EXHIBIT 10.44
RECEIVABLES PURCHASE AGREEMENT
among
TRI FUNDING II, INC.
("TRI II")
and
TRI FUNDING COMPANY I, L.L.C.
("TRI I")
and
TRENDWEST RESORTS, INC.
("Trendwest")
and
TW HOLDINGS, INC.
("TW HOLDINGS")
and
TW HOLDINGS II, INC.
("XX XX")
and
TRI FUNDING III, INC.
(the "Issuer")
Dated as of August 1, 1999
TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE 1 DEFINITIONS............................................................................2
Section 1.01. Defined Terms..........................................................................2
ARTICLE 2 ACQUISITION OF ASSETS..................................................................4
Section 2.01. [Reserved.]............................................................................4
Section 2.02. Initial Acquisition....................................................................4
Section 2.03. Subsequent Acquisitions................................................................4
Section 2.04. Delivery of Contracts; Filing of Financing Statements..................................4
Section 2.05. Servicing of Contracts and Related Vacation Credits....................................5
Section 2.06. Review of Contracts....................................................................5
ARTICLE 3 REPRESENTATIONS AND WARRANTEES.........................................................6
Section 3.01. Representations and Warranties of the Sellers..........................................6
Section 3.02. Representations and Warranties the Issuer.............................................14
Section 3.03. Purchase or Substitution Required upon Breach of Certain
Representations and Warranties....................................................15
Section 3.04. Requirements for Purchase or Substitution of Contracts................................16
ARTICLE 4 SELLER COVENANTS......................................................................17
Section 4.01. Seller Covenants......................................................................17
Section 4.02. Issuer Covenants......................................................................21
Section 4.03. Assignment of Assets..................................................................22
ARTICLE 5 CONDITIONS PRECEDENT..................................................................22
Section 5.01. Conditions to Issuer's Initial Obligations............................................22
Section 5.02. Conditions to the Sellers'Obligations.................................................23
ARTICLE 6 TERM AND TERMINATION..................................................................24
Section 6.01. Term..................................................................................24
Section 6.02. Default by Sellers....................................................................24
ARTICLE 7 MISCELLANEOUS.........................................................................24
Section 7.01. Amendments............................................................................24
Section 7.02. Governing Law.........................................................................24
Section 7.03. Notices...............................................................................25
Section 7.04. Separability Clause...................................................................25
Section 7.05. Assignment............................................................................25
Section 7.06. Further Assurances....................................................................25
Section 7.07. No Waivers; Cumulative Remedies.......................................................25
Section 7.08. Binding Effect; Third Party Beneficiaries.............................................26
Section 7.09. Set-Off...............................................................................26
Section 7.10. Sellers Will Not Institute Insolvency Proceedings.....................................26
Section 7.11. Counterparts..........................................................................26
Signature Page...................................................................................................27
ANNEX A -- FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS AND UPGRADE CONTRACTs
EXHIBIT A -- FORM OF CONTRACt
EXHIBIT B -- FORM OF ASSET ASSIGNMENt
EXHIBIT C -- FORM OF SUBSEQUENT ASSET ASSIGNMENt
EXHIBIT D -- FORM OF SUBORDINATED NOTe
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of August 1, 1999 (this
"Agreement"), by and among TRI Funding II, Inc., a Delaware corporation (herein,
together with its permitted successors and assigns, "TRI II"), TRI Funding
Company I, L.L.C., a Delaware limited liability company (herein, together with
its permitted successors and assigns, "TRI I"), Trendwest Resorts, Inc., an
Oregon corporation (herein, together with its permitted successors and assigns,
"Trendwest"), TW Holdings II, Inc., a Delaware corporation (herein, together
with its permitted successors and assigns, "XX XX"), TW Holdings, Inc., a Nevada
corporation (herein, together with its permitted successors and assigns, "TW
Holdings"), and TRI Funding III, Inc., a Delaware corporation (herein, together
with its permitted successors and assigns, the "Issuer").
PRELIMINARY STATEMENT
The Issuer has entered into an Indenture, dated as of August 1, 1999
(as amended and supplemented from time to time, the "Indenture"), with Norwest
Bank Minnesota, National Association, as trustee (herein, together with its
permitted successors and assigns, the "Trustee"), and Trendwest, as servicer
(herein, together with its permitted successors and assigns, the "Servicer"),
pursuant to which the Issuer intends to issue its notes, as provided in the
Indenture (the "Notes"), limited as to principal amount.
In furtherance thereof, TRI I, TRI II, Trendwest, XX XX and TW Holdings
(collectively, the "Sellers") and the Issuer have entered into this Agreement to
provide for, among other things, the acquisition and purchase by the Issuer from
time to time of all of the right, title and interest in and to certain Assets.
The Issuer will be pledging and granting to the Trustee a security interest in
the Issuer's interest in the Assets, as security for the Notes. As a
precondition to the effectiveness of this Agreement, the Issuer, the Trustee and
the Servicer will enter into the Servicing Agreement, dated as of August 1, 1999
(as amended and supplemented from time to time, the "Servicing Agreement"), to
provide for the administration and servicing of the Assets. In connection with
the issuance of the Notes and pursuant to this Agreement, Trendwest, XX XX and
TW Holdings, on the Closing Date, and Trendwest, TRI I and TRI II, from time to
time, will sell the Assets to the Issuer. Such sales shall be effected on the
Closing Date by this Agreement and an Asset Assignment (as defined herein) among
Trendwest, XX XX, TW Holdings and the Issuer, and on each Subsequent Transfer
Date by this Agreement and the applicable Subsequent Asset Assignment (as
defined herein) among Trendwest, TRI I and TRI II, as applicable, and the
Issuer, and the list of Contracts so conveyed shall be listed on Schedule I to
the Asset Assignment or the applicable Subsequent Asset Assignment.
In order to further secure the Notes, the Issuer subsequently will
grant to the Trustee pursuant to the Indenture, a security interest in, among
other things, the Issuer's rights derived under this Agreement, and the Sellers
agree that all representations, warranties, covenants and
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agreements made by them in this Agreement with respect to the Assets shall also
be for the benefit and security of the Issuer and the Trustee and all holders
from time to time of the Notes. In consideration for the Assets and their
representations, warranties, covenants and other agreements under this
Agreement, on the Closing Date, TW Holdings and XX XX will receive cash, and
Trendwest will receive from the Issuer cash, a Subordinated Note (as defined
herein) and all of the common stock of the Issuer. On each Subsequent Transfer
Date, TRI I and TRI II, as applicable, will receive cash, and Trendwest will
receive cash and increase in the principal amount outstanding of the
Subordinated Note in exchange for the Assets sold by such Person on such date.
ARTICLE 1
DEFINITIONS
Section 1.01. Defined Terms. For purposes of this Agreement the
following terms shall have the meanings specified herein. Capitalized terms used
herein but not otherwise defined shall have the respective meanings assigned to
such terms in the Indenture.
"Acquisition Consideration" shall mean, with respect to any Contracts
and the related Receivables, the cash which shall be paid by the Issuer to the
Sellers on the Closing Date, and, with respect to Trendwest, (i) on the Closing
Date, all of the stock of the Issuer, the Subordinated Note and cash and (ii) on
each Subsequent Transfer Date, cash.
"Asset Assignment" shall mean the Asset Assignment, substantially in
the form attached hereto as Exhibit B, which shall be entered into in connection
with the conveyance of Assets from the Sellers to the Issuer on the Closing
Date.
"Assets" shall mean all of the Sellers' right, title and interest in
and to (a) the Contracts and the related Receivables, including the proceeds of
the Contracts and the related Receivables and all payments received on or with
respect to the Contracts and the related Receivables and due after the related
Cut-Off Date, (b) the Contract Files and the Collateral Agent Files, (c) the
Sellers' rights and interests in the related Vacation Credits, (d) the Servicing
Charges with respect to the Contracts and (e) all income and proceeds of the
foregoing or relating thereto.
"Contract File" shall mean, with respect to each Contract, the
following documents:
(i) a copy of the Contract;
(ii) notice of assignment; and
(iii) any other documents or papers relating to servicing the
Receivables.
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"Collateral Agent" shall mean Sage Systems, Inc. and its permitted
successors and assigns.
"Collateral Agent File" shall mean, with respect to each Contract, the
following documents:
(i) the original Contract; and
(ii) notice of assignment.
"Cut-Off Date" shall have the meaning set forth in the Indenture.
"Electronic Ledgers" shall mean the electronic master records of all
contracts of the Sellers or the Issuer similar to and including the Contracts.
"Eligible Contract" shall mean a Contract that satisfies the selection
criteria set forth in Section 3.01(a) hereof and on which there has been made at
least two scheduled payments.
"Indenture" shall mean the Indenture, dated as of August 1, 1999, by
and among the Issuer, the Trustee and the Servicer, as amended and supplemented
from time to time.
"Issuer Address" shall mean 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx
00000.
"Seller Address" with respect to Trendwest shall mean 0000 Xxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxx 00000, with respect to TW Holdings shall mean 000 X.
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxx, Xxxxxx 00000, with respect to the TRI I shall
mean 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxx 00000, with respect to TRI
II shall mean 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxx 00000 and with
respect to XX XX shall mean 0000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000.
