SECOND AMENDED AND RESTATED INVENTORY LOAN AND SECURITY AGREEMENT

(i)Interest shall accrue on the Loan, as more particularly provided for in this paragraph, and shall be due monthly in arrears on the first day of the month following the month in respect of which such interest accrued, provided that all accrued and unpaid interest on the Maturity Date shall be due on the Maturity Da te, subject to earlier prepayment as provided herein or in any other Loan Document. Interest shall be applied as provided in Section 2.3(a)(ii). Subject to the accrual of interest on the Loan after the occurrence of a Default or Event of Default, as more particularly provided in this paragraph (f), the Monthly Average Weighted Loan Balance in respect of the Loan for each calendar month shall bear interest at a rate per annum equal to the applicable Interest Rate.

(ii)Interest and all fees under this Agreement shall be calculated under this paragraph on the basis of actual days elapsed over a period of a 360 day year.

(iv)Whenever, subsequent to the date of this Agreement, the LIBOR Rate is increased or decreased, the Interest Rate shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the LIBOR Rate on and after the day of such change (subject to the Maximum Rate).

(v)Borrower and Lender intend to comply at all times with applicable usury laws. All agreements between Borrower and Lender, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of demand or acceleration of the maturity of the Loan or otherwise, shall the interest contracted for, charged, received, paid or agreed to be paid to Lender exceed the maximum amount permissible under Applicable Law (the “Maximum Rate”). Lender may, in determining the Maximum Rate in effect from time to time, take advantage of any law, rule or regulation in effect from time to time available to Lender which exempts Lender from any limit upon the rate of interest it may charge or grants to Lender the right to charge a higher rate of interest than that otherwise permitted by Applicable Law. If, from any circumstance whatsoever, interest would otherwise be payable to Lender in excess of the Maximum Rate, the interest payable to Lender shall be reduced to the Maximum Rate; and if from any circumstance Lender shall ever receive anything of value deemed interest by Applicable Law in excess of the Maximum Rate, an amount equal to any excessive interest shall be applied to the reduction of the principal of the Loan and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of the Loan, such excess shall be refunded to Borrower. All interest paid or agreed to be paid to Lender shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest on the Loan for such full period shall not exceed the Maximum Rate. Borrower agrees that in determining whether or not any interest payment under the Security Documents or other Loan Documents exceeds the Maximum Rate, any non-principal payment (except payments specifically described in the Security Documents as “interest”) including without limitation, late charges, shall to the maximum extent not prohibited by law, be an expense, fee or premium rather than interest. Lender hereby expressly disclaims any intent to contract for, charge or receive interest in an amount which exceeds the Maximum Rate. The provisions of this Agreement, the Note, all other Security Documents and Loan Documents are hereby modified to the extent necessary to conform with the limitations and provisions of this paragraph, and this paragraph shall govern over all other provisions in any document or agreement now or hereafter existing. This paragraph shall never be superseded or waived unless there is a written document executed by Lender and Borrower, expressly declaring the usury limitation set forth in this paragraph to be null and void, and no other method or language shall be effective to supersede or waive this paragraph.

(o)Interest and Other Payments Due on Holidays. If any payment due on, or with respect to, this Agreement, any Note or any other Security Document or Loan Document shall fall due on a day other than a Business Day, then such payment shall be made on the 1st Business Day following the day on which such payment shall have so fallen due; provided that if all or any portion of such payment shall consist of a payment of interest, for purposes of calculating such interest, such payment shall be deemed to have been originally due on such first following Business Day, and such interest shall accrue and be payable to (but not including, subject to clause (d) below) the actual date of payment.

(p)Application of Payments Received after 1:00 pm. Any payment actually received by Lender at or before 1:00 p.m., Eastern time, by federal funds wire transfer on any Business Day, shall be deemed to have been received by Lender on such day. Any payment actually received by Lender after 1:00 p.m., Eastern time, by federal funds wire transfer on any Business Day, shall be deemed to have been received on the next following Business Day. All payments received by Lender on a day other than a Business Day, or in a manner other than by federal funds wire transfer, shall be deemed to have been received by Lender on the Business Day such amounts actually become available to Lender prior to 1:00 p.m., Eastern time in immediately av ailable funds.

(q)Use of Proceeds. No Advance to Borrower may be requested or used to fund any obligation of Borrower or any Affiliate of Borrower to Lender or any of its successors and assigns.

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(i)Sales.    

(A)Following the occurrence of any Amortization Triggering Event, if elected by Lender in its sole discretion, Borrower agrees to retain one or more nationally recognized title insurance company or other escrow agent (the “Escrow Agent”) acceptable to Lender and to use its best efforts to have each Escrow Agent execute and deliver to Lender an escrow account acknowledgment in form and substance satisfactory to Lender. The escrow procedures utilized by the Escrow Agent, following the occurrence of any Amortization Triggering Event, shall be satisfactory to Lender.

(B)With respect to each sale of a Pledged Interval, Borrower shall deliver, or cause to be delivered, to Lender the Release Fee required hereunder for such Pledged Interval, and following the occurrence of any Amortization Triggering Event, the Release Price required hereunder for such Pledged Interval. Following the occurrence of any Amortization Triggering Event, upon receipt of payment of the Release Price, Lender shall credit the Release Price payment as provided in Section 2.3(a)(ii) hereof.

(C)Lender reserves the right to adjust and re-calculate the Release Price (i) in the event of a reduction in the number of Pledge d Intervals then remaining, (ii) if the Purchase Price under any Purchase Agreement is less than ninety percent (90%) of the Retail Value set forth in Schedule 4 for such Timeshare Interest constituting a Pledged Interval, or (iii) if Lender determines in its sole discretion that sales of the remaining Pledged Intervals are insufficient to enable all Obligations related to the Inventory Loan arising under this Agreement and the other Loan Documents to be repaid in full on or before Borrower's sale of seventy-five percent (75%) of the aggregate number of all Pledged Intervals.

(D)Following the occurrence of any Amortization Triggering Event, Borrower shall, or if applicable, shall instruct the Escrow Agent, to deliver the applicable Release Price in respect of each Pledged Interval sold, to be sold or otherwise requested by Borrower to be released from the Liens created by this Agreement and the other Security Documents, received by the Escrow Agent on or before the proposed date by Borrower for releasing the Lien encumbering such Pledged Interval, directly to Lender upon receipt by Borrower or the Escrow Agent, as applicable. Borrower acknowledges, and, as applicable, shall instruct the Escrow Agent that Lender shall not authorize the recording of any partial release of its Lien related to a sold Pledged Interval prior to Lender's receipt of the Release Fee and, following the occurrence of an Amortization Triggering Event, the Release Price.

(E)Following the occurrence and during the continuance of an Event of Default, unless otherwise agreed to by Lender, Lender shall not be obligated to release its Lien on any Collateral.

(ii)Application of Proceeds.

(A)    Prior to the occurrence of any Amortization Triggering Event, (1) all Release Prices delivered to Lender in good, co llected funds in legal tender of the United States of America shall be applied as follows:

First, to the payment of

(iii)all costs and charges allocated by Lender in respect of the Inventory Loan, including, without limitation, (1) attorneys' fees for advice, counsel or other legal services, (2) costs and expenses incurred as a result of pursuing, reclaiming, seeking to reclaim, taking, keeping, removing, storing, advertising for sale, selling and foreclosing on the Collateral and any and all other charges and expenses in c onnection therewith, and (3) any costs and expenses (including, without limitation, costs and expenses in the management and operation of any Resort) provided for in any Mortgage or any other Security Document,

(iv)all taxes, assessments or Liens superior to the Lien of this Agreement or the other Security Documents allocated by Lender in respect of the Inventory Loan, except any taxes, assessments or other superior Liens subject to which any sale of Collateral may have been made, and

(v)all other fees, costs and expenses as set forth in Section 10.2 of this Agreement allocated by Lender with respect to the Inventory Loan;

Second, towards the payment of accrued and unpaid interest then due and payable, if any, at the Default Rate in respect of the Inventory Loan,

Third, towards the payment of all other accrued and unpaid interest, if any, then due and payable in respect of the Inventory Loan,< /div>(i)    all costs and charges allocated by Lender in respect of the Inventory Loan, including, without limitation, (1) attorneys' fees for advice, counsel or other legal services, (2) costs and expenses incurred as a result of pursuing, reclaiming, seeking to reclaim, taking, keeping, removing, storing, advertising for sale, selling and foreclosing on the Collateral and any and all other charges and expenses in connection therewith, and (3) any costs and expenses (including, without limitation, costs and expenses in the management and operation of any Resort) provided for in any Mortgage or any other Security Document,

(iii)    all other fees, costs and expenses as set forth in Section 10.2 of this Agreement allocated by Lender with respect to the Inventory Loan;

Second, towards the payment of accrued and unpaid interest then due and payable, if any, at the Default Rate in respect of the Inventory Loan,

Third, towards the payment of all other accrued and unpaid interest, if any, then due and payable in respect of the Inventory Loan,

Fourth, to the payment of the principal amount of the Inventory Loan as sufficient to maintain the Borrowing Base,

Fifth, to reduce the outstanding principal balance of the Inventory Loan,

Sixth, to the payment of

( i)    all costs and charges allocated by Lender in respect of the Receivables Loan, including, without limitation, (1) attorneys' fees for advice, counsel or other legal services, (2) costs and expenses incurred as a result of pursuing, reclaiming, seeking to reclaim, taking, keeping, removing, storing, advertising for sale, selling and foreclosing on the Collateral and any and all other charges and expenses in connection therewith, and (3) any costs and expenses (including, without limitation, costs and expenses in the management and operation of any Resort) provided for in any Mortgage or any other Security Document,

(ii)   & nbsp;all taxes, assessments or Liens superior to the Lien of this Agreement or the other Security Documents allocated by Lender in respect of the Receivables Loan, except any taxes, assessments or other superior Liens subject to which any sale of Collateral may have been made, and

(iii)    all other fees, costs and expenses as set forth in Section 10.2 of this Agreement allocated by Lender with respect to the Receivables Loan;

Seventh, towards the payment of accrued and unpaid interest then due and payable, if any, at the Default Rate in respect of the Receivables Loan,

Eighth, towards the payment of all other accrued and unpaid interest, if any, then due and payable in respect of the Receivables Loan,

Ninth, to the payment of the principal amount of the Receivables Loan as sufficient to maintain the Borrowing Base,

Tenth, to reduce the outstanding balance of the Receivables Loan,

Eleventh, to the payment of all other Obligations in such order as determined by Lender in its sole discretion, and

Twelfth, to the payment of the surplus, if any, to Borrower, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same, provided that if any Obligations shall not have been paid in full, any such surplus shall continue to be held as Collateral hereunder and shall continue to be subject to the terms and conditions hereof until such Obligations shall have been paid in full and such surplus may be used by Lender to pay any such Obligations which from time to time become due and payable.

