Exhibit 10.2

 

 

 

 

 

 

FIRST AMENDED and RESTATED

LOAN AND SECURITY AGREEMENT

(Hypothecation Facility)

By and Between

NATIONAL BANK OF ARIZONA

and

BLUEGREEN/BIG CEDAR VACATIONS, LLC

Dated: June 30, 2015

_________________________________

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TABLE OF CONTENTS

Page

 

 

 

1

DEFINITIONS

2 

1.1 

Certain Defined Terms

2 

1.2 

Other Definitional Provisions

24 

2

LOAN COMMITMENT; USE OF PROCEEDS

25 

2.1 

Loan Commitment

25 

 

(a)  Determination of Advance Amounts

25 

 

(b)  Revolving Nature of Loan

26 

2.2 

Continuation of Obligations Throughout Term

26 

2.2.1

Other Conditions

26 

2.3 

Use of Advance

26 

2.3.1

Aggregation for Purpose of Determining Shortfall

26 

2.3.2

Cross-Collateralization

27 

2.3.3

Revolving Facility

27 

2.4 

Repayment of Loan

27 

2.5 

Interest

27 

2.6 

Payments

27 

2.7 

Minimum Required Payments

28 

 

(a)  Periodic Loan Payments

28 

 

(b)  Maximum Permitted Outstanding Principal Balance

28 

 

(c)  Borrowing Base Maintenance

29 

2.8 

Prepayment

30 

 

(a)  Prohibitions on Prepayment; Prepayment Premium

30 

 

(b)  Exceptions to Prepayment Prohibitions

32 

 

(c)  Prepayment Premium Payable for Involuntary Prepayments

32 

2.9 

Loan Fee

32 

2.1 

Application of Proceeds of Collateral and Payments

32 

2.11 

Borrower's Unconditional Obligation to Make Payments

33 

2.11 

Non-Use Fee

33 

3

SECURITY

33 

3.1 

Grant of Security Interest in Collateral

33 

 

(a)   Grant

33 

 

(b)  Assigned Notes Receivable

33 

3.2 

Lockbox Collections and Servicing; Reconciliation Reports

34 

 

(a)  Collections

34 

 

(b)  Reports

34 

 

(c)  Notice to Purchasers

35 

3.3 

Custodial Agent; Backup Servicing Agent

35 

3.4 

Replacement of Agents

35 

3.5 

Maintenance of Security

36 

3.6 

Liability of Guarantor

36 

4

CONDITIONS PRECEDENT TO ADVANCE; METHOD OF DISBURSEMENT

36 

4.1 

Closing Conditions

36 

 

(a)  Loan Documents

36 

 

(b)  Opinions

36 

 

(c)  Organizational Documents

36 

 

(d)  Credit Reports; Search Reports

37 

 

(e)  Timeshare Project Due Diligence

37 

 

(f)  Subordinate Debt

37 

 

(g)  Exchange Affiliation

37 

 

 

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TABLE OF CONTENTS

(Continued)

 

 

 

 

(h)  Payment of Expenses

37 

 

(i)  First Right of Refusal

38 

 

(j)  Inventory Loan

38 

4.2 

Conditions Precedent and Subsequent to Advance

38 

4.2.1

Conditions Precedent

38 

 

(a)  Request for Advance

38 

 

(b)  Timeshare Documents

38 

 

(c)  Receivables Schedules

38 

 

(d)  Promised Improvements

38 

 

(e)  Servicing Agent Confirmation

39 

 

(f)  Report from Custodial Agent

39 

 

(g)  Confirmation of Recording

39 

 

(h)  Event of Default

39 

 

(i)  Representations and Warranties

39 

 

(j)  No Violation of Usury Law

39 

 

(k)  Payment of Fees

39 

 

(l)  Condemnation or Litigation

39 

 

(m) Other Items

39 

4.2.2

Conditions Subsequent

39 

4.3 

Conditions Satisfied at Borrower's Expense

40 

4.4 

Disbursement of Advances

40 

4.5 

No Waiver

41 

5

REPRESENTATIONS AND WARRANTIES

41 

5.1 

Good Standing

41 

5.2 

Power and Authority; Enforceability

41 

5.3 

Borrower's Principal Place of Business

41 

5.4 

Compliance with Legal Requirements

42 

5.5 

No Misrepresentations

42 

5.6 

No Default for Third Party Obligations

43 

5.7 

Payment of Taxes and Other Impositions

43 

5.8 

Governmental Regulations

43 

5.9 

Employee Benefit Plans

43 

5.1 

Securities Activities

44 

5.11 

Sales Activities

44 

5.12 

Timeshare Interest Not a Security

44 

5.13 

Representations as to each Timeshare Project

45 

 

(a)  Title; Prior Liens

45 

 

(b)  Timeshare Plan

45 

 

(c)  Access

45 

 

(d)  Utilities

45 

 

(e)  Amenities

45 

 

(f)  Improvements

45 

 

(g)  Sale of Intervals

45 

 

(h)  Zoning Laws, Building Codes, Etc.

45 

 

(i)  Units Ready for Use

46 

5.14 

Eligible Notes Receivable

46 

5.15 

Association; Assessments and Reserves

46 

5.16 

Title to and Maintenance of Common Areas and Amenities

46 

5.17 

Reservation System

47 

5.18 

Litigation and Proceedings

47 

5.19 

Operating Contracts

48 

5.2 

Subsidiaries, Affiliates and Capital Structure

48 

5.21 

Timeshare Program Consumer Documents

48 

5.22 

Public Reports

48 

5.23 

Solvency

48 

 

 

 

 

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5.24 

No Material Adverse Change in Financial Condition

49 

5.25 

Timeshare Program Governing Documents

49 

5.26 

Marketing Activities

49 

5.27 

Brokers; Payment of Commissions

49 

5.28 

Reserved

49 

5.29 

Foreign Assets Control Regulations

49 

5.3 

Survival and Additional Representations and Warranties

51 

6

COVENANTS

51 

6.1 

Affirmative Covenants

51 

 

(a)  Good Standing

51 

 

(b)  Compliance with Legal Requirements

51 

 

(c)  Insurance, Casualty and Condemnation

51 

 

(d)  Reports

53 

 

(e)  Subordination of Indebtedness Owing to Affiliates

57 

 

(f)  Payment of Taxes

57 

 

(g)  Payment of Impositions

57 

 

(h)  Further Assurance

58 

 

(i)  Fulfillment of Obligations Under Project and Consumer Documents

58 

 

(j)  Material Increases to Assessments

58 

 

(k)  Maintenance of Timeshare Project and Other Property

58 

 

(l)  Maintenance of Larger Tract

58 

 

(m)  Collection of Receivables Collateral

58 

 

(n)  Loan File

59 

 

(o)  Financial Covenants

59 

 

(p)  Exchange Affiliation

59 

 

(q)  Right to Inspect

59 

 

(r)  Management and Marketing

60 

6.2 

Negative Covenants

60 

 

(a)  Change in Borrower's Name, Principal Place of Business, Jurisdiction of
Organization or Business

60 

 

(b)  Restrictions on Additional Indebtedness

60 

 

(c)  Ownership and Control

61 

 

(d)  No Sales Activities Prior to Approval

61 

 

(e)   No Modification of Receivables Collateral or Payments by Borrower

61 

 

(f)  No Modification of Timeshare Documents

62 

 

(g)  Maintenance of Larger Tract

62 

 

(h)  Making Loans

62 

 

(i)  Negative Pledge

62 

 

(j)  Continuity of Operations

63 

 

(k)  Prohibited Drug Law Activities

64 

6.3 

Survival of Covenants

64 

7

DEFAULT

64 

7.1 

Events of Default

64 

 

(a)  Payments

64 

 

(b)  Covenant Defaults

64 

 

(c)  Cross-Default

65 

 

(d)  Environmental Default

65 

 

(e)  Default by Borrower in Other Agreements

65 

 

(f)  Warranties or Representations

65 

 

(g)  Termination of Borrower

65 

 

(h)  Enforceability of Liens

65 

 

(i)  Creditor or Forfeiture Proceedings

66 

 

(j)  Guaranty

66 

 

(k)  Governmental Actions

66 

 

 

 

 

 

 

(l)  Bankruptcy

66 

2

 

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TABLE OF CONTENTS

(Continued)

 

(m) Attachment, Judgment, Tax Liens

66 

 

(n)  Material Adverse Change

66 

 

(o)  Criminal Proceedings

66 

 

(p)  Loss of License

67 

 

(q)  Suspension of Sales

67 

 

(r)  Reserved

67 

 

(s)  Timeshare Documents

67 

 

(t)  Removal of Collateral

67 

 

(u)  Operating Contracts

67 

 

(v)  Vacation Club

67 

 

(w)  Other Defaults

68 

7.2 

Effect of an Event of Default; Remedies

68 

7.3 

Application of Proceeds During an Event of Default

70 

7.4 

Uniform Commercial Remedies; Sale; Assembly of Receivables Collateral

70 

 

(a)  UCC Remedies; Sale of Collateral

70 

 

(b)  Lender's Right to Execute Conveyances

70 

 

(c)  Obligation to Assemble Receivables Collateral

70 

 

(d)  Registration

71 

7.5 

Application of Proceeds

71 

7.6 

Lender's Right to Perform

71 

7.7 

Waiver of Marshalling

71 

7.8 

Waiver in Legal Actions

72 

7.9 

Set-Off

72 

8

COSTS AND EXPENSES; INDEMNIFICATION; DUTIES OF LENDER

72 

8.1 

Costs and Expenses

72 

8.2 

Indemnification

73 

8.3 

Duties of Lender

73 

8.4 

Delegation of Duties and Rights

73 

8.5 

Foreign Assets Control

74 

9

CONSTRUCTION AND GENERAL TERMS

74 

9.1 

Payment Location

74 

9.2 

Entire Agreement

74 

9.3 

Powers Coupled with an Interest

74 

9.4 

Counterparts; Facsimile Signatures

74 

9.5 

Notices

75 

9.6 

Borrower's Representative

76 

9.7 

General Submission Requirements

76 

9.8 

Participation

77 

9.9 

Successors and Assigns

78 

9.1 

Severability

78 

9.11 

Time of Essence

78 

9.12 

Miscellaneous

79 

9.13 

Forum Selection; Jurisdiction; Choice of Law

79 

9.14 

Dispute Resolution

79 

9.15 

Interpretation

81 

9.16 

Destruction of Note; Substitute Note

81 

9.17 

Compliance With Applicable Usury Law

82 

9.18 

No Relationship with Purchasers

82 

9.19 

No Joint Venture

82 

9.2 

Scope of Reimbursable Attorney's Fees

82 

9.21 

Confidentiality

83 

9.22 

Relief from Automatic Stay, Etc

83 

9.23 

Reliance

83 

 

 

 

 

9.24 

Limitation of Damages

83 

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TABLE OF CONTENTS

(Continued)

9.25 

Waiver of Right of First Refusal

84 

9.26 

Consents, Approvals and Discretion

84 

9.27 

USA Patriot Act Notice

84 

9.28 

Errors and Omissions

85 

9.29 

Background Statements

85 

9.3 

Waiver of Defenses and Release of Claims

85 

9.31 

Document Imaging

85 

9.32 

Prior Loan Agreement

85 

 

 

 

 

4

 

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FIRST AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS FIRST AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (together with the
Exhibits and Schedules attached hereto, collectively, this "Agreement") is made
as of June 30, 2015 by and between BLUEGREEN/BIG CEDAR VACATIONS, LLC, a
Delaware limited liability company ("Borrower") and NATIONAL BANK OF ARIZONA, a
national banking association ("Lender").

 

BACKGROUND

 

A.The Bluegreen Vacation Club (the "Vacation Club") is a multi-site timeshare
plan established by Bluegreen Vacations Unlimited, Inc. pursuant to the Vacation
Club Trust Agreement and entitles Purchasers who become Owner Beneficiaries
under the Vacation Club Trust Agreement to use any component site within the
Vacation Club, subject to the Vacation Club Trust Agreement and the rules and
regulations governing such occupancy, including, without limitation, its
reservation procedures. 

 

B.Borrower is the developer of the Long Creek Project, the Big Cedar Project and
the Paradise Point Project.  In addition to other component site resorts, each
of the Long Creek Project, the Big Cedar Project and the Paradise Point Project
are component site resorts within the Bluegreen Vacation Club. 

 

C.When a Purchaser purchases a Timeshare Interest in either of the Timeshare
Projects, the purchased Timeshare Interest is conveyed by the Borrower to the
Vacation Club Trustee at the Purchaser's direction as set forth in the Purchase
Contract to be held under the terms of the Vacation Club Trust Agreement.  The
Purchaser thereby is designated an Owner Beneficiary and receives Owner
Beneficiary Rights and appurtenant Vacation Points and is entitled to all the
benefits accruing to Owner Beneficiaries under the Vacation Club Trust
Agreement. 

 

D.If the Borrower provides purchase money financing to the Purchaser, the
Vacation Club Trustee (as the title holder of the purchased Timeshare Interest),
at the direction of the Purchaser, executes the Purchaser Mortgage in favor of
the Borrower to secure such financing.  To the extent that the Purchaser
Mortgage is assigned to Lender in consideration for an Advance, the Lender
becomes an Interest Holder Beneficiary under the Vacation Club Trust Agreement
and is thereby entitled to all of the benefits accruing under the Vacation Club
Trust Agreement to Interest Holder Beneficiaries.

 

E. Effective on September 30, 2010, Borrower and Lender entered into that
certain Loan and Security Agreement (the "Original Loan Agreement"), which was
amended pursuant to (i) that certain Amendment No. 1 to Loan and Security
Agreement dated May 31, 2011 (the "Amendment No. 1"), (ii) that certain
Amendment No. 2 to Loan and Security Agreement dated October 10, 2012 (the
"Amendment No. 2"), (iii) that certain Letter Agreement (containing the subject
line "Year End Advances – Reduced Interest Rate" dated October 31, 2012) (the
"10/12 Letter Agreement"), (iv) that certain Amendment No. 3 to Loan and
Security Agreement dated December 13, 2013 (the "Amendment No. 3"), and (v) that
certain Letter Agreement (containing the subject line "Q4 2014

 

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Note Receivable Loan Advance" dated September 17, 2014) (the "9/14 Letter
Agreement" and together with the Original Loan Agreement, the Amendment No. 1,
Amendment No. 2, the 10/12 Letter Agreement, and Amendment No. 3, the "Prior
Loan Agreement") pursuant to which Lender agreed to make a revolving Loan for
purposes of financing receivables arising from the sale of Timeshare Interests
at Bluegreen Wilderness Club at Big Cedar, Long Creek Ranch at Big Cedar and
Paradise Point Resort.  The loan made pursuant to the Prior Loan Agreement was
advanced in various tranches which were identified in the Prior Loan Agreement
as Tranche A, Tranche B, Tranche C and Tranche D.  Tranche A, Tranche B and
Tranche C have been paid in full.

 

F. In addition to the foregoing Loan, Borrower and Lender are parties to another
loan transaction, the purpose of which is to provide Borrower with an inventory
loan facility in the aggregate amount of up to $15,000,000 (such inventory loan
transaction is sometimes referred to as the "Inventory Loan").  

 

G. The Inventory Loan is evidenced by, among other documents, a First Amended
and Restated Loan Agreement (Inventory Loan) dated June 30, 2015 (as amended
from time to time, the "Inventory Loan Agreement") and other documents executed
in connection therewith and defined in the Inventory Loan Agreement as the "Loan
Documents" (as amended from time to time, collectively with the Inventory Loan
Agreement, the "Inventory Loan Documents"). 

 

H. Subject to the satisfaction of certain conditions, Lender and Borrower desire
to amend and restate the Prior Loan Agreement in order to, inter alia,
(i) retain Tranche D (non-9/14 Letter Agreement) (as hereinafter defined) within
"Tranche D", (ii) consolidate Tranche D (9/14 Letter Agreement) (as hereinafter
defined) and a new tranche of Loan Proceeds to be advanced under this Agreement
into one tranche which shall thereafter be referred to as "Tranche E",
 (iii) set forth the terms and conditions under which the proceeds of Tranche E
will be advanced, and (iv) extend the Borrowing Term and the Maturity Date.    

 

I. This Agreement amends, restates and supersedes the Prior Loan Agreement, and
upon the full execution and delivery of this Agreement and the other Loan
Documents by all parties thereto, this Agreement shall become effective and the
Prior Loan Agreement shall be of no further force or effect. 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and the other Loan Documents, and for other good and
valuable consideration, the receipt and adequacy of which are acknowledged, the
parties to this Agreement agree as follows:

 

1.DEFINITIONS

 

1.1Certain Defined Terms.  As used in this Agreement (including any Exhibits
attached hereto) and the other Loan Documents unless otherwise expressly
indicated in this Agreement or the other Loan Documents, the following terms
shall have the following meanings (such meanings to be applicable equally both
to the singular and plural terms defined).

 

2

 

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9/14 Letter Agreement:  defined in the Background Statements.

 

620/575 FICO Score Notes Receivable:  those Notes Receivable under which the
Purchaser thereof has a FICO Score of less than 620 but equal to or greater than
575.

 

Additional Collateral:  has the meaning given to it in Section 2.3.2 hereof. 

 

Advance:    an advance of the proceeds of the Loan by Lender to, or on behalf
of, Borrower in accordance with the terms and conditions of this Agreement,
including an Availability Advance. 

 

Affiliate:  Any Person:  (a) which directly or indirectly controls, or is
controlled by, or is under common control with such Person; (b) which directly
or indirectly beneficially owns or holds five percent (5%) or more of the voting
stock of such Person; or (c) for which five percent (5%) or more of the voting
stock of which is directly or indirectly beneficially owned or held by such
Person; provided,  however, that under no circumstances shall Guarantor be
deemed an Affiliate of any 5% or greater shareholder of Guarantor or any
Affiliate of such shareholder who is not a Direct Affiliate (as defined herein)
of Guarantor, nor shall any such shareholder be deemed to be an Affiliate of
Guarantor.  The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.  For purposes of this definition, (i) only entities included in
Guarantor’s GAAP consolidated financial statements shall be Affiliates of
Guarantor (a "Direct Affiliate"), (ii) Guarantor shall be deemed to be an
Affiliate of Borrower and (iii) each of Bluegreen Vacations Unlimited, Inc. and
Big Cedar, L.L.C. shall be deemed an Affiliate of Borrower.

 

Agents:  the Servicing Agent, the Lockbox Agent and the Custodial
Agent.  "Agent" means, as the context requires, any one of the Agents.

 

Agreement:  this First Amended and Restated Loan and Security Agreement, as it
may from time to time be amended, supplemented or restated.

 

Applicable Usury Law:  the usury law chosen by the parties pursuant to the terms
of Section 9.13 or such other usury law which is applicable if such usury law is
not.

 

Articles of Organization:  the charter, articles of incorporation, articles of
organization, operating agreement, joint venture agreement, partnership
agreement, by-laws and any other written documents evidencing the formation,
organization, governance and continuing existence of an entity.

 

Assignment:    a written Collateral Assignment of Notes Receivable and Purchaser
Mortgages and their proceeds, executed by Borrower substantially in the form and
substance of Exhibits A-1,  A-2 and A-3 attached hereto as to the Big Cedar
Project, the Long Creek Project and the Paradise Point Project, respectively. 

 

Availability Advance: an Advance which is made against an Eligible Note
Receivable after the first Advance made against such Note Receivable in an
amount up to eighty five percent (85%) of the then-outstanding principal balance
of all Eligible Notes Receivable pledged to Lender minus the unpaid Loan
balance.

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Backup Servicing Agent:  Concord Servicing Corporation, an Arizona corporation,
as the Backup Servicing Agent, or its successor as Backup Servicing Agent, under
the Backup Servicing Agreement.

