Duties and Responsibilities of the Servicer. (a) In addition to any other customary services which the Servicer may perform or may be required to perform hereunder, the Servicer shall perform or cause to be performed through sub-servicers, the following servicing and collection activities in accordance with the Servicing Standard: (i) perform standard accounting services and general record keeping services with respect to the Timeshare Loans; (ii) respond to telephone or written inquiries of Obligors concerning the Timeshare Loans; (iii) keep Obligors informed of the proper place and method for making payment with respect to the Timeshare Loans; KL2 2787938.7 (iv) contact Obligors to effect collection and to discourage delinquencies in the payment of amounts owed under the Timeshare Loans and doing so by any lawful means, including but not limited to (A) mailing of routine past due notices, (B) preparing and mailing collection letters, (C) contacting delinquent Obligors by telephone to encourage payment, and (D) mailing of reminder notices to delinquent Obligors; (v) report tax information to Obligors and taxing authorities to the extent required by law; (vi) take such other action as may be necessary or appropriate in the discretion of the Servicer for the purpose of collecting and transferring to the Indenture Trustee for deposit into the Collection Account all payments received by the Servicer or remitted to any of the Servicer’s accounts in respect of the Timeshare Loans (except as otherwise expressly provided herein), and to carry out the duties and obligations imposed upon the Servicer pursuant to the terms of this Indenture; (vii) in the Servicer’s sole discretion, acquire Nonfinancial Assets on behalf of the Issuer and to be held as part of the Trust Estate for such period of time as the Servicer deems it advisable to do so, and to manage, lease or rent, encumber and sell such Nonfinancial Assets, so long as the Servicer acts under the reasonable belief that it is doing so in the best interests of the Issuer, and to deposit any Retained Asset Proceeds in the Collection Account; (viii) remarketing Timeshare Interests; (ix) arranging for Liquidations of Timeshare Properties and Right-to-Use Interests related to 60-Day Plus Delinquent Loans; (x) disposing of Timeshare Interests related to the Timeshare Loans whether following repossession, foreclosure or otherwise; (xi) to the extent requested by the Indenture Trustee, use reasonable best efforts to enforce the purchase and substitution obligation of the Depositor under the Sale Agreement; (xii) not modify, waive or amend the terms of any Timeshare Loan unless a default on such Timeshare Loan has occurred or is imminent or unless such modification, amendment or waiver will not: (i) alter the interest rate on or the principal balance of such Timeshare Loan, (ii) shorten the final maturity of, lengthen the timing of payments of either principal or interest under, or any other terms of, such Timeshare Loan, (iii) adversely affect the Timeshare Interest underlying such Timeshare Loan or (iv) reduce materially the likelihood that payments of interest and principal on such Timeshare Loan will be made when due; provided, however, that the Servicer may make the modifications, amendments or waivers described in clause (i) through (iv) above, so long as such modifications, amendments or waivers are not made with respect to more than 2% of the Timeshare Loans by Aggregate Loan Balance as of the end of the calendar month prior to such modification, amendment or waiver; provided, further, the Servicer may grant an extension of the final KL2 2787938.7 maturity of a Timeshare Loan if the Servicer, in its reasonable discretion, determines that (i) such Timeshare Loan is in default or default on such Timeshare Loan is likely to occur in the foreseeable future, and (ii) the value of such Timeshare Loan will be enhanced by such extension, provided that the Servicer will not (a) grant more than one extension per calendar year with respect to a Timeshare Loan, (b) grant an extension for more than one calendar month with respect to a Timeshare Loan in any calendar year or (c) grant an extension that would cause the stated maturity of a Timeshare Loan to be later than 24 months prior to the Stated Maturity; (xiii) work with Obligors in connection with any transfer of ownership of a Timeshare Interest by an Obligor to another Person and the Servicer may consent to the assumption by such Person of the Timeshare Loan related to such Timeshare Interest; provided, however, in connection with any such assumption, the rate of interest borne by, the maturity date of, the principal amount of, the timing of payments of principal and interest in respect of, and all other material terms of, the related Timeshare Loan shall not be changed other than as permitted in (xii) above; and (xiv) deliver such information and data to the Back-Up Servicer as is required under the Back-Up Servicing Agreement. (b) For so long as a Diamond Resorts Entity controls the Resorts, the Servicer shall use commercially reasonable best efforts to maintain or cause to maintain the Resorts in good repair, working order and condition (ordinary wear and tear excepted). (c) For so long as a Diamond Resorts Entity controls the Resorts, the manager, related management contract and master marketing and sale contract (if applicable) for each Resort at all times shall be reasonably satisfactory to the Administrative Agent. For so long as a Diamond Resorts Entity controls the Association for a Resort, and a Diamond Resorts Entity is the manager, (i) if an amendment or modification to the related management contract and master marketing and sale contract materially and adversely affects the Noteholders or the Purchasers, then it may only be amended or modified with the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed and (ii) if an amendment or modification to the related management contract and master marketing and sale contract does not materially and adversely affect the Noteholders or the Purchasers, the Servicer shall send a copy of such amendment or modification to the Administrative Agent with the Monthly Report to be delivered subsequent to the effective date of such