Interest which accrues on the Loan in respect of any month shall be due and payable on, and shall be paid by Borrower no later than, the first day of the following calendar month. To the extent that any interest due and payable as of the first day of any month shall not have been previously paid in full by the application of the proceeds of the cash down payments, cash payments, loan proceeds and sales proceeds, as set forth above or by the application of any Release Prices or excess Borrowing Base payments made during such month, as set forth in Section 2.3(e) and (f), respectively, or by application of funds received by Lender from the Lockbox Agent, as described in section 2.3(b) or otherwise, without notice or demand, Borrower shall immediately pay such shortfall.

(ix)Acquisition Advances. With respect to each Acquisition Advance, upon the sooner of (a) the date that is eighteen (18) months after the date of such Acquisition Advance, (b) the date upon which Borrower closes the sale of any Timeshare Interest at the related Additional Resort or (c) the end of the Inventory Commitment Period, Borrower shall repay the principal attributable to such Acquisition Advance either (y) through a refinance of all Acquisition Advances related to such Additional Resort with proceeds of Inventory Advances, with any shortfall to be paid directly by Borrower, upon which such Additional Resort shall be added to Schedule 5 hereof and shall no longer be considered an Additional Resort, or (z) on the first day of each month commencing with the month immediately following such date, in equal installments, each in an amount equal to the amount of the principal related to such Acquisition Advance divided by the number of months then remaining until the Maturity Date.

(b)Mandatory Receivables Loan Payments.

(i)Lockbox Account. Subject to Section 8.2(c), Borrower shall direct or otherwise cause the makers of each Pledged Note Receivable, in writing, to pay directly to Lockbox Agent all interest, principal, prepayments (both voluntary and mandatory), and other amounts of any and every description payable to Borrower by or on behalf of such maker pursuant to the applic able Pledged Note Receivable, the related Timeshare Mortgage, or any other related documents or instruments. Such amounts shall be deposited by Lockbox Agent into the lockbox account established and maintained by Lockbox Agent in accordance with the provisions of the Lockbox Agreement (the “Lockbox Account”) by 5:00 p.m. eastern time on each and every Business Day, prior to the Maturity Date. Lockbox Agent shall be responsible pursuant to the terms of the Lockbox Agreement for remitting to Lender, via wire transfer, 100% of cleared funds collected from the Pledged Notes Receivable in the Lockbox Account.

(ii)Application of Funds. Subject to Section 2.3(a)(ii) and Section 8.2 hereof all amounts received by Lender from the Lockbox Account shall be applied by Lender on a weekly basis beginning on the last Business Day of each week in the following order of priority (A) First, to the payment of all expenses, fees, Protective Advances, costs and other charges allocated by Lender in respect of the Receivables Loan; (B) Second, towards the payment of accrued and unpaid interest then due and payable, if any, at the Default Rate in respect of the Receivables Loan, (C) Third, towards the payment of all other accrued and unpaid interest, if any, then due and payable in respect of the Receivables Loan, (D) Fourth, to the payment of the principal amount of the Receivables Loan, (E) Fifth, to the payment of all expenses, fees, Protective Advances, costs and other charges allocated by Lender in respect of the Inventory Loan; (F) Sixth< /font>, towards the payment of accrued and unpaid interest then due and payable, if any, at the Default Rate in respect of the Inventory Loan, (G) Seventh, towards the payment of all other accrued and unpaid interest, if any, then due and payable in respect of the Inventory Loan, (H) Eighth, to the payment of the principal amount of the Inventory Loan, (I) Ninth, to the payment of all other Obligations in such order as determined by Lender in its sole discretion, and (J) Tenth, to the payment of the surplus, if any, to Borrower, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same, provided that if any Obligations shall not have been paid in full, any such surplus shall continue to be held as Collateral hereunder and shall continue to be subject to the terms and conditions hereof until such Obligations shall have been paid in full and such surplus may be used by Lender to pay any such Obligations which from time to time become due and payable. If the amount of funds received by Lender from the Lockbox Agent with respect to any week is insufficient to pay in full the amounts provided for in clauses (A) through (F) of the preceding sentence for such week, without notice or demand, Borrower shall pay the difference to Lender within the first seven (7) days of the next succeeding week.

(iii)Borrower's Receipt of Payments. In the event Borrower receives any payments on any of the Pledged Notes Receivable directly from or on behalf of the maker or makers thereof, Borrower shall receive all such payments in trust for the sole and exclusive benefit of Lender, and Borrower shall deliver to the Lockbox Agent all such payments (in the form so received from Borrower) as and when received by Borrower unless Lender shall have notified Borrower to deliver directly to Lender all payments in respect of the Pledged Notes Receivable which may be received by Borrower, in which event all such payments (in the form received) shall be endorsed by Borrower to Lender and delivered to Lender promptly upon Borrower's receipt thereof.

(c)Prepayments Unconditional. Notwithstanding any other term or provision contained in this Agreement, Borrower's payment obligations are absolute and unconditional without any right of rescission, setoff, counterclaim or defense for any reason.

(e)Release Payments. Payments of Release Prices shall be applied by Lender when received in good, collected funds as set forth in Section 2.3(a)(ii) hereof. To the extent that Borrower delivers, or causes to be delivered, all cash down payments, deposits, cash payments, loan proceeds and sales proceeds in respect of the sale of any Pledged Interval, as provided for under this Section 2.3, and such funds are at least equal to any applicable Release Price for such Pledged Interval, such payments and proceeds s hall be deemed to have satisfied the Release Price in respect of such Pledged Interval in an amount of, and to the extent that, such moneys are actually applied under Section 2.3(a)(ii). No Release Price shall be payable prior to the occurrence of an Amortization Triggering Event.

(f)Borrowing Base. If on any date the aggregate original principal amount of all Advances shall exceed the Borrowing Base, determined as of such date, Borrower shall either (i) immediately pay the amount of such excess to Lender together with interest accrued thereon to (b ut not including) the date of such payment and such amounts shall be applied by Lender when received in good, collected funds as set forth in Section 2.3(a)(ii) or Section 2.3(b) hereof, as applicable, or (ii) if applicable, provided no Event of Default or Amortization Triggering Event has occurred, pledge to Lender (A) unencumbered and unsold Timeshare Interests which shall constitute Pledged Intervals (which comply with all requirements set forth in Section 2.1 and Section 6 hereof), (B) Additional Resorts or (C) increase the aggregate principal amount of Eligible Notes Receivable pledged to Lender, as applicable, sufficient to cure such Borrowing Base deficiency within fifteen (15) Business Days; provided, however that, unless otherwise agreed to by Lender, Borrower shall not be permitted to pledge additional unsold Timeshare Interests, Additional Properties or Eligible Notes Receivable to cure such Borrowing Base deficiency more than once each calendar quarter. The pledge and delivery to Lender of additional Eligible Notes Receivable shall comply with the document delivery and recordation requirements set forth in Section 3.5 of this Agreement and shall be accompanied by a written certification of Borrower to the effect that such additional Pledged Notes Receivable are Eligible Notes Receivable and that, giving effect to the pledge to Lender of such Eligible Note Receivable, the outstanding unpaid principal balance of the Loan is equal to or less than the Borrowing Base. If (i) the outstanding principal amount of Inventory Advances hereunder shall exceed the then applicable Inventory Advance Maximum Amount, (ii) the outstanding principal amount of Acquisition Advances hereunder shall exceed $15,000,000, or (iii) the outstanding principal amount of the Loan hereunder shall exceed $50,000,000, Borrower shall immediately pay the amount of such excess to Lender together with interest accrued thereon to (but not including) the date of such payment and such amounts shall be applied by Lender when received in good, collected funds as set forth in Section 2.3(a)(ii) hereof.

(g)Mandatory Condemnation Payments. Upon the delivery of any Condemnation Compensation to Borrower, any Owner's Association and/or any Purchaser, if such Condemnation Compensation is not required to be used to repair, replace or improve the Pledged Intervals or the Resort in accordance with the terms of this Agreement, the applicable Declaration or Applicable Law, Borrower shall immediately repay the Inventory Loan in an amount equal to the amount of suc h Condemnation Compensation delivered to Borrower, any Owner's Association and/or such Purchaser(s). Such repayments shall be applied in the manner set forth in Section 2.3(a)(ii).

. Lender shall have the right, without prior notice to Borrower or the approval of Borrower, to designate one or more Participating Lenders and to grant to such Participating Lenders participations in the Loan, on terms and conditions satisfactory to Le nder. Such Participating Lenders shall communicate and deal only with Lender in respect to such Participating Lenders' interests in the Loan, the Collateral and enforcement of remedies with respect to the Collateral and Borrower shall communicate and deal hereunder only with Lender and not with any Participating Lender. Borrower shall not be liable hereunder to make any payment to any Participating Lender; all of Borrower's Obligations hereunder shall run directly to Lender. Nothing in this Agreement shall restrict or limit any Participating Lender from assigning all or any part of the participations acquired by it in the Loan from Lender or from Lender replacing or causing the replacement of one or more Participating Lenders. Unless Lender provides thirty (30) days prior written notice to Borrower to the contrary, no Participating Lender shall have the right to consent to any request of Borrower made pursuant to this Agreement or any Loan Document, and Borrower shall be entitled to make any such consent req uests solely to Lender.