"Subsequent Asset Assignment" shall mean each Subsequent Asset
Assignment, substantially in the form attached hereto as Exhibit C, which shall
be entered to in connection with the conveyance of Assets from one or more of
Trendwest, TRI I and TRI II, as applicable, to the Issuer on each Subsequent
Transfer Date.
"Subsequent Contract" shall mean a Contract that a Seller contributes
to the Issuer pursuant to this Agreement on the related Subsequent Transfer Date
during the Prefunding Period and identified on Schedule I to the related
Subsequent Asset Assignment.
"Subsequent Transfer Date" shall mean any Business Day during the
Prefunding Period on which the applicable Sellers contribute Assets to the
Issuer pursuant to this Agreement and the related Subsequent Asset Assignment.
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"Substitute Contract" shall have the meaning set forth in Section
3.04(b) hereof.
"Substitute Receivable" shall mean the Receivable related to a
Substitute Contract.
"Substitution Criterion" shall have the meaning set forth in Section
3.04(b) hereof.
"Upgrade" shall have the meaning set forth in the Indenture.
"Upgrade Contract" shall have the meaning set forth in the Indenture.
ARTICLE 2
ACQUISITION OF ASSETS
Section 2.01. [Reserved.]
Section 2.02. Initial Acquisition. In return for the Acquisition
Consideration with respect to the Assets transferred on the Closing Date and
other rights created by this Agreement, each of Trendwest, XX XX and TW Holdings
hereby transfers, assigns, sells and grants to the Issuer, without recourse
except as provided in Section 3.03 of this Agreement, on the Closing Date, any
and all of such Seller's respective right, title and interest in and to all of
such Assets relating to the Contracts set forth on Schedule I to the Asset
Assignment. Each of the Sellers hereby acknowledges that its transfer of such
Assets to the Issuer is absolute and irrevocable, without reservation or
retention of any interest whatsoever by such Seller.
Section 2.03. Subsequent Acquisitions. TRI I, TRI II and Trendwest in
exchange for cash shall transfer, assign, sell and grant to the Issuer, without
recourse except as provided in Section 3.03 of this Agreement, on each
Subsequent Transfer Date, any and all of such Seller's right, title and interest
in and to all of the Assets relating to the Contracts set forth on Schedule I to
the related Subsequent Asset Assignments. Each of Trendwest, TRI I and TRI II
acknowledges that its transfer of such Assets to the Issuer will be absolute and
irrevocable, without reservation or retention of any interest whatsoever by it.
Section 2.04. Delivery of Contracts; Filing of Financing Statements. (a)
In connection with the Issuer's acquisition of the Assets, Trendwest, on behalf
of the Sellers and the Issuer, shall deliver, or cause the delivery of, the
original Contracts to the Collateral Agent so that the Collateral Agent may
retain possession, as agent of the Trustee thereof as provided in the
Transaction Documents. In addition, the Sellers agree to execute, and Trendwest
agrees to
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record and file prior to the Closing Date or the Subsequent Transfer Date, as
the case may be, at its own expense, financing statements (and thereafter timely
continuation statements with respect to such financing statements) with respect
to the Assets transferred on such date, in accordance with Section 3.01(a)(viii)
and Section 4.01(c) hereof.
(b) In connection with such acquisition, each of the Sellers shall
promptly, at its own expense, cause any Electronic Ledger maintained by it to be
marked to show which Assets have been acquired by the Issuer in accordance with
this Agreement and transferred to the Issuer and pledged by the Issuer to the
Trustee in accordance with the Transaction Documents.
(c) It is the intention of the Sellers and the Issuer that the Issuer
is acquiring full and absolute title to the Assets. If it is determined,
however, that the Sellers have transferred to the Issuer a security interest in
the Assets, then this Agreement shall constitute a security agreement under
applicable law, and each of the Sellers shall be deemed to have granted to the
Issuer, as of the date hereof, a first priority perfected security interest in
such Seller's right, title and interest in the Assets.
Section 2.05. Servicing of Contracts and Related Vacation Credits. The
Servicer shall service the Contracts and the other Assets for the benefit of the
Issuer (and its successors and assigns) in accordance with the terms and
conditions of the Transaction Documents. Notwithstanding the foregoing,
Trendwest acknowledges and agrees that its obligations under this Agreement are
independent of any obligations it may have as Servicer and that its obligations
under this Agreement will continue in full force and effect, whether or not it
is acting as Servicer, until termination of this Agreement in accordance with
Section 6.01 hereof, unless otherwise provided herein.
Section 2.06. Review of Contracts. If any of the Sellers or the
Collateral Agent (who shall thereupon notify the Issuer, Trendwest and the
Trustee) discovers that any Contracts, Contract Files or Collateral Agent Files
are missing or defective (that is, mutilated, damaged, defaced, incomplete,
improperly dated, forged or otherwise physically altered) in any material
respect, Trendwest shall correct or cure such omission, defect or other
irregularity within 30 days from the date Trendwest discovered such omission or
defect, or from the date Trendwest is notified by the Collateral Agent of such
omission or defect. In the event Trendwest is unable to correct or cure such
omission, defect or irregularity within the 30-day period described in the
preceding sentence, Trendwest shall purchase or replace such Contract from the
Issuer in accordance with Section 3.03 hereof.
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ARTICLE 3
REPRESENTATIONS AND WARRANTEES
Section 3.01. Representations and Warranties of the Sellers. Each of
Trendwest, with respect to all of the Contracts and related Receivables, TRI I,
with respect to the Contracts and related Receivables transferred by TRI I, TRI
II, with respect to the Contracts and related Receivables transferred by TRI II,
TW Holdings, with respect to the Contracts and related Receivables transferred
by TW Holdings, TWII, with respect to the Contracts and related Receivables
transferred by TWII, hereby and by the Asset Assignment and each Subsequent
Asset Assignment, hereby makes the following representations and warranties to
the Issuer and for the benefit of the Issuer, the Trustee and Holders of Notes,
on which the Issuer relies in acquiring the Assets and on which the Holders rely
in purchasing such Notes. Such representations and warranties shall survive any
subsequent transfer, assignment, contribution or conveyance of the Contracts and
related Receivables and interest in the related Vacation Credits and any
issuance of Notes.
(a) As to each Contract, as of the Closing Date, with respect
to the Contracts identified on the Contract Schedule on the Closing
Date and as of the related Subsequent Transfer Date, with respect to
Subsequent Contracts:
(i) The information set forth in the Contract
Schedule is true and correct as of the related Cut-Off Date.
(ii) The rights with respect to the Contract are
assignable by the lender thereunder and its successors and
assigns without the consent of any Person.
(iii) The applicable Seller has heretofore provided to
the Collateral Agent the sole original counterpart of the
Contract, together with any and all amendments, waivers and
modifications thereto, except for any original executed
counterparts which have been marked to show that they have
been pledged by the Issuer to the Trustee under the Indenture,
and the terms of such Contract have not been further amended,
waived or modified subsequent to the above being provided to
the Collateral Agent.
(iv) The Electronic Ledgers have been marked as
provided in Section 2.04(b) hereof.
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(v) The Contract was not originated in, nor is it
subject to the laws of, any jurisdiction, the laws of which
would make unlawful the sale, transfer or assignment of such
document under any of the Transaction Documents, including any
repurchase in accordance with the Transaction Documents.
(vi) The Contract is in full force and effect in
accordance with its respective terms, and none of the Sellers
or any Obligor has or will have suspended or reduced any
payments or obligations due or to become due thereunder by
reason of a default by the other party to such Contract; as of
the related Cut-Off Date, no Scheduled Payment with respect to
such Contract has not been received and remains unpaid for a
period of 30 or more days (without regard to advances, if any,
made by the Servicer), and there are no proceedings pending,
or to the best of the knowledge of any Seller, threatened
asserting insolvency of such Obligor; there has been no other
default, breach or violation of such Contract; there are no
proceedings pending, or to the best of the knowledge of any
Seller, threatened, wherein such Obligor or any governmental
agency has alleged that such Contract is illegal or
unenforceable; and none of the related Scheduled Payments are
subject to any set-off or credit of any kind.
(vii) The Contract is the valid, binding and legally
enforceable obligation of the parties thereto, enforceable in
accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a court
of law or equity.
(viii) All actions, filings (including UCC filings) and
recordings as are required by the Indenture and that may be
necessary to perfect, with respect to the Trust Estate, a
first priority security interest of the Issuer and the Trustee
in, and the sale by the applicable Seller to the Issuer of,
the Contract and the related Receivables, being acquired and
the transfer of the security interest in the related Vacation
Credits hereunder have been accomplished and are in full force
and effect.
(ix) The Contract is identical to one of the form
contracts attached as Exhibit A hereto, except for either (i)
such immaterial modifications or deviations from the form
contract which appear in such Contract, which immaterial
modifications or deviations will not have a material adverse
effect on the Holders of the Notes or (ii) such modifications
or deviations as set forth on Schedule I to the Asset
Assignment or Subsequent Asset Assignment, as the case may be,
related to such Contract.
