Document:

Series 2002-1 Supplement dated Nov 14, 2005

EXHIBIT
10.2

 

EXECUTION
COPY

SERIES
2002-1 SUPPLEMENT

 

Dated as
of August 29, 2002

 

Amended
and Restated as of November 14, 2005

 

to

 

MASTER
INDENTURE AND SERVICING AGREEMENT

 

Dated as
of August 29, 2002

 

 

CENDANT
TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC

 

LOAN-BACKED

 

VARIABLE
FUNDING NOTES,

 

SERIES
2002-1

 

 

 

among

 

CENDANT
TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC,

 

as
Issuer

 

CENDANT
TIMESHARE RESORT GROUP--CONSUMER FINANCE, INC.,

 

as Master
Servicer

 

WACHOVIA
BANK, NATIONAL ASSOCIATION,

 

as
Trustee

 

and

 

WACHOVIA
BANK, NATIONAL ASSOCIATION,

 

as
Collateral Agent

 

 

TABLE
OF CONTENTS

Page

	
      ARTICLE
      I 

      DESIGNATION
      of the Series 2002-1 Notes

	
      Section
      1.01.
	 	
      Designation
	 	
      3

	
      ARTICLE
      II 

      Definitions

	
      Section
      2.01.
	 	
      Definitions
	 	
      4

	
      Section
      2.02.
	 	
      Other
      Definitional Provisions
	 	
      19

	
      ARTICLE
      III 

      Servicing
      Compensation

	
      Section
      3.01.
	 	
      Servicing
      Compensation
	 	
      19

	
      ARTICLE
      IV 

      THE
      SERIES 2002-1 NOTES

	
      Section
      4.01.
	 	
      Forms
      Generally
	 	
      19

	
      Section
      4.02.
	 	
      Authorized
      Amount; Conditions to Initial Issuance
	 	
      20

	
      Section
      4.03.
	 	
      Principal,
      Interest and NPA Costs
	 	
      21

	
      Section
      4.04.
	 	
      Nonrecourse
      to the Issuer
	 	
      21

	
      Section
      4.05.
	 	
      Dating
      of the Notes
	 	
      21

	
      Section
      4.06.
	 	
      Payments
      on the Series 2002-1 Notes; Payment of NPA Costs
	 	
      22

	
      Section
      4.07.
	 	
      Increases
      in Notes Principal Amount
	 	
      22

	
      Section
      4.08.
	 	
      Reduction
      of the Facility Limit
	 	
      23

	
      Section
      4.09.
	 	
      Increase
      of the Facility Limit
	 	
      23

	
      Section
      4.10.
	 	
      Repayment
      Obligation
	 	
      24

	
      Section
      4.11.
	 	
      Transfer
      Restrictions
	 	
      24

	
      Section
      4.12.
	 	
      Tax
      Treatment
	 	
      27

	
      ARTICLE
      V 

      REPRESENTATIONS
      AND WARRANTIES OF THE ISSUER; ASSIGNMENT OF REPRESENTATIONS AND
      WARRANTIES

	
      Section
      5.01.
	 	
      Representations
      and Warranties of the Issuer
	 	
      27

	
      Section
      5.02.
	 	
      Assignment
      of Representations and Warranties
	 	
      28

	
      Section
      5.03.
	 	
      Addition
      of New Sellers
	 	
      28

 

 

i

 

TABLE
OF CONTENTS

(continued)

Page

	
      ARTICLE
      VI

      PAYMENTS,
      SECURITY AND ALLOCATIONS

	
      Section
      6.01.
	 	
      Priority
      of Payments
	 	
      30

	
      Section
      6.02.
	 	
      Determination
      of Monthly Principal
	 	
      31

	
      Section
      6.03.
	 	
      Information
      Provided to Trustee
	 	
      31

	
      Section
      6.04.
	 	
      Payments
	 	
      31

	
      Section
      6.05.
	 	
      Collection
      Account
	 	
      31

	
      Section
      6.06.
	 	
      Reserve
      Account
	 	
      33

	
      Section
      6.07.
	 	
      Hedge
      Agreement
	 	
      35

	
      Section
      6.08.
	 	
      Replacement
      of Hedge Provider
	 	
      35

	
      ARTICLE
      VII

      ADDITION,
      RELEASE AND SUBSTITUTION OF LOANS

	
      Section
      7.01.
	 	
      Addition
      of Series 2002-1 Collateral
	 	
      36

	
      Section
      7.02.
	 	
      Release
      of Defective Loans
	 	
      38

	
      Section
      7.03.
	 	
      Release
      of Defaulted Loans
	 	
      39

	
      Section
      7.04.
	 	
      Release
      Upon Optional Prepayments
	 	
      39

	
      Section
      7.05.
	 	
      Release
      Upon Optional Substitution
	 	
      40

	
      Section
      7.06.
	 	
      Release
      Upon Payment in Full
	 	
      41

	
      ARTICLE
      VIII 

      REPORTS
      TO TRUSTEE AND NOTEHOLDERS

	
      Section
      8.01.
	 	
      Monthly
      Report to Trustee
	 	
      41

	
      Section
      8.02.
	 	
      Monthly
      Servicing Report
	 	
      41

	
      Section
      8.03.
	 	
      Delivery
      of Reports to Deal Agent
	 	
      42

	
      Section
      8.04.
	 	
      Tax
      Reporting
	 	
      42

	
      ARTICLE
      IX 

      AMORTIZATION
      EVENTS

	
      Section
      9.01.
	 	
      Amortization
      Events
	 	
      42

	
      ARTICLE
      X 

      Events
      of Default

	
      Section
      10.01.
	 	
      Events
      of Default
	 	
      44

	
      Section
      10.02.
	 	
      Acceleration
      of Maturity; Rescission and Annulment
	 	
      45

 

 

ii

TABLE
OF CONTENTS

(continued)

Page

	
      Section
      10.03.
	 	
      Authority
      to Institute Proceedings and Direct Remedies
	 	
      45

	
      Section
      10.04.
	 	
      Distributions
      of Amounts Collected
	 	
      45

	
      Section
      10.05.
	 	
      Sale
      of Defaulted Loans After an Event of Default
	 	
      46

	
      ARTICLE
      XI 

      PROVISIONS
      RELATING TO THE master SERVICER

	
      Section
      11.01.
	 	
      Master
      Servicer Advances
	 	
      47

	
      Section
      11.02.
	 	
      Additional
      Events of Servicer Defaults
	 	
      47

	
      Section
      11.03.
	 	
      Additional
      Conditions to Master Servicer Transfer
	 	
      48

	
      Section
      11.04.
	 	
      Fair
      Market Value of Defaulted Loans
	 	
      48

	
      ARTICLE
      XII

      Miscellaneous
      Provisions

	
      Section
      12.01.
	 	
      Ratification
      of Agreement
	 	
      49

	
      Section
      12.02.
	 	
      Counterparts
	 	
      49

	
      Section
      12.03.
	 	
      Governing
      Law
	 	
      49

	
      Section
      12.04.
	 	
      Notices
      to Deal Agent
	 	
      49

	
      Section
      12.05.
	 	
      Nonpetition
      Covenant 
	 	
      49

	
      Section
      12.06.
	 	
      Satisfaction
      of Rating Agency Condition
	 	
      49

	
      Section
      12.07.
	 	
      Amendment
      to Documents
	 	
      50

	
      Section
      12.08.  
	 	
      Rating
      Agency Review
	 	
      50

 

iii

 

EXHIBITS

 

	
      EXHIBIT
      A    
	 	
      Form
      of Supplemental Grant
		
      A-1

	
      EXHIBIT
      B
	 	
      Form
      of Series 2002-1 Notes and Certificate of Authentication
		
      B-1

	
      EXHIBIT
      C        
		
      List
      of Initial Principal Amounts
		
      C-1

	
      EXHIBIT
      D
	 	
      Form
      of Monthly Report
	 	
      D-1

	
      EXHIBIT
      E
		
      [Reserved]
		
	
      EXHIBIT
      F
	 	
      Forms
      of Documents to be used by New Sellers:
	 	
		 	
      Form
      F-1 -- Form of Purchase Agreement    
	 	
      F-1

	 	 	
      Form
      F-2 -- Form of Series 2002-1 Purchase Supplement
	 	
      F-2

	
      EXHIBIT
      G
	 	
      Form
      of Noteholder’s Letter
	 	
      G-1

 

 

 

SERIES
2002-1 SUPPLEMENT, dated as of August 29, 2002, and amended and restated as of
November 14, 2005, among CENDANT TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC, a
limited liability company formed under the laws of the State of Delaware and
formerly known as Sierra Receivables Funding Company, LLC, as Issuer, CENDANT
TIMESHARE RESORT GROUP-CONSUMER FINANCE, INC., a Delaware corporation formerly
known as Fairfield Acceptance Corporation-Nevada, as Master Servicer, WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Trustee under the Agreement, and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, as Collateral
Agent.

 

Section
2.10 of the Agreement provides that the Issuer may, pursuant to one or more
Supplements, issue one or more Series of Notes and set forth the terms of such
Series.

 

Pursuant
to this Supplement, the Issuer creates the Series 2002-1 Notes and specifies the
terms thereof.

 

All
things necessary to make this Supplement a valid agreement of the Issuer, the
Master Servicer, the Trustee and the Collateral Agent in accordance with its
terms have been done.

 

GRANTING
CLAUSES

 

The
Issuer hereby Grants to the Collateral Agent, for the benefit of the Trustee for
the benefit of the Series 2002-1 Noteholders, all of the Issuer’s right, title
and interest, whether now owned or hereafter acquired, in, to and under the
following:

 

(a)  all
Series 2002-1 Pledged Loans, together with all other Series 2002-1 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
including any sub-accounts within the Collection Account;

 

(c)  all
money, investment property, instruments and other property credited to, carried
in or deposited in a Lockbox Account or any other bank or similar account into
which Series 2002-1 Collections are deposited, to the extent such money,
investment property, instruments and other property constitutes Series 2002-1
Collections;

 

(d)  the
Reserve Account and all moneys, investment property, instruments and other
property credited to, carried in or deposited in the Reserve Account including
any sub-accounts within 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 Series 2002-1 Pool Purchase Supplement and each Series 2002-1
Purchase Supplement 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 

 

1

 

Issuer
from the Depositor or any Seller under or in connection with the Series 2002-1
Pool Purchase Supplement or any Series 2002-1 Purchase Supplement (including
without limitation all interest and finance charges for late payments accrued
thereon and proceeds of any liquidation or sale of Series 2002-1 Pledged Loans
or resale of Timeshare Properties or Vacation Credits and all other Collections
on the Series 2002-1 Pledged Loans) and all other rights of the Issuer to
enforce the Series 2002-1 Pool Purchase Supplement and each Series 2002-1
Purchase Supplement;

 

(g)  to the
extent related to the Series 2002-1 Pledged Loans or the Series 2002-1 Pledged
Assets, all rights, remedies, powers, privileges and claims of the Issuer under
or with respect to the Pool Purchase Agreement and the each of the Purchase
Agreements 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 Series 2002-1 Pledged Loans (including
without limitation all interest and finance charges for late payments accrued
thereon and proceeds of any liquidation or sale of Series 2002-1 Pledged Loans
or resale of Timeshare Properties or Vacation Credits and all other Collections
on the Series 2002-1 Pledged Loans) and all other rights of the Issuer to
enforce the Pool Purchase Agreement and each Purchase Agreement;

 

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

 

(i)  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;

 

(j)  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; 

 

(k)  all
proceeds of the foregoing property described in clauses (a) through (j) 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 Series 2002-1 Collateral, 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 Series 2002-1 Collateral; 

 

(l)  the
Trendwest Supplemental Agreement and all rights and interests therein and
thereto; and 

 

(m)  all
proceeds of the foregoing.

 

2

 

The
property described in the preceding sentence is collectively referred to as the
“Series
2002-1 Collateral.” The
Grant of the Series 2002-1 Collateral to the Collateral Agent is for the benefit
of the Trustee to secure the Series 2002-1 Notes equally and ratably without
prejudice, priority or distinction among any Series 2002-1 Notes by reason of
difference in time of issuance or otherwise, except as otherwise expressly
provided in the Agreement or in this Supplement and to secure (i) the payment of
all amounts due on the Series 2002-1 Notes in accordance with their respective
terms, (ii) the payment of all other sums payable by the Issuer under the Series
2002-1 Documents or the Series 2002-1 Notes and (iii) compliance by the Issuer
with the provisions of the Series 2002-1 Documents. This Supplement is a
security agreement within the meaning of the UCC.

 

The
Collateral Agent and the Trustee acknowledge the Grant of the Series 2002-1
Collateral, and the Collateral Agent accepts the Series 2002-1 Collateral in
trust hereunder in accordance with the provisions hereof and agrees to perform
the duties herein to the end that the interests of the Series 2002-1 Noteholders
may be adequately and effectively protected.

 

The
Trustee and the Collateral Agent are directed to enter into the Collateral
Agency Agreement pursuant to which the Collateral Agent will act as agent for
the benefit of the Trustee for the purpose of maintaining a security interest in
the Series 2002-1 Collateral. The Trustee and Series 2002-1 Noteholders shall be
bound by the terms of the Collateral Agency Agreement upon the Trustee’s
execution thereof on their behalf. The Series 2002-1 Collateral shall not secure
the payment by or performance by the Issuer of any obligations related to any
other Series.

 

ARTICLE
I

DESIGNATION
OF THE SERIES 2002-1 NOTES

Section
1.01.  Designation.

 

(a)  
There is
hereby created and designated a Series of Notes to be issued pursuant to the
Agreement and this Supplement to be known as “CENDANT TIMESHARE CONDUIT
RECEIVABLES FUNDING, LLC, Loan-Backed Variable Funding Notes, Series 2002-1,”
the “Series
2002-1 Notes” or the
“Notes.”

 

(b)  
The
terms of the Series 2002-1 Notes shall be as set forth in this
Supplement.

 

(c)  
In
the event that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Agreement, the terms
and provisions of this Supplement shall be controlling.

 

3

 

ARTICLE
II

DEFINITIONS

 

Section
2.01.  Definitions.

 

Terms
used herein, but not defined herein, shall have the meaning assigned to such
terms in the Agreement or if not defined in the Agreement, the meaning assigned
to such terms in the applicable Purchase Agreement or the applicable Series
2002-1 Purchase Supplement. Each capitalized term defined herein shall relate
only to the Series 2002-1 Notes and no other Series issued by the Issuer.
Whenever used in this Supplement, 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.

 

“Accrual
Period” means,
with respect to the Series 2002-1 Notes for 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 September
2002 Payment Date.

 

“Acquired
Portfolio Loan” means 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;
provided that, except for purposes of calculating the Transaction Period Excess
Amount, the term Acquired Portfolio Loan shall not include loans acquired from
Kona.

 

“Addition
Cut-Off Date” means,
with respect to Additional 2002-1 Pledged Loans, the cut-off date stated in the
related Supplemental Grant.

 

“Addition
Date” means,
with respect to Additional 2002-1 Pledged Loans, the date designated in the
related Supplemental Grant as the Addition Date.

 

“Additional
2002-1 Pledged Loans” means
Loans (including Qualified Substitute Loans) pledged under this Supplement and a
Supplemental Grant subsequent to the Closing Date.

 

“Advance
Rate”
means:

 

(a) for the
November 2005 Payment Date or any other date occurring in November, 2005,
81.71%; and

 

(b) for any
date occurring on or after December 1, 2005, the percentage determined on the
basis of weighted average seasoning of the Series 2002-1 Pledged Loans as of the
end of the immediately preceding Due Period; for purposes of 

 

4

 

determining
the weighted average seasoning and the Advance Rate the following shall
apply:

 

	
      Seasoning
	
      CTRG-CF
      Loans
	
      Trendwest
      Loans

	
       

      0-6
      Months
	
       

      80.00%
	
       

      77.00%

	
      7-9
      Months
	
      81.50%
	
      78.50%

	
      10-12
      Months
	
      82.75%
	
      80.50%

	
      13-15
      Months
	
      83.75%
	
      81.75%

	
      16-18
      Months
	
      85.50%
	
      83.25%

	 	 	 

(c) for
purposes of determining the seasoning of a Loan, the number of months assigned
to a Loan shall be the number of calendar months that have elapsed between the
date of origination of the Loan to and including the last day of the Due Period
immediately preceding the date of determination.

 

“Agreement” means
the Master Indenture and Servicing Agreement dated as of August 29, 2002 and
amended and restated as of November 14, 2005, among the Issuer, the Master
Servicer, the Trustee and the Collateral Agent and as amended, supplemented and
restated from time to time.

 

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

 

“Amortization
Event” has the
meaning specified in Section 9.01.

 

“Available
Funds” for any
Payment Date means (i) all payments (including prepayments) of principal,
interest and fees collected from or on behalf of the Obligors during the related
Due Period on the Series 2002-1 Pledged Loans; (ii) all Master Servicer Advances
made on or prior to the Payment Date with respect to payments due from the
Obligors on the Series 2002-1 Loans during the related Due Period; (iii) the
Release Price paid to the Trustee for the release of any Series 2002-1 Pledged
Loan and the related Series 2002-1 Pledged Assets; (iv) all Net Liquidation
Proceeds from the disposition of a Series 2002-1 Defaulted Loan; (v) any
Net Hedge Receipts; and (vi) any amount withdrawn from the Reserve Account under
subsection 6.06(b) of this Supplement and deposited into the Collection Account
to be included as Available Funds on or in respect of such Payment
Date.

 

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

 

“Borrowing
Base” means,
at any time, the product of

 

(i) the
remainder of (A) the Series 2002-1 Adjusted Loan Balance at such time minus (B)
the Excess Concentration Amount at such time multiplied by

 

(ii) the
Advance Rate.

 

5

 

“Borrowing
Base Shortfall” means,
at any time, the amount, if any, by which the Notes Principal Amount exceeds the
Borrowing Base then if effect.

 

“Business
Day,” for
purposes of this Supplement, 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, Chicago, Illinois, Charlotte, North Carolina, 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” means,
if on the last Business Day of any Due Period, Trendwest has not met the target
for qualification of WorldMark Resorts with the California Department of Real
Estate as set forth in subsection 7.01(d), then from such date until the target
for qualification is satisfied, an amount by which (i) the sum of the Loan
Balances for all Series 2002-1 Pledged Loans which are Trendwest California
Loans exceeds (ii) five percent (5%) of the Series 2002-1 Adjusted Loan
Balance.

 

“Change
of Control” means
that any of the Issuer, the Depositor, or any Seller of Series 2002-1 Pledged
Loans ceases to be wholly owned, directly or indirectly, by
Cendant.

 

“Class” has the
meaning assigned to that term in the Note Purchase Agreement.

 

“Class
Agent” has the
meaning assigned to that term in the Note Purchase Agreement.

 

“Class
Facility Limit” with
respect to each Class, has the meaning assigned to that term in the Note
Purchase Agreement, as such limit is adjusted from time to time as provided in
the Note Purchase Agreement.

 

“Closing
Date” means
August 30, 2002.

 

“Collection
Account” means
the account established pursuant to Section 6.05 of this
Supplement.

 

“Collateral
Agent” means
Wachovia Bank, National Association, a national banking association, as
Collateral Agent, its successors and assigns and any entity which is substituted
as Collateral Agent under the terms of the Collateral Agency
Agreement.

 

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

 

“Contract
Rate” means,
with respect to any Series 2002-1 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).

 

“CTRG-CF” means
Cendant Timeshare Resort Group-Consumer Finance, Inc., a Delaware corporation
formerly known as Fairfield Acceptance Corporation-Nevada.

 

“CTRG-CF
Loans” means
Series 2002-1 Pledged Loans sold to the Depositor by CTRG-CF. 

 

6

 

“Cut-Off
Date” means
(a) with respect to the Initial Series 2002-1 Pledged Loans, the Initial Cut-Off
Date, (b) with respect to any Additional Series 2002-1 Pledged Loan including
any Qualified Substitute Loan such date as is set forth in the Supplemental
Grant.

 

“Deal
Agent” means
Bank of America, N.A. in its capacity as “Deal Agent” under the Note Purchase
Agreement or any successor to or assignee thereof (to the extent such assignment
is permitted under the Note Purchase Agreement).

 

“Defaulted
Loan” means
any Series 2002-1 Pledged Loan (a) with any portion of a Scheduled Payment
delinquent more than 90 days, (b) with respect to which the Master Servicer
shall have determined in good faith that the 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.

 

“Default
Percentage” means
for any Due Period a fraction (i) the numerator of which is the aggregate
outstanding Loan Balance of all Series 2002-1 Pledged Loans which became
Defaulted Loans during such Due Period and (ii) the denominator of which is the
Series 2002-1 Aggregate Loan Balance as of the last day of such Due
Period.

 

“Defective
Loan” means
(i) any Series 2002-1 Pledged Loan which is a Defective Loan as such term is
defined in the Purchase Agreement under which such Series 2002-1 Pledged Loan
was sold to the Depositor and (ii) any Series 2002-1 Pledged Loan which is a
Missing Documentation Loan.

 

“Delayed
Completion Green Loans” means
Series 2002-1 Pledged Loans which are Green Loans and which have been Series
2002-1 Pledged Loans for 15 months or more and the Green Timeshare Property is
still subject to completion.

 

“Delayed
Completion Green Loans Excess Amount” means,
at any time, the sum of the Loan Balances for all Series 2002-1 Pledged Loans
which are Delayed Completion Green Loans.

 

“Delinquency
Ratio” means
for any Due Period, a fraction the numerator of which is the aggregate
outstanding Loan Balance of all 2002-1 Pledged Loans which are Delinquent Loans
at the end of such Due Period and the denominator of which is the Series 2002-1
Aggregate Loan Balance as of the last day of such Due Period.

 

“Delinquent
Loan” means a
Series 2002-1 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.

 

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

 

“Documents
in Transit Loan” means
any Series 2002-1 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

 

7

 

sent out
for checking and recording or (ii) the documentation has not been delivered by
the Seller to the Custodian. 

 

“Documents
in Transit Excess Amount” means,
at any time, the amount by which (i) the sum of the Loan Balances for all
Series 2002-1 Pledged Loans which are Documents in Transit Loans exceeds (ii) 7%
of the Series 2002-1 Adjusted Loan Balance.

 

“Due
Date” has,
with respect to any Series 2002-1 Pledged Loan, the meaning assigned to the term
in the applicable Purchase Agreement.

 

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

 

“Eligible
Account” means
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
Loan” has,
with respect to any Series 2002-1 Loan, the meaning assigned to that term in the
Series 2002-1 Purchase Supplement pursuant to which such Loan was transferred to
the Depositor.

 

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

 

“Event
of Default” means
one or more of the events described in Section 10.1 of this
Supplement.

 

“Excess
Concentration Amount” means,
on any day, an amount equal to the sum of (i) the Non-US Excess Amount, (ii) the
Green Loans Excess Amount, (iii) 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
and (x), if required under subsection 7.01(d), the California Excess Amount.

 

“Facility
Limit” means
$800,000,000 as such amount may be reduced from time to time in accordance with
Section 4.08 hereof and the Note Purchase Agreement or increased in accordance
with Section 4.09 hereof and the Note Purchase Agreement.

 

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

 

8

 

"Fixed
Week Excess Amount" means,
at any time, the amount by which (i) the combined amount of the Loan Balances of
all Acquired Portfolio Loans for which the related Timeshare Property consists
of a Fixed Week and which as of such time is not subject to the FairShare Plus
Program and has not been converted and is not convertible into a UDI, exceeds
(ii) five percent (5%) of the Series 2002- Adjusted Loan Balance.

 

“Four
Month Default Percentage” means
(i) for the Payment Date occurring in December 2005, the Default Percentage for
November 2005, (ii) for the Payment Date occurring in January 2006, the sum of
the Default Percentage for November 2005 and for December 2005 divided by two,
(iii) for the Payment Date occurring in February 2006, the sum of the Default
Percentage for November 2005, for December 2005 and for January 2006 divided by
three and (iv) for any Payment Date on or after the Payment Date in March 2006,
the sum of the Default Percentages for each of the four immediately preceding
Due Periods divided by four.

 

“Green
Loan” means 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
Loans Excess Amount” means,
at any time, an amount by which (i) the sum of the Loan Balances for all Series
2002-1 Pledged Loans which are Green Loans exceeds (ii) ten percent (10%) of the
Series 2002-1 Adjusted Loan Balance of the Series 2002-1 Pledged
Loans.

 

“Gross
Excess Spread” means
for any Payment Date the Series 2002-1 Interest Collections for the immediately
preceding Due Period, minus the sum
of (i) the aggregate amount of Notes Interest due on such Payment Date and (ii)
the Monthly Master Servicer Fee due on such Payment Date.

 

“Gross
Excess Spread Percentage” means
for any Due Period the percentage equivalent of a fraction, the numerator of
which is the product of 12 times the Gross Excess Spread for the related Payment
Date and the denominator of which is the average daily Series 2002-1 Aggregate
Loan Balance. 

 

“Hedge
Agreement” means
the cap confirmation originally dated on or about the Closing Date between the
Issuer and the counterparty as Hedge Provider and as such Hedge Agreement may be
amended, modified, adjusted or replaced.

 

“Hedge
Provider” means
any entity which enters into a Hedge Agreement with the Issuer.

 

“Hospitality
and Timeshare Segments” means
the Hospitality Services Segment and the Timeshare Resorts Segment within
Cendant Corporation, as such segments are constituted and reported in Cendant’s
filings with the Securities and Exchange Commission in the most recent filings
prior to November 14, 2005.

 

“Initial
Cut-Off Date” means
the close of business on August 27, 2002.

 

9

 

“Initial
Notes Principal Amount” means
the principal amount of the Series 2002-1 Notes issued on the Closing Date,
being in the aggregate $232,506,160.43 and, with respect to each Note, the
initial principal amount of such Note at the time of its issuance.

 

“Initial
Series 2002-1 Pledged Loans” means
those Loans listed on the Series 2002-1 Loan Schedule delivered to the
Collateral Agent as of the Closing Date.

 

“Issuer” means
Cendant Timeshare Conduit Receivables Funding, LLC, a Delaware limited liability
company and its successors and assigns.

 

“Joinder
Agreement” has the
meaning assigned to that term in the Note Purchase Agreement.

 

“Kona” means
Kona Hawaiian Vacation Ownership, LLC, a Hawaii limited liability company, and
its successors and assigns. 

 

“Large
Loans Excess Amount” means,
at any time, the sum of (a) the combined amount of the Loan Balances of all
Series 2002-1 Pledged Loans which have a Loan Balance at such time greater than
$100,000 plus (b) the amount by which (i) the combined amount of the Loan
Balances of all Series 2002-1 Pledged Loans which have a Loan Balance at such
time of $75,000 or more (but not more than $100,000) exceeds (ii) five percent
(5%) of the Series 2002-1 Adjusted Loan Balance.

 

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

 

“Liquidity
Reduction Amortization Period” means
the period beginning with the Payment Date occurring in the first calendar month
following the occurrence of a Liquidity Reduction Date and continuing through
the earlier of (i) the Payment Date on which the Liquidity Reduction Amount has
been paid in full or (ii) the last Payment Date prior to the occurrence of an
Amortization Event.

 

“Liquidity
Reduction Amount” means,
if a Liquidity Reduction Event has occurred with respect to a Conduit, the
principal amount of Notes held by such Class as of the Payment Date immediately
following the applicable Liquidity Reduction Date.

 

“Liquidity
Reduction Date” means
the date on which a Liquidity Reduction Event occurs.

 

“Liquidity
Reduction Event” means
the Liquidity Agreement of a Conduit or Alternate Investor shall be terminated
for any reason (whether at the stated maturity or earlier) or shall otherwise
cease to be in full force and effect.

 

“Liquidity
Termination Date” has the
meaning assigned to that term in the Note Purchase Agreement.

 

“Majority
Facility Investors” has the
meaning assigned to that term in the Note Purchase Agreement.

 

10

 

“Market
Servicing Rate” means
the rate calculated by the Trustee following a Servicer Default and 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 Servicer, 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.

 

“Master
Servicer” means
Cendant Timeshare Resort Group--Consumer Finance, Inc., a Delaware corporation,
or if a change in Master Servicer has occurred in accordance with the terms of
subsection 5.12(b) of the Agreement and Section 11.03 of this Supplement,
Trendwest and, in each case, its successors and assigns, as Master Servicer
under the Agreement or if any Service Transfer occurs under the Agreement, and
thereafter means the Successor Master Servicer appointed pursuant to Section
10.2 of the Agreement.

 

“Master
Servicer Advance” means
amounts, if any, advanced by the Master Servicer, at its option, pursuant to
Section 11.01 to cover any shortfall between (i) the Scheduled Payments on the
Series 2002-1 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.

 

“Maturity
Date” means
December 15, 2008.

 

“Missing
Documentation Loan” means
any Series 2002-1 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 Purchase Agreement, or if the
documentation is not in the possession of the Custodian because it has not been
delivered by the Seller 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
Interest” for
each Note means the Notes Interest due and payable on any Payment
Date.

 

“Monthly
Principal” has the
meaning specified in Section 6.02.

 

“Monthly
Master Servicer Fee” means,
in respect of any Due Period (or portion thereof), an amount equal to
one-twelfth of the product of (a) 1.25% for Due Periods ending after June
30, 2003 and on or before October 31, 2005, and 1.10% for Due Periods ending
after October 31, 2005 and (b) the Series 2002-1 Aggregate Loan Balance at the
beginning of such Due Period (or portion thereof) or if a Successor Master
Servicer has been appointed and accepted the appointment or if the Trustee is
acting as Master Servicer, an amount equal to 

 

11

 

one-twelfth
of the product of (x) the lesser of 3.5% and the Market Servicing Rate and (y)
the Series 2002-1 Aggregate Loan Balance at the beginning of such Due
Period.

 

“Monthly
Trustee Fee” means,
in respect of any Due Period, an amount equal to one-twelfth of 0.01% of the
Notes Principal Amount as of the first day of such Due Period.

 

“Net
Hedge Payment” means
with respect to any Payment 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 Net Hedge Payment shall be calculated by the Master Servicer
and provided in writing to the Trustee and the Deal Agent.

 

“Net
Hedge Receipt” means
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.

 

“Net
Liquidation Proceeds” means,
with respect to any Defaulted Loan which is a Series 2002-1 Pledged Loan and
which has not been released from the Lien of this Supplement, the proceeds of
the sale, liquidation or other disposition of the Defaulted Loan and/or related
Series 2002-1 Pledged Assets.

 

“New
Seller” means
an entity other than CTRG-CF or Trendwest which (a) is a subsidiary of Cendant,
(b) performs its own loan origination and servicing, (c) has entered into a
Purchase Agreement and Series 2002-1 Purchase Supplement as provided in Section
5.03 and, (d) with respect to any Loan Granted under this Supplement has
complied with all conditions set forth in Section 5.03.

 

“New
Seller Excess Amount” means,
at any time, an amount equal to the sum of (a) the amount by which the sum
of the Loan Balances for Series 2002-1 Pledged Loans that were sold to the
Depositor by any one New Seller exceeds 10% of the Series 2002-1 Adjusted Loan
Balance plus, without duplication and (b) the amount by which the sum of the
Loan Balances for Series 2002-1 Pledged Loans that were sold to the Depositor by
all New Sellers exceeds 15% of the Series 2002-1 Adjusted Loan
Balance.

 

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

 

“Non-US
Excess Amount” means,
at any time, the amount by which (i) the sum of the Loan Balances for all Series
2002-1 Loans with Obligors with billing addresses not located in the United
States of America exceeds (ii) five percent (5%) of the Series 2002-1 Adjusted
Loan Balance.

 

“Noteholder’s
Letter” shall
mean a letter substantially in the form of Exhibit G.

