EX-10.1




Exhibit
10.1




EXECUTION COPY




INDENTURE AND SERVICING AGREEMENT




Dated as of November 7, 2008




by and among




SIERRA TIMESHARE CONDUIT RECEIVABLES FUNDING II, LLC,

as Issuer




and




WYNDHAM CONSUMER FINANCE, INC.,

as Servicer




and




WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee




and




U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	
 ARTICLE I

DEFINITIONS
	 	 	 
	 	 	 	 
	Section 1.1.	 	Definitions
	 	 	3	 
	Section 1.2.	 	Other Definitional Provisions
	 	 	36	 
	Section 1.3.	 	Intent and Interpretation of Documents
	 	 	37	 
	 	 	 
	 	 	 	 
	
ARTICLE II

THE NOTES
	 	 	 
	 	 	 	 
	Section 2.1.	 	Form Generally
	 	 	37	 
	Section 2.2.	 	Denominations
	 	 	38	 
	Section 2.3.	 	Execution, Authentication and Delivery
	 	 	38	 
	Section 2.4.	 	Authentication Agent
	 	 	38	 
	Section 2.5.	 	Registration of Transfer and Exchange of Series 2008-A Notes
	 	 	39	 
	Section 2.6.	 	Mutilated, Destroyed, Lost or Stolen Series 2008-A Notes
	 	 	41	 
	Section 2.7.	 	Persons Deemed Owners
	 	 	42	 
	Section 2.8.	 	Appointment of Paying Agent
	 	 	42	 
	Section 2.9.	 	Cancellation
	 	 	42	 
	Section 2.10.	 	Confidentiality
	 	 	43	 
	Section 2.11.	 	144A Information
	 	 	43	 
	Section 2.12.	 	Authorized Amount; Conditions to Initial Issuance
	 	 	43	 
	Section 2.13.	 	Principal, Interest and NPA Costs
	 	 	44	 
	Section 2.14.	 	Nonrecourse to the Issuer
	 	 	45	 
	Section 2.15.	 	Dating of the Series 2008-A Notes
	 	 	45	 
	Section 2.16.	 	Payment on the Series 2008-A Notes; Withholding Tax
	 	 	45	 
	Section 2.17.	 	Increases in Notes Principal Amount
	 	 	46	 
	Section 2.18.	 	Reduction of the Facility Limit
	 	 	46	 
	Section 2.19.	 	Optional Repayment
	 	 	46	 
	Section 2.20.	 	Transfer Restrictions
	 	 	46	 
	Section 2.21.	 	Tax Treatment
	 	 	48	 
	Section 2.22.	 	Liquidity Termination Dates
	 	 	48	 






-i-









 





TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	
ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE ISSUER
	 	 	 
	 	 	 	 
	Section 3.1.	 	Representations and Warranties Regarding the Issuer
	 	 	49	 
	Section 3.2.	 	Representations and Warranties Regarding the Loan Files
	 	 	53	 
	Section 3.3.	 	Rights of Obligors and Release of Loan Files
	 	 	54	 
	Section 3.4.	 	Assignment of Representations and Warranties
	 	 	55	 
	Section 3.5.	 	Addition of New Sellers
	 	 	55	 
	 	 	 
	 	 	 	 
	
ARTICLE IV

PAYMENTS, SECURITY AND ALLOCATIONS
	 	 	 
	 	 	 	 
	Section 4.1.	 	Priority of Payments
	 	 	57	 
	Section 4.2.	 	Information Provided to Trustee
	 	 	58	 
	Section 4.3.	 	Payments
	 	 	58	 
	Section 4.4.	 	Collection Account
	 	 	58	 
	Section 4.5.	 	Control Account
	 	 	60	 
	Section 4.6.	 	Reserve Account
	 	 	60	 
	Section 4.7.	 	Hedge Agreement
	 	 	62	 
	Section 4.8.	 	Replacement of Hedge Provider
	 	 	63	 
	 	 	 
	 	 	 	 
	
ARTICLE V

ADDITION, RELEASE AND SUBSTITUTION OF LOANS
	 	 	 
	 	 	 	 
	Section 5.1.	 	Addition of the Collateral
	 	 	63	 
	Section 5.2.	 	Release of Defective Loans
	 	 	65	 
	Section 5.3.	 	Release of Defaulted Loans
	 	 	66	 
	Section 5.4.	 	Release Upon Optional Prepayments
	 	 	66	 
	Section 5.5.	 	Release Upon Issuance of Exchange Notes
	 	 	67	 
	Section 5.6.	 	Release Upon Payment in Full
	 	 	68	 
	Section 5.7.	 	Release of Green Loans Upon Rating Downgrade
	 	 	68	 
	 	 	 
	 	 	 	 
	
ARTICLE VI

ADDITIONAL COVENANTS OF ISSUER
	 	 	 
	 	 	 	 
	Section 6.1.	 	Affirmative Covenants
	 	 	69	 
	Section 6.2.	 	Negative Covenants of the Issuer
	 	 	77	 






-ii-









 





TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	
ARTICLE VII

SERVICING OF PLEDGED LOANS
	 	 	 
	 	 	 	 
	Section 7.1.	 	Responsibility for Loan Administration
	 	 	80	 
	Section 7.2.	 	Standard of Care
	 	 	80	 
	Section 7.3.	 	Records
	 	 	80	 
	Section 7.4.	 	Series 2008-A Loan Schedule
	 	 	80	 
	Section 7.5.	 	Enforcement
	 	 	80	 
	Section 7.6.	 	Trustee and Collateral Agent to Cooperate
	 	 	81	 
	Section 7.7.	 	Other Matters Relating to the Servicer
	 	 	81	 
	Section 7.8.	 	Servicing Compensation
	 	 	82	 
	Section 7.9.	 	Costs and Expenses
	 	 	82	 
	Section 7.10.	 	Representations and Warranties of the Servicer
	 	 	82	 
	Section 7.11.	 	Additional Covenants of the Servicer
	 	 	83	 
	Section 7.12.	 	Servicer not to Resign
	 	 	86	 
	Section 7.13.	 	Merger or Consolidation of, or Assumption of the Obligations of Servicer
	 	 	86	 
	Section 7.14.	 	Examination of Records
	 	 	87	 
	Section 7.15.	 	Delegation of Duties
	 	 	87	 
	Section 7.16.	 	Servicer Advances
	 	 	87	 
	Section 7.17.	 	Fair Market Value of Defaulted Loans
	 	 	88	 
	 	 	 
	 	 	 	 
	
ARTICLE VIII

REPORTS
	 	 	 
	 	 	 	 
	Section 8.1.	 	Monthly Report to Trustee
	 	 	88	 
	Section 8.2.	 	Monthly Servicing Reports
	 	 	88	 
	Section 8.3.	 	Other Data
	 	 	88	 
	Section 8.4.	 	Annual Servicer’s Certificate
	 	 	89	 
	Section 8.5.	 	Notices to WCF
	 	 	89	 
	Section 8.6.	 	Delivery of Reports to Deal Agent
	 	 	89	 
	Section 8.7.	 	Tax Reporting
	 	 	89	 






-iii-









 





TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	
ARTICLE IX

INDEMNITIES
	 	 	 
	 	 	 	 
	Section 9.1.	 	Liabilities to Obligors
	 	 	89	 
	Section 9.2.	 	Tax Indemnification
	 	 	89	 
	Section 9.3.	 	Servicer’s Indemnities
	 	 	90	 
	Section 9.4.	 	Operation of Indemnities
	 	 	90	 
	 	 	 
	 	 	 	 
	
ARTICLE X

AMORTIZATION EVENTS
	 	 	 
	 	 	 	 
	Section 10.1.	 	Amortization Events
	 	 	90	 
	 	 	 
	 	 	 	 
	
ARTICLE XI

EVENTS OF DEFAULT
	 	 	 
	 	 	 	 
	Section 11.1.	 	Events of Default
	 	 	92	 
	Section 11.2.	 	Acceleration of Maturity; Rescission and Annulment
	 	 	93	 
	Section 11.3.	 	Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	93	 
	Section 11.4.	 	Trustee May File Proofs of Claim
	 	 	94	 
	Section 11.5.	 	Remedies
	 	 	95	 
	Section 11.6.	 	Application of Monies Collected During Event of Default
	 	 	96	 
	Section 11.7.	 	Limitation on Suits by Individual Noteholders
	 	 	97	 
	Section 11.8.	 	Unconditional Rights of Noteholders to Receive Principal and Interest
	 	 	97	 
	Section 11.9.	 	Restoration of Rights and Remedies
	 	 	98	 
	Section 11.10.	 	Waiver of Event of Default
	 	 	98	 
	Section 11.11.	 	Waiver of Stay or Extension Laws
	 	 	98	 
	Section 11.12.	 	Sale of the Collateral
	 	 	98	 
	Section 11.13.	 	Action on Series 2008-A Notes
	 	 	99	 
	Section 11.14.	 	Control by Noteholders
	 	 	99	 
	Section 11.15.	 	Sale of Defaulted Loans After an Event of Default
	 	 	99	 
	 	 	 
	 	 	 	 
	
ARTICLE XII

SERVICER DEFAULTS
	 	 	 
	 	 	 	 
	Section 12.1.	 	Servicer Defaults
	 	 	99	 
	Section 12.2.	 	Appointment of Successor
	 	 	101	 






-iv-









 





TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 12.3.	 	Notification to Noteholders
	 	 	102	 
	Section 12.4.	 	Waiver of Past Defaults
	 	 	102	 
	Section 12.5.	 	Termination of Servicer’s Authority
	 	 	102	 
	Section 12.6.	 	Matters Related to Successor Servicer
	 	 	103	 
	 	 	 
	 	 	 	 
	
ARTICLE XIII

THE TRUSTEE; THE COLLATERAL AGENT; THE CUSTODIAN
	 	 	 
	 	 	 	 
	Section 13.1.	 	Duties of Trustee
	 	 	104	 
	Section 13.2.	 	Certain Matters Affecting the Trustee
	 	 	106	 
	Section 13.3.	 	Trustee Not Liable for Recitals in Series 2008-A Notes or Use of
Proceeds of Series 2008-A Notes
	 	 	107	 
	Section 13.4.	 	Trustee May Own Series 2008-A Notes; Trustee in its Individual Capacity
	 	 	108	 
	Section 13.5.	 	Trustee’s Fees and Expenses; Indemnification
	 	 	108	 
	Section 13.6.	 	Eligibility Requirements for Trustee
	 	 	109	 
	Section 13.7.	 	Resignation or Removal of Trustee
	 	 	109	 
	Section 13.8.	 	Successor Trustee
	 	 	110	 
	Section 13.9.	 	Merger or Consolidation of Trustee
	 	 	110	 
	Section 13.10.	 	Appointment of Co-Trustee or Separate Trustee
	 	 	110	 
	Section 13.11.	 	Trustee May Enforce Claims Without Possession of Series 2008-A Notes
	 	 	111	 
	Section 13.12.	 	Suits for Enforcement
	 	 	112	 
	Section 13.13.	 	Rights of Noteholders to Direct the Trustee
	 	 	112	 
	Section 13.14.	 	Representations and Warranties of the Trustee
	 	 	112	 
	Section 13.15.	 	Maintenance of Office or Agency
	 	 	112	 
	Section 13.16.	 	No Assessment
	 	 	113	 
	Section 13.17.	 	UCC Filings and Title Certificates
	 	 	113	 
	Section 13.18.	 	Replacement of the Custodian
	 	 	113	 
	 	 	 
	 	 	 	 
	
ARTICLE XIV

TERMINATION
	 	 	 
	 	 	 	 
	Section 14.1.	 	Termination of Agreement
	 	 	113	 
	Section 14.2.	 	Final Payment
	 	 	113	 






-v-









 





TABLE OF CONTENTS
(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	Section 14.3.	 	Release of Collateral
	 	 	113	 
	 	 	 
	 	 	 	 
	
ARTICLE XV

MISCELLANEOUS PROVISIONS
	 	 	 
	 	 	 	 
	Section 15.1.	 	Amendment
	 	 	114	 
	Section 15.2.	 	Limitation on Rights of the Noteholders
	 	 	116	 
	Section 15.3.	 	Governing Law
	 	 	116	 
	Section 15.4.	 	Notices
	 	 	116	 
	Section 15.5.	 	Severability of Provisions
	 	 	118	 
	Section 15.6.	 	Assignment
	 	 	118	 
	Section 15.7.	 	Series 2008-A Notes Non-assessable and Fully Paid
	 	 	118	 
	Section 15.8.	 	Further Assurances
	 	 	118	 
	Section 15.9.	 	No Waiver; Cumulative Remedies
	 	 	118	 
	Section 15.10.	 	Counterparts
	 	 	119	 
	Section 15.11.	 	Third-Party Beneficiaries
	 	 	119	 
	Section 15.12.	 	Actions by the Noteholders
	 	 	119	 
	Section 15.13.	 	Merger and Integration
	 	 	119	 
	Section 15.14.	 	No Bankruptcy Petition
	 	 	119	 
	Section 15.15.	 	Headings
	 	 	119	 
	Section 15.16.	 	Satisfaction of Rating Agency Condition
	 	 	119	 
	Section 15.17.	 	Rating Agency Review
	 	 	120	 
	Section 15.18.	 	Changes in the Hedge Agreement
	 	 	120	 
	Section 15.19.	 	Discretion with Respect to Derivative Financial Instruments
	 	 	120	 






-vi-









 






	 	 	 	 	 
	SCHEDULE 1

	 	—
	 	TRUSTEE FEE LETTER
	 
	 	 	 	 
	EXHIBIT A

	 	—
	 	FORM OF SUPPLEMENTAL GRANT
	 
	 	 	 	 
	EXHIBIT B

	 	—
	 	FORM OF SERIES 2008-A NOTE
	 
	 	 	 	 
	EXHIBIT C

	 	—
	 	FORM OF MONTHLY SERVICING REPORT
	 
	 	 	 	 
	EXHIBIT D

	 	—
	 	FORM OF INDENTURE AND SERVICING AGREEMENT FOR THE EXCHANGE NOTES
	 
	 	 	 	 
	EXHIBIT E

	 	—
	 	CONTROL ACCOUNT INFORMATION
	 
	 	 	 	 
	EXHIBIT F

	 	—
	 	FORM OF NOTE PURCHASE AGREEMENT WITH RESPECT TO THE EXCHANGE NOTES
	 
	 	 	 	 
	EXHIBIT G

	 	—
	 	SERVICER CERTIFICATE PURSUANT TO SECTION 3.3(C)
	 
	 	 	 	 
	EXHIBIT H

	 	—
	 	EXCHANGE NOTES INDENTURE POOL CRITERIA
	 
	 	 	 	 
	EXHIBIT I

	 	—
	 	HEDGE AGREEMENT







-vii-











 





INDENTURE AND SERVICING AGREEMENT




     THIS INDENTURE AND SERVICING AGREEMENT dated as of November 7, 2008 is by and among SIERRA
TIMESHARE CONDUIT RECEIVABLES FUNDING II, LLC, a limited liability company organized under the laws
of the State of Delaware, as issuer, WYNDHAM CONSUMER FINANCE, INC., a Delaware corporation, as
servicer, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee and
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as collateral agent. This
Indenture may be supplemented and amended from time to time in accordance with Article XV hereof.



RECITALS




     The Issuer has duly authorized the execution and delivery of this Indenture to provide for the
issuance of its loan-backed notes as provided herein.



     All covenants and agreements made by the Issuer herein are for the benefit and security of the
Trustee, acting on behalf of the Noteholders.



     The Issuer is entering into this Indenture, and the Trustee is accepting the trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged. All things necessary have been done to make the Series 2008-A Notes, when executed
by the Issuer and authenticated and delivered by the Trustee as provided herein, the valid
obligations of the Issuer and to make this Indenture a valid agreement of the Issuer, enforceable
in accordance with its terms.



     NOW THEREFORE, in consideration of the mutual agreements herein contained, each party agrees
as follows for the benefit of the other parties and for the benefit of the Noteholders.



GRANTING CLAUSES




     The Issuer hereby Grants to the Collateral Agent, for the benefit and security of the Trustee,
acting on behalf of the Noteholders, all of the Issuer’s right, title and interest, whether now
owned or hereafter acquired, in, to and under the following:



     (a) all Pledged Loans and all Collections, together with all other Pledged Assets;



     (b) the Collection Account and all money, investment property, instruments and other property
credited to, carried in or deposited in the Collection Account;



     (c) all money, investment property, instruments and other property credited to, carried in or
deposited in the Control Account or any other bank or similar account into which Collections are
deposited, to the extent such money, investment property, instruments and other property
constitutes Collections;



 









 





     (d) the Reserve Account and all money, investment property, instruments and other property
credited to, carried in or deposited in the Reserve Account;



     (e) the Hedge Agreement and all rights and interests therein and thereto;



     (f) all rights, remedies, powers, privileges and claims of the Issuer under or with respect to
the Depositor Purchase Agreement and each Seller Purchase Agreement including, without limitation
all rights to enforce payment obligations of the Issuer, the Depositor and each Seller and all
rights to collect all monies due and to become due to the Issuer from the Depositor or any Seller
under or in connection with the Depositor Purchase Agreement or any Seller Purchase Agreement
(including without limitation all interest and finance charges for late payments accrued thereon
and proceeds of any liquidation or sale of the Pledged Loans or resale of Timeshare Properties and
all other Collections on the Pledged Loans) and all other rights of the Issuer to enforce the
Depositor Purchase Agreement and each Seller Purchase Agreement;



     (g) all certificates and instruments if any, from time to time representing or evidencing any
of the foregoing property described in clauses (a) through (f) above;



     (h) all present and future claims, demands, causes of and choses in action in respect of any
of the foregoing and all interest, principal, payments and distributions of any nature or type on
any of the foregoing;



     (i) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods,
instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas
and other minerals, consisting of, arising from, or relating to, any of the foregoing;



     (j) all proceeds of the foregoing property described in clauses (a) through (i) above, any
security therefor, and all interest, dividends, cash, instruments, financial assets and other
investment property and other property from time to time received, receivable or otherwise
distributed in respect of, or in exchange for or on account of the sale, condemnation or other
disposition of, any or all of the then existing property described in clauses (a) through (i), and
including all payments under insurance policies (whether or not a Seller or an Originator, the
Depositor, the Issuer, the Collateral Agent or the Trustee is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or damage to or otherwise with respect to
any of the Collateral; and



     (k) all proceeds of the foregoing.


The property described in the preceding sentence is collectively referred to as the
“Collateral.” The Grant of the Collateral to the Collateral Agent is for the benefit of
the Trustee to secure the Series 2008-A Notes equally and ratably without prejudice, priority or
distinction among any Series 2008-A Notes by reason of difference in time of issuance or otherwise,
except as otherwise expressly provided in this Indenture and to secure (i) the payment of all
amounts due on the Series 2008-A Notes in accordance with their respective terms, (ii) the payment
of all other sums payable by the Issuer under this Indenture, the Series 2008-A Notes and the Note
Purchase Agreement and (iii) compliance by the Issuer with the provisions of this Indenture and the
Series 2008-A Notes.




2









 








Special Limited Grant of Limited Liability Company Interests




          In addition to the Collateral Granted above, the Issuer hereby Grants to the Trustee, acting
on behalf of the Noteholders, all of the Issuer’s right, title and interest, whether now owned or
hereafter acquired, in, to, and under (i) the limited liability company interests in Sierra
Timeshare Conduit Receivables Funding, LLC, (ii) all rights, remedies, powers, privileges and
claims of the Issuer with respect to such limited liability company interests, including, without
limitation, the right to direct the sale of any assets held by STCRF and receive a distribution of
the proceeds thereof, (iii) all certificates and instruments, if any, from time to time
representing or evidencing any of the foregoing, and (iv) all proceeds of the foregoing (the
“Membership Interest Collateral”), to secure solely the Issuer’s obligation make the
principal payments required by Section 2.13(a)(iv). Notwithstanding any other provisions of this
Indenture, neither the Trustee nor any of the Holders or any other party to this Indenture shall
have any right to foreclose upon or otherwise disturb the Membership Interest Collateral so long as
any of the Series 2002-1 Notes are outstanding. If, upon the Series 2002-1 Termination Date, the
Issuer fails to satisfy the requirements of Section 2.13(a)(iv), such failure shall be deemed to be
a default under this Indenture solely with respect to exercising rights and remedies with respect
to the Membership Interest Collateral under Article 9 of the New York UCC and the Trustee shall
have the rights and remedies of a secured creditor in respect of the Membership Interest
Collateral.



     The Collateral Agent and the Trustee acknowledge the Grant of the Collateral and the Grant of
the Membership Interest Collateral, and the Collateral Agent accepts the Collateral and the Trustee
accepts the Membership Interest Collateral, in each case in trust hereunder in accordance with the
provisions hereof and agrees to perform the duties herein to the end that the interests of the
Noteholders may be adequately and effectively protected. This Indenture is a security agreement
within the meaning of the UCC.



     The Trustee and the Collateral Agent each acknowledges that it has entered into the Collateral
Agency Agreement pursuant to which the Collateral Agent will act as agent for the benefit of the
Trustee and the Noteholders for the purpose of maintaining a security interest in the Collateral.
The Noteholders are bound by the terms of the Collateral Agency Agreement by the Trustee’s
execution thereof on their behalf.



ARTICLE I




DEFINITIONS




     Section 1.1. Definitions



     Whenever used in this Indenture, the following words and phrases shall have the following
meanings, and the definitions of such terms are applicable to the singular as well as the plural
forms of such terms and the masculine as well as the feminine and neuter genders of such terms.



     “AA Advance Rate” shall mean, as of any day,



3









 






     (1) for Wyndham Loans, (i) on or prior to the November 2008 Payment Date, 58.500%, (ii)
on or prior to the December 2008 Payment Date, 56.375%, (iii) on or prior to the January 2009
Payment Date, 54.250%, (iv) on or prior to the February 2009 Payment Date, 52.125% and (v)
thereafter, the AAA Advance Rate.




     (2) for WorldMark Loans, (i) on or prior to the November 2008 Payment Date, 61.000%,
(ii) on or prior to the December 2008 Payment Date, 58.875%, (iii) on or prior to the
January 2009 Payment Date, 56.750%, (iv) on or prior to the February 2009 Payment Date,
54.625% and (v) thereafter, the AAA Advance Rate.



     “AAA Advance Rate” shall mean, (i) for Wyndham Loans, 50.000% and (ii) for WorldMark
Loans, 52.500%.



     “Account” shall mean either of the Collection Account or the Reserve Account and
“Accounts” mean both of such accounts.



     “Accrual Period” shall mean, with respect to any Payment Date, the period beginning on
and including the immediately preceding Payment Date and ending on and excluding the current
Payment Date, except that the first Accrual Period will begin on and include the Closing Date and
end on and exclude the December 2008 Payment Date.



     “Acquired Portfolio Loan” shall mean a loan (which shall be a loan, installment
contract or other contractual obligation incurred to finance the acquisition of an interest in a
vacation property or rights to use vacation properties or otherwise substantially similar to Loans)
which a Seller has acquired either by purchase of a portfolio or by acquisition of an entity which
owns the portfolio and new loans originated with respect to such entity, program or portfolio
during the Transition Period.



     “Addition Date” shall mean each date subsequent to the Closing Date on which a
security interest is granted in Loans to secure the Series 2008-A Notes.



     “Additional Monthly Principal Distribution Amount” shall mean (i) for any Payment Date
on or prior to which an Amortization Event has occurred, the Mandatory Redemption Date has occurred
(unless repayment of the Series 2008-A Notes has been waived pursuant to Section 2.13(a)), the
Termination Date has occurred or the Maturity Date has occurred, zero, and (ii) for any other
Payment Date, an amount equal to the excess, if any of (x) the Borrowing Base over (y) the Adjusted
Borrowing Base on such date.



     “Additional Pledged Loans” shall mean Loans (including Qualified Substitute Loans)
pledged under this Indenture and a Supplemental Grant subsequent to the Initial Advance Date.



     “Adjusted Borrowing Base” shall mean, on any date, the product of



     (i) the remainder of (A) the Adjusted Loan Balance minus (B) the Excess Concentration Amount
on such date and



     (ii) the AAA Advance Rate as of such date.



4









 





     “Adjusted Loan Balance” shall mean, on any date, the Aggregate Loan Balance on such
date minus the sum of (i) the Loan Balances of any Pledged Loans which are Defaulted Loans on the
last day of the immediately preceding Due Period, (ii) the Loan Balances of any Pledged Loans which
are Delinquent Loans on the last day of the immediately preceding Due Period, (iii) the Loan
Balances of any Pledged Loans which are Defective Loans on the last day of the immediately
preceding Due Period and (iv) the Loan Balances of any Pledged Loans which are Impermissibly
Modified Loans on the last day of the immediately preceding Due Period.



     “Administrative Services Agreement” shall mean either (i) the Depositor Administrative
Services Agreement, dated as of August 29, 2002, by and between the Depositor and the
Administrator, or (ii) the Issuer Administrative Services Agreement, dated as of November 5, 2008,
by and between the Issuer and the Administrator, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of the respective agreements.



     “Administrator” shall mean, with respect to either Administrative Services Agreement,
WCF, in its role as administrator with respect to the Depositor or the Issuer, respectively, or any
other entity which becomes the Administrator under the terms of the respective Administrative
Services Agreements.



     “Advance Decrease Date” shall mean the first Payment Date on which, after giving
effect to all payments made on the Series 2008-A Notes on such date, the Notes Principal Amount
does not exceed the Adjusted Borrowing Base.



     “Affiliate” shall mean, when used with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with such Person, and
“control” shall mean the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise, and
“controlling” and “controlled” shall have meanings correlative to the foregoing.



     “Aggregate Loan Balance” shall mean, on any date, the excess of (i) the sum of the
Loan Balances for all Pledged Loans on such date over (ii) the sum of (x) the FICO Score of 7-Year
Loans Excess Amount on such day and (y) the FICO Score of 10-Year Loans Excess Amount on such day.



     “Alternate Investor” shall have the meaning assigned to that term in the Note Purchase
Agreement.



     “Amortization Event” shall have the meaning specified in Section 10.1.



     “Authentication Agent” shall mean a Person designated by the Trustee to authenticate
Series 2008-A Notes on behalf of the Trustee.



     “Authorized Officer” shall mean, with respect to the Issuer, any officer who is
authorized to act for the Issuer in matters relating to the Issuer, and with respect to the Trustee
or any other bank or trust company acting as trustee of an express trust or as custodian or
authenticating agent, a Responsible Officer. Each party may receive and accept a certification of
the authority of any other party as conclusive evidence of the authority of any person to act, and
such
certification may be considered as in full force and effect until receipt by such other party
of written notice to the contrary.



5









 





     “Available Funds” for any Payment Date shall mean an amount equal to the sum of (i)
all Collections and other payments (including prepayments related to Timeshare Upgrades and all
other prepayments) of principal, interest and fees (which for the sake of clarity, excludes
maintenance fees assessed with respect to POAs) collected from or on behalf of the Obligors during
the related Due Period on the Pledged Loans; (ii) any Servicer Advances made on or prior to the
Payment Date with respect to payments due from the Obligors on the Pledged Loans during the related
Due Period; (iii) all amounts received after the immediately preceding Payment Date (or, in the
case of the initial Payment Date, the Initial Advance Date) and on or prior to such Payment Date as
the Release Price paid to the Trustee for the release from the lien of this Indenture of any
Pledged Loan that has become a Defaulted Loan; (iv) all Net Liquidation Proceeds from the
disposition of Pledged Assets securing Defaulted Loans received by the Trustee during the related
Due Period; (v) any amounts received after the immediately preceding Payment Date (or, in the case
of the initial Payment Date, the Initial Advance Date) and on or prior to such Payment Date by the
Trustee as the Release Price or Substitution Adjustment Amount in connection with the release of a
Defective Loan; (vi) any Hedge Receipts received by the Trustee on such Payment Date; (vii) all
other proceeds of the Collateral received by the Trustee or the Servicer during the related Due
Period; and (viii) any amount withdrawn from the Reserve Account under Section 4.6(b) and deposited
into the Collection Account to be included as Available Funds on or in respect of such Payment
Date.



     “Available Funds Shortfall” shall have the meaning specified in Section 4.6(b).



     “Bank Base Rate” shall have the meaning assigned to that term in the Note Purchase
Agreement.



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



     “Benefit Plan” shall mean any employee benefit plan as defined in Section 3(3) of
ERISA in respect of which the Issuer, any eligible Originator, any eligible Seller or any ERISA
Affiliate of the Issuer is, or at any time during the immediately preceding six years was, an
“employer” as defined in Section 3(5) of ERISA.



     “Borrowing Base” shall mean, (x) on any date prior to the Advance Decrease Date, the
product of



     (i) the remainder of (A) the Adjusted Loan Balance at such time minus (B) the Excess
Concentration Amount at such time and



     (ii) the AA Advance Rate for such date; and



     (y) on and after the Advance Decrease Date, the Adjusted Borrowing Base as of such date.



6









 





     “Borrowing Base Amortization Trigger Amount” shall mean (i) on any Payment Date during
any Green Loan Advance Period, the sum of (x) the Borrowing Base on such date and (y) the Green
Loan Deficiency Amount on such date, and (ii) on any other Payment Date, the Borrowing Base on such
date.



     “Borrowing Base Shortfall” shall mean, on any date, the amount, if any, by which the
Notes Principal Amount (without giving effect to any Increase on such date) exceeds the Adjusted
Borrowing Base on such date (without giving effect to any transfers of Additional Pledged Loans to
the Collateral Agent on such date).



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



     “California Excess Amount” shall mean on any date, if on the last Business Day the
most recently ended Due Period, WRDC has not met the target for qualification of WorldMark Resorts
with the California Department of Real Estate as set forth in Section 5.1(c), an amount by which
(i) the sum of the Loan Balances on such date for all Pledged Loans which are WRDC California Loans
exceeds (ii) five percent (5%) of the Adjusted Loan Balance on such date.



     “Capped Monthly Trustee Expenses” shall mean, for any Payment Date, the lesser of (i)
the sum of the unreimbursed reasonable expenses incurred by the Trustee under each of the Facility
Documents to which the Trustee is a party and (ii) the excess, if any, of (a) $20,000 (or, with
respect to the November 2008 Payment Date and the December 2008 Payment Date, $13,333.33) over (b)
the amount of all payments made pursuant to clause (y) of priority FIRST of Section 4.1 during the
calendar quarter in which such Payment Date occurs; provided, however, that if an
Event of Default has occurred and the Series 2008-A Notes have been accelerated pursuant to Section
11.2 or any portion of the Collateral has been sold on or prior to such Payment Date, the Capped
Monthly Trustee Expenses shall equal the sum of the unreimbursed reasonable expenses incurred by
the Trustee under each of the Facility Documents to which the Trustee is a party.



     “Capped Successor Servicer Costs” shall mean, for any Payment Date, the lesser of (i)
the unreimbursed costs and expenses incurred by the Trustee in connection with replacing the
Servicer and (ii) the lesser of (A) the excess, if any, of (1) $100,000 (or, with respect to the
November 2008 Payment Date and the December 2008 Payment Date, $66,666.67) over (2) the amount of
all payments made pursuant to clause (z) of priority FIRST of Section 4.1 in the calendar quarter
in which such Payment Date occurs and (B) the excess, if any, of (1) $340,000 over (2) the amount
of all payments made pursuant to clause (z) of priority FIRST of Section 4.1 since the Closing
Date.



     “Carrying Costs” shall have the meaning assigned to that term in the Note Purchase
Agreement.



     “Change of Control” shall mean that any of the Issuer, the Depositor, or any Seller of
Pledged Loans ceases to be wholly-owned, directly or indirectly, by Wyndham Worldwide.



7









 





     “Closing Date” shall mean November 10, 2008.



     “Club Wyndham Access Loan” shall mean any Pledged Loan which provides financing for
the purchase of a membership interest in the PTVO Owners Association.



     “Club Wyndham Access Loan Excess Amount” shall mean, on any date, the amount by which
(i) the sum of the Loan Balances on such date for all Pledged Loans which are Club Wyndham Access
Loans exceeds (ii) ten percent (10%) of the Adjusted Loan Balance on such date.



     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.



     “Collateral” shall have the meaning specified in the Granting Clause of this
Indenture.



     “Collateral Agency Agreement” shall mean the Collateral Agency Agreement, dated as of
January 15, 1998, by and between Fleet National Bank as predecessor Collateral Agent, Fleet
Securities, Inc. as deal agent and the secured parties named therein, as subsequently amended to
date, including as amended by the Sixteenth Amendment to the Collateral Agency Agreement dated as
of November 7, 2008, by and among the Collateral Agent, the Trustee and other secured parties, as
such Collateral Agency Agreement may be further amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms.



     “Collateral Agent” shall mean U.S. Bank National Association in its capacity as
collateral agent under this Indenture and the Collateral Agency Agreement or any successor
collateral agent appointed under the Collateral Agency Agreement.



     “Collection Account” shall have the meaning specified in Section 4.4.



     “Collections” shall mean, with respect to any Pledged Loan, all funds, collections and
other proceeds of such Pledged Loan after the Cut-Off Date with respect to such Pledged Loan,
including without limitation (i) all Scheduled Payments or recoveries (subject to Section 7.5(g))
made in the form of money, checks and like items to, or a wire transfer or an automated
clearinghouse transfer received in, the Control Account or otherwise received by the Issuer, the
Servicer or the Trustee in respect of such Pledged Loan, (ii) all amounts received by the Issuer,
the Servicer or the Trustee in respect of any Insurance Proceeds relating to such Pledged Loan or
the related Timeshare Property and (iii) all amounts received by the Issuer, the Servicer or the
Trustee in respect of any proceeds of a condemnation of property in any Resort, which proceeds
relate to such Pledged Loan or the related Timeshare Property.



     “Conduit” shall have the meaning assigned to that term in the Note Purchase Agreement.



     “Consolidated Interest Coverage Ratio” shall have the meaning assigned thereto in the
Revolving Credit Agreement.



     “Consolidated Leverage Ratio” shall have the meaning assigned thereto in the Revolving
Credit Agreement.



8









 





     “Contingent Subordinated Notes Interest” shall mean, for each Series 2008-A Note on
any Payment Date, the sum of (i) the Incremental Program Fee due and payable on such Payment Date
with respect to the related Noteholder, (ii) the Incremental Interest for the related Accrual
Period with respect to such Series 2008-A Note and (iii) the Step-Up CP Interest for the related
Accrual Period with respect to the Purchaser Group in whose Funding Agent’s name such Series 2008-A
Note is registered.



     “Contingent Subordinated Overdue Interest” shall mean, as of any Payment Date, the
amount, if any, by which the aggregate Contingent Subordinated Notes Interest in respect of all
Series 2008-A Notes on all prior Payment Dates exceeds the amount paid to Noteholders on such prior
Payment Dates pursuant to clause TENTH of Section 4.1, together with interest thereon for each
Accrual Period at the rate of the Bank Base Rate plus 2.5%.



     “Contract Rate” shall mean, with respect to any Pledged Loan, the annual rate at which
interest accrues on such Loan, as modified from time to time only in accordance with the terms of
PAC or Credit Card Account (if applicable).



     “Control Account” shall mean any of the accounts established pursuant to a Control
Agreement.



     “Control Account Bank” shall mean the commercial bank holding a Control Account.



     “Control Agreement” shall mean a control agreement by and among the Issuer, the
Trustee, the Collateral Agent, the Servicer and the Control Account Bank, which agreement sets
forth the rights of the Issuer, the Trustee, the Collateral Agent and the Control Account Bank,
with respect to the disposition and application of the Collections deposited in the Control
Account, including without limitation the right of the Trustee to direct the Control Account Bank
to remit all Collections directly to the Trustee.



     “Corporate Trust Office” shall mean the office of the Trustee at which at any
particular time its corporate trust business is administered, which office at the date of the
appointment of Wells Fargo Bank, National Association as Trustee hereunder is located at MAC
N9311-161, Sixth Street and Marquette Avenue, Minneapolis, MN 55479, Attention: Corporate Trust
Services—Asset-Backed Administration.



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



     “Credit Standards and Collection Policies” shall mean the Credit Standards and
Collection Policies of WCF and WVRI, or of WRDC, as attached to the applicable Seller Purchase
Agreement and as amended from time to time in accordance with the applicable Seller Purchase
Agreement and the restrictions of Section 6.2(c).



     “Custodial Agreement” shall mean the Twelfth Amended and Restated Custodial Agreement,
dated as of November 7, 2008, by and among the Issuer, the Depositor, WVRI, WCF, WRDC, U.S. Bank
National Association, as Custodian, the Trustee and the Collateral Agent and other issuers,
trustees and other parties described therein as the same may be further
amended, supplemented or otherwise modified from time to time hereafter in accordance with its
terms.



9









 





     “Custodian” shall mean, shall mean U.S. Bank National Association in its capacity as
custodian under the Custodial Agreement, or any successor custodian appointed under the Custodial
Agreement.



     “Customary Practices” shall, with respect to the servicing and administration of any
Pledged Loans have the meaning assigned to that term in the Seller Purchase Agreement under which
such Loan was transferred from a Seller to the Depositor.



     “Cut-Off Date” shall mean (a) with respect to the Initial Pledged Loans, the Initial
Cut-Off Date, and (b) with respect to any Additional Pledged Loan, such date as is set forth in the
Supplemental Grant.



     “Deal Agent” shall have the meaning assigned to that term in the Note Purchase
Agreement.



     “Debt” of any Person shall mean (a) indebtedness of such Person for borrowed money,
(b) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments,
(c) obligations of such Person to pay the deferred purchase price of property or services, (d)
obligations of such Person as lessee under leases which have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases, (e) obligations secured by
any lien, security interest or other charge upon property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of such obligations, (f)
obligations of such Person under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds referred to in
clauses (a) through (e) above, and (g) liabilities of such person in respect of unfunded vested
benefits under Benefit Plans covered by Title IV of ERISA.