 

Backup Servicing Agreement:  the agreement dated as of September 30, 2010 among
Lender, Servicing Agent, Borrower and Backup Servicing Agent which provides for
Backup Servicing Agent to perform for the benefit of Lender backup accounting,
reporting and other servicing functions as set forth therein with respect to the
Receivables Collateral, as it may from time to time be amended, supplemented or
restated. 

 

Bankruptcy Code:  as defined in Section 9.22 hereof.

 

Base Rate:  the rates per annum quoted by Lender as Lender's 30 day LIBOR rate
based upon quotes from the London Interbank Offered Rate from the British
Bankers Association Interest Settlement Rates, as quoted for U.S. Dollars by
Bloomberg, or other comparable services selected by the Lender.  The Index is
not necessarily the lowest rate charged by Lender on its loans.  If the
foregoing 30 day LIBOR rate becomes unavailable during the Term, Lender may
designate a substitute index after notifying Borrower.  The 30 day LIBOR rate is
to be strictly interpreted and is not intended to serve any purpose other than
providing an index to determine the interest rate used herein.  The LIBOR rate
selected by Lender may not necessarily be the same as the quoted "offer" side in
the Eurodollar time deposit market by any particular institution or service
applicable to any interest period. 

 

Base Rate Determination Date:  two Business Days prior to the last Business Day
of each calendar month.  Notwithstanding the foregoing, the initial Base Rate
Determination Date shall be two Business Days prior to the Effective Date.

 

Basic Interest:  as defined in Section 2.5 hereof.

 

Basic Interest Rate:  (a) as to Tranche D, the variable rate of interest per
annum, adjusted as of each Base Rate Determination Date, equal to the Base Rate
in effect as of each such Base Rate Determination Date, plus 350 basis points,
but in no event shall the Basic Interest Rate, as to Tranche D, exceed the rate
permitted by Applicable Usury Law or fall below 4.5% per annum, and (b) as to
Tranche E, the variable interest rate per annum, adjusted as of each Base Rate
Determination Date, equal to the Base Rate in effect as of each Base Rate
Determination Date, plus 325 basis points, but in no event shall the Basic
Interest Rate, as to Tranche E, exceed the rate permitted by the Applicable
Usury Law or fall below 4.00% per annum. 

 

BFC:BFC Financial Corporation, a Florida corporation. 

 

Big Cedar Project:  that certain vacation ownership project, commonly known as
Bluegreen Wilderness Club at Big Cedar, located in Ridgedale, Missouri.

 

Big Cedar Timeshare Association:  Big Cedar Wilderness Club Condominium
Association, Inc., a Missouri corporation not-for-profit, which is the
association established in accordance with

4

 

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the Big Cedar Timeshare Declaration to manage the Big Cedar Timeshare Program
and in which all owners of Timeshare Interests at the Big Cedar Project will be
members.

 

Big Cedar Timeshare Declaration:  that declaration of covenants, conditions and
restrictions which has been executed by Borrower, recorded in the real estate
records of the county where the Big Cedar Project is located, and has
established the Big Cedar Timeshare Program.

 

Big Cedar Timeshare Management Agreement:the management agreement from time to
time entered into between the Big Cedar Timeshare Association and the Timeshare
Manager for the management of the Big Cedar Timeshare Program. 

 

Big Cedar Timeshare Program:  the program created within the Big Cedar Project
under the Big Cedar Timeshare Declaration by which Persons may own Timeshare
Interests, enjoy their respective Timeshare Interests on a recurring basis, and
share the expenses associated with the operation and management of such program.

 

Bluegreen:  Bluegreen Corporation, a Florida corporation, formerly, a
Massachusetts corporation.

 

Bluegreen Inc.:  Bluegreen Vacation Club, Inc., a Florida nonprofit corporation,
and its successors and assigns, which was organized and formed to manage and
operate the Vacation Club and with respect to which each Purchaser becomes a
Class A Member thereof upon the purchase of a Timeshare Interest.

 

Borrower:  the entity named as Borrower in the introductory paragraph of this
Agreement and, subject to the restrictions on assignment and transfer contained
in the Loan Documents, its successors and assigns.

 

Borrower Bank Accounts:  as defined in Section 7.2(g) hereof.

 

Borrowing Base:  with respect to an Eligible Note Receivable, an amount equal to
85% of the unpaid principal balance of such Eligible Note Receivable

 

Borrowing Base Certificate a certificate prepared by Borrower substantially in
the form and substance of Exhibit S, attached hereto. 

 

Borrowing Base Shortfall:  at any time, the amount by which the unpaid principal
balance of the Loan exceeds the aggregate then applicable Borrowing Base of all
Eligible Notes Receivable assigned to Lender.

 

Borrowing Term: the period commencing on the Effective Date and ending on June
30, 2018.

 

Business Day:  every day on which Lender's offices in the state of Arizona are
open to the public for carrying on substantially all its business functions or
any day which is not a Saturday or

5

 

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Sunday or a legal holiday under the laws of the State of Missouri, State of
Florida or the United States.

 

Collateral:  the Receivables Collateral and the collateral pledged to Lender
pursuant to the Security Documents.

 

Confirmation of Recording: the form of Confirmation of Recording from Borrower's
title company to Lender in the form attached hereto as Exhibit K. 

 

Custodial Agent:  US Bank National Association or any other Person approved by
Lender in writing as Custodial Agent under the Custodial Agreement.

 

Custodial Agreement:  that certain Second Amended and Restated Custodial
Agreement dated June 30, 2015 among Lender, Borrower and Custodial Agent
pursuant to which the Custodial Agent is providing custodial and other services
to the benefit of Lender with respect to Notes Receivable pledged to Lender and
other items of Receivables Collateral, as such agreement may from time to time
be amended, supplemented or restated. 

 

Debtor Relief Laws:  any applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, insolvency, reorganization or similar law, proceeding
or device providing for the relief of debtors from time to time in effect and
generally affecting the rights of creditors.

 

Default Rate:  the lesser of (a) the maximum per annum rate permitted by
Applicable Usury Law, and (b) five percent (5%) per annum in excess of the
applicable Basic Interest Rate not to exceed a maximum per annum rate of
eighteen percent (18%).

Delinquency Modification:  an amendment or other modification to the terms and
conditions of a Note Receivable resulting from an installment payment thereunder
becoming contractually past due wherein: (a) the remaining term of such Note
Receivables does not exceed 120 months from the date of the modification, (b) at
least one payment thereunder has been made within 30 days of its due date, as
modified,  and (c) the monthly trial balance identifies such Note Receivable as
being so modified.

Effective Date:  the date of this Agreement. 

 

Eligible Note Receivable: a Note Receivable which satisfies the criteria set
forth below as of the date of the applicable Advance (unless another date is
specified, in which case such Note Receivable shall satisfy such criteria as of
such other date): 

 

(a)The Note Receivable was created in connection with the credit purchase and
sale of a Timeshare Interest (thereby entitling the Purchaser to Owner
Beneficiary Rights under the Vacation Club Trust Agreement) pursuant to the
applicable Timeshare Program Consumer Documents which, in all material respects,
shall be in the forms attached hereto as Exhibits C-1, C-2, and C-3 (as to the
Big Cedar Project, the Long Creek Project, and the Paradise Point Project,
respectively) and under the Timeshare Program Governing Documents approved by
Lender.

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(b)The Purchaser thereunder has made a down payment or payments by cash, check,
credit card or otherwise totaling at least 10% of the actual purchase price
(including closing costs) of the related Timeshare Interest (which down payment
may, (i) in the case of Upgrade Note Receivables or conversion in connection
with an Introductory Loan be represented in whole or in part by the principal
payments and down payment made on, as applicable, such related Original Note
Receivable, related Introductory Loan or the related Timeshare Interest, since
its date of origination, or (ii) in the case of an Upgrade or a conversion in
connection with an Introductory Product, be represented in whole or in part by
the amount paid where the Purchaser has paid in full, whether at the point of
sale or otherwise for the original Timeshare Interest or Introductory Product,
as applicable);

(c)Other than with respect to a Delinquency Modification, the Note Receivable
has an original maturity date of 120 months or less, payable in equal monthly
installments of principal and interest;

(d)The annual rate of interest applied to the unpaid principal balance of the
applicable Note Receivable (other than those Notes Receivable that are subject
to the Servicemembers Civil Relief Act) is at least a fixed rate of 11.99% per
annum.  At all times, the weighted average interest rate for the entire
portfolio of Notes Receivable collaterally assigned to Lender (including those
that are the subject of the Servicemembers Civil Relief Act) must be at least
equal to 13.5% per annum;

(e)Other than as to 620/575 FICO Score Notes Receivable, No Fico Score Notes
Receivable and Non-Resident Notes Receivable for which no FICO Score is
available, the Purchaser's FICO Score shall not be less than 620;

(f)The minimum weighted average FICO Score of all Eligible Notes Receivable
assigned to Lender and with respect to which a FICO Score is available, shall be
at least 690.  Other than with respect to a No FICO Score Note Receivable and a
Non-Resident Note Receivable, in no event shall a particular Note Receivable
qualify as an Eligible Note Receivable in the event the FICO Score of the
Purchaser related thereto is less than 575.  In calculating the minimum weighted
average FICO Score, 620/575 FICO Score Notes Receivable shall be included in
such calculation; however, No FICO Score Notes Receivable and Non-Resident Notes
Receivable shall not be included;

(g)Subject to the exception below governing Jumbo Notes Receivable, at the time
of assignment, the principal balance outstanding of any Note Receivable assigned
to Lender shall not exceed $50,000;

(h)The principal balance outstanding of all Notes Receivable from any one
Purchaser (and assigned to Lender hereunder) shall not exceed $100,000 in the
aggregate without the prior written consent of Lender;

(i)The Purchaser is not subject to any bankruptcy proceedings, whether voluntary
or involuntary;

(j)At the time of an Advance against such Note Receivable (or at the time of
delivery of such Note Receivable to Lender in the case of a Borrowing Base
Shortfall,

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pursuant to Section 2.7(c)), no installment payment thereunder is more than 30
days contractually past due at the time of such Advance against (or at the time
of delivery of such Note Receivable to Lender in the case of a Borrowing Base
Shortfall pursuant to Section 2.7(c)) such Note Receivable and after such
Advance or such delivery, no installment payment thereunder shall become more
than 60 days contractually past due; 

(k)Except for the Non-Resident Notes Receivable, the Purchaser is a resident of
the United States of America (including U.S. territories);

(l)The payment to be received is payable in United States dollars;

(m)Reserved;

(n)The Purchaser has no claim of any defense, setoff or counterclaim under the
applicable Note Receivable;

(o)The Note Receivable represents the balance of the sales price of a Timeshare
Interest entitling a Purchaser to Owner Beneficiary Rights under the Vacation
Club Trust Agreement, and the Purchaser of such Timeshare Interest is not, and
no payment of a sum due under the Note Receivable has been made by, Borrower, an
Affiliate, or an officer, director, agent, employee, principal, broker, creditor
(or relative thereof) of Borrower or of any other Person related to or an
Affiliate of Borrower;

(p)The Timeshare Program Consumer Documents executed by the applicable Purchaser
and all other aspects of the related transaction comply with all applicable
Legal Requirements;

(q)Each Note Receivable, and related Timeshare Program Consumer Document (other
than the Purchaser Mortgage) to which the related Purchaser is a party and which
requires the signature of such Purchaser has been duly executed by such
Purchaser.  The Purchaser Mortgage has been executed by the Vacation Club
Trustee;

(r)The Unit in which the applicable Timeshare Interest financed by the Note
Receivable is situate and to which the Purchaser has access: (i) has been
completed in compliance with all Legal Requirements, is currently served by all
required utilities, is fully furnished and ready for use, subject to renovations
for improvements from time to time in the ordinary course of maintaining the
Unit; (ii) is covered by a valid permanent and unconditional certificate of
occupancy (or its equivalent) duly issued; (iii) is subject to the terms of the
Timeshare Declaration for the applicable Timeshare Project; and (iv) has been
developed to the specifications provided for in the applicable Purchase
Contract.  All furnishings (including appliances) within the Unit(s) to which
the Purchaser has access have been or will timely be fully paid for and are free
and clear of any lien or other interest by any third party, except for any
furniture leases which contain non-disturbance provisions acceptable to Lender;

(s)The Unit in which the applicable Timeshare Interest financed by the Note
Receivable is situate has had all taxes, maintenance, special and other
assessments, penalties and fees related thereto paid when due;

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(t)Any and all applicable rescission periods relating to the purchase by the
applicable Purchaser of a Timeshare Interest have expired;

(u)The Note Receivable is serviced by Guarantor or its successors or assigns, or
by a wholly owned subsidiary thereof, provided that Lender is given written
notice of the identity of such successor servicing agent prior to such Person
assuming servicing responsibilities;

(v)The Note Receivable is secured by a Purchaser Mortgage.  The lien of the
Purchaser Mortgage securing the Note Receivable is or will be a perfected first
priority purchase money mortgage and the related Purchaser Mortgage (i) has been
executed by the Vacation Club Trustee, (ii) will be collaterally assigned of
record to Lender pursuant to the Assignment and a copy of such recorded
Assignment is delivered to the Custodial Agent on or before the expiration of
the Trailing Documents Delivery Date for the subject Advance; and (iii) will
be  fully insured by a Title Policy, when issued, subject only to the Permitted
Encumbrances, in the amount of the Note Receivable, which Title Policy will be
endorsed in the manner specified in the Confirmation of Recording and delivered
to the Custodial Agent on or before the expiration of the Trailing Documents
Delivery Date for the subject Advance;

(w)All representations, warranties and covenants regarding such Note Receivable
and the Timeshare Program Consumer Documents related thereto and the matters
related thereto as set forth in this Agreement are accurate and Borrower shall
have performed all of its obligations with respect thereto;

(x)Lender has a valid, perfected first priority lien against and security
interest in the Note Receivable and the related Timeshare Program Consumer
Documents and all payments to be made thereunder;

(y)The terms of such Note Receivable have not been amended in any way, including
any revisions to the payment provisions to cure any defaults or delinquencies or
a revision that would constitute a downgrade in the type or quality of the
Timeshare Interest purchased by the Purchaser, except in the case of a Permitted
Modification or a Delinquency Modification;

(z)There has been no increase to the applicable interest rate payable on the
Note Receivable as the result of the termination of any automatic payment
option, unless all disclosures required under Regulation Z for such increase
have been properly given by Borrower to Purchaser;

(aa)The Purchaser is not a "blocked person", as defined in the Patriot Act
Certificate and Agreement;

(bb)Each of

(i) a No FICO Score Note Receivable,

(ii) a Non Resident Note Receivable,

(iii) a 620/575 FICO Score Note Receivable, and

(iv) a Jumbo Note Receivable,

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shall be considered Eligible Notes Receivable, provided that (x) the unpaid
principal balance, in the aggregate, of all (A) No FICO Score Notes Receivable,
(B) Non Resident Notes Receivable, (C) 620/575 FICO Score Notes Receivable, and
(D) Jumbo Notes Receivable, assigned to Lender, does not, without duplication,
exceed 10% of the principal balance of all Eligible Notes Receivable assigned to
Lender and against which Lender has made an Advance, and (xi) such Note
Receivable meets all of the other conditions to qualify as an Eligible Note
Receivable;

 

(cc)In addition to meeting the requirements in subsection (bb) above, a No FICO
Score Note Receivable shall be considered an Eligible Note Receivable only in
the event (i) the unpaid principal balance of all No FICO Score Notes Receivable
assigned to Lender does not exceed 5% of the principal balance of all Eligible
Notes Receivable assigned to Lender and against which Lender has made an
Advance, and (ii) such Note Receivable meets all of the other conditions to
qualify as an Eligible Note Receivable;

(dd)In addition to meeting the requirement in subsection (bb) above, a
Non‑Resident Note Receivable shall be considered an Eligible Note Receivable
only in the event (i) the unpaid principal balance of all Non-Resident Notes
Receivable assigned to Lender does not exceed 5% of the unpaid principal balance
of all Eligible Notes Receivable assigned to Lender and against which Lender has
made an Advance, (ii) such Note Receivable meets all of the other conditions to
qualify as an Eligible Note Receivable, and (iii) the payment under such
Non-Resident Note Receivable is made by the Purchaser under an "autopay"
program;

(ee)The Purchaser is personally liable under its Purchase Contract;

(ff)The Purchaser has become an Owner Beneficiary under the Vacation Club Trust
Agreement;

(gg)The purchased Timeshare Interest has been conveyed to the Vacation Club
Trustee to be held under the terms of the Vacation Club Trust Agreement;

(hh)The Purchaser is not an Affiliate, officer, director, agent or employee of
Borrower; and

 

(ii)A Note Receivable which has been modified in a manner which qualifies as a
Delinquency Modification shall be considered an Eligible Note Receivable only in
the event (i) the unpaid principal balance of all such Notes Receivable
(modified in a manner which would qualify as a Delinquency Modification) which
have been assigned to Lender does not exceed 2% of the unpaid principal balance
of all Eligible Notes Receivable assigned to Lender and against which Lender has
made an Advance, (ii) after such modification, no installment payment thereunder
is more than 60 days contractually past due and (iii) such Note Receivable meets
all the other conditions to qualify as an Eligible Note Receivable (including
the 13.5% weighted average interest rate requirement set forth in subsection (d)
above).

 

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Environmental Indemnity:  the First Amended and Restated Hazardous Substances
Remediation and Indemnification Agreement dated as of October 10, 2012, executed
and delivered by Borrower and Guarantor and containing representations,
warranties and covenants regarding the environmental condition of each Timeshare
Project and the Collateral, as such agreement may from time to time be amended,
supplemented or restated. 

 

Event of Default:  as defined in Section 7.1 hereof.

 

Executive Order:  as defined in Section 5.29 hereof.

 

Existing Indebtedness:  Borrower's existing indebtedness owed to Quorum Federal
Credit Union.

 

FICO Score:  a credit risk score determined by the Fair Isaac Company for a
consumer borrower through the analysis of individual credit files.  In the event
that such credit risk scoring program ceases to exist, Lender may select a
successor credit risk scoring program in Lender's discretion. 

 

For Purchasers related to Notes Receivable collaterally assigned to Lender under
this Agreement and which were originated on and after December 15, 2008, the
FICO Score was determined at the point of sale or within 90 days prior to such
sale.  In the event that a Purchaser consists of more than one individual (e.g.,
husband and wife) (a "Purchaser Group"), the FICO Score for such Purchaser Group
shall be based on the highest of the FICO Scores for all individuals who have a
FICO Score in such Purchaser Group.  If all individuals in a Purchaser Group
have no FICO Score, then the Purchaser Group shall be considered to have no FICO
Score.

 

Notwithstanding the foregoing, for Purchasers related to Notes Receivable
collaterally assigned to Lender under this Agreement and which were originated
prior to December 15, 2008, the FICO Score was determined by an Experian Quest
project run in May 2010 and was based on the primary obligor in respect of the
related Note Receivable.

 

Final Rule Effective Date:  the definition for such term as contained in the
Timeshare Program Consumer Documents definition.

 

Foreign Assets Control Regulations:  as defined in Section 5.29 hereof.

 

GAAP:  generally accepted accounting principles, applied on a consistent basis,
as described in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board which are applicable in the circumstances as of the
date in question.

 

Guarantor:  Bluegreen, and, subject to any restrictions on assignment and
transfer contained in the Loan Documents, its successors and assigns.

 

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Guaranty:  a primary, joint and several guaranty agreement made by a Guarantor
with respect to all or any part of the Obligations, as it may be from time to
time amended, supplemented or restated.