 

12

 

“Note
Purchase Agreement” means
the Note Purchase Agreement dated as of August 29, 2002 and amended and restated
as of November 14, 2005 which relates to the sale of the Series 2002-1 Notes by
the Issuer and which is by and among the Issuer, the Depositor, the Master
Servicer, the Performance Guarantor, the Deal Agent, the Conduits, the Alternate
Investors and the Class Agents (each such term not defined herein has the
meaning set forth in the Note Purchase Agreement) as amended, restated,
supplemented or otherwise modified.

 

“Notes” means
the Series 2002-1 Notes and “Note” means
any one of the Series 2002-1 Notes.

 

“Notes
Increase” means a
draw on the Series 2002-1 Notes resulting in an increase in the Notes Principal
Amount outstanding.

 

“Notes
Increase Date” means
with respect to a Notes Increase, the Business Day on which the Notes Increase
occurs pursuant to Section 4.07 of this Supplement.

 

“Notes
Interest” means
for any Payment Date and for each Note outstanding during the related Accrual
Period, an amount equal to the Carrying Costs of the related Class due on such
Payment Date as such amount is reported to the Trustee by the Deal Agent or the
Master Servicer; plus the
Unused Fees and Program Fees due on such Payment Date under the terms of the
related Fee Letter as such amounts are reported to the Trustee by the Deal Agent
or the Master Servicer.

 

“Notes
Principal Amount” means
as of the close of business on any date, with respect to any Note, the Initial
Notes Principal Amount of that Note, less the aggregate amount of principal
payments made on that Note on or prior to such date plus the sum of all
increases in that Note occurring pursuant to Section 4.07 on or prior to such
date; provided that any
principal payments required to be returned to the Issuer in connection with any
Insolvency Proceeding shall be reinstated to the Notes Principal
Amount.

 

“Noteholder” or
“Holder” means
the Person in whose name a Series 2002-1 Note is registered in the Note
Register.

 

“Notice
of Increase” means
the notice presented by the Issuer to the Deal Agent, Master Servicer and
Trustee to request a Notes Increase.

 

“NPA
Costs” means
at any time, the Breakage and Other Costs as defined in the Note Purchase
Agreement.

 

“Original
Principal Balance” means
with respect to any Loan, the original principal balance of such
Loan.

 

“Overdue
Interest” means,
as of any Payment Date, the amount, if any, by which Monthly Interest in respect
of all prior Payment Dates exceeds the amount paid to Noteholders on such prior
Payment Dates, together with interest thereon for each Accrual Period at the
rate of the Bank Base Rate plus 2%.

 

13

 

“Payment
Date” means
the 13th day of
each calendar month, or, if such 13th day is
not a Business Day, the next succeeding Business Day.

 

“Performance
Guaranty” means
the performance guaranty dated as of August 29, 2002 made by Performance
Guarantor in favor of the Trustee.

 

“Permitted
Encumbrance” with
respect to any Series 2002-1 Pledged Loan has the meaning assigned to that term
under the Purchase Agreement pursuant to which such Loan is sold to the
Depositor.

 

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

 

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

 

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

 

“Principal
Distribution Amount” means
for any Payment Date an amount equal to the Borrowing Base Shortfall as of the
last day of the preceding Due Period less the amount by which the Borrowing Base
is increased on such Payment Date.

 

“Priority
of Payments” means
the application of Available Funds in accordance with Section 6.01.

 

“Program
Fees” means
with respect to any Class, the program fees described in the Fee Letter for that
Class.

 

“Purchase
Agreement” means a
Master Loan Purchase Agreement between a Seller and the Depositor pursuant to
which the Seller sells Loans to the Depositor. 

 

“Purchasers” has the
meaning assigned to that term in the Note Purchase Agreement.

 

“Qualified
Hedge Provider” means
an entity which provides a Hedge Agreement and which provider 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.

 

“Qualified
Substitute Loan” means a
substitute Series 2002-1 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” means
each of Fitch, S&P or Moody’s as appropriate and their respective successors
in interest.

 

14

 

“Rating
Agency Condition” means
with respect to any action taken or to be taken, that each Rating Agency then
maintaining a rating on the Series 2002-1 Notes 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 such Rating
Agency to the Series 2002-1 Notes, and, if no Rating Agency is then maintaining
a rating on the Series 2002-1 Notes, shall, with respect to Series 2002-1, mean
the written consent of the Deal Agent.

 

“Record
Date” means
as to any Payment Date the last day of the preceding Due Period.

 

“Release
Date” means
the date on which Series 2002-1 Pledged Loans are released from the Lien of this
Supplement.

 

“Release
Price” means
an amount equal to the outstanding Loan Balance of the Series 2002-1 Pledged
Loan as of the close of business on the Due Date immediately preceding the
Payment Date on which the release is to be made, plus accrued and unpaid
interest thereon to the date of such release.

 

“Released
Series 2002-1 Pledged Loan” means
any Loan which was included as a Series 2002-1 Pledged Loan, but which has been
released from the Lien of this Supplement pursuant to the terms
hereof.

 

“Reported
EBITDA” shall
mean, without duplication, for any period for which such amount is being
determined (i) the combined net income of the Hospitality and Timeshare Segments
(which shall for purposes of this calculation be determined in the same manner
and including the sources of income as those included therein as of November 14,
2005 without regard to changes in reporting practices after such date and,
specifically shall include, without limitation Resort Condominiums
International, LLC and Vacation Rental Group) 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 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 all as
determined on a combined basis for the Hospitality and Timeshare Segments, in
each case in a manner consistent with such number as reported in Cendant’s
consolidated financial statements filed by Cendant with the Securities and
Exchange Commission under Form 10-K for the most recent fiscal year preceding
such 10-K filing, and 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” means,
for any Accrual Period the Weighted Average Series 2002-1 Loans Rate less
7.50%.

 

“Required
Class Agents” has the
meaning assigned to that term in the Note Purchase Agreement.

 

“Reserve
Account” means
the account established pursuant to Section 6.06 of this
Supplement.

 

15

 

“Reserve
Account Excess” has the
meaning specified in Section 6.06 of this Supplement.

 

“Reserve
Required Amount” as of
the Closing Date means $8,403,837.12 and (i) thereafter so long as no
Amortization Event has occurred, means as of each Payment Date an amount equal
to the greater of (x) 2.0% of the Series 2002-1 Aggregate Loan Balance as
of the end of the prior Due Period or (y) the Estimated Fees, plus, in
either case $150,000 related to any indemnification of the Trustee pursuant to
Section 11.5 of the Agreement and (ii) from and after the first Payment
Date following an Amortization Event, the Reserve Required Amount shall be
$0.

 

“Seller
of Series 2002-1 Loans” means a
Seller which has sold a Loan to the Depositor and such Loan is a Series 2002-1
Pledged Loan.

 

“Series
2002-1 Account” means
either of the Collection Account or the Reserve Account and “Series
2002-1 Accounts” mean
both of such accounts.

 

“Series
2002-1 Adjusted Loan Balance” means
the Series 2002-1 Aggregate Loan Balance minus the sum of (i) the Loan Balances
of any Series 2002-1 Pledged Loans which are Defaulted Loans, (ii) the Loan
Balances of any Series 2002-1 Pledged Loans which are Delinquent Loans on the
last day of the immediately preceding Due Period and (iii) the Loan
Balances of any Series 2002-1 Pledged Loans which are Defective
Loans.

 

“Series
2002-1 Aggregate Loan Balance” means,
as of any time, the sum of the Loan Balances for the Series 2002-1 Pledged
Loans.

 

“Series
2002-1 Collateral” has the
meaning specified in the Granting Clause of this Supplement.

 

“Series
2002-1 Collections” means
Collections, as defined in the Agreement, with respect to all Series 2002-1
Pledged Loans.

 

“Series
2002-1 Documents” means
the Series 2002-1 Notes, this Supplement, the Note Purchase Agreement and the
Fee Letters.

 

“Series
2002-1 Interest Collections” means
Collections on the Series 2002-1 Pledged Loans which are allocable to interest
on such Loans in accordance with the terms thereof.

 

“Series
2002-1 Loan Pool” means
all Loans identified in the Series 2002-1 Loan Schedule.

 

“Series
2002-1 Loan Schedule” means a
Loan Schedule, as defined in the Agreement, containing information about the
Series 2002-1 Pledged Loans, which Loan Schedule is as delivered by the Issuer
to the Collateral Agent as of the Closing Date and as amended each month by
delivery of an amendment describing the Series 2002-1 Pledged Loans added and
released.

 

16

 

“Series
2002-1 Notes” has the
meaning specified in Section 1.01 of this Supplement.

 

“Series
2002-1 Pledged Assets” with
respect to each Series 2002-1 Pledged Loan, means the related “Pool Assets” as
defined in the Pool Purchase Agreement.

 

“Series
2002-1 Pledged Loans” means
the Initial Series 2002-1 Pledged Loans and any Additional 2002-1 Pledged Loans,
but excluding any Released Series 2002-1 Pledged Loans.

 

“Series
2002-1 Pool Purchase Supplement” means
the Series 2002-1 Supplement to the Pool Purchase Agreement which supplement is
dated as of August 29, 2002 and is by and between the Depositor and the Issuer
and provides for the transfer of the Series 2002-1 Pledged Loans from the
Depositor to the Issuer.

 

“Series
2002-1 Purchase Supplements” means
each supplement to a Purchase Agreement pursuant to which Series 2002-1 Pledged
Loans are transferred from the respective Seller to the Depositor.

 

“Settlement
Statement” means
the information furnished by the Master Servicer to the Trustee for distribution
to the Noteholders pursuant to Section 8.01 of this Supplement.

 

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

 

“State
Concentration Excess Amount” means
at any time the sum of (i) with respect to each State other than California, the
Loan Balances of all Series 2002-1 Pledged Loans of Obligors with mailing
addresses located in such State which exceed twenty percent (20%) of the Series
2002-1 Adjusted Loan Balance plus (ii) with respect to California, the Loan
Balances of all Series 2002-1 Pledged Loans of Obligors with mailing addresses
located in California which exceed thirty percent (30%) of the Series 2002-1
Adjusted Loan Balance. 

 

“Substitution
Adjustment Amount” has the
meaning specified in the Series 2002-1 Pool Purchase Supplement.

 

“Supplement” means
this Series 2002-1 Supplement as amended from time to time.

 

“Supplemental
Grant” means,
with respect to any Additional 2002-1 Pledged Loans Granted as provided in
Section 3.5 of the Agreement, a Supplemental Grant substantially in the form of
Exhibit A hereto which shall be accompanied by an amendment which amends
the Series 2002-1 Loan Schedule listing such Loans and which shall be deemed to
be incorporated into and made a part of this Supplement.

 

“Three
Month Rolling Average Delinquency Ratio” means
(i) for the Payment Date occurring in December 2005, the Delinquency Ratio for
November 2005, (ii) for the Payment Date occurring in January 2006, the sum of
the Delinquency Ratio for November 2005 and for December 2005 divided by two and
(iii) for any Payment Date on or after the Payment 

 

17

 

Date in
February 2006, the sum of the Delinquency Ratio for each of the three
immediately preceding Due Periods divided by three.

 

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

 

“Transition
Period Excess Amount” means,
at any time, the amount by which the sum of the Loan Balances for all Series
2002-1 Loans which are Acquired Portfolio Loans (including, for such purposes,
Loans acquired from Kona) and for which the Transition Period has extended
beyond 120 days and the Transition Period has not been completed exceeds
ten percent (10%) of the Series 2002-1 Adjusted Loan Balance.

 

“Trendwest
California Loan” means a
Series 2002-1 Pledged Loan which was originated by Trendwest and relates to
Vacation Credits sold in California.

 

“Trendwest
Loans” means
Series 2002-1 Pledged Loans which were sold to the Depositor under the terms of
the Master Loan Purchase Agreement dated as of August 29, 2002 and amended and
restated as of November 14, 2005 between Trendwest and the Depositor and the
Series 2002-1 Purchase Supplement thereto and transferred to the Issuer under
the terms of the Pool Purchase Agreement.

 

“Trendwest
Supplemental Agreement” means
that Supplemental Agreement dated as of January 16, 2004 among Trendwest, the
Depositor and the Issuer, which agreement has been assigned by the Issuer to the
Trustee under this Supplement and which Trendwest Supplemental Agreement is
included as part of the Series 2002-1 Collateral.

 

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

 

“Trustee” means
Wachovia Bank, National Association, or its successor in interest, or any
successor trustee appointed as provided in the Agreement.

 

“Unused
Fees” means
with respect to any Class, the unused fee described in the Fee Letter for that
Class.

 

“Weighted
Average Series 2002-1 Loans Rate” means
as of the last day of any Due Period, the weighted average of the Contract Rates
for all Series 2002-1 Pledged Loans as of such date.

 

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

 

18

 

Section
2.02.   Other
Definitional Provisions.

 

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

 

(b)  
As
used herein and in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms not defined in Section 2.01 or in the
Agreement and accounting terms partly defined in Section 2.01 or in the
Agreement, to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms herein are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained herein shall control.

 

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

 

ARTICLE
III

SERVICING
COMPENSATION

 

Section
3.01.   Servicing
Compensation. As
compensation for its servicing activities with respect to the Series 2002-1
Pledged Loans, the Master Servicer shall be entitled to receive the Monthly
Master Servicer Fee which shall be paid to the Master Servicer pursuant to
Section 6.01 of this Supplement. 

 

ARTICLE
IV

THE
SERIES 2002-1 NOTES

 

Section
4.01.   Forms
Generally. The
Series 2002-1 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 to this Supplement, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Agreement and this Supplement, 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 such Series 2002-1 Notes as
evidenced by their execution of such Series 2002-1 Notes. Any portion of the
text of any Note may be set forth on the reverse or subsequent pages thereof,
with an appropriate reference thereto on the face of the Series 2002-1
Note.

 

Each Note
shall have a grid attached to it on which there shall be recorded the initial
Notes Principal Amount, each Notes Increase for that Note and all principal
payments made on that Note; provided, that
such amounts may instead be recorded in the Purchaser’s or 

 

19

Class
Agent’s records and the failure to make such recordings shall not affect the
obligations of the Issuer hereunder or under such Note.

 

One Note
shall be issued for each Class and be registered in the name of the Class Agent
for that Class as set forth in Exhibit C to this Supplement.

 

Section
4.02.   Authorized
Amount; Conditions to Initial Issuance.
(a) The
Initial Notes Principal Amount as of August 30, 2002 was $232,506,160.43. The
Notes Principal Amount may be increased from time to time as provided in Section
4.07 of this Supplement; provided, however, that the aggregate Notes Principal
Amount shall at no time exceed the then effective Facility Limit and the Notes
Principal Amount of the Note held by any single Class shall not exceed the then
effective Class Facility Limit for such Class.

 

(b)  
The
following shall be conditions to the issuance of the Series 2002-1
Notes:

 

(i)  
There
shall have been delivered to the Trustee a Performance Guaranty under which the
Performance Guarantor will guarantee to the Depositor, the Issuer, the Trustee
and the Collateral Agent on behalf of all holders of Notes issued under the
Agreement, the full and punctual payment and performance of all covenants,
agreements, terms, conditions and other obligations to be performed and observed
by each of CTRG-CF, as Seller and Master Servicer and Trendwest under and
pursuant to the Agreement and this Series Supplement and all amounts related to
the enforcement of the Performance Guaranty; 

 

(ii)  
The
Issuer shall enter into and Grant to the Trustee the Hedge Agreement with terms
described in Section 6.07;

 

(iii)  
The
premium due for the Hedge Agreement as of the Closing Date shall have been paid
as of the Closing Date;

 

(iv)  
On
or immediately prior to the Closing Date the Custodian has possession of each
original Series 2002-1 Pledged Loan and the related Loan File and has
acknowledged to the Trustee and the Deal Agent such receipt and its undertaking
to hold each such original Series 2002-1 Pledged Loan and the related Loan File
for purposes of perfection of the Collateral Agent’s interests in such original
Series 2002-1 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 Purchase Agreement is not in the possession of the Custodian in its
respective Loan File does not constitute a failure to satisfy this
condition;

 

(v)  
The
Issuer shall have delivered the Series 2002-1 Loan Schedule to the Collateral
Agent and each of the Initial Series 2002-1 Pledged Loans listed on such Loan
Schedule shall be Loans sold by a Seller to the Depositor under a Purchase
Agreement and Series 2002-1 Purchase Supplement; 

 

20

 

(vi)  
On
the Closing Date, the Initial Notes Principal Balance shall not exceed the
Borrowing Base which shall for this purpose be calculated by the Master Servicer
as of the Initial Cut-Off Date; and

 

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

 

Section
4.03.   Principal,
Interest and NPA Costs.
(a) Principal. The
Notes shall have a Maturity Date of December 15, 2008.

 

Each Note
shall be subject to prepayment in whole or in part as required or permitted by
the terms of this Supplement.

 

(b)  
Interest.
Interest on each Note shall be due and payable on each Payment Date in the
amount of the Notes Interest calculated for that 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 Master Servicer and the Trustee of the
aggregate amount of Notes Interest to be paid on such Payment Date on all Notes
and the components used in calculating the Notes Interest including the amount
of Carrying Costs, Program Fees and Unused Fees for each Class for such Payment
Date.

 

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

 

Section
4.04.   Nonrecourse
to the Issuer. The
Series 2002-1 Notes are limited obligations of the Issuer payable only from and
to the extent of the Series 2002-1 Collateral. The Holders of the Notes shall
have recourse to the Issuer only to the extent of the Series 2002-1 Collateral,
and to the extent such Series 2002-1 Collateral is not sufficient to pay the
Series 2002-1 Notes and the Notes Interest thereon in full and all other
obligations of the Issuer under this Series 2002-1 Supplement and the other
Series 2002-1 Documents, the Holders of the Series 2002-1 Notes and holders of
other obligations payable from the Series 2002-1 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. Further such Noteholders
agree that such agreement constitutes a subordination agreement for purposes of
Section 510(a) of the Bankruptcy Code.

 

Section
4.05.   Dating
of the Notes. The
Series 2002-1 Notes shall be executed and authenticated as provided in the
Agreement.

 

Each
Series 2002-1 Note authenticated and delivered by the Trustee or the
Authentication Agent to or upon Issuer Order on the Closing Date shall be dated
as of the Closing Date. All other Series 2002-1 Notes that are authenticated
after the Closing Date for any other purpose under this Agreement shall be dated
the date of their authentication.

 

21

 

Notes
issued upon transfer, exchange or replacement of other Series 2002-1 Notes shall
represent the outstanding principal amount of the Notes so transferred,
exchanged or replaced. If any Series 2002-1 Note is divided into more than one
Series 2002-1 Note in accordance with this Article IV the aggregate principal
amount of the Series 2002-1 Notes delivered in exchange shall, in the aggregate
be equal to the principal amount of the divided Series 2002-1 Note.

 

Section
4.06.   Payments
on the Series 2002-1 Notes; Payment of NPA Costs.

 

(a)  
The
Notes Interest calculated for each Payment Date will be due and payable on that
Payment Date. 

 

(b)  
To
the extent of Available Funds distributed as provided in provision SIXTH of
Section 6.01, principal of the Series 2002-1 Notes will be subject to mandatory
prepayment on each Payment Date in the amount of the Monthly Principal. Series
2002-1 Notes will also be subject to prepayment on the date designated under the
terms of Section 4.10. All payments of principal on the Notes shall be made pro
rata based on the outstanding principal amount of the Notes, except with respect
to any Notes which are subject to a Liquidity Reduction Amortization Period. All
outstanding principal of the Notes (unless sooner paid) will be due and payable
on the Maturity Date.

 

(c)  
As
a condition to the payment of principal of and interest on any Series 2002-1
Note without the imposition of U. S. withholding tax, the Issuer shall require
certification acceptable to the Trustee to enable the Issuer, the Trustee or any
Paying Agent to determine their duties and liabilities with respect to any taxes
or other charges that they may be required to deduct or withhold from payments
in respect of such Note under any present or future law or regulation of the
United States or any present or future law or regulation of any political
subdivision thereof or taxing authority therein or to comply with any reporting
or other requirement under any such law or regulation.

 

(d)  
Payments
in respect of interest on and principal of and any other amount payable on or in
respect of any Notes including NPA Costs shall be made on each Payment Date
(i) 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 Note to a United States dollar account specified for such Note in the Note
Register and in accordance with wire transfer instructions received by the
Trustee on or before the Record Date applicable to such Payment Date or, with
respect to the first Payment Date, specified on the Closing Date or, (ii) if no
wire transfer instructions are received by a Paying Agent, by a U. S. dollar
check drawn on a United States bank and delivered by first-class mail, postage
prepaid to each Holder at the address shown in the Note
Register.

 

Section
4.07.   Increases
in Notes Principal Amount. The
Noteholders agree, by acceptance of the Notes that 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 Master
Servicer and subject to the terms and conditions of this Section 4.07, request
that the Series 2002-1 Noteholders fund an increase in the outstanding principal
balance of the Series 2002-1 Notes in the aggregate amount specified in the
notice and on the date 

 

22

 

specified
in the notice. If the terms and conditions to the Note Increase set forth in
this Section 4.07 and in the Note Purchase Agreement are satisfied or waived,
then the Noteholders shall fund an increase by payment, in same day funds, to
the Issuer of the amount of such increase in accordance with the payment
instructions specified in the Notice of Increase. In addition to conditions set
forth in the Note Purchase Agreement, the following shall be conditions to each
Note Increase:

 

(a)  
The
Issuer and the Master Servicer shall have complied in all material respects with
all of their respective covenants and agreements contained in the Agreement,
this Supplement and the Note Purchase Agreement.

 

(b)  
No
Amortization Event, Event of Default, Potential Amortization Event or Potential
Event of Default shall have occurred and be continuing.

 

(c)  
At
least two (2) Business Days preceding the proposed Note Increase Date, the
Issuer shall have delivered to the Deal Agent, the Master Servicer and the
Trustee an electronic copy of a “Notice of Increase” in substantially the form
of Exhibit D to the Note Purchase Agreement.

 

(d)  
After
giving effect to the funding on such proposed Note Increase Date, the Notes
Principal Amount will not exceed the Borrowing Base.

 

(e)  
After
giving effect to the funding on such proposed Note Increase Date, the Notes
Principal Amount will not exceed the Facility Limit and with respect to each
Note, the outstanding principal amount of that Note shall not exceed the Class
Facility Limit for the related Class.

 

(f)  
After
giving effect to the funding on such proposed Note Increase Date and the deposit
of Available Funds, the amount in the Reserve Account will be equal to the
Reserve Required Amount.

 

(g)  
The
Hedge Agreement shall have been adjusted, if required, so that the notional
amount is equal to 90% of the Notes Principal Amount after giving effect to such
Notes Increase and the amortization schedule on the Hedge Agreement has been
adjusted in accordance with a schedule prepared by the Master Servicer and by
the Deal Agent.

 

Section
4.08.   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 made pro rata to each of the Classes and in the
aggregate for a reduction of not less than $20 million and in increments of $1
million in excess thereof.

 

Section
4.09.   Increase
of the Facility Limit.
(a) So long
as no Amortization Event shall have occurred and be continuing, the Issuer may,
on any Business Day, by written notice to the Deal Agent request an increase in
the Facility Limit. The written notice to the Deal Agent shall
specify:

 

23

 

(i)  
the
amount of the requested increase in the Facility Limit; and

 

(ii)  
the
date on which such increase is proposed to occur.

 

(b)  
Any
increase in the Facility Limit shall occur only if approved by each of the
Conduits and Alternate Investors as provided in the Note Purchase Agreement and
shall be evidenced by a notice from the Issuer and the Deal Agent delivered to
the Trustee which shall state the increased Facility Limit and the date on which
such increase shall be effective.

 

Section
4.10.   Repayment
Obligation.
(a) The
Issuer may prepay the 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”), provided
that (i) the aggregate 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 Trustee, for distribution to the Noteholders, on the date of prepayment,
principal plus interest accrued and to accrue on the principal amount of Notes
prepaid through any then applicable Funding Period.

 

(b)  
The
applicable Prepayment Notice shall state (i) the principal amount of the Notes
to be paid and (ii) the principal amount of the Series 2002-1 Pledged Loans to
be released under Section 7.04 at the time of the prepayment of the Notes, not
to exceed the amount by which the Borrowing Base exceeds the Note Principal
Amount calculated immediately after the prepayment of the Notes. Reference is
made to Sections 6.05 and 7.04 for the conditions to and procedure for the
release of the Series 2002-1 Pledged Loans and the related Series 2002-1 Pledged
Assets in connection with any such prepayment.

 

(c)  
Upon
prepayment of the Notes in accordance with subsection (a), the Issuer shall
terminate the existing Hedge Agreement and, if any Series 2002-1 Notes remain
outstanding, replace it with a new Hedge Agreement in a notional amount equal to
90% of the Series 2002-1 Notes Principal Amount after the prepayment of the
Notes. Any amounts received by the Issuer upon the termination, to the extent
not used to acquire a new Hedge Agreement, shall be deposited into the
Collection Account. Such new Hedge Agreement shall have all of the terms
described in Section 6.07.

 

Section
4.11.   Transfer
Restrictions.

 

(a)  
The
Series 2002-1 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 2002-1 Notes under the Securities Act or any
other securities or “Blue Sky” laws or to take any other action not otherwise
required under the Agreement or this Supplement to permit the transfer of the
Series 2002-1 Notes without registration.

 

(b)  
No
transfer of the Series 2002-1 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 4.11 (including the
applicable legend to be set forth on the face of the Series 2002-1 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 

 

24

 

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.

 

In
addition, no transfer of the Series 2002-1 Notes or any interest therein
(including without limitation by pledge or hypothecation) may be made in any
manner that would result in the outstanding securities (other than short-term
paper) being beneficially owned by more than 100 persons. For the purpose of
monitoring compliance with the foregoing restrictions and determining whether
after such transfer or resale the outstanding securities (other than short-term
paper) of the Issuer would be beneficially owned by more than 100 persons
calculated in accordance with Section 3(c)(1) of the Investment Company Act, the
following provisions shall apply:

 

(1) As stated
in Section 4.01, one Note and only one Note shall be issued for each Class and
such Note shall be registered in the name of the Class Agent for that
Class.

 

(2) No more
than nine Notes, each of which shall be issued to a single Class, shall be
issued and outstanding at any time.

 

(3) With
respect to each Class and the Note issued for that Class, the Class Agent shall
deliver to the Issuer and the Trustee a Noteholder’s Letter in the form attached
hereto as Exhibit G together with the supporting certificates from each member
of the Class, also as included in Exhibit G.

 

(4) No Note
or any interest therein may be transferred (including without limitation by
pledge or hypothecation) unless the entire Note is transferred to a Class and as
a condition to the transfer of the Note to such Class the Class Agent for the
transferee Class delivers a Noteholder’s Letter to the Issuer and the Trustee;
provided, however, that such provision shall not restrict the ability of any
Conduit (as defined in the Note Purchase Agreement), under the terms of its
Liquidity Agreement or the Note Purchase Agreement, to 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 2002-1 Notes provided that each
Liquidity Provider or Alternate Investor is a member of the Class of which the
Conduit is a member and has been included as a member covered in a Noteholders
Letter delivered to the Trustee and Issuer.

 

(5) Each
Class, as evidenced by the Noteholder’s Letter, shall include not more than four
persons within the meaning of Section 3(c)(1) of the Investment Company Act
unless the Issuer delivers an express written consent to a larger number of
persons.

 

(6) The
Issuer may from time to time request that, with respect to any Class or to all
Classes, the respective Class Agent or Class Agents deliver to the Issuer either
a new Noteholders Letter or a written statement that the information in the
Noteholder’s Letter most recently delivered to the Issuer has not
changed.

 

25

 

(c)  
Each
Holder of a Series 2002-1 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 2002-1 Notes may be offered and may be resold by a
Noteholder of a Series 2002-1 Note only to QIBs pursuant to
Rule 144A.

 

(ii)  
It
understands that the Series 2002-1 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 2002-1 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 Purchaser has made any representation to it with respect to the
Issuer or the offering or sale of any Series 2002-1 Notes. It has had access to
such financial and other information concerning the Issuer, the Series 2002-1
Notes and the source of payment for the Series 2002-1 Notes as it has deemed
necessary in connection with its decision to purchase the Series 2002-1
Notes.

 

(iv)  
It
is purchasing the Series 2002-1 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 2002-1 Notes, or any
interest or participation therein, as described herein, in the Agreement and in
the Note Purchase Agreement.

 

(v)  
It
acknowledges that the Issuer, the Purchaser 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.

 

(vi)  
It
is not and is not acquiring the Series 2002-1 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.

 

26

 

(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, Form 1001 or Form 4224, indicating such exemption or any other
forms and documentation as may be sufficient under the applicable regulations
for claiming such exemption.

 

(viii)  
It
understands that the Issuer is not registered as an investment company under the
Investment Company Act, but that the Issuer has an exception from registration
as such by virtue of Section 3(c)(1) of the Investment Company Act, which in
general excludes from the definition of an investment company any issuer whose
outstanding securities (other than short-term paper) are beneficially owned by
not more that 100 persons and which has not made and does not propose to make a
public offering of its securities.

 

(ix)  
It
is acquiring the Note or an interest in a Note as a member of a Class and such
Class is not permitted to be composed of more than four persons within the
meaning of Section 3(c)(1) of the Investment Company Act unless the Issuer has
given its express written consent to a larger number of
persons

 

Except as
provided in subsection (d) below, any transfer, resale, pledge or other transfer
of the Series 2002-1 Notes contrary to the restrictions set forth above and in
the Agreement shall be deemed void ab initio by the Trustee.

 

(d)  
Notwithstanding
anything to the contrary herein, each Conduit (as defined in the Note Purchase
Agreement), 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 Alternative Investors party to
the Note Purchase Agreement, participating interests or security interests in
the Series 2002-1 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 subsection 4.11(c) hereof.

 

Section
4.12.   Tax
Treatment. The
Issuer has structured the Agreement and this Supplement and the Notes with the
intention that the Notes will qualify under applicable tax law as indebtedness
of the Issuer, and the Issuer and each Noteholder by acceptance of its Note
agree to treat the 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.

 

ARTICLE
V

REPRESENTATIONS
AND WARRANTIES OF THE ISSUER;

ASSIGNMENT
OF REPRESENTATIONS AND WARRANTIES

 

Section
5.01.   Representations
and Warranties of the Issuer. The
Issuer hereby represents and warrants to the Trustee, the Collateral Agent and
the Series 2002-1 Noteholders on the date of execution of this Series
Supplement, on the Initial Closing Date and any date of an increase in the
Facility Limit or a Notes Increase Date as follows:

 

(a)  
Perfection
of Security Interests in Series 2002-1 Collateral.

 

27

 

(i)  
Payment
of principal and interest on the Series 2002-1 Notes and the prompt observance
and performance by the Issuer of all of the terms and provisions of this
Supplement are secured by the Series 2002-1 Collateral. Upon the issuance of the
Series 2002-1 Notes and at all times thereafter so long as any Series 2002-1
Notes are outstanding, this Supplement creates a security interest (as defined
in the applicable UCC) in the Series 2002-1 Collateral in favor of the
Collateral Agent for the benefit of the Trustee and the Series 2002-1
Noteholders to secure amounts payable under the Series 2002-1 Notes and the
Series 2002-1 Documents, which security interest is perfected and prior to all
other Liens (other than any Permitted Encumbrances) and is enforceable as such
against all creditors of and purchasers from the Issuer; and

 

(ii)  
The
Series 2002-1 Collateral constitutes either “accounts,” “chattel paper,”
“instruments” or “general intangibles” within the meaning of the applicable
UCC.

 

(b)  
Eligible
Loans. Each
Series 2002-1 Pledged Loan, on the date on which it becomes a Series 2002-1
Pledged Loan, is an Eligible Loan and is a Loan sold by a Seller to the
Depositor under a Purchase Agreement and Series 2002-1 Purchase
Supplement.

