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EXHIBIT 10.10
RECEIVABLES PURCHASE AGREEMENT
among
TRENDWEST RESORTS, INC.
("Trendwest")
and
TW HOLDINGS, INC.
("TW Holdings")
and
TRENDWEST FUNDING I, INC.
("TFI")
Dated as of March 1, 1996
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE 1 DEFINITIONS ..................................................2
Section 1.01. Defined Terms ............................................2
ARTICLE 2 ACQUISITION OF ASSETS ........................................3
Section 2.01. [Reserved.] ..............................................3
Section 2.02. Acquisition ..............................................3
Section 2.03. [Reserved.] ..............................................3
Section 2.04. Delivery of Contracts ....................................4
Section 2.05. Servicing of Contracts and Related Credits ...............4
Section 2.06. Review of Contracts ......................................4
ARTICLE 3 REPRESENTATIONS AND WARRANTEES ...............................5
Section 3.01. Representations and Warranties of the Sellers ............5
Section 3.02. Representations and Warranties of TFI ...................12
Section 3.03. Purchase or Substitution Required upon
Breach of Certain Representations and Warranties ........13
Section 3.04. Requirements for Purchase or Substitution of Contracts ..14
ARTICLE 4 SELLER COVENANTS ............................................16
Section 4.01. Seller Covenants ........................................16
Section 4.02. TFI Covenants ...........................................19
Section 4.03. Assignment of Assets ....................................20
ARTICLE 5 CONDITIONS PRECEDENT ........................................20
Section 5.01. Conditions to TFI's Initial Obligations .................20
Section 5.02. Conditions to the Sellers' Obligations ..................21
ARTICLE 6 TERM AND TERMINATION ........................................22
Section 6.01. Term ....................................................22
Section 6.02. Default by Sellers ......................................22
ARTICLE 7 MISCELLANEOUS ...............................................22
Section 7.01. Amendments ..............................................22
Section 7.02. Governing Law ...........................................23
Section 7.03. Notices .................................................23
Section 7.04. Separability Clause .....................................23
Section 7.05. Assignment ..............................................23
Section 7.06. Further Assurances ......................................23
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Section 7.07. No Waivers; Cumulative Remedies .........................23
Section 7.08. Binding Effect; Third Party Beneficiaries ...............24
Section 7.09. Set-Off .................................................24
Section 7.10. Counterparts ............................................24
ANNEX A -- FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS AND UPGRADE
CONTRACTS
EXHIBIT A -- FORM OF CONTRACT
EXHIBIT B -- FORM OF ASSET ASSIGNMENT
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THIS RECEIVABLES PURCHASE AGREEMENT, dated as of March 1, 1996 (this
"Agreement"), by and among Trendwest Resorts, Inc., an Oregon corporation
(herein, together with its permitted successors and assigns, "Trendwest"), TW
Holdings, Inc., a Nevada corporation (herein, together with its permitted
successors and assigns, "TW Holdings"), and Trendwest Funding I, Inc., a
Delaware corporation (herein, together with its permitted successors and
assigns, "TFI").
PRELIMINARY STATEMENT
TRI Funding Company I, L.L.C., a Delaware limited liability company
(the "Issuer") has entered into an Indenture, dated as of March 1, 1996 (as
amended and supplemented from time to time, the "Indenture"), with LaSalle
National Bank, as trustee (herein, together with its permitted successors and
assigns, the "Trustee"), and Trendwest, as servicer (herein, together with its
permitted successors and assigns, the "Servicer"), pursuant to which the Issuer
intends to issue its Notes as provided in the Indenture (the "Notes").
In furtherance thereof, Trendwest and TW Holdings, (collectively, the
"Sellers") and TFI have entered into this Agreement to provide for, among other
things, the acquisition by TFI of all of the right, title and interest in and to
certain Assets which will be sold by TFI to the Issuer pursuant to that certain
Purchase and Sale Agreement, dated as of even date herewith, by and among TFI,
SPC and the Issuer (the "Sale Agreement"). The Issuer will be pledging to the
Trustee the Assets, and the Issuer will be granting to the Trustee a security
interest in the Assets, as security for the Notes. As a precondition to the
effectiveness of this Agreement, the Issuer, the Trustee, the Subservicer and
the Servicer will enter into the Servicing Agreement, dated as of March 1, 1996
(as amended and supplemented from time to time, the "Servicing Agreement"), to
provide for the administration and servicing of the Assets. In connection with
the issuance of the Notes and pursuant to this Agreement, the Sellers will sell
the Assets to TFI. Such sale shall be effected by this Agreement and an Asset
Assignment among the Sellers and TFI, and the list of Contracts so conveyed
shall be listed on Schedule I to such Asset Assignment.
In order to further secure the Notes, TFI is granting to the Issuer,
pursuant to the Sale Agreement, and the Issuer subsequently will grant to the
Trustee pursuant to the Indenture, a security interest in, among other things,
TFI's rights derived under this Agreement, and the Sellers agree that all
representations, warranties, covenants and agreements made by them in this
Agreement with respect to the Assets shall also be for the benefit and security
of the Issuer and the Trustee and all holders from time to time of the Notes. In
consideration for the Assets and their representations, warranties, covenants
and other agreements under this Agreement, the Sellers will receive cash on the
Closing Date and an interest in payments to TFI from the Issuer.
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ARTICLE 1
DEFINITIONS
Section 1.01. Defined Terms. For purposes of this Agreement the
following terms shall have the meanings specified herein. Capitalized terms used
herein but not otherwise defined shall have the respective meanings assigned to
such terms in the Indenture or the Sale Agreement.
"Acquisition Consideration" shall mean, with respect to any Contracts
and the related Receivables, the cash which shall be paid by TFI to the Sellers
on the Closing Date and an interest in payments to TFI from the Issuer in an
aggregate amount equal to 100% of the aggregate principal amount outstanding on
the Contracts as of the Cut-Off Date plus accrued interest through the Closing
Date.
"Asset Assignment" shall mean the Asset Assignment, substantially in
the form attached hereto as Exhibit B, which shall be entered into in connection
with the conveyance of Assets from the Sellers to TFI on the Closing Date.
"Assets" shall mean all of the Sellers' right, title and interest in
and to (a) the Contracts and the related Receivables, including the proceeds of
the Contracts and the related Receivables and all payments received on or with
respect to the Contracts and the related Receivables and due after the Cut-Off
Date, (b) the Contract Files and the Custodian Files, (c) the Sellers' rights
and interests in the related Credits, (d) the Servicing Charges with respect to
the Contracts and (e) all income and proceeds of the foregoing or relating
thereto.
"Contract File" shall mean, with respect to each Contract, the
following documents:
(i) a copy of the Contract;
(ii) notice of assignment; and
(iii) any other documents or papers relating to servicing the
Receivables.
"Custodian" shall mean Sage Systems, Inc. and its permitted
successors and assigns.
"Custodian File" shall mean, with respect to each Contract, the
following documents:
(i) the original Contract; and
(ii) notice of assignment.
"Cut-Off Date" shall have the meaning set forth in the Indenture.
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"Electronic Ledgers" shall mean the electronic master records of all
contracts of the Sellers or the Issuer similar to and including the Contracts.
"Eligible Contract" shall mean a Contract that satisfies the selection
criteria set forth in Section 3.01(a) hereof and which is aged at least four
months, provided that with respect to any Substitute Contract, any reference in
such Section to Cut-Off Date shall be deemed to refer to the date as of which
such Substitute Contract is conveyed to the Seller in accordance with Section
3.04 hereof.