amendment or modification. (d) In the event any Lien (other than a Permitted Lien) attaches to any Timeshare Loan or related collateral from any Person claiming from and through a Diamond Resorts Entity which materially adversely affects the Issuer’s interest in such Timeshare Loan, the Servicer shall, within the earlier to occur of ten Business Days after receiving notice of such attachment or the respective lienholders’ action to foreclose on such lien, either (i) cause such Lien to be released of record, (ii) provide the Indenture Trustee with a bond in accordance with the applicable laws of the state in which the Timeshare Property is located, issued by a corporate surety acceptable to the Administrative Agent, in an amount and in form reasonably acceptable to the Administrative Agent KL2 2787938.7 or (iii) provide the Administrative Agent with such other security as the Administrative Agent may reasonably require. (e) The Servicer shall: (i) promptly notify the Indenture Trustee, the Purchasers and the Administrative Agent of (A) receiving notice of any claim, action or proceeding which may be reasonably expected to have a material adverse effect on the Trust Estate, or any material part thereof, and (B) any action, suit, proceeding, order or injunction of which Servicer becomes aware after the date hereof pending or threatened against or affecting Servicer or any Affiliate which may be reasonably expected to have a material adverse effect on the Trust Estate or the Servicer’s ability to service the same; (ii) at the request of Indenture Trustee with respect to a claim or action or proceeding which arises from or through the Servicer or one of its Affiliates, appear in and defend, at Servicer’s expense, any such claim, action or proceeding which would have a material adverse effect on the Timeshare Loans or the Servicer’s ability to service the same; and (iii) comply in all respects, and shall cause all Affiliates to comply in all respects, with the terms of any orders imposed on such Person by any governmental authority the failure to comply with which would have a material adverse effect on the Timeshare Loans or the Servicer’s ability to service the same. (f) Except as contemplated by the Transaction Documents, the Servicer shall not, and shall not permit any Person to, encumber, pledge or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ (other than in the normal course of business) or security interest in and to the Reservation System (including, without limitation, all hardware, software and data in respect thereof) and furthermore agrees, and shall use commercially reasonable efforts to keep the Reservation System operational, not to dispose of the same and to allow the Collection the use of, and access to, the Reservation System. (g) The Servicer shall (i) notify the Administrative Agent and each of the Purchasers ten days prior to any material amendment or change to the Collection Policy or the Underwriting Guidelines and (ii) obtain the Administrative Agent’s prior written consent (which consent will not be unreasonably withheld or delayed) for any material amendment or change; provided, that the Servicer may immediately implement any changes (and provide notice to the Administrative Agent subsequent thereto) as may be required under applicable law from time to time upon the reasonable determination of the Servicer; and provided, further, that the Servicer shall deliver a copy of any non-material amendments or changes to the Collection Policy or the Underwriting Guidelines to the Administrative Agent, each of the Purchasers and the Indenture Trustee with the Monthly Servicer Report to be delivered subsequent to the effective date of such amendments or changes. (h) In connection with the Servicer’s duties under (vii), (viii), (ix) and (x) of subsection (a) above, the Servicer will undertake such duties in the ordinary course in a manner similar and consistent with (or better than) the manner in which the Servicer sells or markets other Timeshare Interests it or its Affiliates owns. In addition, in connection with the Servicer’s duties under (viii), (ix) and (x) of subsection (a) above, the Servicer agrees that it shall remarket and sell the Timeshare Interests related to the Timeshare Loans owned by the Issuer before it remarkets and sells Timeshare Interests of the same type owned by the Servicer or any of the Servicer’s Affiliates (other than Affiliates engaged primarily in Receivables Securitizations). (i) To the extent that any Timeshare Interest related to a 60-Day Plus Delinquent Loan is not a Retained Asset and is remarketed, or that a Retained Asset is subsequently remarketed or KL2 2787938.7 otherwise sold, the Servicer agrees that it shall require that Liquidation Proceeds be in the form of cash only. (j) [Reserved]. (k) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer hereby covenants that, with respect to a Timeshare Interest underlying a Right-to-Use Loan that is 181 days past due or a Right-to-Use Loan that is less than 181 days past due but for the Servicer has determined should be “charged-off”, it will re-market such Timeshare Interest within 30 days from such 181st date or date of determination and deposit the proceeds therefrom into the Collection Account within such 30-day time period; provided, however, that the foregoing 30-day requirement shall not apply to Right-to-Use Loans that are subject to the (1) the Servicemembers Civil Relief Act of 2003, (2) where the related Obligor is a debtor in a bankruptcy case, (3) where the related Obligor has demanded a UCC foreclosure or (4) where the related Obligor is a Foreign Obligor (other than Canadian Obligors). (l) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer hereby covenants that, with respect to a Timeshare Property underlying a Mortgage Loan that is 181 days past due or a Mortgage Loan that is less than 181 days past due but for the Servicer has determined should be “charged-off”, it will forward the Mortgage Loan to outside legal counsel to commence foreclosure proceedings and it will re-market such Timeshare Property within 30-days following completion of foreclosure date and deposit the proceeds therefrom into the Collection Account within such 30-day time period.