 

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

 

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

 

Section
5.02.   Assignment
of Representations and Warranties. The
Issuer hereby assigns to the Trustee its rights relating to the Series 2002-1
Pledged Loans under the Pool Purchase Agreement including the rights assigned to
the Issuer by the Depositor of the Depositor’s rights to payment due from the
related Seller for repurchases of Defective Loans (as such term is defined in
such Purchase Agreement) resulting from the breach of representations and
warranties under such Purchase Agreement.

 

Section
5.03.   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 Series 2002-1 Pledged Loans under the terms of Section 7.01
provided that the following conditions have been met:

 

(i)  
The
New Seller has entered into a Purchase Agreement with the Depositor
substantially in the form attached hereto as Exhibit F-1 but with such revisions
as shall be necessary to accommodate the type of Loans and related assets of the
New Seller;

 

(ii)  
The
New Seller has entered into a Series 2002-1 Purchase Supplement substantially in
the form attached hereto as Exhibit F-2 but with such revisions as shall be
necessary to accommodate the type of Loans and related assets of the New
Seller;

 

(iii)  
The
Guaranty Agreement has been amended to included the New Seller as a party whose
performance is guarantied or the Performance Guarantor shall 

 

28

 

have
provided a new guaranty agreement under which the Performance Guarantor
guaranties the performance of the New Seller;

 

(iv)  
One
or more of the Custodial Agreements 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 Lockbox Agreement which provides for the
receipt of Collections on the Series 2002-1 Pledged Loans sold by such 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 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 Series 2002-1 Pledged Loans sold by such New Seller to the Depositor
except as contemplated by the Facility Documents);

 

(vii)  
Copies of
proper 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 Series 2002-1 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 Trustee on the Closing
Date shall have been delivered to the Trustee, the Class 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 (ix) above shall have been
reviewed by counsel to the Deal Agent and such counsel shall have notified the
Deal Agent that such items are in the reasonable opinion of such counsel
acceptable in form and substance to permit the addition of Loans of the New
Seller; and

 

(xi)  
The
Deal Agent has delivered to the Issuer its written consent to the addition of
the New Seller and the inclusion of Loans sold by such New Seller as Series
2002-1 Pledged Loans.

 

29

 

ARTICLE
VI

PAYMENTS,
SECURITY AND ALLOCATIONS

 

Section
6.01.   Priority
of Payments.

 

The
Master 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 Monthly Trustee Fees and in reimbursement of the
reasonable expenses of the Trustee under each of the Facility Documents to which
the Trustee is a party, provided that such expenses relate to Series 2002-1; in
the event of a Servicer Default and the replacement of the Master Servicer with
the Trustee or a Successor Master Servicer, the actual costs and expenses of
replacing the Master Servicer shall be permitted expenses of the Trustee;
provided that such costs and expenses relate to Series 2002-1;

 

SECOND,
if the Master Servicer is not Cendant Timeshare Resort Group--Consumer Finance,
Inc. or an affiliate of Cendant, to the Master Servicer, in payment of the
Monthly Master Servicer Fee and, whether or not Cendant Timeshare Resort
Group--Consumer Finance, Inc. or another affiliate of Cendant is then the Master
Servicer, to the Master Servicer in reimbursement of any unreimbursed Master
Servicer Advances;

 

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

 

FOURTH,
to each Noteholder, the Notes Interest for the current Payment Date and NPA
Costs payable to such Noteholder to the extent due and payable and not included
in the Monthly Interest and any Overdue Interest from prior periods (and
interest thereon);

 

FIFTH, if
the Master Servicer is Cendant Timeshare Resort Group--Consumer Finance, Inc. or
another affiliate of Cendant, to the Master Servicer, the Monthly Servicing
Fee;

 

SIXTH, to
the Noteholders, the Monthly Principal for such Payment Date, as described in
Section 6.02;

 

SEVENTH,
if the amount on deposit in the Reserve Account is less than the Required
Reserve 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,
during a Liquidity Reduction Amortization Period, with respect to each Note to
which a Liquidity Reduction Event has occurred the lesser of 

 

30

(i) the
aggregate outstanding principal amount of such Note and (ii) such Notes’
pro rata share of the remaining Available Funds; for such purposes the pro rata
share shall be determined on the basis of the outstanding principal amounts of
such Notes as of the dates their respective Liquidity Reduction Amortization
Period commenced and the sum of the Notes Principal Amount of all Notes then in
a Liquidity Reduction Amortization Period calculated as of the dates their
respective Liquidity Reduction Amortization Periods commenced; and

 

FINALLY,
to the Issuer, any remaining amounts free and clear of the lien of this
Supplement.

 

Section
6.02.   Determination
of Monthly Principal. The
amount of Available Funds required to be distributed for the payment of
principal on the Notes on any Payment Date is the “Monthly
Principal” for
that Payment Date and shall be calculated as follows:

 

(i)  
so
long as no Amortization Event has occurred and the Maturity Date has not
occurred, the Monthly Principal for any Payment Date shall be an amount equal to
the Principal Distribution Amount for that Payment Date;

 

(ii)  
on
the Maturity Date of the Series 2002-1 Notes, the Monthly Principal for such
Payment Date shall be the Notes Principal Amount; and

 

(iii)  
if
an Amortization Event has occurred or if the Liquidity Termination Date has
occurred, then for each Payment Date after the occurrence of such Amortization
Event or Liquidity Termination Date, the Monthly Principal shall be equal to the
entire amount of the remaining Available Funds after making provision for the
payments and distributions required under clauses FIRST through FIFTH in the
Priority of Payments.

 

Section
6.03.   Information
Provided to Trustee. The
Master 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 6.01.

 

Section
6.04.   Payments. On each
Payment Date, the Trustee, as Paying Agent, shall distribute to the Holders the
amounts due and payable under this Supplement and the Notes. Such payments shall
be made as provided in subsection 4.06(d) hereof.

 

Section
6.05.  Collection
Account.

 

(a)  
Collection
Account. The
Trustee, for the benefit of the Series 2002-1 Noteholders, shall establish and
maintain in the name of the Trustee, a segregated account designated as the
“Cendant Timeshare Conduit Receivables Funding, LLC Series 2002-1 Collection
Account” bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders pursuant to this
Supplement.

 

(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 Supplement and the information most recently delivered to

 

31

 

the
Trustee pursuant to Section 8.01; provided, however, that the Trustee shall be
authorized to accept and act upon instructions from the Master Servicer
regarding withdrawals or transfers of funds from the Collection Account, in all
events in accordance with the provisions of this Supplement and the information
most recently delivered pursuant to Section 8.01. In addition, notwithstanding
anything in the foregoing to the contrary, the Trustee shall be authorized to
accept instructions from the Master 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
Master Servicer shall provide the Trustee with notice of such withdrawal or
transfer, together with reasonable supporting details, on the next Servicer’s
Monthly Report to be delivered by the Master Servicer following the date of such
withdrawal or transfer (or in such earlier written notice as may be required by
the Trustee from the Master 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
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 Master Servicer shall transfer all Collections processed by the
Master 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 Series 2002-1 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
Supplement.

 

(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 on or before 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
Supplement. 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 Agreement.

 

(d)  
Irrevocable
Deposit. Any
deposit made into the Collection Account hereunder shall, except as otherwise
provided herein, be irrevocable and the amount of such 

 

32

 

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 Notes are prepaid as provided in Section 4.10 and Series 2002-1
Pledged Loans are released as provided in Section 7.04, 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 payment of the principal of and interest on the Notes being
prepaid 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.

 

Section
6.06.   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 designated as the “Cendant Timeshare Conduit Receivables Funding, LLC
Series 2002-l Reserve Account” bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders pursuant to
this Supplement. 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 Master 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 to such new Reserve Account.
So long as the Trustee is an Eligible Institution, the Reserve Account may be
maintained with it in an Eligible Account.

 

On the
Closing Date the Issuer shall deposit or shall cause to be deposited into the
Reserve Account the sum of $8,403,837.12 as the initial Reserve Required Amount
and thereafter on each Payment Date if the amount on deposit in the Reserve
Account is less than the Required Reserve Amount, a deposit shall be made to the
Reserve Account to the extent of funds available as provided in provision
SEVENTH of Section 6.01.

 

(b)  
Transfer
to Collection Account. On or
prior to each Payment Date, prior to the allocation of funds pursuant to Section
6.01 on such Payment Date, the Master Servicer shall direct the Trustee to
withdraw from the Reserve Account and deposit into the Collection Account to be
included as Available Funds 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 (y)
the amounts required to be applied pursuant to Section 6.01 provisions FIRST
through SIXTH on such Payment Date and for any preceding Payment Date (to the
extent not previously paid) exceed (z) the Available Funds for that Payment
Date (calculated without regard to any amounts to be transferred from

 

33

 

the
Reserve Account). The Trustee shall withdraw such funds from the Reserve Account
and deposit them in the Collection Account as directed by the Master
Servicer.

 

(c)  
Release
of Reserve Account Excess. 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 6.06; provided,
that the
Trustee shall be authorized to transfer funds from the Reserve Account to the
Collection Account at the direction of the Master Servicer as provided in
subsection (b) above and at the direction of the Deal Agent pursuant to
subsection (d) below and to accept and act upon instructions from the Master
Servicer to release to the Issuer, free and clear of the lien of this
Supplement, on the first Business Day following each Payment Date and on the
Business Day following the date of any reduction in the Reserve Required Amount,
an amount of funds held in the Reserve Account equal to the excess (if any) on
such Business Day (the “Reserve
Account Excess”) of the
then outstanding balance of the Reserve Account over the Reserve Required Amount
in effect as of the opening of business on such Business Day (after giving
effect to all transactions and fund transfers required to take place hereunder
on the immediately preceding Payment Date). The Master Servicer, as a condition
of causing the release of funds from the Reserve Account, shall simultaneously
provide the Trustee and the Deal Agent with a certificate of a Servicing Officer
as to the existence and size of any Reserve Account Excess to which the Issuer
is entitled.

 

(d)  
Application
after Amortization Event.
Notwithstanding anything contained in the foregoing subsections to the contrary,
on the first Determination Date after the occurrence of an Amortization Event,
the Trustee, acting at the direction of the Deal Agent, shall withdraw all funds
on deposit in the Reserve Account and deposit such amounts into the Collection
Account to be used solely for the purposes set forth in and in accordance with
the Priority of Payments.

 

(e)  
Termination
of Reserve Account. Any
funds remaining in the Reserve Account after all Notes (including both principal
and interest thereon) have been paid in full and in cash and all other
obligations of the Issuer under the Series 2002-1 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 Supplement.

 

(f)  
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 on or before 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 (f), 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 6.06, all investment
earnings on such funds shall be deemed to be available under this Supplement 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 no investment instructions are received from the Issuer, the Trustee is
authorized 

 

34

 

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 Supplement.

 

(g)  
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
6.07.   Hedge
Agreement. The
Issuer shall at all times, so long as any Notes remain unpaid, provide a Hedge
Agreement with the terms described in this Section 6.07. When all 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 equal
to 90% of the Notes Principal Amount and such notional amount shall amortize on
a monthly basis for a term equal to the actual amortization schedule of payments
on the Series 2002-1 Pledged Loans assuming a schedule of payments and
prepayments mutually determined by the Master 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 Master Servicer and/or
its Affiliates);

 

(b)  
the
Issuer shall, as of each Payment 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 so that the adjusted notional amount of
the Hedge Agreement shall on each Payment Date be an amount equal to 90% of the
Notes Principal Amount; the Issuer shall also, as of each Payment Date adjust
the Hedge Agreement to reflect the Required Cap Rate, the termination date and
the amortization schedule following the addition and release of Series 2002-1
Pledged Loans as of each Payment Date; any additional Premium due for the
adjustments to the interest rate cap shall be paid as a Net Hedge Payment under
Provision THIRD of Section 6.01;

 

(c)  
the
Hedge Agreement shall have a termination date equal to the final maturity date
of the latest maturing Series 2002-1 Pledged Loans; 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.

 

(e)  
References
in this Section 6.07 or otherwise in this Supplement to a notional amount equal
to 90% of the Notes Principal Amount shall allow for rounding to the nearest
$1,000.

 

Section
6.08.   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,

 

35

 

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
VII

ADDITION,
RELEASE AND SUBSTITUTION OF LOANS

 

Section
7.01.   Addition
of Series 2002-1 Collateral.

 

(a)  
Transfer
of Additional Loans. Subject
to the limitations and conditions specified in this Section 7.01, the Issuer may
from time to time, transfer additional Eligible Loans and related Series 2002-1
Pledged Assets to the Collateral Agent for the benefit of the Trustee for the
benefit of the Series 2002-1 Noteholders and such Loans and related assets shall
be included as Series 2002-1 Collateral hereunder.

 

(b)  
The
transfer of Additional 2002-1 Pledged Loans and the related Series 2002-1
Pledged Assets shall be subject to the satisfaction of the following conditions:

 

(i)  
at
least two (2) Business Days preceding the proposed Addition Date, the Issuer
shall have delivered to the Deal Agent a schedule of the Additional 2002-1
Pledged Loans to be transferred on such Addition Date and each of the Additional
2002-1 Pledged Loans shall be a Loan sold by a Seller to the Depositor under a
Purchase Agreement and Series 2002-1 Purchase Supplement; Trendwest Timeshare
Upgrades sold to the Depositor by Trendwest immediately prior to the transfer to
the Issuer and Trendwest Loans sold to the Depositor on a prior date, which have
been sold by the Depositor to an Additional Issuer and which subsequently become
Trendwest Timeshare Upgrades and are then transferred by the Additional Issuer
to the Depositor are, in each case, Loans sold by a Seller to the Depositor
under a Purchase Agreement and Series 2002-1 Purchase
Supplement;

 

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

 

(iii)  
the
Liquidity 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 Additional 2002-1
Pledged Loans;

 

(iv)  
with the
exception of Documents in Transit Loans, on or immediately prior to the Addition
Date the Custodian has possession of each original Additional 2002-1 Pledged
Loan and the related Loan File and has acknowledged to the Trustee and the Deal
Agent such receipt and its undertaking to hold each such original Additional
2002-1 Pledged Loan and the related Loan File for purposes of perfection of

 

36

 

the
Collateral Agent’s interests in such original Additional 2002-1 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 Purchase Agreement
is not in the possession of the Custodian in its respective Loan File does 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 Series 2002-1 Collateral
(including in the Additional 2002-1 Pledged Loans) for the benefit of the
Trustee for the benefit of the Noteholders;

 

(vi)  
each
Additional 2002-1 Pledged Loan shall be an Eligible Loan;

 

(vii)  
if
any of the Additional 2002-1 Pledged Loans are New Seller Loans, the conditions
set forth in Section 5.03 of this Supplement have been satisfied with respect to
the Seller of such Loans;

 

(viii)  
if
any of the Additional 2002-1 Pledged Loans are New Seller Loans and after the
addition of such Loans, the Principal Balance of the Series 2002-1 Pledged Loans
which are New Seller Loans sold by one New Seller to the Depositor would exceed
10% of the Series 2002-1 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 the Additional 2002-1 Pledged Loans are New Seller Loans and after the
addition of such Loans, the Principal Balance of all the Series 2002-1 Pledged
Loans which are New Seller Loans is greater than 15% of the Series 2002-1
Adjusted Loan Balance, then the addition of such New Seller Loans shall be
subject to the prior written consent of all Class Agents; and

 

(x)  
if
any of the Additional 2002-1 Pledged Loans are Acquired Portfolio Loans and
after the addition of such Loans the Principal Balance of all Series 2002-1
Pledged Loans which are Acquired Portfolio Loans acquired as part of one
portfolio is more than 10% of the Series 2002-1 Adjusted Loan Balance, then the
addition of such Loans shall be subject to the prior written consent of Class
Agents representing Majority Facility Investors.

 

(c)  
In
addition to the conditions set forth in (b) above, on the first date on which
Trendwest Loans are included in the Additional 2002-1 Pledged Loans, it shall be
a condition to the addition of such Additional 2002-1 Pledged Loans that the
conditions set forth in Section 2(b)(iv) of the Series 2002-1 Pool Purchase
Supplement be met to the satisfaction of counsel to the Deal
Agent.

 

(d)  
If
on the last Business Day of any Due Period, Trendwest has not met the target for
qualification of WorldMark Resorts with the California Department of Real Estate
(“DRE”) as set
forth in this subsection 7.01(d), 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, Trendwest shall have
qualified with the DRE under Section 11018.10 of the 

 

37

 

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
7.02.   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
applicable Purchase Agreement and Series 2002-1 Purchase Supplement, the Issuer
shall, on the same Payment Date as the Seller is required to repurchase the
Defective Loan, be required either (i) to pay the Release Price of such
Defective Loan and obtain the release of the Defective Loan from the Lien of
this Supplement or (ii) substitute one or more Qualified Substitute Loans for
such Series 2002-1 Pledged Loan as provided in subsection 7.02(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 subsection 7.02(a) not less than two Business Days prior
to the Payment Date on which such release is to be effected, specifying the
Defective Loan and the Release Price therefor. Upon the release of a Defective
Loan pursuant to subsection 7.02(a) the Issuer shall deposit or cause to be
deposited the Release Price in the Collection Account no later than 12:00 noon,
New York time, on the Payment 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 subsection 7.02(c), the Issuer shall
Grant such Qualified Substitute Loan in the same manner as other Additional
2002-1 Pledged Loans and shall include such Qualified Substitute Loans in the
Additional 2002-1 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 principal balance of the Qualified
Substitute Loans will not be less than the principal 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 Master Servicer to amend
the Series 2002-1 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 Master Servicer to deliver the amended
Series 2002-1 Loan Schedule to the Issuer and the Trustee and Collateral
Agent.

 

(d)  
Upon each
release of a Series 2002-1 Pledged Loan under this Section 7.02, 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 Series
2002-1 Pledged Assets related thereto, all monies due or to become due with
respect thereto and all Collections with respect thereto (including payments
received from Obligors from and including the last day of the Due Period next
preceding the date of release) free and clear of the lien of this Supplement.
The Collateral Agent and the Trustee shall execute such documents, releases and
instruments of transfer or assignment 

 

38

 

and take
such other actions as shall reasonably be requested by the Issuer or Depositor
to effect the release of such Defective Loan and the related Series 2002-1
Pledged Assets pursuant to this subsection 7.02. 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 Master Servicer to delete such
Defective Loans from the Series 2002-1 Loan Schedule.

 

(e)  
The
obligation of the Issuer to deposit the Release Price 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 5.01(b) of this Supplement or the representations of the Seller
assigned to the Trustee pursuant to Section 5.02.

 

Section
7.03.   Release
of Defaulted Loans. If any
Series 2002-1 Pledged Loan becomes a Defaulted Loan during any Due Period, the
Issuer may obtain a release of such Series 2002-1 Pledged Loan from the lien of
this Supplement on any Payment 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 7.03 not less than two Business Days prior to the Payment 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 Payment Date on which such release is made.

 

Upon each
release of a Series 2002-1 Pledged Loan under this Section 7.03, 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 Series
2002-1 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 Supplement. 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 Defaulted Loans and the related Series 2002-1 Pledged Assets
pursuant to this Section 7.03. 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 Master Servicer to
delete such Defaulted Loans from the Series 2002-1 Loan Schedule.

 

Section
7.04.   Release
Upon Optional Prepayments. If the
Issuer exercises its right to prepay the Notes in whole or in part as provided
in Section 4.10 of this Supplement, 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 Notes to be prepaid on the prepayment date and the
amount of interest to be paid on such date. The amount of interest to be paid on
such prepayment date shall include interest accrued and to accrue on the
principal amount of Notes prepaid through any then applicable Funding Period. On
the prepayment date, upon receipt by the Trustee of all amounts to be paid to
the Noteholders as principal and as interest as a result of such prepayment and
the satisfaction of the conditions set forth in the following paragraphs, then,
the Collateral Agent and the Trustee shall release from the Lien of this
Supplement those 

 

39

 

Series
2002-1 Pledged Loans and the related Series 2002-1 Pledged Assets which the
Collateral Agent and Trustee are directed to release as described in the
following paragraph. 

 

The Deal
Agent and the Issuer shall agree upon and provide to the Collateral Agent and
the Trustee a list of the Series 2002-1 Pledged Loans which are to be released
and shall direct the Master Servicer to delete such Loans from the Series 2002-1
Pledged Loan Schedule.

 

In
addition to receipt by the Trustee of the principal amount of the Notes to be
prepaid and the interest thereon and the list of the Series 2002-1 Pledged Loans
to be released, the following conditions shall be met before the Lien is
released under this Section 7.04:

 

(i) After
giving effect to such release, no Borrowing Base Shortfall shall exist and no
Amortization Event or Event of Default shall exist; and

 

(ii) Each of
the Issuer and the Master Servicer shall have delivered to the Deal Agent a
certificate to the effect that the Series 2002-1 Pledged Loans to be released
from the Lien of this Supplement 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
7.05.   Release
Upon Optional Substitution.
(a) Under
the terms of the Pool Purchase Agreement, the Depositor may, with respect to
Loans which are Schedule 1-A Pool Loans, as described in the Pool Purchase
Agreement, remove Loans from such Schedule 1-A and substitute other Loans. If
the Depositor elects to substitute a Loan for a Schedule 1-A Pool Loan which is
a Series 2002-1 Pledged Loan, then the Issuer may, as provided in (b) below,
obtain a release of such Loan from the Lien of this Supplement and substitute in
place of such released Series 2002-1 Pledged Loan a Qualified Substitute Loan or
Qualified Substitute Loans. 

 

(b)  
Substitution. Any
such substitution of a Qualified Substitute Loan or Qualified Substitute Loans
under this Section 7.05 shall be accomplished in the same manner as the Grant of
other Additional 2002-1 Pledged Loans and the Issuer shall include such
Qualified Substitute Loans in the Additional 2002-1 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
principal balance of the Qualified Substitute Loans will not be less than the
principal balance of the Loans released and for which the substitution occurs.
In connection with the substitution for one or more Qualified Substitute Loan or
Qualified Substitute 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
Master Servicer to amend the Series 2002-1 Loan Schedule to reflect the removal
of such Schedule 1-A Pool Loan and the substitution of the Qualified Substitute
Loan or Qualified Substitute Loans and the Issuer shall cause the Master
Servicer to deliver the amended Series 2002-1 Loan Schedule to the Issuer and
the Trustee and Collateral Agent.

 

40

 

(c)  
Release
to Issuer. Upon
each release of a Series 2002-1 Pledged Loan under this Section 7.05, 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 released Schedule 1-A
Pool Loan and the Series 2002-1 Pledged Assets related thereto, all monies due
or to become due with respect thereto and all Collections with respect thereto
(including payments received from Obligors from and including the last day of
the Due Period next preceding the date of release) free and clear of the lien of
this Supplement. 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 or Depositor to
effect the release of such Schedule 1-A Pool Loan and the related Series 2002-1
Pledged Assets pursuant to this subsection 7.05. Promptly after the occurrence
of a Release Date and after the substitution for the Schedule 1-A Pool Loan, the
Issuer shall direct the Master Servicer to delete such Loans from the Series
2002-1 Loan Schedule.

 

Section
7.06.   Release
Upon Payment in Full. At such
time as the Series 2002-1 Notes have been paid in full, all fees and expenses of
the Trustee and the Collateral Agent with respect to Series 2002-1 have been
paid in full and all obligations relating to the Series 2002-1 Documents have
been paid in full, then, the Collateral Agent shall, upon the written request of
the Issuer, release all liens and assign to Issuer (without recourse,
representation or warranty) all right, title and interest of the Collateral
Agent in and to the Series 2002-1 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 shall
be reasonably requested by the Issuer to release the security interest of the
Collateral Agent in the Series 2002-1 Collateral.

 

ARTICLE
VIII

REPORTS
TO TRUSTEE AND NOTEHOLDERS

 

Section
8.01.   Monthly
Report to Trustee. On or
before the Determination Date prior to each Payment Date, the Master 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
Sections 6.01 and 6.06, and the Master 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 Master Servicer to
the Trustee and the Noteholders that such information is true and correct in all
material respects. At the option of the Master Servicer, the Settlement
Statement may be combined with the Servicer’s Monthly Report described in
Section 8.02 and delivered to the Trustee as one report.

 

Section
8.02.   Monthly
Servicing Report. On each
Determination Date, the Master Servicer shall deliver to the Trustee and the
Issuer the Servicer’s Monthly Report in the form set forth in Exhibit D to this
Supplement 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 D, certifying the accuracy of such report and that no Event of Default
or event that with the giving of notice or lapse of time or both would become an
Event of Default has occurred, or 

 

41

 

if such
event has occurred and is continuing, specifying the event and its status. Such
certificate shall also identify which, if any, Series 2002-1 Pledged Loans have
become Defective Loans or Defaulted Loans during the preceding Due
Period.

 

Section
8.03.   Delivery
of Reports to Deal Agent. The
Master Servicer shall on each date it delivers a report to the Trustee under
Section 8.01 or 8.02 above deliver a copy of each such report to the Deal
Agent.

 

Section
8.04.   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 Notes as indebtedness of the Issuer for federal income tax
purposes.

 

ARTICLE
IX

AMORTIZATION
EVENTS

 

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

 

(a)  
the
Issuer fails to pay in full the interest due and payable on the Series 2002-1
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 a 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 2002-1 Notes on or
before the Maturity 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 payment in accordance with the Priority of
Payments, but such payment cannot be timely made as a result of a circumstances
beyond the Issuer’s and the Master Servicer’s control, the grace period shall be
extended to three Business Days;

 

(c)  
any
Event of Default occurs under this Supplement;

 

(d)  
a
Servicer Default occurs under the Agreement or this
Supplement;

 

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

 

(f)  
the
Four Month Default Percentage as of the Payment Date in December 2005 or as of
any Payment Date thereafter exceeds 1.25%;

 

(g)  
the
Three Month Rolling Average Delinquency Ratio as calculated for the Payment Date
in December 2005 or for any Payment Date thereafter exceeds
4.0%;

 

42

 

(h)  
the
Gross Excess Spread for any Due Period ending on or prior to November 13, 2006,
is less than 4.50% for any Due Period; for Due Periods ending after November 13,
2006 this provision shall not apply; except that if any Alternate Investor or
Conduit does not extend its Liquidity Termination Date on or before November 13,
2006, this provision shall continue to apply;

 

(i)  
a
Change of Control occurs without the prior satisfaction of the Rating Agency
Condition and the prior written consent of the Required Class
Agents;

 

(j)  
if
(i) any Trendwest Loans are then included in the Series 2002-1 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)  
the
amount of the Borrowing Base at the end of any Due Period is less than the Notes
Principal Amount on that date and the Issuer fails on the following Payment Date
to pay in full the amount of principal on the Notes required to reduce the Notes
Principal Amount to the Borrowing Base or to increase the Borrowing Base to the
Notes Principal Amount; 

 

(l)  
an
Insolvency Event occurs with respect to Cendant; and

 

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

 

(n)  
The
Notes Principal Amount shall at any time exceed the Series 2002-1 Adjusted Loan
Balance; 

 

(o)  
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 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; or

 

(p)  
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 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;

 

then, in
the case of an event described in any clause except clause (c) of the Events of
Default in 

 

43

 

Section
10.01, or clause (l) above, the Deal Agent at the direction of the Majority
Facility Investors, or, with respect to an event described in clause (j) or (k),
the Deal Agent, at the direction of any Class Agent or, with respect to clause
(h) if such provision applies after November 13, 2006, the Deal Agent at the
direction of the Class Agent or Class Agents which have not extended their
Liquidity Termination Dates to a date on or after November 13, 2006, by notice
given in writing to the Issuer, the Master 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 (c) of the Events of Default in
Section 10.01, or clause (l) of this Section 9.01, 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
X

EVENTS OF
DEFAULT

 

Section
10.01.   Events
of Default.

 

(a)  
Failure
on the part of the Issuer (1) to make or cause to be made any payment or deposit
required by the terms of the Agreement, this Supplement or any other Series
2002-1 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), (2) failure on the
part of the Issuer to provide a Hedge Agreement meeting the requirements of
Section 6.07 of this Supplement and such failure continues for five Business
Days or the Hedge Provider ceases to be a Qualified Hedge Provider and the
Issuer fails to provide a Qualified Hedge Provider by one of the methods set
forth in Section 6.08 within the five days provided in Section 6.08 and such
failure continues for five Business Days beyond the period allowed in Section
6.08, or (3) duly to observe or perform or cause to be observed or performed any
covenant or agreement of the Issuer set forth in the Agreement, this Supplement
or any other Series 2002-1 Document or other Facility Document to which the
Issuer is a party (other than these events caused in clause (1) or (2) of this
subsection), which continues unremedied for a period of 30 days (or five
Business Days, in the case of subsection 4.1(b), (f), (g)(2) or (g)(3) or
4.2(a), (c), (d), (e), (i), (l), (n), (o) or (p) of the Agreement) after the
earlier of (aa) 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 (bb) the date on which an officer of the Issuer has
actual knowledge thereof;

 

(b)  
any
representation or warranty made by the Issuer with respect to itself in the
Agreement or this Supplement 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 Series 2002-1 Pledged Loans and other related
Series 2002-1 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;

 

44

 

(c)  
an
Insolvency Event shall occur with respect to any Seller of Series 2002-1 Loans,
the Depositor, the Issuer or Cendant;

 

(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
Master Servicer shall have been terminated following a Servicer Default, and a
Successor Master 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
Master Servicer.

 

THEN, in
the case of the event described in subparagraph (a)(3), after the applicable
grace period, if any, set forth in such subparagraphs, the Deal Agent acting
upon instructions of the Majority Facility Investors by notice given in writing
to the Issuer (and to the Trustee if given by the Noteholders) may declare that
an event of default with respect to Series 2002-1 (an “Event of Default”) has
occurred as of the date of such notice, and in the case of any event described
in subparagraph (a)(l), (a)(2), (b), (c), (d) or (e), an Event of Default with
respect to Series 2002-1 shall occur without any notice or other action on the
part of the Trustee or the Noteholders, immediately upon the occurrence of such
event and shall continue unless waived in writing by the Required Purchasers of
the Series 2002-1 Notes.

Section
10.02.   Acceleration
of Maturity; Rescission and Annulment.

 

(a)  
If
an Event of Default described in paragraph (a), (b), (d) or (e) of
Section 10.1 should occur and be continuing, then and in every such case
the Majority Facility Investors may declare all the Series 2002-1 Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Trustee if declared by Noteholders), and upon any such declaration the unpaid
principal amount of the Series 2002-1 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)
of Section 10.1 should occur then and in every such case the Series 2002-1 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 2002-1 Notes has
been accelerated, such acceleration may be rescinded or annulled the Majority
Facility Investors by written notice to the Issuer and the Trustee may, but are
not required to rescind and annul such acceleration.

 

Section
10.03.   Authority
to Institute Proceedings and Direct Remedies. If an
Event of Default has occurred and is continuing, the Majority Facility Investors
shall have the right to direct the Trustee as provided in Section 9.15 of the
Agreement.