"Indenture" shall mean the Indenture, dated as of March 1, 1996, by and
among the Issuer, the Trustee and the Servicer, as amended and supplemented from
time to time.
"Seller Address" with respect to Trendwest shall mean ▇▇▇▇▇ ▇.▇. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and with respect to TW Holdings shall mean ▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
"SPC" shall mean TWH Funding, Inc. and its successors in interest.
"Substitute Contract" shall have the meaning set forth in Section
3.04(b) hereof.
"Substitute Receivable" shall mean the Receivable related to a
Substitute Contract.
"Substitution Criterion" shall have the meaning set forth in Section
3.04(b) hereof.
"TFI Address" shall mean ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
"Upgrade" shall have the meaning set forth in the Indenture.
"Upgrade Contract" shall have the meaning set forth in the Indenture.
ARTICLE 2
ACQUISITION OF ASSETS
Section 2.01. [Reserved.]
Section 2.02. Acquisition. In return for the Asset Consideration and
other rights created by this Agreement, each of the Sellers hereby transfers,
assigns, sells and grants to TFI, without recourse except as provided in Section
3.03 of this Agreement, on the Closing Date, any and all of such Seller's
respective right, title and interest in and to all of the Assets relating to the
Contracts set forth on Schedule I to the Asset Assignment. Each of the Sellers
hereby acknowledges that its transfer of the Assets to TFI is absolute and
irrevocable, without reservation or retention of any interest whatsoever by such
Seller.
Section 2.03. [Reserved.]
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Section 2.04. Delivery of Contracts; Filing of Financing Statements.
(a) In connection with TFI's acquisition of the Assets, Trendwest, on behalf of
the Sellers, TFI and the Issuer, shall deliver, or cause the delivery of, the
original Contracts to the Custodian so that the Custodian may retain possession
thereof as provided in the Transaction Documents. In addition, the Sellers agree
to execute, and Trendwest agrees to record and file prior to the Closing Date at
its own expense, financing statements (and thereafter timely continuation
statements with respect to such financing statements) with respect to the
Assets, in accordance with Section 3.01(a)(viii) and Section 4.01(c) hereof.
(b) In connection with such acquisition, each of the Sellers shall
promptly, at its own expense, cause any Electronic Ledger maintained by it to be
marked to show which Assets have been acquired by TFI in accordance with this
Agreement and transferred by TFI to the Issuer and pledged by the Issuer to the
Trustee in accordance with the Transaction Documents.
(c) It is the intention of the Sellers and TFI that TFI is acquiring
full and absolute title to the Assets. If it is determined, however, that the
Sellers have transferred to TFI a security interest in the Assets, then this
Agreement shall constitute a security agreement under applicable law, and each
of the Sellers does hereby pledge, grant and assign to TFI a security interest
in the Assets.
Section 2.05. Servicing of Contracts and Related Credits. The Servicer
shall service the Contracts and the other Assets for the benefit of the Issuer
(and its successors and assigns) in accordance with the terms and conditions of
the Transaction Documents. Notwithstanding the foregoing, Trendwest acknowledges
and agrees that its obligations under this Agreement are independent of any
obligations it may have as Servicer and that its obligations under this
Agreement will continue in full force and effect, whether or not it is acting as
Servicer, until termination of this Agreement in accordance with Section 6.01
hereof, unless otherwise provided herein.
Section 2.06. Review of Contracts. If any of the Sellers or the
Custodian (who shall thereupon notify TFI, Trendwest and the Trustee) discovers
that any Contracts are missing or defective (that is, mutilated, damaged,
defaced, incomplete, improperly dated, forged or otherwise physically altered)
in any material respect, Trendwest shall correct or cure such omission, defect
or other irregularity within 30 days from the date Trendwest discovered such
omission or defect, or from the date Trendwest is notified by the Custodian of
such omission or defect. In the event Trendwest is unable to correct or cure
such omission, defect or irregularity within the 30-day period described in the
preceding sentence, Trendwest shall purchase or replace such Contract from TFI
in accordance with Section 3.03 hereof.
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ARTICLE 3
REPRESENTATIONS AND WARRANTEES
Section 3.01. Representations and Warranties of the Sellers. Each of
Trendwest, with respect to all of the Contracts and related Receivables, and TW
Holdings, with respect to the Contracts and related Receivables transferred by
TW Holdings hereby and by the Asset Assignment, hereby makes the following
representations and warranties to TFI and for the benefit of the Issuer, the
Trustee and Holders of the Notes, on which TFI relies in acquiring the Assets
and on which the Holders rely in purchasing the Notes. Such representations and
warranties shall survive any subsequent transfer, assignment, contribution or
conveyance of the Contracts and related Receivables and interest in the related
Credits and any issuance of Notes.
(a) As to each Contract, as of the Closing Date:
(i) The information set forth in the Contract Schedule is true
and correct as of the Cut-Off Date.
(ii) The rights with respect to the Contract are assignable by
the lender thereunder and its successors and assigns without the
consent of any Person.
(iii) The applicable Seller has heretofore provided to the
Custodian the sole original counterpart of the Contract, together with
any and all amendments, waivers and modifications thereto, except for
any original executed counterparts which have been marked to show that
they have been pledged by the Issuer to the Trustee under the
Indenture, and the terms of such Contract have not been further
amended, waived or modified subsequent to the above being provided to
the Custodian.
(iv) The Electronic Ledgers have been marked as provided in
Section 2.04(b) hereof.
(v) The Contract was not originated in, nor is it subject to
the laws of, any jurisdiction, the laws of which would make unlawful
the sale, transfer or assignment of such document under any of the
Transaction Documents, including any repurchase in accordance with the
Transaction Documents.
(vi) The Contract is in full force and effect in accordance
with its respective terms, and none of the Sellers or any Obligor has
or will have suspended or reduced any payments or obligations due or to
become due thereunder by reason of a default by the other party to such
Contract; as of the Closing Date, no Scheduled Payment with respect to
such Contract has not been received and remains unpaid for a period of
30 or more days (without regard to advances, if any, made by the
Servicer), and there are no proceedings pending, or to the best of the
knowledge of any Seller, threatened asserting
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insolvency of such Obligor; there has been no other default, breach or
violation and no event other than relating to an Upgrade, permitting
acceleration under such Contract; there are no proceedings pending, or
to the best of the knowledge of any Seller, threatened, wherein such
Obligor or any governmental agency has alleged that such Contract is
illegal or unenforceable; and none of the related Scheduled Payments
are subject to any set-off or credit of any kind.
(vii) The Contract is the valid, binding and legally
enforceable obligation of the parties thereto, enforceable in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and other similar laws of
general applicability relating to or affecting creditors' rights
generally and to general principles of equity regardless of whether
enforcement is sought in a court of law or equity.
(viii) All actions, filings (including UCC filings) and
recordings as are required by the Indenture and that may be necessary
to perfect a first priority security interest of the Issuer and the
Trustee in, and the sale by the applicable Seller to TFI and the sale
from TFI to the Issuer of, the Contract and the related Receivables
being acquired and the granting of a security interest in the security
interest in the related Credits hereunder have been accomplished and
are in full force and effect.
(ix) The Contract is identical to one of the form contracts
attached as Exhibit A hereto, except for either (i) such immaterial
modifications or deviations from the form contract which appear in such
Contract, which immaterial modifications or deviations will not have a
material adverse effect on the Holders of the Notes or (ii) such
modifications or deviations as set forth on Schedule I to the Asset
Assignment related to such Contract.