Appears in 1 contract
Sources: Indenture (Diamond Resorts Corp)
Duties and Responsibilities of the Servicer. (a) In addition to any other customary services which the Servicer may perform or may be required to perform hereunder, the Servicer shall perform or cause to be performed through sub-servicers, the following servicing and collection activities in accordance with the Servicing Standard:: KL2 3337076.6
(i) perform standard accounting services and general record keeping services with respect to the Timeshare Loans;
(ii) respond to telephone or written inquiries of Obligors concerning the Timeshare Loans;
(iii) keep Obligors informed of the proper place and method for making payment with respect to the Timeshare Loans; KL2 2787938.7;
(iv) contact Obligors to effect collection collections and to discourage delinquencies in the payment of amounts owed under the Timeshare Loans and doing so by any lawful means, including but not limited to (A) mailing of routine past due notices, (B) preparing and mailing collection letters, (C) contacting delinquent Obligors by telephone to encourage payment, and (D) mailing of reminder notices to delinquent Obligors;
(v) report tax information to Obligors and taxing authorities to the extent required by law;
(vi) take such other action as may be necessary or appropriate in the discretion of Servicer’s judgment (which shall be consistent with the Servicer Servicing Standard) for the purpose of collecting and transferring to the Indenture Trustee for deposit into the Collection Account all payments received by the Servicer or remitted to any of the Servicer’s accounts Lockbox Account in respect of the Timeshare Loans (except as otherwise expressly provided herein), and to carry out the duties and obligations imposed upon the Servicer pursuant to the terms of this Indenture;
(vii) arrange for Liquidations of Timeshare Properties related to Defaulted Timeshare Loans and remarket such Timeshare Properties as provided in the Servicer’s sole discretion, acquire Nonfinancial Assets on behalf of the Issuer and to be held as part of the Trust Estate for such period of time as the Servicer deems it advisable to do so, and to manage, lease or rent, encumber and sell such Nonfinancial Assets, so long as the Servicer acts under the reasonable belief that it is doing so in the best interests of the Issuer, and to deposit any Retained Asset Proceeds in the Collection AccountSection 5.3(a)(xiii) hereof;
(viii) remarketing Timeshare Interests;
(ix) arranging for Liquidations of Timeshare Properties and Right-to-Use Interests related to 60-Day Plus Delinquent Loans;
(x) disposing of Timeshare Interests related to the Timeshare Loans whether following repossession, foreclosure or otherwise;
(xi) to the extent requested by the Indenture Trustee, use reasonable best efforts to enforce the purchase and substitution obligation obligations of the Depositor Club Originator under the Sale AgreementTransfer Agreement or the Bluegreen Purchase Agreement with respect to breaches of representations and warranties related to the Timeshare Loans;
(xiiix) not refrain from modifying, waiving or amending the terms of any Timeshare Loan; provided, however, the Servicer may modify, waive or amend the terms of any a Timeshare Loan unless for which a default on such Timeshare Loan has occurred or is imminent or unless and such modification, amendment or waiver will not: not (iA) materially alter the interest rate on or the principal balance of such Timeshare Loan, (iiB) shorten the final maturity of, lengthen the timing of payments of either principal or interest underinterest, or any other terms of, such Timeshare LoanLoan in any manner which would have a material adverse effect on the Noteholders, (iiiC) adversely affect the Timeshare Interest Property underlying such Timeshare Loan or (ivD) reduce materially the likelihood that payments of interest and principal on such Timeshare Loan will shall be made when due; provided, however, that the Servicer may make the modifications, amendments or waivers described in clause (i) through (iv) above, so long as such modifications, amendments or waivers are not made with respect to more than 2% of the Timeshare Loans by Aggregate Loan Balance as of the end of the calendar month prior to such modification, amendment or waiver; provided, further, the Servicer may grant an a single extension of the final KL2 2787938.7 maturity of a Timeshare Loan if the Servicer, in its reasonable discretion, discretion determines that (ix) such