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EXHIBIT 10.7
INDENTURE
among
TRI FUNDING COMPANY I, L.L.C.
("Issuer")
and
TRENDWEST RESORTS, INC.
("Servicer")
and
LASALLE NATIONAL BANK
("Trustee")
Dated as of March 1, 1996
Providing for
$70,000,000
7.42% Receivables-Backed Notes, Series 1996-1
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
Parties.....................................................................1
Preliminary Statement.......................................................1
Granting Clause.............................................................1
ARTICLE ONE DEFINITIONS .................................2
Section 1.01 Definitions .................................2
ARTICLE TWO NOTE FORM ..................................16
Section 2.01 Form .......................................16
ARTICLE THREE THE NOTES ..................................17
Section 3.01 Denomination ...............................17
Section 3.02 Execution, Authentication, Delivery
and Dating .................................17
Section 3.03 Notes as Debt ..............................17
Section 3.04 Registration, Registration of Transfer
and Exchange ...............................17
Section 3.05 Limitation on Transfer and Exchange ........18
Section 3.06 Mutilated, Destroyed, Lost or Stolen
Notes ......................................19
Section 3.07 Payment of Principal and Interest;
Principal and Interest Rights
Preserved ..................................20
Section 3.08 Persons Deemed Owner .......................21
Section 3.09 Cancellation ...............................21
ARTICLE FOUR ORIGINAL ISSUANCE OF NOTES; SUBSTITUTIONS OF
COLLATERAL .................................22
Section 4.01 Conditions to Original Issuance of
Notes ......................................22
Section 4.02 Security for Notes .........................23
Section 4.03 Substitution and Purchase of
Receivables; Upgrade Contracts .............24
Section 4.04 Releases ...................................26
Section 4.05 Trust Estate ...............................26
Section 4.06 Notice of Release ..........................26
Section 4.07 Opinions as to Trust Estate ................27
ARTICLE FIVE SATISFACTION AND DISCHARGE .................27
Section 5.01 Satisfaction and Discharge of Indenture ....27
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ARTICLE SIX DEFAULTS AND REMEDIES 28
Section 6.01 Events of Default ..........................28
Section 6.02 Acceleration of Maturity; Rescission
and Annulment ..............................29
Section 6.03 Collection of Indebtedness and Suits
for Enforcement by Trustee .................30
Section 6.04 Remedies ...................................30
Section 6.05 Optional Preservation of Trust Estate ......31
Section 6.06 Trustee May File Proofs of Claim ...........31
Section 6.07 Trustee May Enforce Claims Without
Possession of Notes ........................32
Section 6.08 Application of Money Collected .............33
Section 6.10 Unconditional Right of Noteholders to
Receive Principal and Interest .............34
Section 6.11 Restoration of Rights and Remedies .........34
Section 6.12 Rights and Remedies Cumulative .............34
Section 6.13 Delay or Omission; Not Waiver ..............35
Section 6.14 Control by Noteholders .....................35
Section 6.15 Waiver of Past Defaults ....................35
Section 6.16 Undertaking for Costs ......................36
Section 6.17 Waiver of Stay or Extension Laws ...........36
Section 6.18 Sale of Trust Estate .......................36
Section 6.19 Action on Notes ............................37
ARTICLE SEVEN THE TRUSTEE ................................38
Section 7.01 Certain Duties and Responsibilities ........38
Section 7.02 Notice of Default ..........................40
Section 7.03 Certain Rights of Trustee ..................40
Section 7.04 Not Responsible for Recitals or
Issuance of Notes ..........................41
Section 7.05 May Hold Notes .............................42
Section 7.06 Money Held in Trust ........................42
Section 7.07 Compensation and Reimbursement .............42
Section 7.08 Corporate Trustee Required;
Eligibility ................................43
Section 7.09 Resignation and Removal; Appointment
of Successor ...............................43
Section 7.10 Acceptance of Appointment by Successor .....44
Section 7.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee ..........44
Section 7.12 Co-Trustees and Separate Trustees ..........45
Section 7.13 Rights with Respect to the Servicer ........46
Section 7.14 Appointment of Authenticating Agent ........46
Section 7.15 Custodian to Hold Contracts ................47
ARTICLE EIGHT OPTIONAL PURCHASE OF RECEIVABLES ...........48
Section 8.01 Optional Purchase of All Receivables .......48
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ARTICLE NINE SUPPLEMENTAL INDENTURES ....................48
Section 9.01 Supplemental Indentures Without
Consent of Noteholders .....................48
Section 9.02 Supplemental Indentures with Consent
of Noteholders .............................49
Section 9.03 Execution of Supplemental Indentures .......50
Section 9.04 Effect of Supplemental Indentures ..........50
Section 9.05 Reference in Notes to Supplemental
Indentures .................................50
ARTICLE TEN REDEMPTION OF NOTES ........................51
Section 10.01 Redemption at the Option of the
Issuer; Election to Redeem .................51
Section 10.02 Notice to Trustee ..........................51
Section 10.03 Notice of Redemption by the Issuer .........51
Section 10.04 Deposit of the Redemption Price ............52
Section 10.05 Notes Payable on Redemption Date ...........52
ARTICLE ELEVEN REPRESENTATIONS, WARRANTIES AND COVENANTS ..52
Section 11.01 Representations and Warranties .............52
Section 11.02 Covenants ..................................56
Section 11.03 Other Matters as to the Issuer .............62
ARTICLE TWELVE ACCOUNTS AND ACCOUNTINGS ...................62
Section 12.01 Collection of Money ........................62
Section 12.02 Collection Account .........................62
Section 12.03 Reserve Account ............................65
Section 12.04 Reports by Trustee to Noteholders ..........67
ARTICLE THIRTEEN PROVISIONS OF GENERAL APPLICATION ..........68
Section 13.01 Acts of Noteholders ........................68
Section 13.02 Notices, etc., to Trustee, Issuer,
Servicer and the Rating Agency .............68
Section 13.03 Notices and Other Documents to
Noteholders; Waiver ........................69
Section 13.04 Effect of Headings and Table of
Contents ...................................69
Section 13.05 Successors and Assigns .....................70
Section 13.06 Separability ...............................70
Section 13.07 Benefits of Indenture ......................70
Section 13.08 Legal Holidays .............................70
Section 13.09 Governing Law ..............................70
Section 13.10 Counterparts ...............................70
Section 13.11 Obligation .................................70
Section 13.12 Compliance Certificates and Opinions .......70
Section 13.13 Effective Date of Transactions .............71
Signatures.................................................................72
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EXHIBIT A Form of Investment Letter
EXHIBIT B Form of Supplement for Grant of Substitute Contracts
and Upgrade Contracts
EXHIBIT C Form of Note
SCHEDULE A Contract Schedule
SCHEDULE B Members of the Issuer and Encumbrances on the
Membership Interests of the Members of the Issuer
SCHEDULE C Pool Information
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INDENTURE, dated as of March 1, 1996 (herein, as amended and
supplemented from time to time as permitted hereby, called this "Indenture"),
among TRI FUNDING COMPANY I, L.L.C., a Delaware limited liability company
(herein, together with its permitted successors and assigns, called the
"Issuer"), TRENDWEST RESORTS, INC., an Oregon corporation, as servicer (herein,
together with its permitted successors and assigns, called the "Servicer"), and
LASALLE NATIONAL BANK, a nationally chartered bank, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Issuer's 7.42% Receivables-Backed
Notes, Series 1996-1 (the "Notes"). All covenants and agreements made by the
Issuer, the Servicer and the Trustee herein are for the benefit and security of
the Holders of the Notes. The Issuer, the Servicer and the Trustee are entering
into this Indenture, and the Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer, the Servicer and the Trustee in accordance with its terms have been
done.
GRANTING CLAUSE
To secure the payment of the principal of and interest on the Notes in
accordance with their terms, the payment of all of the sums payable under this
Indenture and the performance of the covenants contained in this Indenture, the
Issuer hereby Grants to the Trustee, solely in trust and as collateral security
as provided in this Indenture, for the ratable benefit of the Holders of the
Notes, all of the Issuer's rights, title and interest in and to the following
whether now owned or hereafter acquired and any and all benefits accruing to the
Issuer from: (a) the Receivables and Contracts, including all proceeds of the
Contracts and Receivables and all payments received on or with respect to the
Contracts and Receivables and due after the CutOff Date; (b) the Contract Files
and the Custodian Files; (c) the Issuer's rights and interests in the related
Credits; (d) the Receivables Purchase Agreement; (e) the Sale Agreement; (f) the
Servicing Agreement; (g) all amounts from time to time on deposit in the
Collection Account, the Clearing Account, the Distribution Account and the
Reserve Account (including any Eligible Investments and other property in such
accounts); and (h) proceeds of the foregoing (including, but not by way of
limitation, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part or are
included in the proceeds of any of the foregoing) (all of the foregoing being
hereinafter referred to as the "Collateral" or "Trust Estate").
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The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein
required to the best of its ability to the end that the interests of the
Noteholders may be adequately and effectively protected.
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions. Except as otherwise expressly provided herein
or unless the context otherwise requires, the following terms have the
respective meanings set forth below for all purposes of this Indenture, and the
definitions of such terms are equally applicable both to the singular and plural
forms of such terms.
"Acquisition Consideration": The meaning specified in the Receivables
Purchase Agreement.
"Act": With respect to any Noteholder, the meaning specified in Section
13.01.
"Affiliate": At any time, and with respect to any Person, (a) any other
Person that at such time directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of such
first mentioned Person or any Person of which such first mentioned Person
beneficially owns or holds, in the aggregate, directly or indirectly, 10% or
more of any class of voting or equity interests. As used in this definition,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Aggregate Collateral Value": As of any date, the sum of the aggregate
of the Collateral Values outstanding at such date; provided, however, that the
Collateral Value of any Defaulted Contract shall not be included in the
calculation of Aggregate Collateral Value in any Due Period after the Due Period
in which such Contract became a Defaulted Contract.
"Asset Assignment": The meaning specified in the Receivables Purchase
Agreement.
"Assignment": The meaning specified in the Sale Agreement.
"Authenticating Agent": Any entity appointed by the Trustee pursuant to
Section 7.14 hereof.
"Board of Directors": Either the board of directors of the Issuer or of
the Servicer, as the context requires, or any duly authorized committee of such
Board.
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"Board Resolution": A copy of a resolution delivered to the Trustee and
certified by the Secretary or an Assistant Secretary of the Servicer or a
corporate member of the Issuer, as the case may be, to have been duly adopted by
its respective Board of Directors and to be in full force and effect on the date
of such certification.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee is located are authorized or obligated by
law or executive order to close.
"Calculation Date": The last day of a Due Period.
"Cash Accumulation Event": The occurrence of any of the following
events or conditions: (i) as of any Calculation Date, the average Delinquency
Level for the immediately preceding three Due Periods ending on such Calculation
Date is greater than or equal to 8.0%, (ii) as of any Calculation Date, the
average Default Rate for the immediately preceding three Due Periods ending on
such Calculation Date is greater than or equal to 0.6% or (iii)(a) the Issuer
and Trendwest shall have failed to cause SeaFirst Bank, as agent under the
Receivables Transfer Agreement ("SeaFirst"), to execute and deliver to the
Trustee (and the Issuer promptly shall cause a copy thereof to be sent to each
Noteholder) an estoppel and subordination agreement reasonably satisfactory in
form and substance to the Holders of not less than 66-2/3% in aggregate
principal amount of the Notes Outstanding with respect to the Contracts listed
on Schedule A hereto and the related Collateral as of the Closing Date (the
"Initial Collateral") substantially to the effect that (unless the Holders of
not less than 66-2/3% in aggregate principal amount of Notes Outstanding
otherwise agree) SeaFirst has no ownership interest, security interest or other
interest in the Initial Collateral, and, in the event that Seafirst at any time
in the future obtains any such interest, such interest of Seafirst shall be
subordinate and inferior to the interest of the Trustee in the Initial
Collateral and that in no event shall SeaFirst enforce any rights, whether as
secured party or otherwise, against the Initial Collateral until all of the
Issuer's obligations in respect of the Notes and the other Transaction Documents
have been paid in full (nothing in this clause shall be deemed to permit the
Issuer, Trendwest or any other Person to grant an interest in the Initial
Collateral to SeaFirst or any other Person unless first released from the lien
of the Trustee under this Indenture) and (b) the stockholders' equity of the
Servicer and its consolidated subsidiaries, determined in accordance with
generally accepted accounting principles, as would be shown on a consolidated
balance sheet for such Persons, is at any time below $15,000,000; provided,
however, that this clause (iii) not apply during the sixty days immediately
succeeding the Closing Date.
"Cash Accumulation Event Period": Each period commencing at the
beginning of a Due Period in which any Cash Accumulation Event occurs and ending
immediately prior to the beginning of the first subsequent Due Period during
which no Cash Accumulation Event occurs. For purposes of this definition, a Cash
Accumulation Event shall be deemed to occur during a Due Period if as of the
Calculation Date occurring on the last day of such Due Period there is an
occurrence or existence of a Cash Accumulation Event.
"Clearing Account Bank": The meaning specified in the Servicing
Agreement.
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"Clearing Account": The meaning specified in the Servicing Agreement.
"Closing Date": April 19, 1996, the date that the Transaction Documents
are originally executed and delivered by the parties thereto.
"Club" or "WorldMark": WorldMark, the Club, a California mutual benefit
corporation, and its successors in interest.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": The meaning specified in the Granting Clause of this
Indenture.
"Collateral Value": With respect to each Receivable as of any
Calculation Date, the amount of principal outstanding with respect to such
Receivable at the end of such Calculation Date (without giving effect to any
write-off or writedown of such Receivable).
"Collection Account": The account or accounts created and maintained
pursuant to Section 12.02 hereof.
"Competitor" shall mean any Person which is engaged in the vacation
time share business.
"Contract Files": The meaning specified in the Sale Agreement.
"Contract Schedule": The listing of Contracts and Receivables on
Schedule A hereto, which shall include with respect to each Contract listed on
such schedule: (a) a number identifying such Contract, (b) the Collateral Value
of the related Receivable as of the date of execution and as of the CutOff Date,
(c) the Obligor, (d) the date entered into, (e) the original term and the number
of payments made as of the Cut-Off Date, (f) the Scheduled Payment, (g) the
interest rate and (h) the number of Credits financed, as such schedule may be
amended upon any purchase or substitution of Contracts made in accordance with
the terms of the Transaction Documents.
"Contracts": The retail installment contracts (and all rights with
respect thereto, including all guaranties and other agreements or arrangements
of whatever character from time to time supporting or securing payment of any
such contract and all rights with respect to the Credits to the extent
specifically related to any such contract), certain interests in which are
acquired by the Issuer from time to time pursuant to the Sale Agreement and
identified on the Contract Schedule attached hereto as Schedule A, including
Substitute Contracts and Upgrade Contracts, and any amendments, riders and
annexes thereto; provided that, from and after the date on which a Receivable
relating to a Contract is purchased or substituted by the Issuer, TFI or
Trendwest in accordance with Section 4.03 hereof, such Contract shall no longer
constitute a "Contract" for purposes of the Transaction Documents.
"Corporate Trust Office": The principal corporate trust office of the
Trustee located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Asset Backed
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Securities Trust Services Group -- TRI Funding 1996-1, or at such other address
as the Trustee may designate from time to time by notice to the Noteholders and
the Issuer, or the principal corporate trust office of any successor Trustee.
"Credits": The vacation credits financed by an Obligor pursuant to a
Contract.
"Custodian": Sage Systems, Inc., a Washington corporation, and its
permitted successors and assigns.
"Custodian Files": The meaning set forth in the Sale Agreement.
"Cut-Off Date": With respect to Contracts pledged to the Trustee on the
Closing Date, March 16, 1996, and with respect to any Substitute Contract or
Upgrade Contract, the date on which such Contract is pledged to the Trustee by
the Issuer.
"Default": Any occurrence or circumstance which with notice or the
lapse of time or both would become an Event of Default.
"Default Rate": For any Due Period, the sum of the Collateral Values as
of the Calculation Date occurring in such Due Period of all Contracts that
became Defaulted Contracts in such Due Period and remained Defaulted Contracts
as of such Calculation Date divided by the Aggregate Collateral Value on the
Calculation Date immediately preceding such Due Period.
"Defaulted Contract": A Contract shall become a Defaulted Contract at
the earliest of (i) the date on which the Servicer receives notice that the
related Obligor has (or, if a Contract has two Obligors, both Obligors have)
become the subject of bankruptcy proceedings, (ii) the Calculation Date on which
any portion of the related Receivable would (if such Receivable were owned by
Trendwest) be written off Trendwest's financial statements or books of account
or would otherwise be deemed uncollectible in the normal course of business (for
reasons other than disputes of amounts owed with respect to such Receivable),
(iii) the Calculation Date on which all or part of any Scheduled Payment with
respect to such Contract has not been received and remains unpaid for a period
of 180 or more days as of such Calculation Date or (iv) the date on which the
related Obligor has (or, if a Contract has two Obligors, both Obligors have)
given notice to the Servicer, or the Servicer otherwise has reason to believe,
that the related Receivable will not be paid (for reasons other than disputes of
amounts owed with respect to such Receivable).
"Delinquent Contract": As of any Calculation Date, a Contract (a) as to
which a Scheduled Payment was not received by or on behalf of the Issuer within
60 days of when such Scheduled Payment was due and remains unpaid as of such
Calculation Date and (b) is not a Defaulted Contract.
"Delinquency Level": For any Due Period, the sum of the Collateral
Values as of the Calculation Date occurring in such Due Period of all Delinquent
Contracts as of such
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Calculation Date, divided by the Aggregate Collateral Value on the Calculation
Date immediately preceding such Due Period.
"Delivery Date": The date on which a Note is issued in accordance with
this Indenture.
"Determination Date": The fifth day preceding each Payment Date or, if
such day is not a Business Day, the next succeeding Business Day.
"Distribution Account": The trust account created and maintained
pursuant to Section 12.02 hereof.
"Due Date": With respect to each Receivable, the date of the month on
which payment is due thereunder.
"Due Period": As to any Determination Date or Payment Date, as the case
may be, the period beginning on and including the first day and ending at the
end of the last day of the calendar month preceding the month in which such
Determination Date or Payment Date, as the case may be, occurs.
"Eligible Account": A segregated account, which may be an account
maintained with the Trustee, which is maintained with a depository institution
or trust company whose long term unsecured debt obligations are rated at least
A-1 by Fitch, (or, if not rated by Fitch, an equivalent rating from S&P or
Moody's).