 

Section
10.04.   Distributions
of Amounts Collected. If the
Indenture Trustee collects any money or property pursuant to this Article X
following the acceleration of the maturities of the Notes (so long as such
declaration shall not have been rescinded or annulled), it shall pay out the
money or property in the following order:

 

45

 

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, provided that such permitted expenses relate to Series
2002-1; in the event of a Servicer Default and the replacement of the Master
Servicer with the Trustee or a Successor Master Servicer, the costs and expenses
of replacing the Master Servicer shall be permitted expenses of the
Trustee;

SECOND,
if the Master Servicer is not Cendant Timeshare Resort Group--Consumer Finance,
Inc. or an affiliate of Cendant, to the Master Servicer, in payment of amounts
due and unpaid of the Master Servicer Fee and, whether or not Cendant Timeshare
Resort Group--Consumer Finance, Inc. or another affiliate of Cendant is then the
Master Servicer, to the Master Servicer in reimbursement of any unreimbursed
Master Servicer Advances;

THIRD, to
Series 2002-1 Noteholders for interest according to the amounts due and unpaid
on such Series 2002-1 Notes for interest and all other amounts (other than
principal of the Notes) due to the Noteholders under the Series 2002-1
Documents;

FOURTH,
if the Master Servicer is Cendant Timeshare Resort Group--Consumer Finance, Inc.
or another affiliate of Cendant, to the Master Servicer, in payment of amounts
due and unpaid of the Master Servicer Fee;

FIFTH, to
the Series 2002-1 Noteholders in payment of unpaid principal on the Series
2002-1 Notes; provided, however, that, upon the direction of 100% of 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

FINALLY,
to Issuer, any remaining amounts free and clear of the lien of this
Supplement.

 

Section
10.05.   Sale
of Defaulted Loans After an Event of Default. If an
Event of Default has occurred and is continuing, the Master 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.

 

46

 

ARTICLE
XI

PROVISIONS
RELATING TO THE MASTER SERVICER

 

Section
11.01.   Master
Servicer Advances. On or
before each Determination Date the Master Servicer may deposit into the
Collection Account an amount equal to the aggregate amount of Master Servicer
Advances, if any, with respect to Scheduled Payments on Series 2002-1 Pledged
Loans for the preceding Due Period which are not received on or prior to such
Payment Date. Such Master Servicer Advances shall be included as Available
Funds. Neither the Master Servicer, any Successor Master Servicer nor the
Trustee, acting as Master Servicer, shall have any obligation to make any Master
Servicer Advance and may refuse to make a Master Servicer Advance for any reason
or no reason. The Master Servicer shall not make any Master 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 Series 2002-1 Pledged Loan with respect to which
such Master Servicer Advance is proposed to be made.

 

Section
11.02.   Additional
Events of Servicer Defaults. In
addition to the events constituting a Servicer Default as set forth in Section
10.1 of the Agreement, so long as any Series 2002-1 Notes remain outstanding,
each of the following shall also constitute a Servicer
Default:

 

(a)  
any
Indebtedness (as defined in the Credit Agreement described below) of Cendant or
any of its Subsidiaries (as defined in the 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 Credit
Agreement)) exceeding $100,000,000 in the aggregate, is accelerated after
default beyond any applicable grace period provided with respect
thereto;

 

(b)  
the
12-month rolling Reported EBITDA of the Hospitality Services and Timeshare
Resort Segments at the end of any fiscal quarter is less than
$400,000,000;

 

(c)  
the
Master Servicer fails to deliver reports to the Deal Agent in accordance with
Section 8.03 of this Supplement and such failure remains unremedied for five (5)
Business Days;

 

(d)  
failure
on the part of the Master Servicer duly to observe or perform any other
covenants or agreements of the Master Servicer set forth in the Note Purchase
Agreement and such failure continues unremedied for a period of 20 days after
the earlier of the date on which the Master 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 Master Servicer by the Deal Agent;
or

 

(e)  
any
representation and warranty made by the Master Servicer in the Note Purchase
Agreement 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 Series
2002-1 Pledged Loans and other Series 2002-1 Pledged Assets and the Master
Servicer is not in compliance with such representation or warranty within ten
Business Days after the earlier of the date on which the 

 

47

 

Master
Servicer has actual kn7owledge 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 Master Servicer by the Deal Agent.

 

References
in subsection (a) above to the “Credit Agreement” mean the Five Year Competitive
Advance and Revolving Credit Agreement dated as of November 22, 2004 among
Cendant, as borrower, the lenders referred to therein, JPMorgan Chase Bank,
N.A., as administrative agent, Bank of America, N.A., as syndication agent, The
Bank of Nova Scotia, Barclays Bank PLC, Calyon New York Branch and Citibank,
N.A. as co-documentation agents. 

 

Section
11.03.   Additional
Conditions to Master Servicer Transfer. In
addition to the conditions to the transfer of the Master Servicer function as
provided in Section 5.12(b) of the Agreement, the following conditions must
be satisfied before the transfer will be permitted:

 

(a)  
The
entity resigning as Master Servicer and the entity becoming Master Servicer
shall deliver to the Trustee and to the Deal Agent a certificate to the effect
that the resignation of the existing Master Servicer and replacement will not
cause a Material Adverse Effect and as of the date of the substitution, there
has been no material adverse change with respect to the servicing business of
the new Master Servicer which will have a Material Adverse Effect (within the
meaning of (d) or (e) of the definition thereof) with respect to it;
and

 

(b)  
the
Performance Guaranty shall have been amended or a new Performance Guaranty
delivered to the Trustee which amendment or new agreement guaranties the
performance of the new Master Servicer on the same terms as the guaranty which
related to the resigning Master Servicer.

 

Section
11.04.   Fair
Market Value of Defaulted Loans. For the
purpose of Section 5.5(f) of the Agreement, no Series 2002-1 Pledged 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
Series 2002-1 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 applicable Series 2002-1 Pledged Loan or Collateral related
thereto, the Issuer and the applicable Seller or Originator shall determine the
fair market value of such Series 2002-1 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 Master Servicer to each Class 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.

 

48

ARTICLE
XII

MISCELLANEOUS
PROVISIONS

 

Section
12.01.   Ratification
of Agreement. As
supplemented by this Supplement, the Agreement is in all respects ratified and
confirmed and the Agreement as so supplemented by this Supplement shall be read,
taken and construed as one and the same instrument.

 

Section
12.02.   Counterparts. This
Supplement 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
shall constitute one and the same instrument.

 

Section
12.03.   Governing
Law. THIS
SUPPLEMENT 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
12.04.   Notices
to Deal Agent. All
communications and notices hereunder given to the Deal Agent 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 or where permitted to be delivered electronically
herein, to the e-mail address provided:

 

BANK OF
AMERICA, N.A.

Bank of
America Corporate Center

100 North
Tryon Street, 10th Floor

Charlotte,
North Carolina 28255

Attention:
Michelle M. Heath

Telephone:
(704) 386-7922

Telecopy:
(704) 388-0027

(or such
other address as may hereafter be furnished to the Issuer, the Trustee and the
Master Servicer).

Section
12.05.   Nonpetition
Covenant . Each
Noteholder hereby recognizes and agrees to the provisions of Section 13.15 of
the Agreement and specifically agrees that by accepting a Series 2002-1 Note, it
covenants and agrees that it 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.

 

Section
12.06.   Satisfaction
of Rating Agency Condition. It is
agreed by the parties hereto, that, any action which, under the terms of the
Agreement, 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.

 

49

Section
12.07.   Amendment
to Documents. The
Issuer shall not enter into any amendment to any of the Facility Documents to
which it is a party without the prior written consent of the Majority Facility
Investors.

 

Section
12.08.   Rating
Agency Review. The
Issuer hereby agrees that if the Issuer elects to maintain the ratings on the
Series 2002-1 Notes on and after the Liquidity Termination Date in 2006, the
Issuer shall prior to the Liquidity Termination Date in 2006 submit the Series
2002-1 Notes for review to each Rating Agency then maintaining a rating on the
Series 2002-1 Notes. 

 

50

 

IN
WITNESS WHEREOF, the Issuer, the Master Servicer, the Trustee and the Collateral
Agent have caused this Supplement to be duly executed by their respective
officers thereunto duly authorized, all as of the day and year first above
written.

	 	 	
      CENDANT
      TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC,

      as
      Issuer
	 
	 	 	
      By:
	
      /s/
      Mark A. Johnson_

	 	 	 	
      Name:
      Mark A. Johnson

      Title:
      President

	 	 	
      CENDANT
      TIMESHARE RESORT GROUP-

      CONSUMER
      FINANCE, INC.,

      as
      Master Servicer
	 
	 	 	
      By:
	
      /s/
      Mark A. Johnson

	 	 	 	
      Name:
      Mark A. Johnson

      Title:
      President 

	 	 	
      WACHOVIA
      BANK, NATIONAL ASSOCIATION,

      as
      Trustee
	 
	 	 	
      By:
	
      /s/
      Amedeo Morreale

	 	 	 	
      Name:
      Amedeo Morreale

      Title:
      Vice President

	 	 	
      WACHOVIA
      BANK, NATIONAL ASSOCIATION,

      as
      Collateral Agent
	 
	 	 	
      By:
	
      /s/
      Cheryl Whitehead

	 	 	 	
      Name:
      Cheryl Whitehead

      Title:
      Vice President

[Signature
page for Amended and Restated Series 2002-1 Supplement]

 

 

EXHIBIT
A

FORM OF
SUPPLEMENTAL GRANT

 

SUPPLEMENTAL
GRANT NO. __ OF ADDITIONAL 2002-1 PLEDGED LOANS AND SERIES 2002-1 PLEDGED ASSETS
dated as of _______, by and among CENDANT TIMESHARE CONDUIT RECEIVABLES FUNDING,
LLC, a limited liability company formed under the laws of the State of Delaware,
as Issuer, CENDANT TIMESHARE RESORT GROUP-CONSUMER FINANCE, INC., a Delaware
corporation, as Master Servicer, WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, but solely as Trustee under
the Agreement and the Supplement referred to below, and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as Collateral Agent.

 

WITNESSETH:

 

WHEREAS,
the Issuer, the Master Servicer, the Trustee and the Collateral Agent are
parties to the Master Indenture and Servicing Agreement dated as of August 29,
2002 (as amended, supplemented or otherwise modified from time to time, the
“Agreement”); and
the Series 2002-1 Supplement thereto dated as of August 29, 2002 (as amended,
supplemented or otherwise modified, from time to time, the “Supplement”);

 

WHEREAS,
the Issuer wishes to Grant to the Collateral Agent, for the benefit of the
Trustee for the benefit of the Series 2002-1 Noteholders, all of the Issuer’s
right, title and interest, whether now owned or hereafter acquired, in, to and
under the Pledged Loans and related Pledged Assets designated herein to be
included as Additional 2002-1 Pledged Loans and Series 2002-1 Pledged Assets;

 

NOW,
THEREFORE, the Issuer, the Master Servicer, the Trustee and the Collateral Agent
hereby agree as follows:

 

1. Defined
Terms. All
capitalized terms used herein shall have the meanings ascribed to them in the
Supplement or the Agreement unless otherwise defined herein.

 

“Addition
Cut-Off Date” shall
mean, with respect to the Additional 2002-1 Pledged Loans,
__________.

 

“Addition
Date” shall
mean, with respect to the Additional 2002-1 Pledged Loans,
__________.

 

2. Loan
Schedule. The
Issuer hereby delivers to the Collateral Agent a certificate which contains a
true and complete list of the Additional Series 2002-1 Loans Granted to the
Collateral Agent under this Supplemental Grant. The list of the Additional
2002-1 Pledged Loans contained in the accompanying certificate is hereby
incorporated into and made a part of this Supplemental Grant and shall become a
part of and supplement the Series 2002-1 Loan Schedule.

 

A-1

 

3. Grant
of Additional Series 2002-1 Pledged Loans and Series 2002-1 Pledged
Assets.

 

The
Issuer hereby Grants to the Collateral Agent, for the benefit of the Trustee for
the benefit of the Series 2002-1 Noteholders, all of the Issuer’s right, title
and interest, whether now owned or hereafter acquired, in, to and under (i) all
Additional 2002-1 Pledged Loans and the related Series 2002-1 Pledged Assets and
all rights of the Issuer relating to such Additional 2002-1 Pledged Loans and
the related Series 2002-1 Pledged Assets under the Pool Purchase Agreement, the
Series 2002-1 Pool Purchase Supplement, the Purchase Agreements under which the
Additional 2002-1 Pledged Loans were sold to the Depositor and the related
Series 2002-1 Purchase Supplements and (ii) all Collections with respect
thereto, (iii) all certificates and instruments if any, from time to time
representing or evidencing any of the foregoing property described in clauses
(i) or (ii), (iv) 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, (v)
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; (vi) all proceeds of the foregoing property
described in clauses (i) through (v), 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 Additional 2002-1 Pledged
Loans or the related Series 2002-1 Pledged Assets, 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 Additional 2002-1 Pledged
Loans or the related Series 2002-1 Pledged Assets; (vi) all proceeds of the
foregoing and (vii) all proceeds of the foregoing (collectively, the
“Additional
Series 2002-1 Collateral”).

 

In
connection with the foregoing Grant and if necessary, the Issuer agrees to
authorize, record and file one or more financing statements (and continuation
statements or other amendments with respect to such financing statements when
applicable) with respect to the Additional Series 2002-1 Collateral meeting the
requirements of applicable law in such manner and in such jurisdictions as are
necessary to perfect the Grant of the Additional Series 2002-1 Collateral to the
Collateral Agent, and to deliver a file-stamped copy of such financing
statements and continuation statements (or other amendments) or other evidence
of such filing to the Collateral Agent.

 

In
connection with the foregoing sale, the Issuer further agrees, on or prior to
the date of this Supplemental Grant, to cause the portions of its computer files
relating to the Additional 2002-1 Pledged Loans Granted on such date to the
Collateral Agent to be clearly and unambiguously marked to indicate that each
such Additional 2002-1 Pledged Loans and the related Series 2002-1 Pledged
Assets have been Granted on such date to the Collateral Agent pursuant to the
Supplement and this Supplemental Grant.

 

A-2

 

4. Acknowledgement
by the Collateral Agent and the Trustee. The
Collateral Agent and the Trustee acknowledge the Grant of the Additional Series
2002-1 Collateral, and the Collateral Agent accepts the Additional Series 2002-1
Collateral in trust hereunder in accordance with the provisions hereof and the
Supplement and agrees to perform the duties herein to the end that the interests
of the Series 2002-1 Noteholders may be adequately and effectively
protected.

 

The
Collateral Agent hereby acknowledges that, prior to or simultaneously with the
execution and delivery of this Supplemental Grant, the Issuer delivered to the
Collateral Agent a certificate listing the Additional 2002-1 Pledged Loans as
described in Section 2 of this Supplemental Grant and such list of Additional
2002-1 Pledged Loans is attached hereto as Schedule 1.

 

5. Representations
and Warranties of the Issuer. The
Issuer hereby represents and warrants to the Collateral Agent on the Addition
Date that each representation and warranty to be made by it on such Addition
Date pursuant to the Agreement and the Supplement is true and correct, and that
each such representation and warranty is hereby incorporated herein by reference
as though fully set out in this Supplemental Grant.

 

6. Ratification
of the Agreement. The
Agreement and the Supplement is hereby ratified, and all references to the
Agreement and the Supplement shall be deemed from and after the Addition Date to
be references to the Agreement and the Supplement as supplemented and amended by
this Supplemental Grant. Except as expressly amended hereby, all the
representations, warranties, terms, covenants and conditions of the Agreement
and the Supplement shall remain unamended and shall continue to be, and shall
remain, in full force and effect in accordance with its terms and except as
expressly provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or consent to non-compliance with any term or
provision of the Agreement or the Supplement.

 

7. Counterparts. This
Supplemental Grant may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument.

 

8. GOVERNING
LAW. THIS
SUPPLEMENTAL GRANT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

[The
remainder of this page is left blank intentionally.]

 

A-3

 

 

IN
WITNESS WHEREOF, the Issuer, the Master Servicer, the Trustee and the Collateral
Agent have caused this Supplemental Grant to be duly executed by their
respective officers thereunto duly authorized, all as of the day and year first
above written.

	 	 	
      CENDANT
      TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC,

      as
      Issuer
	 
	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	
      CENDANT
      TIMESHARE RESORT GROUP-

      CONSUMER
      FINANCE, INC.,

      as
      Master Servicer
	 
	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	
      WACHOVIA
      BANK, NATIONAL ASSOCIATION,

      as
      Trustee
	 
	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	
      WACHOVIA
      BANK, NATIONAL ASSOCIATION,

      as
      Collateral Agent
	 
	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

EXHIBIT
B

FORM
OF NOTE

 

THIS
NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
OF ANY STATE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS OR (B) IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS TO A PERSON (I) WHO THE TRANSFEROR REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT (“RULE 144A”) AND (II) THAT IS AWARE THAT THE RESALE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A.

 

THE
ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF
1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”). EACH HOLDER OF THIS NOTE AGREES
THAT THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS
IN THE SERIES 2002-1 SUPPLEMENT WHICH LIMIT TRANSFERS ONLY TO ANOTHER CLASS AND
REQUIRE THAT NO CLASS INCLUDE MORE THAN FOUR PERSONS FOR PURPOSES OF SECTION
3(C)(1) OF THE INVESTMENT COMPANY ACT UNLESS THE ISSUER HAS GIVEN ITS EXPRESS
WRITTEN CONSENT TO A LARGER NUMBER OF PERSONS AND AFTER ANY SUCH TRANSFER, THERE
WILL BE NO MORE THAN 100 BENEFICIAL OWNERS OF THE NOTES. FOR SUCH PURPOSES, THE
NUMBER OF BENEFICIAL OWNERS OF THE NOTES WILL BE CALCULATED IN ACCORDANCE WITH
SECTION 3(C)(1) OF THE INVESTMENT COMPANY ACT.

 

PRIOR
TO PURCHASING ANY INTEREST IN THIS NOTE, PURCHASERS SHOULD CONSULT COUNSEL WITH
RESPECT TO THE AVAILABILITY AND CONDITIONS OF EXEMPTION FROM THE RESTRICTION ON
RESALE OR TRANSFER. THE ISSUER HAS NOT AGREED TO REGISTER THE NOTE UNDER THE
SECURITIES ACT, TO QUALIFY THE NOTE UNDER THE SECURITIES LAWS OF ANY STATE OR TO
PROVIDE REGISTRATION RIGHTS TO ANY PURCHASER.

 

THE
PRINCIPAL AMOUNT OF THIS NOTE WILL BE REDUCED FROM TIME TO TIME BY PRINCIPAL
PAYMENTS ON THIS NOTE. IN ADDITION, THE PRINCIPAL AMOUNT OF THIS NOTE MAY BE
INCREASED SUBJECT TO 

 

B-1

 

CERTAIN
TERMS AND CONDITIONS SET FORTH IN THE INDENTURE SUPPLEMENT AND THE NOTE PURCHASE
AGREEMENT. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN THE CURRENT OUTSTANDING
PRINCIPAL BALANCE OF THIS NOTE BY INQUIRY OF THE TRUSTEE. ON THE DATE OF THIS
NOTE, THE TRUSTEE IS WACHOVIA BANK, NATIONAL ASSOCIATION.

 

THE
HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF, AND EACH HOLDER OF A BENEFICIAL
INTEREST IN THIS NOTE, COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME
INSTITUTE AGAINST CENDANT TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC OR SIERRA
DEPOSIT COMPANY, LLC OR JOIN IN ANY INSTITUTION AGAINST CENDANT TIMESHARE
CONDUIT RECEIVABLES FUNDING, LLC OR SIERRA DEPOSIT COMPANY, LLC OF ANY
BANKRUPTCY PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR
SIMILAR LAW.

 

THE
HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL
INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL INTEREST THEREIN,
AGREE TO TREAT THE NOTE AS INDEBTEDNESS OF THE ISSUER FOR APPLICABLE FEDERAL,
STATE, AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX
IMPOSED ON OR MEASURED BY INCOME.

 

EACH
PURCHASER OR TRANSFEREE OF THIS NOTE WILL BE DEEMED TO REPRESENT THAT (I) IT IS
NOT, AND FOR SO LONG AS IT HOLDS THIS NOTE, WILL NOT BE AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974 (“ERISA”), AS AMENDED), INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN (AS
DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE), WHETHER OR NOT THE
PLAN IS SUBJECT TO TITLE I OF ERISA), OR SECTION 4975 OF THE INTERNAL REVENUE
CODE (EACH, A “PLAN”), (II) IT HAS NOT USED “PLAN ASSETS” OF ANY PLAN TO ACQUIRE
SUCH NOTE, AND (III) FOR SO LONG AS IT HOLDS SUCH NOTE, IT WILL NOT ALLOW SUCH
NOTE TO CONSTITUTE “PLAN ASSETS” OF ANY PLAN.

 

B-2

REGISTERED  

PRINCIPAL
AMOUNT: NOT TO EXCEED $___________

_____________________
CLASS

 

No.
R-__

 

 

CENDANT
TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC 

 

LOAN-BACKED
VARIABLE FUNDING NOTE, SERIES 2002-1

 

Cendant
Timeshare Conduit Receivables Funding, LLC, a Delaware limited liability company
(herein referred to as the “Issuer”), for value received, hereby promises to pay
to _____________________, as agent for the members of the Class (the
“_______________Class”) of which ___________________________ are members, or its
assigns, subject to the following provisions, a principal sum not to exceed
___________________ DOLLARS ($__________), or such greater or lesser amount as
determined in accordance with the Master Indenture and Servicing Agreement and
the Series 2002-1 Supplement thereto on the stated Maturity Date (the “Maturity
Date”) as set forth in the Series 2002-1 Supplement, as amended from time to
time, and to pay principal at such times in advance thereof as is provided in
the Series 2002-1 Supplement. The Issuer will pay the Notes Interest on this
Note on each Payment Date in accordance with Sections 4.03(b) and 4.06 of the
Series 2002-1 Supplement. Principal of and interest on this Note shall be paid
in the manner specified on the reverse hereof.

 

The
Series 2002-1 Notes are nonrecourse obligations of the Issuer payable only from
and to the extent of the Series 2002-1 Collateral. The Holders of the Notes
shall have recourse to the Issuer only to the extent of the Series 2002-1
Collateral, and to the extent such Series 2002-1 Collateral is not sufficient to
pay the Series 2002-1 Notes and the interest thereon in full and all other
obligations of the Issuer under the Series 2002-1 Supplement and the other
Series 2002-1 Documents, the Holders of the Series 2002-1 Notes and holders of
other obligations payable from the Series 2002-1 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.

 

Principal
of and interest on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.

 

Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note.

 

Unless
the certificate of authentication hereon has been executed by the Trustee whose
name appears below by manual signature, this Note shall not be entitled to any
benefit under the Indenture referred to on the reverse hereof, or be valid or
obligatory for any purpose.

 

B-3

 

IN
WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or
in facsimile, by its Authorized Officer.

 

	 	 	
      CENDANT
      TIMESHARE CONDUIT RECEIVABLES FUNDING, LLC,

      as
      Issuer

       
	 
	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

Date: November
__, 2005

 

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is
one of the Notes designated above and referred to in the within-mentioned Master
Indenture and Servicing Agreement and Series 2002-1 Supplement to the Master
Indenture and Servicing Agreement.

 

	 	 	
      WACHOVIA
      BANK, NATIONAL ASSOCIATION,

      not
      in its individual capacity but solely as Trustee

       
	 
	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

Date: November
__, 2005

 

B-4

[REVERSE
OF NOTE]

 

This duly
authorized Note of the Issuer, designated as its Loan-Backed Variable Funding
Note, Series 2002-1 (herein called the “Note”), is issued under the Master
Indenture and Servicing Agreement dated as of August 29, 2002, as amended and
restated as of November 14, 2005 (as amended from time to time, the “Master
Indenture”) and the Series 2002-1 Supplement thereto, dated as of August 29,
2002, as amended and restated as of November 14, 2005 (as amended from time to
time, the “Series 2002-1 Supplement,” and together with the Master Indenture,
the “Indenture”), each by and among the Issuer, Cendant Timeshare Resort
Group-Consumer Finance, Inc. as master servicer (the “Master Servicer”), and
Wachovia Bank, National Association as trustee and as collateral agent (the
“Trustee” and the “Collateral Agent,” respectively). This Note is one of a duly
authorized series of Variable Funding Notes of the Issuer designated as its
Loan-Backed Variable Funding Notes Series 2002-1 (the “Series 2002-1 Notes”),
which have in the aggregate a maximum principal amount not to exceed the
Facility Limit as such amount may be reduced or increased from time to time in
accordance with the Series 2002-1 Supplement and the Note Purchase Agreement.
This Note is delivered to and registered in the name of
_______________________________. Interest on each Note will be calculated in
accordance with the terms of the Series 2002-1 Supplement. Within the Series
2002-1 Notes, _______________________ Class Note may bear interest calculated at
a rate different than another Class Note issued to other Holders of Notes. The
respective rights and obligations of the Issuer, the Master Servicer, the
Trustee, the Collateral Agent and the Holders of the Notes are set forth in the
Indenture. This Note is subject to all terms of the Indenture. All terms used in
this Note that are not defined herein shall have the meanings assigned to them
in or pursuant to the Indenture, as supplemented or amended.

 

Payments
of interest on and principal of this Note when due and payable shall be made
(i) by wire transfer in immediately available funds to a United States
dollar account specified by the Holder and included in the Note Register in
accordance with wire transfer instructions received by any Paying Agent on or
before the Record Date applicable to such Payment Date, (as defined in the Note
Purchase Agreement), (ii) if no wire transfer instructions are received by a
Paying Agent, payment shall be by a United States dollar check drawn on a United
States bank and delivered by first-class mail, postage prepaid. Any reduction in
the principal amount of this Note effected by any payments made on any Payment
Date shall be binding upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.

 

As
provided in the Series 2002-1 Supplement, the principal of this Note will be due
and payable in full on the Maturity Date.

 

The
principal amount of this Note outstanding may be increased from time to time in
accordance with the terms of Section 4.07 of the Series 2002-1 Supplement and
the terms of the Note Purchase Agreement but not to exceed the amount stated
above.

 

As
provided in the Indenture and subject to certain restrictions and limitations
set 

 

B-5

 

forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee or the Note Registrar duly executed by, the Holder hereof or such
Person’s attorney-in-fact duly authorized in writing, and such other documents
as the Trustee or the Note Registrar may reasonably require, and thereupon one
or more new Notes of the same Series and Class of authorized denominations and
in the same aggregate principal amount will be issued to the designated
transferee or tranferees. No service charge will be charged for any registration
of transfer or exchange of this Note, but the Issuer or the Trustee or the Note
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

 

Each
Noteholder by acceptance of a Note covenants and agrees that no recourse may be
taken, directly or indirectly, with respect to the obligations of the Issuer,
the Collateral Agent or the Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Trustee in its individual capacity, (ii) the Collateral Agent in its individual
capacity, (iii) any owner of a beneficial interest in the Issuer or (iv) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Collateral Agent in its individual capacity, any holder of a beneficial
interest in the Issuer or the Trustee or of any successor or assign of the
Trustee or the Collateral Agent in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.

 

Prior to
the due presentment for registration of transfer of this Note, the Issuer, the
Collateral Agent, the Trustee, the Paying Agent, the Transfer Agent and the Note
Registrar and any agent of the foregoing shall treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Collateral
Agent, the Trustee, the Paying Agent, the Transfer Agent and Note Registrar nor
any such agent of the foregoing shall be affected by notice to the
contrary.

 

The
Indenture permits certain amendments without the consent of any Noteholders but
with the satisfaction of the Rating Agency Condition. In addition, the Issuer,
the Trustee, the Collateral Agent and the Master Servicer may enter into
amendments which modify the rights and obligations of the Issuer or the rights
of the Holders of the Notes under the Indenture at any time with the consent of
the Majority Holders of each affected Series. Also, if an Event of Default has
occurred for a Series, the Holders of 66 2⁄3% of the Aggregate Principal Amount of
Notes of that Series may waive the Event of Default under the Indenture and its
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.

 

The term
“Issuer” as used in this Note includes any successor to the Issuer under

 

B-6

 

the
Indenture.

 

The Notes
are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations therein set forth.

 

This Note
and the Indenture shall be governed by and 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.

 

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay to the extent of amounts available from the Series
2002-1 Collateral, the principal of and the interest on this Note at the times,
place, and rate, and in the coin or currency herein prescribed.

 

Anything
herein to the contrary notwithstanding, except as expressly provided in the
Facility Documents, neither the owner of a beneficial interest in the Issuer,
nor any of its partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on, or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture. The Holder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Facility Documents, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided,
however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the Series 2002-1 Collateral.

 

 

B-7

ASSIGNMENT

 

Social
Security or taxpayer I.D. or other identifying number of assignee

 

 

_____________________________

 

 

FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

 

____________________________

(name and
address of assignee)

 

 

the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

 

Dated:_________________________ ____________________________________* 

 

Signature
Guaranteed:

 

* NOTE:
The signature to this assignment must correspond with the name of the registered
owner as it appears on the face of the within Note in every particular, without
alteration, enlargement or any change whatsoever.

B-8

 

SCHEDULE
OF NOTE INCREASES

 

AND
PAYMENTS OF PRINCIPAL

 

 

	
       

      Date
	
      Note
      Principal

      Increase
      or Decrease
	
      Balance
      After

      Increase
      or Decrease
	
      Note

      Made
      By

	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

B-9

EXHIBIT
C

Note
R-25:

Registered
to:

BANK OF
AMERICA, N.A., as agent for the members of the Class of which YC SUSI Trust and
Bank of America, N.A are members

Principal
Amount on [___________], 2005: $[__________]

Maximum
Principal Amount: $125,000,000

Account
for payments: Deutsche
Bank, New York

ABA #:
021 001 033

For the
Account of BTCO as Depository for RCC

Account:
00 384 710

Ref:
Receivables Capital - Sierra Receivables

Attn:
Stacy Coulon

Note
R-26:

Registered
to:

CREDIT
SUISSE, NEW YORK BRANCH, as agent for the members of the Class of which Alpine
Securitization Corp. and Credit Suisse, New York Branch are members

Principal
Amount on [__________], 2005: $[________]

Maximum
Principal Amount: $100,000,000

Payment
Instructions:  Accounts
for Payments: Bank of New York

ABA
Number: 021-000-018

Account
Number: 890-038-7025

Attention:
M. Townsend

Reference:
Sierra

C-1

 

Note
R-27:

Registered
to:

THE BANK
OF NOVA SCOTIA, as agent for the members of the Class of which Liberty Street
Funding Corp. and The Bank of Nova Scotia are members,

Principal
Amount on [__________], 2005: $[_________]

Maximum
Principal Amount: $75,000,000

Payment
Instructions:  Liberty
Street Funding Corp. (Sierra Funding)

ABA #:
026002532

Account
Number: 215813

Attention:
Vilma Pindling

Note
R-28:

Registered
to:

JPMORGAN
CHASE BANK, N.A., as agent for the members of the Class of which Jupiter
Securitization Corporation and JPMorgan Chase Bank, N.A. are
members

Principal
Amount on [__________], 2005: $[_________]

Maximum
Principal Amount: $100,000,000

Payment
Instructions:  [__________________]

C-2

 

Note
R-29:

Registered
to:

CALYON,
NEW YORK BRANCH, as agent for the members of the Class of which Atlantic Asset
Securitization Corp. and Calyon, New York Branch are members

Principal
Amount on [______________], 2005: $[__________]

Maximum
Principal Amount: $75,000,000

Payment
Instructions:  Account
for payments:

Calyon,
New York Branch

ABA:
026008073

For
Account #: 01-50576-0001-00

Account
Name: La Fayette Asset Securitization LLC

Attention:
Florence Reyes

Reference:
Sierra Funding Facility

Note
R-30:

Registered
to:

DEUTSCHE
BANK AG, NEW YORK BRANCH, as agent for the members of the Class of which
Saratoga Funding Corp., LLC and Deutsche Bank AG, New York Branch are
members

Principal
Amount on [__________], 2005: $[_________]

Maximum
Principal Amount: $100,000,000

Payment
Instructions:  Deutsche
Bank, NY

ABA #:
026003780

Account
Number: 10-581587-0008

Account
Name: Saratoga Funding Corp.