Timeshare Loan is in default or a default on such Timeshare Loan is likely to occur in the foreseeable future, future and (iiy) the value of such Timeshare Loan will be enhanced by such extension; provided, provided further, the Servicer shall not be permitted to modify, 35 KL2 3337076.6 waive or amend the terms of any Timeshare Loan (other than a Force Majeure Loan) if the sum of the Cut-Off Date Loan Balance of such Timeshare Loan and the Cut-Off Date Loan Balances of all other Timeshare Loans (other than Force Majeure Loans) for which the Servicer has modified, waived or amended the terms thereof since the Closing Date exceeds 3.00% of the Aggregate Closing Date Collateral Balance; provided, further, that the Servicer will not (a) grant more than one extension per calendar year with respect to a Timeshare Loan, (b) grant an extension for more than one calendar month with respect to may determine that a Timeshare Loan is a Force Majeure Loan and may defer loan payments in accordance with the Servicing Standard, but in no event, more than 2 months, provided, that the Servicer may not, without having first received confirmation from each Rating Agency that such action would not result in a qualification downgrade or withdrawal of any calendar year rating assigned to the Notes (and such confirmation shall be deemed if no qualification downgrade or (c) grant an extension withdrawal of any rating assigned to the Notes occurs after the Servicer provides each Rating Agency 10 days’ prior written notice of the same), determine that a Timeshare Loan is a Force Majeure Loan if such determination would cause the stated maturity aggregate Loan Balance of a Timeshare all Force Majeure Loans to exceed 5.00% of the Aggregate Loan to be later than 24 months prior to the Stated MaturityBalance;
(xiiix) work with Obligors in connection with any transfer of ownership of a Timeshare Interest Property by an Obligor to another Person and (to the extent permitted), whereby the Servicer may may, only if required by law, consent to the assumption by such Person of the Timeshare Loan related to such Timeshare InterestProperty (to the extent permitted); provided, however, in connection with any such assumption, the rate of interest borne by, the maturity date of, the principal amount of, the timing of payments of principal and interest in respect of, and all other material terms of, the related Timeshare Loan shall not be changed other than as permitted in Section 5.3(a)(ix) hereof;
(xi) to the extent that the Custodian Fees or the Lockbox Fees are, in the Servicer’s reasonable business judgment, no longer commercially reasonable, use commercially reasonable efforts to exercise its rights under the Custodial Agreement or the Lockbox Agreement to replace the Custodian or Lockbox Bank, as applicable. Any such successor shall be reasonably acceptable to the Indenture Trustee;
(xii) above; and
(xiv) deliver such information and data to the Back-Up Backup Servicer as is required under the Back-Up Backup Servicing Agreement;
(xiii) in the event that a Defaulted Timeshare Loan is not or cannot be released from the Lien of the Indenture pursuant to Section 4.7 hereof, the Servicer shall, in accordance with the Servicing Standard and the Collection Policy, promptly institute collection procedures, which may include, but is not limited to, cancellation, termination or foreclosure proceedings or obtaining a deed-in-lieu of foreclosure (each, a “Foreclosure Property”). Upon the Timeshare Property becoming a Foreclosure Property, the Servicer shall cause the Remarketing Agent to promptly attempt to remarket such Foreclosure Property in accordance with and pursuant to the Remarketing Agreement. The Remarketing Fees due under the Remarketing Agreement shall constitute Liquidation Expenses and upon reimbursement to the Servicer shall be paid by the Servicer to the Remarketing Agent; and KL2 3337076.6
(xiv) with respect to Timeshare Loans related to Timeshare Properties located in the State of Louisiana, take such action as may be necessary in the applicable jurisdiction to avoid the lapse of a related Mortgage while any such Timeshare Loan remains outstanding.
(b) The Servicer may not sell any of the Foreclosure Property that is an asset of the Trust Estate except for or as specifically permitted by this Indenture.
(c) The Servicer shall, for each applicable Credit Card Timeshare Loan, pay the service charge imposed by the applicable credit card vendor for processing the payment due from the Obligor.