"Eligible Investments": Any and all of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit
of, banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any State thereof and
subject to supervision and examination by federal and/or state
authorities, so long as at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company has a short term unsecured debt rating of F-1+ (or its
equivalent) of Fitch, (or, if not rated by Fitch, an equivalent rating
from S&P or Moody's) and provided that each such investment has an
original maturity of no more than 180 days, and (B) any other demand or
time deposit or deposit which is fully insured by the Federal Deposit
Insurance Corporation;
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(iii) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any State thereof which has a long term unsecured debt
rating in the highest available rating category of Fitch (or, if not
rated by Fitch, an equivalent rating from S&P or Moody's) at the time
of such investment;
(iv) commercial paper having, or demand notes constituting an
investment vehicle in commercial paper having, an original maturity of
less than 180 days and issued by an institution having a short term
unsecured debt rating in the highest available rating category of Fitch
(or, if not rated by Fitch, an equivalent rating from S&P or Moody's)
at the time of such investment (the issuer of any demand notes under
this paragraph (iv) must also be an institution that satisfies the
unsecured debt rating test specified in this paragraph (iv));
(v) a guaranteed investment contract issued by an insurance
company or other corporation having a long term unsecured debt rating
or a claims paying ability rated in the highest available rating
category of Fitch (or, if not rated by Fitch, an equivalent rating from
S&P or Moody's) at the time of such investment; and
(vi) money market funds having ratings in the highest or
second highest available rating category of Fitch (or, if not rated by
Fitch, an equivalent rating from S&P or Moody's) at the time of such
investment which invest only in other Eligible Investments; any such
money market funds which provide for demand withdrawals being
conclusively deemed to satisfy any maturity requirement for Eligible
Investments set forth in this Indenture.
Any Eligible Investments may be purchased by or through the Trustee or any of
its Affiliates.
"Event of Default": The meaning specified in Section 6.01 hereof.
"Final Due Date": With respect to each Receivable, the last Due Date
specified in the related Contract.
"Final Payment Date": The date on which the final principal payment on
the Notes becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by acceleration or redemption.
"Fitch": Fitch Investors Service, L.P. and its successors in interest.
"Grant": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over and confirm. A Grant of the
Contracts, the Receivables or of any other instrument shall include all rights,
powers and options (but none of the obligations) of the Granting party
thereunder, including, without limitation, the immediate and continuing right to
claim, collect, receive and receipt for payments in respect of the Contracts and
the
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Receivables, or any other payment due thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the Granting party or
otherwise, and generally to do and receive anything which the Granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Guaranty Amounts": Any and all amounts paid by a guarantor, if any,
indicated on the applicable Contract.
"Holder" or "Noteholder": The person in whose name a Note is registered
in the Note Register.
"Indenture" or "this Indenture": This instrument as originally executed
as from time to time supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
as so supplemented or amended. All references in this Indenture to designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
Indenture as originally executed, or if amended or supplemented, as so amended
and supplemented. The words "herein," "hereof," "hereunder" and other words of
similar import, when not related to a specific subdivision of this Indenture,
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"Independent": When used with respect to any specified Person means
such a Person, who (1) is in fact independent of the Issuer, (2) does not have
any direct financial interest or any material indirect financial interest in the
Issuer or in any Affiliate of the Issuer, (3) is not connected with the Issuer
as an officer, employee, promoter, underwriter, Trustee, partner, director, a
person performing similar functions and (4) is not a brother, sister, spouse,
parent or child of any Person listed in clauses (2) and (3) above. Whenever it
is herein provided that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such Person shall be appointed by a Issuer Order and
approved by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Initial Aggregate Collateral Value": $77,779,368.
"Initial Payment Date": May 15, 1996, the first Payment Date following
the Closing Date.
"Institutional Investor": Any original purchaser of a Note, any holder
of a Note holding more than 5% of the aggregate principal amount of the Notes
Outstanding and any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any similar financial institution or entity,
regardless of legal form.
"Investor": Shall mean R & R Vista, an Oregon partnership, and its
permitted successors and assigns.
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"Investor Interest Distribution Amount": With respect to each Payment
Date, an amount equal to the lesser of (a) an amount equal to the product of (i)
14% per annum and (ii) the difference between (A) $2,333,381 and (B) the
aggregate amount distributed pursuant to Section 12.02(d)(viii) hereof on all
Payment Dates prior to such Payment Date or distributed to the Investors from
the reserves of the Issuer (solely out of funds that have been released to the
Issuer pursuant to Section 12.02(d)(xiv) hereof) and (b) the amount of cash
available after payment of all amounts required by clauses (i) through (vi) of
Section 12.02(d) hereof.
"Investor Principal Distribution Amount": With respect to each Payment
Date, (a) for any Payment Date prior to the Stated Maturity, an amount equal to
the lesser of (i) 3% of the sum of (A) the principal portion of the amounts
collected by or on behalf of the Issuer in the immediately preceding Due Period
attributable to (1) payments by or on behalf of each Obligor of amounts owed on
the related Receivable, (2) Residual Proceeds and Recoveries (without
duplication of amounts in clause (1)) and (3) payments of Purchase Price by TFI,
SPC, the Issuer or Trendwest (without duplication of amounts in clauses (1) or
(2)), and (B) the Collateral Value as of the related Calculation Date of any
Contract that became a Defaulted Contract in the immediately preceding Due
Period; and (ii) the amount of cash available after payment of all amounts
required by clauses (i) through (viii) of Section 12.02(d) hereof; (b) for any
Payment Date on which the Investor Principal Shortfall Amount is greater than
zero, the lesser of (i) the amount set forth in clause (a) above plus an amount
equal to the Investor Principal Shortfall Amount and (ii) the amount of cash
available after payment of all amounts required by clauses (i) through (viii) of
Section 12.02(d) hereof; and (c) on the Stated Maturity, an amount equal to the
lesser of (i) aggregate principal amount of the Investor's investment
outstanding as of such date and (ii) the amount of cash available after payment
of all amounts required by clauses (i) through (viii) of Section 12.02(d)
hereof.
"Investor Principal Shortfall Amount": With respect to any Payment
Date, an amount equal to the aggregate amount of distributions of the Investor
Principal Distribution Amount that were not made on any prior Payment Dates
(without duplication).
"Issuer": TRI Funding Company I, L.L.C., a Delaware limited liability
company, until a successor Person shall have become the Issuer pursuant to the
applicable provisions of this Indenture, and thereafter "Issuer" shall mean such
successor Person.
"Issuer Order" and "Issuer Request": A written order or request signed
in the name of the Issuer by the Chairman of the Board, President, a Vice
President, the Treasurer or Secretary of a member of the Issuer, and delivered
to the Trustee.
"Lien": Any mortgage, deed of trust, pledge, hypothecation, assignment,
participation or equity interest, deposit arrangement, encumbrance, charge, lien
(statutory or other), preferences priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such
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financing statement filed for informational purposes only) or comparable law of
any jurisdiction to evidence any of the foregoing.
"Monthly Servicer's Report": The report prepared by the Servicer
pursuant to Section 4.01 of the Servicing Agreement.
"Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in
interest.
"Note" or "Notes": The notes authenticated and delivered under this
Indenture.
"Noteholder" or "Holder": The Person in whose name a Note is registered
in the Note Register.
"Note Interest Rate": 7.42% per annum.
"Note Purchase Agreements": Each of the Note Purchase Agreements, dated
as of March 1, 1996, between the Issuer and the purchasers named therein.
"Note Register" and "Note Registrar": The respective meanings specified
in Section 3.04 hereof.
"Obligor": The borrower under each related Contract, including any
guarantor of such borrower, and their respective successors and assigns.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, the Controller, an
Assistant Controller or the Secretary of the company (or, with respect to the
Issuer, the corporate member of the Issuer) on whose behalf the certificate is
delivered, and delivered to the Trustee, which certificate shall comply with the
applicable requirements of Section 13.12 hereof. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of the corporate member of the Issuer on behalf of the Issuer.
"Opinion of Counsel": A written opinion of counsel who may, except as
otherwise expressly provided in this Indenture, be counsel for the Issuer and
who shall be reasonably satisfactory to the Trustee and which opinion shall
comply with the applicable requirements of Section 13.12 hereof.
"Outstanding": With respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture,
unless proof satisfactory to the Trustee is presented that any such
Notes are held by a bona fide purchaser;
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provided, however, that for purposes of determining whether the Holders of the
requisite principal amount of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Issuer or any other obligor upon such Notes, any Affiliate of the
Issuer or Trendwest shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, or
waiver, only such Notes which the Trustee knows to be so owned shall be so
disregarded.
"Overdue Payment": With respect to a Due Period and a Delinquent
Contract, all payments due in a prior Due Period that the Servicer receives from
or on behalf of an Obligor during the related Due Period on such Delinquent
Contract, including any Servicing Charges.
"Paying Agent": The Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 7.08 hereof and is
authorized by the Issuer pursuant to Section 11.15(o) hereof to pay the
principal of, or interest on, any Notes on behalf of the Issuer.
"Payment Date": The fifteenth day of each calendar month (or if such
day is not a Business Day, the next succeeding Business Day) commencing on the
Initial Payment Date.
"Permitted Institutional Investor" means (a) any original purchaser of
a Note and (b) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any other similar financial institution or
entity, regardless of legal form.
"Person": Any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Placement Agents": Each of SPP Hambro & Co., LLC and NBD Bank.
"Principal Distribution Amount": With respect to each Payment Date, (a)
for any Payment Date prior to the Stated Maturity, an amount equal to 90% of the
sum (without duplication) of (i) the principal portion of the amounts collected
by or on behalf of the Issuer in the immediately preceding Due Period
attributable to (A) payments by or on behalf of each Obligor of amounts owed on
the related Receivable, (B) Residual Proceeds and Recoveries and (C) payments of
Purchase Price by TFI, SPC, the Issuer or Trendwest, and (ii) the Collateral
Value as of the related Calculation Date of any Contract that became a Defaulted
Contract in the immediately preceding Due Period; (b) for any Payment Date on
which the Principal Shortfall Amount is greater than zero, the amount set forth
in clause (a) above plus an amount equal to the Principal Shortfall Amount and
(c) on the Stated Maturity, an amount equal to the aggregate principal amount of
Notes Outstanding as of such date.
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"Principal Shortfall Amount": With respect to any Payment Date, an
amount equal to the aggregate amount of principal payments on the Notes that
were owed on prior Payment Dates but not made to the Holders prior to such
Payment Date.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase and Substitution Limit": With respect to the Contracts, 10%
of the Initial Aggregate Collateral Value.
"Purchase Price": With respect to any Contract or interest therein
repurchased by the Issuer or Trendwest, as the case may be, pursuant to Section
3.03 of the Receivables Purchase Agreement, Section 3.03 of the Sale Agreement,
Section 4.03 hereof or Section 3.10(b) of the Servicing Agreement, the sum of
(i) the Collateral Value of related Receivable on the Calculation Date on or
immediately succeeding the date when the Receivable is repurchased and (ii) any
interest portion of Scheduled Payments with respect to such Receivable due on or
prior to such Calculation Date but not received through such Calculation Date.
"Rating Agency": Fitch.
"Receivables": With respect to any Contract, all of, and the right to
receive all of (i) the Scheduled Payments, (ii) any Guaranty Amounts, (iii) any
Residual Proceeds, (iv) any Recoveries and (v) any Servicing Charges.
"Receivables Purchase Agreement": The Receivables Purchase Agreement,
dated as of March 1, 1996, by and among TFI, Trendwest and TW Holdings, as
amended and supplemented from time to time, together with the Asset Assignment
executed in connection therewith.
"Receivables Transfer Agreement": The Amended and Restated Receivables
Transfer Agreement, dated as of June 1, 1994, as amended, among TW Holdings, as
Seller, Bank of America NW, N.A. d/b/a SeaFirst Bank, as agent for the
purchasers named therein, and JELD-WEN, inc.
"Record Date": The close of business on the last day of the month
preceding the applicable Payment Date, whether or not a Business Day, except
with respect to the Initial Payment Date for the Notes, the Record Date shall be
the Closing Date.
"Recoveries": For any Due Period occurring during or after the date on
which any Contract becomes a Defaulted Contract and with respect to such
Defaulted Contract, all payments that the Servicer received from or on behalf of
an Obligor during such Due Period in respect of such Defaulted Contract or from
liquidation or reselling the related Credits (including purchases by Trendwest
pursuant to Section 3.10(e) of the Servicing Agreement), including but not
limited to Scheduled Payments, Overdue Payments and Guaranty Amounts,
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as reduced by any reasonably incurred out-of-pocket expenses incurred by the
Servicer in enforcing such Defaulted Contract.
"Redemption Date": A date fixed pursuant to Section 10.01 hereof.
"Redemption Price": With respect to any Note, and as of any Redemption
Date, the Outstanding principal amount of such Note, together with interest
accrued thereon through the Redemption Date at the Note Interest Rate (exclusive
of installments of interest and principal maturing on or prior to the Redemption
Date, payment of which shall have been made or duly provided for to the Holder
of such Note on the applicable Record Date or as otherwise provided in this
Indenture).
"Redemption Record Date": With respect to any redemption of any Note, a
date fixed pursuant to Section 10.01 hereof.
"Registered Holder": The Person whose name appears on the Note Register
on the applicable Record Date or Redemption Record Date.
"Reinvestment Income": Any interest or other earnings earned on all or
part of the Trust Estate.
"Remittance Date": The Business Day immediately preceding each Payment
Date.
"Reserve Account": The trust account created and maintained pursuant to
Section 12.03 hereof.
"Reserve Account Required Balance": As of any Payment Date, an amount
equal to the greater of (i) the product of (a) the sum (expressed as a
percentage) of (1) 2% plus (2) the product of .25% and the total number of times
a Cash Accumulation Event has occurred (for the purposes of this definition, a
Cash Accumulation Event shall be deemed to have occurred only once for any
period of consecutive Due Periods occurring during a single Cash Accumulation
Event Period) and (b) the principal balance of the Notes Outstanding as of such
Payment Date (after any distributions made pursuant to Section 12.02(d) hereof
on such date), (ii) $500,000 and (iii) during a Cash Accumulation Event Period,
$500,000,000; provided, however, that if the event or condition specified in
clause (iii)(a) of the definition of Cash Accumulation Event occurs, the
percentage in clause (1) above shall be 2.5%, and provided further, that if such
event or condition is cured, such percentage shall thereafter be 2.0%.
"Reserve Account Standard Balance": As of any Payment Date, an amount
equal to the Reserve Account Required Balance without giving effect to clause
(iii) thereof.
"Residual Proceeds": With respect to a Contract that is not a Defaulted
Contract and the related Credits, the net proceeds of any resale or other
disposition of such Credits.
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"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Department (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, Assistant
Secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Indenture, and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Investor" means (a) any investment company or pension plan
(other than a pension plan held or managed by an insurance company) that,
directly or indirectly through any subsidiary or through any parent corporation
is engaged in the vacation time share business and (b) any other Person that is
not a Permitted Institutional Investor that, directly or indirectly through any
subsidiary or through any parent corporation is engaged in the vacation time
share business.
"S&P": Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc., and its successors in interest.
"Sale": The meaning specified in Section 6.18 hereof.
"Sale Agreement": The Purchase and Sale Agreement, dated as of March 1,
1996, by and among TFI, SPC, Trendwest and the Issuer, as amended and
supplemented from time to time, together with the Assignment executed in
connection therewith.
"Scheduled Payment": With respect to a Payment Date and a Contract, the
periodic payment set forth in such Contract due from the Obligor in the related
Due Period. Scheduled Payments shall not include any membership dues or other
housekeeping payments relating to the use of the Club.
"Servicer": Initially, Trendwest Resorts, Inc., an Oregon corporation,
and any successor Servicer appointed pursuant to Section 6.02 of the Servicing
Agreement.
"Servicer Fee": On each Payment Date, an amount equal to the product of
(i) one-twelfth of 1.75% and (ii) the Aggregate Collateral Value on the
preceding Payment Date, after distributions made on such date.
"Servicing Agreement": The Servicing Agreement, dated as of March 1,
1996, by and among the Issuer, the Servicer, the Subservicer and the Trustee, as
amended or supplemented from time to time.
"Servicing Charges": The sum of (i) all late payment charges paid by
Obligors on Delinquent Contracts after payment in full of any Scheduled Payments
due in a prior Due Period and Scheduled Payments for the related Due Period and
(ii) any other incidental charges or fees received from an Obligor, including,
but not limited to, late fees, collection fees and bounced check charges.
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"Servicing Officers": The meaning set forth in the Servicing Agreement.
"SPC": TWH Funding I, Inc., a Delaware corporation, and its permitted
successors and assigns.
"State": Any state of the United States of America and, in addition,
the District of Columbia and Puerto Rico.
"Stated Maturity": May 15, 2004.
"Subordinated Note": The subordinated note dated as of the Closing
Date, made by the Issuer to TFI as a part of the consideration for the Purchased
Assets and the payments of which are subordinated by its terms to distributions
made pursuant to clauses (i)-(ix) of Section 12.02(d) hereof. The form of the
Subordinated Note is attached to the Sale Agreement as Exhibit C.
"Subservicer": Sage Systems, Inc. and its permitted successors and
assigns.
"Substitute Contract": The meaning specified in the Sale Agreement.
"Substitute Receivable": The meaning specified in the Sale Agreement.
"Substitution Limit": 1.5% of the Initial Aggregate Collateral Value.
"TFI": Trendwest Funding I, Inc., a Delaware corporation, and its
permitted successors and assigns.
"Transaction Documents": This Indenture, the Note Purchase Agreements,
the Servicing Agreement, the Receivables Purchase Agreement, the Custodian
Agreement, the Sale Agreement and the Notes.
"Trendwest": Trendwest Resorts, Inc., an Oregon corporation, and its
permitted successors and assigns.
"Trigger Event": Any of the following events or conditions: (1) if, as
of any Calculation Date, the aggregate Collateral Value of Contracts that are
Delinquent Contracts is greater than or equal to 12% of the Aggregate Collateral
Value as of the immediately preceding Calculation Date; (2) if, as of any
Calculation Date, the aggregate Collateral Value of Defaulted Contracts that
became Defaulted Contracts in the related Due Period is greater than or equal to
1.0% of the Aggregate Collateral Value as of the immediately preceding
Calculation Date; (3) an Event of Default or Servicer Event of Default has
occurred and is continuing; (4) (a) WorldMark voluntarily incurs or is any time
voluntarily liable for any debt, or any of its property voluntarily is or
voluntarily becomes subject to any Liens (other than (i) utility or similar
easements or licenses which do not relate to borrowings by WorldMark or (ii)
Liens that in the aggregate for all properties do not exceed $100,000), or (b)
WorldMark involuntarily incurs or is any time involuntarily liable
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for any debt, or any of its property involuntarily is or involuntarily becomes
subject to any Liens (other than utility or similar easements or licenses which
do not relate to borrowings by WorldMark) that individually or in the aggregate
(with respect to all such debt and the obligations secured by all such Liens)
exceed $1,000,000; (5) WorldMark sells, leases or otherwise transfers
voluntarily or otherwise, any of its real estate properties or any interest
therein so that, in the aggregate, there is a net decrease in Credits available
for member use greater than or equal to 10% from the number of Credits available
for member use on the Closing Date; (6) if on the Payment Date after the fifth
anniversary of the Closing Date, the aggregate principal amount of Notes
Outstanding is greater than $9,307,415; (7) WorldMark exchanges one of its
present properties for another property that is worth fewer Credits than the
property so exchanged; or (8) WorldMark has interests in units at fewer than 15
developed resort properties.
