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Exhibit __
SERVICING ESCROW AGREEMENT
DATED: October 12, 1993
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ "Buyer"
AND: TRENDWEST RESORTS, INC. "Seller"
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. #▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AND: SAGE SYSTEMS, INC. "Escrow Agent"
▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Pursuant to the terms of the Purchase Agreement between the Buyer and
Seller dated October 12, 1993 (the "Agreement"), the Buyer has agreed to
purchase $1,700,000.00 of Seller's contracts receivable or collateral notes
("Acquired Purchase Contracts"). Payment of the Acquired Purchase Contracts are
secured by security interests and liens in certain beneficial property interests
in condominiums and resorts, as more fully described in the Agreement.
The Escrow Agent is responsible for collecting payments under the
Acquired Purchase Contracts purchased from TRENDWEST RESORTS, INC. This
agreement provides for the designation of a Lock Box Agent which collects the
funds and forwards the funds directly to the Buyer for the account of the Buyer.
Seller has delivered the Purchase Contracts Receivable described in the
Agreement to the Escrow Agent.
This agreement requires the establishment of a reserve pool of purchase
contracts receivable in the amount of $10,000.00 at any time in order to
facilitate the replacement contracts described in Section 3 herein. Seller has
established this reserve pool.
The parties desire to establish a procedure pursuant to which Escrow
Agent holds the Acquired Purchase Contracts, collects the payments, disburses
the funds to the Buyer and Seller according to the terms herein, submits reports
regarding payment status and makes demands upon the reserve pool established by
Seller when required under this agreement.
NOW, THEREFORE, the parties agree that Escrow Agent holds the Acquired
Purchase Contracts described in the Agreement and instruments delivered pursuant
thereto, subject to the following terms and conditions:
1. Seller will deliver to Escrow Agent, as agent of the Buyer, all
Acquired Purchase Contracts designated as part of this purchase, and
Escrow Agent will hold the same on Buyer's behalf, to perfect Buyer's
security interest related thereto
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and otherwise as directed by the Buyer pursuant to the Agreement and
related documents.
2. The Escrow Agent shall collect all principal and interest and other
payments under the Acquired Purchase Contracts when and as they become
due from the various obligors and remit the monies to the Buyer and
Seller as described herein on or before the fifth (5th) day of each
month.
3. The Escrow Agent shall keep and maintain proper books of record and
account in which full, true, and correct entries shall be made of all
transactions relating to the Acquired Purchase Contracts.
4. The Escrow Agent shall submit reports to the Buyer and Seller covering
all transactions relating to the Acquired Purchase Contracts during
each calendar quarter (monthly if possible). Such reports shall be
submitted not later than the 15th day of January, April, July, and
October each year for the respective preceding calendar quarters.
5. Seller will continue to assure that a Lock Box Agreement remains in
full force and effect and that the Lock Box Agent reports regarding
payments received, including without limitation failures to make
payments, or late payments and charges, identifying the particular
Timeshare Interest and Acquired Purchase Contracts.
6. Seller shall assure that real properties taxes are paid as they become
due and fire/hazard insurance is furnished and maintained for the
benefit of the Seller on each property related to the Acquired Purchase
Contracts.
7. The Seller shall promptly notify the Buyer if and when any of the
following events or conditions affecting any of the Acquired Purchase
Contracts shall come to Seller's attention.
(a) Any loss or damage by fire or other hazard to properties covered
by the Acquired Purchase Contracts.
(b) Any deterioration or waste suffered or committed in respect to any
such property.
(c) Any other matter which would adversely affect the value of any
such property.
(d) Any failure of any obligor to make payment within the grace period
provided in the Acquired Purchase Contracts or other failure
continuing for more than 30 days to perform any covenant or other
obligation contained in the Acquired Purchase Contract which in
Seller's judgment requires enforcement against the obligor.
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(e) Any claim of default by any "Timeshare Purchaser" under an
Acquired Purchase Contract.
(f) The institution by or against any Timeshare Purchaser of any
bankruptcy or other insolvency proceedings.
8. Escrow Agent will review the report submitted by the Lock Box Agent and
determine whether any payment due under any Acquired Purchase Contract
held by Escrow Agent is delinquent for more than 90 days. If any
Acquired Purchase Contract is delinquent with respect to payment for
more than 90 days, then Escrow Agent shall immediately demand of Seller
a replacement Qualified Purchase Contract of the same or greater value.
"Qualified Purchase Contract" shall be defined as a contract receivable
or collateral note owned by Seller that is not in default or is not
subject to any of the specific events described in Paragraph 7 herein.