 

Impositions:  all present and future real estate, personal property, excise,
privilege, transaction, documentary stamp and other taxes, charges, assessments
and levies (including non-governmental assessments and levies such as
maintenance charges, association dues and assessments under private covenants,
conditions and restrictions) and any interest, costs, fines or penalties with
respect thereto, general and special, ordinary and extraordinary, foreseen and
unforeseen, of any kind and nature whatsoever which at any time prior to or
after the execution hereof may be assessed, levied or imposed.  Impositions
shall include any and all taxes, withholding obligations, deductions, license or
other fees, assessments, charges, fines, duties, imposts, penalties, or any
property, privilege, excise, real estate or other taxes, charges or assessments
currently or hereafter levied or imposed by any local, state, or federal
governmental authority of the United States upon or in connection with or
measured by the Loan Documents, the Collateral, or the principal or accrued
interest under the Loan, the Prepayment Premium, Loan Fee, Non-Use Fee,
servicing fees, custodial fees, lockbox fees, collection fees or other amounts
payable by Borrower to Lender or to Servicing Agent, Backup Servicing Agent,
Custodial Agent or Lockbox Agent under the Loan Documents or by Purchasers to
Borrower or Lender under the Timeshare Program Consumer Documents.

 

Incipient Default:  an event or condition, the occurrence of which would, with a
lapse of time or the giving of notice or both, become an Event of Default.

 

Indebtedness:  for any Person, without duplication, the sum of the following:

 

(a)indebtedness for borrowed money;

 

(b)obligations evidenced by bonds, debentures, notes or other similar
instruments;

 

(c)obligations to pay the deferred purchase price of property or services;

 

(d)obligations as lessee under leases which have been or should be, in
accordance with GAAP, recorded as capital leases;

 

(e)obligations of such Person to purchase securities (or other property) which
arise out of or in connection with the sale of the same or substantially similar
securities or property;

 

(f)obligations of such Person to reimburse any bank or other Person in respect
of amounts actually paid under a letter of credit or similar instrument;

 

(g)indebtedness or obligations of others secured by a lien on any asset of such
Person, whether or not such indebtedness or obligations are assumed by such
Person (to the extent of the value of the asset);

 

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(h)obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) though (g) above;
and

 

(i)liabilities in respect to unfunded vested benefits under plans covered by
Title IV of the Employee Retirement Income Security Act of 1974, as amended.

 

Insurance Policies:  the insurance policies that Borrower is required to
maintain and deliver pursuant to Section 6.1(c) hereof.

 

Intangible Asset.  A nonphysical, noncurrent right that gives Guarantor or any
of its subsidiaries an exclusive or preferred position in the marketplace
including but not limited to a copyright, patent, trademark, goodwill,
organization costs, capitalized advertising cost, computer programs, licenses
for any of the preceding, governmental licenses (e.g., broadcasting or the right
to sell liquor), leases, franchises, mailing lists, exploration permits, import
and export permits, construction permits, and marketing quotas.

 

Interest Holder Beneficiary:  as defined in the Vacation Club Trust Agreement.

 

Introductory Loan:  a loan originated in connection with an Introductory
Product.

 

Introductory Product:  certain introductory products with FICO scores and
finance terms that are intended to be held in Borrower's portfolio.

 

Inventory Loan:  defined in the Background Statements.

 

Inventory Loan Agreement:  defined in the Background Statements.

 

Inventory Loan Documents:  defined in the Background Statements.

 

Jumbo Notes Receivable:  a Note Receivable or multiple Notes Receivable from the
same Purchaser with a balance that exceeds $50,000 but is less than $100,000. 

 

Legal Requirements:  (a) all present and future judicial decisions, statutes,
regulations, permits, approvals, registrations and licenses or certificates of
any governmental authority (including from any state regulatory agency,
department or division in any jurisdiction in which a Timeshare Project is
located which has the power and authority to regulate timeshare projects in such
jurisdiction) in any way applicable to Borrower or its property, including any
applicable state statute or other law in any jurisdiction where a Timeshare
Project is located which governs the creation and regulation of condominiums in
such jurisdiction, as the same may be amended from time to time, and (b) all
contracts or agreements (written or oral) by which Borrower or its property is
bound or, if compliance therewith would otherwise be in conflict with any of the
Loan Documents, by which Borrower or its property becomes bound with Lender's
prior written consent.

 

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Lender:  National Bank of Arizona, a national banking association, and its
successors and assigns.

 

Loan:  Tranche D and Tranche E, collectively. 

 

Loan Documents:  this Agreement, the Note, any and all Guaranties, any and all
Subordination Agreements, the Lockbox Agreement, the Servicing Agreement, the
Backup Servicing Agreement, the Custodial Agreement, the Environmental
Indemnity, the Security Documents, the Patriot Act Certificate and Agreement,
and all other documents now or hereafter executed in connection with the Loan,
as they may from time to time be amended, modified, supplemented or otherwise
restated.

 

Loan Fee:  as defined in Section 2.9 hereof.    

 

Loan File:  with respect to each of the Notes Receivable, all the Timeshare
Program Consumer Documents relating thereto, each duly executed, as applicable,
plus:

 

(a)All guaranties, if any, for the payment of the Notes Receivable and

 

(b)The Title Policy insuring the lien of the Purchaser Mortgage.

 

Lockbox Agent:  Initially, National Bank of Arizona, a national banking
association, as the Lockbox Agent, or its successor as Lockbox Agent, under the
Lockbox Agreement.

 

Lockbox Agreement:  the Lockbox Agreement (Bluegreen/Big Cedar Vacations, LLC)
 dated as of September 22, 2010, as amended by the Amendment No. 1 to Lockbox
Agreement (Bluegreen/Big Cedar Vacations, LLC)  dated as of October 10, 2012, by
and between Lender, Borrower and Lockbox Agent, which provides for Lockbox Agent
to collect, through a lockbox, payments under Notes Receivable constituting part
of the Receivables Collateral and to remit them to Lender, as it may from time
to time be amended, supplemented or restated. 

 

Long Creek Project:  that certain vacation ownership project, commonly known as
Long Creek Ranch at Big Cedar, located in Ridgedale, Missouri.

 

Long Creek Timeshare Association:  Bluegreen Wilderness Club at Long Creek Ranch
Condominium Association, Inc., a Missouri corporation not-for-profit, which is
the association established in accordance with the Long Creek Timeshare
Declaration to manage the Long Creek Timeshare Program and in which all owners
of Timeshare Interests at the Long Creek Project will be members.

 

Long Creek Timeshare Declaration:  that declaration of covenants, conditions and
restrictions which has been executed by Borrower, recorded in the real estate
records of the county where the Long Creek Project is located, and has
established the Long Creek Timeshare Program.

 

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Long Creek Timeshare Management Agreement:  the management agreement from time
to time entered into between the Long Creek Timeshare Association and the
Timeshare Manager for the management of the Long Creek Timeshare Program.

 

Long Creek Timeshare Program:  the program created within the Long Creek Project
under the applicable Timeshare Declaration by which Persons may own Timeshare
Interests, enjoy their respective Timeshare Interests on a recurring basis, and
share the expenses associated with the operation and management of such program.

 

Material Adverse Change:  any material and adverse change in, or a change which
has a material adverse effect upon, any of:

 

(a)the business, properties, operations or condition (financial or otherwise) of
Borrower or of Guarantor, which, with the giving of notice or the passage of
time, or both, could reasonably be expected to result in either (i) Borrower or
Guarantor failing to comply with any of the financial covenants contained in
Section 6.1(o) or (ii) Borrower's or Guarantor's inability to perform its or
their respective obligations pursuant to the terms of the Loan Documents; or

 

(b)the legal or financial ability of Borrower or Guarantor to perform its or
their respective obligations under the Loan Documents and to avoid any Incipient
Default or Event of Default; or

 

(c)the legality, validity, binding effect or enforceability against Borrower or
Guarantor of any Loan Document.

 

Maturity Date:  for each of Tranche D and Tranche E, the first to occur of
(i) December 30, 2022 or (ii) the date on which the Loan is required to be
repaid pursuant to the terms of this Agreement.

 

Maximum Loan Amount:  $45,000,000.

 

Maximum Permitted Outstanding Principal Balance: as defined in Section
2.7(b) hereof.

Minimum Required Timeshare Approvals:  all approvals, registrations and licenses
required from governmental authorities in order to sell and finance Timeshare
Interests and offer them for sale, including a copy of the
registrations/consents to sell, the final subdivision public reports/public
offering statements and/or prospectuses (including the Public Report) and
approvals thereof required to be issued by or used in the jurisdiction where the
applicable Timeshare Project is located and other jurisdictions where Timeshare
Interests have been offered for sale or sold.

 

No FICO Score Notes Receivable:  a Note Receivable from a Purchaser who is a
resident of the United States of America but for whom no FICO Score is available
from Fair Isaac Company.

 

Non-Resident Notes Receivable:  a Note Receivable from a Purchaser who is a
resident of Canada or the United Kingdom.

 

Non-Use Fee: as defined in Section 2.12 hereof.

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Note:  the Third Amended and Restated Revolving Promissory Note to be made and
delivered by Borrower to Lender having a face amount equal to $45,000,000, dated
as of the Effective Date and made payable to Lender to evidence the Loan, as it
may from time to time be amended, supplemented or restated. 

 

Note Receivable:  a purchase money promissory note which has arisen out of a
sale of a Timeshare Interest by Borrower to a Purchaser, is made payable by such
Purchaser solely to Borrower, and is secured by a Purchaser Mortgage.

 

Notice to Purchasers:  as defined in Section 3.2(c) hereof.

 

Obligations:  all obligations, agreements, duties, covenants and conditions of
Borrower to Lender which Borrower is now or hereafter required to Perform under
the Loan Documents.  Without in any way limiting the foregoing, the term
Obligations includes (i) any and all obligations of Borrower to Lender with
respect to the Loan and (ii) any and all obligations of Borrower to Lender
arising under or in connection with any transaction hereafter entered into
between Borrower and Lender which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures, as applicable.

Opening Prepayment Date:  as the context requires, the Opening Prepayment Date
(Tranche E) or the Opening Prepayment Date (Tranche D). 

 

Opening Prepayment Date (Tranche D): October 10, 2015. 

 

Opening Prepayment Date (Tranche E):  the date which occurs upon the expiration
of the Borrowing Term.

 

Operating Contracts:  as defined in Section 5.19 hereof.

 

Original Note Receivable:  a Note Receivable for which the related Purchaser has
elected to effect and the Borrower has agreed to effect an Upgrade.

 

Owner Beneficiary:  the Purchaser under the Purchase Contract who purchases a
Timeshare Interest in a Timeshare Project pursuant to such Purchase Contract and
is thereby designated an Owner Beneficiary under the terms of the Vacation Club
Trust Agreement and entitled to exercise Owner Beneficiary Rights with
appurtenant Vacation Points.

 

Owner Beneficiary Rights:  the beneficial rights provided to a Purchaser under
the Vacation Club Trust Agreement, which rights shall specifically include the
rights of performance provided to Owner Beneficiaries by the Vacation Club
Trustee under the Vacation Club Trust Agreement and

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related documents, which Owner Beneficiary Rights shall specifically include as
an appurtenance thereto Vacation Points.

 

Paradise Point Project: that certain vacation ownership project, commonly known
as Paradise Point Resort, located in Hollister, Missouri.

 

Paradise Point Timeshare Association: Paradise Point Resort Property Owners
Association, a Missouri corporation not-for-profit, which is the association
established in accordance with the Paradise Point Timeshare Declaration to
manage the Paradise Point Timeshare Program and in which all owners of Timeshare
Interests at the Paradise Point Project will be members. 

 

Paradise Point Timeshare Declaration: that declaration of covenants, conditions
and restrictions which has been recorded in the real estate records of the
county where the Paradise Point Project is located, and has established the
Paradise Point Timeshare Program. 

 

Paradise Point Timeshare Management Agreement: the management agreement from
time to time entered into between the Paradise Point Timeshare Association and
the Timeshare Manager for the management of the Paradise Point Timeshare
Program. 

 

Paradise Point Timeshare Program: the program created within the Paradise Point
Project under the Paradise Point Timeshare Declaration by which Persons may own
Timeshare Interests, enjoy their respective Timeshare Interests on a recurring
basis, and share the expenses associated with the operation and management of
such program.

 

Patriot Act Certificate and Agreement:  the Patriot Act Certificate and
Agreement dated as of September 30, 2010 by and among Borrower, Guarantor and
Lender, as amended, supplemented or restated.  

 

Performance or Perform:  full, timely and faithful payment and performance.

 

Permitted Debt:  the meaning given to it in Section 6.2(b) hereof.

 

Permitted Encumbrances:  with respect to each Timeshare Project (i) real estate
taxes and assessments not yet due and payable, (ii) exceptions to title which
are approved in writing by Lender (including such easements, dedications and
covenants which Lender consents to in writing after the date of this Agreement),
(iii) those exceptions listed on the Exhibits B-1, B-2, and B-3 attached hereto
(as to the Big Cedar Project, the Long Creek Project, and the Paradise Point
Project, respectively) and, (iv) as to Phase III only (as defined in the
Inventory Loan Agreement), the additional exceptions listed on the attached
Exhibit B-4.   

 

Permitted Modification:   an amendment or other modification to the terms and
conditions of a Note Receivable (a) as a result of the Servicemembers Civil
Relief Act, (b) with respect to a one percent (1%) increase or decrease in the
related Note Receivable’s interest rate related to a voluntary or involuntary
election to commence or cease using an automatic payment option, as applicable,
(c) in connection with an Upgrade Note Receivable or (d) in order to make a
correction to fix a

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typographical error in the documentation executed in connection with the closing
of the related consumer loan, and made in the ordinary course of business.

 

Person:  an individual, general partnership, limited partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.

 

Prefunding Documents:  those Timeshare Program Consumer Documents identified on
Exhibit A to the Custodial Agreement as "Prefunding Documents" and in the form
required in that Exhibit. 

 

Prepayment Premium:  an amount to be paid pursuant to Section 2.8 upon a
prepayment of the Loan.

 

Prior Loan Agreement:  defined in the Background Statements.

 

Prohibited Drug Law Activities:  as defined in Section 6.2(k).

 

Public Report:  the approved public report, permit or public offering statement
for the Vacation Club and for the applicable Timeshare Project and the approvals
or registrations for such Timeshare Project, in the jurisdiction in which such
Timeshare Project is located and in each other jurisdiction in which sales of
Timeshare Interests are made or such Timeshare Project is otherwise required to
be registered.

Purchase Contract:  a purchase contract by and between a Purchaser, Bluegreen
Vacations Unlimited Inc. (as "Club Developer"), and Borrower (as "Facilitator")
pursuant to which Borrower has agreed to sell and a Purchaser has agreed to
purchase a Timeshare Interest in connection with such Purchaser's designation as
an Owner Beneficiary under the Vacation Club Trust Agreement, commonly known as
a Bluegreen Owner Beneficiary Agreement.

 

Purchaser:  a person who has executed a Purchase Contract as a purchaser.

 

Purchaser Mortgage:  the purchase money deed of trust given to secure a Note
Receivable.

 

Receivables Collateral:  (a) the Notes Receivable which are now or hereafter
assigned, endorsed or delivered to Lender pursuant to this Agreement or against
which an Advance has been made, all payments due to become due thereunder, in
whatever form, including cash, checks, notes, drafts and other instruments for
the payment of money;  (b) all rights under all documents evidencing, securing,
guaranteeing or otherwise pertaining to such Notes Receivable, including the
Owner Beneficiary Rights under the Vacation Club Trust Agreement and pertaining
to the purchased Timeshare Interest, Title Policies, Purchaser Mortgages and
Purchase Contracts including all rights of foreclosure, termination,
dispossession and repossession thereunder, all documents, instruments,
contracts, liens and security interests related to such Notes Receivable, all
collateral and other security securing the obligations of any Person under such
Note Receivable and all rights and remedies of whatever kind or nature Borrower
may hold or acquire for purpose of securing or enforcing such Notes Receivable
and related Timeshare Program Consumer Documents (expressly

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excluding any rights as developer or declarant under the applicable Timeshare
Declaration, the Timeshare Program Consumer Documents or the Timeshare Program
Governing Documents); (c) all deposits, accounts, instruments, contract rights,
general intangibles, chattel paper, documents, instruments, pre-authorization
account-debit agreements, claims and judgments pertaining to or arising out of
any of the foregoing; (d) all proceeds, property, property rights, privileges
and other benefits arising out of the enforcement of such Notes Receivable or
the related Purchaser Mortgages, Purchase Contracts and other Timeshare Program
Consumer Documents, including all property returned by and reclaimed by or
repossessed from Purchasers thereunder; (e) any lockbox agreements  and the
funds contained in any accounts established pursuant thereto, relating to such
Notes Receivable, except amounts deposited in error; (f)  all rights, now or
hereafter existing under any payment authorization agreements signed or
delivered by or on behalf of a Purchaser under a Note Receivable described in
clause (a) above and all accounts and other proceeds derived therefrom; (g) any
rights inuring to Borrower as an "institutional mortgagee," an "institutional
lender" or a "mortgagee" as provided in the Timeshare Declaration in connection
with any Notes Receivable described in clause (a) above and the related
Purchaser Mortgages pledged to Lender; (h) all rights of the Borrower to
exercise, at any meeting of the Timeshare Association, the voting rights of a
Purchaser whose Note Receivable has been assigned or delivered to
Lender;  (i) all of Borrower's rights to any insurance policies related to a
Timeshare Project, to the extent pertaining to a Note Receivable assigned to
Lender or to the Timeshare Interest securing such Note Receivable; (j) all
computer software, files, books and records of Borrower pertaining to any of the
foregoing clauses (a) through (i), subject to any licensing limitations; (k) all
rights of the Borrower as an Interest Holder Beneficiary as to the foregoing;
(l) the cash and non-cash proceeds of all of the foregoing, including (whether
or not acquired with cash proceeds), all accounts, chattel paper, contract
rights, documents, general intangibles, instruments, fixtures, and equipment,
inventory and other goods; and (m) all extensions, additions, improvements,
betterments, renewals, substitutions, amendments of any of the foregoing  and
the products and proceeds thereof.

 

Required Payment Date: the meaning given to it in Section 2.7(b) hereof.

 

Reservation System:  the method, arrangement or procedure including any computer
network and software employed for the purpose of enabling or facilitating the
operation of the system which enables each Purchaser to utilize such Purchaser's
right to reserve a use period in a Timeshare Project in accordance with the
provisions and conditions set forth therein.

 

Reservation System License:  a non-exclusive license granted by Bluegreen
Resorts Management, Inc. to Lender as of the date of this Agreement entitling
Lender to the non-exclusive license to use the Reservation System upon the terms
and conditions described therein.

 

Resolution:  a resolution of a corporation certified as true and correct by an
authorized officer of such corporation, a certificate signed by such members,
the manager or managers and/or the authorized officers of a limited liability
company as may be required by applicable law and by the Articles of Organization
of such limited liability company, or a partnership certificate signed by all of
the general partners of such partnership and such other partners whose approval
is required.

 

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Security Documents:  the Assignments, this Agreement, the Reservation System
License, and all other documents now or hereafter securing the Obligations, as
they may be from time to time be amended, supplemented or restated.

 

Servicing Agent:  Bluegreen, as the Servicing Agent, or its successor as
Servicing Agent, under the Servicing Agreement.

 

Servicing Agreement:  the Servicing Agreement dated as of September 30, 2010
among Lender, Borrower and Servicing Agent which provides for Servicing Agent to
perform for the benefit of Lender accounting, reporting and other servicing
functions with respect to the Receivables Collateral, as it may from time to
time be amended, supplemented or restated. 