(x) The Contract was originated by Trendwest in
Trendwest's ordinary course of business and meets Trendwest's
qualifications for originating vacation
7
credit installment contracts. The origination and collection
practices used by Trendwest and the applicable Seller with
respect to such Contract have been in all respects legal,
proper, prudent and customary in the vacation credit financing
and servicing business.
(xi) The Receivable is under a Contract that has a
term to the last Scheduled Payment Date of not more than 84
months and not less than one month.
(xii) The Contract obligates the related Obligor to
make all Scheduled Payments thereunder in full notwithstanding
the collection by Trendwest of a security deposit with respect
thereto. The calculation of the Collateral Value of the
related Receivable does not include any security deposits or
similar payments collected by or on behalf of Trendwest which
are applied to Scheduled Payments.
(xiii) All requirements of applicable federal, State
and local laws, and regulations thereunder, including, without
limitation, usury laws, if any, in respect of the Contract
have been complied with in all material respects, and such
Contract complied in all material respects at the time it was
originated or made and now complies in all material respects
with all legal requirements of the jurisdiction in which it
was originated.
(xiv) The Contract is not and will not be subject to
any right of rescission, set-off, counterclaim or defense,
including the defense of usury, whether arising out of
transactions concerning such Contract or otherwise, and the
operation of any of the terms of such Contract or the exercise
by the applicable Seller or the Obligor of any right under
such Contract will not render such Contract unenforceable in
whole or in part, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect
thereto, except that certain rights or defenses may exist
under applicable law which, individually or in the aggregate,
do not make the remedies available to the Seller with respect
to such Contract inadequate for the practical realization of
the benefits provided thereby.
(xv) Each of the Sellers has duly fulfilled all
obligations on the lender's part to be fulfilled under or in
connection with the Contract, including, without limitation,
giving any notices or consents necessary to effect the
acquisition of the Assets by the Issuer and has done nothing
to impair the rights of the Issuer in such Contract or
payments with respect thereto.
(xvi) The Contract, the related Receivable and the
related Seller's interest in the related Vacation Credits have
not been sold, transferred, assigned or pledged by such Seller
to any Person other than the Issuer (except for such interests
in the Assets which shall be terminated on or prior to the
Closing Date), and upon execution and delivery hereof and of
the Asset Assignment or
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Subsequent Asset Assignment, as applicable, by the related
Seller and the payment by the Issuer of the related
Acquisition Consideration, the Issuer will have all of the
right, title and interest in and to such Seller's interest in
the Contract and the related Receivable and a security
interest in the related Vacation Credits, free and clear of
all liens and encumbrances, except for the interests of the
Obligor pursuant to such Contract. Such Contract has not been
satisfied, subordinated or rescinded.
(xvii) The relevant Seller has no specific knowledge
that the Contract will not be fully performed in accordance
with its terms.
(xviii) The Obligor has made two payments (which
payments may be advance payments under such Contract) due
under the Contract within the time set forth in such Contract.
(xix) The related Obligor is located in the United
States of America or Canada, and the related Scheduled
Payments are payable in U.S. dollars.
(xx) The related Scheduled Payments were established
at the time such Contract was originated.
(xxi) There are no unpaid brokerage or other fees owed
to third parties relating to the origination of the Contract.
(xxii) The Contract cannot be rescinded pursuant to
applicable consumer finance laws.
(xxiii) The contract was originated in compliance with
the requirements of all federal, state and local laws, rules
and regulations applicable to the origination of the Contract
(including, without limitation, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", the Soldiers' and Sailors' Civil
Relief Act of 1940, and any other federal, state and local
laws relating to interest, usury, consumer credit, equal
credit opportunity, fair credit reporting, privacy, consumer
protection, false or deceptive trade practices and disclosure,
the Mail Fraud statute and any timeshare disclosure),
non-compliance with which could have a material adverse effect
on the enforceability or value of the Contract.
(xxiv) All Scheduled Payments are due and payable on a
monthly basis, and such Scheduled Payments are level payments
throughout the terms of the Contract.
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(b) As to the aggregate pool of Contracts supporting Notes as
of the Closing Date and each Subsequent Transfer Date (including those
contracts contributed to the Issuer on such Subsequent Transfer Date),
no Seller used any selection procedures that identified the Contracts
as being less desirable or valuable than other comparable vacation
credit installment contracts owned by such Seller.
(c) As to each Seller as of the Closing Date and as to each
of Trendwest, TRI I and TRI II on each Subsequent Transfer Date:
(i) Such Seller has been duly organized and is
validly existing and in good standing as a corporation or
limited liability company, as applicable, under the laws of
the State in which such Seller was organized with corporate
power and authority to own its properties and to transact the
business in which it is now engaged, and such Seller is duly
qualified to do business in and is in good standing under the
laws of each State in which its business is located or is not
required under applicable law to effect such qualification,
except where failure to so qualify would not have a material
adverse effect on the ability of such Seller to perform its
obligations under the Transaction Documents or on any of the
Contracts, the Receivables or the related Vacation Credits or
on the ability of such Seller, the Issuer or the Trustee to
realize upon or enforce the same.
(ii) The performance of the obligations of such
Seller under this Agreement and the other Transaction
Documents and the consummation of the transactions herein and
therein contemplated will not conflict with or result in any
breach of any of the terms or provisions of, or constitute
with or without notice, lapse of time or both, a default under
the Certificate of Incorporation, Articles of Incorporation,
Bylaws, Certificate of Formation or Limited Liability Company
Agreement, as applicable, of such Seller, or any material
indenture, agreement, mortgage, deed of trust or other
instrument to which such Seller is a party or by which it is
bound, or result in the creation or imposition of any lien,
charge or encumbrance (except the lien created by the
Transaction Documents) upon any of the property or assets of
such Seller pursuant to the terms of such indenture, mortgage,
deed of trust, or other agreement or instrument to which such
Seller is a party or by which such Seller is bound or to which
any of such Seller's property or assets is subject, nor will
such action result in any violation of the provisions of such
Seller's Certificate of Incorporation, Articles of
Incorporation, By-laws, Certificate of Formation or Limited
Liability Company Agreement, as applicable, or any statute or
any order, rule or regulation of any court or any regulatory
authority or other governmental agency or body having
jurisdiction over such Seller or any of its properties; and no
consent, approval, authorization, order, registration or
qualification of or with or other action of any court, or any
such regulatory authority or other governmental agency or body
is required for
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consummation of the transactions contemplated by this
Agreement and the other Transaction Documents except such
consents, approvals and authorizations which have been
obtained or such registrations or qualifications which have
been made.
(iii) This Agreement and any other Transaction
Document to which such Seller is a party have been duly
authorized, executed and delivered by such Seller by all
necessary corporate action and such agreements are the valid
and legally binding obligations of such Seller, enforceable
against such Seller in accordance with their respective terms,
subject as to enforcement to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights
generally and to general principles of equity regardless of
whether enforcement is sought in a court of law or equity.
(iv) The relevant Seller Address is the chief
executive office, principal place of business and the office
where such Seller keeps its records concerning the Contracts,
Receivables and the related Vacation Credits. Such Seller has
not used any address other than its Seller Address, 00000 X.X.
00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 or 0000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, in the
previous five-year period. Such Seller's legal name is as set
forth in this Agreement. Such Seller has not used or done
business under any other name in the previous six-year period.
(v) Such Seller does not believe, nor does it have
any reasonable cause to believe, that it cannot perform each
and every covenant contained in this Agreement.
(vi) The transactions contemplated by the Transaction
Documents are being consummated by such Seller in furtherance
of its ordinary business purposes, with no contemplation of
insolvency and with no intent to hinder, delay or defraud any
of its present or future creditors.
(vii) The consideration received by such Seller
pursuant to this Agreement is fair consideration having value
reasonably equivalent to or in excess of the value of the
performance of such Seller's obligations hereunder.
(viii) Neither on the date of the transactions
contemplated by the Transaction Documents or immediately
before or after such transactions, nor as a result of the
transactions, will such Seller:
(A) be insolvent such that the sum of its
debts is greater than all of its respective property,
at a fair valuation;
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(B) be engaged in, or about to engage in,
business or a transaction for which any property
remaining with such Seller will be an unreasonably
small capital or the remaining assets of such Seller
will be unreasonably small in relation to its
respective business or the transaction; and
(C) have intended to incur, or believed it
would incur, debts that would be beyond its
respective ability to pay as such debts mature or
become due. Such Seller's assets and cash flow enable
it to meet its present obligations in the ordinary
course of business as they become due.
(ix) Both immediately before and after the
transactions contemplated by the Transaction Documents (a) the
present fair salable value of such Seller's assets was or will
be in excess of the amount that will be required to pay its
probable liabilities as they then exist and as they become
absolute and matured; and (b) the sum of such Seller's assets
was or will be greater than the sum of its debts, valuing its
assets at a fair salable value.
(x) The acquisition of the Assets by the Issuer
pursuant to this Agreement is not subject to the bulk transfer
or any similar statutory provisions in effect in any
applicable jurisdiction.
