Exhibit 10.2

EXECUTION COPY

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST 2011-1,

as Issuer

MARRIOTT OWNERSHIP RESORTS, INC.,

as Servicer

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee and Back-Up Servicer

 

 

SECOND AMENDED AND RESTATED INDENTURE AND SERVICING

AGREEMENT

Dated as of September 1, 2012

 

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     2   

Section 1.01

  

General Definitions

     2   

Section 1.02

  

Compliance Certificates and Opinions

     2   

Section 1.03

  

Form of Documents Delivered to Indenture Trustee

     3   

Section 1.04

  

Acts of Noteholders, etc.

     4   

Section 1.05

  

Notice to Noteholders; Waiver

     5   

Section 1.06

  

Effect of Headings and Table of Contents

     5   

Section 1.07

  

Successors and Assigns

     5   

Section 1.08

  

GOVERNING LAW

     5   

Section 1.09

  

Legal Holidays

     6   

Section 1.10

  

Execution in Counterparts

     6   

Section 1.11

  

Inspection

     6   

Section 1.12

  

Survival of Representations and Warranties

     6   

ARTICLE II THE NOTES

     7   

Section 2.01

  

General Provisions

     7   

Section 2.02

  

Definitive Notes

     8   

Section 2.03

  

Registration, Transfer and Exchange of Notes

     8   

Section 2.04

  

Mutilated, Destroyed, Lost and Stolen Notes

     10   

Section 2.05

  

Payment of Interest and Principal; Rights Preserved

     10   

Section 2.06

  

Persons Deemed Owners

     11   

Section 2.07

  

Cancellation

     11   

Section 2.08

  

Noteholder Lists

     11   

 

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Section 2.09

  

Treasury Notes

     12   

Section 2.10

  

Principal, Interest and NPA Costs

     12   

Section 2.11

  

Increases in Outstanding Note Balance

     12   

Section 2.12

  

Reduction of the Facility Limit

     12   

Section 2.13

  

Facility Termination Date

     13   

ARTICLE III ACCOUNTS; COLLECTION AND APPLICATION OF MONEYS; REPORTS

     14   

Section 3.01

  

Trust Accounts; Investments by Indenture Trustee

     14   

Section 3.02

  

Establishment and Administration of the Trust Accounts

     16   

Section 3.03

  

Hedge Agreement

     19   

Section 3.04

  

Distributions

     22   

Section 3.05

  

Reports to Noteholders

     24   

Section 3.06

  

Withholding Taxes

     25   

ARTICLE IV THE TRUST ESTATE

     25   

Section 4.01

  

Conveyance of Trust Estate/ Acceptance by Indenture Trustee

     25   

Section 4.02

  

Acquisition of Timeshare Loans

     26   

Section 4.03

  

Additional Timeshare Loans

     26   

Section 4.04

  

Grant of Security Interest; Tax Treatment

     27   

Section 4.05

  

Further Action Evidencing Grant of Security Interest

     28   

Section 4.06

  

Substitution and Repurchase of Timeshare Loans

     28   

Section 4.07

  

Release of Lien

     30   

Section 4.08

  

Appointment of Custodian

     33   

Section 4.09

  

Sale of Timeshare Loans

     33   

ARTICLE V SERVICING OF TIMESHARE LOANS

     33   

Section 5.01

  

Appointment of Servicer; Servicing Standard

     33   

 

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Section 5.02

  

Payments on the Timeshare Loans

     33   

Section 5.03

  

Duties and Responsibilities of the Servicer

     34   

Section 5.04

  

Servicer Events of Default

     37   

Section 5.05

  

Accountings; Statements and Reports

     39   

Section 5.06

  

Records

     41   

Section 5.07

  

Fidelity Bond

     41   

Section 5.08

  

Merger or Consolidation of the Servicer

     42   

Section 5.09

  

Sub-Servicing

     42   

Section 5.10

  

Servicer Resignation

     42   

Section 5.11

  

Fees and Expenses

     43   

Section 5.12

  

Access to Certain Documentation

     43   

Section 5.13

  

No Offset

     43   

Section 5.14

  

Cooperation

     43   

Section 5.15

  

Indemnification; Third Party Claim

     44   

Section 5.16

  

Limitation on Liability

     44   

Section 5.17

  

Aruba Notice

     44   

Section 5.18

  

St. Kitts

     44   

Section 5.19

  

Back-Up Servicer and Successor Servicer

     45   

ARTICLE VI EVENTS OF DEFAULT; REMEDIES

     47   

Section 6.01

  

Events of Default

     47   

Section 6.02

  

Acceleration of Maturity; Rescission and Annulment

     50   

Section 6.03

  

Remedies

     51   

Section 6.04

  

Indenture Trustee May File Proofs of Claim. (a)

     52   

Section 6.05

  

Indenture Trustee May Enforce Claims Without Possession of Notes

     53   

 

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Section 6.06

  

Application of Money Collected

     53   

Section 6.07

  

Limitation on Suits

     54   

Section 6.08

  

Unconditional Right of Noteholders to Receive Principal and Interest

     55   

Section 6.09

  

Restoration of Rights and Remedies

     55   

Section 6.10

  

Rights and Remedies Cumulative

     55   

Section 6.11

  

Delay or Omission Not Waiver

     55   

Section 6.12

  

Control by Noteholders

     55   

Section 6.13

  

Waiver of Events of Default

     56   

Section 6.14

  

Undertaking for Costs

     56   

Section 6.15

  

Waiver of Stay or Extension Laws

     57   

Section 6.16

  

Sale of Trust Estate

     57   

ARTICLE VII THE INDENTURE TRUSTEE

     58   

Section 7.01

  

Certain Duties

     58   

Section 7.02

  

Notice of Events of Default and Amortization Events

     59   

Section 7.03

  

Certain Matters Affecting the Indenture Trustee

     60   

Section 7.04

  

Indenture Trustee Not Liable for Notes or Timeshare Loans

     61   

Section 7.05

  

Indenture Trustee May Own Notes

     61   

Section 7.06

  

Indenture Trustee’s Fees and Expenses

     61   

Section 7.07

  

Eligibility Requirements for Indenture Trustee

     61   

Section 7.08

  

Resignation or Removal of Indenture Trustee

     62   

Section 7.09

  

Successor Indenture Trustee

     62   

Section 7.10

  

Merger or Consolidation of Indenture Trustee

     64   

Section 7.11

  

Appointment of Co-Indenture Trustee or Separate Indenture Trustee

     64   

Section 7.12

  

Note Registrar Rights

     65   

Section 7.13

  

Authorization

     65   

 

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ARTICLE VIII COVENANTS

     66   

Section 8.01

  

Payment of Principal and Interest

     66   

Section 8.02

  

Maintenance of Office or Agency; Chief Executive Office

     66   

Section 8.03

  

Money for Payments to Noteholders to be Held in Trust

     66   

Section 8.04

  

Existence; Merger; Consolidation, etc.

     66   

Section 8.05

  

Protection of Trust Estate; Further Assurances

     67   

Section 8.06

  

Additional Covenants

     68   

Section 8.07

  

Taxes

     69   

Section 8.08

  

Treatment of Notes as Debt for Tax Purposes

     69   

Section 8.09

  

Collections

     69   

Section 8.10

  

Segregation of Collections

     70   

Section 8.11

  

Change in Payment Instructions to Obligors

     70   

Section 8.12

  

Change in Payment Instructions to Obligors

     70   

Section 8.13

  

Notices to Obligors

     71   

Section 8.14

  

Segregation of Collections

     71   

Section 8.15

  

Further Instruments and Acts

     71   

ARTICLE IX SUPPLEMENTAL INDENTURES

     72   

Section 9.01

  

Supplemental Indentures without Consent of Noteholders

     72   

Section 9.02

  

Supplemental Indentures with Consent of Noteholders

     72   

Section 9.03

  

Execution of Supplemental Indentures

     73   

Section 9.04

  

Effect of Supplemental Indentures

     74   

Section 9.05

  

Reference in Notes to Supplemental Indentures

     74   

 

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ARTICLE X OPTIONAL PREPAYMENT AND MANDATORY REDEMPTION OF NOTES

     74   

Section 10.01

  

Optional Prepayment

     74   

Section 10.02

  

Mandatory Redemption

     74   

ARTICLE XI SATISFACTION AND DISCHARGE

     75   

Section 11.01

  

Satisfaction and Discharge of Indenture

     75   

Section 11.02

  

Application of Trust Money

     76   

Section 11.03

  

Trust Termination Date

     76   

ARTICLE XII REPRESENTATIONS AND WARRANTIES

     76   

Section 12.01

  

Representations and Warranties of the Issuer

     76   

Section 12.02

  

Representations and Warranties of the Initial Servicer

     80   

Section 12.03

  

Representations and Warranties of the Indenture Trustee and the Back-Up Servicer

     82   

Section 12.04

  

Multiple Roles

     84   

ARTICLE XIII MISCELLANEOUS

     84   

Section 13.01

  

Officer’s Certificate and Opinion of Counsel as to Conditions Precedent

     84   

Section 13.02

  

Statements Required in Certificate or Opinion

     84   

Section 13.03

  

Notices

     85   

Section 13.04

  

No Proceedings

     87   

Section 13.05

  

Limitation of Liability

     88   

Section 13.06

  

Entire Agreement

     88   

Section 13.07

  

Severability of Provisions

     88   

Section 13.08

  

Indulgences; No Waivers

     89   

Section 13.09

  

Conditions Precedent to the Amendment Effective Date

     89   

 

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Exhibit A    Form of Notes Exhibit B    Form of Investor Representation Letter
Exhibit C    Form of Supplemental Grant Exhibit D    Form of Funding Date
Certificate Exhibit E    [Reserved] Exhibit F    Form of Servicer Officer’s
Certificate Exhibit G    Form of Aruba Notice Exhibit H    Trade Names Exhibit I
   Data Conversion Layout Exhibit J    Exchange Notes Pool Criteria Annex A   
Standard Definitions

 

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SECOND AMENDED AND RESTATED INDENTURE AND SERVICING AGREEMENT

This Second Amended and Restated Indenture and Servicing Agreement, dated as of
September 1, 2012 (this “Indenture and Servicing Agreement”), is among MARRIOTT
VACATIONS WORLDWIDE OWNER TRUST 2011-1, a statutory trust organized under the
laws of the State of Delaware, as issuer (the “Issuer”), Marriott Ownership
Resorts, Inc. (“MORI”), a Delaware corporation, as servicer (the “Servicer”),
and Wells Fargo Bank, National Association, a national banking association, as
indenture trustee (the “Indenture Trustee”) and as back-up servicer (in such
capacity, the “Back-Up Servicer”) and hereby amends and restates in its entirety
that certain indenture and servicing agreement, dated as of September 1, 2011
(the “Closing Date Indenture and Servicing Agreement”), by and among the parties
hereto, as amended by that certain amended and restated indenture and servicing
agreement, dated as of September 1, 2011 (the “Amended and Restated Indenture
and Servicing Agreement”), by and among the parties hereto.

RECITALS OF THE ISSUER

WHEREAS, The Issuer duly authorized the execution and delivery of the Closing
Date Indenture and Servicing Agreement to provide for the issuance of Timeshare
Loan-Backed Variable Funding Notes, Series 2011-1 (the “Notes”) as provided
therein;

WHEREAS, the Issuer, MORI, the Servicer, the Indenture Trustee and the Back-Up
Servicer entered into the Amended and Restated Indenture and Servicing Agreement
as of September 1, 2011; and

WHEREAS, the parties hereto desire to amend and restate in its entirety the
Amended and Restated Indenture and Servicing Agreement and the Standard
Definitions as provided herein, and all actions required to do so under
Section 9.02 of the Amended and Restated Indenture and Servicing Agreement have
been taken.

NOW, THEREFORE, THIS INDENTURE AND SERVICING AGREEMENT WITNESSETH:

For and in consideration of the premises and the purchase of the Notes by the
holders thereof, it is mutually covenanted and agreed, for the benefit of the
Noteholders, as follows:

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 Servicing Agreement and the performance of the covenants contained
in this Indenture and Servicing Agreement, the Issuer hereby Grants to the
Indenture Trustee, for the benefit of the Noteholders and the Hedge
Counterparties, all of the Issuer’s right, title and interest in and to the
following whether now owned or hereafter acquired and any and all benefits
accruing to the Issuer from, (i) all Timeshare Loans and Conveyed Timeshare Loan
Assets acquired by the Issuer, (ii) the Qualified Substitute Timeshare Loans, if
any, (iii) the Receivables in respect of such Timeshare Loans due on and after
the related Cut-Off Date, (iv) the related Timeshare Loan Files, (v) all

 

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Related Security in respect of each such Timeshare Loan, (vi) all rights and
remedies under the Sale Agreement, (vii) all rights and remedies under the
Custodial Agreement, (viii) all rights and remedies under the Hedge Agreements,
(ix) all rights and remedies under the Performance Guaranty, (x) all amounts in
or to be deposited to each Trust Account, and (xi) proceeds of the foregoing
(including, without 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)
(collectively, the “Trust Estate”). Notwithstanding the foregoing, the Trust
Estate shall not include any Miscellaneous Payments and Processing Charges made
by an Obligor.

Such Grant is made in trust to secure (i) the payment of all amounts due on the
Notes in accordance with their terms, equally and ratably except as otherwise
may be provided in this Indenture and Servicing Agreement, without prejudice,
priority, or distinction between any Note by reason of differences in time of
issuance or otherwise, (ii) the payment of all amounts due to the Hedge
Counterparty under the Hedge Agreement and (iii) the payment of all other sums
payable under the Notes and this Indenture and Servicing Agreement.

The Indenture 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 and to the end that the interests of the
Noteholders may be adequately and effectively protected as hereinafter provided.

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

Section 1.01 General Definitions.

In addition to the terms defined elsewhere in this Indenture and Servicing
Agreement, capitalized terms shall have the meanings given them in the “Second
Amended and Restated Standard Definitions” attached hereto as Annex A.

Section 1.02 Compliance Certificates and Opinions.

Upon any written application or request (or oral application with prompt written
or electronic confirmation) by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture and Servicing Agreement, other than
any request that (a) the Indenture Trustee authenticate the Notes specified in
such request, (b) the Indenture Trustee invest moneys in any of the Trust
Accounts pursuant to the written directions specified in such request, or
(c) the Indenture Trustee pay moneys due and payable to the Issuer hereunder to
the Issuer’s assignee specified in such request, the Indenture Trustee shall
require the Issuer to furnish to the Indenture Trustee an Officer’s Certificate
stating that all conditions precedent, if any, provided for in this Indenture
and Servicing Agreement relating to the proposed action have been complied with
and that the request otherwise is in accordance with the terms of this Indenture
and Servicing Agreement, and an Opinion of Counsel stating that in the opinion
of

 

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such counsel all such conditions precedent, if any, have been complied with,
except that, in the case of any such requested action as to which other evidence
of satisfaction of the conditions precedent thereto is specifically required by
any provision of this Indenture and Servicing Agreement, no additional
certificate or opinion need be furnished.

Section 1.03 Form of Documents Delivered to Indenture Trustee.

In any case where several matters are required to be certified by, or covered by
an opinion of any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of only one such Person, or that they be
so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

Any certificate or opinion of an officer of the Issuer delivered to the
Indenture Trustee may be based, insofar as it relates to legal matters, upon an
Opinion of Counsel, unless such officer knows that such Opinion of Counsel with
respect to the matters upon which his certificate or opinion is based are
erroneous. Any such officer’s certificate or opinion and any Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Issuer as to
such factual matters unless such officer or counsel knows that the certificate
or opinion or representations with respect to such matters are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel’s opinion which shall contain appropriate language permitting reliance
on such other counsel’s opinion.

Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture and Servicing Agreement, they may, but need not, be
consolidated and form one instrument.

Wherever in this Indenture and Servicing Agreement, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Issuer shall deliver any document as a condition of the granting of
such application, or as evidence of compliance with any term hereof, it is
intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee’s right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Section 7.01(b) hereof.

Whenever in this Indenture and Servicing Agreement it is provided that the
absence of the occurrence and continuation of a Potential Event of Default,
Event of Default, Potential Servicer Event of Default, Servicer Event of
Default, Potential Amortization Event or Amortization Event is a condition
precedent to the taking of any action by the Indenture Trustee at the request or
direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer’s right to make such request or
direction, the

 

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Indenture Trustee shall be protected in acting in accordance with such request
or direction if it does not have knowledge of the occurrence and continuation of
such event. For all purposes of this Indenture and Servicing Agreement, the
Indenture Trustee shall not be deemed to have knowledge of any Default, Event of
Default, Servicer Event of Default or Amortization Event nor shall the Indenture
Trustee have any duty to monitor or investigate to determine whether a Default,
an Event of Default (other than an Event of Default of the kind described in
Section 6.01(a) hereof), a Servicer Event of Default or an Amortization Event
has occurred unless a Responsible Officer of the Indenture Trustee shall have
actual knowledge thereof or shall have been notified in writing thereof by the
Issuer, the Servicer or any Noteholder.

Section 1.04 Acts of Noteholders, etc.

(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture and Servicing Agreement 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 agents
duly appointed in writing, including but not limited to trust agents and
administrative agents; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture 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 Servicing Agreement and (subject to
Section 7.01 hereof) conclusive in favor of the Indenture Trustee and the
Issuer, if made in the manner provided in this Section 1.04.

(b) The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him or her the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Indenture Trustee, in its reasonable discretion,
deems sufficient.

(c) Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the holder of any Note shall bind every future holder of the same
Note and 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 Indenture Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.

(d) By accepting the Notes issued pursuant to this Indenture and Servicing
Agreement, each Noteholder irrevocably appoints the Indenture Trustee hereunder
as the special attorney-in-fact for such Noteholder vested with full power on
behalf of such Noteholder to effect and enforce the rights of such Noteholder
for the benefit of such Noteholder; provided that nothing contained in this
Section 1.04(d) shall be deemed to confer upon the Indenture Trustee any duty or
power to vote on behalf of the Noteholders with respect to any matter on which
the Noteholders have a right to vote pursuant to the terms of this Indenture and
Servicing Agreement.

 

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Section 1.05 Notice to Noteholders; Waiver.

(a) Where this Indenture and Servicing Agreement provides for notice to
Noteholders of any event, or the mailing of any report to Noteholders, such
notice or report shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, certified mail return receipt requested, or
sent by private courier or confirmed electronically to each Noteholder affected
by such event or to whom such report is required to be mailed, at its address as
it appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed,
neither the failure to mail such notice or report, nor any defect in any notice
or report so mailed, to any particular Noteholder shall affect the sufficiency
of such notice or report with respect to other Noteholders. Where this Indenture
and Servicing Agreement provides for notice in any manner, such notice may be
waived in writing by the 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 Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

(b) In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to mail or send notice to Noteholders,
in accordance with Section 1.05(a) hereof, of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Indenture and Servicing Agreement, then such notification
or delivery as shall be made with the approval of the Indenture Trustee shall
constitute a sufficient notification for every purpose hereunder.

Section 1.06 Effect of Headings and Table of Contents.

The Article and Section headings herein and in the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section 1.07 Successors and Assigns.

All covenants and agreements in this Indenture and Servicing Agreement by each
of the parties hereto shall bind its respective successors and permitted
assigns, whether so expressed or not.

Section 1.08 GOVERNING LAW.

THIS INDENTURE AND SERVICING AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. UNLESS
MADE APPLICABLE IN A SUPPLEMENT HERETO, THIS INDENTURE AND SERVICING AGREEMENT
IS NOT SUBJECT TO THE TRUST INDENTURE ACT OF 1939, AS AMENDED, AND SHALL NOT BE
GOVERNED THEREBY AND CONSTRUED IN ACCORDANCE THEREWITH.

 

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Section 1.09 Legal Holidays.

In any case where any Payment Date or the Stated Maturity or any other date on
which principal of or interest on any Note is proposed to be paid shall not be a
Business Day, then (notwithstanding any other provision of this Indenture and
Servicing Agreement or of the Notes) such payment 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 such Payment Date, Stated Maturity, or other date on which
principal of or interest on any Note is proposed to be paid, provided that no
penalty interest shall accrue for the period from and after such Payment Date,
Stated Maturity, or any other date on which principal of or interest on any Note
is proposed to be paid, as the case may be, until such next succeeding Business
Day.

Section 1.10 Execution in Counterparts.

This Indenture and Servicing Agreement 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.
Delivery of an executed counterpart of this Indenture and Servicing Agreement by
facsimile or other electronic transmission (i.e., “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart hereof and deemed an
original.

Section 1.11 Inspection.

The Issuer agrees that it will permit the Indenture Trustee, the Administrative
Agent, each Funding Agent and each Purchaser or their agents or representatives
inspection rights in accordance with Section 3.1(l) of the Note Purchase
Agreement. All information obtained by the Indenture Trustee, the Administrative
Agent, any Funding Agent or any Purchaser pursuant to this Section 1.11 shall be
kept confidential; provided that any of the foregoing parties may share any
information obtained by it or its representatives pursuant to this Section 1.11
with each other, and as permitted by Section 6.8 of the Note Purchase Agreement.

Section 1.12 Survival of Representations and Warranties.

The representations, warranties and certifications of the Issuer made in this
Indenture and Servicing Agreement or in any certificate or other writing
delivered by the Issuer pursuant hereto shall survive the authentication and
delivery of the Notes hereunder.

 

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ARTICLE II

THE NOTES

Section 2.01 General Provisions.

(a) Form of Notes. The Notes shall be designated as the Marriott Vacations
Worldwide Owner Trust 2011-1, Timeshare Loan Backed Variable Funding Notes,
Series 2011-1. The Notes, together with their certificates of authentication,
shall be in substantially the form set forth in Exhibit A hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or are permitted by this Indenture and Servicing Agreement, 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
officer executing such Notes, as evidenced by such officer’s execution of such
Notes.

(b) Denominations. The Outstanding Note Balance of Notes which may be
authenticated and delivered under this Indenture and Servicing Agreement shall
not exceed the Facility Limit and the outstanding principal amount of a Note
held by any single Purchaser Group or any single Non-Conduit Committed Purchaser
shall not exceed the then-effective Purchaser Commitment Amount for such
Purchaser Group or Non-Conduit Committed Purchaser. The Notes shall be issuable
only as registered Notes without interest coupons in the denominations of at
least $1,000,000 and in integral multiples of $1,000; provided, however, that
the foregoing shall not restrict or prevent the transfer in accordance with
Section 2.03 hereof of any Note with a remaining Outstanding Note Balance of
less than $1,000,000.

(c) Execution, Authentication, Delivery and Dating. The original Notes were
issued and delivered to the Noteholders on the Closing Date. On the Amendment
Effective Date, each Funding Agent and each Non-Conduit Committed Purchaser
shall surrender its Note to the Issuer in exchange for an amended and restated
Note dated the Amendment Effective Date and reflecting any changes to the
related Commitment Amount and such other changes as are appropriate to reflect
the amendment and restatement of this Indenture and Servicing Agreement and the
Note Purchase Agreement. Upon surrender of an original Note and issuance of an
amended and restated Note therefor, such original Note shall be cancelled and
destroyed by the Note Registrar. The Notes shall be manually executed on behalf
of the Issuer by an Authorized Officer of the Owner Trustee. Any Note bearing
the signature of an individual who was at the time of execution thereof an
Authorized Officer of the Owner Trustee shall bind the Issuer, notwithstanding
that such individual ceases to hold such office prior to the authentication and
delivery of such Note or did not hold such office at the date of such Note. No
Note shall be entitled to any benefit under this Indenture and Servicing
Agreement or be valid or obligatory for any purpose unless there appears on such
Note a certificate of authentication substantially in the form set forth in
Exhibit A hereto, executed by the Indenture Trustee by manual signature, and
such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Each Note shall be dated the date of its authentication. The Notes may from time
to time be executed by the Issuer and delivered to the Indenture Trustee for
authentication together with an Issuer Order to the Indenture Trustee directing
the authentication and delivery of such Notes and thereupon the same shall be
authenticated and delivered by the Indenture Trustee in accordance with such
Issuer Order.

 

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Section 2.02 Definitive Notes. The Notes shall be issued in definitive form
only. One Note shall initially be issued for each Purchaser Group and be
registered in the name of the related Funding Agent. One Note shall be issued
for each Non-Conduit Committed Purchaser, if any, and be registered in the name
of the Non-Conduit Committed Purchaser itself.

Section 2.03 Registration, Transfer and Exchange of Notes.

(a) Note Register. At all times during the term of this Indenture and Servicing
Agreement, the Issuer shall cause to be kept at the Corporate Trust Office a
register (the “Note Register”) for the registration, transfer and exchange of
Notes. The Indenture Trustee is hereby appointed “Note Registrar” for purposes
of registering Notes and transfers of Notes as herein provided. The names and
addresses of all Noteholders and the names and addresses of the transferees of
any Notes shall be registered in the Note Register. The Person in whose name any
Note is so registered shall be deemed and treated as the sole owner and
Noteholder thereof for all purposes of this Indenture and Servicing Agreement
and the Note Registrar, the Issuer, the Indenture Trustee, the Servicer and any
agent of any of them shall not be affected by any notice or knowledge to the
contrary. The Notes are transferable or exchangeable only upon the surrender of
such Note to the Note Registrar at the Corporate Trust Office together with an
assignment and transfer (executed by the Holder or his duly authorized
attorney), subject to the applicable requirements of this Section 2.03. Upon
request of the Indenture Trustee, the Note Registrar shall provide the Indenture
Trustee with the names and addresses of Noteholders.

(b) Surrender. Upon surrender for registration of transfer of any Note, subject
to the applicable requirements of this Section 2.03, the Issuer shall execute
and the Indenture Trustee shall duly authenticate in the name of the designated
transferee or transferees, one or more new Notes in denominations of a like
aggregate denomination as the Note being surrendered. Each Note surrendered for
registration of transfer shall be canceled and subsequently destroyed by the
Note Registrar. Each new Note issued pursuant to this Section 2.03 shall be
registered in the name of any Person as the transferring Holder may request,
subject to the applicable provisions of this Section 2.03. All Notes issued upon
any registration of transfer or exchange of Notes shall be entitled to the same
benefits under this Indenture and Servicing Agreement as the Notes surrendered
upon such registration of transfer or exchange.

(c) Securities Laws and other Transfer Restrictions. The issuance of the Notes
will not be registered or qualified under the Securities Act or the securities
laws of any state. No resale or transfer of any Note may be made unless such
resale or transfer is made pursuant to an effective registration statement under
the Securities Act and an effective registration or a qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification because such resale or transfer is in
compliance with Rule 144A under the Securities Act, to a person who the
transferor reasonably believes is a Qualified Institutional Buyer (as defined in
Rule 144A) that is purchasing for its own account or for the account of a
Qualified Institutional Buyer and to whom notice is given that such resale or
transfer is being made in reliance upon Rule 144A under the Securities Act as
certified by such transferee (unless such transferee is already a Purchaser) in
a letter in the form of Exhibit B hereto and in accordance with any applicable
securities laws of any state of the United States and any applicable
jurisdiction. None of the Issuer, the Servicer or the Indenture Trustee is
obligated to register or qualify the Notes under the Securities Act or any other
securities law or to take any action not otherwise required under this Indenture
and Servicing Agreement to permit the transfer of any Note without registration.

 

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Except during the occurrence and continuance of an Event of Default, no resale
or transfer of any Note may be made to a Direct Competitor without the prior
written consent of the Issuer and the Servicer. Neither the Indenture Trustee
nor the Note Registrar shall have any obligation to monitor the compliance with
the immediately preceding sentence.

(d) ERISA Considerations. No resale or other transfer of any Note or any
interest therein may be made to any purchaser or transferee unless (i) such
purchaser or transferee is not, and will not acquire such Note or any interest
therein on behalf of or with the assets of, any Benefit Plan or (ii) no
“prohibited transaction” under ERISA or Section 4975 of the Code that is not
subject to a statutory, regulatory or administrative exemption and no violation
of any substantially similar provision of federal, state or local law will occur
in connection with such purchaser’s or such transferee’s acquisition, holding or
disposition of such Note or any interest therein. In addition, neither the Notes
nor any interest therein may be purchased by or transferred to any Benefit Plan,
or person acting on behalf of or with assets of any Benefit Plan, unless it
represents that it is not sponsored (within the meaning of Section 3(16)(B) of
ERISA) by the Issuer, MORI, the Seller, the Servicer, the Back-Up Servicer, the
Indenture Trustee or the Noteholders, or by any Affiliate of any such Person.

(e) Transfer Fees, Charges and Taxes. No fee or service charge shall be imposed
by the Note Registrar for its services in respect of any registration of
transfer or exchange referred to in this Section 2.03. The Note Registrar may
require payment by each transferor of a sum sufficient to cover any tax, expense
or other governmental charge payable in connection with any such transfer.

(f) No Obligation to Register. None of the Issuer, the Indenture Trustee, the
Servicer or the Note Registrar is obligated to register or qualify the Notes
under the Securities Act or any other securities law or to take any action not
otherwise required under this Indenture and Servicing Agreement to permit the
transfer of such Notes without registration or qualification. Any such
Noteholder desiring to effect such transfer shall, and does hereby agree to,
indemnify the Issuer, the Indenture Trustee, the Servicer and the Note Registrar
against any loss, liability or expense that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

(g) Rule 144A Information. The Servicer agrees to cause the Issuer and the
Issuer agrees to provide such information as required under Rule 144A(d)(4)
under the Securities Act so as to allow resales of Notes to Qualified
Institutional Buyers in accordance herewith.

(h) Sole Obligation. The Notes represent the sole obligation of the Issuer
payable from the Trust Estate and do not represent the obligations of the
Originator, the Servicer, the Seller, the Back-Up Servicer, the Indenture
Trustee, the Noteholders or the Custodian.

(i) Liquidity Providers. Notwithstanding anything to the contrary herein, each
Conduit under the terms of its Liquidity Agreement or the Note Purchase
Agreement may at any time sell or grant to one or more Liquidity Providers party
to the Liquidity Agreement or one

 

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or more Alternate Purchasers party to the Note Purchase Agreement, participating
interests or security interest, as applicable, in the Notes provided that each
Liquidity Provider or Alternate Purchaser shall, by any such purchase, be deemed
to have acknowledged and agreed to the provisions of this Indenture and
Servicing Agreement.

Section 2.04 Mutilated, Destroyed, Lost and Stolen Notes.

(a) If any mutilated Note is surrendered to the Indenture Trustee, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a replacement Note of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

(b) If there shall be delivered to the Issuer and the Indenture Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any Note
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless then, in the absence of actual
notice to the Issuer or the Indenture Trustee that such Note has been acquired
by a bona fide purchaser, the Issuer shall execute and upon its request the
Indenture Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Note, a replacement Note of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

(c) In case the final installment of principal on any such mutilated, destroyed,
lost or stolen Note has become or will at the next Payment Date become due and
payable, the Issuer in its discretion may, instead of issuing a replacement
Note, pay such Note.

(d) Upon the issuance of any replacement Note under this Section 2.04, the
Issuer or the Indenture Trustee may require the payment by the Noteholder of a
sum sufficient to cover any tax or other governmental charge that may be imposed
as a result of the issuance of such replacement Note.

(e) Every replacement Note issued pursuant to this Section 2.04 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 and Servicing Agreement equally and
proportionately with any and all other Notes duly issued hereunder.

(f) The provisions of this Section 2.04 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 2.05 Payment of Interest and Principal; Rights Preserved.

(a) Any installment of interest or principal, payable on any Note that is
punctually paid or duly provided for by or on behalf of the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such Note was
registered at the close of business on the Record Date for such Payment Date by
wire transfer of federal funds to the account and number specified in the Note
Register, in each case on such Record Date for such Person (which shall be, as
to each original Noteholder, the account and number specified in the Note
Purchase Agreement) or, if no wire transfer information is available, by check
mailed to the address specified in the Note Register.

 

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(b) All reductions in the principal amount of a Note effected by payments of
installments of principal made on any Payment Date shall be binding upon all
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. All payments on the Notes shall be paid without any
requirement of presentment, except that each Holder of any Note shall be deemed
to agree, by its acceptance of the same, to surrender such Note at the Corporate
Trust Office prior to receipt of payment of the final installment of principal
of such Note.

Section 2.06 Persons Deemed Owners.

Prior to due presentment of a Note for registration of transfer, the Issuer, the
Indenture Trustee, and any agent of the Issuer or the Indenture Trustee may
treat the registered Noteholder as the owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not payment on such Note is overdue, and neither
the Issuer, the Indenture Trustee, nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.

Section 2.07 Cancellation.

All Notes surrendered for registration of transfer or exchange or following
final payment shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by
it. The Issuer may at any time deliver to the Indenture Trustee for cancellation
any Notes previously authenticated and delivered hereunder which the Issuer may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Indenture Trustee. No Notes shall be authenticated in
lieu of or in exchange for any Notes canceled as provided in this Section 2.07,
except as expressly permitted by this Indenture and Servicing Agreement. All
canceled Notes held by the Indenture Trustee may be disposed of in the normal
course of its business or as directed by an Issuer Order.

Section 2.08 Noteholder Lists.

The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. In the event the Indenture Trustee no longer serves as the Note
Registrar, the Issuer shall furnish to the Indenture Trustee at least five
Business Days before each Payment Date (and in all events in intervals of not
more than six months) and at such other times as the Indenture Trustee may
request in writing a list in such form and as of such date as the Indenture
Trustee may reasonably require of the names and addresses of Noteholders. For so
long as Wells Fargo Bank, National Association is acting in the capacity of
Indenture Trustee, it shall also be the Note Registrar hereunder.

 

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Section 2.09 Treasury Notes.

In determining whether the Noteholders of the requisite percentage of the
Outstanding Note Balance have concurred in any direction, waiver or consent,
Notes held or redeemed by the Issuer or held by an Affiliate of the Issuer shall
be considered as though not Outstanding, except that for the purposes of
determining whether the Indenture Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which a Responsible Officer of the
Indenture Trustee knows are so owned shall be so disregarded.

Section 2.10 Principal, Interest and NPA Costs.

(a) Stated Maturity. The Notes shall mature and be fully due and payable at
Stated Maturity.

(b) Optional Redemption and Mandatory Redemption Date. The Notes are subject to
optional and mandatory redemption as provided in Article X hereto.

(c) Interest. Interest Distribution Amounts on each Note shall be due and
payable on each Payment Date. No later than 3:00 P.M. (New York City time), four
Business Days prior to each Payment Date, the Administrative Agent shall provide
notice to the Issuer, the Servicer and the Indenture Trustee of the aggregate
amount of Interest Distribution Amounts and Unused Fees to be paid on such
Payment Date.

(d) NPA Costs. NPA Costs shall be due and payable to each Funding Agent and each
Non-Conduit Committed Purchaser on each Payment Date. No later than 3:00 P.M.
(New York City time), four Business Days prior to each Payment Date, the
Administrative Agent shall provide notice to the Issuer, the Servicer and the
Indenture Trustee of the aggregate amount of NPA Costs to be paid on such
Payment Date.

Section 2.11 Increases in Outstanding Note Balance.

The Noteholders agree by acceptance of the Notes that, the Issuer may, from time
to time by irrevocable written Borrowing Notice given to the Administrative
Agent, the Indenture Trustee and the Servicer and subject to the terms and
conditions with respect to an Increase set forth in Section 2.2 of the Note
Purchase Agreement, request that the Noteholders fund an Increase in the
aggregate amount and on the date specified in the Borrowing Notice. If the terms
and conditions to the Increase set forth in the Note Purchase Agreement are
satisfied or waived, then such Increase shall be funded in accordance with the
Note Purchase Agreement.

Section 2.12 Reduction of the Facility Limit.

In accordance with the Note Purchase Agreement, the Issuer may, upon at least
five Business Days’ written notice to the Administrative Agent, each Funding
Agent and each Non-Conduit Committed Purchaser, reduce, in part, the Facility
Limit to (but not below) the Outstanding Note Balance. Any such reduction in the
Facility Limit shall not be less than $1,000,000 and in increments of $1,000,000
in excess thereof and shall be applied to reduce the Purchaser Commitment Amount
of each Purchaser Group and each Non-Conduit Committed Purchaser on a pro rata
basis pursuant to the terms of the Note Purchase Agreement.

 

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Section 2.13 Facility Termination Date.

(a) If a Facility Termination Date occurs with respect to less than all
Noteholders, then the Issuer, the Servicer and the Indenture Trustee shall enter
into an indenture and servicing agreement substantially in the form of this
Indenture and Servicing Agreement, together with any changes mutually acceptable
to such parties and the Extending Noteholders (each such indenture and servicing
agreement, an “Exchange Notes Indenture”). The Issuer shall issue to each
Extending Noteholder on the Payment Date immediately following such Facility
Termination Date, an Exchange Note in a principal amount equal to the principal
amount of such Extending Noteholder’s Note (or, in the case of any Extending
Noteholder which is extending its Facility Termination Date for an amount less
than its entire Purchaser Commitment Amount, the Extended Portion with respect
to such Extending Noteholder); provided, however, that if, upon the issuance of
the Exchange Notes, the initial aggregate outstanding note balance of the
Exchange Notes would not be at least $1,000,000, then the Issuer shall not issue
any Exchange Notes and no Facility Termination Date with respect to any
Noteholder shall be extended; provided, further, however, that if, upon the
issuance of the Exchange Notes, the Outstanding Note Balance for the Notes would
be less than $1,000,000, then the Issuer shall prepay the entire Outstanding
Note Balance pursuant to Section 10.01 immediately following the issuance of the
Exchange Notes.

(b) Each Noteholder, by its acceptance of a Note, hereby agrees that if it
becomes an Extending Noteholder and the Facility Termination Date occurs with
respect to any Noteholder, it will surrender its Note to the Issuer in exchange
for an Exchange Note in an equal principal amount (or, in the case of any
Extending Noteholder which is extending its Facility Termination Date for an
amount less than its entire Purchaser Commitment Amount, the Extended Portion
with respect to such Extending Noteholder) on the Payment Date immediately
following the Facility Termination Date with respect to the other Non-Extending
Noteholders. Upon such exchange, the Notes surrendered shall be deemed to be
fully paid and the Indenture Trustee shall cancel such Notes.

(c) In connection with the execution by the Issuer of an Exchange Notes
Indenture on the Payment Date immediately succeeding any Facility Termination
Date, Timeshare Loans with aggregate Loan Balances not less than the product of
(i) the Extending Noteholders’ Percentage on such Facility Termination Date and
(ii) the Aggregate Loan Balance on such Payment Date shall be released from the
Lien of this Indenture and Servicing Agreement and pledged as security for the
Exchange Notes issued pursuant to such Exchange Notes Indenture.

(d) In connection with the issuance of any Exchange Notes on the Payment Date
following a Facility Termination Date, the Issuer, the Servicer, the Seller, the
Performance Guarantor, each Extending Purchaser with respect to such Facility
Termination Date and the Administrative Agent shall enter into a note purchase
agreement with respect to the Exchange Notes, substantially in the form of the
Note Purchase Agreement, together with any changes mutually acceptable to such
parties.

 

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ARTICLE III

ACCOUNTS; COLLECTION AND

APPLICATION OF MONEYS; REPORTS

Section 3.01 Trust Accounts; Investments by Indenture Trustee.

(a) On or before the Closing Date, the Indenture Trustee has established and
shall maintain in the name of the Indenture Trustee for the benefit of the
Noteholders as provided in this Indenture and Servicing Agreement, the Trust
Accounts, which accounts shall be Eligible Bank Accounts maintained at the
Corporate Trust Office. From time to time, the Indenture Trustee shall
establish, to the extent required under this Indenture and Servicing Agreement,
accounts in the name of the Indenture Trustee for the benefit of the
Noteholders, which accounts shall be Eligible Bank Accounts.

Subject to the further provisions of this Section 3.01, the Indenture Trustee
shall, upon receipt or upon transfer from another account, as the case may be,
deposit into such Trust Accounts all amounts received by it which are required
to be deposited therein in accordance with the provisions of this Indenture and
Servicing Agreement. All such amounts and all investments made with such
amounts, including all income and other gain from such investments, shall be
held by the Indenture Trustee in such accounts as part of the Trust Estate as
herein provided, subject to withdrawal by the Indenture Trustee in accordance
with, and for the purposes specified in the provisions of, this Indenture and
Servicing Agreement.

(b) The Indenture Trustee shall assume that any amount remitted to it in respect
of the Trust Estate is to be deposited into the Collection Account pursuant to
Section 3.02(a) hereof.

(c) None of the parties hereto shall have any right of set-off with respect to
any Trust Account, or any investment therein.

(d) So long as no Event of Default shall have occurred and be continuing, all or
a portion of the amounts in any Trust Account shall be invested and reinvested
by the Indenture Trustee pursuant to an Issuer Order in one or more Eligible
Investments. Subject to the restrictions on the maturity of investments set
forth in Section 3.01(f) hereof, each such Issuer Order may authorize the
Indenture Trustee to make the specific Eligible Investments set forth therein,
to make Eligible Investments from time to time consistent with the general
instructions set forth therein, or to make specific Eligible Investments
pursuant to instructions received in writing or by electronic or facsimile
transmission from the employees or agents of the Issuer, as the case may be,
identified therein, in each case in such amounts as such Issuer Order shall
specify.

(e) In the event that either (i) the Issuer shall have failed to give investment
directions to the Indenture Trustee by 9:30 A.M., New York City time on any
Business Day on which there may be uninvested cash or (ii) an Event of Default
shall be continuing, the Indenture

 

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Trustee shall promptly invest and reinvest the funds then in the designated
Trust Account to the fullest extent practicable in those obligations or
securities described in clause 5 of the definition of “Eligible Investments”.
All investments made by the Indenture Trustee shall mature no later than the
maturity date therefor permitted by Section 3.01(f) hereof.

(f) No investment of any amount held in any Trust Account shall mature later
than the Business Day immediately preceding the Payment Date which is scheduled
to occur immediately following the date of investment. All income or other gains
(net of losses) from the investment of moneys deposited in any Trust Account
shall be deposited by the Indenture Trustee in such account immediately upon
receipt.

(g) Any investment of any funds in any Trust Account and any sale of any
investment held in such accounts, shall be made under the following terms and
conditions:

(i) each such investment shall be made in the name of the Indenture Trustee, in
each case in such manner as shall be necessary to maintain the identity of such
investments as assets of the Trust Estate;

(ii) any certificate or other instrument evidencing such investment shall be
delivered directly to the Indenture Trustee and the Indenture Trustee shall have
sole possession of such instrument, and all income on such investment;

(iii) the proceeds of any sale of an investment shall be remitted by the
purchaser thereof directly to the Indenture Trustee for deposit in the account
in which such investment was held; provided that no such sale may occur on any
day other than the Business Day immediately preceding a Payment Date (for the
avoidance of doubt, any full or partial liquidation of an investment in a money
market fund is not subject to the foregoing date restriction); and

(iv) during the continuance of a Potential Event of Default, Event of Default,
Potential Amortization Event, Amortization Event, Potential Servicer Event of
Default or Servicer Event of Default, neither the Issuer nor any of its
Affiliates may exercise any voting rights with respect to an investment.

(h) If any amounts are needed for disbursement from any Trust Account and
sufficient uninvested funds are not collected and available therein to make such
disbursement, in the absence of an Issuer Order for the liquidation of
investments held therein in an amount sufficient to provide the required funds,
the Indenture Trustee shall select and cause to be sold or otherwise converted
to cash a sufficient amount of the investments in such account.

(i) The Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in any Trust Account resulting from losses on investments made in
accordance with the provisions of this Section 3.01 including, but not limited
to, losses resulting from the sale or depreciation in the market value of such
investments (but the institution serving as Indenture Trustee shall at all times
remain liable for its own obligations, if any, constituting part of such
investments). The Indenture Trustee shall not be liable for any investment made
by it in accordance with this Section 3.01 on the grounds that it could have
made a more favorable investment or a more favorable selection for sale of an
investment.

 

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(j) Each party hereto agrees that each of the Trust Accounts constitutes a
“securities account” within the meaning of Article 8 of the UCC and in such
capacity Wells Fargo Bank, National Association shall be acting as a “securities
intermediary” within the meaning of 8-102 of the UCC and that, regardless of any
provision in any other agreement, for purposes of the UCC, the State of New York
shall be deemed to be the “securities intermediary’s jurisdiction” under
Section 8-110 of the UCC. The Indenture Trustee shall be the “entitlement
holder” within the meaning of Section 8-102(a)(7) of the UCC with respect to the
Trust Accounts. In furtherance of the foregoing, Wells Fargo Bank, National
Association, acting as a “securities intermediary,” shall comply with
“entitlement orders” within the meaning of Section 8-102(a)(8) of the UCC
originated by the Indenture Trustee with respect to the Trust Accounts, without
further consent by the Issuer. Each item of property (whether investment
property, financial asset, security, instrument or cash) credited to each Trust
Account shall be treated as a “financial asset” within the meaning of
Section 8-102(a)(9) of the UCC. All securities or other property underlying any
financial assets credited to each Trust Account shall be registered in the name
of the Indenture Trustee or indorsed to the Indenture Trustee or in blank and in
no case will any financial asset credited to any Trust Account be registered in
the name of the Issuer, payable to the order of the Issuer or specially indorsed
to the Issuer. The Trust Accounts shall be under the sole dominion and control
(as defined in Section 8-106 of the UCC) of the Indenture Trustee and the Issuer
shall have no right to close, make withdrawals from, or give disbursement
directions with respect to, or receive distributions from, the Collection
Account except in accordance with Section 3.04 hereof.