 

Subordination Agreement:  such subordination agreement from a Subordinator
subordinating Indebtedness owed to it by Borrower to all or a part of the
Obligations, whether delivered on or before the Effective Date or thereafter, as
the same may from time to time be amended, supplemented or restated.

 

Subordinated Indebtedness.  Indebtedness represented by Guarantor's junior
subordinated debentures or such other Indebtedness incurred by Guarantor which
is treated as subordinated indebtedness in accordance with GAAP.

 

Subordinator:  at any time, a Person (including Big Cedar, L.L.C., a Missouri
limited liability company, Bluegreen Vacations Unlimited, Inc., a Florida
corporation and Guarantor) then required under the terms of this Agreement to
subordinate Indebtedness owed to it by Borrower or a Guarantor to all or any
part of the Obligations in accordance with the terms of a Subordination
Agreement.

 

Tangible Net Worth:    on a consolidated basis for Guarantor and its
subsidiaries, at any date, the (a) sum of (i) total shareholders' equity,
including any non-controlling interest, as reported in Guarantor's most recent
annual financial statement, plus (ii) Subordinated Indebtedness, as reported in
Guarantor's most recent annual financial statement and (b) less any loans or
other indebtedness owed by an Affiliate to Guarantor, including BFC and any
other of Guarantor's shareholders, owners or members.

 

Term:  the duration of this Agreement, commencing on the Effective Date and
ending when all of the payment Obligations have been Performed.

 

Timeshare Association:  individually and collectively, as the context requires,
the Big Cedar Timeshare Association, the Long Creek Timeshare Association and
the Paradise Point Timeshare Association.

 

Timeshare Declaration:  individually and collectively, as the context requires,
the Big Cedar Timeshare Declaration, the Long Creek Timeshare Declaration and
the Paradise Point Timeshare Declaration. 

 

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Timeshare Interest:  a timeshare fee simple estate in the relevant Timeshare
Project as established and provided in the applicable Timeshare Declaration,
which consists of an undivided interest as tenant in common with other owners in
the relevant Timeshare Program, including the appurtenant exclusive right to
occupy and use a Unit for one or more periods per calendar year or per second
calendar year of one week or a portion of one week, and subject to the then
existing reservation rules and regulations of the applicable Timeshare
Association, if applicable, together with all appurtenant rights and interests,
including without limitation, the right to make reservations pursuant to the
reservation system pertaining thereto, if applicable, and appurtenant use rights
in and to common elements at the relevant Timeshare Project, easements,
licenses, access and use rights in and to all of the facilities at the relevant
Timeshare Project, all of which the Purchaser thereof directs Borrower to
immediately convey to the Vacation Club Trustee and which the Vacation Club
Trustee holds pursuant to the provisions of the Vacation Club Trust Agreement,
at which time, the Purchaser becomes a member and Owner Beneficiary of the
Vacation Club, is identified in a schedule attached to the Vacation Club Trust
Agreement, as amended from time to time to include new Owner Beneficiaries, and
is entitled to certain Owner Beneficiary Rights under the Vacation Club Trust
Agreement and a specific number of Vacation Points corresponding to such rights,
which Vacation Points may be used by the Owner Beneficiary for lodging for
varying lengths of time at various Vacation Club resorts. 

 

Timeshare Management Agreement:  individually and collectively, as the context
requires, the Big Cedar Timeshare Management Agreement, the Long Creek Timeshare
Management Agreement and the Paradise Point Timeshare Management Agreement. 

 

Timeshare Manager:  individually and collectively, as the context requires, the
Person from time to time employed by (i) the Big Cedar Timeshare Association to
manage the Big Cedar Timeshare Program; (ii) the Long Creek Timeshare
Association to manage the Long Creek Timeshare Program and (iii) the Paradise
Point Timeshare Association to manage the Paradise Point Timeshare Program, in
the case of each of the foregoing clauses (i)-(iii), as of the date of this
Agreement, being Bluegreen Resorts Management, Inc., a Delaware corporation.  

 

Timeshare Program:  individually and collectively, as the context requires, the
Big Cedar Timeshare Program, the Long Creek Timeshare Program and the Paradise
Point Timeshare Program.    

 

Timeshare Program Consumer Documents:  the following documents used by Borrower
in connection with the credit sale of Timeshare Interests at a Timeshare
Project: 

(a)

Note Receivable (endorsed to Lender's order with recourse pursuant to the form
of endorsement attached hereto as Exhibit J);

(b)

Deed of Trust;

(c)

General Warranty Deed;

(d)

Service Disclosure Statement;

(e)Good Faith Estimate of Settlement Charges (for sales closing prior to
the Final Rule Effective Date);

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(f)HUD-1 Settlement Statement (for sales closing prior to the Final Rule
Effective Date);

(g)Truth-in-Lending Disclosure Statement (for sales closing prior to the Final
Rule Effective Date);

(h)Closing Disclosure (for sales closing on or after the date the CFPB requires
that such disclosure be delivered (the "Final Rule Effective Date"));

(i)Loan Estimate (for sales closing on or after the Final Rule Effective Date
and to the extent required to be delivered under applicable law);

(j)Bluegreen Owner Beneficiary Agreement and any addendum thereto;  

(k)Assent to Execution of Documents, if applicable;

(l)Certificate of Purchase of Owner Beneficiary Rights (if such purchase
occurred after January 31, 2006);

(m)Owner Confirmation Interview (or Biennial Owner Confirmation Interview);

(n)Receipt for Timeshare Documents;

(o)Compliance Agreement;

(p)Credit Application;

(q)Other than with respect to No FICO Score Notes Receivable and Non-Resident
Notes Receivable, (i) for Notes Receivable originated on and after December 15,
2008, evidence of FICO Score in the form of a truncated or full credit report
and (ii) for Notes Receivable originated prior to December 15, 2008, evidence of
FICO Score in such form as previously agreed upon between Borrower and Lender;
and

(r)Any Public Offering Statement receipts.

A sample form of each Timeshare Program Consumer Document in connection with the
credit sale of Timeshare Interests at a Timeshare Project is attached hereto as
Exhibits C-1, C-2, and C-3 (as to the Big Cedar Project, the Long Creek Project,
and the Paradise Point Project, respectively).    

 

Timeshare Program Governing Documents:  the Public Report, the Timeshare
Declaration, any condominium declarations pertaining to a Timeshare Project, the
Articles of Organization and bylaws for each Timeshare Association and for
Bluegreen Inc., any and all rules and regulations from time to time adopted by
each Timeshare Association and Bluegreen Inc., the Timeshare Management
Agreement, the Vacation Club Trust Agreement, the Vacation Club Management
Agreement, any subsidy agreement by which Borrower is obligated to subsidize
shortfalls in the budget of the Timeshare Program in lieu of paying assessments,
any affiliation

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agreements,  any amenity agreements and any other existing and future contracts,
agreements or other documents relating to the establishment, use, occupancy,
operation, management, marketing, sale and maintenance of a Timeshare Project.

 

Timeshare Project:  individually and collectively, as the context requires, the
Big Cedar Project, the Long Creek Project and the Paradise Point Project.    

 

Title Insurer:  a title company which is acceptable to Lender and issues a Title
Policy, including without limitation, First American Title Insurance Company.

 

Title Policy:  in connection with each Purchaser Mortgage which is a part of the
Receivables Collateral, an ALTA lender's policy of title insurance in an amount
not less than the Borrowing Base of the Note Receivable secured by the Purchaser
Mortgage, insuring Borrower's and its successors' and assigns' interest in the
Purchaser Mortgage as a perfected, direct, first and exclusive lien on the
Timeshare Interest(s) encumbered thereby, subject only to the Permitted
Encumbrances, issued by Title Insurer and in form and substance attached hereto
as Exhibits D-1,  D-2, and D-3 (as to the Big Cedar Project, the Long Creek
Project, and the Paradise Point Project, respectively). 

 

Trading With The Enemy Act:  as defined in Section 5.29 hereof.

 

Trailing Documents Delivery Date: as to a particular Advance, the last Business
Day of the first month which occurs no sooner than ninety (90) calendar days
following the making of the subject Advance. 

 

Tranche:  Tranche D or Tranche E, as the context requires.

 

Tranche D (9/14 Letter Agreement): that portion of the Loan advanced from time
to time by Lender to Borrower under the Prior Loan Agreement between December
13, 2013 and the Effective Date which was subject to the 9/14 Letter Agreement
and which, prior to the Effective Date, was referred to in Lender's internal
records as "Note 9008".

 

Tranche D (non-9/14 Letter Agreement): that portion of the Loan advanced from
time to time by Lender to Borrower under the Prior Loan Agreement between
December 13, 2013 and the Effective Date which was not subject to the 9/14
Letter Agreement and which, prior to the Effective Date, was referred to in
Lender's internal records as "Note 9006".

 

Tranche D: that portion of the Loan consisting of Tranche D (non-9/14 Letter
Agreement) and which at all times after the Effective Date will be referred to
in Lender's internal records as "Note 9006". 

 

Tranche E: that portion of the Loan advanced from time to time by Lender to
Borrower under this Agreement after the Effective Date, together with that
portion of the Loan consisting of Tranche D (9/14 Letter Agreement) and which at
all times after the Effective Date will be referred to in Lender's internal
records as "Note 9008".

 

Unit:  a dwelling unit in a Timeshare Project.

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Upgrade:  the process in which (A) an obligor of an Original Note Receivable
elects to (i)(a) reconvey the existing Timeshare Interest for new Timeshare
Interest (such new Timeshare Interest having a greater dollar value than the
existing Timeshare Interest) and (b) cancel the Original Note Receivable in
exchange for an Upgrade Note Receivable secured by such new Timeshare Interest
or (ii)(a) acquires additional Timeshare Interest and (b) cancels the Original
Note Receivable in exchange for an Upgrade Note Receivable secured by the
existing Timeshare Interest and the additional Timeshare Interest or (B) an
owner of existing Timeshare Interest that is fully paid elects to (i) reconvey
such Timeshare Interest for a new Timeshare Interest (such new Timeshare
Interest having a greater dollar value than the existing Timeshare Interest) or
(ii) acquires additional Timeshare Interest.

 

Upgrade Note Receivable: the new Note Receivable originated by the Borrower in
connection with an Upgrade.

 

Vacation Club:  defined in the Background Statements.

 

Vacation Club Management Agreement:  the management agreement from time to time
entered into between the Vacation Club Trustee and the Vacation Club Manager for
the management of the Vacation Club.

 

Vacation Club Manager:  Bluegreen Resorts Management, Inc., a Delaware
corporation, and such other Person from time to time employed by the Vacation
Club Trustee to manage the Vacation Club.

 

Vacation Club Trust:  the trust established pursuant to the Vacation Club Trust
Agreement and in accordance with F.S. Ch. 721 (the Florida Vacation Plans and
Timesharing Act).

 

Vacation Club Trust Agreement:  means, collectively, that certain Bluegreen
Vacation Club Amended and Restated Trust Agreement, dated as of May 18, 1994, by
and among Bluegreen Vacations Unlimited, Inc., the Vacation Club Trustee,
Bluegreen Resorts Management, Inc. and Bluegreen Vacation Club, Inc., as
amended, restated or otherwise modified from time to time, together with all
other agreements, documents and instruments governing the operation of the
Vacation Club.

 

Vacation Club Trustee:  Vacation Trust, Inc., a Florida corporation, in its
capacity as trustee under the Vacation Club Trust Agreement, and its permitted
successors and assigns.

 

Vacation Points:  the value placed upon a nightly or weekly occupancy of a
timeshare unit pursuant to the terms of the Purchase Contract, which value may
be set forth within the Demand Balancing Standard (as defined in the Vacation
Club Trust Agreement).

 

Ward Financial:  Ward Financial Company, a Pennsylvania corporation.

 

1.2Other Definitional Provisions. 

 

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Capitalized terms used in this Agreement or in any Loan Document which are
defined herein shall have the meanings set forth herein.  Capitalized terms
defined in the Preliminary Statements or elsewhere in this Agreement shall have
the meanings assigned to them at the place first defined.  As used herein, the
term "this Agreement" shall include all exhibits, schedules and addenda attached
hereto, all of which shall be deemed incorporated herein and made a part
hereof.  The definitions include the singular and plural forms of the terms
defined.  Any defined term which relates to a document, instrument or agreement
shall include within its definition any amendments, modifications, supplements,
renewals, restatements, extensions, or substitutions which may have been
heretofore or may be hereafter executed in accordance with the terms hereof and
thereof.  Unless otherwise specified, references to particular section numbers
shall mean the respective sections of this Agreement.

Accounting terms not defined herein will have the respective meanings given to
them under GAAP.  To the extent that the definitions of accounting terms herein
are inconsistent with the meanings of such terms under GAAP, the definitions
contained herein will control. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement.  In this
Agreement in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding", and reference to a numbered or
lettered subdivision of an Article, section or paragraph shall include relevant
matter within the Article, section or paragraph which is applicable to but not
within such numbered or lettered subdivision.  Whenever the words "including",
"include", or "includes" are used in the Loan Documents, they shall be
interpreted in a non-exclusive manner as though the words, "without limitation,"
immediately followed the same.

 

2.LOAN COMMITMENT; USE OF PROCEEDS

2.1Loan Commitment.

 

(a)Determination of Advance Amounts.  Lender hereby agrees, if Borrower has
Performed all of the Obligations then due, to make Advances to Borrower in
accordance with the terms and conditions of this Agreement for the purposes
specified in Section 2.3.  The maximum amount of an Advance shall be equal to
(a) the aggregate Borrowing Base for all Eligible Notes Receivable less (b) the
then unpaid principal balance of the Loan; provided, however, at no time shall
the unpaid principal balance of the Loan exceed the Maximum Loan Amount, and
further provided that at no time shall the combined unpaid principal balance of
the Loan and the Inventory Loan exceed the Maximum Loan Amount.  Furthermore,
Lender hereby agrees, if Borrower has Performed all the Obligations then due, to
make Availability Advances to Borrower in accordance with the terms and
conditions of this Agreement for the purposes specified in Section 2.3.  The
maximum amount of any Availability Advance shall be equal to (a) eighty-five
percent (85%) of the then‑outstanding principal balance of all Eligible Notes
Receivable pledged to Lender less (b) the unpaid principal balance of the Loan;
provided, however, that at no time shall the unpaid principal balance of the
Loan exceed the Maximum Loan Amount and further provided that at no time shall
the combined unpaid principal balance of the Loan and the Inventory Loan exceed
the Maximum Loan Amount.  In addition to satisfying all of the conditions
precedent to the making of an Advance, as a condition of an Availability
Advance, Borrower shall deliver to Lender a Request for Availability Advance
substantially in the form and substance of Exhibit U attached hereto, together

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with such other items which are reasonably necessary to determine satisfaction
of the conditions precedent thereto.    

 

(b)Revolving Nature of Loan.  The Loan is a revolving line of credit; however,
all Advances shall be viewed as a single loan.  Borrower shall not be entitled
to obtain Advances after the expiration of the Borrowing Term unless Lender, in
its discretion, agrees in writing with Borrower to make Advances thereafter on
terms and conditions satisfactory to Lender

 

2.2Continuation of Obligations Throughout Term.  This Agreement and Borrower's
liability for Performance of the Obligations shall continue until the end of the
Term.

 

2.2.1   Other Conditions.  Notwithstanding any provision in this Agreement to
the contrary and subject to the conditions to making Advances set forth in this
Agreement, Lender hereby agrees to advance to Borrower total Loan proceeds not
to exceed an outstanding principal balance equivalent to the Maximum Loan
Amount.  Tranche D (i) constitutes a portion of the Loan and (ii) constitutes
all Advances (including Availability Advances) of the Loan made prior to the
Effective Date that have not yet been repaid (other than those subject to the
9/14 Letter Agreement).  Tranche E (i) constitutes a portion of the Loan and
(ii) constitutes all Advances (including Availability Advances) subject to the
9/14 Letter Agreement, including Availability Advances, and all revolving
Advances made after the Effective Date.  Each of Tranche D and Tranche E (i) are
evidenced by the Note and (ii) constitute a single loan.  Tranche D does not
revolve.  Tranche E is a revolving line of credit loan facility and as the
unpaid principal balance of Tranche D and Tranche E reduces, such reduction
shall enable Borrower to obtain revolving Advances under Tranche E within the
Borrowing Term, subject to all conditions precedent to the making of such
Advance and to the further condition that the outstanding principal balance of
the Loan and the combined outstanding principal balance of the Loan and
Inventory Loan not exceed the Maximum Loan Amount.  Advances of Tranche E shall
be made subject to the terms and conditions set forth herein governing Advances
(including Section 4.2 hereof), together with the following additional
conditions:

 

(i) In the event the unpaid principal balance of the Loan or the combined unpaid
principal balance of the Loan and the Inventory Loan exceed the Maximum Loan
Amount, Borrower shall, within five (5) Business Days following written demand,
make payment to Lender in the amount of such excess. 

(ii) Tranche E Advances shall be made in amounts of not less than $500,000 each
(with the exception of the final Advance of Tranche E which may be in an amount
less than $500,000) and shall be made no more frequently than once per calendar
month.  In addition to the foregoing, Availability Advances shall be made in
amounts of not less than $250,000 each and shall be made no more frequently than
once per calendar month, based upon the Borrowing Base calculation as of the end
of the immediately preceding calendar month.

2.3Use of Advance.  Borrower will use the proceeds of the Loan only for working
capital, sales, marketing and other proper business purposes as it shall
determine.

 

2.3.1Aggregation for Purpose of Determining Shortfall.Tranche D and Tranche E
shall be deemed one single loan and the Borrowing Base for each of Tranche D and
Tranche E shall be

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aggregated for purposes of determining the existence of a Borrowing Base
Shortfall.  In addition, since all Tranches (inclusive of those tranches in
existence under the Prior Loan Agreement) constitute one loan, all Notes
Receivable pledged to Lender in connection with an advance under any such
Tranche (inclusive of those tranches in existence under the Prior Loan
Agreement) shall secure the prompt payment and performance of amounts due and
owing under all Tranches. 

 

2.3.2Cross-Collateralization.The Loan, and the Obligations hereunder and under
any Loan Documents, shall (in addition to the Collateral) be further secured and
cross‑collateralized by any properties, interests or assets of Borrower, real,
personal or mixed, tangible or intangible, in which Lender is granted lien or
mortgage rights or security interests at any time under the Inventory Loan
Documents or with respect to the Inventory Loan (such properties, interests or
assets in which Lender may hold lien rights or security interests from time to
time are called the "Additional Collateral").  For value received, Borrower
hereby grants to Lender a security interest in and to the Additional Collateral
as security for the payment and performance of the Obligations; and Borrower
agrees to deliver to Lender financing statements and other documents as may be
required by Lender from time to time to further evidence and perfect Lender's
liens and security interests in the Additional Collateral.  However, at such
time as the Inventory Loan has been paid in full and the borrowing term
thereunder has expired and provided that there does not then exist an Event of
Default or Incipient Default that matures into an Event of Default, the
Additional Collateral shall no longer constitute security for the Loan or the
Obligations under any of the Loan Documents and Lender shall promptly execute
reasonable documents to evidence such release of the Additional Collateral,
which, if necessary, shall be recorded or filed at the sole cost and expense of
Borrower. 

 

2.3.3Revolving Facility.  To the extent that any of the Loan Documents provide
that the Loan is a non-revolving loan facility, such Loan Documents are hereby
amended to provide that the Loan is a revolving loan facility pursuant to the
provisions of this Agreement. 

 

2.4Repayment of Loan.  The Loan shall be evidenced by the Note and shall be
repaid in immediately available funds according to the terms of the Note and
this Agreement.