(xi) There are no proceedings or investigations
pending or, to the knowledge of such Seller, threatened
against or affecting such Seller in or before any court,
governmental authority or agency or arbitration board or
tribunal which, individually or in the aggregate, involve the
possibility of materially and adversely affecting the
properties, business, prospects, profits or condition
(financial or otherwise) of such Seller, or the ability of
such Seller to perform its obligations under this Agreement or
the other Transaction Documents. Such Seller is not in default
with respect to any order of any court, governmental authority
or agency or arbitration board or tribunal.
(xii) All tax returns or extensions required to be
filed by such Seller in any jurisdiction have in fact been
filed, and all taxes, assessments, fees and other governmental
charges upon such Seller, or upon any of the respective
properties, income or franchises shown to be due and payable
on such returns have been, or will be, paid. All such tax
returns are true and correct, and such Seller has no knowledge
of any proposed additional tax assessment against it in any
material amount nor of any basis therefor. The provisions for
taxes on the books of such Seller are in accordance with
generally accepted accounting principles.
(xiii) Such Seller (i) is not in violation of any laws,
ordinances, governmental rules or regulations to which it is
subject, (ii) has not failed to obtain any licenses, permits,
franchises or other governmental authorizations
12
necessary to the ownership of its property or to the conduct
of its business, and (iii) is not in violation in any material
respect of any term of any agreement, charter instrument,
bylaw or instrument to which it is a party or by which it may
be bound which violation or failure to obtain might materially
adversely affect the business or condition (financial or
otherwise) of such Seller.
(xiv) It is the intention of such Seller that the
Assets are being or have been acquired by the Issuer and that
the beneficial interest in and title to the Assets are not
part of such Seller's estate in the event of the filing of a
bankruptcy petition by or against such Seller under any
bankruptcy law.
(xv) Immediately prior to the acquisition of the
Assets by the Issuer pursuant to this Agreement, such Seller
was the sole owner of its portion of the Assets at such time
and had good and marketable title to the Assets, free and
clear of all liens, claims and encumbrances (except for the
Acquisition Consideration and security interests in the Assets
which shall be terminated on or prior to the Closing Date or
the related Subsequent Transfer Date, as applicable).
(xvi) The Sellers will treat the transfer of the
Assets as a sale to the Issuer for federal, State and local
income tax reporting and accounting purposes.
(xvii) The sale of the Assets pursuant to this
Agreement constitutes the valid sale by the Sellers to the
Issuer of all of such Seller's right, title and interest in
the Assets.
(xviii) The Sellers have valid business reasons for
selling the Assets to the Issuer pursuant to this Agreement
rather than obtaining a loan secured by the Assets.
(xix) The Sellers will be operated generally so as to
not be substantively consolidated with the Issuer for
bankruptcy purposes.
(xx) No event has occurred that adversely affects the
Sellers' ability to perform the transactions contemplated by
the Transaction Documents.
(xxi) Each pension plan or profit sharing plan to
which each of the Sellers is a party has been fully funded in
accordance with the obligations of such Seller as set forth in
such plan.
(xxii) Neither the acquisition nor the holding of the
Contracts and the related Receivables violates any federal or
State law, rule or regulation the non-compliance with which
could have a material adverse effect on the value of the
Contracts or the related Receivables.
13
Section 3.02. Representations and Warranties of the Issuer. The Issuer
hereby makes the following representations and warranties for the benefit of the
Trustee and Holders of the Notes, on which the Sellers rely in entering into
this Agreement with the Issuer and on which the Holders of the Notes rely in
purchasing the Notes; such representations and warranties speak as of the
Closing Date unless otherwise indicated, but shall survive any subsequent
transfer, assignment, contribution or conveyance of the Assets or any part
thereof:
(a) The Issuer has been duly organized and is validly
existing in good standing as a corporation under the laws of the State
of Delaware, with corporate power and authority to own its properties,
perform its obligations under the Transaction Documents and to transact
the business in which it is now engaged or in which it proposes to
engage; the Issuer is duly qualified to do business and is in good
standing in each State in which the nature of its business requires it
to be so qualified, except where failure to so qualify would not have a
material adverse effect on the ability of the Issuer to perform its
obligations under the Transaction Documents.
(b) The transfer to and receipt by the Issuer of the Sellers'
interest in the Contracts, the Receivables and the related Vacation
Credits pursuant to this Agreement and the consummation of the
transactions contemplated herein and in the Transaction Documents will
not conflict with or result in breach of any of the terms or provisions
of, or constitute (with or without notice, lapse of time or both) a
default under the Certificate of Incorporation or By-laws of the Issuer
or any material indenture, agreement, mortgage, deed of trust or other
instrument to which the Issuer is a party or by which it is bound, or
result in the creation or imposition of any lien, charge or encumbrance
(except for the lien created by the Indenture) upon any of the property
or assets of the Issuer pursuant to the terms of, such indenture,
mortgage, deed of trust, or other agreement or instrument to which the
Issuer is a party or by which it is bound or to which any of the
property or assets of the Issuer is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Issuer or any statute or any order,
rule or regulation of any court or regulatory authority or other
governmental agency or body having jurisdiction over the Issuer or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with or other action of any court
or any such regulatory authority or other governmental agency or body
is required for the acquisition of the Assets hereunder.
(c) The Transaction Documents to which the Issuer is a party
have been duly authorized, executed and delivered by the Issuer by all
necessary corporate action and constitute valid and legally binding
obligations of the Issuer enforceable against the Issuer in accordance
with their terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating
to or
14
affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a court of equity
or law.
(d) There are no proceedings or investigations to which the
Issuer is a party pending or, to the knowledge of the Issuer,
threatened, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (a) asserting the
invalidity of this Agreement, (b) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated
by this Agreement, or (c) seeking any determination or ruling that
would materially and adversely affect the performance by the Issuer of
its obligations under, or the validity or enforceability of, this
Agreement.
(e) All approvals, authorizations, consents, orders or other
actions of any Person or of any court, governmental agency or body or
official, required in connection with the execution and delivery of
this Agreement, have been or will be taken or obtained on or prior to
the Closing Date.
(f) The Issuer Address is the principal place of business and
chief executive office of the Issuer.
Section 3.03. Purchase or Substitution Required upon Breach of Certain
Representations and Warranties. Upon discovery by the Issuer or any of the
Sellers of the breach of any representations or warranties set forth in Section
3.01 or 3.02 hereof which materially and adversely affects the value of a
Contract, Receivable, the related Vacation Credits, or the interests of the
Holders of the Notes, or a breach of any of the representations and warranties
set forth in Sections 3.01(a)(v), 3.01(a)(vi), 3.01(a)(vii), 3.01(a)(xiii),
3.01(a)(xiv), 3.01(a)(xvi), 3.01(a)(xxii) or 3.01(a)(xxiii) hereof, the party
discovering such breach shall give prompt written notice to the other parties.
Trendwest shall, within 30 days from the date it was notified of, or otherwise
discovers, such breach, cure such breach, or, (1) if the breach relates to a
particular Contract, Receivable or Vacation Credit and is not cured, either (a)
purchase the Issuer's interest in such Contract and the related Receivable from
the Issuer at the Purchase Price or (b) provide a Substitute Contract or (2) if
the breach relates to a representation or warranty regarding the selection
criteria of the Contracts as a whole and is not cured by Trendwest, either (a)
purchase the Issuer's interest in such non-conforming Contracts and the related
Receivables from the Issuer or (b) provide Substitute Contracts as set forth
above, so that the representations and warranties with respect to the selection
criteria are correct, as evidenced by a certificate of an officer of Trendwest
to the Trustee. The Purchase Price for a purchased Contract shall be paid, and
any Substitute Contract shall be delivered, by Trendwest to the Issuer in
accordance with Section 3.04(c) hereof. It is understood and agreed that the
obligation of Trendwest to cure or purchase or replace any Contract as to which
such a breach has occurred shall constitute the sole remedy respecting such
breach available to the Issuer, the Holders of Notes or the Trustee on behalf of
such Holders (except for any indemnities provided under Section 4.01(j) hereof
or any obligations under the Indenture) for any losses, claims, damages and
liabilities arising from the
15
Issuer's interest in such Contract or the inclusion of the Issuer's interest in
such Contract in the Trust Estate.
Section 3.04. Requirements for Purchase or Substitution of Contracts;
Upgrades. (a) If Trendwest is required to purchase the Issuer's interest in any
Contract and the related Receivables under Section 3.03 hereof or if the Issuer
is required or elects to purchase the Trustee's interest in any Contract and the
related Receivables under Section 3.10 of the Servicing Agreement, such Contract
and related Receivables shall be purchased by Trendwest at the Purchase Price.
All purchases shall be accomplished at the times specified in subsection (c)
below.