Attention:
Siegfried Radar Ph: 212-474-7737

Reference:
Sierra 2002-1

C-3

 

Note
R-31:

Registered
to:

THE ROYAL
BANK OF SCOTLAND, as agent for the members of the Class of which Cortina
Funding, Inc. is the member

Principal
Amount on [___________], 2005: $[__________]

Maximum
Principal Amount: $75,000,000

Payment
Instructions:  Account
for payments:

J.P.
Morgan Chase Bank

Clearing
Code: CHASUS33

Account
of: RBS (RBOSGB2L)

Account
No.: CORFUN USDC

Ref:
Favour - Cortina Funding Inc.

Note
R-32:

Registered
to:

THE BANK
OF TOKYO-MITSUBISHI, LTD., as
agent for the members of the Class of which Victory Receivables Corporation is
the member

Principal
Amount on [______________], 2005: $___________

Maximum
Principal Amount: $75,000,000

Account
for payments:  Deutsche
Bank Trust Company Americas

ABA:
021-001-033

Account
Number: 01419647

Ref:
Victory Receivables/Cendant Timeshare

Attn:
Kristy Yee

C-4

 

Note
R-33:

Registered
to:

CITICORP
NORTH AMERICA, INC., as agent
for the members of the Class of which Ciesco LLC and Citibank, N.A. are
members

Principal
Amount on [____________], 2005: $___________

Maximum
Principal Amount: $75,000,000

 

Account
for payments:  

 

ABA:
021-000-089

For
Account #: 40636636

Account
Name: CIESCO Redemption Account

Attention:
Robert Kohl

Reference:
CIESCO

C-5

 

EXHIBIT
D

Form
of Monthly Servicer Report

[To Be
Inserted.]

D-1

 

EXHIBIT
E

[RESERVED]

 

E-1

 

EXHIBIT
G

 

 

FORM
OF NOTEHOLDER’S LETTER

[Date]

 

Cendant
Timeshare Conduit Receivables Funding, LLC,

as
Issuer

 

Wachovia
Bank, National Association

 

as
Trustee

 

	 	
      Re:
	
      Cendant
      Timeshare Conduit Receivables Funding, LLC

 

Loan-Backed
Variable Funding Notes, Series 2002-1

 

Ladies
and Gentlemen:

 

1. This
letter applies to the above-referenced Loan-Backed Variable Funding Notes (the
“Notes”) which are described in a Series 2002-1 Supplement, dated as of
August 29, 2002, as amended from time to time (the “Indenture
Supplement”) among
Cendant Timeshare Conduit Receivables Funding, LLC (the “Issuer”),
Cendant Timeshare Resort Group--Consumer Finance, Inc., as Master Servicer (the
“Master
Servicer”) and
Wachovia Bank, National Association, as Trustee (the “Trustee”) and as
Collateral Agent. Capitalized terms not defined herein shall have the meaning
assigned to them in the Indenture Supplement.

 

2. This
letter is delivered to you [in connection with the delivery of the Fourth
Amendment to the Indenture Supplement] [in connection with the proposed
acquisition of a Note by the Class described below] and for purposes of
monitoring compliance with the restrictions set forth in subsection 4.11(b) of
the Series 2002-1 Supplement, and, specifically, for purposes of allowing the
Issuer to determine that, at all times the outstanding securities (other than
short-term paper) of the Issuer are beneficially owned by not more than 100
persons calculated in accordance with Section 3(c)(1) of the Investment Company
Act. 

 

3. We hereby
acknowledge, represent and agree with the Issuer [and if this letter is
delivered in connection with the transfer of a Note to us, with the Class which
is transferring the Note to us] all of the provisions set forth in subsection
4.11(c) of the Indenture Supplement. 

 

4. In
addition, we hereby specifically make the following representations and
warranties.

 

A. We
understand that the Issuer is not registered as an investment company under the
Investment Company Act of 1940, as amended (the “Investment
Company Act”), but
that the Issuer has an exception from registration as such by virtue of
Section 3(c)(1) of the Investment Company Act, which in general excludes
from the definition of an investment company any issuer whose outstanding
securities (other than 

 

G-1

 

 

short-term
paper) are beneficially owned by not more than 100 persons and which has not
made and does not propose to make a public offering of its
securities.

 

B. This
letter is delivered by the Class Agent on behalf of the Class name below and
with respect to a single Note issued to that Class and registered in the name of
the Class Agent.

 

C. On the
basis of certifications provided by each member of the Class for which the
undersigned serves as Class Agent, the members of the Class do not constitute
more than ___ persons for purposes of Section 3(c)(1) of the Investment Company
Act. If the number of persons stated in the prior sentence exceeds four, the
Issuer has given its express written consent to such larger number.

 

5. This
letter shall be for the benefit of the Issuer. We recognize that such parties
will rely upon the truth and accuracy of the representations and agreements set
forth in this letter.

 

This
letter and the representations and warranties contained herein are being
delivered as of _____________.

 

Class to
which this Noteholder’s Letter Relates:

_______________________________________

[Name of
Class Agent],

as Class
Agent for the Class of which the entities listed in the Certificate of Class
Member are the only members

By:_______________________________________      

Name:

Title:

 

 

[Form of
certificate to be provided by the members of the Class]

Certificate
of Class Member

____________________,
[the “Member”], as a member of the _____________ Class, hereby certifies that it
constitutes not more than ____ person[s] for purposes of Section 3(c)(1) of the
Investment Company Act.

G-2

 

In
connection with the forgoing statement, the Member hereby states
that:

It
understands that the Issuer will not register as an investment company under the
U.S. Investment Company Act of 1940, as amended (the "1940 Act"), nor will it
make a public offering of its securities within the United States. It
understands that the Issuer intends to comply with Section 3(c)(1) of the 1940
Act, and, accordingly, the number of investors will be limited to no more than
100 beneficial owners within the meaning of the 1940 Act.

In making
the certification set forth in the first paragraph above, the Member:

	 	
      (a)
	
      Certifies
      that either (A) (i) it was not formed and is not operated for the purpose
      of investing in the Issuer, (ii) it does not invest more than 40% of its
      total assets in the Issuer, (iii) each of the Member’s beneficial owners
      participates in investments made by the Member pro rata in accordance with
      its interest in the Member and, accordingly, its beneficial owners cannot
      opt in or out of investments made by the Member or decide the amount of
      their participation, and (iv) its beneficial owners did not and will not
      contribute additional capital (other than previously committed capital)
      for the purpose of purchasing the Notes or (B) the Member is unable
      to make all of the representations contained in the preceding provision
      (A) and has, therefore, calculated the number of the Member's beneficial
      owners for purposes of the 1940 Act and has determined that number to be
      as stated in paragraph (c) below.

	 	
      (b)
	
      Certifies
      that either (A) it is not a registered investment company, or a company
      that is excluded from the definition of investment company solely by
      reason of the provisions of either Section 3(c)(1) or Section 3(c)(7) or
      Section 7(d) of the 1940 Act or (B) the Member is unable to make all of
      the representations contained in the preceding provision (A) and has,
      therefore, calculated the number of the Member's beneficial owners for
      purposes of the 1940 Act and has determined that number to be stated as in
      paragraph (c) below.

	(c)  	
      The
      number of beneficial owners of the Member is not more than
      _________.

This
certification is being delivered as of ____________.

By:
_______________________________ 

Name:

G-3Master Loan Purchase Agreement (Fairfield) dated Nov 14, 2005

EXHIBIT
10.3

 

EXECUTION
COPY

 

 

MASTER
LOAN PURCHASE AGREEMENT

 

Dated as
of August 29, 2002

 

Amended
and Restated as of November 14, 2005

 

by and
between

 

CENDANT
TIMESHARE RESORT GROUP-CONSUMER FINANCE, INC.,

 

as
Seller

 

and

 

FAIRFIELD
RESORTS, INC.,

 

as
Co-Originator

 

and

 

FAIRFIELD
MYRTLE BEACH, INC.,

 

as
Co-Originator

 

and

 

KONA
HAWAIIAN VACATION OWNERSHIP, LLC,

 

as an
Originator

 

and

 

SHAWNEE
DEVELOPMENT, INC.,

 

as an
Originator

 

and

 

SEA
GARDENS BEACH AND TENNIS RESORT, INC.,

 

VACATION
BREAK RESORTS, INC.,

 

VACATION
BREAK RESORTS AT STAR ISLAND, INC.,

 

PALM
VACATION GROUP

 

and

 

OCEAN
RANCH VACATION GROUP,

 

each as a
VB Subsidiary

 

and

 

PALM
VACATION GROUP

 

and

 

OCEAN
RANCH VACATION GROUP,

 

each as a
VB Partnership

 

and

 

SIERRA
DEPOSIT COMPANY, LLC

 

as
Purchaser

 

 

TABLE
OF CONTENTS

 

 

 

	 	 	 	 	 Page
	
      RECITALS

       
	 	 	 	
      1

       

	
      Section
      1.

       
	 	
      Definitions

       
	 	
      2

       

	
      Section
      2.

       
	 	
      Purchase
      and Sale of Loans

       
	 	
      17

       

	
      Section
      3.

       
	 	
      Pool
      Purchase Price

       
	 	
      17

       

	
      Section
      4.

       
	 	
      Payment
      of Purchase Price

       
	 	
      18

       

	 	 	
      (a)
      Closing Dates

       
	 	
      18

       

	 	 	
      (b)
      Manner of Payment of Additional Pool Purchase Price

       
	 	
      18

       

	 	 	
      (c)
      Scheduled Payments Under Loans and Cut-Off Date

       
	 	
      18

       

	
      Section
      5.

       
	 	
      Conditions
      Precedent to Sale of Loans

       
	 	
      18

       

	
      Section
      6.

       
	 	
      Representations
      and Warranties of the Seller, FRI, FMB, SDI and the VB
      Subsidiaries

       
	 	
      18

       

	 	 	
      (a)
      General Representations and Warranties of the Seller, FRI, FMB, SDI and
      the VB Subsidiaries

       
	 	
      18

       

	 	 	
      (b)
      Representations and Warranties Regarding the Loans

       
	 	
      23

       

	 	 	
      (c)
      Representations and Warranties Regarding the Loan Files

       
	 	
      29

       

	 	 	
      (d)
      Survival of Representations and Warranties

       
	 	
      29

       

	 	 	
      (e)
      Indemnification of the Company

       
	 	
      29

       

	 	 	
      (f)
      Representations and Warranties of Kona

       
	 	
      30

       

	
      Section
      7.

       
	 	
      Repurchases
      or Substitution of Loans for Breach of Representations and
      Warranties

       
	 	
      30

       

	
      Section
      8.

       
	 	
      Covenants
      of the Seller and FRI

       
	 	
      30

       

	 	 	
      (a)
      Affirmative Covenants of the Seller and FRI

       
	 	
      30

       

	 	 	
      (b)
      Negative Covenants of the Seller and FRI

       
	 	
      34

       

	
      Section
      9.

       
	 	
      Representations
      and Warranties of the Company

       
	 	
      36

       

	
      Section
      10.

       
	 	
      Covenants
      of the Company

       
	 	
      37

       

	
      Section
      11.

       
	 	
      Miscellaneous

       
	 	
      38

       

	 	 	
      (a)
      Amendment

       
	 	
      38

       

	 	 	
      (b)
      Assignment

       
	 	
      38

       

	 	 	
      (c)
      Counterparts

       
	 	
      38

       

	 	 	 (d)
      Termination	 	
       39

       

 

TABLE
OF CONTENTS

(continued)

 

	 	 	 	 	 Page
	 	 	
      (e)
      GOVERNING LAW

       
	 	
      39

       

	 	 	
      (f)
      Notices

       
	 	
      39

       

	 	 	
      (g)
      Severability of Provisions

       
	 	
      39

       

	 	 	
      (h)
      Successors and Assigns

       
	 	
      39

       

	 	 	
      (i)
      Costs, Expenses and Taxes

       
	 	
      39

       

	 	 	
      (j)
      No Bankruptcy Petition

       
	 	
      40

       

	 	 	
      (k)
      Treatment of Timeshare Upgrades

       
	 	
      40

       

 

SCHEDULES

	 	
      Schedule
      1

       
	
      -
      

       
	
      Loan
      Schedule

       

	 	
      Schedule
      2 

       
	
      -
      

       
	
      Resorts

       

	 	
      Schedule
      3 

       
	
      -
      

       
	
      Environmental
      Issues

       

	 	
      Schedule
      4

       
	
      -
      

       
	
      Lockbox
      Accounts

       

	 	
      Schedule
      5

       
	
      -
      

       
	
      Litigation

       

 

EXHIBITS

	 	
      Exhibit
      A

       
	
       

       
	
      Forms
      of Custodial Agreements

       

	 	
      Exhibit
      B

       
	 	
      Form
      of Assignment of Additional Loans

       

	 	
      Exhibit
      C

       
	 	
      Credit
      Standards and Collection Policies of Cendant Timeshare Resort
      Group—Consumer Finance, Inc. and Fairfield Resorts, Inc.

       

	 	
      Exhibit
      D

       
	 	
      Forms
      of Loans

       

	 	
      Exhibit
      E

       
	 	
      Forms
      of Lockbox Agreements

       

	 	
      Exhibit
      F

       
	 	
      Representatives
      and Warranties of Kona

       

 

MASTER
LOAN PURCHASE AGREEMENT

 

THIS
MASTER LOAN PURCHASE AGREEMENT (this “Agreement”), dated
as of August 29, 2002, as amended and restated as of November 14, 2005, is made
by and between CENDANT TIMESHARE RESORT GROUP-CONSUMER FINANCE, INC., a Delaware
corporation formerly known as Fairfield Acceptance Corporation-Nevada, as seller
(the “Seller”),
FAIRFIELD RESORTS, INC., a Delaware corporation and the parent corporation of
the Seller, as co-originator (“FRI”),
FAIRFIELD MYRTLE BEACH, INC., a Delaware corporation and a wholly-owned
subsidiary of FRI, as co-originator (“FMB”), KONA
HAWAIIAN VACATION OWNERSHIP, LLC, a Hawaii limited liability company, as an
originator (“Kona”),
SHAWNEE DEVELOPMENT, INC., a Pennsylvania corporation, as an originator
(“SDI”), SEA
GARDENS BEACH AND TENNIS RESORT, INC., a Florida corporation (“Sea
Gardens”),
VACATION BREAK RESORTS, INC., a Florida corporation (“VBR”),
VACATION BREAK RESORTS AT STAR ISLAND, INC., a Florida corporation
(“VBRS”) (each
of Sea Gardens, VBR and VBRS being wholly-owned subsidiaries of Vacation Break,
USA, Inc., a wholly-owned subsidiary of FRI), PALM VACATION GROUP, a Florida
general partnership (“PVG”), OCEAN
RANCH VACATION GROUP, a Florida general partnership (“ORVG”) (each
of Sea Gardens, VBR, VBRS, PVG and ORVG are hereinafter collectively referred to
as the “VB
Subsidiaries” and PVG
and ORVG are hereinafter collectively referred to as the “VB
Partnerships”) and
SIERRA DEPOSIT COMPANY, LLC, a Delaware limited liability company, as purchaser
(hereinafter referred to as the “Purchaser” or the
“Company”).

 

RECITALS

 

WHEREAS,
FRI, FMB, Kona, SDI and the VB Subsidiaries have originated certain Loans in
connection with the sale to Obligors of Timeshare Properties at various Resorts;

 

WHEREAS,
in the ordinary course of their businesses, FRI purchases or will purchase
directly or indirectly from FMB, Kona, SDI and the VB Subsidiaries, and the
Seller purchases or will purchase from FRI, certain Loans and related property
(including an interest in the Timeshare Properties underlying such Loans);

 

WHEREAS,
each of FRI, FMB, Kona, SDI, the VB Subsidiaries, the Seller and the Company
wishes to enter into this Agreement and the related Master Loan Purchase
Agreement Supplement for each Series of Notes (each, a “PA
Supplement”) in
order to, among other things, effect the sale to the Company on the related
Closing Date of Initial Loans and related Transferred Assets that CTRG-CF owns
as of the close of business on the related Cut-Off Date, and the sale to the
Company of Additional Loans (including Additional Upgrade Balances) and related
Transferred Assets that CTRG-CF will own from time to time thereafter as of the
close of business on the related Addition Cut-Off Dates; and 

 

WHEREAS,
the Company intends to transfer and assign the Loans and related Transferred
Assets to the various Issuers, which will then grant security interests in the
Loans and related Transferred Assets to Wachovia Bank, National Association, as
Collateral Agent on behalf of the various Trustees and the holders of Notes
issued from time to time pursuant to an Indenture and Servicing
Agreement.

 

 

NOW,
THEREFORE, in consideration of the purchase price set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows: 

 

Section
1.  Definitions.

 

Whenever
used in this Agreement, the following words and phrases shall have the following
meanings: 

 

“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 the Seller or an affiliate of the 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; provided that, the term Acquired Portfolio Loan
shall not include loans acquired from Kona.

 

“Addition
Cut-Off Date” shall
mean, for Additional Loans of any Series, the date set forth in the related
Assignment.

 

“Addition
Date” shall
mean, with respect to any Series, the Addition Date as defined in the related PA
Supplement.

 

“Additional
Issuer” shall
mean an entity which is a subsidiary of the Purchaser, other than the Initial
Issuer, which purchases Loans from the Purchaser with the proceeds of a Series
of Notes issued by such entity and pledges the Loans to secure such Series of
Notes.

 

“Additional
Loan” shall
mean, with respect to any Series, each installment contract or contract for deed
or contract or note secured by a mortgage, deed of trust, vendor’s lien or
retention of title, in each case relating to the sale of one or more Timeshare
Properties or Green Timeshare Properties to an Obligor and each Additional
Upgrade Balance, in each case constituting one of the Loans of such Series
purchased from the Seller as of an Addition Cut-Off Date and listed on Schedule
1 to the related Assignment.

 

“Additional
Pool Purchase Price” shall
have the meaning set forth in Section 3.

 

“Additional
Series” shall
mean a Series of Notes, other than the Series 2002-1 Notes.

 

“Additional
Upgrade Balance” shall
mean, with respect to any Loan, any future borrowing made by the related Obligor
pursuant to a modification of the Loan relating to a Timeshare Upgrade after the
Cut-Off Date or the Addition Cut-Off Date, as applicable, with respect to such
Loan, together with all money due or to become due in respect of such
borrowing.

 

“Affiliate” of any
Person shall mean any other Person controlling or 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.

 

 

“Agreement” shall
mean this Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Amortization
Event” shall
mean, with respect to any Series, one or more of the events constituting an
Amortization Event as defined in the related Indenture Supplement.

 

“Alliance
Program” shall
mean any sales and marketing program pursuant to which an Originator acquires
recovered Timeshare Property interests from sold out third-party unaffiliated
resorts for resale.

 

“Assessments” shall
mean any assessments made with respect to a Timeshare Property, including but
not limited to real estate taxes, recreation fees, community club or property
owners’ association dues, water and sewer improvement district assessments or
other similar assessments, the nonpayment of which could result in the
imposition of a Lien or other encumbrance upon such Timeshare
Property.

 

“Assignment” shall
mean, with respect to any Series, an Assignment as defined in the related PA
Supplement.

 

“Assignment
of Mortgage” shall
mean any assignment (including any collateral assignment) of any
Mortgage.

 

“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 Company or any ERISA Affiliate of the Company is, or at any time
during the immediately preceding six years was, an “employer” as defined in
Section 3(5) of ERISA.

 

“Business
Day” shall
mean any day other than (i) a Saturday or Sunday or (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, or any other city specified in
the PA Supplement for a Series, are authorized or obligated by law or executive
order to be closed.

 

“Cendant” shall
mean Cendant Corporation, a Delaware corporation, or any successor
thereof.

 

“Closing
Date” shall
mean, with respect to any Series, the Closing Date as defined in the related PA
Supplement.

 

“Collateral” shall
have the meaning set forth in the Indenture and Servicing
Agreement.

 

“Collateral
Agency Agreement” shall
mean the Collateral Agency Agreement dated as of January 15, 1998 by and
between Wachovia Bank, National Association as successor Collateral Agent and
the secured parties named therein, as amended by the First Amendment dated as of
July 31, 1998, the Second Amendment dated as of July 25, 2000, the
Third Amendment dated as of July 1, 2001, the Fourth Amendment dated as of
August 29, 2002, the Fifth Amendment dated as of March 31, 2003, the Sixth
Amendment dated as of May 20, 

 

 

2003, the
Seventh Amendment dated as of December 5, 2003, the Eighth Amendment dated as of
March 27, 2004 and the Ninth Amendment dated as of August 11, 2005, as such
Collateral Agency Agreement may be further amended, supplemented or otherwise
modified from time to time in accordance therewith.

 

“Collateral
Agent” shall
mean Wachovia Bank, National Association, as Collateral Agent, its successors
and assigns and any entity which is substituted as Collateral Agent under the
terms of the Collateral Agency Agreement.

 

“Collection
Account” shall
mean with respect to any Series the account or accounts established as the
collection account for such Series pursuant to the Indenture and Servicing
Agreement under which such Series of Notes is issued.

 

“Collections” shall
mean, with respect to any Loan, all funds, cash collections and other cash
proceeds of such Loan, including without limitation (i) all Scheduled Payments
or recoveries made in the form of money, checks and like items to, or a wire
transfer or an automated clearinghouse transfer received in, any of the Lockbox
Accounts or received by the Issuer or the Master Servicer (or any Subservicer)
in respect of such Loan, (ii) all amounts received by the Issuer, the Master
Servicer (or any Subservicer) or the Trustee in respect of any Insurance
Proceeds relating to such Loan or the related Timeshare Property and (iii) all
amounts received by the Issuer, the Master Servicer (or any Subservicer) or the
Trustee in respect of any proceeds in respect of a condemnation of property in
any Resort, which proceeds relate to such Loan or the related Timeshare
Property.

 

“Company” shall
have the meaning set forth in the preamble. 

 

“Contaminants” shall
have the meaning set forth in Section 6(b)(xii).

 

“Corporate
Trust Office” with
respect to any Trustee, shall have the meaning set forth in the Indenture and
Servicing Agreement.

 

“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 CTRG-CF and FRI, a copy of
which is attached to this Agreement as Exhibit C, as the same may be amended
from time to time in accordance with the provisions of Section
8(b)(iii).

 

“CTRG-CF” shall
mean Cendant Timeshare Resort Group-Consumer Finance, Inc., a Delaware
corporation formerly known as Fairfield Acceptance Corporation-Nevada, domiciled
in Nevada and a wholly-owned subsidiary of FRI.

 

“Custodial
Agreement” shall
mean the Fifth Amended and Restated Custodial Agreement dated as of August 11,
2005 by and between each of the Issuers, CTRG-CF, Trendwest, Wachovia Bank,
National Association as Custodian, the Trustees and the Collateral Agent, a copy
of which is attached to this Agreement as Exhibit A, as the same may be amended,

 

 

supplemented
or otherwise modified from time to time thereafter in accordance with the terms
hereof.

 

“Custodian” shall
mean, at any time, the custodian under either Custodial Agreement at such
time.

 

“Customary
Practices” shall
mean the Master Servicer’s practices with respect to the servicing and
administration of Loans as in effect from time to time, which practices shall be
consistent with the practices employed by prudent lending institutions that
originate and service instruments similar to the Loans or other timeshare loans
in the jurisdictions in which the Resorts are located.

 

“Cut-Off
Date” shall
mean, with respect to any Series, the Cut-Off Date as defined in the related PA
Supplement.

 

“De
Minimus Levels” shall
have the meaning set forth in Section 6(b)(xii).

 

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

 

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

 

“Defaulted
Loan Repurchase Cap” shall
mean, as of any date of determination, an amount equal to the product of (a)
16.00% multiplied
by (b) the
aggregate Loan principal balance of all Loans (calculated as of the Cut-Off Date
or related Addition Cut-Off Date, as applicable, for each Loan) sold by the
Seller to the Depositor pursuant to this Agreement on or prior to such date of
determination.

 

“Defective
Loan” shall
mean, with respect to any Series, any Loan with any uncured material breach of a
representation or warranty of the Seller set forth in Section 6(b) hereof and in
the related PA Supplement. 

 

“Delinquent
Loan” shall
mean, with respect to any Series, a Loan with any portion of a Scheduled Payment
delinquent more than 30 days, other than any Loan that is a Defaulted
Loan.

 

“Depositor
Administrative Services Agreement” shall
mean the administrative services agreement dated as of August 29, 2002 by and
between CTRG-CF as administrator and the Company as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof.

 

 

“Due
Date” shall
mean, with respect to any Loan, the date on which an Obligor is required to make
a Scheduled Payment thereon.

 

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

 

“Eligible
Loan” shall
mean, with respect to any Series, an Eligible Loan as defined in the related PA
Supplement.

 

“Environmental
Laws” shall
have the meaning set forth in Section 6(b)(xii).

 

“Equity
Percentage” shall
mean, with respect to a Loan, a fraction, expressed as a percentage, the
numerator of which
is the excess of (A)
the Timeshare Price of the related Timeshare Property relating to a Loan paid or
to be paid by an Obligor over (B) the
outstanding principal balance of such Loan at the time of sale of such Timeshare
Property to such Obligor (less the
amount of any valid check presented by such Obligor at the time of such sale
that has cleared the payment system), and the denominator of which
is the Timeshare Price of the related Timeshare Property, provided that any
cash downpayments or principal payments made on any initial Loan that have been
fully prepaid as part of a Timeshare Upgrade and financed downpayments under
such initial Loan financed over a period not exceeding six months from the date
of origination of such Loan that have actually been paid within such six-month
period shall be included for purposes of calculating the numerator of such
fraction.

 

“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 Internal Revenue Code) as such Person; (ii) a trade or business (whether or
not incorporated) under common control (within the meaning of Section 414(c) of
the Internal Revenue Code) with such Person; or (iii) a member of the same
affiliated service group (within the meaning of Section 414(m) of the Internal
Revenue Code) as such Person, any corporation described in clause (i) or any
trade or business described in clause (ii).

 

“ERISA
Liabilities” shall
have the meaning set forth in Section 8(b)(vi).

 

“Event
of Default” shall
mean, with respect to any Series, one or more of the events constituting an
Event of Default under the related Indenture Supplement.

 

“Facility
Documents” shall
mean, collectively, this Agreement, each PA Supplement, each Indenture and
Servicing Agreement, each Indenture Supplement, each Pool
Purchase Agreement, the Custodial Agreement, the Lockbox Agreements, the
Collateral Agency Agreement, the Title Clearing Agreements, the Loan Conveyance
Documents, the Depositor Administrative Services Agreement, the Issuer
Administrative Services Agreement, the Financing Statements and all other
agreements, documents and instruments delivered pursuant thereto or in
connection therewith.

 

 

“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 FRI, FMB and such
other Subsidiaries and third party developers as may be named by an amendment or
addendum thereto, as the same may be amended, restated, supplemented or
otherwise modified from time to time thereafter in accordance with the terms of
this Agreement.

 

“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.

 

“Fixed
Week” shall
mean a Timeshare Property representing a fee simple interest in a lodging unit
at a Resort that entitles the related Obligor to occupy such lodging unit for a
specified one-week period each year.

 

“FMB” shall
have the meaning set forth in the preamble.

 

“FRI” shall
have the meaning set forth in the preamble.

 

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

 

“Grant” shall
have the meaning set forth in the Indenture and Servicing
Agreement.

 

“Green
Loan” shall
mean a Loan the proceeds of which are used to finance the purchase of a Green
Timeshare Property.

 

“Green
Timeshare Property” shall
mean a Timeshare Property for which construction on the related Resort has not
yet begun or is subject to completion.

 

“Indemnified
Amounts” shall
have the meaning set forth in Section 6(e). 

 

“Indenture
and Servicing Agreement” shall
mean (i) the Master Indenture and Servicing Agreement dated as of August
29, 2002, as amended and restated as of November 14, 2005, together with the
Indenture Supplement, each as amended from time to time, and each among the
Initial Issuer, as issuer, CTRG-CF, as master servicer and Wachovia Bank,
National Association, as trustee and collateral agent, and (ii) with
respect to any Additional Series, the indenture and servicing agreement or
similar document or documents pursuant to which such Additional Series is issued
and in which the terms of such Additional Series are set forth.

 

“Indenture
Supplement” shall
mean (i) with respect to Series 2002-1, the supplement to the Master Indenture
and Servicing Agreement executed and delivered in connection with the issuance
of the Series 2002-1 Notes and all amendments thereof and supplements thereto
and (ii) with respect to any Additional Series, the Indenture and Servicing
Agreement for that Series.

 

 

“Independent
Director” shall
mean an individual who is an Independent Director as defined in the Limited
Liability Company Agreement of the Company as in effect on the date of this
Agreement.

 

“Initial
Closing Date” shall
mean August 29, 2002.

 

“Initial
Issuer” shall
mean Cendant Timeshare Conduit Receivables Funding, LLC formerly known as Sierra
Receivables Funding Company, LLC, a Delaware limited liability company as issuer
of the Series 2002-1 Notes.

 

“Initial
Loan” shall
mean, with respect to any Series, each Loan listed on the related Loan Schedule
on the Closing Date for such Series.

 

“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
applicable Debtor Relief Law now or hereafter in effect, or the filing of a
petition against such Person in an involuntary case under any applicable Debtor
Relief Law now or hereafter in effect, 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 applicable Debtor
Relief Law now or hereafter in effect, 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, 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.

 

“Installment
Contract” shall
mean, with respect to any Series, an installment sale contract for deed and
retained title in a related Timeshare Property by and between an Originator and
an Obligor.

 

“Insurance
Proceeds” shall
mean proceeds of any insurance policy relating to any Loan or the related
Timeshare Property, including any refund of unearned premium, but only to the
extent such proceeds are not to be applied to the restoration of any
improvements on the related Timeshare Property or released to the Obligor in
accordance with Customary Practices.

 

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

 

“Issuer” shall
mean the Initial Issuer and each Additional Issuer. 

 

 

“Issuer
Administrative Services Agreement” shall
mean the administrative services agreement dated as of August 29, 2002 by and
between CTRG-CF as administrator and the Initial Issuer as the same may be
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof.

 

“Kona” shall
mean Kona Hawaiian Vacation Ownership, LLC, a Hawaii limited liability
company.

 

“Kona
Addition Date” shall
mean November 27, 2002.

 

“Lien” shall
mean any security interest, mortgage, 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.

 

“Loan” shall
mean, with respect to any Series, each installment contract or contract for deed
or contract or note secured by a mortgage, deed of trust, vendor’s lien or
retention of title, in each case relating to the sale of one or more Timeshare
Properties or Green Timeshare Properties to an Obligor, that is listed on the
Loan Schedule for such Series on the related Closing Date and any Additional
Loans that are listed from time to time on such Loan Schedule in accordance with
the related PA Supplement.

 

“Loan
Conveyance Documents” shall
mean, with respect to any Loan, (a) the Assignment of Additional Loans in
the form of Exhibit B, if applicable, and (b) any such other releases,
documents, instruments or agreements as may be required by the Company, the
Issuer or the Trustee in order to more fully effect the sale (including any
prior assignments) of such Loan and any related Transferred Assets.

 

“Loan
Documents” shall
mean, with respect to any Loan, all papers and documents related to such Loan,
including the original of all applicable promissory notes, stamped as required
by the Custodial Agreement, the original of any related recorded or (to the
extent permitted under this Agreement) unrecorded Mortgage (or a copy of such
recorded Mortgage if the original of the recorded Mortgage is not available,
certified to be a true and complete copy of the original) and a copy of any
recorded or (to the extent permitted under this Agreement) unrecorded warranty
deed transferring legal title to the related Timeshare Property to the Obligor;
provided,
however, that
the Loan Documents may be provided in microfiche or other electronic form to the
extent permitted under the Custodial Agreement.

 

“Loan
File” shall
mean, with respect to any Loan, the Loan Documents pertaining to such Loan and
any additional amendments, supplements, extensions, modifications or waiver
agreements required to be added to the Loan File pursuant to this Agreement, the
Credit Standards and Collection Policies and/or Customary Practices.