(x) The Contract was originated by Trendwest in Trendwest's
ordinary course of business and meets Trendwest's qualifications for
originating vacation credit installment contracts. The origination and
collection practices used by Trendwest and the applicable Seller with
respect to such Contract have been in all respects legal, proper,
prudent and customary in the vacation credit financing and servicing
business.
(xi) The Receivable is under a Contract that has a term to the
last Scheduled Payment Date of not more than 84 months and not less
than one month.
(xii) The Contract obligates the related Obligor to make all
Scheduled Payments thereunder in full notwithstanding the collection by
Trendwest of a security deposit with respect thereto. The calculation
of the Collateral Value of the related Receivable does not include any
security deposits or similar
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payments collected by or on behalf of Trendwest which are applied to
Scheduled Payments.
(xiii) All requirements of applicable federal, State and local
laws, and regulations thereunder, including, without limitation, usury
laws, if any, in respect of the Contract have been complied with in all
material respects, and such Contract complied in all material respects
at the time it was originated or made and now complies in all material
respects with all legal requirements of the jurisdiction in which it
was originated.
(xiv) The Contract is not and will not be subject to any right
of rescission, set-off, counterclaim or defense, including the defense
of usury, whether arising out of transactions concerning such Contract
or otherwise, and the operation of any of the terms of such Contract or
the exercise by the applicable Seller or the Obligor of any right under
such Contract will not render such Contract unenforceable in whole or
in part, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto, except that certain
rights or defenses may exist under applicable law which, individually
or in the aggregate, do not make the remedies available to the Seller
with respect to such Contract inadequate for the practical realization
of the benefits provided thereby.
(xv) Each of the Sellers has duly fulfilled all obligations on
the lender's part to be fulfilled under or in connection with the
Contract, including, without limitation, giving any notices or consents
necessary to effect the acquisition of the Assets by TFI and has done
nothing to impair the rights of TFI in such Contract or payments with
respect thereto.
(xvi) The Contract and the related Seller's interest in the
related Credits have not been sold, transferred, assigned or pledged by
the Seller to any Person other than the Issuer (except for such
interests in the Purchased Assets which shall be terminated on or prior
to the Closing Date), and upon execution and delivery hereof and of the
Asset Assignment by the related Seller and the payment by the Issuer of
the related Acquisition Consideration, TFI will have all of the right,
title and interest in and to such Seller's interest in the Contract and
the related Receivable and a security interest in the related Credits,
free and clear of all liens and encumbrances, except for the interests
of the Obligor pursuant to such Contract. Such Contract has not been
satisfied, subordinated or rescinded.
(xvii) The relevant Seller has no specific knowledge that the
Contract will not be fully performed in accordance with its terms.
(xviii) The Obligor has made the first payment (which payment
may be an advance payment under such Contract) due under the Contract
within the time set forth in such Contract.
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(xix) The related Obligor is located in the United States of
America or Canada, and the related Scheduled Payments are payable in
U.S. dollars.
(xx) Except for changes due to Upgrades, the related Scheduled
Payments were established at the time such Contract was originated.
(xxi) There are no unpaid brokerage or other fees owed to
third parties relating to the origination of the Contract.
(xxii) The Contract cannot be rescinded pursuant to applicable
consumer finance laws.
(xxiii) The contract was originated in compliance with the
requirements of all federal, state and local laws, rules and
regulations applicable to the origination of the Contract (including,
without limitation, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve
Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil
Relief Act of 1940, and any other federal, state and local laws
relating to interest, usury, consumer credit, equal credit opportunity,
fair credit reporting, privacy, consumer protection, false or deceptive
trade practices and disclosure, the Mail Fraud statute and any
timeshare disclosure), non-compliance with which could have a material
adverse effect on the enforceability or value of the Contract.
(xxiv) All Scheduled Payments are due and payable on a monthly
basis and such Scheduled Payments are level payments throughout the
terms of the Contracts.
(b) As to the aggregate pool of Contracts as of the Closing Date no
Seller used any selection procedures that identified the Contracts as being less
desirable or valuable than other comparable vacation credit installment
contracts owned by such Seller.
(c) As to each Seller as of the Closing Date:
(i) Such Seller has been duly organized and is validly
existing and in good standing as a corporation under the laws of the
State in which such Seller was organized with corporate power and
authority to own its properties and to transact the business in which
it is now engaged, and such Seller is duly qualified to do business in
and is in good standing under the laws of each State in which its
business is located or is not required under applicable law to effect
such qualification, except where failure to so qualify would not have a
material adverse effect on the ability of such Seller to perform its
obligations under the Transaction Documents or on any of the Contracts,
the Receivables or the
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related Credits or on the ability of such Seller, TFI, the Issuer or
the Trustee to realize upon or enforce the same.
(ii) The performance of the obligations of such Seller under
this Agreement and the other Transaction Documents and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in any breach of any of the terms or provisions of, or
constitute with or without notice, lapse of time or both, a default
under the Articles of Incorporation or Bylaws of such Seller, or any
material indenture, agreement, mortgage, deed of trust or other
instrument to which such Seller is a party or by which it is bound, or
result in the creation or imposition of any lien, charge or encumbrance
(except the lien created by the Transaction Documents) upon any of the
property or assets of such Seller pursuant to the terms of such
indenture, mortgage, deed of trust, or other agreement or instrument to
which such Seller is a party or by which such Seller is bound or to
which any of such Seller's property or assets is subject, nor will such
action result in any violation of the provisions of such Seller's
Articles of Incorporation or By-laws or any statute or any order, rule
or regulation of any court or any regulatory authority or other
governmental agency or body having jurisdiction over such Seller or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with or other action of any court,
or any such regulatory authority or other governmental agency or body
is required for consummation of the transactions contemplated by this
Agreement and the other Transaction Documents except such consents,
approvals and authorizations which have been obtained or such
registrations or qualifications which have been made.
(iii) This Agreement and any other Transaction Document to
which such Seller is a party have been duly authorized, executed and
delivered by such Seller by all necessary corporate action and such
agreements are the valid and legally binding obligations of such
Seller, enforceable against such Seller in accordance with their
respective terms, subject as to enforcement to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights generally and
to general principles of equity regardless of whether enforcement is
sought in a court of law or equity.
(iv) The relevant Seller Address is the chief executive
office, principal place of business and the office where such Seller
keeps its records concerning the Contracts, Receivables and the related
Credits. Such Seller has not used any address other than its Seller
Address and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in the previous five-year period. Such Seller's legal
name is as set forth in this Agreement. Such Seller has not used or
done business under any other name in the previous six-year period.
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(v) Such Seller does not believe, nor does it have any
reasonable cause to believe, that it cannot perform each and every
covenant contained in this Agreement.
(vi) The transactions contemplated by the Transaction
Documents are being consummated by such Seller in furtherance of its
ordinary business purposes, with no contemplation of insolvency and
with no intent to hinder, delay or defraud any of its present or future
creditors.
(vii) The consideration received by such Seller pursuant to
this Agreement is fair consideration having value reasonably equivalent
to or in excess of the value of the performance of such Seller's
obligations hereunder.