(b) If Trendwest is required to substitute any Contract under Section
3.03 hereof, each such contract (a "Substitute Contract") shall (i) be an
Eligible Contract; (ii) be written on one of the standard forms attached as
Exhibit A to this Agreement; (iii) be accompanied by a supplement to this
Agreement substantially in the form of Annex A hereto subjecting such Contract
to the provisions hereof and providing with respect to such Substitute Contract
the information required in the Contract Schedule; (iv) not have been selected
using procedures that identified the Contracts as being less desirable or
valuable than other comparable vacation credit installment contracts owned by
Trendwest; and (v) not have any Scheduled Payments that are due after the date
that is six months prior to the Stated Maturity of the Notes supported by such
Contract. In addition, (i) such Substitute Contracts shall have an aggregate
Collateral Value at least equal to and not substantially greater than the
aggregate Collateral Value of the Contracts being withdrawn as of the date of
withdrawal (the "Substitution Criterion"), (ii) such Substitute Contract will
have an interest rate that is not 1% less than the original Contract and (iii)
the representations and warranties set forth in Sections 3.01 and 3.02 shall be
true and correct with respect to such Substitute Contract and the aggregate pool
of Contracts as of the date such Substitute Contract is conveyed to the Issuer.
Upon the substitution of any Substitute Contract pursuant to the
provisions of this Section 3.04(b), Trendwest hereby agrees that such Substitute
Contract will be subject to all the terms and provisions of this Agreement, the
Servicing Agreement, the Collateral Agent Agreement and the Indenture just as if
such Substitute Contract had been one of the original Contracts acquired on the
Closing Date. Upon the substitution of a Substitute Contract pursuant to this
Section 3.04(b), the Issuer and Trendwest shall also comply with the provisions
and limitations set forth in the Indenture. All substitutions shall be
accomplished at the time specified in subsection (c) below.
(c) Any purchase or substitution of a Contract by Trendwest in
accordance with Section 3.03 hereof or this Section 3.04 shall be made either by
remittance of the Purchase Price to the Servicer for deposit into the Clearing
Account in accordance with Section 3.03(a) of the Servicing Agreement or by
substitution of a Substitute Contract, as applicable, within one Business Day
following the expiration of the cure period set forth in Section 3.03 hereof.
16
(d) If an Obligor desires to enter into an Upgrade Contract, Trendwest,
as Servicer, shall inform the Issuer of such fact. In such event, if the Issuer
desires to purchase the receivable related to such Upgrade and so advises
Trendwest, Trendwest will allow the Obligor to upgrade and transfer the related
Upgrade Contract to the Issuer in exchange for the existing Contract with such
Obligor and an amount equal to the difference in the principal balance between
the existing Contract and the Upgrade Contract (which amount shall be paid to
Trendwest out of funds distributed to the Issuer pursuant to Section 12.02(d) of
the Indenture or by increasing the amount owed by the Issuer under the
Subordinated Note); provided, however, that (i) such Upgrade Contract must have
an interest rate that is not more than 1.0% per annum lower than the interest
rate on the Contract that is being replaced, (ii) each Scheduled Payment under
the Upgrade Contract must be the equal to or greater than the Scheduled Payments
on the existing Contract, (iii) such Obligor must have made all Scheduled
Payments within the time periods required by the related Contract which were due
on or before the date of such Upgrade, (iv) such Upgrade Contract must be
written on one of the standard forms attached as Exhibit A to this Agreement,
(v) the Upgrade Contract is an Eligible Contract, (vi) simultaneous with the
execution of the Upgrade Contract, Trendwest shall have executed a form of
assignment to the Issuer attached to such Upgrade Contract and the Issuer will
pledge such Receivable to the Trustee pursuant to the Indenture, (vii) such
Upgrade Contract shall be delivered by Trendwest to the Collateral Agent
immediately after execution of such contract by the Obligor, WorldMark and
Trendwest (and, in any event, prior to the release of the original Contract),
(viii) any applicable rescission period has expired and (ix) clauses (i)-(viii)
above shall be representations and warranties of Trendwest, and Trendwest shall
be obligated to purchase from the Issuer any Upgrade Contract that does not
comply with such representations and warranties. Simultaneous with the delivery
of such Upgrade Contract to the Collateral Agent, Trendwest shall deliver to the
Trustee a supplement to this Agreement substantially in the form of Annex A
hereto subjecting such Contract to the provisions hereof and providing with
respect to such Upgrade Contract the information required on the Contract
Schedule.
Upon the acquisition by the Issuer of any Upgrade Contract pursuant to
the provisions of this Section 3.04(d) (and the subsequent transfer of the
related Receivable to the Issuer), Trendwest hereby agrees that such Upgrade
Contract and the related Receivable, as applicable, will be subject to all the
terms and provisions of this Agreement and the Indenture just as if such Upgrade
Contract had been one of the original Contracts acquired on the Closing Date.
ARTICLE 4
SELLER COVENANTS
Section 4.01. Seller Covenants. Each Seller hereby covenants and agrees
with the Issuer as follows:
(a) Except as hereinafter provided, such Seller will keep in
full effect its existence, rights and franchises as a corporation or
limited liability company, as
17
applicable, and will obtain and preserve its qualification to do
business as a foreign corporation or limited liability company, as
applicable, in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement or any of the Contracts and to perform its duties hereunder.
Any person into which such Seller may be merged or consolidated, or to
whom such Seller has sold substantially all of its assets, or any
corporation resulting from any merger, conversion or consolidation to
which such Seller shall be a party, or any Person succeeding to the
business of such Seller shall be the successor of such Seller
hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that (w) immediately after
giving effect to such transaction, no representation or warranty made
pursuant to Section 3.01(c) hereof shall have been breached, (x) such
successor executes an agreement of assumption, in form reasonably
satisfactory to the Trustee, to perform every obligation under this
Agreement, (y) such Seller shall have delivered to the Issuer a
certificate of an officer of such Seller and an Opinion of Counsel each
stating that such consolidation, merger, or succession and such
agreement of assumption complies with this Section 4.01 and that all
conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, and (z) such Seller shall
have delivered to the Issuer an Opinion of Counsel either (1) stating
that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and
filed that are necessary fully to preserve and protect the interest of
the Issuer in the Contracts and reciting the details of such filings,
or (2) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest.
(b) Neither such Seller nor any of the members, directors,
officers, employees or agents of such Seller (and, with respect to TRI
I, of the members of such Seller) shall be under any liability to the
Issuer, the Trustee or the Holders of Notes for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment not involving recklessness or
negligence; provided, however, that this provision shall not protect
such Seller against any breach of warranties or representations made
herein, or failure to perform its obligations in strict compliance with
this Agreement, or any liability which would otherwise be imposed by
reason of any breach of the terms and conditions of this Agreement.
Such Seller, and any member, director, officer, employee or agent of
such Seller (and, with respect to TRI I, of the members of such
Seller), may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters
arising hereunder. Such Seller shall not be under any obligation to
appear in, prosecute, or defend any legal action that is not incidental
to its obligations as the seller of the Assets under this Agreement and
that in its opinion may involve it in any expense or liability.
(c) Such Seller will from time to time, at its own expense,
execute and file such additional financing statements (including
continuation statements) as may be necessary or which the Trustee may
deem appropriate to preserve the security interests
18
and liens described in Section 3.01(a)(viii) hereof and are reasonably
satisfactory in form and substance to the Issuer.
(d) Such Seller will not change its name, identity or
corporate structure in any manner that would, could, or might make any
financing statement or continuation statement misleading within the
meaning of section 9-402(7) of the UCC, unless it shall have given the
Issuer and the Trustee at least 30 days' prior written notice thereof.
(e) Such Seller will give the Issuer and the Trustee at least
30 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new
financing statement.
(f) Such Seller will duly fulfill all obligations on its part
to be fulfilled under or in connection with each Contract, will not
change or modify the terms of the Contracts (and shall prevent any
third-party originator that still owns any Contract from changing or
modifying the terms of any such Contract) except as expressly permitted
by the terms of the Transaction Documents and will do nothing to impair
the rights of the Issuer or the Trustee in the Assets. In the event
that the rights of such Seller under any Contract or any guaranty of
the related Obligor's obligations under any Contract are not assignable
to the Issuer, such Seller will enforce such rights on behalf of the
Issuer; the Seller is not aware of any such inability to assign any
Contracts.
(g) Such Seller will comply, in all material respects, with
all material acts, rules, regulations, orders, decrees and directions
of any governmental authority applicable to the Assets or any part
thereof; provided, however, that such Seller may contest any act,
regulation, order, decree or direction in any reasonable manner which
shall not materially and adversely affect the rights of the Issuer or
the Trustee in the Assets.
(h) Such Seller will advise the Issuer and the Trustee
promptly, in reasonable detail, of the occurrence of any breach by such
Seller following discovery by such Seller of such breach of any of its
representations, warranties and covenants contained herein.
(i) Such Seller will execute or endorse, acknowledge, and
deliver to the Issuer and the Trustee from time to time such schedules,
confirmatory assignments, conveyances, and other reassurances or
instruments and take such further similar actions relating to the
Assets, and the rights covered by the Transaction Documents, as the
Issuer or the Trustee may reasonably request to preserve and maintain
title to the Assets and the rights of the Trustee and the Holders of
Notes therein against the claims of all persons and parties.