(d) For so long as a Diamond Resorts Entity Bluegreen or any of its Affiliates controls the Resorts, the Servicer shall use commercially reasonable best efforts to cause the Club Managing Entity to maintain or cause to maintain the Resorts in good repair, working order and condition (ordinary wear and tear excepted).
(ce) For so long as a Diamond Resorts Entity Bluegreen or any of its Affiliates controls the Resorts, the manager, manager and the related management contract and master marketing and sale contract (if applicable) for each Resort at all times shall be reasonably satisfactory to the Administrative AgentNoteholders representing at least 66‑2/3% of the Adjusted Note Balance of each Class of Notes. For so long as a Diamond Resorts Entity Bluegreen or any of its Affiliates controls the Timeshare Association for a Resort, and a Diamond Resorts Entity Bluegreen or an Affiliate thereof is the manager, (i) if an amendment or modification to the related management contract and master marketing and sale contract materially and adversely affects the Noteholders or the Purchasers, then it may only be amended or modified in a manner that reasonably may be determined to have a material adverse effect on the Noteholders only with the prior written consent of the Administrative AgentNoteholders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes, which consent shall not be unreasonably withheld or delayed and (ii) if an amendment or modification to the related management contract and master marketing and sale contract does not materially and adversely affect the Noteholders or the Purchasers, the Servicer shall send a copy of such amendment or modification to the Administrative Agent with the Monthly Report to be delivered subsequent to the effective date of such amendment or modificationdelayed.
(df) In the event any Lien (other than a Permitted Lien) attaches to any Timeshare Loan or related collateral from any Person claiming from and through a Diamond Resorts Entity Bluegreen or one of its Affiliates which materially adversely affects the Issuer’s interest in such Timeshare Loan, the Servicer Bluegreen shall, within the earlier to occur of ten Business Days after receiving notice of such attachment or the respective lienholders’ action to foreclose on such lien, either (i) cause such Lien to be released of record, (ii) provide the Indenture Trustee with a bond in accordance with the applicable laws of the state in which the Timeshare Property is located, issued by a corporate surety acceptable to the Administrative AgentIndenture Trustee, in an amount and in form reasonably acceptable to the Administrative Agent KL2 2787938.7 Indenture Trustee or (iii) provide the Administrative Agent Indenture Trustee with such other security as the Administrative Agent Indenture Trustee may reasonably require.
(eg) The Servicer shall: (i) promptly notify the Indenture Trustee, the Purchasers and the Administrative Agent Trustee of (A) receiving notice of any claim, action or proceeding which may be reasonably expected to have a material adverse effect on the Trust Estate, or any material part thereof, and (B) any action, suit, proceeding, order or injunction of which Servicer becomes aware after the date hereof pending or threatened against or affecting Servicer or any Affiliate which may be reasonably expected to have a material adverse effect on the Trust Estate or the Servicer’s ability to service the same; (ii) at the request of Indenture Trustee with respect to a claim or action or proceeding which arises from or through the Servicer or one of its Affiliates, appear in and defend, at Servicer’s expense, any such claim, action or proceeding which would have a material adverse effect on the Timeshare Loans or the Servicer’s ability to service the same; and (iii) comply in all respects, and shall cause all Affiliates to comply in all respects, with the terms of any orders imposed on such Person by any governmental authority the failure to comply with which would have a material adverse effect on the Timeshare Loans or the Servicer’s ability to service the same.37 KL2 3337076.6
(fh) Except as contemplated by the Transaction Documents, the Servicer shall not, and shall not permit any Person the Club Managing Entity to, encumber, pledge or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ (other than in the normal course of business) or security interest in and to the Reservation System (including, without limitation, all hardware, software and data in respect thereof) and furthermore agrees, and shall cause the Club Managing Entity, to use commercially reasonable efforts to keep the Reservation System operational, not to dispose of the same and to allow the Collection Club the use of, and access to, the Reservation System.
(g) The Servicer shall (i) notify System in accordance with the Administrative Agent and each terms of the Purchasers ten days prior Club Management Agreement. Notwithstanding the foregoing, should the Club Managing Entity determine that it is desirable to any material amendment or change replace the existing hardware and software related to the Collection Policy Reservation System, it will be allowed to enter into a lease or the Underwriting Guidelines and (ii) obtain the Administrative Agent’s prior written consent (which consent will not be unreasonably withheld or delayed) for any material amendment or change; provided, that the Servicer may immediately implement any changes (and provide notice to the Administrative Agent subsequent thereto) as may be required under applicable law from time to time upon the reasonable determination of the Servicer; and provided, further, that the Servicer shall deliver a copy of any non-material amendments or changes to the Collection Policy or the Underwriting Guidelines to the Administrative Agent, each of the Purchasers and the Indenture Trustee with the Monthly Servicer Report to be delivered subsequent to the effective date of such amendments or changes.