 

2.5Interest.  Except as otherwise provided in the Note or this Agreement,
interest ("Basic Interest") shall accrue on the unpaid principal balance of the
Loan from time to time outstanding at the Basic Interest Rate.  Basic Interest
is computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days during the calendar month that
the principal balance is outstanding.  Interest shall accrue on funds as of the
date Lender wires such funds to Borrower or to any escrow agent handling
disbursement of an Advance.  Payments of principal and any other amounts due and
payable under the Loan Documents (other than Basic Interest) shall accrue
interest at the Default Rate after the occurrence and continuation of an Event
of Default.  Borrower acknowledges and agrees that the Default Rate is
reasonable in light of the increased risk of collection after the occurrence and
continuation of an Event of Default. 

 

2.6Payments. 

 

(a)All payments of principal, interest and fees on the Loan shall be made to
Lender by federal funds wire transfer as instructed by Lender in immediately
available funds.  If any

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payment of principal, interest or fees to be made by Borrower becomes due on a
day other than a Business Day, such payment will be due on the next succeeding
Business Day and such extension of time will be included in computing any
interest with respect to such payment.

 

(b)If any installment of interest and/or the payment of principal is not
received by Lender within 10 days after the due date thereof, then in addition
to the remedies conferred upon Lender pursuant to Section 7.2 hereof and the
other Loan Documents, Lender may elect to assess a late charge of 5% of the
amount of the installment due and unpaid, which late charge will be added to the
delinquent amount to compensate Lender for the expense of handling the
delinquency; provided, however, no late charge shall be imposed upon a payment
to repay the Loan upon the Maturity Date or upon acceleration of the
Loan.  Borrower and Lender agree that such late charge represents a good faith
and fair and reasonable estimate of the probable cost to Lender of such
delinquency.  Borrower acknowledges that during the time that any such amount is
in default, Lender will incur losses which are impracticable, costly and
inconvenient to ascertain and that such late charge represents a reasonable sum
considering all of the circumstances existing on the date of the execution of
this Agreement and represents a reasonable estimate of the losses Lender will
incur by reason of late payment.  Borrower further agrees that proof of actual
losses would be costly, inconvenient, impracticable and extremely difficult to
fix.  Acceptance of such late charge will not constitute a waiver of the default
with respect to the overdue installment, and will not prevent Lender from
exercising any of the other rights and remedies available hereunder.    

 

2.7Minimum Required Payments.

 

(a)Periodic Loan Payments.  All payments (i.e., principal, interest, late
charges and fees) made on account of Notes Receivable pledged to Lender shall be
paid to Lender.  On each Business Day, until the Maturity Date or the date on
which the Loan is paid in full, whichever date first occurs, Borrower will pay
or cause to be paid to Lender (through Lender's lockbox account in Lender’s name
maintained under the Lockbox Agreement) 100% of all proceeds (except servicing
fee payments and those payments described in Section 3.2(a)(ii)) of the
Receivables Collateral (including all ACH (i.e., automated clearinghouse system)
payments and checks) then collected under the Notes Receivable which constitute
part of the Receivables Collateral.  Such proceeds shall be applied by Lender
against the unpaid principal balance of the Loan on Wednesday of each week and
on the last day of each calendar month, or if not a Business Day, on the next
succeeding Business Day.    Regardless of whether the proceeds of the
Receivables Collateral are sufficient for that purpose, (i) interest on the
principal balance of the Loan from time to time outstanding and accruing during
a particular calendar month shall be due and payable in arrears on the 10th day
of the next succeeding calendar month and (ii) the Loan shall be due and payable
in full on the Maturity Date.

 

(b)Maximum Permitted Outstanding Principal Balance.   In no event shall the
unpaid principal balance of the Loan exceed the following amounts as of the
following required payment dates (each a "Required Payment Date").  Borrower
shall make any necessary principal payments to Lender, on or before the
applicable Required Payment Date, in order to reduce the unpaid principal
balance to the required amount (the "Maximum Permitted Outstanding Principal
Balance"), in the event collections from the Receivables Collateral (inclusive
of those collections that are to be applied against the unpaid principal balance
of the Loan on the last day of each

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calendar month pursuant to Section 2.7(a) hereof) have not been sufficient to
reduce the maximum outstanding principal balance of the Loan to the Maximum
Permitted Outstanding Principal Balance prior to or on the applicable Required
Payment Date.  Upon the expiration of the Borrowing Term, the principal balance
of the Loan (inclusive of all unpaid Tranches) shall be calculated for purposes
of calculating the Maximum Permitted Outstanding Principal Balance.  Subsequent
to the expiration of the Borrowing Term, the Maximum Permitted Outstanding
Principal Balance on each Required Payment Date shall equal the respective
percentages set forth below of the outstanding principal balance of the Loan
(inclusive of all unpaid Tranches) at the expiration of the Borrowing Term. 

 

 

 

 

Required Payment Date

Maximum Permitted Outstanding

Principal Balance 

(as a percentage of the outstanding principal balance of the Loan at the
expiration of the Borrowing Term)

12 months following expiration of the Borrowing Term

85%

24 months following expiration of the Borrowing Term

70%

36 months following expiration of the Borrowing Term

55%

48 months following expiration of the Borrowing Term

45%

60 months following expiration of the Borrowing Term

20%

Maturity Date

0%

 

(c)Borrowing Base Maintenance.  If there exists a Borrowing Base Shortfall
during any calendar month for any reason including by reason of the fact that a
particular Note Receivable is no longer an Eligible Note Receivable, then within
twenty (20) days after the date of the Borrowing Base Certificate delivered to
Lender pursuant to Section 6.1(d)(v) showing such Borrowing Base Shortfall,
Borrower will at its sole option either (a) make to Lender a principal payment
in an amount equal to the Borrowing Base Shortfall plus accrued and unpaid
interest on such principal payment or (b) deliver to Lender one or more Eligible
Notes Receivable having an aggregate Borrowing Base not less than the Borrowing
Base Shortfall; provided, however, such Eligible Notes Receivable may have an
aggregate Borrowing Base less than the Borrowing Base Shortfall so long as
Borrower simultaneously pays to lender the difference in cash.  Simultaneously
with the delivery of Eligible Notes Receivable to correct a Borrowing Base
Shortfall, Borrower will deliver to Lender all of the items (except for a
Request for Loan Advance) required to be delivered by Borrower to Lender
pursuant to Section 4.2, together with a "Borrower's Certificate" in form

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and substance identical to Exhibit E.  Lender will reassign and endorse to
Borrower, without recourse or warranty of any kind, an ineligible Note
Receivable if:  (a) no Event of Default or Incipient Default exists;
(b) Borrower has made all principal payments and Performed all replacement
obligations as required above in connection with the Borrowing Base Shortfall
and as a result there is no Borrowing Base Shortfall; and (c) Borrower has
requested Lender in writing to release the ineligible Note Receivable.  Borrower
will prepare the reassignment document which shall be in form and substance
substantially identical to Exhibits F-1,  F-2, or F-3 (attached hereto), as to
the Big Cedar Project, the Long Creek Project, and the Paradise Point Project,
respectively,  and will deliver it to Lender for execution. Lender will send or
cause to be sent to Borrower the reassignment document and the Note Receivable
being reassigned within a reasonable time (not to exceed 20 days) after
satisfaction of the conditions precedent specified above.

 

In addition to, and not in limitation of the foregoing, and upon the request of
Borrower from time to time otherwise during the Term, but no more frequently
than once per calendar month, Lender will reassign and endorse to Borrower,
without recourse or warranty of any kind, an ineligible Note Receivable if:  (a)
no Event of Default or Incipient Default exists; (b)  there is no Borrowing Base
Shortfall; and (c) Borrower has requested Lender in writing to release such
ineligible Note Receivable.  Borrower will prepare the related reassignment
document which shall be in form and substance substantially identical to
Exhibits F-1, F-2, or F-3 (attached hereto), as to the Big Cedar Project, the
Long Creek Project, or the Paradise Point Project, respectively, and will
deliver it to Lender for execution.  Lender will send or cause to be sent to
Borrower the reassignment document and the Note Receivable being reassigned
within a reasonable time (not to exceed 20 days) after satisfaction of the
conditions precedent specified above.

 

2.8Prepayment.

 

(a)Prohibitions on Prepayment; Prepayment Premium.  Without the prior written
consent of Lender, Borrower shall not be entitled to prepay the Loan except in
accordance with the terms of this Agreement.  Commencing: (i) on the Effective
Date and ending on the day immediately preceding the Opening Prepayment Date
(Tranche D),  Borrower shall have the option to prepay Tranche D in full, but
not in part, (ii) on the Effective Date and ending on the day immediately
preceding the Opening Prepayment Date (Tranche E), Borrower shall have the
option to prepay Tranche E in full, but not in part, (iii) on the Opening
Prepayment Date (Tranche D), Borrower shall have the option to prepay Tranche D
in full, or in part, and (iv) on the Opening Prepayment Date (Tranche E),
Borrower shall have the option to prepay the remaining portion of Tranche E in
full, or in part, on the condition, in each of clauses (i), (ii),  (iii) or
(iv),  that Lender has received not less than 30 days prior written notice of
such prepayment and that Borrower makes the simultaneous payment of a prepayment
premium (the "Prepayment Premium") equal to the following percentage of that
portion of the principal balance of the Tranche which is being prepaid:

 

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Period

Prepayment Premium

Prior to the expiration of the applicable Opening Prepayment Date

5%

1 – 12 months after the expiration of the applicable Opening Prepayment Date

3%

13 – 24 months after the expiration of the applicable Opening Prepayment Date

2%

25 – 36 months after the expiration of the applicable Opening Prepayment Date

1%

37 and thereafter

0%

 

Any prepayment in full of Tranche E must be accompanied by a simultaneous
prepayment in full of the remaining balance of Tranche D, together with any
applicable Prepayment Premium.  Furthermore, in the event Tranche E is prepaid
in full prior to the receipt of a Certificate of Conformance with respect to the
entirety of Phase III (as defined in the Inventory Loan Agreement), the
Inventory Loan must be prepaid in full concurrently with the prepayment in full
of Tranche E.

 

No prepayment shall relieve the Borrower of its obligation to make regularly
scheduled payments of principal and interest as required under this Agreement.

 

In addition, in the event of (i) a partial prepayment of the Loan subject to the
terms and conditions set forth in this  Section 2.8(a), or (ii) a prepayment in
full subject to the terms and conditions set forth in this  Section 2.8(a) or
other repayment in full of the Loan and termination of this Agreement and the
other Loan Documents, Lender shall release its security interest and reassign
and endorse to Borrower, without recourse or warranty of any kind,  such Notes
Receivable, Purchaser Mortgages and other related Collateral collaterally
assigned to Lender under this Agreement or the other Loan Documents, provided
that, if such prepayment is a partial prepayment of the Loan permitted under
this Section 2.8(a) of this Agreement, Lender and Borrower shall mutually agree
as to the collateral pool to be released, so that (i) the quality and nature of
the Notes Receivable, Purchaser Mortgages and other related Collateral from a
credit underwriting standard after such release is materially consistent (other
than seasoning) with the quality and nature of the Notes Receivable, Purchaser
Mortgages and other related Collateral from the credit underwriting standard
that existed immediately prior to such partial prepayment and release, (ii)
there is no Borrowing Base Shortfall, and (iii) no Incipient Default or Event of
Default will result from such release.  All releases by Lender to Borrower shall
be (a) in form reasonably satisfactory to Lender, and (b) at the Borrower’s cost
and expense.  Borrower will prepare the related reassignment and release
documents and will deliver them to Lender for execution. Lender will send or
cause to be sent to Borrower the reassignment and related release documents and
the Notes Receivable being reassigned within a reasonable time (not to exceed 20
days) after satisfaction of the conditions precedent specified above.    

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(b)Exceptions to Prepayment Prohibitions.  Notwithstanding anything in
Section 2.8(a) to the contrary, the following shall not be prepayments
prohibited pursuant to Section 2.8(a) or require the payment of the Prepayment
Premium:  (i) principal payments scheduled under the Note including those
payments required pursuant to Section 2.7; (ii) prepayments of the Loan
resulting from prepayments of the Collateral by Purchasers which have not been
solicited by Borrower in breach of the terms and conditions of Section 6.2(e);
or (iii) prepayments resulting from the acceleration of the Loan under the Loan
Documents.  Any such prepayment shall not relieve Borrower of its obligation to
make all regularly scheduled payments due under the Loan Documents. 

 

(c)Prepayment Premium Payable for Involuntary Prepayments.  The Prepayment
Premium shall be payable if the prepayment of the Loan is voluntary but shall
not be required because repayment of the Loan has been accelerated pursuant to
any of Lender's rights under the Loan Documents (including any right to
accelerate following casualty or condemnation or when an Event of Default
exists).

 

2.9Loan Fee.   A fee of one and one half percent (1.5%) on the amount of each
Tranche E Advance shall be paid to Lender by Borrower (cumulatively, the "Loan
Fee") concurrently with such Advance and which may be withheld from the proceeds
of such Advance.  On the date that is eighteen (18) months after the Effective
Date, the positive difference, if any, between $112,500 and the Loan Fee paid by
Borrower between the Effective Date and the date that is eighteen (18) months
after the Effective Date shall be due and payable to Lender.  In no event shall
the total Loan Fee exceed $112,500.  The Loan Fee was fully earned as of the
Effective Date in consideration for Lender's agreement to fund Advances in
accordance with the terms of this Agreement.  Regardless of whether Borrower
repays or is required to repay the Loan prior to the end of the Maturity Date,
Borrower will not be entitled to any refund of the Loan Fee. 

 

2.10Application of Proceeds of Collateral and Payments.  Notwithstanding
anything in the Loan Documents to the contrary, the amount of all payments or
amounts received by Lender with respect to the Loan (other than those payments
described in Section 3.2(a)(ii)) shall be applied in the following order of
priority:  (a) to any past due payments of interest on the Loan and to accrued
interest on the Loan through the date of such payment, including any interest at
the Default Rate; (b) to any late fees, examination fees and expenses,
collection fees and expenses and any other fees and expenses due to Lender in
its capacity as Lockbox Agent or otherwise under the Loan Documents in
connection with the Loan; (c) to the unpaid principal balance of Tranche D until
the Tranche D principal balance is reduced to zero; and (e) to the unpaid
principal balance of Tranche E until the Tranche E principal balance is reduced
to zero.  In calculating interest and applying payments as set forth above:  (i)
interest on the Loan shall be calculated and collected through the date payment
is actually received by Lender; (ii) interest on the outstanding balance of the
Loan shall be charged during any grace period permitted under the Loan
Documents; (iii) at the end of each month, at the reasonable discretion of
Lender, all past due interest and other past due charges provided for under the
Loan Documents with respect to the Loan shall be added to the principal balance
of the Loan; and (iv) to the extent that Borrower makes a payment or Lender
receives any payment or proceeds of the Collateral for Borrower's benefit that
is subsequently invalidated, set aside or required to be repaid to any other
Person, then, to such extent, the Obligations in connection with the Loan shall
be revived and continue as if such payment or proceeds had not been received by
Lender and Lender

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may adjust the Loan balance as Lender, in its discretion, deems appropriate as
indicated under the circumstances.  The provisions of this Section 2.10 are also
subject to the parties' rights and obligations under the Loan Documents as to
the application of proceeds of the Collateral following an Event of Default.

 

2.11Borrower's Unconditional Obligation to Make Payments.  Whether or not the
proceeds from the Receivables Collateral shall be sufficient for that purpose,
Borrower will pay when due all payments required to be made pursuant to any of
the Loan Documents, Borrower's obligation to make such payments being absolute
and unconditional. 

 

2.12Non-Use Fee.  If during any calendar month between the period beginning one
year after the Effective Date and ending on the last day of the calendar month
in which the Borrowing Term expires, the highest combined unpaid principal
balance of the Loan and the Inventory Loan during such calendar month is at any
time less than $28,000,000, then within five Business Days following the end of
any such calendar month, Borrower shall pay to Lender a non-use fee (the
"Non-Use Fee") of one-half percent (.5%) per annum on the difference between
$28,000,000 and the largest combined unpaid principal balance during such
calendar month then ended under the Loan and the Inventory Loan.  However, in
the event the combined unpaid principal balance of this Loan and the Inventory
Loan is equal to or greater than $28,000,000 during such calendar month, then no
Non‑Use Fee shall be due and payable.  The Non-Use Fee under this Agreement is
the same Non-Use Fee payable under the Inventory Loan Agreement and only one
Non-Use Fee is payable. 

 

3.SECURITY

 

3.1Grant of Security Interest in Receivables Collateral. 

 

(a) Grant.  To secure the payment and Performance of all of the Obligations,
Borrower hereby grants to Lender a security interest in and collaterally assigns
to Lender the Receivables Collateral.  Such security interest shall be absolute,
continuing, perfected, direct, first, exclusive and applicable to all existing
and future Receivables Collateral, and shall secure all the Advances and all of
the Obligations.  To further secure the payment and Performance of the
Obligations, Borrower hereby grants to Lender a security interest in the
Borrower Bank Accounts.  IT IS THE EXPRESS INTENT OF BORROWER THAT ALL OF THE
COLLATERAL SHALL SECURE ONLY OBLIGATIONS UNDER THE LOAN DOCUMENTS.  All liens
and security interests shall be first priority liens and security
interests.  Borrower and Lender hereby agree that this Agreement shall be deemed
to be a security agreement under the Uniform Commercial Codes of the State of
Arizona, the State of Delaware and the State of Missouri.  Accordingly, in
addition to any other rights and remedies available to Lender hereunder, Lender
shall have all the rights of a secured party under the Arizona, Delaware and
Missouri Uniform Commercial Codes.

 

(b)Assigned Notes Receivable.  Borrower will collaterally assign, endorse to
Lender, with full recourse, and deliver to Lender or, at Lender's request, to
Lender's Custodial Agent all Notes Receivable which are part of the Receivables
Collateral. A copy of each Purchase Contract for each Note Receivable pledged to
Lender and all security agreements and the documents collateral thereto shall be
assigned to Lender and delivered to Lender or, at Lender's request, to its

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Custodial Agent.  Borrower further warrants and guarantees the enforceability of
the Receivables Collateral.  Lender is hereby appointed Borrower's
attorney-in-fact to take any and all actions in Borrower's name and/or on
Borrower's behalf deemed necessary or appropriate by Lender with respect to the
remittance of payments (including the endorsement of payment items) received on
account of the Receivables Collateral.  Borrower authorizes Lender to file a
UCC‑1 Financing Statement in the form attached to a pre-approved pre-filing
authorization letter and confirms Lender's authority to pre‑file the UCC‑1
Financing Statement as of the date of the pre‑filing authorization letter.

 

3.2Lockbox Collections and Servicing; Reconciliation Reports. 

 

(a)Collections. 

 

(i)Lockbox Agent shall deposit payments on the Notes Receivable constituting
part of the Receivables Collateral and remit those collected payments to Lender
on each Business Day according to the terms of the Lockbox Agreement, at
Borrower's sole cost and expense.  Lender shall apply such payments against the
Loan on Wednesday of each week and on the last day of each calendar month, or if
not a Business Day, on the next succeeding Business Day.  Payments shall not be
deemed received by Lender until Lender actually receives such payments from
Lockbox Agent.  Servicing Agent shall perform the monthly reporting services
required by Lender with regard to the Receivables Collateral as set forth in the
Servicing Agreement, all at Borrower's sole cost and expense.