(k) In the event that Wells Fargo Bank, National Association, as securities
intermediary, has or subsequently obtains by agreement, by operation of law or
otherwise a security interest in the Trust Accounts or any security entitlement
credited thereto, it hereby agrees that such security interest shall be
subordinate to the security interest created by this Indenture and Servicing
Agreement and that the Indenture Trustee’s rights to the funds on deposit
therein shall be subject to Section 3.04 hereof. The financial assets credited
to, and other items deposited to the Trust Accounts will not be subject to
deduction, set-off, banker’s lien, or any other right in favor of any Person
other than as created pursuant to this Indenture and Servicing Agreement.

Section 3.02 Establishment and Administration of the Trust Accounts.

(a) Collection Account. The Indenture Trustee has caused to be established and
shall cause to be maintained an account (the “Collection Account”) for the
benefit of the Noteholders. The Collection Account shall be an Eligible Bank
Account initially established at the Corporate Trust Office of the Indenture
Trustee, bearing the designation “Marriott Vacations Worldwide Owner Trust
2011-1 — Collection Account, Wells Fargo Bank, National Association, as
Indenture Trustee for the benefit of the Noteholders”. The Indenture Trustee on
behalf of the Noteholders shall possess all right, title and interest in all
funds on deposit from time to time in the Collection Account and in all proceeds
thereof. The Collection Account shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Noteholders as their interests
appear in the Trust Estate. If, at any time, the Collection Account ceases to be
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Eligible Bank Account, the Indenture Trustee shall within two Business Days
establish a new Collection Account which shall be an Eligible Bank Account,
transfer any cash and/or any investments to such new Collection Account and from
the date such new Collection Account is established, it shall be the “Collection
Account”. The Indenture Trustee agrees to immediately deposit any amounts
received by it into the Collection Account. Amounts on deposit in the Collection
Account shall be invested in accordance with Section 3.01 hereof. Withdrawals
and payments from the Collection Account will be made on each Payment Date as
provided in Section 3.04 hereof. All investment earnings on the Collection
Account shall be distributed to the Owner Trustee for distribution to the owners
of the beneficial interests in the Issuer on each Payment Date.

(b) Reserve Account. The Indenture Trustee has caused to be established and
shall cause to be maintained an account (the “Reserve Account”) for the benefit
of the Noteholders. The Reserve Account shall be an Eligible Bank Account
initially established at the Corporate Trust Office of the Indenture Trustee,
bearing the designation “Marriott Vacations Worldwide Owner Trust 2011-1 —
Reserve Account, Wells Fargo Bank, National Association, as Indenture Trustee
for the benefit of the Noteholders”. The Indenture Trustee on behalf of the
Noteholders shall possess all right, title and interest in all funds on deposit
from time to time in the Reserve Account and in all proceeds thereof. The
Reserve Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders as their interests appear in the
Trust Estate. If, at any time, the Reserve Account ceases to be an Eligible Bank
Account, the Indenture Trustee shall within two Business Days establish a new
Reserve Account which shall be an Eligible Bank Account, transfer any cash
and/or any investments to such new Reserve Account and from the date such new
Reserve Account is established, it shall be the “Reserve Account.” Amounts on
deposit in the Reserve Account shall be invested in accordance with Section 3.01
hereof. Deposits to the Reserve Account shall be made in accordance with
Section 3.04(a) hereof. Funding, withdrawals and payments from the Reserve
Account shall be made in the following manner:

(i) Funding. On each Funding Date, the Issuer shall deposit or shall cause to be
deposited into the Reserve Account an amount equal to the Reserve Account
Required Funding Date Deposit (after giving effect to the addition of Additional
Timeshare Loans on such date) and thereafter, on each Payment Date if the amount
on deposit in the Reserve Account (after giving effect to any deposit of the
applicable portion of the proceeds of any Increase on such Payment Date) is less
than the Reserve Account Required Balance, a deposit shall be made to the
Reserve Account, to the extent of Available Funds as provided in Section 3.04
hereof.

(ii) Withdrawals. If, on any Determination Date, the amounts on deposit in the
Collection Account (after giving effect to all deposits thereto required
hereunder) are insufficient to pay the Required Payments for the related Payment
Date, on such Payment Date, the Indenture Trustee shall, based on the Monthly
Servicer Report and to the extent of funds available in the Reserve Account,
withdraw from the Reserve Account and deposit into the Collection Account an
amount equal to the lesser of such insufficiency and the amount on deposit in
such Reserve Account (the amount withdrawn, the “Reserve Account Draw Amount”).

 

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(iii) Mandatory Redemption Date, Stated Maturity or Payment in Full. On the
earliest to occur of a Mandatory Redemption Date, the Stated Maturity and the
Payment Date on which the Outstanding Note Balance will be reduced to zero, the
Indenture Trustee shall withdraw all amounts on deposit in the Reserve Account
and shall deposit such amounts into the Collection Account.

(iv) Amortization Event and Acceleration Event. Upon the occurrence of an
Amortization Event, the Indenture Trustee shall withdraw all amounts on deposit
in the Reserve Account and shall deposit such amounts to the Collection Account
to be used as Available Funds on the next Payment Date. Upon the occurrence of
an Acceleration Event, the Indenture Trustee shall withdraw all amounts on
deposit in the Reserve Account and shall deposit such amounts to the Collection
Account for distribution in accordance with Section 6.06 hereof.

(v) Amounts in Excess of Reserve Account Required Balance. If, on any Payment
Date, amounts on deposit in the Reserve Account are greater than the Reserve
Account Required Balance (after giving effect to all other distributions and
disbursements on such Payment Date), the Indenture Trustee shall, based on the
Monthly Servicer Report, withdraw funds in excess of the Reserve Account
Required Balance from the Reserve Account and deposit such funds into the
Collection Account as Available Funds on such Payment Date for application in
accordance with Section 3.04 hereof.

(vi) Facility Termination Date. On the Payment Date immediately following each
Facility Termination Date on which Exchange Notes are being issued by the Issuer
pursuant to Section 2.13, the Indenture Trustee acting at the direction of the
Servicer, shall withdraw from the Reserve Account an amount equal to the excess
of (i) the amount of cash or other immediately available funds on deposit in the
Reserve Account on such Payment Date (after giving effect to any withdrawals
pursuant to Section 3.02(b)(ii)) over (ii) the Reserve Account Required Balance
as of such Payment Date (after giving effect to the release of any Timeshare
Loans on such date pursuant to Section 4.07) and pay such amount, free and clear
of the Lien of this Indenture and Servicing Agreement, to the indenture trustee
under the related Exchange Notes Indenture, for deposit into the reserve account
for such Exchange Notes.

(c) Control Account. The Issuer has established or has caused to be established
and shall maintain or cause to be maintained a system of operations, accounts
and instructions with respect to the Obligors and a Control Account at the
Control Account Bank as described herein. Pursuant to the Control Agreement to
which the Issuer (or its agent) is party, the Control Account Bank shall be
instructed that prior to the occurrence of an Event of Default or Servicer Event
of Default, the Servicer is authorized to effect or direct deposits and
withdrawals into and out of the Control Account. The Servicer is authorized to,
and the Servicer hereby agrees to, segregate collections therein and direct the
Control Account Bank to initiate electronic transfer of all funds therein that
relate to the Timeshare Loans owned by the Issuer to the Collection Account
within two Business Days of receipt (or, if initially there is insufficient
information to determine to which timeshare loan any funds relate, within two
Business Days of obtaining sufficient information). Upon the occurrence of an
Event of Default or Servicer Event

 

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of Default, the Indenture Trustee may, or upon the direction of the
Administrative Agent or Majority Facility Investors, shall, deliver a notice of
an Event of Default or Servicer Event of Default to the Agent (as defined in the
Control Account Intercreditor Agreement) and request that the Agent deliver a
shifting control notice to the Control Account Bank whereupon the Servicer shall
no longer be authorized to give any direction to the Control Account Bank or
have access of any kind to the Control Account. The Indenture Trustee is hereby
irrevocably authorized and empowered following the occurrence and during the
continuance of an Event of Default or Servicer Event of Default, as the Issuer’s
attorney-in-fact, to endorse any item deposited in the Control Account, or
presented for deposit in the Control Account or the Collection Account,
requiring the endorsement of the Issuer, which authorization is coupled with an
interest and is irrevocable.

(d) Hedge Collateral Account. In the event a Hedge Agreement contemplates the
posting of collateral, the Indenture Trustee shall cause to be established and
shall maintain an account (the “Hedge Collateral Account”) for the benefit of
the Noteholders. The Hedge Collateral Account shall be an Eligible Bank Account
initially established at the Corporate Trust Office of the Indenture Trustee,
bearing the designation “Marriott Vacations Worldwide Owner Trust 2011-1 – Hedge
Collateral Account, Wells Fargo Bank, National Association, as Indenture Trustee
for the benefit of the Noteholders”. The Indenture Trustee on behalf of the
Noteholders shall possess all right, title and interest in all funds on deposit
from time to time in the Hedge Collateral Account and in all proceeds thereof.
The Hedge Collateral Account shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders as their interests appear
in the Trust Estate. If, at any time, the Hedge Collateral Account ceases to be
an Eligible Bank Account, the Indenture Trustee shall within two Business Days
establish a new Hedge Collateral Account which shall be an Eligible Bank
Account, transfer any cash and/or any investments to such new Hedge Collateral
Account and from the date such new Hedge Collateral Account is established, it
shall be the “Hedge Collateral Account.” Amounts on deposit in the Hedge
Collateral Account shall be invested in accordance with Section 3.01 hereof and
in accordance with the terms of the related Hedge Agreement and in the event of
any conflict regarding eligible investments, the provisions of the related Hedge
Agreement shall prevail. Deposits and withdrawals to and from the Hedge
Collateral Account shall be made in accordance with the Hedge Agreements.

Section 3.03 Hedge Agreement.

(a) The Issuer shall, at all times, so long as the Notes remain unpaid, provide
Hedge Agreements in accordance with the terms described below in this
Section 3.03. The Hedge Agreements shall meet the following requirements (the
“Hedge Requirements”):

(i) each Hedge Agreement shall either be in the form of an interest rate cap or
an interest rate swap, or a combination thereof, in each case between the Issuer
and a Qualified Hedge Counterparty, with an effective date on or prior to a
Funding Date;

(ii) the Hedge Agreements shall provide for a notional amount at least equal to,
in the aggregate, 90% of the Outstanding Note Balance as of the Initial Funding
Date and such notional amount shall amortize on a monthly basis in accordance
with the Hedge Amortization Schedule;

 

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(iii) the Issuer shall, as of each Funding Date, cause the notional amount of
the Hedge Agreements to be adjusted or enter into new Hedge Agreements to
reflect any increase in the Outstanding Note Balance as of such Funding Date so
that the adjusted notional amount of the Hedge Agreements shall on such Funding
Date (after giving effect to the Increase on such date) be an amount at least
equal to 90%, but, in the case of Hedge Agreements in the form of interest rate
swaps, not in excess of 105%, of the Outstanding Note Balance and such notional
amount shall amortize on a monthly basis in accordance with the Hedge
Amortization Schedule;

(iv) the Issuer shall, on each Funding Date, adjust (A) the Hedge Agreements to
reflect the Required Cap Rate (in the case of a Hedge Agreement in the form of
an interest rate cap) and (B) the termination date of the Hedge Agreements in
accordance with the Hedge Amortization Schedule following such Funding Date;

(v) any additional premium due for the adjustments to the Hedge Agreements on
any Funding Date shall be paid by the Issuer from the proceeds of the related
Increase;

(vi) in the case of an interest rate swap, the Hedge Agreement shall provide for
the payment on each Payment Date to the related Hedge Counterparty of interest
on the notional amount thereof at a fixed rate per annum and the payment to the
Indenture Trustee for deposit into the Collection Account of a floating rate per
annum equal to the LIBOR Rate for each Interest Accrual Period; provided that
the Issuer and the Hedge Counterparties may, subject to the related Hedge
Agreements, make payments on a net basis; provided, further, that the fixed rate
per annum paid to a Hedge Counterparty under an interest rate swap shall not
exceed the weighted average coupon for the Borrowing Base Loans as of the last
day of the related Due Period, less 8.50%;

(vii) in the case of an interest rate cap, the Hedge Agreement shall provide for
the payment by the Hedge Counterparty to the Indenture Trustee for deposit into
the Collection Account on each Payment Date if the LIBOR Rate is greater than
the Required Cap Rate for the related Interest Accrual Period, if any;

(viii) the Hedge Agreements shall terminate on the last day that the Notes are
assumed to be Outstanding based on the Hedge Amortization Schedules; and

(ix) each Hedge Agreement may permit, if the related Hedge Counterparty fails to
meet the rating requirements in clause (a) of the definition of Qualified Hedge
Counterparty, such related Hedge Counterparty to post collateral to secure its
obligations under the related Hedge Agreement. To the extent such Hedge
Agreement permits the posting of collateral, such Hedge Agreement shall require
the following terms (the “Hedge Agreement Collateral Posting Requirements”):

 

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(A) the Hedge Counterparty shall, within 15 days’ of failing to meet such rating
requirement, secure its obligations under the related Hedge Agreement, by
posting collateral to the Indenture Trustee for deposit into the Hedge
Collateral Account in an amount equal to the Hedge Collateral Amount;

(B) the Hedge Counterparty shall, at least on a weekly basis, mark-to-market the
related Hedge Agreement (pursuant to the terms thereof) and post additional
collateral, as necessary such that the amount on deposit in the Hedge Collateral
Account is at least equal to the Hedge Collateral Amount; and;

(C) “Hedge Collateral Amount” shall mean with respect to a Hedge Counterparty
that has been downgraded below the rating requirements in clause (a) of the
definition of Qualified Hedge Counterparty, the following:

 

  (1) If the Hedge Counterparty has a long-term unsecured debt rating of below
“A” from S&P or a short-term unsecured debt rating below “A-1” from S&P but has
a long-term unsecured debt rating of at least BBB+ from S&P, the Hedge
Collateral Amount shall be calculated using the following formula:

Max[0, MtM]

 

  (2) If the Hedge Counterparty has a long-term unsecured debt rating of below
“BBB+” from S&P or a short-term unsecured debt rating below “A-2” from S&P but
has a long-term unsecured debt rating of at least BBB- from S&P, the Hedge
Collateral Amount shall be calculated using the following formula:

Max[0, MtM + (4% * notional amount of Hedge Agreement)]

“MtM” = Mark-to-market value of the Hedge Agreement. For the avoidance of doubt,
the Mark-to-market value shall be expressed as a negative number if the Issuer
is net out-of-the-money with respect to the Hedge Agreement and as a positive
number if the Issuer is net in-the-money with respect to the Hedge Agreement.

(b) Immediately upon receipt, the Indenture Trustee shall deposit all amounts
received in respect of the Hedge Agreements into the Collection Account (other
than amounts in respect of the Hedge Agreement Collateral Posting Requirements,
which shall be deposited into the Hedge Collateral Account). Other than
amendments or modifications to effect the adjustments to the notional amount of
the Hedge Agreements required by this Section 3.03, any consents, directions or
approvals of amendments or modifications to a Hedge Agreement required to be
given by the Indenture Trustee under the Hedge Agreement will require the
direction of the Required Facility Investors.

 

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(c) Upon notice or knowledge of any Hedge Event of Default or Termination Event,
any party hereto shall provide notice to the other parties hereto and the Hedge
Counterparty.

(d) The Issuer agrees that if any Hedge Counterparty ceases to be a Qualified
Hedge Counterparty, unless 100% of the Purchasers agree that such Hedge
Counterparty shall continue, the Issuer shall have five (5) Business Days (x) to
cause such Hedge Counterparty to assign its obligations under the related Hedge
Agreement to a new Qualified Hedge Counterparty (or such Hedge Counterparty
shall have five (5) Business Days to again become a Qualified Hedge
Counterparty), (y) to obtain a guarantor (with such form of guarantee meeting
S&P’s then current criteria) that meets the definition of Qualified Hedge
Counterparty, or (z) to obtain a substitute Hedge Agreement, together with the
related Qualified Hedge Counterparty’s acknowledgement of the pledge by the
Issuer to the Indenture Trustee of the Issuer’s rights under such Hedge
Agreement provided, that the Issuer shall not terminate ineligible Hedge
Agreements until the related substitute Hedge Agreements are effective.

(e) Three Business Days prior to each Funding Date and Payment Date, the
Servicer, on behalf of the Issuer shall, provide to the Administrative Agent a
timeshare loan data file with sufficient information so that, if required, the
Administrative Agent may prepare the Hedge Amortization Schedule. With respect
to each Funding Date or upon the periodic (but not more frequent than monthly)
request of the Servicer, the Administrative Agent shall provide the Issuer and
the Servicer with the Hedge Amortization Schedule within 2 Business Days of its
receipt of the data file from the Issuer.

(f) Subject to the limitation on Hedge Agreements in the form of interest rate
swaps set forth in Section 3.03(a)(iii), without affecting the Issuer’s
obligations under Section 3.03(d), the parties hereto agree that the Hedge
Requirements do not obligate the Issuer to cause the Hedge Counterparty to
terminate, assign or collateralize its Hedge Agreement as a result of such Hedge
Counterparty no longer satisfying the definition of Qualified Hedge
Counterparty, and, consequently, the Issuer may be party to multiple Hedge
Agreements and/or interest rate swaps or interest rate caps with counterparties
which are Qualified Hedge Counterparties as well as counterparties that are not
Qualified Hedge Counterparties, all collectively having an aggregate notional
amount in excess of 100% of the Outstanding Note Balance.

(g) In the event the Issuer shall execute a Securitization Take-Out Transaction,
whereby all of the Outstanding Note Balance of the Notes is repaid, it shall
terminate all Hedge Agreements in the form of interest rate swaps.

Section 3.04 Distributions.

(a) Priority of Distributions. So long as no Acceleration Event has occurred and
is continuing, to the extent of Available Funds on deposit in the Collection
Account (including any Reserve Account Draw Amount deposited therein), on each
Payment Date the Indenture Trustee shall, based on the Monthly Servicer Report,
make the following disbursements and distributions to the following parties no
later than 11:00 A.M. (New York City time), in the following order of priority:

 

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(i) to the Indenture Trustee, the Indenture Trustee Fee, plus any accrued and
unpaid Indenture Trustee Fees with respect to prior Payment Dates, and Indenture
Trustee Expenses and Custodial Fees incurred and charged by the Indenture
Trustee during the related Due Period; provided that payments to the Indenture
Trustee as reimbursement for any expenses will be limited to $25,000 per
calendar year (up to a cumulative total of $250,000) as long as no Event of
Default has occurred, and the Notes have not been accelerated, or the Trust
Estate sold, pursuant to this Indenture and Servicing Agreement;

(ii) to the Back-Up Servicer, the Back-Up Servicing Fee, plus any accrued and
unpaid Back-Up Servicing Fees with respect to prior Payment Dates and any
Transition Expenses incurred during the related Due Period (up to an aggregate
cumulative total of $340,000);

(iii) on the Payment Date occurring in January of each year only, to the Owner
Trustee, the Owner Trustee Fee, and on each Payment Date, expenses incurred by
the Owner Trustee; provided that payments to the Owner Trustee as reimbursement
for any expenses will be limited to $10,000 per calendar year (up to a
cumulative total of $100,000) as long as no Event of Default has occurred, and
the Notes have not been accelerated, or the Trust Estate sold, pursuant to this
Indenture and Servicing Agreement;

(iv) on the Payment Date occurring in January of each year only, to the
Administrator, the Administrator Fee, and on each Payment Date, expenses
incurred by the Administrator; provided that payments to the Administrator as
reimbursement for any expenses will be limited to $5,000 per calendar year (up
to a cumulative total of $30,000 as long as no Event of Default has occurred,
and the Notes have not been accelerated, or the Trust Estate sold, pursuant to
this Indenture and Servicing Agreement;

(v) to the Servicer, the Servicing Fee, plus any accrued and unpaid Servicing
Fees with respect to prior Payment Dates;

(vi) to each Hedge Counterparty, its Net Hedge Payment, if any;

(vii) to the Administrative Agent, the Administrative Agent Fee, plus any
accrued and unpaid Administrative Agent Fees with respect to prior Payment
Dates;

(viii) to the Noteholders, the Interest Distribution Amount and any unpaid
Interest Distribution Amounts from prior Payment Dates;

(ix) to the Noteholders, the related Unused Fees and any NPA Costs (other than
the portion thereof related to clause (iii) of the definition of Breakage and
Other Costs), plus any accrued and unpaid Unused Fees and/or NPA Costs (other
than the portion thereof related to clause (iii) of the definition of Breakage
and Other Costs) from prior Payment Dates;

(x) on a pari passu basis (A) to the Noteholders, the Principal Distribution
Amount and (B) other than if the Hedge Counterparty is the “Defaulting Party” or
the sole “Affected Party” (as such terms are defined in the Hedge Agreement), to
the Hedge Counterparty, the Hedge Termination Payment, if any;

 

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(xi) to the Noteholders, the Usage Step-Up Fees and any unpaid Usage Step-Up
Fees from prior Payment Dates;

(xii) to the Noteholders, any NPA Costs not paid in accordance with (ix) above;

(xiii) after the occurrence and continuance of an Amortization Event, or on and
after the Facility Termination Date, to the Noteholders, all remaining Available
Funds until the Outstanding Note Balance is reduced to zero;

(xiv) to the Reserve Account, all remaining amounts until the amounts on deposit
in the Reserve Account shall equal the Reserve Account Required Balance;

(xv) to the Hedge Counterparty, any Hedge Termination Payment required under the
Hedge Agreement and not paid in accordance with clause (x) above;

(xvi) to the Indenture Trustee, Custodian and Back-Up Servicer any expenses not
paid in accordance with (i) and (ii) above;

(xvii) to the Owner Trustee, any expenses not paid in accordance with
(iii) above;

(xviii) to the Administrator, any expenses not paid in accordance with
(iv) above; and

(xix) to the Owner Trustee for distribution to the owners of the beneficial
interests in the Issuer, any remaining Available Funds on deposit in the
Collection Account.

(b) Acceleration Event. If an Acceleration Event shall have occurred and be
continuing, distributions shall be made in the manner and priority set forth in
Section 6.06 hereof.

Section 3.05 Reports to Noteholders.

On each Payment Date the Indenture Trustee shall account to each Noteholder
(i) the portion of payments then being made which represents principal and the
amount which represents interest, and shall contemporaneously advise the Issuer
of all such payments, and (ii) the amounts on deposit in each Trust Account and
identifying the investments included therein. The Indenture Trustee may satisfy
its obligations under this Section 3.05 by making available electronically the
Monthly Servicer Report to the Noteholders and the Issuer; provided, however,
the Indenture Trustee shall have no obligation to provide such information
described in this Section 3.05 until it has received the requisite information
from the Issuer or the Servicer. On or before the 5th day prior to the final
Payment Date of the Notes, the Indenture Trustee shall send notice of such
Payment Date to the Noteholders. Such notice shall include a statement that if
such Notes are paid in full on the final Payment Date, interest shall cease to
accrue as of the day immediately preceding such final Payment Date.

 

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The Indenture Trustee will make available to the Noteholders, via the Indenture
Trustee’s Internet Website, the Monthly Servicer Report available each month
and, with the consent or at the direction of the Issuer, such other information
regarding the Notes and/or the Timeshare Loans as the Indenture Trustee may have
in its possession, but only with the use of a password provided by the Indenture
Trustee. The Indenture Trustee will make no representation or warranties as to
the accuracy or completeness of such documents and will assume no responsibility
therefor.

The Indenture Trustee’s Internet Website shall be initially located at
“www.CTSLink.com” or at such other address as shall be specified by the
Indenture Trustee from time to time in writing to the Issuer, the Servicer and
the Noteholders. In connection with providing access to the Indenture Trustee’s
Internet Website, the Indenture Trustee may require registration and the
acceptance of a disclaimer. The Indenture Trustee shall not be liable for the
dissemination of information in accordance with this Indenture and Servicing
Agreement.

The Indenture Trustee shall have the right to change the way Monthly Servicer
Reports are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Indenture Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.

Annually (and more often if required by applicable law), the Indenture Trustee
shall distribute to Noteholders any Form 1099 or similar information returns
required by applicable tax law to be distributed to the Noteholders. The
Servicer shall prepare or cause to be prepared all such information for
distribution by the Indenture Trustee to the Noteholders.

Section 3.06 Withholding Taxes. The Indenture Trustee, on behalf of the Issuer,
shall comply with all requirements of the Code and applicable Treasury
Regulations and applicable state and local law with respect to the withholding
from any distributions made by it to any Noteholder of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.

ARTICLE IV

THE TRUST ESTATE

Section 4.01 Conveyance of Trust Estate/ Acceptance by Indenture Trustee.

(a) The Indenture Trustee does hereby acknowledge and accept the conveyance by
the Issuer of the assets constituting the Trust Estate. The Indenture Trustee
shall hold the Trust Estate in trust for the benefit of the Noteholders, subject
to the terms and provisions hereof. In connection with any transfer of Timeshare
Loans to the Issuer, the Issuer has delivered or has caused the Seller to
deliver, or will deliver or will cause the Seller to deliver, (i) to the
Custodian, the Timeshare Loan Files, and (ii) to the Servicer, the Timeshare
Loan Servicing Files.

 

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(b) The Indenture Trustee shall perform its duties under this Section 4.01 and
hereunder on behalf of the Trust Estate and for the benefit of the Noteholders
in accordance with the terms of this Indenture and Servicing Agreement and
applicable law and, in each case, taking into account its other obligations
hereunder, but without regard to:

(i) any relationship that the Indenture Trustee or any Affiliate of the
Indenture Trustee may have with an Obligor;

(ii) the ownership of any Note by the Indenture Trustee or any Affiliate of the
Indenture Trustee;

(iii) the Indenture Trustee’s right to receive compensation for its services
hereunder or with respect to any particular transaction; or

(iv) the ownership, or holding in trust for others, by the Indenture Trustee of
any other assets or property.

Section 4.02 Acquisition of Timeshare Loans.

The Issuer covenants that, except as provided in Section 4.03 hereof, it shall
only acquire Timeshare Loans in accordance with the provisions of the Sale
Agreement and, without limiting the generality of the Granting Clause set forth
herein, upon any such acquisition, such Timeshare Loans shall be deemed to be a
part of the Trust Estate.

Section 4.03 Additional Timeshare Loans.

(a) Subject to the limitations and conditions specified in this Section 4.03,
the Issuer may from time to time identify Additional Timeshare Loans that are
Eligible Timeshare Loans to be acquired by or Granted to the Issuer on a Funding
Date or Transfer Date, as applicable. Such Additional Timeshare Loans and the
related assets shall be included in the Trust Estate as provided herein.

(b) The acquisition or Grant of the Additional Timeshare Loans shall be subject
to the satisfaction of the following conditions:

(i) all conditions precedent in Section 2.2 of the Note Purchase Agreement
related to an Increase in the Outstanding Note Balance shall have been
satisfied;

(ii) the Issuer and the Servicer shall execute a Supplemental Grant
substantially in the form of Exhibit C hereto;

(iii) the Purchaser Termination Date has not occurred and no Amortization Event,
Potential Amortization Event, Servicer Event of Default, Potential Servicer
Event of Default, Event of Default, or Potential Event of Default shall have
occurred and be continuing on such Funding Date, and no Amortization Event,
Potential Amortization Event, Servicer Event of Default, Potential Servicer
Event of Default, Event of Default, or Potential Event of Default would occur
after giving effect to the

 

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addition of the Timeshare Loans; it being understood and agreed that, provided
there is no Borrowing Base Shortfall at such time and after giving effect to a
Securitization Take-Out Transaction, the occurrence of any Amortization Event,
Potential Amortization Event, Servicer Event of Default, Potential Servicer
Event of Default, Event of Default or Potential Event of Default solely as a
result of the release of Timeshare Loans hereunder in connection with a
Securitization Take-Out Transaction shall not be deemed an Amortization Event,
Potential Amortization Event, Servicer Event of Default, Potential Servicer
Event of Default, Event of Default or Potential Event of Default for purposes of
this Indenture and Servicing Agreement or any other Facility Document for a
period of 3 months following such Securitization Take-Out Transaction;

(iv) on or prior to the Funding Date or Transfer Date, the Custodian shall have
possession of the related Timeshare Loan Files and shall have delivered a
receipt therefor in accordance with the provisions of the Custodial Agreement;

(v) the Issuer shall have taken any actions necessary or advisable to maintain
the Indenture Trustee’s perfected security interest in the Trust Estate
(including in such Additional Timeshare Loans) for the benefit of the
Noteholders;

(vi) each Additional Timeshare Loan shall be an Eligible Timeshare Loan; and

(vii) the Issuer shall execute a Funding Date Certificate in the form of Exhibit
D hereto.

Section 4.04 Grant of Security Interest; Tax Treatment.

(a) The provisions of this Indenture and Servicing Agreement shall be construed
in furtherance of the Intended Tax Characterization. The conveyance by the
Issuer of the Timeshare Loans to the Indenture Trustee shall not constitute and
are not intended to result in an assumption by the Indenture Trustee or any
Noteholder of any obligation of the Issuer or the Servicer to the Obligors, the
insurers under any insurance policies, or any other Person in connection with
the Timeshare Loans.

(b) It is the intention of the parties hereto that, with respect to all taxes,
the Notes will be treated as indebtedness of the Issuer to the Noteholders
secured by the Timeshare Loans (the “Intended Tax Characterization”). The
Issuer, the Servicer, the Back-Up Servicer and the Indenture Trustee, by
entering into this Indenture and Servicing Agreement, and each Noteholder by the
purchase of a Note, agree to report such transactions for purposes of all taxes
in a manner consistent with the Intended Tax Characterization, unless otherwise
required by applicable law. If the Notes are not properly treated as
indebtedness with respect to all taxes, then the parties intend (as provided in
the Trust Agreement) that they shall constitute interests in a partnership for
such purposes and, in that regard, agree that no election to treat the Issuer in
any part as a corporation under Treasury Regulation section 301.7701-3 shall be
made by any Person.

(c) The Issuer, the Servicer and the Back-Up Servicer shall take no action
inconsistent with the Indenture Trustee’s interest in the Timeshare Loans and
shall indicate or shall cause to be indicated in its books and records held on
its behalf that each Timeshare Loan constituting the Trust Estate has been
pledged to the Indenture Trustee on behalf of the Noteholders.

 

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Section 4.05 Further Action Evidencing Grant of Security Interest.

(a) The Issuer and the Servicer each agrees that, from time to time, at its
respective expense, it will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or
appropriate, or that the Servicer or the Indenture Trustee or the Majority
Facility Investors may reasonably request, in order to perfect, protect or more
fully evidence the security interest in the Timeshare Loans or to enable the
Indenture Trustee to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Issuer will, without the necessity
of a request and upon the request of the Servicer or the Indenture Trustee,
authorize or execute, as applicable, and file (or cause to be filed) such
assignments of Mortgage, financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to create and maintain in the Indenture Trustee a first
priority perfected security interest, at all times, in the Trust Estate,
including, without limitation, recording and filing UCC-1 financing statements,
amendments or continuation statements prior to the effective date of any change
of the name, identity or structure or relocation of its chief executive office
or its jurisdiction of formation or any change that would or could affect the
perfection pursuant to any financing statement or continuation statement or
assignment previously filed or make any UCC-1 or continuation statement
previously filed pursuant to this Indenture and Servicing Agreement seriously
misleading within the meaning of applicable provisions of the UCC (and the
Issuer shall give the Indenture Trustee at least 30 Business Days prior notice
of the expected occurrence of any such circumstance). The Issuer shall promptly
deliver to the Indenture Trustee file-stamped copies of any such filing.

(b) (i) The Issuer hereby grants to each of the Servicer and the Indenture
Trustee a power of attorney to execute and file all documents including, but not
limited to assignments of Mortgage, UCC financing statements, amendments or
continuation statements, on behalf of the Issuer as may be necessary or
desirable to effectuate the foregoing and (ii) the Servicer hereby grants to the
Indenture Trustee a power of attorney to execute and file all documents on
behalf of the Servicer as may be necessary or desirable to effectuate the
foregoing; provided, however, that such grant shall not create a duty on the
Indenture Trustee or the Servicer to file, prepare, record or monitor, or any
responsibility for the contents or adequacy of, any such documents.

Section 4.06 Substitution and Repurchase of Timeshare Loans.

(a) Mandatory Substitution and Repurchase of Timeshare Loans for Breach of
Representation or Warranty. If at any time, any party hereto obtains knowledge,
discovers, or is notified by any other party hereto, that any representation or
warranty of the Seller in the Sale Agreement was incorrect at the time such
representation or warranty was made, then the party discovering such defect,
omission, or circumstance shall promptly notify the other parties to this
Indenture and Servicing Agreement, the Seller, and the Performance Guarantor. In
the event any such representation or warranty of the Seller is incorrect and
materially and adversely affects the

 

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value of a Timeshare Loan or the interests of the Noteholders therein, then the
Issuer and the Indenture Trustee shall require the Seller, within 60 days after
the date it is first notified of, or otherwise discovers such breach, to
eliminate or otherwise cure in all material respects the circumstance or
condition which has caused such representation or warranty to be incorrect or if
the breach relates to a particular Timeshare Loan and is not cured in all
material respects (such Timeshare Loan, a “Defective Timeshare Loan”), either
(a) repurchase such Defective Timeshare Loan at the Repurchase Price or
(b) provide one or more Qualified Substitute Timeshare Loans and pay the related
Substitution Shortfall Amount, if any. The Indenture Trustee is hereby appointed
attorney-in-fact, which appointment is coupled with an interest and is therefore
irrevocable, to act on behalf and in the name of the Issuer to enforce the
Seller’s repurchase or substitution obligations if the Seller has not complied
with its repurchase or substitution obligations under the Sale Agreement within
60 days of the end of the aforementioned 60 day period.

Notwithstanding the foregoing, (A) the failure to deliver a policy of lender’s
title insurance in respect of a Timeshare Loan shall not constitute a breach of
representation or warranty in respect of such Timeshare Loan if (i) the
Timeshare Loan File contains a commitment to issue a policy of lender’s title
insurance, and (ii) if such actual policy is delivered to the Custodian not
later than the 90th day following the Funding Date or the Transfer Date, as the
case may be, and (B) the failure to provide evidence that a Mortgage or
certificate of title has been recorded and/or stamped, as the case may be, in
the appropriate recording office shall not constitute a breach of representation
or warranty in respect of such Timeshare Loan if such evidence is provided not
later than the 90th day following the Funding Date or the Transfer Date, as the
case may be; provided, however, that if such policy of lender’s title insurance
was delayed because the related original Mortgage (or a copy thereof) had not
been received from the appropriate recording office by the Custodian prior to
the 80th day following the Funding Date or the Transfer Date, as the case may
be, then such 90-day periods in (A)(ii) and (B) shall be extended to a date 30
days after such receipt.

(b) Optional Repurchase and Substitution of Timeshare Loans. On any date,
pursuant to the Sale Agreement, the Seller shall have the option, but not the
obligation, to either (i) repurchase a Defaulted Timeshare Loan from the Issuer
for a price equal to the Repurchase Price therefor, or (ii) substitute one or
more Qualified Substitute Timeshare Loans for a Defaulted Timeshare Loan and pay
the related Substitution Shortfall Amount, if any; provided, however, the
aggregate Cut-Off Date Loan Balance of Defaulted Timeshare Loans that may be
repurchased and of Defaulted Timeshare Loans that may be substituted pursuant to
this Section 4.06(b) shall be limited on any date to 20% of the highest
aggregate Loan Balance of all Timeshare Loans owned by the Issuer since the
Closing Date or, if a Securitization Take-Out Transaction shall have occurred,
the related Securitization Take-Out Date, less the aggregate Cut-Off Date Loan
Balance of all Defaulted Timeshare Loans previously repurchased or substituted
pursuant to this Section 4.06(b).

(c) Repurchase Prices and Substitution Shortfall Amounts. The Issuer and the
Indenture Trustee shall direct that the Seller remit all amounts in respect of
Repurchase Prices and Substitution Shortfall Amounts to the Indenture Trustee
for deposit in the Collection Account. In the event that more than one Timeshare
Loan is substituted pursuant to Section 4.06(a) or Section 4.06(b) hereof on any
Transfer Date, the Substitution Shortfall Amounts and the Loan Balances of
Qualified Substitute Timeshare Loans shall be calculated on an aggregate basis
for all substitutions made on such Transfer Date.

 

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(d) Schedule of Timeshare Loans. The Issuer shall cause the Seller to provide
the Indenture Trustee on any date on which a Timeshare Loan is repurchased or
substituted, with a revised Schedule of Timeshare Loans to the Sale Agreement
reflecting the removal of Timeshare Loans and subjecting any Qualified
Substitute Timeshare Loans to the provisions thereof.

(e) Officer’s Certificate. No substitution of a Timeshare Loan shall be
effective unless the Issuer and the Indenture Trustee shall have received an
Officer’s Certificate from the Seller indicating that (i) the new Timeshare Loan
meets all the criteria of the definition of “Qualified Substitute Timeshare
Loan”, (ii) the Timeshare Loan Files for such Qualified Substitute Timeshare
Loan have been delivered to the Custodian, and (iii) the Timeshare Loan
Servicing Files for such Qualified Substitute Timeshare Loan have been delivered
to the Servicer.

(f) Qualified Substitute Timeshare Loans. On or prior to the related Transfer
Date, the Issuer shall direct the Seller to deliver or cause the delivery of the
Timeshare Loan Files of the related Qualified Substitute Timeshare Loans to the
Custodian on or prior to the related Transfer Date in accordance with the
provisions of this Indenture and Servicing Agreement and the Custodial
Agreement.

Section 4.07 Release of Lien.

(a) Repurchase and Substitutions and Paid–in-Full Timeshare Loans. The Issuer
shall be entitled to obtain a release from the Lien of this Indenture and
Servicing Agreement for any Timeshare Loan repurchased or substituted pursuant
to Section 4.06 hereof, (i) in the case of any repurchase, after payment of the
Repurchase Price of the Timeshare Loan, or (ii) in the case of any substitution,
after payment of any applicable Substitution Shortfall Amount and the delivery
of the Timeshare Loan Files for the related Qualified Substitute Timeshare Loan
to the Custodian. The Issuer shall be entitled to obtain a release from the Lien
of the Indenture and Servicing Agreement for any Timeshare Loan which has been
paid in full. In connection with this Section 4.07(a), the Indenture Trustee
will execute and deliver such endorsements and assignments as are provided to it
by the Seller, in each case without recourse, representation or warranty, as
shall be necessary to vest in the Seller, the legal and beneficial ownership of
each repurchased or substituted Timeshare Loan being released pursuant to this
Section 4.07(a). The Servicer shall direct the Custodian to release the related
Timeshare Loan Files upon receipt of a Request for Release from the Servicer, as
provided for in the Custodial Agreement.

(b) Release Upon Optional Prepayments. If the Issuer exercises its right to
prepay the Notes in whole or in part as provided in Section 10.01 of this
Indenture and Servicing Agreement, the Issuer and the Administrative Agent shall
notify the Indenture Trustee in writing of the prepayment date and the principal
amount of the Notes to be prepaid on the prepayment date and the amount of
interest and other amounts due and payable on such date in accordance

 

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with this Indenture and Servicing Agreement and the Note Purchase Agreement. On
the prepayment date, upon receipt by the Indenture Trustee of all amounts to be
paid to the Noteholders in accordance with this Indenture and Servicing
Agreement and the Note Purchase Agreement as a result of such prepayment and the
satisfaction of the conditions set forth in the following paragraphs, then, the
Indenture Trustee shall release from the Lien of this Indenture those Timeshare
Loans, all monies due or to become due with respect thereto and all collections
with respect thereto from and including the last day of the Due Period
immediately preceding such date of release which the Indenture Trustee is
directed to release as described in the following paragraph.

The Issuer shall provide to the Indenture Trustee a list of the Timeshare Loans
which are to be released, shall direct the Indenture Trustee to release such
Timeshare Loans, and shall direct the Servicer to delete such Timeshare Loans
from the Schedule of Timeshare Loans.

In addition to receipt by the Indenture Trustee of the principal amount of the
Notes to be prepaid, the interest thereon and other amounts due and payable in
connection with such prepayment and the list of the Timeshare Loans to be
released, the following conditions shall be met before the Lien is released
under this Section 4.07(b): (i) after giving effect to such release, no
Borrowing Base Shortfall shall exist and no Amortization Event or Event of
Default shall have occurred; and (ii) each of the Issuer and the Servicer shall
have delivered to the Administrative Agent a certificate to the effect that the
Timeshare Loans to be released from the Lien of this Indenture and Servicing
Agreement were not selected in a manner involving any selection procedures
materially adverse to the Noteholders and that the release of such Timeshare
Loans would not reasonably be expected to cause a Potential Amortization Event,
an Amortization Event, a Potential Event of Default or Event of Default; it
being understood and agreed that provided there is no Borrowing Base Shortfall
at such time and after giving effect to a Securitization Take-Out Transaction,
the occurrence of any Amortization Event, Potential Amortization Event, Servicer
Event of Default, Potential Servicer Event of Default, Event of Default or
Potential Event of Default solely as a result of the release of Timeshare Loans
hereunder in connection with a Securitization Take-Out Transaction shall not be
deemed an Amortization Event, Potential Amortization Event, Servicer Event of
Default, Potential Servicer Event of Default, Event of Default or Potential
Event of Default for purposes of this Indenture and Servicing Agreement or any
other Facility Document for a period of 3 months following such Securitization
Take-Out Transaction.

(c) Release Upon Issuance of Exchange Notes.

(i) If the Issuer is required to issue any Exchange Notes on the Payment Date
immediately succeeding a Facility Termination Date, the Issuer shall notify the
Indenture Trustee in writing of the aggregate principal amount of the Notes held
by Extending Noteholders to be canceled on such Payment Date. On such Payment
Date, upon cancellation of the Notes held by the Extending Noteholders, the
Indenture Trustee shall release from the Lien of this Indenture and Servicing
Agreement, Timeshare Loans with aggregate Loan Balances at least equal to the
Extending Noteholders’ Percentage of the Aggregate Loan Balance on such Payment
Date, as the Indenture Trustee is directed to release as set forth in
Section 4.07(c)(ii).

 

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(ii) An independent auditor mutually agreeable to the Issuer and the
Administrative Agent shall select the Timeshare Loans to be released from the
Lien of this Indenture and Servicing Agreement pursuant to this Section 4.07(c)
on a random basis and no selection procedures adverse to the Noteholders or to
the holders of the Exchange Notes shall be employed in such selection. The
Timeshare Loans selected to be released from the Lien of this Indenture pursuant
to this Section 4.07(c) shall be such that the collateral for the Exchange Notes
and the Collateral shall each conform to the criteria set forth in Exhibit J as
of the date of the issuance of such Exchange Notes. Such independent auditor
shall provide to the Indenture Trustee and the Servicer a list of the Timeshare
Loans which are selected to be released, shall direct the Indenture Trustee to
release such Loans, and shall direct the Servicer to delete such Timeshare Loans
from the Schedule of Timeshare Loans.

(iii) The Lien on any Timeshare Loans shall not be released under this
Section 4.07(c) unless (i) after giving effect to such release, the Borrowing
Base shall be at least equal to the Outstanding Note Balance, (ii) the amount in
the Reserve Account shall be at least equal to the Reserve Account Required
Balance, (iii) none of a Potential Amortization Event, an Amortization Event, a
Potential Event of Default or Event of Default shall exist or would occur as a
result of such release, and (iv) each of the Issuer and the Servicer shall have
delivered to the Administrative Agent a certificate to the effect that the
Timeshare Loans to be released from the Lien of this Indenture and Servicing
Agreement pursuant to this Section 4.07(c) were not selected in a manner
involving any selection procedures adverse to the Noteholders and that the
release of such Timeshare Loans would not reasonably be expected to cause a
Potential Amortization Event, an Amortization Event, a Potential Event of
Default or Event of Default.

(iv) Upon each release of a Timeshare Loan under this Section 4.07(c), the
Indenture Trustee shall automatically and without further action release, sell,
transfer, assign, set over and otherwise convey to the Issuer, without recourse,
representation or warranty, all of the Indenture Trustee’s right, title and
interest in and to such Timeshare Loan and the assets related thereto, all
monies due or to become due with respect thereto and all collections with
respect thereto from and including the last day of the Due Period immediately
preceding such date of release free and clear of the Lien of this Indenture and
Servicing Agreement. The Indenture Trustee shall execute such documents,
releases and instruments of transfer or assignment and take such other actions
as directed by the Issuer to effect the release of such Timeshare Loans and the
related assets pursuant to this Section 4.07(c).

(d) Release Upon Payment in Full. At such time as the Notes have been paid in
full, all amounts owing under the Note Purchase Agreement shall have been paid
in full, all fees and expenses of the Indenture Trustee, the Custodian, the
Servicer, the Back-Up Servicer, and the Administrative Agent have been paid in
full and all other obligations relating to the Facility Documents have been paid
in full, then, the Indenture Trustee shall, upon the written request of the
Issuer, release all Liens and assign to the Issuer (without recourse,
representation or warranty) all right, title and interest of the Indenture
Trustee in and to the Trust Estate, and all proceeds thereof. The Indenture
Trustee shall execute and deliver such instruments of assignment, in each case
without recourse, representation or warranty, as directed by the Issuer to
release the security interest of the Trustee in the Trust Estate.

 

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Section 4.08 Appointment of Custodian.