(viii) Neither on the date of the transactions contemplated by
the Transaction Documents or immediately before or after such
transactions, nor as a result of the transactions, will such Seller:
(A) be insolvent such that the sum of its debts is
greater than all of its respective property, at a fair
valuation;
(B) be engaged in, or about to engage in, business or a
transaction for which any property remaining with such Seller
will be an unreasonably small capital or the remaining assets
of such Seller will be unreasonably small in relation to its
respective business or the transaction; and
(C) have intended to incur, or believed it would incur,
debts that would be beyond its respective ability to pay as
such debts mature or become due. Such Seller's assets and cash
flow enable it to meet its present obligations in the ordinary
course of business as they become due.
(ix) Both immediately before and after the transactions
contemplated by the Transaction Documents (a) the present fair salable
value of such Seller's assets was or will be in excess of the amount
that will be required to pay its probable liabilities as they then
exist and as they become absolute and matured; and (b) the sum of such
Seller's assets was or will be greater than the sum of its debts,
valuing its assets at a fair salable value.
(x) The acquisition of the Assets by TFI pursuant to this
Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
(xi) There are no proceedings or investigations pending or, to
the knowledge of such Seller, threatened against or affecting such
Seller in or before any court, governmental authority or agency or
arbitration board or tribunal which, individually or in the aggregate,
involve the possibility of
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materially and adversely affecting the properties, business, prospects,
profits or condition (financial or otherwise) of such Seller, or the
ability of such Seller to perform its obligations under this Agreement
or the other Transaction Documents. Such Seller is not in default with
respect to any order of any court, governmental authority or agency or
arbitration board or tribunal.
(xii) All tax returns or extensions required to be filed by
such Seller in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon such Seller, or
upon any of the respective properties, income or franchises shown to be
due and payable on such returns have been, or will be, paid. All such
tax returns are true and correct, and such Seller has no knowledge of
any proposed additional tax assessment against it in any material
amount nor of any basis therefor. The provisions for taxes on the books
of such Seller are in accordance with generally accepted accounting
principles.
(xiii) Such Seller (i) is not in violation of any laws,
ordinances, governmental rules or regulations to which it is subject,
(ii) has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its
property or to the conduct of its business, and (iii) is not in
violation in any material respect of any term of any agreement, charter
instrument, bylaw or instrument to which it is a party or by which it
may be bound which violation or failure to obtain might materially
adversely affect the business or condition (financial or otherwise) of
such Seller.
(xiv) The Sellers and TFI are members of an affiliated group
within the meaning of Section 1504 of the Code which has filed and will
continue to file a consolidated federal income tax return at all times
until termination of the Transaction Documents.
(xv) It is the intention of such Seller that the Assets are
being or have been acquired by TFI and that the beneficial interest in
and title to the Assets are not part of such Seller's estate in the
event of the filing of a bankruptcy petition by or against such Seller
under any bankruptcy law.
(xvi) Immediately prior to the acquisition of the Assets by
TFI pursuant to this Agreement, such Seller was the sole owner of its
portion of the Assets at such time and had good and marketable title to
the Assets, free and clear of all liens, claims and encumbrances
(except for the Acquisition Consideration and security interests in the
Assets which shall be terminated on or prior to the Closing Date).
(xvii) The Sellers will treat the transfer of the Assets as a
sale to TFI for federal, State and local income tax reporting and
accounting purposes.
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(xviii) The sale of the Assets pursuant to this Agreement
constitutes the valid sale by the Sellers to TFI of all of the Sellers'
right, title and interest in the Assets.
(xix) The Sellers have valid business reasons for selling the
Assets to TFI pursuant to this Agreement rather than obtaining a loan
secured by the Assets.
(xx) The Sellers will be operated generally so as to not be
substantively consolidated with TFI for bankruptcy purposes.
(xxi) No event has occurred that adversely affects the
Sellers' ability to perform the transactions contemplated by the
Transaction Documents.
(xxii) Each pension plan or profit sharing plan to which each
of the Sellers is a party has been fully funded in accordance with the
obligations of such Seller as set forth in such plan.
(xxiii) Neither the acquisition nor the holding of the
Contracts and the related Receivables violates any federal or State
law, rule or regulation the non-compliance with which could have a
material adverse effect on the value of the Contracts or the related
Receivables.
Section 3.02. Representations and Warranties of TFI. TFI hereby makes
the following representations and warranties for the benefit of the Issuer, the
Trustee and Holders of the Notes, on which the Sellers rely in entering into
this Agreement with TFI and on which the Holders of the Notes rely in purchasing
the Notes; such representations and warranties speak as of the Closing Date
unless otherwise indicated, but shall survive any subsequent transfer,
assignment, contribution or conveyance of the Assets or any part thereof:
(a) TFI has been duly organized and is validly existing in
good standing as a corporation under the laws of the State of Delaware,
with corporate power and authority to own its properties, perform its
obligations under the Transaction Documents and to transact the
business in which it is now engaged or in which it proposes to engage;
TFI is duly qualified to do business and is in good standing in each
State in which the nature of its business requires it to be so
qualified, except where failure to so qualify would not have a material
adverse effect on the ability of TFI to perform its obligations under
the Transaction Documents.
(b) The transfer to and receipt by TFI of the Sellers'
interest in the Contracts, the Receivables and the related Credits
pursuant to this Agreement and the consummation of the transactions
contemplated herein and in the Transaction Documents will not conflict
with or result in breach of any of the terms or provisions of, or
constitute (with or without notice, lapse of time or both) a default
under the Certificate of Incorporation or By-laws of TFI or any
material indenture, agreement, mortgage, deed of trust or other
instrument to which TFI is a party or by which it is
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bound, or result in the creation or imposition of any lien, charge or
encumbrance (except for the lien created by the Sale Agreement and the
Indenture) upon any of the property or assets of TFI pursuant to the
terms of, such indenture, mortgage, deed of trust, or other agreement
or instrument to which TFI is a party or by which it is bound or to
which any of the property or assets of TFI is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of TFI or any statute or any order, rule or
regulation of any court or regulatory authority or other governmental
agency or body having jurisdiction over TFI or any of its properties;
and no consent, approval, authorization, order, registration or
qualification of or with or other action of any court or any such
regulatory authority or other governmental agency or body is required
for the acquisition of the Assets hereunder.
(c) The Transaction Documents to which TFI is a party have
been duly authorized, executed and delivered by TFI by all necessary
corporate action and constitute valid and legally binding obligations
of TFI enforceable against TFI in accordance with their terms, subject
as to enforcement to bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a court of equity or
law.
(d) There are no proceedings or investigations to which TFI is
a party pending or, to the knowledge of TFI, threatened, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (a) asserting the invalidity of this
Agreement, (b) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement,
or (c) seeking any determination or ruling that would materially and
adversely affect the performance by TFI of its obligations under, or
the validity or enforceability of, this Agreement.
(e) All approvals, authorizations, consents, orders or other
actions of any Person or of any court, governmental agency or body or
official, required in connection with the execution and delivery of
this Agreement, have been or will be taken or obtained on or prior to
the Closing Date.
(f) The TFI Address is the principal place of business and
chief executive office of TFI.