 

 

“Loan
Pool” shall
mean, with respect to any Series, all Loans identified in the Loan Schedule for
such Series.

 

“Loan
Rate” shall
mean the annual rate at which interest accrues on any Loan, as modified from
time to time in accordance with the terms of any related Credit Standards and
Collection Policies.

 

“Loan
Schedule” shall
mean, with respect to any Series, the list of Loans attached to the related PA
Supplement as Schedule 1, as amended from time to time on each Addition Date and
Repurchase Date as provided in the related PA Supplement, which list shall set
forth the following information with respect to each Loan therein as of the
applicable date:

 

	 	
      (a)
	
      the
      Loan number;

 

	 	
      (b)
	
      the
      Obligor’s name and the home address and telephone number for such Obligor
      set forth in the Loan;

 

	 	
      (c)
	
      the
      Resort in which the related Timeshare Property is
  located;

 

	 	
      (d)
	
      as
      to Fixed Weeks, the building, unit and week thereof; as to UDIs, the phase
      number thereof; and as to all other Timeshare Properties, the number of
      Points issued pursuant to the FairShare Plus Program (if applicable) for
      which occupancy rights in such Timeshare Property may be redeemed and
      which are represented thereby;

 

	 	
      (e)
	
      the
      Loan Rate;

 

	 	
      (f)
	
      whether
      the Obligor has elected a PAC with respect to the
Loan;

 

	 	
      (g)
	
      the
      original term of the Loan;

 

	 	
      (h)
	
      the
      original Loan principal balance and outstanding Loan principal balance as
      of the Cut-Off Date or related Addition Cut-Off Date, as
      applicable;

 

	 	
      (i)
	
      the
      date of execution of the Loan;

 

	 	
      (j)
	
      the
      amount of the Scheduled Payment on the
Loan;

 

	 	
      (k)
	
      the
      original Timeshare Price and Equity Percentage;
and

 

	 	
      (l)
	
      whether
      the related Timeshare Property has been deeded to the
    Obligor.

 

The Loan
Schedule also shall set forth the aggregate amounts described under clause (h)
above for all outstanding Loans. The Loan Schedule may be in the form of more
than one list, collectively setting forth all of the information
required.

 

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

 

 

“Lockbox
Agreement” shall
mean (i) with respect to Loans pledged to secure the Series 2002-1
Notes, any agreement substantially in the form of Exhibit E by and between the
Initial Issuer, the Trustee, the Master Servicer and the applicable Lockbox
Bank, which agreement sets forth the rights of the Issuer, the Trustee and the
applicable Lockbox Bank with respect to the disposition and application of the
Collections deposited in the applicable Lockbox Account, including without
limitation the right of the Trustee to direct the Lockbox Bank to remit all
Collections directly to the Trustee and (ii) with respect to Loans pledged to
secure an Additional Series, the lockbox agreements or similar arrangements
described in the applicable Indenture and Servicing Agreement.

 

“Lockbox
Bank” shall
mean any of the commercial banks holding one or more Lockbox Accounts for the
purpose of receiving Collections. 

 

“Lot” shall
mean a fully or partially developed parcel of real estate.

 

“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 entity.

 

“Master
Servicer” shall
mean, with respect to each Indenture and Servicing Agreement, the entity then
designated as the servicer or master servicer under such agreement.

 

“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 Facility Documents to which it
is a party; (c) the validity or enforceability of, or collectibility of amounts
payable under, any 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 Facility Documents to which it is a party; or (e) the value,
validity, enforceability or collectibility of the Loans pledged as collateral
for any Series of Notes or any of the other Transferred Assets pledged as
collateral for any Series of Notes.

 

“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.

 

“Nominee” shall
mean (i) with respect to each of the Title Clearing Agreements, the person
designed in such agreement as the nominee or, where applicable, the entity given
such other designation as is appropriate and which is the entity to which legal
title to the subject property is conveyed and held and (ii) with respect to
other title clearing documents, instruments and agreements, title holding
documents, instruments and agreement or similar documents, instruments and
agreements, the entity-which
shall not be the Seller or an Affiliate of the Seller-to which
legal title to the subject property is conveyed and held for ease of transfer
and for the benefit of the entities, among others, to which Series 2002-1 Loans
have from time to time been conveyed, as their interests may
appear.

 

 

“Note” shall
mean any Loan-backed note issued, executed and authenticated in accordance with
an Indenture and Servicing Agreement and, where appropriate, any related
Indenture Supplement.

 

“Noteholder” shall
have the meaning set forth in the Indenture and Servicing
Agreement.

 

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

 

“Operating
Agreement” shall
mean the Tenth Amended and Restated Operating Agreement dated as of August 11,
2005 by and between FRI, FMB, Kona, the VB Subsidiaries, Trendwest and the
Seller and such agreement as it may be amended and supplemented from time to
time.

 

“Opinion
of Counsel” shall
mean a written opinion of counsel in form and substance reasonably satisfactory
to the recipient thereof.

 

“Originator” shall
mean FRI, FMB, Kona, SDI, or a VB Subsidiary, as the case may be, or any
other Subsidiary of Cendant Corporation that originates Loans in accordance with
the Credit Standards and Collection Policies for sale to CTRG-CF.

 

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

 

“PA
Supplement” shall
have the meaning set forth in the recitals.

 

“Payment
Date” shall
mean, with respect to any Series, the payment date set forth in the related
Indenture and Servicing Agreement or in the related Indenture Supplement, as
applicable.

 

“Permitted
Encumbrance” shall
mean, with respect to a Loan, any of the following Liens against the related
Timeshare Property: (i) the interest therein of the Obligor and/or the Nominee,
as the case may be, (ii) the Lien of due and unpaid Assessments, (iii)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, such exceptions appearing of record being consistent
with the normal business practices of CTRG-CF and FRI or specifically disclosed
in the applicable land sales registrations filed with the applicable regulatory
agencies and (iv) other matters to which properties of the same type as those
underlying such Loan are commonly subject that do not materially interfere with
the benefits of the security intended to be provided by such Timeshare
Property.

 

“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 any other
organization or entity, 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.

 

 

“Plan
Insolvency” shall
mean, with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.

 

“POA” shall
mean each property owners’ association or similar timeshare owner body for a
Timeshare Property Regime or Resort or portion thereof, in each case established
pursuant to the declarations, articles or similar charter documents applicable
to each such Timeshare Property Regime, Resort or portion thereof.

 

“Points” shall
mean, with respect to any lodging unit at a Timeshare Property Regime, the
number of points of symbolic value assigned to such unit pursuant to the
FairShare Plus Program.

 

“Pool
Purchase Agreement” shall
mean (i) with respect to Series 2002-1 Notes, the master purchase agreement
dated as of August 29, 2002, as amended and restated as of November 14, 2005, by
and between the Company and the Initial Issuer and all amendments thereof and
supplements thereto and (ii) with respect to any Additional Series, the Term
Purchase Agreement by and between the Company and the Additional Issuer which
issues such Additional Series.

 

“Pool
Purchase Price” shall
mean, with respect to any Series, the Pool Purchase Price as defined in the
related PA Supplement.

 

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

 

“Purchase” shall
mean, with respect to any Series, a Purchase as defined in the related PA
Supplement.

 

“Purchaser” shall
have the meaning set forth in the preamble.

 

“Qualified
Substitute Loan” shall
mean, with respect to any Series, a substitute Loan that (i) is an Eligible Loan
on the applicable date of substitution for such substitute Loan, (ii) on such
date of substitution has a Loan Rate not less than the Loan Rate of the
substituted Loan and (iii) is not selected in a manner adverse to the Purchaser
or its assignees.

 

“Records” shall
mean all copies of Loans (not including originals) and other documents, books,
records and other information (including without limitation computer programs,
tapes, discs, punch cards, data processing software and related property and
rights) maintained by the Seller or any of its respective Affiliates (including
without limitation each Originator, but not including the Purchaser or the
Issuer) with respect to Loans, the related Transferred Assets and the related
Obligors.

 

“Reorganization” shall
mean, with respect to any Multiemployer Plan, the condition that such Plan is in
reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable
Event” shall
mean any of the events described in Section 4043 of ERISA.

 

 

“Repurchase
Date” shall
mean, with respect to any Series, the Repurchase Date as defined in the related
PA Supplement.

 

“Repurchase
Price” shall
mean, with respect to any Series, the Repurchase Price as defined in the related
PA Supplement.

 

“Reservation
System” shall
mean the system with respect to Timeshare Properties pursuant to which a
reservation for a particular location, time, length of stay and unit type is
received, accepted, modified or canceled.

 

“Reserve
Account” shall,
with respect to any Series, mean any reserve account established pursuant to the
related Indenture Supplement.

 

“Resort” shall
mean each resort or development listed on Schedule 2 (as such Schedule 2 may be
amended from time to time with the written consent of the Company and the Seller
in connection with proposed sales of Additional Loans relating to resorts or
developments with respect to which Loans have not previously been sold under
this Agreement).

 

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

 

“SDI” shall
mean Shawnee Development, Inc., a Pennsylvania corporation.

 

“SDI
Addition Date” means
the date on which Loans originated by SDI are first sold to the Purchaser under
the terms of this Agreement and a PA Supplement.

 

“Seller” shall
have the meaning set forth in the preamble.

 

“Series” shall
mean (i) with respect to the sale of Loans to the Purchaser pursuant to a PA
Supplement, all Loans sold pursuant to a PA Supplement and (ii) with respect to
Notes, the Series 2002-1 Notes or any Additional Series.

 

“Series
Termination Date” shall
mean, with respect to any Series, the Series Termination Date as defined in the
related PA Supplement or Indenture and Servicing Agreement.

 

“State” shall
mean any of the 50 United States or the District of Columbia.

 

“Subservicer” shall
have the meaning set forth in the Indenture and Servicing
Agreement.

 

“Subservicing
Agreement” shall
have the meaning set forth in the Indenture and Servicing
Agreement.

 

“Subsidiary” shall
mean, with respect to any Person, any corporation or other entity of which more
than 50% of the outstanding capital stock or other ownership interests having
ordinary voting power to elect a majority of the board of directors of such
corporation (notwithstanding that at the time capital stock of any other class
or classes of such corporation 

 

 

shall or
might have voting power upon the occurrence of any contingency) or other persons
performing similar functions is at the time directly or indirectly owned by such
Person.

 

“Substitution
Adjustment Amount” shall,
with respect to any Series, have the meaning set forth in the related PA
Supplement.

 

“Term
Purchase Agreement” shall
mean a purchase agreement between the Purchaser and an Additional Issuer
pursuant to which the Purchaser sells Loans to the Additional Issuer and the
Additional Issuer purchases such Loans for the purpose of pledging the Loans to
secure a Series of Notes. 

 

“Timeshare
Price” shall
mean the original price of the Timeshare Property paid by an Obligor,
plus any
accrued and unpaid interest and other amounts owed by the Obligor.

 

“Timeshare
Property” shall
mean the underlying ownership interest that is the subject of a Loan, which
ownership interest may be either a Fixed Week, a UDI or the Points with respect
thereto under the FairShare Plus Program.

 

“Timeshare
Property Regime” shall
mean any of the various interval ownership regimes located at a Resort, each of
which is an arrangement established under applicable state law whereby all or a
designated portion of a development is made subject to a declaration permitting
the transfer of Timeshare Properties therein, which Timeshare Properties shall,
in the case of Fixed Weeks and UDIs, constitute real property under the
applicable local law of each of the jurisdictions in which such regime is
located.

 

“Timeshare
Upgrade” shall
mean the upgrade by an Obligor of the Obligor’s existing Timeshare Property to
an upgraded Timeshare Property or an obligor’s purchase of an additional
Timeshare Property.

 

“Title
Clearing Agreement” shall
mean, with respect to certain Loans that are Installment Contracts, each of (a)
the Sixteenth Amended and Restated Title Clearing Agreement dated as of August
11, 2005, as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, by and among the Issuer, FRI, CTRG-CF, the
Purchaser, Lawyers Title Insurance Corporation, the Collateral Agent and the
other parties thereto; (b) the Fourteenth Amended and Restated Title Clearing
Agreement (Colorado) dated as of August 11, 2005, as amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof, by
and among the Issuer, FRI, CTRG-CF, the Purchaser, Colorado Land Title Company,
the Collateral Agent and the other parties thereto; (c) the Twelfth Amended and
Restated Title Clearing Agreement (Westwinds) dated as of August 11, 2005, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof, by and among the Issuer, FRI, CTRG-CF, the Purchaser, Lawyers
Title Insurance Corporation, the Collateral Agent and the other parties thereto;
(d) the Eleventh Amended and Restated Nashville Title Clearing Agreement dated
as of August 11, 2005, as amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof, by and among the Issuer, FRI,
CTRG-CF, the Purchaser, Lawyers Title Insurance Corporation, the Collateral
Agent and the other parties thereto; (e) the Eleventh Amended and Restated
Seawatch Plantation Title Clearing Agreement dated as of August 11, 2005, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof, by and among the Issuer, FRI, FMB, CTRG-CF, the Purchaser,
Lawyers Title Insurance Corporation, the Collateral Agent and the other parties
thereto; (f) the Thirteenth Amended and Restated Supplementary Trust Agreement
(Arizona) dated as of August 11, 2005, as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, by and among
the Issuer, FRI, CTRG-CF, the Purchaser, First American Title Insurance
Corporation, the Collateral Agent and the other parties thereto; (g) the Seventh
Amended and Restated Nevada Title Clearing Agreement dated as of August 11,

 

 

2005, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof, by and among the Issuer, FRI, CTRG-CF, the Purchaser,
Lawyer’s Title of Nevada, Inc., the Collateral Agent and the other parties
thereto; and (h) such other title clearing agreements and other similar
documents, instruments and agreements which may be entered into from time to
time by each of FRI, CTRG-CF, the Issuer, the Purchaser and the Collateral Agent
(among other Persons) in accordance with the transactions contemplated by this
Agreement and other Facility Documents relating to the Timeshare
Properties.

 

“Transferred
Assets” shall
mean, with respect to any Series, any and all right, title and interest of the
Seller in, to and under:

 

(a) the Loans
from time to time, including without limitation the Initial Loans as of the
close of business on the Cut-Off Date and the Additional Loans as of the close
of business on the related Addition Cut-Off Dates and all Scheduled Payments,
other Collections and other funds received in respect of such Initial Loans and
Additional Loans on or after the Cut-Off Date or Addition Cut-Off Date, as
applicable, and any other monies due or to become due on or after the Cut-Off
Date or Addition Cut-Off Date, as applicable, in respect of any such Loans, and
any security therefor;

 

(b) (i) the
Timeshare Properties relating to the Loans and (ii) the Title Clearing
Agreements and the FairShare Plus Program (including without limitation the
FairShare Plus Agreement) to the extent that they relate to such Timeshare
Properties;

 

(c) any
Mortgages relating to the Loans;

 

(d) any
Insurance Policies relating to the Loans;

 

(e) the Loan
Files and other Records relating to the Loans;

 

(f) the Loan
Conveyance Documents relating to the Loans;

 

(g) 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 or
other disposition of the Transferred Assets, and including all payments under
Insurance Policies (whether or not any of the Seller, the Purchaser, any
Originator, the Master Servicer, the Issuer 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 

 

 

Transferred
Assets, and any security granted or purported to be granted in respect of any
Transferred Assets; and 

 

(h) all
proceeds of any of the foregoing property described in clauses (a) through
(g).

 

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

 

“Trendwest” shall
mean Trendwest Resorts, Inc., a wholly-owned indirect Subsidiary of
Cendant.

 

“Trustee” shall
mean with respect to each Indenture and Servicing Agreement, the entity
designated as the trustee under such agreement.

 

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

 

“UDI” shall
mean an individual interest in fee simple (as tenants in common with all other
undivided interest owners) in a lodging unit or group of lodging units at a
Resort.

 

“VB
Partnerships” shall
have the meaning set forth in the preamble.

 

“VB
Subsidiaries” shall
have the meaning set forth in the preamble.

 

Section
2.   Purchase and Sale of Loans.

 

The
Seller may from time to time sell and assign to the Company, and the Company may
from time to time Purchase from the Seller, all the Seller’s right, title and
interest in, to and under the Loans listed on the Loan Schedule with respect to
the related PA Supplement. The principal terms of the Purchase and sale of Loans
for each Series shall be set forth in the related PA Supplement.

 

Section
3.   Pool Purchase Price.

 

Provisions
with respect to the Purchase and sale of the Loans for each Series shall be set
forth in the related PA Supplement.

 

The
purchase price for any Additional Loans and other related Transferred Assets
(the “Additional
Pool Purchase Price”)
conveyed to the Company under this Agreement and the related PA Supplement on
each Addition Date shall be a dollar amount equal to the aggregate outstanding
principal balance of such Additional Loans sold on such date, subject to
adjustment to reflect such factors as the Company and the Seller mutually agree
will result in an Additional Pool Purchase Price equal to the fair market value
of such Additional Loans and other related Transferred Assets.

 

 

 

Section
4.   Payment of Purchase Price.

 

(a)
 Closing Dates. On the
terms and subject to the conditions of this Agreement and the related PA
Supplement, payment of the Pool Purchase Price for each Series shall be made by
the Company on the related Closing Date in immediately available funds to the
Seller to such accounts at such banks as the Seller shall designate to the
Company not less than one Business Day prior to the such Closing Date.

 

(b)
Manner of Payment of Additional Pool Purchase Price. On the
terms and subject to the conditions in this Agreement and the related PA
Supplement, the Company shall pay to the Seller, on each Business Day on which
any Additional Loans are purchased from the Seller by the Company pursuant to
Section 2 of the related PA Supplement, the Additional Pool Purchase Price for
such Additional Loans by paying such Additional Pool Purchase Price to the
Seller in cash.

 

(c)
Scheduled Payments Under Loans and Cut-Off Date. The
Company shall be entitled to all Scheduled Payments, other Collections and all
other funds with respect to any Loan received on or after the related Cut-Off
Date or Addition Cut-Off Date, as applicable. The principal balance of each Loan
as of the related Cut-Off Date or Addition Cut-Off Date, as applicable, shall be
determined after deduction, in accordance with the terms of each such Loan, of
payments of principal received before such Cut-Off Date or Addition Cut-Off
Date.

 

Section
5. Conditions Precedent to Sale of Loans.

 

No
Purchase of Loans and related Transferred Assets shall be made hereunder or
under any PA Supplement on any date on which:

 

(a) the
Company does not have sufficient funds available to pay the related Pool
Purchase Price or Additional Pool Purchase Price in cash; or 

 

(b) an
Insolvency Event has occurred and is continuing with respect to the Seller or
the Company.

 

Section
6. Representations and Warranties of the Seller, FRI, FMB, SDI and the
VB Subsidiaries.

 

(a)
General Representations and Warranties of the Seller, FRI, FMB, SDI and the
VB Subsidiaries. The
Seller, FRI, FMB, SDI and the VB Subsidiaries jointly and severally represent
and warrant as of each Closing Date and as of each Addition Date (except that
SDI makes any representations and warranties with respect to SDI only as of the
SDI Addition Date, as of each Closing Date occurring after the SDI Addition Date
and as of each Addition Date occurring after the SDI Addition Date), or as of
such other date specified in such representation and warranty,
that:

 

 

(i) Organization
and Good Standing.

 

(A) Each of
the Seller, FRI, FMB, SDI and the VB Subsidiaries (other than the VB
Partnerships) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its organization and has full corporate
power, authority and legal right to own its properties 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 Agreement, any
related PA Supplement and each of the Facility Documents to which it is a party.
Each of the Seller, FRI, FMB, SDI and the VB Subsidiaries (other than the VB
Partnerships) is organized in the jurisdiction set forth in the preamble. Each
of the Seller, FRI, FMB, SDI and the VB Subsidiaries (other than the VB
Partnerships) 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 in which failure to qualify or to obtain such licenses and
approvals would render any Loan unenforceable by any of the Seller, FRI, FMB,
SDI or the VB Subsidiaries (other than the VB Partnerships). 

 

(B) Each of
the VB Partnerships is a general partnership duly organized and validly existing
under the laws of the State of Florida and has full power, authority and legal
right to own its properties 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 Agreement, any related PA
Supplement and each of the Facility Documents to which it is a party. Each of
the VB Partnerships is duly qualified to do business and is in good standing 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
Loan unenforceable by any of the VB Partnerships. 

 

(C) The name
of each of the Seller, FRI, FMB, SDI and the VB Subsidiaries set forth in the
preamble of this Agreement is the correct legal name of such entity, and such
name has not been changed in the past six years (except that CTRG-CF changed its
name from Fairfield Acceptance Corporation-Nevada to Cendant Timeshare Resort
Group—Consumer Finance, Inc. on August 31, 2004 and FRI changed its name from
Fairfield Communities, Inc. to Fairfield Resorts, Inc. on June 26, 200l). None
of the Seller, FRI, FMB, SDI or the VB Subsidiaries utilizes any trade names,
assumed names, fictitious names or “doing business names.” 

 

(ii) Due
Authorization and No Conflict. The
execution, delivery and performance by each of the Seller, FRI, FMB, SDI and the
VB Subsidiaries of each of the Facility Documents to which it is a party, and
the consummation by each such party of the transactions contemplated hereby and
under each other Facility Document to which it is a party, has been duly
authorized by the Seller, FRI, FMB, SDI and the VB Subsidiaries, respectively,
by all necessary corporate or partnership action, does not contravene (i) the
Seller’s, FRI’s, FMB’s, SDI's or the VB Subsidiaries’ charter or by-laws or
partnership agreement, (ii) any law, rule or regulation applicable to the
Seller, 

 

FRI, FMB,
SDI or the VB Subsidiaries, (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 any of the Seller, FRI, FMB, SDI or the VB Subsidiaries or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting the
Seller, FRI, FMB, SDI, the VB Subsidiaries or their properties (except where
such contravention would not have a Material Adverse Effect with respect to such
Persons or properties), and do not result in (except as provided in the Facility
Documents) or require the creation of any Lien upon or with respect to any of
their properties; and no transaction contemplated hereby requires compliance
with any bulk sales act or similar law. Each of the Facility Documents to which
the Seller, FRI, FMB, SDI or the VB Subsidiaries is a party have been duly
executed and delivered on behalf of the Seller, FRI, FMB, SDI or the VB
Subsidiaries, as applicable. To the extent that this representation is being
made with respect to Title I of ERISA or Section 4975 of the Code, it is made
subject to the assumption that none of the assets being used to purchase the
Loans and Transferred Assets constitute assets of any Benefit Plan or Plan with
respect to which the Seller is a party in interest or disqualified person.

 

(iii) Governmental
and Other Consents. All
approvals, authorizations, consents or orders of any court or governmental
agency or body required in connection with the execution and delivery by the
Seller, FRI, FMB, SDI or the VB Subsidiaries of this Agreement, any related PA
Supplement or any of the other Facility Documents to which it is a party, the
consummation by such party of the transactions contemplated hereby or thereby,
the performance by such party of and the compliance by such party 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 such Party. 

 

(iv) Enforceability
of Facility Documents. Each of
the Facility Documents to which any of the Seller, FRI, FMB, SDI or the VB
Subsidiaries is a party has been duly and validly executed and delivered by the
Seller, FRI, FMB, SDI or the VB Subsidiaries, as applicable, and constitutes the
legal, valid and binding obligation of the Seller, FRI, FMB, SDI or the VB
Subsidiaries, as applicable, enforceable against it 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). 

 

(v) No
Litigation. Except
as disclosed in Schedule 5 to this Agreement or to any Assignment, there are no
proceedings or investigations pending, or to the knowledge of the Seller, FRI,
FMB, SDI or the VB Subsidiaries threatened, against the Seller, FRI, FMB, SDI or
the VB Subsidiaries before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (A) asserting the invalidity
of this Agreement or any of the other Facility Documents, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the other Facility Documents, (C) seeking any
determination or ruling that would adversely affect the performance by any of
the Seller, FRI, FMB, SDI or the VB Subsidiaries of its obligations under this
Agreement, any related PA Supplement or any of the other Facility Documents to
which it is a party, (D) seeking any determination or ruling that would

 

 

adversely
affect the validity or enforceability of this Agreement or any of the other
Facility Documents or (E) seeking any determination or ruling that would,
if adversely determined, be reasonably likely to have a Material Adverse Effect
with respect to such party.

 

(vi) Governmental
Regulations. Neither
the Seller, FRI, FMB, SDI nor any of the VB Subsidiaries is (A) an “investment
company” registered or required to be registered under the Investment Company
Act of 1940, as amended, or (B) a “public utility company” or a “holding
company,” a “subsidiary company” or an “affiliate” of any public utility company
within the meaning of Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(ii) of the
Public Utility Holding Company Act of 1935, as amended.

 

(vii) Margin
Regulations. Neither
the Seller, FRI, FMB, SDI nor any of the VB Subsidiaries is 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 such term is
defined or used in any of Regulations T, U or X of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the notes issued by
the Issuer has been used by the Seller, FRI, FMB, SDI or any of the VB
Subsidiaries for so purchasing or carrying margin stock or for any purpose that
violates or would be inconsistent with the provisions of any of
Regulations T, U or X of the Board of Governors of the Federal Reserve
System. 

 

(viii) Location
of Chief Executive Office and Records. The
principal place of business and chief executive office of FRI and FMB, and the
office where FRI and FMB maintain all of their Records, is located at 8427 South
Park Circle, Orlando, Florida 32819; the principal place of business and chief
executive office of the Seller, and the office where the Seller maintains all of
its Records, is 10750 West Charleston Blvd., Suite 130, Las Vegas, Nevada 89135;
the principal place of business and chief executive office of SDI, and the
office where SDI maintains all of its Records shall be provided by written
notice given by Shawnee to the Trustee for the Series 2002-1 Notes on or prior
to the SDI Addition Date; and the principal place of business and chief
executive office of each of the VB Subsidiaries is located at 8427 South Park
Circle, Orlando, Florida 32819. None of FRI, FMB, SDI, the VB Subsidiaries or
the Seller has changed its principal place of business or chief executive office
(or the office where such entity maintains all of its Records) during the
previous six years (except that FRI and FMB changed their principal place of
business and chief executive office from 8669 Commodity Circle, Suite 200,
Orlando, Florida 32819 to the address set forth above on February 18, 2002;
CTRG-CF changed its principal place of business and chief executive office from
7730 West Sahara Avenue, Suite 105, Las Vegas, Nevada 89117 to the address set
forth above in 2002; and each of the VB Subsidiaries changed its principal place
of business and chief executive office from 6400 North Andrews Avenue, Fort
Lauderdale, Florida 33309 to the address set forth above in 2001). At any time
after the Initial Closing Date, upon 30 days’ prior written notice to the
Trustee as assignee of the Company and the Issuer, any of the Seller, FRI, FMB,
SDI and the VB Subsidiaries may change its name or may change its type or its
jurisdiction of organization to another jurisdiction within the United States
and any of the VB Partnerships may change the location of its chief executive
office, but only so long as all action necessary or reasonably requested by the
Company to amend the 

 

 

existing
financing statements and to file additional financing statements in all
applicable jurisdictions to perfect the transfer of the Loans and the related
Transferred Assets is taken.

 

(ix) Lockbox
Accounts. Except
in the case of any Lockbox Account pursuant to which only Collections in respect
of Loans subject to a PAC or Credit Card Account are deposited, each of the
Seller, FRI, FMB, SDI and the VB Subsidiaries, as applicable, has filed a
standing delivery order with the United States Postal Service authorizing each
Lockbox Bank to receive mail delivered to the related Post Office Box. The
account numbers of all Lockbox Accounts, together with the names, addresses, ABA
numbers and names of contact persons of all the Lockbox Banks maintaining such
Lockbox Accounts and the related Post Office Boxes (other than those separately
identified in an Indenture and Servicing Agreement), are set forth in Schedule
4. From and after the Initial Closing Date, none of the Seller, FRI, FMB, SDI or
the VB Subsidiaries shall have any right, title and/or interest in or to any of
the Lockbox Accounts or the Post Office Boxes and will maintain no Lockbox
accounts in their own names for the collection of payments in respect of the
Loans. None of the Seller, FRI, FMB, SDI or the VB Subsidiaries has any lockbox
or other accounts for the collection of payments in respect of the Loans other
than the Lockbox Accounts. 

 

(x) Facility
Documents. This
Agreement and any PA Supplement are the only agreements pursuant to which the
Seller sells the Loans and other related Transferred Assets to the Company. Each
of the Seller, FRI, FMB SDI and the VB Subsidiaries has furnished to the Company
true, correct and complete copies of each Facility Document to which any of the
Seller, FRI, FMB, SDI and the VB Subsidiaries is a party, each of which is in
full force and effect. None of the Seller, FRI, FMB, SDI, any of the VB
Subsidiaries or any of its Affiliates (not including the Purchaser or the
Issuer) is in default thereunder in any material respect. 

 

(xi) Taxes. Each of
the Seller, FRI, FMB, SDI and the VB Subsidiaries has timely filed or caused to
be filed all federal, state and local tax returns required to be filed by it,
and has paid or caused to be paid all taxes shown to be due and payable on such
returns or on any assessments received 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 Seller, FRI, FMB, SDI or
any of the VB Subsidiaries, as applicable, has set aside adequate reserves on
its books in accordance with GAAP, and which proceedings have not given rise to
any Lien. 

 

(xii) Accounting
Treatment. Each of
the Seller, FRI, FMB, SDI and the VB Subsidiaries has accounted for the
transactions contemplated in the Facility Documents to which it is a party in
accordance with GAAP.

 

(xiii) ERISA. There
has been no (A) occurrence or expected occurrence of any Reportable Event with
respect to any Benefit Plan subject to Title IV of ERISA of FRI, FMB, the
Seller, SDI or any ERISA Affiliate, or any withdrawal from, or the termination,
Reorganization or Plan Insolvency of any Multiemployer Plan or (B) institution
of proceedings or the taking of any other action by Pension Benefit Guaranty
Corporation or 

 

 

by FRI,
FMB, SDI, the Seller or any ERISA Affiliate or any such Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or Plan
Insolvency of, any such Plan. 

 

(xiv) No
Adverse Selection. No
selection procedures materially adverse to the Company, the Issuer, the
Noteholders, the Trustee or the Collateral Agent have been employed by any of
the Seller, FRI, FMB, SDI or the VB Subsidiaries in selecting the Loans for
inclusion in the Loan Pool on such Closing Date or Addition Date, as
applicable.

 

(xv) FairShare
Plus Program.

 

(A) As of
each Closing Date or any Addition Date, as applicable, for each Timeshare
Property Regime for which the related Timeshare Properties are comprised
primarily of UDIs, the ratio of (1)
the total number of Points actually allocated to such Timeshare Property Regime
pursuant to the FairShare Plus Program for the succeeding twelve-month period
to (2) the
total number of Points allocable to available space in such Timeshare Property
Regime over such twelve-month period, does not exceed 1.0 to 1.0.

 

(B) On each
Closing Date or any Addition Date, as applicable, for each owner of a UDI who is
a member of the FairShare Plus Program, the ratio,
expressed as a percentage, of (1) the number of Points allocated to such
owner in Timeshare Property Regime in return for assigning his Timeshare
Property to the FairShare Plus Program trust to (2) the
total number of Points assigned to all UDI owners in such Timeshare Property
Regime, does not exceed the percentage of such owner’s undivided interest in
such Timeshare Property Regime as described in such owner’s Loan.

 

(xvi) [Reserved].

 

(xvii) Separate
Identity. Each of
the Seller, FRI, SDI, the VB Subsidiaries and their respective Affiliates has
observed the applicable legal requirements on its part for the recognition of
the Company as a legal entity separate and apart from each of the Seller, FRI,
SDI, the VB Subsidiaries and any of their respective Affiliates (other than the
Company) and has taken all actions necessary on its part to be taken in order to
ensure that the facts and assumptions relating to the Company set forth in the
opinion of Orrick, Herrington & Sutcliffe LLP relating to substantive
consolidation matters with respect to the Seller and the Company are true and
correct; provided,
however, that
none of the Seller, FRI, FMB, SDI or any of the VB Subsidiaries makes any
representations or warranties in this Section 6(a)(xvii) with respect to the
Company or the Issuer.