"Trigger Event Period": Each period commencing at the beginning of a
Due Period in which any Trigger Event occurs or exists and ending immediately
prior to the beginning of the first subsequent Due Period that follows a period
of six consecutive Due Periods during which no Trigger Event occurs or exists.
"Trustee": LaSalle National Bank, until a successor Person shall have
become the Trustee pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Person.
"Trust Estate": The meaning specified in the Granting Clause of this
Indenture.
"Trustee Fee": The fee payable on each Payment Date to the Trustee in
consideration for the Trustee's performance of its duties pursuant to this
Indenture as Trustee, in an amount equal to the product of (i) one-twelfth of
the Trustee Fee Rate and (ii) the aggregate principal amount of Outstanding
Notes on the preceding Payment Date after giving effect to distributions on such
date (or, in the case of the Initial Payment Date, the initial aggregate
principal amount of the Notes).
"Trustee Fee Rate": .04% per annum.
"TW Holdings": TW Holdings, Inc., a Nevada corporation, and its
permitted successors and assigns.
"UCC": The Uniform Commercial Code as it may from time to time be in
effect in the applicable State.
"Upgrade": The cancellation of a Contract and entry into a new contract
by an Obligor, WorldMark and Trendwest, pursuant to which the Obligor purchases
additional Credits in exchange for an increase in the principal balance owed by
the Obligor.
"Upgrade Contract": The new contract entered into by an Obligor,
Trendwest and the Club related to an Upgrade by such Obligor. The Upgrade
Contract shall be pledged to the Trustee pursuant to Section 4.03(g) hereof.
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"Vice President": With respect to a member of the Issuer or the
Trustee, any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"WorldMark" or the "Club": WorldMark, the Club, a California mutual
benefit corporation, and its successors in interest.
ARTICLE TWO
NOTE FORM
Section 2.01 Form. The Notes, together with the certificates of
authentication, shall be in substantially the form set forth in Exhibit C
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any manner acceptable to the Trustee and the initial purchasers of the Notes,
all as determined by the officers executing such Notes, as evidenced by their
execution of such Notes.
ARTICLE THREE
THE NOTES
Section 3.01 Denomination. The aggregate principal amount of Notes
which may be authenticated and delivered under this Indenture is limited to an
aggregate principal amount of $70,000,000 (except for Notes authenticated and
delivered upon registration of transfer or in exchange for or in lieu of, other
Notes pursuant to Sections 3.03, 3.04, 3.06 or 9.05 hereof). The Notes shall be
issuable only as registered Notes without coupons in the denominations of at
least $100,000; provided, however, that, the foregoing shall not restrict or
prevent the transfer in accordance with Sections 3.04 and 3.05 hereof of any
Note with a remaining outstanding principal amount of less than $100,000.
Section 3.02 Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by the President, one of the Vice
Presidents or the Treasurer of a corporate member of the Issuer. The signature
of these officers on the Notes must be manual.
Notes bearing the manual signatures of individuals who were at any time
the proper officers of such corporate member of the Issuer shall bind the
Issuer, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication
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or delivery of such Notes or did not hold offices at the date of authentication
or delivery of such Notes.
Each Note shall bear on its face the appropriate Delivery Date and be
dated as of the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or by any Authenticating Agent by the manual signature
of one of its authorized officers, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 3.03 Notes as Debt. For all federal, state, local and
foreign tax purposes, all Noteholders shall treat the Notes as debt of the
Issuer.
Section 3.04 Registration, Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept initially at the Corporate Trust Office of
the Trustee a register (the "Note Register"), in which, subject to such
reasonable regulations as it may prescribe, the Issuer shall provide for the
registration of Notes and the registration of transfers of Notes. LaSalle
National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, is
hereby appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Trustee shall have the right to rely
conclusively upon a certificate of the Note Registrar as to the names and
addresses of the holders of the Notes and the principal amounts and numbers of
such Notes as held. Upon request of any Holder, the Trustee shall, to the extent
it may lawfully do so, furnish such Holder with a list of the names and
addresses of all Holders entered on the Note Register indicating the principal
amount and serial number, if any, of each Note held by each Holder.
(b) Only upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 11.02(n)
hereof and subject to the conditions set forth in Section 3.05 and Section 3.06
hereof, the Issuer shall execute, and the Trustee or its agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations, and of a
like aggregate principal amount and Stated Maturity.
(c) At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denominations and of a like aggregate principal amount
and Stated Maturity, only upon surrender of the Notes to be exchanged at such
office or agency, subject to Section 3.06 hereof. Whenever any Notes are so
surrendered for exchange, the Issuer shall execute, and the Trustee or its agent
shall authenticate and deliver, the Notes which the Noteholder making the
exchange is entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt and
entitled to the same benefits
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under this Indenture, as the Notes surrendered upon such registration of such
transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Note Registrar) be duly
endorsed or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Issuer and the Note Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 3.03 or 9.05 hereof not involving any registration
of transfer.
Notwithstanding anything else to the contrary contained in this
Indenture, the obligation of the Issuer to pay the principal of and interest on
the Notes is not a general obligation of the Issuer, but is limited solely to
the amounts available out of the Collateral pledged to the Trustee under this
Indenture.
Section 3.05 Limitation on Transfer and Exchange. The Notes will not be
registered or qualified under the Securities Act of 1933, as amended (the "1933
Act"), or the securities laws of any State. No transfer of any Note shall be
made unless that transfer is made in a transaction which does not require
registration or qualification under the 1933 Act or under applicable State
securities laws. In the event that a transfer is to be made without registration
or qualification, such Noteholder's prospective transferee shall either (i)
deliver to the Trustee an investment letter substantially in the form set forth
on Exhibit A hereto (the "Investment Letter") or (ii) deliver to the Trustee an
opinion of counsel that the transfer is exempt from the 1933 Act and will not
result in the Issuer being required to register as an "investment company" under
the Investment Company Act of 1940, as amended. Such opinion may be given by an
attorney that is an employee or officer of such transferee. Neither the Issuer
nor the Trustee is obligated to register or qualify the Notes under the 1933 Act
or any other securities law.
The Trustee shall have no liability to the Trust Estate or any
Noteholder arising from a transfer of any such Note in reliance upon a
certification or opinion described in this Section 3.05.
Each Holder, by acceptance of any Note, agrees that such Holder will
not offer, sell or transfer any Note to a Restricted Investor. Notwithstanding
the foregoing restrictions on the offer, transfer or sale of the Notes, any
Noteholder may offer, sell or transfer any of its Notes to any Permitted
Institutional Investor (other than a Restricted Investor) holding securities in
a Competitor as part of its investment portfolio. In determining whether a
transferee is a Restricted Investor, a Noteholder shall be entitled to rely on a
certificate to that effect executed by an authorized officer of such Person.
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Section 3.06 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Note Registrar, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such destruction, loss, theft
or mutilation), and (ii) there is delivered to the Trustee such security or
indemnity as may be required by the Trustee to save the Issuer and the Trustee
or any agent of any of them harmless, then, in the absence of notice to the
Issuer or the Note Registrar that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and, upon its request, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Note of the same tenor, initial principal
amount and Stated Maturity, bearing a number not contemporaneously outstanding.
If the Holder of such Note is, or is a nominee for, an original purchaser of the
Notes or another Holder with a minimum net worth of at least $50,000,000, such
Person's own unsecured agreement of indemnity shall be deemed to be satisfactory
for the purposes of clause (ii) above. If after the delivery of such new Note, a
bona fide purchaser of the original Note in lieu of which such new Note was
issued presents for payment such original Note, the Issuer and the Trustee shall
be entitled to recover such new Note from the person to whom it was delivered or
any person taking therefrom, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expenses incurred by the Issuer or the Trustee or any
agent of any of them in connection therewith. If any such mutilated, destroyed,
lost or stolen Note shall have become or shall be about to become due and
payable, or shall have become subject to redemption in full, instead of issuing
a new Note, the Issuer may pay such Note without surrender thereof, except that
any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section 3.06, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 3.06, in lieu of any
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07 Payment of Principal and Interest; Principal and
Interest Rights Preserved. (a) The Notes shall bear interest on the unpaid
principal amount thereof from and including the Closing Date at the Note
Interest Rate (calculated on the basis of a 360-day year consisting of 12 months
of 30 days each) through the day immediately preceding the Initial Payment Date
and thereafter, monthly from and including the most recent Payment Date through
the day immediately preceding the applicable Payment Date and (to the extent
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that the payment of such interest shall be legally enforceable) on any overdue
installment of principal or interest from the date such principal or interest
became due and payable until fully paid. Interest shall be due and payable in
arrears on each Payment Date, with each payment of interest calculated as
described above on the unpaid principal amount of the Outstanding Notes on the
day immediately preceding such Payment Date or, with respect to interest payable
on the Initial Payment Date, on the principal amount of the Outstanding Notes on
the Closing Date; provided, however, that in making any interest payment, if the
interest calculation with respect to any Note shall result in a portion of such
payment being less than $.01, then such payment shall be decreased to the
nearest whole cent, and no subsequent adjustment shall be made in respect
thereof.
(b) The principal of each Note shall be payable in installments
ending no later than the Stated Maturity unless such Note becomes due and
payable at an earlier date by declaration of acceleration or automatic
acceleration, call for redemption or otherwise. All reductions in the principal
amount of any Note effected by payments of installments of principal made on any
Payment Date shall be binding upon all future Holders of such Note, and of any
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment is noted on such Note. Each
installment of principal payable on the Notes shall be in an amount equal to the
Principal Distribution Amount. The principal payable on the Notes shall be paid
on each Payment Date beginning on the Initial Payment Date and ending on the
Final Payment Date on a pro rata basis based upon the face amount of each Note;
provided, however, that if as a result of such proration a portion of such
principal would be less than $.01, then such payment shall be decreased to the
nearest whole cent, and such portion shall be applied to the next succeeding
principal payment.
(c) The principal of and interest on the Notes are payable by check
mailed by first-class mail to the Person whose name appears as the Registered
Holder of such Note on the Note Register at the address of such Person as it
appears on the Note Register or, if requested by such Registered Holder, by wire
transfer in immediately available funds to the account specified in writing to
the Trustee by such Registered Holder 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 the payment of public and private debts; provided, however,
that the Trustee shall, unless and until otherwise instructed by such
Noteholder, pay each initial Noteholder via wire transfer in immediately
available funds to the accounts specified, if any, in Annex 1 to each Note
Purchase Agreement. The Trustee hereby acknowledges receipt of Annex 1 to each
Note Purchase Agreement, which sets forth such information with respect to the
initial Holders. All payments on the Notes shall be paid without any requirement
of presentment. The Issuer shall notify the Trustee at the close of business on
the Record Date next preceding the Payment Date on which the Issuer expects that
the final installment of principal of such Note will be paid that the Issuer
expects that such final installment will be paid on such Payment Date. Notice of
final payment on any Note shall be mailed by the Trustee to the Holder of such
Note in accordance with Section 12.05(a) hereof. Funds representing any such
checks returned undeliverable shall be held in accordance with Section 11.02(o).
Upon payment in full of all amounts owed to the Noteholders under the
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Notes, the Notes shall be void and the Noteholders shall use reasonable efforts
to return their Notes to the Trustee at the Corporate Trust Office for
cancellation upon written request of the Trustee or the Issuer. In the event a
Noteholder cannot return its Note to the Trustee within 60 days following
payment in full of the Note, it shall send the Trustee an affidavit certifying
such loss upon request.
Section 3.08 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee shall treat the Person in whose name any Note is
registered as the owner of such Note for the purpose of receiving payments of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
Section 3.09 Cancellation. All Notes surrendered to the Trustee for
payment, registration of transfer or exchange (including Notes surrendered to
any Person other than the Trustee which shall be delivered to the Trustee) shall
be promptly canceled by the Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section 3.09, except
as expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be disposed of by the Trustee as is customary with its standard practice.
ARTICLE FOUR
ORIGINAL ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL
Section 4.01 Conditions to Original Issuance of Notes. (a) The
Trustee shall, upon receipt of an Issuer Order and upon the satisfaction of the
conditions set forth below, authenticate and deliver the Notes on the Delivery
Date. The Outstanding Notes shall be equally and ratably entitled, with all
other Notes as provided herein, to the benefits of this Indenture without
preference, priority or distinction, all in accordance with the terms and
provisions of this Indenture.
(b) The obligation of the Trustee to authenticate, execute and
deliver the Notes is subject to the satisfaction of the following conditions:
(i) the Issuer shall have executed the Notes to be
authenticated and delivered on the Closing Date and shall have
delivered such Notes to the Trustee on or prior to the Closing Date;
(ii) the Issuer shall have delivered to the Custodian on or
prior to the Closing Date the original executed counterpart of each
Contract (and the rest of the contents of the related Custodian File)
identified in the Contract Schedule on the Closing Date, and the
Trustee shall have received a receipt from the Custodian evidencing
such delivery;
(iii) the Issuer and the Servicer shall have delivered to the
Trustee on or prior to the Closing Date an Officer's Certificate dated
as of the Closing Date of each of the
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Issuer and the Servicer, stating, as applicable, that (A) such Person
is not in Default under this Indenture or the Servicing Agreement and
that the issuance of the Notes will not result in any breach of any of
the terms, conditions or provisions of, or constitute a default under,
such Person's certificate of incorporation, by-laws or other
organizational documents, as applicable, or any material indenture,
mortgage, deed of trust or other agreement or instrument to which such
Person is a party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which such Person is
a party or by which it may be bound or to which it may be subject; and
(B) that all conditions precedent provided in this Indenture relating
to the authentication and delivery of the Notes have been complied
with;
(iv) each of the Issuer, TFI, SPC, the Custodian and the
Servicer shall have delivered to the Trustee on or prior to the Closing
Date a Board Resolution of its board of directors authorizing, as
applicable, the execution, delivery and performance of this Indenture
and the other Transaction Documents and the transactions contemplated
hereby and thereby, certified by an officer of the Issuer, TFI, SPC or
the Servicer, as applicable;
(v) each of the Issuer, TFI, SPC, the Custodian and the
Servicer shall have delivered to the Trustee on or prior to the Closing
Date a copy of an officially certified document, dated not more than 30
days prior to the Closing Date, evidencing its due organization and
good standing;
(vi) each of the Issuer, TFI, SPC, the Custodian and the
Servicer shall have delivered to the Trustee on or prior to the Closing
Date copies of its charter and by-laws certified by its Secretary or an
Assistant Secretary;
(vii) the Issuer shall have delivered, or cause to be
delivered, to the Trustee, on or prior to the Closing Date, evidence of
filing (a) with the Secretary of State of the State of the Issuer's
chief executive office, UCC-1 financing statements executed by the
Issuer, as debtor, and naming the Trustee for the benefit of the
Noteholders as secured party, and the Trust Estate as collateral; and
(b) with the Secretary of State of the States in which the chief
executive office of each of Trendwest, TW Holdings, TFI and SPC is
located, UCC-1 financing statements executed by the applicable
transferor as debtor and naming the applicable transferee as secured
party and naming as collateral the collateral transferred by each
transferor;
(viii) the Servicer shall have delivered to the Trustee on or
prior to the Closing Date a certificate listing the Servicing Officers
of the Servicer as of the Closing Date and setting forth specimen
signatures of such Servicing Officers;
(ix) the Issuer shall have delivered to the Trustee on or
prior to the Closing Date an executed copy of the Servicing Agreement,
the Receivables Purchase Agreement and the Sale Agreement and all
amendments and supplements thereto;
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(x) TFI and SPC shall have delivered to the Trustee on or
prior to the Closing Date an executed copy of the Receivables Purchase
Agreement and the Sale Agreement and all amendments and supplements
thereto; and
(xi) the Custodian shall have delivered to the Trustee on or
prior to the Closing Date an Officer's Certificate dated as of the
Closing Date stating that (A) the execution, delivery and performance
of the Custodian Agreement will not result in a breach of any of the
terms, conditions, provisions of, or constitute a default under, the
Custodian's certificate of incorporation or by-laws or any material
indenture, mortgage, deed of trust or other agreement or instrument to
which such Person is a party or by which it is bound, or any order of
any court or administrative agency entered into in any proceeding to
which the Custodian is a party or by which it may be bound or to which
it may be subject.
Section 4.02 Security for Notes. (a) Filing. The Issuer shall file
UCC-1 financing statements described in Section 4.01(b)(vii) hereof in
accordance with such Section 4.01(b)(vii). From time to time, the Servicer shall
take or cause to be taken such actions and execute such documents as are
necessary or deemed by the Trustee to be appropriate to perfect the Trustee's
interests in the Contracts and the Receivables and protect the Trustee's
interest in the related Credits against all other Persons, including, without
limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title.
(b) Name Change or Relocation. If any change in the Issuer's name,
identity, structure or the location of its principal place of business or chief
executive office occurs, then the Issuer shall deliver 30 days' prior written
notice of such change or relocation to the Servicer, the Trustee, the Rating
Agency and the Noteholders and no later than the effective date of such change
or relocation, the Servicer shall file such amendments or statements as may be
required to preserve and protect the Trustee's interests in the Trust Estate.
(c) Chief Executive Office. During the term of this Indenture, the
Issuer will maintain its chief executive office and principal place of business
in one of the States of the United States.
(d) Costs and Expense. The Servicer agrees to pay all reasonable costs
and disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Trustee's right, title and
interest in and to the Trust Estate.
Section 4.03 Substitution and Purchase of Receivables; Upgrade
Contracts. (a) If at any time the Issuer or the Trustee obtains knowledge
(within the meaning of 7.01(e) hereof), discovers or is notified by the Servicer
that any of the representations and warranties of Trendwest, TFI or SPC in the
Sale Agreement or Trendwest or TW Holdings in the Receivables Purchase Agreement
were incorrect at the time as of which such representations and warranties were
made, then the Person discovering such defect, omission, or
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circumstance shall promptly notify the other parties to this Indenture, the
Noteholders and Trendwest.
(b) In the event any representation or warranty of Trendwest, TFI or
SPC in the Sale Agreement or Trendwest or TW Holdings in the Receivables
Purchase Agreement is incorrect and materially and adversely affects the value
of a Contract, the related Receivable or the related Credits, or the interests
of the Holders of the Notes, or in the event of any 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) of each of the Sale Agreement or the Receivables Purchase
Agreement, then the Issuer shall require TFI or Trendwest, pursuant to the Sale
Agreement or the Receivables Purchase Agreement, as applicable, to eliminate or
otherwise cure the circumstance or condition which has caused such
representation or warranty to be incorrect within 30 days of discovery or notice
thereof. If TFI or Trendwest fails or is unable to cure such circumstance or
condition in accordance with the Sale Agreement or the Receivables Purchase
Agreement, as applicable, then the Issuer shall require TFI or Trendwest to
substitute or purchase pursuant to the Sale Agreement or the Receivables
Purchase Agreement, as applicable, any Receivable related to any Contract as to
which such representation or warranty is incorrect within the time specified in
Section 3.03 of the Sale Agreement or the Receivables Purchase Agreement. The
Servicer shall remit the proceeds of a purchase to the Subservicer for deposit
into the Clearing Account upon receipt of such amounts by the Servicer pursuant
to Section 3.03 of the Sale Agreement or Section 3.03 of the Receivables
Purchase Agreement, as applicable.
