office, as applicable, or at its registered office for the time being. If such
person is not or ceases to be effectively appointed to accept service of process
on the Purchaser’s, Seller’s, Servicer’s or Trustee’s behalf, the Purchaser,
Seller, Servicer or Trustee, as applicable, shall, on the written demand of
the
process agent, appoint a further person in the State of New York to accept
service of process on its behalf and, failing such appointment within 15 days,
the process agent shall be entitled to appoint such a person by written notice
to the Purchaser, Seller, Servicer or Trustee, as applicable. Nothing in this
sub-clause shall affect the right of the process agent to serve process in
any
other manner permitted by law.
Section
11.23 No
Set-Off.
Each
of
the Seller and Servicer agrees that it shall have no right of set-off or
banker’s lien against, and no right to otherwise deduct from, any funds held in
any account described herein or in the Basic Documents for any amount owed
to it
by the Seller, Servicer or Noteholder.
Section
11.24 No
Waiver; Cumulative Remedies.
No
failure to exercise and no delay in exercising any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single
or
partial exercise of any right, remedy, power 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
11.25 Merger
and Integration.
Except
as
specifically stated otherwise herein, this Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.
50
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
day and the year first above written.
SILVERLEAF FINANCE IV, LLC, | ||
a Delaware limited liability company, as Purchaser | ||
|
|
|
By: | /S/ XXXXX X. XXXXX, XX. | |
Name: Xxxxx X. Xxxxx, Xx. | ||
Title: Vice President, Treasurer & Chief Financial Officer |
SILVERLEAF RESORTS, INC., | ||
a Texas corporation, as Seller | ||
|
|
|
By: | /S/ XXXXX X. XXXXX, XX. | |
Name: Xxxxx X. Xxxxx, Xx. | ||
Title: Chief Financial Officer |
SILVERLEAF RESORTS, INC., | ||
a Texas corporation, as Servicer | ||
|
|
|
By: | /S/ XXXXX X. XXXXX, XX. | |
Name: Xxxxx X. Xxxxx, Xx. | ||
Title: Chief Financial Officer |
XXXXX FARGO BANK, NATIONAL ASSOCIATION, | ||
not in its individual capacity, but solely as Backup Servicer, | ||
Trustee and Account Intermediary | ||
|
|
|
By: | /S/ XXX XXXXXX | |
Name: Xxx Xxxxxx | ||
Title: Assistant Vice President |
Agreed
and accepted:
UBS
REAL
ESTATE SECURITIES INC.
By:
Mostafiz
Shahmohammed
Title:
Executive
Director
By:
Xxxxxxxx
Xxxxxxxxxx
Title:
Director
51
List
of
Schedule and Exhibits to Agreement not Filed Herewith:
Schedule
B--Location for Delivery of Timeshare Loan Files
Schedule
C--Form of Trial Balance Report/Delinquency Report
Exhibit
A--Form of Servicer’s Certificate
Exhibit
B--Eligibility Criteria
Exhibit
C--Form of Assignment
Exhibit
D--Form of Addition Notice
Exhibit
E--ACH Form
Exhibit
F--List of Silverleaf Executive Management
Exhibit
G--Record Layout
Exhibit
H--Servicer’s Monthly Representation Certificate
Exhibit
I--Escrow Agent Wiring Instructions
Exhibit
J--Form of Waiver Letter
Exhibit
K--Credit Policy/Collection Policy
Exhibit
L--Form of Notice of Non-Titled Loans
52