The Indenture Trustee may appoint a Custodian to hold all of the Timeshare Loan
Files as agent for the Indenture Trustee. Each Custodian shall be a depository
institution supervised and regulated by a federal or state banking authority,
shall have combined capital and surplus of at least $10,000,000, shall be
qualified to do business in the jurisdiction in which it holds any Timeshare
Loan File and shall not be the Issuer or an Affiliate of the Issuer. The initial
Custodian shall be Wells Fargo Bank, National Association pursuant to the terms
of the Custodial Agreement. The Indenture Trustee shall not be responsible for
paying the Custodial Fees or any other amounts owed to the Custodian.

Section 4.09 Sale of Timeshare Loans.

The parties hereto agree that none of the Timeshare Loans in the Trust Estate
may be sold or disposed of in any manner except as expressly provided for
herein.

ARTICLE V

SERVICING OF TIMESHARE LOANS

Section 5.01 Appointment of Servicer; Servicing Standard.

Subject to the terms and conditions herein, the Issuer hereby appoints MORI as
the initial Servicer hereunder. The Servicer shall service and administer the
Timeshare Loans and perform all of its duties hereunder in accordance with
applicable law, the terms of the respective Timeshare Loans and, to the extent
consistent with the foregoing, in accordance with the customary and usual
procedures employed by the Servicer with respect to comparable assets that the
Servicer services for itself or its Affiliates (the “Servicing Standard”).

Section 5.02 Payments on the Timeshare Loans.

(a) The Servicer shall in a manner consistent with the Credit and Collection
Policy, collect all payments made under each Timeshare Loan and cause each
Obligor to timely make all payments in respect of his or her Timeshare Loan to a
Control Account subject to a Control Agreement.

(b) All interest earned on funds received with respect to Timeshare Loans and
any Processing Charges deposited in accounts of the Servicer prior to deposit to
the Collection Account pursuant to Section 5.02(d) hereof shall be deemed to be
additional compensation to the Servicer for the performance of its duties and
obligations hereunder.

 

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(c) On the related Funding Date and Transfer Date, the Servicer shall deposit to
the Collection Account all amounts collected and received in respect of the
Timeshare Loans (other than the amounts described in (b) above) after the
related Cut-Off Date.

(d) Subject to (b) above and (e) below within two Business Days of receipt (or,
if initially there is insufficient information to determine to which Timeshare
Loan any funds relate, within two Business Days of obtaining sufficient
information), the Servicer shall segregate all collections in respect of the
Timeshare Loans and shall remit (or cause the related Control Account Bank to
remit) such amounts to the Collection Account. The Servicer is not required to
remit any Miscellaneous Payments or Processing Charges, to the extent received,
to the Collection Account.

(e) The Servicer shall net out Liquidation Expenses from any Liquidation
Proceeds on Defaulted Timeshare Loans prior to deposit of the net Liquidation
Proceeds into the Collection Account pursuant to Section 5.02(d) hereof. To the
extent that the Servicer shall subsequently recover any portion of such
Liquidation Expenses from the related Obligor, the Servicer shall deposit such
amounts into the Collection Account in accordance with Section 5.02(d) hereof.

Section 5.03 Duties and Responsibilities of the Servicer.

(a) In addition to any other customary services which the Servicer may perform
or may be required to perform hereunder, the Servicer shall perform or cause to
be performed through sub-servicers, the following servicing and collection
activities in accordance with the Servicing Standard:

(i) perform standard accounting services and general record keeping services
with respect to the Timeshare Loans;

(ii) respond to telephone or written inquiries of Obligors concerning the
Timeshare Loans;

(iii) keep Obligors informed of the proper place and method for making payment
with respect to the Timeshare Loans;

(iv) contact Obligors to effect collection and to discourage delinquencies in
the payment of amounts owed under the Timeshare Loans and doing so by any lawful
means, including but not limited to (A) mailing of routine past due notices,
(B) preparing and mailing collection letters, (C) contacting delinquent Obligors
by telephone to encourage payment, and (D) mailing of reminder notices to
delinquent Obligors;

(v) report tax information to Obligors and taxing authorities to the extent
required by law;

 

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(vi) take such other action as may be necessary or appropriate in the discretion
of the Servicer for the purpose of collecting and transferring to the Indenture
Trustee for deposit into the Collection Account all payments received by the
Servicer or remitted to any of the Servicer’s accounts in respect of the
Timeshare Loans (except as otherwise expressly provided herein), and to carry
out the duties and obligations imposed upon the Servicer pursuant to the terms
of this Indenture and Servicing Agreement;

(vii) remarket Timeshare Properties and Vacation Interests;

(viii) arrange for Liquidations of Timeshare Properties and Vacation Interests
related to Defaulted Timeshare Loans;

(ix) dispose of Timeshare Properties related to the Timeshare Loans whether
following repossession, foreclosure or otherwise;

(x) to the extent requested by the Indenture Trustee, use reasonable best
efforts to enforce the purchase and substitution obligation of the Seller under
the Sale Agreement;

(xi) not modify, waive or amend the terms of any Timeshare Loan; provided,
however, the Servicer may modify, waive or amend a Timeshare Loan for which a
default has occurred or is imminent and such modification, amendment or waiver
does not (i) materially alter the interest rate on or the principal balance of
such Timeshare Loan, (ii) shorten the final maturity of, lengthen the timing of
payments of either principal or interest, or any other terms of, such Timeshare
Loan in any manner which would have a material adverse affect on Noteholders,
(iii) adversely affect the Timeshare Property underlying such Timeshare Loan or
(iv) reduce materially the likelihood that payments of interest and principal on
such Timeshare Loan shall be made when due; provided, further, the Servicer may
grant an extension of the final maturity of a Timeshare Loan if the Servicer, in
its reasonable discretion, determines that (A) such Timeshare Loan is in default
or default on such Timeshare Loan is likely to occur in the foreseeable future,
and (B) the value of such Timeshare Loan will be enhanced by such extension;
provided, further, that the Servicer shall not (1) grant more than one extension
per calendar year with respect to a Timeshare Loan or (2) grant an extension for
more than one calendar month with respect to a Timeshare Loan in any calendar
year;

(xii) work with Obligors in connection with any transfer of ownership of a
Timeshare Property or Vacation Interest by an Obligor to another Person, whereby
the Servicer may consent to the assumption by such Person of the Timeshare Loan
related to such Timeshare Property or Vacation Interest; provided, however, in
connection with any such assumption, the rate of interest borne by, the maturity
date of, the principal amount of, the timing of payments of principal and
interest in respect of, and all other material terms of, the related Timeshare
Loan shall not be changed other than as permitted in (xi) above;

(xiii) (A) cause all the timeshare or fractional interest resorts operated by
MORI (including but not limited to those under the Marriott Vacation Club,
Ritz-Carlton Club and Grand Residences brands) to have property damage insurance
coverage for the full replacement value thereof or, if not available on
commercially reasonable terms, the

 

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maximum amount available on commercially reasonable terms, as determined in
accordance with the Servicing Standard and (B) to the extent that there is any
reduction in the policy limits of such coverage or the Servicer has determined,
in accordance with the Servicing Standard, that such coverage is not available
on commercially reasonable terms, provide written notice to the Issuer within
five Business Days of such determination;

(xiv) deliver such information and data to the Back-Up Servicer as is required
pursuant to Section 5.19 hereof;

(xv) on behalf of the Issuer, maintain the perfection and priority of the
security interest Granted hereunder;

(xvi) observe and perform its obligations under the Control Account
Intercreditor Agreement and the Control Agreement, monitor the Control Accounts
and identify and segregate all funds in the Control Accounts and direct the
Control Account Bank to remit all collections on the Timeshare Loans to the
Collection Account; and

(xvii) on behalf of the Issuer, monitor the Hedge Agreements and to prepare such
data and information as may be required by the Issuer, from time to time, to
determine whether the Hedge Requirements are being satisfied.

In connection with the Servicer’s duties under (vii), (viii) and (ix) above, the
Servicer will, as soon as practical, undertake such duties in the ordinary
course in a manner similar and consistent with (or better than) the manner in
which the Servicer sells or markets other timeshare properties or Vacation
Interests it or its Affiliates owns.

To the extent that any Timeshare Property or Vacation Interest related to a
Defaulted Timeshare Loan is remarketed, the Servicer agrees that it shall
require that any Liquidation Proceeds be in the form of cash only.

(b) For so long as MORI or an affiliate of MORI is the on-site manager of the
Resorts, the Servicer shall use commercially best efforts to maintain or cause
to maintain the Resorts in good repair, working order and condition (ordinary
wear and tear excepted).

(c) In the event any Lien (other than a Permitted Lien) attaches to any
Timeshare Loan or related collateral from any Person claiming from and through
an affiliate of MORI which materially and adversely affects the Issuer’s
interest in such Timeshare Loan, the Servicer shall, within the earlier to occur
of 10 Business Days after receiving notice of such attachment or the respective
lienholders’ action to foreclose on such lien, either (i) cause such Lien to be
released of record, (ii) provide the Indenture Trustee with a bond in accordance
with the applicable laws of the state in which the Timeshare Property is
located, issued by a corporate surety acceptable to the Administrative Agent, in
form reasonably acceptable to the Administrative Agent or (iii) provide the
Administrative Agent with such other security as the Administrative Agent may
reasonably require.

 

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(d) The Servicer shall: (i) promptly notify the Indenture Trustee of
(A) receiving notice of any claim, action or proceeding which may be reasonably
expected to have a material adverse effect on the Trust Estate, or any material
part thereof, and (B) any action, suit, proceeding, order or injunction of which
the Servicer becomes aware after the date hereof pending or threatened against
or affecting the Servicer or any Affiliate which may be reasonably expected to
have a material adverse effect on the Trust Estate or the Servicer’s ability to
service the same; (ii) at the request of Indenture Trustee with respect to a
claim or action or proceeding which arises from or through the Servicer or one
of its Affiliates, appear in and defend, at Servicer’s expense, any such claim,
action or proceeding which would have a material adverse effect on the Timeshare
Loans or the Servicer’s ability to service the same; and (iii) comply in all
material respects, and shall cause all Affiliates to comply in all material
respects, with the terms of any orders imposed on such Person by any
governmental authority the failure to comply with which would have a material
adverse effect on the Timeshare Loans or the Servicer’s ability to service the
same.

(e) The Servicer agrees (so long as it is MORI or an Affiliate thereof) that it
shall use commercially reasonable efforts to keep the reservation system for the
MVC Trust (including, without limitation, all hardware, software and data in
respect thereof), operational (including by virtue of necessary hardware and
software updates and/or upgrades), not to dispose of the same and to allow the
MVC Trust the use of, and access to, such reservation system.

(f) The Servicer shall notify the Indenture Trustee and Administrative Agent ten
days prior to any material amendment or change to such portion of the Credit and
Collection Policy relating to the servicing and collection process of Timeshare
Loans that are eligible to be acquired by the Issuer, and shall have received
written consent from the Administrative Agent (such consent to not be
unreasonably withheld or delayed).

(g) The Servicer agrees (so long as it is MORI or an Affiliate thereof), that it
shall, and shall cause its affiliates to perform and observe in all material
respects the obligations and duties under the Marriott License Agreement.

Section 5.04 Servicer Events of Default.

(a) A “Servicer Event of Default” means the occurrence and continuance of any of
the following events:

(i) (A) failure by the Servicer to make any required payment, transfer or
deposit when due hereunder and the continuance of such default for a period of
three Business Days or (B) failure by the Servicer to make any required
payments, transfers or deposits when due hereunder more than four (4) times;

(ii) failure by the Servicer to provide any required report within five Business
Days of when such report is required to be delivered hereunder;

(iii) any failure by the Servicer to observe or perform in any material respect
any covenant or agreement of the Servicer contained in this Indenture and
Servicing Agreement or any other Facility Document which failure has a material
adverse effect on the Noteholders;

 

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(iv) any representation or warranty made by the Servicer in this Indenture and
Servicing Agreement or any other Facility Document shall prove to be incorrect
in any material respect as of the time when the same shall have been made, and
such breach is not remedied within 30 days after the earlier of (x) the Servicer
first acquiring knowledge thereof, and (y) the Servicer’s receipt of written
notice thereof;

(v) the entry by a court having jurisdiction in the premises of (A) a decree or
order for relief in respect of the Servicer in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization, or
other similar law or (B) a decree or order adjudging the Servicer a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of or in respect of the Servicer under
any applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or other similar official of the
Servicer, or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or

(vi) the commencement by the Servicer of a voluntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by either to the entry of a decree or order for relief
in respect of the Servicer in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or similar official of the Servicer or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the Servicer’s failure to pay its debts generally as they become due, or the
taking of corporate action by the Servicer in furtherance of any such action; or

(vii) for so long as MORI or an Affiliate thereof is the Servicer, the Financial
Covenants are not satisfied or waived (A) in accordance with the Corporate
Revolver Facility or (B) by the Required Facility Investors if the Corporate
Revolver Facility is terminated;

(viii) for so long as MORI or an Affiliate thereof is the Servicer, an event of
default (or any other defined term or event having similar purpose) occurs under
the Corporate Revolver Facility or under any future credit agreement similar in
nature to the Corporate Revolver Facility and, in either case, the indebtedness
related thereto is accelerated and not rescinded in accordance with the
Corporate Revolver Facility or other credit agreement, as the case may be;

 

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(ix) for so long as MORI or an Affiliate thereof is the Servicer, a Change of
Control shall have occurred; or

(x) for so long as MORI or an Affiliate thereof is the Servicer, either (A) the
Marriott License Agreement is not in full force and effect or (B) MVW, MORI or
any affiliate thereof shall have defaulted under the Marriott License Agreement
and Marriott International shall have terminated or materially restricted MVW’s,
MORI’s or their affiliate’s use of the Marriott and Ritz-Carlton related
trademarks and other intellectual property.

(b) If any Servicer Event of Default shall have occurred and not been waived
hereunder, the Indenture Trustee may, and upon notice from the Majority Facility
Investors shall, terminate, on behalf of the Noteholders, by notice in writing
to the Servicer, all of the rights and obligations of the Servicer, as Servicer
under this Indenture and Servicing Agreement.

(c) If any Authorized Officer of the Servicer shall have knowledge of the
occurrence of a default by the Servicer hereunder, the Servicer shall promptly
notify the Indenture Trustee, the Issuer, the Back-Up Servicer and the
Noteholders, and shall specify in such notice the action, if any, the Servicer
is taking in respect of such default. Unless consented to by the Required
Facility Investors, the Issuer may not waive any Servicer Event of Default.

(d) If any Servicer Event of Default or Event of Default shall have occurred and
not been waived hereunder, the Indenture Trustee may, and at the direction of
the Administrative Agent, shall, direct the Creditor Agent under the Control
Account Intercreditor Agreement to direct the Control Account Banks to remit all
funds relating to the Timeshare Loans to the Collection Account. The Servicer
shall cause to be delivered, notices to the Obligors related to the Timeshare
Loans, instructing such Obligors to remit payments in respect thereof to the
accounts specified by the Indenture Trustee.

Section 5.05 Accountings; Statements and Reports.

(a) Monthly Servicer Report. Not later than each Determination Date, the
Servicer shall deliver to the Issuer, the Indenture Trustee (who shall make such
Monthly Servicer Report available to the Noteholders), the Back-Up Servicer and
the Administrative Agent a report (the “Monthly Servicer Report”) substantially
in the form approved by the Administrative Agent. The Monthly Servicer Report
shall be completed with the information specified therein for the related Due
Period and shall contain such other information as may be reasonably requested
by the Issuer, the Indenture Trustee, the Back-Up Servicer, the Administrative
Agent or the Noteholders in writing at least five Business Days prior to such
Determination Date. Each such Monthly Servicer Report shall be accompanied by an
Officer’s Certificate of the Servicer in the form of Exhibit F hereto,
certifying the accuracy of the computations reflected in such Monthly Servicer
Report.

(b) Certification as to Compliance. The Servicer shall deliver to the Issuer,
the Indenture Trustee (who shall make such Officer’s Certificate available to
the Noteholders), the Back-Up Servicer, the Administrative Agent an Officer’s
Certificate on or before December 31 of each year commencing in 2011: (i) to the
effect that a review of the activities of the Servicer

 

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during the preceding calendar year, and of its performance under this Indenture
and Servicing Agreement during such period has been made under the supervision
of the officers executing such Officer’s Certificate with a view to determining
whether during such period the Servicer had performed and observed all of its
obligations under this Indenture and Servicing Agreement, and either (A) stating
that based on such review no Servicer Event of Default is known to have occurred
and is continuing, or (B) if such a Servicer Event of Default is known to have
occurred and is continuing, specifying such Servicer Event of Default and the
nature and status thereof; and (ii) describing in reasonable detail to his
knowledge any occurrence in respect of any Timeshare Loan which would be of
material adverse significance to a Person owning such Timeshare Loan.

(c) Annual Accountants’ Reports. On or before December 31, 2011, and on or
before September 30 of each year commencing in 2012, the Servicer shall
(i) cause a firm of independent public accountants (such firm to be Ernst &
Young LLP or such other firm selected by the Servicer with the written consent
of the Majority Facility Investors) to furnish a certificate or statement (and
the Servicer shall provide a copy of such certificate or statement to the
Issuer, the Owner Trustee, the Indenture Trustee, the Administrative Agent and
the Noteholders), to the effect that such firm has performed certain procedures
(such procedures to be approved by the Majority Facility Investors) with respect
to the Servicer’s servicing controls and procedures for the previous calendar
year and that, on the basis of such firms’ procedures, conducted substantially
in compliance with standards established by the American Institute of Certified
Public Accountants, nothing has come to the attention of such firm indicating
that the Servicer has not complied with the minimum servicing standards
identified in the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America (“USAP”), except for
such significant exceptions or errors that, in the opinion of such firm, it is
required to report; provided, that if such firm of independent public
accountants shall prohibit disclosure of such certificate or statement on the
grounds that the Issuer does not own any Timeshare Loans, the Servicer shall
notify the Administrative Agent and the Indenture Trustee in writing and the
Servicer shall not be required to deliver such certificate or statement; and
(ii) cause a Servicer Representative after due investigation and review to
furnish a certificate or statement to the Issuer, the Indenture Trustee, the
Administrative Agent and the Noteholders, to the effect that such Servicer
Representative has (x) read this Indenture and Servicing Agreement,
(y) performed certain procedures, in accordance with USAP, with respect to the
records and calculations set forth in the Monthly Servicer Reports delivered by
the Servicer during the reporting period and certain specified documents and
records relating to the servicing of the Timeshare Loans and the reporting
requirements with respect thereto and (z) on the basis of such Servicer
Representative’s procedures, certifies that except for such exceptions as such
Servicer Representative shall believe immaterial and such other exceptions as
shall be set forth in such statement, (A) the information set forth in such
Monthly Servicer Reports was correct; and (B) the servicing and reporting
requirements have been conducted in compliance with this Indenture and Servicing
Agreement. In the event such independent public accountants require the
Indenture Trustee to agree to the procedures to be performed by such firm in any
of the reports required to be prepared pursuant to this Section 5.05(c), the
Servicer shall direct the Indenture Trustee in writing to so agree; it being
understood and agreed that the Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Indenture Trustee has not made any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.

 

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(d) Report on Proceedings and Servicer Event of Default. (i) Promptly upon the
Servicer’s becoming aware of any proposed or pending investigation of it by any
Governmental Authority or any court or administrative proceeding which involves
or may involve the possibility of materially and adversely affecting the
properties, business, prospects, profits or conditions (financial or otherwise)
of the Servicer and subsidiaries, as a whole, a written notice specifying the
nature of such investigation or proceeding and what action the Servicer is
taking or proposes to take with respect thereto and evaluating its merits, or
(ii) immediately upon becoming aware of the existence of any condition or event
which constitutes a Servicer Event of Default, a written notice to the Issuer,
the Indenture Trustee, the Administrative Agent and the Noteholders describing
its nature and period of existence and what action the Servicer is taking or
proposes to take with respect thereto.

Section 5.06 Records.

The Servicer shall maintain all data for which it is responsible (including,
without limitation, computerized tapes or disks) relating directly to or
maintained in connection with the servicing of the Timeshare Loans (which data
and records shall be clearly marked to reflect that the Timeshare Loans have
been pledged to the Indenture Trustee on behalf of the Noteholders and
constitute property of the Trust Estate) at the address specified in
Section 13.03 hereof or, upon 15 days’ notice to the Issuer and the Indenture
Trustee, at such other place where any Servicing Officer of the Servicer is
located, and shall give the Issuer and the Indenture Trustee or their authorized
agents access to all such information at all reasonable times, upon 72 hours’
written notice.

Section 5.07 Fidelity Bond.

The Servicer shall maintain or cause to be maintained a fidelity bond with
respect to the Servicer in such form and amount as is customary for institutions
acting as custodian of funds in respect of timeshare loans or receivables on
behalf of institutional investors. Any such fidelity bond shall be maintained in
a form and amount that would meet the requirements of prudent institutional loan
servicers. No provision of this Section 5.07 requiring such fidelity bond shall
diminish or relieve the Servicer from its duties and obligations as set forth in
this Indenture and Servicing Agreement. The Servicer shall be deemed to have
complied with this provision if one of its respective Affiliates has such
fidelity bond coverage and, by the terms of such fidelity bond, the coverage
afforded thereunder extends to the Servicer. Upon a request of the Indenture
Trustee, the Servicer shall deliver to the Indenture Trustee, a certification
evidencing coverage under such fidelity bond. Any such fidelity bond shall not
be canceled or modified in a materially adverse manner without ten days’ prior
written notice to the Indenture Trustee.

 

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Section 5.08 Merger or Consolidation of the Servicer.

(a) The Servicer shall promptly provide written notice to the Indenture Trustee
and the Noteholders of any merger or consolidation of the Servicer. The Servicer
shall keep in full effect its existence, rights and franchise as a corporation
under the laws of the state of its incorporation except as permitted herein, and
shall 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 Indenture and
Servicing Agreement or any of the Timeshare Loans and to perform its duties
under this Indenture and Servicing Agreement.

(b) Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer 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 the successor or surviving Person (i) is a company whose business
includes the servicing of assets similar to the Timeshare Loans and shall be
authorized to transact business in the state or states in which the related
Timeshare Properties it is to service are situated; (ii) is a U.S. Person, and
(iii) delivers to the Indenture Trustee (A) an agreement, in form and substance
reasonably satisfactory to the Indenture Trustee and the Noteholders, which
contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Indenture and Servicing Agreement and (B) an
Opinion of Counsel as to the enforceability of such agreement.

Section 5.09 Sub-Servicing.

(a) The Servicer may enter into one or more subservicing agreements with a
subservicer provided any such subservicing agreement is reasonably acceptable to
the Majority Facility Investors. References herein to actions taken or to be
taken by the Servicer in servicing the Timeshare Loans include actions taken or
to be taken by a subservicer on behalf of the Servicer. Any subservicing
agreement will be upon such terms and conditions as the Servicer may reasonably
agree and as are not inconsistent with this Indenture and Servicing Agreement.
The Servicer shall be solely responsible for any subservicing fees.

(b) Notwithstanding any subservicing agreement, the Servicer shall remain
obligated and liable for the servicing and administering of the Timeshare Loans
in accordance with this Indenture and Servicing Agreement without diminution of
such obligation or liability by virtue of such subservicing agreement and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Timeshare Loans.

Section 5.10 Servicer Resignation.

The Servicer may not resign from the duties and obligations hereby imposed on it
under this Indenture and Servicing Agreement unless it determines that by reason
of a change in legal or regulatory requirements the performance of its duties
under this Indenture and Servicing Agreement would cause it to be in violation
of such requirements. Such resignation shall not be effective until the
Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer hereunder. Upon the effective date of such resignation, the
Servicer shall comply with Section 5.19(f) hereof.

 

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Section 5.11 Fees and Expenses.

As compensation for the performance of its obligations under this Indenture and
Servicing Agreement, the Servicer shall be entitled to receive on each Payment
Date, from amounts on deposit in the Collection Account and in the priorities
described in Section 3.04 hereof, the Servicing Fee and as additional
compensation, the amounts described in Section 5.02(b) hereof. Other than
Liquidation Expenses, the Servicer shall pay all expenses incurred by it in
connection with its servicing activities hereunder.

Section 5.12 Access to Certain Documentation.

Upon five Business Days’ prior written notice (or without prior written notice
following a Servicer Event of Default), the Servicer will, from time to time
during regular business hours, as requested by the Issuer, the Indenture
Trustee, the Back-Up Servicer, the Administrative Agent or any Noteholder and,
prior to the occurrence of a Servicer Event of Default, at the expense of the
Issuer, the Indenture Trustee or such Noteholder and upon the occurrence and
continuance of a Servicer Event of Default, at the expense of the Servicer,
permit the Issuer, the Indenture Trustee, the Administrative Agent or any
Noteholder or its agents or representatives (i) to examine and make copies of
and abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the control of
the Servicer relating to the servicing of the Timeshare Loans serviced by it and
(ii) to visit the offices and properties of the Servicer for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to the Timeshare Loans with any of the officers, employees or
accountants of the Servicer having knowledge of such matters. Nothing in this
Section 5.12 shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 5.12.

Section 5.13 No Offset.

Prior to the termination of this Indenture and Servicing Agreement, the
obligations of Servicer under this Indenture and Servicing Agreement shall not
be subject to any defense, counterclaim or right of offset which the Servicer
has or may have against the Issuer, the Indenture Trustee or any Noteholder,
whether in respect of this Indenture and Servicing Agreement, any Timeshare Loan
or otherwise.

Section 5.14 Cooperation.

The Indenture Trustee agrees to cooperate with the Servicer in connection with
the Servicer’s preparation of the Monthly Servicer Report, including without
limitation, providing account balances of Trust Accounts and notification of the
Events of Default or Amortization Events and other information of which the
Indenture Trustee has knowledge which may affect the Monthly Servicer Report.

 

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Section 5.15 Indemnification; Third Party Claim.

The Servicer agrees to indemnify the Issuer, the Indenture Trustee, the Back-Up
Servicer, the Custodian, the Administrative Agent and the Noteholders (each, an
“Indemnified Party”) from and against any and all actual damages (excluding
economic losses related to the collectibility of any Timeshare Loan), claims,
reasonable attorneys’ fees and related costs, judgments, and any other costs,
fees and expenses (collectively, “Costs”) that each may sustain because of the
failure of the Servicer to service the Timeshare Loans in accordance with the
Servicing Standard or otherwise perform its obligations and duties hereunder in
compliance with the terms of this Indenture and Servicing Agreement, or because
of any act or omission by the Servicer due to its negligence or willful
misconduct in connection with its maintenance and custody of any funds,
documents and records under this Indenture and Servicing Agreement, or its
release thereof except as contemplated by this Indenture and Servicing
Agreement, other than any Costs attributable directly to the gross negligence,
bad faith or willful misconduct of an Indemnified Party. The Servicer shall
immediately notify the Issuer, the Administrative Agent and the Indenture
Trustee if it has knowledge (receipt of notice being deemed knowledge) of a
claim made by a third party with respect to the Timeshare Loans, and, if such
claim relates to the servicing of the Timeshare Loans by the Servicer, assume,
with the consent of the Indenture Trustee, the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it.
This Section 5.15 shall survive the termination of this Indenture and Servicing
Agreement or the resignation or removal of the Servicer hereunder.

Section 5.16 Limitation on Liability.

It is expressly understood and agreed by the parties hereto that MORI is
executing this Indenture and Servicing Agreement solely as Servicer and MORI
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture and Servicing Agreement applicable to the Servicer.

Section 5.17 Aruba Notice.

Within 45 days of any Funding Date or any Transfer Date (with respect to a
Qualified Substitute Timeshare Loan), as the case may be, the Servicer shall
give notice to each Obligor under a Weeks-Based Timeshare Loan with respect to
any Resort in the country of Aruba that such Weeks-Based Timeshare Loan has been
transferred and assigned to the Indenture Trustee, in trust, for the benefit of
the Noteholders. Such notice may include any notice or notices that the Issuer’s
predecessors in title to the Timeshare Loan may give to the same Obligor with
respect to any transfers and assignments of the Timeshare Loan by such
predecessors. Such notice shall be in the form attached hereto as Exhibit G, as
the same may be amended, revised or substituted by the Indenture Trustee and the
Servicer from time to time.

Section 5.18 St. Kitts.

The Servicer shall cause this Indenture and Servicing Agreement to be delivered
to the Inland Revenue Department of the Federation of St. Christopher and Nevis
within five Business Days of the first Funding Date on which a Timeshare Loan
relating to a St. Kitts property is transferred to the Trust Estate to be
stamped. Promptly upon the Indenture being stamped, the Servicer shall deliver
such stamped Indenture to the Indenture Trustee.

 

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Section 5.19 Back-Up Servicer and Successor Servicer.

(a) Subject to the terms and conditions herein, the Issuer hereby appoints Wells
Fargo Bank, National Association as the initial Back-Up Servicer hereunder. The
Back-Up Servicer shall perform all of its duties hereunder in accordance with
applicable law, the terms of this Indenture and Servicing Agreement, the
respective Timeshare Loans and, to the extent consistent with the foregoing, in
accordance with the customary and usual procedures employed by the Back-Up
Servicer with respect to comparable assets that the Back-Up Servicer services
for itself or other Persons. The Back-Up Servicer shall be compensated for its
services hereunder by the Back-Up Servicing Fee.

(b) Not later than the Determination Date preceding a Payment Date, the Servicer
shall prepare and deliver to the Back-Up Servicer: (i) a copy of the Monthly
Servicer Report and all other reports and notices, if any, delivered to the
Issuer and the Indenture Trustee (collectively, the “Monthly Reports”); and
(ii) a computer file or files stored on compact disc, magnetic tape or provided
electronically, prepared in accordance with the record layout for data
conversion attached hereto as Exhibit I and made a part hereof (the “Tape(s)”).
The Tape(s) shall contain (x) all information with respect to the Timeshare
Loans as of the close of business on the last day of the Due Period necessary to
store the appropriate data in the Back-Up Servicer’s system from which the
Back-Up Servicer will be capable of preparing a trial balance relating to the
data and (y) an initial trial balance showing balances of the Timeshare Loans as
of the last Business Day corresponding to the date of the Tape(s) (the “Initial
Trial Balance”). The Back-Up Servicer shall have no obligations as to the
Collection Reports other than to insure that they are able to be opened and read
(which it shall determine promptly upon receipt). The Servicer shall give prompt
written notice to the Indenture Trustee, the Back-Up Servicer and the Initial
Purchaser of any modifications in the Servicer’s servicing systems.

(c) The Back-Up Servicer shall use the Tape(s) and Initial Trial Balance to
ensure that the Monthly Reports are complete on their face and the following
items in such Monthly Reports have been accurately calculated, if applicable,
and reported: (i) the Aggregate Loan Balance, (ii) the Outstanding Note Balance,
(iii) the payments to be made pursuant to Section 3.04 hereof, (iv) the
Warehouse Portfolio Default Level, (v) the Warehouse Portfolio Delinquency
Level, (vi) the Securitized Portfolio Default Level and (vii) the Securitized
Portfolio Delinquency Level. The Back-Up Servicer shall give written notice on
or prior to the Business Day immediately preceding the related Payment Date to
the Indenture Trustee and the Administrative Agent of any discrepancies
discovered pursuant to its review of the items required by this Section 5.19(c)
or if any of the items in Section 5.19(b) can not be open and read.

(d) Other than the duties specifically set forth in this Indenture and Servicing
Agreement, the Back-Up Servicer shall have no obligation hereunder, including,
without limitation, to supervise, verify, monitor or administer the performance
of the Servicer. The Back-Up Servicer shall have no liability for any action
taken or omitted to be taken by the Servicer.

 

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(e) From and after the receipt by the Servicer of a written termination notice
pursuant to Section 5.04 hereof or the resignation of the Servicer pursuant to
Section 5.10 hereof, and upon written notice thereof to the Back-Up Servicer
from the Indenture Trustee, all authority and power of the Servicer under this
Indenture and Servicing Agreement, whether with respect to the Timeshare Loans
or otherwise, shall pass to and be vested in the Back-Up Servicer, as the
Successor Servicer, on the Assumption Date (as defined in Section 5.19(f)
hereof).

(f) The Servicer shall perform such actions as are reasonably necessary to
assist the Indenture Trustee and the Successor Servicer in such transfer of the
Servicer’s duties and obligations pursuant to Section 5.19(e) hereof. The
Servicer agrees that it shall promptly (and in any event no later than five
Business Days subsequent to its receipt of a notice of termination pursuant to
Section 5.04(b) hereof) provide the Successor Servicer (with costs being borne
by the Servicer) with all documents and records (including, without limitation,
those in electronic form) reasonably requested by it to enable the Successor
Servicer to assume the Servicer’s duties and obligations hereunder, and shall
cooperate with the Successor Servicer in effecting the assumption by the
Successor Servicer of the Servicer’s obligations hereunder, including, without
limitation, subject to the provisions of the Control Account, the transfer
within two Business Days to the Successor Servicer for administration by it of
all cash amounts which, at the time or thereafter, shall be received by it with
respect to the Timeshare Loans (provided, however, that the Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under this
Indenture and Servicing Agreement on or prior to the date of such termination).
If the Servicer fails to undertake such action as is reasonably necessary to
effectuate such transfer of its duties and obligations, the Indenture Trustee,
or the Successor Servicer if so directed by the Indenture Trustee, is hereby
authorized and empowered to execute and deliver, on behalf of and at the expense
of the Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things reasonably
necessary to effect the purposes of such notice of termination. Promptly after
receipt by the Successor Servicer of such documents and records, the Successor
Servicer will commence the performance of such servicing duties and obligations
as Successor Servicer in accordance with the terms and conditions of this
Indenture and Servicing Agreement (such date, the “Assumption Date”), and from
and after the Assumption Date the Successor Servicer shall receive the Servicing
Fee and agrees to and shall be bound by all of the provisions of this Article V
and any other provisions of this Indenture and Servicing Agreement relating to
the duties and obligations of the Servicer, except as otherwise specifically
provided herein.

(i) Notwithstanding anything contained in this Indenture and Servicing Agreement
to the contrary, the Successor Servicer is authorized to accept and rely on all
of the accounting, records (including computer records) and work of the Servicer
relating to the Timeshare Loans (collectively, the “Predecessor Servicer Work
Product”) without any audit or other examination thereof, and the Successor
Servicer shall have no duty, responsibility, obligation or liability for the
acts and omissions of the Servicer. If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, “Errors”) exist
in any Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the Successor
Servicer making or continuing any Errors (collectively, “Continued Errors”), the
Successor Servicer shall have no duty, responsibility,

 

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obligation or liability for such Continued Errors; provided, however, that the
Successor Servicer agrees to use its best efforts to prevent further Continued
Errors. In the event that the Successor Servicer becomes aware of Errors or
Continued Errors, the Successor Servicer, with the prior consent of the
Indenture Trustee (acting at the direction of the Majority Facility Investors)
shall use its best efforts to reconstruct and reconcile such data as is
commercially reasonable to correct such Errors and Continued Errors and to
prevent future Continued Errors and shall be entitled to recover its costs
thereby.

(ii) The Successor Servicer shall have: (A) no liability with respect to any
obligation which was required to be performed by the terminated or resigned
Servicer prior to the Assumption Date or any claim of a third party based on any
alleged action or inaction of the terminated or resigned Servicer, (B) no
obligation to perform any repurchase or advancing obligations, if any, of the
Servicer, (C) no obligation to pay any taxes required to be paid by the
Servicer, (D) no obligation to pay any of the fees and expenses of any other
party involved in this transaction that were incurred by the prior Servicer and
(E) no liability or obligation with respect to any Servicer indemnification
obligations of any prior Servicer including the original Servicer.

(g) In the event that Wells Fargo Bank, National Association as the initial
Back-Up Servicer is terminated for any reason, or fails or is unable to act as
Back-Up Servicer and/or as Successor Servicer, the Indenture Trustee may enter
into a back-up servicing agreement with a back-up servicer, and may appoint a
successor servicer to act under this Indenture and Servicing Agreement, in
either event with the consent or at the direction of the Majority Facility
Investors and on such terms and conditions as are provided herein as to the
Back-Up Servicer or the Successor Servicer, as applicable.

(h) Within 30 days of its appointment as successor Servicer, Wells Fargo shall
deliver to the Administrative Agent a copy of the then current Credit and
Collection Policy that will be used in servicing the Timeshare Loans.

(i) The Back-Up Servicer shall, until it is appointed as successor Servicer, be
entitled to the same protections afforded the Indenture Trustee in Sections 7.03
and 7.04 hereof.

ARTICLE VI

EVENTS OF DEFAULT; REMEDIES

Section 6.01 Events of Default.

“Event of Default” wherever used herein with respect to Notes, means any one of
the following:

(a) (1) the default in the making of payments of Interest Distribution Amounts,
Unused Fees, NPA Costs, Purchaser Fees, Administrative Agent Fees or other
amounts payable by the Issuer under any Facility Document within two Business
Days after the same becomes due and payable (determined irrespective of
Available Funds) or (2) a failure to reduce the Outstanding Note Balance to zero
at the Stated Maturity or the Mandatory Redemption Date; or

 

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(b) a non-monetary default in the performance, or breach, of any covenant of an
MVW Entity in this Indenture and Servicing Agreement or any other Facility
Document (other than a covenant dealing with a default in the performance of
which or the breach of which is specifically dealt with elsewhere in this
Section 6.01), the continuance of such default or breach for a period of 30 days
after the earlier of (x) such MVW Entity first acquiring knowledge therefor, and
(y) such MVW Entity’s receipt of written notice thereof from the Indenture
Trustee; provided, however, that if such default or breach is in respect of the
covenants contained in Section 8.04(a) and Section 8.06(a)(i) or (ii), there
shall be no grace period whatsoever; or

(c) if any representation or warranty of an MVW Entity made in this Indenture
and Servicing Agreement or any other Facility Document (other than a
representation or warranty which is specifically dealt with elsewhere in this
Section 6.01) shall prove to be incorrect in any material respect as of the time
when the same shall have been made, and, to the extent such representation or
warranty is curable, such breach is not remedied within 30 days after the
earlier of (x) such MVW Entity first acquiring knowledge thereof, and (y) the
Indenture Trustee’s giving written notice thereof to such MVW Entity; or

(d) the entry by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of an MVW Entity or the MVC Trust in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or (ii) a decree or order adjudging an MVW
Entity or the MVC Trust a bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment, or composition of or
in respect of an MVW Entity or the MVC Trust under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or other similar official of an MVW Entity or the MVC Trust, or of
any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days; or

(e) the commencement by an MVW Entity or the MVC Trust of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by either to the entry of a
decree or order for relief in respect of an MVW Entity or the MVC Trust in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or similar official of such MVW
Entity or the MVC Trust or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or such MVW Entity’s
or the MVC Trust’s failure to pay its debts generally as they become due, or the
taking of corporate action by such MVW Entity or MVC Trust in furtherance of any
such action; or

 

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(f) the Issuer becoming subject to registration as an “investment company” under
the 1940 Act; or

(g) (1) the breach of a representation or warranty or covenant in any Facility
Document related to the security interest of the Indenture Trustee in the Trust
Estate, or (2) the impairment of the validity of any security interest of the
Indenture Trustee in the Trust Estate in any material respect, except as
expressly permitted hereunder, or (3) the creation of any material encumbrance
on all or any portion of the Trust Estate not otherwise permitted which is not
stayed or released within 10 days of the Issuer having knowledge of its
creation; or

(h) any provision of any Facility Document shall at any time for any reason
cease to be valid and binding on and enforceable against any MVW Entity party
thereto, or the validity or enforceability thereof shall be contested by any MVW
Entity party thereto, or a proceeding shall be commenced by any MVW Entity
seeking to establish the invalidity or unenforceability thereof or, any MVW
Entity shall deny in writing that it has any liability or obligation purported
to be created under any Facility Document; or

(i) any default of the Seller of its obligation to repurchase or substitute a
Timeshare Loan under the Sale Agreement within the relevant time period; or

(j) any default under the Performance Guaranty; or

(k) the failure to maintain Hedge Agreements satisfying the Hedge Requirements
or any Hedge Counterparty ceases to be a Qualified Hedge Counterparty and such
failure continues for five (5) Business Days; or

(l) an event of default (or any other defined term or event having similar
purpose) occurs under the Corporate Revolver Facility or under any future credit
agreement similar in nature to the Corporate Revolver Facility and, in either
case, the indebtedness related thereto is accelerated and not rescinded in
accordance with the Corporate Revolver Facility or other credit agreement, as
the case may be; or

(m) a Change of Control shall have occurred; or

(n) the Servicer has been terminated following a Servicer Event of Default and a
Successor Servicer has not been appointed or such appointment has not been
accepted within 20 days of the date of termination specified in the related
termination notice; or

(o) one or more judgments or decrees shall be entered against the Issuer, the
Seller, MORI or the Performance Guarantor involving in the aggregate a liability
(not paid or covered by insurance) of, in the case of the Issuer and the Seller,
$50,000 or more, or, in the case of MORI or the Performance Guarantor,
$70,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days from the
entry thereof; or

(p) the occurrence of an event constituting a Servicer Event of Default under
Section 5.04(a)(i)(B) or Section 5.04(a)(x) of this Indenture and Servicing
Agreement; or

 

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(q) the Outstanding Note Balance exceeds the Borrowing Base as of the related
Payment Date and the Issuer fails on such Payment Date to either (i) pay in full
an amount of principal on the Note equal to such excess or (ii) pledge
additional Timeshare Loans such that the Outstanding Note Balance does not
exceed the Borrowing Base.

Except as otherwise provided in clause (p) hereunder, a Servicer Event of
Default shall not constitute an Event of Default hereunder.

Section 6.02 Acceleration of Maturity; Rescission and Annulment.

(a) If an Event of Default of the kind specified in Section 6.01(d) or
Section 6.01(e) hereof occurs, the Notes shall automatically become due and
payable at the sum of the then Outstanding Note Balances, together with all
accrued and unpaid Interest Distribution Amounts and Unused Fees thereon. If an
Event of Default (other than an Event of Default of the type described in the
preceding sentence) occurs, the Indenture Trustee shall, upon notice from the
Majority Facility Investors, declare the Notes to be immediately due and payable
at the sum of the then Outstanding Note Balance, plus all accrued and unpaid
Interest Distribution Amounts and Unused Fees thereon.

(b) Upon any such declaration or automatic acceleration, the then Outstanding
Note Balance, together with all accrued and unpaid Interest Distribution Amounts
and Unused Fees thereon shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Issuer. The Indenture Trustee shall promptly send a notice
of any declaration or automatic acceleration to the Noteholders.

(c) At any time after such a declaration of acceleration has been made, or after
such acceleration has automatically become effective and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article provided, the Required Facility Investors (other
than MORI and its Affiliates) by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:

(i) The amounts on deposit in the Trust Accounts and other funds from
collections with respect to the Timeshare Loans in the possession of the
Servicer but not yet deposited in the Trust Accounts, is a sum sufficient to
pay:

(A) all principal due on the Notes which has become due otherwise than by such
declaration of acceleration and interest thereon from the date when the same
first became due until the date of payment or deposit at the applicable rates
used to calculate the applicable Carrying Cost plus the Usage Rate,

(B) all interest due with respect to the Notes and, to the extent that payment
of such interest is lawful, interest upon overdue interest from the date when
the same first became due until the date of payment or deposit at the applicable
rates used to calculate the applicable Carrying Cost plus the Usage Rate, and

 

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(C) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements, and advances of each of the
Indenture Trustee, the Servicer and Back-Up Servicer, their agents and counsel;

and

(ii) all Events of Default with respect to the Notes, other than the non-payment
of the then Outstanding Note Balance which became due solely by such declaration
of acceleration, have been cured or waived as provided in Section 6.13 hereof.

(d) An automatic acceleration may be rescinded and annulled by the Required
Facility Investors.

(e) Notwithstanding Section 6.02 (c) and (d) above, (i) if the Indenture Trustee
has commenced making payments as described in Section 6.06 hereof, no
acceleration may be rescinded or annulled and (ii) no rescission shall affect
any subsequent Event of Default or impair any right consequent thereon.

Section 6.03 Remedies.

(a) If an Event of Default with respect to the Notes occurs and is continuing of
which a Responsible Officer of the Indenture Trustee has actual knowledge, the
Indenture Trustee shall immediately give notice to each Noteholder as set forth
in Section 7.02 hereof and shall solicit such Noteholders for advice. The
Indenture Trustee shall then take such action as so directed by the Majority
Facility Investors subject to the provisions of this Indenture and Servicing
Agreement.

(b) Following any acceleration of the Notes, the Indenture Trustee shall have
all of the rights, powers and remedies with respect to the Trust Estate as are
available to secured parties under the UCC or other applicable law, subject to
subsection (d) below. Such rights, powers and remedies may be exercised by the
Indenture Trustee in its own name as trustee of an express trust.

(c) If an Event of Default specified in Section 6.01(a) hereof occurs and is
continuing, the Indenture Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Issuer for the sum of the
Outstanding Note Balance, and interest remaining unpaid with respect to the
Notes.

(d) If an Event of Default occurs and is continuing, the Indenture Trustee may
in its discretion, and at the instruction of the Majority Facility Investors
shall, proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate judicial or other proceedings as the Indenture
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 and Servicing Agreement or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy. The Indenture Trustee shall
notify the Issuer, the Servicer and the Noteholders of any such action.