(j) Trendwest agrees to indemnify, defend and hold the Issuer
harmless from and against any and all loss, liability, damage,
judgment, claim, deficiency or expense
19
(including interest, penalties, reasonable attorney's fees and amounts
paid in settlement) that is caused by (i) a material breach at any time
by any Seller of the representations, warranties and covenants
contained in Section 3.01 hereof or this Section 4.01 or (ii) any
material information furnished by any Seller which is set forth in any
schedule delivered hereunder, being untrue in any material respect when
any such representation was made or schedule delivered, provided that
Trendwest shall not have any liability with respect to a representation
or warranty as to any specific Contract, Receivable or the related
Vacation Credits other than to purchase such Contract or substitute for
such Contract in accordance with Section 3.03 hereof unless such breach
of representation or warranty is the result of a Seller's fraud,
negligence, bad faith or willful misconduct. Trendwest shall also
indemnify the Issuer, the Trustee and the Servicer for any cost or
expenses incurred by them in the enforcement of this Agreement. The
obligations of Trendwest under this Section 4.01(j) shall be considered
to have been relied upon by the Issuer and shall survive the execution,
delivery and performance of this Agreement, regardless of any
investigation made by or on behalf of the Issuer, until termination of
the Indenture. If Trendwest has made any indemnity payments pursuant to
this Section 4.01(j) and thereafter the recipient collects any of such
amounts from others, such party will promptly repay the amount
collected to Trendwest, without interest.
(k) Such Seller will do nothing to disturb or impair the
acquisition hereunder by the Issuer of all of such Seller's right,
title and interest in the Assets.
(l) Such Seller (i) will (A) maintain its books and records
separate from the books and records of the Issuer and (B) maintain bank
accounts separate from those of the Issuer and (ii) will not (x) take,
prior to the complete payment of the Notes, any action that would cause
the dissolution or liquidation of the Issuer, (y) guarantee (directly
or indirectly), endorse or otherwise become contingently liable
(directly or indirectly) for the obligations of the Issuer or (z)
institute against the Issuer, or join any other person in instituting
against the Issuer, any case, proceeding or other action under any
existing or future bankruptcy, insolvency or similar laws.
(m) Such Seller shall notify the Issuer and the Trustee
promptly after becoming aware of any Lien on any Asset.
(n) On each date as of which Trendwest substitutes a
Substitute Contract in accordance with Section 3.03 hereof, Trendwest
shall provide to the Issuer a supplement to this Agreement
substantially in the form of Annex A hereto subjecting such Contract to
the provisions hereof and providing with respect to such Substitute
Contract the information required in the Contract Schedule.
(o) The annual financial statements of such Seller will
disclose the effects of the transactions contemplated by the
Transaction Documents in accordance with generally accepted accounting
principles. The financial statements of such Seller and the Issuer will
also disclose that the assets of the Issuer are not available to pay
creditors of
20
such Seller. The resolutions, agreements and other instruments
underlying the Transaction Documents will be continuously maintained by
such Seller as official records.
(p) Such Seller will, at its own cost and expense, (i) retain
the Electronic Ledger as a master record of the Contracts and the
related Vacation Credits and copies of all documents relating to each
Contract (other than the original executed Contracts) as custodian for
the Issuer and other Persons, if any, with interests in the Contracts
and the related Vacation Credits and (ii) xxxx the Contracts and the
Electronic Ledger to the effect that the Contracts and such Seller's
interest in the related Vacation Credits have been acquired by the
Issuer and a security interest in the related Contracts and the related
Vacation Credits have been granted by such Seller to the Issuer and
that such Receivables, security interests and rights have been pledged,
transferred and assigned to the Trustee by the Issuer pursuant to the
Indenture.
(q) Such Seller will perform the transactions contemplated by
this Agreement in a manner that is consistent with the Issuer's
ownership interest in the Assets. Such Seller will respond to all third
party inquiries confirming the transfer of the Assets to the Issuer.
(r) Such Seller shall immediately transfer to the Servicer
for deposit in the Clearing Account any payment it receives relating to
the Assets.
Section 4.02. Issuer Covenants. The Issuer hereby covenants and agrees
with the Sellers as follows:
(a) The Issuer hereby acknowledges and agrees that its rights
in the related Vacation Credits are expressly subject to the rights of
the related Obligors in such Vacation Credits pursuant to the
applicable Contract.
(b) On each date as of which any interest in any Contract is
to be purchased or replaced by Trendwest pursuant to Section 3.03
hereof, the Issuer shall submit to Trendwest an instrument of
assignment assigning the Issuer's interest in such Contract and the
related Vacation Credits to Trendwest, signed by the president, senior
vice president or any vice president of the Issuer. Each such
assignment shall operate as an assignment, without recourse,
representation, or warranty, to Trendwest of all of the Issuer's right,
title, and interest in and to such Contract, the related Receivable and
the related Vacation Credits and any security documents relating
thereto, such assignment being an assignment outright and not for
security, and upon payment of the Purchase Price or delivery of a
Substitute Contract, Trendwest will thereupon own such interest in the
Contract and all such security and documents, free of any further
obligation to the Issuer with respect thereto. If in any enforcement
suit or legal proceeding it is held that Trendwest may not enforce a
Contract on the ground that it is not a real party in interest or
holder entitled to enforce the Contract, the Issuer shall, at the
Issuer's expense, take
21
such steps as the Issuer deems necessary to enforce the Contract,
including bringing suit in the Issuer's name.
(c) The Issuer warrants that, except as contemplated by the
Transaction Documents, it will have ownership of or a valid security
interest in the related Vacation Credits. The Issuer shall not assign,
sell, pledge, or exchange, or in any way encumber or otherwise dispose
of the related Vacation Credits, except as contemplated by or permitted
under the Transaction Documents.
Section 4.03. Assignment of Assets. The Sellers understand that the
Issuer will assign to and grant to the Trustee a security interest in the Assets
(including but not limited to the Receivables, Contracts and the related
Vacation Credits). The Sellers consent to such assignments and grants and
further agree that all representations, warranties, covenants and agreements the
Sellers made herein shall also be for the benefit of and inure to the Issuer,
the Trustee and all Holders from time to time of the Notes.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.01. Conditions to Issuer's Initial Obligations. The
obligations of the Issuer to execute and deliver the Asset Assignment to the
Sellers on the Closing Date and the applicable Subsequent Asset Assignment to
the applicable Sellers on each Subsequent Transfer Date, pursuant to, and
perform it obligations pursuant to, this Agreement shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Sellers
contained in Sections 3.01(b) and 3.01(c) hereof and all information
provided in the Contract Schedule shall be true and correct on the
Closing Date and, with respect to Trendwest, each applicable Seller and
each Subsequent Contract, each related Subsequent Transfer Date, with
the same effect as though such representations and warranties had been
made on such date, and on the Closing Date the Sellers shall have
delivered to the Issuer, the Trustee and the Initial Purchaser an
Officer's Certificate to such effect (with respect to the Closing Date
sale only);
(b) All representations and warranties of the Sellers
contained in Section 3.01(a) hereof shall be true and correct on the
Closing Date with respect to the Contracts listed on the Contract
Schedule on the Closing Date and on the related Subsequent Transfer
Date with respect to the Subsequent Contracts, with the same effect as
though such representations and warranties had been made on such date,
and on the Closing Date the Sellers shall have delivered to the Issuer,
the Trustee and the Initial
22
Purchaser of the Notes an Officer's Certificate to such effect (with
respect to the Closing Date sale only);
(c) The Sellers shall have delivered all other information
theretofore required or reasonably requested by the Issuer to be
delivered by the Sellers hereunder, duly certified by an officer of
each of the Sellers, and the Sellers shall have substantially performed
all other obligations required to be performed as of the Closing Date
and each Subsequent Transfer Date by the provisions of this Agreement;
(d) On or prior to the Closing Date and each Subsequent
Transfer Date, Trendwest, on behalf of the Sellers shall have
delivered, or caused the delivery of, the Collateral Agent File related
to the Contracts identified in the Contract Schedule to the Collateral
Agent or its agent and, subject to Section 2.04 hereof, there shall
have been made all filings, recordings and/or registrations, and there
shall have been given, or taken, any notice or any other similar
action, as may be necessary in the opinion of the Issuer, in order to
establish and preserve the right, title and interest of the Issuer in
such Contract and the other Assets;
(e) On or before the Closing Date, the Issuer, the Servicer
and the Trustee shall have entered into the Servicing Agreement;
(f) The Notes shall be issued and sold on the Closing Date,
the Issuer shall receive the full consideration due it upon the
issuance of such Notes, the Issuer shall have applied such
consideration, to the extent necessary, to pay the related
consideration to the Sellers on such date; and
(g) Each applicable Seller shall have executed and delivered
the Asset Assignment or a Subsequent Asset Assignment, as applicable.
Section 5.02. Conditions to the Sellers' Obligations. The obligations of
each of the Sellers to execute and deliver to the Issuer the Asset Assignment or
a Subsequent Asset Assignment, as applicable, and perform its obligations
pursuant to this Agreement on the Closing Date and each Subsequent Date shall be
subject to the satisfaction of the following conditions:
(a) All representations and warranties of the Issuer
contained in this Agreement shall be true and correct with the same
effect as though such representations and warranties had been made on
such date;
(b) The Issuer shall have executed and delivered the
applicable Asset Assignment; and
(c) All corporate and legal proceedings and all instruments
in connection with the transactions contemplated by this Agreement
shall be satisfactory in form and
23
substance to such Seller, and such Seller shall have received from the
Issuer copies of all documents (including, without limitation, records
of corporate proceedings) relevant to the transactions herein
contemplated as such Seller may reasonably have requested.