(h) In connection with the Servicer’s duties under (vii), (viii), (ix) and (x) of subsection (a) above, the Servicer will undertake such duties in the ordinary course in a manner similar and consistent with (or better than) the manner in which the Servicer sells or markets other Timeshare Interests it or its Affiliates owns. In addition, finance arrangement in connection with the Servicer’s duties under (viii), (ix) lease or purchase of such hardware and (x) of subsection (a) above, the Servicer agrees that it shall remarket and sell the Timeshare Interests related to the Timeshare Loans owned by the Issuer before it remarkets and sells Timeshare Interests of the same type owned by the Servicer or any of the Servicer’s Affiliates (other than Affiliates engaged primarily in Receivables Securitizations)software.
(i) To The Servicer shall comply in all material respects with the extent that any Collection Policy in effect on the Closing Date (or, as amended from time to time with the consent of the Noteholders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes) and with the terms of the Timeshare Interest related to a 60-Day Plus Delinquent Loan is not a Retained Asset and is remarketed, or that a Retained Asset is subsequently remarketed or KL2 2787938.7 otherwise sold, the Servicer agrees that it shall require that Liquidation Proceeds be in the form of cash onlyLoans.
(j) [Reserved]At the written request of a Rating Agency, the Servicer shall prepare and deliver to such Rating Agency, updated replines in the format set forth in the Offering Circular.
(k) Notwithstanding any discretion provided in At the Collection Policydirection and on behalf of the Issuer, the initial Servicer hereby covenants that, shall notify the Indenture Trustee and Initial Lockbox Bank within sixty (60) days of terminating the Lockbox Agreement with respect the Initial Lockbox Bank and shall further direct the Indenture Trustee to enter into a Timeshare Interest underlying a Right-to-Use Loan that is 181 days past due or a Right-to-Use Loan that is less than 181 days past due but for Lockbox Agreement with the Servicer has determined should be “charged-off”, it will re-market such Timeshare Interest within 30 days from such 181st date or date of determination and deposit the proceeds therefrom into the Collection Account within such 30-day time period; provided, however, that the foregoing 30-day requirement shall not apply to Right-to-Use Loans that are subject to the (1) the Servicemembers Civil Relief Act of 2003, (2) where the related Obligor is a debtor in a bankruptcy case, (3) where the related Obligor has demanded a UCC foreclosure or (4) where the related Obligor is a Foreign Obligor (other than Canadian Obligors)Successor Lockbox Bank.
(l) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer hereby covenants that, with respect to a Timeshare Property underlying a Mortgage Loan that is 181 days past due or a Mortgage Loan that is less than 181 days past due but for the Servicer has determined should be “charged-off”, it will forward the Mortgage Loan to outside legal counsel to commence foreclosure proceedings and it will re-market such Timeshare Property within 30-days following completion of foreclosure date and deposit the proceeds therefrom into the Collection Account within such 30-day time period.