     “Debtor Relief Laws” shall mean the Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency,
reorganization, suspension of payments, or similar debtor relief laws from time to time in effect
affecting the rights of creditors generally.



     “Default Percentage” shall mean for any Payment Date, a fraction (i) the numerator of
which is the aggregate outstanding Loan Balance on such date of all Pledged Loans which became
Defaulted Loans during the related Due Period and (ii) the denominator of which is the Aggregate
Loan Balance on such Payment Date (without giving effect to any transfers of Additional Pledged
Loans to the Collateral Agent following the last day of the related Due Period).



     “Defaulted Loan” shall mean any Pledged Loan (a) with any portion of a Scheduled
Payment is delinquent more than 90 days, (b) with respect to which the Servicer shall have
determined in good faith that the related Obligor will not resume making Scheduled Payments, (c)
for which the related Obligor shall have become the subject of a proceeding under a Debtor Relief
Law or (d) for which cancellation or foreclosure actions have been commenced.



10









 





     “Defective Loan” shall mean (i) any Pledged Loan which is a Defective Loan as such
term is defined in the Seller Purchase Agreement under which such Loan was sold to the Depositor or
(ii) any Pledged Loan which is a Missing Documentation Loan.



     “Delayed Completion Green Loans” shall mean, as of any date, the Pledged Loans which
are Green Loans and which have been Pledged Loans for 15 months or more and the related Green
Timeshare Property is still subject to completion as of such date.



     “Delayed Completion Green Loans Excess Amount” shall mean, on any date, the sum of the
Loan Balances on such date for all Pledged Loans which were Delayed Completion Green Loans on the
last day of the immediately preceding Due Period.



     “Delinquency Ratio” shall mean for any Payment Date, a fraction (i) the numerator of
which is the aggregate outstanding Loan Balance on such date of all Pledged Loans which are
Delinquent Loans as of the last day of the related Due Period and (ii) the denominator of which is
the Aggregate Loan Balance on such Payment Date (without giving effect to any transfers of
Additional Pledged Loans to the Collateral Agent following the last day of the related Due Period).



     “Delinquent Loan” shall mean a Pledged Loan with any Scheduled Payment or portion of a
Scheduled Payment delinquent more than 30 days other than a Loan that is a Defaulted Loan.



     “Depositor” shall mean Sierra Deposit Company, LLC, a Delaware limited liability
company, as depositor under the Depositor Purchase Agreement.



     “Depositor Purchase Agreement” shall mean the Purchase Agreement dated as of November
7, 2008 by and between the Depositor and the Issuer as the same may be further amended,
supplemented or otherwise modified from time to time hereafter in accordance with its terms.



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



     “Documents in Transit Excess Amount” shall mean, on any date, the amount by which (i)
the sum of the Loan Balances on such date for all Pledged Loans which are Documents in Transit
Loans on the last day of the immediately preceding Due Period exceeds (ii) fifteen percent (15%) of
the Adjusted Loan Balance on such date.



     “Documents in Transit Loan” shall mean any Pledged Loan with respect to which the
original Loan and/or the related Loan File or any part thereof is not in the possession of the
Custodian because either (i) the Mortgage and related documentation has been sent out for checking
and recording or (ii) the documentation has not been delivered by the Seller thereof to the
Custodian.



     “Due Date” shall, with respect to any Pledged Loan, have the meaning assigned to that
term in the Seller Purchase Agreement pursuant to which such Loan was transferred to the Depositor.



11









 





     “Due Period” shall mean for any Payment Date, the immediately preceding calendar
month.



     “Eligible Account” shall mean either (a) a segregated account (including a securities
account) with an Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United States of America or
any one of the states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited in such account, so
long as any of the securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories which signifies investment grade.



     “Eligible Institution” shall mean any depository institution the short term unsecured
senior indebtedness of which is rated at least “F-l” by Fitch, “A-l” by S&P or “P-l” by Moody’s,
and the long term unsecured indebtedness rating of which is rated at least “A” by Fitch, “A” by S&P
or “A-2” by Moody’s.



     “Eligible Loan” shall, with respect to any Pledged Loan have the meaning assigned to
that term in the Seller Purchase Agreement pursuant to which such Loan was transferred to the
Depositor.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.



     “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
Code) as such Person; or (ii) a trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the Code) with such Person.



     “Estimated Fees” shall mean an amount to be stated by the Servicer each month in the
Monthly Servicing Report and used to calculate the Reserve Required Amount, which amount shall be
the Servicer’s good faith estimate of the sum of the Monthly Trustee Fee for the immediately
following three months, the Monthly Servicer Fee for the immediately following three months and the
fees to become due under the Fee Letter for the immediately following three months.



     “Event of Default” shall mean the events designated as Events of Default under Section
11.1 of this Indenture.



     “Excess Concentration Amount” shall mean, on any day, an amount equal to the sum of
(i) the Non-US Excess Amount, (ii) the Green Loans Excess Amount, (iii) the Delayed Completion
Green Loans Excess Amount, (iv) the New Seller Excess Amount, (v) the Transition Period Excess
Amount, (vi) the Large Loans Excess Amount, (vii) the State Concentration Excess Amount, (viii) the
Documents in Transit Excess Amount, (ix) the Fixed Week Excess Amount, (x) the Extended Term Excess
Amount, (xi) the Club Wyndham Access Loan Excess Amount, (xii) the Presidential Reserve Loan Excess
Amount, (xiii) the WorldMark Loan Excess Amount, (xiv) the WorldMark Loan FICO Score 650 Excess
Amount, (xv) the WorldMark Loan FICO Score 700 Excess Amount, (xvi) the Wyndham Loan FICO Score 650
Excess Amount, (xvii) the Wyndham Loan FICO Score 700 Excess Amount, (xviii) the California Excess



12









 







Amount, (xix) the Series 2008-A Pool Green Loans Excess Amount and (xxx) the Series 2008-A
Pool Extended Term Excess Amount.



     “Exchange Notes” shall mean notes issued pursuant to an Exchange Notes Indenture in
exchange for Series 2008-A Notes then held by Extending Noteholders.



     “Exchange Notes Indenture” shall have the meaning specified in Section 2.22(a).



     “Existing Seller Purchase Agreement” shall have the meaning specified in the
definition of Seller Purchase Agreements.



     “Extended Portion” shall have the meaning assigned to such term in the Note Purchase
Agreement.



     “Extended Term Excess Amount” shall mean, on any day, the amount by which, (i) the sum
of (A) the Loan Balances on such date for all Pledged Loans which have an original term greater
than 120 months as of the last day of the immediately preceding Due Period, and (B) the Series
2002-1 Loan Balance of all Series 2002-1 Pledged Loans which have an original term greater than 120
months as of the last day of the immediately preceding Due Period exceeds (ii) 7.5% of the sum of
(A) the Adjusted Loan Balance and (B) the Series 2002-1 Reference Loan Balance on such date.



     “Extending Noteholder” shall mean a Noteholder which is the Funding Agent for an
Extending Purchaser Group.



     “Extending Noteholders’ Percentage” shall mean, as of any Liquidity Termination Date,
the percentage equivalent of a fraction, (i) the numerator of which is equal to the aggregate
principal amount of the Series 2008-A Notes held by each Extending Noteholder (or, in the case of
any Extending Noteholder which is extending its Liquidity Termination Date for an amount that is
less than its entire Purchaser Group Commitment Amount, the Extended Portion with respect to such
Extending Noteholder) on such date and (ii) the denominator of which is equal to the Notes
Principal Amount on such date.



     “Extending Purchaser Group” shall have the meaning assigned to such term in the Note
Purchase Agreement.



     “Facility Documents” shall mean, collectively, this Indenture, each Seller Purchase
Agreement, the Depositor Purchase Agreement, the Custodial Agreement, the Control Agreement, the
Title Clearing Agreements, the Loan Conveyance Documents, the Collateral Agency Agreement, the
Administrative Services Agreements, the Tax Sharing Agreement, the LLC Agreement, the Fee Letter,
the Financing Statements and all other agreements, documents and instruments delivered pursuant
thereto or in connection therewith, and “Facility Document” shall mean any of them.



     “Facility Limit” shall mean, as of any date, the sum of the Purchaser Group Commitment
Amounts for each Purchaser Group as of such date.



13









 





     “FairShare Plus Agreement” shall mean the Amended and Restated FairShare Vacation Plan
Use Management Trust Agreement effective as of January 1, 1996 by and between WVRI, and certain of
its subsidiaries and third party developers, as the same has been amended prior to the date of this
Indenture and as the same may be further amended, supplemented or otherwise modified from time to
time hereafter in accordance with its terms.



     “FairShare Plus Program” shall mean the program pursuant to which the occupancy and
use of a Timeshare Property is assigned to the trust created by the FairShare Plus Agreement in
exchange for annual symbolic points that are used to establish the location, timing, length of stay
and unit type of a vacation, including without limitation systems relating to reservations,
accounting and collection, disbursement and enforcement of assessments in respect of contributed
units.



     “Fee Letter” shall have the meaning assigned to such term in the Note Purchase
Agreement.



     “FICO Score” shall mean a credit risk score for individuals calculated using the model
developed by Fair, Isaac and Company. Any reference to FICO Score herein shall mean the FICO Score
attributed to an Obligor at the time of sale of an interest in a Timeshare Property to the Obligor.



     “FICO Score of 7-Year Loans Excess Amount” shall mean, on any date, an amount equal to
the sum of the Loan Balances on such date of each Loan which has been specified by the Servicer in
writing to the Trustee and the Deal Agent pursuant to Section 7.11(n) to be excluded from the
calculation of the Aggregate Loan Balance.



     “FICO Score of 10-Year Loans Excess Amount” shall mean, on any date, an amount equal
to the sum of the Loan Balances on such date of each Loan which has been specified by the Servicer
in writing to the Trustee and the Deal Agent pursuant to Section 7.11(n) to be excluded from the
calculation of the Aggregate Loan Balance.



     “Financing Statements” shall mean, collectively, the UCC financing statements and the
amendments thereto required to be filed in connection with any of the transactions contemplated
hereby or any of the other Facility Documents.



     “Fitch” shall mean Fitch, Inc. or any successor thereto.



     “Fixed Week” shall have the meaning set forth in the applicable Seller Purchaser
Agreement.



     “Fixed Week Excess Amount” shall mean, on any date, the amount by which (i) the
combined amount of the Loan Balances on such date of all Acquired Portfolio Loans for which the
related Timeshare Property consists of a Fixed Week and which is not subject to the FairShare Plus
Program and has not been converted and is not convertible into a UDI as of the last day of the
immediately preceding Due Period, exceeds (ii) five percent (5%) of the Adjusted Loan Balance on
such date.



14









 





     “Four Month Default Percentage” shall mean, for any Payment Date, the sum of the
Default Percentages for such Payment Date and each of the three immediately preceding Payment Dates
divided by four.



     “Funding Agent” shall have the meaning assigned to that term in the Note Purchase
Agreement.



     “Funding Period” shall have the meaning assigned to such term in the Note Purchase
Agreement.



     “GAAP” shall mean generally accepted accounting principles as in effect from time to
time in the United States.



     “Grant” shall mean, as to any asset or property, to pledge, assign and grant a
security interest in such asset or property. A Grant of any item of the Collateral or the
Membership Interest Collateral shall include all rights, powers and options of the Granting party
thereunder or with respect thereto, including without limitation the immediate and continuing right
to claim, collect, receive and give receipt for principal, interest and other payments in respect
of such item of the Collateral, principal and interest payments and receipts in respect of the
Permitted Investments, Insurance Proceeds, purchase prices and all other monies payable thereunder
and all income, proceeds, products, rents and profits thereof, to give and receive notices and
other communications, to make waivers or other agreements, to exercise all such rights and options,
to bring Proceedings in the name of the Granting party or otherwise, and generally to do and
receive anything which the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.



     “Green Loan” shall mean a Loan the proceeds of which are used to finance the purchase
of a Timeshare Property for which construction on the related Resort has not yet begun or is
subject to completion.



     “Green Loan Advance Period” shall mean, with respect to any Rating Downgrade
Condition, the period from the last day of the Due Period on which the Rating Downgrade Condition
first exists to and including the earlier of (i) the first day on which such Rating Downgrade
Condition no longer exists and (ii) the third next succeeding Payment Date.



     “Green Loan Deficiency Amount” shall mean, as of any date as of which a Rating
Downgrade Condition existed on the last day of the immediately preceding Due Period, the excess of
(A) the product of (i) the excess of (a) the sum of the Loan Balances on such date (or, with
respect to any such Green Loans that have been released from the Lien of this Indenture pursuant to
Section 5.7, the Loan Balance on the date of such release) for all Loans which were Green Loans
pledged to the Collateral Agent as Collateral as of the last day of the Due Period in which such
Rating Downgrade Condition occurred over (b) the sum of (1) the Six Month Green Loans Excess Amount
(without taking into account the second sentence of the definition thereof) on such date, (2) the
Twelve-Month Green Loans Excess Amount (without taking into account the second sentence of the
definition thereof) on such date, (3) the Delayed Completion Green Loans Excess Amount on such date
and (4) the Series 2008-A Pool Green Loans Excess Amount as of such date and (ii) if (x) such day
is prior to the Advance Decrease Date, the AA Advance



15









 







Rate for such date and (y) such day is on or after the Advance Decrease Date, the AAA Advance
Rate over (B) the sum of the amounts distributed to Noteholders pursuant to clause NINTH of Section
4.1 on each Payment Date prior to such date.



     “Green Loan Deficiency Principal Distribution Amount” shall mean, (i) with respect to
any Payment Date as of which a Rating Downgrade Condition existed as of the last day of the related
Due Period, an amount equal to the Green Loan Deficiency Amount on such date and (ii) with respect
to any Payment Date as of which no Rating Downgrade Condition existed as of the last day of the
related Due Period, zero.



     “Green Loans Excess Amount” shall mean, on any date, the sum of the Six-Month Green
Loan Excess Amount and the Twelve-Month Green Loan Excess Amount on such date.



     “Green Loan Reserve Percentage” for any Payment Date shall mean with respect to any
Green Loan:



     (i) 0% if such Green Loan as of such Payment Date is a Six-Month Green Loan or is a
Delayed Completion Green Loan;



     (ii) 50% if such Green Loan as of such Payment Date is a Twelve-Month Green Loan; and



     (iii) 100% if such Green Loan as of such Payment Date is a Twelve-Month Plus Green
Loan;



     provided, however, that, if as of such Payment Date a Twelve-Month Green Loans Excess Amount
exists, the Green Loan Reserve Percentage applicable to a portion of the Twelve-Month Green Loans
equal to such Twelve-Month Green Loans Excess Amount shall be 0%.



     “Green Timeshare Property” shall mean a Timeshare Property the acquisition of which
was financed with a Green Loan.



     “Gross Excess Spread Percentage” shall mean for any Due Period the percentage
equivalent of a fraction, the numerator of which is the product of (x) the Interest Collections for
such Due Period, minus the sum of (i) the aggregate amount of Senior Notes Interest due on
the Payment Date immediately following such Due Period and (ii) the Monthly Servicer Fee for such
Due Period and (y) 360 divided by the actual number of days in such Due Period, and the denominator
of which is the average daily Aggregate Loan Balance for such Due Period.



     “Hedge Agreement” shall mean the Confirmation, in the form of Exhibit I, entered into
on or before the Initial Advance Date between the Issuer and the Hedge Provider, and the
definitions and provisions incorporated therein and the form of the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) to which such Confirmation is subject, as such Hedge Agreement may be
amended, modified or replaced.



16









 





     “Hedge Payment” shall mean with respect to any Payment Date that is not also a Note
Increase Date, the aggregate amount, if any, which the Issuer is obligated to pay as an additional
premium to the Hedge Provider on such Payment Date as a result of an increase in the notional
amount of the Hedge Agreement and/or any other change in the terms or adjustments of the Hedge
Agreement which require payment of an increased or additional premium. The amount of any such
Hedge Payment shall be calculated by the Servicer and provided in writing to the Trustee and the
Deal Agent.



     “Hedge Provider” shall mean the initial counterparty under the Hedge Agreement, and
any permitted Qualified Hedge Provider counterparty to the Hedge Agreement thereafter.



     “Hedge Receipt” shall mean with respect to any Payment Date, the aggregate amount, if
any, paid on the Payment Date to the Trustee under the terms of the Hedge Agreement then in effect
including payments for termination or sale of all or a portion of the Hedge Agreement.



     “Impermissibly Modified Loan” shall mean any Pledged Loan (i) which is a Timeshare
Upgrade unless such Timeshare Upgrade was originated in compliance with Section 11(k) of the
Existing Seller Purchase Agreement or the equivalent provision in any other Seller Purchase
Agreement or (ii) the provisions of which have been amended, modified or waived other than in
compliance with Sections 6.2(b) and 7.5(d).



     “Increase” shall have the meaning set forth in the Note Purchase Agreement.



     “Incremental Interest” shall have the meaning assigned to such term in the Note
Purchase Agreement.



     “Incremental Program Fee” shall have the meaning assigned to such term in the Fee
Letter.



     “Indenture” shall mean this Indenture and Servicing Agreement, dated as of November 7,
2008, among the Issuer, the Servicer, the Trustee and the Collateral Agent, as amended,
supplemented and restated from time to time hereafter in accordance with the terms hereof.



     “Initial Advance Date” shall mean the Payment Date on which the first advances are
made on the Series 2008-A Notes pursuant to Sections 2.12 and 2.17 and the terms of the Note
Purchase Agreement.



     “Initial Cut-Off Date” shall mean the close of business on October 31, 2008.



     “Initial Monthly Principal Distribution Amount” shall mean, for any Payment Date, an
amount equal to the excess of (i) the Monthly Principal for such Payment Date over (ii) the
Additional Monthly Principal Distribution Amount for such Payment Date.



     “Initial Notes Principal Amount” shall have the meaning assigned to such term in the
Note Purchase Agreement.



     “Initial Pledged Loans” shall mean those Loans listed on the Series 2008-A Loan
Schedule delivered to the Collateral Agent as of the Initial Advance Date.



17









 





     “Insolvency Event” shall mean, with respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any Debtor Relief Law, or the
filing of a petition against such Person in an involuntary case under any Debtor Relief Law, which
case remains unstayed and undismissed within 30 days of such filing, or the appointing of a
receiver, conservator, liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the ordering of the winding-up or
liquidation of such Person’s business; or (b) the commencement by such Person of a voluntary case
under any Debtor Relief Law, or the consent by such Person to the entry of an order for relief in
an involuntary case under any such Debtor Relief Law, or the consent by such Person to the
appointment of or taking possession by a receiver, conservator, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial part of its
property, or the making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due or the admission by
such Person of its inability to pay its debts generally as they become due.



     “Insolvency Proceeding” shall mean any proceeding relating to an Insolvency Event.



     “Insurance Proceeds” shall mean, with respect to any Pledged Loans, the meaning
assigned to that term in the Seller Purchase Agreement under which such Pledged Loan was
transferred to the Depositor.



     “Interest Collections” shall mean, for any Due Period, all Collections received on the
Pledged Loans during such Due Period which are allocable to interest on such Loans in accordance
with the terms thereof.



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



     “Issuer” shall mean Sierra Timeshare Conduit Receivables Funding II, LLC, a Delaware
limited liability company and its successors and assigns.



     “Issuer Excluded Excess Amount” shall mean, on any date, the sum of (i) the FICO Score
of 7-Year Loans Excess Amount and (ii) the FICO Score of 10-Year Loans Excess Amount, in each case
on such date.



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



     “Large Loans Excess Amount” shall mean, on any date, the sum of (a) the combined
amount of the Loan Balances on such date of all Pledged Loans which have a Loan Balance on such
date greater than $100,000 plus (b) the amount by which (i) the combined amount of the Loan
Balances on such date of all Pledged Loans which have a Loan Balance on such date of $75,000 or
more (but not more than $100,000) on such date exceeds (ii) five percent (5%) of the Adjusted Loan
Balance on such date.



18









 





     “LIBOR Rate” shall mean USD-LIBOR-BBA as defined in the 2006 ISDA Definitions
published by the International Swaps and Derivatives Association, Inc., as amended from time to
time, with the Designated Maturity as defined therein being one (1) month.



     “Lien” shall mean any mortgage, security interest, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the foregoing and the
filing of any financing statement under the UCC (other than any such financing statement filed for
informational purposes only) or comparable law of any jurisdiction to evidence any of the
foregoing.



     “Liquidity Agreement” shall have the meaning assigned to such term in the Note
Purchase Agreement.



     “Liquidity Provider” shall have the meaning assigned thereto in the Note Purchase
Agreement.



     “Liquidity Termination Date” shall have the meaning assigned to such term in the Note
Purchase Agreement.



     “LLC Agreement” shall mean the Limited Liability Agreement of Sierra Timeshare Conduit
Receivables Funding II, LLC, dated as of November 5, 2008, as amended, supplemented, restated or
otherwise modified from time to time.



     “Loan” shall mean each loan, installment contract, contract for deed, contract or note
secured by a mortgage, deed of trust, vendor’s lien or retention of title originated or acquired by
a Seller and relating to the sale of one or more Timeshare Properties.



     “Loan Balance” shall mean, on any date, with respect to any Pledged Loan, the
outstanding principal balance due under or in respect of such Pledged Loan as of the last day of
the immediately preceding Due Period.



     “Loan Conveyance Documents” shall mean, with respect to any Pledged Loan, (a) the
applicable Seller Purchase Agreement or assignment of additional loans under which such Pledged
Loan was transferred from a Seller to the Depositor, (b) the Depositor Purchase Agreement or
assignment of additional loans under which such Pledged Loan was transferred from the Depositor to
the Issuer, (c) this Indenture or the applicable Supplemental Grant pursuant to which the Pledged
Loan is Granted to the Collateral Agent for the benefit of the Trustee and (d) any such other
releases, documents, instruments or agreements as may be required by the Depositor, the Issuer, the
Collateral Agent or the Trustee in order to more fully effect the transfer or Grant (including any
prior assignments) of such Pledged Loan and any related Pledged Assets from the Originator to the
Seller, from the Seller to the Depositor, from the Depositor to the Issuer and from the Issuer to
the Collateral Agent or the Trustee.



19









 





     “Loan Documents” shall, with respect to any Pledged Loan, have the meaning assigned to
that term in the Seller Purchase Agreement under which such Pledged Loan was transferred from a
Seller to the Depositor.



     “Loan File” shall, with respect to any Pledged Loan, have the meaning assigned to that
term in the Seller Purchase Agreement under which such Pledged Loan was transferred from a Seller
to the Depositor.



     “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 have the meaning assigned to that term in the Note
Purchase Agreement.



     “Mandatory Redemption Date” shall mean the Payment Date falling in the thirteenth
calendar month after the calendar month in which the last Liquidity Termination Date occurs.



     “Market Servicing Rate” shall mean the rate calculated by the Trustee following a
Servicer Default, which rate shall be calculated as follows: (1) the Trustee shall, within 10
Business Days after the occurrence of a Servicer Default, solicit bids from entities which are
experienced in servicing loans similar to the Pledged Loans and shall request delivery of such bids
to the Trustee within 30 days of the delivery of the notice to potential Successor Servicers, and
such bids shall state a servicing fee as part of the bid and (2) upon the receipt of three
arms-length bids, the Trustee shall disregard the highest bid and the lowest bid and select the
remaining middle bid, and the servicing fee rate bid by such bidder shall be the Market Servicing
Rate.



     “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 any of such Person;
	 
	 	(b)	 	the ability of such Person to perform its respective
obligations under any of the Facility Documents to which it is a party;
	 
	 	(c)	 	the validity or enforceability of, or collectibility of amounts
payable under, this Indenture or any of the Facility Documents to which it is a
party;
	 
	 	(d)	 	the status, existence, perfection or priority of any Lien
arising through or under such Person under any of the Facility Documents to
which it is a party; or
	 
	 	(e)	 	the value, validity, enforceability or collectibility of the
Pledged Loans or any of the other Pledged Assets or of the Membership Interest
Collateral.





     “Maturity Date” shall mean November 2025 Payment Date.



20









 





     “Member” shall have the meaning assigned thereto in the LLC Agreement.



     “Membership Interest Collateral” shall have the meaning specified in the Granting
Clause of this Indenture.



     “Missing Documentation Loan” shall mean any Pledged Loan with respect to which (A) the
original Loan and/or the related Loan File or any part thereof are not in the possession of the
Custodian at the time of the sale of such Loan to the Depositor and (B) if the related Mortgage is
not in the possession of the Custodian because it has been removed from the Loan File for review
and recording in the local real property recording office, it has not been returned to the Loan
File in the time frame required by the applicable Seller Purchase Agreement, or if the
documentation is not in the possession of the Custodian because it has not been delivered by the
Seller thereof to the Custodian, such documentation is not in the custody of the Custodian within
30 days after the date of the sale of such Loan to the Issuer.



     “Monthly Principal” shall mean, for any Payment Date (i) so long as neither an
Amortization Event nor the Termination Date has occurred (x) if on the last day of the immediately
preceding Due Period no Rating Downgrade Condition existed, an amount equal to the Principal
Distribution Amount for such Payment Date and (y) if on the last day of the immediately preceding
Due Period a Rating Downgrade Condition existed, an amount equal to the excess of (1) the Principal
Distribution Amount for such Payment Date over (2) the Green Loan Deficiency Principal Distribution
Amount for such Payment Date; and (ii) on or after the Termination Date or the occurrence of an
Amortization Event, the lesser of the Notes Principal Amount and the excess of (1) the entire
amount of the remaining Available Funds after making provisions for the payments and distributions
required under clauses FIRST through FIFTH in Section 4.1 on such Payment Date over (2) the amount,
if any, by which the amount on deposit in the Reserve Account is less than the Required Reserve
Account Amount on such date.



     “Monthly Servicer Fee” shall mean, in respect of any Due Period (or portion thereof),
an amount equal to one-twelfth of the product of (a) 1.10% and (b) the Aggregate Loan Balance on
the first day of such Due Period (or portion thereof) or if a Successor Servicer has been appointed
and accepted the appointment or if the Trustee is acting as Servicer, an amount equal to
one-twelfth of the product of (x) the lesser of 3.5% and the Market Servicing Rate and (y) the
Aggregate Loan Balance on the first day of such Due Period.



     “Monthly Servicing Report” shall mean each monthly report prepared by the Servicer as
provided in Section 8.3.



     “Monthly Trustee Fee” shall mean, in respect of any Due Period, the sum of $1,000.



     “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor thereto.



     “Mortgage” shall mean any mortgage, deed of trust, purchase money deed of trust or
deed to secure debt encumbering the related Timeshare Property, granted by the related Obligor to
the Originator of a Loan to secure payments or other obligations under such Loan.



     “Multiemployer Plan” shall have the meaning set forth in Section 3(37) of ERISA.



21









 





     “Net Liquidation Proceeds” shall mean, with respect to any Defaulted Loan which has
not been released from the Lien of this Indenture, the proceeds of the sale, liquidation or other
disposition of the Defaulted Loan and/or related Pledged Assets.



     “New Seller” shall mean an entity other than WCF which (a) is a subsidiary of the
Parent Corporation, (b) performs its own loan origination and servicing, (c) has entered into a
Seller Purchase Agreement as provided in Section 3.5 and, (d) with respect to any Loan Granted
under this Indenture has complied with all conditions set forth in Section 3.5.



     “New Seller Excess Amount” shall mean, on any date, an amount equal to the sum of (a)
the amount by which the sum of the Loan Balances for Pledged Loans that were sold to the Depositor
by any one New Seller exceeds 10% of the Adjusted Loan Balance on such date plus, without
duplication (b) the amount by which the sum of the Loan Balances for Pledged Loans that were sold
to the Depositor by all New Sellers exceeds 15% of the Adjusted Loan Balance on such date.



     “New Seller Loans” shall mean Loans sold by a New Seller to the Depositor under a
Seller Purchase Agreement.



     “New York UCC” shall have the meaning set forth in Section 1.2(f).



     “Nominee” shall have the meaning set forth in each Seller Purchase Agreement.



     “Non-US Excess Amount” shall mean, on any date, the amount by which (i) the sum of the
Loan Balances on such date for all Pledged Loans with Obligors with billing addresses not located
in the United States of America as of the last day of the immediately preceding Due Period exceeds
(ii) five percent (5%) of the Adjusted Loan Balance on such date.



     “Note Register” shall have the meaning specified in Section 2.5.



     “Note Registrar” shall have the meaning specified in Section 2.5.



     “Note Purchase Agreement” shall mean the Note Purchase Agreement dated as of November
7, 2008, which relates to the sale of the Series 2008-A Notes by the Issuer and which is by and
among the Issuer, the Depositor, the Servicer, the Performance Guarantor, the Deal Agent, the
Conduits, the Alternate Investors and the Funding Agents as amended, restated, supplemented or
otherwise modified from time to time hereafter in accordance with its terms.



     “Noteholder” or “Holder” shall mean the Person in whose name a Series 2008-A
Note is registered in the Note Register.



     “Notes Increase Date” shall mean with respect to an Increase, the Business Day on
which the Increase occurs pursuant to Section 2.17.



     “Notes Interest” shall mean for each Series 2008-A Note on any Payment Date, an amount
equal to the Carrying Costs for the related Accrual Period with respect to the Purchaser Group in
whose Funding Agent’s name such Series 2008-A Note is registered as such amount is reported to the
Trustee by the Deal Agent or the Servicer; plus the Purchaser Group Fees due on
such Payment Date to such Noteholder under the terms of the Fee Letter as such amounts are
reported to the Trustee by the Deal Agent or the Servicer.



22









 





     “Notes Principal Amount” shall mean, as of the close of business on any date, the
Initial Notes Principal Amount plus (i) the aggregate amount of all Increases made with respect to
the Series 2008-A Notes pursuant to Section 2.17 less (ii) the aggregate amount of all principal
payments made on the Series 2008-A Notes on or prior to such date less (iii) the principal amount
of any Series 2008-A Notes cancelled pursuant to Section 2.22; provided that any principal
payments required to be returned to the Issuer shall be reinstated to the Notes Principal Amount.



     “Notice of Increase” shall mean the notice presented by the Issuer to the Deal Agent,
Servicer and Trustee to request an Increase.



     “NPA Costs” shall mean, as of any Payment Date, the Breakage and Other Costs as
defined in the Note Purchase Agreement due and payable on such Payment Date.



     “Obligor” shall mean, with respect to any Loan, the Person or Persons obligated to
make Scheduled Payments thereon.



     “Officer’s Certificate” shall mean, unless otherwise specified in this Indenture, a
certificate delivered to the Trustee signed by any Vice President or more senior officer of the
Issuer or the Servicer, as the case may be, or, in the case of a Successor Servicer, a certificate
signed by any Vice President or more senior officer or the financial controller (or an officer
holding an office with equivalent or more senior responsibilities) of such Successor Servicer, and
delivered to the Trustee.



     “Opinion of Counsel” shall mean a written opinion of counsel who may be counsel for,
or an employee of, the Person providing the opinion and who shall be reasonably acceptable to the
Trustee.



     “Originator,” with respect to any Pledged Loan, shall have the meaning assigned to
such term in the Seller Purchase Agreement under which such Pledged Loan was transferred to the
Depositor or if such term is not so defined, the entity which originates or acquires Loans and
transfers such Loans directly or through a Seller to the Depositor.



     “PAC” shall mean an arrangement whereby an Obligor makes Scheduled Payments under a
Loan via pre-authorized debit.



     “Parent Corporation” shall mean Wyndham Worldwide.



     “Paying Agent” shall mean the Trustee or any successor thereto, in its capacity as
paying agent for the Series 2008-A Notes.



     “Payment Date” shall mean the 13th day of each calendar month, or, if such
13th day is not a Business Day, the next succeeding Business Day, commencing December
15, 2008.



23









 





     “Performance Guaranty” shall mean that Performance Guaranty dated as of November 7,
2008 given by Wyndham Worldwide in favor of the Issuer, the Depositor and the Trustee.



     “Performance Guarantor” shall mean Wyndham Worldwide.



     “Permitted Encumbrances” shall, with respect to any Pledged Loan, have the meaning
assigned to that term in the Seller Purchase Agreement under which such Pledged Loan was
transferred from a Seller to the Depositor.



     “Permitted Investments” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or instrumentality thereof
having maturities on or before the first Payment Date after the date of acquisition; (ii) time
deposits and certificates of deposit having maturities on or before the first Payment Date after
the date of acquisition, maintained with or issued by any commercial bank having capital and
surplus in excess of $500,000,000 and having a short term senior unsecured debt rating of at least
“F-l” by Fitch, “A-1” by S&P or “P-l” by Moody’s; (iii) repurchase agreements having maturities on
or before the first Payment Date after the date of acquisition for underlying securities of the
types described in clauses (i) and (ii) above or clause (iv) below with any institution having a
short term senior unsecured debt rating of at least “F-l” by Fitch, “A-l” by S&P, or “P-l” by
Moody’s; (iv) commercial paper maturing on or before the first Payment Date after the date of
acquisition and having a short term senior unsecured debt rating of at least “F-l” by Fitch, “A-l”
by S&P or “P-l” by Moody’s; and (v) money market funds rated “Aaa” by Moody’s which invest solely
in any of the foregoing, including any such funds in which the Trustee or an Affiliate of the
Trustee acts as an investment advisor or provides other investment related services;
provided, however, that no obligation of any Seller shall constitute a Permitted
Investment.



     “Person” shall mean any person or entity including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental entity or other entity or organization of any nature,
whether or not a legal entity.



     “Plan” shall mean an employee benefit plan or other retirement arrangement subject to
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time.



     “Pledged Asset” with respect to each Pledged Loan, shall mean the related “Assets” as
defined in the Depositor Purchase Agreement.



     “Pledged Loan” shall mean the Initial Pledged Loans and any Additional Pledged Loans,
but excluding any Released Pledged Loans.



     “POA” shall have the meaning assigned thereto in each Seller Purchase Agreement.



     “Post Office Box” shall mean each post office box to which Obligors are directed to
mail payments in respect of the Pledged Loans.



     “Potential Amortization Event” shall mean an event which, but for the lapse of time or
the giving of notice or both, would constitute an Amortization Event.



24









 





     “Potential Event of Default” shall mean an event which, but for the lapse of time or
the giving of notice or both, would constitute an Event of Default.



     “Potential Servicer Default” shall mean an event which, but for the lapse of time or
the giving of notice or both, would constitute a Servicer Default.



     “Presidential Reserve Loan” shall mean any Pledged Loan which provides financing for
the purchase of an UDI in a Timeshare Property Regime at a Resort in which all or a portion of the
units comprising such Timeshare Property Regime are designated as Presidential Reserve units and in
respect of which units the owners have preferential reservation rights.



     “Presidential Reserve Loan Excess Amount” shall mean, on any date, the amount by which
(i) the sum of the Loan Balances on such date for all Pledged Loans which are Presidential Reserve
Loans as of the last day of the immediately preceding Due Period exceeds (ii) 10% of the Adjusted
Loan Balance on such date.



     “Principal Distribution Amount” shall mean for any Payment Date an amount equal to the
Borrowing Base Shortfall on such Payment Date; provided, however, that for any
Payment Date on which (x) the Securitized Pool Three Month Rolling Average Delinquency Percentage
exceeds 5.0% or (y) the Securitized Pool Four Month Default Percentage exceeds 1.0%, the Principal
Distribution Amount shall be the lesser of (a) the Notes Principal Amount as of such Payment Date
and (b) the excess of (i) the entire amount of the remaining Available Funds after making
provisions for the payments and distributions required under clauses FIRST through FIFTH in Section
4.1 on such Payment Date over (ii) the amount, if any, by which the amount on deposit in the
Reserve Account is less than the Reserve Required Amount on such Payment Date.



     “Priority of Payments” shall mean the application of Available Funds in accordance
with Section 4.1.



     “Proceeding” shall have the meaning specified in Section 11.3.



     “Purchase” shall mean a purchase of Pledged Loans by the Issuer from the Depositor
pursuant to the Depositor Purchase Agreement.



     “Purchaser Group” shall have the meaning assigned to that term in the Note Purchase
Agreement.



     “Purchaser Group Commitment Amount” with respect to each Purchaser Group, shall have
the meaning assigned to that term in the Note Purchase Agreement.



     “Purchaser Group Fees” shall have the meaning specified in the Fee Letter.



     “PYF 2007-A Notes” shall mean the Premium Yield Facility 2007-A LLC Floating Rate
Vacation Timeshare Loan Backed Notes, Series 2007-A.



     “Qualified Hedge Provider” shall mean a counterparty to the Hedge Agreement and which
has a long term unsecured debt rating of at least A from each of Moody’s and S&P and a short-term
unsecured debt rating of at least A-1 from S&P and P-1 from Moody’s.



25









 





     “Qualified Substitute Loan” shall mean a substitute Pledged Loan that is an Eligible
Loan on the applicable date of substitution and that on such date of substitution has a coupon rate
not less than the coupon rate of the substituted Pledged Loan.



     “Rating Agency” shall mean each of S&P and Moody’s and their respective successors in
interest.



     “Rating Agency Condition” shall mean, with respect to any action to be taken, that
each Rating Agency shall have been given at least five (5) days prior notice thereof and (i) in the
case of S&P, S&P shall have notified the Issuer and the Trustee in writing that such action will
not result in a reduction, downgrade, suspension or withdrawal of the rating then assigned by S&P
to the Series 2008-A Notes, and (ii) in the case of Moody’s, the Issuer and the Trustee shall not
have received written notice from Moody’s that such action will result in a reduction, downgrade,
suspension or withdrawal of the rating then assigned by Moody’s to the Series 2008-A Notes.