(c) If the Issuer fails to enforce the purchase or substitution
obligation of TFI or Trendwest under the Sale Agreement or the Receivables
Purchase Agreement, the Trustee is hereby appointed attorney-in-fact to act on
behalf of and in the name of the Issuer to require such purchase or
substitution.
(d) With respect to any Defaulted Contract or Delinquent Contract, the
Issuer shall be entitled to purchase the Receivable related to such Contract or
to deliver a Substitute Receivable meeting the same requirements as those
specified in Section 3.04 of each of the Sale Agreement or the Receivables
Purchase Agreement for substitutions and purchases by TFI or Trendwest upon
breaches of a representation or warranty by TFI, SPC, Trendwest or TW Holdings
thereunder; provided, however, that the cumulative Collateral Value of Defaulted
Contracts and Delinquent Contracts which are purchased or substituted by the
Issuer (measured as of the date of substitution) shall not exceed the Purchase
and Substitution Limit; provided, further, that the aggregate Collateral Value
of all Substitute Contracts in any calendar year cannot exceed the Substitution
Limit.
(e) The Issuer shall provide to the Trustee, or with respect to item
(ii) below the Custodian, on the date of delivery of any Substitute Contract the
items listed in (i) and (ii) below.
(i) a supplement to the Sale Agreement substantially in the
form of Annex A to the Sale Agreement and Exhibit B hereto, subjecting
such Substitute Contract to the
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provisions thereof and hereof and providing with respect to such
Substitute Contract the information set forth in the Contract Schedule;
and
(ii) the original executed counterpart of the Contract and the
Custodian File relating to such Substitute Contract.
(f) If a Contract becomes a Defaulted Contract, the Issuer may
purchase such Contract by paying to the Trustee out of the amount paid to the
Issuer pursuant to clause (xiv) of Section 12.02(d) the Purchase Price for such
Defaulted Contract; provided, however, the Issuer cannot purchase a Defaulted
Contract if the Collateral Value of all such Defaulted Contracts so purchased
would exceed the amount paid to the Issuer pursuant to clause (xiv) of Section
12.02(d); further provided, that the purchases pursuant to this Section 4.03(f)
shall be deemed to be purchases subject to the Purchase and Substitution Limit
as if repurchased pursuant to Section 4.03(b).
(g) If an Obligor desires to enter into an Upgrade Contract and the
Issuer purchases such Contract from TFI in exchange for the existing Contract
pursuant to Section 3.04(e) of the Sale Agreement, then the Servicer shall cause
Trendwest to deliver such Upgrade Contract to the Issuer immediately upon
execution by Trendwest, WorldMark and the Obligor, and the Issuer shall pledge
such Upgrade Contract to the Trustee immediately upon such execution by
delivering (i) to the Trustee a supplemental grant in the form of Annex A to the
Sale Agreement and Exhibit B hereto, subjecting such Upgrade Contract to the
provisions thereof and hereof and providing with respect to such Upgrade
Contract the information set forth in the Contract Schedule and (ii) to the
Custodian the original executed counterpart of the Upgrade Contract and the rest
of the contents of the related Custodian File.
Section 4.04 Releases. (a) The Issuer shall be entitled to obtain a
release from the lien of this Indenture for any Contract, the related Receivable
and the related Credits at any time (i) after a payment by TFI or Trendwest of
the Purchase Price of the Receivable, (ii) after a Substitute Contract is
substituted for such Contract, or (iii) upon the purchase of a Contract in
accordance with Section 3.10(b) of the Servicing Agreement, if the Issuer
delivers to the Trustee an Officer's Certificate (A) identifying the Receivable
and the related Contract and the related Credits to be released, (B) requesting
the release thereof, (C) setting forth the amount deposited in the Clearing
Account with respect thereto, in the event a Contract, the related Receivable
and the related Credits are being released from the lien of this Indenture
pursuant to (i) or (iii) above, and (D) certifying that the amount deposited in
the Clearing Account equals (x) the Purchase Price of the Receivable related to
such Contract, in the event a Contract, the related Receivable and the related
Credits are being released from the lien of this Indenture pursuant to (i) above
or (y) the entire amount set forth in Section 3.10(b) of the Servicing Agreement
with respect to such Contract, the related Receivable and related Credits in the
event of a release from the lien of this Indenture pursuant to (iii) above;
provided, however, that upon the termination of a Contract, any residual
proceeds from the related Credits shall be placed in the Clearing Account prior
to the Trustee or the Issuer releasing the related Credits from the security
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interest granted to the Trustee by the Issuer pursuant to this Indenture or to
the Issuer by either TFI or SPC pursuant to the Sale Agreement.
(b) Upon satisfaction of the conditions specified in subsection (a)
above or upon the satisfaction of the conditions in Section 4.03(e) or the
remittance of the Purchase Price by the Issuer pursuant to Section 4.03(d) or
Section 4.03(f) hereof and Section 3.04 of the Sale Agreement with respect to a
Contract, the Trustee shall release from the lien of this Indenture the
Contract, the related Receivable and the related Credits described in the
Issuer's request for release and shall deliver, or instruct the Custodian to
deliver, to or upon the order of the Issuer such Contract and the related
Custodian File.
Section 4.05 Trust Estate. When required by the provisions of Articles
Four, Six and Twelve hereof, the Trustee shall execute instruments to release
property from the lien of this Indenture, or convey the Trustee's interest in
the same, in a manner and under circumstances which are not inconsistent with
the provisions of this Indenture. No party relying upon an instrument executed
by the Trustee as provided in this Article Four shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
Section 4.06 Notice of Release. The Trustee shall be entitled to
receive at least 10 days' notice of any action to be taken pursuant to Section
4.04(a) hereof, accompanied by copies of any instruments involved.
Section 4.07 Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Trustee an Opinion of Counsel either stating that,
in the opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any UCC financing statements and continuation statements, as are necessary to
(x) perfect the transfers from and grants of security interests by, (i)
Trendwest and TW Holdings to TFI and (ii) TFI and SPC to the Issuer, and (y)
perfect and make effective the first priority lien and security interest in
favor of the Trustee, for the benefit of the Noteholders, created by this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before each anniversary of the Closing Date, the Issuer
shall furnish to the Trustee (with a copy to each of the Noteholders) an Opinion
of Counsel with respect to each jurisdiction in which a UCC financing statement
has been filed against each of TFI, SPC, Trendwest, TW Holdings and the Issuer
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, rerecording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any UCC financing statements and
continuation statements as is necessary to maintain the first priority lien and
security interest created by this Indenture, and the security interest, if
applicable, created by the Sale Agreement or the Receivables Purchase Agreement
and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien
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and security interest. Such Opinion of Counsel shall also describe the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and the execution and
filing of any UCC financing statements and continuation statements that will, in
the opinion of such counsel, be required to maintain the lien and security
interest of this Indenture and the security interest, if applicable, created by
the Sale Agreement or the Receivables Purchase Agreement until the next date a
continuation statement must be filed to maintain the Trustee's interest in the
Collateral.
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 5.01 Satisfaction and Discharge of Indenture. (a) Following
payment in full of (i) the Notes, (ii) the fees and charges of the Trustee and
(iii) all other obligations of the Issuer under this Indenture, and the release
by the Trustee of the Trust Estate in accordance with Section 5.01(b) hereof,
this Indenture shall be discharged.
(b) In connection with the discharge of this Indenture and the release
of the Trust Estate, the Trustee shall release from the lien of this Indenture
and shall deliver, or instruct the Custodian to deliver, to or upon the order of
the Issuer all property remaining in the Trust Estate and shall execute and
file, at the expense of the Issuer, UCC financing statements evidencing such
discharge and release.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. "Event of Default" wherever used herein
means any one of the following events:
(1) default in the payment of any interest upon any Note
within one Business Day after the same becomes due and payable; or
(2) default in the payment of any principal of any Note within
one Business Day after the same becomes due and payable; or
(3) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture, the Note Purchase
Agreements, the Sale Agreement, the Custodian Agreement or the
Servicing Agreement (other than a covenant or warranty default, the
observance or performance of which is elsewhere in this Section 6.01
specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture, the Note Purchase Agreements, the Sale
Agreement, the Custodian Agreement, the Servicing Agreement or in any
certificate or other writing delivered pursuant hereto or thereto or in
connection herewith or therewith proving to have been incorrect in any
material respect as of the time when the same shall have
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been made and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of 30 days (except for defaults relating to
Sections 4.03 and 11.02(a), (b), (i), (j), (l), (q) and (s) hereof,
which shall have no grace period) from the earlier of the Issuer
obtaining actual knowledge of, or receiving from the Trustee or any
Holder notice of, such default or incorrect representation or warranty;
or
(4) the Issuer becomes subject to registration as an
"investment company" under the Investment Company Act of 1940, as
amended; or
(5) the filing of a petition or the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of
the Issuer under the Federal Bankruptcy Code or any other applicable
federal or State bankruptcy, insolvency, reorganization, liquidation or
other similar law now or hereafter in effect or any arrangement with
creditors or appointing a receiver, liquidator, assignee, trustee, or
sequestrator (or other similar official) for the Issuer or for any
substantial part of its property in an involuntary case, or ordering
the winding up or liquidation of the Issuer's affairs, and the
continuance of any such petition undismissed or of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(6) the institution by the Issuer of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by the Issuer to
the institution of bankruptcy or insolvency proceedings against the
Issuer, or the filing by the Issuer of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable federal or State bankruptcy, insolvency,
reorganization, liquidation or other similar law now or hereafter in
effect, or the consent by the Issuer to the filing of any such petition
or to the appointment of or possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or other similar
official) of the Issuer or of any substantial part of the Issuer's
property, or the making by the Issuer of any assignment for the benefit
of creditors, or the admission by either in writing of its inability,
or the failure by it generally, to pay its debts as they become due, or
the taking of corporate action by the Issuer in furtherance of any such
action; or
(7) (i) the impairment of the validity of any security
interest of the Trustee in the Trust Estate, except as expressly
permitted, or (ii) creation of any encumbrance not otherwise permitted
which is not stayed or released within 10 days of the Issuer having
knowledge of its creation; or
(8) a default in the observance or performance by Trendwest,
with respect to Contracts transferred by SPC, or both TFI and
Trendwest, with respect to Contracts transferred by TFI, of their
repurchase obligations pursuant to Section 3.03 of the Sale Agreement
or by Trendwest of its repurchase obligations under Section 3.03 of the
Receivable Purchase Agreement.
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Section 6.02 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to the Notes at the time Outstanding occurs and is
continuing, then Holders of not less than 66-2/3 % in aggregate principal amount
of the Outstanding Notes may declare, by notice in writing to the Trustee and
the Issuer, or may direct the Trustee to declare, by notice in writing to the
Issuer, the principal of all the Notes to be immediately due and payable, and
upon any such declaration, such principal shall become immediately due and
payable without any presentment, demand, protest or other notice of any kind
(except such notices as shall be expressly required by the provisions of this
Indenture), all of which are hereby expressly waived; provided, however, that if
an Event of Default under paragraph (5) or (6) of Section 6.01 hereof occurs
with respect to the Issuer, the Notes shall automatically become due and payable
without any declaration notice to the Issuer or the Trustee. The Trustee shall
send a copy of any such notice to the Rating Agency.
At any time after such a declaration of acceleration has been made, or
after such acceleration has automatically become effective, but before any Sale
of the Trust Estate has been made or a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of not less than 66-2/3% in aggregate principal amount of
the Outstanding Notes, by written notice to the Issuer and the Trustee, may
rescind and annul such declaration or automatic acceleration and its
consequences (except that in the case of a payment default on the Notes, the
consent of all the Noteholders shall be required to rescind and annul such
declaration or automatic acceleration and its consequences) if:
(1) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Notes,
(B) the principal of any Notes which has become due
otherwise than by such declaration of acceleration or
automatic acceleration and interest thereon at the rate borne
by such Notes from the time such principal first became due
until the date when paid, and
(C) all sums paid or advanced, together with interest
thereon, by the Trustee or any Noteholder hereunder and the
reasonable compensation, expenses, disbursements and advances
of the Trustee and the Noteholders, their agents and counsel
incurred in connection with the enforcement of this Indenture
to the date of such payment or deposit; and
(2) all Events of Default, other than the nonpayment of the
principal of the Notes which have become due solely by such declaration
of acceleration or by automatic acceleration, have been cured or waived
as provided in Section 6.15 hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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Section 6.03 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Issuer covenants that if an Event of Default shall occur and be
continuing and the Notes have been declared, or automatically become, due and
payable and such declaration or automatic acceleration has not been rescinded
and annulled, the Issuer will, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of the Notes, the whole amount then due and
payable on the Notes for principal and interest, with interest upon the overdue
principal and overdue interest at the Note Interest Rate and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Issuer fails to pay such amount forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust may, institute
Proceedings for the collection of the sums so due and unpaid, and prosecute such
Proceeding to judgment or final decree, and enforce the same against the Issuer
and collect the monies adjudged or decreed to be payable in the manner provided
by law out of the property of the Issuer, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.04 Remedies. If an Event of Default shall have occurred and
be continuing, the Trustee may do one or more of the following:
(a) institute Proceedings for the collection of all amounts
then due and payable on the Notes or under this Indenture, whether by
declaration, automatic acceleration or otherwise, enforce any judgment
obtained, and collect from the Issuer the monies adjudged due;
(b) take possession of and sell the Trust Estate securing the
Notes or any portion thereof or rights or interest therein, at one or
more Sales called and conducted in any manner permitted by law;
(c) institute any Proceedings from time to time for the
complete or partial foreclosure of the lien created by this Indenture
with respect to the Trust Estate securing the Notes;
(d) during the continuance of a default under a Contract,
exercise any of the rights of the lender under such Contract; and
(e) exercise any remedies of a secured party under the UCC or
any applicable law and take any other appropriate action to protect and
enforce the rights and remedies of the Trustee or the Holders of the
Notes hereunder;
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provided, however, that without the consent of the Holders of not less than
66-2/3% in principal amount of Notes Outstanding, the Trustee may not sell or
otherwise liquidate any portion of the Trust Estate unless the proceeds of such
Sale or liquidation distributable to the Noteholders are sufficient to discharge
in full the amounts then due and unpaid upon the Notes for principal and
interest.
Section 6.05 Optional Preservation of Trust Estate. If (i) an Event of
Default shall have occurred and be continuing with respect to the Notes and (ii)
no Notes have been declared, or have automatically become, due and payable, or
such declaration or automatic acceleration and its consequences have been
annulled and rescinded, the Trustee, upon request from the Holders of a majority
in principal amount of the Outstanding Notes, may elect, by giving written
notice of such election to the Issuer, to take possession of and retain the
Trust Estate securing the Notes intact, collect or cause the collection of the
proceeds thereof and make and apply all payments and deposits and maintain all
accounts in respect of such Notes in accordance with the provisions of Article
Twelve of this Indenture. If the Trustee is unable to or is stayed from giving
such notice to the Issuer for any reason whatsoever, such election shall be
effective as of the time of such determination or request, as the case may be,
notwithstanding any failure to give such notice, and the Trustee shall give such
notice upon the removal or cure of such inability or stay (but shall have no
obligation to effect such removal or cure). Any such election may be rescinded
with respect to any portion of the Trust Estate securing the Notes remaining at
the time of such rescission by written notice to the Trustee and the Issuer from
the Holders of a majority in principal amount of the Outstanding Notes.
Section 6.06 Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial Proceeding relating to
the Issuer or any other obligor upon any of the Notes or the property of the
Issuer or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration, automatic acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Issuer for
the payment of overdue principal or interest) shall be entitled and empowered to
intervene in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of
the Notes issued hereunder and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof) and of the
Noteholders allowed in such judicial Proceeding, and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
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and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such Proceeding.
Section 6.07 Trustee May Enforce Claims Without Possession of Notes.
(a) In all Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all of the
Noteholders, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.
(b) All rights of actions and claims under this Indenture or the
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Notes or the production thereof in any Proceeding relating thereto,
and any such Proceedings instituted by the Trustee shall be brought in its own
name as Trustee of an express trust, and any recovery whether by judgment,
settlement or otherwise shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the benefit of the Holders of the Notes and shall be
distributed as set forth in Section 6.08 hereof.
Section 6.08 Application of Money Collected. If the Notes have been
declared, have automatically become, or otherwise become due and payable
following an Event of Default and such declaration or automatic acceleration has
not been rescinded or annulled, any money collected by the Trustee with respect
to the Notes pursuant to this Article Six or otherwise and any other money that
may be held thereafter by the Trustee as security for the Notes, including
without limitation the amounts in the Reserve Account, shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, without
presentation of any Notes:
FIRST: To the payment to the Trustee of the Trustee Fee and
its expenses then due and to the Trustee its costs incurred in
connection with enforcing the remedies provided for in this Article
Six;
SECOND: To the payment of, if Trendwest or an Affiliate
thereof is not the Servicer, all amounts due the Servicer pursuant to
Section 3.09 of the Servicing Agreement and Section 12.02(d)(ii)
hereof;
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THIRD: To the payment of the amounts then due and unpaid upon
the Notes for interest, with interest (to the extent such interest has
been collected by the Trustee or a sum sufficient therefor has been so
collected and payment thereof is legally enforceable at the respective
rate or rates prescribed therefor in the Notes) on overdue principal
and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for interest;
FOURTH: To the payment of the remaining outstanding principal
balance of the Notes ratably without preference or priority of any
kind;
FIFTH: To the payment to the Trustee any other amounts due to
the Trustee as expressly provided herein and in the Servicing
Agreement;
SIXTH: To reimburse the Noteholders for any costs or expenses
incurred in connection with any enforcement action with respect to this
Indenture or the Notes or any other Transaction Document;
SEVENTH: To the payment of amounts due and unpaid to the
Investor for principal and interest;
EIGHTH: To the payment of, if Trendwest or an Affiliate
thereof is the Servicer, all amounts due the Servicer pursuant to
Section 3.09 of the Servicing Agreement and Section 12.02(d)(ii)
hereof;
NINTH: To the payment of any surplus to or at the written
direction of the Issuer or any other person legally entitled thereto.
Section 6.09 Limitation on Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 66-2/3% in principal amount
of the Outstanding Notes shall have made written request to the Trustee
to institute Proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice,
request and offer of security or indemnity has failed to institute any
such Proceedings; and
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(5) no direction inconsistent with such written request has
been given to the Trustee during such 30-day period by the Holders of
not less than 66-2/3% or more in principal amount of the Outstanding
Notes; it being understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Notes, or to obtain or to
seek to obtain priority or preference over any other Holders of Notes
or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the
Holders of Notes.