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(h)Commitment Fee. Borrower shall pay to Lender a non-refundable Commitment Fee of $500,000 on the Closing Date.

(i)Unused Line Fee.    Borrower shall pay to Lender the Unused Line Fee that is due commencing on the first day of the first month following the Closing Date during the term of the Loan, as applicable; and which at such time shall automatically be paid from the proceeds of the Lockbox Account.

(j)Release Fee. &n bsp;  Borrower shall pay to Lender an administrative release fee equal to $10 (the “Release Fee”) for each Pledged Interval sold or otherwise released. Such Release Fee shall be due and payable to Lender whether or not a Release Price is due and payable to Lender and whether or not all Obligations have been paid in full.    

. All fees hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed in each calculation period, as applicable. In no contingency or event whatsoever, whether by reason of acceleration or otherwise, shall the interest and other charges paid or agreed to be paid to Lender for the use, forbearance or detention of money hereunder exceed the maximum rate permissible under Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. If, due to any circumstance whatsoever, fulfillment of any provision hereof, at the time performance of such provision shall be due, shall exceed any such limit, then, the obligation to be so fulfilled shall be reduced to such lawful limit, and, if Lender shall have received interest or any other charges of any kind which might be deemed to be interest under Applicable Law in excess of the maximum lawful rate, then such excess shall be applied first to any unpaid fees and charges hereunder, then to unpaid principal balance owed by Borrower hereunder, and if the then remaining excess interest is greater than the previously unpaid principal balance, Lender shall promptly refund such excess amount to Borrower and the provisions hereof shall be deemed amended to provide for such permissible rate. The terms and provisions of this Section 2.6 shall control to the extent any other provision of any Loan Document is inconsistent herewith.

. Notwithstanding any other provision of any Loan Document, if any payment, interest, Obligation, fee, charge or other amount due under any Loan Document is not received by Lender within one (1) Business Day of its due date (other than a final payment due at maturity or upon acceleration of the Obligations), then Borrower shall pay to Lender a late charge equal to 5.0% of the amount not timely made or paid.

. All payments and reimbursements to Lender made under this Agreement or any Loan Document shall be free and clear of and without deduction for all Taxes, excluding taxes to the extent imposed on Lender's net income. If Borrower shall be required by law to deduct any such amounts from or in respect of any sum payable under this Agreement or any Loan Document to Lender, then the sum payable to Lender shall be increased as may be necessary so that, after making all required deductions, Lender receives an amount equal to the sum it would have received had no such deductions been made. Notwithstanding any other provision of this Agreement or any Loan Document, if at any time after the Closing or the making of any Advance (a) any change in any existing law, regulation, treaty or directive or in the interpretation or application thereof, (b) any new law, regulation, treaty or directive enacted or any interpretation or application thereof, or (c) compliance by Lender with any Applicable Law: (i) subjects Lender to any tax, levy, impost, deduction, assessment, charge or withholding of any kind whatsoever with res pect to this Agreement or any Loan Document, or changes the basis of taxation of payments to Lender of any amount payable thereunder (except for net income taxes, or franchise taxes imposed in lieu of net income taxes, imposed generally by federal, state or local taxing authorities with respect to interest or commitment fees or other fees payable hereunder or changes in the rate of tax on the overall net income of Lender), or (ii) imposes on Lender any other condition or increased cost in connection with the transactions contemplated thereby or participations therein; and the result of any of the foregoing is to increase the cost to Lender of making or continuing or maintaining any Loan hereunder or to reduce any amount receivable hereunder, then, in any such case, Borrower shall promptly pay to Lender any additional amounts necessary to compensate Lender, on an after-tax basis, for such additional cost or reduced amount as determined by Lender. If Lender becomes entitled to claim any additional amounts purs uant to this Section 2.8 it shall promptly notify, in reasonable detail, Borrower of the event by reason of which Lender has become so entitled, and each such notice of additional amounts payable pursuant to this Section 2.8 submitted by Lender to Borrower shall, absent manifest error, be final, conclusive and binding for all purposes. Notwithstanding the foregoing, in the event Lender requests Borrower pay the amounts required pursuant to this Section 2.8, Borrower shall have the right following ninety (90) Business Days of Borrower's receipt of such request, to prepay the Loan in whol e, but not in part, and terminate this Agreement without paying any prepayment premium described in Section 2.3(c) hereof; provided Borrower shall pay to Lender within thirty (30) Business Days of Borrower's receipt of such request all such amounts required pursuant to this Section 2.8 for the period of time prior to Borrower prepaying the Loan in full and terminating this Agreement.

2.9    Payments by Lender; Protective Advances.    

    

(k)Should any amount required to be paid under this Agreement or any other Loan Document or Existing Receivables Loan Document be unpaid beyond any applicable cure period, such amount may be paid by Lender, which payment shall be deemed a request for an Advance under the Loan as of the date such payment is due, and Borrower irrevocably authorizes disbursement of any such funds to Lender by way of direct payment of the relevant amount, interest or Obligations in accordance with this Agreement without necessity of any demand whether or not a Default or Event of Default has occurred or is continuing. No payment or prepayment of any am ount by Lender or any other Person shall entitle any Person to be subrogated to the rights of Lender under any Loan Document unless and until the Obligations (other than indemnity obligations under the Loan Documents that are not then due and payable or for which any events or claims that would give rise thereto are not then pending) have been fully performed and paid indefeasibly in cash and this Agreement has been terminated. Any sums expended or amounts paid by Lender as a result of Borrower's failure to pay, perform or comply with any Loan Document or any of the Obligations may be charged to Borrower's account as an Advance under the Loan and added to the Obligations.

(l)Notwithstanding any provision of this Agreement or any Loan Document, Lender, in its sole discretion, shall have the right, but not any obligation, at any time that Borrower fails to do so, and from time to time, without prior notice, to: (i) obtain insurance (at the Borrower's expense) covering any of the Collateral to the extent not obtained as required under any Loan Document; (ii) discharge (at the Borrower's expense) taxes or Liens affecting any of the Collateral that have not been paid in violation of any Loan Document or that jeopardize the Lender's Lien priority in the Collateral, including any underlying collateral securing any Pledged Receivable; or (iii) make any other payment (at the Borrower's expense) for the administration, servicing, maintenance, preservation or protection of the Collateral, or any underlying collateral securing any Pledged Receivable (each such advance or payment set forth in Section 2.9(a), and clauses (i), (ii) and (iii) above, a &ldqu o;Protective Advance”). Lender shall be reimbursed for all Protective Advances and any Protective Advances shall bear interest at the Interest Rate from the date the Protective Advance is made by Lender until it is repaid. No Protective Advance by Lender shall be construed as a waiver by Lender of any Default, Event of Default or any of the rights or remedies of Lender.

. For the purpose of securing the prompt and complete payment and performance by Borrower of all of the Obligations,Borrower does unconditionally and irrevocably hereby grant to Lender a first priority security interest in, and a Lien upon, the following assets of Borrower, whether now owned or hereafter acquired (such assets being herein referred to as the “Collateral”):

(m)all accounts, contract rights, general intangibles, documents, instruments, chattel paper, inventory, equipment and proceeds of Borrower related solely to the Additional Resorts and Pledged Intervals and not other Timeshare Interests or Timeshare Units;

(n)all Books and Records;

(o)all of Borrower's right, title and interest of whatever character (whether as owner, vendor, mortgagee, chattel lessee, Declarant, Timesh are Unit owner, Timeshare Interest owner or otherwise, whether vested or contingent and whether now owned or hereafter acquired) in and to the Pledged Intervals and the Additional Resorts;

(p)all of Borrower's right, title and interest of whatever character (whether as owner, chattel lessee, Declarant, Timeshare Unit owner, Timeshare Interest owner, or otherwise, whether vested or contingent and whether now owned or hereafter acquired) in and to any and all judgments, settlements, claims, awards, insurance proceeds and other proceeds and compensation, and any interest thereon (collectively, “Compensa tion”), now or hereafter made or payable in connection with (i) any casualty or other damage to all or any part of any Pledged Interval or Additional Resort, (ii) any condemnation proceedings affecting any Pledged Interval or Additional Resort or any rights thereto or any interest therein, (iii) any damage to or taking of any Pledged Interval or Additional Resort or any rights thereto or any interest therein arising from or otherwise relating to any exercise of the power of eminent domain (including, without limitation, any and all Compensation for change of grade of streets or any other injury to or decrease in the value of any Pledged Interval), or any conveyance in lieu of or under threat of any such taking, (iv) any and all proceeds of any sale, assignment or other disposition of any Pledged Interval or Additional Resort or any rights thereto or any interest therei n, (v) any and all proceeds of any other conversion (whether voluntary or involuntary) of any Pledged Interval or Additional Resort or any rights thereto or any interest therein or to cash or any liquidated claim, and (vi) any and all refunds and rebates of or with respect to any Insurance Premium, any Imposition or any other charge for utilities relating to any Pledged Interval or Additional Resort (including, without limitation, any and all refunds and rebates of or with respect to any deposit or prepayment relating to any such Insurance Premium, Imposition or charge), and any and all interest thereon, whether now or hereafter payable or accruing;

(q)all of Borrower's right, title and interest in, to and under (including, without limitation, all revenues, proceeds, rents and other benefits derived from) any franchises, permits, trade names, trademarks (and goodwill associated therewith), approvals, leasehold interests (whether as lessor or lessee or sublessor or sublessee), management contracts, marketing contracts, maintenance contracts, utility contracts, security contracts, other servicing contracts, licensing contracts or other similar contracts, and all guaranties of any of the foregoing or any other guaranties issued to Lender for the direct or indirect benefit of Borrower relating, in each case, to the Additional Resorts;