 

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(e) If (i) the Indenture Trustee shall have received instructions within 45 days
from the date notice pursuant to Section 6.03(a) hereof is first given from the
Majority Facility Investors to the effect that such Persons approve of or
request the liquidation of the Timeshare Loans or (ii) upon an Event of Default
set forth in Section 6.01(d) or (e) hereof, the Indenture Trustee shall to the
extent lawful, promptly sell, dispose of or otherwise liquidate the Timeshare
Loans in a commercially reasonable manner and on commercially reasonable terms,
which shall include the solicitation of competitive bids. The Indenture Trustee
may obtain a prior determination from any conservator, receiver or liquidator of
the Issuer that the terms and manner of any proposed sale, disposition or
liquidation are commercially reasonable.

Section 6.04 Indenture Trustee May File Proofs of Claim. (a) In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Issuer, or any other obligor in respect of the Notes,
or the property of the Issuer, or such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the principal of the Notes shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand on the
Issuer for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of principal and interest
owing and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and any predecessor Indenture Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and any predecessor Indenture Trustee, their agents and
counsel) and of the Noteholders allowed in such judicial proceeding;

(ii) to collect and receive any moneys or other property payable or deliverable
on any such claims and to distribute the same; and

(iii) to participate as a member, voting or otherwise, of any official committee
of creditors appointed in such matter;

and any custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Indenture Trustee and to pay to the
Indenture Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and any predecessor
Indenture Trustee, their agents and counsel, and any other amounts due the
Indenture Trustee and any predecessor Indenture Trustee under Section 7.06
hereof.

(b) Nothing herein contained shall be deemed to authorize the Indenture Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, agreement, adjustment or composition affecting the Notes
or the rights of any Noteholder thereof or affecting the Timeshare Loans or the
other assets constituting the Trust Estate or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such proceeding.

 

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Section 6.05 Indenture Trustee May Enforce Claims Without Possession of Notes.

All rights of action and claims under this Indenture and Servicing Agreement,
the Notes, the Timeshare Loans or the other assets constituting the Trust Estate
may be prosecuted and enforced by the Indenture Trustee without the possession
of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Indenture Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provisions for the payment of reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and any
predecessor Indenture Trustee, their agents and counsel, be for the benefit of
the Noteholders in respect of which such judgment has been recovered, and
distributed pursuant to the priorities contemplated by Section 3.04 hereof and
Section 6.06 hereof.

Section 6.06 Application of Money Collected.

(a) Subject to the following paragraph, if the Notes have been declared, have
automatically become, or otherwise become due and payable following an Event of
Default (an “Acceleration Event”) and such Acceleration Event has not been
rescinded or annulled, any money collected by the Indenture Trustee in respect
of the Trust Estate and any other money that may be held thereafter by the
Indenture Trustee as security for the Notes, including without limitation the
amounts on deposit in the Reserve Account, shall be applied in the following
order, at the date or dates fixed by the Indenture Trustee and, in case of the
distribution of such money on account of principal or interest, without
presentment of any Notes:

 

  (i) to the Indenture Trustee, the Custodian and the Back-Up Servicer, ratably
based on their respective entitlements, any amounts due and owing as of such
date;

 

  (ii) to the Owner Trustee, any unpaid Owner Trustee Fees;

 

  (iii) to the Administrator, any unpaid Administrator Fees;

 

  (iv) to the Servicer, any unpaid Servicing Fees;

 

  (v) to the Administrative Agent, any unpaid Administrative Agent Fees;

 

  (vi) to the Noteholders, the Interest Distribution Amount

 

  (vii) to the Noteholders, any unpaid Unused Fees and NPA Costs (other than the
portion thereof related to clause (iii) of the definition of Breakage and Other
Costs);

 

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  (viii) on a pari passu basis (A) to the Noteholders, all remaining amounts
until the Outstanding Note Balance is reduced to zero and (B) other than if the
Hedge counterparty is the “Defaulting Party” or the sole “Affected Party” (as
such terms are defined in the Hedge Agreement), to the Hedge Counterparty, the
Hedge Termination Payment, if any;

 

  (ix) to the Noteholders, the Usage Step-Up Fees and any unpaid Usage Step-Up
Fees from prior Payment Dates;

 

  (x) to the Noteholders any NPA Costs not paid in accordance with (vii) above;

 

  (xi) to the Hedge Counterparty, any Hedge Termination Payment required under
the Hedge Agreement and not paid in accordance with clause (viii) above; and

 

  (xii) to the Owner Trustee for distribution to the owners of the beneficial
interests in the Issuer, any remaining amounts.

(b) Notwithstanding the occurrence and continuation of an Event of Default,
prior to the occurrence of an Acceleration Event, the Noteholders shall continue
to be paid in the manner and priorities described in Section 3.04 hereof.

Section 6.07 Limitation on Suits.

No Noteholder, solely by virtue of its status as Noteholder, shall have any
right by virtue or by availing of any provision of this Indenture and Servicing
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture and Servicing Agreement, unless an
Event of Default shall have occurred and is continuing and the Holders of Notes
evidencing not less than 25% of the then Outstanding Note Balance shall have
made written request upon the Indenture Trustee to institute such action, suit
or proceeding in its own name as Indenture Trustee hereunder and shall have
offered to the Indenture Trustee such reasonable indemnity as it may require
against the cost, expenses and liabilities to be incurred therein or thereby,
and the Indenture Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding and no direction inconsistent with such written
request has been given such Indenture Trustee during such 60-day period by such
Noteholders; it being understood and intended, and being expressly covenanted by
each Noteholder with every other Noteholder and the Indenture Trustee, that no
one or more Noteholders shall have any right in any manner whatever by virtue or
by availing of any provision of this Indenture and Servicing Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Notes, or to obtain or seek to obtain priority over or preference to any other
such Holder, or to enforce any right under this Indenture and Servicing
Agreement, except in the manner herein provided and for the benefit of all
Noteholders. For the protection and enforcement of the provisions of this
Section 6.07, each and every Noteholder and the Indenture Trustee shall be
entitled to such relief as can be given either at law or in equity.

 

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Section 6.08 Unconditional Right of Noteholders to Receive Principal and
Interest.

Notwithstanding any other provision in this Indenture and Servicing Agreement,
other than the provisions hereof limiting the right to recover amounts due on
the Notes to recoveries from the property comprising the Trust Estate, the
Holder of any Note shall have the absolute and unconditional right to receive
payment of the principal of and interest on such Note as such payments of
principal and interest become due, including on the Stated Maturity and
Mandatory Redemption Date, and such right shall not be impaired without the
consent of such Noteholder.

Section 6.09 Restoration of Rights and Remedies.

If the Indenture Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Indenture and Servicing Agreement and
such proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in
every such case, subject to any determination in such proceeding, the Issuer,
the Indenture Trustee and the Noteholders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders continue as though no such
proceeding had been instituted.

Section 6.10 Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost, or stolen Notes in Section 2.04(f) hereof, no right
or remedy herein conferred upon or reserved to the Indenture 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 6.11 Delay or Omission Not Waiver.

No delay or omission of the Indenture 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 an
acquiescence therein. Every right and remedy given by this Article or by law to
the Indenture Trustee or to the Noteholders may be exercised from time to time,
and as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.

Section 6.12 Control by Noteholders.

Except as may otherwise be provided in this Indenture and Servicing Agreement,
until such time as the conditions specified in Sections 11.01(a)(i) and
(ii) hereof have been satisfied in full, the Majority Facility Investors shall
have the right to direct the time, method and

 

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place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee,
with respect to the Notes. Notwithstanding the foregoing:

(i) no such direction shall be in conflict with any rule of law or with this
Indenture and Servicing Agreement;

(ii) the Indenture Trustee shall not be required to follow any such direction
which the Indenture Trustee reasonably believes might result in any personal
liability on the part of the Indenture Trustee for which the Indenture Trustee
is not adequately indemnified; and

(iii) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee which is not inconsistent with any such direction; provided
that the Indenture Trustee shall give notice of any such action to each
Noteholder.

Section 6.13 Waiver of Events of Default.

(a) Prior to the Indenture Trustee’s acquisition of money, judgment or decree
for payment, in either case for the payment of all amounts owing by the Issuer
in connection with this Indenture and Servicing Agreement and the Notes issued
hereunder, the Required Facility Investors have the right to waive any Event of
Default, except a continuing Event of Default:

(i) in respect of the payment of the principal of or interest on any Note (which
may only be waived by the Holder of such Note), or

(ii) in respect of a covenant or provision hereof which under Article 9 hereof
cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected (which only may be waived by the Holders of all
Outstanding Notes affected).

(b) A copy of each waiver pursuant to Section 6.13(a) hereof shall be furnished
by the Issuer to the Indenture Trustee and each Noteholder.

(c) Upon any such waiver, such Event of Default shall cease to exist and shall
be deemed to have been cured, for every purpose of this Indenture and Servicing
Agreement; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereon.

Section 6.14 Undertaking for Costs.

All parties to this Indenture and Servicing Agreement agree (and each Holder of
any Note by its 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 and Servicing Agreement, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess

 

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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 the provisions of this
Section 6.14 shall not apply to any suit instituted by the Indenture Trustee, to
any suit instituted by any Noteholder, or the Majority Facility Investors, 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 maturities for such
payments, including the Stated Maturity as applicable.

Section 6.15 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 Servicing Agreement; 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 Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

Section 6.16 Sale of Trust Estate.

(a) The power to effect any sale of any portion of the Trust Estate pursuant to
Section 6.03 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 so allocated shall have been sold or all amounts
payable on the Notes shall have been paid. The Indenture Trustee may from time
to time, upon directions in accordance with Section 6.12 hereof, postpone any
public sale by public announcement made at the time and place of such sale.

(b) To the extent permitted by applicable law, the Indenture Trustee shall not
sell to a third party the Trust Estate, or any portion thereof except as
permitted under Section 6.03(e) hereof.

(c) In connection with a sale of all or any portion of the Trust Estate:

(i) any one or more Noteholders or the Owner may bid for and purchase the
property offered for sale, and upon compliance with the terms of sale may hold,
retain, and possess and dispose of such property, without further
accountability, and any Noteholder may, in paying the purchase money therefor,
deliver in lieu of cash any Outstanding Notes or claims for interest thereon for
credit in the amount that shall, upon distribution of the net proceeds of such
sale, be payable thereon, and the Notes, in case the amounts so payable thereon
shall be less than the amount due thereon, shall be returned to the Noteholders
after being appropriately stamped to show such partial payment; provided,
however, that the Owner may irrevocably waive its option to bid for and purchase
the property offered for sale by delivering a waiver letter to the Indenture
Trustee;

 

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(ii) the Indenture Trustee shall execute and deliver an appropriate instrument
of conveyance prepared by the Servicer transferring the Issuer’s interest
without representation or warranty and without recourse in any portion of the
Trust Estate in connection with a sale thereof;

(iii) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey the Issuer’s interest in
any portion of the Trust Estate in connection with a sale thereof, and to take
all action necessary to effect such sale;

(iv) no purchaser or transferee at such a sale shall be bound to ascertain the
Indenture Trustee’s authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys; and

(v) The method, manner, time, place and terms of any sale of all or any portion
of the Trust Estate shall be commercially reasonable.

ARTICLE VII

THE INDENTURE TRUSTEE

Section 7.01 Certain Duties. (a) The Indenture Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this Indenture
and Servicing Agreement, and no implied covenants or obligations shall be read
into this Indenture and Servicing Agreement against the Indenture Trustee.

(b) In the absence of bad faith on its part, the Indenture 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
Indenture Trustee and conforming to the requirements of this Indenture and
Servicing Agreement; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Indenture Trustee, the Indenture Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture and Servicing Agreement, provided however, the Indenture Trustee shall
not be required to verify or recalculate the contents thereof.

(c) In case an Event of Default has occurred and is continuing, the Indenture
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and Servicing Agreement, and use the same degree of care and skill in
their exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person’s own affairs; provided, however,
that no provision in this Indenture and Servicing Agreement shall be construed
to limit the obligations of the Indenture Trustee to provide notices under
Section 7.02 hereof.

(d) The Indenture Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture and Servicing Agreement at the
request or direction of any of the Noteholders pursuant to this Indenture and
Servicing Agreement, unless

 

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such Noteholders shall have offered to the Indenture Trustee reasonable security
or indemnity (which may be in the form of written assurances) against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.

(e) No provision of this Indenture and Servicing Agreement shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

(i) this Section 7.01(e) shall not be construed to limit the effect of
Section 7.01(a) and (b) hereof;

(ii) the Indenture Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it shall be proved that the Indenture
Trustee shall have been negligent in ascertaining the pertinent facts; and

(iii) the Indenture 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 written
direction of the holders of the requisite principal amount of the outstanding
Notes, or in accordance with any written direction delivered to it under
Section 6.02(a) hereof, relating to the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or exercising any
trust or power conferred upon the Indenture Trustee, under this Indenture and
Servicing Agreement.

(f) Whether or not therein expressly so provided, every provision of this
Indenture and Servicing Agreement relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee shall be subject
to the provisions of this Section 7.01.

(g) The Indenture Trustee makes no representations or warranties with respect to
the Timeshare Loans.

(h) Notwithstanding anything to the contrary herein, the Indenture Trustee is
not required to expend or risk its own funds or otherwise incur 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 to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

Section 7.02 Notice of Events of Default and Amortization Events.

The Indenture Trustee shall promptly (but in any event within three Business
Days) notify the Issuer, the Servicer, and the Noteholders upon a Responsible
Officer obtaining actual knowledge of any event which constitutes an
Amortization Event, an Event of Default or a Servicer Event of Default or would
constitute an Amortization Event, an Event of Default or a Servicer Event of
Default but for the requirement that notice be given or time elapse or both,
provided, further, that this Section 7.02 shall not limit the obligations of the
Indenture Trustee to provide notices expressly required by this Indenture and
Servicing Agreement.

 

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Section 7.03 Certain Matters Affecting the Indenture Trustee. Subject to the
provisions of Section 7.01 hereof:

(a) The Indenture 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, debenture,
note, other evidence of indebtedness or other 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 any Noteholders, the Issuer, or the Servicer
mentioned herein shall be in writing;

(c) Whenever in the performance of its duties hereunder the Indenture Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Indenture Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer’s Certificate or an Opinion of Counsel;

(d) The Indenture Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be deemed authorization in respect of
any action taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon;

(e) Prior to the occurrence of an Amortization Event, an Event of Default, or a
Servicer Event of Default, or after the curing of all Amortization Events,
Events of Default or Servicer Events of Default which may have occurred, the
Indenture 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, consent, order, approval, bond or other paper document,
unless requested in writing so to do by the Majority Facility Investors;
provided, however, that if the payment within a reasonable time to the Indenture
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the reasonable opinion of the Indenture
Trustee, not reasonably assured to the Indenture Trustee by the security
afforded to it by the terms of this Indenture and Servicing Agreement, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Indenture Trustee,
shall be reimbursed by the Servicer upon demand;

(f) The Indenture Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian (which may be Affiliates of the Indenture Trustee) and
the Indenture Trustee shall not be liable for any acts or omissions of such
agents, attorneys or custodians appointed with due care by it hereunder; and

(g) Delivery of any reports, information and documents to the Indenture Trustee
provided for herein is for informational purposes only (unless otherwise
expressly stated) and the Indenture Trustee’s receipt of such shall not
constitute constructive knowledge of any information contained therein or
determinable from information contained therein, including the Servicer’s or the
Issuer’s compliance with any of its representations, warranties or covenants
hereunder (as to which the Indenture Trustee is entitled to rely exclusively on
Officer’s Certificates).

 

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Section 7.04 Indenture Trustee Not Liable for Notes or Timeshare Loans. (a) The
Indenture Trustee makes no representations as to the validity or sufficiency of
this Indenture and Servicing Agreement or any Facility Document, the Notes
(other than the authentication thereof) or of any Timeshare Loan. The Indenture
Trustee shall not be accountable for the use or application by the Issuer of
funds paid to the Issuer in consideration of conveyance of the Timeshare Loans
to the Trust Estate.

(b) The Indenture Trustee shall have no responsibility or liability for or with
respect to the validity of any security interest in any property securing a
Timeshare Loan; the existence or validity of any Timeshare Loan, the validity of
the assignment of any Timeshare Loan to the Trust Estate or of any intervening
assignment; the review of any Timeshare Loan, any Timeshare Loan File, the
completeness of any Timeshare Loan File, the receipt by the Custodian of any
Timeshare Loan or Timeshare Loan File (it being understood that the Indenture
Trustee has not reviewed and does not intend to review such matters); the
performance or enforcement of any Timeshare Loan; the compliance by the
Servicer, the Issuer or the Servicer with any covenant or the breach by the
Servicer or the Issuer of any warranty or representation made hereunder or in
any Facility Document or the accuracy of any such warranty or representation;
the acts or omissions of the Servicer, the Servicer or any Obligor; or any
action of the Servicer or the Servicer taken in the name of the Indenture
Trustee.

Section 7.05 Indenture Trustee May Own Notes.

The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Notes with the same rights as it would have if it were not
Indenture Trustee.

Section 7.06 Indenture Trustee’s Fees and Expenses.

On each Payment Date, the Indenture Trustee shall be entitled to the Indenture
Trustee Fee and reimbursement of Indenture Trustee Expenses in the priority
provided in Section 3.04 hereof.

Section 7.07 Eligibility Requirements for Indenture Trustee.

The Indenture Trustee hereunder shall at all times (a) be a corporation,
national banking association, depository institution, or trust company organized
and doing business under the laws of the United States of America or any state
thereof authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, (b) be subject to
supervision or examination by federal or state authority, (c) be capable of
maintaining an Eligible Bank Account, (d) have a long-term unsecured debt rating
of not less than “BBB” from S&P or “Baa2” from Moody’s, and (e) shall be
acceptable to the Majority Facility Investors. If such institution publishes
reports of condition at least annually, pursuant to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 7.07, the combined capital and surplus of such institution shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Indenture Trustee
shall cease to be eligible in accordance with the provisions of this
Section 7.07, the Indenture Trustee shall resign immediately in the manner and
with the effect specified in Section 7.08 hereof.

 

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Section 7.08 Resignation or Removal of Indenture Trustee. (a) Subject to clause
(c) below, the Indenture Trustee may at any time resign and be discharged with
respect to the Notes by giving 60 days’ written notice thereof to the Servicer,
the Issuer and the Noteholders. Upon receiving such notice of resignation, the
Issuer shall promptly appoint a successor Indenture Trustee not objected to by
the Majority Facility Investors within 30 days of such notice, by written
instrument, in quintuplicate, one counterpart of which instrument shall be
delivered to each of the Issuer, the Servicer, the successor Indenture Trustee
and the predecessor Indenture Trustee. If no successor Indenture Trustee shall
have been so appointed and have accepted appointment within 60 days after the
giving of such notice of resignation, the resigning Indenture Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.

(b) If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of Section 7.07 hereof and shall fail to resign
after written request therefor by the Issuer, or if at any time the Indenture
Trustee shall be legally unable to act, fails to perform in any material respect
its obligations under this Indenture and Servicing Agreement, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Indenture Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Indenture Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Issuer or the Majority
Facility Investors may direct, and the Servicer shall follow such direction and
remove the Indenture Trustee. If it removes the Indenture Trustee under the
authority of the immediately preceding sentence, the Issuer shall promptly
appoint a successor Indenture Trustee not objected to by the Majority Facility
Investors, within 30 days after prior written notice, by written instrument, in
sufficient originals, one counterpart of which instrument shall be delivered to
each of the Issuer, the Servicer, the Noteholders, the successor Indenture
Trustee and the predecessor Indenture Trustee.

(c) Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to any of the provisions of this
Section 7.08 shall not become effective until acceptance of appointment by the
successor Indenture Trustee as provided in Section 7.09 hereof.

Section 7.09 Successor Indenture Trustee. (a) Any successor Indenture Trustee
appointed as provided in Section 7.08 hereof shall execute, acknowledge and
deliver to each of the Servicer, the Issuer, the Noteholders and to its
predecessor Indenture Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Indenture
Trustee shall become effective and such successor Indenture Trustee, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder with like effect as
if originally named an Indenture Trustee. The predecessor Indenture Trustee
shall deliver or cause to be delivered to the successor Indenture Trustee or its
custodian any Facility Documents and statements held by it or its custodian
hereunder; and the Servicer and the Issuer and the predecessor Indenture Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for the full and certain vesting and confirmation in the
successor Indenture Trustee of all such rights, powers, duties and obligations.

 

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(b) In case of the appointment hereunder of a successor Indenture Trustee with
respect to the Notes, the Issuer, the retiring Indenture Trustee and each
successor Indenture Trustee with respect to the Notes shall execute and deliver
an indenture supplemental hereto wherein each successor Indenture Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Indenture Trustee all the rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Notes to which the appointment of
such successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee
is not retiring with respect to all Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Indenture Trustee with respect to the Notes as
to which the retiring Indenture Trustee is not retiring shall continue to be
vested in the retiring Indenture Trustee, and (iii) shall add to or change any
of the provisions of this Indenture and Servicing Agreement as shall be
necessary to provide for or facilitate the administration of the Trust Estate
hereunder by more than one Indenture Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Indenture
Trustees co-trustees of the same allocated trust and that each such Indenture
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Indenture Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Indenture Trustee shall become effective
to the extent provided therein and each such successor Indenture Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Indenture Trustee with respect
to the Notes to which the appointment of such successor Indenture Trustee
relates; but, on request of the Issuer or any successor Indenture Trustee, such
retiring Indenture Trustee shall duly assign, transfer and deliver to such
successor Indenture Trustee all property and money held by such retiring
Indenture Trustee hereunder with respect to the Notes of that or those to which
the appointment of such successor Indenture Trustee relates.

Upon request of any such successor Indenture 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 referred to in the
preceding paragraph.

(c) No successor Indenture Trustee shall accept appointment as provided in this
Section 7.09 unless at the time of such acceptance such successor Indenture
Trustee shall be eligible under the provisions of Section 7.07 hereof.

(d) Upon acceptance of appointment by a successor Indenture Trustee as provided
in this Section 7.09, the Servicer shall mail notice of the succession of such
Indenture Trustee hereunder to each Noteholder at its address as shown in the
Note Register. If the Servicer fails to mail such notice within 10 days after
acceptance of appointment by the successor Indenture Trustee, the successor
Indenture Trustee shall cause such notice to be mailed at the expense of the
Issuer and the Servicer.

 

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Section 7.10 Merger or Consolidation of Indenture Trustee.

Any corporation into which the Indenture Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Indenture Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Indenture
Trustee, shall be the successor of the Indenture Trustee hereunder, provided
such corporation shall be eligible under the provisions of Section 7.07 hereof,
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.

Section 7.11 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) At any time or times for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust Estate may at the time be located or
in which any action of the Indenture Trustee may be required to be performed or
taken, the Indenture Trustee, the Servicer or the Majority Facility Investors,
by an instrument in writing signed by it or them, may appoint, at the reasonable
expense of the Issuer (as an Indenture Trustee Expense) and the Servicer, one or
more individuals or corporations to act as separate trustee or separate trustees
or co-trustee, acting jointly with the Indenture Trustee, of all or any part of
the Trust Estate, to the full extent that local law makes it necessary for such
separate trustee or separate trustees or co-trustee acting jointly with the
Indenture Trustee to act. Notwithstanding the appointment of any separate or
co-trustee, the Indenture Trustee shall remain obligated and liable for the
obligations of the Indenture Trustee under this Indenture and Servicing
Agreement.

(b) The Indenture Trustee and, at the request of the Indenture Trustee, the
Issuer shall execute, acknowledge and deliver all such instruments as may be
required by the legal requirements of any jurisdiction or by any such separate
trustee or separate trustees or co-trustee for the purpose of more fully
confirming such title, rights, or duties to such separate trustee or separate
trustees or co-trustee. Upon the acceptance in writing of such appointment by
any such separate trustee or separate trustees or co-trustee, it, he, she or
they shall be vested with such title to the Trust Estate or any part thereof,
and with such rights, powers, duties and obligations as shall be specified in
the instrument of appointment, and such rights, powers, duties and obligations
shall be conferred or imposed upon and exercised or performed by the Indenture
Trustee, or the Indenture Trustee and such separate trustee or separate trustees
or co-trustees jointly with the Indenture Trustee subject to all the terms of
this Indenture and Servicing Agreement, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall be
exercised and performed by such separate trustee or separate trustees or
co-trustee, as the case may be. Any separate trustee or separate trustees or
co-trustee may, at any time by an instrument in writing, constitute the
Indenture Trustee its attorney-in-fact and agent with full power and authority
to do all acts and things and to exercise all discretion on its behalf and in
its name. In any case, if any such separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, the title to the Trust Estate
and all assets, property, rights, power duties and obligations and duties of
such separate trustee or co-trustee shall, so far as permitted by law, vest in
and be exercised by the Indenture Trustee, without the appointment of a
successor to such separate trustee or co-trustee unless and until a successor is
appointed.

 

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(c) All provisions of this Indenture and Servicing Agreement which are for the
benefit of the Indenture Trustee shall extend to and apply to each separate
trustee or co-trustee appointed pursuant to the foregoing provisions of this
Section 7.11.

(d) Every additional trustee and separate trustee hereunder shall, to the extent
permitted by law, be appointed and act and the Indenture Trustee shall act,
subject to the following provisions and conditions: (i) all powers, duties and
obligations and rights conferred upon the Indenture Trustee in respect of the
receipt, custody, investment and payment of monies shall be exercised solely by
the Indenture Trustee; (ii) all other rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be conferred or imposed
and exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent that
under any law of any jurisdiction in which any particular act or acts are to be
performed, the Indenture Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to property in any such jurisdiction) shall be
exercised and performed by such additional trustee or trustees or separate
trustee or trustees; (iii) no power hereby given to, or exercisable by, any such
additional trustee or separate trustee shall be exercised hereunder by such
trustee except jointly with, or with the consent of, the Indenture Trustee; and
(iv) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder.

If at any time, the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to such law, the Indenture Trustee shall execute and
deliver all instruments and agreements necessary or proper to remove any
additional trustee or separate trustee.

(e) Any request, approval or consent in writing by the Indenture Trustee to any
additional trustee or separate trustee shall be sufficient warrant to such
additional trustee or separate trustee, as the case may be, to take such action
as may be so requested, approved or consented to.

(f) Notwithstanding any other provision of this Section 7.11, the powers of any
additional trustee or separate trustee shall not exceed those of the Indenture
Trustee hereunder.

Section 7.12 Note Registrar Rights.

So long as the Indenture Trustee is the Note Registrar, the Note Registrar shall
be entitled to the rights, benefits and immunities of the Indenture Trustee as
set forth in this Article VII to the same extent and as fully as though named in
place of the Indenture Trustee.

Section 7.13 Authorization.

The Indenture Trustee is hereby authorized to enter into and perform each of the
Facility Documents.

 

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ARTICLE VIII

COVENANTS

Section 8.01 Payment of Principal and Interest.

The Issuer will cause the due and punctual payment of the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture and Servicing Agreement.

Section 8.02 Maintenance of Office or Agency; Chief Executive Office.

The Issuer will maintain an office or agency in the State of Delaware at the
Corporate Trust Office of the Owner Trustee, where notices and demands to or
upon the Issuer in respect of the Notes and this Indenture and Servicing
Agreement may be served.

Section 8.03 Money for Payments to Noteholders to be Held in Trust.

(a) All payments of amounts due and payable with respect to any Notes that are
to be made from amounts withdrawn from the Trust Accounts pursuant to
Section 3.04 or Section 6.06 hereof shall be made on behalf of the Issuer by the
Indenture Trustee, and no amounts so withdrawn from the Collection Account for
payments of Notes shall be paid over to the Issuer under any circumstances
except as provided in this Section 8.03, in Section 3.04 hereof or Section 6.06
hereof.

(b) In making payments hereunder, the Indenture Trustee will hold all sums held
by it for the payment of amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided.

(c) Except as required by applicable law, any money held by the Indenture
Trustee in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for three years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable
escheat laws, and so long as no Event of Default has occurred and is continuing,
paid to the Issuer upon request; otherwise, such amounts shall be redeposited in
the Collection Account as Available Funds, and such Noteholder shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof
(but only to the extent of the amounts so paid to the Issuer), and all liability
of the Indenture Trustee with respect to such trust money shall thereupon cease.

Section 8.04 Existence; Merger; Consolidation, etc.

(a) The Issuer will keep in full effect its existence, rights and franchises as
a statutory trust under the laws of the State of Delaware, and will obtain and
preserve its qualification to do business as a foreign statutory trust in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture and Servicing Agreement, the Notes
or any of the Timeshare Loans.

 

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(b) The Issuer shall at all times observe and comply in all material respects
with (i) all laws applicable to it, (ii) all requirements of law in the
declaration and payment of distributions, (iii) all requisite and appropriate
formalities (including without limitation all appropriate authorizations
required by the Trust Agreement) in the management of its business and affairs
and the conduct of the transactions contemplated hereby, and (iv) the provisions
of the Trust Agreement.

(c) The Issuer shall not (i) consolidate or merge with or into any other Person
or convey or transfer its properties and assets substantially as an entirety to
any other Person or (ii) commingle its assets with those of any other Person.

(d) The Issuer shall not become an “investment company” or come under the
“control” of an “investment company” as such terms are defined in the 1940 Act
(or any successor or amendatory statute), and the rules and regulations
thereunder (taking into account not only the general definition of the term
“investment company” but also any available exceptions to such general
definition); provided, however, that the Issuer shall be in compliance with this
Section 8.04(d) if it shall have obtained an order exempting it from regulation
as an “investment company” so long as it is in compliance with the conditions
imposed in such order.

Section 8.05 Protection of Trust Estate; Further Assurances.

The Issuer will from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance, and other instruments, and will take such
other action as may be necessary or advisable to:

(i) grant more effectively the assets comprising all or any portion of the Trust
Estate;

(ii) maintain or preserve the lien of this Indenture and Servicing Agreement or
carry out more effectively the purposes hereof;

(iii) publish notice of, or protect the validity of, any Grant made or to be
made by this Indenture and Servicing Agreement and perfect the security interest
contemplated hereby in favor of the Indenture Trustee in each of the Timeshare
Loans and all other property included in the Trust Estate; provided, that the
Issuer shall not be required to cause the recordation of the Indenture Trustee’s
name as lienholder on the related title documents for the Timeshare Properties
so long as no Event of Default has occurred and is continuing;

(iv) enforce or cause the Servicer to enforce any of the Timeshare Loans in
accordance with the Servicing Standard, provided, however, the Issuer will not
cause the Servicer to obtain on behalf of the Indenture Trustee or the
Noteholders, any Timeshare Property or to take any actions with respect to any
property the result of which would adversely affect the interests of the
Indenture Trustee or the Noteholders (including, but not limited to actions
which would cause the Indenture Trustee or the related Noteholders to be
considered a holder of title, mortgagee-in-possession, or otherwise, or an
“owner” or “operator” of Timeshare Property not in compliance with applicable
environmental statutes); and

 

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(v) preserve and defend title to the Timeshare Loans (including the right to
receive all payments due or to become due thereunder), the interests in the
Timeshare Properties, or other property included in the Trust Estate and
preserve and defend the rights of the Indenture Trustee in the Trust Estate
(including the right to receive all payments due or to become due thereunder)
against the claims of all Persons and parties other than as permitted hereunder.

The Issuer, upon the Issuer’s failure to do so, hereby irrevocably designates
the Indenture Trustee and the Servicer, severally, its agents and
attorneys-in-fact to execute any financing statement or continuation statement
or assignment of Mortgage required pursuant to this Section 8.05; provided,
however, that such designation shall not be deemed to create a duty in the
Indenture Trustee to monitor the compliance of the Issuer with the foregoing
covenants, and provided, further, that the duty of the Indenture Trustee to
execute any instrument required pursuant to this Section 8.05 shall arise only
if a Responsible Officer of the Indenture Trustee has actual knowledge of any
failure of the Issuer to comply with the provisions of this Section 8.05. Such
financing statements may describe the Trust Estate in the same manner as
described herein or may contain an indication or description of collateral that
describes such property in any other manner as any of them may determine, in its
sole discretion, is necessary, advisable or prudent to ensure the perfection of
the security interest in the Trust Estate granted to the Indenture Trustee
herein, including, without limitation, describing such property as “all assets”
or “all personal property, whether now owned or hereafter acquired.”

Section 8.06 Additional Covenants.

(a) The Issuer will not:

(i) sell, transfer, exchange or otherwise dispose of any portion of the Trust
Estate except as expressly permitted by this Indenture and Servicing Agreement;

(ii) claim any credit on, or make any deduction from, the principal of, or
interest on, any of the Notes by reason of the payment of any taxes levied or
assessed upon any portion of the Trust Estate;

(iii) (A) permit the validity or effectiveness of this Indenture and Servicing
Agreement or any Grant hereby to be impaired, or permit the lien of this
Indenture and Servicing Agreement to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any covenants
or obligations under this Indenture and Servicing Agreement, except as may be
expressly permitted hereby, (B) permit any lien, charge, security interest,
mortgage or other encumbrance to be created on or to extend to or otherwise
arise upon or burden the Trust Estate or any part thereof or any interest
therein or the proceeds thereof other than the lien of this Indenture and
Servicing Agreement, or (C) except as otherwise contemplated in this Indenture
and Servicing Agreement, permit the lien of this Indenture and Servicing
Agreement not to constitute a valid first priority security interest in the
Trust Estate; or

 

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(iv) take any other action or fail to take any actions which may cause the
Issuer to be taxable as (A) an association pursuant to Section 7701 of the Code
and the corresponding regulations, (B) a publicly traded partnership taxable as
a corporation pursuant to Section 7704 of the Code and the corresponding
regulations or (C) a taxable mortgage pool pursuant to Section 7701(i) of the
Code and the corresponding regulations.

(b) Notice of Events of Default and Amortization Events. Within one Business Day
of becoming aware of the existence of any condition or event which constitutes a
Default or an Event of Default, a Servicer Event of Default or an Amortization
Event, the Issuer shall deliver to the Indenture Trustee a written notice
describing its nature and period of existence and what action the Issuer is
taking or proposes to take with respect thereto.

(c) Report on Proceedings. Promptly upon the Issuer becoming aware of: (i) any
proposed or pending investigation of it by any governmental authority or agency;
or (ii) any pending or proposed court or administrative proceeding which
involves or may involve the possibility of materially and adversely affecting
the properties, business, prospects, profits or condition (financial or
otherwise) of the Issuer, the Issuer shall deliver to the Indenture Trustee a
written notice specifying the nature of such investigation or proceeding and
what action the Issuer is taking or proposes to take with respect thereto and
evaluating its merits.

Section 8.07 Taxes. The Issuer shall pay all taxes when due and payable or
levied against its assets, properties or income, including any property that is
part of the Trust Estate, except to the extent the Issuer is contesting the same
in good faith and has set aside adequate reserves in accordance with generally
accepted accounting principles for the payment thereof. The Issuer shall be
disregarded for federal income tax purposes.

Section 8.08 Treatment of Notes as Debt for Tax Purposes. The Issuer shall treat
the Notes as indebtedness for all federal, state and local income and franchise
tax purposes.

Section 8.09 Collections.

(a) The Issuer shall instruct or cause all Obligors to be instructed to:

(i) send all scheduled payments of principal or interest under the Timeshare
Loans directly to Post Office Boxes for credit to the Control Account or
directly to the Control Account,

(ii) make scheduled payments of principal or interest under the Timeshare Loans
by way of pre-authorized debits from a deposit account of such Obligor pursuant
to a PAC or from a credit card of such Obligor pursuant to a Credit Card Account
from which payments under the Timeshare Loans shall be electronically
transferred to the Control Account or to another account for processing and
transfer into the Collection Account, or

(iii) make payment by electronic transfer of funds to the Control Account or to
another account for processing and transfer into the Collection Account.

 

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(b) In the case of funds transfers pursuant to a PAC or Credit Card Account, or
other electronic means, take, or cause each of the Servicer and/or the Control
Account Bank to take, all necessary and appropriate action to ensure that each
such pre-authorized debit or credit card payment or transfer is credited
directly to the Control Account or another account for transfer to the
Collection Account.

(c) The Issuer shall hold any collections or other proceeds of the Trust Estate
received directly by it in trust for the benefit of the Indenture Trustee and
the Noteholders and deposit such collections into the Control Account or the
Collection Account within two Business Days following the Issuer’s receipt
thereof (or, if initially there is insufficient information to determine to
which Timeshare Loan any funds relate, within two Business Days of obtaining
sufficient information).

Section 8.10 Segregation of Collections.

The Issuer (or its agent) shall with respect to the Control Account either
(i) prevent the deposit into such account of any funds other than collections in
respect of the Timeshare Loans or (ii) enter into an intercreditor agreement
with other entities which have an interest in the amounts in the Control Account
to allocate the collections with respect to the Timeshare Loans to the Issuer
and transfer such amounts to the Indenture Trustee for deposit into the
Collection Account; provided that, the covenant in clause (i) of this paragraph
shall not be breached to the extent that funds not constituting collections in
respect of the Timeshare Loans are inadvertently deposited into such Control
Account and are promptly segregated and remitted to the owner thereof.

Section 8.11 Change in Payment Instructions to Obligors.

The Issuer (or its agent) shall not add or terminate any bank as a Control
Account Bank or make any change in the instructions to Obligors regarding
payments to be made to any Control Account at a Control Account Bank, unless the
Indenture Trustee and Administrative Agent shall have received (i) 30 days’
prior notice of such addition, termination or change; (ii) written confirmation
from the Issuer that after the effectiveness of any such termination, there
shall be at least one (1) Control Account in existence; and (iii) prior to the
effective date of such addition, termination or change, (x) executed copies of
the Control Agreement executed by the new Control Account Bank, the Issuer (or
its agent), the Indenture Trustee (or its agent), the Servicer and other
appropriate parties and (y) copies of all agreements and documents signed by
either the Issuer or the Control Account Bank with respect to any new Control
Account.

Section 8.12 Change in Payment Instructions to Obligors.

The Servicer will not add or terminate any bank as a Control Account Bank or
make any change in its instructions to Obligors regarding payments to be made to
any Control Account Bank, unless the Indenture Trustee and the Administrative
Agent shall have received (i) 30 Business Days’ prior notice of such addition,
termination or change and (ii) prior to the effective date of such addition,
termination or change, (x) fully executed copies of the new or revised Control
Agreement executed by the new Control Account Bank, the Issuer (or its agent),
Indenture Trustee (or its agent), the Servicer and other appropriate parties and
(y) copies of all agreements and documents signed by either the Issuer or the
Control Account Bank with respect to any new Control Account.

 

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Section 8.13 Notices to Obligors.

The Servicer will ensure that the Obligor of each Timeshare Loan either: (1) has
been instructed, pursuant to the Servicer’s routine distribution of a periodic
statement to such Obligor next succeeding: (A) the date the Loan becomes subject
to the Lien of this Indenture and Servicing Agreement, or (B) the day on which a
PAC ceased to apply to such Timeshare Loan, in the case of a Timeshare Loan
formerly subject to a PAC, but in no event later than the then next-succeeding
due date for a scheduled payment of principal or interest with respect to such
Timeshare Loan, to remit payments for a Timeshare Loan thereunder to a Post
Office Box for credit to the Control Account, or directly to the Control
Account, in each case maintained at a Control Account Bank pursuant to the terms
of a Control Agreement, (2) has entered into a PAC, pursuant to which a deposit
account of such Obligor is made subject to a pre-authorized debit in respect of
scheduled payments of principal or interest with respect to Timeshare Loans as
they become due and payable, and the Servicer has, and has caused each of the
Control Account Bank and/or the Indenture Trustee, to take all necessary and
appropriate action to ensure that each such preauthorized debit is credited
directly to the Control Account or the Collection Account; (3) has authorized
scheduled payments of principal and interest with respect to a Timeshare Loan
from a credit card of such Obligor pursuant to a Credit Card Account, and the
Servicer has taken all necessary and appropriate action to ensure that each such
payment is credited directly to the Control Account or another account for
immediate transfer to the Collection Account; or (4) has authorized electronic
transfer of payments through other electronic means, and the Servicer has taken
all necessary and appropriate action to ensure that each such transfer is
credited directly to the Control Account or another account for immediate
transfer to the Collection Account.

Section 8.14 Segregation of Collections.

The Servicer will, with respect to the Control Account, either (i) prevent the
deposit into such account of any funds other than collections in respect of the
Timeshare Loans or (ii) enter into an intercreditor agreement with other
entities which have an interest in the amounts in the Control Account to
allocate the collections with respect to the Timeshare Loans to the Issuer and
transfer such amounts to the Indenture Trustee for deposit into the appropriate
Collection Account; provided that, the covenant in clause (i) of this
Section 8.14 shall not be breached to the extent funds not constituting
collections in respect of Timeshare Loans are inadvertently deposited into such
Control Account and are promptly segregated and remitted to the owner thereof.

Section 8.15 Further Instruments and Acts.

Upon request of the Indenture Trustee, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture and Servicing
Agreement.

 

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ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 9.01 Supplemental Indentures without Consent of Noteholders.

(a) The Issuer, the Servicer, the Back-Up Servicer and, by an Issuer Order, the
Indenture Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Indenture Trustee
without the consent of any Noteholder, for any of the following purposes:

(i) to correct or amplify the description of any property at any time subject to
the lien of this Indenture and Servicing Agreement, or to better assure, convey
and confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture and Servicing Agreement; provided such
action pursuant to this clause (i) shall not adversely affect the interests of
the Noteholders or the Hedge Counterparty in any respect; or

(ii) to evidence and provide for the acceptance of appointment hereunder by a
successor Indenture Trustee with respect to the Notes and to add to or change
any of the provisions of this Indenture and Servicing Agreement as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Indenture Trustee, pursuant to the requirements of
Section 7.09 and Section 7.11 hereof.

(b) The Indenture Trustee shall deliver, at least five Business Days prior to
the effectiveness thereof, to each Noteholder and the Hedge Counterparty a copy
of any supplemental indenture entered into pursuant to this Section 9.01 hereof.

Section 9.02 Supplemental Indentures with Consent of Noteholders.

(a) With the consent of the Majority Facility Investors delivered to the Issuer
and the Indenture Trustee, the Issuer, the Servicer, the Back-Up Servicer and,
by an Issuer Order, the Indenture 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
and Servicing Agreement or of modifying in any manner the rights of the
Noteholders under this Indenture and Servicing Agreement; provided, that no
supplemental indenture shall, without the consent of the Noteholder of each
Outstanding Note affected thereby:

(i) change the Stated Maturity or Mandatory Redemption Date of any Note or the
amount of principal payments or interest payments due or to become due on any
Payment Date with respect to any Note, or change the priority of payment thereof
as set forth herein, or reduce the principal amount thereof or the Carrying
Cost, Usage Fee and Unused Fee thereon or related thereto, or change the place
of payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or modify or alter the definition of the term “Advance
Rate,” or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof;

 

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(ii) reduce the required percentage of the Outstanding Note Balance that must be
represented by voting on whether to enter into any supplemental indenture or to
waive compliance with certain provisions of this Indenture and Servicing
Agreement or Events of Default and their consequences;

(iii) modify any of the provisions of this Section 9.02 or Section 6.13 hereof
except to increase any percentage of Noteholders required for any modification
or waiver or to provide that certain other provisions of this Indenture and
Servicing Agreement cannot be modified or waived without the consent of the
Holders of each Outstanding Note affected thereby;

(iv) modify or alter the provisions of the proviso to the definition of the term
“Outstanding”; or

(v) permit the creation of any lien ranking prior to or on a parity with the
lien of this Indenture and Servicing Agreement with respect to any part of the
Trust Estate or terminate (except as provided for herein) the lien of this
Indenture and Servicing Agreement on any property at any time subject hereto or
deprive any Noteholder of the security afforded by the lien of this Indenture
and Servicing Agreement;

provided, no such supplemental indenture may modify or change any terms
whatsoever of the Indenture that could be construed as increasing the Issuer’s
or the Servicer’s discretion hereunder; provided further, that the Indenture
Trustee shall not enter into any such supplemental indenture which would have an
adverse effect on the Hedge Counterparty without the written consent of the
Hedge Counterparty and the Indenture Trustee shall be entitled to receive and
rely on an Officer’s Certificate of the Hedge Counterparty as to whether a
proposed supplemental indenture will adversely affect the Hedge Counterparty.

(b) The Indenture Trustee shall promptly deliver to each Noteholder a copy of
any supplemental indenture entered into pursuant to Section 9.02(a) hereof.

Section 9.03 Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any supplemental
indenture (a) pursuant to Section 9.01 hereof or (b) pursuant to Section 9.02
hereof without the consent of each holder of the Notes to the execution of the
same, or the modifications thereby of the trusts created by this Indenture and
Servicing Agreement, the Indenture Trustee shall be entitled to receive, and
(subject to Section 7.01 hereof) shall be, fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and Servicing Agreement. The Indenture
Trustee may, but shall not be obligated to, enter into any supplemental
indenture which affects the Indenture Trustee’s own rights, duties, obligations,
or immunities under this Indenture and Servicing Agreement or otherwise.

 

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Section 9.04 Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article, this
Indenture and Servicing Agreement shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture and Servicing
Agreement 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 may, and shall if required by the Indenture
Trustee, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. New Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.

ARTICLE X

OPTIONAL PREPAYMENT AND MANDATORY REDEMPTION OF NOTES

Section 10.01 Optional Prepayment. The Issuer may prepay the Notes on any day,
in whole or in part, on at least five (5) days’ prior written notice to the
Administrative Agent, each Funding Agent and each Non-Conduit Committed
Purchaser with a copy to the Indenture Trustee (or such lesser notice period as
shall be acceptable to the Administrative Agent) (such notice a “Prepayment
Notice”) in accordance with Section 2.3 of the Note Purchase Agreement, provided
that (i) the Outstanding Note Balance prepaid is at least $1,000,000 (unless
such lesser amount is agreed to by the Administrative Agent) and (ii) the Issuer
pays to the Administrative Agent, for distribution to the Funding Agents and the
Non-Conduit Committed Purchasers, on the date of prepayment, the amounts set
forth on the Prepayment Notice.