Section 6.10 Unconditional Right of Noteholders to Receive Principal
and Interest. Notwithstanding any other provision in this Indenture, the
Noteholders shall have the right, which is absolute and unconditional, to
receive payment of the principal, interest, and premium, if any, on such Note as
such principal, interest, and premium, if any, becomes due and payable and to
institute any Proceeding for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Noteholder.
Section 6.11 Restoration of Rights and Remedies. If the Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Noteholder,
then, and in every case, the Issuer, the Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 6.12 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes in the last paragraph of Section 3.06 hereof, no right or
remedy herein conferred upon or reserved to the Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.13 Delay or Omission; Not Waiver. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or any acquiescence therein. Every right and
remedy given by this Article Six or by law to the Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Noteholders, as the case may be.
Section 6.14 Control by Noteholders. The Holders of not less than
66-2/3% in principal amount of the Outstanding Notes, shall have the right to
direct the time, method
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and place of conducting any Proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee; provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture including, without limitation, any provision
hereof which expressly provides for greater percentage of principal of
Outstanding Notes;
(2) any direction to the Trustee by the Noteholders to
undertake a private Sale of the Trust Estate shall be by the Holders of
not less than 66-2/3% in principal amount of Outstanding Notes, unless
the condition set forth in Section 6.18(b)(ii) hereof is met;
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; provided,
however, that, subject to Section 7.01 hereof, the Trustee need not
take any action which a Responsible Officer or Officers of the Trustee
in good faith determines might involve it in personal liability or be
unjustly prejudicial to the Noteholders not consenting; and
(4) the Trustee has been furnished reasonable indemnity
against costs, expenses and liabilities which it might incur in
connection therewith as provided in Section 7.01(f) hereof; provided,
that the unsecured agreement to indemnify the Trustee by any Holder
(or, in the case of any Note held in nominee name, the principal of
such nominee) that is an Institutional Investor that has a minimum net
worth of at least $50,000,000 shall be deemed to be satisfactory.
Section 6.15 Waiver of Past Defaults. The Holders of not less than
66-2/3% in principal amount of the Outstanding Notes may on behalf of the
Holders of all the Notes waive any past Default hereunder and its consequences,
except a Default:
(1) in the payment of the principal of, or premium, if any, or
interest on any Note, or a Default described in Sections 6.01(5) and
(6) hereof, or
(2) in respect of a covenant or provision hereof which under
Article Nine hereof cannot be modified or amended without the consent
of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.16 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
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such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but notwithstanding such assessment, the provisions of this
Section 6.16 shall not apply to any suit instituted by the Trustee, or to any
suit instituted by any Noteholder or group of Noteholders, holding in the
aggregate more than 50% in principal amount of the Outstanding Notes, or to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal of or interest on any Note on or after the Stated Maturity provided
that such suit is not deemed to be frivolous under the applicable rules of civil
procedure by such court.
Section 6.17 Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not, at any time, insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 6.18 Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Section 6.04 hereof shall
not be exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
securing the Notes shall have been sold or all amounts payable on the Notes and
under this Indenture with respect thereto shall have been paid. The Trustee may
from time to time postpone any Sale by public announcement made at the time and
place of such Sale.
(b) To the extent permitted by applicable law, the Trustee shall not,
in any private Sale, sell to a third party the Trust Estate, or any portion
thereof unless:
(i) the Holders of not less than 66-2/3% in principal amount
of Notes Outstanding, consent to or direct the Trustee to make such
Sale; or
(ii) the proceeds of such Sale would not be less than the sum
of all amounts due to the Trustee hereunder and the entire unpaid
principal amount of the Notes and interest due or to become due thereon
on the Payment Date next succeeding such Sale.
(c) The Trustee or the Noteholders may bid for and acquire any portion
of the Trust Estate in connection with a public Sale thereof, and in lieu of
paying cash therefor, any Noteholder may make settlement for the purchase price
by crediting against amounts owing on the Notes of such Holder or other amounts
owing to such Holder secured by this Indenture, that portion of the net proceeds
of such Sale to which such Holder would be entitled, after deducting the
reasonable costs, charges and expenses incurred by the Trustee or the
Noteholders in connection with such Sale. The Notes need not be produced in
order to complete any such Sale, or in order for the net proceeds of such Sale
to be credited
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against the Notes. The Trustee or the Noteholders may hold, lease, operate,
manage or otherwise deal with any property so acquired in any manner permitted
by law.
(d) The Trustee shall execute and deliver an appropriate instrument
of conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof. In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to transfer and convey
its interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale. No purchaser or
transferee at such a sale shall be bound to ascertain the Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
(e) The method, manner, time, place and terms of any Sale of all or
any portion of the Trust Estate shall be commercially reasonable.
Section 6.19 Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
ARTICLE SEVEN
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default known to the Trustee as provided in
subsection (e) below:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith or negligence on its part,
the Trustee may conclusively rely as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions,
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
and to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default known to the Trustee as provided in
subsection (e) below has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and shall use the
same degree of care and skill in its
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exercise, as a reasonable person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction the Holders of a majority (or other such percentage
as may be required by the terms hereof) in principal amount of the
Outstanding Notes in accordance with Section 6.14 hereof relating to
the time, method and place of conducting any Proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture, the Sale Agreement or the
Servicing Agreement; and
(iv) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
(e) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default described in Section
6.01(4), 6.01(5) or 6.01(6) hereof, any Default described in Section 6.01(3)
hereof or Section 4.03(a) hereof unless a Responsible Officer has actual
knowledge thereof or unless written notice of any event which is in fact such an
Event of Default or Default is received by the Trustee at the Corporate Trust
Office, and such notice references the Notes generally, the Issuer, the Trust
Estate or this Indenture.
(f) The Trustee shall be under no obligation to institute any suit, or
to take any remedial proceeding under this Indenture, or to enter any appearance
or in any way defend in any suit in which it may be made defendant, or to take
any steps in the execution of the trusts hereby created or in the enforcement of
any rights and powers hereunder until it shall be indemnified to its reasonable
satisfaction against any and all costs and expenses, outlays and counsel fees
and other reasonable disbursements and against all liability, except liability
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resulting from the Trustee's negligence or willful misconduct as adjudicated, in
connection with any action so taken; provided, that the unsecured agreement to
indemnify the Trustee by any Holder (or, in the case of any Note held in nominee
name, the principal of such nominee) that is an Institutional Investor that has
a minimum net worth of at least $50,000,000 shall be deemed to be satisfactory.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Issuer in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration or automatic acceleration of the maturity
of the Notes, whether such extinguishment occurs through a Sale of the Trust
Estate to another person, the acquisition of the Trust Estate by the Trustee
with respect to the Trust Estate (or the proceeds thereof) and the Noteholders
and the rights of the Noteholders shall continue to be governed by the terms of
this Indenture.
(h) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) through (g), inclusive, of this Section 7.01 shall
be subject to the provisions of subsections (a) through (c), inclusive, of this
Section 7.01.
(i) The Trustee shall provide the reports and accountings as required
pursuant to Section 12.04 hereof.
(j) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture. The Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, no implied covenant shall be read into
this Indenture and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely on the truth of the statements and corrections of
the opinions furnished to the Trustee.
Section 7.02 Notice of Default. Promptly after the occurrence of any
Default known to the Trustee (within the meaning of Section 7.01(e) hereof)
which is continuing, the Trustee shall transmit by mail to all Holders of Notes,
as their names and addresses appear on the Note Register, notice of such Default
hereunder known to the Trustee.
Section 7.03 Certain Rights of Trustee. Except as otherwise provided in
Section 7.01,
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other obligation, paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel selected by the Trustee with due care or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
provided, that the unsecured agreement to indemnify the Trustee by any
Holder (or, in the case of any Note held in nominee name, the principal
of such nominee) that is an Institutional Investor that has a minimum
net worth of at least $50,000,000 shall be deemed to be satisfactory.
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuer, upon
reasonable notice and at reasonable times personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney,
appointed with due care by it hereunder.
Section 7.04 Not Responsible for Recitals or Issuance of Notes. (a)
The recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or condition of the Trust Estate or any
part thereof, or as to the title of the Issuer thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of any
securities at any time pledged and deposited with the Trustee hereunder or as to
the validity or sufficiency of this Indenture or of the Notes. The Trustee shall
not be accountable for the use or application by the Issuer of Notes or the
proceeds thereof or of any money paid to the Issuer or upon Issuer Order under
any provisions hereof.
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(b) Except as otherwise expressly provided herein and without limiting
the generality of the foregoing, the Trustee shall have no responsibility or
liability for or with respect to the existence or validity of any of the Credits
or Contracts, the perfection of any security interest (whether as of the date
hereof or at any future time), the maintenance of or the taking of any action to
maintain such perfection, the validity of the assignment of any portion of the
Trust Estate to the Trustee or of any intervening assignment, the review of any
Contract (it being understood that the Trustee has not reviewed and does not
intend to review the substance or form of any such Contract), the performance or
enforcement of any Contract, the compliance by the Issuer, Trendwest, SPC, TFI
or the Servicer with any covenant or the breach by the Issuer, Trendwest, SPC,
TFI or the Servicer of any warranty or representation made hereunder or in any
related document or the accuracy of any such warranty or representation, any
investment of monies in the Collection Account or the Reserve Account or any
loss resulting therefrom, the acts or omissions of the Issuer, Trendwest, SPC,
TFI, the Servicer or any Obligor, any action of the Servicer taken in the name
of the Trustee, or the validity of the Servicing Agreement, the Sale Agreement
or the Receivables Purchase Agreement.
(c) The Trustee shall not have any obligation or liability under any
Contract by reason of or arising out of this Indenture or the granting of a
security interest in such Contract hereunder or the receipt by the Trustee of
any payment relating to any Contract pursuant hereto, nor shall the Trustee be
required or obligated in any manner to perform or fulfill any of the obligations
of the Seller under or pursuant to any Contract, or to make any payment, or to
make any inquiry as to the nature or the sufficiency of any payment received by
it, or the sufficiency of any performance by any party, under any Contract.
Section 7.05 May Hold Notes. The Trustee, the Servicer, any Paying
Agent, the Note Registrar, any Authenticating Agent or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes, and if operative, may otherwise deal with the Issuer with the same
rights it would have if it were not Trustee, Servicer, Paying Agent, Note
Registrar, Authenticating Agent or such other agent.
Section 7.06 Money Held in Trust. Money and investments held in trust
by the Trustee or any Paying Agent hereunder shall be held in one or more trust
accounts hereunder but need not be segregated from other funds except to the
extent required herein or required by law. The Trustee or any Paying Agent shall
be under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Issuer or otherwise specifically provided herein.
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Section 7.07 Compensation and Reimbursement. The Issuer agrees:
(i) to pay the Trustee monthly its fee for all services
rendered by it hereunder as Trustee, in the amount of the Trustee Fee
(which compensation shall not otherwise be limited by any provision of
law in regard to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or the Servicing
Agreement (including the reasonable compensation and the expenses and
disbursements of the Trustee's agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, bad faith or willful misconduct; and
(iii) to indemnify and hold harmless the Trust Estate and the
Trustee from and against any loss, liability, expense, damage or injury
sustained or suffered pursuant to this Indenture by reason of any acts,
omissions or alleged acts or omissions arising out of activities of the
Trust Estate or the Trustee (including without limitation any violation
of any applicable laws by the Issuer as a result of the transactions
contemplated by this Indenture), including, but not limited to, any
judgment, award, settlement, reasonable attorneys' fees and other
expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the Issuer shall
not indemnify the Trustee if such loss, liability, expense, damage or
injury is due to the Trustee's negligence or willful misconduct,
willful misfeasance or bad faith in the performance of duties. Any
indemnification pursuant to this Section 7.07 shall only be payable
from the assets of the Issuer and shall not be payable from the assets
of the Trust Estate. The provisions of this indemnity shall run
directly to and be enforceable by an injured person subject to the
limitations hereof and this indemnification agreement shall survive the
termination of this Indenture.
Upon the occurrence of an Event of Default resulting in an acceleration
of maturity of the Notes that has not been rescinded and annulled, the Trustee
shall have, as security for the performance of the Issuer under this Section
7.07, a lien ranking senior to the lien of the Notes with respect to which any
claim of the Trustee under this Section 7.07 arose upon all property and funds
held or collected as part of the Trust Estate by the Trustee in its capacity as
such. The Trustee shall not institute any Proceeding seeking the enforcement of
such lien against any Trust Estate unless (i) such Proceeding is in connection
with a proceeding in accordance with Article Six hereof for enforcement of the
lien of this Indenture for the benefit of the Holders of the Notes secured by
such Trust Estate after the occurrence of an Event of Default (other than an
Event of Default due solely to a breach of this Section 7.07) and a resulting
declaration of acceleration or automatic acceleration of maturity of such Notes
that has not been rescinded and annulled, or (ii) such Proceeding does not
result in or cause a Sale or other disposition of such Trust Estate. All monies
so collected by the Trustee shall be applied in accordance with Section 6.08
hereof, and the Trustee shall receive
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amounts pursuant to Section 6.08 hereof only to the extent that payment thereof
will not result in a subsequent Event of Default caused by such payments to the
Trustee.
Section 7.08 Corporate Trustee Required; Eligibility. There shall at
all times be a trustee hereunder which shall be a corporation or association
organized and doing business under the laws of the United States of America or
of any State, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000, or be a member
of a consolidated bank holding company with a combined capital and surplus of at
least $100,000,000, subject to supervision or examination by Federal or state
authority and having an office within the United States of America, and, except
with respect to the initial Trustee hereunder, which shall have a commercial
paper or other short-term rating of the highest short term rating categories by
Fitch (or, if not rated by Fitch, by S&P or ▇▇▇▇▇'▇) or otherwise acceptable to
the Holders of not less than 66-2/3% in principal amount of the Outstanding
Notes. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.08, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.08, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article Seven.
Section 7.09 Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article Seven shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.10 hereof.
(b) The Trustee may resign at any time by giving 60 days' written
notice thereof to the Issuer and to each Noteholder. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 60 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor Trustee.
(c) The Trustee may be removed with or without cause by the Act of
the Holders of not less than 66-2/3% in principal amount of the Outstanding
Notes by notice to the Trustee at any time.
(d) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause
with respect to the Notes, the Holders of not less than 66-2/3% in principal
amount of the Notes Outstanding or the Issuer, with the written consent of
Holders of not less than 66-2/3% in principal amount of Notes Outstanding, may
appoint a successor Trustee.
(e) The Issuer shall give notice to the Servicer, the Custodian and
the Noteholders in the manner provided in Section 13.03 hereof of each
resignation and each removal of the
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Trustee and each appointment of a successor Trustee with respect to the Notes.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office.
Section 7.10 Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Issuer, each Noteholder and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee but, on request of the Issuer or the successor
Trustee, such retiring Trustee shall, upon payment of its reasonable
out-of-pocket costs and expenses, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 7.07 hereof. Upon
request of any such successor Trustee, the Issuer shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article
Seven.
Section 7.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article Seven, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Notes have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.
Section 7.12 Co-Trustees and Separate Trustees. At any time or times,
for the purpose of meeting the legal requirements of any jurisdiction in which
any of the Trust Estate may at the time be located, the Issuer, and the Trustee
shall have power to appoint, and, upon the written request of the Trustee, or of
the Holders of Notes representing at least 25% of the aggregate principal amount
of the Outstanding Notes, the Issuer shall for such purpose join with the
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by the
Trustee, either to act as co-Trustee, jointly with the Trustee of all or any
part of such Trust Estate, or to act as separate Trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.12. If the Issuer does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event
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of Default has occurred and is continuing, the Trustee alone shall have power to
make such appointment.
Should any written instrument from the Issuer be reasonably required by
any co-Trustee or separate Trustee so appointed for more fully confirming to
such co-Trustee or separate Trustee such property, title, right or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Issuer.
Every co-Trustee or separate Trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(i) the Notes shall be authenticated and delivered by, and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised solely by the Trustee;
(ii) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Trustee or by the Trustee and such
co-Trustee or separate Trustee jointly, as shall be provided in the
instrument appointing such co- Trustee or separate Trustee, except to
the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-Trustee or separate Trustee;
(iii) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by a Board
Resolution, may accept the resignation of or remove any co-Trustee or
separate Trustee, appointed under this Section 7.12, and, in case an
Event of Default has occurred and is continuing, the Trustee shall have
power to accept the resignation of, or remove, any such co-Trustee or
separate Trustee without the concurrence of the Issuer. Upon the
written request of the Trustee, the Issuer shall join with the Trustee
in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-Trustee or separate Trustee that has so
resigned or been removed may be appointed in the manner provided in
this Section 7.12;
(iv) no co-Trustee or separate Trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee or
any other such Trustee hereunder nor shall the Trustee be liable by
reason of any act or omission of any co-Trustee or separate Trustee
selected by the Trustee with due care or appointed in accordance with
directions to the Trustee pursuant to Section 6.14 hereof; and
(v) any Act of Noteholders delivered to the Trustee shall be
deemed to have been delivered to each such co- Trustee and separate
Trustee.
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Section 7.13 Rights with Respect to the Servicer. The Trustee's rights
and obligations with respect to the Servicer shall be governed by the Servicing
Agreement.
Section 7.14 Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to the Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes issued upon
original issue or upon exchange, registration of transfer or pursuant to Section
3.06 hereof, and Notes so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the
Trustee's certificate of authentication or the delivery of Notes to the Trustee
for authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent
and delivery of the Notes to the Authenticating Agent on behalf of the Trustee.
Each Authenticating Agent shall be acceptable to the Issuer and a majority in
principal amount Outstanding of the Noteholders and shall at all times be a
corporation having a combined capital and surplus of not less than the
equivalent of $50,000,000 and subject to supervision or examination by Federal
or state authority or the equivalent foreign authority, in the case of an
Authenticating Agent who is not organized and doing business under the laws of
the United States of America, any state thereof or the District of Columbia. If
such Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section 7.14, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section 7.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 7.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent; provided, such
corporation shall be otherwise eligible under this Section 7.14.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Issuer. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 7.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Notes, if any, with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Note Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall
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become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 7.14.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 7.14, but the
Trustee shall not be entitled to be reimbursed for such payments.
If an appointment is made pursuant to this Section 7.14, the Notes may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Notes described in the within-mentioned Indenture.
LASALLE NATIONAL BANK, as Trustee
By _______________________________
As Authenticating Agent
By _______________________________
Authorized Officer
Section 7.15 Custodian to Hold Contracts. The Custodian, as agent
(solely for the purpose of perfecting the security interest of the Trustee in
the Contracts and the related Custodian Files) and bailee of the Trustee, shall
hold each Contract, together with any documents relating thereto that may from
time to time be delivered to the Custodian, until such time as such Contract is
released from the lien of this Indenture pursuant to the terms hereof. Within 10
days of the Closing Date, the Custodian will review each Custodian File to
determine whether or not such file is complete, and it shall file an exception
report with the Issuer, the Trustee, the Servicer and each Noteholder within
such time period. If an exception is not cured within 40 days of the Closing
Date, the related Contract must be repurchased by Trendwest within 30 days of
the end of such 40-day period. The Trustee shall have no responsibility or
liability for the actions or inactions of the Custodian.