(r)all of Borrower's right, title and interest of whatever character (whether as owner, vendor, mortgagee, chattel lessee, Declarant, unit owner, Timeshare Unit owner, Timeshare Interest owner or otherwise, whe ther vested or contingent and whether now owned or hereafter acquired) in and to (i) the Additional Resorts, including, without limitation, all Timeshare Interests (now existing or hereafter created) (whether sold or unsold), (ii) all building materials, supplies and other Property now or hereafter stored at or delivered to an Additional Resort or any other location for installation in or on an Additional Resort, (iii) any and all plans, specifications, drawings, books, records, marketing materials and similar items now or hereafter relating to an Additional Resort, the operation and use thereof, any rights of Borrower thereto or any interest therein, (iv) any construction contract and the architect and engineering contracts entered into or to be entered into by Borrower in connection with the construction and development of an Additional Resort and (v) any payment, performance or other surety bonds obtained by any contractor or subcontractor in connection with the development and co nstruction of an Additional Resort;

(s)all other “Mortgaged Property,” as such term is defined in each Mortgage and all options that Borrower may obtain;

(t)all Note Receivables and all tangible personal property related to any Note Receivables pledged to Lender, whether pursuant to this Agreement, a Master Collateral Assignment or a Supplemental Collateral Assignment, any other Loan Document or otherwise (the “Pledged Note Recei vables”), including without limitation all present and future Goods, Inventory, Fixtures and Equipment (including items of equipment which are or become Fixtures), and Computer Hardware and Software related to the Pledged Receivables;

(u)all of such Borrower's intangible personal property related to the Pledged Note Receivables, including, without limitation, all present and future Accounts, securities, Contract Rights, Contracts, Permits, General Intangibles, Chattel Paper, Investment Property, Intellectual Property, Documents, Instruments, deposit accounts, Letter-of-Credit Rights and Supporting Obligations, rights to the payment of money or other forms of consideration of any kind, tax refunds, insurance proceed s (including, without limitation, proceeds of any life insurance policy), now owned or hereafter acquired, and all intangible and tangible personal property relating to or arising out of any of the foregoing;

(v)all Timeshare Mortgages encumbering the Timeshare Interests financed by the Pledged Notes Receivable and, to the extent of Borrower's interest as mortgagee with respect to each Timeshare Mortgage assigned to Lender, the Encumbered Timeshare Interests, together with all appurtenant rights and interests, including, without limitation, appurtenant rights and interests in and to the Common Elements, and easement, license and use rights in and to all facilities, all as described, defined and set forth in the Declaration;

(w)all Timeshare Documents and all other documents, instruments, accounts, chattel paper, and general intangibles relating to the Pledged Notes Receivable, and related Timeshare Mortgages and the other Collateral (including the cash and non-cash proceeds thereof);

(x)all rights in, to and under all Payment Authorization Agreements signed and delivered by or on behalf of each Purchaser of an Encumbered Timeshare Interest and all accounts and proceeds relating thereto or deriving therefrom;

(y)any rights inuring to Borrower as a “preferred mortgagee” or a “mortgagee” in connection with any Encumbered Timeshare Interest as provided in the Declaration;

(z)any extensions, additions, improvements, betterments, renewals, substitutions and replacements of, for or to any of the Collateral, wherever located, together with the products, proceeds, issues, rents and profits thereof, and any replacements, additions or accessions thereto or substitutions thereof, and all rights in or under insurance policies and to the proceeds of any insurance policies covering any of the other Collateral, all rights to unearned or refunded ins urance premiums, and the proceeds of any condemnation awards or any claims regarding any of the other Collateral;

(aa)all books, records, reports, computer tapes, computer disks and software relating to all or any portion of the Collateral;

(ab)all rights of Borrower or its successors or assigns under any Timeshare Documents, relating to any Encumbered Timeshare Interest;

(ac)as the same may relate to any Pledged Note Receivable or any other Collateral, all policies of insurance (including without limitation, casualty and hazard insurance and policies of owner's or mortgagee's title insurance), or rights as loss payee or endorsee thereof, and escrow agreements, all tax, insurance, security or other deposits, including rights in respect of letters of credit evidencing or securing any such deposit, and rights acquired by reason of condemnation or exercise of the power of eminent domain;

(ad)all now existing or hereafter arising rights to service, administer and/or collect the Pledged Note Receivables or any other Collateral and all rights to the payment of money on account of such servic ing, administration and/or collection activities;

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

(af)all proceeds arising from the rent or sale of unsold (i) Pledged Intervals or (ii) fee simple ownership interests of Borrower in an Additional Resort;

whether such Collateral shall be presently in existence or whether it shall be acquired or created by Borrower at any time hereafter, wherever located, together with the products and proceeds thereof, and any replacements, additions and/or accessions thereto and substitutions thereof and after-acquired property.

Borrower consents and agrees that Lender shall be under no obligation to marshal any assets (including, without limitation, any pledged membership interests or any life insurance proceeds) in favor of Borrower, or against or in payment of any or all of the Obligations.

(ag)Maintenance of Perfection. Lender shall not be required to take any steps to perfect or maintain the perfection of its first priority security interest in the Collateral and no loss of, or damage to, the Collateral shall release Borrower from any of the Obligations.

(ah)No Assumption of Obligations. The execution and delivery of this Agreement, and the granting of the Liens in and to the Collateral, shall not subject Lender to, or transfer or pass to Lender or in any way affect or modify, the liability of Borrower under any or all of the Purchase Agreements, the Property-Related Contracts or in connection with any Resort, any Declaration or any Owner's Association's Articles of Incorporation or By-Laws, it being understood and agreed that notwithstanding this Agreement, and the granting of the Liens in and to the Collateral, all of the obligations of Borrower (whether as owner, chattel lessee, vendor, mortgagee, Declarant, Timeshare Unit owner, Timeshare Interest owner or otherwise) to each and every other party under each and every one of the Purchase Agreements and the Property-Related Contracts and/or in connection with any Resort or any Declaration, the Articles of Incorporation and By-Laws of any Owner's Association shall be and remain enforceable by such other party, i ts successors and assigns, only against Borrower or Persons other than Lender, and Lender has not assumed any of the obligations or duties of Borrower under or with respect to any of the Purchase Agreements, or the Property-Related Contracts or otherwise in connection with any Declaration or the Articles of Incorporation and By-Laws of any Owner's Association.

(ai)No Obligation to Take Action. Borrower hereby agrees and acknowledges that neither the acceptance of this Agreement or any other Security Document by Lender nor the exercise of, or failure to exercise, any right, power or remedy in this Agreement or in any other Security Document conferred upon Lender shall be deemed or constr ued to obligate Lender to pay any sum of money, take any other action or incur any liability in connection with, or collect or realize upon, any of the Purchase Agreements or any other Collateral. It is further agreed and understood by Borrower that Lender shall not be liable in any way for any cost, expense or liability connected with, or any charge or liability arising from, any of the Purchase Agreements, any of the contracts of purchase in respect of the Timeshare Units, any of the Property-Related Contracts or any other Collateral.

(aj)Indemnification. Borrower hereby agrees to indemnify Lender, and hold it harmless, from any and all liability, loss or damage which it may or might incur by reason of any and all claims and demands whatsoever which may be asserted against Lender arising out of, as a result of, or otherwise connected with, the Liens hereby granted to Lender by Borrower under or in respect of any of the Purchase Agreements or any other Collateral by reason of (i) the failure by Borrower to perform any obligations or undertakings required to be performed by Borrower under or in connection with any of such Purchase Agreements, the Property-Related Contracts or any other Collateral, (ii) any failure by Borrower, in connection with any of such Purchase Agreements, the Property-Related Contracts or any other Collateral, to comply with any applicable federal, state or local consumer credit, sale rescission or usury statute, including, without limitation, any such statute of any state in which a Purchaser may reside, the Consumer Credit Protection Act, as amended, the Federal Trade Commission Act, as amended, the consumer credit laws and subdivision laws of each Applicable State , as amended, and all rules and regulations promulgated under the foregoing statutes, acts and codes, the Interstate Land Sales Full Disclosure Act, and the rules and regulations promulgated thereunder, and (iii) failure by Borrower to comply with any applicable federal, state or local statutes, ordinances or declarations and the restrictions, rules and regulations promulgated thereunder or contained therein pertaining to the use or operation of any Pledged Interval or any Resort (including, without limitation, the statutes, ordinances, declarations, restrictions, rules and regulations of any Applicable State or its agencies or municipalities), or to otherwise discharge its duties and obligations under Applicable Law, under each Declaration or any Owner's Association's Articles of Incorporation or By-Laws as Declarant, unless such claims or demands were directly a result of Lender's gross negligence or willful misconduct.

3.3    Financing Statements

. Borrower hereby authorizes Lender to file any financing statements on Borrower's behalf required by the Uniform Commercial Code together with any and all other instruments or documents and take such other action, as may be necessary to perfect, and to continue the perfection of, Lender's security interest and Liens in the Collateral. The parties agree that a legible carbon, photographic or other reproduction of this Agreement or of a financing statement shall be sufficient as a financing statement.

. All Books and Records are to remain, at all times, on the premises of Borrower either at 1221 River Bend Drive, Dallas, Texas 75247 or at any Resort, and Borrower represents and warrants to Lender that all of the currently existing Books and Records is now located there, and Borrower will not transfer the Books and Records from such premises to other locations without the prior written approval of Lender. Borrower shall, upon receipt of a written request therefor from Lender after the occurrence of an Event of Default, deliver to Lender then current copies of all computer tapes, disks, software and micro-fiche records constituting, in whole or in part, the Books and Records. The portion of the Collateral consisting of (i) the original Pledged Notes Recei vable; (ii) the original Purchase Agreements (including any addenda thereto) related to such Pledged Notes Receivable; and (iii) originals or true copies of the related Timeshare Mortgages, truth-in-lending disclosure statements and, if required by Lender, loan applications, any related Purchaser's or owner's acknowledgments and understandings, certificates of title, public offering statement and other receipts, Payment Authorization Agreements and Exchange Company applications and disclosures shall be delivered, at Borrower's expense, to Custodian to accept delivery of and maintain possession, custody, and control of all such documents and instruments on behalf of Lender during such period of time. Each original Pledged Note Receivable in favor of Borrower and delivered by Borrower to Lender shall be duly endorsed by Borrower with the words: “Pay to the order of CAPITALSOURCE FINANCE LLC, together with its successors and assigns, with recourse.”