     “Rating Downgrade Condition” shall mean that (i) the senior unsecured debt of Wyndham
Worldwide is rated below “Baa3” by Moody’s, or Moody’s has withdrawn its rating of the senior
unsecured debt of Wyndham Worldwide and has not reinstated a rating of at least “Baa3” and (ii) the
senior unsecured debt of Wyndham Worldwide is rated below “BBB-” by S&P, or S&P has withdrawn its
rating of the senior unsecured debt of Wyndham Worldwide and has not reinstated a rating of at
least “BBB-”. The occurrence of any Ratings Downgrade Condition shall continue until the date on
which the senior unsecured debt of Wyndham Worldwide is rated at or above “Baa3” by Moody’s and
“BBB-” by S&P.



     “Record Date” shall mean the date on which Noteholders entitled to receive a payment
of interest or principal on the succeeding Payment Date are determined, such date as to any Payment
Date being the day preceding such Payment Date (or if such day is not a Business Day, the
immediately preceding Business Day).



     “Registered Noteholder” shall mean a Holder of a Series 2008-A Note that is registered
in the Note Register.



     “Registered Notes” shall have the meaning set forth in Section 2.1.



     “Release Date” shall mean the date on which Pledged Loans are released from the Lien
of this Indenture.



     “Release Price” shall mean an amount equal to the outstanding Loan Balance of the
Pledged Loan as of the date on which the release is to be made, plus accrued and unpaid interest
thereon to the date of such release.



     “Released Pledged Loan” shall mean any Loan which was a Pledged Loan, but which was
released from the Lien of this Indenture pursuant to the terms hereof.



     “Reported EBITDA” shall mean, without duplication, for any period for which such
amount is being determined (i) the net income of Wyndham Worldwide plus provision for taxes based
on income, depreciation expense, interest expense, amortization expense, other non-cash items
reducing net income (and increasing EBITDA) minus (ii) any cash expenditure during



26









 







such period to the extent such cash expenditures did not reduce net income for such period and
were applied against reserves that constituted non-cash items which reduced net income during prior
periods, calculated in each case in a manner consistent with such number as reported by Wyndham
Worldwide in its combined financial statements filed by Wyndham Worldwide under Form 10-K for the
most recent fiscal year preceding such 10-K filing, and in each year as filed under Form 10-Q for
the period from the beginning of the most recent fiscal year through the end of the fiscal quarter
preceding such 10-Q filing.



     “Required Cap Rate” shall mean, for any Accrual Period, the Weighted Average Series
2008-A Loans Rate less 7.50%.



     “Required Facility Investors” shall have the meaning assigned to that term in the Note
Purchase Agreement.



     “Reserve Account” shall have the meaning specified in Section 4.6.



     “Reserve Required Amount” shall mean (i) so long as no Amortization Event has
occurred, as of any date an amount equal to the greater of (x) 2.0% of the Aggregate Loan Balance
on such date and (y) the most recently reported Estimated Fees, plus, in either case (A) $150,000
related to any indemnification of the Trustee pursuant to Section 13.5 and (B) an amount equal to
the sum of the Green Loan Reserve Percentage of the Loan Balance for each Pledged Loan which is a
Green Loan multiplied by the applicable Advance Rate on such date, and (ii) on and after the first
Payment Date following the occurrence of an Amortization Event, 1.00% of the Aggregate Loan Balance
on such date.



     “Resort” shall have the meaning set forth in each Seller Purchase Agreement.



     “Responsible Officer” shall mean any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer,
any Assistant Secretary, any trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated officers, in each
case having direct responsibility for the administration of this Indenture.



     “Revolving Credit Agreement” shall mean the Credit Agreement dated as of July 7, 2006
among Wyndham Worldwide, as borrower, the lenders referred to therein, JPMorgan Chase Bank, N.A.,
as administrative agent, Citicorp USA, Inc., as syndication agent, and Bank of America, N.A., The
Bank of Nova Scotia and Credit Suisse Securities (USA) LLC, as co-documentation agents, without
giving effect to any amendment thereto made subsequent to the Closing Date.



     “Rolling Period” shall have the meaning set forth in the Revolving Credit Agreement.



     “S&P” shall mean Standard & Poor’s Ratings Services or any successor thereto.



     “Sale” shall have the meaning specified in Section 11.12(a).



     “Scheduled Payment” shall mean the scheduled monthly payment of principal and interest
on a Pledged Loan.



27









 





     “Securities Act” shall mean the U.S. Securities Act of 1933, as amended.



     “Securitized Pool” shall mean, as of any date, all assets originated by the
Originators or any other Affiliate of WCF and financed by any special purpose entity and which are
serviced by WCF including the assets in all term issuances, all warehouse facilities (other than
the Series 2002-1 Notes and the Series 2008-A Notes) and other securitization facilities that are
outstanding at any time between the Closing Date and the date on which the Series 2008-A Notes are
paid in full excluding PYF 2007-A Notes and any future securitized pool of assets that is not
composed of collateral with eligibility requirements generally analogous to those of the Pledged
Loans.



     “Securitized Pool Default Percentage” shall mean for any Due Period a fraction (i) the
numerator of which is the aggregate outstanding principal balance due in respect of all loans in
the Securitized Pool which became Securitized Pool Defaulted Loans during such Due Period and (ii)
the denominator of which is the aggregate outstanding loan balance due in respect of all loans in
the Securitized Pool as of the last day of such Due Period.



     “Securitized Pool Defaulted Loan” shall mean any loan in the Securitized Pool (a) with
any portion of a scheduled monthly payment of principal or interest is delinquent more than 120
days, (b) with respect to which WCF as servicer shall have determined in good faith that the
related obligor will not resume making scheduled monthly payments, (c) for which the related
obligor shall have become the subject of a proceeding under a Debtor Relief Law or (d) for which
cancellation or foreclosure actions have been commenced.



     “Securitized Pool Delinquency Ratio” shall mean for any Due Period, a fraction (i) the
numerator of which is the aggregate outstanding principal balance due in respect of all loans in
the Securitized Pool which are Securitized Pool Delinquent Loans at the end of such Due Period and
(ii) the denominator of which is the aggregate outstanding loan balance due in respect of all loans
in the Securitized Pool as of the last day of such Due Period.



     “Securitized Pool Delinquent Loan” shall mean any loan in the Securitized Pool with
any scheduled monthly payment of interest or principal (or any portion thereof) delinquent more
than 60 days other than a loan that is a Securitized Pool Defaulted Loan.



     “Securitized Pool Four Month Default Percentage” shall mean, for any Payment Date, the
sum of the Securitized Pool Default Percentages for each of the four immediately preceding Due
Periods divided by four.



     “Securitized Pool Three Month Rolling Average Delinquency Percentage” shall mean, for
any Payment Date, the sum of the Securitized Pool Delinquency Ratios for each of the three
immediately preceding Due Periods divided by three.



     “Seller” shall have the meaning assigned to that term in any Seller Purchase
Agreement.



     “Seller of Series 2008-A Loans” shall mean a Seller which has sold a Loan to the
Depositor which is a Pledged Loan.



     “Seller Purchase Agreements” shall mean collectively (i) the Master Loan Purchase
Agreement among WCF, as Seller, WVRI, WRDC and the other Originators named therein and



28









 







the Purchaser, as supplemented by the Series 2008-A Supplement thereto (the “Existing
Seller Purchase Agreement”) and (ii) any Master Loan Purchase Agreement (as supplemented by any
supplement thereto) to a sale of Loans from a New Seller to the Depositor, which Loans are
subsequently sold by the Depositor to the Issuer.



     “Senior Notes Interest” shall mean, for each Series 2008-A Note on any Payment Date,
the excess of (i) the Notes Interest for such Series 2008-A Note on such Payment Date over (ii) the
Contingent Subordinated Notes Interest for such Series 2008-A Note on such Payment Date.



     “Senior Overdue Interest” shall mean, as of any Payment Date, the amount, if any, by
which the aggregate Senior Notes Interest in respect of all Series 2008-A Notes on all prior
Payment Dates exceeds the amount paid to Noteholders on such prior Payment Dates pursuant to clause
FOURTH of Section 4.1, together with interest thereon for each Accrual Period at the rate of the
Bank Base Rate plus 2.5%.



     “Series 2002-1 Collateral Deficiency Amount” shall mean an amount, not less than zero,
equal to the sum of (A) the lesser of (i) the excess of the Notes Principal Amount over the
Borrowing Base on the Series 2002-1 Termination Date (after giving effect to any payments of the
amount specified in clause (B) of this definition pursuant to Section 2.13(a)(iv), but without
giving effect to any other prepayments on such date) and (ii) the sum of (a) the excess of (1) the
Extended Term Excess Amount on the Series 2002-1 Termination Date over (2) the Extended Term Excess
Amount as of the immediately preceding day and (b) the excess of (1) the Green Loan Excess Amount
on the Series 2002-1 Termination Date over (2) the Green Loan Excess Amount as of the immediately
preceding day, and (B) if the Notes Principal Amount exceeds the Borrowing Base on the day
immediately prior to the Series 2002-1 Termination Date (after giving effect to all payments made
on such date), an amount equal to the lesser of (i) such excess and (ii) the Series 2002-1
Termination Date Green Loan Loss Amount on such date.



     “Series 2002-1 Indenture” shall mean the Master Indenture and Servicing Agreement
dated as of August 29, 2002, as amended and restated as of July 7, 2006, and as further amended by
the First Amendment to the Master Indenture and Servicing Agreement as of October 30, 2007, and as
further amended, supplemented or restated from time to time hereafter, among Sierra Timeshare
Conduit Receivables Funding, LLC, the Servicer, the Trustee and the Collateral Agent supplemented
by the Series 2002-1 Supplement thereto dated as of July 7, 2006, as amended by the First Amendment
to the Series 2002-1 Supplement dated as of November 13, 2006, as further amended by the Second
Amendment to the Series 2002-1 Supplement dated as of October 30, 2007, and as further amended by
the Third Amendment to the Series 2002-1 Supplement dated as of November 7, 2008, among Sierra
Timeshare Conduit Receivables Funding, LLC, the Servicer, the trustee thereof and the Collateral
Agent, without giving effect to any amendment thereto made subsequent to the Closing Date, unless
the Majority Facility Investors have consented to such amendment.



     “Series 2002-1 Loan Balance” shall mean, as of any date with respect to any Series
2002-1 Pledged Loan, the “Loan Balance” (as such term is defined in the Series 2002-1 Indenture) of
such Series 2002-1 Pledged Loan as of the last day of the immediately preceding Due Period;
provided that as of any date on or after the Series 2002-1 Termination Date, the Series
2002-1 Loan Balance of any Series 2002-1 Pledged Loan shall be zero.



29









 





     “Series 2002-1 Notes” shall mean Sierra Timeshare Conduit Receivables Funding LLC
Loan-Backed Variable Funding Notes Series 2002-1 Notes issued pursuant to the Series 2002-1
Indenture.



     “Series 2002-1 Pledged Loan” shall mean a “Pledged Loan” as such term is defined in
the Series 2002-1 Indenture.



     “Series 2002-1 Reference Loan Balance” shall mean, on any date, the product of (i) the
Adjusted Loan Balance (as such term is defined in the Series 2002-1 Indenture) as of the last day
of the immediately preceding Due Period and (ii) 84.27%; provided that as of any date on or
after the Series 2002-1 Termination Date, the Series 2002-1 Reference Loan Balance shall be zero.



     “Series 2002-1 Termination Date” shall mean the first date upon which the Series
2002-1 Notes have been repaid in full.



     “Series 2002-1 Termination Date Green Loan Loss Amount” shall mean, on the Series
2002-1 Termination Date the product of (i) the sum of the Loan Balances of each Defaulted Loan (as
of the date it became a Defaulted Loan and without giving effect to the release thereof from the
Lien of this Indenture) that became a Defaulted Loan since the most recently preceding Note
Increase Date and that was a Green Loan as of such Note Increase Date and (ii) the percentage
equivalent of a fraction, (x) the numerator of which is equal to the Series 2002-1 Reference Loan
Balance as of the most recently preceding Note Increase Date and (y) the denominator of which is
equal to the sum of the Adjusted Loan Balance and the Series 2002-1 Reference Loan Balance as of
the most recently preceding Note Increase Date.



     “Series 2008-A Loan” shall mean a Loan that is a Pledged Loan.



     “Series 2008-A Loan Schedule” shall mean the loan schedule containing information
about the Pledged Loans, which loan schedule is delivered electronically by the Issuer to the
Trustee as of the Initial Advance Date, and as such schedule is amended by delivery electronically
by the Issuer to the Trustee of information related to the release of Pledged Loans or the Grant of
Additional Pledged Loans or Qualified Substitute Loans.



     “Series 2008-A Notes” shall mean the Sierra Timeshare Conduit Receivables Funding II,
LLC, Loan-Backed Variable Funding Notes, Series 2008-A, issued pursuant hereto.



     “Series 2008-A Pool Extended Term Excess Amount” shall mean, on any date, the amount,
if any, by which (i) the excess of (x) the Loan Balances on such date for all Pledged Loans which
have an original term greater than 120 months on the last day of the immediately preceding Due
Period over (y) 15% of the Adjusted Loan Balance on such date exceeds (ii) the Extended Term Excess
Amount on such date.



     “Series 2008-A Pool Green Loans Capped Amount” shall mean, on any date, the product of
(i) the Adjusted Loan Balance on such date and (ii) if such date is (x) on or prior to the June
2009 Payment Date, 25%, or (y) following the June 2009 Payment Date, 15%.



30









 





     “Series 2008-A Pool Green Loans Excess Amount” shall mean, on any date, the amount, if
any, by which (i) the greater of (A) the excess, if any, of (x) the Loan Balances on such date for
all Pledged Loans which are Green Loans on the last day of the immediately preceding Due Period
over (y) the Series 2008-A Pool Green Loans Capped Amount on such date and (B) the sum of the
Series 2008-A Pool Six-Month Green Loans Excess Amount, the Series 2008-A Pool Twelve-Month Green
Loans Excess Amount, and the Delayed Completion Green Loans Excess Amount on such date exceeds (ii)
the sum of the Six-Month Green Loans Excess Amount, the Twelve-Month Green Loans Excess Amount and
the Delayed Completion Green Loans Excess Amount on such date.



     “Series 2008-A Pool Six-Month Green Loans Excess Amount” shall mean, on any date, the
amount by which (i) the sum of the Loan Balances on such date for all Pledged Loans which are
Six-Month Green Loans as of the last day of the immediately preceding Due Period exceeds (ii) (x)
on or prior to the June 2009 Payment Date, 16.667% of the Adjusted Loan Balance on such date, and
(y) following the June 2009 Payment Date, 10% of the Adjusted Loan Balance on such date.



     “Series 2008-A Pool Twelve-Month Green Loans Excess Amount” shall mean, on any date,
the amount by which (i) the sum of the Loan Balances on such date for all Pledged Loans which are
Twelve-Month Green Loans as of the last day of the immediately preceding Due Period exceeds (ii)
(x) on or prior to the June 2009 Payment Date, 8.333% of the Adjusted Loan Balance on such date,
and (y) following the June 2009 Payment Date, 5% of the Adjusted Loan Balance on such date.



     “Series 2008-A Supplement” shall mean the Series 2008-A Supplement to the Master Loan
Purchase Agreement among WCF, as Seller, WVRI, WRDC, the other Originators named therein and the
Depositor pursuant to which the Seller sells Loans to the Depositor.



     “Service Transfer” shall have the meaning specified in Section 12.1.



     “Servicer” shall mean Wyndham Consumer Finance, Inc., a Delaware corporation, or any
Successor Servicer appointed pursuant to Section 12.2.



     “Servicer Advance” shall mean amounts, if any, advanced by the Servicer, at its
option, pursuant to Section 7.16 to cover any shortfall between (i) the Scheduled Payments on the
Pledged Loans for a Due Period, and (ii) the amounts actually deposited in the Collection Account
on account of such Scheduled Payments on or prior to the Payment Date immediately following such
Due Period.



     “Servicer Default” shall mean the defaults specified in Section 12.1.



     “Servicing Officer” shall mean any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Loans whose name appears on a list of servicing
officers furnished to the Trustee by the Servicer, as such list may be amended from time to time.



     “Settlement Statement” shall mean the information furnished by the Servicer to the
Trustee for distribution to the Noteholders pursuant to Section 8.1.



31









 





     “Six-Month Green Loans” shall mean, as of any date, Green Loans which finance a
Timeshare Property related to a Resort which has a scheduled completion date not more than six
months after the end of the Due Period during which such date occurs and which are not Delayed
Completion Green Loans.



     “Six-Month Green Loans Excess Amount” shall mean, on any date, the amount by which,
(i) the sum of (A) the Loan Balances on such date for all Pledged Loans which are Six-Month Green
Loans as of the last day of the immediately preceding Due Period and (B) the Series 2002-1 Loan
Balance on such date of all Series 2002-1 Pledged Loans which are Six-Month Green Loans (as such
term is defined in the Series 2002-1 Indenture) as of the last day of such Due Period exceeds (ii)
ten percent (10%) of the sum of (A) the Adjusted Loan Balance and (B) the Series 2002-1 Reference
Loan Balance on such date. Notwithstanding the above, on any date as of which a Rating Downgrade
Condition existed on the last day of the immediately preceding Due Period, the Six-Month Green
Loans Excess Amount shall mean the sum of the Loan Balances on such date for all Pledged Loans
which are Six-Month Green Loans as of the last day of such Due Period.



     “State” shall mean any one of the 50 states of the United States plus the District of
Columbia.



     “State Concentration Excess Amount” shall mean, on any date, the sum of (i) with
respect to each State other than California, the amount by which the sum of the Loan Balances on
such date of all Pledged Loans of Obligors with mailing addresses located in such State on the last
date of the immediately preceding Due Period exceeds twenty percent (20%) of the Adjusted Loan
Balance on such date plus (ii) with respect to California, the amount by which the sum of the Loan
Balances on such date of all Pledged Loans of Obligors with mailing addresses located in California
on the last day of the immediately preceding Due Period exceeds thirty percent (30%) of the
Adjusted Loan Balance on such date.



     “STCRF” shall mean Sierra Timeshare Conduit Receivables Funding, LLC, a Delaware
limited liability company and its successors and assigns.



     “Step-Up CP Interest” shall have the meaning specified in the Note Purchase Agreement.



     “Subsidiary” shall mean, as to any Person, 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 by such Person.



     “Substitution Adjustment Amount” shall have the meaning specified in the Depositor
Purchase Agreement.



     “Successor Servicer” shall have the meaning set forth in Section 12.2.



     “Supplemental Grant” shall mean, with respect to any Additional Pledged Loans Granted
as provided in Section 5.1 of this Indenture, a Supplemental Grant substantially in the form of
Exhibit A which shall be accompanied by an amendment which amends the Series 2008-A Loan



32









 







Schedule listing such Loans and which shall be deemed to be incorporated into and made a part
of this Indenture.



     “Tax Sharing Agreement” shall mean the Tax Sharing Agreement dated as of November 7,
2008 by and among the Issuer, Wyndham Worldwide and WCF as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.



     “Termination Date” shall mean the earliest to occur of (i) the Mandatory Redemption
Date (unless repayment of the Series 2008-A Notes is waived in accordance with Section 2.13(a)),
(ii) the Maturity Date and (iii) the first Payment Date on which the Liquidity Termination Date has
occurred with respect to any Purchaser Group.



     “Termination Notice” shall have the meaning specified in Section 12.1.



     “Three Month Rolling Average Delinquency Ratio” shall mean for any Payment Date, the
sum of the Delinquency Ratios for such Payment Date and each of the two immediately preceding
Payment Dates divided by three.



     “Timeshare Property” shall, with respect to any Pledged Loan, have the meaning
assigned to that term in the Seller Purchase Agreement under which such Pledged Loan was
transferred to the Depositors.



     “Timeshare Property Regime” shall, with respect to any Pledged Loan, have the meaning
assigned to that term in the Seller Purchase Agreement, under which such Pledged Loan was
transferred to the Depositor.



     “Timeshare Upgrade” shall, with respect to any Pledged Loan, have the meaning assigned
to that term in the Seller Purchase Agreement, under which such Pledged Loan was transferred to the
Depositor.



     “Title Clearing Agreement” shall, with respect to any Pledged Loan, have the meaning
assigned to that term in the Seller Purchase Agreement, under which such Pledged Loan was
transferred to the Depositor.



     “Transition Period” shall mean the period from the date a Seller acquires an
organization, facility or program from an unrelated entity to the date on which such Seller has
fully converted the servicing of Loans related to such organization, facility or program to the
Servicer’s Credit Standards and Collection Policies.



     “Transition Period Excess Amount” shall mean, on any date, the amount by which the sum
of the Loan Balances on such date for all Pledged Loans which are Acquired Portfolio Loans and for
which the Transition Period has extended beyond 120 days and the Transition Period has not been
completed as of the last day of the immediately preceding Due Period exceeds ten percent (10%) of
the Adjusted Loan Balance on such date.



     “Trustee” shall mean Wells Fargo Bank, National Association, or its successor in
interest, or any successor trustee appointed as provided in this Indenture.



33









 





     “Trustee Fee Letter” shall mean the schedule of fees attached as Schedule 1, and all
amendments thereof, supplements thereto or replacements thereto.



     “Twelve-Month Green Loans” shall mean, as of any date, Green Loans which finance a
Timeshare Property related to a Resort which has a scheduled completion date more than six months
but not more than 12 months after the end of the Due Period during which such date occurs and which
are not Delayed Completion Green Loans.



     “Twelve-Month Green Loans Excess Amount” shall mean, on any date, the amount by which
(i) the sum (A) of the Loan Balances on such date for all Pledged Loans which are Twelve-Month
Green Loans as of the last day of the immediately preceding Due Period and (B) the Series 2002-1
Loan Balance on such date of all Series 2002-1 Pledged Loans which are Twelve-Month Green Loans (as
such term is defined in the Series 2002-1 Indenture) as of the last day of such Due Period exceeds
(ii) five percent (5%) of the sum of (A) the Adjusted Loan Balance and (B) the Series 2002-1
Reference Loan Balance on such date. Notwithstanding the above, on any date as of which a Rating
Downgrade Condition existed on the last day of the immediately preceding Due Period, the
Twelve-Month Green Loans Excess Amount shall mean the sum of the Loan Balances on such date for all
Pledged Loans which are Twelve-Month Green Loans as of the last day of the immediately preceding
Due Period.



     “Twelve-Month Plus Green Loans” shall mean, as of any date, Green Loans which finance
a Timeshare Property related to a Resort which has a scheduled completion date more than 12 months
after the end of the Due Period during which such date occurs and which are not Delayed Completion
Green Loans.



     “UCC” shall mean the Uniform Commercial Code, as amended from time to time, as in
effect in any applicable jurisdiction.



     “UDI” shall have the meaning assigned thereto in each Seller Purchase Agreement.



     “Unused Fees” shall mean with respect to any Purchaser Group, the unused fee described
in the Fee Letter.



     “Vacation Credits” shall mean ownership interests in WorldMark that entitle the owner
thereof to use WRDC Resorts that are owned by WorldMark.



     “WCF” shall mean Wyndham Consumer Finance, Inc., a Delaware corporation.



     “Weighted Average Series 2008-A Loans Rate” shall mean, with respect to any Accrual
Period, the weighted average of the Contract Rates for all Pledged Loans as the last day of the Due
Period immediately preceding the related Payment Date.



     “WorldMark” shall mean WorldMark, The Club, a California non-profit mutual benefit
corporation, and its successors in interest.



     “WorldMark Adjusted Loan Balance” shall mean, on any date, the Loan Balances on such
date of all WorldMark Loans minus the sum of (i) the Loan Balances of any WorldMark Loans which are
Defaulted Loans as of the last day of the immediately preceding Due Period, (ii)



34









 







the Loan Balances of any WorldMark Loans which are Delinquent Loans as of the last day of the
immediately preceding Due Period, (iii) the Loan Balances of any WorldMark Loans which are
Defective Loans as of the last day of the immediately preceding Due Period, (iv) the portion of the
FICO Score of 7-Year Loans Excess Amount comprised of WorldMark Loans on such date and (v) the
portion of the FICO Score of 10-Year Loans Excess Amount comprised of WorldMark Loans on such date.



     “WorldMark Loans” shall mean Pledged Loans originated by WRDC.



     “WorldMark Loan Excess Amount” shall mean, on any date, the amount by which (i) the
sum of the Loan Balances on such date for all Pledged Loans which are WorldMark Loans exceeds (ii)
45% of the Adjusted Loan Balance on such date.



     “WorldMark Loan FICO Score 650 Excess Amount” shall mean, on any date, the amount by
which (i) the sum of Loan Balances on such date for all Pledged Loans that are WorldMark Loans that
have a FICO Score of 649 or less exceeds (ii) 25% of the WorldMark Adjusted Loan Balance on such
date.



     “WorldMark Loan FICO Score 700 Excess Amount” shall mean, on any date, the amount by
which (i) the sum of Loan Balances on such date for all Pledged Loans that are WorldMark Loans that
have a FICO Score of 699 or less exceeds (ii) the sum of (A) 55% of the WorldMark Adjusted Loan
Balance and (B) the WorldMark Loan FICO Score 650 Excess Amount on such date.



     “WorldMark Resorts” shall mean resorts developed by WRDC in which WRDC sells vacation
ownership interests .



     “WRDC” shall mean Wyndham Resort Development Corporation, an Oregon corporation and
its successors and assigns.



     “WRDC California Loan” shall mean a Pledged Loan which was originated by WRDC and
relates to Vacation Credits sold in California.



     “WRDC Timeshare Upgrade” shall mean a Loan which was sold to the Depositor by WRDC and
with respect to which the Obligor purchases a Timeshare Upgrade.



     “WVRI” shall mean Wyndham Vacation Resorts, Inc., a Delaware corporation and its
successors and assigns.



     “Wyndham Adjusted Loan Balance” shall mean, on any date, the Loan Balances on such
date of all Wyndham Loans minus the sum of (i) the Loan Balances of any Wyndham Loans which are
Defaulted Loans as of the last day of the immediately preceding Due Period, (ii) the Loan Balances
of any Wyndham Loans which are Delinquent Loans as of the last day of the immediately preceding Due
Period, (iii) the Loan Balances of any Wyndham Loans which are Defective Loans as of the last day
of the immediately preceding Due Period, (iv) the portion of the FICO Score of 7-Year Loans Excess
Amount comprised of Wyndham Loans on such date and (v) the portion of the FICO Score of 10-Year
Loans Excess Amount comprised of Wyndham Loans on such date.




35











 





     “Wyndham Loans” shall mean Pledged Loans sold to the Depositor by WCF excluding
WorldMark Loans.



     “Wyndham Loan FICO Score 650 Excess Amount” shall mean, on any date, the amount by
which (i) the sum of Loan Balances on such date for all Pledged Loans that are Wyndham Loans that
have a FICO Score of 649 or less exceeds (ii) 20% of the Wyndham Adjusted Loan Balance on such
date.



     “Wyndham Loan FICO Score 700 Excess Amount” shall mean, on any date, the amount by
which (i) the sum of Loan Balances on such date for all Pledged Loans that are Wyndham Loans that
have a FICO Score of 699 or less exceeds (ii) the sum of (A) 45% of the Wyndham Adjusted Loan
Balance and (B) the Wyndham Loan FICO Score 650 Excess Amount on such date.



     “Wyndham Worldwide” shall mean Wyndham Worldwide Corporation and its successors and
assigns.



     Section 1.2. Other Definitional Provisions.



     (a) Terms used in this Indenture and not otherwise defined herein shall have the meanings
ascribed to them in the Existing Seller Purchase Agreement or the Depositor Purchase Agreement,
each as in effect as of the Closing Date.



     (b) All terms defined in this Indenture shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein.



     (c) As used in this Indenture and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in Section 1.1, and accounting terms
partly defined in Section 1.1 to the extent not defined, shall have the respective meanings given
to them under GAAP as in effect from time to time. To the extent that the definitions of
accounting terms herein or in any certificate or other document delivered pursuant hereto are
inconsistent with the meanings of such terms under GAAP, the definitions contained herein or in any
such certificate or other document shall control.



     (d) Any reference to each Rating Agency shall only apply to any specific rating agency if such
rating agency is then rating the Series 2008-A Notes.



     (e) Unless otherwise specified, references to any amount as on deposit or outstanding on any
particular date shall mean such amount at the close of business on such day.



     (f) Terms used herein that are defined in the New York Uniform Commercial Code (the “New
York UCC”) and not otherwise defined herein shall have the meanings set forth in the New York
UCC, unless the context requires otherwise. Any reference herein to a “beneficial interest” in a
security also shall mean, unless the context otherwise requires, a security entitlement with
respect to such security, and any reference herein to a “beneficial owner” or “beneficial holder”
of a security also shall mean, unless the context otherwise requires, the holder of a security
entitlement with respect to such security. Any reference herein to money or
other property that is to be deposited in or is on deposit in a securities account shall also
mean that such money or other property is to be credited to, or is credited to, such securities
account.



36









 





     (g) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Indenture shall refer to this Indenture as a whole and not to any particular provision of this
Indenture; and Article, Section, subsection, Schedule and Exhibit references contained in this
Indenture are references to Articles, Sections, subsections, Schedules and Exhibits in or to this
Indenture unless otherwise specified.



     (h) In determining whether the requisite percentage of Noteholders or of all Noteholders have
concurred in any direction, waiver or consent, Series 2008-A Notes owned by the Issuer or an
Affiliate of the Issuer shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in making such determination or
relying on any such direction, waiver or consent, only Series 2008-A Notes which a Responsible
Officer of the Trustee knows pursuant to written notice (or in the case of the Issuer, by reference
to the Note Register if the Trustee is also the Note Registrar) are so owned shall be so
disregarded. Series 2008-A Notes so owned that have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to such Series 2008-A Notes and that the pledgee is not the Issuer, any other
obligor upon the Series 2008-A Notes, the Depositor, the Servicer or any Affiliate of any of the
foregoing Persons.



     Section 1.3. Intent and Interpretation of Documents



     The arrangement by this Indenture, the Seller Purchase Agreements, the Depositor Purchase
Agreement, the Custodial Agreement, the Collateral Agency Agreement and the other Facility
Documents is intended not to be a taxable mortgage pool for federal income tax purposes, and is
intended to constitute a sale of the Loans by the applicable Seller to the Depositor for commercial
law purposes. Each of the Depositor and the Issuer are and are intended to be a legal entity
separate and distinct from each Seller for all purposes other than tax purposes. This Indenture
and the other Facility Documents shall be interpreted to further these intentions.



ARTICLE II




THE NOTES




     Section 2.1. Form Generally.



     (a) The Series 2008-A Notes shall be issued in fully registered form without interest coupons.
The Series 2008-A Notes and the Trustee’s or Authentication Agent’s certificate of authentication
thereon (the “Certificate of Authentication”) shall be in substantially the forms set forth
as Exhibit B, with such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may, consistently herewith, be
determined by the Authorized Officers of the Issuer executing the Series 2008-A Notes as evidenced
by their execution of the Series 2008-A Notes. Any portion of the text of any



37









 







Series 2008-A Note may be set forth on the reverse or subsequent pages thereof, with an
appropriate reference thereto on the face of the Note.



     The Series 2008-A Notes shall be typewritten, word processed, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by the officers
executing such Series 2008-A Notes, as evidenced by their execution of such Series 2008-A Notes.



     All Series 2008-A Notes shall be dated as provided in Section 2.15.



     (b) Each Series 2008-A Note shall have a grid attached to it on which there shall be recorded
the advances made on such Series 2008-A Note and all principal payments made on that Note;
provided, that such amounts may instead be recorded in the Conduit’s, Alternative Investor’s or
Funding Agent’s records and the failure to make such recordings shall not affect the obligations of
the Issuer hereunder or under such Series 2008-A Note.



     (c) One Series 2008-A Note shall initially be issued for each Purchaser Group and be
registered in the name of the Funding Agent for that Purchaser Group as set forth in Exhibit B.



     Section 2.2. Denominations.



     Except as otherwise specified in this Indenture and the Series 2008-A Notes, each Series
2008-A Note shall be issued in fully registered form in minimum amounts of U.S. $1,000.



     Section 2.3. Execution, Authentication and Delivery.



     Each Series 2008-A Note shall be executed by manual or facsimile signature on behalf of the
Issuer by an Authorized Officer of the Issuer.



     Series 2008-A Notes bearing the manual or facsimile signature of an individual who was, at the
time when such signature was affixed, authorized to sign on behalf of the Issuer shall not be
rendered invalid, notwithstanding the fact that such individual ceased to be so authorized prior to
the authentication and delivery of such Series 2008-A Notes or does not hold such office at the
date of issuance such Series 2008-A Notes.



     At any time and from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Series 2008-A Notes executed by the Issuer to the Trustee for authentication and
delivery, and the Trustee shall authenticate and deliver such Series 2008-A Notes as provided in
this Indenture and not otherwise.



     No Series 2008-A Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Series 2008-A Note a certificate of
authentication substantially in the form provided for herein executed by or on behalf of the
Trustee by the manual signature of a duly authorized signatory, and such certificate upon any
Series 2008-A Note shall be conclusive evidence, and the only evidence, that such Series 2008-A
Note has been duly authenticated and delivered hereunder.



     Section 2.4. Authentication Agent.



38









 





     (a) The Trustee may appoint one or more Authentication Agents with respect to the Series
2008-A Notes which shall be authorized to act on behalf of the Trustee in authenticating the Series
2008-A Notes in connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Series 2008-A Notes. Whenever reference is made in this Indenture to the
authentication of Series 2008-A Notes by the Trustee or the Trustee’s certificate of
authentication, such reference shall be deemed to include authentication on behalf of the Trustee
by an Authentication Agent and a certificate of authentication executed on behalf of the Trustee by
an Authentication Agent. Each Authentication Agent must be acceptable to the Issuer and the
Servicer.



     (b) Any institution succeeding to the corporate agency business of an Authentication Agent
shall continue to be an Authentication Agent without the execution or filing of any power or any
further act on the part of the Trustee or such Authentication Agent.



     (c) An Authentication Agent may at any time resign by giving notice of resignation to the
Trustee and to the Issuer. The Trustee may at any time terminate the agency of an Authentication
Agent by giving notice of termination to such Authentication Agent and to the Issuer and the
Servicer. Upon receiving such a notice of resignation or upon such a termination, or in case at
any time an Authentication Agent shall cease to be acceptable to the Trustee or the Issuer, the
Trustee may promptly appoint a successor Authentication Agent. Any successor Authentication Agent
upon acceptance of its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as an Authentication
Agent. No successor Authentication Agent shall be appointed unless acceptable to the Issuer and
the Servicer.



     (d) The Issuer agrees to pay to each Authentication Agent from time to time reasonable
compensation for its services under this Section 2.4.



     (e) The provisions of Sections 13.1 and 13.3 shall be applicable to any Authentication Agent.



     (f) Pursuant to an appointment made under this Section 2.4, the Series 2008-A Notes may have
endorsed thereon, in lieu of or in addition to the Trustee’s certificate of authentication, an
alternative certificate of authentication in substantially the following form:



     “This is one of the Series 2008-A Notes described in the within-mentioned agreement.



	 	 	 	 	 
	 	                                                  



                                                  

as Authentication Agent

for the Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory” 	 
	 	 	 	 
	 




     Section 2.5. Registration of Transfer and Exchange of Series 2008-A Notes.



39









 





     (a) The Issuer shall cause to be kept at the Corporate Trust Office, a register (the “Note
Register”) in which, subject to such reasonable regulations as it may prescribe, the
registration of Series 2008-A Notes and the registration of transfers of Series 2008-A Notes shall
be provided. A note registrar (which may be the Trustee) (in such capacity, the “Note
Registrar”) shall provide for the registration of Registered Notes and transfers and exchanges
of Registered Notes as herein provided. The Note Registrar shall initially be the Trustee. Any
reference in this Indenture to the Note Registrar shall include any co-note registrar unless the
context requires otherwise.



     The Trustee may revoke such appointment and remove any Note Registrar if the Trustee
determines in its sole discretion that such Note Registrar failed to perform its obligations under
this Indenture in any material respect. Any Note Registrar shall be permitted to resign as Note
Registrar upon thirty (30) days’ notice to the Issuer and the Trustee; provided, however, that such
resignation shall not be effective and such Note Registrar shall continue to perform its duties as
Note Registrar until the Trustee has appointed a successor Note Registrar (which may be the
Trustee) reasonably acceptable to the Issuer.



     Upon surrender for registration of transfer or exchange of any Registered Note at any office
or agency of the Note Registrar maintained for such purpose, subject to any transfer restrictions
contained in this Indenture, one or more new Registered Notes in authorized denominations of like
tenor and aggregate principal amount shall be executed, authenticated and delivered, in the name of
the designated transferee or transferees.



     At the option of a Registered Noteholder, subject to the provisions of this Section 2.5 and
any restrictions contained in this Indenture, Registered Notes may be exchanged for other
Registered Notes of authorized denominations of like tenor and aggregate principal amount, upon
surrender of the Registered Notes to be exchanged at any such office or agency.



     All Series 2008-A Notes issued upon any registration of transfer or exchange of Series 2008-A
Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture as the Series 2008-A Notes surrendered upon such registration of
transfer or exchange.



     The preceding provisions of this Section 2.5(a) notwithstanding, the Trustee or the Note
Registrar, as the case may be, shall not be required to register the transfer of or exchange any
Series 2008-A Note for a period of fifteen (15) days preceding the due date for any payment with
respect to the Note.



     Whenever any Series 2008-A Notes are so surrendered for exchange, subject to any restrictions
contained in this Indenture, the Issuer shall execute and the Trustee shall authenticate and
deliver the Series 2008-A Notes which the Noteholder making the exchange is entitled to receive.
Every Series 2008-A Note presented or surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in a form satisfactory to the Trustee or the Note
Registrar duly executed by the Noteholder or the attorney-in-fact thereof duly authorized in
writing.