The Trustee shall be under no duty or obligation to inspect, review
or examine the Contracts or the related Custodian Files for any purpose,
including, without limitation, to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
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ARTICLE EIGHT
OPTIONAL PURCHASE OF RECEIVABLES
Section 8.01 Optional Purchase of All Receivables; Liquidation of
Trust Estate. (a) On the Business Day immediately preceding any Payment Date
after the aggregate principal amount of the then Outstanding Notes is less than
10% of the original aggregate principal amount of the Notes, the initial
Servicer and TFI each shall have the option to purchase all of the Collateral;
provided, however, that the amount to be paid for such purchase (as set forth in
the following sentence) shall be sufficient to pay any amounts then due and
payable to the Trustee and the Servicer, and the full amount of principal,
premium, if any, and interest then due and payable on the Notes and the Issuer
shall redeem the Notes on such Payment Date pursuant to Article X hereof. To
exercise such option, the initial Servicer or TFI, as the case may be, shall pay
the aggregate Purchase Price for all of the Receivables and shall succeed to all
interests in and to the Collateral. The party exercising such option to
repurchase shall deposit the aggregate Purchase Price for the Receivables into
the Collection Account, and the Trustee shall distribute the amounts so
deposited in accordance with Section 12.02.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
The Issuer, the Servicer and the Trustee, without the consent of the Holders of
any Notes, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes, provided that any such amendment, as evidenced by an
Opinion of Counsel, will not have a material adverse effect on Noteholders:
(1) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property; or
(2) to evidence the succession of another Person to the
Issuer, and the assumption by such successor of the covenants of the
Issuer herein and in the Notes contained, in accordance with Section
11.02(q) hereof; or
(3) to add to the covenants of the Issuer, for the benefit of
the Holders of all Notes, or to surrender any right or power herein
conferred upon the Issuer; or
(4) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee for the benefit of the Noteholders; or
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(5) to evidence the succession of the Trustee pursuant to
Article Seven hereof.
No supplemental indenture that permits the issuance of the Notes in
coupon form will be of any force and effect unless the Trustee and the Issuer
shall have received an Opinion of Counsel to the effect that such amendment will
not adversely affect the Issuer's ability to deduct the interest paid on the
Notes. The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Promptly after the execution by the Issuer, the Servicer and the
Trustee of any supplemental indenture pursuant to this Section 9.01, the Issuer
shall mail to each Noteholder and to the Rating Agency a copy of such
supplemental indenture.
Section 9.02 Supplemental Indentures with Consent of Noteholders.
With the consent of the Holders of not less than 66-2/3% in principal amount of
the Outstanding Notes, by Act of said Holders delivered to the Issuer and the
Trustee, the Issuer, the Servicer and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holders of each Outstanding Note affected thereby:
(1) change the Stated Maturity of any Note or the due date of
any installment of principal of, or any installment of interest on, any
Note, or reduce the principal amount thereof or the Note Interest Rate
or change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment; or
(2) reduce the percentage in principal amount of the
Outstanding Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with certain provisions of
this Indenture or Events of Default or their consequences; or
(3) impair or adversely affect the Trust Estate except as
otherwise permitted herein; or
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(5) modify any of the provisions of this Section 9.02, except
to increase the percentage of Holders of the Outstanding Notes required
for any modification or waiver or to provide that certain other
provisions of this Indenture cannot be modified
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or waived without the consent of the Holder of each Outstanding Note
affected thereby; or
(6) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or terminate the lien of this Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the
security afforded by the lien of this Indenture; or
(7) modify any of Sections 6.01(l) or (2), 6.02, 6.03, 6.08,
6.18, or 12.02(d) hereof.
It shall be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture.
Promptly after the execution by the Issuer, the Servicer and the
Trustee of any supplemental indenture pursuant to this Section 9.02, the Issuer
shall mail to the Holders of the Notes and the Placement Agents a copy of such
supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive upon request, and (subject to Section 7.01 hereof) shall be fully
protected in relying in good faith upon, an Opinion of Counsel reasonably
acceptable to the Trustee stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own duties or immunities under this Indenture or
otherwise.
Section 9.04 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article Nine, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.05 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article Nine may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
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ARTICLE TEN
REDEMPTION OF NOTES
Section 10.01 Redemption at the Option of the Issuer; Election to
Redeem. The Issuer shall have the option to redeem the Notes, in whole but not
in part, as to the then Outstanding Notes, on any Payment Date (the "Redemption
Date") after the aggregate principal amount of the then Outstanding Notes is
less than 10% of the original aggregate principal amount of the Notes, at the
applicable Redemption Price plus any fees due hereunder.
The Issuer shall set the Redemption Date and the Redemption Record Date
and give notice thereof to the Trustee pursuant to Section 10.02 hereof.
Installments of interest and principal due on or prior to a Redemption
Date shall continue to be payable to the Holders of Notes called for redemption
as of the relevant Record Dates according to their terms and the provisions of
Section 3.07 hereof. The election of the Issuer to redeem any Notes pursuant to
this Section 10.01 shall be evidenced by a Board Resolution directing the
Trustee to make the payment of the applicable Redemption Price on all of the
Notes to be redeemed from monies deposited with the Trustee pursuant to Section
10.04 hereof.
Section 10.02 Notice to Trustee. In the case of any redemption pursuant
to Section 10.01 hereof, the Issuer shall, at least 15 days prior to the
Redemption Date, notify the Trustee of such Redemption Date.
Section 10.03 Notice of Redemption by the Issuer. Upon receipt of such
notice and such deposit set forth in Section 10.02 above, the Trustee shall
provide notice of redemption pursuant to Section 10.01 hereof by first-class
mail, postage prepaid, mailed no later than the Business Day following the
Calculation Date on which such deposit was made, to each Holder of Notes whose
Notes are to be redeemed, at his address in the Note Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price; and
(3) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Note, and that interest thereon
shall cease to accrue on the Redemption Date if the Redemption Price is
paid on such date.
Notice of redemption of Notes shall be given by the Trustee in the name
and at the expense of the Issuer. Failure to give notice of redemption, or any
defect therein, to any Holder of any Note selected for redemption shall not
impair or affect the validity of the redemption of any other Note.
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Section 10.04 Deposit of the Redemption Price. On or before the
Business Day next preceding any Redemption Date, the Issuer shall deposit with
the Trustee or, if there is a Paying Agent, with the Paying Agent an amount of
monies sufficient to pay the Redemption Price of all Notes which are to be
redeemed on such Redemption Date plus any fees due hereunder.
Section 10.05 Notes Payable on Redemption Date. Notice of redemption
having been given as provided in Section 10.03 hereof, the Notes shall, on the
Redemption Date, become due and payable at the Redemption Price and on such
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price) such Notes shall cease to bear interest. The Holders of such
Notes shall be paid the Redemption Price by the Paying Agent on behalf of the
Issuer; provided, however, that installments of principal and interest which are
due on or prior to the Redemption Date shall be payable to the Holders of such
Notes registered as such on the relevant Record Dates according to their terms
and the provisions of Section 3.07 hereof.
If the Holders of any Note called for redemption shall not be so paid,
the principal and premium, if any, shall, until paid, bear interest from the
Redemption Date at the Note Interest Rate.
ARTICLE ELEVEN
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 11.01 Representations and Warranties. The Issuer hereby makes
the following representations and warranties for the benefit of the Trustee and
the Noteholders on which the Trustee relies in accepting the Trust Estate in
trust and in authenticating the Notes. Such representations and warranties are
made as of the Closing Date, but shall survive the transfer, grant and
assignment of the Trust Estate to the Trustee.
(a) Organization and Good Standing. The Issuer is a limited liability
company duly organized, validly existing and in good standing under the law of
the State of Delaware and each other State where the nature of its business
requires it to qualify, except to the extent that the failure to so qualify
would not in the aggregate materially adversely affect the ability of the Issuer
to perform its obligations under this Indenture, the Notes, the Note Purchase
Agreements, the Custodian Agreement or the Sale Agreement.
(b) Authorization. The Issuer has the power, authority and legal right
to execute, deliver and perform this Indenture, the Notes, the Note Purchase
Agreements, the Custodian Agreement and the Sale Agreement and the execution,
delivery and performance of this Indenture, the Notes, the Note Purchase
Agreements, the Custodian Agreement and the Sale Agreement have been duly
authorized by the Issuer by all necessary action.
(c) Binding Obligation. This Indenture, the Notes, the Note Purchase
Agreements, the Custodian Agreement and the Sale Agreement have been duly
executed and delivered by
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the Issuer, and this Indenture, assuming due authorization, execution and
delivery by the Trustee and the Servicer, the Sale Agreement, assuming due
authorization, execution and delivery by TFI, SPC and Trendwest, each Note
Purchase Agreement, assuming due authorization, execution and delivery by each
initial purchaser of Notes, and the Custodian Agreement, assuming due
authorization, execution and delivery by the Trustee, the Custodian and the
Servicer, each constitutes a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms except that (A) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws (whether statutory, regulatory or decisional) now or
hereafter in effect relating to creditors' rights generally and (B) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to certain equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought, whether a proceeding at law
or in equity.
(d) No Violation. The consummation of the transactions contemplated by
the fulfillment of the terms of this Indenture, the Notes, the Note Purchase
Agreements, the Custodian Agreement and the Sale Agreement will not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under the
organizational documents or bylaws 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 in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of such indenture, agreement,
mortgage, deed of trust or other such instrument, other than any Lien created or
imposed pursuant to the terms of this Indenture or the Sale Agreement, or
violate any law or, to the best of the Issuer's knowledge, after due inquiry,
any material order, rule or regulation applicable to the Issuer of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Issuer or any of its
properties.
(e) No Proceedings. There are no Proceedings or investigations to which
the Issuer, or any of the Issuer's Affiliates, is a party pending, or, to the
knowledge of Issuer, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A)
asserting the invalidity of this Indenture, the Sale Agreement, the Receivables
Purchase Agreement, the Note Purchase Agreements, the Custodian Agreement or the
Notes, (B) seeking to prevent the issuance of the Notes or the consummation of
any of the transactions contemplated by the Sale Agreement, the Receivables
Purchase Agreement, this Indenture, the Note Purchase Agreements, the Custodian
Agreement or the Notes 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 Indenture, the Sale Agreement,
the Receivables Purchase Agreement, the Note Purchase Agreements, the Custodian
Agreement or the Notes.
(f) Approvals. 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 Indenture, the
Note Purchase Agreements, the Custodian Agreement or the Sale Agreement and with
the valid and proper authorization, issuance and sale of the Notes pursuant to
this Indenture and the Note Purchase Agreements
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(except approvals of State securities officials under the Blue Sky laws), have
been or will be taken or obtained on or prior to the Closing Date.
(g) Name and Place of Business. The Issuer's legal name is as set forth
in this Indenture. The Issuer has not used or done business under any other name
in the previous five-year period. The Issuer's principal place of business and
chief executive office is located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location where all action required by Section
11.02(f) hereof shall have been taken place with respect to the Trust Estate.
The Issuer has not used any other address in the previous five-year period.
(h) Transfer and Assignment. Upon the delivery to the Custodian of the
Contracts and the filing of the UCC financing statements described in Sections
4.01(b)(vii) and 4.02(a) hereof, the Trustee for the benefit of the Noteholders
shall have a first priority perfected security interest in the Receivables, the
Contracts and in the proceeds thereof, except for Liens permitted under Section
11.02(a) and limited to the extent set forth in Section 9-306 of the UCC as in
effect in the applicable jurisdiction. All filings (including, without
limitation, UCC filings) as are necessary in any jurisdiction to perfect the
interest of the Trustee in the Trust Estate (other than the Credits), including
the transfer of the Contracts and the payments to become due thereunder, have
been made.
(i) Members of the Issuer. All of the members of the Issuer are listed
on Schedule B hereto, and each is the registered owner of such Person's
membership interests in the Issuer; all of such interests have been fully paid
and are owned of record, free and clear of all mortgages, assignments, pledges,
security interests, warrants, options and rights to purchase, except as set
forth on Schedule B hereof. The Issuer will not permit any member to transfer
its membership interest, other than for estate planning purposes, without the
consent of the Holders of a majority in principal amount of Notes Outstanding.
The Issuer shall ensure that at all times at least one of its members will be a
bankruptcy remote special purpose entity.
(j) Sale Agreement. As of the Closing Date, the Issuer has entered into
the Sale Agreement and the Assignment with TFI and SPC relating to its
acquisition of the Receivables related to the Contracts identified therein and a
security interest in related Credits, and the representations and warranties
made by TFI and SPC relating to such Contracts, such Receivables and such
interests in the related Credits have been validly assigned to and are for the
benefit of the Issuer, the Trustee and the Noteholders and such representations
and warranties are true and correct in all material respects.
(k) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts and the related Receivables and the grant of a security interest in
the related Credits by TFI and SPC to the Issuer pursuant to the Sale Agreement
or by the Issuer pursuant to this Indenture is not subject to the bulk transfer
or any similar statutory provisions in effect in any applicable jurisdiction.
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(l) Solvency. 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 the Issuer:
(A) be insolvent such that the sum of its debts is greater
than all of its respective property, at a fair valuation;
(B) be engaged in, or about to engage in, business or a
transaction for which any property remaining with the Issuer will be an
unreasonably small capital or the remaining assets of the Issuer 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. The Issuer's assets and cash flow enable it to meet its
present obligations in the ordinary course of business as they become
due.
(m) Tax Returns. All tax returns or extensions required to be filed by
the Issuer in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon the Issuer, 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. To the best of the Issuer's knowledge,
all such tax returns are true and correct and the Issuer 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 the Issuer are in
accordance with generally accepted accounting principles.
(n) Tax Reporting. The Issuer will treat the acquisition of the
Contracts and the related Receivables and the security interest in the related
Credits as a sale to the Issuer for federal, State and local income tax
reporting and accounting purposes.
(o) Subsidiaries. The Issuer has no subsidiaries.
(p) Pension Plans. Each pension plan or profit sharing plan to which
the Issuer is a party has been fully funded in accordance with the obligations
of the Issuer set forth in such plan.
(q) Constituent Documents. The Issuer will not amend its Certificate of
Formation or its Limited Liability Company Agreement without the consent of the
Trustee and the Holders of a majority in principal amount of the Notes
Outstanding.
(r) Value of Contracts. As of the Cut-off Date, the aggregate principal
balance of the Contracts equaled the Initial Aggregate Collateral Value.
(s) Term of Contracts. As of the Closing Date, the Schedule of
Contracts accurately reflects the duration of each Contract.
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(t) Pool Information. As of the Cut-Off Date, the information set forth
on Schedule C hereto is true and correct.
(u) Number of Credits. As of the Closing Date, the aggregate number of
Credits is 241,169,000.
Section 11.02 Covenants. The Issuer hereby makes the following
covenants on which the Trustee relies in accepting the Trust Estate in trust and
in authenticating the Notes. Such covenants are made as of the Closing Date, but
shall survive the transfer, grant and assignment of the Trust Estate to the
Trustee.
(a) No Liens. Except for the conveyances and grant of security
interests hereunder, the Issuer will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
portion of the Trust Estate now existing or hereafter created, or any interest
therein prior to the termination of this Indenture pursuant to Section 5.01
hereof; the Issuer will notify the Trustee of the existence of any Lien on any
portion of the Trust Estate immediately upon discovery thereof; and the Issuer
shall defend the right, title and interest of the Trustee in, to and under the
Trust Estate now existing or hereafter created, against all claims of third
parties claiming through or under the Issuer; provided, however, that nothing in
this Section 11.02(a) shall prevent or be deemed to prohibit the Issuer from
suffering to exist upon any of the Trust Estate any Liens for municipal or other
local taxes and other governmental charges if such taxes or governmental charges
shall not at the time be due and payable or if the Issuer shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
(b) Delivery of Collections. The Issuer agrees to hold in trust and
promptly pay to the Servicer all amounts received by the Issuer in respect of
the Trust Estate (other than amounts distributed to or for the benefit of the
Issuer pursuant to Article Twelve hereof).
(c) Obligations with Respect to Contracts. The Issuer will duly fulfill
all obligations on its part to be fulfilled under or in connection with each
Contract and will do nothing to impair the rights of the Trustee (for the
benefit of the Noteholders) in the Receivables, the Contracts and any other part
of the Trust Estate. As long as there is no event of default under the
applicable Contract, the Issuer will not disturb the Obligor's use of the Club
in accordance with the rules of the Club.
(d) Compliance with Law. The Issuer will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Contracts or any part thereof,
provided, however, that the Issuer may contest any act, regulation, order,
decree or direction in any reasonable manner which shall not materially and
adversely affect the rights of the Trustee (for the benefit of the Noteholders)
in the Receivables, the Contracts and the related Credits. The Issuer will
comply, in all material respects, with all requirements of law applicable to the
Issuer.
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(e) Preservation of Security Interest. The Issuer shall execute and
file such continuation statements and any other documents which may be required
by law or which the Trustee deems appropriate to fully preserve and protect the
interest of the Trustee (for the benefit of the Noteholders) in the Trust
Estate.
(f) Maintenance of Office, etc. The Issuer will not, without
providing 30 days' prior written notice to the Trustee and each Noteholder and
without filing such amendments to any previously filed financing statements as
the Trustee may require or as may be required in order to maintain the Trustee's
perfected security interest in the Trust Estate (other than the Credits), (a)
change the location of its chief executive office, or (b) change its name,
identity or corporate structure in any manner which would make any financing
statement or continuation statement filed by the Issuer in accordance with the
Servicing Agreement or this Indenture seriously misleading within the meaning of
Article 9-402(7) of any applicable enactment of the UCC.
(g) Further Assurances. Except as set forth in Section 11.02(e), the
Issuer will make, execute or endorse, acknowledge, and file or deliver to the
Trustee from time to time such schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such other steps relating to the Trust
Estate, as the Trustee may request and reasonably require.
(h) Notice of Liens. The Issuer shall notify the Trustee and each
Noteholder promptly after becoming aware of any Lien on any Trust Estate, except
for any Liens for municipal or other local taxes if such taxes shall not at the
time be due or payable without penalty.