Section 3.03. Purchase or Substitution Required upon Breach of Certain
Representations and Warranties. Upon discovery by TFI or any of the Sellers of
the breach of any representations or warranties set forth in Section 3.01 or
3.02 hereof which materially and adversely affects the value of a Contract,
Receivable, the related Credits, or the interests of the Holders of the Notes,
or a breach of any of the representations and warranties set forth in Sections
3.01(a)(v), 3.01(a)(vi), 3.01(a)(vii), 3.01(a)(xiii), 3.01(a)(xiv),
3.01(a)(xvi), 3.01(a)(xxii) or 3.01(a)(xxiii) hereof, the party discovering such
breach shall give prompt written notice to the other parties. Trendwest shall,
within 30 days
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from the date it was notified of, or otherwise discovers, such breach, cure such
breach, or, (1) if the breach relates to a particular Contract and is not cured,
either (a) purchase TFI's interest in such Contract and the related Receivable
from TFI at the Purchase Price or (b) provide a Substitute Contract or (2) if
the breach relates to a representation or warranty regarding the selection
criteria of the Contracts as a whole and is not cured by Trendwest, either (a)
purchase TFI's interest in such non-conforming Contracts and the related
Receivables from TFI or (b) provide Substitute Contracts as set forth above, so
that the representations and warranties with respect to the selection criteria
are correct, as evidenced by a certificate of an officer of Trendwest to the
Trustee. The Purchase Price for a purchased Contract shall be paid, and any
Substitute Contract shall be delivered, by Trendwest to TFI in accordance with
Section 3.04(c) hereof. It is understood and agreed that the obligation of
Trendwest to cure or purchase or replace any Contract as to which such a breach
has occurred shall constitute the sole remedy respecting such breach available
to TFI, the Issuer, the Holders of Notes or the Trustee on behalf of such
Holders (except for any indemnities provided under Section 4.01(j) hereof or any
obligations under the Sale Agreement or the Indenture) for any losses, claims,
damages and liabilities arising from TFI's interest in such Contract or the
inclusion of TFI's interest in such Contract in the Trust Estate.
Section 3.04. Requirements for Purchase or Substitution of Contracts;
Upgrades. (a) If Trendwest is required to purchase TFI's interest in any
Contract and the related Receivables under Section 3.03 hereof, if TFI or
Trendwest is required to purchase the Issuer's interest in any Contract and the
related Receivables under Section 3.03 of the Sale Agreement, or if the Issuer
is required or elects to purchase the Trustee's interest in any Contract and the
related Receivables under Section 3.10 of the Servicing Agreement, such Contract
and related Receivables shall be purchased by Trendwest at the Purchase Price.
All purchases shall be accomplished at the times specified in subsection (c)
below.
(b) If Trendwest is required to substitute any Contract under Section
3.03 hereof or if TFI or Trendwest is required to substitute any Contract under
Section 3.03 of the Sale Agreement (a "Substitute Contract"), each such
Substitute Contract shall (i) be an Eligible Contract; (ii) be written on one of
the standard forms attached as Exhibit A to this Agreement; (iii) be accompanied
by a supplement to this Agreement substantially in the form of Annex A hereto
subjecting such Contract to the provisions hereof and providing with respect to
such Substitute Contract the information required in the Contract Schedule; (iv)
not have been selected using procedures that identified the Contracts as being
less desirable or valuable than other comparable vacation credit installment
contracts owned by Trendwest; and (v) not have any Scheduled Payments that are
due after the Stated Maturity Date of the Notes. In addition, (i) such
Substitute Contracts shall have an aggregate Collateral Value at least equal to
and not substantially greater than the aggregate Collateral Value of the
Contracts being withdrawn as of the date of withdrawal (the "Substitution
Criterion") and (ii) the representations and warranties set forth in Sections
3.01 and 3.02 shall be true and correct with respect to such Substitute Contract
and the aggregate pool of Contracts as of the date such Substitute Contract is
conveyed to TFI.
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Upon the substitution of any Substitute Contract pursuant to the
provisions of this Section 3.04(b), Trendwest hereby agrees that such Substitute
Contract will be subject to all the terms and provisions of this Agreement, the
Sale Agreement, the Servicing Agreement, the Custodian Agreement and the
Indenture just as if such Substitute Contract had been one of the original
Contracts acquired on the Closing Date. Upon the substitution of a Substitute
Contract pursuant to this Section 3.04(b), TFI and Trendwest shall also comply
with the provisions and limitations set forth in the Indenture. All
substitutions shall be accomplished at the time specified in subsection (c)
below.
(c) Any purchase or substitution of a Contract by Trendwest in
accordance with Section 3.03 hereof or this Section 3.04 or by TFI or Trendwest
under Section 3.03 or Section 3.04 of the Sale Agreement shall be made either by
remittance of the Purchase Price to the Subservicer for deposit into the
Clearing Account in accordance with Section 3.03(a) of the Servicing Agreement
or by substitution of a Substitute Contract, as applicable, within one Business
Day following the expiration of the cure period set forth in Section 3.03
hereof.
(d) If an Obligor desires to enter into an Upgrade Contract, Trendwest,
as Servicer, shall inform the Issuer of such fact. In such event, if the Issuer
desires to enter into such Upgrade and so advises Trendwest, Trendwest for the
benefit of the Issuer may (but shall not be obligated to) enter into an Upgrade
Contract with such Obligor and transfer such Upgrade Contract to TFI for
transfer to the Issuer in exchange for the existing Contract with such Obligor
and an amount equal to the difference in the principal balance between the
existing Contract and the Upgrade Contract (which amount shall be paid to
Trendwest by increasing the amount owed by TFI under the intercompany debt
between TFI and Trendwest); provided, however, that (i) such Upgrade Contract
has an interest rate that is not more than 1.0% per annum lower than the
interest rate on the Contract that is being replaced, (ii) each Scheduled
Payment under the Upgrade Contract shall be the equal to or greater than the
Scheduled Payments on the existing Contract, (iii) such Obligor has made all
Scheduled Payments due on or before the date of such Upgrade, (iv) such Upgrade
Contract is written on one of the standard forms attached as Exhibit A to this
Agreement, (v) simultaneous with the execution of the Upgrade Contract,
Trendwest shall execute a form of assignment to TFI attached to such Upgrade
Contract, and indicate on the face of the Upgrade Contract that such contract is
being sold to TFI, so that TFI can immediately execute an assignment to the
Issuer and be pledged to the Trustee pursuant to the Indenture, (vi) such
Upgrade Contract shall be delivered by Trendwest to the Custodian immediately
after execution of such contract by the Obligor, WorldMark and Trendwest (and,
in any event, prior to the release of the original Contract), (vii) the transfer
of the Upgrade Contract shall not be effective (and the lien of the Trustee on
the existing Contract and the related Receivable shall not be released) until
after any applicable rescission period has expired and (viii) clauses (i)-(vii)
above shall be representations and warranties of Trendwest, and Trendwest shall
be obligated to purchase from the Issuer any Upgrade Contract that does not
comply with such representations and warranties. Simultaneous with the delivery
of such Upgrade Contract to the Custodian, Trendwest shall deliver to the
Trustee a supplement to this Agreement substantially in the form of Annex A
hereto
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subjecting such Contract to the provisions hereof and providing with respect to
such Upgrade Contract the information required on the Contract Schedule.
Upon the acquisition by TFI and, subsequently, the Issuer of any
Upgrade Contract pursuant to the provisions of this Section 3.04(d), Trendwest
hereby agrees that such Upgrade Contract will be subject to all the terms and
provisions of this Agreement, the Sale Agreement, the Servicing Agreement and
the Indenture just as if such Upgrade Contract had been one of the original
Contracts acquired on the Closing Date.
ARTICLE 4
SELLER COVENANTS
Section 4.01. Seller Covenants. Each Seller hereby covenants and agrees
with TFI as follows:
(a) Except as hereinafter provided, such Seller will keep in
full effect its existence, rights and franchises as a corporation, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement or any of the Contracts and to perform its duties hereunder.