 

(ii)In the event that the collections received by Lender include payments for
items other than principal and interest payable under the Notes Receivable
assigned to Lender (e.g., tax and insurance impounds, maintenance and other
assessment payments, late charges, "NSF" or returned check charges, etc.),
Lender shall remit such other payments back to Borrower no more frequently than
once per calendar month provided that (i) no Event of Default or Incipient
Default exists, (ii) Borrower requests in writing that Lender remit such other
payments back to Borrower, (iii) Borrower specifically identifies (inclusive of
the amount of) such other payments, (iv) Borrower provides Lender with back-up
to support the claim that such payments should not be part of the proceeds of
Collateral, and (v) if such amount is actually remitted to Borrower, then Lender
may adjust the Loan balance to reflect such remittance.

 

(b)Reports.  Lender may, upon written notice to Borrower and Servicing Agent,
request a written reconciliation from Borrower and Servicing Agent reconciling
the difference between the payments actually received by Lockbox Agent during
the subject month and the payments stated in the servicing report to have been
made by the Purchasers under Notes Receivable assigned to Lender.  Borrower
shall provide and shall cause Servicing Agent to provide Lender with such
servicing report within 10 Business Days of Borrower's receipt of Lender's
request.  To the extent that Lender is not satisfied, in its sole and absolute
discretion, with said servicing report, then upon written notice to Borrower,
Borrower shall pay to Lender within 5 Business Days of such notice the amount by
which the payments stated in the servicing reports to have been made by the
Purchasers under the Notes Receivable assigned to Lender exceed the payments
actually received by

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Lockbox Agent during the subject month, which difference is not reconciled to
Lender's reasonable satisfaction. 

 

(c)Notice to Purchasers.

 

(i)Each Purchaser under a Note Receivable assigned to Lender shall be directed
by Borrower or Servicing Agent, in writing, to make all payments on account of
such Note Receivable (A) by automatic debit to such Purchaser's bank account, to
be initiated by and to be paid to Lockbox Agent; or (B) by check payable to the
order of Borrower and mailed to the Lockbox Agent at the address specified in
the Lockbox Agreement;

 

(ii)Borrower or Servicing Agent previously delivered to Lender the form of
notice to be delivered to Purchasers advising them of the collateral assignment
of their Note Receivable to Lender and directing that all payments on account of
such Purchaser's Note Receivable be made as directed in such notice, which
notice (the "Notice to Purchasers") is substantially in the form attached hereto
as Exhibit G signed by Borrower or Servicing Agent. 

 

(iii)In addition, upon the occurrence and continuance of an Event of Default,
Borrower hereby grants to Lender a power of attorney, by and on behalf of
Borrower and in the name of Borrower and at Borrower's cost, to give notice in
writing or otherwise, in such form or manner as Lender may deem advisable in its
sole discretion, to each Purchaser of such assignment in favor of Lender with
direction to make all payments on account of such Purchaser's Note Receivable in
accordance with such instructions as Lender may deem advisable in its sole
discretion.  This power of attorney is coupled with an interest and is
irrevocable.

 

(iv)Borrower authorizes Servicing Agent (but Servicing Agent shall not be
obligated) to communicate at any time and from time to time with any Purchaser
or any other Person primarily or secondarily liable under a Note Receivable
assigned to Lender with regard to the lien of Lender thereon and any other
matter relating thereto and to request from such Purchaser or other Person any
information related thereto.

 

3.3Custodial Agent; Backup Servicing Agent.  The Custodial Agent shall act as
Lender's exclusive agent to maintain custody of the Notes Receivable and other
Receivables Collateral and to assist in the perfection of Lender's liens in the
Notes Receivable and other Receivables Collateral.  Borrower agrees not to
interfere with the Custodian's performance of its duties under the Custodial
Agreement or to take any action that would be inconsistent in any way with the
terms of the Custodial Agreement.  Any custodial fees, if any, and the costs and
expenses of the Custodial Agent shall be paid by Borrower.  Borrower shall cause
Servicing Agent to engage the Backup Servicing Agent as a condition of the
closing of the transaction contemplated hereby.  Any backup servicing fees and
the costs and expenses of the Backup Servicing Agent shall be paid by Borrower.

 

3.4Replacement of Agents.  Lender shall have the right at such times as are
provided in the applicable agreement, upon written notice to Borrower, (i) to
transfer the servicing of the Notes Receivable to the Backup Servicing Agent or
to an alternate Qualified Servicing Agent in

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accordance with the terms of the Servicing Agreement and/or (ii) to transfer the
custodial activities in connection with Notes Receivable to an alternate
qualified Custodial Agent in accordance with the terms of the Custodial
Agreement and/or (iii) to transfer the backup servicing of the Notes Receivable
to an alternate qualified Backup Servicing Agent in accordance with the terms of
the Backup Servicing Agreement.  The custodial fees, servicing fees, lockbox
fees and the costs and expenses of the Servicing Agent, Backup Servicing Agent,
Lockbox Agent and Custodial Agent shall be timely paid by Borrower.  The
determination of a successor to the then existing Custodial Agent, the then
existing Backup Servicing Agent and the existing Servicing Agent shall be made
by the mutual agreement of the Lender and the Borrower unless there then exists
an Event of Default or, in connection with the appointment of a successor to
Bluegreen as the Servicing Agent, unless there has occurred a Termination Event
(as defined in the Servicing Agreement).  For purposes of this Section 3.4, a
"Qualified Servicing Agent" shall mean a nationally recognized and licensed
servicer of timeshare loan receivables that (a) is actively servicing a
portfolio of timeshare loans with an aggregate principal balance of not less
than $200,000,000, (b) has servicing and collection capabilities for all
categories of delinquent and defaulted timeshare loans (including through
foreclosure) and (c) is not the Lender or an Affiliate of the Lender.

 

3.5Maintenance of Security  Borrower will deliver or cause to be delivered to
Lender and/or the Custodial Agent and will maintain or cause to be maintained in
full force and effect throughout the Term (except as otherwise expressly
provided in such Loan Document), as security for the Performance of the
Obligations, the Security Documents and all other security required to be given
to Lender pursuant to the terms of this Agreement.

 

3.6Liability of Guarantor.  The payment and Performance of the Obligations shall
be jointly, severally, primarily and unconditionally guaranteed by Guarantor as
set forth in the Guaranty.

 

4.CONDITIONS PRECEDENT TO ADVANCE; METHOD OF DISBURSEMENT

 

4.1Closing Conditions.  The obligation of Lender to consummate the transaction
contemplated by this Agreement is subject to the fulfillment or waiver of each
of the following conditions to the satisfaction of Lender, in the exercise of
its sole discretion:

 

(a)Loan Documents.  Borrower shall have delivered to Lender the Loan Documents,
duly executed, delivered and in form and substance satisfactory to Lender.

 

(b)Opinions.  Borrower shall have delivered to Lender a favorable opinion or
opinions from independent counsel for Borrower and Guarantor with respect to
matters reasonably requested by Lender.

 

(c)Organizational Documents.  Borrower shall have delivered to Lender (i)
updates (from the forms previously delivered) of the Articles of Organization of
Borrower, each Timeshare Association, Guarantor and (if any) other sureties for
the Obligations and, if applicable, their respective managers, members and
partners, to the extent any such entity is not a natural person; (ii) the
Resolutions of Borrower, Guarantor and (if any) other sureties for the
Obligations and, if applicable, their respective managers, members and partners,
to the extent any such entity is

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not a natural person, authorizing the execution and delivery of the Loan
Documents, the transactions contemplated thereby and such other matters as
Lender may require; and (iii) a certificate of good standing for Borrower, each
Timeshare Association, Guarantor and (if any) other sureties for the Performance
of the Obligations and, if applicable, their respective managers, members and
partners, to the extent any such entity is not a natural person, from the state
of its organization and from the states of, as applicable, Florida and Missouri.

 

(d)Credit Reports; Search Reports.  Lender shall have received, in form and
substance satisfactory to Lender, the results of UCC searches with respect to
Borrower, each Timeshare Association, and the Guarantor, and lien, litigation,
judgment and bankruptcy searches for Borrower, Guarantor, and each Timeshare
Association, conducted in such jurisdictions and for such other entities as
Lender deems appropriate in order to verify, among other things, that (i) Lender
has a first priority perfected lien on and security interest in all of the
Collateral, (ii) there are no judgments, tax liens or bankruptcy filings
affecting the Borrower, the Guarantor or any Timeshare Project, and (iii) there
is no material litigation outstanding affecting Borrower or the Guarantor (other
than as disclosed in the Guarantor's public filings made with the United States
Securities and Exchange Commission).

 

(e)Timeshare Project Due Diligence.  Borrower shall deliver to Lender the
following due diligence items at least 15 days before the Effective Date (unless
otherwise waived by the Lender in writing), all of which must be satisfactory in
form and substance to Lender in its sole and absolute discretion:

 

(i)Taxes and Assessments.  Copies of the most recent tax bills for
each Timeshare Project and evidence satisfactory to Lender that all taxes and
assessments on each Timeshare Project have been paid. 

 

(ii)Insurance.  A mortgagee/loss payee/additional insured endorsement to each
Insurance Policy or certificate holder designation in favor of Lender or other
proof of insurance as evidenced by a certificate of insurance, reasonably
acceptable to Lender.  The Lender acknowledges that the certificates of
insurance delivered to it prior to or as of the Effective Date are acceptable.

 

(iii)Checklist Items.  Those documents and items of due diligence listed on the
Closing Checklist attached hereto as Exhibit H.

 

(f)Subordinate Debt.  Borrower shall provide Lender with the terms and
conditions of and other details concerning the Indebtedness (if any) which is
intended to be the subject matter of the Subordination Agreement. 

 

(g)Exchange Affiliation.  Borrower shall provide Lender with evidence that the
Vacation Club is affiliated with Resort Condominiums International, LLC, which
affiliation encompasses the Timeshare Projects.

 

(h)Payment of Expenses.  Borrower shall have paid or shall have made
arrangements satisfactory to Lender for the payment of all reasonable costs and
expenses incurred by

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Lender in connection with the documentation, negotiation, and closing of the
Loan, including any portion of the Loan Fee as may be due on the Effective Date,
all reasonable attorneys' fees and expenses and all recording fees, taxes, title
premiums, and other expenses associated therewith.

 

(i)First Right of Refusal.  Lender shall have received satisfactory evidence
that any first right of refusal rights held by any other lender of Borrower has
been waived with respect to the Loan.

 

(j)Inventory Loan.  All conditions precedent to the closing of the amendment to
the Inventory Loan, as reflected in the Inventory Loan Agreement, shall have
been satisfied.

 

4.2Conditions Precedent and Subsequent to Advance. 

 

4.2.1Conditions Precedent.  The following conditions precedent are required to
be satisfied before Lender has any obligation to make an Advance.  All items to
be delivered to Lender in satisfaction of the following conditions shall be
satisfactory in form and substance to Lender in its sole and absolute
discretion:

 

(a)Request for Advance.  At least one Business Day prior to the requested
Advance, Borrower shall deliver to Lender a Request for Loan Advance
substantially in the form and substance of Exhibit I attached hereto. 

 

(b)Timeshare Documents.  At least ten (10) days prior to the requested Advance,
Borrower shall deliver to the Custodial Agent Prefunding Documents for each Note
Receivable for which an Advance is being requested.

 

(c)Receivables Schedules.  At least five (5)  Business Days prior to the
requested Advance, Borrower will deliver to Lender for each Note Receivable with
respect to which Borrower is requesting an Advance, a schedule of the Notes
Receivable which shall show, without limitation, the unpaid principal balance of
each such Note Receivable, the rate of interest at which such Note Receivable
accrues, the FICO Score for the Purchaser under each such Note Receivable, the
weighted average FICO Score, the original term of such Note Receivable and, if
any installment thereunder is past due, the number of days of such
delinquency.  Such schedule shall otherwise be in form and content satisfactory
to Lender and shall be certified correct by the Chief Financial Officer or
equivalent of Borrower.  

 

(d)Promised Improvements.  If not previously furnished, Borrower will provide
evidence to Lender that:  (i) all Timeshare Interests which are the subject of
the Notes Receivable against which Lender is making Advances have all on-site
and off-site improvements thereto that are then required to be completed
pursuant to the Timeshare Program Consumer Documents, Timeshare Program
Governing Documents and applicable law and necessary and promised utilities are
available; (ii) all Units and amenities which are required to be provided to
Purchasers obligated on the Notes Receivable with respect to which Borrower is
requesting an Advance pursuant to the Timeshare Program Consumer Documents,
Timeshare Program Governing Documents and applicable law, have been completed in
accordance with all applicable building codes and are fully furnished,
necessarily equipped and will be available for use by Purchasers without
disturbance or

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termination of their use rights so long as they are not in default of their
obligations under the Notes Receivable; and (iii) all furnishings in the Units
and amenities are owned (or will be owned in accordance with applicable Legal
Requirements) by an owners' association or associations in which the Purchasers
are members, free of charges, liens and security interests other than the
Permitted Encumbrances.    

 

(e)Servicing Agent Confirmation.  If requested by Lender, Borrower will provide
Lender with written confirmation from the Servicing Agent that it has not
received any claim of set-off by the Purchaser under the Note Receivable against
which Lender is making an Advance.    

 

(f)Report from Custodial Agent.  Lender has received a satisfactory
Certification of Custodian from the Custodial Agent pursuant to the Custodial
Agreement with regard to the Notes Receivable which are the subject of the
contemplated Advance.

 

(g)Confirmation of Recording.  Lender has received from Resort Title Agency,
Inc., as agent for the Title Insurer, an electronic copy of the fully executed
Confirmation of Recording with regard to each Purchaser Mortgage against which
Lender is making an Advance. 

 

(h)Event of Default.  No Event of Default or Incipient Default has occurred and
is continuing, or would result from such Advance or from the application of the
proceeds therefrom.

 

(i)Representations and Warranties.  The representations and warranties of
Borrower and any Guarantor contained in the Loan Documents are true and correct
in all material respects on and as of the date of the requested disbursement,
before and after giving effect thereto and to the application of the proceeds
therefrom, as though made on and as of such date.  

 

(j)No Violation of Usury Law.  The interest rate applicable to the Advance
(before giving effect to any savings clause) will not exceed the maximum rate
permitted by Applicable Usury Law.    

 

(k)Payment of Fees.  Borrower has paid to Lender the portion of the Loan Fee and
all other fees which are required to be paid at the time of the Advance.  

 

(l)Condemnation or Litigation.  There are no condemnation proceedings or
litigation proceedings pending or, to the best of Borrower’s knowledge,
threatened against any Unit or any Timeshare Interest in a Timeshare Project or
against Borrower which would in any way, in Lender's judgment, impair or affect
the full utilization of a Timeshare Project or materially adversely affect a
Timeshare Project, Borrower or the Collateral taken as a whole.

 

(m)Other Items.  If requested by Lender, Borrower has delivered to Lender such
other items which are reasonably necessary to evaluate the request for the
Advance and the satisfaction of the conditions precedent thereto. 

 

4.2.2Conditions Subsequent.  The following conditions are required to be
satisfied following the making of a particular Advance within the time period
set forth below:

 

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(a) Title Policy.  On or before the expiration of the Trailing Documents
Delivery Date as to a particular Advance, Borrower will deliver to the Custodial
Agent the Title Policies with respect to the Purchaser Mortgages which are the
subject of such Advance, which policies are to be endorsed in the manner
specified in the Confirmation of Recording and otherwise in the form attached
hereto as Exhibits D-1, D-2, and D-3 as to the Big Cedar Project, the Long Creek
Project, and the Paradise Point Project, respectively. 

(b) Assignment.  On or before the expiration of the Trailing Documents Delivery
Date as to a particular Advance, Borrower will deliver to the Custodial Agent a
copy of the original recorded Assignment for such Advance substantially in the
form and substance of Exhibits A-1,  A-2 and A-3 (attached hereto), as to the
Big Cedar Project, the Long Creek Project and the Paradise Point Project,
respectively, assigning to Lender the Notes Receivable and Purchaser Mortgages
against which Lender made the subject Advance. 

(c) Confirmation of Recording.  On or before the expiration of the Trailing
Documents Delivery Date as to a particular Advance, Borrower will deliver to the
Custodial Agent the Confirmation of Recording from Resort Title Agency, Inc., as
agent for the Title Insurer, with respect to the Purchaser Mortgages against
which Lender made the subject Advance.

(d) Deed of Trust.  On or before the expiration of the Trailing Documents
Delivery Date as to a particular Advance, Borrower will deliver to the Custodial
Agent a copy of the original fully executed, acknowledged and recorded Purchaser
Mortgage securing the Notes Receivable against which Lender made the subject
Advance.

In the event as to a particular Note Receivable, the documents described in
subsections (a), (b), (c) or (d) above are not delivered to the Custodial Agent
prior to the expiration of the applicable Trailing Documents Delivery Date, then
that Note Receivable shall no longer be deemed an Eligible Note Receivable and
if a Borrowing Base Shortfall occurs as a result of such ineligibility, the
provisions of Section 2.7(c) shall be applicable.  Lender shall continue to
collect the proceeds from such ineligible Note Receivable and apply such
proceeds in accordance with the provisions of Section 2.10 until Borrower makes
a written request for a reassignment of such ineligible Note Receivable.  Upon
such written request, Lender will reassign such ineligible Note Receivable to
Borrower under the conditions set forth in Section 2.7(c).  When the documents
described in subsections (a), (b), (c) or (d) above for such Note Receivable are
delivered to the Custodial Agent, then that Note Receivable shall be deemed an
Eligible Note Receivable provided that all other conditions to eligibility are
satisfied.  The monthly Borrowing Base Certificate delivered pursuant to Section
6.1(d)(v) shall specifically exclude from eligibility those Notes Receivable for
which the documents described in subsections (a), (b), (c) or (d) above have not
been delivered to the Custodial Agent on or prior to the expiration of the
applicable Trailing Documents Delivery Date.

4.3Conditions Satisfied at Borrower's Expense.  The conditions to each Advance
shall be satisfied by Borrower at its expense. 

 

4.4Disbursement of Advances.  Each Advance shall be payable to Borrower.  Each
Advance shall be disbursed by wire transfer.  Borrower will pay Lender's
reasonable charge in connection with any wire transfer.  Lender may, at its
option, withhold from each Advance any sum

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(including costs and expenses) then due to it under the terms of the Loan
Documents or which Borrower would be obligated to reimburse Lender pursuant to
the Loan Documents if first paid directly by Lender. 

 

4.5No Waiver.  Although Lender shall have no obligation to make any Advance
unless and until all of the conditions precedent to such Advance have been
satisfied, Lender may, at its discretion, make such Advance prior to that time
without waiving or releasing any of the Obligations. 

 

5.REPRESENTATIONS AND WARRANTIES

 

As an inducement to Lender to execute this Agreement, make the Loan, and
disburse the proceeds of the Loan, Borrower represents and warrants to Lender
the truth and accuracy of the matters set forth in this Article 5.

 

5.1Good Standing.  Borrower, Guarantor, Bluegreen Inc. and each Timeshare
Association are duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and are in good standing and authorized
to do business in each jurisdiction where at any time the location or nature of
their properties or their business makes such good standing and qualification
necessary, except where the failure to be so qualified will not have a material
adverse effect on the business or financial condition of any such Persons or the
validity or enforceability of any Notes Receivable.  Borrower, Guarantor,
Bluegreen Inc. and each Timeshare Association have full power and authority to
carry on their business and own their property.  Each Timeshare Association has
the full power and authority to perform its/the obligations under the
applicable Timeshare Declaration and its applicable Timeshare Management
Agreement.  The Vacation Club Trustee is duly organized and validly existing as
a corporation under the laws of the State of Florida.  The Vacation Club is a
validly existing multi-site timeshare plan under F.S. Ch. 721.  The Vacation
Club Trust Agreement has been accepted for filing under F.S. Ch. 721. 