The portion of the Collateral delivered to Lender or Custodian as described above shall be segregated by Lender or Custodian, as the case may be, and stored in a secure, fire-resistant filing cabinet, access to which is limited in a commercially reasonable manner. Borrower agrees that such storage is and shall be deemed to constitute reasonable care by Lender with respect to such Collateral. Except to the extent expressly included in the Custodian's fee as set forth in the Custodial Agreement, all insurance and other expenses of protecting the Collateral, including, without limitation, storing, warehousing, insuring, handling, maintaining, and shipping the Collateral, and any and all excise, property, intangible, sales, and use taxes imposed by any state, federal, or local governmental authority on any of the Collateral or in respect of the sale thereof shall be paid by Borrower. Provided that Lender or Custodian retains the original Pledged Notes Receivable and related Timeshare Mortgages and originals or copies of the related Timeshare Documents, delivered to it and stores it in a secure, fire-resistant filing cabinet as provided above, Lender shall not be liable or responsible in any way for the safekeeping of the Collateral or for any loss or damage thereto or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, Lockbox Agent, Custodian, or any other Person whomsoever, excluding damages or losses that occur as a result of Lender's gross negligence or willful misconduct.

(i)Borrower agrees to maintain or cause to be maintained or, as provided under the applicable Declaration, cause the applicable Owner's Association to maintain, insurance (with financially sound and reputable insurers) with respect to

(1)all Pledged Intervals and each Resort (including each Additional Resort),

(2)the personal property located at each Resort, including each Additional Resort (including, without limitation, the Resort Facilities and other furniture, fixtures and furnishings thereof),

(3)all other equipment and other personal property of every nature whatsoever now or hereafter located in or on, or attached to, and used or intended to be used in connection with each Resort, including each Additional Resort, and

(4)the Books and Records and other valuable papers,

against casualties, contingencies, hazards and such other risks (including, without limitation, (A) fire, hurricane, tornado, wind damage, and such other risks insured against by a standard all-risk property and fire insurance policy and endorsement for extended coverage, and (B) earthquake and flood insurance, if applicable and required by Lender); provided, however, that such casualty insurance shall (aa) in no case be in an amount less than an amount sufficient to rebuild the applicable Resort or the portions ther eof which shall have suffered the loss and replace any of the personal property located therein, (bb) be sufficient to avoid any co-insurance requirements in respect of Borrower and/or any Owner's Association, and (cc) be sufficient to provide funds to fully compensate Borrower or owners of Timeshare Interests for any inability to utilize any units during any period following a loss (e.g., rent loss or business interruption insurance). With respect to such insurance, Borrower shall deliver or cause to be delivered, or cause the applicable Owner's Association to deliver (to the extent permitted by Applicable Law and the applicable Declaration), certificates of insurance to Lender, with satisfactory lender's loss payable endorsements naming Lender as loss payee to the extent of its interest and as such interest may appear on the date of the initial advance hereunder. Each policy of such insurance or endorsement with respect thereto shall contain a clause requiring the insurer to give not less than 30 days ' prior written notice to Lender in the event of cancellation of the policy for any reason whatsoever and a clause that the interest of Lender shall not be impaired or invalidated by any act or neglect of Borrower or other owner of the Collateral nor by the occupation of the premises for purposes more hazardous than are permitted by said policy. If Borrower shall fail to provide and pay for such insurance, or have the same provided and paid for, Lender may, at Borrower's expense, procure the same, but shall not be required to do so.

(ii)Borrower shall maintain or cause to be maintained insurance with financially sound and reputable insurers with respect to each Resort and its business (including, without limitation, the Collateral) covering any public liability of Borrower, i ts officers, agents or employees (including, without limitation, damage by Borrower or its officers, agents or employees to the Resort of other Persons, any bodily injury caused by Borrower or its officers, agents or employees to any other Person, or any negligent act or other similar liability of Borrower or its officers, agents or employees) and in such amounts as are satisfactory to Lender and to which Borrower has agreed; Lender shall be named as an additional insured thereon. Borrower shall, as provided in each Declaration, cause the applicable Owner's Association to maintain insurance with financially sound and reputable insurers with respect to each Resort covering any public liability of such Owner's Association or its officers, agents or employees to each Resort of other Persons, any bodily injury caused by such Owner's Association or its officers, agents or employees to any other Person, or any negligent act or other similar liability of each Owner's Association or its officers, agents or employees and in such amounts as are provided for in each Declaration.

(iii)Borrower shall, prior to renewal, submit, or so long as Borrower is in control of an Owner's Association, cause such Owner's Association to submit, and thereafter shall use its best efforts to cause each Owner's Association to submit, to Lender insurance certificates showing the type and amounts of insurance coverage maintained in respect of each Resort. Borrower shall, to the extent permitted by Applicable Law and the applicable Declaration, cause all casualty policies of insurance provided under the each applicable Declaration to have mortgagee endorsements in respect of Lender's interests in and to the Pledged Intervals that are the subject of any Mortgage or any Timeshare Mortgage in which Lender may have a security interest and Lien hereunder or under the Receivables Loan Documentation.

(iv)Borrower shall pay, or cause each of the Silverleaf Club and the Orlando Breeze Resort Club to pay, all premiums on the aforesaid insurance policies and all other fees and charges payable in connection with such insurance policies (such premiums, fees and charges being collectively referred to herein as “Insurance Premiums”) not later than the due date thereof. If Borrower shall fail to pay, or cause each of Silverleaf Club and the Orlando Breeze Resort Club to pay, any such Insurance Premiums, Lender may (but shall not be obligated to), at Borrower's expense, pay the same. Any such payment shall be subject to Section 3.11 and Section 3.12 hereof.

(v)If the Mortgaged Property (as defined in each Mortgage) is sold at a foreclosure sale or if Lender shall acquire title to said Mortgaged Property, Lender shall have all of the right, title and interest of Borrower in a nd to all insurance policies required under this Section 3.6(a) and the unearned premiums thereon, related to the Mortgaged Property, and in and to the proceeds resulting from any damage to said Mortgaged Property prior to such sale or acquisition.

(vi)Anything contained in this Section 3.6(a) to the contrary notwithstanding, any of the undertakings of Borrower in this Section 3.6(a) in respect of insuring each Resort or in respect of causing each Owner's Association to perform any undertaking under this Section 3.6(a) shall be subject to any Applicable Laws and the applicable Declaration.

(al)Borrower shall in good faith cooperate with Lender (to the extent Lender's rights are not adverse to the rights of any other lender) in obtaining for Lender the benefits of any insurance or other proceeds lawfully or equitably payable to Borrower in connection with the transactions contemplated hereby and in paying any Obligation (including the payment by Borrower of the expense of an inde pendent appraisal on behalf of Lender in case of a fire or other casualty affecting the Property)

(i)Subject to Applicable Law and the provisions of each Declaration, as applicable, and any limitations thereunder, any proceeds of insurance in respect of the Pledged Intervals received by any Owner's Association or any manager retained by it and then further paid by the applicable Owner's Association or such manager to Borrower (whether as Declarant or otherwise), as provided for in the a pplicable Declaration, shall be promptly paid and/or turned over by Borrower to Lender as proceeds of the Collateral and, subject to Section 3.5(c) hereof, applied to the prepayment of the Loan as provided in Section 2.3(a)(ii) hereof.

(ii)Without limiting the immediately preceding paragraph, any proceeds of insurance in respect of any Pledged Interval received by Borrower at a time during which the insurance provisions of the applicable Declaration shall not be in effect as to any Pledged Interv al shall be treated as provided in Section 3.6(d) of this Agreement.

(an)Miscellaneous Application of Insurance Proceeds. In connection with, and pursuant to, Section 3.6(c)(ii) hereof, Lender and Borrower agree to the following:

(i)Following the occurrence of any Default or Event of Default (provided that if such Default or Event of Default is cured by Borrower, then clause (ii) below and not this clause (i) shall thereafter apply), and subject to Applicable Law and the provisions of each Declaration, Lender may direct the proceeds from any such policies to be received and collected by Lender, Borrower, the Silverleaf Club or Orlando Breeze Resort Club, as applicable, or another third party acceptable to Lender. Following the occurrence of any Default or Event of Default, each insurance company is hereby authorized and directed to make payment for all such losses directly to Lender, Borrower, the Silverleaf Club or Orlando Breeze Resort Club, as applicable, or such other third party as directed by Lender. Following the occurrence of any Default or Event of Default (provided that if such Default or Event of Default is cured by Borrower, then clause (ii) below and not this clause (i) shall thereafter apply), and subject to Applicable Law and the provisions of each Declaration and any limitations thereunder, and provided Lender is entitled to receive such insurance proceeds pursuant to the applicable Declaration, after deducting from said insurance proceeds all of its expenses incurred in the collection and administration of such sums, including attorneys' fees, Lender may apply the net proceeds or any part thereof, at its option (i) to payment of the Obligations, whether or not due, as provided in Section 2.3(a)(ii) hereof, (ii) to the repair and/or restoration of the Pledged Intervals, or (iii) for any other purposes or objects for which Lender is entitled to advance funds under this Agreement or any of the other Security Documents; all without affecting the Liens and security interests of this Agreement and the other Security Docume nts. Lender shall not be held responsible for any failure to collect any insurance proceeds due under the terms of any policy regardless of the cause of such failure.