Any person into which such Seller may be merged or consolidated, or to
whom such Seller has sold substantially all of its assets, or any
corporation resulting from any merger, conversion or consolidation to
which such Seller shall be a party, or any Person succeeding to the
business of such Seller shall be the successor of such Seller
hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that (w) immediately after
giving effect to such transaction, no representation or warranty made
pursuant to Section 3.01(c) hereof shall have been breached, (x) such
successor executes an agreement of assumption, in form reasonably
satisfactory to the Trustee, to perform every obligation under this
Agreement, (y) such Seller shall have delivered to TFI a certificate of
an officer of such Seller and an Opinion of Counsel each stating that
such consolidation, merger, or succession and such agreement of
assumption complies with this Section 4.01 and that all conditions
precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and (z) such Seller shall have
delivered to TFI an Opinion of Counsel either (1) stating that, in the
opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of TFI in the
Contracts and reciting the details of such filings, or (2) stating
that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest.
(b) Neither such Seller nor any of the directors, officers,
employees or agents of such Seller shall be under any liability to TFI,
the Trustee or the Holders of Notes for any action taken or for
refraining from the taking of any action in good
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faith pursuant to this Agreement, or for errors in judgment not
involving recklessness or negligence; provided, however, that this
provision shall not protect such Seller against any breach of
warranties or representations made herein, or failure to perform its
obligations in strict compliance with this Agreement, or any liability
which would otherwise be imposed by reason of any breach of the terms
and conditions of this Agreement. Such Seller, and any director,
officer, employee or agent of such Seller, may rely in good faith on
any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. Such Seller shall
not be under any obligation to appear in, prosecute, or defend any
legal action that is not incidental to its obligations as the seller of
the Assets under this Agreement and that in its opinion may involve it
in any expense or liability.
(c) Such Seller will from time to time, at its own expense,
execute and file such additional financing statements (including
continuation statements) as may be necessary or which the Trustee may
deem appropriate to preserve the security interests and liens described
in Section 3.01(a)(viii) hereof and are reasonably satisfactory in form
and substance to TFI and the Issuer.
(d) Such Seller will not change its name, identity or
corporate structure in any manner that would, could, or might make any
financing statement or continuation statement misleading within the
meaning of section 9-402(7) of the UCC, unless it shall have given TFI,
the Issuer and the Trustee at least 30 days' prior written notice
thereof.
(e) Such Seller will give TFI, the Issuer and the Trustee at
least 30 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new
financing statement.
(f) Such Seller will duly fulfill all obligations on its part
to be fulfilled under or in connection with each Contract, will not
change or modify the terms of the Contracts (and shall prevent any
third-party originator that still owns any Contract from changing or
modifying the terms of any such Contract) except as expressly permitted
by the terms of the Transaction Documents and will do nothing to impair
the rights of TFI, the Issuer or the Trustee in the Assets. In the
event that the rights of such Seller under any Contract or any guaranty
of the related Obligor's obligations under any Contract are not
assignable to TFI or the Issuer, such Seller will enforce such rights
on behalf of TFI or the Issuer; the Seller is not aware of any such
inability to assign any Contracts.
(g) Such Seller will comply, in all material respects, with
all material acts, rules, regulations, orders, decrees and directions
of any governmental authority applicable to the Assets or any part
thereof; provided, however, that such Seller may contest any act,
regulation, order, decree or direction in any reasonable manner which
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shall not materially and adversely affect the rights of TFI, the Issuer
or the Trustee in the Assets.
(h) Such Seller will advise TFI, the Issuer and the Trustee
promptly, in reasonable detail, of the occurrence of any breach by such
Seller following discovery by such Seller of such breach of any of its
representations, warranties and covenants contained herein.
(i) Such Seller will execute or endorse, acknowledge, and
deliver to TFI, the Issuer and the Trustee from time to time such
schedules, confirmatory assignments, conveyances, and other
reassurances or instruments and take such further similar actions
relating to the Assets, and the rights covered by the Transaction
Documents, as TFI, the Issuer or the Trustee may reasonably request to
preserve and maintain title to the Assets and the rights of the Trustee
and the Holders of Notes therein against the claims of all persons and
parties.
(j) Trendwest agrees to indemnify, defend and hold TFI
harmless from and against any and all loss, liability, damage, judgment,
claim, deficiency or expense (including interest, penalties, reasonable
attorney's fees and amounts paid in settlement) that is caused by (i) a
material breach at any time by any Seller of its representations,
warranties and covenants contained in Section 3.01 hereof or this
Section 4.01 or (ii) any material information furnished by any Seller
which is set forth in any schedule delivered hereunder, being untrue in
any material respect when any such representation was made or schedule
delivered, provided that Trendwest shall not have any liability with
respect to a representation or warranty as to any specific Contract,
Receivable or the related Credits other than to purchase such Contract
or substitute for such Contract in accordance with Section 3.03 hereof
unless such breach of representation or warranty is the result of a
Seller's fraud, negligence, bad faith or willful misconduct. Trendwest
shall also indemnify the Issuer, the Trustee and the Servicer for any
cost or expenses incurred by them in the enforcement of this Agreement.
The obligations of Trendwest under this Section 4.01(j) shall be
considered to have been relied upon by TFI and shall survive the
execution, delivery and performance of this Agreement, regardless of any
investigation made by or on behalf of TFI, until termination of the
Indenture. If Trendwest has made any indemnity payments pursuant to this
Section 4.01(j) and thereafter the recipient collects any of such
amounts from others, such party will promptly repay the amount collected
to Trendwest, without interest.
(k) Such Seller will do nothing to disturb or impair the
acquisition hereunder by TFI of all of such Seller's right, title and
interest in the Assets or the Issuer's rights, title or interest in the
Purchased Assets.
(l) Such Seller (i) will (A) maintain its books and records
separate from the books and records of TFI and (B) maintain bank
accounts separate from those of TFI and (ii) will not (x) take, prior
to the complete payment of the Notes, any action that would cause the
dissolution or liquidation of TFI, (y) guarantee (directly or
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indirectly), endorse or otherwise become contingently liable (directly
or indirectly) for the obligations of TFI or (z) institute against TFI,
or join any other person in instituting against TFI, any case,
proceeding or other action under any existing or future bankruptcy,
insolvency or similar laws.
(m) Such Seller shall notify TFI, the Issuer and the Trustee
promptly after becoming aware of any Lien on any Asset.
(n) On each date as of which Trendwest substitutes a
Substitute Contract in accordance with Section 3.03 hereof, Trendwest
shall provide to TFI a supplement to this Agreement substantially in
the form of Annex A hereto subjecting such Contract to the provisions
hereof and providing with respect to such Substitute Contract the
information required in the Contract Schedule.
(o) The annual financial statements of such Seller will
disclose the effects of the transactions contemplated by the
Transaction Documents in accordance with generally accepted accounting
principles. The financial statements of such Seller and TFI will also
disclose that the assets of TFI are not available to pay creditors of
such Seller. The resolutions, agreements and other instruments
underlying the Transaction Documents will be continuously maintained by
such Seller as official records.
(p) Such Seller will, at its own cost and expense, (i) retain
the Electronic Ledger as a master record of the Contracts and the
related Credits and copies of all documents relating to each Contract
(other than the original executed Contracts) as custodian for the
Issuer and other Persons, if any, with interests in the Contracts and
the related Credits and (ii) ▇▇▇▇ the Contracts and the Electronic
Ledger to the effect that the Contracts and such Seller's interest in
the related Credits have been acquired by TFI, that the Contracts and
the related Receivables subsequently have been transferred by TFI to
the Issuer and a security interest in the related Credits have been
granted by TFI to the Issuer and that such Receivables, security
interests and rights have been pledged, transferred and assigned to the
Trustee by the Issuer pursuant to the Indenture.