 

(b) 
Representations and Warranties Regarding the Loans. The
Seller and FRI jointly and severally represent and warrant to the Company as of
the applicable Cut-Off Date and Addition Cut-Off Date as to each Loan conveyed
on and as of each Closing Date or the related Addition Date, as applicable
(except as otherwise expressly stated and except that representations
and warranties with respect to Kona apply
only to Loans conveyed on or after the Kona Addition 

 

 

Date and
representations and warranties with respect to SDI apply only to Loans conveyed
on or after the SDI Addition Date) as follows: 

 

(i) Eligibility. Such
Loan is an Eligible Loan. 

 

(ii) No
Waivers. The
terms of such Loan have not been waived, altered, modified or extended in any
respect other than (A) modifications entered into in accordance with Customary
Practices and Credit Standards and Collections Policies that do not reduce the
amount or extend the maturity of required Scheduled Payments and
(B) modifications in the applicability of a PAC (which may result in a
change in the related Loan Rate). 

 

(iii) Binding
Obligation. Such
Loan is the legal, valid and binding obligation of the Obligor thereunder and is
enforceable against the Obligor in accordance with its terms, except as such
enforceability may be limited by Debtor Relief Laws or by general principles of
equity (whether considered in a suit at law or in equity). 

 

(iv) No
Defenses. Such
Loan is not subject to any statutory right of rescission, setoff, counterclaim
or defense, including without limitation the defense of usury. 

 

(v) Lawful
Assignment. Such
Loan was not originated in, and is not subject to the laws of, any jurisdiction
the laws of which would make the transfer of the Loan under this Agreement or
any PA Supplement unlawful. 

 

(vi) Compliance
with Law. The
Originator and the Seller have complied with requirements of all material
federal, state and local laws (including without limitation usury, truth in
lending and equal credit opportunity laws) applicable to such Loan in all
material respects. The related Timeshare Property Regime is in compliance with
any and all applicable zoning and building laws and regulations and any other
laws and regulations relating to the use and occupancy of such Timeshare
Property Regime, except where such noncompliance would not have a Material
Adverse Effect with respect to the applicable Originator and the Seller. None of
the Seller, FRI, FMB, Kona, SDI or the VB Subsidiaries has received notice of
any material violation of any legal requirements applicable to such Timeshare
Property Regime, except where such violation would not have a Material Adverse
Effect with respect to the applicable Originator and the Seller. The Timeshare
Property Regime related to such Loan complies with all applicable state
statutes, including without limitation condominium statutes, timeshare statutes,
HUD filings relating to interstate land sales (if applicable) and the
requirements of any governmental authority or local authority having
jurisdiction with respect to such Timeshare Property Regime, and constitutes a
valid and conforming condominium and timeshare regime under the laws of the
State in which the related Resort is located, except where such noncompliance
would not have a Material Adverse Effect with respect to the applicable
Originator and the Seller.

 

(vii) Loan
in Force; No Subordination. Such
Loan is in full force and effect and has not been subordinated, satisfied in
whole or in part or rescinded. 

 

 

(viii) Capacity
of Parties. All
parties to such Loan had legal capacity to execute the Loan. 

 

(ix) Original
Loans. All
original executed copies of such Loans are or, within 30 days of Purchase, will
be in the custody of the Custodian except to the extent otherwise permitted
pursuant to Section 6(b)(xiv) 

 

(x) Loan
Form/Governing Law. Such
Loan was executed in substantially the form of one of the forms of Loan in
Exhibit D (as such Exhibit D may be amended from time to time with the consent
of the Seller and the Company), except for changes required by applicable law
and certain other modifications that do not, individually or in the aggregate,
affect the enforceability or collectibility of such Loan. In addition, such Loan
was originated in and is governed by the laws of the State in which the related
Resort is located.

 

(xi) Interest
in Real Property. The
Timeshare Property underlying such Loan is an interest in real property
consisting of either a Fixed Week or a UDI, and (except for a Timeshare Property
that is a Green Timeshare Property) such Timeshare Property has been deeded to a
Nominee or has been deeded to the related Obligor in accordance with the
requirements of the related Loan and applicable law. 

 

(xii) Environmental
Compliance. Each
Timeshare Property Regime related to a Loan is now, and at all times during
FRI’s ownership thereof (or the ownership of any Affiliate thereof other than
the Company and the Issuer), has been free of contamination from any substance,
material or waste identified as toxic or hazardous according to any federal,
state or local law, rule, regulation or order governing, imposing standards of
conduct with respect to, or regulating in any way the discharge, generation,
removal, transportation, storage or handling of toxic or hazardous substances,
materials or waste or air or water pollution (hereinafter referred to as
“Environmental
Laws”),
including without limitation any PCB, radioactive substance, methane, asbestos,
volatile hydrocarbons, petroleum products or wastes, industrial solvents or any
other material or substance that now or hereafter may cause or constitute a
health, safety or other environmental hazard to any person or property (any such
substance together with any substance, material or waste identified as toxic or
hazardous under any Environmental Law now in effect or hereinafter enacted shall
be referred to herein as “Contaminants”), but
excluding from the foregoing any levels of Contaminants at or below which such
Environmental Laws do not apply (“De
Minimus Levels”).
Neither FRI nor any Affiliate of FRI (other than the Company and the Issuer) has
caused or suffered to occur any discharge, spill, uncontrolled loss or seepage
of any petroleum or chemical product or any Contaminant (except for De Minimus
Levels thereof) onto any property comprising or adjoining any Timeshare Property
Regime, and neither FRI nor any Affiliate of FRI (other than the Company and the
Issuer) nor any Obligor or occupant of all or part of any Timeshare Property
Regime is now or has been involved in operations at the related Timeshare
Property Regime that could lead to liability for FRI, the Company, any Affiliate
of FRI or any other owner of such Timeshare Property Regime or the imposition of
a Lien on such Timeshare Property Regime under any Environmental Law. No
practice, procedure or policy employed by FRI (or any Affiliate thereof other
than the 

 

 

Company
and the Issuer) with respect to POAs for which FRI acts as the manager or, to
the best knowledge of the Seller, by the manager of the POAs with respect to
POAs managed by parties unaffiliated with FRI, violates any Environmental Law
that, if enforced, would reasonably be expected to (A) have a Material Adverse
Effect on such POA or the ability of such POA to do business, (B) have a
Material Adverse Effect on the financial condition of the POA or (C) constitute
grounds for the revocation of any license, charter, permit or registration that
is material to the conduct of the business of the POA. 

 

Except as
set forth in Schedule 3, (1) all property owned, managed, or controlled by
FRI or any Affiliate of FRI (other than the Company and the Issuer) and located
within a Resort is now, and at all times during FRI’s ownership, management or
control thereof (or the ownership, management or control of any Affiliate
thereof (other than the Company and the Issuer)) has been free of contamination
from any Contaminants, except for De Minimus Levels thereof, (2) neither
FRI nor any Affiliate of FRI (other than the Company and the Issuer) has caused
or suffered to occur any discharge, spill, uncontrolled loss or seepage of any
Contaminants onto any property comprising or adjoining any of the Resorts,
except for De Minimus Levels thereof, and (3) neither FRI nor any Affiliate
of FRI (other than the Company and the Issuer) nor any Obligor or occupant of
all or part of any of any Resort is now or previously has been involved in
operations at any Resort that could lead to liability for FRI, the Company, any
Affiliate of FRI or any other owner of any Resort or the imposition of a Lien on
such Resort under any Environmental Law. None of the matters set forth in
Schedule 3 will have a Material Adverse Effect with respect to the Company or
its assignees or the interests of the Company or its assignees in the Loans.
Each Resort, and the present use thereof, does not violate any Environmental Law
in any manner that would materially adversely affect the value or use of such
Resort or the performance by the POAs of their respective obligations under
their applicable declarations, articles or similar charter documents. There is
no condition presently existing, and to the best knowledge of FRI and the Seller
no event has occurred or failed to occur with respect to any Resort, relating to
any Contaminants or compliance with any Environmental Laws that would reasonably
be expected to have a Materially Adverse Effect with respect to such Resort,
including in connection with the present use of such Resort. 

 

(xiii) Tax
Liens. All
taxes applicable to such Loan and the related Timeshare Property have been paid,
except where the failure to pay such tax would not have a Material Adverse
Effect with respect to the Seller or its assignees or the Purchaser or the
collectibility or enforceability of the Loan. There are no delinquent tax liens
in respect of the Timeshare Property underlying such Loan. 

 

(xiv) Loan
Files. The
related Loan File contains the following Loan Documents (which may include
microfiche or other electronic copies of the Loan Documents to the extent
provided in the Custodial Agreement):

 

(A) for Loans
other than Loans described in clause (B) below, at least one original of each
Loan (or, if the Loan and promissory note are contained in separate documents,
an original of the promissory note); provided,
however, that
the original Loan may have been removed from the Loan File in accordance with

 

 

the
Custodial Agreement for the performance of collection services and other routine
servicing requirements; and 

 

(B) for Loans
relating to Timeshare Properties located in Resorts in North Carolina or South
Carolina with respect to which two originals of such Loans have been executed,
each original Loan is in the Loan File, and each contains the following legend
(whether by stamp or otherwise) on its face:

 

“THIS
COPY IS ONE OF TWO ORIGINALS, AND WAS EXECUTED SOLELY FOR RECORDATION. TO THE
EXTENT THAT POSSESSION OF THIS CONTRACT IS REQUIRED TO TRANSFER OR PERFECT A
TRANSFER OF ANY INTEREST IN OR TO THIS CONTRACT, POSSESSION OF THE OTHER
ORIGINAL HEREOF IS REQUIRED”; 

 

and

 

(C) for Loans
with respect to which the related Timeshare Property has been deeded out to the
related Obligor:

 

(1) a copy of
the deed for such Timeshare Property; and

 

(2) the
original recorded Mortgage (or a copy thereof, if applicable, for Mortgages that
have been submitted for recording as set forth herein) and Assignments of
Mortgages in favor of the Collateral Agent (or a copy of such recorded Mortgage
or Assignment of Mortgage, as the case may be, certified to be a true and
complete copy thereof, if the original of the recorded Mortgage or Assignment of
Mortgage is lost or destroyed), provided that, in
the case of any Loan with respect to which the related Mortgage and/or deed has
been removed from the Loan File for review and recording in the local real
property recording office: (x) the original Mortgage shall have been returned to
the Loan File no later than (1) 180 days from the related loan closing date
(in the case of Loans (other than Green Loans) relating to Timeshare Properties
located in the State of Florida), (2) 180 days from the date on which the
related Timeshare Property is required to be deeded to an Obligor in the case of
Green Loans relating to Timeshare Properties located in the State of Florida or
Loans relating to Timeshare Properties located in any state other than Florida,
Nevada, North Carolina, South Carolina or Virginia or (3) 210 days from the date
on which the related Timeshare Property is required to be deeded to an Obligor
with respect to Timeshare Properties located in Nevada, North Carolina, South
Carolina or Virginia and (y) in the case of any Loan (other than a Green
Loan) relating to a Timeshare Property located in the State of Florida, the Loan
File shall contain one or more certificates from FRI’s applicable title agents
in Florida to the effect that the related Mortgage has been delivered for
purposes of recordation to the appropriate local real property recording
office.

 

(xv) Lockbox
Accounts. As of
the applicable Cut-Off Date, the Obligor of such Loan either: 

 

 

(A) shall
have been instructed to remit Payments thereunder to a Post Office Box for
credit to a Lockbox Account or directly to a Lockbox Account, in each case
maintained at a Lockbox Bank pursuant to the terms of a Lockbox Agreement;
or

 

(B) has
entered into a PAC or Credit Card Account pursuant to which a deposit account of
such Obligor is made subject to a pre-authorized debit in respect of Payments as
they become due and payable, and the Seller has caused a Lockbox Bank to take
all necessary and appropriate action to ensure that each such pre-authorized
debit is credited directly to a Lockbox Account. 

 

(xvi) Ownership
Interest. As of
the Closing Date or related Addition Date, as applicable, the Seller has good
and marketable title to the Loan, free and clear of all Liens (other than
Permitted Encumbrances).

 

(xvii) Interest
in Loan. Such
Loan constitutes either a “general intangible,” an “instrument,” “chattel paper”
or an “account” under the Uniform Commercial Code of the States of Delaware,
Florida and New York.

 

(xviii) Recordation
of Assignments. The
collateral Assignment of Mortgage to the Collateral Agent relating to the
Mortgage with respect to each Loan has been recorded or delivered for
recordation simultaneously with the related Mortgage to the proper office in the
jurisdiction in which the related Timeshare Property is located, except to the
extent the related Timeshare Property is located in the State of Florida and the
Seller shall have delivered an Opinion of Counsel to the effect that recordation
of the Assignment of Mortgage is not necessary to perfect a security interest
therein in favor of the Collateral Agent.

 

(xix) Material
Disputes. To the
actual knowledge of the Seller, the Loan is not subject to any material
dispute.

 

(xx) Good
Title; No Liens. Upon
the Purchase hereunder occurring on such Closing Date or Addition Date, as
applicable, the Company will be the lawful owner of, and have good title to,
each Loan and all of the other related Transferred Assets that are the subject
of such Purchase, free and clear of any Liens (other than any Permitted
Encumbrances on the related Timeshare Properties). All Loans and related
Transferred Assets are purchased without recourse to any of the Seller, FRI,
FMB, Kona, SDI or the VB Subsidiaries except as described in this Agreement and
any PA Supplement. Such Purchase by the Company under this Agreement and under
any PA Supplement constitutes a valid and true sale and transfer for
consideration (and not merely the grant of a security interest to secure a
loan), enforceable against creditors of each of the Seller, FRI, FMB, Kona, SDI
and the VB Subsidiaries, and no Loan or other related Transferred Assets that
are the subject of such Purchase will constitute property of the Seller after
such Purchase. 

 

(xxi) Solvency. Each of
the Seller, FRI, FMB, Kona, SDI and the VB Subsidiaries, both prior to and
immediately after giving effect to the Purchase of Loans hereunder and under any
PA Supplement occurring on such Closing Date or Addition 

 

 

Date, as
applicable, (A) is not insolvent (as such term is defined in §101(32)(A) of
the Bankruptcy Code), (B) is able to pay its debts as they become due and
(C) 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.

 

(xxii) POA
Reserves. The
capital reserves and maintenance fee levels of the POAs related to each
Timeshare Property Regime underlying the Loans Purchased on such Closing Date or
Addition Date, as applicable, are adequate in light of the operating
requirements of such POAs. 

 

(c) Representations
and Warranties Regarding the Loan Files. The
Seller and FRI jointly and severally represent and warrant to the Company as of
each Closing Date and related Addition Date as to each Loan and the related Loan
File conveyed by it hereunder on and as of such Closing Date or related Addition
Date, as applicable (except as otherwise expressly stated) as follows:

 

(i) Possession. On or
immediately prior to each Closing Date or related Addition Date, as applicable,
the Custodian will have possession of each original Loan and the related Loan
File, and will have acknowledged such receipt and its undertaking to hold such
original Loan and the related Loan File for purposes of perfection of the
Collateral Agent’s interest in such original Loan and the related Loan File;
provided,
however, that
the fact that any document not required to be in its respective Loan File
pursuant to Section 6(b)(ix) or Section 6(b)(xiv) of this Agreement is not
in the possession of the Custodian in its respective Loan File does not
constitute a breach of this representation. 

 

(ii) Marking
Records. On or
before each Closing Date or Addition Date, as applicable, the Seller shall have
caused the portions of its computer files relating to the Loans sold on such
date to the Company to be clearly and unambiguously marked to indicate that each
such Loan has been conveyed on such date to the Company.

 

(d)
Survival of Representations and Warranties. It is
understood and agreed that the representations and warranties contained in this
Section 6 shall remain operative and in full force and effect, shall survive the
transfer and conveyance of the Loans with respect to any Series by the Seller to
the Company under this Agreement and any PA Supplement, the conveyance of the
Loans by the Company to the Initial Issuer or to an Additional Issuer pursuant
to the Pool Purchase Agreement and any Term Purchase Agreement and the Grant of
the Collateral by the Initial Issuer or any Additional Issuer to the Collateral
Agent and shall inure to the benefit of the Company, the respective Issuers, the
Trustees, the Collateral Agent and the Noteholders and their respective
designees, successors and assigns. 

 

(e)
Indemnification of the Company. FMB,
Kona, SDI, each VB Subsidiary and FRI shall jointly and severally indemnify,
defend and hold harmless the Company against any and all claims, losses and
liabilities, including reasonable attorneys’ fees (the foregoing being
collectively referred to as “Indemnified
Amounts”) that
may at any time be imposed on, incurred by or asserted against the Company as a
result of a breach by any of FMB, Kona, SDI, any VB Subsidiary or FRI of any of
its respective representations, warranties or covenants hereunder. Except as
otherwise provided in Section 11(i), FRI shall pay to the Company, on demand,
any 

 

 

and all
amounts necessary to indemnify the Company for (i) any and all recording and
filing fees in connection with the transfer of the Loans from the Seller to the
Company, and any and all liabilities with respect to, or resulting from any
delay in paying when due, any taxes (including sales, excise or property taxes)
payable in connection with the transfer of the Loans from the Seller to the
Company and (ii) costs, expenses and reasonable counsel fees in defending
against the same. The agreements in this Section 6(e) shall survive the
termination of this Agreement or any PA Supplement and the payment of all
amounts payable hereunder, under any PA Supplement and under the Loans. For
purposes of this Section 6(e), any reference to the Company shall include any
officer, director, employee or agent thereof, or any successor or assignee
thereof or of the Company. 

 

(f)
Representations and Warranties of Kona. Kona
makes those representations and warranties set forth in Exhibit F to this
Agreement as of the Kona Addition Date and as of each Closing Date occurring
after the Kona Addition Date and as of each Addition Date occurring after the
Kona Addition Date or as of such other date specified in such representation and
warranty.

 

Section
7. Repurchases or Substitution of Loans for Breach of Representations and
Warranties.

 

Provisions
with respect to the repurchase or substitution of Loans of any Series for breach
of representations and warranties under this Agreement and any PA Supplement
shall be set forth in the related PA Supplement.

 

Section
8. Covenants of the Seller and FRI.

 

(a)
Affirmative Covenants of the Seller and FRI. Each of
the Seller and FRI covenants and agrees that it will, at any time prior to the
Termination Date: 

 

(i) Compliance
with Laws, Etc. Comply
in all material respects with all applicable laws, rules, regulations and orders
with respect to it, its business and properties, provisions of ERISA, the
Internal Revenue Code and all applicable regulations and interpretations
thereunder, and all Loans and Facility Documents to which it is a
party.

 

(ii) Preservation
of Corporate Existence.
Preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation, 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
with respect to it.

 

(iii) Audits. Upon at
least two Business Days notice during regular business hours, permit the Company
and/or its agents, representatives or assigns access:

 

(A) to the
offices and properties of the Seller or FRI in order to examine and make copies
of and abstracts from all books, correspondence and 

 

Records
of the Seller or FRI as appropriate to verify the Seller’s or FRI’s compliance
with this Agreement, any PA Supplement or any other Facility Documents to which
the Seller or FRI is a party and any other agreement contemplated hereby or
thereby, and the Company and/or its agents, representatives and assigns may
examine and audit the same and make photocopies, computer tapes or other
computer replicas thereof, as appropriate, and each of the Seller and FRI will
provide to the Company and/or its agents, representatives and assigns, at the
expense of the Seller and FRI, such clerical and other assistance as may be
reasonably requested in connection therewith; and

 

(B) to the
officers or employees of the Seller or FRI designated by the Seller or FRI, as
applicable, in order to discuss matters relating to the Loans and the
performance of the Seller or FRI hereunder, under any PA Supplement or any other
Facility Documents to which the Seller or FRI is a party and any other agreement
contemplated hereby or thereby, and under the other Facility Documents to which
it is a party with the officers or employees of the Seller and FRI having
knowledge of such matters.

 

Each such
audit shall be at the sole expense of the Seller and FRI. The Company shall be
entitled to conduct such audits as frequently as it deems reasonable in the
exercise of the Company’s reasonable commercial judgment; provided,
however, that
such audits shall not be conducted more frequently than annually unless an Event
of Default or an Amortization Event shall have occurred. The Company and its
agents, representatives and assigns also shall have the right to discuss the
Seller’s and FRI’s affairs with the officers, employees and independent
accountants of the Seller and FRI and to verify under appropriate procedures the
validity, amount, quality, quantity, value and condition of, or any other matter
relating to, the Loans and other related Transferred Assets.

 

(iv) [Reserved].

 

(v) Performance
and Compliance with Receivables and Loans. At its
expense, timely and fully perform and comply in all material respects with the
Credit Standards and Collection Policies and Customary Practices with respect to
the Loans and with all provisions, covenants and other promises required to be
observed by the Seller or FRI under the Loans.

 

(vi) [Reserved].

 

(vii) Ownership
Interest. Take
such action with respect to each Loan as is necessary to ensure that the Company
maintains a first priority ownership interest in such Loan and the other related
Transferred Assets, in each case free and clear of any Liens arising through or
under the Seller or FRI and, in the case of any Timeshare Properties, other than
any Permitted Encumbrance thereon, and respond to any inquiries with respect to
ownership of a Loan sold by it hereunder by stating that, from and after the
Initial Closing Date or related Addition Date, as applicable, it is no longer
the owner of such Loan and that ownership of such Loan has been transferred to
the Company.

 

 

(viii) Instruments. Not
remove any portion of the Loans or related Transferred Assets with respect to
any Series that consists of money or is evidenced by an instrument, certificate
or other writing from the jurisdiction in which it was held under the related
Custodial Agreement unless the Company shall have first received an Opinion of
Counsel to the effect that the Company shall continue to have a first-priority
perfected ownership or security interest with respect to such property after
giving effect to such action or actions.

 

(ix) No
Release. Not
take any action, and use its best efforts not to permit any action to be taken
by others, that would release any Person from such Person’s covenants or
obligations under any document, instrument or agreement relating to the Loans or
the other Transferred Assets, or result in the 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
Agreement or any PA Supplement or such other instrument or document.

 

(x) Insurance
and Condemnation.

 

(A) FRI (1)
shall with respect to each Resort which it develops or which is developed by its
subsidiaries (other than the Purchaser or the Issuer), cause the governing
document of each such POA at the time of creation to contain covenants requiring
insurance as described in this paragraph and (2) so long as FRI or an Affiliate
(other than the Purchaser or the Issuer) maintains primary or substantial
responsibility for the management, administration or other services of a similar
nature with respect to such Resort, FRI shall do or cause to be done all things
which it may accomplish with a reasonable amount of cost or effort to cause each
POA to maintain the insurance described in this paragraph. The insurance
referred to clauses in (1) and (2) above is “all-risk” property and general
liability insurance with financially sound and reputable insurers providing
coverage in scope and amount that (x) satisfy the requirements of the
declarations (or any similar charter document) governing the POA for the
maintenance of such insurance policies and (y) are 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. So long as
FRI or an Affiliate other than the Purchaser or the Issuer maintains primary or
substantial responsibility for the management, administration or other services
of a similar nature with respect to such Resort and possesses the right to
direct the application of insurance proceeds, FRI shall use its best efforts to
apply the proceeds of any such insurance policies in the manner specified in the
related declarations (or any similar charter document) governing the POA and/or
any similar charter documents of such POA (which exercise of best efforts shall
include voting as a member of the POA or as a proxy or attorney-in-fact for a
member). For the avoidance of doubt, the parties acknowledge that the ultimate
discretion and control relating to the maintenance of any such insurance
policies is vested in the POA in accordance with the respective declaration (or
any similar charter document) relating to each Timeshare Property Regime.

 

 

(B) Each of
CTRG-CF and FRI shall remit to the Collection Account the portion of any
proceeds received pursuant to a condemnation of property in any Resort relating
to any Timeshare Property to the extent the Obligors are required to make such
remittance under the terms of one or more Loans that have been sold to the
Company hereunder and under the related PA Supplement.

 

(xi) Separate
Identity. Take
such action (and cause FMB, Kona, SDI and the VB Subsidiaries to take such
action) as is necessary to ensure compliance with Section 6(a)(xvii), including
taking all actions necessary on its part to be taken in order to ensure that the
facts and assumptions relating to the Company set forth in the opinion of
Orrick, Herrington & Sutcliffe LLP relating to substantive consolidation
matters with respect to the Seller and the Company are true and correct.

 

(xii) Computer
Files. Mark or
cause to be marked each Loan in its computer files as described in Section
6(c)(ii) and deliver to the Company, the Issuer, the Trustee and the Collateral
Agent a copy of the Loan Schedule for each Series as amended from time to
time.

 

(xiii) Taxes. 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 local tax returns
that 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 with
respect to the Purchaser, the Seller or FRI, or otherwise be reasonably expected
to expose the Purchaser, the Seller or FRI to material liability. Each of the
Seller and FRI will pay or cause to be paid all taxes shown to be due and
payable on such returns or on any assessments received 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 Seller, FRI or the
applicable Affiliate has 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 with respect to the Purchaser, the Seller or FRI, or
otherwise be reasonably expected to expose the Purchaser, the Seller or FRI to
material liability.

 

(xiv) Facility
Documents. Comply
in all material respects with the terms of, and employ the procedures outlined
under, this Agreement, any PA Supplement and all other Facility Documents to
which it is a party, and take all such action as may be from time to time
reasonably requested by the Company to maintain this Agreement, any PA
Supplement and all such other Facility Documents in full force and
effect.

 

(xv) Loan
Schedule. With
respect to any Series, promptly amend the applicable Loan Schedule to reflect
terms or discrepancies that become known after each Closing Date or any Addition
Date, and promptly notify the Company, the Issuer, the Trustee and the
Collateral Agent of any such amendments.

 

(xvi) Segregation
of Collections.
Prevent, to the extent within its control, the deposit into the Collection
Account or any Reserve Account of any funds other than Collections in respect of
the Loans with respect to any Series, and to the extent that, to its knowledge,
any such funds are nevertheless deposited into the Collection Account or any

 

 

Reserve
Account, promptly identify any such funds to the Master Servicer for segregation
and remittance to the owner thereof.

 

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

 

Negative
Covenants of the Seller and FRI. Each of
the Seller and FRI covenants and agrees that it will not, at any time prior to
the final Series Termination Date without the prior written consent of the
Company:

 

(i) Sales,
Liens, Etc. Against Loans and Transferred Assets. Except
for the transfers hereunder, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist, any Lien arising through or
under it (other than, in the case of any Timeshare Properties, any Permitted
Encumbrances thereon) upon or with respect to any Loan or other Transferred
Asset or any interest therein. Each of FRI and the Seller shall immediately
notify the Company of the existence of any Lien arising through or under it on
any Loan or other Transferred Asset.

 

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

 

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

 

(iv) Change
in Payment Instructions to Obligors. Add,
except in connection with the issuance of an Additional Series of Notes, or
terminate any bank as a bank holding any account for the collection of payments
in respect of the Loans from those listed in Exhibit E or make any change in its
instructions to Obligors regarding payments to be made to any Lockbox Account at
a Lockbox Bank, unless the Company and the Trustee shall have received
(A) 30 days’ prior written notice of such addition, termination or change,
(B) written confirmation from the Seller or FRI that, after the
effectiveness of any such termination, there will be at least one Lockbox in
existence and (C) prior to the date of such addition, termination or
change, (1) executed copies of Lockbox Agreements executed by each new
Lockbox Bank, the Seller, the Company, the Master Servicer and the Trustee and
(2) copies of all agreements and documents signed by either the Company or
the respective Lockbox Bank with respect to any new Lockbox
Account.

 

 

(v) Change
in Corporate Name, Etc. Make
any change to its name or its type or jurisdiction of organization (or, in the
case of the VB Partnerships, change the location of its chief executive office)
that existed on the Initial Closing Date without providing at least 30 days’
prior written notice to the Company and the Trustee and taking all action
necessary or reasonably requested by the Trustee to amend its existing financing
statements and file additional financing statements in all applicable
jurisdictions as are necessary to maintain the perfection of the security
interest of the Company.

 

(vi) ERISA
Matters. (A)
Engage or permit any ERISA Affiliate to engage in any prohibited transaction for
which an exemption is not available or has not previously been obtained from the
U.S. Department of Labor; (B) permit to exist any accumulated funding deficiency
(as defined in Section 302(a) of ERISA and Section 412(a) of the Internal
Revenue Code) or funding deficiency with respect to any Benefit Plan other than
a Multiemployer Plan; (C) fail to make any payments to any Multiemployer Plan
that the Seller, FRI or any ERISA Affiliate may be required to make under the
agreement relating to such Multiemployer Plan or any law pertaining thereto; (D)
terminate any Benefit Plan so as to result in any liability; (E) permit to exist
any occurrence of any Reportable Event that represents a material risk of a
liability of the Seller, FRI or any ERISA Affiliate under ERISA or the Internal
Revenue Code; provided,
however, that
the ERISA Affiliates of the Seller and FRI may take or allow such prohibited
transactions, accumulated funding deficiencies, payments, terminations and
Reportable Events described in clauses (A) through (E) above so long as such
events occurring within any fiscal year of the Seller or FRI, in the aggregate,
involve a payment of money by or an incurrence of liability of any such ERISA
Affiliate (collectively, “ERISA
Liabilities”) in an
amount that does not exceed $2,000,000 or otherwise result in liability that
would result in imposition of a lien.

 

(vii) Terminate
or Reject Loans. Without
limiting the requirements of Section 8(b)(ii), terminate or reject any 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 Loan and any related Transferred Assets have been repurchased by
the Seller pursuant to Section 7 of the related PA Supplement.

 

(viii) Facility
Documents. Except
as otherwise permitted under Section 8(b)(ii), (A) terminate, amend or otherwise
modify any Facility Document to which it is a party or grant any waiver or
consent thereunder or (B) terminate, amend or otherwise modify the FairShare
Plus Agreement; provided,
however, that
(1) the Title Clearing Agreements may be amended for the purposes of (x) making
additional properties subject thereto, (y) making an Affiliate of FRI a
party thereto having the same rights and obligations thereunder as FRI or (z)
identifying a separate pool of loans (which shall not include Loans sold to the
Company hereunder) to be sold or pledged to secure debt under a pooling or
financing arrangement similar to that evidenced by the Indenture and Servicing
Agreement, and (2) the FairShare Plus Agreement may be amended from time to time
(x) to substitute or add additional parties thereto, (y) to comply with state
and federal laws or regulations or (z) for any other purpose, provided that
with respect to this Section 8(b)(viii), FRI or the Seller furnishes to the
Company, the Issuer and the Trustee 

 

 

an
Opinion of Counsel to the effect that such amendment or modification will not
adversely affect in any material respect the respective interests of the
Company, the Issuer, the Trustee or the Collateral Agent (if applicable) in the
Loans and other Transferred Assets. 

 

(ix) Insolvency
Proceedings.
Institute Insolvency Proceedings with respect to the Company or the Issuer or
consent to the institution of Insolvency Proceedings against the Company or the
Issuer, or take any corporate action in furtherance of any such action.

 

Section
9.  Representations and Warranties of the
Company.

 

The
Company represents and warrants as of each Closing Date and Addition Date, or as
of such other date specified in such representation and warranty, that:

 

(a) The
Company is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware and has full limited liability
company power, authority, and legal right to own its properties and conduct its
business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement and any PA Supplement. The Company 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 necessary to carry on its
business as presently conducted and to perform its obligations under this
Agreement and any PA Supplement. One hundred percent (100%) of the outstanding
membership interests of the Company is directly owned (both beneficially and of
record) by CTRG-CF. Such membership interests are validly issued, fully paid and
nonassessable and there are no options, warrants or other rights to acquire
membership interests from the Company.