Appears in 1 contract
Duties and Responsibilities of the Servicer. (a) In addition to any other customary services which the Servicer may perform or may be required to perform hereunder, the Servicer shall perform or cause to be performed through sub-servicers, the following servicing and collection activities in accordance with the Servicing Standard:
(i) perform standard accounting services and general record keeping services with respect to the Timeshare Loans;
(ii) respond to telephone or written inquiries of Obligors concerning the Timeshare Loans;; KL2 2817472.7
(iii) keep Obligors informed of the proper place and method for making payment with respect to the Timeshare Loans; KL2 2787938.7;
(iv) contact Obligors to effect collection and to discourage delinquencies in the payment of amounts owed under the Timeshare Loans and doing so by any lawful means, including but not limited to (A) mailing of routine past due notices, (B) preparing and mailing collection letters, (C) contacting delinquent Obligors by telephone to encourage payment, and (D) mailing of reminder notices to delinquent Obligors;
(v) report tax information to Obligors and taxing authorities to the extent required by law;
(vi) take such other action as may be necessary or appropriate in the discretion of the Servicer for the purpose of collecting and transferring to the Indenture Trustee for deposit into the Collection Account all payments received by the Servicer or remitted to any of the Servicer’s accounts in respect of the Timeshare Loans (except as otherwise expressly provided herein), and to carry out the duties and obligations imposed upon the Servicer pursuant to the terms of this Indenture;
(vii) in the Servicer’s sole discretion, acquire Nonfinancial Assets on behalf of the Issuer and to be held as part of the Trust Estate for such period of time as the Servicer deems it advisable to do so, and to manage, lease or rent, encumber and sell such Nonfinancial Assets, so long as the Servicer acts under the reasonable belief that it is doing so in the best interests of the Issuer, and to deposit any Retained Asset Proceeds in the Collection Account;
(viii) remarketing Timeshare Interests;
(ix) arranging for Liquidations of Timeshare Properties and Right-to-Use Interests related to 60-Day Plus Delinquent Loans;
(x) disposing of Timeshare Interests related to the Timeshare Loans whether following repossession, foreclosure or otherwise;
(xi) to the extent requested by the Indenture Trustee, use reasonable best efforts to enforce the purchase and substitution obligation of the Depositor under the Sale Agreement;
(xii) not modify, waive or amend the terms of any Timeshare Loan unless a default on such Timeshare Loan has occurred or is imminent or unless such modification, amendment or waiver will not: (i) alter the interest rate on or the principal balance of such Timeshare Loan, (ii) shorten the final maturity of, lengthen the timing of payments of either principal or interest under, or any other terms of, such Timeshare Loan, (iii) adversely affect the Timeshare Interest underlying such Timeshare Loan or (iv) reduce materially the likelihood that payments of interest and principal on such Timeshare Loan will be made when due; provided, however, that the Servicer may make the modifications, amendments or waivers described in clause (i) through (iv) above, so long as such modifications, amendments or waivers are not made with respect to more than 2% of the Timeshare Loans by Aggregate Loan Balance as of the end of the calendar month prior to such modification, amendment or waiver; provided, further, the Servicer may grant an extension of the final KL2 2787938.7 maturity of a Timeshare Loan if the Servicer, in its reasonable discretion, determines that (i) such Timeshare Loan is in default or default on such Timeshare Loan is likely to occur in the foreseeable future, and (ii) the value of such Timeshare Loan will be enhanced by such extension, provided that the Servicer will not (a) grant more than one extension per calendar year with respect to a Timeshare Loan, (b) grant an extension for more than one calendar month with respect to a Timeshare Loan in any calendar year or (c) grant an extension that would cause the stated maturity of a Timeshare Loan to be later than 24 months prior to the Stated Maturity;
(xiii) work with Obligors in connection with any transfer of ownership of a Timeshare Interest by an Obligor to another Person and the Servicer may consent to the assumption by such Person of the Timeshare Loan related to such Timeshare Interest; provided, however, in connection with any such assumption, the rate of interest borne by, the maturity date of, the principal amount of, the timing of payments of principal and interest in respect of, and all other material terms of, the related Timeshare Loan shall not be changed other than as permitted in (xii) above; and
(xiv) deliver such information and data to the Back-Up Servicer as is required under the Back-Up Servicing Agreement.
(b) For so long as a Diamond Resorts Entity controls the Resorts, the Servicer shall use commercially reasonable best efforts to maintain or cause to maintain the Resorts in good repair, working order and condition (ordinary wear and tear excepted).
(c) For so long as a Diamond Resorts Entity controls the Resorts, the manager, related management contract and master marketing and sale contract (if applicable) for each Resort at all times shall be reasonably satisfactory to the Administrative Agent. For so long as a Diamond Resorts Entity controls the Association for a Resort, and a Diamond Resorts Entity is the manager, (i) if an amendment or modification to the related management contract and master marketing and sale contract materially and adversely affects the Noteholders or the Purchasers, then it may only be amended or modified with the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed and (ii) if an amendment or modification to the related management contract and master marketing and sale contract does not materially and adversely affect the Noteholders or the Purchasers, the Servicer shall send a copy of such amendment or modification to the Administrative Agent with the Monthly Report to be delivered subsequent to the effective date of such amendment or modification.
(d) In the event any Lien (other than a Permitted Lien) attaches to any Timeshare Loan or related collateral from any Person claiming from and through a Diamond Resorts Entity which materially adversely affects the Issuer’s interest in such Timeshare Loan, the Servicer shall, within the earlier to occur of ten Business Days after receiving notice of such attachment or the respective lienholders’ action to foreclose on such lien, either (i) cause such Lien to be released of record, (ii) provide the Indenture Trustee with a bond in accordance with the applicable laws of the state in which the Timeshare Property is located, issued by a corporate surety acceptable to the Administrative Agent, in an amount and in form reasonably acceptable to the Administrative Agent KL2 2787938.7 or (iii) provide the Administrative Agent with such other security as the Administrative Agent may reasonably require.