(b) The applicable Prepayment Notice shall state (i) the principal amount of the
Notes to be prepaid and (ii) the aggregate Loan Balance of Timeshare Loans to be
released at the time of prepayment of the Notes, with aggregate Loan Balances in
an amount such that, after giving effect to such release, the Outstanding Note
Balance shall not exceed the Borrowing Base calculated immediately after the
prepayment of the Notes.

Section 10.02 Mandatory Redemption. The Notes shall be subject to mandatory
redemption in whole by the Issuer on the Mandatory Redemption Date and the
entire principal amount of the Notes shall be due and payable on such Mandatory
Redemption Date unless such redemption is waived in writing prior to the
Mandatory Redemption Date by the Holders of 100% of the Notes which are
outstanding on such Mandatory Redemption Date.

 

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ARTICLE XI

SATISFACTION AND DISCHARGE

Section 11.01 Satisfaction and Discharge of Indenture.

(a) This Indenture and Servicing Agreement shall cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Notes herein expressly provided for), and the Indenture Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture and Servicing Agreement, when:

(i) either:

(A) all Notes theretofore authenticated and delivered to Noteholders (other than
(1) Notes which have been destroyed, lost or stolen and which have been paid as
provided in Section 2.05 hereof and (2) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 8.03(c) hereof) have been delivered to the Indenture Trustee
for cancellation upon payment and discharge of the entire indebtedness on such
Notes; or

(B) the final installments of principal on all such Notes not theretofore
delivered to the Indenture Trustee for cancellation (1) have become due and
payable, or (2) will become due and payable at their Stated Maturity, as
applicable within one year, and the Issuer has irrevocably deposited or caused
to be deposited with the Indenture Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire indebtedness on
such Notes to the date of such deposit (in the case of Notes which have become
due and payable) or to the Stated Maturity thereof upon the delivery of such
Notes to the Indenture Trustee for cancellation; or

(C) in the event of a redemption pursuant to Article X, the Issuer has
irrevocably deposited or caused to be deposited with the Indenture Trustee as
trust funds in trust for the purpose of early repayment of the Notes, an amount
sufficient to pay and discharge the entire indebtedness on such Notes upon the
delivery of such Notes to the Indenture Trustee for cancellation;

(ii) the Issuer and the Servicer have paid or caused to be paid all other sums
payable hereunder by the Issuer and the Servicer to the Indenture Trustee for
the benefit of the Noteholders and the Indenture Trustee, including proceeds of
the Timeshare Loans pursuant to Sections 3.04 or 6.06 hereof;

(iii) the funds held in trust by the Indenture Trustee pursuant to Sections
11.01(a)(i) and (ii) hereof for the purpose of paying and discharging the entire
indebtedness on the Notes have been applied to such purpose and the rights of
all of the Noteholders to receive payments from the Issuer have terminated;

 

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(iv) following the completion of the actions provided in Sections 11.01(a)(i),
(ii) and (iii) hereof, the Indenture Trustee has delivered to the Issuer all
cash, securities and other property held by it as part of the Trust Estate; and

(v) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture and
Servicing Agreement have been complied with.

(b) Notwithstanding the satisfaction and discharge of this Indenture and
Servicing Agreement, the obligations of the Issuer to the Indenture Trustee
under Section 7.06 hereof and, if money shall have been deposited with the
Indenture Trustee pursuant to Section 11.01(a)(i) hereof, the obligations of the
Indenture Trustee under Section 11.02 hereof and Section 8.03(c) hereof shall
survive.

Section 11.02 Application of Trust Money.

Subject to the provisions of Section 8.03(c) hereof, all money deposited with
the Indenture Trustee pursuant to Sections 11.01 and 8.03 hereof shall be held
in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture and Servicing Agreement, to the payment to the Persons entitled
thereto, of the principal and interest for whose payment such money has been
deposited with the Indenture Trustee.

Section 11.03 Trust Termination Date.

The Trust Estate created by this Indenture and Servicing Agreement shall be
deemed to have terminated on the date that the Indenture Trustee executes and
delivers to the Issuer and the Owner Trustee an instrument acknowledging
satisfaction and discharge of this Indenture and Servicing Agreement.

ARTICLE XII

REPRESENTATIONS AND WARRANTIES

Section 12.01 Representations and Warranties of the Issuer.

The Issuer represents and warrants to the Indenture Trustee, the Servicer and
the Noteholders, as of the Closing Date, the Amendment Effective Date and each
Funding Date, as follows:

(a) Organization and Good Standing. The Issuer has been duly formed and is
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as
such properties shall be currently owned and such business is presently
conducted and has the power and authority to own and convey all of its
properties and to execute and deliver this Indenture and Servicing Agreement and
the other Facility Documents and to perform the transactions contemplated hereby
and thereby.

 

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(b) Binding Obligation. This Indenture and Servicing Agreement and the other
Facility Documents to which it is a party have each been duly executed and
delivered on behalf of the Issuer and this Indenture and Servicing Agreement and
each other Facility Document to which it is a party constitutes a legal, valid
and binding obligation of the Issuer enforceable in accordance with its terms
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting creditors’ rights and by general principles of equity.

(c) No Consents Required. No consent of, or other action by, and no notice to or
filing with, any Governmental Authority or any other party, is required for the
due execution, delivery and performance by the Issuer of this Indenture and
Servicing Agreement or any of the other Facility Documents or for the perfection
of or the exercise by the Indenture Trustee or the Noteholders of any of their
rights or remedies thereunder which have not been duly obtained.

(d) No Violation. The consummation of the transaction contemplated by this
Indenture and Servicing Agreement and the fulfillment of the terms hereof shall
not conflict with, result in any material breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the certificate of trust, the trust agreement of the Issuer, or
any indenture, agreement or other instrument to which the Issuer is a party or
by which it is bound; nor result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than this Indenture and Servicing Agreement).

(e) No Proceedings. There is no pending or threatened action, suit or
proceeding, nor any injunction, writ, restraining order or other order of any
nature against or affecting the Issuer, its officers or directors, or the
property of the Issuer, in any court or tribunal, or before any arbitrator of
any kind or before or by any Governmental Authority (i) asserting the invalidity
of this Indenture and Servicing Agreement or any of the other Facility
Documents, (ii) seeking to prevent the sale and assignment of any Timeshare Loan
or the consummation of any of the transactions contemplated thereby,
(iii) seeking any determination or ruling that might materially and adversely
affect (A) the performance by the Issuer of this Indenture and Servicing
Agreement or any of the other Facility Documents or the interests of the
Noteholders, (B) the validity or enforceability of this Indenture and Servicing
Agreement or any of the other Facility Documents, (C) any Timeshare Loan, or
(D) the Intended Tax Characterization, or (iv) asserting a claim for payment of
money adverse to the Issuer or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by this
Indenture and Servicing Agreement or any of the other Facility Documents.

(f) Issuer Not Insolvent. The Issuer is solvent and will not become insolvent
after giving effect to the transactions contemplated by this Indenture and
Servicing Agreement and each of the other Facility Documents.

 

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(g) Notes Authorized, Executed, Authenticated, Validly Issued and Outstanding.
The Notes have been duly and validly authorized, and when duly and validly
executed by the Issuer and authenticated by the Indenture Trustee in accordance
with the terms of this Indenture and Servicing Agreement and delivered to and
paid for by each Holder as provided herein, will be validly issued and
outstanding and entitled to the benefits hereof.

(h) Location of Chief Executive Office and Records. The principal place of
business and chief executive office of the Issuer, and the office where the
Issuer maintains all of its records is located at 6649 Westwood Boulevard,
Orlando, Florida.

(i) Name. The legal name of the Issuer is as set forth in the signature page of
this Indenture and Servicing Agreement and the Issuer does not have any
tradenames, fictitious names, assumed names or “doing business as” names.

(j) Accuracy of Information. The representations and warranties of the Issuer in
the Facility Documents are true and correct in all material respects as of the
Closing Date, the Amendment Effective Date and, except for representations and
warranties expressly made as of a different date, each Funding Date and Transfer
Date.

(k) Special Purpose. The Issuer shall engage in no business, and take no actions
with respect to any other transaction than the transactions contemplated by the
Facility Documents and will otherwise maintain its existence separate from the
Seller and all other entities as provided in its organizational documents.

(l) Securities Laws. The Issuer is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the 1940 Act, as
amended.

(m) Representations and Warranties Regarding Security Interest and Loan Files.

(i) Payment of principal and interest on the Notes in accordance with their
terms and the performance by the Issuer of all its obligations under this
Indenture and Servicing Agreement are secured by the Trust Estate. The Grant
contained in the “Granting Clause” of this Indenture and Servicing Agreement
creates a valid and continuing security interest (as defined in the applicable
UCC) in the Trust Estate in favor of the Indenture Trustee, which security
interest is prior to all other Liens arising under the UCC, and is enforceable
as such against creditors of the Issuer, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).

(ii) The Timeshare Loans and the documents evidencing such Timeshare Loans
constitute either “accounts”, “chattel paper”, “instruments” or “general
intangibles” within the meaning of the applicable UCC.

(iii) The Issuer owns and has good and marketable title to the Trust Estate free
and clear of any Lien, claim or encumbrance of any Person.

 

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(iv) The Issuer has caused or will have caused, within ten days of the Closing
Date and Funding Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Trust Estate granted to the
Indenture Trustee hereunder.

(v) All original executed copies of each Obligor Note that constitute or
evidence the Trust Estate have been delivered to the Custodian and the Issuer
has received a Trust Receipt therefor, which acknowledges that the Custodian is
holding the Obligor Notes that constitute or evidence the Trust Estate solely on
behalf and for the benefit of the Indenture Trustee.

(vi) Other than the security interest granted to the Indenture Trustee pursuant
to this Indenture and Servicing Agreement, the Issuer has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the Trust
Estate. The Issuer has not authorized the filing of and is not aware of any
financing statements against the Issuer that include a description of collateral
covering the Trust Estate other than any financing statement relating to the
security interest granted to the Indenture Trustee hereunder or that has been
terminated.

(vii) All financing statements filed or to be filed against the Issuer in favor
of the Indenture Trustee in connection herewith describing the Trust Estate
contain a statement to the following effect: “A purchase of or security interest
in any collateral described in this financing statement will violate the rights
of the Secured Party.”

(viii) None of the Obligor Notes that constitute or evidence the Trust Estate
has any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Indenture Trustee.

The foregoing representations and warranties in Section 12.01(m)(i) –
(viii) shall remain in full force and effect and shall not be waived or amended
until the Notes are paid in full or otherwise released or discharged.

(n) Eligible Timeshare Loans. Each Timeshare Loan acquired by the Issuer on a
Funding Date is an Eligible Timeshare Loan and each Timeshare Loan used in the
calculation of the Borrowing Base on a Funding Date or a Payment Date is an
Eligible Timeshare Loan as of such Funding Date or Payment Date, as applicable.

(o) Control Account. The Control Account Bank has the authority to receive mail
delivered to the related Post Office Box. The account number of the Control
Account, together with the names, addresses, ABA numbers and names of contact
persons of the Control Account Bank maintaining such Control Account and the
related Post Office Boxes have been delivered to the Administrative Agent and
the Indenture Trustee. From and after the Closing Date, the Indenture Trustee
(or its agent) shall have a first priority perfected security interest in all of
the monies, checks, instruments, depository transfers or automated clearing
house electronic transfers and other items of payment and their proceeds and all
monies and earnings, if any thereon, relating to the Timeshare Loans in the
Control Account. The Indenture Trustee (or its agent) has control over the
Control Account.

 

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Section 12.02 Representations and Warranties of the Initial Servicer.

The initial Servicer hereby represents and warrants as of the Closing Date, the
Amendment Effective Date and each Funding Date, the following:

(a) Organization and Authority. The Servicer:

(i) is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware;

(ii) has all requisite power and authority to own and operate its properties and
to conduct its business as currently conducted and as proposed to be conducted
as contemplated by the Facility Documents to which it is a party, to enter into
the Facility Documents to which it is a party and to perform its obligations
under the Facility Documents to which it is a party; and

(iii) has made all filings and holds all material franchises, licenses, permits
and registrations which are required under the laws of each jurisdiction in
which the properties owned (or held under lease) by it or the nature of its
activities makes such filings, franchises, licenses, permits or registrations
necessary.

(b) Place of Business. The address of the principal place of business and chief
executive office of the Servicer is 6649 Westwood Boulevard, Orlando, Florida
32821 and there have been no other such locations during the immediately
preceding four months.

(c) Compliance with Other Instruments, etc. The Servicer is not in violation of
any term of its certificate of incorporation or bylaws. The execution, delivery
and performance by the Servicer of the Facility Documents to which it is a party
do not and will not (i) conflict with or violate the certificate of
incorporation or by-laws of the Servicer, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of, or constitute a default
under, or result in the creation of any Lien on any of the properties or assets
of the Servicer pursuant to the terms of any instrument or agreement to which
the Servicer is a party or by which it is bound, or (iii) require any consent of
or other action by any trustee or any creditor of, any lessor to or any investor
in the Servicer.

(d) Compliance with Law. The Servicer is in compliance with all statutes, laws
and ordinances and all governmental rules and regulations to which it is
subject, the violation of which, either individually or in the aggregate, could
materially adversely affect its business, earnings, properties or condition
(financial or other). The policies and procedures set forth in the Credit and
Collection Policies on the Closing Date, the Amendment Effective Date and each
Funding Date are in material compliance with all applicable statutes, laws and
ordinances and all governmental rules and regulations and are consistent with
the Servicing Standard. The execution, delivery and performance of the Facility
Documents to which it is a party do not and will not cause the Servicer to be in
violation of any law or ordinance, or any order, rule or regulation, of any
federal, state, municipal or other governmental or public authority or agency.

 

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(e) Pending Litigation or Other Proceedings. There is no pending or, to the best
of the Servicer’s knowledge, threatened action, suit, proceeding or
investigation before any court, administrative agency, arbitrator or
governmental body against or affecting the Servicer which, if decided adversely,
would materially and adversely affect (i) the condition (financial or
otherwise), business or operations of the Servicer, (ii) the ability of the
Servicer to perform its obligations under, or the validity or enforceability of
this Indenture and Servicing Agreement or any other documents or transactions
contemplated under this Indenture and Servicing Agreement, (iii) any property or
title of any Obligor to any Timeshare Property or (iv) the Indenture Trustee’s
ability to foreclose or otherwise enforce the Liens of the Timeshare Loans.

(f) Taxes. It has timely filed all tax returns (federal, state and local) which
are required to be filed and has paid all taxes related thereto, other than
those which are being contested in good faith.

(g) Transactions in Ordinary Course. The transactions contemplated by this
Indenture and Servicing Agreement are in the ordinary course of business of the
Servicer.

(h) [Reserved].

(i) Proceedings. The Servicer has taken all action necessary to authorize the
execution and delivery by it of the Facility Documents to which it is a party
and the performance of all obligations to be performed by it under the Facility
Documents.

(j) Defaults. The Servicer is not in default under any material agreement,
contract, instrument or indenture to which it is a party or by which it or its
properties is or are bound, or with respect to any order of any court,
administrative agency, arbitrator or governmental body which default would have
a material adverse effect on the transactions contemplated hereunder; and to the
Servicer’s knowledge, as applicable, no event has occurred which with notice or
lapse of time or both would constitute such a default with respect to any such
agreement, contract, instrument or indenture, or with respect to any such order
of any court, administrative agency, arbitrator or governmental body.

(k) Insolvency. The Servicer is solvent. Prior to the date hereof, the Servicer
did not, and is not about to, engage in any business or transaction for which
any property remaining with the Servicer would constitute an unreasonably small
amount of capital. In addition, the Servicer has not incurred debts that would
be beyond the Servicer’s ability to pay as such debts matured.

(l) No Consents. No prior consent, approval or authorization of, registration,
qualification, designation, declaration or filing with, or notice to any
federal, state or local governmental or public authority or agency, is, was or
will be required for the valid execution, delivery and performance by the
Servicer of the Facility Documents to which it is a party. The Servicer has
obtained all consents, approvals or authorizations of, made all declarations or
filings with, or given all notices to, all federal, state or local governmental
or public authorities or agencies which are necessary for the continued conduct
by the Servicer of its respective businesses as now conducted, other than such
consents, approvals, authorizations, declarations, filings and notices which,
neither individually nor in the aggregate, materially and adversely affect, or
in the future will materially and adversely affect, the business, earnings,
prospects, properties or condition (financial or other) of the Servicer.

 

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(m) Name. The legal name of the Servicer is as set forth in the signature page
of this Indenture and Servicing Agreement and except for the trade names set
forth on Exhibit H attached hereto, the Servicer does not have any tradenames,
fictitious names, assumed names or “doing business as” names.

(n) Information. No document, certificate or report furnished by the Servicer,
in writing, pursuant to this Indenture and Servicing Agreement or in connection
with the transactions contemplated hereby, contains or will contain when
furnished any untrue statement of a material fact or fails or will fail to state
a material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading. There are
no facts relating to the Servicer as of the Closing Date, the Amendment
Effective Date or Funding Date which when taken as a whole, materially adversely
affect the financial condition or assets or business of the Servicer, or which
may impair the ability of the Servicer to perform its obligations under this
Indenture and Servicing Agreement, which have not been disclosed herein or in
the certificates and other documents furnished by or on behalf of the Servicer
pursuant hereto or thereto specifically for use in connection with the
transactions contemplated hereby or thereby.

Section 12.03 Representations and Warranties of the Indenture Trustee and the
Back-Up Servicer.

Each of the Indenture Trustee and the Back-Up Servicer hereby represents and
warrants as of the Closing Date, the Amendment Effective Date and each Funding
Date, the following:

(a) Each of the Indenture Trustee and the Back-Up Servicer is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States.

(b) The execution and delivery of this Indenture and Servicing Agreement and the
other Facility Documents to which the Indenture Trustee or the Back-Up Servicer
is a party, and the performance and compliance with the terms of this Indenture
and Servicing Agreement and the other Facility Documents to which the Indenture
Trustee or the Back-Up Servicer is a party by the Indenture Trustee or the
Back-Up Servicer, will not violate the Indenture Trustee’s or the Back-Up
Servicer’s, as applicable, organizational documents or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material agreement or other
material instrument to which it is a party or by which it is bound.

(c) Except to the extent that the laws of certain jurisdictions in which any
part of the Trust Estate may be located require that a co-trustee or separate
trustee be appointed to act with respect to such property as contemplated
herein, the Indenture Trustee has the full power and authority to carry on its
business as now being conducted and to enter into and consummate all
transactions contemplated by this Indenture and Servicing Agreement and the
other Facility

 

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Documents, has duly authorized the execution, delivery and performance of this
Indenture and Servicing Agreement and the other Facility Documents to which it
is a party, and has duly executed and delivered this Indenture and Servicing
Agreement and the other Facility Documents to which it is a party.

(d) The Back-Up Servicer has the full power and authority to carry on its
business as now being conducted and to enter into and consummate all
transactions contemplated by this Indenture and Servicing Agreement and the
other Facility Documents, has duly authorized the execution, delivery and
performance of this Indenture and Servicing Agreement and the other Facility
Documents to which it is a party, and has duly executed and delivered this
Indenture and Servicing Agreement and the other Facility Documents to which it
is a party.

(e) This Indenture and Servicing Agreement, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a valid and
binding obligation of the Indenture Trustee and the Back-Up Servicer,
enforceable against the Indenture Trustee and the Back-Up Servicer in accordance
with the terms hereof, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors’ rights generally and the rights of creditors of banks, and
(ii) general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.

(f) Neither the Indenture Trustee nor the Back-Up Servicer is in violation of,
and its execution and delivery of this Indenture and Servicing Agreement and the
other Facility Documents to which either is a party and its performance and
compliance with the terms of this Indenture and Servicing Agreement and the
other Facility Documents to which it is a party will not constitute a violation
of, any law, any order or decree of any court or arbiter, or any order,
regulation or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Indenture Trustee’s and the Back-Up
Servicer’s good faith and reasonable judgment, is likely to affect materially
and adversely the ability of the Indenture Trustee or the Back-Up Servicer to
perform its obligations under any Facility Document to which it is a party.

(g) No litigation is pending or, to the best of the Indenture Trustee’s and the
Back-Up Servicer’s knowledge, threatened against the Indenture Trustee or the
Back-Up Servicer that, if determined adversely to the Indenture Trustee or the
Back-Up Servicer, would prohibit the Indenture Trustee or the Back-Up Servicer
from entering into any Facility Document to which it is a party or, in the
Indenture Trustee’s and the Back-Up Servicer’s good faith and reasonable
judgment, is likely to materially and adversely affect the ability of the
Indenture Trustee or the Back-Up Servicer to perform its obligations under any
Facility Document to which it is a party.

(h) Any consent, approval, authorization or order of any court or governmental
agency or body required for the execution, delivery and performance by the
Indenture Trustee or the Back-Up Servicer of or compliance by the Indenture
Trustee or the Back-Up Servicer with the Facility Documents to which it is a
party or the consummation of the transactions contemplated by the Facility
Documents has been obtained and is effective.

 

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Section 12.04 Multiple Roles.

The parties expressly acknowledge and consent to Wells Fargo Bank, National
Association, acting in the multiple roles of Indenture Trustee, the Custodian,
the Back-Up Servicer and the Successor Servicer. Wells Fargo Bank, National
Association may, in such capacities, discharge its separate functions fully,
without hindrance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by Wells Fargo Bank, National
Association of express duties set forth in this Indenture and Servicing
Agreement in any of such capacities, all of which defenses, claims or assertions
are hereby expressly waived by the other parties hereto except in the case of
negligence (other than errors in judgment), bad faith or willful misconduct by
Wells Fargo Bank, National Association.

ARTICLE XIII

MISCELLANEOUS

Section 13.01 Officer’s Certificate and Opinion of Counsel as to Conditions
Precedent.

Upon any request or application by the Issuer to the Indenture Trustee to take
any action under this Indenture and Servicing Agreement, the Issuer shall
furnish to the Indenture Trustee:

(a) an Officer’s Certificate (which shall include the statements set forth in
Section 13.02 hereof) stating that all conditions precedent, if any, provided
for in this Indenture and Servicing Agreement relating to the proposed action
have been complied with; and

(b) an Opinion of Counsel (which shall include the statements set forth in
Section 13.02 hereof) stating that, in the opinion of such counsel, all such
conditions precedent, if any, have been complied with.

Section 13.02 Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture and Servicing Agreement shall include:

(a) a statement that the Person making such certificate or opinion has read such
covenant or condition;

(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 such Person, he or she has made such
examination or investigation as is necessary to enable him/her to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

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(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.

Section 13.03 Notices. (a) All communications, instructions, directions and
notices to the parties thereto shall be (i) in writing (which may be by
facsimile transmission (or if permitted hereunder, via electronic mail),
followed by delivery of original documentation within one Business Day),
(ii) effective when received and (iii) delivered or mailed first class mail,
postage prepaid to it at the following address:

If to the Issuer:

Marriott Vacations Worldwide Owner Trust 2011-1

c/o Wilmington Trust, National Association

1220 North Market Street, Suite 202

Wilmington, Delaware 19801

Attention: Dante M. Monakil

Facsimile Number: (302) 661-2266

Telephone Number: (302) 255-4966

 

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With a copy to:

Marriott Ownership Resorts, Inc.

6649 Westwood Boulevard

Orlando, Florida 32821

Attention: General Counsel

Facsimile Number: (407) 206-6420

Telephone Number: (407) 206-6000

And

Marriott Vacations Worldwide Corporation

6649 Westwood Boulevard

Orlando, Florida 32821

Attention: General Counsel

Facsimile Number: (407) 513-6680

Telephone Number: (407) 206-6000

And

Wilmington Trust, National Association

1220 North Market Street, Suite 202

Mail Code: MD1-WD22

Wilmington, Delaware, 19801

Attention: Dante M. Monakil, CCTS

Facsimile Number:     (302) 661-2266

Telephone Number:  (302) 225-4970

If to the Servicer or the Administrator:

Marriott Ownership Resorts, Inc.

6649 Westwood Boulevard

Orlando, Florida 32821

Attention: General Counsel

Facsimile Number: (407) 206-6420

Telephone Number: (407) 206-6000

 

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With a copy to:

Marriott Vacations Worldwide Corporation

6649 Westwood Boulevard

Orlando, Florida 32821

Attention: General Counsel

Facsimile Number: (407) 513-6680

Telephone Number: (407) 206-6000

If to the Indenture Trustee and the Back-Up Servicer:

Wells Fargo Bank, National Association

MAC N9311-161

Sixth Street & Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Corporate Trust

                  Services/Asset-Backed Administration

Facsimile Number:    (612) 667-3539

Telephone Number:  (612) 667-8058

If to the Noteholders:

At the address set forth in the Note Register

or at such other address as the party may designate by notice to the other
parties hereto, which shall be effective when received.

(b) All communications and notices pursuant hereto to a Noteholder shall be in
writing and delivered or mailed by first class mail, postage prepaid or by
overnight courier at the address shown in the Note Register. The Indenture
Trustee agrees to deliver or mail to each Noteholder upon receipt, all notices
and reports that the Indenture Trustee may receive hereunder and under any
Facility Documents. Unless otherwise provided herein, the Indenture Trustee may
consent to any requests received under such documents or, at its option, follow
the directions of the Majority Facility Investors within 30 days after prior
written notice to the Noteholders. All notices to Noteholders shall be sent
simultaneously. Expenses for such communications and notices shall be borne by
the Servicer.

Section 13.04 No Proceedings.

Each Noteholder, the Servicer and the Indenture Trustee hereby agrees that it
will not, directly or indirectly institute, or cause to be instituted, against
the Issuer or the Trust Estate any proceeding of the type referred to in
Section 6.01(e) hereof so long as there shall not have elapsed one year plus one
day since the last maturity of the Notes.

 

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Section 13.05 Limitation of Liability.

(a) It is expressly understood and agreed by the parties hereto that (a) this
Indenture and Servicing Agreement is executed and delivered by Wilmington Trust,
National Association, not individually or personally but solely as Owner Trustee
of the Issuer, in the exercise of the powers and authority conferred and vested
in it, (b) each of the representations, undertakings and agreements herein made
on the part of the Issuer is made and intended not as personal representations,
undertakings and agreements Wilmington Trust, National Association but is made
and intended for the purpose of binding only the Issuer, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust,
National Association, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust,
National Association be personally liable for the payment of any indebtedness or
expenses of the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this
Indenture and Servicing Agreement or any other related document. Notwithstanding
the foregoing, Wilmington Trust, National Association shall not be relieved of
any of its duties and obligations under the Administration Agreement or the
Trust Agreement.

(b) It is expressly understood and agreed by the parties hereto that MORI is
executing this Indenture and Servicing Agreement solely as Servicer and MORI
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture and Servicing Agreement applicable to the Servicer.

Section 13.06 Entire Agreement.

This Indenture and Servicing Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.

Section 13.07 Severability of Provisions.

If any one or more of the covenants, agreements, provisions or terms of this
Indenture and Servicing Agreement shall be for any reason whatsoever held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Indenture and Servicing Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Indenture and Servicing Agreement
or of the Notes or the rights of the Holders thereof.

 

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Section 13.08 Indulgences; No Waivers.

Neither the failure nor any delay on the part of a party to exercise any right,
remedy, power or privilege under this Indenture and Servicing Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

Section 13.09 Conditions Precedent to the Amendment Effective Date.

Any amendment to the Amended and Restated Indenture and Servicing Agreement by
this Indenture and Servicing Agreement shall be effective upon the Amendment
Effective Date, so long as the following conditions precedent have been
satisfied on or prior to such date:

(a) This Indenture and Servicing Agreement shall have been executed and
delivered by each of the parties hereto;

(b) The Trustee shall have received the written consent of each Noteholder, each
Funding Agent and the Administrative Agent to the amendment to and the
restatement of the Amended and Restated Indenture and Servicing Agreement by
this Indenture and Servicing Agreement;

(c) The Indenture Trustee shall have received any Opinions of Counsel required
by the Indenture Trustee to be delivered to the Indenture Trustee; and

(d) The Amended and Restated Note Purchase Agreement, dated the Amendment
Effective Date, shall have been executed and delivered by each party thereto.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture and Servicing
Agreement to be duly executed as of the day and year first above written.

 

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST

2011-1, as Issuer

By:   WILMINGTON TRUST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as Owner Trustee   By:   /s/ Dante M.
Monakil     Name:   Dante M. Monakil     Title:   Vice President MARRIOTT
OWNERSHIP RESORTS, INC., as Servicer By:   /s/ Joseph J. Bramuchi   Name:  
Joseph J. Bramuchi   Title:   Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee and Back-Up Servicer

By:   /s/ Jennifer Westberg   Name:   Jennifer Westberg   Title:   Vice
President

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ANNEX A

Standard Definitions

--------------------------------------------------------------------------------

Final

(Second Amended and Restated)

September 11, 2012

Annex A

SECOND AMENDED AND RESTATED STANDARD DEFINITIONS

Rules of Construction. In these Second Amended and Restated Standard Definitions
and with respect to the Facility Documents (as defined below), (a) the meanings
of defined terms are equally applicable to the singular and plural forms of the
defined terms, (b) in any Facility Document, the words “hereof,” “herein,”
“hereunder” and similar words refer to such Facility Document as a whole and not
to any particular provisions of such Facility Document, (c) any subsection,
Section, Article, Annex, Schedule and Exhibit references in any Facility
Document are to such Facility Document unless otherwise specified, (d) the term
“documents” includes any and all documents, instruments, agreements,
certificates, indentures, notices and other writings, however evidenced
(including electronically), (e) the term “including” is not limiting and (except
to the extent specifically provided otherwise) shall mean “including (without
limitation)”, (f) unless otherwise specified, in the computation of periods of
time from a specified date to a later specified date, the word “from” shall mean
“from and including,” the words “to” and “until” each shall mean “to but
excluding,” and the word “through” shall mean “to and including”, and (g) the
words “may” and “might” and similar terms used with respect to the taking of an
action by any Person shall reflect that such action is optional and not required
to be taken by such Person.

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“Act” shall have the meaning specified in Section 1.04 of the Indenture and
Servicing Agreement.

“Acceleration Event” shall have the meaning specified in Section 6.06 of the
Indenture and Servicing Agreement.

“Accounting Based Consolidation Event” shall mean the consolidation, for
financial and/or regulatory accounting purposes, of all or any portion of the
assets and liabilities of any Conduit that are subject to the Note Purchase
Agreement or any other Facility Document with all or any portion of the assets
and liabilities of an Affected Entity. An Accounting Based Consolidation Event
shall be deemed to occur on the date any Affected Entity shall acknowledge in
writing that any such consolidation of the assets and liabilities of the related
Conduit shall occur.

“Acquiring Alternate Purchaser” shall have the meaning set forth in
Section 5.10(d) of the Note Purchase Agreement.

“Acquiring Non-Conduit Committed Purchaser” shall have the meaning set forth in
Section 5.10(f) of the Note Purchase Agreement.

“Acquiring Purchaser” shall mean an Acquiring Purchaser Group or an Acquiring
Non-Conduit Committed Purchaser.

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“Acquiring Purchaser Group” shall have the meaning set forth in Section 5.10(f)
of the Note Purchase Agreement.

“Additional Conduit” shall have the meaning set forth in Section 2.3(d) of the
Note Purchase Agreement.

“Additional Funding Agent” shall have the meaning set forth in Section 2.3(d) of
the Note Purchase Agreement.

“Additional Non-Conduit Committed Purchaser” shall have the meaning set forth in
Section 2.3(d) of the Note Purchase Agreement.

“Additional Purchaser” shall mean an Additional Conduit and the Related
Additional Alternate Purchasers or an Additional Non-Conduit Committed
Purchaser.

“Additional Timeshare Loans” shall mean any Timeshare Loans (including Qualified
Substitute Timeshare Loans) conveyed by MORI to the Seller and by the Seller to
the Issuer and pledged by the Issuer to the Indenture Trustee on a Funding Date
or Transfer Date, as applicable.

“Additional Timeshare Loan Supplement” shall mean, with respect to any
Additional Timeshare Loans, an Additional Timeshare Loan Supplement,
substantially in the form of Exhibit D to the Purchase Agreement or Sale
Agreement, as applicable.

“Adjusted Commitment” shall mean on any date of determination with respect to an
Alternate Purchaser for a Conduit, such Alternate Purchaser’s Commitment minus
the sum of (a) the portion of the Purchaser Invested Amount with respect to the
Purchaser Group of which such Conduit is a member funded by such Alternate
Purchaser and (b) the portion of such Purchaser Invested Amount an interest in
which was acquired by such Alternate Purchaser acting as a Liquidity Provider
pursuant to a Liquidity Agreement.

“Adjusted LIBOR Rate” shall mean, with respect to any Funding Period, the sum of
(A) the Applicable Percentage and (B) a rate per annum equal to the rate
(rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by
dividing (i) the LIBOR Rate for such Funding Period by (ii) a percentage equal
to 100% minus the reserve percentage (rounded upward to the next 1/100th of 1%)
in effect on such day and applicable to the Alternate Purchaser or related
Liquidity Provider for which this rate is calculated under regulations issued
from time to time by the Board of Governors of the Federal Reserve System for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as “eurocurrency liabilities”). The Adjusted
LIBOR Rate shall be adjusted automatically as of the effective date of any
change in such reserve percentage.

“Administration Agreement” shall mean that certain administration agreement,
dated as of September 1, 2011, by and among the Issuer, the Indenture Trustee,
the Owner Trustee and the Administrator.

 

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“Administrative Agent” shall mean Deutsche Bank AG, New York Branch, in its
capacity as Administrative Agent for the Purchasers and the Funding Agents, and
any successor Administrative Agent appointed pursuant to the terms of the Note
Purchase Agreement.

“Administrative Agent-Related Persons” shall mean the Administrative Agent,
together with its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and their respective Affiliates.

“Administrative Agent Fee” shall have the meaning set forth in the related Fee
Letter; provided that the Administrative Agent Fee shall not be greater than
0.10% of the Facility Limit per annum.

“Administrator” shall mean Marriott Ownership Resorts, Inc., a Delaware
corporation.

“Administrator Fee” shall equal $1,000 paid annually in accordance with
Section 3.04 of the Indenture and Servicing Agreement.

“Advance Rate” shall mean, with respect to the Borrowing Base Loans related to a
Borrowing Base Loan Group, the applicable Advance Rate specified in the chart
below:

 

Borrowing Base Loan Group

   Applicable
Advance Rate  

FICO 600 to 649 Loan Group

     50 % 

FICO 650 to 699 Loan Group

     76 % 

FICO 700 to 749 Loan Group

     91 % 

FICO 750 Plus Loan Group

     96 % 

Foreign Timeshare Loan Group I

     68 % 

Foreign Timeshare Loan Group II

     40 % 

“Adverse Claim” shall mean any claim of ownership or any lien, security
interest, title retention, trust or other charge or encumbrance, or other type
of preferential arrangement having the effect or purpose of creating a lien or
security interest, other than the interests created under the Indenture and
Servicing Agreement in favor of the Indenture Trustee and the Noteholders.

“Affected Entity” shall mean (i) any Alternate Purchaser, (ii) any Liquidity
Provider, (iii) any agent, administrator or manager of any Conduit, or (iv) any
bank holding company in respect of any of the foregoing.

“Affiliate” shall mean with respect to any Person, a Person: (a) which directly
or indirectly controls, or is controlled by, or is under common control with
such Person; (b) which directly or indirectly beneficially owns or holds five
percent (5%) or more of the voting stock of

 

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such Person; or (c) for which five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by such Person. The
term “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.
Without limiting the generality of the foregoing, for purposes of the definition
of “Outstanding,” MVCO Series LLC, MORI, MVC Trust, MVCI Finance, C.V., The
Ritz-Carlton Development Company, Inc., Marriott Ownership Resorts (St. Thomas),
Inc., Marriott Vacation Worldwide Corporation and their Affiliates shall be
deemed an Affiliate of the Issuer.

“Aggregate Loan Balance” shall mean the sum of the Loan Balances for all
Borrowing Base Loans.

“Alternate Purchasers” shall mean, with respect to a Conduit, each Purchaser
identified as an Alternate Purchaser for such Conduit on Schedule I to the Note
Purchase Agreement or in the Assignment and Assumption Agreement pursuant to
which such Conduit became a party to the Note Purchase Agreement, and any
permitted assignee thereof.

“Alternate Purchaser Assignment and Assumption Agreement” shall mean an
Assignment and Assumption Agreement substantially in the form of Exhibit A to
the Note Purchase Agreement.

“Alternate Purchaser Percentage” shall mean, with respect to any Alternate
Purchaser for a Conduit, such Alternate Purchaser’s Commitment with respect to
such Conduit as a percentage of the Purchaser Commitment Amount with respect to
the Purchaser Group of which such Conduit is a member.

“Amendment Effective Date” shall mean September 11, 2012, so long as the
conditions precedent set forth in Section 13.09 of the Indenture and Servicing
Agreement and Section 3.8 of the Note Purchase Agreement have been satisfied on
or prior to such date.

“Amortization Event” shall exist on and after a Determination Date if any of the
following shall have occurred:

(a) the Warehouse Portfolio Three Month Rolling Average Delinquency Percentage
is greater than 5.50%; or

(b) the Securitized Portfolio Three Month Rolling Average Delinquency Percentage
is greater than 5.50%; or

(c) the Warehouse Portfolio Three Month Rolling Average Default Percentage is
greater than 0.75%; or

(d) the Securitized Portfolio Three Month Rolling Average Default Percentage is
greater than 0.75%; or

(e) to the extent the Aggregate Loan Balance is more than $0, the Gross Excess
Spread Percentage for the related Due Period is less than 5.00%; or

 

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(f) an Event of Default occurs; or

(g) a Servicer Event of Default occurs; or

(h) the amount on deposit in the Reserve Account is less than the Reserve
Account Required Balance for any three consecutive Business Days; or

(i) the MVC Trust shall incur any indebtedness (other than trade debt in the
ordinary course).

Upon the first occurrence of an Amortization Event of a type described in any of
clauses (a), (b), (c), (d) or (e) above, such Amortization Event shall continue
until the Determination Date on which the Warehouse Portfolio Three Month
Rolling Average Delinquency Percentage, Securitized Portfolio Three Month
Rolling Average Delinquency Percentage, Warehouse Portfolio Three Month Rolling
Average Default Percentage, Securitized Portfolio Three Month Rolling Average
Default Percentage or Gross Excess Spread Percentage, as the case may be, is
equal to or less than (in the case of clauses (a), (b), (c) or (d)) or equal to
or greater than (in the case of clause (e)), the specified threshold. Upon the
second occurrence of an Amortization Event of a type described in any of clauses
(a), (b), (c), (d) or (e) above, an Amortization Event shall exist and continue
until the Outstanding Note Balance has been reduced to zero.

An Amortization Event of the type described in clauses (f), (g), (h) or
(i) shall continue until the Outstanding Note Balance of the Notes has been
reduced to zero.

“Anticipated Completion Date” shall mean, for a Pre-Completion Loan, the date
set forth in the related Additional Timeshare Loan Supplement as specified by
resort and building on which the related Unit is expected to be an Available
Unit.

“Applicable Percentage” shall mean 1.50%.

“Assignment and Assumption Agreement” shall mean any Alternate Purchaser
Assignment and Assumption Agreement or any Purchaser Assignment and Assumption
Agreement.

“Assumption Date” shall have the meaning specified in Section 5.19(f) of the
Indenture and Servicing Agreement.

“Authorized Officer” shall mean (a) with respect to any corporation, limited
liability company or partnership, the Chairman of the Board, the President, any
Vice President, the Secretary, the Treasurer, any Assistant Secretary, any
Assistant Treasurer, Managing Member and each other officer of such corporation
or limited liability company or the general partner of such partnership
customarily performing functions similar to those performed by any of the above
designated officers, and with respect to a particular matter, any other officer
to whom such matter is referred because of such officer’s knowledge and
familiarity with the particular subject or such officer specifically authorized
in resolutions of the Board of Directors of such corporation or managing member
of such limited liability company to sign agreements, instruments or other
documents in connection with the Indenture and Servicing Agreement on behalf of
such corporation, limited liability company or partnership, as the case may be
or (b) with respect to a trust, any person meeting the criteria specified in
clause (a) above with respect to the related trustee.

 

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“Available Funds” shall mean for any Payment Date, (A) all funds on deposit in
the Collection Account after making all transfers and deposits required from or
by (i) the Servicer pursuant to the Indenture and Servicing Agreement, (ii) the
Reserve Account pursuant to Section 3.02(b) of the Indenture and Servicing
Agreement, (iii) the Seller or the Issuer pursuant to Section 4.06 of the
Indenture and Servicing Agreement, (iv) the Performance Guarantor pursuant to
the Performance Guaranty, and (v) a Hedge Counterparty in respect of a Hedge
Agreement, less (B) amounts on deposit in the Collection Account related to
collections related to any Due Periods subsequent to the Due Period related to
such Payment Date.

“Available Unit” shall mean a Unit where the Unit’s construction has been
completed in accordance with applicable brand standards and becomes available
for occupancy by timeshare owners.

“Back-Up Servicer” shall mean Wells Fargo Bank, National Association and its
permitted successors and assigns, as provided in the Indenture and Servicing
Agreement.

“Back-Up Servicing Fee” shall mean for any Payment Date, an amount equal to the
greater of (a) $2,500 and (b) the product of (x) one-twelfth of 0.02% and
(y) the Aggregate Loan Balance as of the first day of the related Due Period.

“Bank Base Rate” shall mean, with respect to any Purchaser for any day, a rate
per annum equal to the sum of (i) the Base Rate with respect to such Purchaser
on such date and (ii) the Applicable Percentage.

“Base Rate” shall mean, with respect to any Purchaser for any day, a rate per
annum equal to the greatest of (i) the prime rate of interest announced publicly
by (x) if such Purchaser is a Non-Conduit Committed Purchaser, such Purchaser
(or the Affiliate of such Purchaser that announces such rate), and (y) if such
Purchaser is a member of a Purchaser Group, the Funding Agent with respect to
such Purchaser Group (or the Affiliate of such Purchaser or Funding Agent, as
applicable, that announces such rate) as in effect at its principal office from
time to time, changing when and as said prime rate changes (such rate not
necessarily being the lowest or best rate charged by such Person), (ii) the sum
of (a) 0.50% and (b) the rate equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by such Purchaser (or if such Purchaser is a member of a Purchaser
Group, the Funding Agent with respect to such Purchaser Group) from three
Federal funds brokers of recognized standing selected by it and (iii) the sum of
(x) 1.00% and (b) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor
page or such other page or service as such Purchaser shall determine in its sole
discretion) as the London interbank offered rate for deposits in U.S. dollars at
approximately 11:00 A.M. (London time) on such date (or if

 

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such day is not a London Business Day, on the next preceding London Business
Day) for a term of one month, or, if more than one rate is specified on the
applicable page or screen, the arithmetic mean of all such rates.
Notwithstanding any of the foregoing to the contrary, solely for the purposes of
Sections 2.8(c) and 2.8(d) of the Note Purchase Agreement, “Base Rate” shall
mean the greater of the rates described in clause (i) and clause (ii) of the
preceding sentence.

“Bankruptcy Code” shall mean the federal Bankruptcy Code, as amended (Title 11
of the United States Code).

“Beneficial Interest” shall mean the beneficial interests in the MVC Trust owned
by an Obligor.

“Benefit Plan” shall mean an “employee benefit plan” as defined in Section 3(3)
of ERISA that is subject to Title I of ERISA or any other “plan” as defined in
Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code or
any entity whose underlying assets include plan assets by reason of an employee
benefit plan’s or plan’s investment in such entity or any plan that is subject
to any substantially similar provision of federal, state or local law.

“Borrowing Base” means for any date of determination, the lesser of:

(x) the sum of the products of (i) the aggregate Loan Balance of each Borrowing
Base Loan Group minus its related Excluded Loan Group Balance and (ii) the
applicable Advance Rate; and

(y) the sum of the products of (i) the aggregate Loan Balance of each Borrowing
Base Loan Group minus its related Excluded Loan Group Balance and (ii) 85%.

For purposes of calculating the Borrowing Base on a Funding Date, the aggregate
Loan Balance of a Borrowing Base Loan Group, the Aggregate Loan Balance and
Excluded Loan Balance shall be measured as of the last day of the Due Period
related to the immediately preceding Payment Date (or, with respect to the
Additional Timeshare Loans conveyed on such Funding Date or Timeshare Loans
conveyed during the same Due Period, the related Cut-off Date). For purposes of
calculating the Borrowing Base with respect to any Determination Date, the
aggregate Loan Balance of a Borrowing Base Loan Group, the Aggregate Loan
Balance and Excluded Loan Balance shall be measured as of the end of the related
Due Period (or, with respect to the Additional Timeshare Loans conveyed on such
Funding Date or Timeshare Loans conveyed during the same Due Period, the related
Cut-off Date). All Defaulted Timeshare Loans, Delinquent Timeshare Loans and
Defective Timeshare Loans shall be deemed to have a Loan Balance of zero ($0)
for purposes of this definition.