Trendwest's obligation to repurchase the Contracts pursuant to this
Agreement shall not be affected by any failure of the Issuer to comply with
clause (a) of this Section 5.02 subsequent to the Closing Date.
ARTICLE 6
TERM AND TERMINATION
Section 6.01. Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue in full force and effect until
the later of (i) payment with respect to the last Asset or (ii) termination of
the Indenture.
Section 6.02. Default by Sellers. If any Seller shall be in default
under this Agreement and such default shall not have been cured for a period of
60 days, or if such Seller shall become insolvent or make an assignment for the
benefit of its creditors or have a receiver appointed for all or substantially
all of its properties, or if any proceedings commenced, or consented to, by such
Seller are not stayed or dismissed within 90 days after being commenced against
such Seller under any bankruptcy, insolvency or other law for the relief of
debtors, the Issuer shall have the right, in addition to any other rights it may
have under any applicable law, to terminate this Agreement with respect to such
Seller upon 30 days' prior written notice to such Seller; provided that any
termination of this Agreement shall not release such Seller from any obligation
under this Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Amendments. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally but only by an instrument in
writing signed by the party against which enforcement is sought. This Agreement
may be amended by the Issuer and the Sellers only with the prior written consent
of the Holders of 66-2/3% in principal amount of the Outstanding Notes of the
Controlling Class.
Section 7.02. Governing Law. This Agreement shall be construed in
accordance with the internal laws of the State of New York, without regard to
choice of law principles.
24
Section 7.03. Notices. All demands, notices and communications hereunder
shall be in writing and shall be delivered personally, mailed by registered or
certified United States mail, postage prepaid, or sent via overnight air courier
or facsimile communication and addressed, in the case of the Sellers, to the
Seller Address, and in the case of the Issuer, to the Issuer Address. All
notices and demands shall be deemed to have been given either at the time of the
delivery thereof to any officer of the Person entitled to receive such notices
and demands at the address of such Person for notices hereunder, or on the third
day after the mailing thereof to such address, as the case may be. Any Person
may change the address for notices hereunder by giving notice of such change to
the other Person.
Section 7.04. Separability Clause. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.05. Assignment. Except as provided in Section 4.01(a), this
Agreement may not be assigned or delegated by any Seller without the prior
written consent of the Issuer, the Trustee and the Holders of 66-2/3% in
principal amount of the Outstanding Notes of the Controlling Class and may not
be assigned or delegated by the Issuer without the prior written consent of each
of the Sellers, the Trustee and the Holders of 66-2/3% in principal amount of
the Outstanding Notes of the Controlling Class.
Section 7.06. Further Assurances. Each of the Sellers and the Issuer
agrees to do such further acts and things and to execute and deliver to the
Trustee such additional assignments, agreements, powers and instruments as are
required by the Trustee to carry into effect the purposes of this Agreement or
to better assure and confirm unto the Trustee or the Holders of the Notes their
rights, powers or remedies hereunder. If any Obligor shall be in default under
any Contract, upon reasonable request from the Servicer, the applicable Seller
will take all reasonable steps to assist in enforcing such Contract and
preserving and maintaining title to the Assets and the rights of the Trustee and
the Holders of the Notes therein against the claims of all persons and parties
to the extent the applicable Seller is capable of performing such requested
steps and the Servicer reasonably determines that the assistance of the
applicable Seller is necessary to effect the intent and purposes hereof.
Section 7.07. No Waivers; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Issuer or the Sellers, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise of any right, remedy, or privilege hereunder
preclude any other or further exercise hereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
25
Section 7.08. Binding Effect; Third Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties hereto, the Holders
of Outstanding Notes, and their respective successors and permitted assigns.
Section 7.09. Set-Off. (a) Each of the Sellers hereby irrevocably and
unconditionally waives all right of set-off that it may have under contract
(including this Agreement), applicable law or otherwise with respect to any
funds or monies of the Issuer at any time held by or in the possession of such
Seller.
(b) The Issuer shall have the right to set-off against each Seller any
amounts to which such Seller may be entitled and to apply such amounts to any
claims the Issuer may have against such Seller from time to time under this
Agreement. Upon any such set-off the Issuer shall give notice of the amount
thereof and the reasons therefor.
Section 7.10. Sellers Will Not Institute Insolvency Proceedings. During
the term of this Agreement and for one year and one day after the termination
hereof, none of the parties hereto or any Affiliate thereof or any Holder of
Outstanding Notes (and each Holder of Outstanding Notes so agrees by acceptance
of a Note) will file any involuntary petition or otherwise institute any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceeding under any federal or state bankruptcy or similar law against
the Issuer.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts all of which together shall constitute one original document.
26
IN WITNESS WHEREOF, the Sellers and the Issuer have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the date and year first above written.
TRENDWEST RESORTS, INC.
By
Name:
Title:
TRI FUNDING II, INC.
By
Name:
Title:
TRI FUNDING COMPANY I, L.L.C.
By: TRENDWEST FUNDING I, INC., as member
By
Name:
Title:
TW HOLDINGS, INC.
By
Name:
Title:
27
TW HOLDINGS II, INC.
By
Name:
Title:
TRI FUNDING III, INC.
By
Name:
Title:
28
ANNEX A
FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
Pursuant to Section 3.04(b) and Section 3.04(d) of the Receivables
Purchase Agreement dated as of August 1, 1999 (the "Agreement"), among Trendwest
Resorts, Inc. ("Trendwest"), TRI Funding Company I, L.L.C., TRI Funding II,
Inc., TW Holdings, Inc., TW Holding II, Inc. and TRI Funding III, Inc. (the
"Issuer"), attached as Schedule I hereto is a Supplemental Contract Schedule,
which includes information regarding Assets that are hereby sold, assigned,
transferred and delivered by Trendwest to the Issuer in accordance with the
Agreement and the Asset Assignment and setting forth the Collateral Value of any
Contract being sold to the Issuer by Trendwest pursuant to an Upgrade or
exchanged pursuant to a substitution.
TRENDWEST RESORTS, INC.
By
Name:
Title:
SCHEDULE I
SUPPLEMENTAL CONTRACT SCHEDULE FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
EXHIBIT A
FORM OF CONTRACT
EXHIBIT B
FORM OF ASSET ASSIGNMENT
This Asset Assignment ("Assignment") is made as of August 25, 1999 (the
"Closing Date"), by and among Trendwest Resorts, Inc., an Oregon corporation
("Trendwest"), TW Holdings II, Inc., a Delaware corporation ("XX XX"), TW
Holdings, Inc., a Nevada corporation, (together with Trendwest, and XX XX, the
"Assignors" and each an "Assignor") and TRI Funding III, Inc., a Delaware
corporation ("Assignee"), with reference to the following facts:
RECITALS:
A. In connection with the sale of certain assets of the Assignors in
conjunction with the issuance of notes on the date hereof by TRI Funding III,
Inc., Assignee and the Assignors have executed the Receivables Purchase
Agreement dated as of August 1, 1999 (the "Agreement").
B. In connection with the Agreement, each of the Assignors desires to
assign and transfer to Assignee all of such Assignor's right, title and interest
in and to each of the assets described in Schedule I hereto, and the
corresponding paragraphs below (the "Assigned Interests").
C. Assignee desires to accept this Assignment and transfer of the
Assigned Interests and assume all duties and obligations attendant thereto,
accruing after the Closing Date.
D. Terms used but not defined herein have the meanings ascribed to
them in the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the mutual
covenants set forth herein, the Assignors and Assignee hereby agree as follows:
1. Assignment. Each Assignor hereby assigns, conveys, grants and
transfers, without recourse except as provided in the Agreement, to Assignee
(and the successors and assigns of Assignee) the following property:
1.1. Such Assignor's right, title and interest in and to the
Contracts and related Receivables described and listed on Schedule I
hereto.
1.2. A security interest in the vacation credits subject to
each such Contract (the "Vacation Credits").
1.3. All other Assets relating to such Contract.
2. Assumption. Assignee hereby accepts the foregoing assignment and
hereby assumes all of the indebtedness, if any, duties and obligations incident
hereto and thereto, subject to the terms and conditions of the Agreement.
3. Further Assurance. The Assignors and Assignee each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or appropriate to consummate and
effectuate this Assignment.
4. Distinct Entities. The Assignors and Assignee hereby acknowledge
that for all purposes each of the Assignors and the Assignee are separate and
distinct legal entities. Accordingly, no Assignor shall be liable to any third
party for the debts, obligations and liabilities of the Assignee; and Assignee
shall not be liable to any third party for the debts, obligations and
liabilities of any Assignor to the extent that such debts, obligations and
liabilities have not been expressly assumed by Assignee hereunder.
5. Governing Law. This Assignment shall be governed by and interpreted
in accordance with the laws of the State of New York, and the parties hereto
hereby acknowledge and agree that this Assignment and the transactions
contemplated hereunder were negotiated and entered into in the State of New
York.