Escrow Agent shall notify the Buyer of the demand. If Seller fails to
provide a Qualified Purchase Contract of the same or greater value
(such qualification and value to be determined by Seller) within 15
days after demand, then Escrow Agent shall notify Seller and the Buyer
in writing of the failure. In the event the Seller submits a Qualified
Purchase Contract from the reserve pool described above, the Seller
shall restore the reserve pool to the $50,000.00 level described
hereinabove. Escrow Agent is not required to do more than send the
demand and other notices described in this Agreement, and in particular
is not required to bring suit or otherwise take any action with respect
to any failure to respond to written notices or demands.
9. Upon tender of Qualified Purchase Contract, Escrow Agent will assure
that Seller receives the original Acquired Purchase Contract and all
other documents described as an "Acquired Purchase Contract" under this
agreement. The Buyer will deliver to or otherwise make available to
Seller any purchase agreements, security agreements, or copies thereof
and other documents in its possession as Seller may reasonably need to
enforce the same against any obligor or Timeshare Purchaser. A copy of
the standard documents used are attached hereto as exhibits.
10. Seller shall not add to, modify, or waive any of the terms, conditions,
or other provisions of any of the Acquired Purchase Contracts without
the prior written consent of Buyer.
11. For the services rendered hereunder, Seller agrees to pay Escrow Agent
any and all escrow fees to set up or replace Acquired Purchase
Contracts held in the escrow.
12. Seller shall perform all services required hereunder without further
charge, and may retain, provided Seller is not in default under the
Agreement or any agreement related thereto:
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(a) Fifty percent of any late payment charges arising by failure of
the Timeshare Purchaser to make timely payments of principal and
interest.
(b) Fees for change of ownership, substitution of insurance policies,
modifications, mortgagee's statements, other default penalties and
amounts payable by Timeshare Purchasers, and any other fees or
charges arising out of the servicing of the Acquired Purchase
Contracts.
Prepayment penalties, if any, shall be paid to the Buyer.
13. The Buyer shall have the option at any time upon notice to Seller and
Escrow Agent to terminate this servicing arrangement and to service the
Acquired Purchase Contracts itself or through others. If the Buyer
should so elect, Seller and Escrow Agent shall immediately return to
Buyer, without charge, all Acquired Purchase Contracts and papers,
documents and funds, if any, then held by Seller and Escrow Agent with
respect to the Acquired Purchase Contracts.
This Servicing Escrow Agreement shall have no force and effect unless
and until signed by all three parties hereto (by counterpart) , in the space
provided below, but will thereafter bind the successors and assigns of each
party.
Buyer:
____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Seller: TRENDWEST RESORTS, INC.
By:_________________________
Its:________________________
Escrow Agent: SAGE SYSTEMS, INC.
By:_________________________
Its:________________________
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▇▇▇▇ OF SALE
FOR VALUE RECEIVED, TRENDWEST RESORTS, INC., a Washington corporation
(referred to herein as "Seller") sell, assign and transfer to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ (collectively referred to as "Buyer"), all of Seller's right, title
and interest in the Acquired Purchase Contracts as of the Effective Time. The
property being conveyed pursuant to this ▇▇▇▇ of Sale is listed on Appendix "A",
attached hereto.
This ▇▇▇▇ of Sale is given pursuant to that certain Purchase Agreement
dated as of October 12, 1993, between Seller and Buyers ("Agreement"), which is
incorporated herein by reference and which contains certain warranties and
disclaimers applicable for this instrument. All capitalized terms in this ▇▇▇▇
of Sale shall have the meanings specified in the Agreement.
DATED this 12th day of October, 1993.
TRENDWEST RESORTS, INC.
By:______________________
Its:_____________________
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ASSIGNMENT AND ASSUMPTION AGREEMENT
FOR VALUE RECEIVED, (i) TRENDWEST RESORTS, INC., a Washington
corporation and (referred to herein as "Assignor"), assign, transfer and set
over to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (referred to as "Assignee"), all of Assignor's
right, title and interest as of the Effective Time in the Acquired Purchase
Contracts described in that certain Purchase Agreement dated as of October 12,
1993 between Assignor and Assignee ("Agreement"), and listed in the attached
Schedule; and (ii) the Assignee hereby assumes and agrees to perform all
obligations of Assignor under said contracts, which arise or mature after the
Effective Time.
This Assignment and Assumption Agreement is executed pursuant to the
Agreement, which contains warranties, rights and limitations with respect to the
obligations assigned and assumed hereunder and which Agreement is incorporated
herein by this reference. All capitalized terms in this instrument shall have
the meanings set forth in the Agreement, unless separately defined herein.
DATED this 12th day of October, 1993.
ASSIGNEE: ASSIGNOR:
TRENDWEST RESORTS, INC.
______________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By:________________________
Its:_______________________
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