40









 





     Series 2008-A Notes issued upon transfer, exchange or replacement of other Series 2008-A Notes
shall represent the outstanding principal amount of the Series 2008-A Notes so transferred,
exchanged or replaced. If any Series 2008-A Note is divided into more than one Series 2008-A Note
in accordance with this Article II the aggregate principal amount of the Series 2008-A Notes
delivered in exchange shall, in the aggregate be equal to the principal amount of the divided
Series 2008-A Note.



     No service charge shall be made for any registration of transfer or exchange of Series 2008-A
Notes, but the Note Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any such transfer or exchange.



     All Series 2008-A Notes surrendered for registration of transfer and exchange or for payment
shall be canceled and disposed of in a manner satisfactory to the Trustee.



     The Issuer shall execute and deliver to the Trustee Series 2008-A Notes in such amounts and at
such times as are necessary to enable the Trustee to fulfill its responsibilities under this
Indenture and the Series 2008-A Notes.



     (b) The Note Registrar will maintain at its expense in Minneapolis, Minnesota, or New York,
New York an office or agency where Series 2008-A Notes may be surrendered for registration of
transfer or exchange.



     Section 2.6. Mutilated, Destroyed, Lost or Stolen Series 2008-A Notes.



     If (a) any mutilated Series 2008-A Note is surrendered to the Note Registrar, or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and
(b) in case of destruction, loss or theft there is delivered to the Note Registrar such security or
indemnity as may be required by it to hold the Issuer, the Note Registrar and the Trustee harmless,
then, in the absence of notice to the Issuer, the Note Registrar or the Trustee that such Series
2008-A Note has been acquired by a protected purchaser, the Issuer shall execute, and the Trustee
shall authenticate and the Note Registrar shall deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Series 2008-A Note of like tenor and
aggregate principal amount, bearing a number not contemporaneously outstanding; provided, however,
that if any such mutilated, destroyed, lost or stolen Series 2008-A Note shall have become or
within seven days shall be due and payable, or shall have been selected or called for redemption,
instead of issuing a replacement Note, the Issuer may pay such Series 2008-A Note without surrender
thereof, except that any mutilated Series 2008-A Note shall be surrendered. If, after the delivery
of such replacement Series 2008-A Note or payment of a destroyed, lost or stolen Series 2008-A Note
pursuant to the proviso to the preceding sentence, a protected purchaser of the original Series
2008-A Note in lieu of which such replacement Series 2008-A Note was issued presents for payment
such original Note, the Issuer and the Trustee shall be entitled to recover such replacement Series
2008-A Note (or such payment) from the Person to whom it was delivered or any Person taking such
replacement Series 2008-A Note from such Person to whom such replacement Series 2008-A Note was
delivered or any assignee of such Person, except a protected purchaser and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Trustee in connection therewith.



41









 





     In connection with the issuance of any replacement Series 2008-A Note under this Section 2.6,
the Issuer or the Note Registrar may require the payment by the Holder of such Series 2008-A Note
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the reasonable fees and expenses of the
Trustee or the Note Registrar) connected therewith.



     Any replacement Series 2008-A Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Series 2008-A Note shall constitute complete and indefeasible
evidence of a debt of the Issuer, as if originally issued, whether or not the destroyed, lost or
stolen Series 2008-A Note shall be found at any time, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Series 2008-A Notes duly issued
hereunder.



     The provisions of this Section 2.6 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 Series 2008-A Notes.



     Section 2.7. Persons Deemed Owners.



     The Trustee, the Paying Agent, the Note Registrar, the Issuer and any agent of any of them may
prior to due presentation of a Registered Note for registration of transfer, treat the Person in
whose name any Registered Note is registered as the owner of such Registered Note for the purpose
of receiving distributions pursuant to the terms of this Indenture and for all other purposes
whatsoever, and, in any such case, neither the Trustee, the Paying Agent, the Note Registrar, the
Issuer nor any agent of any of them shall be affected by any notice to the contrary.



     Section 2.8. Appointment of Paying Agent.



     The Paying Agent shall make distributions to the Funding Agents on behalf of the applicable
Noteholders from the Collection Account pursuant to the provisions of this Indenture and the Note
Purchase Agreement and shall report the amounts of such distributions to the Issuer. Any Paying
Agent shall have the revocable power to withdraw funds from the Collection Account for the purpose
of making the distributions referred to above. The Issuer may revoke such power and remove the
Paying Agent if the Issuer determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Indenture in any material respect. The Issuer reserves
the right at any time to vary or terminate the appointment of a Paying Agent for the Series 2008-A
Notes, and to appoint additional or other Paying Agents, provided that it will at all times
maintain the Trustee as a Paying Agent. In the event that any Paying Agent shall resign, the
Issuer may appoint a successor to act as Paying Agent. Any reference in this Indenture to the
Paying Agent shall include any co-paying agent unless the context requires otherwise.



     Section 2.9. Cancellation.



     All Series 2008-A Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Issuer may at any time deliver to the Trustee for
cancellation any Series 2008-A Notes previously authenticated and delivered hereunder which



42









 







the Issuer may have acquired in any lawful manner whatsoever, and all Series 2008-A Notes so
delivered shall be promptly cancelled by the Trustee. No Series 2008-A Notes shall be
authenticated in lieu of or in exchange for any Series 2008-A Notes cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled Series 2008-A Notes held
by the Trustee shall be destroyed unless the Issuer shall direct by a timely order that they be
returned to it.



     Section 2.10. Confidentiality. The Trustee and the Collateral Agent hereby agree not
to disclose to any Person any of the names or addresses of the Obligors under any of the Pledged
Loans or other information contained in the Series 2008-A Loan Schedule or the data transmitted to
the Trustee or the Collateral Agent hereunder, except (i) as may be required by law, rule,
regulation or order applicable to it or in response to any subpoena or other valid legal process,
(ii) as may be necessary in connection with any request of any federal or state regulatory
authority having jurisdiction over it or the National Association of Insurance Commissioners, (iii)
in connection with the performance of its duties hereunder, (iv) to a Successor Servicer appointed
pursuant to Section 12.2, (v) in enforcing the rights of Noteholders and (vi) as requested by any
Person in connection with the financing statements filed pursuant to this Indenture. The Trustee
and the Collateral Agent hereby agree to take such measures as shall be reasonably requested by the
Issuer of it to protect and maintain the security and confidentiality of such information. The
Trustee and the Collateral Agent shall use reasonable efforts to provide the Issuer with written
notice five days prior to any disclosure pursuant to this Section 2.10.



     Section 2.11. 144A Information. The Issuer agrees to furnish to the Trustee, for
delivery to each Noteholder or any prospective transferee of a Series 2008-A Note at such
Noteholder’s (or transferee’s) request, all information with respect to the Issuer, the Depositor,
the Sellers, the Performance Guarantor or the Servicer, the Pledged Loans or the Series 2008-A
Notes required pursuant to Rule 144A promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended, to enable such Noteholder to effect resales of the Series
2008-A Notes (or interests therein) pursuant to such rule.



     Section 2.12. Authorized Amount; Conditions to Initial Issuance. (a) The Series
2008-A Notes shall be issued on the Closing Date in a maximum principal amount of $942,500,000.
The Noteholders shall fund the initial Notes Principal Amount on the Initial Advance Date and the
Notes Principal Amount may be further increased from time to time as provided in Section 2.17 of
this Indenture and the terms of the Note Purchase Agreement; provided, however, that the Series
2008-A Notes Principal Amount shall at no time exceed the then effective Facility Limit and the
outstanding principal amount of the Series 2008-A Note held by any single Purchaser Group shall not
exceed the then effective Purchaser Group Commitment Amount for such Purchaser Group.



     (b) The following shall be conditions to the initial funding of the Series 2008-A Notes on the
Initial Advance Date:




     (i) The Issuer shall have entered into and Granted to the Trustee the
Hedge Agreement with terms described in Section 4.7;



43









 






     (ii) The premium due for the Hedge Agreement as of the Initial Advance
Date shall have been paid as of the Initial Advance Date; and




     (iii) Any additional conditions set forth in Section 2.2 or Section 3.3
of the Note Purchase Agreement shall have been satisfied.



     Section 2.13. Principal, Interest and NPA Costs. (a) Principal. (i) The
Series 2008-A Notes shall mature and be fully due and payable on the Maturity Date.



     (ii) The Series 2008-A Notes shall be subject to mandatory redemption in whole by the Issuer
on the Mandatory Redemption Date and the entire principal amount of the Series 2008-A 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 Series 2008-A Notes which
would be outstanding on such Mandatory Redemption Date.



     (iii) To the extent of Available Funds distributed as provided in provision SIXTH, EIGHTH or
NINTH of Section 4.1 on any Payment Date, principal of the Series 2008-A Notes will be subject to
mandatory prepayment on such Payment Date in the amount of the Monthly Principal and the Green Loan
Deficiency Principal Distribution Amount, if any. Series 2008-A Notes will also be subject to
prepayment on the date designated under the terms of Section 2.19. All payments of principal on
the Series 2008-A Notes shall be made pro rata based on the outstanding principal amount of the
Series 2008-A Notes. All outstanding principal of the Series 2008-A Notes (unless sooner paid)
will be due and payable on the Maturity Date.



     (iv) On the Series 2002-1 Termination Date, the Issuer shall repay the Notes Principal Amount
in an amount equal to the Series 2002-1 Collateral Deficiency Amount, if any. If (A) the amount of
such required payment equals zero, or (B) the Issuer makes the applicable payments required in the
preceding sentence, on the later of the Series 2002-1 Termination Date and the date of such
required payments, if any, the Lien of this Indenture on the Membership Interest Collateral shall
be released. Upon the release of the Membership Interest Collateral under this Section
2.13(a)(iv), the 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 Trustee’s right, title and interest in and to the Membership Interest Collateral, and
all monies due or to become due with respect thereto, free and clear of the Lien of this Indenture,
and the Trustee shall execute such documents, releases and instruments of transfer or assignment
and take such other actions as shall reasonably be requested by the Issuer to effect the release of
the Membership Interest Collateral pursuant to this Section 2.13(a)(iv).



     (b) Interest. Interest on each Series 2008-A Note shall be due and payable on each
Payment Date in the amount of the Notes Interest calculated for that Series 2008-A Note for that
Payment Date. On the Determination Date prior to each Payment Date, the Deal Agent shall provide
written notice to the Issuer, the Servicer and the Trustee of the aggregate amount of Notes
Interest to be paid on such Payment Date on all Series 2008-A Notes and the components used in
calculating the Notes Interest including the amount of Carrying Costs and Purchaser Group Fees for
each Purchaser Group for such Payment Date.



44









 





     (c) NPA Costs. NPA Costs shall be due and payable to each Funding Agent on each
Payment Date. On the Determination Date prior to each Payment Date, the Deal Agent shall provide
written notice to Issuer, the Servicer and the Trustee of the aggregate amount of NPA Costs due on
such Payment Date and the amount due to each Purchaser Group.



     (d) Payments in respect of interest on and principal of and any other amount payable on or in
respect of any Series 2008-A Notes including NPA Costs shall be made on each Payment Date by wire
transfer in immediately available funds sent by the Trustee on or prior to 11:00 a.m. New York City
time on the Payment Date with respect to any Series 2008-A Note in accordance with Section 2.16(a).



     Section 2.14. Nonrecourse to the Issuer. The Series 2008-A Notes are limited
obligations of the Issuer payable only from and to the extent of the Collateral and, to the extent
provided herein, the Membership Interest Collateral. The Holders of the Series 2008-A Notes shall
have recourse to the Issuer only to the extent of the Collateral and, to the extent provided
herein, the Membership Interest Collateral, and to the extent such Collateral and Membership
Interest Collateral is not sufficient to pay the Series 2008-A Notes and the Notes Interest thereon
in full and all other obligations of the Issuer under this Indenture and the other Facility
Documents, the Holders of the Series 2008-A Notes and holders of other obligations payable from the
Collateral and the Membership Interest Collateral shall have no rights in any other assets which
the Issuer may have including, but not limited to any assets of the Issuer which may be Granted to
secure other obligations. To the extent any Noteholder is deemed to have any interest in any
assets of the Issuer which assets have been Granted to secure other obligations, such Noteholder
agrees that its interest in those assets is subordinated to claims or rights of such other
debtholders with respect to those assets. Such Noteholders further agree that such agreement
constitutes a subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.



     Section 2.15. Dating of the Series 2008-A Notes.



     Each Series 2008-A Note authenticated and delivered by the Trustee or the Authentication Agent
to or upon Issuer Order on or before the Closing Date shall be dated as of the Closing Date. All
other Series 2008-A Notes that are authenticated after the Closing Date for any other purpose under
this Indenture shall be dated the date of their authentication.



     Section 2.16. Payment on the Series 2008-A Notes; Withholding Tax.



     (a) The Trustee shall pay all amounts paid to or deposited with it for payment to any
Purchaser Group to the account or accounts so specified by the related Funding Agent; provided that
such account or accounts for each Purchaser Group on the Closing Date shall be deemed to be those
indicated under “Account for Payment” under each Conduit’s or Alternate Investor’s signature to the
Note Purchase Agreement (a copy of which shall be provided to the Trustee).



     (b) As a condition to the payment of principal of and interest on any Series 2008-A Note
without the imposition of U. S. withholding tax, the Issuer shall require compliance with Section
4.3(c) of the Note Purchase Agreement.



45









 





     Section 2.17. Increases in Notes Principal Amount. The Noteholders agree by
acceptance of the Series 2008-A Notes that, on any Payment Date (or, following the Advance Decrease
Date, on any date), the Issuer may from time to time by irrevocable written notice substantially in
the form attached to the Note Purchase Agreement given to the Deal Agent, the Trustee and the
Servicer and subject to the terms and conditions of the Note Purchase Agreement, request that the
Noteholders fund an Increase in the aggregate amount specified in the notice and on the date
specified in the 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 2.18. 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 Deal Agent
reduce, in part, the Facility Limit to (but not below) the Notes Principal Amount. Any such
reduction in the Facility Limit shall be in an amount not less than $20 million and in increments
of $1 million in excess thereof and shall be applied to reduce the Purchaser Group Commitment
Amount of each Purchaser Group on a pro rata basis pursuant to the terms of the Note Purchase
Agreement.



     Section 2.19. Optional Repayment. (a) The Issuer may prepay the Series 2008-A Notes
on any day, in whole or in part, on ten (10) days’ prior written notice to the Deal Agent (or such
lesser notice period as shall be acceptable to the Deal Agent) (such notice, a “Prepayment Notice”)
in accordance with Section 2.3 of the Note Purchase Agreement, provided that (i) the Notes
Principal Amount prepaid is at least $10,000,000 (unless a lesser amount is agreed to by the Deal
Agent) and (ii) the Issuer pays to the Deal Agent, for distribution to the Funding Agents, on the
date of prepayment, the amounts set forth on the Note Purchase Agreement.



     (b) The applicable Prepayment Notice shall state (i) the principal amount of the Series 2008-A
Notes to be paid and (ii) the aggregate Loan Balance of the Pledged Loans to be released under
Section 5.4 at the time of the prepayment of the Series 2008-A Notes, with aggregate Loan Balances
in an amount such that, after giving effect to such release, the Borrowing Base shall not exceed
the Notes Principal Amount calculated immediately after the prepayment of the Series 2008-A Notes.
Reference is made to Section 5.4 for the conditions to and procedure for the release of the Pledged
Loans and the related Pledged Assets in connection with any such prepayment.



     (c) Upon prepayment of the Series 2008-A Notes in accordance with subsection (a), the Issuer
shall modify the existing Hedge Agreement in accordance with Section 4.7 such that the notional
amount shall at least equal to the Notes Principal Amount after the prepayment of the Series 2008-A
Notes.



     Section 2.20. Transfer Restrictions.



     (a) The Series 2008-A Notes have not been registered under the Securities Act or any state
securities law. Neither the Issuer nor the Trustee nor any other Person is obligated to register
the Series 2008-A Notes under the Securities Act or any other securities or “Blue Sky” laws or to
take any other action not otherwise required under this Indenture to permit the transfer of the
Series 2008-A Notes without registration.



46









 





     (b) No transfer of the Series 2008-A Notes or any interest therein (including without
limitation by pledge or hypothecation) shall be made except in compliance with the restrictions on
transfer set forth in this Section 2.20 (including the applicable legend to be set forth on the
face of the Series 2008-A Notes as provided in Exhibit B), in a transaction exempt from the
registration requirements of the Securities Act and applicable state securities or “Blue Sky” laws
(i) to a person who the transferor reasonably believes is a “qualified institutional buyer” within
the meaning thereof in Rule 144A (a “QIB”) and (B) that is aware that the resale or other transfer
is being made in reliance on Rule 144A.



     (c) Each Holder of the Note, by its acceptance thereof, will be deemed to have acknowledged,
represented to and agreed with the Issuer and, in the case of any transferee of a Purchaser, such
Purchaser as follows:




     (i) It understands that the Series 2008-A Notes may be offered and may
be resold by a Noteholder of the Series 2008-A Note only to QIBs pursuant to
Rule 144A.




     (ii) It understands that the Series 2008-A Notes have not been and will
not be registered under the Securities Act or any state or other applicable
securities law and that the Series 2008-A Notes, or any interest or
participation therein, may not be offered, sold, pledged or otherwise
transferred unless registered pursuant to, or exempt from registration
under, the Securities Act and any other applicable securities law.




     (iii) It acknowledges that none of the Issuer or any Purchaser or any
person representing the Issuer or a Noteholder has made any representation
to it with respect to the Issuer or the offering or sale of any Series
2008-A Notes. It has had access to such financial and other information
concerning the Issuer, the Series 2008-A Notes and the source of payment for
the Series 2008-A Notes as it has deemed necessary in connection with its
decision to purchase the Series 2008-A Notes.




     (iv) It is purchasing the Series 2008-A Notes for its own account, or
for one or more investor accounts for which it is acting as fiduciary or
agent, in each case for investment, and not with a view to, or for offer or
sale in connection with, any distribution thereof in violation of the
Securities Act, subject to any requirements of law that the disposition of
its property or the property of such investor account or accounts be at all
times within its or their control and subject to its or their ability to
resell such Series 2008-A Notes, or any interest or participation therein,
as described herein, in this Indenture and in the Note Purchase Agreement.




     (v) It acknowledges that the Issuer, the Noteholders and others will
rely on the truth and accuracy of the foregoing acknowledgments,
representations and agreements, and agrees that if any of the foregoing
acknowledgments, representations and agreements deemed to have been made by
it are no longer accurate, it shall promptly notify the Issuer.



47









 






     (vi) It is not and is not acquiring the Series 2008-A Notes by or on
behalf of, or with “plan assets” of, (i) an employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), whether or not subject to Title I of ERISA, (ii)
a plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended (the “Code”); (iii) an entity whose underlying assets
include “plan assets” by reason of a Plan’s investment in the Purchaser; or
(iv) a person who is otherwise a “benefit plan investor,” as defined in U.S.
Department of Labor (“DOL”) Regulation Section 2510.3-101 (a
“Benefit Plan Investor”), including any insurance company general
account or a governmental or foreign plan that is generally not subject to
ERISA or Section 4975(e) of the Code.




     (vii) With respect to any foreign purchaser claiming an exemption from
United States income or withholding tax, that it has delivered to the
Trustee a true and complete Form W-8 BEN or Form W-8ECI, indicating such
exemption or any successor or other forms and documentation as may be
sufficient under the applicable regulations for claiming such exemption.




     Except as provided in subsection (d) below, any transfer, resale, pledge or other
transfer of the Series 2008-A Notes contrary to the restrictions set forth above and in this
Indenture shall be deemed void ab initio by the Trustee unless using such restriction is
waived by the Issuer by a written instrument delivered to the Trustee.



     (d) 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 or more Alternate Investors party to
the Note Purchase Agreement, participating interests or security interests in the Series 2008-A
Notes provided that each Liquidity Provider or Alternate Investor shall, by any such purchase be
deemed to have acknowledged and agreed to the provisions of Section 2.20(c).



     Section 2.21. Tax Treatment. The Issuer has structured this Indenture and the Series
2008-A Notes with the intention that the Series 2008-A Notes will qualify under applicable tax law
as indebtedness of the Issuer, and the Issuer and each Noteholder by acceptance of its Series
2008-A Note agree to treat the Series 2008-A Notes (or beneficial interest therein) as indebtedness
for purposes of federal, state and local income or franchise taxes or any other tax imposed on or
measured by income.



     Section 2.22. Liquidity Termination Dates. (a) If a Liquidity Termination Date occurs
with respect to less than all Noteholders, then the Issuer, the Servicer, the Trustee and the
Collateral Agent shall enter into an indenture and servicing agreement substantially in the form of
Exhibit D, 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 succeeding such
Liquidity Termination Date an Exchange Note in a principal amount equal to the principal amount of
such Extending Noteholder’s Series 2008-A Note (or, in the case of any



48









 







Extending Noteholder which is extending its Liquidity Termination Date for an amount that is
less than its entire Purchaser Group 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 principal amount of the Exchanges Notes would not
be at least equal to $20,000,000, then the Issuer shall not issue any Exchange Notes and no
Liquidity Termination Date with respect to any Noteholder shall be extended; provided
further, however, that if, upon the issuance of the Exchange Notes, the Notes
Principal Amount for the Series 2008-A Notes would not be at least $20,000,000, then the Issuer
shall prepay the entire Notes Principal Amount pursuant to Section 2.19 immediately following the
issuance of the Exchange Notes.



     (b) Each Noteholder, by its acceptance of a Series 2008-A Note, hereby agrees that if it
becomes an Extending Noteholder and the Liquidity Termination Date occurs with respect to any
Noteholder, it will surrender its Series 2008-A Note to the Issuer in return for an Exchange Note
in an equal principal amount (or, in the case of any Extending Noteholder which is extending its
Liquidity Termination Date for an amount that is less than its entire Purchaser Group Commitment
Amount, the Extended Portion with respect to such Extending Noteholder) on the Payment Date
immediately succeeding the Liquidity Termination Date with respect to other Noteholder. Upon such
exchange the Series 2008-A Notes surrendered shall be deemed to be fully paid and the Trustee shall
cancel such Series 2008-A Notes.



     (c) In connection with the execution by the Issuer of an Exchange Notes Indenture on the
Payment Date immediately succeeding any Liquidity Termination Date, Pledged Loans with aggregate
Loan Balances not less than the product of (i) the Extending Noteholders’ Percentage with respect
to such Liquidity Termination Date and (ii) the Aggregate Loan Balance on such Payment Date shall
be released from the Lien of this Indenture pursuant to Section 5.5 and Granted 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 immediately
succeeding a Liquidity Termination Date, the Issuer, the Servicer, the Depositor, the Performance
Guarantor, each Extending Purchaser Group with respect to such Liquidity Termination Date and the
Deal Agent shall enter into a note purchase agreement with respect to the Exchange Notes,
substantially in the form of Exhibit F, together with any changes mutually acceptable to such
parties.



ARTICLE III




REPRESENTATIONS AND WARRANTIES OF THE ISSUER




     Section 3.1. Representations and Warranties Regarding the Issuer. The Issuer hereby
represents and warrants to the Trustee, the Collateral Agent and the Noteholders on the Closing
Date, on any Addition Date, on any date of an increase in the Facility Limit and on any Notes
Increase Date as follows:



     (a) Due Formation and Good Standing. The Issuer is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of Delaware, and has full
power, authority and legal right to own its properties and conduct its business as such



49









 







properties are presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under each of the Facility Documents to which it is a party.
The Issuer is duly qualified to do business and is in good standing as a foreign entity, and has
obtained all necessary licenses and approvals in each jurisdiction in which failure to qualify or
to obtain such licenses and approvals would render any Pledged Loan unenforceable by the Issuer or
would otherwise have a Material Adverse Effect with respect to the Issuer.



     (b) Due Authorization and No Conflict. The execution, delivery and performance by the
Issuer of each of the Facility Documents to which it is a party, and the consummation by the Issuer
of each of the transactions contemplated hereby and thereby, including without limitation the
acquisition of the Pledged Loans under the Depositor Purchase Agreement and the making of the
Grants contemplated hereunder, have in all cases been duly authorized by the Issuer by all
necessary action, do not contravene (i) the Issuer’s certificate of formation or the LLC Agreement,
(ii) any existing law, rule or regulation applicable to the Issuer, (iii) any contractual
restriction contained in any material indenture, loan or credit agreement, lease, mortgage, deed of
trust, security agreement, bond, note, or other material agreement or instrument binding on or
affecting the Issuer or its property or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting the Issuer or its property (except in the case of clause (ii) where such
contravention would not have a Material Adverse Effect with respect to the Issuer), and do not
result in or require the creation of any Lien upon or with respect to any of its properties (except
as provided in such Facility Documents); and no transaction contemplated hereby requires compliance
with any bulk sales act or similar law. Each of the other Facility Documents to which the Issuer
is a party have been duly executed and delivered by the Issuer.



     (c) Governmental and Other Consents. All approvals, authorizations, consents, orders
of any court or governmental agency or body required in connection with the execution and delivery
by the Issuer of any of the Facility Documents to which the Issuer is a party, the issuance of the
Series 2008-A Notes consummation by the Issuer of the transactions contemplated hereby or thereby,
the performance by the Issuer of and the compliance by the Issuer with the terms hereof or thereof,
have been obtained, except where the failure so to do would not have a Material Adverse Effect with
respect to the Issuer.



     (d) Enforceability of Facility Documents. Each of the Facility Documents to which the
Issuer is a party has been duly and validly executed and delivered by the Issuer and constitutes
the legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance
with its respective terms, except as enforceability may be subject to or limited by Debtor Relief
Laws or by general principles of equity (whether considered in a suit at law or in equity).



     (e) No Litigation. There are no proceedings or investigations pending or, to the best
knowledge of the Issuer, threatened, against the Issuer before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Indenture or any of the other Facility Documents, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Indenture or any of the other Facility
Documents, (iii) seeking any determination or ruling that would adversely affect the performance by
the Issuer of its obligations under this Indenture or any of the other Facility Documents to which
the Issuer is a party, (iv) seeking any determination or ruling that would



50









 







adversely affect the validity or enforceability of this Indenture or any of the other Facility
Documents or (v) seeking any determination or ruling which would be reasonably likely to have a
Material Adverse Effect with respect to the Issuer.



     (f) Use of Proceeds. All proceeds of the issuance of the Series 2008-A Notes shall be
used by the Issuer to acquire Loans from the Depositor under the Depositor Purchase Agreement, to
pay costs related to the issuance of the Series 2008-A Notes or to otherwise fund costs and
expenses permitted to be paid under the terms of the Facility Documents.



     (g) Governmental Regulations. The Issuer is not an “investment company” registered or
required to be registered under the Investment Company Act.



     (h) Margin Regulations. The Issuer is not engaged, principally or as one of its
important activities, in the business of extending credit for the purpose of “purchasing” or
“carrying” any “margin stock” (as each of the quoted terms is defined or used in any of Regulations
T, U or X of the Board of Governors of the Federal Reserve System, as in effect from time to time).
No part of the proceeds of any of the Series 2008-A Notes has been used for so purchasing or
carrying margin stock or for any purpose which violates, or which would be inconsistent with, the
provisions of any of Regulations T, U or X of the Board of Governors of the Federal Reserve System,
as in effect from time to time.



     (i) Location and Names of Issuer. The Issuer was formed on April 21, 2008 as a
limited liability company under the laws of the State of Delaware by filing a Certificate of
Formation with the name of Sierra Timeshare 2008-3 Receivables Funding, LLC and has at all times
since such date remained as a Delaware limited liability company. A Certificate of Amendment was
filed on September 30, 2008 to change the name of the Issuer to Sierra Timeshare Conduit
Receivables Funding II, LLC. Since such Certificate of Amendment was filed, the Issuer has not had
any legal name other than Sierra Timeshare Conduit Receivables Funding II, LLC. The Issuer has no
trade names, fictitious names, assumed names or “doing business as” names, and has not had any such
names or had any other legal name, other than as described in this Section 3.1(i), at any time
since its formation. As of the Closing Date, the principal place of business and chief executive
office of the Issuer is located at 10750 West Charleston Blvd., Suite 130, Mailstop 2064, Las
Vegas, NV 89135. As of the Closing Date, the Issuer does not operate its business or maintain the
Records at any other locations.



     (j) Control Account. The Issuer has filed or has caused to be filed a standing
delivery order with the United States Postal Service authorizing the Control Account Bank to
receive mail delivered to the related Post Office Boxes. 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, are
specified in Exhibit E. From and after the Closing Date, the Trustee shall hold all right and
title to and 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 in the Control Account. The Trustee has control over the Control
Account and the Control Account Bank is required on each Business Day to transfer all collected and
available balances in the Control Account to the Collection Account held by the Trustee.




51











 





     (k) Subsidiaries. Other than through its ownership of the limited liability company
interests of STCRF, the Issuer has no Subsidiaries and does not own or hold, directly or
indirectly, any capital stock or equity security of, or any equity interest in, any Person, other
than Permitted Investments.



     (l) Facility Documents. The Depositor Purchase Agreement is the only agreement
pursuant to which the Issuer purchases the Pledged Loans and the related Pledged Assets. The
Issuer has furnished to the Trustee and the Collateral Agent, true, correct and complete copies of
each Facility Document to which the Issuer is a party, each of which is in full force and effect.
Neither the Issuer nor any Affiliate thereof is in default of any of its obligations thereunder in
any material respect. Upon each Purchase pursuant to the Depositor Purchase Agreement, the Issuer
shall be the lawful owner of, and have good title to, each Pledged Loan and all related Pledged
Assets, free and clear of any Liens (other than the Lien of this Indenture and any Permitted
Encumbrances on the related Timeshare Properties), or shall have a first-priority perfected
security interest therein. All such Pledged Loans and other related Pledged Assets are purchased
without recourse to the Depositor except as described in the Depositor Purchase Agreement. The
Purchase by the Issuer under the Depositor Purchase Agreement constitutes either a sale or
first-priority perfected security interest, enforceable against creditors of the Depositor.



     (m) Business. Since its formation, the Issuer has conducted no business other than
the execution, delivery and performance of the Facility Documents contemplated hereby, the Purchase
of Loans thereunder, the issuance and payment of Series 2008-A Notes and such other activities as
are incidental to the foregoing. The Issuer has incurred no Debt except that expressly incurred
hereunder, under the other Facility Documents, and, if applicable, under any Exchange Note
Indenture.



     (n) Ownership of the Issuer. One hundred percent (100%) of the outstanding equity
interest in the Issuer is directly owned (both beneficially and of record) by the Depositor.



     (o) Taxes. The Issuer has timely filed or caused to be timely filed all federal,
state, local and foreign tax returns which are required to be filed by it, and has paid or caused
to be paid all taxes due and owing by it, other than any taxes or assessments, the validity of
which are being contested in good faith by appropriate proceedings timely instituted and diligently
pursued and with respect to which the Issuer has set aside adequate reserves on its books in
accordance with GAAP and which proceedings have not given rise to any Lien.



     (p) Tax Classification. Since its formation, for federal income tax purposes, the
Issuer (i) has been classified as a disregarded entity or partnership and (ii) has not been
classified as an association taxable as a corporation or a publicly traded partnership.



     (q) Solvency. The Issuer (i) is not “insolvent” (as such term is defined in the
Bankruptcy Code); (ii) is able to pay its debts as they become due; and (iii) does not have
unreasonably small capital for the business in which it is engaged or for any business or
transaction in which it is about to engage.



52









 





     (r) ERISA. The Issuer has not established and does not maintain or contribute to any
Benefit Plan that is covered by Title IV of ERISA.



     (s) No Adverse Selection. No selection procedures materially adverse to the
Noteholders, the Trustee or the Collateral Agent have been or will be employed by the Issuer in
selecting the Pledged Loans for inclusion in the Collateral.



     (t) Eligible Loans. Each Pledged Loan, on the date on which it becomes a Pledged
Loan, is an Eligible Loan and is a Loan sold by a Seller to the Depositor under a Seller Purchase
Agreement.



     (u) Servicer Default. No Servicer Default has occurred and is continuing.



     (v) Events of Default; Amortization Events. No Event of Default has occurred, no
Amortization Event has occurred, no Potential Event of Default has occurred and is continuing, and
no Potential Amortization Event has occurred and is continuing.



     (w) Perfection of Security Interests in the Collateral. Payment of principal and
interest on the Series 2008-A Notes and the prompt observance and performance by the Issuer of all
of the terms and provisions of this Indenture are secured by the Collateral and, to the extent
provided herein, the Membership Interest Collateral. Upon the issuance of the Series 2008-A Notes
and at all times thereafter so long as any Series 2008-A Notes are outstanding, this Indenture
creates a security interest (as defined in the applicable UCC) in the Collateral in favor of the
Collateral Agent for the benefit of the Trustee and the Noteholders to secure amounts payable under
the Series 2008-A Notes, the Indenture and the Note Purchase Agreement, which security interest is
perfected and prior to all other Liens (other than any Permitted Encumbrances on the related
Timeshare Properties) and is enforceable as such against all creditors of and purchasers from the
Issuer. Upon the issuance of the Series 2008-A Notes, this Indenture creates a security interest
(as defined in the applicable UCC) in the Membership Interest Collateral in favor of the Trustee
for the benefit of the Noteholders to secure the Issuer’s obligations to make the principal
payments required by Section 2.13(a)(iv), which security interest is perfected and prior to all
other Liens (other than any Permitted Encumbrances on the related Timeshare Properties) and is
enforceable as such against the creditors of and purchasers from the Issuer.



     Section 3.2. Representations and Warranties Regarding the Loan Files. The Issuer
represents and warrants to each of the Trustee, the Collateral Agent, the Servicer and the
Noteholders as to each Pledged Loan that:



     (a) Possession. On or immediately prior to each Addition Date, the Custodian will
have possession of each original Pledged Loan and the related Loan File, and will have acknowledged
such receipt and its undertaking to hold such documents for purposes of perfection of the
Collateral Agent’s interests in such original Pledged Loan and the related Loan File;
provided, however, that the fact that any of the Loan Documents not required to be
in its respective Loan File under the terms of the respective Seller Purchase Agreement is not in
the possession of the Custodian in its respective Loan File does not constitute a breach of this
representation; and provided that, possession of Loan Documents may be in the form
of microfiche or other electronic copies of the Loan Documents to the extent provided in the
Custodial Agreement.



53









 





     (b) Marking Records. On or before each Addition Date, each of the Issuer and the
Servicer shall have caused the portions of the computer files relating to the Pledged Loans Granted
to the Collateral Agent on such date to be clearly and unambiguously marked to indicate that such
Loans constitute part of the Collateral Granted by the Issuer in accordance with the terms of this
Indenture.



     The representations and warranties of the Issuer set forth in this Section 3.2 shall be deemed
to be remade without further act by any Person on and as of each Addition Date with respect to each
Loan Granted by the Issuer on and as of each such date. The representations and warranties set
forth in this Section 3.2 shall survive any Grant of the respective Loans by the Issuer.



     Section 3.3. Rights of Obligors and Release of Loan Files.



     (a) Notwithstanding any other provision contained in this Indenture, including the Collateral
Agent’s, the Trustee’s and the Noteholders’ remedies pursuant hereto and pursuant to the Collateral
Agency Agreement, the rights of any Obligor to any Timeshare Property subject to a Pledged Loan
shall, so long as such Obligor is not in default thereunder, be superior to those of the Collateral
Agent, the Trustee and the Noteholders, and none of the Collateral Agent, the Trustee or the
Noteholders, so long as such Obligor is not in default thereunder, shall interfere with such
Obligor’s use and enjoyment of the Timeshare Property subject thereto.



     (b) If pursuant to the terms of this Indenture, the Collateral Agent or the Trustee shall
acquire through foreclosure the Issuer’s interest in any portion of the Timeshare Property subject
to a Pledged Loan, the Collateral Agent and the Trustee hereby specifically agree to release or
cause to be released any Timeshare Property from any Lien under this Indenture upon completion of
all payments and the performance of all the terms and conditions required to be made and performed
by such Obligor under such Pledged Loan, and each of the Collateral Agent and the Trustee hereby
consents to any such release by the Collateral Agent.



     (c) At such time as an Obligor has paid in full the purchase price or the requisite percentage
of the purchase price for deeding pursuant to a Pledged Loan and has otherwise fully discharged all
of such Obligor’s obligations and responsibilities required to be discharged as a condition to such
deeding, the Servicer shall notify the Trustee and the Collateral Agent by a certificate
substantially in the form attached hereto as Exhibit G (which certificate shall include a statement
to the effect that all amounts received in connection with such payment have been deposited in the
appropriate Collection Account) of a Servicing Officer and shall request delivery to the Servicer
from the Custodian of the related Loan Files. Upon receipt of such certificate and request or at
such earlier time as is required by applicable law, the Trustee and the Collateral Agent (a) shall
be deemed, without the necessity of taking any action, to have approved release by the Custodian of
the Loan Files to the Servicer (in all cases in accordance with the provisions of the Custodial
Agreement), (b) shall be deemed to approve the release by the Nominee of the related deed of title,
and any documents and records maintained in connection therewith, to the Obligor as provided in the
Title Clearing Agreement, provided that



54









 







title to the Timeshare Property has not already been deeded to the Obligor and/or (c) shall
execute such documents and instruments of transfer and assignment and take such other action as is
necessary to release its interest in the Timeshare Property subject to deeding (in the case of any
Pledged Loan which has been paid in full). The Servicer shall cause each Loan File or any document
therein so released which relates to a Pledged Loan for which the Obligor’s obligations have not
been fully discharged to be returned to the Custodian for the sole benefit of the Collateral Agent
on behalf of the Noteholders when the Servicer’s need therefor no longer exists.