(q) Such Seller will perform the transactions contemplated by
this Agreement in a manner that is consistent with TFI's ownership
interest in the Assets (prior to the conveyance of any part of such
interest to the Issuer pursuant to the Sale Agreement). Such Seller
will respond to all third party inquiries confirming the transfer of
the Assets to TFI and of the Purchased Assets to the Issuer.
(r) Such Seller shall immediately transfer to the Servicer for
deposit in the Clearing Account any payment it receives relating to the
Assets.
Section 4.02. TFI Covenants. TFI hereby covenants and agrees with the
Sellers as follows:
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(a) TFI hereby acknowledges and agrees that its rights in the
related Credits are expressly subject to the rights of the related
Obligors in such Credits pursuant to the applicable Contract.
(b) On each date as of which any interest in any Contract is
to be purchased or replaced by Trendwest pursuant to Section 3.03
hereof, TFI shall submit to Trendwest an instrument of assignment
assigning TFI's interest in such Contract and the related Credits to
Trendwest, signed by the president, senior vice president or any vice
president of TFI. Each such assignment shall operate as an assignment,
without recourse, representation, or warranty, to Trendwest of all of
TFI's right, title, and interest in and to such Contract, related
Credits and any security documents relating thereto, such assignment
being an assignment outright and not for security, and upon payment of
the Purchase Price or delivery of a Substitute Contract, Trendwest will
thereupon own such interest in the Contract and all such security and
documents, free of any further obligation to TFI with respect thereto.
If in any enforcement suit or legal proceeding it is held that
Trendwest may not enforce a Contract on the ground that it is not a
real party in interest or holder entitled to enforce the Contract, TFI
shall, at TFI's expense, take such steps as TFI deems necessary to
enforce the Contract, including bringing suit in TFI's name.
(c) TFI warrants that, except as contemplated by the
Transaction Documents, it will have ownership of or a valid security
interest in the related Credits. TFI shall not assign, sell, pledge, or
exchange, or in any way encumber or otherwise dispose of the related
Credits, except as contemplated by or permitted under the Transaction
Documents.
Section 4.03. Assignment of Assets. The Sellers understand that TFI
will assign to the Issuer the Receivables and grant to the Issuer a security
interest in all its right, title and interest to this Agreement, the Contracts
and the related Credits and that the Issuer will assign to and grant to the
Trustee a security interest in such Receivables, Contracts and the related
Credits. The Sellers consent to such assignments and grants and further agree
that all representations, warranties, covenants and agreements the Sellers made
herein shall also be for the benefit of and inure to the Issuer, the Trustee and
all Holders from time to time of the Notes.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.01. Conditions to TFI's Initial Obligations. The obligations
of TFI to execute and deliver the Asset Assignment to the Sellers on the Closing
Date pursuant to, and perform it obligations pursuant to, this Agreement shall
be subject to the satisfaction of the following conditions:
(a) All representations and warranties of the Sellers
contained in Sections 3.01(b) and 3.01(c) hereof and all information
provided in the Contract
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Schedule shall be true and correct on the Closing Date, with the same
effect as though such representations and warranties had been made on
such date, and the Sellers shall have delivered to TFI, the Issuer, the
Trustee and each original purchaser of Notes an Officer's Certificate
to such effect;
(b) All representations and warranties of the Sellers
contained in Section 3.01(a) hereof shall be true and correct on the
Closing Date with respect to the Contracts listed on the Contract
Schedule, with the same effect as though such representations and
warranties had been made on such date, and the Sellers shall have
delivered to TFI, the Issuer, the Trustee and each original purchaser
of Notes an Officer's Certificate to such effect;
(c) The Sellers shall have delivered all other information
theretofore required or reasonably requested by TFI to be delivered by
the Sellers hereunder, duly certified by an officer of each of the
Sellers, and the Sellers shall have substantially performed all other
obligations required to be performed as of the Closing Date by the
provisions of this Agreement;
(d) On or prior to the Closing Date, Trendwest, on behalf of
the Sellers shall have delivered, or caused the delivery of, the
Custodian File related to the Contracts identified in the Contract
Schedule to the Custodian or its agent and, subject to Section 2.04
hereof, there shall have been made all filings, recordings and/or
registrations, and there shall have been given, or taken, any notice or
any other similar action, as may be necessary in the opinion of TFI, in
order to establish and preserve the right, title and interest of TFI in
such Contract and the other Assets;
(e) On or before the Closing Date, the Issuer, the Servicer,
the Subservicer and the Trustee shall have entered into the Servicing
Agreement;
(f) The Notes shall be issued and sold on the Closing Date,
the Issuer shall receive the full consideration due it upon the
issuance of the Notes, the Issuer shall have applied such
consideration, to the extent necessary, to pay the related
consideration to TFI for the sale of the Contracts and the Receivables
and the grant of the security interest in the Credits, and TFI shall
have applied such consideration, to the extent necessary, to pay the
related Acquisition Consideration; and
(g) Each of the Sellers shall have executed and delivered the
Asset Assignment.
Section 5.02. Conditions to the Sellers' Obligations. The obligations
of each of the Sellers to execute and deliver to TFI the Asset Assignment, and
perform its obligations pursuant to this Agreement on the Closing Date shall be
subject to the satisfaction of the following conditions:
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(a) All representations and warranties of TFI contained in
this Agreement shall be true and correct with the same effect as though
such representations and warranties had been made on such date;
(b) TFI shall have executed and delivered the Asset
Assignment; and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall
be satisfactory in form and substance to such Seller, and such Seller
shall have received from the TFI copies of all documents (including,
without limitation, records of corporate proceedings) relevant to the
transactions herein contemplated as such Seller may reasonably have
requested.
Trendwest's and TFI's obligations to repurchase the Contracts pursuant
to this Agreement shall not be affected by any failure of the Issuer to comply
with clause (a) of this Section 5.02 subsequent to the Closing Date.
ARTICLE 6
TERM AND TERMINATION
Section 6.01. Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue in full force and effect until
the later of (i) payment with respect to the last Asset or (ii) termination of
the Indenture.
Section 6.02. Default by Sellers. If either Seller shall be in default
under this Agreement and such default shall not have been cured for a period of
60 days, or if such Seller shall become insolvent or make an assignment for the
benefit of its creditors or have a receiver appointed for all or substantially
all of its properties, or if any proceedings commenced, or consented to, by such
Seller are not stayed or dismissed within 90 days after being commenced against
such Seller under any bankruptcy, insolvency or other law for the relief of
debtors, TFI shall have the right, in addition to any other rights it may have
under any applicable law, to terminate this Agreement with respect to such
Seller upon 30 days' prior written notice to such Seller; provided that any
termination of this Agreement shall not release such Seller from any obligation
under this Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Amendments. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally but only by an instrument in
writing signed by the party against which enforcement is sought. This Agreement
may be amended by TFI and the Sellers only with the prior written consent of the
Holders of 66-2/3% in principal amount of Notes Outstanding.
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Section 7.02. Governing Law. This Agreement shall be construed in
accordance with the internal laws of the State of New York, without regard to
choice of law principles.
Section 7.03. Notices. All demands, notices and communications
hereunder shall be in writing and shall be delivered personally, mailed by
registered or certified United States mail, postage prepaid, or sent via
overnight air courier or facsimile communication and addressed, in the case of
the Sellers, to the Seller Address, and in the case of TFI, to the TFI Address.