(i) Activities of the Issuer. The Issuer (a) shall engage in only (1)
the acquisition, ownership, selling and pledging of the property acquired by the
Issuer pursuant to the Sale Agreement (including the ability to enter into a new
installment contract with an Obligor pursuant to an Upgrade), and causing the
issuance of, receiving and selling the Notes issued pursuant to this Indenture
and (2) the exercise of any powers permitted to limited liability companies
under the limited liability company law of the State of Delaware which are
incidental to the foregoing or necessary to accomplish the foregoing; (b) will
(1) maintain its books and records separate from the books and records of any
other entity, (2) maintain separate bank accounts and no funds of the Issuer
shall be commingled with funds of any other entity, (3) keep in full effect its
existence, rights and franchises as a limited liability company under the laws
of the State of Delaware, and will obtain and preserve its qualification to do
business as a foreign limited liability company in each jurisdiction in which
such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, (4) conduct its business from an office or
office space separate from the office of TFI, SPC and Trendwest and will
maintain a telephone number separate from that of TFI, SPC and Trendwest, and
(5) operate its business generally so as not to be substantively consolidated
with any of its Affiliates; and (c) will not (1) dissolve or liquidate in whole
or in part, (2) own any subsidiary or lend or advance any moneys to, or make an
investment in, any Person, (3) make any capital expenditures, (4)(A) commence
any case, proceeding or other action under any existing or future bankruptcy,
insolvency or similar
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law seeking to have an order for relief entered with respect to it, or seeking
reorganization, arrangement, adjustment, wind-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, (B) seek
appointment of a receiver, trustee, custodian or other similar official for it
or any part of its assets, (C) make a general assignment for the benefit of
creditors (other than as contemplated herein), or (D) take any action in
furtherance of, or consenting or acquiescing in, any of the foregoing, (5)
guarantee (directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of, or own or purchase any
stock, obligations or securities of or any other interest in, or make any
capital contribution to, any other Person, (6) merge or consolidate with any
other Person, except as permitted pursuant to Section 11.02(q) hereof, (7)
engage in any other action that adversely affects whether the separate legal
identity of the Issuer will be respected, including without limitation (A)
holding itself out as being liable for the debts of any other party or (B)
acting other than in its corporate name and through its duly authorized officers
or agents, or (8) create, incur, assume, or in any manner become liable in
respect of any indebtedness other than that contemplated herein or trade
payables and expense accruals incurred in the ordinary course of business and
which are incidental to its business purpose. The Issuer shall not amend any
article in its Certificate of Formation or its Limited Liability Company
Agreement that deals with any matter discussed above without the prior written
consent of the Holders of not less than 66-2/3% in aggregate principal amount of
the Outstanding Notes.
(j) Directors. The Issuer agrees that at all times, at least one
member of the Issuer shall have at least one director and one executive officer
of such member that will not be a director, officer or employee of any direct or
ultimate parent, or Affiliate of such parent or of the Issuer (other than such
member) or a brother, sister, parent, child or spouse of any of the foregoing;
provided, however, that (a) such independent director may also be the
independent officer and (b) such independent director and such independent
officer may serve in similar capacities for other "special purpose corporations"
formed by the Issuer and its Affiliates. Such member's Certificate of
Incorporation shall at all times provide that such independent director shall
have a fiduciary duty to the Holders of the Notes.
(k) Consolidated Return. The Issuer is not a member of an affiliated
group with TFI or Trendwest within the meaning of Section 1504 of the Code and
will not file a consolidated return with either of TFI or Trendwest for federal
income tax purposes at any time until after the termination of this Indenture.
(l) Security Interest in the Credits. The Issuer warrants that it has
a valid security interest in the Credits and that it will defend its security
interest in such Credits against all Persons, claims and demands whatsoever. The
Issuer shall not assign, sell, pledge, or exchange, or in any way encumber or
otherwise dispose of its interest in the Credits, except as permitted under this
Indenture.
(m) Taxable Income from the Receivables. The Issuer shall treat the
Receivables as owned by it for federal, State and local income tax purposes, and
any affiliated group of which the Issuer is a member within the meaning of
section 1504 of the Code shall treat the Receivables as owned by the Issuer for
federal, State and local income tax purposes, shall
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report and include in the computation of the Issuer's gross income for such tax
purposes in its consolidated or combined return the income from the Receivables
and the Contracts, and shall deduct the interest paid or accrued with respect to
the Notes in accordance with its applicable method of accounting for such
purposes.
(n) Maintenance of Office or Agency. The Issuer will maintain an
office or agency within the United States of America where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demand to or upon the
Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Trustee at the Corporate Trust Office for each of
said purposes. The Issuer will give 30 days' prior written notice to the Trustee
and the Noteholders of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Trustee and the Noteholders with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Trustee, and the Issuer hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
(o) Money for Note Payments to Be Held in Trust. The Trustee shall
execute and deliver, and if there is any Paying Agent other than the Trustee,
the Issuer will cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that, subject to the provisions of this Section 11.02, such Paying
Agent will:
(i) hold all sums held by it for the payment of principal of
or interest on Notes in trust for the benefit of the Noteholders
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Trustee notice of any Default by the Issuer (or
any other obligor upon the Notes) in the making of any payment of
principal or interest; and
(iii) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
(p) Enforcement of Servicing Agreement, the Sale Agreement and
Receivables Purchase Agreement. The Issuer will take all actions necessary, and
diligently pursue all remedies available to it, to the extent commercially
reasonable, to enforce the obligations of the Servicer under the Servicing
Agreement, TFI, Trendwest and SPC under the Sale
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Agreement and Trendwest and TW Holdings under the Receivables Purchase Agreement
and to secure its rights thereunder.
(q) Issuer May Consolidate, etc., Only on Certain Terms. The Issuer
shall not consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger or which acquires by conveyance
or transfer the properties and assets of the Issuer substantially as an
entirety shall be a Person organized and existing as a limited purpose
entity under the laws of the United States of America or any State
thereof and shall have expressly assumed, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the obligation to make due and punctual
payments of the principal of and interest on all of the Notes and to
perform every covenant of this Indenture on the part of the Issuer to
be performed or observed; and
(ii) immediately after giving effect to such transaction, no
Event of Default or Default shall have occurred and be continuing; and
(iii) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article Eleven and that all conditions
precedent herein relating to such transaction have been complied with;
and
(iv) such consolidation, merger, conveyance or transfer shall
be on such terms as shall fully preserve the lien and security hereof,
the perfection and priority thereof and the rights and powers of the
Trustee and the Holders of the Notes hereunder; and
(v) the surviving entity shall be a "special purpose entity";
i.e., shall have an organizational charter substantially similar to the
Certificate of Formation and the Limited Liability Company Agreement of
the Issuer including specific limitations on the business purposes, and
provisions for independent directors; and
(vi) the Issuer shall have obtained the prior written consent
of the Holders of the Notes, which shall not be unreasonably withheld.
(r) Successor Substituted. Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Issuer substantially
as an entirety in accordance with Section 11.02(q) hereof, the Person formed by
or surviving such consolidation or merger (if other than the Issuer) or the
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the "Issuer" in the first paragraph of this instrument or any successor which
shall theretofore have become such in the manner prescribed in this Article
Eleven shall be released from its
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liabilities as obligor and maker on all the Notes and from its obligations under
this Indenture and may be dissolved, wound-up and liquidated at any time
thereafter.
(s) Use of Proceeds. The proceeds from the sale of the Notes will be
used by the Issuer (i) to pay the Acquisition Consideration, (ii) to pay the
expenses associated with the issuance of Notes pursuant to this Indenture and
the transactions contemplated hereby and by the Sale Agreement, the Receivables
Purchase Agreement and the Servicing Agreement and (iii) for the Issuer's
general business purposes. None of the transactions contemplated in this
Indenture, the Sale Agreement, the Receivables Purchase Agreement or the
Servicing Agreement (including the use of the proceeds from the sale of the
Notes) will result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulations issued pursuant thereto, including
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. The Issuer does not own or intend to carry or
purchase any "margin security" within the meaning of said Regulation G,
including margin securities originally issued by it or any "margin stock" within
the meaning of said Regulation U.
(t) Investment Company Act of 1940. The Issuer will at all times
conduct its operations in a manner which will not subject it to registration as
an "investment company" under the Investment Company Act of 1940, as amended.
(u) Transactions with Affiliates. The Issuer will not enter into or
cause, suffer or permit to exist any arrangement or contract with any of its
Affiliates unless such arrangement or contract is fair and equitable to the
Issuer, is commercially reasonable and is an arrangement or contract no less
favorable to the Issuer than generally available on an arms-length basis in
equitable transactions with third parties.
(v) Delivery of Custodian Files. The Issuer shall deliver, or cause
to be delivered, to the Custodian the Custodian Files related to the Contracts
identified on the Contract Schedule within 10 days of the Closing Date in
accordance with Section 4.01(b)(ii) hereof.
(w) Rule 144A Transfers. The Issuer will deliver with reasonable
promptness any financial or other information that a Holder may reasonably
request from time to time to permit such Holder to comply with the requirements
of Rule 144A under the Securities Act of 1933, as amended, in connection with
the resale of Notes by such Holder.
(x) The Issuer will not, and will not permit any of its Affiliate
to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any
of the Notes except in accordance with Article 10 hereof.
(y) The Issuer shall provide to the Trustee or any Noteholder and
their duly authorized representatives, attorneys or accountants access to any
and all documentation and to any existing data processing systems (including,
but not limited to, any data that can reasonably be generated therefrom)
regarding the Trust Estate (including the Contract Schedule) that the Issuer may
possess, such access being afforded at no cost to the Issuer (except during the
continuance of an Event of Default hereunder), but only upon reasonable
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request and during normal business hours so as not to interfere unreasonably
with the Issuer's normal operations or customer or employee relations, at
offices designated by the Issuer.
Section 11.03 Other Matters as to the Issuer. (a) Limitation on
Liability of Directors, Officers, or Employees of Bankruptcy Remote Member of
the Issuer. The directors, officers, or employees of TFI shall not be under any
liability to the Trustee, the Noteholders, the Issuer, the Servicer or any other
Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Indenture and
the issuance of the Notes.
(b) Parties Will Not Institute Insolvency Proceedings. So long as
this Indenture is in effect, and for one year and one day following its
termination, none of the parties hereto or any Affiliate thereof 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 or by the Issuer; provided,
however, that the Trustee shall not be prohibited from taking any such actions
after an Event of Default if it is acting at the direction of Holders of not
less than 66-2/3% in principal amount of Notes Outstanding.
ARTICLE TWELVE
ACCOUNTS AND ACCOUNTINGS
Section 12.01 Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall hold all
such money and property so received by it as part of the Trust Estate and shall
apply it as provided in this Indenture. If any Contract becomes a Defaulted
Contract, the Trustee, upon the written request of the Issuer or the Servicer
may, and upon the request of the Holders of a majority in principal amount of
the Outstanding Notes shall, take such action as may be reasonably necessary to
assist the Servicer to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and to proceed thereafter as provided in Article Six hereof.
Section 12.02 Collection Account; Distribution Account. (a) Prior to
the Closing Date, the Trustee shall open and maintain an account (which shall be
comprised of a depository account and a daily investment account (collectively,
the "Collection Account")), which at all times shall be an Eligible Account and
which may be established at the Clearing Account Bank, for the benefit of the
Noteholders, for the receipt of (i) amounts deposited by the Subservicer into
the Clearing Account and (ii) any Reinvestment Income. Funds in the
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Collection Account shall not be commingled with any other monies. All monies
deposited from time to time in the Collection Account pursuant to this Indenture
shall be held in the name of the Trustee as part of the Trust Estate as herein
provided. The fees relating to the Collection Account shall be paid out of the
investment income of the Collection Account, and the Servicer and the Issuer
shall be responsible for paying any fees or expenses not paid out of such
investment income. The Trustee shall not be responsible for paying such fees and
expenses.
Prior to the Closing Date, the Trustee shall open and maintain a trust
account (the "Distribution Account"), which at all times shall be an Eligible
Account for the benefit of the Noteholders, for the receipt of (i) amounts
transferred from the Collection Account pursuant to Section 12.02(d) hereof, and
(ii) amounts transferred from the Reserve Account in accordance with Section
12.03(d)(i) and (iii) hereof. Funds in the Distribution Account shall not be
commingled with any other monies. All payments to be made from time to time by
the Issuer to the Noteholders out of funds in the Distribution Account pursuant
to this Indenture shall be made by the Trustee or the Paying Agent of the
Issuer. All monies deposited from time to time in the Distribution Account
pursuant to this Indenture shall be held by the Trustee as part of the Trust
Estate as herein provided. Amounts deposited in the Distribution Account shall
remain uninvested; provided, however, that if the Trustee has actual knowledge
that any such amounts will remain in the Distribution Account more than one
Business Day after the day amounts are deposited in such account, such amounts
shall be deposited in Eligible Investments, and any earnings thereon shall be
remitted by the Trustee to Collection Account.
(b) Upon Issuer Order, the Trustee shall direct the depository
institution or trust company holding the Collection Account to invest the funds
in the Collection Account in Eligible Investments. The Issuer Order shall
specify the Eligible Investments in which such amounts shall be invested, shall
state that the same are Eligible Investments and shall further specify the
percentage of funds to be invested in each Eligible Investment. No such Eligible
Investment shall mature later than the Business Day preceding the next following
Remittance Date and shall not be sold or disposed of prior to its maturity. In
the absence of a Issuer Order, the Trustee shall invest funds in the Collection
Account in Eligible Investments described in clause (vi) of the definition
thereof. Eligible Investments shall be made in the name of the Trustee for the
benefit of the Noteholders. The Trustee shall have no responsibility for
verifying that any investments directed by the Issuer are Eligible Investments.
(c) Any income or other gain from investments in Eligible
Investments as outlined in (b) above shall be credited to the Collection Account
and any loss resulting from such investments shall be charged to such account;
provided, however, that the Issuer shall make or cause to be made no later than
the applicable Payment Date a deposit to the Collection Account to the extent of
any losses therein caused as a result of the Issuer's investment instructions
provided for herein. The Trustee shall not be liable for any loss incurred on
any funds invested in Eligible Investments pursuant to the provisions of this
Section 12.02.
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(d) On each Payment Date if either no Default or Event of Default
shall have occurred and be continuing or a Default or Event of Default shall
have occurred and be continuing but the entire unpaid principal amount of the
Notes shall not have been declared, have automatically become or otherwise have
become, due and payable pursuant to Section 6.02 hereof, then on such Payment
Date, after making all transfers and deposits into the Distribution Account from
the Collection Account pursuant to Section 12.02(a) hereof or from the Reserve
Account pursuant to clauses (i) and (iii) of Section 12.03(d) hereof, the
Trustee shall withdraw from the Distribution Account (other than amounts
representing payments of Receivables due after the related Calculation Date
immediately preceding such Payment Date), and shall make the following
disbursements in the following order in accordance with the provisions of and
instructions on the Monthly Servicer's Report; provided that the Trustee shall,
to the extent funds are available in the Distribution Account, make interest
payments based on the outstanding principal balance of the Notes even if it
shall not have received the Monthly Servicer's Report:
(i) to pay to the Trustee the Trustee Fee and any expenses
incurred by the Trustee in accordance with Section 7.07(ii) hereof then
due;
(ii) to pay to the Servicer: (A) the Servicer Fee; and (B) the
amounts necessary to reimburse the Servicer and any successor Servicer
as provided in Section 3.09 of the Servicing Agreement for reasonable
costs and expenses incurred by the Servicer (including reasonable
attorney's fees and out-of-pocket expenses) in connection with the
realization, attempted realization or enforcement of rights and
remedies upon Defaulted Contracts, from amounts received as Recoveries
from any Defaulted Contracts;
(iii) to pay the aggregate interest due on the Outstanding
Notes on that Payment Date and any overdue interest, to be applied as
provided in Section 3.07 hereof;
(iv) to pay the Principal Distribution Amount for all
Outstanding Notes on that Payment Date, to be applied to the payment of
Note principal as provided in Section 3.07 hereof;
(v) on each Payment Date relating to a Due Period occurring
during a Trigger Event Period, apply any remaining funds to the payment
of principal on a pro rata basis to the Holders of the Outstanding
Notes (after taking into account the payments of Note principal made
pursuant to clause (iv) above);
(vi) to deposit into the Reserve Account (A) an amount
necessary to bring the balance therein to an amount equal to the
Reserve Account Required Balance or (B) on each Payment Date relating
to a Due Period occurring during a Cash Accumulation Event Period, all
remaining funds in the Distribution Account;
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(vii) to reimburse the Noteholders for any reasonable costs and
expenses incurred in connection with any enforcement action with
respect to this Indenture or the Notes or any other Transaction
Documents;
(viii) to pay to the Investors the Investor Interest Distribution
Amount;
(ix) to pay to the Investors the Investor Principal
Distribution Amount;
(x) to pay to TFI the interest due TFI under the Subordinated
Note;
(xi) to pay to TFI, to the extent available, the principal due
to TFI under the Subordinated Note;
(xii) to pay to the Trustee any other amounts due to the
Trustee as expressly provided herein and in the Servicing Agreement;
(xiii) to pay to the Servicer any other amounts due the Servicer
as expressly provided herein and in the Servicing Agreement; and
(xiv) to remit any excess funds to or at the direction of the
Issuer.
The Trustee, based solely on the information set forth on the Monthly
Servicer's Report, shall cause the funds necessary to make the distributions set
forth in this Section 12.02(d) to be transferred into the Distribution Account
from funds in the Collection Account on the Business Day immediately preceding
the related Payment Date.
The foregoing provisions of paragraph 12.02(d) notwithstanding, any
monies deposited in the Distribution Account for purposes of redeeming Notes
pursuant to Article Ten hereof shall, subject to Section 11.02(o) hereof, remain
in the Distribution Account until used to redeem such Notes.
(e) Upon the Issuer's or the Trustee's obtaining actual knowledge
of the occurrence of any Trigger Event, the Issuer or the Trustee, as the case
may be, shall within two Business Days of obtaining such actual knowledge notify
the Noteholders of such occurrence.
Section 12.03 Reserve Account. (a) Prior to the Closing Date, the
Trustee shall open and maintain a trust account (the "Reserve Account"), which
at all times will be an Eligible Account, for the benefit of the Noteholders,
for the receipt of the initial deposit of the initial Reserve Account Required
Balance by Issuer and of deposits pursuant to Section 12.02(d)(vi) hereof. The
Issuer agrees to deposit $1,400,000 in the Reserve Account on or prior to the
Closing Date. Monies received in the Reserve Account will be invested at the
written direction of the Issuer in Eligible Investments during the term of this
Indenture, and any income or other gain realized from such investment, shall be
held by the Trustee in the Reserve Account as part of the Trust Estate as
security for the Notes subject to disbursement and withdrawal as herein
provided. Monies shall be subject to withdrawal in accordance with Section
12.03(d) hereof.
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(b) Upon Issuer Order all or a portion of the Reserve Account shall
be invested and reinvested at TFI's written direction in one or more Eligible
Investments. In the absence of an Issuer Order, the Trustee shall invest funds
in the Reserve Account in Eligible Investments described in clause (vi) of the
definition thereof. All income or other gain from such investments shall be
credited to such Reserve Account and any loss resulting from such investments
shall be charged to such Reserve Account; provided, however, that the Issuer
shall make or cause to be made on any Remittance Date a deposit to the Reserve
Account to the extent of any losses therein caused as a result of the Issuer's
investment instructions. No Eligible Investment shall mature later than the
Business Day preceding the next following Payment Date and shall not be sold or
disposed of prior to its maturity. Eligible Investments shall be made in the
name of the Trustee for the benefit of the Noteholders. The Trustee shall
provide to the Servicer a monthly account statement showing deposits and
withdrawals in such month and listing such investments, describing the Eligible
Investments in which such amounts have been invested.