(e) The Servicer shall: (i) promptly notify the Indenture Trustee, the Purchasers and the Administrative Agent of (A) receiving notice of any claim, action or proceeding which may be reasonably expected to have a material adverse effect on the Trust Estate, or any material part thereof, and (B) any action, suit, proceeding, order or injunction of which Servicer becomes aware after the date hereof pending or threatened against or affecting Servicer or any Affiliate which may be reasonably expected to have a material adverse effect on the Trust Estate or the Servicer’s ability to service the same; (ii) at the request of Indenture Trustee with respect to a claim or action or proceeding which arises from or through the Servicer or one of its Affiliates, appear in and defend, at Servicer’s expense, any such claim, action or proceeding which would have a material adverse effect on the Timeshare Loans or the Servicer’s ability to service the same; and (iii) comply in all respects, and shall cause all Affiliates to comply in all respects, with the terms of any orders imposed on such Person by any governmental authority the failure to comply with which would have a material adverse effect on the Timeshare Loans or the Servicer’s ability to service the same.
(f) Except as contemplated by the Transaction Documents, the Servicer shall not, and shall not permit any Person to, encumber, pledge or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ (other than in the normal course of business) or security interest in and to the Reservation System (including, without limitation, all hardware, software and data in respect thereof) and furthermore agrees, and shall use commercially reasonable efforts to keep the Reservation System operational, not to dispose of the same and to allow the Collection the use of, and access to, the Reservation System.
(g) The Servicer shall (i) notify the Administrative Agent and each of the Purchasers ten days prior to any material amendment or change to the Collection Policy or the Underwriting Guidelines and (ii) obtain the Administrative Agent’s prior written consent (which consent will not be unreasonably withheld or delayed) for any material amendment or change; provided, that the Servicer may immediately implement any changes (and provide notice to the Administrative Agent subsequent thereto) as may be required under applicable law from time to time upon the reasonable determination of the Servicer; and provided, further, that the Servicer shall deliver a copy of any non-material amendments or changes to the Collection Policy or the Underwriting Guidelines to the Administrative Agent, each of the Purchasers and the Indenture Trustee with the Monthly Servicer Report to be delivered subsequent to the effective date of such amendments or changes.
(h) In connection with the Servicer’s duties under (vii), (viii), (ix) and (x) of subsection (a) above, the Servicer will undertake such duties in the ordinary course in a manner similar and consistent with (or better than) the manner in which the Servicer sells or markets other Timeshare Interests it or its Affiliates owns. In addition, in connection with the Servicer’s duties under (viii), (ix) and (x) of subsection (a) above, the Servicer agrees that it shall remarket and sell the Timeshare Interests related to the Timeshare Loans owned by the Issuer before it remarkets and sells Timeshare Interests of the same type owned by the Servicer or any of the Servicer’s Affiliates (other than Affiliates engaged primarily in Receivables Securitizations).
(i) To the extent that any Timeshare Interest related to a 60-Day Plus Delinquent Loan is not a Retained Asset and is remarketed, or that a Retained Asset is subsequently remarketed or KL2 2787938.7 otherwise sold, the Servicer agrees that it shall require that Liquidation Proceeds be in the form of cash only.
(j) [Reserved].
(k) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer hereby covenants that, with respect to a Timeshare Interest underlying a Right-to-Use Loan that is 181 days past due or a Right-to-Use Loan that is less than 181 days past due but for the Servicer has determined should be “charged-off”, it will re-market such Timeshare Interest within 30 days from such 181st date or date of determination and deposit the proceeds therefrom into the Collection Account within such 30-day time period; provided, however, that the foregoing 30-day requirement shall not apply to Right-to-Use Loans that are subject to the (1) the Servicemembers Civil Relief Act of 2003, (2) where the related Obligor is a debtor in a bankruptcy case, (3) where the related Obligor has demanded a UCC foreclosure or (4) where the related Obligor is a Foreign Obligor (other than Canadian Obligors).
(l) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer hereby covenants that, with respect to a Timeshare Property underlying a Mortgage Loan that is 181 days past due or a Mortgage Loan that is less than 181 days past due but for the Servicer has determined should be “charged-off”, it will forward the Mortgage Loan to outside legal counsel to commence foreclosure proceedings and it will re-market such Timeshare Property within 30-days following completion of foreclosure date and deposit the proceeds therefrom into the Collection Account within such 30-day time period.
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