“Borrowing Base Loan Group” means any of the Foreign Timeshare Loan Group I,
Foreign Timeshare Loan Group II, FICO 600 to 649 Loan Group, FICO 650 to 699
Loan Group, FICO 700 to 749 Loan Group and FICO 750 Plus Loan Group.

“Borrowing Base Loans” shall mean, as of any date of determination, all
Timeshare Loans that are Eligible Timeshare Loans on such date and owned
directly by the Issuer and pledged to the Indenture Trustee pursuant to the
Indenture and Servicing Agreement or a Supplemental Grant.

 

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“Borrowing Base Shortfall” means on as of any date of determination, the amount,
if any, by which the Outstanding Note Balance (without giving effect to any
Increase on such date) exceeds the Borrowing Base on such date (without giving
effect to any pledge of Additional Timeshare Loans to the Indenture Trustee on
such date).

“Borrowing Notice” shall mean the notice presented by the Issuer to the
Administrative Agent, each Funding Agent, each Non-Conduit Committed Purchaser,
the Servicer and the Indenture Trustee to request the initial advance on the
Initial Funding Date or thereafter, an Increase, in the form attached as Exhibit
D to the Note Purchase Agreement.

“Breakage and Other Costs” shall mean any and all amounts owing by the Issuer to
any Purchaser or Funding Agent or the Administrative Agent pursuant to this
Agreement or any other Facility Document, other than in respect of interest or
principal on any Note and shall include without limitation (i) the amount of all
fees due under the Renewal Fee Letter (other than Purchaser Fees and the
Up-Front Renewal Fees), (ii) the amount of any Early Collection Fee and
(iii) any other amounts due from the Issuer hereunder but not included in
interest or principal on the Notes including, without limitation, under Sections
4.1, 4.2, 4.3 and 4.4 of the Note Purchase Agreement.

“Business Day” shall mean any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in New York City, the city in which the
Servicer is located or the city in which the Corporate Trust Office is located,
are authorized or obligated by law or executive order to be closed.

“Carrying Costs” shall mean, with respect to any Interest Accrual Period the sum
(without duplication) of the following amounts determined on an accrual basis in
accordance with GAAP consistently applied: with respect to (x) any Purchaser
Group, (a) the amount of interest accrued with respect to the portion of the
Purchaser Invested Amount funded by the Conduit which is a member of such
Purchaser Group at a rate equal to the CP Rate applicable to such Conduit for
such Interest Accrual Period and (b) the amount of interest accrued with respect
to the portion of the Purchaser Invested Amount funded by any Alternate
Purchaser which is a member of such Purchaser Group or any Liquidity Provider
with respect to such Conduit at either the Adjusted LIBOR Rate or the Bank Base
Rate, as applicable in accordance with Section 2.8(a) of the Note Purchase
Agreement and (y) any Non-Conduit Committed Purchaser, the amount of interest
accrued with respect to its Purchaser Invested Amount at the LIBOR Rate or the
LIBOR Rate plus the Applicable Percentage, as applicable, in accordance with
Section 2.8(a) of the Note Purchase Agreement; provided, however, that following
the occurrence of an Event of Default, the Carrying Costs with respect to any
Purchaser Group or Non-Conduit Committed Purchaser shall be determined in
accordance with Section 2.8(b) of the Note Purchase Agreement. The Carrying
Costs for any Interest Accrual Period determined by reference to the applicable
CP Rate or daily LIBOR Rate shall be calculated using an estimate for the days
in such Interest Accrual Period remaining after the date on which the applicable
Funding Agent or Non-Conduit Committed Purchaser notifies the Administrative
Agent of the applicable Carrying

 

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Costs pursuant to Section 2.8(a)(v) of the Note Purchase Agreement. On or before
the day on which the applicable Funding Agent or Non-Conduit Committed Purchaser
is required to notify the Administrative Agent of the applicable Carrying Costs
with respect to the next succeeding Accrual Period, such Funding Agent or
Non-Conduit Committed Purchaser shall re-determine the Carrying Costs in respect
of the prior Accrual Period and if such re-determined amount is higher or lower
than the Carrying Costs initially reported as described above, such Funding
Agent or Non-Conduit Committed Purchaser shall advise the Administrative Agent
of the re-determined Carrying Costs, specifying the amount of any Carrying Costs
Underpayment or any Carrying Costs Overpayment.

“Carrying Costs Overpayment” shall mean, with respect to any Accrual Period
(x) with respect to a Purchaser Group the excess, if any, of (i) the amount of
Carrying Costs for such Accrual Period determined based on the CP Rate as
initially determined by the applicable Funding Agent pursuant to the definition
of “Carrying Costs”, over (ii) the amount of Carrying Costs for such Accrual
Period determined based on the CP Rate as re-determined by such Funding Agent
prior to the next succeeding Payment Date pursuant to the definition of
“Carrying Costs” and (y) with respect to a Non-Conduit Committed Purchaser, the
excess, if any, of (i) the amount of Carrying Costs for such Accrual Period
determined based on the LIBOR Rate as initially determined by such Non-Conduit
Committed Purchaser pursuant to the definition of “Carrying Costs”, over
(ii) the amount of Carrying Costs for such Accrual Period determined based on
the LIBOR Rate as re-determined by such Non-Conduit Committed Purchaser prior to
the next succeeding Payment Date pursuant to the definition of “Carrying Costs”.

“Carrying Costs Underpayment” shall mean, with respect to any Accrual Period
(x) with respect to a Purchaser Group, the excess, if any, of (i) the amount of
Carrying Costs for such Accrual Period determined based on the CP Rate as
re-determined by the applicable Funding Agent prior to the next succeeding
Payment Date pursuant to the definition of “Carrying Costs”, over (ii) the
amount of Carrying Costs for such Accrual Period determined based on the CP Rate
as initially determined by such Funding Agent pursuant to the definition of
“Carrying Costs” and (y) with respect to a Non-Conduit Committed Purchaser, the
excess, if any, of (i) the amount of Carrying Costs for such Accrual Period
determined based on the LIBOR Rate as re-determined by such Non-Conduit
Committed Purchaser prior to the next succeeding Payment Date pursuant to the
definition of “Carrying Costs”, over (ii) the amount of Carrying Costs for such
Accrual Period determined based on the LIBOR Rate as initially determined by
such Non-Conduit Committed Purchaser pursuant to the definition of “Carrying
Costs”.

“Certificate of Trust” shall mean the Certificate of Trust filed with the
Secretary of State for the State of Delaware on September 6, 2011 in order to
form the Issuer, as the same may be amended, supplemented or otherwise modified
in accordance with the terms thereof.

“Change of Control” means (i) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) ) shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more
than 30% of the outstanding common stock of the Performance Guarantor, (ii) the
board of directors of the Performance Guarantor shall cease to

 

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consist of a majority of Continuing Directors; or (iii) the Performance
Guarantor, through its subsidiary MVW US Holdings, Inc., shall cease to own and
control, of record and beneficially, directly 100% of each class of outstanding
Capital Stock of MORI, the Seller and the Owner, free and clear of all Liens
(except Liens created hereunder or under the Corporate Revolver Facility.

“Closing Date” shall mean September 28, 2011.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time and any successor statute, together with the rules and regulations
thereunder.

“Collection Account” shall mean the account established and maintained by the
Indenture Trustee pursuant to Section 3.02(a) of the Indenture and Servicing
Agreement.

“Commercial Paper” shall mean either (i) the promissory notes of any Conduit
issued by such Conduit in the commercial paper market or (ii) the promissory
notes issued in the commercial paper market by a multi-seller commercial paper
conduit the proceeds of which are loaned to a Conduit.

“Commitment” shall mean, for each Committed Purchaser, on any date of
determination, the commitment of such Committed Purchaser to purchase a Note on
the Initial Funding Date and, thereafter, to maintain and, subject to certain
conditions, increase its investment therein in accordance with the terms of the
Note Purchase Agreement in an amount not to exceed (a) (i) in the case of any
Committed Purchaser which is a party hereto on the Amendment Effective Date, the
dollar amount set forth opposite the name of such Committed Purchaser on
Schedule I of the Note Purchase Agreement, (ii) in the case of any Committed
Purchaser which is not a party hereto on the Amendment Effective Date, the
dollar amount specified as such in the Purchaser Assignment and Assumption
Agreement for such Purchaser or (iii) in the case of any permitted assignee of
an Alternate Purchaser pursuant to Section 5.10(d) of the Note Purchase
Agreement, the amount specified as such in the Alternate Purchaser Assignment
and Assumption Agreement pursuant to which such assignee acquired its interest
in the Notes, minus (b) the dollar amount of any portion thereof assigned
pursuant to an Assignment and Assumption Agreement in accordance with
Section 5.10 of the Note Purchase Agreement prior to such date of determination,
plus (c) the dollar amount of any increase to such Committed Purchaser’s
Commitment consented to by such Committed Purchaser prior to such date of
determination.

“Commitment Percentage” shall mean, on any date of determination, with respect
to any Non-Conduit Committed Purchaser or Purchaser Group, the ratio, expressed
as a percentage, which the Purchaser Commitment Amount of such Non-Conduit
Committed Purchaser or Purchaser Group bears to the Facility Limit on such date.

“Committed Purchaser” shall mean any Alternate Purchaser or any Non-Conduit
Committed Purchaser.

 

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“Competes” shall mean (1) to compete, conduct or participate or engage in, or
bid for or otherwise pursue a business, whether as a principal, sole proprietor,
partner, stockholder, or agent of, or consultant to or manager for, any Person
or in any other capacity; or (2) have any debt or equity ownership interest in
or actively assist, any Person or business that conducts, participates or
engages in, or bids for or otherwise pursues a business, whether as a principal,
sole proprietor, partner or stockholder, or agent of, or consultant to or
manager for, any Person or in any other capacity; provided, that “Competes”
shall not include ownership of less than 5% of the outstanding equity securities
of a publicly-traded Person; provided, further, that “Competes” shall not
include acting as a lender (including a Purchaser under the Facility Documents)
to a Direct Competitor or acting in an advisory role to a Direct Competitor.

“Conduit” shall mean any commercial paper conduit identified as a Conduit on
Schedule I to the Note Purchase Agreement or in the Assignment and Assumption
Agreement pursuant to which such Purchaser became a party thereto, and any
permitted assignee thereof.

“Conduit Assignee” shall mean, with respect to any Conduit, either (x) any
commercial paper conduit administered by the Funding Agent with respect to such
Conduit or (y) any other commercial paper conduit which has entered into a
Liquidity Agreement with one or more Alternate Purchasers (or any Affiliate of
such Alternate Purchasers) with respect to such Conduit, in either case
designated by the Funding Agent with respect to such Conduit to accept an
assignment from such Conduit of the Purchaser Invested Amount or a portion
thereof with respect to the Purchaser Group of which such Conduit is a member
and such Conduit’s rights and obligations under this Agreement pursuant to
Section 5.10(c) of the Note Purchase Agreement; provided that no Conduit
Assignee pursuant to clause (y) of this definition shall be a direct competitor
(or an Affiliate thereof) of the Performance Guarantor or the Servicer in the
lodging, vacation exchange and rentals or vacation ownership businesses.

“Consolidated Net Worth” shall mean at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of MVW under
stockholders’ equity at such date.

“Consolidated Tangible Net Worth” shall mean, at any date, (a) Consolidated Net
Worth, minus (b) the net book value of all assets on the consolidated balance
sheet of MVWC used to calculate Consolidated Net Worth that would be treated as
intangible assets under GAAP (including goodwill, trademarks, trade names,
service marks, service names, copyrights, patents, organizational expenses and
the excess of any equity in any Subsidiary over the cost of the investment in
such Subsidiary), all as determined on a consolidated basis in accordance with
GAAP

“Continued Errors” shall have the meaning specified in Section 5.19(f)(i) of the
Indenture and Servicing Agreement.

“Continuing Directors” shall mean the directors of the Performance Guarantor on
the Amendment Effective Date and each other director, if, in each case, such
other director’s nomination for election to the board of directors of such
Performance Guarantor is recommended by at least 66-2/3% of the then Continuing
Directors.

 

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“Control Account” shall mean any account subject to a Control Agreement. A list
of all Control Accounts on the Amendment Effective Date has been provided by the
Issuer (or its agent) to the Administrative Agent and the Indenture Trustee.

“Control Account Bank” shall mean a commercial bank at which a Control Account
is established. A list of all Control Account Banks on the Amendment Effective
Date has been provided by the Issuer (or its agent) to the Administrative Agent
and the Indenture Trustee.

“Control Agreement” shall mean a control agreement by and among the Issuer (or
its agent), the Indenture Trustee (or its agent), the Servicer and the related
Control Account Bank, which agreement sets forth the rights of the parties
thereto with respect to the disposition and application of collections deposited
in the related Control Account, including the right of the Indenture Trustee (or
its agent) to direct the Control Account Bank to remit collections directly to
the Indenture Trustee for the benefit of the Noteholders.

“Control Account Intercreditor Agreement” means that certain intercreditor,
security and agency agreement, dated as of September 1, 2011, by and among the
Issuer, the Indenture Trustee, MVW, MORI, the Servicer, the various issuers and
indenture trustees and other creditors party thereto from time to time, and
Wells Fargo Bank, National Association, as agent.

“Conveyed Timeshare Loan Assets” shall have the meaning set forth in Section 2
of the Purchase Agreement and Sale Agreement.

“Corporate Revolver Facility” means that certain credit agreement, dated as of
October 20, 2011, among MVW, MORI, as borrower, the several lenders from time to
time parties thereto, Bank of America, N.A. and Deutsche Bank Securities Inc.,
as co-documentation agents and JPMorgan Chase Bank, N.A., as administrative
agent, as amended.

“Corporate Trust Office” shall mean (i) the office of the Indenture Trustee,
which office is at the address set forth in Section 13.03 of the Indenture and
Servicing Agreement, or (ii) the office of the Owner Trustee, which is at the
address set forth in Section 2.2 of the Trust Agreement, as applicable.

“CP Rate” shall mean, with respect to (a) a Conduit that is funding a portion of
the Purchaser Invested Amount with respect to the Purchaser Group of which it is
a member on a pooled basis, for each day, the weighted average rate at which
interest or discount is accruing on or in respect of the Commercial Paper with
respect to such Conduit allocated, in whole or in part, by the related Funding
Agent, to fund the purchase or maintenance of such portion of such Purchaser
Invested Amount (including, without limitation, any interest attributable to the
commissions of placement agents and dealers in respect of such Commercial Paper
and any costs associated with funding small or odd-lot amounts, to the extent
that such commissions or costs are allocated, in whole or in part, to such
Commercial Paper by such Funding Agent) or (b) a Conduit that is funding a
portion of the Purchaser Invested Amount with respect to the Purchaser Group of
which it is a member with Commercial Paper with respect to such Conduit issued
in specified tranches (such Conduit, a “Match Funded Conduit”), the weighted
average rate of the

 

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Commercial Paper with respect to such Conduit issued to fund or maintain such
portion of such Purchaser Invested Amount, including an amount equal to the
portion of the Face Amount of the outstanding Commercial Paper issued to fund or
maintain such portion of such Purchaser Invested Amount that corresponds to the
portion of the proceeds of such Commercial Paper that was used to pay the
interest or discount component of maturing Commercial Paper issued to fund or
maintain such portion of such Purchaser Invested Amount, to the extent that such
Conduit has not received payments of interest in respect of such interest
component prior to the maturity date of such maturing Commercial Paper, and
including the portion of such interest or discount component constituting dealer
or placement agent commissions; provided, however, that each such Match Funded
Conduit shall approve the length of each tranche period and the portion of such
Purchaser Invested Amount allocated to such tranche period.

“CRD” shall mean the European Union Directive 2006/48/EC, as amended from time
to time.

“CRD MVW Entity” means each of the Owner, MORI and the Seller.

“Credit and Collection Policy” shall mean those credit and collection policies
and practices of the initial Servicer in effect as of a specified date; and for
any successor Servicer shall mean the credit and collection policies and
practices of such successor in effect on the date which it commences servicing.
The Credit and Collection Policy of the initial Servicer in effect on the
Closing Date and the Amendment Effective Date has been delivered to the
Administrative Agent and the Indenture Trustee.

“Credit Card Account” shall mean an arrangement whereby an Obligor makes
payments under a Timeshare Loan via pre-authorized debit to a Major Credit Card.

“Current Equity Percentage” shall mean, with respect to any date of
determination and a Timeshare Loan (a) 100% minus (B) the ratio expressed as a
percentage of (i) the related Loan Balance minus financed closing costs divided
by (ii) the related Purchase Price.

“Custodial Agreement” shall mean that certain custodial agreement, dated as of
September 1, 2011, by and among, the Custodian, the Indenture Trustee, the
Servicer and the Issuer.

“Custodial Fees” shall mean such fees as the Custodian shall charge from time to
time, as specified in the Custodial Agreement.

“Custodian” shall mean Wells Fargo Bank, National Association or its permitted
successors and assigns.

“Cut-Off Date” shall mean the date specified in the related Schedule of
Timeshare Loans as the date after which all subsequent collections related to
such Timeshare Loans are sold by MORI to the Seller and by the Seller to the
Issuer and pledged by the Issuer to the Indenture Trustee.

 

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“Cut-Off Date Loan Balance” shall mean the Loan Balance of a Timeshare Loan on
the related Cut-Off Date.

“DBRS” shall mean DBRS, Inc.

“Defaulted Timeshare Loan” is any Timeshare Loan for which any of the earliest
following events may have occurred: (i) any payment or part thereof has been
delinquent more than 150 days as of the end of the related Due Period (as
determined by the Servicer in accordance with the Servicing Standard), (ii) the
Servicer has initiated foreclosure or similar proceedings with respect to the
related Timeshare Property or has received the related deed or assignment in
lieu of foreclosure, or (iii) provided that such Timeshare Loan is at least one
day delinquent, the Servicer has determined that such Timeshare Loan should be
fully written off in accordance with the Credit and Collection Policy.

“Defective Timeshare Loan” shall have the meaning specified in Section 4.06 of
the Indenture and Servicing Agreement.

“Deficit” shall have the meaning specified in Section 2.4 of the Note Purchase
Agreement.

“Delinquent Timeshare Loan” is a Timeshare Loan for which any payment or part
thereof has been delinquent more than 30 days as of the end of the related Due
Period.

“Determination Date” shall mean, with respect to any Payment Date, the second
Business Day prior to such Payment Date.

“Direct Competitor” means any Person that Competes with MVW, MORI or any
Vacation Ownership Business or any Subsidiary of such Person or other Person
that controls, is controlled by, or is under common control with, any of the
foregoing Persons. For purposes of this definition, “control” of a Person means
the power, directly or indirectly, to direct or to cause the direction of the
management and policies of such Person, whether by contract or otherwise.

“Domestic Obligor” shall mean Obligors who are citizens or residents of, and
make payments from, the United States, Puerto Rico, the U.S. Virgin Islands, or
Guam, any of the other territories of the United States, Canada or U.S. military
bases. For the avoidance of doubt, having a military address outside the United
States or making payments from such address shall not cause a United States
citizen or resident Obligor to not be a Domestic Obligor.

“Downpayment Percentage” shall mean, with respect to any date of determination
and a Timeshare Loan (a) 100% minus (b) the ratio expressed as a percentage of
(i) the original Loan Balance of such Timeshare Loan minus financed closing
costs divided by (ii) the related Purchase Price.

“Due Period” shall mean with respect to (i) any Payment Date other than the
initial Payment Date, the immediately preceding calendar month and (ii) the
initial Payment Date, the period from the Closing Date to and including the last
day of the calendar month prior to such Payment Date.

 

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“Early Collection Fee” shall mean, (i) with respect to any Purchaser Group and
any Funding Period during which the portion of the Outstanding Note Balance that
was allocated to such Funding Period is reduced for any reason whatsoever, the
excess, if any, of (x) the additional Carrying Costs that would have accrued
during such Funding Period if such reductions had not occurred, minus (y) the
income, if any, received by the recipient of such reductions from investing the
proceeds of such reductions and (ii) with respect to any Non-Conduit Committed
Purchaser and any Interest Accrual Period during which the Purchaser Invested
Amount of such Non-Conduit Committed Purchaser is reduced for any reason
whatsoever on a date other than a Payment Date, the excess, if any, of (x) the
additional Carrying Costs that would have accrued during such Interest Accrual
Period if such reductions had not occurred, minus (y) the income, if any,
received by the recipient of such reductions from investing the proceeds of such
reductions.

“Effective Date” shall mean, with respect to any Purchaser which becomes a party
to the Note Purchase Agreement after the Closing Date, the date on which such
Purchaser becomes a party hereto, whether by assignment or direct execution of
the Note Purchase Agreement or otherwise.

“Eligible Bank Account” shall mean a segregated account, which may be an account
maintained with the Indenture Trustee, which is either (a) maintained with a
depository institution or trust company whose long-term unsecured debt
obligations are rated at least A by S&P and A2 by Moody’s and whose short-term
unsecured obligations are rated at least A-1 by S&P and P-1 by Moody’s; or (b) a
trust account or similar account maintained at the corporate trust department of
the Indenture Trustee.

“Eligible Investments” shall mean one or more of the following obligations or
securities:

(1) direct obligations of, and obligations fully guaranteed as to timely payment
of principal and interest 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 (“Direct
Obligations”);

(2) federal funds, or demand and time deposits in, certificates of deposit of,
or bankers’ acceptances issued by, any depository institution or trust company
(including U.S. subsidiaries of foreign depositories and the Indenture Trustee
or any agent of the Indenture Trustee, acting in its respective commercial
capacity) incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal or state
banking authorities, so long as at the time of investment, the commercial paper
or other short-term unsecured debt obligations or long-term unsecured debt
obligations of such depository institution or trust company have been rated by
each Rating Agency in its highest short-term rating category or one of its two
highest long-term rating categories (and no such rating shall include a
subscript of “f”, “r”, “p”, “pi”, “q” or “t”);

 

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(3) 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 short-term unsecured debt rating from each Rating Agency, at the
time of investment at least equal to the highest short-term unsecured debt
ratings of each Rating Agency (and no such rating shall include a subscript of
“f”, “r”, “p”, “pi”, “q” or “t”), provided, however, that securities issued by
any particular corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust Estate to
exceed 20% of the sum of the Outstanding Note Balance and the aggregate
principal amount of all Eligible Investments in the Collection Account,
provided, further, that such securities will not be Eligible Investments if they
are published as being under review with negative implications from either
Rating Agency;

(4) commercial paper (including both non interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not
more than 180 days after the date of issuance thereof) rated by each Rating
Agency in its highest short-term ratings (and no such rating shall include a
subscript of “f”, “r”, “p”, “pi”, “q” or “t”); and

(5) any other demand, money market fund, common trust estate or time deposit or
obligation, or interest-bearing or other security or investment (including those
managed or advised by the Indenture Trustee or an Affiliate thereof), rated in
the highest rating category by each Rating Agency (and no such rating shall
include a subscript of “f”, “r”, “p”, “pi”, “q” or “t”). Such investments in
this subsection (5) may include money market mutual funds rated either “AAAm” or
“AAAm-G” by S&P or common trust estates, including any other fund for which the
Indenture Trustee or an Affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Indenture Trustee or an Affiliate thereof charges
and collects fees and expenses from such funds for services rendered, (y) the
Indenture Trustee or an Affiliate thereof charges and collects fees and expenses
for services rendered pursuant to the Indenture and Servicing Agreement, and
(z) services performed for such funds and pursuant to this Indenture and
Servicing Agreement may converge at any time;

provided, however, that (a) any Eligible Investment must be money-market or
other relatively risk-free instruments without options and with maturities no
later than the Business Day prior to the expected Payment Date, and (b) no such
instrument shall be an Eligible Investment if such instrument (1) evidences
either (x) a right to receive only interest payments with respect to the
obligations underlying such instrument or (y) both principal and interest
payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield to
maturity of greater than 120% of the yield to maturity at par of such underlying
obligations, and (2) is purchased at a price in excess of par.

 

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“Eligible Timeshare Loan” shall mean a Timeshare Loan conforming to each of the
representations and warranties set forth in Schedule I to the Sale Agreement as
of the Funding Date, Transfer Date or, with respect to a Determination Date (and
the related Payment Date), the last day of the related Due Period, as the case
may be. Delinquent Timeshare Loans, Defaulted Timeshare Loans and Defective
Timeshare Loans, as of any date of determination, are not Eligible Timeshare
Loans.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.

“ERISA Affiliate” shall mean, with respect to any Person, (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Internal Revenue Code) as such Person; (ii) a
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with such Person; or
(iii) for purposes of Code Section 412, a member of the same affiliated service
group (within the meaning of Section 414(m) of the Internal Revenue Code) as
such Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above.

“Errors” shall have the meaning specified in Section 5.19(f)(i) of the Indenture
and Servicing Agreement.

“Event of Default” shall have the meaning specified in Section 6.01 of the
Indenture and Servicing Agreement.

“Exchange Notes” shall mean notes issued pursuant to an Exchange Notes Indenture
in exchange for Notes held by an Extending Noteholder.

“Exchange Notes Indenture” shall have the meaning set forth in Section 2.13 of
the Indenture and Servicing Agreement.

“Excluded Loan Balance” as of any date of determination shall mean the sum of
the following:

(i) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
relating to a Timeshare Property at an RCC Resort or a GRM Resort exceeds 10.0%
of the Aggregate Loan Balance of all Borrowing Base Loans; plus

(ii) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
with an original term to stated maturity more than 120 months exceeds 30.0% of
the Aggregate Loan Balance of all Borrowing Base Loans; plus

(iii) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
with both an original term to stated maturity of more than 180 months and were
originated after the Closing Date, exceeds 5% of the Aggregate Loan Balance of
all Borrowing Base Loans; plus

 

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(iv) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
for which the related Obligor is a resident of the Highest State Concentration
exceeds 30.0% of the Aggregate Loan Balance of all Borrowing Base Loans; plus

(v) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
for which the related Obligor is a resident of the Highest Five State
Concentration exceeds 60.0% of the Aggregate Loan Balance of all Borrowing Base
Loans, plus

(vi) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
having a Foreign Obligor from the Highest Country Concentration exceeds 30.0% of
the aggregate Loan Balance of all Borrowing Base Loans having a Foreign Obligor;
plus

(vii) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
having a Foreign Obligor from the Highest Three Countries Concentration exceeds
60.0% of the aggregate Loan Balance of all Borrowing Base Loans having a Foreign
Obligor; plus

(viii) the Loan Balance of any Pre-Completion Loan with more than 9 months
remaining until its Anticipated Completion Date; plus

(ix) the amount by which the aggregate Loan Balance of all Pre-Completion Loans
with 9 months or less until their respective Anticipated Completion Date exceeds
7.5% of the Aggregate Loan Balance of all Borrowing Base Loans; plus

(x) the Loan Balance of any Pre-Completion Loan for which the related Unit is
not an Available Unit as of its Anticipated Completion date; plus

(xi) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
with a Loan Balance greater than $125,000 exceeds 15.0% of the Aggregate Loan
Balance of all Borrowing Base Loans; plus

(xii) the amount by which the aggregate Loan Balance of all Borrowing Base Loans
(other than Borrowing Base Loans related to an Upgrade) for which the related
Obligor did not have a Downpayment Percentage of at least 10% at the time of
purchase exceeds 10% of the Aggregate Loan Balance of all Borrowing Base Loans.

“Excluded Loan Group Balance” means for any Borrowing Base Loan Group, an amount
equal to the Excluded Loan Balance multiplied by a fraction, the numerator of
which is the aggregate Loan Balance of Borrowing Base Loans in such Borrowing
Base Loan Group and the denominator of which is the Aggregate Loan Balance of
the Borrowing Base Loans.

“Excluded Taxes” shall have the meaning set forth in Section 4.3 of the Note
Purchase Agreement.

 

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“Extended Portion” shall mean, with respect to any Purchaser Group or
Non-Conduit Committed Purchaser that is extending the Facility Termination Date
with respect to less than all of its Purchaser Commitment Amount, an amount
equal to the portion of such Purchaser Group or Non-Conduit Committed
Purchaser’s Purchaser Invested Amount that is being extended.

“Extending Noteholder” shall mean a Noteholder that is either (x) the Funding
Agent for a Purchaser Group that is an Extending Purchaser or (y) a Non-Conduit
Committed Purchaser that is an Extending Purchaser.

“Extending Noteholder’s Percentage” shall mean, as of any Facility Termination
Date, the percentage equivalent of a fraction (i) the numerator of which is
equal to the aggregate principal amount of the Notes held by each Extending
Noteholder (or, in the case of any Extending Noteholder which is extending its
Facility Termination Date for an amount that is less than its entire Purchaser
Commitment Amount, the Extended Portion with respect to such Extending
Noteholder) on such date and (ii) the denominator of which is equal to the
Outstanding Note Balance on such date.

“Extending Purchaser” shall mean a Purchaser Group or a Non-Conduit Committed
Purchaser other than a Non-Extending Purchaser.

“Face Amount” shall mean, with respect to any Commercial Paper, the amount to be
paid by the applicable Conduit on the maturity date of such Commercial Paper,
whether issued on a discount basis or on an interest-bearing basis.

“Facility Documents” shall mean, collectively, the Indenture and Servicing
Agreement, the Performance Guaranty, the Purchase Agreement, the Sale Agreement,
the Custodial Agreement, the Administration Agreement, the Trust Agreement, the
UCC financing statements, the Fee Letter, the Control Agreement, the Control
Account Intercreditor Agreement, each Hedge Agreement and all other agreements,
documents or instruments delivered in connection with the transactions
contemplated thereby, and “Facility Document” shall mean any of them.

“Facility Limit” shall mean, on any date of determination, the sum of the
Purchaser Commitment Amounts with respect to each of the Purchaser Groups and
the Non-Conduit Committed Purchasers on such date. The Facility Limit shall be
reduced by the Purchaser Commitment Amount of each Non-Extending Purchaser on
the Facility Termination Date with respect to such Non-Extending Purchaser (or,
in the case of an Extending Noteholder which is extending its Facility
Termination Date for an amount less than its entire Purchaser Commitment Amount,
the non-Extended Portion of the related Purchaser Commitment Amount). On the
Amendment Effective Date, the Facility Limit shall be $250,000,000.

“Facility Termination Date” shall mean, with respect to any Purchaser Group or
Non-Conduit Committed Purchaser, September 10, 2014, as such date may be
extended in accordance with Section 2.3(c) of the Note Purchase Agreement.

 

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“Fee Letter” shall mean, as the context shall require, the (i) Fee Letter among
the Issuer, the Performance Guarantor, MORI, each Purchaser, the Administrative
Agent, each Funding Agent and Non-Conduit Committed Purchaser relating to the
Up-Front Fees, (ii) Fee Letter among the Issuer, the Performance Guarantor, MORI
and the Structuring Agent relating to the Structuring Fee, or (iii) Fee Letter
among the Issuer, MORI, the Performance Guarantor and the Administrative Agent
relating to the Administrative Agent Fee, in each case, as such fee letter may
from time to time be amended, supplemented or otherwise modified in accordance
with its terms.

“FICO” means a credit risk score for individuals calculated using the model
developed by Fair, Isaac and Company. Any reference to a FICO score in a
Facility Document shall mean the FICO score attributed to any Domestic Obligor
at the time of sale of an interest in a Timeshare Property to such Domestic
Obligor; provided that if there is more than one Domestic Obligor with respect
to a Timeshare Loan, any reference to a FICO score in a Facility Document shall
mean the FICO score attributed to, (i) if such Timeshare Loan was originated on
or prior to November 30, 2005, either (A) the FICO score of the primary Domestic
Obligor or (B) the average of the FICO Scores of the primary and secondary
Domestic Obligor or (ii) if such Timeshare Loan was originated after
November 30, 2005, the primary Domestic Obligor, in each case at the time of
sale of an interest in a Timeshare Property to such Domestic Obligors.

“FICO 600 to 649 Loan Group” means all Borrowing Base Loans for which the
related Domestic Obligors have FICO scores in the range from and including 600
to and including 649.

“FICO 650 to 699 Loan Group” means all Borrowing Base Loans for which the
related Domestic Obligors have FICO scores in the range from and including 650
to and including 699.

“FICO 700 to 749 Loan Group” means all Borrowing Base Loans for which the
related Domestic Obligors have FICO scores in the range from and including 700
to and including 749.

“FICO 750 Plus Loan Group” means all Borrowing Base Loans for which the related
Domestic Obligors have FICO scores equal to or greater than 750.

“Financial Covenants” means (A) the covenant contained in the Corporate Revolver
Facility that relates to (1) Consolidated Tangible Net Worth, (2) the maximum
ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA and (3) minimum
Consolidated Interest Coverage Ratio (as such terms are defined in the Corporate
Revolver Facility), (B) the Minimum Consolidated Tangible Net Worth Floor
Covenant and (C) any other numerical financial covenant or covenants found in
the Corporate Revolver Facility, as and when required under the Corporate
Revolver Facility.

“Fitch” shall mean Fitch, Inc.

 

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“Foreign Country” shall mean a jurisdiction that is not the “United States” (as
defined in Section 7701(a)(9) of the Code), Canada, Guam, Puerto Rico, the U.S.
Virgin Islands or any of the territories of the United States.

“Foreign Obligor” shall mean an Obligor who is not a Domestic Obligor.

“Foreign Timeshare Loan” means a Borrowing Base Loan for which the related
Obligor is a Foreign Obligor.

“Foreign Timeshare Loan Group I” means Borrowing Base Loans which are Foreign
Timeshare Loans with an aggregate Loan Balance up to and including an amount
equal to 25% of the Aggregate Loan Balance of all Borrowing Base Loans.

“Foreign Timeshare Loan Group II” means Borrowing Base Loans which are Foreign
Timeshare Loans with an aggregate Loan Balance in excess of 25% but less than
40% of the Aggregate Loan Balance of all Borrowing Base Loans.

“Funding Agent-Related Persons” shall mean the applicable Funding Agent,
together with its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and their respective Affiliates.

“Funding Agent” shall have the meaning set forth in the Preliminary Statement of
the Note Purchase Agreement.

“Funding Date” shall mean the Initial Funding Date or the date on which the
Outstanding Note Balance is increased pursuant to Section 2.2 of the Note
Purchase Agreement.

“Funding Period” shall mean, with respect to any portion of the Purchaser
Invested Amount with respect to any Purchaser Group: (i) if such amount accrues
interest by reference to the CP Rate in accordance with Section 2.8 of the Note
Purchase Agreement a period selected by the Funding Agent for such Purchaser
Group and notified to the Issuer and with the consultation of the Issuer, it
being understood that such Funding Agent shall have the sole right to choose
such period; (ii) if such amount accrues interest by reference to the Adjusted
LIBOR Rate in accordance with Section 2.8 of the Note Purchase Agreement, the
period determined in accordance with Section 2.8 of the Note Purchase Agreement;
(iii) if such amount accrues interest by reference to the Bank Base Rate in
accordance with Section 2.8 of the Note Purchase Agreement, a period of from 1
to 30 days; provided, however, that whenever the last day of a Funding Period
would otherwise occur on a day other than a Business Day, the last day of such
Funding Period shall be extended to occur on the next succeeding Business Day.

“Funding Source” shall have the meaning set forth in Section 4.2 of the Note
Purchase Agreement.

“GAAP” generally accepted accounting principles in the United States as in
effect from time to time, except that for purposes of the Financial Covenants,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 3.1(t)

 

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of the Note Purchase Agreement. In the event that any “Accounting Change” (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in the Indenture and
Servicing Agreement, then the Issuer and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of the Indenture and
Servicing Agreement so as to reflect equitably such Accounting Changes with the
desired result that the criteria for evaluating the Performance Guarantor’s
financial condition shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. Until such time as such an amendment shall
have been executed and delivered by the Issuer, the Administrative Agent and the
Majority Facility Investors, all financial covenants, standards and terms in the
Indenture and Servicing Agreement shall continue to be calculated or construed
as if such Accounting Changes had not occurred. “Accounting Changes” refers to
changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission.

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Grant” shall mean to grant, bargain, convey, assign, transfer, mortgage,
pledge, create and grant a security interest in and right of set-off against,
deposit, set over and confirm.

“GRM Resort” means a Resort operating under the Grand Residences by Marriott
brand.

“Gross Excess Spread Percentage” shall mean for any Due Period the percentage
equivalent of a fraction:

(A) the numerator of which is the product of:

(x) the sum of (i) all collections for such Due Period on the Borrowing Base
Loans attributable to interest and (ii) amounts received from a Qualified Hedge
Counterparty during such Due Period, minus the sum of (i) the Interest
Distribution Amount on the related Payment Date, (ii) the Servicing Fee on the
related Payment Date; and (iii) any Net Hedge Payment due on the related Payment
Date;

(y) 360, divided by the actual number of days in such Due Period, and

(B) the denominator of which is the average of the Aggregate Loan Balance at the
beginning and end of such Due Period.

“Hedge Agreement” shall mean collectively (i)(A) the related ISDA Master
Agreement, the related Schedule to the ISDA Master Agreement, and the related
Confirmation or (B) a long form confirmation, and (ii) to the extent applicable,
pursuant to Section 3.03(a)(ix) of the Indenture, an ISDA Credit Support Annex
relating thereto.

 

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“Hedge Agreement Collateral Posting Requirements” shall have the meaning set
forth in Section 3.03(a)(ix) of the Indenture and Servicing Agreement.

“Hedge Amortization Schedule” shall mean the amortization schedule prepared from
time to time by the Administrative Agent in accordance with Section 3.03(e) of
the Indenture in connection with the Hedge Agreements based on (i) the timeshare
loan data file prepared by the Issuer and the Servicer for the Administrative
Agent and (ii) the commercially reasonable assumptions regarding payment,
prepayment and defaults on the Timeshare Loans agreed upon by the Issuer and the
Administrative Agent in writing.

“Hedge Collateral Account” shall mean the account established and maintained by
the Indenture Trustee pursuant to Section 3.02(d) of the Indenture and Servicing
Agreement.

“Hedge Collateral Amount” shall have the meaning specified in Section 3.03 of
the Indenture and Servicing Agreement.

“Hedge Counterparty” shall mean the initial counterparty under a Hedge
Agreement, and any Qualified Hedge Counterparty to such Hedge Agreement
thereafter.

“Hedge Event of Default or Termination Event” shall mean any event of default or
termination event under a Hedge Agreement.

“Hedge Requirements” shall have the meaning specified in Section 3.03 of the
Indenture and Servicing Agreement.

“Hedge Termination Payment” shall mean any termination payment due to a Hedge
Counterparty as a result of a termination of a Hedge Agreement.

“Highest Country Concentration” shall mean, with respect to all the Borrowing
Base Loans, the Foreign Country with the highest concentration of Foreign
Obligors, measured by Loan Balance.

“Highest Five State Concentration” shall mean, with respect to all the Borrowing
Base Loans, the states in the United States with the five highest concentrations
of Obligors, measured by Loan Balance.

“Highest Lawful Rate” shall have the meaning specified in Section 3 of the Sale
Agreement.

“Highest State Concentration” shall mean, with respect to all the Borrowing Base
Loans, the state in the United States with the highest concentration of
Obligors, measured by Loan Balance.

“Highest Three Countries Concentration” shall mean, with respect to all the
Borrowing Base Loans, the Foreign Countries with the three highest
concentrations of Foreign Obligors, measured by Loan Balance.

 

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“Holder” or “Noteholder” shall mean a holder of any Note.

“Increase” shall have the meaning set forth in Section 2.2(a) of the Note
Purchase Agreement.

“Indemnified Amounts” shall have the meaning set forth in Section 4.1 of the
Note Purchase Agreement.

“Indemnified Parties” shall have the meaning set forth in Section 4.1 of the
Note Purchase Agreement.

“Indenture and Servicing Agreement” shall mean the second amended and restated
indenture and servicing agreement, dated as of September 1, 2012, among the
Issuer, the Servicer, the Indenture Trustee and the Back-Up Servicer, as such
agreement may from time to time be amended, supplemented or otherwise modified
in accordance with its terms.

“Indenture Trustee” shall mean Wells Fargo Bank, National Association, or such
successor as set forth in Section 7.09 of the Indenture and Servicing Agreement.

“Indenture Trustee Expenses” shall mean reasonable out-of-pocket expenses of the
Indenture Trustee incurred in connection with performance of the Indenture
Trustee’s obligations and duties under the Indenture and Servicing Agreement.

“Indenture Trustee Fee” shall equal $1,500 per month.

“Initial Funding Date” shall mean the date initial advances are made on the
Notes pursuant to Sections 2.2 and 3.3 of the Note Purchase Agreement.

“Initial Outstanding Note Balance” shall be zero on the Closing Date and
thereafter shall have the meaning set forth in Section 2.1 of the Note Purchase
Agreement.

“Initial Trial Balance” shall have the meaning specified in Section 5.19 of the
Indenture and Servicing Agreement.

“Insurance Proceeds” means (i) proceeds of any insurance policy, including
property insurance policies, casualty insurance policies and title insurance
policies and (ii) any condemnation proceeds, in each case which relate to the
Timeshare Loans or the Timeshare Properties and are paid or required to be paid
to, and may be retained by, the Issuer, any of its Affiliates or to any
mortgagee of record.

“Intended Tax Characterization” shall have the meaning specified in
Section 4.04(b) of the Indenture and Servicing Agreement.

“Interest Accrual Period” shall mean, with respect to a Payment Date, the period
beginning on and including the immediately preceding Payment Date and ending on
and excluding such Payment Date; provided that the initial Interest Accrual
Period will begin on and include the Closing Date and end on and exclude the
initial Payment Date.

 

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“Interest Distribution Amount” shall mean for each Note on any Payment Date, the
sum of:

(i) an amount equal to the Carrying Costs for the related Interest Accrual
Period with respect to a Non-Conduit Committed Purchaser that holds such Note or
the Purchaser Group in whose Funding Agent’s name such Note is registered, as
applicable, as such amount is reported to the Indenture Trustee by the
Administrative Agent or the Servicer, and

(ii) the related Usage Fees; and

(iii) any unpaid Interest Distribution Amounts from prior Payment Dates plus, to
the extent permitted by law, interest thereon at the rate used to calculate the
Carrying Cost plus the rate used to calculate the Usage Fees for such Payment
Date.

“Issuer” shall mean Marriott Vacations Worldwide Owner Trust 2011-1, a Delaware
statutory trust, together with its successors and permitted assigns.

“Issuer Order” shall mean a written order or request delivered to the Indenture
Trustee and signed in the name of the Issuer by an Authorized Officer.

“Law” shall mean any applicable law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body or Governmental Authority.

“LIBOR Rate” shall mean, (a) with respect to any Funding Period, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBOR01 Page (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 A.M. (London
time) two London Business Days prior to the first day of such Funding Period for
a term equal to the length of such Funding Period, as determined in accordance
with Section 2.8 of the Note Purchase Agreement or (b) with respect to any day
during an Interest Accrual Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page
(or any successor page or such other page or service as each Non-Conduit
Committed Purchaser shall determine in its sole discretion) as the London
interbank offered rate for deposits in U.S. dollars for a term of thirty
(30) days at approximately 11:00 A.M. (London time) on such day, or if such day
is not a London Business Day on the immediately preceding London Business Day;
provided, however, if more than one rate is specified on the applicable page or
screen, the applicable rate shall be the arithmetic mean of all such rates. If
for any reason such rate is not available, the term “LIBOR Rate” shall mean,
(a) for any Funding Period, the rate at which deposits in U.S. dollars are
offered to the applicable Funding Agent in the London interbank market at
approximately 11:00 A.M. (London time) two London Business Days prior to the
first day of such Funding Period for a term equal to the length of such Funding
Period or (b) for any day during an Interest Accrual Period, the rate at which
deposits in U.S. dollars are offered to the applicable Non-Conduit Committed
Purchaser in the London interbank market at approximately 11:00 A.M. (London
time) on such day, or if such day is not a London Business Day on the
immediately preceding London Business Day for a term of thirty (30) days.

 

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“Lien” shall mean any mortgage, pledge, hypothecation, assignment for security,
security interest, claim, participation, encumbrance, levy, lien or charge.

“Liquidation” shall mean with respect to any Defaulted Timeshare Loan, the sale
or compulsory disposition of the related Timeshare Property, following
foreclosure, other enforcement action or the taking of a deed-in-lieu of
foreclosure, to a Person other than the Servicer or the Issuer and the delivery
of a bill of sale or the recording of a deed of conveyance with respect thereto,
as applicable.

“Liquidation Expenses” shall mean, with respect to a Defaulted Timeshare Loan,
the out-of-pocket expenses (exclusive of overhead expenses) incurred by the
Servicer in connection with the performance of its obligations under Sections
5.03 (a) (vii) through (ix) in the Indenture and Servicing Agreement, including
(i) any foreclosure and other repossession expenses incurred with respect to
such Timeshare Loan, (ii) (a) if MORI or an Affiliate thereof (a “MVW Servicer”)
is the Servicer, commissions and marketing and sales expenses incurred with
respect to the sale of the related Timeshare Property or Vacation Interest
(calculated as the MVW Average Marketing and Sales Percentage of the total
liquidation or resale price of such Timeshare Property or Vacation Interest
(expressed as a dollar figure)), or (b) if a MVW Servicer is no longer the
Servicer or, a MVW Servicer in its sole discretion elects to permanently cease
using the methodology described in (a) above, actual commissions and actual
marketing and sales expenses incurred with respect to the sale of the related
Timeshare Property or Vacation Interest, and (iii) any other fees and expenses
reasonably applied or allocated in the ordinary course of business with respect
to the Liquidation of such Defaulted Timeshare Loan (including any assessed
timeshare association fees); provided, however, that in each case, any fees,
expenses and commissions must be commercially reasonable and incurred in
accordance with the Servicing Standard.