(c) If any amounts invested as provided in Section 12.03(b) hereof
shall be needed for disbursement from the Reserve Account as set forth in
Section 12.03(d) hereof, the Trustee shall cause such investments of such
Reserve Account to be sold or otherwise converted to cash to the credit of such
Reserve Account. The Trustee shall not be liable for any investment loss
resulting from investment of money in the Reserve Account in any Eligible
Investment in accordance with the terms hereof (other than in its capacity as
obligor under any Eligible Investment).
(d) Disbursements from the Reserve Account shall be made, to the
extent funds therefor are available, only as follows:
(i) in the event that the amount in the Collection Account at
1:00 p.m., Chicago time, on the Determination Date immediately
preceding any Payment Date (other than amounts representing payments of
Receivables due after the related Calculation Date immediately
preceding such Payment Date) is less than the sum of the amounts
required to be transferred to the Distribution Account on the related
Remittance Date for distribution pursuant to clauses (i), (ii), (iii)
and (iv) of Section 12.02(d) hereof, the Trustee shall, in accordance
with the related Monthly Servicer's Report, withdraw funds from the
Reserve Account on or prior to 4:00 p.m., Chicago time, on the Business
Day immediately preceding such Payment Date to the extent necessary to
make such payments on such Payment Date and deposit such funds into the
Distribution Account;
(ii) subject to subparagraphs (iii), (iv) and (v) of this
Section 12.03(d), in the event that on any Payment Date the balance in
the Reserve Account equals an amount greater than the Reserve Account
Required Balance (after giving effect to the distributions listed in
Section 12.02(d)(i) through (v) hereof on such Payment Date in
accordance with the Monthly Servicer's Report), the Trustee shall
withdraw funds in the Reserve Account in such amount so that the
remaining amount in the Reserve Account after such withdrawal will
equal the Reserve Account Required Balance, and disburse such amounts
to or at the direction of the Issuer; no funds shall be released
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to the Issuer pursuant to this subparagraph (ii) if any of a Trigger
Event Period, a Cash Accumulation Event Period or an Event of Default
has occurred and is continuing;
(iii) in the event that on any Payment Date a Trigger Event has
occurred and is continuing, the Trustee shall, but only at the
direction of Holders of not less than 66-2/3% in principal amount of
Notes Outstanding, withdraw all funds from the Reserve Account (or any
such lesser amount of such funds as such Holders may direct) and
deposit such funds into the Distribution Account for disbursement in
accordance with the provisions of Section 12.02(d) hereof;
(iv) subject to subparagraph (iii) of this Section 12.03(d),
in the event that on any Payment Date a Trigger Event has occurred and
is continuing at a time when the amount in the Reserve Account is
greater than the Reserve Account Standard Balance, the Trustee shall
withdraw funds from the Reserve Account and deposit such funds into the
Distribution Account for disbursement in accordance with the provisions
of Section 12.02(d) hereof to the extent necessary so that after such
withdrawal the amount in the Reserve Account equals the Reserve Account
Standard Balance;
(v) in the event that a Cash Accumulation Event occurs and is
subsequently cured, the Trustee shall withdraw the amount that is in
the Reserve Account that is greater than the Reserve Account Required
Balance (after giving effect to the distributions listed in clauses (i)
through (iv) of Section 12.02(d) on such Payment Date) and distribute
such amount pursuant to clauses (vii) through (xiv), in accordance with
the Monthly Servicer's Report; and
(vi) on the Final Payment Date, to the extent any funds remain
in the Reserve Account after distributions pursuant to clauses (i)
through (v) of Section 12.02(d), such remaining amounts shall be used
to pay the amounts set forth in clauses (vi) through (xiv) of Section
12.02(d) hereof.
Section 12.04 Reports by Trustee to Noteholders. (a) On each Payment Date
the Trustee shall account to each Holder of Notes and to Fitch on which payments
of principal and interest are then being made the amount which represents
principal and the amount which represents interest, and shall contemporaneously
advise the Issuer of all such payments. The Trustee may satisfy its obligations
under this Section 12.04 by delivering the Monthly Servicer's Report to each
such Holder of the Notes, Fitch and the Issuer. On or before the 10th day prior
to the Final Payment Date, the Trustee shall provide notice to Fitch and to the
Holders of the Notes of the Final Payment Date. Such notice shall include a
statement that if the Notes are paid in full on the Final Payment Date interest
shall cease to accrue as of the last day preceding the date on which such Final
Payment Date occurs.
(b) The Issuer shall, on a monthly basis beginning on the first
Calculation Date, confirm the credit rating or, if more than one credit rating
has been assigned, each such credit rating of each institution in which funds
are invested pursuant to clause (vi) of the
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definition of Eligible Investments and shall promptly notify the Trustee and the
Noteholders if any such credit rating has been lowered.
(c) At least annually, the Trustee shall distribute to Noteholders
any Form 1099 or similar information returns required by applicable tax law to
be distributed to the Noteholders and received in accordance with the next
sentence. The Trustee shall prepare or cause to be prepared all such information
for distribution by the Trustee to the Noteholders.
ARTICLE THIRTEEN
PROVISIONS OF GENERAL APPLICATION
Section 13.01 Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 7.01
hereof) conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 13.01.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 13.02 Notices, etc., to Trustee, Issuer, Servicer and the Rating
Agency. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with any party hereto shall be
sufficient for every purpose hereunder if in writing and telecopied or mailed,
first-class postage prepaid and addressed to the appropriate address below:
(a) to the Trustee at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇), Attention:
Asset Backed Securities Trust
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Services, TRI Funding 1996-1, or at any other address previously
furnished in writing to the Issuer, the Noteholders and the Servicer;
or
(b) to the Issuer at TRI Funding Company I, c/o JELD-WEN,
inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile
number (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Treasurer, or at any other address
previously furnished in writing to the Trustee, the Noteholders and the
Servicer by the Issuer; or
(c) to the Servicer at Trendwest Resorts, Inc., ▇▇▇▇▇ ▇.▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile number (206)
990-2305), Attention: Executive Vice President, or at any other address
previously furnished in writing to the Trustee, the Noteholders and the
Issuer; or
(d) to Fitch at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
or at any other address previously furnished in writing to the Trustee,
the Noteholders or the Issuer.
Section 13.03 Notices and Other Documents to Noteholders; Waiver. (a) Where
this Indenture provides for notice to Noteholders of any event, such notice
shall be in writing and sent (i) by telefacsimile if the sender on the same day
sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (ii) by registered or certified mail with return
receipt requested (postage prepaid), or (iii) by a recognized overnight delivery
service (with charges prepaid). Any such notice to a Noteholder or its nominee
must be sent (i) to such Person at the address specified for such communications
in the Note Register, or at such other address as the Noteholder shall have
specified to the Trustee in writing and (ii) if specified, to such other Person
as shall be identified in writing to the Trustee by each Noteholder or its
nominee.
Notice under this Section 13.03 will be deemed to be given only when
actually received.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
(c) Any reports, documents or other communications other than notices
to be sent to Noteholders may be telecopied or mailed, first-class postage
prepaid and shall be addressed to the Noteholders and their nominees and
designees, if applicable, as set forth in paragraph (a) above.
Section 13.04 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
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Section 13.05 Successors and Assigns. All covenants and agreements in this
Indenture by the Issuer shall bind its successors and assigns, whether so
expressed or not.
Section 13.06 Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
unpaired thereby.
Section 13.07 Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto, the Noteholders, and any Paying Agent which may be appointed pursuant to
the provisions hereof, and any of their successors hereunder, any benefit or any
legal or equitable right, remedy or claim under this Indenture or under the
Notes.
Section 13.08 Legal Holidays. In any case in which the date of any Payment
Date or the Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment of
principal, interest, or premium, if any, need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on the nominal date of any such Stated Maturity or Payment Date and,
assuming such payment is actually made on such subsequent Business Day, no
additional interest shall accrue on the amount so paid for the period from and
after any such nominal date.
Section 13.09 Governing Law. This Indenture and each Note shall be
construed in accordance with and governed by the internal laws of the State of
New York applicable to agreements made and to be performed therein, without
regard to the conflict of laws provisions of any State.
Section 13.10 Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 13.11 Obligation. No recourse may be taken, directly or indirectly,
against any incorporator, subscriber to the capital stock, stockholder, member,
partner, employee, officer or director of the Issuer or of any predecessor or
successor of the Issuer with respect to the Issuer's obligations on the Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith; provided, however, that this Section 13.11 shall not protect any
Person from his, her or its own fraud or willful misconduct or from any
liability that such Person may incur in another capacity under the Transaction
Documents.
Section 13.12 Compliance Certificates and Opinions. Upon any application,
order or request by the Issuer or the Servicer to the Trustee to take any action
under any provision of this Indenture for which a specific request is required
under this Indenture, the Issuer or the Servicer, as applicable, shall furnish
to the Trustee an Officer's Certificate of the Issuer or the Servicer, as
applicable, stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, except that
in the case of any such application or request as to which the furnishing of a
different certificate is
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specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate
or opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
such individual has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 13.13 Effective Date of Transactions. This Indenture and the other
Transaction Documents shall be deemed to be effective and shall be valid and
enforceable as of the Closing Date.
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IN WITNESS WHEREOF, the Issuer, the Servicer and the Trustee have
caused this Indenture to be duly executed by the persons thereunto duly
authorized as of the day and year first above written.
TRI FUNDING COMPANY I, L.L.C., Issuer
By: TRENDWEST FUNDING I, INC., Member
By:
-------------------------------------
Name:
Title:
TRENDWEST RESORTS, INC.,
Servicer
By:
-------------------------------------
Name:
Title:
LASALLE NATIONAL BANK, Trustee
By:
-------------------------------------
Name:
Title:
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EXHIBIT A
FORM OF INVESTMENT LETTER
TRI FUNDING COMPANY I, L.L.C.
7.42% RECEIVABLE-BACKED NOTES, SERIES 1996-1
TRI Funding Company I, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle National Bank,
as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Name and Address of Transferor]
The undersigned hereby certifies with respect to the above-referenced
notes (the "Notes") on behalf of the purchaser named below (the "Purchaser") as
follows:
1. I __________________, am the chief financial officer,
a person fulfilling an equivalent function or other executive officer
of the Purchaser.
2. I am familiar with the provisions of Rule 144A ("Rule
144A") under the Securities Act of 1933, as amended (the "Act").
3. The Purchaser is a "qualified institutional buyer," as
defined in Rule 144A.
4. The Purchaser is aware that the addressees may rely on the
exemption from the registration requirements of the Act provided by
Rule 144A.
5. The Purchaser acknowledges that the Purchaser has (i)
received such information regarding the issuer of the Notes as the
Purchaser may require pursuant to Rule 144A or (ii) the Purchaser has
determined not to request such information.
6. The Purchaser understands that the Notes are being issued
only in transactions not involving any public offering within the
meaning of the Act and Section 3(c)(1) of the Investment Company Act of
1940, as amended (the "Investment Company Act").
80
7. The Purchaser is considered to be "one person" for
purposes of calculating the number of beneficial owners of securities
of TRI Funding Company I, L.L.C. under Section 3(c)(1) of the
Investment Company Act.
8. The Purchaser acknowledges that transfer of a Note can
only be effected in accordance with the Indenture executed and
delivered in connection with the issuance of the Notes.
The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made jointly
and severally.
Executed at _________________________, ____________________, this ____
day of ______________, 19__.
----------------------------------- ------------------------------------
Purchaser's Name and Title (Print) Signature of Purchaser
-----------------------------------
Address of Purchaser
-----------------------------------
Purchaser's Taxpayer
Identification or Social
Note Number
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EXHIBIT B
FORM OF SUPPLEMENT FOR GRANT OF INTERESTS IN
SUBSTITUTE CONTRACTS AND UPGRADE CONTRACTS
Pursuant to Section 4.03(e) and Section 4.03(g) of the Indenture, dated
as of March 1, 1996, among TRI Funding Company I, L.L.C. (the "Issuer"),
Trendwest Resorts, Inc. (the "Servicer") and LaSalle National Bank, as Trustee
(the "Trustee"), (such Indenture as amended and supplemented from time to time,
the "Indenture"), attached hereto as Annex I is a supplement to Schedule A of
the Indenture, which includes information regarding certain interests in
Contracts, the related Receivables and the related Credits that are hereby
Granted by the Issuer to the Trustee in accordance with the Indenture. For
purposes of this Supplement, all defined terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Indenture.
Dated:
TRI FUNDING COMPANY I, L.L.C.
By: TRENDWEST FUNDING I, INC., Member
By
--------------------------------------
Name:
Title:
82
ANNEX I
SUPPLEMENT FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
83
EXHIBIT C
FORM OF NOTE
THE ISSUER HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"), AND THIS NOTE
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE TRANSFER OF THIS
NOTE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN THE
INDENTURE UNDER WHICH THIS NOTE IS ISSUED (A COPY OF WHICH IS AVAILABLE FROM THE
TRUSTEE UPON REQUEST).
DUE TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN
ON THE FACE HEREOF. ANYONE PURCHASING THIS NOTE MAY ASCERTAIN THE OUTSTANDING
PRINCIPAL AMOUNT HEREOF BY INQUIRY OF THE TRUSTEE.
PPN: 87264# AA 2
No. R-__ $__________
TRI FUNDING COMPANY I, L.L.C.
7.42% RECEIVABLE-BACKED NOTE, SERIES 1996-1
Delivery Date: _____________ Stated Maturity: May 15, 2004
TRI Funding Company I, L.L.C., a limited liability company duly
organized and existing under the laws of the State of Delaware (the "Issuer,"
which term includes any successor entity under the Indenture referred to below),
for value received, hereby promises to pay to __________, or registered assigns,
the principal sum of __________ Dollars ($__________) in monthly installments
beginning on May 15, 1996 (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 principal of or interest on this 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 the Delivery Date through the day immediately preceding the
Initial Payment Date, and thereafter, monthly from and including the most recent
Payment Date through the day immediately preceding the applicable Payment Date,
at the rate of 7.42% per annum (calculated on the basis of a 360-day year
consisting of 12 months of 30 days each). Each monthly installment of
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principal payable on this Note shall be an amount equal to the pro rata share of
the Principal Distribution Amount, as such term is defined in the Indenture
described herein. Any remaining unpaid portion of the principal amount of this
Note shall be due and payable no later than the Stated Maturity referred to
above. The interest and principal so payable on any Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note is
registered on the Record Date for such Payment Date, which shall be the close of
business on the last day of the month prior to such Payment Date (whether or not
a Business Day).
The principal and interest on this Note are payable by check mailed by
first-class mail to the Person whose name appears as the Registered Holder of
this Note on the Note Register at the address of such Person as it appears on
the Note Register, or by wire transfer in immediately available funds to the
account specified in writing to the Trustee by the Person whose name appears as
the Registered Holder of this Note on the Note Register 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; provided, however, that the Trustee will deliver to the initial
Noteholders payments of principal and interest by wire transfer in immediately
available funds to the accounts specified in Annex 1 to the Note Purchase
Agreements between the Issuer and such initial Noteholders. 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.
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its 7.42% Receivable-Backed Notes, Series 1996-1 (herein called
the "Notes") issued under an Indenture (referred to herein as the "Indenture"),
dated as of March 1, 1996, among the Issuer, Trendwest Resorts, Inc., as
Servicer, and LaSalle National Bank, as Trustee (the "Trustee," which term
includes any successor Trustee under such Indenture). Reference is hereby made
to the Indenture for a statement of the respective rights thereunder of the
Issuer, the Trustee and the Holders of the Notes, and the terms upon which the
Notes are authenticated and delivered. All terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
The Notes are secured by certain Receivables and by certain other
Collateral described in the Indenture. The Trust Estate secures the Notes
equally and ratably without prejudice, priority or distinction between any Note
and any other Note by reason of time of issue or otherwise, and also secures the
payment of certain other amounts and certain other obligations as described in
the Indenture.
Unless earlier declared or automatically becoming due and payable by
reason of an Event of Default, the 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, except that the Notes shall be redeemable
at the option of the Issuer, in whole but not in part, at any time after the
Outstanding principal amount of Notes declines to 10% or less of the original
principal amount of the Notes at a redemption price equal to the Outstanding
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principal amount thereof plus accrued interest thereon through the Redemption
Date at the Note Interest Rate (exclusive of installments of interest and
principal maturing on or prior to the Redemption Date, payment of which shall
have been made or duly provided for to the Holder of this Note on the applicable
Record Date or as otherwise provided in the Indenture). If an Event of Default
shall occur and be continuing, the principal of all the Notes may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register of
the Issuer only upon surrender of this Note for registration of transfer at the
office or agency of the Issuer in the United States of America maintained for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Trustee and duly executed by
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes of the same Stated Maturity of authorized denominations and
for the same initial aggregate principal amount will be issued to the designated
transferees.
Prior to due presentment for registration of transfer of this Note, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes whether or
not this Note be overdue, and neither the Issuer, the Trustee, nor any such
agent shall be affected by notice to the contrary.
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 Holders of the Notes 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 aggregate principal amount of Notes at the time
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. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note.
The Notes are issuable only in registered form without coupons in such
authorized denominations as provided in the Indenture and subject to certain
limitations therein set forth.
For federal, State, local and foreign tax purposes, all Noteholders
shall treat the Notes as debt of the Issuer.
This 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.
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No reference herein to the Indenture and no provision of this 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 Note,
but solely from the Collateral pledged to the Trustee under the Indenture at the
times, place and rate, and in the coin or currency, herein prescribed.
Notwithstanding anything else to the contrary contained in this Note or the
Indenture, the obligation of the Issuer to pay the principal of and interest on
this Note is not a general obligation of the Issuer, nor its officers or
directors, but is limited solely to the Collateral pledged under the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, TRI Funding Company I, L.L.C. has caused this Note
to be signed, manually, by the President, a Vice President or the Treasurer of
one of its members.
TRI FUNDING COMPANY I, L.L.C.
By: TRENDWEST FUNDING I, INC., Member
By
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Title:
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[FORM OF TRUSTEE'S
CERTIFICATE OF AUTHENTICATION]
This is one of the Notes described in the within-mentioned Indenture.
Dated: [Date]
LASALLE NATIONAL BANK,
as Trustee
By:
-------------------------------
Authorized Signatory
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SCHEDULE A
CONTRACT SCHEDULE
89
SCHEDULE B
MEMBERS OF THE ISSUER
Trendwest Funding I, Inc.
R&R Vista
ENCUMBRANCES ON THE MEMBERSHIP
INTERESTS OF THE MEMBERS OF THE ISSUER
R&R Vista has pledged its membership interest in the Issuer to NBD Bank
to secure a loan from NBD Bank to R&R Vista.
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SCHEDULE C
POOL INFORMATION
[PORTFOLIO ANALYSIS TO BE ATTACHED]