 

5.2Power and Authority; Enforceability.  Borrower and Guarantor have full power
and authority to execute and deliver the applicable Loan Documents and to
Perform the Obligations, and to own, pledge, mortgage, hypothecate and otherwise
encumber and operate its property.  All action necessary and required by
Borrower's and Guarantor's Articles of Organization and all other Legal
Requirements for Borrower to obtain the Loan, and for Borrower and Guarantor to
execute and deliver the Loan Documents and all other documents and instruments
which have been or will be executed and delivered in connection with the Loan
Documents and to Perform the Obligations has been duly and effectively
taken.  The applicable Loan Documents are and, to Borrower's knowledge, shall
be, legal, valid, binding and enforceable against Borrower and Guarantor; and do
not violate the Applicable Usury Law and the execution and delivery of the
applicable Loan Documents by Borrower or Guarantor does not constitute a default
or result in the imposition of a lien under the terms or provisions of any
agreements to which Borrower or Guarantor is a party.  No consent of any
governmental agency or any other Person not a party to this Agreement is or will
be required as a condition to the execution, delivery or enforceability of the
Loan Documents.

 

5.3Borrower's Principal Place of Business.  Borrower's principal place of
business and chief executive office are as follows:   C/O Bluegreen Corporation,
4960 Conference North, Suite

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100, Boca Raton, Florida, 33431.  During the past five (5) years, Borrower  has
not been known by any other name or located in any address other than as set
forth in this Agreement.

 

5.4Compliance with Legal Requirements.  Borrower has complied with all Legal
Requirements in all material respects, including all Legal Requirements of the
state in which each Timeshare Project is located and all other jurisdictions in
which Timeshare Interests will be sold or offered for sale.  Without limiting
the generality of the foregoing, Borrower has, to the extent required by its
activities and businesses, fully complied with and shall, throughout the Term,
continue to comply with (a) all of the applicable provisions of (i) the Consumer
Credit Protection Act; (ii) the Truth-in-Lending Act and Regulation Z
thereunder; (iii) the Equal Credit Opportunity Act and Regulation B thereunder;
(iv) Regulation B of the Federal Reserve Board; (v) the Federal Trade
Commission's 3‑day cooling‑off Rule for Door‑to‑Door Sales; (vi) the Federal
Trade Commission Act; (vii) the Interstate Land Sales Full Disclosure Act;
(viii) the Americans With Disabilities Act and related accessibility guidelines;
(ix) the Real Estate Settlement Procedures Act and Regulation X thereunder; (x)
the FTC Privacy Act; (xi) all applicable insurance brokerage or agency
requirements; (xii) the Gramm-Leach-Bliley Act; (xiii) the Fair Debt Collection
Practices Act; (xiv) the Credit Reporting Act; (xv) the Fair Housing Act;
(xvi) the Mail Fraud Statute; (xvii) the Flood Disaster Protection Act of 1973;
(xviii) the Federal Trade Commission's Privacy of Consumer Information Rule,
(xix) the Federal Trade Commission "do-not-call rules"; (xx) USA Patriot Act;
(xxi) the Securities Exchange Act of 1934; (xxii) the federal postal laws;
(xxiii) all applicable state and federal securities laws; (xxiv) all applicable
usury laws; (xxv) all applicable trade practices, home and telephone
solicitation, sweepstakes, anti‑lottery and consumer credit and protection laws;
(xxvi) all applicable real estate sales licensing, disclosure, reporting and
escrow laws; (xxvii) the laws applicable in the State of Missouri governing
condominiums, timeshares and time-sharing activities; (xxviii) all laws, rules
and regulations promulgated by the Missouri Department of Real Estate; (xxix)
all amendments to and rules and regulations promulgated under the foregoing acts
or laws; and (xxx) all other applicable federal statutes and the rules and
regulations promulgated under them; and (b) and all other applicable laws (and
the rules and regulations promulgated under them) relating to timeshare
ownership, the establishment of a Timeshare Project, or the sale, offering for
sale, marketing or financing of Timeshare Interests in them or it. Borrower's
marketing and sales practices are in compliance with and, throughout the Term,
will continue to be in compliance with, applicable laws, including its lead
generation techniques.  Neither Borrower nor any Guarantor has been contacted or
notified of any Federal Trade Commission or any Department of Justice inquiry or
investigation in connection with marketing and sale of Timeshare Interests or of
any such Attorney General inquiry or investigation that could reasonably be
expected to have a material adverse effect upon the business or financial
condition of Borrower or Guarantor.    

 

5.5No Misrepresentations.  The Loan Documents and all certificates, financial
statements and written materials furnished to Lender by or on behalf of Borrower
or Guarantor in connection with the Loan do not contain as of the date furnished
to Lender any untrue statement of a material fact or omit to state a fact which
materially adversely affects or in the future may materially adversely affect a
Timeshare Project, the Collateral, the business or financial condition of
Borrower or any Guarantor, or the ability of Borrower or Guarantor to Perform
the Obligations.  All financial statements furnished to Lender by or on behalf
of Borrower or Guarantor in connection with the

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Loan will be prepared in accordance with GAAP (other than with respect to the
Borrower’s quarterly financial statements).

 

5.6No Default for Third Party Obligations.  Neither Borrower nor Guarantor is in
default under any other material agreement evidencing, guaranteeing or securing
borrowed money or a receivables purchase financing or in violation of or in
default under any material term in any other material agreement, instrument,
order, decree or judgment of any court, arbitration or governmental authority to
which it is a party or by which it is bound. 

 

5.7Payment of Taxes and Other Impositions.  Borrower and Guarantor have filed
all tax returns and has paid all Impositions, if any, required to be filed by
them or paid by them when due, including real estate taxes and assessments
relating to each Timeshare Project or the Collateral, unless the same is being
appealed or contested in good faith and unless as a result of such appeal, the
execution and enforcement of such taxes and assessments is stayed pending the
outcome of such appeal. 

 

5.8Governmental Regulations.  Neither Borrower nor Guarantor is subject to
regulation under the Investment Company Act of 1940, as the same may be amended
from time to time, or any federal or state statute or regulation limiting its
ability to incur debt or perform the Obligations.

 

5.9Employee Benefit Plans.  Borrower does not maintain any pension, retirement,
profit sharing or similar employee benefit plan that is subject to the Employee
Retirement Income and Security Act of 1974 as the same may be amended from time
to time pursuant to which such entity's contribution requirement is made
concurrently with the employee's contribution.  The Guarantor has a pension,
profit sharing or other compensatory or similar plan of the Guarantor (herein
after called a "Plan") providing for a program of deferred compensation for any
employee or officer.  No fact or situation, including but not limited to, any
"Reportable Event," as that term is defined in Section 4043 of the Employee
Retirement Income Security Act of 1974 as the same may be amended from time to
time ("Pension Reform Act"), exists or will exist in connection with any Plan of
the Guarantor which might constitute grounds for termination of any Plan by the
Pension Benefit Guaranty Corporation or cause the appointment by the appropriate
United States District Court of a Trustee to administer any such Plan.  No
"Prohibited Transaction" with respect to the Guarantor within the meaning of
Section 406 of the Pension Reform Act exists or will exist with respect to any
Plan upon the execution and delivery of the Guaranty or the performance by the
parties hereto of their respective duties and obligations hereunder, except a
prohibited transaction that qualifies for an exemption under the Pension Reform
Act.  The Guarantor will (1) at all times make prompt payment of contributions
required to meet the minimum funding standards set forth in Sections 302 through
305 of the Pension Reform Act with respect to each Plan: (2) promptly,  upon
written request therefor, furnish to the Lender copies of each annual report
required to be filed pursuant to Section 103 of the Pension Reform Act in
connection with each Plan for each Plan Year, including any certified financial
statements or actuarial statements required pursuant to said Section 103; (3)
notify the Lender immediately of any fact, including, but not limited, to any
Reportable Event arising in connection with any Plan which might constitute
grounds for termination thereof by the Pension Benefit Guaranty Corporation or
for the appointment by the appropriate United States District Court of a Trustee
to administer the Plan; and (4) notify the Lender of any "Prohibited
Transaction" with respect to Guarantor as that term is defined in Section 406 of
the Pension Reform Act, except a

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prohibited transaction that qualifies for an exemption under the Pension Reform
Act.  The Guarantor will not (a) engage in any Prohibited Transaction, except a
prohibited transaction that qualifies for an exemption under the Pension Reform
Act, or (b) terminate any such Plan in a manner which could result in the
imposition of a lien on the property of the Guarantor pursuant to Section 4068
of the Pension Reform Act.

5.10Securities Activities.  Neither Borrower nor Guarantor is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" (as defined
in Regulation U of the Board of Governors of the Federal Reserve System in
effect from time to time), and not more than 25% of the value of the assets of
either such entity consists of such margin stock.  Furthermore, none of the
proceeds of the Loan will be used to purchase or carry any "margin stock" and no
portion of the proceeds of the Loan will be extended by Borrower to others for
the purpose of purchasing or carrying margin stock. None of the transactions
contemplated in this Agreement (including the use of the proceeds from the Loan)
will violate or result in the violation of Section 7 of the Securities Exchange
Act of 1934, as amended, or any regulations issued under it, including
Regulations G, T, U and X of the Federal Reserve Board, 12 C.F.R. Part 11.

 

5.11Sales Activities.  All Notes Receivable pledged hereunder shall be derived
from Timeshare Interests that have been and will be sold solely in the following
jurisdictions:

 

Timeshare Project

Jurisdiction

Big Cedar Project

Missouri

Long Creek Project

Missouri

Paradise Point

Missouri

 

All sales have been and will be made in material compliance with all Legal
Requirements and utilizing a then current Public Report approved by all
applicable regulatory authorities.  Notwithstanding the foregoing, those Notes
Receivables identified on Schedule 5.11, attached hereto, were derived from the
sale of Timeshare Interests which were sold in the jurisdictions identified on
Schedule 5.11 and not in Missouri.  Even though such Notes Receivables were
derived from the sale of Timeshare Interests which were sold in the
jurisdictions other than Missouri, such Notes Receivable and the other Timeshare
Program Consumer Documents executed in connection therewith are enforceable
against the Purchaser thereunder, subject to bankruptcy, insolvency,
reorganization, moratorium, equity, and similar rules and laws, including those
affecting the rights of creditors generally.    No later than 10 days prior to
the making of a particular Advance, Borrower shall have the right to supplement
Schedule 5.11 with the identification of additional Notes Receivable by the
delivery of revised Schedule 5.11 to Lender.  The representation and warranty
made by Borrower to Lender in the immediately prior sentence shall be reaffirmed
by Borrower to Lender as to such revised Schedule 5.11, concurrently with its
delivery to Lender.

 

5.12Timeshare Interest Not a Security.  Borrower has not sold or offered for
sale any Timeshare Interest as an investment or in any other manner or
jurisdiction that would constitute the sale or the offering for sale of a
"security" under the Securities Act of 1933, the Securities Exchange Act of
1934, any state securities laws, commonly known as "blue sky" laws, or any other
applicable law.

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5.13Representations as to each Timeshare Project.

 

(a)Title; Prior Liens.  Borrower has good and marketable title to each unsold
Timeshare Interest in a Timeshare Project and to the Collateral.  There are no
liens, security interests, or encumbrances against such Timeshare Project other
than the Permitted Encumbrances and other than future liens against such
Timeshare Project to the extent permitted under Section 6.2(b) of this
Agreement. 

 

(b)Timeshare Plan.  Each Timeshare Project and each Timeshare Programs therein
have been established and dedicated as a timeshare project, in material
compliance with all Legal Requirements and with applicable Timeshare Declaration
and other Timeshare Program Governing Documents, and matters affecting title or
use of such Timeshare Project.  The Vacation Club is in material compliance with
all laws, codes, rules and regulations applicable to it with respect to its
activities in operating the Vacation Club and has obtained all necessary
licenses and registrations required in that regard.

 

(c)Access.  Each Timeshare Project (including all amenities) has access over
easements to a publicly dedicated road and all roadways, and parking lots that
serve such Timeshare Project are and will be common elements or easement parcels
under the applicable Timeshare Declaration. 

 

(d)Utilities.  Electric, gas, sewer, water facilities and other necessary
utilities are lawfully available in sufficient capacity to service each
Timeshare Project and any easements necessary to the furnishing of such utility
service have been obtained and duly recorded.

 

(e)Amenities.  All amenities promised pursuant to representations, warranties or
covenants contained in the Timeshare Program Governing Documents are completed
and will be provided in accordance therewith.  Such amenities include those
listed in the applicable Timeshare Declaration.  Each Timeshare Association and
each Purchaser of a Timeshare Interest has access to and the use of all of the
amenities and public utilities of such Timeshare Project as and to the extent
provided in the applicable Timeshare Declaration and the Timeshare Program
Governing Documents.

 

(f)Improvements.  All costs arising from the acquisition, installation,
construction and completion of any improvements and the purchase of any
equipment, inventory, or furnishings located in or on each Timeshare Project
have been or will be promptly and timely paid.

 

(g)Sale of Intervals.  Including presale inventory in respect of portions of a
Timeshare Project whose development is in process but not yet completed, and the
corresponding owners, and allowing for cancellations or terminations of previous
sales, the total Timeshare Interests offered for sale or sold will not exceed
the available accommodations at such Timeshare Project. 

 

(h)Zoning Laws, Building Codes, Etc.  Each Timeshare Project, all the buildings
and other improvements in which the Units are situated and all amenities have
been, and Borrower

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hereby covenants will be, completed in material compliance with all Legal
Requirements, including without limitation all applicable zoning codes, building
codes, health codes, fire and safety codes, and other applicable laws, including
without limitation environmental laws in a manner that Borrower's failure to so
comply would not reasonably be expected to result in a Material Adverse
Change.  All inspections, licenses, permits required to be made or issued in
respect of such buildings and amenities have been and Borrower hereby covenants
will be, made or issued by the appropriate authorities.  The use and occupancy
of such buildings for their intended purposes is and Borrower hereby covenants
will be, lawful under all applicable laws.  Final certificates of occupancy or
the equivalent have been, or will be,  issued by the appropriate governmental
authority and Borrower hereby covenants will be in effect for each Unit prior to
the closing of the sale of any Timeshare Interest in such Unit.  The timeshare
use and occupancy of Units does not violate or constitute a non-conforming use
or require a variance under any private covenant or restriction or any zoning,
use or similar law, ordinance or regulation affecting the use or occupancy of a
Timeshare Project. 

 

(i)Units Ready for Use.  Prior to the closing of the sale of any Timeshare
Interest within a Unit, such Unit is fully furnished and, subject to renovations
for improvements from time to time in the ordinary course of maintaining the
Units, ready for use by Purchasers.  All common furnishings (including
appliances) within such Units are and will be owned by Borrower or the
applicable Timeshare Association, have been or will be fully paid for, and are
and will be free and clear of any liens or other interests of any third party
including any lessor.

 

5.14Eligible Notes Receivable.  Each Note Receivable which is assigned to Lender
pursuant to this Agreement and against which an Advance is requested or which is
assigned in satisfaction of Borrower's obligations under Section 2.7(c) shall be
an Eligible Note Receivable at the time of assignment.  Borrower has Performed
all of its obligations to Purchasers, and there are no executory obligations to
Purchasers to be Performed by Borrower, except for non-delinquent and executory
obligations disclosed to Purchasers in their Purchase Contracts. 

 

5.15Association; Assessments and Reserves.  When a Purchaser closes the purchase
of a Timeshare Interest, such Purchaser automatically becomes a member of
Bluegreen Inc.  and the Vacation Club Trustee, as the titled owner of the
Timeshare Interest, is designated as the  member of the applicable Timeshare
Association and is entitled to vote on the affairs thereof, subject only to
retaining ownership of a Timeshare Interest.  Each Timeshare Association has (or
will have) authority to levy annual assessments to cover the costs of
maintaining and operating the Timeshare Project to which it pertains.  To
Borrower's knowledge, Bluegreen Inc. and each Timeshare Association are and will
be solvent.  To Borrower's knowledge, levied assessments will be adequate to
cover the current costs of maintaining and operating each Timeshare Project and
to establish and maintain a reasonable reserve for capital improvements.  To
Borrower's knowledge, there will be no events which could give rise to a
material increase in such costs, except for additions of subsequent phases of a
Timeshare Project that will not materially increase assessments.

 

5.16Title to and Maintenance of Common Areas and Amenities.  Except as otherwise
permitted and disclosed by the Timeshare Program Governing Documents (a) each
Timeshare Association or the owners of Timeshare Interests in common (which
interest may be held by the Vacation Club Trustee pursuant to the Vacation Club
Trust Agreement) will at all times own the furnishings in the Units and all the
common areas in the Timeshare Project pertaining to such

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Timeshare Association and owners and other amenities which have been promised or
represented as being available to Purchasers in the Timeshare Program Governing
Documents, free and clear of liens and security interests except for the
Permitted Encumbrances; (b) no part of a Timeshare Project is or will be subject
to partition by the owners of Timeshare Interests; and (c) all access roads and
utilities and off-site improvements necessary to the use of each Timeshare
Project will have been dedicated to and/or accepted by the responsible
governmental authority or utility company, or are owned by an association of
owners of property in a larger planned development or developments of which
such Timeshare Project is a part, or are owned by Borrower and subject to the
Purchasers' right of access and use.

 

5.17Reservation System.  The Reservation System is fully operational for its
intended purpose.  The Reservation System shall continue in operation and shall
be available to all Purchasers to assure their ability to make reservations and
exercise their use rights in respect of a Unit in the applicable Timeshare
Project, subject to compliance with the applicable Timeshare Program Consumer
Documents and the applicable Timeshare Program Governing Documents.  Borrower
acknowledges the significance of the Reservation System to the ability of the
applicable Timeshare Project to operate properly and allow Purchasers to make
reservations and exercise use rights.  On the Effective Date and continuing for
the balance of the Term, Borrower agrees to cause Bluegreen Resorts Management,
Inc. to grant Lender a non-exclusive license to use the Reservation System
pursuant to a license agreement in form substantially similar to that set forth
in Schedule 5.17.  Lender acknowledges that Lender has received a non-exclusive
license to use the Reservation System consistent with the form of license
agreement attached hereto as Schedule 5.17. 

 

5.18Litigation and Proceedings.    Other than as disclosed in Exhibit L, and
other than as disclosed in the most recent SEC filing related to Guarantor and
delivered to Lender prior to the Effective Date and, if applicable, quarterly
thereafter, there are no actions, suits, proceedings, orders, injunctions,
bankruptcy actions, or foreclosure actions pending or, to the knowledge of
Borrower, threatened, in any court, at law or in equity, or before or by any
governmental authority, against or affecting Borrower, a Timeshare Association,
Guarantor, the Vacation Club, a Timeshare Manager, Bluegreen Inc. or a Timeshare
Project, which, if adversely determined, would result in a Material Adverse
Change to Borrower, Guarantor, the Vacation Club, a Timeshare Manager, Bluegreen
Inc. or a Timeshare Project or which would materially impair the ability of
Borrower or Guarantor to complete its or their Obligations under the Loan
Documents, or which would attack the validity, enforceability, or priority of
any of Lender's liens or of any material provisions of the Loan Documents, at
law or in equity.  None of the matters reflected on Exhibit L or as disclosed in
the most recent SEC filing related to Guarantor and delivered to Lender prior to
the Effective Date, are reasonably expected to result in a Material Adverse
Change to Borrower, Guarantor, the Vacation Club, a Timeshare Manager, Bluegreen
Inc. or a Timeshare Project or are reasonably expected to materially impair the
ability of Borrower or Guarantor to complete its or their Obligations under the
Loan Documents, or would attack the validity, enforceability, or priority of any
of Lender's liens or of any material provisions of the Loan Documents, at law or
in equity.  Neither Borrower nor Guarantor has received any notice the import of
which would result in a Material Adverse Change to their respective financial
condition or the performance of their respective Obligations, or to a Timeshare
Project or the Collateral.  Borrower will promptly notify Lender if any action,
litigation or proceeding is commenced or threatened against it that could result
in a Material Adverse Change.  Notwithstanding the foregoing, to the extent any
required update or report is covered by the public

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filings made with the United States Securities & Exchange Commission and related
to Guarantor, Borrower shall be deemed to be in compliance with this Section
5.18.    