     Section 3.4. Assignment of Representations and Warranties. The Issuer hereby assigns
to the Trustee its rights relating to the Pledged Loans under the Depositor Purchase Agreement
including the rights assigned to the Issuer by the Depositor to payment due from the related Seller
for repurchases of Defective Loans (as such term is defined in the applicable Seller Purchase
Agreement) resulting from the breach of representations and warranties under such Seller Purchase
Agreement.



     Section 3.5. Addition of New Sellers. Loans sold to the Depositor by a New Seller and
sold by the Depositor to the Issuer may be Granted as Pledged Loans under the terms of Section 5.1
provided that the following conditions have been met:




     (i) The New Seller shall have entered into a Seller Purchase Agreement
with the Depositor substantially in the form of the Existing Seller Purchase
Agreement but with such revisions as shall be necessary to accommodate the
type of Loans and related assets of the New Seller;




     (ii) The Depositor Purchase Agreement shall have been amended to
include the Loans and related assets of the New Seller as assets being
transferred to the Issuer thereunder;




     (iii) The Performance Guaranty shall have been amended to include the
New Seller as a party whose performance is guarantied or the Performance
Guarantor shall have provided a new guaranty agreement under which the
Performance Guarantor guaranties the performance of the New Seller;




     (iv) The Custodial Agreement shall have been amended to provide that
the New Seller may deliver Loan Files to the Custodian to be held for the
benefit of the Collateral Agent;




     (v) The New Seller shall have provided a Control Account Agreement
which provides for the receipt of Collections on the Pledged Loans sold by
such New Seller and the delivery of such Collections to the Collateral
Agent;




     (vi) The New Seller shall have provided to counsel for the Deal Agent
copies of search reports certified by parties acceptable to counsel for the
Deal Agent dated a date reasonably prior to the date on which the entity
becomes a New Seller (A) listing all effective financing statements



55









 







which name the New Seller (under its present name and any previous
names) as debtor or seller and which are filed with respect to the New
Seller in each relevant jurisdiction, together with copies of such financing
statements (none of which shall cover any portion of the Pledged Loans sold
by such New Seller to the Depositor except as contemplated by the Facility
Documents);




     (vii) The New Seller shall have provided filed copies of appropriate
UCC financing statement amendments (Form UCC3), if any, necessary to
terminate all security interests and other rights of any Person previously
granted by the New Seller in the Loans of the New Seller to the extent such
Loans are to become Pledged Loans and the related Pledged Assets;




     (viii) An Opinion of Counsel with respect to true sale and federal
bankruptcy matters similar in substance to the opinions delivered to the
Purchaser Groups pursuant to the Note Purchase Agreement on the Closing Date
shall have been delivered to the Trustee, the Deal Agent, the Funding
Agents, the Purchasers with respect to sales of the Loans by the New Seller
to the Depositor;




     (ix) The Issuer shall have delivered to the Trustee and the Collateral
Agent and the Deal Agent copies of UCC financing statements with respect to
the sale of the Loans from the New Seller to the Depositor, from the
Depositor to the Issuer and the Grant to the Collateral Agent together with
Opinions of Counsel to the effect that such transfer or security interests
have been perfected and are of a first priority;




     (x) Each of the items described in provisions (i) through (viii) above
shall be in form and substance acceptable to the Majority Facility
Investors; and




     (xi) The Majority Facility Investors shall have delivered to the Issuer
written consent to the addition of the New Seller and the inclusion of Loans
sold by such New Seller as Pledged Loans.



56









 





ARTICLE IV




PAYMENTS, SECURITY AND ALLOCATIONS




     Section 4.1. Priority of Payments.



     The Servicer shall apply, or by written instruction to the Trustee shall cause the Trustee to
apply, on each Payment Date Available Funds for that Payment Date on deposit in the Collection
Account to make the following payments and in the following order of priority:




     FIRST, to the Trustee in payment of the sum of (x) the Monthly Trustee Fees for the
related Due Period and any unpaid Monthly Trustee Fees for a previous Due Period, (y) the
Capped Monthly Trustee Expenses for such Payment Date and (z) in the event of a Servicer
Default and the replacement of the Servicer with the Trustee or a Successor Servicer, the
Capped Successor Servicer Costs for such Payment Date;




     SECOND, if the Servicer is not Wyndham Consumer Finance, Inc. or an affiliate of the
Parent Corporation, to the Servicer, in payment of the Monthly Servicer Fee for the related
Due Period and any unpaid Monthly Servicer Fee for a previous Due Period and, whether or not
Wyndham Consumer Finance, Inc. or another affiliate of the Parent Corporation is then the
Servicer, to the Servicer in reimbursement of any unreimbursed Servicer Advances;




     THIRD, to the Hedge Provider under the Hedge Agreement, the Hedge Payments;




     FOURTH, to each Noteholder, the Senior Notes Interest for such Payment Date and the NPA
Costs payable to such Noteholder to the extent due and payable and any Senior Overdue
Interest due to such Noteholder (and interest thereon);




     FIFTH, if the Servicer is Wyndham Consumer Finance, Inc. or another affiliate of the
Parent Corporation, to the Servicer, the Monthly Servicer Fee for the related Due Period and
any unpaid Monthly Servicer Fee for a previous Due Period;




     SIXTH, to the Noteholders, the Initial Monthly Principal Distribution Amount for such
Payment Date;




     SEVENTH, if the amount on deposit in the Reserve Account is less than the Reserve
Required Amount, to the Reserve Account, all remaining Available Funds until the amount on
deposit in the Reserve Account is equal to the Reserve Required Amount;




     EIGHTH, to the Noteholders, the Additional Monthly Principal Distribution Amount for
such Payment Date;




     NINTH, to the Noteholders, the Green Loan Deficiency Principal Distribution Amount, if
any, for such Payment Date;



57









 






     TENTH, to each Noteholder, the Contingent Subordinated Notes Interest for such Payment
Date and any Contingent Subordinated Overdue Interest due to such Noteholder (and interest
thereon);




     ELEVENTH, to the Trustee in payment of any reasonable expenses and costs under each of
the Facility Documents to which the Trustee is a party, including with respect to replacing
the Servicer, any such amounts not paid pursuant to clause FIRST;




     TWELFTH, to the Issuer, any remaining amounts free and clear of the lien of this
Indenture.



     Section 4.2. Information Provided to Trustee. The Servicer shall promptly provide the
Trustee in writing with all information necessary to enable the Trustee to make the payments and
deposits required pursuant to Section 4.1.



     Section 4.3. Payments. On each Payment Date, the Trustee, as Paying Agent, shall
distribute to the Noteholders the amounts due and payable under this Indenture, the Series 2008-A
Notes and the Note Purchase Agreement. Such payments shall be made as provided in Section 2.16(a).



     Section 4.4. Collection Account.



     (a) Collection Account. The Trustee, for the benefit of the Noteholders, shall
establish and maintain in the name of the Trustee, a segregated account (the “Collection
Account”) designated as the “Sierra Timeshare Conduit Receivables Funding II, LLC Collection
Account” bearing a designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders pursuant to this Indenture.



     (b) Withdrawals. The Trustee shall have the sole and exclusive right to withdraw or
order a transfer of funds from the Collection Account, in all events in accordance with the terms
and provisions of this Indenture and the information most recently delivered to the Trustee
pursuant to Section 8.1; provided, however, that the Trustee shall be authorized to accept and act
upon instructions from the Servicer regarding withdrawals or transfers of funds from the Collection
Account, in all events in accordance with the provisions of this Indenture and the information most
recently delivered pursuant to Section 8.1. In addition, notwithstanding anything in the foregoing
to the contrary, the Trustee shall be authorized to accept instructions from the Servicer on a
daily basis regarding withdrawals or order transfers of funds from the Collection Account, to the
extent such funds either (i) have been mistakenly deposited into the Collection Account (including
without limitation funds representing Assessments or dues payable by Obligors to POAs or other
entities) or (ii) relate to items subsequently returned for insufficient funds or as a result of
stop payments. In the case of any withdrawal or transfer pursuant to the foregoing sentence, the
Servicer shall provide the Trustee with notice of such withdrawal or transfer, together with
reasonable supporting details, on the next Monthly Servicing Report to be delivered by the Servicer
following the date of such withdrawal or transfer (or in such earlier written notice as may be
required by the Trustee from the Servicer from time to time). Notwithstanding anything therein to
the contrary, the Trustee shall be entitled to make withdrawals or order transfers of funds from
the Collection Account, in the



58









 







amount of all reasonable and appropriate out-of-pocket costs and expenses incurred by the
Trustee in connection with any misdirected funds described in clause (i) and (ii) of the second
foregoing sentence. Within two Business Days of receipt, the Servicer shall transfer all
Collections processed by the Servicer to the Trustee for deposit into the Collection Account. The
Trustee shall deposit or cause to be deposited into the Collection Account upon receipt all amounts
in respect of releases of Pledged Loans by the Issuer. On each Payment Date, the Trustee shall
apply amounts in the Collection Account to make the payments and disbursements described in this
Indenture.



     (c) Administration of the Collection Account. Funds in the Collection Account shall,
at the direction of the Issuer, at all times be invested in Permitted Investments; provided,
however, that all Permitted Investments (i) shall be purchased at a price not exceeding the stated
principal amount thereof, (ii) shall pay the stated principal amount thereof at the stated maturity
of such investment and (iii) shall mature one Business Day prior to the next Payment Date, in order
to ensure that funds on deposit therein will be available on such Payment Date. The Trustee shall
maintain or cause to be maintained possession of the negotiable instruments or securities
evidencing the Permitted Investments from the time of purchase thereof until the time of sale or
maturity. Subject to the restrictions set forth in the first sentence of this paragraph, the
Issuer shall instruct the Trustee in writing regarding the investment of funds on deposit in the
Collection Account. All investment earnings on such funds shall be deemed to be available to the
Trustee for the uses specified in this Indenture. The Trustee shall be fully protected in
following the investment instructions of the Issuer, and shall have no obligation for keeping the
funds fully invested at all times or for making any investments other than in accordance with such
written investment instructions. If no investment instructions are received from the Issuer, the
Trustee is authorized to invest the funds in Permitted Investments described in clause (v) of the
definition thereof. In no event shall the Trustee be liable for any investment losses incurred in
connection with the investment of funds on deposit in the Collection Account by the Trustee
pursuant to this Indenture.



     (d) Irrevocable Deposit. Any deposit made into the Collection Account hereunder
shall, except as otherwise provided herein, be irrevocable and the amount of such deposit and any
money, instrument, investment property or other property on deposit in or credited to such Account
hereunder and all interest thereon shall be held in trust by the Trustee and applied solely as
provided herein.



     (e) Source. All amounts delivered to the Trustee shall be accompanied by information
in reasonable detail and in writing specifying the source and nature of the amounts.



     (f) Prepayment. On any date on which Series 2008-A Notes are prepaid as provided in
Section 2.19 and Pledged Loans are released as provided in Section 5.4, the Trustee shall, if so
directed by the Issuer and the Deal Agent, accept funds for deposit into the Collection Account and
deposit such funds into the Collection Account. Any such amount deposited into the Collection
Account on a prepayment date shall be used first to make the payments due in connection with such
prepayment and release in accordance with the terms hereof on that date and any remaining amounts
so deposited, shall be paid by the Trustee as the Trustee is instructed in writing by the Deal
Agent and the Issuer.



59









 





     Section 4.5. 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 it is party, the Control Account Bank
shall be irrevocably instructed to initiate an electronic transfer of all funds on deposit in the
Control Account derived from Pledged Loans to the Collection Account on the Business Day on which
such funds become available. Prior to the occurrence of an Event of Default the Trustee shall be
authorized to allow the Servicer to effect or direct deposits into the Control Account. The
Trustee is hereby irrevocably authorized and empowered, 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 a Collection Account, requiring the endorsement of the Issuer, which authorization is coupled
with an interest and is irrevocable.



     All funds in the Control Account shall be transferred daily by or upon the order of the
Trustee by electronic funds transfer or intra-bank transfer to the Collection Account.



     Section 4.6. Reserve Account.



     (a) Creation and Funding of the Reserve Account. The Trustee shall establish and
maintain in the name of the Trustee, an Eligible Account (the “Reserve Account”) designated
as the “Sierra Timeshare Conduit Receivables Funding II, LLC Series 2008-A Reserve Account” bearing
a designation clearly indicating that the funds deposited therein are held for the benefit of the
Noteholders pursuant to this Indenture. The Reserve Account shall be under the sole dominion and
control of the Trustee; however, if so directed by the Issuer, the Reserve Account may be an
account in the name of the Trustee opened at another financial institution. If, at any time, the
Reserve Account ceases to be an Eligible Account, the Trustee (or the Servicer on its behalf) shall
within ten (10) Business Days (or such longer period, not to exceed thirty (30) calendar days, as
to which the Deal Agent may consent) establish a new Reserve Account as an Eligible Account and
shall transfer any property held in the prior Reserve Account to such new Reserve Account. So long
as the Trustee is an Eligible Institution, the Reserve Account may be maintained with it as an
Eligible Account.



     On the Initial Advance Date and each Addition Date the Issuer shall deposit or shall cause to
be deposited into the Reserve Account an amount such that the amount on deposit therein equals the
Reserve Required Amount 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 Required Amount, a deposit
shall be made to the Reserve Account to the extent of funds available as provided in provision
SEVENTH of Section 4.1.



     (b) Transfer to Collection Account. On or prior to each Payment Date, prior to the
allocation of funds pursuant to Section 4.1 on such Payment Date, the Servicer shall direct the
Trustee to withdraw from the Reserve Account and deposit into the Collection Account to be included
as Available Funds the sum of (i) such amount, if any, as shall be equal to the lesser of (A) the
amount of cash or other immediately available funds on deposit in the Reserve Account on such
Payment Date and (B) the amount, if any, by which (1) the amounts required to be applied pursuant
to Section 4.1 provisions FIRST through SIXTH on such Payment Date exceed



60









 




(2) the Available Funds for that Payment Date (calculated without regard to any amounts to be
transferred from the Reserve Account) (such excess amount, the “Available Funds Shortfall”)
and (ii) the excess, if any, of (A) the amount of cash or other immediately available funds on
deposit in the Reserve Account on such Payment Date over (B) the sum of (1) the Reserve Required
Amount as of such Payment Date and (2) the Available Funds Shortfall as of such Payment Date. The
Trustee shall withdraw such funds from the Reserve Account and deposit them in the Collection
Account as directed by the Servicer.




     (c) Application on Liquidity Termination Event. Notwithstanding anything contained in
the foregoing subsections to the contrary, on the Payment Date immediately following each Liquidity
Termination Date on which Exchange Notes are being issued by the Issuer pursuant to Section 2.22,
the 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 4.6(b)) over (ii) the Reserve Required Amount as of such Payment Date (after
giving effect to the release of any Pledged Loans on such date pursuant to Section 5.5) and pay
such amount, free and clear of the Lien of this Indenture, to the trustee under the related
Exchange Notes Indenture, for deposit into the reserve account for such Exchange Notes.



     (d) [reserved]



     (e) Withdrawals from the Reserve Account. The Trustee shall have the sole and
exclusive right to withdraw or order a transfer of funds from the Reserve Account, in all events in
accordance with the terms and provisions of this Section 4.6; provided, that the
Trustee shall be authorized to transfer funds from the Reserve Account to the Collection Account at
the direction of the Servicer as provided in subsection (b) and (c) above.



     (f) Termination of Reserve Account. Any funds remaining in the Reserve Account after
all Series 2008-A Notes (including both principal and interest thereon) have been paid in full and
in cash and all other obligations of the Issuer under the Facility Documents have been paid in full
and in cash shall be remitted by the Trustee to the Issuer free and clear of the lien of this
Indenture.



     (g) Administration of the Reserve Account. Funds in the Reserve Account shall be
invested in Permitted Investments as directed by the Issuer; provided, however, that all Permitted
Investments (i) shall be purchased at a price not exceeding the stated principal amount thereof,
(ii) shall pay the stated principal amount thereof at the stated maturity of such investment and
(iii) shall mature one Business Day prior to the next Payment Date. All such Permitted Investments
shall be held by the Trustee. Subject to the restrictions set forth in the first sentence of this
subsection (g), the Issuer shall instruct the Trustee in writing regarding the investment of funds
on deposit in the Reserve Account. For purposes of determining the availability of balances in
Reserve Account for withdrawal pursuant to this Section 4.6, all investment earnings on such funds
shall be deemed to be available under this Indenture for the uses specified in such section. The
Trustee shall be fully protected in following the investment instructions of the Issuer, and shall
have no obligation for keeping the funds fully invested at all times or for making any investments
other than in accordance with such written investment instructions. If



61









 







no investment instructions are received from the Issuer, the Trustee is authorized to invest
the funds in Permitted Investments described in clause (v) of the definition thereof. In no event
shall the Trustee be liable for any investment losses incurred in connection with the investment of
funds on deposit in the Reserve Account by the Trustee pursuant to this Indenture.



     (h) Deposit Irrevocable. Any deposit made into the Reserve Account hereunder shall,
except as otherwise provided herein, be irrevocable and the amount of such deposit and any money,
instruments, investment property, or other property credited to carried in, or deposited in the
Reserve Account hereunder and all interest thereon shall be held in trust by the Trustee and
applied solely as provided herein.



     Section 4.7. Hedge Agreement. The Issuer shall at all times, so long as any Series
2008-A Notes remain unpaid, provide an interest rate cap with the terms described in this Section
4.7. When all Series 2008-A Notes have been paid in full, the Issuer shall terminate the Hedge
Agreement. The Hedge Agreement shall meet the following requirements:



     (a) the Hedge Agreement shall provide an interest rate cap for a notional amount at least
equal to the Notes Principal Amount as of the Initial Advance Date and such notional amount shall
amortize on a monthly basis for a term equal to the actual amortization schedule of payments on the
Pledged Loans assuming a schedule of payments and prepayments mutually determined by the Servicer,
the Issuer and the Deal Agent at such time (which schedule shall be based upon the historical
amortization experience of Loans owned or serviced by the Servicer and/or its Affiliates, and a
copy of which shall be provided to the Funding Agents);



     (b) the Issuer shall, as of each Payment Date and Note Increase Date, cause the notional
amount of the Hedge Agreement to be adjusted to reflect any increase or decrease in the Notes
Principal Amount as of such Payment Date or Note Increase Date so that the adjusted notional amount
of the Hedge Agreement shall on such Payment Date and Note Increase Date (after giving effect to
the Increase on such date) be an amount at least equal to the Notes Principal Amount; the Issuer
shall also, on the date of any addition or release of Pledged Loans adjust the Hedge Agreement to
reflect the Required Cap Rate, adjustments to the termination date of the Hedge Agreement in
accordance with subsection (c) of this Section 4.7 and adjustments to the amortization schedule
under the Hedge Agreement in accordance with subsection (a) of this Section 4.7 following such
addition or release of Pledged Loans; any additional Premium due for the adjustments to the Hedge
Agreement (i) on any Note Increase Date shall be paid by the Issuer from the proceeds of the
related Increase, (ii) on any Release Date shall be paid by the Issuer and (iii) on a Payment Date
that is not also a Note Increase Date shall be paid as a Hedge Payment under Provision THIRD of
Section 4.1;



     (c) the Hedge Agreement shall have a termination date equal to the final maturity date of the
latest maturing Pledged Loan; and



     (d) the Hedge Agreement shall provide for a payment by the Hedge Provider to the Trustee for
deposit into the Collection Account on each Payment Date if for the related Accrual Period the
LIBOR Rate was greater than the Required Cap Rate.



62









 




References in this Section 4.7 or otherwise in this Indenture to a notional amount equal to the
Notes Principal Amount shall allow for rounding to the nearest $1,000.




     Section 4.8. Replacement of Hedge Provider. The Issuer agrees that if any Hedge
Provider ceases to be a Qualified Hedge Provider, the Issuer shall have five (5) days (x) to cause
such Hedge Provider to assign its obligations under the related Hedge Agreement to a new, Qualified
Hedge Provider (or such Hedge Provider shall have five (5) days to again become a Qualified Hedge
Provider) or (y) to obtain a substitute Hedge Agreement, together with the related Qualified Hedge
Provider’s acknowledgment of the Grant by the Issuer to the Trustee of such Hedge Agreement.



ARTICLE V




ADDITION, RELEASE AND SUBSTITUTION OF LOANS




     Section 5.1. Addition of the Collateral.



     (a) Transfer of Loans. Subject to the limitations and conditions specified in this
Section 5.1, the Issuer may from time to time, identify additional Eligible Loans and related
Pledged Assets to be granted to the Trustee and transferred to the Collateral Agent for the benefit
of the Trustee on behalf of the Noteholders and such Loans and related assets shall be included as
Collateral hereunder as provided herein.



     (b) The transfer of Pledged Loans and the related Pledged Assets shall be subject to the
satisfaction of the following conditions:




     (i) at least two (2) Business Days preceding the Initial Advance Date
or the proposed Addition Date, the Issuer shall have delivered to the Deal
Agent a schedule of such Pledged Loans to be granted to the Trustee and
transferred on the Initial Advance Date or such Addition Date and each of
such Pledged Loans shall be a Loan sold by a Seller to the Depositor under a
Seller Purchase Agreement;




     (ii) the Issuer, the Servicer, the Trustee and the Collateral Agent
shall execute a Supplemental Grant in substantially the form of Exhibit A
and the Servicer shall have delivered a signed copy of such Supplemental
Grant to the Collateral Agent and the Trustee;




     (iii) the Termination Date shall not have occurred and no Amortization
Event, Servicer Default, Event of Default, Potential Amortization Event,
Potential Servicer Default or Potential Event of Default shall have occurred
and be continuing or would occur as a result of the addition of such Pledged
Loans;




     (iv) with the exception of Documents in Transit Loans, on or prior to
the Initial Advance Date or the Addition Date the Custodian shall have
possession of each original Pledged Loan and the related Loan File and shall
have acknowledged to the Trustee such receipt and its



63









 







undertaking to hold each such original Pledged Loan and the related
Loan File for purposes of perfection of the Collateral Agent’s interests in
such original Pledged Loans and the related Loan File; provided that the
fact that any document not required to be in its respective Loan File
pursuant to the applicable Seller Purchase Agreement is not in the
possession of the Custodian in its respective Loan File shall not constitute
a failure to satisfy this condition;




     (v) the Issuer shall have taken any actions necessary or advisable to
maintain the Collateral Agent’s perfected security interest in the
Collateral (including in such Pledged Loans) for the benefit of the Trustee
for the benefit of the Noteholders;




     (vi) each such Pledged Loan shall be an Eligible Loan;




     (vii) if any of such Pledged Loans are New Seller Loans, the conditions
set forth in Section 3.5 shall have been satisfied with respect to such New
Seller;




     (viii) if any of such Pledged Loans are New Seller Loans and after the
addition of such Loans, the Principal Balance of the Pledged Loans which are
New Seller Loans sold by one New Seller to the Depositor would exceed 10% of
the Adjusted Loan Balance, then the addition of such New Seller Loans shall
be subject to the prior written consent of the Deal Agent;




     (ix) if any of such Pledged Loans are New Seller Loans and after the
addition of such Loans, the Principal Balance of all the Pledged Loans which
are New Seller Loans will be greater than 15% of the Adjusted Loan Balance,
then the addition of such New Seller Loans shall be subject to the prior
written consent of each Funding Agent;




     (x) if any of such Pledged Loans are Acquired Portfolio Loans and after
the addition of such Loans the Principal Balance of all Pledged Loans which
are Acquired Portfolio Loans acquired as part of one portfolio will be more
than 10% of the Adjusted Loan Balance, then the addition of such Loans shall
be subject to the prior written consent of the Majority Facility Investors;
and




     (xi) if any of such Pledged Loans are Green Loans, no Rating Downgrade
Condition shall exist as of the Addition Date with respect to such Loans.



     (c) If on the last Business Day of any Due Period, WRDC has not met the target for
qualification of WorldMark Resorts with the California Department of Real Estate (“DRE”) as
set forth in this Section 5.1(c), then until the target for qualification is satisfied, the
California Excess Amount shall be included in the Excess Concentration Amount. References to the
target for qualification of WorldMark Resorts with the DRE mean that, as of a specified time, WRDC



64









 







shall have qualified with the DRE under Section 11018.10 of the California Business and
Professions Code (the “Timeshare Law”) WorldMark Resorts supporting not less than 90% of
the total Vacation Credits that, as of such date, have been sold in all jurisdictions including
California.



     Section 5.2. Release of Defective Loans.



     (a) Obligation With Respect to Defective Loans. If a Seller is required to repurchase
a Defective Loan under the terms of the Seller Purchase Agreement to which it is a party, the
Issuer shall, on the same date as such Seller is required to repurchase the Defective Loan, be
required either (i) to deposit the Release Price of such Defective Loan into the Collection Account
and obtain the release of the Defective Loan from the Lien of this Indenture or (ii) substitute one
or more Qualified Substitute Loans for such Pledged Loan as provided in Section 5.2(c) and obtain
the release of the Defective Loan.



     (b) Payments. The Issuer shall provide written notice to the Trustee and the
Collateral Agent of any release pursuant to Section 5.2(a) not less than two Business Days prior to
the date on which such release is to be effected, specifying (i) the Defective Loan and (ii) either
(x) if such Defective Loan is to be repurchased by the Depositor, the Release Price therefor or (y)
if such Defective Loan will be replaced with one or more Qualified Substitute Loans, the
Substitution Adjustment Amount, if any, with respect thereto. Upon the release of a Defective Loan
pursuant to Section 5.2(a) the Issuer shall deposit or cause to be deposited the Release Price or
Substitution Adjustment Amount, if any, in the Collection Account no later than 12:00 noon, New
York City time, on the date on which such release is made (the “Release Date”).



     (c) Substitution. If the Issuer elects to substitute a Qualified Substitute Loan or
Qualified Substitute Loans for a Defective Loan pursuant to this Section 5.2(c), the Issuer shall
Grant to the Trustee and transfer to the Collateral Agent such Qualified Substitute Loan in the
same manner as other Additional Pledged Loans in accordance with Section 5.1 and shall include such
Qualified Substitute Loans in the Additional Pledged Loans described in a Supplemental Grant. The
Qualified Substitute Loan or Qualified Substitute Loans will not be selected in a manner adverse to
the Noteholders, and the aggregate Loan Balance of the Qualified Substitute Loans will not be less
than the Loan Balance of the Defective Loans for which the substitution occurs. In connection with
the substitution for one or more Qualified Substitute Loans for one or more Defective Loans, the
Issuer shall deposit an amount, if any, equal to the related Substitution Adjustment Amount in the
Collection Account on the date of substitution without any reimbursement therefor. The Issuer
shall cause the Servicer to amend the Series 2008-A Loan Schedule to reflect the removal of such
Defective Loan and the substitution of the Qualified Substitute Loan or Qualified Substitute Loans
and the Issuer shall cause the Servicer to deliver the amended Series 2008-A Loan Schedule to the
Issuer, the Trustee and Collateral Agent.



     (d) Upon each release of a Pledged Loan under this Section 5.2, the Collateral Agent and the
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
Collateral Agent’s and the Trustee’s right, title and interest in and to such Defective Loan and
the Pledged Assets related thereto, all monies due or to become due with respect thereto and all



65









 







Collections with respect thereto (including payments received from Obligors from and including
the last day of the Due Period immediately preceding the date of release) free and clear of the
lien of this Indenture. The Collateral Agent and the Trustee shall execute such documents,
releases and instruments of transfer or assignment and take such other actions as directed by the
Issuer or the Depositor to effect the release of such Defective Loan and the related Pledged Assets
pursuant to this Section 5.2. Promptly after the occurrence of a Release Date and after the
payment for and release of or substitution for Defective Loans, the Issuer shall direct the
Servicer to delete such Defective Loans from the Series 2008-A Loan Schedule.



     (e) The obligation of the Issuer to deposit the Release Price or Substitution Adjustment
Amount or provide a Qualified Substitute Loan for any Defective Loan shall constitute the sole
remedy against the Issuer with respect to any breach of the representations and warranties set
forth in 3.1(t) of this Indenture or the representations of the Seller assigned to the Trustee
pursuant to Section 3.4.



     Section 5.3. Release of Defaulted Loans. If any Pledged Loan becomes a Defaulted Loan
during any Due Period, the Issuer may obtain a release of such Pledged Loan from the lien of this
Indenture on any date thereafter. To obtain such release the Issuer shall be required to pay the
Release Price of such Defaulted Loan to the Trustee for deposit into the Collection Account. The
Issuer shall provide written notice to the Trustee and the Collateral Agent of any release pursuant
to this Section 5.3 not less than two Business Days prior to the date on which such release is to
be effected, specifying the Defaulted Loan and the Release Price therefor. The Issuer shall pay
the Release Price to the Trustee for deposit into the Collection Account not later than 12:00 noon,
New York City time, on the Business Day prior to the date on which such release is made.



     Upon each release of a Pledged Loan under this Section 5.3, the Collateral Agent and the
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
Collateral Agent’s and Trustee’s right, title and interest in and to such Defaulted Loan and the
Pledged Assets related thereto, all monies due or to become due with respect thereto and all
Collections with respect thereto free and clear of the Lien of this Indenture. The Collateral
Agent and the 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
Defaulted Loans and the related Pledged Assets pursuant to this Section 5.3. Promptly after the
occurrence of a Release Date and after the payment for and release of a Defaulted Loan, in respect
to which the Release Price has been paid the Issuer shall direct the Servicer to delete such
Defaulted Loans from the Series 2008-A Loan Schedule.



     Section 5.4. Release Upon Optional Prepayments. If the Issuer exercises its right to
prepay the Series 2008-A Notes in whole or in part as provided in Section 2.19 of this Indenture,
the Issuer and the Deal Agent shall notify the Trustee and the Collateral Agent in writing of the
prepayment date and the principal amount of the Series 2008-A Notes to be prepaid on the prepayment
date and the amount of interest and other amounts due and payable on such date in accordance with
this Indenture and the Note Purchase Agreement. On the prepayment date, upon receipt by the
Trustee of all amounts to be paid to the Noteholders in accordance with this Indenture and the Note
Purchase Agreement as a result of such prepayment and the satisfaction



66









 







of the conditions set forth in the following paragraphs, then, the Collateral Agent and the
Trustee shall release from the Lien of this Indenture those Pledged Loans and the related Pledged
Assets, 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 Collateral Agent and Trustee are directed to release as described in the
following paragraph.



     The Issuer shall provide to the Collateral Agent and the Trustee a list of the Pledged Loans
which are to be released, shall direct the Collateral Agent to release such Loans, and shall direct
the Servicer to delete such Loans from the Series 2008-A Loan Schedule.



     In addition to receipt by the Trustee of the principal amount of the Series 2008-A Notes to be
prepaid, the interest thereon and other amounts due and payable in connection with such prepayment
and the list of the Pledged Loans to be released, the following conditions shall be met before the
Lien is released under this Section 5.4:




     (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 Deal Agent a
certificate to the effect that the Pledged Loans to be released from the Lien of this
Indenture were not selected in a manner involving any selection procedures materially
adverse to the Noteholders and that the release of such Loans would not reasonably be
expected to cause a Potential Amortization Event or an Amortization Event.



     Section 5.5. Release Upon Issuance of Exchange Notes. (a) If the Issuer is required
to issue any Exchange Notes on the Payment Date immediately succeeding a Liquidity Termination
Date, the Issuer shall notify the Trustee and the Collateral Agent in writing of the aggregate
principal amount of the Series 2008-A Notes held by Extending Noteholders to be canceled on such
Payment Date. On such Payment Date, upon cancellation of the Series 2008-A Notes held by the
Extending Noteholders, then the Collateral Agent and the Trustee shall release from the Lien of
this Indenture Pledged Loans with aggregate Loan Balances at least equal to the Extending
Noteholders’ Percentage of the Aggregate Loan Balance on such Payment Date, and the related Pledged
Assets, as the Collateral Agent and the Trustee are directed to release as set forth in Section
5.5(b).



     (b) An independent auditor mutually agreeable to the Issuer and the Deal Agent shall select
the Loans to be released from the Lien of this Indenture pursuant to this Section 5.5 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 Loans selected to be released from the Lien of this
Indenture pursuant to this Section 5.5(b) shall be such that the collateral for the Exchange Notes
and the Collateral shall each conform to the criteria set forth in Exhibit H as of the date of the
issuance of such Exchange Notes. Such independent auditor shall provide to the Collateral Agent,
the Trustee and the Servicer a list of the Pledged Loans which are selected to be released, shall
direct the Collateral Agent to release such Loans, and shall direct the Servicer to delete such
Loans from the Series 2008-A Loan Schedule.




67












 





     (c) The Lien on any Pledged Loans shall not be released under this Section 5.5 unless (i)
after giving effect to such release, the Borrowing Base shall be at least equal to the Notes
Principal Amount, (ii) the amount in the Reserve Account shall be at least equal to the Reserve
Required Amount, (iii) no Potential Event of Default, Amortization Event 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 Deal Agent a certificate to the effect that the Pledged Loans to be
released from the Lien of this Indenture pursuant to this Section 5.5 were not selected in a manner
involving any selection procedures adverse to the Noteholders and that the release of such Loans
would not reasonably be expected to cause a Potential Amortization Event or an Amortization Event.



     (d) Upon each release of a Pledged Loan under this Section 5.5, the Collateral Agent and the
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
Collateral Agent’s and Trustee’s right, title and interest in and to such Pledged Loan and the
Pledged 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. The Collateral Agent
and the 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 Pledged Loans
and the related Pledged Assets pursuant to this Section 5.5.



     Section 5.6. Release Upon Payment in Full. At such time as the Series 2008-A 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 Trustee and the Collateral Agent with respect to Series 2008-A
Notes have been paid in full and all obligations relating to the Facility Documents have been paid
in full, then, the Collateral Agent 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 Collateral Agent in and to the Collateral and the Membership Interest Collateral,
and all proceeds thereof. The Collateral Agent and the 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 Collateral Agent in the Collateral and the
security interest of the Trustee in the Membership Interest Collateral.



     Section 5.7. Release of Green Loans Upon Rating Downgrade. (a) On any Payment Date as
of which a Rating Downgrade Condition existed on the last day of the related Due Period, the Issuer
shall have the right, so long as no Potential Amortization Event, Potential Event of Default,
Amortization Event or Event of Default has occurred and is continuing, to obtain a release of the
Lien of this Indenture on Green Loans with an aggregate Loan Balance on such date equal to the
excess of (x) the product of (i) the sum of the amounts distributed to Noteholders pursuant to
clause NINTH of Section 4.1 on such Payment Date and each prior Payment Date and (ii) one
divided by (a) if such Payment Date is prior to the Advance Decrease Date, the AA
Advance Rate for such date or (b) if such Payment Date is on or after the Advance Decrease Date,
the AAA Advance Rate, over (y) the aggregate Loan Balance of all Green Loans released pursuant to
this Section 5.7 since the occurrence of such Rating Downgrade Condition (calculated as of the date
such Green Loans were released pursuant to this Section 5.7). The Issuer shall provide written
notice to the Trustee and the Collateral Agent of any release pursuant



68









 







to this Section 5.7 not less than two Business Days prior to the Payment Date on which such
release is to be effected, specifying the Green Loans to be released.



     (b) Upon each release of a Green Loan under this Section 5.7, the Collateral Agent and the
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
Collateral Agent’s and Trustee’s right, title and interest in and to such Green Loan and the
Pledged 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 free and clear of the Lien of this Indenture. The Collateral Agent and the
Trustee shall execute such documents, releases and instruments of transfer or assignment and take
such other actions as shall reasonably be requested by the Issuer to effect the release of such
Green Loans and the related Pledged Assets pursuant to this Section 5.7. Promptly after the
release of a Green Loan, the Issuer shall direct the Servicer to delete such Green Loan from the
Series 2008-A Loan Schedule.



ARTICLE VI




ADDITIONAL COVENANTS OF ISSUER




     Section 6.1. Affirmative Covenants.



     (a) Compliance with Laws, Etc. The Issuer shall comply in all material respects with
all applicable laws, rules, regulations and orders with respect to it, its business and properties,
all Pledged Loans and all Facility Documents to which it is a party (including without limitation
the laws, rules and regulations of each state governing the sale of timeshare contracts).



     (b) Preservation of Existence. The Issuer shall preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain
qualified in good standing as a foreign entity, and maintain all necessary licenses and approvals,
in each jurisdiction in which it does business, except where the failure to preserve and maintain
such existence, rights, franchises, privileges, qualifications, licenses and approvals would not
have a Material Adverse Effect.



     (c) Adequate Capitalization. The Issuer shall ensure that at all times it is
adequately capitalized to engage in the transactions contemplated by this Indenture.



     (d) Keeping of Records and Books of Account. The Issuer shall cause the Servicer to
maintain and implement administrative and operating procedures (including without limitation an
ability to recreate records evidencing the Pledged Loans in the event of the destruction or loss of
the originals thereof) and keep and maintain, all documents, books, records and other information
reasonably necessary or advisable for the collection of all Pledged Loans (including without
limitation records adequate to permit the daily identification of all Collections with respect to,
and adjustments of amounts payable under, each Pledged Loan).



     (e) Performance and Compliance with Receivables and Loans. The Issuer shall at its
expense, timely and fully perform and comply in all material respects with all material



69









 







provisions, covenants and other promises required to be observed by it under the Pledged Loans
and Pledged Assets.



     (f) Credit Standards and Collection Policies. The Issuer shall comply in all material
respects with the Credit Standards and Collection Policies and Customary Practices in regard to
each Pledged Loan and the related Pledged Assets.