(ii)Subject to each Declaration and Applicable Law, prior to the occurrence of any Default or Event of Default and if Borrower gives Lender notice of any casualty as provided in clause (d) below, Borrower or the Silverleaf Club or Orlando Breeze Resort Club, as applicable, shall have the right to adjust and compromise losses under insurance policies and to collect and receive insurance proceeds and shall apply such insurance proceeds with respect to such losses solely and exclusively to the repair and restoration of the Pledged Intervals (and the affected Resort, as applicable) or, if consented to by Lender, to the payment of the Obligations as Borrower deems appropriate in its reasonable discretion. With respect to any such casualty loss, Borrower shall have the right to use any insurance proceeds received on account of such loss to the repair and restoration of the Pledged Intervals (and the affected Resort, as applicable).

(ao)Borrower Undertakings. In the event of any casualty or loss in respect of any Pledged Intervals or any Resort (including, without limitation, any of the Collateral) that exceeds $250,000 in damages, Borrower shall immediately notify Lender of the same.

(ap)Other Lenders. To the extent any other timeshare receivable or timeshare inventory lender of Borrower and its Affiliates has any rights to approve the form of insurance policies with respect to any Resort, the amounts of coverage thereunder, the insurers under such policies, or the designation of an attorney in fact for purposes of dealing with damage to any part of any Resort or insurance claims or matters related thereto, or any successor to such attorney in fact, or any changes with respect to any of the foregoing, Borrower shall take all steps as may be necessary (and, after turnover, if any, of control of a Resort to any Owner's Association, Borrower shall use its best efforts) to ensure that Lender shall at all times have a co-equal right, with such other lender (including, without limitatio n, Borrower or any third-party lender), to approve all such matters and any proposed changes in respect thereof; and Borrower shall not cause or permit any changes with respect to any insurance policies, insurers, coverage, attorney in fact, or insurance trustee, if any, without Lender's prior written approval.

.

(i)Subject to Applicable Law and to the provisions of each Declaration, any compensation, awards, damages, claims, rights of action, proceeds, payment and other relief (collectively, “Condemnation Compensation”) of, or on account of, any damage or taking of all or any part of any Pledged Intervals in connection with any condemnation proceedings or any exercise of the power of eminent domain (or any conveyance in lieu of or under threat of any such taking), including, without limitation, any such Condemn ation Compensation for change of grade of streets or any other injury to or decrease in the value of all or any part of any Pledged Intervals or Additional Resort, payable to any Owner's Association or any manager retained by it and paid further by any Owner's Association or such manager to Borrower (whether as Declarant or otherwise), unless otherwise provided for in the applicable Declaration, shall be promptly paid and/or turned over to Lender as proceeds of the Collateral or otherwise and, applied to the prepayment of the Loan, as provided in Section 2.3(a)(ii) hereof.

(ii)Subject to Applicable Law and to the provisions of the applica ble Declaration, Lender shall be entitled to receive all Condemnation Compensation in respect of the affected Pledged Intervals payable with respect to any condemnation or taking. The application of such Condemnation Compensation shall be as set forth below in clause (iii) below. Lender is hereby authorized, at its option, to commence, appear in and prosecute, in its own or in Borrower's name, any action or proceeding relating to any condemnation or taking, and to settle or compromise any claim in connection therewith. All Condemnation Compensation in respect of any Pledged Interval or Additional Resort and the rights thereto are hereby assigned by Borrower to Lender.

(iii)Subject to Applicable Law and to the provisions of the applicable Declaration, after deducting from any Condemnation Compensation in respect of the applicable Pledged Interval or Additional Resort, all of its expenses incurred in the collection and administration thereof, including attorney's fees, Lender shall, if no Default or Event of Default shall then exist, or may, in its sole and absolute discretion if a Default or Event of Default shall then exist, make the net Condemnation Compensation available to Borrower, the Silverleaf Club or the Orlando Breeze Resort Club, as applicable, to repair and/or restore the Additional Resort or the Pledged Intervals and, as applicable, the affected Resort.

If Borrower fails to comply with any of the requirements set forth in the immediately preceding sentence or if a Default or Event of Default exists and Lender shall have decided not to make such net Condemnation Compensation available to Borrower, Lender m ay apply such net Condemnation Compensation or any part thereof, at its option, (A) to the payment of the Obligations, whether or not due, as provided in Section 2.3(a)(ii) hereof, or (B) for any other purposes or objects for which Lender is entitled to advance funds under this Agreement, all without affecting the security interests or Liens of this Agreement or any of the other Security Documents. All net Condemnation Compensation to be disbursed by Lender pursuant to this clause (iii) shall be disbursed in a manner acceptable to Lender as the repair and/or replacement work proceeds. Lender shall not be held responsible for any failure to collect any Condemnation Compensation regardless of the reason for such failure. Borrower agrees to execute such further assignment of any compensation, awards, damages, claims, rights of action and proceeds as Lender may require. All repair and/or replacement work shall be diligently prosecuted to completion by Borrower and shall be completed prior to the Maturity Date.

(ar)Borrower Undertakings. In the event of any condemnation or taking in respect of any Pledged Interval or any Resort (including, without limitation, any of the Collateral), Borrower shall immediately notify Lender of the same.

 

Borrower shall pay or, as provided in the applicable Declaration, cause the applicable Owner's Association to pay, on or before the last day when they may be paid without interest or penalty, all taxes, assessments, rates, dues, charges, fees, levies, excises, duties, fines, impositions, liabilities, obligations and encumbrances (including, without limitation, water and sewer rents and charges, charges for setting or repairing meters and charges for other utilities or services), general or special, ordinary or extraordinary, foreseen or unforeseen, of every kind whatsoever, now or hereafter imposed, levied or assessed by any public or quasi-public authority or instrumentality (including, without limitation, each Applicable State and its agencies, counties and municipalities), upon or against any of the Collateral or the use, occupancy or possession of any Resort, or upon or against this Agreement, the Note or the other Security Documents, the Obligations or the interest of Lender in the Purchase Agreements, any of the contracts of purchase in respect of the Timeshare Units or any Mortgage or any other item of Collateral (provided that this Section 3.8 shall not be construed to require Borrower to pay any income tax imposed upon the general income of Lender), as well as all assessments and other governmental or quasi-governmental charges imposed, levied or assessed in respect of any Collateral, and any and all interest, costs and penalties on or with respect to any of the foregoing (collectively, the “Impositions”). Upon request by Lender, Borrower shall deliver, or cause the applicable Owner's Association to deliver, to Lender receipts or other satisfactory proof of payment of any Impositions.

Borrower shall not claim, demand or be entitled to receive any reduction of, or credit toward, any Imposition on account of the Obligations. No deduction shall be claimed from the taxable value of any Collateral or by reason of the Obligations, any of the Security Documents or the interest of Lender in the Collateral.

If existing laws or procedures governing the taxation of mortgages, security documents or debts secured by deeds of trusts, mortgages or other security documents shall be changed in any manner after the date hereof so as to materially adversely impair the security of any Mortgage or the security interest herein granted or granted in any of the other Security Documents or to reduce the net income to Lender in respect of the Obligations (excluding from any such determination of net income any reduction in such net income attributable to a change in taxes imposed on, or measured by, the net income of Lender), then, upon request by Lender, Borrower shall pay to Lender or to the taxing authority (if so directed by Lender), all taxes, charges and related costs for which Lender may be liable as a result thereof.

Borrower shall pay, or cause to be paid, when due, any and all recording (mortgage or personal property), intangible property and documentary stamp taxes, all similar taxes, and all filing, registration and recording fees, which are now or hereafter may become payable in connection with the Obligations, each Mortgage, this Agreement, any of the other Security Documents, the Timeshare Mortgages or any of the other Collateral. Borrower shall pay when due any and all excise, transfer and conveyance taxes which are now or hereafter may become payable in connection with the Obligations, each Mortgage, this Agreement or any of the other Security Documents, or in connection with any foreclosure of any Mortgage, or any other foreclosure of any Collateral under this Agreement or under any of the other Security Documents, or any other transfer of any item of Collateral in extinguishment of all or any part of the Obligations or any other enforcement of the rights of Lender with respect thereto.

Borrower shall have the right, at its sole expense, to contest the validity of any such Impositions (other than ad valorem taxes addressed below) by appropriate proceedings diligently and continuously conducted in good faith to final determination, in which event Borrower shall not be required to pay or, as provided in the applicable Declaration, cause the applicable Owner's Association to pay, any such Impositions (other than ad valorem taxes addressed below) in accordance with this section if, and only so long as:

(as)no final judicial determination in respect of any forecl osure or other enforcement proceeding in respect of such Impositions (other than ad valorem taxes addressed below) shall have been rendered and no nonjudicial foreclosure proceeding or sale in respect of such Impositions (other than ad valorem taxes addressed below) shall have been commenced;

(at)no claim for liability of any kind shall have been asserted against the Lender in connection with such Impositions (other than ad valorem taxes addressed below); and

(au)if such Impositions (other than ad valorem taxes addressed below) are in an amount greater than $100,000, Borrower shall have established an escrow with the Lender, or shall have delivered to the Lender a satisfactory bond issued by a surety acceptable to the Lender or a satisfactory letter of credit for the benefit of the Lender issued by a bank acceptable to the Lender, in each case in an amount estimated by the Lender to be adequate to cover (i) the unpaid amount of such required payment, (ii) all interest, penalties and similar charges which reasonably can be expected to accrue by reason of such contest or by reason of such nonpayment, and (iii) all costs, fees and expenses (including, without limitation, attorneys' fees and disbursements) which reasonably can be expected to be incurred in connection therewith by the Lender, which escrow, bond or letter of credit shall be maintained in effect throughout such contest and the amount of which shall be increased from time to time if reasonably required by the Lender to cover the foregoing amounts in subclause (i), subclause (ii) and subcla use (iii).

Borrower shall inform the Lender, in advance and in writing, of its intention to contest any Impositions (other than ad valorem taxes addressed below) under this Section 3.8 if such required payment shall exceed $100,000.