“Liquidation Proceeds” shall mean with respect to the Liquidation of any
Defaulted Timeshare Loan, the amounts actually received by the Servicer in
connection with such Liquidation including any rental income, less related
rental expenses.

“Liquidity Agreement” shall mean an agreement between a Conduit and a Liquidity
Provider evidencing the obligation of such Liquidity Provider to provide
liquidity support, credit enhancement or asset purchase facilities for or in
respect of any assets or liabilities of such Conduit in connection with the
issuance by such Conduit of Commercial Paper or the borrowing by such Conduit of
the proceeds of Commercial Paper.

“Liquidity Provider” shall mean the Person or Persons who will provide liquidity
or program support to a Conduit in connection with the issuance by such Conduit
of Commercial Paper or the borrowing by such Conduit of the proceeds of
Commercial Paper.

“Loan Balance” shall mean, for any date of determination, the outstanding
principal balance due under or in respect of a Timeshare Loan (including a
Defaulted Timeshare Loan).

 

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“Loan Number” shall mean, with respect to any Timeshare Loan, the number
assigned to such Timeshare Loan by the Servicer, which number is set forth in
the related Schedule of Timeshare Loans, as amended from time to time.

“London Business Day” shall mean, with respect to the determination of the LIBOR
Rate, any Business Day other than a Business Day on which banking institutions
in London, England trading in dollar deposits in the London interbank market are
authorized or obligated by law or executive order to be closed.

“Lost Note Affidavit” shall mean the affidavit to be executed in connection with
any delivery of a copy of an original Obligor Note in lieu of such original, in
the form of Exhibit C attached to the Purchase Agreement and the Sale Agreement.

“Major Credit Card” shall mean a credit card issued by any VISA USA, Inc.,
MasterCard International Incorporated, American Express Company, Discover Bank
or Diners Club International Ltd. credit card affiliate or member entity.

“Majority Facility Investors” shall mean at any time, Purchaser Groups and/or
Non-Conduit Committed Purchasers having Commitment Percentages aggregating more
than 51%.

“Majority Purchaser Group Investors” shall mean at any time, with respect to
each Purchaser Group, the Alternate Purchasers with respect to such Purchaser
Group having Alternate Purchaser Percentages aggregating more than 51%.

“Mandatory Redemption Date” means the Payment Date occurring in the 13th
calendar month after the calendar month in which the last Facility Termination
Date occurs; provided, however, if, on the Facility Termination Date, an
Amortization Event exists, the Mandatory Redemption Date means the Payment Date
occurring in the 6th calendar month after the calendar month in which the
Facility Termination Date occurs.

“Margin Stock” shall have the meaning provided in Regulation U.

“Marriott International” shall mean Marriott International, Inc., a Delaware
corporation.

“Marriott License Agreement” means the license, services and development
agreement, entered into on November 17, 2011 by and among Marriott
International, MVW and the other signatories thereto pursuant to which, among
other things, MVW is granted the exclusive right, for the term of such
agreement, to use certain “Marriott” marks and intellectual property in
connection with MVW’s Vacation Ownership Business.

“Material Adverse Effect” shall mean, with respect to any Person and any event
or circumstance, a material adverse effect on (a) the business, properties,
operations or condition (financial or otherwise) of such Person, (b) the ability
of such Person to perform its respective obligations under any Facility
Documents to which it is a party, (c) the validity or enforceability of, or
collectability of amounts payable under, any Facility Documents to which it is a
party, (d) the status, existence, perfection or priority of any Lien granted by
such Person under any Facility Documents to which it is a party, or (e) the
value, validity, enforceability or collectability of the Trust Estate.

 

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“Minimum Consolidated Tangible Net Worth Floor Covenant” shall mean the
requirement that the Consolidated Tangible Net Worth of MVW must be, at all
times, at least $700,000,000.

“Miscellaneous Payments” shall mean, with respect to any Timeshare Loan, any
amounts received from or on behalf of the related Obligor representing
assessments, payments relating to real property taxes, insurance premiums,
maintenance fees and charges and condominium association fees and any other
payments not owed under the related Obligor Note.

“Monthly Reports” shall have the meaning specified in Section 5.19(b) of the
Indenture and Servicing Agreement.

“Monthly Servicer Report” shall have the meaning specified in Section 5.05 of
the Indenture and Servicing Agreement.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“MORI” shall mean Marriott Ownership Resorts, Inc., a Delaware corporation.

“MORI Affiliated Manager” shall mean Marriott Resorts Hospitality Corporation, a
wholly-owned subsidiary of MORI, Marriott Resorts Hospitality (Bahamas) Limited,
a wholly owned subsidiary of Marriott Resorts Hospitality Corporation or another
Affiliate of MORI, as applicable, together with their respective successors and
assigns.

“Mortgage” shall mean the original recorded mortgage, deed of trust or other act
or instrument creating a first priority lien on a Timeshare Property securing a
Mortgage Loan, or a copy thereof certified by the applicable recording office.

“Mortgage Loan” shall mean any Timeshare Loan that is not a Right-To-Use Loan.
As used in the Facility Documents, the term “Mortgage Loan” shall include the
related Obligor Note, Mortgage and other security documents contained in the
related Timeshare Loan File.

“MVC Trust” shall mean MVC Trust, a Florida land trust (Florida Land Trust
No. 1082-0300-00) established pursuant to the MVC Trust Agreement.

“MVC Trust Agreement” shall mean that certain trust agreement, dated March 11,
2010, by and among MORI, First American Trust, FSB and MVC Trust Owners
Association, a Florida corporation not for profit.

“MVC Trust Association” means MVC Trust Owners Association, Inc., a Florida
not-for-profit corporation

 

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“MVC Trustee” shall mean First American Trust, FSB, as Trustee of the MVC Trust.

“MVW” shall mean Marriott Vacations Worldwide Corporation, a Delaware
corporation.

“MVW Average Marketing and Sales Percentage” shall mean, with respect to any
Payment Date, (a) the sum of the MVW Marketing and Sales Percentages for the
three four-week accounting periods immediately preceding the first day of the
calendar month in which such Payment Date occurs, divided by (b) three.

“MVW Entity” means any of (a) the Issuer, (b) the Seller, (c) MORI and (d) the
Performance Guarantor.

“MVW Marketing and Sales Percentage” shall mean (a) the marketing and sales
expenses (including sales commissions) incurred by all resorts of the applicable
Marriott Vacation Club International brand during a four-week accounting period,
divided by (b) the aggregate sales revenue for all resorts of the applicable
Marriott Vacation Club International brand during such four-week accounting
period (expressed as a percentage).

“MVW Resort” shall mean a resort of any Marriott Vacation Club International
brand, including but not limited to, The Ritz-Carlton Club, The Ritz-Carlton
Destination Club, Marriott Vacation Club Destinations and Grand Residences by
Marriott, in which a fractional interest in one or more residential units or
dwellings thereof has been conveyed to the MVC Trust.

“MVW Resort Association” shall mean a timeshare association relating to any MVW
Resort.

“MVW Servicer” shall have the meaning set forth in the definition of Liquidation
Expenses.

“MVW Unit” shall mean a residential unit or dwelling at a MVW Resort.

“Net Hedge Payment” shall mean the net amount, if any, then payable by the
Issuer to the Hedge Counterparty under a Hedge Agreement, excluding any Hedge
Termination Payment.

“Non-Conduit Committed Purchaser” shall mean any Purchaser which is designated
as a Non-Conduit Committed Purchaser on Schedule I to the Note Purchase
Agreement or in the Assignment and Assumption Agreement pursuant to which such
Purchaser became a party to the Note Purchase Agreement, and any permitted
assignee thereof.

“Non-Extending Purchaser” means any Purchaser Group or Non-Conduit Committed
Purchaser who shall not have agreed to an extension of its Facility Termination
Date pursuant to Section 2.3(c) of the Note Purchase Agreement.

 

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“Note Purchase Agreement” shall mean that amended and restated note purchase
agreement, dated the Amendment Effective Date, by and among the Issuer, the
Seller, the Performance Guarantor, the Servicer, the Purchasers, Funding Agents
and the Administrative Agent.

“Note Register” shall have the meaning specified in Section 2.03(a) of the
Indenture and Servicing Agreement.

“Note Registrar” shall have the meaning specified in Section 2.03(a) of the
Indenture and Servicing Agreement.

“Notes” shall mean the Issuer’s Timeshare Loan-Backed Variable Funding Notes,
Series 2011-1, issued pursuant to the Indenture and Servicing Agreement.

“Notes Increase Amount” shall have the meaning set forth in Section 2.2(a) of
the Note Purchase Agreement.

“NPA Costs” means, as of any Payment Date, the Breakage and Other Costs due and
payable on such Payment Date in accordance with the Note Purchase Agreement.

“Obligations” shall have the meaning set forth in Section 1(a)(ii) of the
Performance Guaranty.

“Obligor” shall mean a Person obligated to make payments under a Timeshare Loan.

“Obligor Note” shall mean the original, executed promissory note or other
instrument of indebtedness evidencing the indebtedness of an Obligor under a
Timeshare Loan, which note or instrument shall be substantially in the form of
Exhibit B attached to the Sale Agreement, together with any rider, addendum or
amendment thereto, or any renewal, substitution or replacement of such note or
instrument.

“Officer’s Certificate” shall mean a certificate executed by a Responsible
Officer of the related party.

“Official Body” shall mean any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

“Opinion of Counsel” shall mean a written opinion of counsel, in each case
reasonably acceptable to the addressees thereof.

“Originator” shall mean, with respect to a Timeshare Loan, the original lender,
mortgagee or similar party.

 

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“Other Issuer” shall mean any Person other than the Issuer that has entered into
a receivables purchase agreement, transfer and administration agreement or other
similar agreement with the applicable Conduit.

“Outstanding” shall mean, with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under the
Indenture and Servicing Agreement except:

(a) Notes theretofore canceled by the Indenture Trustee or delivered to the
Indenture Trustee for cancellation;

(b) Notes or portions thereof for whose payment money in the necessary amount
has been theretofore irrevocably deposited with the Indenture Trustee in trust
for the holders of such Notes for the payment of principal; and

(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to the Indenture and Servicing Agreement
unless proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a Person in whose hands the Note is a valid obligation;
provided, however, that in determining whether the holders of the requisite
percentage of the Outstanding Note Balance have given any request, demand,
authorization, direction, notice, consent, or waiver hereunder, Notes owned by
the Issuer or any Affiliate of the Issuer or any entity consolidated in MORI’s
and/or MVW’s consolidated financial statements shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, or waiver, only Notes that a Responsible Officer of
the Indenture Trustee actually has notice are so owned shall be so disregarded.

“Outstanding Note Balance” shall mean, as of any date of determination, the
Initial Outstanding Note Balance plus (i) the aggregate amount of Increases made
with respect to the Notes pursuant to the Indenture and Servicing Agreement and
the Note Purchase Agreement, less (ii) the aggregate amount of all principal
payments on the Notes on or prior to such date of determination, less (iii) the
principal amount of any Notes cancelled pursuant to Section 2.13 of the
Indenture and Servicing Agreement; provided, that any principal payments
required to be returned to the Issuer shall be reinstated to the Outstanding
Note Balance. For purposes of consents, approvals, voting or other similar acts
of the Noteholders under any of the Facility Documents, “Outstanding Note
Balance” shall exclude amounts with respect to Notes or interests in Notes which
are held by the Issuer or any Affiliate of the Issuer or any entity consolidated
in MORI’s and/or MVW’s consolidated financial statements.

“Owner” shall mean MVCO Series LLC, a Delaware limited liability company, or any
subsequent owner of the beneficial interest in the Issuer.

“Owner Trustee” shall mean Wilmington Trust, National Association, or any
successor thereof, acting not in its individual capacity but solely as trustee
under the Trust Agreement.

 

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“Owner Trustee Fee” shall equal $4,500 a year paid in accordance with
Section 3.04 of the Indenture and Servicing Agreement.

“Participants” shall have the meaning set forth in Section 5.10(e) of the Note
Purchase Agreement.

“Payment Date” shall mean the 20th day of each calendar month, or, if such date
is not a Business Day, then the next succeeding Business Day, commencing in
October 2011.

“PAC” shall mean an arrangement whereby an Obligor makes payments under the
Timeshare Loan via pre-authorized debit.

“Percentage Interest” shall mean, as of any date with respect to any Purchaser
Group or Non-Conduit Committed Purchaser, the percentage equivalent of a
fraction, (i) the numerator of which is the outstanding principal amount on such
date of the Note registered in the name of the Funding Agent for such Purchaser
Group or such Non-Conduit Purchaser, as applicable and (ii) the denominator of
which is the Outstanding Note Balance on such date.

“Performance Guarantor” shall mean MVW or its successor.

“Performance Guaranty” shall mean that amended and restated performance
guaranty, dated as of September 1, 2012, given by the Performance Guarantor in
favor of the Issuer and the Indenture Trustee.

“Permitted Liens” shall mean, as to any Timeshare Property, (a) the lien of
current real property taxes, maintenance fees, ground rents, water charges,
sewer rents and assessments not yet due and payable, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public record,
none of which, individually or in the aggregate, materially interferes with the
current use of the Timeshare Property or the security intended to be provided by
the related Mortgage or with the Obligor’s ability to pay his or her obligations
when they become due or materially and adversely affects the value of the
Timeshare Property and (c) the exceptions (general and specific) set forth in
the related title insurance policy, none of which, individually or in the
aggregate, materially interferes with the security intended to be provided by
such Mortgage or with the Obligor’s ability to pay his or her obligations when
they become due or materially and adversely affects the value of the Timeshare
Property.

“Permitted Transferee” shall mean any commercial paper conduit, bank, financial
institution or other Person, as applicable (i) which is an existing Purchaser,
(ii) the unsecured debt obligations of which are rated no lower than the
applicable rating of the Purchaser from which it is purchasing an interest in a
Note pursuant to Section 5.10 or (iii) to which the Issuer has consented
becoming a Purchaser (such consent not to be unreasonably withheld).

“Person” shall mean an individual, partnership, limited liability company,
corporation, joint stock company, trust (including a business trust),
unincorporated association, joint venture, firm, enterprise, Official Body or
any other entity.

 

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“Post-Office Box” shall mean each post office box to which Obligors are directed
to make payments in respect of the Timeshare Loans. A list of all Post-Office
Boxes on the Amendment Effective Date has been provided by the Issuer (or its
agent) to the Administrative Agent and the Indenture Trustee.

“Potential Amortization Event” means an event which, but for the lapse of time
or the giving of notice or both, would constitute an Amortization Event.

“Potential Event of Default” means an event which, but for the lapse of time or
the giving of notice or both, would constitute an Event of Default.

“Potential Servicer Event of Default” means an event which, but for the lapse of
time or the giving of notice or both, would constitute a Servicer Event of
Default.

“Pre-Completion Loan” shall mean any Weeks-Based Timeshare Loan for which the
related Unit is not completed and located in or on the floor or building in the
Resort specified in the related Additional Timeshare Loan Supplement, or is not
ready for occupancy by timeshare owners. A Timeshare Loan shall cease to be a
Pre-Completion Loan on the date on which the related Unit’s construction has
been completed in accordance with applicable brand standards and becomes
available for occupancy by timeshare owners.

“Predecessor Servicer Work Product” shall have the meaning specified in
Section 5.19 of the Indenture and Servicing Agreement.

“Prepayment Notice” shall have the meaning set forth in Section 10.01 of the
Indenture and Servicing Agreement.

“Pricing Increase Notice” shall have the meaning set forth in Section 2.8(a) of
the Note Purchase Agreement.

“Pricing Increase Rescission” shall have the meaning set forth in Section 2.8(a)
of the Note Purchase Agreement.

“Principal Distribution Amount” shall mean an amount equal to the Borrowing Base
Shortfall on such Payment Date.

“Processing Charges” shall mean any amounts due under an Obligor Note in respect
of processing fees, service fees or late fees.

“Purchase Agreement” shall mean the amended and restated purchase agreement,
dated as of September 1, 2012, by and between MORI and the Seller pursuant to
which MORI sells the Timeshare Loans to the Seller.

“Purchase Contract” shall mean the purchase contract pursuant to which an
Obligor purchased a Timeshare Property.

 

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“Purchase Price” shall mean the original price of the Timeshare Property
purchased by an Obligor.

“Purchasers” shall mean, collectively, the Conduits and the Committed
Purchasers.

“Purchaser Addition Date” shall have the meaning set forth in Section 2.3(d) of
the Note Purchase Agreement.

“Purchaser Assignment and Assumption Agreement” shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit B to the Note Purchase
Agreement.

“Purchaser Commitment Amount” shall mean (x) with respect to any Purchaser
Group, the aggregate Commitments of the Alternate Purchasers which are members
of such Purchaser Group and (y) with respect to any Non-Conduit Committed
Purchaser, the Commitment of such Non-Conduit Committed Purchaser. The Purchaser
Commitment Amount with respect to each Purchaser Group or Non-Conduit Committed
Purchaser shall be reduced to zero on the Facility Termination Date with respect
to such Purchaser Group or Non-Conduit Committed Purchaser.

“Purchaser Fees” shall have the meaning specified in the Fee Letter.

“Purchaser Group” shall mean, collectively, a Conduit and the Alternate
Purchaser or Alternate Purchasers with respect to such Conduit.

“Purchaser Invested Amount” means, with respect to any Purchaser Group or
Non-Conduit Committed Purchaser as of any date, such Purchaser Group’s or
Non-Conduit Committed Purchaser’s Percentage Interest multiplied by the
Outstanding Note Balance on such date.

“Purchaser Termination Date” shall mean, with respect to each Purchaser Group or
Non-Conduit Committed Purchaser, the earlier of (i) the date on which an
Amortization Event or an Event of Default occurs and (ii) two Business Days
prior to the Facility Termination Date with respect to such Purchaser Group or
Non-Conduit Committed Purchaser.

“Qualified Hedge Counterparty” means (a) a counterparty to a Hedge Agreement
which has a long-term unsecured debt rating of at least “A” from S&P and a
short-term unsecured debt rating of at least “A-1” from S&P, or (b) a
counterparty to an existing Hedge Agreement which experiences a downgrade by S&P
below the ratings specified in clause (a) above but satisfies the Hedge
Agreement Collateral Posting Requirements; provided that for purposes of this
clause (b), a downgraded counterparty shall cease to be a Qualified Hedge
Counterparty if such counterparty has a long-term unsecured debt rating below
BBB- or has not been upgraded to meet the requirements of clause (a) above
within 60 days of such downgrade.

“Qualified Substitute Timeshare Loan” shall mean a Timeshare Loan which on the
related Transfer Date is an Eligible Timeshare Loan.

 

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“Rating Agencies” shall mean S&P and Moody’s, or their permitted successors and
assigns.

“RCC Resort” means a Resort operating under The Ritz-Carlton Club brand.

“Receivables” shall mean all funds, collections and other proceeds of a
Timeshare Loan including without limitation (i) all scheduled payments or
recoveries made in the form of money, checks, and like items to, or a wire
transfer or an automated clearinghouse transfer received by the Issuer, the
Servicer or the Indenture Trustee in respect of such Timeshare Loan, and
(ii) all amounts received by the Issuer, the Servicer or the Indenture Trustee
in respect of the Related Security for such Timeshare Loan.

“Recipient” shall have the meaning set forth in Section 2.6 of the Note Purchase
Agreement.

“Record Date” shall mean, with respect to any Payment Date, the close of
business on the last Business Day of the month preceding the month in which such
Payment Date occurs.

“Records” shall mean all Timeshare Loan Files and other documents, books,
records and other information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and related property and
rights) maintained with respect to Timeshare Loans and the related Obligors.

“Regulatory Change” shall have the meaning set forth in Section 4.2 of the Note
Purchase Agreement.

“Related Additional Alternate Purchasers” shall have the meaning set forth in
Section 2.3(d) of the Note Purchase Agreement.

“Related Commercial Paper” shall mean, with respect to any Conduit, the
Commercial Paper of such Conduit, all or a portion of the proceeds of which were
used to finance the acquisition or maintenance of an interest in the Notes.

“Related Security” shall mean with respect to any Timeshare Loan and with
respect to the Purchase Agreement, the Sale Agreement or the Indenture and
Servicing Agreement, as applicable, (i) all of the Purchaser’s, the Seller’s or
the Issuer’s interest, as applicable, in the Timeshare Property arising under or
in connection with the related Mortgage or Right-to-Use Agreement, and the
related Timeshare Loan Files relating to such Timeshare Loan, but not including
any Miscellaneous Payments, (ii) all other security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Timeshare Loan, together with all mortgages, assignments and financing
statements signed by an Obligor describing any collateral securing such
Timeshare Loan, (iii) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Timeshare Loan, (iv) all other security and books, records and
computer tapes relating to the foregoing and (v) with respect to the Indenture
and Servicing Agreement, all of the Issuer’s right, title and interest in and to
the Custodial Agreement and the Collection Account (or any other account into
which collections in respect of the Timeshare Loans may be deposited from time
to time).

 

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“Relevant UCC” shall mean the Uniform Commercial Code as in effect in the
applicable jurisdiction.

“Renewal Fee Letter” shall mean, as the context shall require, the (i) Fee
Letter among the Issuer, the Performance Guarantor, MORI, each Purchaser, the
Administrative Agent, each Funding Agent and Non-Conduit Committed Purchaser
relating to the Up-Front Renewal Fees, (ii) Fee Letter among the Issuer, the
Performance Guarantor, MORI and the Structuring Agent relating to the
Structuring Renewal Fee, or (iii) Fee Letter among the Issuer, MORI, the
Performance Guarantor and the Administrative Agent relating to the
Administrative Agent Fee, in each case, as such fee letter may from time to time
be amended, supplemented or otherwise modified in accordance with its terms.

“Repurchase Price” shall mean with respect to any Timeshare Loan to be
repurchased by the Seller pursuant to the Sale Agreement, a cash price equal to
the Loan Balance of such Timeshare Loan as of the date of such repurchase,
together with all accrued and unpaid interest on such Timeshare Loan at the
related coupon rate to but not including the due date in the then current Due
Period; provided that the “Repurchase Price” with respect to any Defaulted
Timeshare Loan repurchased by the Seller pursuant to the Sale Agreement prior to
the date which is two years after the Amendment Effective Date, shall mean a
cash price equal to the Loan Balance of such Defaulted Timeshare Loan as of the
date of such repurchase.

“Repurchased Timeshare Loans” shall mean the most seasoned $30,000,000 of
Timeshare Loans that were part of the Securitized Portfolio and were released
from the related securitization pursuant to a clean-up call, optional redemption
or similar mechanism and subsequently sold by the Seller to the Issuer pursuant
to the Sale Agreement and included as Borrowing Base Loans.

“Request for Release” shall be a request signed by the Servicer in the form
attached as Exhibit B to the Custodial Agreement.

“Required Cap Rate” means for any Interest Accrual Period and for any Hedge
Agreement in the form of an interest rate cap, the weighted average coupon for
the Borrowing Base Loans as of the last day of the related Due Period, less
8.50%.

“Required Facility Investors” shall mean at any time Purchaser Groups and/or
Non-Conduit Committed Purchasers having Commitment Percentages aggregating more
than 66 2/3%.

“Required Payments” shall mean with respect to any Payment Date, the items set
forth in (i) through (xii) of Section 3.04(a) of the Indenture and Servicing
Agreement without regard to Available Funds.

“Required Rating” shall have the meaning set forth in Section 3.7 of the Note
Purchase Agreement.

 

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“Reserve Account” shall mean the account maintained by the Indenture Trustee
pursuant to Section 3.02(b) of the Indenture and Servicing Agreement.

“Reserve Account Draw Amount” shall have the meaning specified in
Section 3.02(b)(ii) of the Indenture and Servicing Agreement.

“Reserve Account Required Balance” shall mean for any date of determination,
0.50% of the Aggregate Loan Balance of the Borrowing Base Loans.

“Reserve Account Required Funding Date Deposit” means, as of any Funding Date,
the amount required to be deposited on such Funding Date such that the amount on
deposit in the Reserve Account is equal to the Reserve Account Required Balance.
For purposes of calculating the Reserve Account Required Funding Date Deposit
for a Funding Date, the Aggregate Loan Balance shall be measured as of the last
day of the Due Period related to the immediately preceding Payment Date (or,
with respect to the Additional Timeshare Loans conveyed on such Funding Date or
Timeshare Loan conveyed during the same Due Period, the related Cut-off Date).

“Resort” shall mean any of the following resorts: Aruba Ocean Club; Aruba Surf
Club; Barony Beach Club; BeachPlace Towers; Canyon Villas; Crystal Shores;
Custom House; Cypress Harbour; Desert Springs Villas; Desert Springs Villas II;
Douglas at Streamside; Grand Chateau; Evergreen at Streamside; Fairway Villas;
Frenchman’s Cove; Marriott Grand Residence Club, Lake Tahoe; Grande Ocean
Resort; Grande Vista; Heritage Club; Harbour Club; Harbour Lake; Imperial Palms
Villas; Kauai Resort and Beach Club; Kauai Lagoons – Kalanipu’u; Ko Olina Beach
Club; Lakeshore Reserve at Grande Lakes; Legends Edge at Bay Point; Monarch at
Sea Pines; Manor Club at Ford’s Colony; Maui Ocean Club; Mountain Valley Lodge;
MountainSide; Marriott Vacation Club Destinations (Points); Newport Coast
Villas; Ocean Pointe; Oceana Palms; OceanWatch at Grande Dunes; Royal Palms;
Sabal Palms; St. Kitts Beach Club; Shadow Ridge; Summit Watch; SurfWatch; Timber
Lodge; Villas at Doral; Waiohai Beach Club; Willow Ridge Lodge; The Ritz-Carlton
Club, Aspen Highlands; The Ritz-Carlton Club, Bachelor Gulch; The Ritz-Carlton
Club, Jupiter; The Ritz-Carlton Club, Lake Tahoe; The Ritz-Carlton Club, San
Francisco; The Ritz-Carlton Club, St. Thomas; or the Ritz-Carlton Club, Vail.

“Resort Associations” shall mean any of the following associations: Aspen
Highlands Condominium Association, Inc.; Association of Apartment Owners of
Marriott’s Kauai Resort and Beach Club; Association of Apartment Owners of Maui
Ocean Club; Association of Owners of Waiohai Beach Club; Association of Owners
of Kalanipu’u Condominium; Barony Beach Club Owners’ Association, Inc.;
BeachPlace Towers Condominium Association, Inc.; Canyon Villas Vacation Owners
Association; Cooperatieve Vereniging Aruba Surf Club a/k/a Aruba Surf Club
Cooperative Association; Cooperatieve Vereniging Marriott Vacation Club of Aruba
a/k/a Marriott Vacation Club International of Aruba Cooperative Association;
Crystal Shores Condominium Association, Inc.; Custom House Leasehold Condominium
Association, LLC; Cypress Harbour Condominium Association, Inc.; Desert Springs
Villas Timeshare Association; Desert Springs Villas Master Association; Desert
Springs Villas II Timeshare Association; Douglas at Streamside Condominium
Association;

 

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Eagle Tree Condominium Association, Inc.; Eagle Tree Property Owners
Association, Inc. Evergreen at Streamside Condominium Association; Fairway
Villas at Seaview Condominium Association, Inc.; Frenchman’s Cove Condominium
Owners’ Association, Inc.; Grand Chateau Owners’ Association, Inc.; Grande Ocean
Resort Owners’ Association, Inc.; Grande Vista of Orlando Condominium
Association, Inc.; GRCLT Condominium, Inc.; Great Bay Condominium Owners
Association, Inc.; Harbour Club Owners’ Association, Inc.; HAB Condominium
Association, Inc.; HAO Condominium Association, Inc; Heritage Club Owner’s
Association, Inc.; Highlands Resort Club Association, Inc.; Highlands Resort
Condominium Association, Inc.; Hotel Breckenridge Condominium Association;
Imperial Palm Villas Condominium Association, Inc.; Kalanipu’u Vacation Owners
Association; Ko Olina Beach Club Vacation Owners Association; Lakeshore Reserve
Condominium Association, Inc.; Legends Edge Condominium Association, Inc.; Manor
Club at Ford’s Colony Condominium Association; Manor Club at Ford’s Colony
Time-Share Association; Marriott’s Kauai Beach Club Owners Association; Maui
Ocean Club Vacation Owners Association; Monarch at Sea Pines Owners’
Association, Inc.; Mountain Valley Lodge Resort Owners Association, Inc.;
MountainSide Condominium Association, Inc.; Newport Coast Villas Condominium
Association; Newport Coast Villas Timeshare Association; Newport Coast Villas
Master Association; Oceana Palms Condominium Association, Inc., Ocean Pointe at
Palm Beach Shores Condominium Association, Inc.; OceanWatch Villas Owners
Association; RCC-BG Condominium Association, Inc.; Royal Palms of Orlando
Condominium Association, Inc.; Sabal Palms of Orlando Condominium Association,
Inc.; Shadow Ridge Condominium Association; Shadow Ridge Timeshare Association;
Shadow Ridge Master Association; St. Kitts Beach Club Condominium Association,
Summit Watch Condominium Owners Association, Inc.; Summit Watch Resort Owners
Association, Inc.; Sunset Pointe Owners’ Association, Inc.; SurfWatch Owners
Association; The Neighborhood Association, Inc.; Timber Lodge Condominium
Association; Timber Lodge Timeshare Association; Villas at Doral Condominium
Association, Inc.; Waiohai Beach Club Vacation Owners Association; WDL Vail
Condominium Association, Inc.; WDL Vail Club Association, Inc.; 690 Market Club
Owners Association, Inc.; and 690 Market Master Association, Inc.

“Responsible Officer” shall mean (a) when used with respect to the Indenture
Trustee, any officer assigned to the Corporate Trust Office, including any
Managing Director, Vice President, Assistant Vice President, Secretary,
Assistant Secretary, Assistant Treasurer, any trust officer or any other officer
of the Indenture Trustee customarily performing functions similar to those
performed by any of the above designated officers, 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;
(b) when used with respect to the Servicer, any officer responsible for the
administration or management of the Servicer’s servicing department; and
(c) with respect to any other Person, the Chairman of the Board, the President,
a Vice President, the Treasurer, the Secretary, an Assistant Secretary, or the
manager of such Person.

“Retained Interest” shall mean a material net economic interest of not less than
5% of the sum of the Loan Balances of the Timeshare Loans as required under and
in accordance with Article 122a of the CRD.

 

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“Right-to-Use Agreement” shall mean with respect to a Right-to-Use Loan,
collectively (A) the various instruments, including a Resort’s articles of
association, a Resort’s timeshare plan, a Resort’s disclosure statement used in
selling Units, any share purchase agreement with an Obligor associated with such
Right-to-Use Loan, that among other things: (i) in consideration of the payment
of a purchase price, including payment of the related Obligor Note, grants and
conveys to the Obligor shares in the related Resort Association, which in turn
grants the Obligor the license or right-to-use and occupy a Timeshare Property
in a Resort, (ii) imposes certain obligations on the Obligor regarding payment
of the related Obligor Note, the Obligor’s use or occupancy of the Timeshare
Property and the payment of a maintenance fee to the management company, and
(iii) grants the holder thereof certain rights, including the rights to payment
of the related Obligor Note, and, in the circumstances provided therein, to
terminate the Right-to-Use Agreement or revoke the Obligor’s rights under it, to
reacquire any shares of the Resort’s association, and thereafter to resell the
license or right-to-use and occupy the related Timeshare Property to another
Person, (B) the related Vacation Interest, and (C) the related Purchase
Contract.

“Right-to-Use Loan” shall mean a Timeshare Loan that is subject to a
Right-to-Use Agreement. As used in the Facility Documents, the term
“Right-to-Use Loan” shall include the related Obligor Note, the Right-to-Use
Agreement and other security documents contained in the related Timeshare Loan
File.

“S&P” shall mean Standard & Poor’s Ratings Services, a Standard & Poor’s
Financial Services LLC business.

“Sale Agreement” shall mean the amended and restated sale agreement, dated as of
September 1, 2012, by and between the Seller and the Issuer pursuant to which
the Seller sells the Timeshare Loans to the Issuer.

“Schedule of Timeshare Loans” shall mean the list of Timeshare Loans attached to
an Additional Timeshare Loan Supplement (in respect of the Purchase Agreement
and Sale Agreement) and a Supplemental Grant (in respect of the Indenture and
Servicing Agreement) in electronic format, as amended from time to time to
reflect repurchases and substitutions pursuant to the terms of the Purchase
Agreement, Sale Agreement and the Indenture and Servicing Agreement, which list
shall set forth the following information with respect to each Timeshare Loan as
of the related Cut-Off Date, in numbered columns:

 

  1 Loan Number

 

  2 Name of Obligor

 

  3 Timeshare Estate Unit(s)/Week(s)/Number(s)/Beneficial Interest Number(s)

 

  4 Interest Rate Per Annum

 

  5 FICO score

 

  6 State of Residence

 

  7 Country of Residence

 

  8 Date of Origination

 

  9 Original Loan Balance

 

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  10 Maturity Date

 

  11 Monthly Payment Amount

 

  12 Original Term (in months)

 

  13 Outstanding Loan Balance

 

  14 Refinance

 

  15 Right-to-Use Timeshare Estate

 

  16 Pre-Completion Loan and Anticipated Completion Date

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Securitization Take-Out Date” shall mean the date of any Securitization
Take-Out Transaction.

“Securitization Take-Out Transaction” shall mean any securitization or other
financing of the assets securing the Notes whereby all or a portion of the
Outstanding Note Balance of the Notes is repaid from the proceeds of such
securitization or other financing.

“Securitized Portfolio” shall mean, as of any date, all timeshare loans
originated by MORI or an Affiliate and financed by any special purpose entity
and which are serviced by MORI including the timeshare loans in all term
issuances, all warehouse facilities (other than the Notes) and other term
securitization facilities that are outstanding as of such date.

“Securitized Portfolio Default Level” shall mean, for any Due Period, the
quotient (expressed as a percentage) of (i)(A) the sum of the Loan Balances of
all Timeshare Loans in the Securitized Portfolio that became Defaulted Timeshare
Loans during such Due Period (other than Defaulted Timeshare Loans for which the
related seller has exercised its option, if any, to repurchase or substitute
pursuant to the related transaction documents) minus (B) any remarketing
proceeds received during such Due Period in respect of any Defaulted Timeshare
Loans for which the related seller did not exercise its option to repurchase or
substitute, divided by (ii) the aggregate Loan Balance of all Timeshare Loans in
the Securitized Portfolio on the first day of such Due Period.

“Securitized Portfolio Delinquency Level” shall mean, for any Due Period, the
quotient (expressed as a percentage) of the sum of all Loan Balances of all
Timeshare Loans (exclusive of Timeshare Loans that became Defaulted Timeshare
Loans on or before the last day of such Due Period) included in the Securitized
Portfolio that are 61 days or more delinquent on the last day of such Due Period
(as determined by the Servicer in accordance with the Servicing Standard)
divided by the aggregate Loan Balance of all Timeshare Loans in the Securitized
Portfolio on the last day of such Due Period.

“Securitized Portfolio Three Month Rolling Average Default Percentage” means for
any Payment Date, the average of the Securitized Portfolio Default Levels for
the last three Due Periods.

“Securitized Portfolio Three Month Rolling Average Delinquency Percentage” means
for any Payment Date, the average of the Securitized Portfolio Delinquency
Levels for the last three Due Periods.

 

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“Seller” shall mean MORI SPC Series Corp., a Delaware corporation.

“Servicing Fee” shall mean for any Payment Date, the product of one-twelfth of
0.50% and the Aggregate Loan Balance as of the beginning of the related Due
Period or, with respect to any subsequent servicer, as otherwise determined
pursuant to Section 5.04 of the Indenture and Servicing Agreement.

“Servicer” shall mean MORI, and any successor servicer appointed in accordance
with the terms of the Indenture and Servicing Agreement.

“Servicer Event of Default” shall have the meaning specified in Section 5.04 of
the Indenture and Servicing Agreement.

“Servicer Representative” shall mean the Servicer’s internal auditors, chief
financial officer, treasurer or designee of the chief financial officer or
treasurer.

“Servicing Officer” shall mean those officers of the Servicer involved in, or
responsible for, the administration and servicing of the Timeshare Loans, as
identified on the list of Servicing Officers furnished by the Servicer to the
Indenture Trustee and the Noteholders from time to time.

“Servicing Standard” shall have the meaning specified in Section 5.01 of the
Indenture and Servicing Agreement.

“St. Kitts Mortgage Loan” shall mean a Mortgage Loan originated in connection
with purchases of interests at St. Kitts Beach Club.

“Standard Definitions” shall mean these Second Amended and Restated Standard
Definitions.

“Stated Maturity” shall mean the Payment Date occurring in September 2035.

“Statutory Trust Statute” shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. § 3801, et seq., as the same may be amended from time to time.

“Step-Up CP Interest” shall mean, for any Interest Accrual Period with respect
to any Purchaser Group, the excess of (i) the amount calculated for such
Interest Accrual Period pursuant to subclause (a) of clause (x) of the
definition of Carrying Costs with respect to such Purchaser Group over (ii) an
amount equal to the product of (x) the average daily amount during such Interest
Accrual Period of the portion of the Purchaser Invested Amount for such
Purchaser Group funded by the Conduit with respect to such Purchaser Group,
(y) a rate equal to the LIBOR Rate for the related Funding Period plus 1.00% and
(z) the number of days in such Interest Accrual Period divided by 360.

“Structuring Agent” means Deutsche Bank Securities Inc.

“Structuring Fee” shall have the meaning set forth in the Fee Letter.

 

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“Structuring Renewal Fee” shall have the meaning set forth in the Renewal Fee
Letter.

“Subsidiary” shall mean any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned or controlled by such Person, one or more of
the other subsidiaries of such Person or any combination thereof.

“Substitution Shortfall Amount” shall mean with respect to a substitution
pursuant to Section 4.06 of the Indenture and Servicing Agreement, an amount
equal to the excess, if any, of (a) the Loan Balance of the Timeshare Loan being
replaced as of the related Transfer Date, together with all accrued and unpaid
interest on such Timeshare Loan at the related coupon rate to but not including
the due date in the related Due Period over (b) the Loan Balance of the
Qualified Substitute Timeshare Loan as of the related Transfer Date. If on any
Transfer Date, one or more Qualified Substitute Timeshare Loans are substituted
for one or more Timeshare Loans, the Substitution Shortfall Amount shall be
determined as provided in the preceding sentence on an aggregate basis.

“Successor Servicer” shall mean the Back-Up Servicer and its permitted
successors and assigns, as provided in the Indenture and Servicing Agreement,
upon succeeding to the responsibilities and obligations of the Servicer in
accordance with Section 5.19 of the Indenture and Servicing Agreement.

“Supplemental Grant” shall mean with respect to any Additional Timeshare Loans
and other related assets pledged to the Indenture Trustee pursuant to the
Indenture, a Supplemental Grant substantially in the form attached as Exhibit C
of the Indenture. The Supplemental Grant shall include a Schedule of Timeshare
Loans for the related Additional Timeshare Loans and an updated Schedule of
Timeshare Loans for all Borrowing Base Loans.

“Tape(s)” shall have the meaning specified in Section 5.19 of the Indenture and
Servicing Agreement.

“Taxes” shall have the meaning set forth in Section 4.3 of the Note Purchase
Agreement.

“Timeshare Loan” shall mean a Mortgage Loan, a Right-to-Use Loan or a Qualified
Substitute Timeshare Loan subject to the lien of the Indenture and Servicing
Agreement.

“Timeshare Loan Acquisition Price” shall mean on any date of determination, with
respect to any Timeshare Loan, an amount equal to the fair market value of such
Timeshare Loan as determined by MORI under the Purchase Agreement and by the
Seller under the Sale Agreement, as applicable.

 

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“Timeshare Loan Files” shall mean with respect to each Timeshare Loan and each
Obligor:

(a) an original Obligor Note (or a Lost Note Affidavit and indemnity from the
Seller with a copy of such Obligor Note attached thereto), executed by the
Obligor, endorsed in the form “Pay to the order of                         ,
without recourse” (either directly on the Obligor Note or on an allonge
thereto), by an Authorized Officer of the Seller showing a complete chain of
endorsements from the original payee of the Obligor Note to the Seller;

(b) (x) if such Timeshare Loan is a Mortgage Loan (other than a St. Kitts
Mortgage Loan), (i) an original Mortgage (or a copy thereof) with evidence that
such Mortgage has been recorded in the appropriate recording office or
(ii) until the original Mortgage has been returned to the originator of the
Mortgage Loan by such recording office, a photocopy of an unrecorded Mortgage
that has been delivered to such recording office, and the delivery of such copy
of an original Mortgage or photocopy of an unrecorded Mortgage to the Custodian
by the Issuer or the Servicer shall be deemed to be a certification by the
Issuer that such copy or photocopy is a true and correct copy of the original
Mortgage, or (y) if such Timeshare Loan is a St. Kitts Mortgage Loan, a copy of
the recorded or stamped Mortgage;

(c) (x) if such Timeshare Loan is a Mortgage Loan (other than a St. Kitts
Mortgage Loan), original assignments of the Mortgage (which may be a part of a
blanket assignment of more than one Timeshare Loan), from the originator of the
Mortgage Loan to the Indenture Trustee in recordable form but unrecorded, signed
by an Authorized Officer of the originator of the Mortgage Loan or (y) if such
Timeshare Loan is a St. Kitts Mortgage Loan, copies of the recorded assignments
of the Mortgage from the originator of the St. Kitts Mortgage Loan to the
Issuer;

(d) if such Timeshare Loan is a St. Kitts Mortgage Loan, (i) an original
certificate of title (or a copy thereof) with evidence that such certificate of
title has been stamped by the office of the Registrar of Titles of the Island of
Saint Christopher in favor of the Indenture Trustee or (ii) until the original
certificate of title has been returned to the Custodian or Servicer by such
office, a photocopy of the certificate of title that has been delivered to such
office, and the delivery of such copy of the original certificate of title to
the Custodian by the Issuer or the Servicer shall be deemed to be a
certification by the Issuer that such copy or photocopy is a true and correct
copy of the original certificate of title;

(e) if such Timeshare Loan is a Mortgage Loan, an original lender’s title
insurance policy or master policy (or a copy thereof) referencing such Mortgage
Loan, when available, and if a copy, the delivery thereof to the Custodian by
the Issuer shall be deemed to be a certification by the Issuer that such copy is
a true an correct copy of such lender’s title insurance policy or master policy;

(f) an original or a copy of each guarantee, assumption, modification or
substitution agreement, if any, which relates to the Timeshare Loan (including
but not limited to the Obligor Note, Mortgage, Right-to-Use Agreement, as
applicable), and if a copy, the delivery thereof to the Custodian by the Issuer
or the Servicer shall be deemed to be a certification by the Issuer that such
copy is a true and correct copy of such guarantee assumption, modification or
substitution agreement;

 

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(g) if such Timeshare Loan is a Right-to Use Loan, the original related
Right-to-Use Agreement and any related pledge and security agreements (or copies
thereof), and if copies, the delivery thereof to the Custodian by the Issuer or
the Servicer shall be deemed to be a certification by the Issuer that such
copies are true and correct copies of such Right-to-Use Agreement and related
pledge and security agreements, provided, however, that each Timeshare Loan File
shall not include any documents attached to or delivered to an Obligor with a
Right-to-Use Agreement that are not signed by the parties to the Right-to-Use
Agreement and are delivered in identical form to all Obligors (such as articles
of association, a timeshare plan and a public disclosure statement) if copies of
such documents have been delivered to the Custodian by the Issuer or the
Servicer, and such delivery to the Custodian shall be deemed to be a
certification by the Issuer that such copies are true and complete copies of
such documents;

(h) if such Timeshare Loan is a Right-to Use Loan, a copy of the related
Vacation Interest representing membership in the related timeshare association
of the related Resort;

(i) an original fully executed Purchase Contract (or a copy thereof), and if a
copy, the delivery thereof to the Custodian by the Issuer or the Servicer shall
be deemed to be a certification by the Issuer that such copy is a true and
correct copy of such Purchase Contract, unless (i) the Timeshare Loan File
represents the refinancing of a timeshare loan, in which event no related
Purchase Contract shall be included or (ii) a complete Purchase Contract is not
available, in which event such portions as are available shall be included in
the Timeshare Loan File and the delivery of any portions of a Purchase Contract
to the Custodian by the Issuer or the Servicer shall be deemed to be a
certification by the Issuer that such portions constitute the only portions that
are available; and

(j) all other documents related to such Timeshare Loan including any Trailing
Documents immediately upon receipt by the Trustee.

“Timeshare Loan Servicing Files” shall mean, with respect to each Timeshare Loan
and each Obligor a copy of the Timeshare Loan Files and all other papers and
computerized records customarily maintained by the Servicer in servicing
timeshare loans comparable to the Timeshare Loans.

“Timeshare Loan Update Memo” shall mean any memorandum executed by an authorized
representative of Servicer and delivered to Custodian from time to time that
provides additional or modified information in respect of any Timeshare Loan or
Timeshare Loan File.

“Timeshare Property” shall mean Weeks-Based Timeshare Property or Beneficial
Interests, as the case may be, and the rights granted thereunder to the Issuer
(as assignee of the originator of such loan), which secure a Timeshare Loan.