     (g) Collections. (1) The Issuer shall instruct or cause all Obligors to be instructed
to either:




     (A) send all Scheduled Payments directly to Post Office Boxes for
credit to the Control Account or directly to the Control Account,




     (B) make Scheduled Payments 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 Scheduled Payments
shall be electronically transferred to the Control Account or to another
account for processing and transfer into the Collection Account, or




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




     (2) In the case of funds transfers pursuant to a PAC or Credit Card Account, or through
Western Union, take, or cause each of the Servicer, the Control Account Bank and/or the
Trustee 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.




     (3) The Issuer shall hold any Collections or other proceeds of the Collateral received
directly by it in trust for the benefit of the 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.



     (h) Compliance with ERISA. The Issuer shall comply in all material respects with the
provisions of ERISA, the Code, and all other applicable laws and the regulations and
interpretations thereunder.



     (i) Perfected Security Interest. The Issuer shall take such action with respect to
each Pledged Loan as is necessary to ensure that the Collateral Agent maintains on behalf of the
Trustee, a first priority perfected security interest in such Pledged Loan and the Pledged Assets
relating thereto, in each case free and clear of any Liens (other than the Lien created by this
Indenture and in the case of any Timeshare Properties, any Permitted Encumbrance).



     (j) No Release. The Issuer shall not take any action and shall use its best efforts
not to permit any action to be taken by others that would release any Person from any of such
Person’s material covenants or material obligations under any document, instrument or



70









 







agreement included in the Collateral, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or effectiveness of, any such
document, instrument or agreement except as expressly provided in this Indenture or such other
instrument or document.



     (k) Insurance and Condemnation.




     (i) The Issuer shall do or cause to be done all things that it may
accomplish with a reasonable amount of cost or effort to cause each of the
POAs for each Resort to (A) maintain one or more policies of “all-risk”
property and general liability insurance with financially sound and
reputable insurers, providing coverage in scope and amount which (x)
satisfies the requirements of the declarations (or any similar charter
document) governing the POA for the maintenance of such insurance policies
and (y) is at least consistent with the scope and amount of such insurance
coverage obtained by prudent POAs and/or management of other similar
developments in the same jurisdiction; and (B) apply the proceeds of any
such insurance policies in the manner specified in the relevant declarations
(or any similar charter document) governing the POA and/or any similar
charter documents of such POA. For the avoidance of doubt, the parties
hereto acknowledge that the ultimate discretion and control relating to the
maintenance of any such insurance policies is vested in the POAs in
accordance with the respective declaration (or any similar charter document)
relating to each Timeshare Property Regime.




     (ii) The Issuer shall remit to the appropriate Collection Account the
portion of any proceeds received pursuant to a condemnation of property in
any Resort to the extent that such proceeds relate to any of the Timeshare
Properties.



     (l) Custodian.




     (i) On or before each Addition Date and thereafter promptly upon the
generation of any documents, instruments and agreements evidencing or
otherwise relating to the Pledged Loans or related Pledged Assets received
by any of the Issuer or the Servicer, the Issuer shall deliver or cause to
be delivered directly to the Custodian for the benefit of the Collateral
Agent pursuant to the Custodial Agreement the Loan File for each Pledged
Loan. Such Loan File may be provided in microfiche or other electronic form
to the extent permitted under the Custodial Agreement. The Issuer shall
cause the Custodian to hold, maintain and keep custody of all the Loan File
for the benefit of the Collateral Agent in a secure fire retardant location
at an office of the Custodian, which location shall be reasonably acceptable
to the Collateral Agent and the Trustee.



71









 






     (ii) The Issuer shall cause the Custodian at all times to maintain
control of the Loan File for the benefit of the Collateral Agent on behalf
of the Trustee and the Noteholders, in each case pursuant to the Custodial
Agreement. Each of the Issuer and the Servicer may access the Loan File at
the Custodian’s storage facility only for the purposes and upon the terms
and conditions set forth herein and in the Custodial Agreement. Each of the
Issuer and the Servicer may only remove documents from the Loan File for
collection services and other routine servicing requirements from such
facility in accordance with the terms of the Custodial Agreement, all as set
forth and pursuant to the “Bailment Agreement” (as defined in and attached
as an exhibit to the Custodial Agreement).




     (iii) The Issuer shall at all times comply in all material respects
with the terms of its obligations under the Custodial Agreement and shall
not enter into any modification, amendment or supplement of or to, and shall
not terminate the Custodial Agreement, without the Collateral Agent’s and
Trustee’s prior written consent.



     (m) Separate Identity. The Issuer shall take all actions required to maintain the
Issuer’s status as a separate legal entity. Without limiting the foregoing, the Issuer shall:




     (i) Maintain in full effect its existence, rights and franchises as a
limited liability company under the laws of the state of its formation and
will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Indenture and the other Facility
Documents to which the Issuer is a party and each other instrument or
agreement necessary or appropriate to proper administration hereof and
permit and effectuate the transactions contemplated hereby.




     (ii) Except as provided herein, maintain its own deposit, securities
and other account or accounts with financial institutions, separate from
those of any Affiliate of the Issuer. The funds of the Issuer will not be
diverted to any other Person or for other than the use of the Issuer, and,
except as may be expressly permitted by this Indenture or any other Facility
Document to which the Issuer is a party, the funds of the Issuer shall not
be commingled with those of any other Person.




     (iii) Ensure that, to the extent that it shares the same officers or
other employees as any of its members, managers or other Affiliates, the
salaries of and the expenses related to providing benefits to such officers
and other employees shall be fairly allocated among such entities, and each
such entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.




     (iv) Ensure that, to the extent that it jointly contracts with any of
its stockholders, members or managers or other Affiliates to do business



72









 







with vendors or service providers or to share overhead expenses, the
costs incurred in so doing shall be allocated fairly among such entities,
and each such entity shall bear its fair share of such costs. To the extent
that the Issuer contracts or does business with vendors or service providers
where the goods and services provided are partially for the benefit of any
other Person, the costs incurred in so doing shall be fairly allocated to or
among such entities for whose benefit the goods and services are provided,
and each such entity shall bear its fair share of such costs.




     (v) Ensure that all material transactions between the Issuer and any of
its Affiliates shall be only on an arm’s-length basis and shall not be on
terms more favorable to either party than the terms that would be found in a
similar transaction involving unrelated third parties. All such
transactions shall receive the approval of the Issuer’s board of directors
including the Independent Directors.




     (vi) Maintain a principal executive and administrative office through
which its business is conducted and a telephone number separate from those
of its members, managers and other Affiliates. To the extent that the
Issuer and any of its members, managers or other Affiliates have offices in
contiguous space, there shall be fair and appropriate allocation of overhead
costs (including rent) among them, and each such entity shall bear its fair
share of such expenses.




     (vii) Conduct its affairs strictly in accordance with its certificate
of formation and limited liability company agreement and observe all
necessary, appropriate and customary formalities, including, but not limited
to, holding all regular and special meetings of the board of directors
appropriate to authorize all actions of the Issuer, keeping separate and
accurate minutes of such meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not
limited to, intercompany transaction accounts. Regular meetings of the
board of directors shall be held at least annually.




     (viii) Ensure that its board of directors shall at all times include at
least two Independent Directors (for purposes hereof, “Independent
Directors” shall mean any member of the board of directors of the Issuer
that is not and has not at any time been (x) an officer, agent, advisor,
consultant, attorney, accountant, employee or shareholder of any Affiliate
of the Issuer which is not a special purpose entity, (y) a director of any
Affiliate of the Issuer other than an independent director of any Affiliate
which is a special purpose entity or (z) a member of the immediate family of
any of the foregoing).



73









 






     (ix) Ensure that decisions with respect to its business and daily
operations shall be independently made by the Issuer (although the officer
making any particular decision may also be an officer or director of an
Affiliate of the Issuer) and shall not be dictated by an Affiliate of the
Issuer.




     (x) Act solely in its own company name and through its own authorized
members, managers, officers and agents, and no Affiliate of the Issuer shall
be appointed to act as agent of the Issuer. The Issuer shall at all times
use its own stationery and business forms and, except as is consistent with
its tax treatment, describe itself as a separate legal entity.




     (xi) Except as contemplated by the Facility Documents, ensure that no
Affiliate of the Issuer shall loan money to the Issuer, and no Affiliate of
the Issuer will otherwise guaranty debts of the Issuer.




     (xii) Other than organizational expenses and as contemplated by the
Facility Documents, pay all expenses, indebtedness and other obligations
incurred by it using its own funds.




     (xiii) Except as provided herein and in any other Facility Document,
not enter into any guaranty, or otherwise become liable, with respect to or
hold its assets or creditworthiness out as being available for the payment
of any obligation of any Affiliate of the Issuer nor shall the Issuer make
any loans to any Person.




     (xiv) Ensure that any financial reports required of the Issuer shall
comply with GAAP and shall be issued separately from, but may be
consolidated with, any reports prepared for any of its Affiliates so long as
such consolidated reports contain footnotes describing the effect of the
transactions between the Issuer and such Affiliate and also state that the
assets of the Issuer are not available to pay creditors of the Affiliate.




     (xv) Ensure that at all times it is adequately capitalized to engage in
the transactions contemplated in its certificate of formation and its
limited liability company agreement.



     (n) Computer Files. The Issuer shall mark or cause to be marked each Pledged Loan in
its computer files as described in Section 3.2(b).



     (o) Taxes. The Issuer shall file or cause to be filed, and cause each of its
Affiliates with whom it shares consolidated tax liability to file, all federal, state, and foreign
local tax returns which are required to be filed by it, except where the failure to file such
returns could not reasonably be expected to have a Material Adverse Effect. The Issuer shall pay
or cause to be paid all taxes due and owing by it, other than any taxes or assessments, the
validity of which are being contested in good faith by appropriate proceedings and with respect to
which the Issuer or the applicable Affiliate shall have set aside adequate reserves on its books in
accordance with GAAP, and which proceedings could not reasonably be expected to have a Material
Adverse Effect.



74









 





     (p) Tax Classification. The Issuer shall, for as long as the Series 2008-A Notes are
outstanding, not take any action, or fail to take any action, that would cause the Issuer not to
remain classified, for federal income tax purposes, as a disregarded entity or a partnership that
is not classified as a publicly traded partnership.



     (q) Facility Documents. The Issuer shall comply in all material respects with the
terms of, employ the procedures outlined in and enforce the obligations of the Depositor under the
Depositor Purchase Agreement and of the parties to each of the other Facility Documents to which
the Issuer is a party, and take all such action as may reasonably be required to maintain all such
Facility Documents to which the Issuer is a party in full force and effect.



     (r) Series 2008-A Loan Schedule. The Issuer shall at least once each calendar month,
provide to the Trustee an amendment to the Series 2008-A Loan Schedule, or cause the Servicer to
electronically provide an amendment to the Series 2008-A Loan Schedule, listing the Pledged Loans
added to the Collateral and the Pledged Loans released from the Collateral and amending the Series
2008-A Loan Schedule to reflect terms or discrepancies in such schedule that become known to the
Issuer since the filing of the original Series 2008-A Loan Schedule or since the most recent
amendment thereto.



     (s) Segregation of Collections. The Issuer shall with respect to the Control Account
either (i) prevent the deposit into such account of any funds other than Collections in respect of
Pledged 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
Pledged Loans to the Issuer and transfer such amounts to the Trustee for deposit into the
Collection Account; (provided that, the covenant in clause (i) of this paragraph (s) shall not be
breached to the extent that funds not constituting Collections in respect of the Pledged Loans are
inadvertently deposited into such Control Account and are promptly segregated and remitted to the
owner thereof).



     (t) Filings; Further Assurances.




     (i) On or prior to the Closing Date, the Issuer shall have caused at
its sole expense the Financing Statements, assignments and amendments
thereof necessary to perfect the security interest in the Collateral and the
Membership Interest Collateral to be filed or recorded in the appropriate
offices.




     (ii) The Issuer shall, at its sole expense, from time to time
authorize, prepare, execute and deliver, or authorize and cause to be
prepared, executed and delivered, all such Financing Statements,
continuation statements, amendments, instruments of further assurance and
other instruments, in such forms, and shall take such other actions, as
shall be required by the Servicer, the Trustee or the Deal Agent or as the
Servicer, the Trustee or the Deal Agent otherwise deems reasonably necessary
or advisable to perfect the Lien created by this Indenture in the Collateral
and the Membership Interest Collateral. The Servicer agrees, at its sole
expense, to cooperate with and assist the Issuer in taking any such



75









 







action (whether at the request of the Issuer, the Trustee or the Deal
Agent). Without limiting the foregoing, the Issuer shall from time to time,
at its sole expense, authorize, execute, file, deliver and record all such
supplements and amendments hereto and to this Indenture and all such
Financing Statements, amendments thereto, continuation statements,
instruments of further assurance, or other statements, specific assignments
or other instruments or documents and take any other action that is
reasonably necessary to, or that any of the Servicer, the Trustee deems
reasonably necessary or advisable to: (i) Grant more effectively all or any
portion of the Collateral and the Membership Interest Collateral; (ii)
maintain or preserve the Lien Granted under this Indenture (and the priority
thereof) or carry out more effectively the purposes hereof or thereof; (iii)
perfect, maintain the perfection of, publish notice of, or protect the
validity of any Grant made or to be made pursuant to this Indenture; (iv)
enforce any of the Pledged Loans or any of the other Pledged Assets
(including without limitation by cooperating with the Trustee, at the
expense of the Issuer, in filing and recording such Financing Statements
against such Obligors as the Servicer, the Trustee shall deem necessary or
advisable from time to time); (v) preserve and defend title to any Pledged
Loans or all or any other part of the Pledged Assets, and the rights of the
Trustee in such Pledged Loans or other related Pledged Assets, against the
claims of all Persons and parties; or (vi) pay any and all taxes levied or
assessed upon all or any part of any Collateral.




     (iii) The Issuer shall, on or prior to the date of Grant of any Pledged
Loans under this Indenture, deliver or cause to be delivered all original
copies of the Pledged Loan (other than in the case of any Pledged Loans not
required under the terms of the relevant Seller Purchase Agreement to be in
the relevant Loan File), together with the related Loan File, to the
Custodian, in suitable form for transfer by delivery, or accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Trustee. Such “original copies” may be
provided in microfiche or other electronic form to the extent permitted
under the Custodial Agreement. In the event that the Issuer receives any
other instrument or any writing which, in either event, evidences a Pledged
Loan or other Pledged Assets, the Issuer shall deliver such instrument or
writing to the Custodian to be held as collateral in which the Collateral
Agent has a security interest for the benefit of the Trustee within two
Business Days after the Issuer’s receipt thereof, in suitable form for
transfer by delivery, or accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
the Trustee.




     (iv) The Issuer hereby authorizes the Trustee, and gives the Collateral
Agent its irrevocable power of attorney (which authorization is coupled with
an interest and is irrevocable), in the name of the Issuer or otherwise, to
execute, deliver, file and record any Financing Statement,



76









 







continuation statement, amendment, specific assignment or other writing
or paper and to take any other action that the Trustee in its sole
discretion, may deem necessary or appropriate to further perfect the Lien
created hereby. Any expenses incurred by the Trustee or the Collateral
Agent pursuant to the exercise of its rights under this Section 6.l(t)(iv)
shall be for the sole account and responsibility of the Issuer and payable
under Section 13.5 to the Trustee.



     (u) Management of Resorts. The Issuer hereby covenants and agrees that it will with
respect to each Resort cause the Originator with respect to that Resort (to the extent that such
Originator is otherwise responsible for maintaining such Resort) to do or cause to be done all
things which it may accomplish with a reasonable amount of cost or effort, in order to maintain
each such Resort (including without limitation all grounds, waters and improvements thereon) in at
least as good condition, repair and working order as would be customary for prudent managers of
similar timeshare properties.



     (v) Amendment to Documents. The Issuer shall not enter into any amendment to any of
the Facility Documents to which it is a party or consent to any amendment of any Facility Document
without the prior written consent of the Majority Facility Investors.



     (w) Request New Series 2008-A Note Ratings. At any time following the Advance
Decrease Date, the Issuer shall, at the request of the Deal Agent, request and take all reasonable
actions to acquire a renewed rating of the Series 2008-A Notes from each of the Rating Agencies.
The Issuer shall only be required to make one such request of each Rating Agency, and shall bear
all costs, fees and expenses incurred in connection with such requests.



     Section 6.2. Negative Covenants of the Issuer. So long as any of the Series 2008-A
Notes are outstanding, the Issuer shall not:



     (a) Sales, Liens, Etc., Against Receivables and Related Security. Except for the
releases contemplated under this Indenture sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist, any Lien (other than the Lien created by this
Indenture or, with respect to Timeshare Properties relating to Pledged Loans, any Permitted
Encumbrances thereon) upon or with respect to, any Pledged Loan or any other Pledged Assets, or any
interests in either thereof, or upon or with respect to any Collateral or Membership Interest
Collateral under this Indenture. The Issuer shall immediately notify the Trustee and the
Collateral Agent of the existence of any Lien on any Pledged Loan or any other Pledged Assets, and
the Issuer shall defend the right, title and interest of each of the Issuer and the Collateral
Agent, Trustee and Noteholders in, to and under the Pledged Loans and all other Pledged Assets,
against all claims of third parties.



     (b) Extension or Amendment of Loan Terms. Other than in accordance with Section
7.5(d), extend (other than as a result of a Timeshare Upgrade), amend, waive or otherwise modify
the terms of any Pledged Loan or permit the rescission or cancellation of any Pledged Loan, whether
for any reason relating to a negative change in the related Obligor’s creditworthiness or inability
to make any payment under the Pledged Loan or otherwise.



77









 





     (c) Change in Business or Credit Standard and Collection Policies. (i) Make any
change in the character of its business or (ii) make any change in the Credit Standards and
Collection Policies, or (iii) deviate from the exercise of Customary Practices, which change or
deviation would, in any such case, materially impair the value or collectibility of any Pledged
Loan.



     (d) Change in Payment Instructions to Obligors. Add or terminate any bank as a
Control Account Bank (listed on Exhibit E) 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 Trustee
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, the Trustee and the Servicer 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.



     (e) Stock, Merger, Consolidation, Etc. Consolidate with or merge into or with any
other Person, or purchase or otherwise acquire all or substantially all of the assets or capital
stock, or other ownership interest of, any Person or sell, transfer, lease or otherwise dispose of
all or substantially all of its assets to any Person, except as expressly permitted under the terms
of this Indenture; provided, however, that nothing in this Section 6.2(e) shall prevent the Issuer
from acquiring, owning or transferring or otherwise disposing of the limited liability company
interests of STCRF in accordance with the provisions of this Indenture and the other Facility
Documents.



     (f) Change in Control. At any time fail to be a wholly owned direct or indirect
subsidiary of the Performance Guarantor and a wholly owned direct or indirect subsidiary of WCF.



     (g) ERISA Matters. Establish or maintain or contribute to any Benefit Plan that is
covered by Title IV of ERISA.



     (h) Terminate or Reject Loans. Without limiting anything in Section 6.2(b), terminate
or reject any Pledged Loan prior to the end of the term of such Loan, whether such rejection or
early termination is made pursuant to an equitable cause, statute, regulation, judicial proceeding
or other applicable law, unless prior to such termination or rejection, such Pledged Loan and any
related Pledged Assets have been released from the Lien created by this Indenture.



     (i) Debt. Create, incur, assume or suffer to exist any Debt except as contemplated by
the Facility Documents and any Exchange Notes Indenture.



     (j) Guarantees. Guarantee, endorse or otherwise be or become contingently liable
(including by agreement to maintain balance sheet tests) in connection with the obligations of any
other Person, except endorsements of negotiable instruments for collection in the ordinary course
of business and reimbursement or indemnification obligations as provided for under this Indenture
or as contemplated by the Facility Documents.



78









 





     (k) Limitation on Transactions with Affiliates. Enter into, or be a party to any
transaction with any Affiliate, except for:




     (i) the transactions contemplated hereby and by the other Facility
Documents; and




     (ii) to the extent not otherwise prohibited under this Indenture, other
transactions upon fair and reasonable terms materially no less favorable to
the Issuer than would be obtained in a comparable arm’s-length transaction
with a Person not an Affiliate.



     (l) Lines of Business. Conduct any business other than that described in the LLC
Agreement, or enter into any transaction with any Person which is not contemplated by or incidental
to the performance of its obligations under the Facility Documents to which it is a party.



     (m) Limitation on Investments. Make or suffer to exist any loans or advances to, or
extend any credit to, or make any investments (by way of transfer of property, contributions to
capital, purchase of stock or securities or evidences of indebtedness, acquisition of the business
or assets or otherwise) in, any Affiliate or any other Person except for (i) Permitted Investments,
(ii) the purchase of Loans pursuant to the terms of the Depositor Purchase Agreement and (iii) the
limited liability company interests of STCRF.



     (n) Insolvency Proceedings. Seek dissolution or liquidation in whole or in part of
the Issuer.



     (o) Distributions to Member. Make any distribution to its Member except as provided
in the LLC Agreement.



     (p) Place of Business; Change of Name. Change (x) its type or jurisdiction of
organization from that listed in Section 3.1(i), (y) its name or (z) the location of its Records
relating to the Collateral or its chief executive office or principal place of business from the
location listed in Section 3.1(i), unless in any such event the Issuer shall have given the Trustee
and the Collateral Agent at least ten (10) days prior written notice thereof and shall take all
action reasonably necessary to amend its existing Financing Statements and file additional
Financing Statements in all applicable jurisdictions necessary or advisable to maintain the
perfection of the Lien of the Collateral Agent under this Indenture.



     (q) Business Names. Use any trade names, fictitious names, assumed names or “doing
business as” names.



     (r) Subordinated Note. Amend, modify or supplement the Subordinated Note without the
prior written consent of the Majority Facility Investors.



ARTICLE VII




SERVICING OF PLEDGED LOANS




79









 





     Section 7.1. Responsibility for Loan Administration. The Servicer shall manage,
administer, service and make collections on the Pledged Loans on behalf of the Trustee on behalf of
the Noteholders and Issuer. Without limiting the generality of the foregoing, but subject to all
other provisions hereof, the Trustee and the Issuer grant to the Servicer a limited power of
attorney to execute and the Servicer is hereby authorized and empowered to so execute and deliver,
on behalf of itself, the Issuer and the Trustee or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release or discharge and all other comparable
instruments with respect to the Pledged Loans, any related Mortgages and the related Timeshare
Properties, but only to the extent deemed necessary by the Servicer.



     The Trustee, the Issuer and the Collateral Agent, at the request of a Servicing Officer, shall
furnish the Servicer with any documents in its possession reasonably requested or take any action
reasonably requested, necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties hereunder (subject, in the case of requests for documents contained in
any Loan Files, to the requirements of Section 6.1(l)(ii)).



     Wyndham Consumer Finance, Inc. is hereby appointed as the Servicer until such time as any
Service Transfer shall be effected under Article XII.



     Section 7.2. Standard of Care. In managing, administering, servicing and making
collections on the Pledged Loans pursuant to this Indenture, the Servicer will exercise that degree
of skill and care consistent with Customary Practices and the Credit Standards and Collection
Policies.



     Section 7.3. Records. The Servicer shall, during the period it is Servicer hereunder,
maintain such books of account, computer data files and other records as will enable the Trustee to
determine the status of each Pledged Loan and will enable such Loan to be serviced in accordance
with the terms of this Indenture by a Successor Servicer following a Service Transfer.



     Section 7.4. Series 2008-A Loan Schedule. The Servicer shall at all times maintain
the Series 2008-A Loan Schedule and electronically provide to the Trustee, the Issuer, the
Collateral Agent and the Custodian a current, complete copy of the Series 2008-A Loan Schedule.
The Series 2008-A Loan Schedule may be in one or multiple documents including an original listing
and monthly amendments listing changes.



     Section 7.5. Enforcement.



     (a) The Servicer will, consistent with Section 7.2, act with respect to the Pledged Loans in
such manner as will maximize the receipt of Collections in respect of such Pledged Loans
(including, to the extent necessary, instituting foreclosure proceedings against the Timeshare
Property, if any, underlying a Pledged Loan or disposing of the underlying Timeshare Property, if
any).



     (b) The Servicer may sue to enforce or collect upon Pledged Loans, in its own name, if
possible, or as agent for the Issuer. If the Servicer elects to commence a legal proceeding to
enforce a Pledged Loan, the act of commencement shall be deemed to be an automatic assignment of
the Pledged Loan to the Servicer for purposes of collection only. If, however, in



80









 







any enforcement suit or legal proceeding it is held that the Servicer may not enforce a
Pledged Loan on the grounds that it is not a real party in interest or a holder entitled to enforce
the Pledged Loan, the Trustee on behalf of the Issuer shall, at the Servicer’s expense, take such
steps as the Servicer and the Trustee may mutually agree are necessary (such agreement not to be
unreasonably withheld) to enforce the Pledged Loan, including bringing suit in its name or the name
of the Issuer. The Servicer shall provide to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred thereby.



     (c) The Servicer, upon notice to the Trustee, may grant to the Obligor on any Pledged Loan any
rebate, refund or adjustment out of the appropriate Collection Account that the Servicer in good
faith believes is required as a matter of law; provided that, on any Business Day
on which such rebate, refund or adjustment is to be paid hereunder, such rebate, refund or
adjustment shall only be paid to the extent of funds otherwise available for distribution from the
Collection Account.



     (d) The Servicer will not extend, amend, waive or otherwise modify the terms of any Pledged
Loan or permit the rescission or cancellation of any Pledged Loan, whether for any reason relating
to a negative change in the related Obligor’s creditworthiness or inability to make any payment
under the Pledged Loan or otherwise other than in accordance with Customary Practices.



     (e) The Servicer shall have the discretion to sell the collateral which secures any Defaulted
Loans free and clear of the Lien of this Indenture, in exchange for cash, in accordance with
Customary Practices and Credit Standards and Collection Policies. All proceeds of any such sale of
such collateral shall be deposited by the Servicer into the Collection Account.



     (f) The Servicer shall not sell any Defaulted Loan or any collateral securing a Defaulted Loan
to any Seller or Originator except for an amount at least equal to the fair market value thereof.



     (g) Notwithstanding any other provision of this Indenture, the Servicer shall have no
obligation to, and shall not, foreclose on the collateral securing any Pledged Loan unless the
proceeds from such foreclosure will be sufficient to cover the expenses of such foreclosure.
Notwithstanding any other provision of this Indenture, proceeds from the foreclosure by the
Servicer on the collateral securing any Pledged Loans shall first be applied by the Servicer to
reimburse itself for the expenses of such foreclosure, and any remaining proceeds shall be
deposited into the Collection Account.



     Section 7.6. Trustee and Collateral Agent to Cooperate. Upon request of a Servicing
Officer, the Trustee and the Collateral Agent shall perform such other acts as are reasonably
requested by the Servicer (including without limitation the execution of documents) and otherwise
cooperate with the Servicer in enforcement of the Trustee’s rights and remedies with respect to
Pledged Loans.



     Section 7.7. Other Matters Relating to the Servicer. The Servicer is hereby
authorized and empowered to:



81









 





     (a) advise the Trustee in connection with the amount of withdrawals from Accounts in
accordance with the provisions of this Indenture;



     (b) execute and deliver, on behalf of the Issuer, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other comparable instruments,
with respect to the Pledged Loans and, after the delinquency of any Pledged Loan and to the extent
permitted under and in compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Pledged Loan including without limitation the exercise of rights
under any power-of-attorney granted in any Pledged Loan; and



     (c) make any filings, reports, notices, applications, registrations with, and to seek any
consents or authorizations from the Securities and Exchange Commission and any state securities
authority on behalf of the Issuer as may be necessary or advisable to comply with any federal or
state securities or reporting requirements laws.



     Prior to the occurrence of an Event of Default hereunder, the Trustee agrees that, it shall
promptly follow the instructions of the Servicer duly given to withdraw funds from the Accounts in
accordance with the terms hereof.



     Section 7.8. Servicing Compensation. As compensation for its servicing activities
hereunder, the Servicer shall be entitled to receive the Monthly Servicer Fee which shall be
calculated under this Indenture and be paid to the Servicer pursuant to the terms of this
Indenture.



     Section 7.9. Costs and Expenses. The costs and expenses incurred by the Servicer in
carrying out its duties hereunder, including without limitation the fees and expenses incurred in
connection with the enforcement of Pledged Loans, shall be paid by the Servicer and the Servicer
shall be entitled to reimbursement hereunder from the Issuer as provided herein. Failure by the
Servicer to receive reimbursement shall not relieve the Servicer of its obligations under this
Indenture.



     Section 7.10. Representations and Warranties of the Servicer. The Servicer hereby
represents and warrants to the Trustee and the Collateral Agent as of the date of this Indenture
and represents to the Noteholders as of the Closing Date:



     (a) Organization and Good Standing. The Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has full
corporate power, authority, and legal right to own its property and conduct its business as such
properties are presently owned and such business is presently conducted, and to execute, deliver
and perform its obligations under this Indenture. The Servicer is duly qualified to do business
and is in good standing as a foreign corporation, and has obtained all necessary licenses and
approvals in each jurisdiction necessary for the enforcement of each Pledged Loan or in which
failure to qualify or to obtain such licenses and approvals would have a Material Adverse Effect.



     (b) Due Authorization. The execution and delivery by the Servicer of each of the
Facility Documents to which it is a party, and the consummation by the Servicer of the transactions
contemplated hereby and thereby have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.



82









 





     (c) Binding Obligations. Each of the Facility Documents to which Servicer is a party
constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer
in accordance with its terms, except as such enforceability may be subject to or limited by
applicable Debtor Relief Laws and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).



     (d) No Conflict; No Violation. The execution and delivery by the Servicer of each of
the Facility Documents to which the Servicer is a party, and the performance by the Servicer of the
transactions contemplated by such agreements and the fulfillment by the Servicer of the terms
hereof and thereof applicable to the Servicer, will not conflict with, violate, result in any
breach of the terms and provisions of, or constitute (with or without notice or lapse of time or
both) a default under any provision of any existing law or regulation or any order or decree of any
court applicable to the Servicer or its certificate of incorporation or bylaws or any material
indenture, contract, agreement, mortgage, deed of trust or other material instrument, to which the
Servicer is a party or by which it is bound, except where such conflict, violation, breach or
default would not have a Material Adverse Effect.



     (e) No Proceedings. There are no proceedings or investigations pending or, to the
knowledge of the Servicer threatened, against the Servicer, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Indenture or any of the other Facility Documents, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Indenture or any of the other Facility
Documents, (iii) seeking any determination or ruling that, in the reasonable judgment of the
Servicer, would adversely affect the performance by the Servicer of its obligations under this
Indenture or any of the other Facility Documents, (iv) seeking any determination or ruling that
would adversely affect the validity or enforceability of this Indenture or any of the other
Facility Documents or (v) seeking any determination or ruling that would have a Material Adverse
Effect.



     (f) All Consents Required. All approvals, authorizations, consents, orders or other
actions of any Person or any governmental body or official required in connection with the
execution and delivery by the Servicer of this Indenture or of the other Facility Documents to
which it is a party or the performance by the Servicer of the transactions contemplated hereby and
thereby and the fulfillment by the Servicer of the terms hereof and thereof, have been obtained,
except where the failure so to do would not have a Material Adverse Effect.



     Section 7.11. Additional Covenants of the Servicer. The Servicer further agrees as
provided in this Section 7.11.



     (a) Change in Payment Instructions to Obligors. The Servicer will not add or
terminate any bank as a Control Account Bank from those listed on Exhibit E or make any change in
its instructions to Obligors regarding payments to be made to any Control Account Bank, unless the
Trustee 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, the Trustee and the Servicer 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.



83









 





     (b) Collections. The Servicer shall hold any Collections or other proceeds of the
Collateral received directly by it in trust for the benefit of the Trustee and deposit such
Collections or other proceeds into the Collection Account as soon as practicable but in any event
within two Business Days following the Servicer’s receipt thereof.



     (c) Compliance with Requirements of Law. The Servicer will maintain in effect all
qualifications required under all relevant laws, rules, regulations and orders in order to service
each Pledged Loan, and shall comply in all material respects with all applicable laws, rules,
regulations and orders with respect to it, its business and properties, and the servicing of the
Pledged Loans (including without limitation the laws, rules and regulations of each state governing
the sale of timeshare contracts).



     (d) Protection of Rights. The Servicer will take no action that would impair in any
material respect the rights of any of the Collateral Agent or the Trustee in the Pledged Loans or
any other the Collateral, or violate the Collateral Agency Agreement.



     (e) Credit Standards and Collection Policies. The Servicer will comply in all
material respects with the Credit Standards and Collection Policies and Customary Practices with
respect to each Pledged Loan.



     (f) Notice to Obligors. The Servicer will ensure that the Obligor of each Pledged
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 a Pledged Loan, or
	 
	 	(B)	 	the day on which a PAC ceased to apply to such
Pledged Loan, in the case of a Pledged Loan formerly subject to a PAC,




but in no event later than the then next-succeeding due date for a Scheduled Payment under the
related Pledged Loan, to remit Scheduled Payments 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 as they become due and payable,
and the Servicer has, and has caused each of the Control Account Bank and/or the Trustee, to take
all necessary and appropriate action to ensure that each such pre-authorized debit is credited
directly to the Control Account or the Collection Account;



          (3) has authorized Scheduled Payments 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



84









 





          (4) has authorized electronic transfer of payments through Western Union, 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.



     (g) Relocation of Servicer. The Servicer shall give the Trustee, the Collateral Agent
and each Rating Agency at least 30 days, prior written notice of any relocation of any office from
which it services Pledged Loans or keeps records concerning the Pledged Loans. The Servicer shall
at all times maintain each office from which it services Pledged Loans within the United States of
America.



     (h) Instruments. The Servicer will not remove any portion of the Pledged Loans or
other collateral that consists of money or is evidenced by an instrument, certificate or other
writing (including any Pledged Loan) from the jurisdiction in which it is then held unless the
Trustee has first received an Opinion of Counsel to the effect that the Lien created by this
Indenture with respect to such property will continue to be maintained after giving effect to such
action or actions; provided, however, that each Custodian, the Collateral Agent and the Servicer
may remove Loans from such jurisdiction to the extent necessary to satisfy any requirement of law
or court order, in all cases in accordance with the provisions of the Custodial Agreement, the
Collateral Agency Agreement and this Indenture.



     (i) Series 2008-A Loan Schedule. The Servicer will promptly amend the related Series
2008-A Loan Schedule to reflect terms or discrepancies that become known to the Servicer at any
time.



     (j) 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 Pledged 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
Pledged Loans to the Issuer and transfer such amounts to the Trustee for deposit into the
appropriate Collection Account; (provided that, the covenant in clause (i) of this paragraph (j)
shall not be breached to the extent funds not constituting Collections in respect of Pledged Loans
are inadvertently deposited into such Control Account and are promptly segregated and remitted to
the owner thereof.



     (k) Terminate or Reject Loans. Except to the extent necessary to address defects in
the sales process or in cases of exceptional hardship of the Obligor, and without limiting anything
in Section 6.2(b), the Servicer will not terminate any Pledged Loan prior to the end of the term of
such Loan, whether such early termination is made pursuant to an equitable cause, statute,
regulation, judicial proceeding or other applicable law, unless prior to such termination, the
Issuer consents and any related Pledged Assets have been released from the Lien of this Indenture.




85












 





     (l) Change in Business or Credit Standards and Collection Policies. The Servicer will
not make any change in the Credit Standards and Collection Policies or deviate from the exercise of
Customary Practices, which change or deviation would materially impair the value or collectibility
of any Pledged Loan.



     (m) Keeping of Records and Books of Account. The Servicer shall maintain and
implement administrative and operating procedures (including without limitation an ability to
recreate records evidencing the Pledged Loans in the event of the destruction or loss of the
originals thereof) and keep and maintain, all documents, books, records and other information
reasonably necessary or advisable for the collection of all Pledged Loans (including without
limitation records adequate to permit the daily identification of all Collections with respect to,
and adjustments of amounts payable under, each Pledged Loan).



     (n) Issuer Excluded Excess Amount. If on any Determination Date the weighted average
FICO Score of all Loans with an original term of longer than 84 months as of the last day of the
immediately preceding Due Period is not at least 655 (the “7-Year Loans Restriction”), then
the Servicer shall, at the direction of the Issuer, specify in writing Loans to be included in the
FICO Score of 7-Year Loans Excess Amount such that, upon such inclusion, the 7-Year Loans
Restriction shall be fulfilled. If on any Determination Date the weighted average FICO Score of
all Loans with an original term of longer than 120 months as of the last day of the immediately
preceding Due Period is not at least 730 (the “10-Year Loans Restriction”), then the
Servicer shall, at the direction of the Issuer, specify in writing Loans to be included in the FICO
Score of 10-Year Loans Excess Amount such that, upon such inclusion, the 10-Year Loans Restriction
shall be fulfilled.



     (o) No Impermissibly Modified Loan. The Servicer shall not take any action that would
cause a Loan to be an Impermissibly Modified Loan.



     Section 7.12. Servicer not to Resign. The entity then serving as Servicer shall not
resign from the obligations and duties hereby imposed on it hereunder except upon determination
that (i) the performance of its duties hereunder is no longer permissible under applicable law,
(ii) there is no reasonable action which can be taken to make the performance of its duties
hereunder permissible under applicable law and (iii) a Successor Servicer shall have been appointed
and accepted the duties as Servicer pursuant to Section 12.2. Any such determination permitting
the resignation of the Servicer pursuant to clause (i) of the preceding sentence shall be evidenced
by an Opinion of Counsel to such effect delivered to the Trustee. No such resignation shall be
effective until a Successor Servicer shall have assumed the responsibilities and obligations of the
Servicer in accordance with Section 12.2.



     Section 7.13. Merger or Consolidation of, or Assumption of the Obligations of
Servicer.