All notices and demands shall be deemed to have been given either at the time of
the delivery thereof to any officer of the Person entitled to receive such
notices and demands at the address of such Person for notices hereunder, or on
the third day after the mailing thereof to such address, as the case may be. Any
Person may change the address for notices hereunder by giving notice of such
change to the other Person.
Section 7.04. Separability Clause. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.05. Assignment. Except as provided in Section 4.01(a), this
Agreement may not be assigned or delegated by any Seller without the prior
written consent of TFI, the Trustee and the Holders of 66-2/3% in principal
amount of the Notes Outstanding and may not be assigned or delegated by TFI
without the prior written consent of each of the Sellers, the Trustee and the
Holders of 66-2/3% in principal amount of the Notes Outstanding.
Section 7.06. Further Assurances. Each of the Sellers and TFI agrees to
do such further acts and things and to execute and deliver to the Trustee such
additional assignments, agreements, powers and instruments as are required by
the Trustee to carry into effect the purposes of this Agreement or to better
assure and confirm unto the Trustee or the Holders of the Notes their rights,
powers or remedies hereunder. If any Obligor shall be in default under any
Contract, upon reasonable request from the Servicer, the applicable Seller will
take all reasonable steps to assist in enforcing such Contract and preserving
and maintaining title to the Assets and the rights of the Trustee and the
Holders of the Notes therein against the claims of all persons and parties to
the extent the applicable Seller is capable of performing such requested steps
and the Servicer reasonably determines that the assistance of the applicable
Seller is necessary to effect the intent and purposes hereof.
Section 7.07. No Waivers; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of TFI or the Sellers, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise of any right, remedy, or privilege hereunder
preclude any other or further exercise hereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
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Section 7.08. Binding Effect; Third Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties hereto,
the Holders of Outstanding Notes, and their respective successors and permitted
assigns.
Section 7.09. Set-Off. (a) Each of the Sellers hereby irrevocably and
unconditionally waives all right of set-off that it may have under contract
(including this Agreement), applicable law or otherwise with respect to any
funds or monies of TFI and the Issuer at any time held by or in the possession
of such Seller.
(b) TFI and the Issuer shall have the right to set-off against each
Seller any amounts to which such Seller may be entitled and to apply such
amounts to any claims TFI and the Issuer may have against such Seller from time
to time under this Agreement. Upon any such set-off TFI shall give notice of the
amount thereof and the reasons therefor.
Section 7.10. Counterparts. This Agreement may be executed in one or
more counterparts all of which together shall constitute one original document.
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IN WITNESS WHEREOF, the Sellers and TFI have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the date and year first above written.
TRENDWEST RESORTS, INC., in its
individual capacity and
as Seller
By______________________________________
Name:
Title:
TW HOLDINGS, INC., Seller
By______________________________________
Name:
Title:
TRENDWEST FUNDING I, INC.
By _____________________________________
Name:
Title:
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ANNEX A
FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
Pursuant to Section 3.04(b) and Section 3.04(d) of the Receivables
Purchase Agreement dated as of March 1, 1996 (the "Agreement"), among Trendwest
Resorts, Inc. ("Trendwest"), TW Holdings, Inc. and Trendwest Funding I, Inc.
("TFI"), attached as Schedule I hereto is a Supplemental Contract Schedule,
which includes information regarding Assets that are hereby sold, assigned,
transferred and delivered by Trendwest to TFI in accordance with the Agreement
and the Asset Assignment and setting forth the Collateral Value of any Contract
being sold to TFI by the Issuer pursuant to an Upgrade or exchanged pursuant to
a substitution.
TRENDWEST RESORTS, INC.
By______________________________________
Name:
Title:
30
SCHEDULE I
SUPPLEMENTAL CONTRACT SCHEDULE FOR SUBSTITUTE CONTRACTS
AND UPGRADE CONTRACTS
31
EXHIBIT A
FORM OF CONTRACT
32
EXHIBIT B
FORM OF ASSET ASSIGNMENT
This Asset Assignment ("Assignment") is made as of April 17, 1996 (the
"Closing Date"), by and among Trendwest Resorts, Inc., an Oregon corporation
("Trendwest"), TW Holdings, Inc., a Nevada corporation, (together with
Trendwest, the "Assignors" and each an "Assignor") and Trendwest Funding I,
Inc., a Delaware corporation ("Assignee"), with reference to the following
facts:
RECITALS:
A. In connection with the sale of certain assets of the Assignors in
conjunction with the issuance of notes on the date hereof by TRI Funding Company
I, L.L.C., Assignee and the Assignors have executed the Receivables Purchase
Agreement dated as of March 1, 1996 (the "Agreement").
B. In connection with the Agreement, each of the Assignors desires to
assign and transfer to Assignee all of such Assignor's right, title and interest
in and to each of the assets described in Schedule I hereto, and the
corresponding paragraphs below (the "Assigned Interests").
C. Assignee desires to accept this Assignment and transfer of the
Assigned Interests and assume all duties and obligations attendant thereto,
accruing after the Transfer Date.
D. Terms used but not defined herein have the meanings ascribed to them
in the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the mutual
covenants set forth herein, the Assignors and Assignee hereby agree as follows:
1. Assignment. Each Assignor hereby assigns, conveys, grants and
transfers, without recourse except as provided in the Agreement, to Assignee
(and the successors and assigns of Assignee) the following property:
1.1. Such Assignor's right, title and interest in and to the
Contracts and related Receivables described and listed on Schedule I
hereto.
1.2. A security interest in the vacation credits subject to
each such Contract (the "Credits").
1.3. All other Assets relating to such Contract.
33
2. Assumption. Assignee hereby accepts the foregoing assignment and
hereby assumes all of the duties and obligations incident hereto and thereto,
subject to the terms and conditions of the Agreement.
3. Further Assurance. The Assignors and Assignee each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or appropriate to consummate and
effectuate this Assignment.
4. Distinct Entities. The Assignors and Assignee hereby acknowledge
that for all purposes each of the Assignors and the Assignee are separate and
distinct legal entities. Accordingly, no Assignor shall be liable to any third
party for the debts, obligations and liabilities of the Assignee; and Assignee
shall not be liable to any third party for the debts, obligations and
liabilities of any Assignor to the extent that such debts, obligations and
liabilities have not been expressly assumed by Assignee hereunder.
5. Governing Law. This Assignment shall be governed by and interpreted
in accordance with the laws of the State of New York, and the parties hereto
hereby acknowledge and agree that this Assignment and the transactions
contemplated hereunder were negotiated and entered into in the State of New
York.
6. Authority. Each of the Assignors and the Assignee hereby represent
respectively that they have full power and authority to enter into this
Assignment.
7. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which, taken
together, shall constitute one and the same instrument.
8. Successors and Assigns. Each of the Assignors and the Assignee agree
that this Assignment will be binding and will inure to the benefit of each
Assignor and its successors and assigns and the Assignee and its successors and
assigns.
B-2
34
IN WITNESS WHEREOF, this Assignment has been executed as of the date
first above written.
TRENDWEST RESORTS, INC., Assignor
By______________________________________
Name:
Title:
TW HOLDINGS, INC., Assignor
By______________________________________
Name:
Title:
TRENDWEST FUNDING I, INC., Assignee
By______________________________________
Name:
Title:
B-3
35
SCHEDULE I
CONTRACT SCHEDULE