6. Authority. Each of the Assignors and the Assignee hereby represent
respectively that they have full power and authority to enter into this
Assignment.
7. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which, taken
together, shall constitute one and the same instrument.
8. Successors and Assigns. Each of the Assignors and the Assignee
agree that this Assignment will be binding and will inure to the benefit of each
Assignor and its successors and assigns and the Assignee and its successors and
assigns.
IN WITNESS WHEREOF, this Assignment has been executed as of the date
first above written.
TRENDWEST RESORTS, INC., Assignor
By
Name:
Title:
TW HOLDINGS II, INC.
By
Name:
Title:
TW HOLDINGS, INC., Assignor
By
Name:
Title:
TRI FUNDING III, INC., Assignee
By
Name:
Title:
SCHEDULE I
CONTRACT SCHEDULE
EXHIBIT C
FORM OF SUBSEQUENT ASSET ASSIGNMENT
This Asset Assignment ("Assignment") is made as of ______________,
_____ (the "Subsequent Transfer Date"), by and among
_________________________________________ (the "Assignor"), and TRI Funding III,
Inc., a Delaware corporation ("Assignee"), with reference to the following
facts:
RECITALS:
A. In connection with the sale of certain assets of the Assignor in
conjunction with the issuance of notes on the date hereof by TRI Funding III,
Inc., Assignee and the Assignor have executed the Receivables Purchase Agreement
dated as of August 1, 1999 (the "Agreement").
B. In connection with the Agreement, the Assignor desires to assign
and transfer to Assignee all of such Assignor's right, title and interest in and
to each of the assets described in Schedule I hereto, and the corresponding
paragraphs below (the "Assigned Interests").
C. Assignee desires to accept this Assignment and transfer of the
Assigned Interests and assume all duties and obligations attendant thereto,
accruing after the Subsequent Transfer Date.
D. Terms used but not defined herein have the meanings ascribed to
them in the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the mutual
covenants set forth herein, the Assignor and Assignee hereby agree as follows:
1. Assignment. The Assignor hereby assigns, conveys, grants and
transfers, without recourse except as provided in the Agreement, to Assignee
(and the successors and assigns of Assignee) the following property:
1.1. The Assignor's right, title and interest in and to the
Contracts and related Receivables described and listed on Schedule I
hereto.
1.2. A security interest in the vacation credits subject to
each such Contract (the "Vacation Credits").
1.3. All other Assets relating to such Contract.
2. Assumption. Assignee hereby accepts the foregoing assignment and
hereby assumes all of the indebtedness, if any, duties and obligations incident
hereto and thereto, subject to the terms and conditions of the Agreement.
3. Further Assurance. The Assignor and Assignee each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or appropriate to consummate and
effectuate this Assignment.
4. Distinct Entities. The Assignor and Assignee hereby acknowledge
that for all purposes each of the Assignor and the Assignee are separate and
distinct legal entities. Accordingly, the Assignor shall not be liable to any
third party for the debts, obligations and liabilities of the Assignee; and
Assignee shall not be liable to any third party for the debts, obligations and
liabilities of the Assignor to the extent that such debts, obligations and
liabilities have not been expressly assumed by Assignee hereunder.
5. Governing Law. This Assignment shall be governed by and interpreted
in accordance with the laws of the State of New York, and the parties hereto
hereby acknowledge and agree that this Assignment and the transactions
contemplated hereunder were negotiated and entered into in the State of New
York.
6. Authority. Each of the Assignor and the Assignee hereby represent
respectively that they have full power and authority to enter into this
Assignment.
7. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which, taken
together, shall constitute one and the same instrument.
8. Successors and Assigns. Each of the Assignor and the Assignee agree
that this Assignment will be binding and will inure to the benefit of the
Assignor and its successors and assigns and the Assignee and its successors and
assigns.
IN WITNESS WHEREOF, this Assignment has been executed as of the date
first above written.
______________________________, Assignor
By
Name:
Title:
TRI FUNDING III, INC., Assignee
By
Name:
Title:
SCHEDULE I
CONTRACT SCHEDULE
EXHIBIT D
FORM OF SUBORDINATED NOTE
$------------
TRI FUNDING III, INC.
SUBORDINATED NOTE
Date: August 25, 1999 Stated Maturity: __________, 2___
TRI FUNDING III, INC., a special purpose corporation duly organized and
existing under the laws of the State of Delaware (the "Issuer," which term
includes any successor entity under the Indenture referred to below), for value
received, hereby promises to pay to Trendwest Resorts, Inc. ("Trendwest"), or
its assigns, the principal sum ___________________ Dollars ($_____________) in
monthly installments beginning on September 15, 1999 (the "Initial Payment
Date"), and to pay interest monthly in arrears on the unpaid portion of said
principal sum (and, to the extent that the payment of such interest shall be
legally enforceable, on any overdue installment of interest on this Subordinated
Note) on the fifteenth day of each calendar month or, if such fifteenth day is
not a Business Day, the Business Day immediately following (each, a "Payment
Date"), for the period from and including August 25, 1999 through the last day
of the applicable Due Period immediately preceding the Initial Payment Date for
the Notes referred to below, and thereafter, monthly from and including the
first day through the last day of the Due Period immediately preceding the
Payment Date, at the rate of _______% per annum (calculated on the basis of a
360-day year consisting of 12 months of 30 days each). Each monthly installment
of principal payable on this Subordinated Note shall be an amount equal to the
cash available for distribution until the principal amount owed hereunder, as
adjusted as set forth below, is paid in full. Any remaining unpaid portion of
the principal amount of this Subordinated Note shall be due and payable no later
than the Stated Maturity referred to above; provided, however, that if the Notes
(as defined below) are not paid in full on such date, no such amounts shall be
due or payable until the Notes are paid in full. All terms used in this
Subordinated Note which are defined in the Indenture (referred to herein as the
"Indenture"), dated as of August 1, 1999, among the Issuer, Trendwest Resorts,
Inc., as Servicer, and Norwest Bank Minnesota, National Association, as Trustee
shall have the meanings assigned to them in the Indenture.
The principal and interest on this Subordinated Note are payable by
check mailed by first-class mail to Trendwest or its assigns or by wire transfer
in immediately available funds to the
account specified in writing to the Trustee by Trendwest or its assigns
received at least five Business Days prior to the Record Date for the Payment
Date on which wire transfers will commence, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Funds represented by checks returned undelivered
will be held for payment to the Person entitled thereto, subject to the terms of
the Indenture, at the office or agency in the United States of America
designated as such by the Issuer for such purpose pursuant to the Indenture.
The principal owed on this Subordinated Note will be increased from
time to time in the event that Trendwest transfers the receivable related to an
Upgrade Contract to the Issuer to be included in the Trust Estate, such amount
to equal the difference between the principal balance of the receivable of
Upgrade Contract as of the date of such Upgrade and the Collateral Value on such
date of the Receivable being replaced.
This Subordinated Note and the Issuer's Receivables-Backed Notes 1999-1
(the "Notes") issued pursuant to the Indenture are secured by certain
Receivables and other Collateral described in the Indenture. The Trust Estate
relating to the Notes also secures the payment of certain other amounts and
certain other obligations as described in the Indenture. Until the Notes are
paid in full and the obligations of the Issuer under the Indenture are
satisfied, (i) the Subordinated Notes are payable only at the time and in the
manner provided in the Indenture and are not redeemable or prepayable at the
option of the Issuer before such time and (ii) the holder of this Subordinated
Note will not cause the filing of a bankruptcy petition against the Issuer for
any reason whatsoever, including, without limitation, the failure of the Issuer
to make any payments of principal of or interest on this Subordinated Note until
after a period equal to 10 days plus the applicable preference period under the
United States Bankruptcy Code has passed since the Notes were paid in full.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the holder of this Subordinated Note under the
Indenture at any time by the Issuer, the Trustee and the Servicer with the
consent of the Holders of not less than 66-2/3% in principal amount of Notes of
the Controlling Class of the Notes Outstanding under the Indenture. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes, at the time Outstanding
under the Indenture, to waive compliance by the Issuer with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. This Subordinated Note shall not be amended without the consent of
Holders of not less than 66-2/3% in principal amount of the Controlling Class of
the Notes Outstanding.
No reference herein to the Indenture and no provision of this
Subordinated Note or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Subordinated Note, but, so long as any Notes are Outstanding,
solely from the Collateral pledged to the Trustee under the Indenture with
respect to the Notes at the times, place and rate, and in the coin or currency,
herein prescribed.
Notwithstanding anything else to the contrary contained in this
Subordinated Note or the Indenture, the obligation of the Issuer to pay the
principal of and interest on this Subordinated Note is not a general obligation
of the Issuer, nor its officers or directors, but, so long as any Notes are
Outstanding, is limited solely to the Collateral pledged under the Indenture.
So long as the Notes are Outstanding, Trendwest shall not transfer this
Subordinated Note to any Person.
This Subordinated Note and the Indenture shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to conflicts of laws principles.
IN WITNESS WHEREOF, TRI Funding III, Inc. has caused this Subordinated
Note to be signed, manually, by its ______________________.
TRI FUNDING III, INC.
By
Name:
Title:
SCHEDULE I
CONTRACT SCHEDULE