     The Servicer shall not consolidate with or merge into any other corporation or convey or
transfer its properties and assets substantially as an entirety to any Person unless:




     (i) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an



86









 







entirety shall be a corporation organized and existing under the laws
of the United States of America or any state or the District of Columbia
and, if the Servicer is not the surviving entity, shall expressly assume by
an agreement supplemental hereto, executed and delivered to the Trustee in
form satisfactory to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder;




     (ii) the Servicer has delivered to the Trustee an Officer’s Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section 7.13, and all conditions precedent provided for herein relating to
such transaction have been satisfied;




     (iii) the Rating Agency Condition has been satisfied with respect to
such consolidation, amendment, merger, conveyance or transfer; and




     (iv) immediately prior to and after the consummation of such merger,
consolidation, conveyance or transfer, no event which, with notice or
passage of time or both, would become a Servicer Default under the terms of
this Indenture shall have occurred and be continuing.



     Section 7.14. Examination of Records. Each of the Issuer and the Servicer shall
clearly and unambiguously identify each Pledged Loan in its respective computer or other records to
reflect that such Pledged Loan has been Granted to the Collateral Agent pursuant to this Indenture.
Each of the Issuer and the Servicer shall, prior to the sale or transfer to a third party of any
Loan similar to the Pledged Loans held in its custody, examine its computer and other records to
determine that such Loan is not a Pledged Loan.



     Section 7.15. Delegation of Duties. In the ordinary course of business, the Servicer,
including any Successor Servicer, may at any time delegate any duties hereunder to any Person who
agrees to conduct such duties in accordance with the terms of this Indenture, and any such Person
to whom such duties have been delegated may be terminated concurrently with the termination of the
Servicer hereunder. Any such delegations shall not constitute a resignation within the meaning of
Section 7.12 of this Indenture. Notwithstanding anything to the contrary contained herein, or in
any agreement relating to such delegations, the Servicer shall remain obligated and liable to the
Trustee, the Issuer, the Collateral Agent and the Noteholders for the servicing and administration
of the Pledged Loans in accordance with the provisions of this Indenture to the same extent and
under the same terms and conditions as if it alone were servicing and administering the Pledged
Loans.



     Section 7.16. Servicer Advances. On or before each Determination Date the Servicer
may deposit into the Collection Account an amount equal to the aggregate amount of Servicer
Advances, if any, with respect to Scheduled Payments on Pledged Loans for the preceding Due Period
which are not received on or prior to such Determination Date. Such Servicer Advances shall be
included as Available Funds. Neither the Servicer, any Successor Servicer nor the Trustee, acting
as Servicer, shall have any obligation to make any Servicer Advance and may



87









 







refuse to make a Servicer Advance for any reason or no reason. The Servicer shall not make
any Servicer Advance that, after reasonable inquiry and in its sole discretion, it determines is
unlikely to be ultimately recoverable from subsequent payments or collections or otherwise with
respect to the Pledged Loan with respect to which such Servicer Advance is proposed to be made.



     Section 7.17. Fair Market Value of Defaulted Loans. For the purpose of Section
7.5(f), no Defaulted Loan or Collateral related thereto shall be sold to any Seller or Originator
unless the cash proceeds of such sale are at least equal to the fair market value of such Pledged
Loan. For this purpose, “fair market value” shall mean initially, an amount equal to 25% of the
original sale price of the related Timeshare Property and, in the event either the Issuer or the
applicable Seller or Originator shall determine that such percentage is not reflective of the fair
market value of the Pledged Loan or Collateral related thereto, the Issuer and the applicable
Seller or Originator shall determine the fair market value of such Pledged Loan or Collateral
related thereto, as a percentage of the original sale price of the related Timeshare Property.
Prior to any such determination of a revised fair market value, written notice of such
determination including, in reasonable detail, the calculation thereof, shall be given by the
Servicer to each Funding Agent. Any such determination shall be based on the historical inventory
cost of the applicable Seller or Originator consistent with the cost of goods sold.



ARTICLE VIII




REPORTS




     Section 8.1. Monthly Report to Trustee. On or before 3:00 p.m., New York City time,
on the Determination Date prior to each Payment Date, the Servicer shall transmit to the Trustee in
a form or forms acceptable to the Trustee information necessary to make payments and transfer funds
as provided in Article IV, and the Servicer shall produce the Settlement Statement for such Payment
Date. Transmission of such information to the Trustee shall be deemed to be a representation and
warranty by the Servicer to the Trustee and the Noteholders that such information is true and
correct in all material respects. At the option of the Servicer, the Settlement Statement may be
combined with the Monthly Servicing Report described in Section 8.2 and delivered to the Trustee as
one report.



     Section 8.2. Monthly Servicing Reports. On each Determination Date, the Servicer
shall deliver to the Trustee, the Issuer and each Rating Agency the Monthly Servicing Report in the
form set forth in Exhibit C with such additions as the Trustee may from time to time request,
together with a certificate of a Servicing Officer substantially in the form of Exhibit C,
certifying the accuracy of such report and that no Event of Default, Potential Event of Default,
Amortization Event or Potential Amortization Event has occurred, or if such event has occurred and
is continuing, specifying the event and its status. Such certificate shall also identify which, if
any, Pledged Loans have become Defective Loans or Defaulted Loans during the preceding Due Period.



     Section 8.3. Other Data. In addition, the Servicer shall at the reasonable request of
the Trustee, the Issuer or a Rating Agency, furnish to the Trustee, the Issuer or such Rating
Agency such underlying data as can be generated by the Servicer’s existing data processing system
without undue modification or expense; provided, however, nothing in this Section
8.3 shall
permit any of the Trustee, the Issuer or any Rating Agency to materially change or modify the
ongoing data reporting requirements under this Article VIII.



88









 





     Section 8.4. Annual Servicer’s Certificate. The Servicer will deliver to the Issuer,
the Trustee and each Rating Agency within forty-five (45) days after the end of each fiscal year,
beginning with the fiscal year, ending December 31, 2008, an Officer’s Certificate stating that (a)
a review of the activities of the Servicer during the preceding calendar year (or, in the case of
the first such Officer’s Certificate, the period since the Closing Date) and of its performance
under this Indenture during such period was made under the supervision of the officer signing such
certificate and (b) to the Servicer’s knowledge, based on such review, the Servicer has fully
performed all of its obligations under this Indenture for the relevant time period, or, if there
has been a default in the performance of any such obligation, specifying each such default known to
such officer and the nature and status thereof.



     Section 8.5. Notices to WCF. In the event that WCF is not acting as Servicer, any
Successor Servicer appointed and acting pursuant to Section 12.2 shall deliver or make available to
the Issuer and WCF each certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to the provisions of this Article VIII.



     Section 8.6. Delivery of Reports to Deal Agent. The Servicer shall on each date it
delivers a report to the Trustee under Section 8.1 or 8.2 above deliver a copy of each such report
to the Deal Agent and each Funding Agent.



     Section 8.7. Tax Reporting. The Trustee shall file or cause to be filed with the
Internal Revenue Service and furnish or cause to be furnished to Noteholders Information Reporting
Forms 1099, together with such other information, reports or returns at the time or times and in
the manner required by the Internal Revenue Code consistent with the treatment of the Series 2008-A
Notes as indebtedness of the Issuer for federal income tax purposes.



ARTICLE IX




INDEMNITIES




     Section 9.1. Liabilities to Obligors. No obligation or liability to any Obligor under
any of the Pledged Loans is intended to be assumed by the Trustee or the Noteholders under or as a
result of this Indenture and the transactions contemplated hereby and, to the maximum extent
permitted by law, the Trustee and the Noteholders expressly disclaim any such obligation and
liability.



     Section 9.2. Tax Indemnification. The Issuer agrees to pay, and to indemnify, defend
and hold harmless the Trustee, the Servicer and the Noteholders from, any taxes which may at any
time be asserted with respect to, and as of the date of, the Grant of the Pledged Loans to the
Collateral Agent for the benefit of the Trustee, the Servicer and the Noteholders, including
without limitation any sales, gross receipts, general corporation, personal property, privilege or
license taxes (but not including any federal, state or other income or intangible asset taxes
arising out of the issuance of the Series 2008-A Notes or distributions with respect thereto, other
than any such intangible asset taxes in respect of a jurisdiction in which the indemnified person
is not
otherwise subject to tax on its intangible assets) and costs, expenses and reasonable counsel
fees in defending against the same.



89









 





     Section 9.3. Servicer’s Indemnities. Each entity serving as Servicer shall defend and
indemnify the Issuer and the Trustee against any and all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel and expenses of litigation, in
respect of any action taken, or failure to take any action by such entity as Servicer (but not by
any predecessor or successor Servicer) with respect to this Indenture or any Pledged Loan;
provided, however, that such indemnity shall apply only in respect of any negligent
action taken, or negligent failure to take any action, or reckless disregard of duties hereunder,
or bad faith or willful misconduct by the Servicer. This indemnity shall survive any Service
Transfer (but a Servicer’s obligations under this Section 9.3 shall not relate to any actions of
any Successor Servicer after a Service Transfer) and any payment of the amount owing hereunder or
under this Indenture or any release by the Issuer of any such Pledged Loan.



     Section 9.4. Operation of Indemnities. Indemnification under this Article IX shall
include without limitation reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer has made any indemnity payments to the Trustee, the Noteholders or the Issuer pursuant
to this Article IX and if either the Trustee, the Noteholders or the Issuer thereafter collect any
of such amounts from others, the Trustee, the Noteholders or the Issuer will promptly repay such
amounts collected to the Servicer without interest.



ARTICLE X




AMORTIZATION EVENTS




     Section 10.1. Amortization Events. If one or more of the following events shall occur
and be continuing:



     (a) the Issuer fails to pay in full the Senior Notes Interest due and payable on the Series
2008-A Notes on any Payment Date and such failure continues for two Business Days;
provided, however, that if the Issuer has made deposits of Collections to the
Collection Account in an amount sufficient to make such interest payment when due in accordance
with the Priority of Payments, but the payment cannot be made in a timely manner as a result of
circumstances beyond the Issuer’s control, the grace period shall be extended to three Business
Days;



     (b) the Issuer fails to pay in full the principal of the Series 2008-A Notes on or before the
Mandatory Redemption Date;



     (c) any Event of Default occurs;



     (d) a Servicer Default occurs;



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



     (f) the Four Month Default Percentage as of any Payment Date exceeds 1.25%;



90









 





     (g) the Three Month Rolling Average Delinquency Ratio as calculated for any Payment Date
exceeds 4.0%;



     (h) on any Payment Date, the Gross Excess Spread Percentage for the related Due Period is less
than 2.75%;



     (i) a Change of Control with respect to a Seller (other than WCF, WVRI or WRDC) occurs without
the prior satisfaction of the Rating Agency Condition and the prior written consent of the Required
Facility Investors, or a Change of Control with respect to the Issuer, the Depositor, WCF, WVRI or
WRDC occurs without the prior satisfaction of the Rating Agency Condition and the prior written
consent of each of the Funding Agents;



     (j) if (i) any WorldMark Loans are then included in the Pledged Loans and (ii) (A) WorldMark
voluntarily incurs or at any time becomes voluntarily liable for any Debt (other than customary
trade payables), (B) any of WorldMark’s property becomes subject to any Liens, other than utility
or other easements or licenses unrelated to any debt of WorldMark or Liens that do not exceed, in
the aggregate, $100,000 or (C) WorldMark involuntarily incurs or is liable for any debt or its
property becomes involuntarily subject to any Liens (other than utility or similar easements or
licenses unrelated to any debt of WorldMark) that individually or in the aggregate (with respect to
all such Debt and the obligations secured by all such Liens) exceed $1,000,000;



     (k) [reserved];



     (l) the Notes Principal Amount on any Payment Date (without giving effect to any Increase on
such date) exceeds the Borrowing Base Amortization Trigger Amount as of such Payment Date and the
Issuer fails on such Payment Date either (i) to pay in full an amount of principal on the Series
2008-A Notes equal to such excess or (ii) to pledge Loans as Collateral with Loan Balances in an
amount such that the Borrowing Base Amortization Trigger Amount would have been at least equal to
the Notes Principal Amount on such date;



     (m) an Insolvency Event occurs with respect to any Seller of Series 2008-A Loans or the Parent
Corporation;



     (n) Wyndham Worldwide fails to perform under the terms of the Performance Guaranty or the
Performance Guaranty shall cease to be in full force and effect;



     (o) the Notes Principal Amount shall at any time exceed the Adjusted Loan Balance;



     (p) failure on the part of the Depositor duly to observe or perform any covenants or
agreements of the Depositor set forth in any of the Facility Documents to which the Depositor is a
party (other than any failure described in any other clause of this Section 10.1) and such failure
continues unremedied for a period of 30 days after the earlier of the date on which the Depositor
has actual knowledge of the failure and the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Depositor by the Issuer, the Trustee or any
Noteholder;



     (q) any representation and warranty made by the Depositor in any Facility Document shall prove
to have been incorrect in any material respect when made and the Depositor is not in



91









 







compliance with such representation or warranty within 30 days after the earlier of the date
on which the Depositor has actual knowledge of such breach and the date on which written notice of
such breach requiring that such breach be remedied, shall have been given to the Depositor by the
Issuer, the Trustee or any Noteholder;



     (r) the Securitized Pool Three Month Rolling Average Delinquency Percentage exceeds 5.0% for
four consecutive Payment Dates; or



     (s) the Securitized Pool Four Month Default Percentage exceeds 1.0% for four consecutive
Payment Dates;


then, in the case of an event described in any clause except clause (a)(1), (c) or (e) of the
Events of Default in Section 11.1, or clause (b) or (m) above, the Deal Agent at the direction of
the Majority Facility Investors, or, with respect to an event described in clause (j), (l) or (n),
the Deal Agent, at the direction of any Funding Agent, by notice given in writing to the Issuer,
the Servicer and the Trustee, may declare that an Amortization Event has occurred as of the date of
such notice and, in the case of any event described in clause (a)(1), (c) or (e) of the Events of
Default in Section 11.1, or clause (b) or (m) of this Section 10.1, an Amortization Event will
occur immediately upon the occurrence of such event without any notice or other action on the part
of the Deal Agent, the Trustee or any other entity.




ARTICLE XI




EVENTS OF DEFAULT




     Section 11.1. Events of Default. If any of the following events occur:



     (a) Failure on the part of the Issuer (1) to repay the Notes Principal Amount in full on or
before the Mandatory Redemption Date, (2) to repay the Notes Principal Amount in full on or before
the Maturity Date, (3) to make or cause to be made any payment or deposit required by the terms of
this Indenture or any other Document on or before the date such payment or deposit is required to
be made and such failure remains unremedied for two Business Days (provided, however, that if the
Issuer is unable to make a payment or deposit when due and such failure is as a result of
circumstances beyond the Issuer’s control, the grace period shall be extended to three Business
Days), (4) on or after the Initial Advance Date, to provide a Hedge Agreement meeting the
requirements of Section 4.7 and such failure continues for five Business Days, (5) if the Hedge
Provider ceases to be a Qualified Hedge Provider, to enter into a Hedge Agreement with a Qualified
Hedge Provider by one of the methods set forth in Section 4.8 within the five days provided in
Section 4.8 and such failure continues for five Business Days beyond the period allowed in Section
4.8, or (6) to duly to observe or perform or cause to be observed or performed any covenant or
agreement of the Issuer set forth in this Indenture or any other Facility Document to which the
Issuer is a party (other than these events caused in clause (1), (2), (3), (4) or (5) of this
subsection), which continues unremedied for a period of 30 days (or five Business Days, in the case
of Section 6.1(b), (f), (g)(2) or (g)(3) or 6.2(a), (c), (d), (e), (i), (l), (n), (o) or (p)) after
the earlier of (x) the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to an officer of the Issuer by the Trustee or any Noteholder or (y)
the date on which an officer of the Issuer has actual knowledge thereof;



92









 





     (b) any representation or warranty made by the Issuer with respect to itself in this Indenture
shall prove to have been incorrect in any material respect when made and has a material adverse
effect on the Trustee’s or the Collateral Agent’s interest in the Pledged Loans and other related
Pledged Assets and the Issuer is not in compliance with such representation or warranty within ten
Business Days after the earlier of the date on which the Issuer or a Responsible Officer of the
Trustee has actual knowledge of such breach and the date on which written notice of such breach
requiring that such breach be remedied, shall have been given to the Issuer by the Trustee or any
Noteholder;



     (c) (1) an Insolvency Event shall occur with respect to the Depositor or the Issuer, or (2) an
Insolvency Event shall occur with respect to any Seller of Series 2008-A Loans or the Parent
Corporation;



     (d) the Issuer shall become an “investment company” or shall become under the control of an
“investment company” within the meaning of the Investment Company Act; or



     (e) the Servicer shall have been terminated following a Servicer Default, and a Successor
Servicer shall not have been appointed or such appointment shall not have been accepted within five
Business Days after the date of the termination stated in the Termination Notice and the Trustee is
not acting as Servicer;



     THEN, in the case of the event described in subparagraph (a)(1), (a)(5), (a)(6) or (c)(2),
after the applicable grace period, if any, set forth in such subparagraphs, the Majority Facility
Investors by notice given in writing to the Issuer (and to the Trustee) may declare that an event
of default has occurred as of the date of such notice, and in the case of any event described in
subparagraph (a)(2), (a)(3), (a)(4), (b), (c)(1), (d) or (e), an Event of Default shall occur
without any notice or other action on the part of the Deal Agent, immediately upon the occurrence
of such event and shall continue unless waived in writing by each of the Funding Agents.



     Section 11.2. Acceleration of Maturity; Rescission and Annulment.



     (a) If an Event of Default described in paragraph (a)(1), (a)(2), (a)(3), (a)(4), (a)(5),
(a)(6), (b), (c)(2), (d) or (e) of Section 11.1 should occur and be continuing, then and in every
such case the Majority Facility Investors may declare all the Series 2008-A Notes to be immediately
due and payable, by a notice in writing to the Issuer and to the Trustee, and upon any such
declaration the unpaid principal amount of the Series 2008-A Notes, together with accrued or
accreted and unpaid interest thereon through the date of acceleration, shall become immediately due
and payable. If an Event of Default described in paragraph (c)(1) of Section 11.1 should occur
then and in every such case the Series 2008-A Notes together with accrued or accreted and unpaid
interest through the date of acceleration, shall become automatically and immediately due and
payable.



     (b) If an Event of Default has occurred and the maturity of the Series 2008-A Notes has been
accelerated, such acceleration may be rescinded or annulled by each of the Funding Agents by
written notice to the Issuer and the Trustee.



     Section 11.3. Collection of Indebtedness and Suits for Enforcement by Trustee. The
Issuer covenants that if the Series 2008-A Notes are accelerated following the occurrence of an



93









 







Event of Default, and such acceleration has not been rescinded and annulled, the Issuer shall,
upon demand of the Trustee, pay to it, for the benefit of the Noteholders, the whole amount then
due and payable on the Series 2008-A Notes for principal and interest, with interest upon the
overdue principal and upon overdue installments of interest to the extent that payment of such
interest shall be legally enforceable; and, in addition thereto, such further amount as shall be
sufficient to cover the reasonable costs and expenses of collection, including the compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; provided,
however, the amount due under this Section 11.3 shall not exceed the aggregate proceeds
from the sale of the Collateral and amounts otherwise held by the Issuer and available for such
purpose.



     Until such demand is made by the Trustee, the Issuer shall pay the principal of and interest
on the Series 2008-A Notes to the Trustee for the benefit of the registered Holders to be applied
as provided in this Indenture, whether or not the Series 2008-A Notes are overdue.



     If the Issuer fails to pay such amounts forthwith upon such demand, then the Trustee for the
benefit of the Noteholders and as trustee of an express trust, may, with the prior written consent
of or at the direction of the Majority Facility Investors, institute suits in equity, actions at
law or other legal, judicial or administrative proceedings (each, a “Proceeding”) for the
collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer and collect the monies adjudged or decreed to
be payable in the manner provided by law out of the Collateral wherever situated. In the event a
Proceeding shall involve the liquidation of the Collateral, the Trustee shall pay all costs and
expenses for such Proceeding and shall be reimbursed for such costs and expenses from the resulting
liquidation proceeds. In the event that the Trustee determines that liquidation proceeds will not
be sufficient to fully reimburse the Trustee, the Trustee shall receive indemnity satisfactory to
it against such costs and expenses from the Noteholders (which indemnity may include, at the
Trustee’s option, consent by each Noteholder authorizing the Trustee to be reimbursed from amounts
available in the Collection Account).



     If an Event of Default occurs and is continuing, the Trustee may, and with the prior written
consent of or at the direction of the Majority Facility Investors, shall, proceed to protect and
enforce its rights and the rights of the Noteholders hereunder and under the Series 2008-A Notes,
by such appropriate Proceedings as are necessary to effectuate, protect and enforce any such
rights, whether for the specific enforcement of any covenant, agreement, obligation or indemnity in
this Indenture or in aid of the exercise of any power granted herein, or to enforce any other
proper remedy.



     Section 11.4. Trustee May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other Proceeding relative to the Issuer or the property of the Issuer or its
creditors, the Trustee (irrespective of whether the principal of the Series 2008-A Notes shall then
be due and payable as therein expressed or by declaration or otherwise) shall be entitled and
empowered, by intervention in such Proceeding or otherwise,




     (a) to file a proof of claim for the whole amount of principal and interest owing and
unpaid in respect of the Series 2008-A Notes and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee



94









 







(including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Noteholders allowed in such
Proceeding, and




     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same to the Noteholders;


and any receiver, assignee, trustee, liquidator or sequestrator (or other similar official) in any
such Proceeding is hereby authorized by each Noteholder to make such payments to the Trustee, and
in the event that the Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the
Trustee under Article XIII.




     Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Series 2008-A Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any such Proceeding.



     Section 11.5. Remedies.



     (a) If an Event of Default shall have occurred and be continuing, the Trustee and the
Collateral Agent (upon direction by the Trustee) may, with the prior written consent of or at the
direction of the Majority Facility Investors, do one or more of the following (subject to Section
11.6):




     (1) institute Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Series 2008-A Notes or under this Indenture,
whether by declaration or otherwise, enforce any judgment obtained, and collect from the
Collateral and Membership Interest Collateral and the property of the Issuer monies adjudged
due;




     (2) obtain possession of the Pledged Loans in accordance with the terms of the
Custodial Agreement and sell the Collateral and Membership Interest Collateral or any
portion thereof or rights or interests therein, at one or more public or private sales
called and conducted in any manner permitted by law and in accordance with Section 11.13;




     (3) institute Proceedings in its own name and as trustee of an express trust from time
to time for the complete or partial foreclosure of this Indenture with respect to the
Collateral and Membership Interest Collateral; and




     (4) exercise any remedies of a secured party under the UCC with respect to the
Collateral and Membership Interest Collateral and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee or the Holders and each other
agreement contemplated hereby (including retaining the Collateral pursuant to Section 11.6
and applying distributions from the Collateral pursuant to Section 11.6);



95









 




provided, however, that the Trustee may not sell or otherwise liquidate, or direct
the Collateral Agent to sell or otherwise liquidate, the Collateral which constitutes Loans and
Pledged Assets following an Event of Default other than an Event of Default described in this
Indenture resulting from an Insolvency Event, unless either (i) the Majority Facility Investors
consent thereto, or (ii) the proceeds of such sale or liquidation distributable to the Noteholders
are sufficient to discharge in full the amounts then due and unpaid upon the Series 2008-A Notes
for principal and accrued interest and the fees and other amounts required to be paid prior to
payment of amounts due on the Series 2008-A Notes pursuant to Section 11.6.




     For purposes of clause (i) or clause (ii) of the preceding paragraph, the Trustee may, but
need not, obtain and rely upon an opinion of an independent accountant or an independent investment
banking firm of national reputation as to the feasibility of such proposed action and as to the
sufficiency of the distributions and other amounts receivable with respect to the Collateral to
make the required payments of principal of and interest on the Series 2008-A Notes, and any such
opinion shall be conclusive evidence as to such feasibility or sufficiency. The Issuer shall bear
the reasonable costs and expenses of any such opinion.



     (b) In addition to the remedies provided in Section 11.5(a), if so provided in this Indenture,
the Trustee may, and at the request of the Majority Facility Investors shall, institute a
Proceeding in its own name and as trustee of an express trust solely to compel performance of a
covenant, agreement, obligation or indemnity or to cure the representation or warranty or
statement, the breach of which gave rise to the Event of Default; and the Trustee may enforce any
equitable decree or order arising from such Proceeding.



     (c) Notwithstanding anything in this Article XI to the contrary, the Trustee shall only have
the right to foreclose on, or otherwise exercise any remedy with respect to, the Membership
Interest Collateral to the extent required to make the payments pursuant to Section 2.13(a)(iv) on
the Series 2002-1 Termination Date.



     Section 11.6. Application of Monies Collected During Event of Default. If the Series
2008-A Notes have been accelerated following an Event of Default and such acceleration and its
consequences have not been rescinded and annulled, and distributions on the Collateral securing the
Series 2008-A Notes are not being applied pursuant to Section 11.6, any monies collected by the
Trustee pursuant to this Article XI or otherwise with respect to such Series 2008-A Notes shall be
applied in accordance with the following order:




     FIRST, to the Trustee in payment of the Monthly Trustee Fees and in reimbursement of
permitted expenses of the Trustee under each of the Facility Documents to which the Trustee
is a party; in the event of a Servicer Default and the replacement of the Servicer with the
Trustee or a Successor Servicer, the costs and expenses of replacing the Servicer shall be
permitted expenses of the Trustee;




     SECOND, if the Servicer is not Wyndham Consumer Finance, Inc. or an affiliate of the
Parent Corporation, to the Servicer, in payment of amounts due and unpaid of the Servicer
Fee and, whether or not Wyndham Consumer Finance, Inc. or another affiliate of the Parent
Corporation is then the Servicer, to the Servicer in reimbursement of any unreimbursed
Servicer Advances;



96









 






     THIRD, to Noteholders for interest according to the amounts due and unpaid on such
Series 2008-A Notes for interest and all other amounts (other than principal of the Series
2008-A Notes) due to the Noteholders under the Facility Documents;




     FOURTH, if the Servicer is Wyndham Consumer Finance, Inc. or another affiliate of the
Parent Corporation, to the Servicer, in payment of amounts due and unpaid of the Servicer
Fee;




     FIFTH, to the Noteholders in payment of unpaid principal on the Series 2008-A Notes;
provided, however, that, upon the direction of 100% of the Noteholders and to the extent
permitted by law as determined solely by the Noteholders, any amounts otherwise due to the
Noteholders under this provision FIFTH, shall not be applied to reduce principal, but shall
be applied by the Trustee to purchase a Hedge Agreement in the amount and manner specified
by the Noteholders;




     SIXTH, to the hedge provider or hedge providers under the Hedge Agreement or Hedge
Agreements any termination payments due under any Hedge Agreement; and




     SEVENTH, to Issuer, any remaining amounts free and clear of the lien of this Indenture.



     Section 11.7. Limitation on Suits by Individual Noteholders. Subject to Section 11.8,
no Noteholder shall have any right to institute any Proceeding with respect to this Indenture, or
for the appointment of a receiver or trustee, or for any other remedy hereunder or thereunder,
unless:



     (a) such Holder has previously given written notice to the Trustee of a continuing Event of
Default;



     (b) the Majority Facility Investors shall have made written requests to the Trustee to
institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;



     (c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request; and



     (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such Proceeding,


it being understood and intended that no one or more Noteholders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.




     Section 11.8. Unconditional Rights of Noteholders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Series 2008-A Note shall
have the right, which right is absolute and unconditional, to receive payment of the principal and
interest on such Series 2008-A Note on or after the respective due dates thereof expressed in such
Series 2008-A Note or in this Indenture and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without the consent of
such Noteholder.



97









 





     Section 11.9. Restoration of Rights and Remedies. If the Trustee or any Noteholder
has instituted any Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.



     Section 11.10. Waiver of Event of Default. Prior to the Trustee’s acquisition of a
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 the Series 2008-A Notes issued hereunder the Required
Facility Investors have the right to waive any Event of Default (other than an Event of Default
pursuant to Section 11.1(a)(1)) and its consequences.



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



     Section 11.11. Waiver of Stay or Extension Laws. The Issuer covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, on the basis of any such law,
hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been enacted.



     Section 11.12. Sale of the Collateral.



     (a) The power to effect any sale (a “Sale”) of any portion of the Collateral and
Membership Interest Collateral pursuant to Section 11.5 shall not be exhausted by any one or more
Sales as to any portion of such Collateral and Membership Interest Collateral remaining unsold, but
shall continue unimpaired until the entire Collateral shall have been sold or all amounts payable
on the Series 2008-A Notes and this Indenture shall have been paid, whichever occurs later. The
Trustee may from time to time postpone any Sale by public announcement made at the time and place
of such Sale. The Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any Sale. The Trustee may reimburse itself from the proceeds of any sale for the
reasonable costs and expenses incurred in connection with such sale. The net proceeds of such sale
shall be applied as provided in this Indenture.



98









 





     (b) The Trustee and/or the Collateral Agent (as directed by the Trustee), as applicable, shall
execute and deliver an appropriate instrument of conveyance transferring its
interest in any portion of the Collateral and Membership Interest Collateral in connection
with a Sale thereof. In addition, the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey the Issuer’s interest in any portion of the
Collateral and Membership Interest Collateral in connection with a Sale thereof, and to take all
action necessary to effect such Sale. No purchaser or transferee at such Sale shall be bound to
ascertain the Trustee’s authority, inquire into the satisfaction of any conditions precedent or see
to the application of any monies.



     Section 11.13. Action on Series 2008-A Notes. The Trustee’s right to seek and recover
judgment on the Series 2008-A Notes or under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this Indenture. None of the
rights or remedies of the Trustee or the Noteholders hereunder shall be impaired by the recovery of
any judgment by the Trustee or any Noteholder against the Issuer or by the levy of any execution
under such judgment upon any portion of the Collateral or upon any of the assets of the Issuer.



     Section 11.14. Control by Noteholders. If an Event of Default has occurred and is
continuing, the Majority Facility Investors shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Trustee with respect to the
Series 2008-A Notes or exercising any trust or power conferred on the Trustee; provided that




     (i) such direction shall not be in conflict with any rule of law or
with this Indenture;




     (ii) any direction to the Trustee to sell or liquidate the Collateral
which constitutes Loans and the related Pledged Assets shall be subject to
the provisions of Sections 11.5; and




     (iii) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction;


provided, however, that, subject to Section 13.1, the Trustee need not take any action that it
determines might involve it in liability.




     Section 11.15. Sale of Defaulted Loans After an Event of Default. If an Event of
Default has occurred and is continuing, the Servicer will not sell, assign, transfer or otherwise
dispose of any Defaulted Loan or any interest therein, or any Collateral securing a Defaulted Loan,
without the prior written consent of the Deal Agent.



ARTICLE XII




SERVICER DEFAULTS




     Section 12.1. Servicer Defaults. If any one of the following events (each, a
“Servicer Default”) shall occur and be continuing:



99









 





     (a) any failure by the Servicer to make any payment, transfer or deposit on or before the date
such payment, transfer or deposit is required to be made or given under the terms of this
Indenture and such failure remains unremedied for two Business Days; provided, however, that
if the Servicer is unable to make a payment, transfer or deposit when due and such failure is as a
result of circumstances beyond the Servicer’s control, the grace period shall be extended to five
Business Days;



     (b) failure on the part of the Servicer duly to observe or perform any other covenants or
agreements of the Servicer set forth in this Indenture or any other Facility Document to which the
Servicer is a party and such failure continues unremedied for a period of 20 days after the earlier
of the date on which the Servicer has actual knowledge of the failure and the date on which written
notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by
the Trustee, or to the Servicer and the Trustee by any Noteholder or the Deal Agent;



     (c) any representation and warranty made by the Servicer in this Indenture or any other
Facility Document to which the Servicer is a party shall prove to have been incorrect in any
material respect when made and has a material and adverse impact on the Trustee’s interest in the
Pledged Loans or other Pledged Assets and the Servicer is not in compliance with such
representation or warranty within ten Business Days after the earlier of the date on which the
Servicer has actual knowledge of such breach and the date on which written notice of such breach
requiring that such breach be remedied, shall have been given to the Servicer by the Trustee or to
the Servicer and the Trustee by any Noteholder or the Deal Agent;



     (d) an Insolvency Event shall occur with respect to the Servicer or the Parent Corporation;



     (e) the Servicer fails to deliver reports to the Trustee in accordance with Section 8.2 of
this Indenture and such failure remains unremedied for five Business Days;



     (f) any Indebtedness as defined in the Revolving Credit Agreement of the Parent Corporation or
any of its Subsidiaries (as defined in the Revolving Credit Agreement, but in no event including
the Depositor, the Issuer or any other securitization entity (of the type described in the
definition of Securitization Entity in the Revolving Credit Agreement)) exceeding $50,000,000 in
the aggregate, is accelerated after default beyond any applicable grace period provided with
respect thereto;



     (g) the 12-month rolling Reported EBITDA at the end of any fiscal quarter is less than
$400,000,000;



     (h) the Servicer fails to deliver reports to the Deal Agent in accordance with Section 8.6 of
this Indenture and such failure remains unremedied for five (5) Business Days;



     (i) the Consolidated Leverage Ratio for the most recent Rolling Period is greater than 3.5 to
1.0; or



     (j) the Consolidated Interest Coverage Ratio for the most recent Rolling Period is less than
3.0 to 1.0,




100












 




THEN, so long as such Servicer Default shall be continuing, either the Trustee, or the Majority
Facility Investors of all Series 2008-A Notes by notice then given in writing to the Servicer and
each Rating Agency (and to the Trustee if given by the Majority Facility Investors) (a
“Termination Notice”), may terminate all of the rights and obligations of the Servicer as
Servicer under this Indenture (such termination being herein called a “Service Transfer”).
After receipt by the Servicer of such Termination Notice and subject to the terms of Section
12.2(a), the Trustee shall automatically assume the responsibilities of the Servicer hereunder
until the date that a Successor Servicer shall have been appointed pursuant to Section 12.2 and all
authority and power of the Servicer under this Indenture shall pass to and be vested in the Trustee
or such Successor Servicer, as the case may be, without further action on the part of any Person,
and, without limitation, the Trustee at the direction of the Majority Facility Investors is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments upon
the failure of the Servicer to execute or deliver such documents or instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights.




     The Servicer agrees to cooperate with the Trustee and such Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct servicing hereunder,
including without limitation the transfer to such Successor Servicer of all authority of the
Servicer to service the Pledged Loans provided for under this Indenture, including without
limitation all authority over any Collections which shall on the date of transfer be held by the
Servicer for deposit in the Control Account or which shall thereafter be received by the Servicer
with respect to the Pledged Loans, and in assisting the Successor Servicer in enforcing all rights
under this Indenture including, without limitation, allowing the Successor Servicer’s personnel
access to the Servicer’s premises for the purpose of collecting payments on the Pledged Loans made
at such premises. The Servicer shall promptly transfer its electronic records relating to the
Pledged Loans to the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all other records,
correspondence and documents necessary for the continued servicing of the Pledged Loans in the
manner and at such times as the Successor Servicer shall reasonably request. The Servicer shall
allow the Successor Servicer access to the Servicer’s officers and employees. To the extent that
compliance with this Section 12.1 shall require the Servicer to disclose to the Successor Servicer
information of any kind which the Servicer reasonably deems to be confidential, the Successor
Servicer shall be required to enter into such customary licensing and confidentiality agreements as
the Servicer shall deem necessary to protect its interest and as shall be satisfactory in form and
substance to the Successor Servicer. The Servicer hereby consents to the entry against it of an
order for preliminary, temporary or permanent injunctive relief by any court of competent
jurisdiction, to ensure compliance by the Servicer with the provisions of this paragraph.



     Section 12.2. Appointment of Successor.



     (a) Appointment. On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 12.1, or any permitted resignation of the Servicer pursuant to Section 7.12,
the Servicer shall continue to perform all servicing functions under this Indenture until the date
specified in the Termination Notice or otherwise specified by the Trustee or until a date mutually
agreed upon by the Servicer and the Trustee. Upon receipt by the Servicer of a Termination



101









 







Notice, the Trustee, acting on behalf of the Majority Facility Investors, shall as promptly as
possible after the giving of a Termination Notice appoint a successor servicer (in any case, the
“Successor Servicer”) and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Trustee; provided that such appointment shall be subject to
satisfaction of the Rating Agency Condition. In the event a Successor Servicer has not been
appointed and accepted the appointment by the date of termination stated in the Termination Notice
the Trustee shall automatically assume responsibility for performing the servicing functions under
this Indenture on the date of such termination. In the event that a Successor Servicer has not
been appointed and has not accepted its appointment and the Trustee is legally unable or otherwise
not capable of assuming responsibility for performing the servicing functions under this Indenture,
the Trustee shall petition a court of competent jurisdiction to appoint any established financial
institution having a net worth of not less than $100,000,000 and whose regular business includes
the servicing of receivables similar to the Pledged Loans or other consumer finance receivables;
provided, however, pending the appointment of a Successor Servicer, the Trustee
will act as the Successor Servicer.



     (b) Duties and Obligations of Successor Servicer. Upon its appointment, the Successor
Servicer shall be the successor in all respects to the Servicer with respect to servicing functions
under this Indenture and shall be subject to all the responsibilities and duties relating thereto
placed on the Servicer by the terms and provisions hereof, and all references in this Indenture to
the Servicer shall be deemed to refer to the Successor Servicer.



     (c) Compensation of Successor Servicer; Costs and Expenses of Servicing Transfer. In
connection with such appointment and assumption, the Trustee may make such arrangements for the
compensation of the Successor Servicer as provided in this Indenture. The costs and expenses of
transferring servicing shall be paid by the Servicer which is resigning or being replaced and to
the extent such costs and expenses are not so paid, shall be paid from Collections as provided in
this Indenture.