Upon termination of any such contest (whether by final determination or otherwise), or at any time during the course of any such contest that the conditions relieving Borrower of its obligation to make such payment shall no longer be satisfied or shall be discovered not to have been satisfied, Borrower shall make such pa yment. Following the occurrence and continuance of a Default or Event of Default, at Lender's option, the escrow established or bond or letter of credit, as the case may be, delivered pursuant to this Section 3.8 may be, in the case of the escrow, liquidated, or, in the case of the bond or the letter of credit, drawn upon, at such time and the proceeds thereof may be applied to payment of all or any part of such required payment and the interest, penalties, charges, costs, fees and expenses (including, without limitation, attorneys' fees and disbursements) referred to in subclause (ii) and subclause (iii) of the immediately preceding paragraph. Promptly after such payment has been made, Borrower shall deliver to the Lender evidence reasonably satisfactory to the Lender that such payment has been made. Thereafter, the amount then remaining in the escrow established pursua nt to this Section 3.7 or such bond or letter of credit, as the case may be, shall be returned to Borrower free and clear of the Lien of this Agreement or any other Security Document so long as no Event of Default shall have occurred and be continuing or, if an Event of Default shall have occurred and be continuing, shall be retained by the Lender as part of the Collateral.

The Borrower or the applicable Owner's Association, as the case may be, shall have the right at their respective sole expense to contest the validity of any ad valorem tax assessment related to any property owned by the Borrower and not subject to the timeshare regime established at each Resort, and in the case of each Owner's Association, to property covered by the applicable Declaration. In connection with any ad valorem tax challenge filed by either the Borrower or any Owner's Association, the Borrower or such Owner's Association, as the case may be, shall be required to deliver written notice of such intention to contest and shall make a "good faith deposit", which shall be in an amount determined in good faith either by the Borrower or such Owner's Association equal to the tax amount owed based upon the admitted fair market value by the party challenging such assessment. Such proceedings may continue if, and only so long as no final judicial determination in respect of any foreclosure or other enforcement proceedings in respect to such ad valorem taxes shall have been rendered, and no claim for liability of any kind shall have been asserted against the Lender in connection with such ad valorem taxes.

In the event the amount of the "good faith deposit" made by either the Borrower or any Owner's Association is less than the amount claimed by the Lender, the Tax Collector, the Borrower or any Owner's Association, as the case may be, Borrower or any Owner's Association shall establish an escrow arrangement reasonably satisfactory to Lender equal to the amount of any such deficiency, together with an additional amount sufficient to cover any interest which may accrue during the pendency of such proceeding. Upon the termination of any such proceeding, whether by final determination or otherwise, the Borrower or any Owner's Association, as the case may be, shall make full and final payment of the final amount of ad valorem taxes determined to be owed, together with any additional levies, charges, interest, cost or expenses which may be due. Promptly after such payment has been made, Borrower or any Owner's Association shall deliver to Lender evidence reasonably satisfactory to Lender tha t any such payment has been made.

 

If any mechanic's, laborer's, materialman's, statutory or other Lien shall be filed or otherwise imposed upon or against any item of the Collateral or any Pledged Interval or Additional Resort, then Borrower shall, within thirty (30) days after being given notice of the filing of such Lien or otherwise becoming aware of the imposition of such Lien (but in any event not later than thirty (30) days preceding any sale dat e relating to such Lien), cause such Lien to be vacated or discharged of record by payment, deposit, bond, final order of a court of competent jurisdiction or otherwise.

Borrower shall have the right, at its sole expense, to contest the validity of any such Lien or of the claim evidenced or secured thereby, by appropriate proceedings commenced prior to the expiration of the aforesaid 30-day period and thereafter diligently and continuously conducted in good faith to final determination, in which event Borrower shall not be required to cause any such Lien to be vacated or discharged of record in accordance with the immediately preceding paragraph if, and only so long as:

(av)no final judicial determination in respect of any foreclosure or other enforcement proceeding in respect of such Lien or the claim evidenced or secured thereby shall have been rendered and no nonjudicial foreclosure proceeding or sale in respect of such Lien or such claim shall have been commenced;

(aw)no claim for liability of any kind shall have been asserted against Lender in connection with such Lien or the claim evidenced or secured thereby; and

(ax)if such Lien shall secure a cla im of more than $100,000, Borrower shall have established an escrow with Lender, or shall have delivered to Lender a satisfactory bond issued by a surety acceptable to Lender or a satisfactory letter of credit for the benefit of Lender issued by a bank acceptable to Lender, in each case in an amount estimated by Lender to be adequate to cover (i) the unpaid amount of such claim, (ii) all interest, penalties and similar charges which reasonably can be expected to accrue by reason of such contest or by reason of such nonpayment, and (iii) all costs, fees and expenses (including, without limitation, attorneys' fees and disbursements) which reasonably can be expected to be incurred in connection therewith by Lender, which escrow, bond or letter of credit shall be maintained in effect throughout such contest and the amount of which shall be increased from time to time if reasonably required by Lender to cover the foregoing amounts in subclause (i), subclause (ii) and subclause (iii).

Borrower shall inform Lender, in advance and in writing, of its intention to contest any Lien securing a claim, or such claim itself, under this Section 3.9 if such claim shall exceed $100,000.

Upon termination of any such contest (whether by final determination or otherwise), or at any time during the course of any such contest that the conditions relieving Borrower of its obligation to cause such Lien to be vacated or discharged shall no longer be satisfied or shall be discovered not to have been satisfied, Borrower shall cause such Lien to be vacated or discharged of record. At Lender's option, the escrow established or bond or letter of credit, as the case may be, delivered pursuant to this Section 3.9 may be, in the case of the escrow, liquidated, or, in the case of the bond or the letter of credit, drawn upon, at such time and the proceeds thereof may be applied to payment of all or any part of the claim evidenced or secured by such Lien and the interest, penalties, charges, costs, fees and expenses (including, without limitation, attorneys' fees and disbursements) referred to in subclause (ii) and subclause (iii) of the immediately preceding paragraph. Promptly after such Lien has been vacated or discharged of record, Borrower shall deliver to Lender evidence reasonably satisfactory to Lender that such Lien has been vacated or discharged of record. Thereafter, the amount then remaining in the escrow established pursuant to this Section 3.9 or such bond or letter of credit, as the case may be, shall be returned to Borrower free and clear of the Lien of this Agreement or any other Security Document so long as no Event of Default shall have occurred and be continuing or, if an Event of Default shall have occurred and be continuing, shall be retained by Lender as part of the Collateral.

If any Lien shall not be vacated or discharged as required by this Section, then, in addition to any other right or remedy of Lender, Lender may, but shall not be obligated to, discharge such Lien in such manner as Lender may select, and Lender shall be entitled, if Lender shall so elect, to compel the prosecution of an action for the foreclosure of such Lien by th e lienor and, if Lender shall so elect, to pay the amount of any judgment in favor of such lienor with interest, costs and allowances. Upon request by Lender, Borrower shall pay to Lender, or to any other Person designated by Lender, the amount of all payments made by Lender as provided above and all costs, expenses and liabilities (including, without limitation, attorneys' fees and disbursements) incurred by Lender in connection therewith, together with interest thereon at the Default Rate from the date paid or incurred by Lender until the date so paid to, or as directed by, Lender. To the extent permitted by law, Lender shall thereupon be subrogated to the rights of such lienor and any such payments made by Lender pursuant to this Section 3.9 shall be secured by the Collateral.

To further secure the Obligations, Borrower grants to Lender a security interest in any cash, escrow arrangement, letter of credit, bond or other security provided pursuant to this Section 3.9.

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(ay)Certain Restrictions. Borrower shall not, as Declarant, Timeshare Interest owner or Timeshare Unit owner, without the prior written consent of Lender, such consent not to be unreasonably withheld,

(i)request, consent to or otherwise initiate, consent to or acquiesce in any zoning classification or reclassification of any Resort or the adoption, issuance, imposition or amendment of any other law, ordinance, rule, regulation, order, judgment, injunction or decree relating to the use, occupancy, operation, development, disposition or design of any Resort which would limit the use of th e Pledged Intervals therein or reduce its or their Fair Market Value,

(ii)request, consent to or otherwise initiate, consent to or acquiesce in the annexation of any part of any Resort by or into any municipality or other governmental or quasi-governmental unit,

(iii)enter into, consent to or otherwise cause, permit or suffer to become subject to any covenant, agreement or other arrangement restricting or limiting the use, occupancy, operation, development or disposition thereof (other than any covenant of this Agreement, the other Security Do cuments, or any Declaration),

(iv)except as permitted in the applicable Declaration, permit the Timeshare Interests or the Timeshare Units to be used other than for nonpermanent residential purposes, or

(v)consent to any material amendment, modification, alteration or other change to any Declaration without the prior written consent of Lender, or otherwise sell Timeshare Interests not correctly set forth in the applicable Declaration.

(az)Use by Public. Borrower shall not cause, permit or suffer to be used by the public without restriction (except as required by Applicable Law or as otherwise provided in the applicable Declaration or Resort Map) or in any manner that might tend to impair Borrower's right, title and interest in and to each Resort or in any manner that might make possible any claim of adverse usage or adverse possession by the public or any claim of implied dedication of all or any part of any Resort.

(ba)Voting Rights. Except with the prior written consent of Lender, Borrower shall not propose or vote for or consent to any modification of, or amendment to, any Declaration or any Owner's Association's Articles of Incorporation or By-Laws which could have (in the reasonable sole opinion of Lender) a material adverse effect on the Collateral or the operation or prospects of any Resort. In each case under the applicable Declaration and/or the applicable Owner's Association's Articles of Incorporation or By-Laws in which the consent or the vote of a holder of a mortgage or “security interest” in respect of the Timeshare Interests and/or the Timeshare Units (including any such case in which Borrower would be considered to be a holder of a mortgage or “security interest” by virtue of any Timeshare Mortgage) is provided for or is required, or in which Borrower's consent is required (as Declarant or as an owner of a Timeshare Interest or Timeshare Unit or as a vendor or mortg agee or otherwise) for any proposed action, Borrower shall not vote or give such consent without obtaining the prior written consent of Lender if such action (in the reasonable opinion of Lender) could have an material adverse effect on the Collateral or the operation or prospects of any Resort.