“Trailing Document” shall mean any additional documentation related to a
Timeshare Loan or supplemental to a Timeshare Loan File delivered to the
Custodian following its initial receipt of the relevant Timeshare Loan File and
immediately incorporated into such relevant Timeshare Loan File by the Custodian
upon receipt.

 

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“Transfer Date” shall mean with respect to a Qualified Substitute Timeshare
Loan, the date on which the Issuer acquires such Qualified Substitute Timeshare
Loan from the Seller and Grants such Qualified Substitute Timeshare Loan to the
Indenture Trustee to be included as part of the Trust Estate.

“Transition Expenses” shall mean any documented costs and expenses (other than
general overhead expenses) incurred by the Back-Up Servicer should it become the
Successor Servicer as a direct consequence of the termination or resignation of
the initial Servicer and the transition of the duties and obligations of the
initial Servicer to the Successor Servicer.

“Trust Accounts” shall mean collectively, the Collection Account, the Reserve
Account, the Control Accounts, the Hedge Collateral Account and such other
accounts established by the Indenture Trustee pursuant to Section 3.01(a) of the
Indenture and Servicing Agreement.

“Trust Agreement” shall mean that certain amended and restated trust agreement,
dated the Closing Date, by and between the Owner and the Owner Trustee.

“Trust-Based Timeshare Loan” shall mean a Timeshare Loan secured by a Beneficial
Interest.

“Trust Estate” shall have the meaning specified in the Granting Clause of the
Indenture and Servicing Agreement.

“UCC” means, with respect to any jurisdiction, the uniform commercial code then
in effect in such jurisdiction.

“Unit” shall mean a residential unit or dwelling at a Resort.

“Unused Fees” shall mean with respect to any Purchaser Group or any Non-Conduit
Committed Purchaser, the product of:

(i) the Unused Rate; and

(ii) the excess of (x) its average daily Purchaser Commitment Amount during the
related Interest Accrual Period over (y) its average daily Purchaser Invested
Amount during the related Interest Accrual Period; and

(iii) the number of days in such Interest Accrual Period, divided by 360.

“Unused Rate” means 0.65%.

“Up-Front Fees” shall have the meaning specified in the Fee Letter.

“Up-Front Renewal Fees” shall have the meaning specified in the Renewal Fee
Letter.

“Upgrade” means, with respect to a Timeshare Loan, a situation in which an
Obligor elects to upgrade the related Timeshare Property or to purchase
additional Timeshare Properties and enters into a new timeshare loan secured by
the upgraded Timeshare Property or the original Timeshare Property and the
additional Timeshare Properties.

 

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“Usage Fees” shall mean shall mean with respect to any Purchaser Group or any
Non-Conduit Committed Purchaser, the product of:

(i) the Usage Rate; and

(ii) its average daily Purchaser Invested Amount during the related Interest
Accrual Period; and

(iii) the number of days in such Interest Accrual Period, divided by 360.

“Usage Rate” means 1.50%.

“Usage Step-Up Fees” means with respect to any Purchaser Group or any
Non-Conduit Committed Purchaser, the product of:

(i) the Usage Step-Up Rate;

(ii) its average daily Purchaser Invested Amount during the related Interest
Accrual Period; and

(iii) the number of days in such Interest Accrual Period, divided by 360.

“Usage Step-Up Rate” means (i) upon the earlier of the occurrence of an
Amortization Event or the Facility Termination Date until an Event of Default
has occurred and is continuing, 1.50% or (ii) if an Event of Default has
occurred and is continuing, 2.00%.

“USAP” shall have the meaning specified in Section 5.05(c) of the Indenture and
Servicing Agreement.

“Vacation Interest” shall mean the vacation certificate or stock certificate
issued by and evidencing membership in a homeowner’s association of a Resort
pursuant to which the owner thereof has a license or right-to-use a Timeshare
Property at a Resort.

“Vacation Ownership Business” means the development, sale, management,
marketing, operation or financing of (1) timeshare, fractional, interval,
vacation club, destination club, vacation membership, private membership club,
private residence club, points club, and other forms of products, programs and
services wherein purchasers acquire an ownership interest, use right or other
entitlement to use one or more of certain determinable accommodations and
associated facilities in a system of units and facilities on a recurring,
periodic basis and pay for such ownership interest, use right or other
entitlement in advance (whether payments are made in lump-sum or periodically
over time), and (2) associated exchange programs.

“Warehouse Portfolio” shall mean, as any date of determination, all Timeshare
Loans owned by the Issuer.

 

- 46 -

--------------------------------------------------------------------------------

“Warehouse Portfolio Default Level” shall mean, for any Due Period, the quotient
(expressed as a percentage) of (i)(A) the sum of the Loan Balances of all
Timeshare Loans in the Warehouse Portfolio that became Defaulted Timeshare Loans
during such Due Period (other than Defaulted Timeshare Loans for which the
Seller has exercised its option to repurchase or substitute pursuant to
Section 6(b) of the Sale Agreement) minus (B) any remarketing proceeds received
during such Due Period in respect of any Defaulted Timeshare Loans for which the
Seller did not exercise its option to repurchase or substitute, divided by
(ii) the Aggregate Loan Balance on the first day of such Due Period.

“Warehouse Portfolio Delinquency Level” shall mean, for any Due Period, the
quotient (expressed as a percentage) of the sum of all Loan Balances of all
Timeshare Loans (exclusive of Timeshare Loans that became Defaulted Timeshare
Loans on or before the last day of such Due Period) included in the Warehouse
Portfolio that are 61 days or more delinquent on the last day of such Due Period
(as determined by the Servicer in accordance with the Servicing Standard)
divided by the Aggregate Loan Balance on the last day of such Due Period.

“Warehouse Portfolio Three Month Rolling Average Default Percentage” means for
any Payment Date, the average of the Warehouse Portfolio Default Levels for the
last three Due Periods.

“Warehouse Portfolio Three Month Rolling Average Delinquency Percentage” means
for any Payment Date, the average of the Warehouse Portfolio Delinquency Levels
for the last three Due Periods.

“Weeks-Based Timeshare Loan” shall mean a Timeshare Loan secured by a
Weeks-Based Timeshare Property.

“Weeks-Based Timeshare Property” shall mean the contractual rights regarding a
Unit that is the subject of a Right-to-Use Agreement, or the timeshare fee or
other estate regarding a Unit.

 

- 47 -

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Final (Second Amended and Restated - 9/11/12)

EXHIBIT A

FORM OF NOTES

--------------------------------------------------------------------------------

THIS VARIABLE FUNDING NOTE, SERIES 2011-1 (THIS “NOTE”), WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, IN MINIMUM
DENOMINATIONS OF $1,000,000 AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS
THEREOF, AND ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (II) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) AND (II) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

THE PRINCIPAL AMOUNT OF THIS NOTE WILL BE REDUCED FROM TIME TO TIME BY PRINCIPAL
PAYMENTS ON THIS NOTE. IN ADDITION, THE PRINCIPAL AMOUNT OF THIS NOTE MAY BE
INCREASED IN ACCORDANCE WITH THE INDENTURE AND SERVICING AGREEMENT AND THE NOTE
PURCHASE AGREEMENT. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN THE OUTSTANDING
PRINCIPAL BALANCE OF THIS NOTE BY INQUIRY OF THE INDENTURE TRUSTEE.

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST 2011-1

TIMESHARE LOAN BACKED VARIABLE FUNDING NOTE, SERIES 2011-1

Date:

Principal Amount: Up to $[            ]

No. [            ]

FOR VALUE RECEIVED, Marriott Vacations Worldwide Owner Trust 2011-1, a Delaware
statutory trust (the “Issuer”), hereby promises to pay to [        ] (the
“Holder”) or its assigns, the principal sum not to exceed [        ] Dollars
($[        ]) in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Second Amended and Restated Indenture and Servicing Agreement, dated as of
[DATE] 1, 2012 (the “Indenture and Servicing Agreement”), by and among the
Issuer,

 

Indenture Exhibit    A - 2   

--------------------------------------------------------------------------------

Marriott Ownership Resorts, Inc., as servicer and Wells Fargo Bank, National
Association, as indenture trustee (in such capacity, the “Indenture Trustee”),
and as back-up servicer, and to pay interest thereon on each Payment Date in
accordance with Sections 2.10 and 3.04 of the Indenture and Servicing Agreement.
Capitalized terms used but not defined herein shall have the meanings given them
in “Standard Definitions” attached as Annex A to the Indenture and Servicing
Agreement.

By its holding of this Note, the Holder shall be deemed to accept the terms of
the Indenture and Servicing Agreement and agree to be bound thereby.

Unless the certificate of authentication hereon has been executed by the
Indenture Trustee referred to herein by manual signature, this Note shall not be
entitled to any benefit under the Indenture and Servicing Agreement or be valid
or obligatory for any purpose.

This Note is one of a duly authorized issue of notes of the Issuer designated as
its “Notes” and issued under the Indenture and Servicing Agreement.

This Note is secured by the pledge to the Indenture Trustee under the Indenture
and Servicing Agreement of the Trust Estate and recourse is limited to the
extent set forth in the Indenture and Servicing Agreement. The amounts owed
under this Note shall not include any recourse to the Indenture Trustee or any
affiliates thereof.

If certain Events of Default under the Indenture and Servicing Agreement have
been declared or occur, the Outstanding Note Balance of this Note may be
declared immediately due and payable or payments of principal may be accelerated
in the manner and with the effect provided in the Indenture and Servicing
Agreement. Notice of such declaration will be given by mail to holder(s) of this
Note, as his/her/their name(s) and address(es) appear in the Note Register, as
provided in the Indenture and Servicing Agreement. Subject to the terms of the
Indenture and Servicing Agreement, upon payment of such principal amount
together with all accrued interest, the obligations of the Issuer with respect
to the payment of principal and interest on this Note shall terminate.

The Indenture and Servicing Agreement 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 and Servicing Agreement at any time by the Issuer and the Indenture
Trustee with the consent of such holders of the percentages specified in the
Indenture and Servicing Agreement at the time Outstanding. The Indenture and
Servicing Agreement also contains provisions permitting such holders of
specified percentages in Outstanding Note Balance of the Notes, at the time
Outstanding, on behalf of all the holders, to waive compliance by the Issuer
with certain provisions of the Indenture and Servicing Agreement and certain
past defaults under the Indenture and Servicing Agreement 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
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.

 

Indenture Exhibit    A - 3   

--------------------------------------------------------------------------------

This Note may be issued only in registered form and only in minimum
denominations of at least $1,000,000 and integral multiples of $1,000 in excess
thereof; provided that the foregoing shall not restrict or prevent the transfer
in accordance with Section 2.03 of the Indenture and Servicing Agreement of any
Note having a remaining Outstanding Note Balance of other than an integral
multiple of $1,000, or the issuance of a single Note with a remaining
Outstanding Note Balance less than $1,000,000. The holder of this Note is deemed
to acknowledge that the Notes may be purchased and transferred only in minimum
denominations of $1,000,000 and integral multiples of $1,000 in excess thereof
and that this Note (or any beneficial interests herein) may not be transferred
in an amount less than such authorized denominations or which would result in
the holder of this Note having a beneficial interest below such authorized
denominations.

The Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note may be overdue, and neither
the Issuer, the Indenture Trustee nor any such agent shall be affected by notice
to the contrary.

No transfer of this Note or interest herein may be made unless that transfer is
made pursuant to an effective registration statement under the Securities Act
and an effective registration or a qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification because such transfer is in compliance with Rule
144A under the Securities Act, to a person who the transferor reasonably
believes is a Qualified Institutional Buyer (as defined in Rule 144A) that is
purchasing for its own account or for the account of a Qualified Institutional
Buyer and to whom notice is given that such transfer is being made in reliance
upon Rule 144A under the Securities Act as certified by such transferee in a
letter in the form of Exhibit B attached to the Indenture and Servicing
Agreement; and in accordance with any applicable securities laws of any state of
the United States and any applicable jurisdiction. None of the Issuer, the
Servicer or the Indenture Trustee is obligated to register or qualify the Notes
under the Securities Act or any other securities law or to take any action not
otherwise required under the Indenture and Servicing Agreement to permit the
transfer of any Note without registration.

The Holder of this Note may be required to exchange it for an Exchange Note
under the terms of Section 2.13 of the Indenture and Servicing Agreement.

As provided in the Indenture and Servicing Agreement, the principal amount of
this Note will be due and payable in full on the earlier of (i) the Mandatory
Redemption Date and (ii) the Stated Maturity.

The Indenture and Servicing Agreement and this Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.

Section 13.04 of the Indenture and Servicing Agreement is incorporated herein by
reference.

 

Indenture Exhibit    A - 4   

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by
the manual signature of its duly Authorized Officer.

Dated:

 

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST 2011-1 By:  

WILMINGTON TRUST,

NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee

  By:       Name: Dante M. Monakil   Title: Vice President

 

Indenture Exhibit    A - 5   

--------------------------------------------------------------------------------

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the within mentioned Indenture and
Servicing Agreement.

Dated:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Indenture Trustee By:    

Name:   Jennifer Westberg

Title:   Vice President

 

Indenture Exhibit    A - 6   

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF INVESTOR REPRESENTATION LETTER

 

B - 1

--------------------------------------------------------------------------------

INVESTOR REPRESENTATION LETTER

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST 2011-1

Timeshare Loan Backed Variable Funding Notes, Series 2011-1

Marriott Vacations Worldwide Owner Trust 2011-1

c/o Wilmington Trust, National Association, as Owner Trustee

1220 North Market Street

Suite 202

Wilmington, DE 19801

Wells Fargo Bank, National Association, as Indenture Trustee

Sixth & Marquette

MAC N9311-161

Minneapolis, Minnesota 55479

Ladies and Gentlemen:

                          (the “Purchaser”) hereby represents and warrants to
you in connection with its purchase of $                     in principal amount
of the above-captioned notes (the “Notes”) as follows:

1. The Purchaser (i) is a qualified institutional buyer, and has delivered to
you the certificate substantially in the form attached hereto as Annex I or
Annex II, as applicable, and (ii) is aware that the sale to it is being made in
reliance on Rule 144A of the Securities Act of 1933, as amended (the “Securities
Act”), and (iii) is acquiring the Notes for its own account or for the account
of a qualified institutional buyer. The Purchaser is purchasing the Notes for
investment purposes and not with a view to, or for, offer or sale in connection
with a public distribution or in any other manner that would violate the
Securities Act or applicable state securities laws.

2. The Purchaser understands that the Notes are being offered in a transaction
not involving any public offering in the United States within the meaning of the
Securities Act, that the Notes have not been and will not be registered under
the Securities Act and that (A) if in the future it decides to offer, resell,
pledge or otherwise transfer any of the Notes, such Notes may be offered,
resold, pledged or otherwise transferred in minimum denominations of $1,000,000
and in integral multiples of $1,000 in excess thereof, and only (i) to a person
whom the seller reasonably believes is a qualified institutional buyer in a
transaction meeting the requirements of Rule 144A of the Securities Act, or
(ii) pursuant to an effective registration statement under the Securities Act,
in each of cases (i) and (ii) in accordance with any applicable securities laws
of any State of the United States and any other applicable jurisdiction, and
that (B) the Purchaser will, and each subsequent holder is required to, notify
any subsequent purchaser of such Notes from it of the resale restrictions
referred to in (A) above.

3. The Purchaser understands that the Notes will, unless otherwise agreed by the
Issuer and the Holder thereof, bear a legend substantially to the following
effect.

THIS VARIABLE FUNDING NOTE, SERIES 2011-1 (THIS “NOTE”), WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, IN MINIMUM
DENOMINATIONS OF $1,000,000 AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS
THEREOF, AND ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (II) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) AND (II) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

B - 2

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4. If the Purchaser is purchasing any Notes as a fiduciary or agent for one or
more investor accounts, it has sole investment discretion with respect to each
such account and has full power to make acknowledgments, representations and
agreements contained herein on behalf of such account(s).

5. The Purchaser has received all information, if any, requested by the
Purchaser, has had full opportunity to review such information and has received
information necessary to verify such information. The Purchaser represents that
in making its investment decision to acquire the Notes, the Purchaser has not
relied on representations, warranties, opinions, projections, financial or other
information or analysis, if any, supplied to it by any person, including the
addressees of this letter.

6. The Purchaser (i) has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment in
the Notes, and (ii) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of such investment.

7. The Purchaser understands that the Issuer, the Administrative Agent and
others will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements contained in this letter and agrees that if any
of the acknowledgments, representations or agreements deemed to have been made
by it are no longer accurate, it will promptly notify the Issuer and the
Administrative Agent. If it is acquiring any Notes as a fiduciary or agent for
one or more investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power to make the
foregoing acknowledgments, representations and agreements contained in this
letter on behalf of such account.

8. The Notes may not be sold or transferred to, and each Purchaser by its
purchase of the Notes shall be deemed to have represented and covenanted that it
is not acquiring the Notes for or on behalf of or with the assets of, and will
not transfer the Notes to, any employee benefit plan as defined in Section 3
(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), that is subject to Title I of ERISA or any other “plan” as defined in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
“Code”), that is subject to Section 4975 of the Code or any entity whose
underlying assets include plan assets by reason of an employee benefit plan’s or
plan’s investment in such entity, or any plan that is subject to any
substantially similar provision of federal, state or local law (“Similar Law”),
except that such purchase for or on behalf of or with assets of a plan shall be
permitted:

(i) to the extent such purchase is made by or on behalf of a bank collective
investment fund maintained by the Purchaser in which no plan (together with any
other plans maintained by the same employer or employee organization) has an
interest in excess of 10% of the total assets in such collective investment
fund, and the other applicable conditions of Prohibited Transaction Class
Exemption 91-38 issued by the Department of Labor are satisfied as of the date
of acquisition of the Notes and all such conditions will continue to be
satisfied thereafter;

(ii) to the extent such purchase is made by or on behalf of an insurance company
pooled separate account maintained by the Purchaser in which no plan (together
with any other plans maintained by the same employer or employee organization)
has an interest in excess of 10% of the total of all assets in such pooled
separate account, and the other applicable conditions of Prohibited Transaction
Class Exemption 90-1 issued by the Department of Labor are satisfied as of the
date of acquisition of the Notes and all such conditions will continue to be
satisfied thereafter;

(iii) to the extent such purchase is made on behalf of a plan by a “qualified
professional asset manager”, as such term is described and used in Prohibited
Transaction Class Exemption 84-14 issued by the Department of Labor, and the
assets of such plan when combined with the assets of other plans established or
maintained by the same employer (or affiliate thereof) or employee organization
and managed by such qualified professional asset manager do not represent more
than 20% of the total client assets managed by such qualified professional asset
manager at the time of the transaction, and the other applicable conditions of
such exemption are otherwise satisfied as of the date of acquisition of the
Notes and all such conditions will continue to be satisfied thereafter;

(iv) to the extent such plan is a governmental plan (as defined in Section 3(32)
of ERISA) which is not subject to the provisions of Title I of ERISA or Sections
401 and 501 of the Code;

(v) to the extent such purchase is made by or on behalf of an insurance company
general account in which the reserves and liabilities for the general account
contracts held by or on behalf of any plan, together with any other plans
maintained by the same employer (or its affiliates) or employee organization, do
not exceed 10% of the total reserves and liabilities of the insurance company
general account (exclusive of separate account liabilities), plus surplus as set
forth in the National Association of Insurance Commissioners Annual Statement
filed with the state of domicile of the insurer, in accordance with Prohibited
Transaction Class Exemption 95-60, and the other applicable conditions of such
exemption are otherwise satisfied as of the date of acquisition of the Notes and
all such conditions will continue to be satisfied thereafter;

 

B - 3

--------------------------------------------------------------------------------

(vi) to the extent such purchase is made by an in-house asset manager within the
meaning of Part IV(a) of Prohibited Transaction Class Exemption 96-23 and such
manager has made or properly authorized the decision for such plan to purchase
Notes, under circumstances such that Prohibited Transaction Class Exemption
96-23 is applicable to the purchase, holding and disposition of such Notes and
all of the other applicable conditions of such exemption are otherwise satisfied
as of the date of acquisition of such Notes and all such conditions will
continue to be satisfied thereafter; or

(vii) to the extent such purchase will not otherwise give rise to a transaction
described in Section 406 of ERISA or Section 4975(c)(1) of the Code for which a
statutory, regulatory or administrative exemption is unavailable or be a
violation of Similar Law.

The Purchaser, if described in the preceding clauses, further represents and
agrees that it is not sponsored (within the meaning of Section 3(16)(B) of
ERISA) by the Issuer, MORI, the Seller, the Indenture Trustee or the
Administrative Agent, or by any affiliate of any such person.

9. The Purchaser acknowledges that, under the Second Amended and Restated
Indenture and Servicing Agreement, Notes (or beneficial interests therein) may
be purchased and transferred only in authorized denominations — i.e., a minimum
denomination of $1,000,000 and integral multiplies of $1,000 in excess thereof.
The Purchaser covenants that the Purchaser will neither (i) transfer Notes (or
beneficial interests therein) in less than the authorized denominations nor
(ii) transfer Notes (or beneficial interests therein) where the result would be
to reduce the Purchaser’s remaining holdings of Notes (or beneficial interests
therein) below the authorized denominations.

10. By execution hereof, the Purchaser agrees to be bound, as Noteholder, by all
of the terms, covenants and conditions of the Second Amended and Restated
Indenture and Servicing Agreement and 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                      , 20    .

 

   Purchaser’s Signature   Purchaser’s Name and Title (Print)   Address of
Purchaser  

Purchaser’s Taxpayer Identification or

Social Security Number

 

B - 4

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ANNEX 1 TO EXHIBIT B

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees Other Than Registered Investment Companies]

The undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”), Marriott Vacations Worldwide Owner Trust 2011-1 and Wells Fargo
Bank, National Association, as Note Registrar, with respect to the Note being
transferred (the “Transferred Note”) as described in the Investor Representation
Letter to which this certification relates and to which this certification is an
Annex:

1. As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity
purchasing the Transferred Note (the “Purchaser”).

2. The Purchaser is a “qualified institutional buyer” as that term is defined in
Rule 144A under the Securities Act of 1933 (“Rule 144A”) because (i) the
Purchaser owned and/or invested on a discretionary basis $ in securities (other
than the excluded securities referred to below) as of the end of the Purchaser’s
most recent fiscal year (such amount being calculated in accordance with Rule
144A) [Purchaser must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Purchaser is a dealer, and, in that case,
Purchaser must own and/or invest on, a discretionary basis at least $10,000,000
in securities.] and (ii) the Purchaser satisfies the criteria in the category
marked below.

 

  ¨ Corporation, etc. The Purchaser is a corporation (other than a bank, savings
and loan association or similar institution), business trust, partnership, or
any organization described in Section 501(c)(3) of the Internal Revenue Code of
1986.

 

  ¨ Bank. The Purchaser (a) is a national bank or a banking institution
organized under the laws of any State, U.S. territory or the District of
Columbia, the business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an audited net worth of
at least $25,000,000 as demonstrated in its latest annual financial statements,
a copy of which is attached hereto, as of a date not more than 16 months
preceding the date of sale of the Certificate in the case of a U.S. bank, and
not more than 18 months preceding such date of sale for a foreign bank or
equivalent institution.

 

  ¨ Savings and Loan. The Purchaser (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto, as of a date not more than 16
months preceding the date of sale of the Certificate in the case of a U.S.
savings and loan association, and not more than 18 months preceding such date of
sale for a foreign savings and loan association or equivalent institution.

 

  ¨ Broker-dealer. The Purchaser is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.

 

  ¨ Insurance Company. The Purchaser is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State, U.S.
territory or the District of Columbia.

 

  ¨ State or Local Plan. The Purchaser is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its employees.

 

  ¨ ERISA Plan. The Purchaser is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.

 

  ¨ Investment Advisor. The Purchaser is an investment advisor registered under
the Investment Advisers Act of 1940.

 

B - 5

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¨    Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection (a)(1) of
Rule 144A pursuant to which it qualifies. Note that registered investment
companies should complete Annex 2 rather than this
Annex 1.)                                      
                                         
                                                 

 

  

 

  

 

3. The term “securities” as used herein does not include (i) securities of
issuers that are affiliated with the Purchaser, (ii) securities that are part of
an unsold allotment to or subscription by the Purchaser, if the Purchaser is a
dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Purchaser, the Purchaser did not
include any of the securities referred to in this paragraph.

4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Purchaser, the Purchaser used the cost
of such securities to the Purchaser, unless the Purchaser reports its securities
holdings in its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has been
published, in which case the securities were valued at market. Further, in
determining such aggregate amount, the Purchaser may have included securities
owned by subsidiaries of the Purchaser, but only if such subsidiaries are
consolidated with the Purchaser in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Purchaser’s direction. However, such
securities were not included if the Purchaser is a majority-owned, consolidated
subsidiary of another enterprise and the Purchaser is not itself a reporting
company under the Securities Exchange Act of 1934.

5. The Purchaser acknowledges that it is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Purchaser may be in reliance on Rule 144A.

 

Will the Purchaser be purchasing the Transferred Note

only for the Purchaser’s own account?

        

¨

Yes

   ¨
No

6. If the answer to the foregoing question is “no”, then in each case where the
Purchaser is purchasing for an account other than its own, such account belongs
to a third party that is itself a “qualified institutional buyer” within the
meaning of Rule 144A, and the “qualified institutional buyer” status of such
third party has been established by the Purchaser through one or more of the
appropriate methods contemplated by Rule 144A.

7. The Purchaser will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein. Until such notice
is given, the Purchaser’s purchase of the Transferred Note will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Purchaser is a bank or savings and loan as provided above, the
Purchaser agrees that it will furnish to such parties any updated annual
financial statements that become available on or before the date of such
purchase, promptly after they become available.

 

 

  Print Name of Purchaser By:    

Name:     Title:    

 

B - 6

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ANNEX 2 TO EXHIBIT B

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Purchasers That Are Registered Investment Companies]

The undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”), Marriott Vacations Worldwide Owner Trust 2011-1 and Wells Fargo
Bank, National Association, as Note Registrar, with respect to the Note being
transferred (the “Transferred Note”) as described in the Investor Representation
Letter to which this certification relates and to which this certification is an
Annex:

1. As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity
purchasing the Transferred Note (the “Purchaser”) or, if the Purchaser is a
“qualified institutional buyer” as that term is defined in Rule 144A under the
Securities Act of 1933 (“Rule 144A”) because the Purchaser is part of a Family
of Investment Companies (as defined below), is an executive officer of the
investment adviser (the “Adviser”).

2. The Purchaser is a “qualified institutional buyer” as defined in Rule 144A
because (i) the Purchaser is an investment company registered under the
Investment Company Act of 1940, and (ii) as marked below, the Purchaser alone
owned and/or invested on a discretionary basis, or the Purchaser’s Family of
Investment Companies owned, at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Purchaser’s most
recent fiscal year. For purposes of determining the amount of securities owned
by the Purchaser or the Purchaser’s Family of Investment Companies, the cost of
such securities was used, unless the Purchaser or any member of the Purchaser’s
Family of Investment Companies, as the case may be, reports its securities
holdings in its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has been
published, in which case the securities of such entity were valued at market.

 

  ¨ The Purchaser owned and/or invested on a discretionary basis $         in
securities (other than the excluded securities referred to below) as of the end
of the Purchaser’s most recent fiscal year (such amount being calculated in
accordance with Rule 144A).

 

  ¨ The Purchaser is part of a Family of Investment Companies which owned in the
aggregate $         in securities (other than the excluded securities referred
to below) as of the end of the Purchaser’s most recent fiscal year (such amount
being calculated in accordance with Rule 144A).

3. The term “Family of Investment Companies” as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

4. The term “securities” as used herein does not include (i) securities of
issuers that are affiliated with the Purchaser or are part of the Purchaser’s
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate and
commodity swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Purchaser, or owned by the
Purchaser’s Family of Investment Companies, the securities referred to in this
paragraph were excluded.

5. The Purchaser is familiar with Rule 144A and understands that the parties to
which this certification is being made are relying and will continue to rely on
the statements made herein because one or more sales to the Purchaser will be in
reliance on Rule 144A.

 

Will the Purchaser be purchasing the Transferred Note

only for the Purchaser’s own account?

        

¨

Yes

  

¨

No

6. If the answer to the foregoing question is “no”, then in each case where the
Purchaser is purchasing for an account other than its own, such account belongs
to a third party that is itself a “qualified institutional buyer” within the
meaning of Rule 144A, and the “qualified institutional buyer” status of such
third party has been established by the Purchaser through one or more of the
appropriate methods contemplated by Rule 144A.

 

B - 7

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7. The undersigned will notify the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice, the
Purchaser’s purchase of the Transferred Note will constitute a reaffirmation of
this certification by the undersigned as of the date of such purchase.

 

 

  Print Name of Purchaser or Adviser   By:    

Name:     Title:    

IF AN ADVISER:

 

 

Print Name of Purchaser

Date:                    

 

B - 8

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EXHIBIT C

FORM OF SUPPLEMENTAL GRANT

SUPPLEMENTAL GRANT NO.      OF ADDITIONAL TIMESHARE LOANS dated as of
                    , by and among MARRIOTT VACATIONS WORLDWIDE OWNER TRUST
2011-1, a statutory trust organized under the laws of the State of Delaware (the
“Issuer”), MARRIOTT OWNERSHIP RESORTS, INC. (“MORI”), a Delaware corporation, as
servicer (the “Servicer”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, as indenture trustee (the “Indenture Trustee”) and as
back-up servicer (in such capacity, the “Back-Up Servicer”).

WITNESSETH:

WHEREAS, the Issuer, the Servicer, the Indenture Trustee and the Back-Up
Servicer are parties to the Second Amended and Restated Indenture and Servicing
Agreement, dated as of [DATE] 1, 2012 (as amended or otherwise modified from
time to time, the “Indenture and Servicing Agreement”);

WHEREAS, the Issuer wishes to pledge to the Indenture Trustee, for the benefit
of the Noteholders and the Hedge Counterparty, all of the Issuer’s rights, title
and interest, whether now owned or hereafter acquired and any and all benefits
accruing to the Issuer from the Timeshare Loans and Related Security designated
herein to be included as Additional Timeshare Loans and part of the Trust
Estate;

NOW, THEREFORE, the Issuer, the Servicer, the Indenture Trustee and the Back-Up
Servicer agree as follows:

1. Defined Terms. All capitalized terms used herein shall have the meanings
ascribed to them in the Indenture and Servicing Agreement unless otherwise
defined herein.

“Cut-Off Date” shall mean, with respect to the Additional Timeshare Loans,
            .

“[Funding][Transfer] Date” shall mean, with respect to the Additional Timeshare
Loans,             .

2. Schedule of Timeshare Loans. The Issuer hereby delivers to the Indenture
Trustee Schedule I which contains a true and complete list of the Additional
Timeshare Loans pledged to the Indenture Trustee under this Supplemental Grant.
The list of Additional Timeshare Loans contained in the accompanying certificate
is hereby incorporated into and made a part of this Supplemental Grant and shall
become a part of and supplement the Schedule of Timeshare Loans.

 

C - 1

--------------------------------------------------------------------------------

3. Grant of Additional Timeshare Loans.

The Issuer hereby pledges to the Indenture Trustee, for the benefit of the
Noteholders and the Hedge Counterparty, all of the Issuer’s right, title and
interest in and to the following whether now owned or hereafter acquired and any
and all benefits accruing to the Issuer from, (i) all Additional Timeshare Loans
and Additional Conveyed Timeshare Loan Assets acquired by the Issuer under the
Sale Agreement, (ii) the Receivables in respect of such Additional Timeshare
Loans due on and after the related Cut-Off Date, (iii) the related Timeshare
Loan Files, (iv) all Related Security in respect of each such Additional
Timeshare Loan, (v) all of its rights and remedies relating to such Additional
Timeshare Loans under the Sale Agreement, (vi) all of its rights and remedies
relating to such Additional Timeshare Loans under the Custodial Agreement,
(vii) all of its rights and remedies relating to such Additional Timeshare Loans
under the Performance Guaranty, and (viii) proceeds of the foregoing (including,
without 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) (collectively, the
“Additional Trust Estate”).

In connection with the foregoing pledge and if necessary, the Issuer agrees to
authorize, record and file one or more financing statements (and continuation
statements or other amendments with respect to such financing statements when
applicable) with respect to the Additional Trust Estate meeting the requirements
of applicable law in such manner and in such jurisdictions as are necessary to
perfect the pledge of the Additional Trust Estate to the Indenture Trustee, and
to deliver a file-stamped copy of such financing statements and continuation
statements (or other amendments) or other evidence of such filing to the
Indenture Trustee.

In connection with the foregoing pledge, the Issuer further agrees, on or prior
to the date of this Supplemental Grant, to cause the portions of its computer
files relating to the Additional Pledged Loans pledged on such date to the
Indenture Trustee to be clearly and unambiguously marked to indicate that each
such Additional Timeshare Loan and Related Security have been pledged on such
date to the Indenture Trustee pursuant to the Indenture and Servicing Agreement
and this Supplemental Grant.

4. Acknowledgement by the Indenture Trustee. The Indenture Trustee acknowledges
the pledge of the Additional Trust Estate, and the Indenture Trustee accepts the
Additional Trust Estate in trust hereunder in accordance with the provisions
hereof the Indenture and Servicing Agreement.

The Indenture Trustee hereby acknowledges that, prior to or simultaneously with
the execution and delivery of this Supplemental Grant, the Issuer delivered to
the Indenture Trustee Schedule I listing the Additional Timeshare Loans as
described in Section 2 of this Supplemental Grant and such list of Additional
Timeshare Loans is attached hereto as Schedule I.

 

C - 2

--------------------------------------------------------------------------------

5. Representations and Warranties of the Issuer. The Issuer hereby represents
and warrants to the Indenture Trustee on the [Funding][Transfer] Date that each
representation and warranty to be made by it on such [Funding][Transfer] Date
pursuant to the Indenture and Servicing Agreement is true and correct, and that
each such representation and warranty is hereby incorporated herein by reference
as though fully set out in this Supplemental Grant.

6. Ratification of the Indenture and Servicing Agreement. The Indenture and
Servicing Agreement is hereby ratified, and all references to the Indenture and
Servicing Agreement shall be deemed from and after the [Funding][Transfer] Date
to be references to the Indenture and Servicing Agreement as supplemented and
amended by this Supplemental Grant. Except as expressly amended hereby, all the
representations, warranties, terms, covenants and conditions of the Indenture
and Servicing Agreement shall remain unamended and shall continue to be, and
shall remain, in full force and effect in accordance with its terms and except
as expressly provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or consent to non-compliance with any term or
provision of the Indenture and Servicing Agreement.

7. Counterparts. This Supplemental Grant may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of this Supplemental Grant by
facsimile or other electronic transmission (i.e., “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart hereof and deemed an
original.

8. GOVERNING LAW. THIS SUPPLEMENTAL GRANT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

 

C - 3

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IN WITNESS WHEREOF, the Issuer, the Servicer, the Indenture Trustee and the
Back-Up Servicer have caused this Supplemental Grant to be duly executed by
their respective officers thereunto duly authorized, all as of the day and year
first above written.

 

 

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST, 2011-1, as Issuer By:  

WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in it individual capacity but solely as Owner Trustee

By:      Name:   Title:   MARRIOTT OWNERSHIP RESORTS, INC., as Servicer By:    
Name:   Title:   WELLS FARGO BANK, NATIONAL ASSOCIATION, as Indenture Trustee
and Back-Up Servicer By:     Name:   Title:  

 

C - 4

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EXHIBIT D

FUNDING DATE CERTIFICATE

FUNDING DATE CERTIFICATE OF

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST 2011-1

[            ], 20[    ]

In connection with that certain second amended and restated indenture and
servicing agreement, dated as of September 11, 2012 (the “Indenture and
Servicing Agreement”), by and among Marriott Vacations Worldwide Owner Trust
2011-1, a Delaware statutory trust, as issuer (the “Issuer”), Marriott Ownership
Resorts, Inc., a Delaware corporation, as servicer (“MORI”), and Wells Fargo
Bank, National Association, as indenture trustee and back-up servicer, the
Issuer hereby certifies that:

1. As of the [Funding Date][Transfer Date] on [                ], 20[    ], all
of the conditions set forth in Section 4.03(b) of the Indenture and Servicing
Agreement shall have been satisfied.

Capitalized terms used but not defined herein shall have the meanings specified
in the Indenture and Servicing Agreement.

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
first written above.

 

MARRIOTT VACATIONS WORLDWIDE OWNER TRUST 2011-1, as Issuer By:   Marriott
Ownership Resorts, Inc., as Administrator   By:  

 

  Name:     Title:  

 

D - 1

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EXHIBIT E

[RESERVED]

 

E - 1

--------------------------------------------------------------------------------

EXHIBIT F

FORM OF SERVICER OFFICER’S CERTIFICATE

 

F - 1

--------------------------------------------------------------------------------

OFFICER’S CERTIFICATE

The undersigned, an officer of Marriott Ownership Resorts, Inc. (the
“Servicer”), based on the information available on the date of this Certificate,
does hereby certify as follows:

1. I am an officer of the Servicer who has been authorized to issue this
officer’s certificate on behalf of the Servicer.

2. I have reviewed the data contained in the Monthly Servicer Report and the
computations reflected in the Monthly Servicer Report attached hereto as
Schedule A are true, correct and complete.

3. Each of the CRD Marriott Entities are consolidated for accounting purposes.

4. A CRD Marriott Entity continues to hold the Retained Interest as detailed in
Section 3.1(kk) of the Note Purchase Agreement.

5. The CRD Marriott Entity holding the Retained Interest has not sold or
subjected the Retained Interest to any credit risk mitigation or any short
positions or any other hedge in a manner which would be contrary to Article
122a(1) of the CRD.

 

MARRIOTT OWNERSHIP RESORTS, INC. By:       Name:   Title:

 

F - 2

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Schedule A

 

F - 3

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EXHIBIT G

FORM OF ARUBA NOTICE

 

G - 1

--------------------------------------------------------------------------------

(Date)

Name

Address

City, State, Zip

Country

Re: Marriott’s Aruba Ocean Club—Loan #

Dear (name):

As a valued Aruba Ocean Club Owner, you are very important to us and we are
committed to keeping you informed about any business that affects you. In
keeping our promise, we wish to inform you of a recent change that affects the
loan for your ownership at Marriott’s Aruba Ocean Club, but does not affect the
way it will be serviced.

Marriott Vacation Club International of Aruba N.V., the owner of your loan,
pursuant to an instrument of transfer, transferred and assigned all of its
right, title and interest to the loan to Marriott Ownership Resorts, Inc., a
Delaware corporation (“MORI”). MORI, pursuant to a purchase agreement, sold all
of its right, title and interest to the loan to MORI SPC Series Corp., a
Delaware corporation (“MORI SPC”). After these transfers, MORI SPC, pursuant to
a sale agreement, transferred and assigned all of its right, title and interest
to the loan to Marriott Vacations Worldwide Owner Trust 2011-1 (the “Issuer”),
and the Issuer, pursuant to an indenture, pledged all of its right, title and
interest to the loans to Wells Fargo Bank, National Association, as indenture
trustee for the benefit of note holders pursuant to the indenture.

We want to assure you that Marriott Vacation Club International will continue to
provide service for all aspects of your loan. The transfer in no way affects how
you make your payments, and we appreciate your making them as usual. Nor does it
affect your membership in the Marriott Vacation Club International of Aruba
Cooperative Association or the usage of your Aruba Ocean Club property.

The transfer of loans to other lenders is a routine procedure in our industry
and will not affect our business relationship. If you wish to speak to a
Marriott Vacation Club International representative, please call our offices at
800-845-4226 or 801-468-4089. Our hours are Monday through Friday, 9 a.m. to 8
p.m., Eastern Time. We welcome any questions you may have.

Thank you for being a member of the Marriott Vacation Club International family.
It is always our pleasure to assist you in any way we can.

Sincerely,

David Matern

Vice President, Marriott Ownership Resorts, Inc.

On behalf of MVCI, MORI and MORI SPC

 

G - 2

--------------------------------------------------------------------------------

(Date)

Name

Address

City, State, Zip

Country

Re: Marriott’s Aruba Surf Club—Loan #

Dear (name):

As a valued Aruba Surf Club Owner, you are very important to us and we are
committed to keeping you informed about any business that affects you. In
keeping our promise, we wish to inform you of a recent change that affects the
loan for your ownership at Marriott’s Aruba Surf Club, but does not affect the
way it will be serviced.

MVCI Finance C.V., the owner of your loan, pursuant to an instrument of
transfer, transferred and assigned all of its right, title and interest to the
loan to Marriott Ownership Resorts, Inc., a Delaware corporation (“MORI”). MORI,
pursuant to a purchase agreement, sold all of its right, title and interest to
the loan to MORI SPC Series Corp., a Delaware corporation (“MORI SPC”). After
these transfers, MORI SPC, pursuant to a sale agreement, transferred and
assigned all of its right, title and interest to the loan to Marriott Vacations
Worldwide Owner Trust 2011-1 (the “Issuer”), and the Issuer, pursuant to an
indenture, pledged all of its right, title and interest to the loans to Wells
Fargo Bank, National Association, as indenture trustee for the benefit of note
holders pursuant to the indenture.

We want to assure you that Marriott Vacation Club International will continue to
provide service for all aspects of your loan. The transfer in no way affects how
you make your payments, and we appreciate your making them as usual. Nor does it
affect your membership in the Aruba Surf Club Cooperative Association or the
usage of your Aruba Surf Club property.

The transfer of loans to other lenders is a routine procedure in our industry
and will not affect our business relationship. If you wish to speak to a
Marriott Vacation Club International representative, please call our offices at
800-845-4226 or 801-468-4089. Our hours are Monday through Friday, 9 a.m. to 8
p.m., Eastern Time. We welcome any questions you may have.

Thank you for being a member of the Marriott Vacation Club International family.
It is always our pleasure to assist you in any way we can.

Sincerely,

David Matern

Vice President, Marriott Ownership Resorts, Inc.

On behalf of MVCI, MORI and MORI SPC

 

G - 3

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EXHIBIT H

TRADE NAMES

 

H - 1

--------------------------------------------------------------------------------

Jurisdiction

  

Assumed Name

Alabama

   Marriott Vacation Club International (MVCI)

Arizona

   MVCI

California

   GRAND RESIDENCES BY MARRIOTT

California

   MVCI

California

   MVCI

Colorado

   Grand Residences by Marriott

Colorado

   MVCI

Connecticut

   MVCI

Delaware

   MVCI

Florida

   Faldo Golf Institute by Marriott

Florida

   Flagler’s

Florida

   Grande Pines Golf Club

Florida

   Horizons by Marriott Vacation Club (HMVC)

Florida

   International Golf Club

Florida

   MVCI

Florida

   The Pool Patio and Grill

Georgia

   MVCI

Hawaii

   Grand Residences by Marriott

Hawaii

   Marriott’s Waiohai Beach Resort

Hawaii

   MVCI

Illinois

   HMVC

Illinois

   MVCI

Kentucky

   HMVC

Kentucky

   Marriott Vacation Club International, Corp.

 

H - 2

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Jurisdiction

  

Assumed Name

Maryland

   MVCI

Massachusetts

   MVCI

Minnesota

   HMVC

Minnesota

   MVCI

Nebraska

   HMVC

Nevada

   MVCI

New Hampshire

   MVCI

New Jersey

   HMVC

New Jersey

   Marriott Vacation Club International

New York

   HMVC

New York

   MVCI

North Carolina

   MVCI

Ohio

   HMVC

Ohio

   MVCI

Oregon

   MVCI

Rhode Island

   MVCI

South Carolina

   MVCI

Texas

   HMVC

Texas

   MVCI

Utah

   Marriott’s Mountainside Resort

Utah

   Marriott’s Summit Watch Resort

Utah

   MVCI

Virginia

   MVCI

Washington

   MVCI

 

H - 3

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Exhibit I

Data Conversion Layout

Data as of date

Loan ID

Loan Code

investor name

Brand

proj_id

Project_Description

open_dt

Purchase Amount

Orig Bal

Prin Bal

Original Term

Rate

Payment

Next payment due date

collateral

collateral_co

Estimated CO Date

Borrower Country

Borrower State Code

Borrower State

FICO

contr_id

Remaining Term

foreign_flg

Total Closing Costs

Financed Closing Costs

Days Delinquent

Delinquency Bucket

down $

down %

refinance

bldng_id

Points

 

I - 1

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Exhibit J

Exchange Notes Pool Criteria

In each case, as determined on the date of the release of the related Timeshare
Loans pursuant to Section 4.07(c) of the Second Amended and Restated Indenture
and Servicing Agreement:

1. Each pool must be in compliance with its applicable definition of Borrowing
Base.

2. The weighted average coupon of the Aggregate Loan Balances for each pool must
not differ by more than 0.25%.

3. The weighted average life to maturity of the Aggregate Loan Balances for each
pool must not differ by more than three months.

4. The weighted average FICO scores of the Aggregate Loan Balances for each pool
minus the Loan Balances for any Defaulted Timeshare Loans, Delinquent Timeshare
Loans and Defective Timeshare Loans, must not differ by more than 10.

5. The Outstanding Note Balance as a percentage of the Borrowing Base for each
pool must not differ by more than 2.00%.

6. The Excluded Loan Balance for each pool as a percentage of the related
Aggregate Loan Balance must not differ by more than 2.00%.

7. The aggregate amount of Timeshare Loans with any scheduled monthly payment of
interest or principal (or any portion thereof) delinquent more than 60 days
delinquency as a percentage of the Aggregate Loan Balances in each pool must not
differ by more than 0.5%.

 

J - 1