     Section 12.3. Notification to Noteholders. Upon the occurrence of any Servicer
Default or any event which, with the giving of notice or passage of time or both, would become a
Servicer Default, the Servicer shall give prompt written notice thereof to the Trustee, the Deal
Agent and the Issuer and the Trustee shall give notice to the Noteholders at their respective
addresses appearing in the Note Register. Upon any termination or appointment of a Successor
Servicer pursuant to this Article XII, the Trustee shall give prompt written notice thereof to the
Issuer and to the Noteholders at their respective addresses appearing in the Note Register.



     Section 12.4. Waiver of Past Defaults. The Majority Facility Investors of all Series
2008-A Notes may, on behalf of all Holders, waive any Servicer Default and its consequences. Upon
any such waiver of a past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this Indenture. No such waiver
shall extend to any subsequent or other default or impair any right consequent thereon except to
the extent expressly so waived.



     Section 12.5. Termination of Servicer’s Authority. All authority and power granted to
the Servicer under this Indenture shall automatically cease and terminate upon termination of this
Indenture pursuant to Section 14.1, and shall pass to and be vested in the Issuer and without



102









 







limitation the Issuer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights upon termination of this Indenture. The Servicer shall cooperate with
the Issuer in effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing on the Pledged Loans. The Servicer shall transfer its electronic records
relating to the Pledged Loans to the Issuer in such electronic form as Issuer may reasonably
request and shall transfer all other records, correspondence and documents relating to the Pledged
Loans to the Issuer in the manner and at such times as the Issuer shall reasonably request. To the
extent that compliance with this Section 12.5 shall require the Servicer to disclose information of
any kind which the Servicer deems to be confidential, the Issuer shall be required to enter into
such customary licensing and confidentiality agreements as the Servicer shall deem necessary to
protect its interests and as shall be reasonably satisfactory in form and substance to the Issuer.



     Section 12.6. Matters Related to Successor Servicer.



     The Successor Servicer will not be responsible for delays attributable to the Servicer’s
failure to deliver information, defects in the information supplied by the Servicer or other
circumstances beyond the control of the Successor Servicer.



     The Successor Servicer will make arrangements with the Servicer for the prompt and safe
transfer of, and the Servicer shall provide to the Successor Servicer, all necessary servicing
files and records, including (as deemed necessary by the Successor Servicer at such time): (i)
microfiche loan documentation, (ii) servicing system tapes, (iii) Pledged Loan payment history,
(iv) collections history and (v) the trial balances, as of the close of business on the day
immediately preceding conversion to the Successor Servicer, reflecting all applicable Pledged Loan
information. The current Servicer shall be obligated to pay the costs associated with the transfer
of the servicing files and records to the Successor Servicer.



     The Successor Servicer shall have no responsibility and shall not be in default hereunder nor
incur any liability for any failure, error, malfunction or any delay in carrying out any of its
duties under this Indenture if any such failure or delay results from the Successor Servicer acting
in accordance with information prepared or supplied by a Person other than the Successor Servicer
or the failure of any such Person to prepare or provide such information. The Successor Servicer
shall have no responsibility, shall not be in default and shall incur no liability (i) for any act
or failure to act by any third party, including the Servicer, the Issuer or the Trustee or for any
inaccuracy or omission in a notice or communication received by the Successor Servicer from any
third party or (ii) which is due to or results from the invalidity, unenforceability of any Pledged
Loan under applicable law or the breach or the inaccuracy of any representation or warranty made
with respect to any Pledged Loan.



     If the Trustee or any other Successor Servicer assumes the role of Successor Servicer
hereunder, such Successor Servicer shall be entitled to appoint subservicers whenever it shall be
deemed necessary by such Successor Servicer.



     Neither the Trustee nor any other successor Servicer hereunder shall have any obligation for
any action or failure to act on the part of any predecessor Servicer.



103









 





ARTICLE XIII




THE TRUSTEE; THE COLLATERAL AGENT; THE CUSTODIAN




     Section 13.1. Duties of Trustee.



     (a) The Trustee, prior to the occurrence of an Event of Default of which a Responsible Officer
of the Trustee shall have actual knowledge and after the curing of all such Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. If an Event of Default of which a Responsible Officer of the Trustee
shall have actual knowledge has occurred and has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent institutional trustee would exercise or use under
the circumstances in the conduct of such institution’s own affairs. The Trustee is hereby
authorized and empowered to make the withdrawals and payments from the Accounts in accordance with
the instructions set forth in this Indenture until the termination of this Indenture in accordance
with Section 14.1 unless this appointment is earlier terminated pursuant to the terms hereof.



     (b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee which are specifically required to
be furnished pursuant to any provision of this Indenture, shall examine them to determine whether
they conform to such requirements; provided, however, that the Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion, report, document, order
or other instrument furnished by the Servicer, the Issuer or any other Person hereunder (other than
the Trustee). The Trustee shall give prompt written notice to the Noteholders of any material lack
of conformity of any such instrument to the applicable requirements of this Indenture discovered by
the Trustee.



     (c) Subject to Section 13.1(a), no provision of this Indenture shall be construed to relieve
the Trustee from liability for its own gross negligence, reckless disregard of its duties, bad
faith or misconduct; provided, however, that:




     (i) the Trustee shall not be personally liable for an error of judgment
made in good faith by a Responsible Officer or employees of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;




     (ii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with this Indenture or at the direction of the Majority Facility
Investors relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising or
omitting to exercise any trust or power conferred upon the Trustee, under
this Indenture;



104









 






     (iii) the Trustee shall not be charged with knowledge of any failure by
any other party hereto to comply with its obligations hereunder or of the
occurrence of any Event of Default or Servicer Default unless a Responsible
Officer of the Trustee obtains actual knowledge of such failure based upon
receipt of written information or other communication or a Responsible
Officer of the Trustee receives written notice of such failure from the
Servicer or any Noteholder. In the absence of receipt of notice or actual
knowledge by a Responsible Officer the Trustee may conclusively assume there
is no Event of Default or Servicer Default; and




     (iv) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge or have
received notice and after all the curing of all such Events of Default which
may have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, no implied
covenants or obligations shall be read into this Indenture against the
Trustee and, in the absence of bad faith, willful misconduct or negligence
on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture.



     (d) The Trustee shall not be 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 there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured to it (which
adequate indemnity may include, at the Trustee’s option, consent by the Majority Facility Investors
authorizing the Trustee to be reimbursed for any funds from amounts available in the Collection
Account), and none of the provisions contained in this Indenture shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of the obligations of
the Servicer under this Indenture except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Indenture.



     (e) Except for actions expressly authorized by this Indenture, the Trustee shall take no
action reasonably likely to impair the interests of the Issuer in any Pledged Loan now existing or
hereafter created or to impair the value of any Pledged Loan now existing or hereafter created.



     (f) Except as provided in this Indenture, the Trustee shall have no power to dispose of or
vary any Collateral.



     (g) In the event that the Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Registrar, as the case may be, under this
Indenture, the Trustee (if it is not then the Registrar) shall be obligated promptly to perform
such obligation, duty or agreement in the manner so required.



105









 





     (h) The Trustee shall have no duty to (A) see to any recording, filing or depositing of this
Indenture or any agreement referred to herein or any financing statement or continuation statement
evidencing a security interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B) see to any
insurance, (C) see to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part
of any Collateral other than from funds available in the related Collection Account, or (D) confirm
or verify the contents of any reports or certificates of the Servicer delivered to the Trustee
pursuant to this Indenture believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties.



     (i) Promptly after the occurrence of an Event of Default, and, in any event, within two
Business Days thereafter, the Trustee shall notify each Noteholder and each Rating Agency, if any,
of the occurrence thereof to the extent a Responsible Officer of the Trustee has actual knowledge
thereof based upon receipt of written information or other communication.



     Section 13.2. Certain Matters Affecting the Trustee. Except for its own gross
negligence, reckless disregard of its duties, bad faith or misconduct:



     (a) the Trustee may rely on and shall be protected from liability to the Issuer and the
Noteholders in acting on, or in refraining from acting in accord with, any resolution, Officer’s
Certificate, certificate of auditors or any other certificate, statement, conversation, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed, sent or made by the proper Person or Persons;



     (b) the Trustee may consult with counsel and any advice of counsel (including without
limitation counsel to the Issuer or the Servicer) shall be full and complete authorization and
protection from liability to the Issuer and the Noteholders in respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion of
counsel;



     (c) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture, or to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Noteholders, pursuant to the provisions of
this Indenture, unless such Noteholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the obligations, upon the
occurrence of any Servicer Default or Event of Default of which a Responsible Officer of the
Trustee shall have actual knowledge or have received notice (which has not been cured), to exercise
such of the rights and powers vested in it by this Indenture, and to 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;



     (d) neither the Trustee nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be personally liable for any action taken, suffered or
omitted to be taken by the Trustee or such Person in good faith and believed by such Person to be
authorized or within the discretion or rights or powers conferred upon it by this Indenture,
nor for any action taken or omitted to be taken by any other party hereto;



106









 





     (e) the Trustee shall not be bound to make any investigation into the facts of matters stated
in any Monthly Servicing Report, any other report or statement delivered to the Trustee by the
Servicer, resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or 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 Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require indemnity satisfactory to
the Trustee against such cost, expense or liability as a condition to taking any such action.



     (f) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or a custodian, and the Trustee
shall not be responsible for any misconduct or negligence on the part of any such agent, attorney
or custodian appointed with due care by it hereunder;



     (g) except as may be required by Section 13.1(b), the Trustee shall not be required to make
any initial or periodic examination of any documents or records related to the Pledged Loans for
the purpose of establishing the presence or absence of defects, the compliance by the Servicer or
the Issuer with their respective representations and warranties or for any other purpose;



     (h) the right of the Trustee to perform any discretionary act enumerated in this Indenture
shall not be construed as a duty, and the Trustee shall not be answerable for the performance of
such act; and



     (i) the Trustee shall not be required to give any bond or surety in respect of the powers
granted hereunder.



     Section 13.3. Trustee Not Liable for Recitals in Series 2008-A Notes or Use of Proceeds of
Series 2008-A Notes. The Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Series 2008-A Notes (other than the certificate of authentication on
the Series 2008-A Notes) or for any statements, representations or warranties made herein by any
Person other than the Trustee (except as expressly set forth herein). Except as set forth in
Section 13.14, the Trustee makes no representations as to the validity, enforceability or
sufficiency of this Indenture or of the Series 2008-A Notes (other than the certificate of
authentication on the Series 2008-A Notes) or of any Pledged Loan or related document. The Trustee
shall not be accountable for the use or application of funds properly withdrawn from any Account on
the instructions of the Servicer or for the use or application by the Issuer of the proceeds of any
of the Series 2008-A Notes, or for the use or application of any funds paid to the Issuer in
respect of the Pledged Loans. The Trustee shall not be responsible for the legality or validity of
this Indenture or the validity, priority, perfection or sufficiency of the security for the Series
2008-A Notes issued or intended to be issued hereunder. The Trustee shall have no responsibility
for filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to record this Indenture.



107









 





     Section 13.4. Trustee May Own Series 2008-A Notes; Trustee in its Individual Capacity.
Wells Fargo Bank, National Association, in its individual or any other capacity, may become the
owner or pledgee of Series 2008-A Notes with the same rights as it would have if it were not the
Trustee. Wells Fargo Bank, National Association and its Affiliates may generally engage in any
kind of business with the Issuer or the Servicer as though Wells Fargo Bank, National Association
were not acting in such capacity hereunder and without any duty to account therefor. Nothing
contained in this Indenture shall limit in any way the ability of Wells Fargo Bank, National
Association and its Affiliates to act as a trustee or in a similar capacity for other interval
ownership and lot contract and installment note financings pursuant to agreements similar to this
Indenture.



     Section 13.5. Trustee’s Fees and Expenses; Indemnification. The Trustee shall be
entitled to receive from time to time pursuant to this Indenture and the Trustee Fee Letter, (a)
such compensation as shall be agreed to between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an express trust) for
all services rendered by it in the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder as the Trustee and to be reimbursed for its
out-of-pocket expenses (including reasonable attorneys’ fees), incurred or paid in establishing,
administering and carrying out its duties under this Indenture or the Collateral Agency Agreement
and (b) subject to Section 9.3, the Issuer and the Servicer agree, jointly and severally, to pay,
reimburse, indemnify and hold harmless the Trustee (without reimbursement from any Account or
otherwise) upon its request for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever (including
without limitation fees, expenses and disbursements of counsel) which may at any time (including
without limitation at any time following the termination of this Indenture and payment on account
of the Series 2008-A Notes) be imposed on, incurred by or asserted against the Trustee in any way
relating to or arising out of this Indenture, the Collateral Agency Agreement or any other Facility
Document to which the Trustee is a party or the transactions contemplated hereby or any action
taken or omitted by the Trustee under or in connection with any of the foregoing except for those
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence, reckless disregard of its duties, bad
faith or willful misconduct of the Trustee and except that if the Trustee is appointed Successor
Servicer pursuant to Section 12.2, the provisions of this Section 13.5 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its capacity as Successor Servicer.
The agreements in this Section 13.5 shall survive the termination of this Indenture, the
resignation or removal of the Trustee and all amounts payable on account of the Series 2008-A
Notes.



     Anything in this Indenture to the contrary notwithstanding, in no event shall the Trustee be
liable for special, indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss
or damage and regardless of the form of action.



108









 





     Section 13.6. Eligibility Requirements for Trustee. The Trustee hereunder (if other
than Wells Fargo Bank, National Association) shall at all times be an Eligible Institution and a
corporation or banking association 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, and
such Trustee (including Wells Fargo Bank, National Association) shall have a combined capital and
surplus of at least $25,000,000 (or, in the case of a successor to the initial Trustee,
$100,000,000) and subject to supervision or examination by federal or state authority. If such
corporation or banking association publishes reports of condition at least annually, pursuant to
law or to the requirements of federal or state supervising or examining authority, then for the
purpose of this Section 13.6, the combined capital and surplus of such corporation or banking
association 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 Trustee shall cease to be eligible in
accordance with the provisions of this Section 13.6, the Trustee shall resign immediately in the
manner and with the effect specified in Section 13.7.



     Section 13.7. Resignation or Removal of Trustee.



     (a) The Trustee may at any time resign and be discharged from the trust hereby created by
giving 60 days prior written notice thereof to the Issuer, the Servicer, the Noteholders and each
Rating Agency. Upon receiving such notice of resignation, the Issuer shall promptly arrange to
appoint a successor trustee meeting the requirements of Section 13.6 and the Servicer shall notify
the Trustee and each Rating Agency of such appointment by written instrument, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and have accepted within 30 days after the giving
of such notice of resignation, a successor Trustee shall be appointed by Majority Facility
Investors. The successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the Trustee. If no successor Trustee shall have been so appointed by the
Issuer or the Noteholders and shall have accepted appointment in the manner hereinafter provided,
any Noteholder, on behalf of itself and all others similarly situated, or the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor Trustee.



     (b) If at any time the Trustee shall cease to be eligible in accordance with the provisions of
Section 13.6 and shall fail to resign after written request therefor by the Issuer or the Servicer,
or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Issuer, the Servicer or the Majority
Facility Investors may remove the Trustee and promptly appoint a successor Trustee by written
instrument, one copy of which instrument shall be delivered to the Trustee so removed and one copy
to the successor Trustee.



     (c) At any time the Majority Facility Investors may remove the Trustee and promptly appoint a
successor Trustee by written instrument, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee.



109









 





     (d) Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant
to any of the provisions of this Section 13.7 shall not become effective until acceptance of
appointment by the successor Trustee as provided in Section 13.8.



     Section 13.8. Successor Trustee.



     (a) Any successor Trustee, appointed as provided in Section 13.7, shall execute, acknowledge
and deliver to the Issuer, the Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the predecessor Trustee shall
become effective and such successor 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 as Trustee herein. The predecessor Trustee
shall deliver to the successor Trustee all money, documents and other property held by it
hereunder; and Issuer and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting and confirming in
the successor Trustee all such rights, power, duties and obligations.



     (b) No successor Trustee shall accept appointment as provided in this Section 13.8 unless at
the time of such acceptance such successor Trustee shall be eligible under the provisions of
Section 13.6.



     (c) Upon acceptance of appointment by a successor Trustee as provided in this Section 13.8,
such successor Trustee shall mail notice of such succession hereunder to the Trustee, the Issuer,
the Servicer and all Noteholders at their addresses as shown in the Note Register.



     Section 13.9. Merger or Consolidation of Trustee. Any Person into which the Trustee
may be merged or converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding
to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided, such corporation shall be eligible under the provisions of Section 13.6, 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 13.10. Appointment of Co-Trustee or Separate Trustee.



     (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the Collateral may at the
time be located, the Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Collateral and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Collateral, or any part thereof,
and subject to the other provisions of this Section 13.10, such powers, duties, obligations, rights
and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor trustee under Section
13.6 and no notice to the Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 13.8.



110









 





     (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed
and act subject to the following provisions and conditions:




     (i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to the
extent that under any laws of any jurisdiction in which any particular act
or acts are to be performed, the 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 the Collateral, or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Trustee;




     (ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and




     (iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.



     (c) Any notice, request or other writing given to the Trustee shall be deemed to have been
given to each of the then separate trustees and co-trustees, as effectively as if given to each of
them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture
and the conditions of this Article XIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified in its instrument
of appointment, either jointly with the Trustee or separately, as may be provided therein, subject
to all the provisions of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee and a copy thereof given to the Servicer.



     (d) Any separate trustee or co-trustee may at any time constitute the Trustee its agent or
attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect to this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or a successor trustee.



     Section 13.11. Trustee May Enforce Claims Without Possession of Series 2008-A Notes.
All rights of action and claims under this Indenture or the Series 2008-A Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Series 2008-A Notes or the
production thereof in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the Noteholders in respect of which
such judgment has been obtained.



111









 





     Section 13.12. Suits for Enforcement. If an Event of Default or a Servicer Default
shall occur and be continuing, the Trustee, in its discretion, may, subject to the provisions of
Article XI and Section 12.1, proceed to protect and enforce its rights and the rights of the
Noteholders under this Indenture by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in this Indenture or in
aid of the execution of any power granted in this Indenture or for the enforcement of any other
legal, equitable or other remedy as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or the Noteholders.



     Section 13.13. Rights of Noteholders to Direct the Trustee. The Majority Facility
Investors shall have the right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee;
provided, however, that, subject to Section 13.1, the Trustee shall have the right
to decline to follow any such direction if the Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly prejudicial to the
rights of Noteholders not parties to such direction, or if the Trustee has not been offered
reasonable security or indemnity, as contemplated by Section 13.2, by such Holders; and
provided further, that nothing in this Indenture shall impair the right of the
Trustee to take any action deemed proper by the Trustee and which is not inconsistent with such
direction by the Noteholders.



     Section 13.14. Representations and Warranties of the Trustee. The Trustee represents
and warrants that:



     (a) the Trustee is a national banking association with trust powers organized, validly
existing and in good standing under the laws of the United States;



     (b) the Trustee has full power, authority and right to execute, deliver and perform this
Indenture and has taken all necessary action to authorize the execution, delivery and performance
by it of this Indenture; and



     (c) this Indenture has been duly executed and delivered by the Trustee and constitutes the
legal, valid and binding agreement of the Trustee enforceable against the Trustee in accordance
with its terms, except as such enforceability may be limited by Debtor Relief Laws and except as
such enforceability may be limited by general principles of equity (whether considered in a suit at
law or in equity).



     Section 13.15. Maintenance of Office or Agency. The Trustee appointed will maintain
at its expense in Minneapolis, Minnesota, or New York, New York, an office or offices or agency or
agencies where notices and demands to or upon the Trustee in respect of the Series 2008-A Notes and
this Indenture may be served, and each successor Trustee will give prompt written notice to the
Issuer, the Servicer and the Noteholders of any change in the location of any such office or
agency.



112









 





     Section 13.16. No Assessment. Wells Fargo Bank, National Association’s agreement to
act as Trustee hereunder shall not constitute or be construed as Wells Fargo Bank, National
Association’s assessment of the Issuer’s or any Obligor’s creditworthiness or a credit analysis of
any Loans.



     Section 13.17. UCC Filings and Title Certificates. The Trustee and the Noteholders
expressly recognize and agree that the Collateral Agent may be listed as the secured party of
record on the various Financing Statements required to be filed under this Indenture in order to
perfect the security interest in the Collateral and such listing will not affect in any way the
respective status of the other secured parties under the Collateral Agency Agreement as the holders
of their respective interests in other collateral. In addition, such listing shall impose no
duties on the Collateral Agent other than those expressly and specifically undertaken in accordance
with this Indenture and the Collateral Agency Agreement.



     Section 13.18. Replacement of the Custodian. Each of the Issuer and the Servicer
agree not to replace the Custodian unless the Rating Agency Condition has been satisfied with
respect to such replacement.



ARTICLE XIV




TERMINATION




     Section 14.1. Termination of Agreement. The respective obligations and
responsibilities of the Issuer, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Noteholders as hereafter set forth) shall terminate
on the day after the Payment Date following the date on which funds shall have been deposited in
the Collection Account sufficient to pay the Notes Principal Amount plus all interest accrued on
the Series 2008-A Notes through the day preceding such Payment Date plus all other amounts payable
pursuant to the Note Purchase Agreement; provided that, all amounts required to be
paid on such Payment Date pursuant to this Indenture shall have been paid.



     Section 14.2. Final Payment.



     (a) Written notice of any termination shall be given (subject to at least two Business Days’
prior notice from the Servicer to the Trustee) by the Trustee to the Noteholders and each Rating
Agency then rating the Series 2008-A Notes mailed not later than the fifth day of the month of such
final payment specifying (a) the Payment Date and (b) the amount of any such final payment. The
Trustee shall give such notice to the Registrar at the time such notice is given to the
Noteholders.



     (b) On or after the final Payment Date, upon written request of the Trustee, the Noteholders
shall surrender their Series 2008-A Notes to the office specified in such request.



     Section 14.3. Release of Collateral. Upon the termination of this Indenture pursuant
to Section 14.1, the Trustee shall release all liens and assign to the Issuer (without recourse,
representation or warranty) all right, title and interest of the Trustee in and to the Collateral
and the Membership Interest Collateral and all proceeds thereof. The Trustee shall execute and
deliver such instruments of assignment, in each case without recourse, representation or
warranty, as shall be reasonably requested by the Issuer to release the security interest of
the Trustee in the Collateral and the Membership Interest Collateral.



113









 





ARTICLE XV




MISCELLANEOUS PROVISIONS




     Section 15.1. Amendment.



     (a) Amendments Without Consent of the Noteholders. The Issuer, the Trustee, the
Collateral Agent and the Servicer, at any time and from time to time, without the consent of any of
the Noteholders, may enter into one or more amendments to this Indenture in form satisfactory to
the Trustee for any of the following purposes:




     (i) to cure any ambiguity, correct, modify or supplement any provision which is
defective or inconsistent with any other provision herein; provided that,
such correction, modification or supplement shall not alter in any material respect, the
amount or timing of payments to or other rights of the Noteholders; or




     (ii) to modify transfer restrictions on the Series 2008-A Notes, so long as any such
modifications comply with the Securities Act and the Investment Company Act;


provided that, (x) in each case, the Issuer shall have satisfied the Rating Agency
Condition with respect to such corrections, amendments, modifications or clarifications and (y),
the Issuer shall have delivered to the Trustee an Officer’s Certificate of the Issuer, an Officer’s
Certificate of the Servicer, and an Opinion of Counsel each to the effect that such change will not
adversely affect the rights of any Noteholders and evidence that any additional conditions to such
amendment have been satisfied.




     Subject to Section 15.1(c), the Trustee is hereby authorized to join in the execution of any
such amendment and to make any further appropriate agreements and stipulations that may be therein
contained. So long as any of the Series 2008-A Notes are outstanding, at the cost of the Issuer,
the Trustee shall provide to each Rating Agency then rating the Series 2008-A Notes a copy of any
proposed amendment prior to the execution thereof by the Trustee and, as soon as practicable after
the execution by the Issuer, the Trustee and the Collateral Agent of any such amendment, provide to
each Rating Agency a copy of the executed amendment.



     (b) Amendments With Consent of the Noteholders. With the consent of the Required
Facility Investors and upon satisfaction of the Rating Agency Condition, the Issuer and the Trustee
may enter into an amendment hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture, or modifying in any manner the
rights of the Holders of the Series 2008-A Notes under this Indenture; provided
that, no such amendment shall, without the consent of all affected Noteholders:



114









 






     (i) reduce in any manner the amount of, or change the timing of, principal, interest
and other payments required to be made on any Note;




     (ii) change the application of proceeds of any Collateral or Membership Interest
Collateral to the payment of Series 2008-A Notes or modify the Priority of Payments;




     (iii) reduce the percentage of Noteholders required to take or approve any action under
this Indenture; or




     (iv) permit the creation of any lien ranking prior to or on a parity with the lien of
this Indenture, with respect to any part of the Collateral or Membership Interest Collateral
or terminate the lien of this Indenture on any property at any time subject thereto or
deprive the Noteholders of the security afforded by the lien of this Indenture.



     It shall not be necessary in connection with any consent of the Noteholders under this Section
15.1(b) for the Noteholders to approve the specific form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The Trustee will not be permitted
to enter into any such amendment if, as a result of such amendment, the ratings of the Series
2008-A Notes (if then rated) would be reduced without the consent of each affected Noteholder.



     Promptly after the execution by the Issuer, the Trustee, the Collateral Agent and the Servicer
of any amendment pursuant to this Section 15.1(b), the Trustee, at the expense of the Issuer shall
mail to the Noteholders and each Rating Agency rating the Series 2008-A Notes, a copy thereof.



     (c) Execution of Amendments. In executing or accepting the additional trusts created
by any amendment permitted by this Section 15.1 or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 13.1 and
13.2) shall be fully protected in relying in good faith upon, an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Indenture and that all
conditions precedent applicable thereto under this Indenture have been satisfied. The Trustee may,
but shall not be obligated to, enter into any such amendment which affects the Trustee’s own
rights, duties or immunities under this Indenture, or otherwise.



     (d) Effect of Amendments. Upon the execution of any amendment under this Section
15.1, this Indenture shall be modified in accordance therewith, and such amendment shall form a
part of this Indenture for all purposes; and every Holder of a Series 2008-A Note theretofore and
thereafter authenticated and delivered hereunder shall be bound thereby.



     (e) Reference in Series 2008-A Notes to Amendments. Series 2008-A Notes executed,
authenticated and delivered after the execution of any amendment pursuant to this Section 15.1 may,
and if required by the Trustee shall, bear a notation in form approved by the Trustee as to any
matter provided for in such amendment. If the Issuer shall so determine, new Series 2008-A Notes,
so modified as to conform in the opinion of the Issuer to any such amendment, may be prepared and
executed by the Issuer and authenticated and delivered by the Trustee or its authenticating agent
in exchange for outstanding Series 2008-A Notes.



115









 





     (f) Consent of Deal Agent. Notwithstanding any of the foregoing to the contrary, the
Issuer shall not enter into any amendment to the Indenture the effect of which would be a material
change in the rights or responsibilities of the Deal Agent hereunder without the consent of the
Deal Agent.



     (g) Consent of Funding Agents. The Issuer shall not enter into any amendment to the
Indenture that would require the consent of each of the Funding Agents under the Note Purchase
Agreement unless such consents have been obtained.



     Section 15.2. Limitation on Rights of the Noteholders.



     (a) The death or incapacity of any Noteholder shall not operate to terminate this Indenture,
nor shall such death or incapacity entitle such Noteholder’s legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any court for a partition
or winding up of the Collateral or Membership Interest Collateral, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.



     (b) Nothing herein set forth, or contained in the terms of the Series 2008-A Notes, shall be
construed so as to constitute the Noteholders from time to time as partners or members of an
association; nor shall any Noteholder be under any liability to any third person by reason of any
action taken by the parties to this Indenture pursuant to any provision hereof.



     Section 15.3. Governing Law. This Indenture 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.



     Section 15.4. Notices. All communications and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered to, or transmitted by overnight
courier, or transmitted by telex or telecopy and confirmed by a mailed writing:


If to the Issuer:



SIERRA TIMESHARE CONDUIT RECEIVABLES FUNDING II, LLC

10750 West Charleston Boulevard

Suite 130

Mailstop 2064

Las Vegas, Nevada 89135

Attention: President

(or such other address as may hereafter be furnished to the Trustee, the Servicer and the Collateral Agent in writing by the Issuer).



If to the Servicer:



WYNDHAM CONSUMER FINANCE, INC.

10750 West Charleston Boulevard

Suite 130

Las Vegas, Nevada 89135




116









 









Fax number: 702-227-3114

Attention: President, Treasurer and Controller

(or such other address as may hereafter be furnished to the Trustee, the Issuer and the Collateral Agent in writing by the Servicer).



If to the Trustee:



WELLS FARGO BANK, NATIONAL ASSOCIATION

Sixth & Marquette

MAC N9311-161

Minneapolis, Minnesota 55479

Fax number: 612-667-3464

Attention: Corporate Trust Services Asset-Backed Administration



(or such other address as may be furnished to the Servicer, the Issuer and the Collateral Agent in writing by the Trustee).



If to the Collateral Agent:



U.S. BANK NATIONAL ASSOCIATION

269 Technology Way

Building B, Unit 3

Rocklin, CA 95765

Fax number: 916-626-3252

Attention: Structured Finance Trust Services

                         Re: Sierra Timeshare Conduit Receivables Funding II, LLC

                         Series 2008-A



(or such other address as may be furnished in writing to the Trustee, the Issuer and the Servicer by the Collateral Agent).



If to each Rating Agency:



Moody’s Investor Service, Inc.

7 World Trade Center

At 250 Greenwich Street

New York, New York 10007

Fax number: 212-553-4642

(or such other address as may be furnished in writing to the Trustee, the Issuer and the Servicer).



Standard & Poor’s Ratings Services

55 Water Street

New York, New York 10041

Fax number: 212-438-2655

(or such other address as may be furnished in writing to the Trustee, the Issuer and the Servicer).




117









 







If to the Noteholders:

(to such addresses as may be furnished in writing by any Noteholder to the Trustee).



If to the Deal Agent:



JPMorgan Chase Bank, N.A.

10 South Dearborn Street

13th Floor

Chicago, Illinois 60670

Fax number: 312-732-3600

Attention: ABS Transaction Management




     All communications and notices pursuant hereto to a Noteholder will be given by
first-class mail, postage prepaid, to the registered holders of such Series 2008-A Notes at
their respective address as shown in the Note Register. Any notice so given within the time
prescribed in this Indenture shall be conclusively presumed to have been duly given, whether or not
the Noteholder receives such notice.



     Section 15.5. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Indenture shall for any reason whatsoever be 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 shall in no way affect the
validity or enforceability of the other provisions of this Indenture or of the Series 2008-A Notes
or rights of the Noteholders thereof.



     Section 15.6. Assignment. Notwithstanding anything to the contrary contained herein,
except as provided in Section 12.2, this Indenture may not be assigned by the Issuer or the
Servicer without the prior consent of the Majority Facility Investors.



     Section 15.7. Series 2008-A Notes Non-assessable and Fully Paid. It is the intention
of the Issuer that the Noteholders shall not be personally liable for obligations of the Issuer and
that the indebtedness represented by the Series 2008-A Notes shall be non-assessable for any losses
or expenses of the Issuer or for any reason whatsoever.



     Section 15.8. Further Assurances. Each of the Issuer, the Servicer and the Collateral
Agent agree to do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully to effect the
purposes of this Indenture, including without limitation the authorization of any financing
statements, amendments thereto, or continuation statements relating to the Collateral for filing
under the provisions of the UCC of any applicable jurisdiction.



     Section 15.9. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Trustee or the Noteholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. No waiver of any provision hereof shall
be effective unless made in writing. The rights, remedies, powers and privileges therein
provided are cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.



118









 





     Section 15.10. Counterparts. This Indenture may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which shall be an
original, but all of which together shall constitute one and the same instrument.



     Section 15.11. Third-Party Beneficiaries. This Indenture will inure to the benefit of
and be binding upon the parties hereto, the Noteholders and their respective successors and
permitted assigns. Except as otherwise provided in this Article XV, no other person will have any
right or obligation hereunder.



     Section 15.12. Actions by the Noteholders.



     (a) Wherever in this Indenture a provision is made that an action may be taken or a notice,
demand or instruction given by the Noteholders, such action, notice or instruction may be taken or
given by any Noteholder, unless such provision requires a specific percentage of the Noteholders.
If, at any time, the request, demand, authorization, direction, consent, waiver or other act of a
specific percentage of the Noteholders is required pursuant to this Indenture, written notification
of the substance thereof shall be furnished to all Noteholders.



     (b) Any request, demand, authorization, direction, consent, waiver or other act by a
Noteholder binds such Noteholder and every subsequent holder of such Series 2008-A Note issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee, the Issuer or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Note.



     Section 15.13. Merger and Integration. Except as set forth in the Trustee Fee Letter,
and except as specifically stated otherwise herein, this Indenture and the other Facility
Documents set forth the entire understanding of the parties relating to the subject matter hereof,
and, except as set forth in such Trustee Fee Letter, all prior understandings, written or oral, are
superseded by this Indenture and the other Facility Documents. This Indenture may not be modified,
amended, waived or supplemented except as provided herein.



     Section 15.14. No Bankruptcy Petition. The Trustee, the Servicer, the Collateral
Agent, each Noteholder, the Deal Agent, and each Funding Agent, and each beneficial owner of a
Series 2008-A Note or an interest therein, by accepting a Note, hereby covenant and agree that they
will not at any time institute against the Issuer or the Depositor, or join in instituting against
the Issuer or the Depositor, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any Debtor Relief Law until one year and one day after such
time as all of the Issuer and the Depositor have paid in full all indebtedness owed by such Person.
The provisions of this Section 15.14 will survive any termination of this Indenture.



     Section 15.15. Headings. The headings herein are for purposes of reference only and
shall not otherwise affect the meaning or interpretation of any provision hereof.



     Section 15.16. Satisfaction of Rating Agency Condition. It is agreed by the parties
hereto, that, any action which, under the terms of this Indenture, is subject to the satisfaction
of
the Rating Agency Condition, shall also be subject to the condition that such action shall not
be taken unless the Deal Agent has given its prior written consent to the action.



119









 





     Section 15.17. Rating Agency Review. The Issuer hereby agrees that if the Issuer
elects to maintain the ratings on the Series 2008-A Notes on and after the Liquidity Termination
Date in 2009, the Issuer shall prior to the Liquidity Termination Date in 2009 submit the Series
2008-A Notes for review to each Rating Agency then maintaining a rating on the Series 2008-A Notes.



     Section 15.18. Changes in the Hedge Agreement. The Issuer agrees that it will notify
each Rating Agency then maintaining a rating on the Series 2008-A Notes of any amendments to the
Hedge Agreement.



     Section 15.19. Discretion with Respect to Derivative Financial Instruments. The
parties to this Indenture recognize and agree that, in the course of managing its assets and
obligations, the Issuer may, from time to time, find it useful and prudent to enter into, or to
terminate or modify, derivative financial instruments for the purpose of hedging its interest rate
risk, and the parties hereby agree that, (a) in addition to the Hedge Agreement, the Issuer may,
from time to time, enter into derivative financial instruments for the purpose of hedging the
Issuer’s interest rate risk in accordance with the terms of the Facility Documents and (b) the
Issuer may, in its discretion, terminate, or modify, any such derivative financial instrument in
accordance with the terms of the Facility Documents; provided that the Issuer shall not terminate
or modify the Hedge Agreement except as provided in this Indenture and solely in accordance with
the appropriate mechanism(s) as set forth in the Hedge Agreement, and, with respect to any
derivative financial instruments, other than the Hedge Agreement, the Issuer shall not enter into
any such instruments unless the Rating Agency Condition has been satisfied with respect to such
derivative financial instrument; provided further, however, that, so long as the Hedge Agreement is
in effect, (x) no instrument shall be entered into pursuant to clause (a) above and (y) no
termination (or modification) shall be effected pursuant to clause (b) above, without the prior
written consent of the Hedge Provider if the effect of such instrument, termination (or
modification) would be to adversely affect the Hedge Provider’s ability or right to receive payment
under the terms of the Hedge Agreement, or if the instrument, termination (or modification) would
modify the obligations of or impair the ability of the Issuer to fully perform any of its payment
obligations under the Hedge Agreement; and provided further, however, that any termination,
modification or replacement with respect to the Hedge Agreement effected otherwise in accordance
with this Indenture and the appropriate mechanism(s) as set forth in the Hedge Agreement shall not
be subject to the provisions of this Section 15.19.



120









 





     IN WITNESS WHEREOF, Issuer, the Servicer, the Trustee and the Collateral Agent have caused
this Indenture to be duly executed by their respective officers as of the day and year first above
written.



	 	 	 	 	 
	 	SIERRA TIMESHARE CONDUIT RECEIVABLES FUNDING II, LLC,

as Issuer

 	 
	 	By:  	/s/ Mark A. Johnson
 	 
	 	 	Name:  	Mark A. Johnson 	 
	 	 	Title:  	President 	 
	 
	 	WYNDHAM CONSUMER FINANCE, INC.,

as Servicer

 	 
	 	By:  	/s/ Mark A. Johnson
 	 
	 	 	Name:  	Mark A. Johnson 	 
	 	 	Title:  	President 	 
	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	/s/ Benjamin Krueger
 	 
	 	 	Name:  	Benjamin Krueger 	 
	 	 	Title:  	Vice President 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION, as

as Collateral Agent

 	 
	 	By:  	/s/ Cheryl Whitehead
 	 
	 	 	Name:  	Cheryl Whitehead 	 
	 	 	Title:  	Vice President 	 
	 



[Signature page for Indenture and Servicing Agreement]