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(bb)Access. Wit h respect to the consummation of each sale of a Pledged Interval to a Purchaser under a Purchase Agreement and in connection with the acquisition of each Additional Resort, Borrower shall cause the owner of such Pledged Interval and any purchaser of any fee simple interest in such Additional Resort to have access to a publicly dedicated road and shall cause all private roadways, parking lots and rights of way within the applicable Resort or other private areas in such Resort to be Common Elements or Resort Facilities in respect of such Pledged Interval.

(bc)Utilities. With respect to the consummation of each sale of a Pledged Interval to a Purchaser under a Purchase Agreement and in co nnection with the acquisition of each Additional Resort, Borrower shall cause electric, gas, sewer, and water service and other necessary utilities to be available to the Timeshare Units and to any unit in each Additional Resort in sufficient capacity to service the same and shall pay, or cause to be paid, all tap fees or other connection charges in respect thereof).

(bd)Use of Amenities. With respect to the consummation of each sale of a Pledged Interval to a Purchaser under a Purchase Agreement and in connection with the acquisition of each Additional Resort, Borrower shall cause the owner of such Pledged Interval and any purchaser of any fee simple interest in such Additional Resort to have access to, and the use of, all of the amenities and public utilities relating to the applicable Resort and such Pledged Interval (consistent with the contractual provisions and rules and regulations existing with respect to such amenities and public utilities), including, without limitation, the Resort Facilities and rights of way.

(be)Timeshare Regime. The Borrower shall do all things necessary in order to preserve the timeshare regimes in respect of all Pledged Intervals.

(bf)Local Legal Compliance. Borrower shall comply, and shall cause each Resort (including each Additional Resort), each Pledged Interval, the other Timeshare Interests and Timeshare Units to comply, with all applicable restrictive covenants, zoning, design and land use ordinances and building codes, all applicable health and environmental laws and regulations and all other Applicable Laws, rules and regulations and all approvals, consents and licenses (including, without limitation, the applicable Declaration). Borrower shall cause all Timeshare Interests (including the Pledged Intervals) and the sales thereof to comply with all Applicable Laws, rules and regulations, and all approvals, consents and licenses (including without limitation, each Declaration).

(bg)Registration Compliance. Borrower shall diligently pursue the obtaining of, and, after the obtainment thereof, shall maintain, or cause to be maintained, all necessary consents, franchises, approvals, and exemption certificates in connection with, and Borrower will make, or cause to be made, all registrations or declarations with any government or any agency or department thereof required in connection with, the occupancy, use and operation of each Resort (including each Additional Resort) and the marketing and sale of the Timeshare Interests (including all Pledged Intervals).

(bh)Records. Borrower shall maintain accurate and complete files relating to the Purchase Agreements and the other Collateral to the reasonable satisfaction of Lender, and such files will contain copies of each Purchase Agreement, the Note Receivable, Timeshare Mortgage, all relevant credit memoranda, and all collection information and correspondence in respect thereof, as the case may be.

(bi)Forms of Timeshare Documents. Instruments in substantially the form of the Purchase Agreement, the form of statement of rescission rights required by Applicable Laws, and the form of other instruments and documents related thereto, including, if applicable, any Note Receivable and/or Timeshare Mortgage, in each case in form and substance reasonably acceptable to Lender, shall be used by Borrower for all purchase and sale transactions of Pledged Intervals. Borrower shall not materially modify, amend or otherwise alter any of the terms of such forms without Lender's prior written consent, except as may be required by any regulatory agency or Applicable Law. Notwithstanding Lender's review and determination of acceptability, if any, of such forms, Borrower shall remain solely liable for all aspects of such forms and their use; any determination of acceptability, if any, by Lender relating to such forms shall only be for Lender's benefit and no other Person shall be entitled to rely thereon in any manner.

Instruments in substantially the form of the Note Receivable, the form of the Timeshare Mortgage, the form of the grant deed, the form of the Truth-in-Lending Statement and the form of the other instruments and documents related thereto set forth, in each case, in form and substance reasonably acceptable to Lender, shall be used by Borrower for all sales of Timeshare Interests which are financed by Borrower or Lender after the Closing Date and for so long as any Obligation remains outstanding. Borrower shall not materially modify, amend or otherwise alter such forms or any of the terms of such forms without Lender's prior written consent, such consent not to be unreasonably withheld, except as may be required by any regulatory agency or Applicable Law. Notwithstanding Lender's review and determination of acceptability, if any, of such forms, Borrower shall remain solely liable for all aspects of such forms and their use; any determination of acceptability, if any, by Lender relating to s uch forms shall only be for Lender's benefit and no other Person shall be entitled to rely thereon in any manner.

(bj)Property-Related Contracts. Except as required by Applicable Law, or if otherwise waived by Lender, and if such amendment to, modification or new Property-Related Contract described below will have, or could reasonably be expected to have a material adverse effect on Borrower's ability to pay the Loan or the value of the Collateral, or Lender's Liens on the Collateral or the priority of any such Lien, Borrower shall not modify, amend, or enter into, or (subject to the rights and obligations of any Owner's Association and its members under any Declaration or any Owner's Association's Articles of Incorporation or By-Laws) permit to be modified, amended, or enter into, any Property-Related Contract without the prior written consent of Lender, which consent shall not be unreasonably withheld. Borrower shall perform all of its obligations in a timely fashion under each Property-Related Contract. For purposes of this Section 3.11(i), and for no other purpose, section or reference in this Agreement or any other Loan Document, the term, “Property-Related Contracts” shall not include sales and marketing agreements or contracts related to the sales of Timeshare Interests, or any employment related agreements or contracts between Borrower and either (i) any Executive Management Member and (ii) any member of senior management of Borrower.

(bk)Undertaking. Borrower shall perform each and every covenant, agreement, and undertaking applicable to Borrower (whether as Declarant, owner of a Timeshare Interest or Timeshare Unit or otherwise) under each Declaration and each Owner's Association's Articles of Incorporation or By-Laws.

. All Insurance Premiums and all expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral, any and all Impositions on any of the Collateral or in respect of the sale or other disposal thereof shall be borne and paid by Borrower.

If, by reason of any suit or proceeding of any kind, nature or description against Borrower, or by Borrower or any other party against any other Person, or by reason of any other facts or circumstances, which in Lender's sole discretion makes it advisable for Lender to seek counsel for the protection and preservation of the Collateral, or to defend its own interest, such expenses and counsel fees shall be allowed to Lender and borne and paid by Borrower.

. All sums paid or incurred by Lender under this Section 3, and any and all other sums for which Borrower may become liable hereunder, and all costs and expenses (including payments to other Lien holders and attorneys' fees, legal expenses and court costs) which Lender may incur in enforcing or protecting its Lien on, or rights and interest in, the Collateral or any of its rights or remedies under this Agreement or any other Security Document or in respect of a ny of the transactions contemplated herein or therein (a) shall be considered as additional indebtedness owing by Borrower to Lender hereunder and, as such, shall be secured by all of the Collateral, and (b) shall accrue interest at the Default Rate from the date paid by Lender until paid in full by Borrower, provided that any sums paid or incurred by Lender under this Section 3 when no Event of Default shall then exist in respect of the payment of such sums and no other Event of Default shall exist hereunder shall accrue interest at the Interest Rate for the Receivables Loan and not the Default Rate and provided further that such sums paid or incurred by Lender shall accrue interest at the Default Rate when the Default Rate shall otherwise be applicable hereunder.

. Lender shall not be (a) obligated or responsible for, the payment of any of the amounts or sums referred to in this Section 3, or (b) liable or responsible in any way for the safekeeping of any of the Collateral or for any los s or damage thereto.

. Upon prior notification to Borrower following the continuance of an Event of Default, Lender may contact any Purchaser solely for the purpose of verifying the Purchase Agreement to which such Purchaser is a party and Borrower shall render such assistance to Lender in connection therewith as Lender may reasonably request.

(bl)Release for Timeshare Interests. Provided no Event of Default has occurred which is continuing, Lender agrees to execute and deliver to Borrower or its escrowee the documents referred to below pursuant to which the security interest and Lien in and to any Pledged Interval constituting a Timeshare Interest (other than an Encumbered Timeshare Interest) created by this Agreement, any Mortgage or any other Security Document will be released if, but only if, all of the following conditions shall have been fully satisfied:

(i)the full Release Fee and, as applicable following any Amortization Triggering Event or in the event there is a Borrowing Base deficiency, the full Release Price, in respect of such Pledged Interval shall have been paid to and received by Lender or its agent in good, collected funds;

(ii)a request, substantially in the form of Exhibit B attached hereto, shall have been completed and executed by Borrower and submitted to Lender not less than 2 Business Days in advance of the date on which Borrower desires to consummate such release; a nd

(iii)a partial release of mortgage, in form and substance satisfactory to Lender, and a partial release of security interest, in form and substance satisfactory to Lender, shall have been completed by Borrower and submitted to Lender with the aforesaid request.

Borrower shall bear the responsibility of recording any and all documents executed by Lender under this Section 3.16(a). Borrower shall pay all escrow costs and recording and transfer costs in respect of such do cuments. Following the occurrence of an Amortization Triggering Event, if requested by Lender, Borrower shall establish an escrow in respect of any release under this Section 3.16(a). If Lender requests an Escrow Agent be established following the occurrence of an Amortization Trigger Event, Lender shall deposit the documents to be executed by it pursuant to clause (iv) above in such escrow if, but only if,

(1)the documentation establishing such escrow is in form and substance satisfactory to Lender and such documentation shall have been submitted to Lender together with the written request referred to in clause (ii) above,