 

(b) The
execution, delivery and performance of this Agreement and any PA Supplement by
the Company and the consummation by the Company of the transactions provided for
in this Agreement and any PA Supplement have been duly approved by all necessary
limited liability company action on the part of the Company.

 

(c) This
Agreement and any PA Supplement constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
except as such enforceability may be subject to or limited by Debtor Relief Laws
and except as such enforceability may be limited by general principles of
equity.

 

(d) The
execution and delivery by the Company of this Agreement and any PA Supplement ,
the performance by the Company of the transactions contemplated hereby and the
fulfillment by the Company of the terms hereof applicable to the Company will
not conflict with, violate, result in any breach of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
material default under any provision of any existing law or regulation or any
order or decree of any court applicable to the Company or its certificate of
formation or limited liability company agreement or any material indenture,
contract, agreement, mortgage, deed of trust, or other material instrument to
which the Company is a party or by which it or its properties is
bound.

 

 

(e) There
are no proceedings or investigations pending, or to the knowledge of the Company
threatened, against the Company before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (A)
asserting the invalidity of this Agreement or any PA Supplement,
(B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any PA Supplement, (C) seeking any
determination or ruling that, in the reasonable judgment of the Company, would
adversely affect the performance by the Company of its obligations under this
Agreement or any PA Supplement or (D) seeking any determination or ruling
that would adversely affect the validity or enforceability of this Agreement or
any PA Supplement.

 

(f) All
approvals, authorizations, consents, orders or other actions of any person or
entity or any governmental body or official required in connection with the
execution and delivery of this Agreement and any PA Supplement by the Company,
the performance by it of the transactions contemplated hereby and the
fulfillment by it of the terms hereof, have been obtained and are in full force
and effect.

 

(g) The
Company is solvent and will not become insolvent immediately after giving effect
to the transactions contemplated by this Agreement and any PA Supplement, the
Company has not incurred debts beyond its ability to pay and, immediately after
giving effect to the transactions contemplated by this Agreement and any PA
Supplement, the Company shall have an adequate amount of capital to conduct its
business in the foreseeable future.

 

Section
10.  Covenants of the Company.

 

The
Company hereby acknowledges that the parties to the Facility Documents are
entering into the transactions contemplated by the Facility Documents in
reliance upon the Company’s identity as a legal entity separate from the Seller,
FRI, Kona, SDI, the VB Subsidiaries and their respective Affiliates. From and
after the date hereof until the final Series Termination Date under any
Indenture Supplement, the Company will take such actions as shall be required in
order that:

 

(a) The
Company will conduct its business in office space allocated to it and for which
it pays an appropriate rent and overhead allocation;

 

(b) The
Company will maintain corporate records and books of account separate from those
of the Seller, FRI, Kona, SDI, the VB Subsidiaries and their respective
Affiliates and telephone numbers and stationery that are separate and distinct
from those of the Seller, FRI, Kona, SDI, the VB Subsidiaries and their
respective Affiliates;

 

(c) The
Company’s assets will be maintained in a manner that facilitates their
identification and segregation from those of any of the Seller, FRI, Kona, SDI,
the VB Subsidiaries and their respective Affiliates;

 

(d) The
Company will observe corporate formalities in its dealings with the public and
with the Seller, FRI, Kona, SDI, the VB Subsidiaries and their respective
Affiliates and, except as contemplated by the Facility Documents, funds or other
assets of the Company will not be commingled with those of any of the Seller,
FRI, Kona, SDI, the VB Subsidiaries and their respective Affiliates. The Company
will at all times, in its dealings with the public and with 

 

 

the
Seller, FRI, Kona, SDI, the VB Subsidiaries and their respective Affiliates,
hold itself out and conduct itself as a legal entity separate and distinct from
the Seller, FRI, Kona, SDI, the VB Subsidiaries and their respective Affiliates.
The Company will not maintain joint bank accounts or other depository accounts
to which any of the Seller, FRI, Kona, SDI, the VB Subsidiaries and their
respective Affiliates (other than the Master Servicer) has independent
access;

 

(e) The duly
elected board of directors of the Company and duly appointed officers of the
Company will at all times have sole authority to control decisions and actions
with respect to the daily business affairs of the Company;

 

(f) Not less
than one member of the Company’s board of directors will be an Independent
Director. The Company will observe those provisions in its limited liability
company agreement that provide that the Company’s board of directors will not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Company unless the Independent Director and all
other members of the Company’s board of directors unanimously approve the taking
of such action in writing prior to the taking of such action;

 

(g) The
Company will compensate each of its employees, consultants and agents from the
Company’s own funds for services provided to the Company; and

 

(h) Except as
contemplated by the Facility Documents, the Company will not hold itself out to
be responsible for the debts of any of the Seller, FRI, Kona, SDI, the VB
Subsidiaries and their respective Affiliates.

 

Section
11. Miscellaneous.

 

(a)
Amendment. This
Agreement may be amended from time to time or the provisions hereof may be
waived or otherwise modified by the parties hereto by written agreement signed
by the parties hereto.

 

(b)
Assignment. The
Company has the right to assign its interests under this Agreement and any PA
Supplement as may be required to effect the purposes of the Pool Purchase
Agreement or any Term Purchase Agreement without the consent of the Seller or
FRI, and the assignee shall succeed to the rights hereunder of the Company. The
Seller agrees to perform its obligations hereunder for the benefit of the
respective Issuers, Trustees and Noteholders and for the benefit of the
Collateral Agent, and agrees that such parties are intended third party
beneficiaries of this Agreement and agrees that the Trustees (or the Collateral
Agent) and (subject to the terms and conditions of the applicable Indenture and
Servicing Agreement and any applicable Indenture Supplement) the Noteholders may
enforce the provisions of this Agreement and any PA Supplement, exercise the
rights of the Company and enforce the obligations of the Seller hereunder
without the consent of the Company.

 

(c)
Counterparts. This
Agreement may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

 

 

(d)
Termination. The
obligations of each of the Seller and FRI under this Agreement and any PA
Supplement shall survive the sale of the Loans to the Company and the Company’s
transfer of the Loans and other related Transferred Assets to the
Issuer.

 

(e)
GOVERNING LAW.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, INCLUDING §5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PRINCIPLES. 

 

(f)
Notices. All
demands and notices hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered at or mailed by certified mail, postage
prepaid and return receipt requested, or by express delivery service, to (i) in
the case of the Seller, Cendant Timeshare Resort Group—Consumer Finance, Inc.,
10750 West Charleston Blvd., Suite 130, Las Vegas, Nevada 89135, Attention:
President, or such other address as may hereafter be furnished to the Company
and FRI in writing by the Seller, (ii) in the case of FRI, FMB, Kona, SDI and
the VB Subsidiaries, c/o Fairfield Resorts, Inc., 8427 South Park Circle,
Orlando, Florida 32819, Attention: President, or such other address as may
hereafter be furnished to the Seller or the Company in writing by FRI, and (c)
in the case of the Company, Sierra Deposit Company, LLC, 10750 West Charleston
Blvd., Suite 130, Mailstop 2067, Las Vegas, Nevada 89135, Attention: President,
or such other address as may hereafter be furnished to the Seller or FRI in
writing by the Company.

 

(g)
Severability of Provisions. If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this
Agreement.

 

(h)
Successors and Assigns. This
Agreement shall be binding upon each of the Seller, FRI, Kona, SDI, the VB
Subsidiaries, the VB Partnerships and the Company and their respective permitted
successors and assigns, and shall inure to the benefit of each of the Seller,
FRI, Kona, SDI, the VB Subsidiaries, the VB Partnerships and the Company and
each of the Issuer, the Trustee and the Collateral Agent to the extent
explicitly contemplated hereby.

 

(i)
Costs, Expenses and Taxes.

 

(i) Each of
the Seller and FRI jointly and severally agrees to pay on demand to the Company
all reasonable costs and expenses, if any, incurred or reimbursed (or to be
reimbursed) by the Company (including reasonable counsel fees and expenses) in
connection with the enforcement or preservation of the rights and remedies under
this Agreement and any PA Supplement. 

 

(ii) Each of
the Seller and FRI jointly and severally agrees to pay, indemnify and hold the
Company harmless from and against any and all stamp, sales, excise and other
taxes and fees payable or determined to be payable by or reimbursed (or to be
reimbursed) by the Company in connection with the execution, delivery, filing
and 

 

recording
of this Agreement ors any PA Supplement, and against any liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees. 

 

(j) No
Bankruptcy Petition. Each of
the Seller, Kona, SDI, each VB Subsidiary, each VB Partnership and FRI covenants
and agrees not to institute against the Company or the Issuer, or join any other
person in instituting against the Company or the Issuer, any proceeding under
any Debtor Relief Law.

 

(k)
Treatment of Timeshare Upgrades.
Notwithstanding anything in this Agreement to the contrary (but subject to the
other provisions of this paragraph), the Seller (or the Master Servicer on the
Seller’s behalf) may upgrade any Timeshare Property by entering into a new Loan
with the related Obligor, but only if the proceeds of such new Loan are used to
prepay all obligations in full of such Obligor under the existing Loan (the
proceeds of which shall be the property of the Company). Upon its creation, the
new Loan created by such Timeshare Upgrade shall not be property of the Company,
but may be sold by the Seller to the Company as an Additional Loan pursuant to
the terms and conditions of this Agreement and any PA Supplement. The parties
hereto intend that the Seller (or the Master Servicer on the Seller’s behalf)
will not upgrade a Timeshare Property pursuant to this Section 11(k) in order to
provide direct or indirect assurance to the Seller, the Trustee or any
Noteholder against loss by reason of the bankruptcy or insolvency (or other
credit condition) of, or default by, the Obligor on, or the uncollectibility of,
any Loan.

IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year
first above written. 

 

	 	 	 	
       

      CENDANT
      TIMESHARE RESORT 

      GROUP-CONSUMER
      FINANCE, INC.

       
	 
	 	 	
      By:
	 /s/ Mark A. Johnson	 
	 	 	 	
      Name:
      Mark A. Johnson

      Title:
      President
	 

 

	 	 	 	
       

      FAIRFIELD
      RESORTS, INC. 

       

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

	 	 	 	
       

      FAIRFIELD
      MYRTLE BEACH, INC.

       

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

	 	 	 	
       

      SEA
      GARDENS BEACH AND TENNIS RESORT, INC.

       

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

 

 

[Signature
page for Amended and Restated CTRG-CF MLPA]

 

	 	 	 	
       

      VACATION
      BREAK RESORTS, INC.

       

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

 

	 	 	 	
       

      VACATION
      BREAK RESORTS AT STAR ISLAND, INC.

       

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

	 	 	 	
       

      PALM
      VACATION GROUP,

      by
      its General Partners:

       

      Vacation
      Break Resorts at Palm Aire, Inc.

       

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

	 	 	 	
       

       

       

      Palm
      Resort Group, Inc.

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

 

 

	 	 	 	
       

      OCEAN
      RANCH VACATION GROUP,

      by
      its General Partners:

       

      Vacation
      Break at Ocean Ranch, Inc.

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

	 	 	 	
       

      Ocean
      Ranch Development, Inc.

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

 

	 	 	 	
       

      KONA
      HAWAIIAN VACATION OWNERSHIP, LLC

      By: Fairfield
      Resorts, Inc.

      Its
      Managing Member

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

 

	 	 	 	
       

      SHAWNEE
      DEVELOPMENT, INC.

	 	 	
      By:
	 
	 	 	 	
      Name:
      Michael A. Hug

      Title:
      Senior Vice President and Chief Financial  Officer

 

	 	 	 	
       

      SIERRA
      DEPOSIT COMPANY, LLC

	 	 	
      By:
	 /s/ Michael A. Hug
	 	 	 	
      Name:
      Mark A. Johnson

      Title:
      President 

[Signature
page for Amended and Restated CTRG-CF MLPA]

 

SCHEDULE
1

Loan
Schedule

 

SCHEDULE
2

Resorts

Fairfield
Harbour

Fairfield
Glade

Fairfield
Mountains

Fairfield
Plantation

Fairfield
Saphire Valley

Fairfield
Bay

Fairfield
Flagstaff

Fairfield
Ocean Ridge

Fairfield
Pagosa

Fairfield
Music City USA

Fairfield
Branson

Fairfield
Cypress Palms

Fairfield
Williamsburg

Fairfield
Kingsgate

Fairfield
Seawatch Plantation

Fairfield
Washington DC

Daytona
Beach

Breakers

Sea
Gardens Beach & Tennis

Santa
Barbara Resort & Yacht

Palm Aire
Resort and Spa

Star
Island

Royal
Vista Resort

Destin

Grand
Desert - Las Vegas

Durango

Sedona

Governor's
Crossing

Fairfield
Ventura

Fairfield
Myrtle Beach

Fairfield
Atlantic Beach

Lake
Tahoe

Dolphin's
Cove

Royal Sea
Cliffs

Atlantic
City

Outrigger

Bonnet
Creek

Destin -
Beach Street Cottages

Kona
Hawaiian Village

Shawnee

New
Orleans (La Bella Maison)

 

SCHEDULE
3

Environmental
Issues

 

None.

 

SCHEDULE
4

Lockbox
Accounts

	
       

      Bank
	
      Account
      Name
	
       

      Account
	
       

      ABA
      Number
	
      Account
      Number
	
      Contact
      Person

	
      Bank
      of America
	
      Cendant
      Timeshare Conduit Receivables Funding, LLC - Fairfield
	
      Lockbox
	
      Wire
      026009593

      ACH
      011000138
	
      3756384323
	
      Toni
      Krantz 212-503-8471

	
      Wells
      Fargo
	
      Cendant
      Timeshare Conduit Receivables Funding, LLC - Fairfield
	
      Deposit
	
      121000248
	
      1009350057
	
      Alice
      Botello 415-222-6730

	
      JPMorgan
      Chase Bank
	
      Cendant
      Timeshare Conduit Receivables Funding, LLC - Fairfield
	
      ACH
      Collections
	
      021000021
	
      323405452
	
      Dorin
      Ladon 312-954-9288

 

SCHEDULE
5

Litigation

On July
18, 2005, a complaint was filed in Federal District Court in the Middle District
of Florida against Fairfield Resorts Inc., FairShare Vacation Owners
Association, and certain individual officers of Fairfield Resorts Inc., as
defendants. The lawsuit was filed as a purported class action on behalf of two
named couples and all similarly situated owners of Timeshare Properties at
Fairfield Resorts Inc.’s properties. The complaint alleges various counts,
including breach of contract and breaches of certain duties arising from alleged
actions of the defendants and resulting in the plaintiffs’ alleged difficulties
in reserving resort facilities. The plaintiffs seek unspecified monetary damages
and equitable remedies. The lawsuit is in an early stage, but Fairfield Resorts
Inc. believes it has meritorious defenses and intends to vigorously defend the
suit.

 

EXHIBIT
A

Forms
of Custodial Agreement

 

 

EXHIBIT
B

FORM OF
ASSIGNMENT OF ADDITIONAL LOANS

 

 

ASSIGNMENT
NO. __ OF ADDITIONAL LOANS dated as of _______, by and between CENDANT TIMESHARE
RESORT GROUP-CONSUMER FINANCE, INC., a Delaware corporation formerly known as
Fairfield Acceptance Corporation-Nevada (the “Seller”),
FAIRFIELD RESORTS, INC., a Delaware corporation, KONA HAWAIIAN VACATION
OWNERSHIP, LLC, a Hawaii limited liability company, SHAWNEE DEVELOPMENT, INC., a
Pennsylvania corporation, FAIRFIELD MYRTLE BEACH, INC., a Delaware corporation,
SEA GARDENS BEACH AND TENNIS RESORT, INC., a Florida corporation, VACATION BREAK
RESORTS, INC., a Florida corporation, VACATION BREAK RESORTS AT STAR ISLAND,
INC., a Florida corporation, PALM VACATION GROUP, a Florida general partnership,
OCEAN RANCH VACATION GROUP, a Florida general partnership, and SIERRA DEPOSIT
COMPANY, LLC, a Delaware limited liability company (the “Purchaser”),
pursuant to the Agreement referred to below.

 

WITNESSETH:

 

WHEREAS,
the Seller and the Purchaser are parties to the Master Loan Purchase Agreement
dated as of August 29, 2002 and amended and restated as of November 14, 2005,
and the Purchase Agreement Supplement dated as of August 29, 2002 and amended
and restated as of November 14, 2005 (the “PA
Supplement”) (as so
supplemented, and as such agreement may have been, or may from time to time be,
further amended, supplemented or otherwise modified, the “Agreement”);

 

WHEREAS,
pursuant to the Agreement, the Seller wishes to designate Additional Loans
(including Additional Upgrade Balances) to be included as Loans, and the Seller
wishes to sell its right, title and interest in and to the Additional Loans to
the Purchaser pursuant to this Assignment and the Agreement; and

 

WHEREAS,
the Purchaser wishes to purchase such Additional Loans subject to the terms and
conditions hereof.

 

NOW,
THEREFORE, the Seller and the Purchaser hereby agree as follows:

 

1. Defined
Terms. All
capitalized terms used herein shall have the meanings ascribed to them in the
Agreement unless otherwise defined herein.

 

“Addition
Cut-Off Date” shall
mean, with respect to the Additional Loans, __________.

 

“Addition
Date” shall
mean, with respect to the Additional Loans, __________.

 

 

“Additional
Loans” shall
mean the Additional Loans, as defined in the Agreement, that are sold hereby and
listed on Schedule 1.

 

“Additional
Transferred Assets” shall
have the meaning set forth in Section 3.

 

2. Designation
of Additional Loans. The
Seller delivers herewith a Loan Schedule containing a true and complete list of
the Additional Loans. Such Loan Schedule is incorporated into and made part of
this Assignment, shall be Schedule 1 to this Assignment and shall supplement
Schedule 1 to the Agreement.

 

3. Sale
of Additional Loans.

 

The
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Purchaser, without recourse except as provided in the Agreement, all of the
Seller’s right, title and interest in, to and under (i) the Additional
Loans as of the close of business on the Addition Cut-Off Date and all Scheduled
Payments, other Collections and other funds received in respect of such
Additional Loans on or after the Addition Cut-Off Date and any other monies due
or to become due on or after the Addition Cut-Off Date in respect of any such
Additional Loans, and any security therefor; (ii) (A) the Timeshare Properties
relating to the Timeshare Property Loans and (B) the Title Clearing Agreements
and the FairShare Plus Program (including without limitation the FairShare Plus
Agreement) to the extent that they relate to such Timeshare Properties; (iii)
any Mortgages relating to the Additional Loans; (iv) any Insurance Policies
relating to the Additional Loans; (v) the Loan Files and other Records relating
to the Additional Loans; (vi) the Loan Conveyance Documents relating to the
Additional Loans; (vii) 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 or other disposition of the Additional Transferred
Assets, and including all payments under Insurance Policies (whether or not any
of the Seller, the Purchaser, any Originator, the Master Servicer, the Issuer 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
Additional Transferred Assets, and any security granted or purported to be
granted in respect of any Additional Transferred Assets; and (viii) all proceeds
of any of the foregoing property described in clauses (i) through (vii)
(collectively, the “Additional
Transferred Assets”).

 

In
connection with the foregoing sale and if necessary, the Seller agrees to record
and file one or more financing statements (and continuation statements or other
amendments with respect to such financing statements when applicable) with
respect to the Additional Transferred Assets meeting the requirements of
applicable State law in such manner and in such jurisdictions as are necessary
to perfect the sale of the Additional Transferred Assets to the Purchaser, and
to deliver a file-stamped copy of such financing statements and continuation
statements (or other amendments) or other evidence of such filing to the
Purchaser.

 

In
connection with the foregoing sale, the Seller further agrees, on or prior to
the date of this Assignment, to cause the portions of its computer files
relating to the Additional Loans sold on such date to the Purchaser to be
clearly and unambiguously marked to indicate that each such Additional Loan has
been sold on such date to the Purchaser pursuant to the Agreement and this
Assignment.

 

 

It is the
express and specific intent of the parties that the transfer of the Additional
Loans and the other Transferred Assets relating thereto from the Seller to the
Purchaser as provided is and shall be construed for all purposes as a true and
absolute sale of such Additional Loans and Transferred Assets, shall be absolute
and irrevocable and provide the Purchaser with the full benefits of ownership of
the Additional Loans and related Transferred Assets and will be treated as such
for all federal income tax reporting and all other purposes. Without prejudice
to preceding sentence providing for the absolute transfer of the Seller’s
interest in the Additional Loans and other Transferred Assets to the Purchaser,
in order to secure the prompt payment and performance of all obligations of the
Seller to the Purchaser under the Agreement, whether now or hereafter existing,
due or to become due, direct or indirect, or absolute or contingent, the Seller
hereby assigns and grants to the Purchaser a first priority security interest in
all of the Seller’s right, title and interest, whether now owned or hereafter
acquired, if any, in, to and under all of the Additional Loans and the other
related Transferred Assets and the proceeds thereof. FRI, FMB, Kona, SDI, the VB
Subsidiaries and the Seller acknowledge that the Additional Loans and other
related Transferred Assets are subject to the Lien of the Indenture and
Servicing Agreement for the benefit of the Collateral Agent on behalf of the
Trustee and the Noteholders.

 

4. Acceptance
by the Purchaser. The
Purchaser hereby acknowledges that, prior to or simultaneously with the
execution and delivery of this Assignment, the Seller delivered to the Purchaser
the Loan Schedule described in Section 2 of this Assignment with respect to all
Additional Loans.

 

5. Representations
and Warranties of the Seller. The
Seller hereby represents and warrants to the Purchaser on the Addition Date that
each representation and warranty to be made by it on such Addition Date pursuant
to the Agreement is true and correct, and that each such representation and
warranty is hereby incorporated herein by reference as though fully set out in
this Assignment.

 

6. Ratification
of the Agreement. The
Agreement is hereby ratified, and all references to the Agreement shall be
deemed from and after the Addition Date to be references to the Agreement as
supplemented and amended by this Assignment. Except as expressly amended hereby,
all the representations, warranties, terms, covenants and conditions of the
Agreement shall remain unamended and shall continue to be, and shall remain, in
full force and effect in accordance with its terms and except as expressly
provided herein shall not constitute or be deemed to constitute a waiver of
compliance with or consent to non-compliance with any term or provision of the
Agreement.

 

7. Counterparts. This
Assignment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.

 

8. GOVERNING
LAW. THIS
ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, INCLUDING § 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PRINCIPLES.

 

[The
remainder of this page is left blank intentionally.]

IN
WITNESS WHEREOF, each of the parties hereto has caused this Assignment to be
duly executed by their respective officers as of the day and year first written
above.

	 	 	 	
       

      CENDANT
      TIMESHARE RESORT 

      GROUP-CONSUMER
      FINANCE, INC.

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	 	
       

      FAIRFIELD
      RESORTS, INC. 

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

       

	 	 	 	
       

      FAIRFIELD
      MYRTLE BEACH, INC. 

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	 	
       

      SEA
      GARDENS BEACH AND TENNIS RESORT, INC. 

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

	 	 	 	
       

      VACATION
      BREAK RESORTS, INC.

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

 

	 	 	 	
       

      VACATION
      BREAK RESORTS AT STAR ISLAND, INC.

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	 	
       

      PALM
      VACATION GROUP,

      by
      its General Partners:

       

      Vacation
      Break Resorts at Palm Aire, Inc.

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	 	
       

      Palm
      Resort Group, Inc.

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

	 	 	 	
       

      HAWAIIAN
      VACATION OWNERSHIP, LLC

      By:
      Fairfield Resorts, Inc.,

      Its
      Managing Member

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

 

	 	 	 	
       

      SHAWNEE
      DEVELOPMENT, INC.

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

	 	 	 	
       

      OCEAN
      RANCH VACATION GROUP,

      by
      its General Partners:

       

      Vacation
      Break at Ocean Ranch, Inc.

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	 	
       

      Ocean
      Ranch Development, Inc.

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

	 	 	 	
       

      SIERRA
      DEPOSIT COMPANY, LLC

       

	 	 	
      By:
	 
	 	 	 	
      Name:
      

      Title:
      

 

 

EXHIBIT
C

 

Credit
Standard and Collection Policies

 

EXHIBIT
D

 

Forms
of Loans

 

EXHIBIT
E

 

Forms of

Lockbox
Agreements

 

EXHIBIT
F

Representations
and Warranties of Kona.

 

(a) General
Representation of Kona. Kona
represents and warrants as of the Kona Addition Date, as of each Closing Date
occurring after the Kona Addition Date and as of each Addition Date occurring
after the Kona Addition Date or as of such other date specified in such
representation and warranty that:

 

(1) Organization
and Good Standing.

 

(i) Kona is a
limited liability company duly organized and validly existing and in good
standing under the laws of the State of Hawaii and has full power, authority and
legal right to own its properties 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 the Purchase Agreement, any related PA
Supplement to which it is a party, and each of the Facility Documents to which
it is a party. Kona 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 in which failure to qualify or to obtain such licenses and
approvals would render any Loan unenforceable by Kona.

 

(ii) Kona’s
name as set forth in the preamble of this Agreement is its correct legal name
and has not been changed in the past six years. Kona does not utilize any trade
name, assumed name, fictitious name or “doing business name.”

 

(2) Due
Authorization and No Conflict. The
execution, delivery and performance by Kona of each of the Facility Documents to
which it is a party and the consummation by Kona of the transactions
contemplated under the Purchase Agreement and each other Facility Document to
which Kona is a party has been duly authorized by Kona by all necessary company
action, does not contravene (i) Kona’s limited liability company agreement, (ii)
any law, rule or regulation applicable to Kona, (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 Kona or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting Kona or its
properties (except where such contravention would not have a Material Adverse
Effect with respect to Kona or its properties), and do not result in or require
the creation of any Lien upon or with respect to any of its properties; and no
transaction contemplated hereby or the Facility Documents requires compliance
with any bulk sales act or similar law. To the extent that this representation
is being made with respect to Title I of ERISA or Section 4975 of the Code, it
is made subject to the assumption that none of the assets being used to purchase
the Loans and Transferred Assets constitute assets of any Benefit Plan or Plan
with respect to which the Seller is a party in interest or disqualified
person.

 

 

(3) Governmental
and Other Consents. All
approvals, authorizations, consents or orders of any court or governmental
agency or body required in connection with the execution and delivery by Kona of
this Agreement and the consummation by Kona of the transactions contemplated
hereby, the performance by Kona of and the compliance by Kona with the terms
hereof and of the Master Loan Purchase Agreement as amended hereby have been
obtained, except where the failure to do so would not have a Material Adverse
Effect with respect to Kona.

 

(4) Enforceability
of this Agreement. This
Agreement and each of the Facility Documents to which Kona is a party has been
duly and validly executed and delivered by Kona and constitutes the legal, valid
and binding obligation of Kona, enforceable against it 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).

 

(5) No
Litigation. There
are no proceedings or investigations pending, or to the knowledge of Kona,
threatened, against Kona before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (A) asserting the
invalidity of this Agreement or any of the other Facility Documents, (B) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement or any of the other Facility Documents, (C) seeking any determination
or ruling that would adversely affect the performance by Kona of its obligations
under this Agreement or any of the Facility Documents to which it is a party,
(D) seeking any determination or ruling that would adversely affect the validity
or enforceability of this Agreement or any of the other Facility Documents or
(E) seeking any determination or ruling that would, if adversely determined, be
reasonably likely to have a Material Adverse Effect with respect to
Kona.

 

(6) Governmental
Regulations. Kona is
not (A) an “investment company” registered or required to be registered under
the Investment Company Act of 1940, as amended, or (B) a “public utility
company” or a “holding company,” a “subsidiary company” or an “affiliate” of any
public utility company within the meaning of Section 2(a)(5), 2(a)(7), 2(a)(8)
or 2(a)(ii) of the Public Utility Holding Company Act of 1935, as
amended.

 

(7) Margin
Regulations. Kona 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 such term is defined or used in any of Regulations T, U or X of the
Board of Governors of the Federal Reserve System). No part of the proceeds of
any of the notes issued by the Issuer has been used by Kona for so purchasing or
carrying margin stock or for any purpose that violates or would be inconsistent
with the provisions of any of Regulations T, U or X of the Board of Governors of
the Federal Reserve System.

 

(8) Location
of Chief Executive Office and Records. The
principal place of business and chief executive office of Kona and the office
where all of its Records are maintained, is located at Kona Hawaiian Vacation
Ownership, LLC, 75 5722 Kuakini Highway, Suite 108, Kailua Kona, Hawaii 96740.
Kona has not changed its principal place of business or chief executive office
(or the office where it maintains all of its Records) during the previous six
years. 

 

 

At any
time after the Kona Addition Date, upon 30 days’ prior written notice to the
Trustee as assignee of the Purchaser and the Issuer, Kona may change its name or
may change its type or its jurisdiction of organization to another jurisdiction
within the United States, but only so long as all action necessary or reasonably
requested by the Purchaser to amend the existing financing statements and to
file additional financing statements in all applicable jurisdictions to perfect
the transfer of the Loans and the related Transferred Assets is
taken.

 

(9) Lockbox
Accounts. Except
in the case of any Lockbox Account pursuant to which only Collections in respect
of Loans subject to a PAC or Credit Card Account are deposited, Kona has filed a
standing delivery order with the United States Postal Service authorizing each
Lockbox Bank to receive mail delivered to the related Post Office Box. The
account numbers of all Lockbox Accounts, together with the names, addresses, ABA
numbers and names of contact persons of all the Lockbox Banks maintaining such
Lockbox Accounts and the related Post Office Boxes, are set forth in Schedule 4
to the Master Loan Purchase Agreement. From and after the date of the Kona
Addition Date, Kona shall not have any right, title and/or interest in or to any
of the Lockbox Accounts or the Post Office Boxes and will maintain no Lockbox
accounts in its own name for the collection of payments in respect of the Loans.
Kona does not have any lockbox or other accounts for the collection of payments
in respect of the Loans other than the Lockbox Accounts.

 

(10) Facility
Documents. Kona
has furnished to the Company true, correct and complete copies of each Facility
Document to which it is a party, each of which is in full force and effect. Kona
is not in default thereunder in any material respect.

 

(11) Taxes. Kona
has timely filed or caused to be filed all federal, state and local tax returns
required to be filed by it, and has paid or caused to be paid all taxes shown to
be due and payable on such returns or on any assessments received by it, other
than any taxes or assessments the validity of which are being contested in good
faith by appropriate proceedings and has set aside adequate reserves on its
books in accordance with GAAP, and which proceedings have not given rise to any
Lien.

 

(12) Accounting
Treatment. Kona
has accounted for the transactions contemplated in this Agreement and the
Facility Documents in accordance with GAAP.

 

(13) ERISA There
has been no (A) occurrence or expected occurrence of any Reportable Event with
respect to any Benefit Plan subject to Title IV of ERISA of Kona, or any
withdrawal from, or the termination, Reorganization or Plan Insolvency of any
Multiemployer Plan or (B) institution of proceedings or the taking of any other
action by Pension Benefit Guaranty Corporation or by Kona or any such
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Plan Insolvency of, any such Plan.

 

(14) No
Adverse Selection. No
selection procedures materially adverse to the Purchaser, the Issuer, the
Noteholders, the Trustee or the Collateral Agent have been employed by Kona in
selecting the Loans for inclusion in the Loan Pool on any Closing Date or
Addition Date.

 

(15) Separate
Identity. Kona
has observed the applicable legal requirements on its part for the recognition
of the Purchaser as a legal entity separate and apart from the Seller; provided,
however, that Kona makes no representation or warranty in this paragraph with
respect to the Company or the Issuer.

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