 

5.19Operating Contracts.    The management agreements listed and described on
Exhibits M-1, M-2, and M-3, attached hereto, as to the Big Cedar Project, the
Long Creek Project, or the Paradise Point Project, respectively, as may be
amended in writing by Borrower (provided that such amendments do not materially
and adversely affect the rights of Lender or the Collateral), comprise all of
the material agreements or arrangements relating to the management of each
Timeshare Project by the Timeshare Manager as of the date hereof (collectively,
and as amended or replaced from time to time in accordance with the terms
thereof and this Section 5.19, the "Operating Contracts").  Except for changes
as may be consented to in advance by Lender, the Operating Contracts shall
remain in full force and effect and Borrower shall take or cause to be taken,
actions to prevent defaults thereunder; provided, however, such Operating
Contracts may be amended or terminated without Lender consent so long as any
such amendment or termination would not result in a Material Adverse Change,
provided, however, that any termination of the Operating Contract dealing with
management shall be replaced with a customary management agreement with a
Timeshare Manager with substantial experience and expertise in the hospitality
industry and with respect to timeshare operations of a type and quality which is
substantially similar to the Timeshare Project, which Person shall be reasonably
acceptable to Lender. 

 

5.20Subsidiaries, Affiliates and Capital Structure.  The members of Borrower and
their respective ownership interests are reflected on Exhibit N hereto. 

 

5.21Timeshare Program Consumer Documents.  The Timeshare Program Consumer
Documents in substantially the forms attached hereto as Exhibits C-1, C-2, and
C-3 as to the Big Cedar Project, the Long Creek Project, or the Paradise Point
Project, respectively, are the only documents which have been used in connection
with the credit sale of Timeshare Interests pertaining to those Notes Receivable
that will be collaterally assigned to Lender. 

 

5.22Public Reports.  The Public Report for each Timeshare Project and for the
Vacation Club, copies of which have been previously delivered to Lender, has
been approved by all applicable regulatory agencies and in form and content
complies in all material respects with all applicable Legal Requirements.  With
respect to the sale of each Timeshare Interest, there will be in effect at the
time of sale and Borrower will have used an unexpired, Public Report, approved
by all applicable regulatory agencies.  If required by the applicable law of a
state in which Borrower is selling Timeshare Interests, Borrower will keep such
Public Reports updated and approved by the applicable regulatory agency of that
state.  Upon request of Lender, Borrower will promptly deliver to Lender
evidence of such continued approval, including all extensions thereof, promptly
upon receipt by Borrower.  In the event that a Public Report is amended at any
time, and upon the request therefore by Lender, Borrower will promptly deliver
to Lender a copy of such amendment.

 

5.23Solvency.  Borrower and Guarantor are each solvent.  No transfer of property
is being made by Borrower or Guarantor and no obligation is being incurred by
Borrower or Guarantor in connection with the transactions contemplated by this
Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of Borrower or Guarantor.

 

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5.24No Material Adverse Change in Financial Condition.  There has been no
Material Adverse Change in the financial condition of Borrower, Guarantor or
their respective subsidiaries since the date of the most recent financial
statements delivered to Lender.

 

5.25Timeshare Program Governing Documents.  The Timeshare Program Governing
Documents (and all amendments, modifications supplements and additions thereto)
described on Exhibits P-1,  P-2, P‑3 and P-4 hereto, as to the Big Cedar
Project, the Long Creek Project, the Vacation Club, and the Paradise Point
Project, respectively, comprise all of the existing Timeshare Program Governing
Documents with respect to each Timeshare Project and the Vacation Club as to
those Notes Receivable that will be collaterally assigned to Lender.

 

5.26Marketing Activities.  All marketing and sales activities have been and will
be performed by independent contractors or employees of Borrower or its
Affiliates, all of whom are and will be properly licensed, as necessary, in
accordance with applicable laws.  Borrower will retain a duly licensed broker of
record in respect to the sales of Timeshare Interests in each Timeshare Project
as may be required by applicable law in the state in which such Timeshare
Interests are sold.

 

5.27Brokers; Payment of Commissions.  No consultant, advisor, broker, agent,
finder or intermediary has acted on Borrower's behalf in connection with the
negotiation of this Agreement or the consummation of the transactions
contemplated hereby.  Borrower has been advised by Lender or its agents that
Ward Financial is the only consultant, advisor, broker, agent, finder or
intermediary that has acted on Lender's behalf in connection with the
negotiation of this Agreement or the consummation of the transactions
contemplated hereby.  Lender agrees to pay Ward Financial a commission pursuant
to a separate agreement between Lender and Ward Financial.  Borrower agrees to
indemnity Lender for any compensation due to Ward Financial as a result of the
acts of Borrower and any additional compensation due to any other Person
claiming any commission or finder's fee or other compensation as a result of any
actions by such Person for or on behalf of Borrower. 

 

5.28Reserved.   

5.29Foreign Assets Control Regulations.  Neither the requesting or borrowing of
the Loan or the use of the proceeds of the Loan will violate the Trading With
the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the "Trading With the Enemy
Act") or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the "Foreign
Assets Control Regulations") or any enabling legislation or executive order
relating thereto (which for the avoidance of doubt shall include, but shall not
be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) (the "Executive Order") and (b)
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).  Furthermore,
neither the Borrower nor any of its subsidiaries or Direct Affiliates (i) is or
will become a "blocked person" as described in the Executive Order, the Trading
With the Enemy Act or the Foreign Assets Control Regulations or (ii) engages or
will engage in any dealings or transactions, or be otherwise associated, with
any such "blocked person."  Lender may disclose any and all information
regarding Borrower and a Purchaser in connection with any regulatory examination
of Lender or to the extent Lender deems advisable to disclose such information
to such applicable regulatory agencies involving matters relating to the Trading
With the Enemy Act, the Foreign Assets Control

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Regulations or the Executive Order; provided, however, that if Lender is legally
permitted to do so, no such disclosure shall be made prior to the Lender (x)
giving the Borrower prior written notification within one (1) Business Day after
Lender's receipt of notice of any such required disclosure or decision of the
Lender to make such disclosure, that explains in reasonable detail (if known to
Lender), the basis for such disclosure, which notification shall include the
following: (i) the contents of the disclosure, (ii) the Person to whom the
disclosure must be made, and (iii) if known to Lender, the legal basis for the
disclosure; (y) using commercially reasonable efforts to require that any
recipient of such disclosure maintain such information on a confidential basis
in accordance with all Legal Requirements, including all applicable consumer
privacy laws; and (z) if Lender is legally permitted to do so, providing
Borrower with an opportunity to redact all of the names, social security numbers
and bank account numbers of, and all non-public personal information pertaining
to, any Purchasers.    

5.30Contracts with Affiliates; Subordinated Indebtedness.

(a) Subject to future changes to Borrower's organization structure that do not
violate subsection 6.2(c) of this Agreement, Schedule 5.30 is a true and
complete organizational chart disclosing the ownership and relationship of
Borrower, each member of Borrower and Guarantor, including any subsidiaries of
Borrower and any Affiliates of Borrower that have any involvement or interest in
the Timeshare Associations or the Timeshare Projects.  Schedule 5.30 discloses
all written agreements between Borrower and any of its Direct Affiliates with
respect to the Timeshare Associations or the Timeshare Projects (as in effect on
the Effective Date or as supplemented with the consent of Lender, the "Approved
Transactions").  All Approved Transactions were negotiated in good faith, are
arms-length transactions and all terms, covenants and conditions which govern
the Approved Transactions are at market rate. 

(b) The intercompany indebtedness for those of Borrower’s Affiliates described
as “Due to Related Parties” on Borrower’s balance sheet constitutes all
Borrower's debts, liabilities and obligations to any Affiliates of Borrower as
of the date of such balance sheet.  Borrower has provided copies of all
instruments, agreements and other writings evidencing and/or securing any of the
foregoing intercompany debt to Lender.  Borrower agrees that all of such
indebtedness shall be expressly subordinated to the Loan.  If (i) an Event of
Default shall have occurred and is continuing, (ii) an Incipient Default exists,
or (iii) if the making of such payment would result in an Incipient Default or
Event of Default or would render the Borrower insolvent, Borrower will not,
directly or indirectly, (A) permit any payment to be made in respect of any
intercompany indebtedness, liabilities or obligations, direct or contingent, to
any Affiliate including Guarantor and members of Borrower, which payments shall
be and are hereby made subordinate to the payment of principal of, and interest
on, the Note and the other payment Obligations of Borrower to Lender under the
other Loan Documents, (B) permit the amendment, rescission or other modification
of any of Borrower's obligations with respect to intercompany indebtedness other
than in respect of Guarantor or members of Borrower, or (C) incur additional
intercompany indebtedness other than in respect of Guarantor or members of
Borrower.  All such additional intercompany indebtedness shall constitute
additional subordinated indebtedness.  All Persons to whom Borrower owes
intercompany indebtedness, including Guarantor and members of Borrower, shall
execute a Subordination Agreement as a condition of Closing.  Notwithstanding
the foregoing or anything otherwise to the contrary, intercompany indebtedness
in the form of payments by Borrower to Affiliates, Guarantor or members of
Borrower for bona fide services rendered or goods received pursuant to arm's
length

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contractual arrangements shall not be required to be subordinated at any time
and shall not be subject to subordination as provided in this Section 5.30 or
otherwise. 

5.31Survival and Additional Representations and Warranties.  The representations
and warranties contained in this Article 5 are in addition to, and not in
derogation of, the representations and warranties contained elsewhere in the
Loan Documents and shall be deemed to be made and reaffirmed prior to the making
of each Advance, except as disclosed in writing to Lender. 

6.COVENANTS

 

6.1Affirmative Covenants.

 

(a)Good Standing.  Borrower will maintain and cause Guarantor, Bluegreen Inc.
and each Timeshare Association to maintain their respective existence as a
business organization of the same type as when it signed this Agreement, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and remain in good standing and authorized to
do business in the jurisdiction where at any time the location or nature of its
properties or its business then makes such good standing and qualification
necessary, except where the failure to be so qualified will not have a material
adverse effect on the business or financial condition of any such Persons or the
validity or enforceability of any Notes Receivable. Borrower will maintain and
cause Guarantor to maintain full authority to Perform the Obligations and to
carry on their businesses and own their properties, except where the failure to
be so authorized will not have a material adverse effect on the business or
financial condition of any such Persons, the validity or enforceability of any
Notes Receivable or the Performance of the Obligations.

 

(b)Compliance with Legal Requirements.  Borrower will comply with all Legal
Requirements in all material respects, including all Legal Requirements of the
state in which each Timeshare Project is located and all other jurisdictions in
which a Timeshare Project is located or in which Timeshare Interests will be
sold or offered for sale. 

 

(c)Insurance, Casualty and Condemnation. 

 

(i)Insurance Requirements.  At all times throughout the Loan term, Borrower
shall, at its sole cost and expense, maintain (or cause the maintenance of)
insurance, and shall pay (or cause the payment of), as the same becomes due and
payable, all premiums in respect thereto, including, but not necessarily limited
to:

(A)Property.  For all of the improvements at the Timeshare Project, a policy of
standard "all risk" fire and extended coverage insurance, with vandalism and
malicious mischief endorsements, to the extent of one hundred percent (100%) of
the full replacement value against "all risks of physical loss" including
without limitation a guaranteed replacement cost and code compliance coverage
endorsement including boiler and machinery insurance coverage, heating, air
conditioning equipment, and other equipment of such nature, and insurance
against loss or damage to personal property located at or on the Timeshare
Project by fire and other hazards covered by such insurance (with deductibles
reasonably acceptable to Lender).  All such insurance shall be payable to Lender
under an attached Beneficiary's Loss Payable

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Endorsement (Form 438 BFUNS or equivalent).  Such insurance policy and each
portion thereof shall be in the broadest and most comprehensive form available
in the market at the time such policy is issued or amended.  Such policy shall,
if required by Lender, contain an agreed value clause sufficient (as determined
by Lender) to eliminate any risk of coinsurance. 

(B)Liability.  Insurance protecting the Borrower and Lender against loss or
losses from liability imposed by law or assumed in any written contract and
arising from personal injury, including bodily injury or death, or a limit of
liability of not less than $1,000,000 (combined single limit for personal injury
and property damage per occurrence), $2,000,000 aggregate, and an umbrella
excess liability policy in an amount not less than $5,000,000 protecting the
Borrower and Lender against any loss or liability or damage for personal injury,
including bodily injury or death, or property damage.  Such policies must be
written on an occurrence basis so as to provide blanket contractual liability,
broad form property damage coverage, and coverage for products and completed
operations.

(C)Business Interruption.  Business interruption insurance (extra expense/loss
of income insurance) in an amount sufficient to cover any loss of income from
the Timeshare Project in an amount of not less than actual loss sustained for a
period of twelve (12) months. 

(D)Flood.  A policy or policies of flood insurance in the maximum amount of
flood insurance available with respect to the Project under the National Flood
Insurance Program.  This requirement will be waived upon presentation of
evidence satisfactory to Lender that no portion of the site is located within an
area identified by the U.S. Department of Housing and Urban Development as
having special flood hazards.

(E)Earthquake.  Earthquake insurance in such amount as required by Lender,
provided such insurance is available at commercially reasonable prices, but in
no event shall the coverage be less than the full amount required by the
"Probably Maximum Loss" or "PML" study for the Project.

(ii)Other.  All insurance required shall be procured and maintained in
financially sound and generally recognized responsible insurance companies
selected by the Borrower and subject to the approval of Lender.  Such companies
should be authorized to insure property located in the State of Missouri.  The
company issuing the policies shall be rated "B+" or better by A.M. Best Co., in
Bests' Key guide.  All property policies evidencing the insurance required shall
name Lender and its successors and/or assigns as first mortgagee and all
liability policies evidencing the insurance required shall name Lender and its
successors and/or assigns as an additional insured, shall not be cancelable as
to the interests of Lender due to the acts of the Borrower, and shall provide
for at least thirty (30) days prior written notice of the cancellation or
modification thereof to Lender.

(iii)Evidence.  All such policies of insurance, or certificates of insurance
evidencing that such insurance is in full force and effect, shall be delivered
to Lender on or

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before the Effective Date (together with proof of the payment of the premiums
thereof).  Prior to the expiration of each such policy, Borrower shall furnish
Lender evidence that such policy has been renewed or replaced in the form of a
certificate reciting that there is insurance coverage in place of the types and
in the amounts required hereunder.

(iv)Adjustments.  Borrower shall give immediate written notice to the insurance
carrier and to Lender of any material loss in respect to which a claim is being
made.    

(v)Use and Application of Insurance Proceeds.  In the event that any portion of
the respective Timeshare Projects subject to the respective, applicable
Timeshare Declarations should suffer any casualty loss covered by hazard
insurance or other insurance, upon receipt of any insurance proceeds, the
respective Timeshare Associations are required (in accordance with the
provisions of the respective Timeshare Declarations), during the time such
properties are covered by such insurance, under the respective Timeshare
Declarations to rebuild or repair the damaged portions of all of the buildings
and other improvements within the property described in the respective,
applicable Timeshare Program Governing Documents unless provided otherwise
pursuant to Article 14 of the Big Cedar Timeshare Declaration, pursuant to
Article 14 of the Long Creek Ranch Timeshare Declaration or pursuant to Article
VII of the Paradise Point Timeshare Declaration.  In the event that any proceeds
of insurance are to be delivered to holders of first mortgage liens pursuant to
Article 14 of the Big Cedar Timeshare Declaration, pursuant to Article 14 of the
Long Creek Ranch Timeshare Declaration or pursuant to Article VII of the
Paradise Point Timeshare Declaration, Borrower agrees to deliver to Lender such
proceeds relating to the Notes Receivable that are part of the Collateral to the
extent received by Borrower. 

(vi)Condemnation.  Borrower shall immediately notify Lender of the institution
of any proceeding for the condemnation or other taking of any of the Timeshare
Projects or any portion thereof.  Notwithstanding anything to the contrary
contained herein, for so long as any condemned portion of any of the Timeshare
Projects are to be replaced by the respective, applicable Timeshare
Associations  in accordance with the respective, applicable Timeshare
Declarations, any and all awards and payments arising from any condemnation or
conveyances in lieu thereof relating to such portion of the respective,
applicable Timeshare Projects shall be distributed and used in accordance with
the provisions of the respective, applicable Timeshare Declarations.  In the
event that any proceeds of condemnation are to be delivered to holders of first
mortgage liens pursuant to the Big Cedar Timeshare Declaration, pursuant to the
Long Creek Timeshare Declaration or pursuant to the Paradise Point Timeshare
Declaration, Borrower agrees to deliver to Lender such proceeds relating to the
Notes Receivable that are part of the Collateral to the extent received by
Borrower.    

(d)Reports.  Borrower shall keep adequate records and books of account
reflecting all financial transactions of Borrower and with respect to each
Timeshare Project, and the Collateral, in which complete entries will be made in
accordance with GAAP.  So long as the Obligations remain outstanding, Borrower
shall furnish or cause to be furnished to Lender the following at Borrower's
sole cost and expense:

 

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(i)Sales and Inventory Reports.  Within five (5) Business Days after request
therefore by Lender, a monthly, quarterly or annual report, as the case may be,
showing: (i) all sales of Timeshare Interests (including cash sales); (ii) all
remaining available inventory of Units and Timeshare Interests; (iii) a schedule
of sales prices; and (iv) all cancellations of sales of Timeshare
Interests.  Such reports shall be certified by Borrower to be true, correct and
complete and shall be provided in a form to be reasonably approved by Lender.

 

(ii)Quarterly Financial Reports.  Within 60 days after the end of fiscal
quarterly periods ending March, June and September of each fiscal year,
management prepared unaudited balance sheet and statements of income and cash
flow (on a fiscal quarter to date basis and a cumulative year-to-date basis as
required by GAAP) of Guarantor and management prepared unaudited balance sheet
and statements of income of Borrower (prepared on a consolidated basis),
certified by the chief financial officer or treasurer of the subject of such
statement, prepared in accordance with GAAP (other than with respect to the
Borrower), including in comparative form the corresponding figures as of the end
of the corresponding prior year quarter of the subject, all in reasonable
detail, subject to year-end adjustments. 

 

(iii)Year End Financials.  As soon as available and in any event within 120 days
after the end of each fiscal year of Borrower, Guarantor and each Timeshare
Association: (i) the balance sheets of the Borrower, Guarantor, and each
Timeshare Association as of the end of such year and the related statements of
income, retained earnings (or its equivalent as applicable) and cash flow for
such fiscal year, prepared in accordance with GAAP, certified by the chief
financial officer (or an acceptable equivalent) of the Borrower, the Timeshare
Association and Guarantor, as to the statements supplied by those entities,
prepared on a consolidated basis as to Borrower and Guarantor, setting forth in
comparative form the corresponding figures as of the end of the previous fiscal
year, all in reasonable detail, including all supporting schedules and comments,
and prepared in accordance with GAAP and (ii) a schedule of all outstanding
Indebtedness of the Borrower, Guarantor and each Timeshare Association
describing in reasonable detail each such debt or loan outstanding and the
principal amount with respect to each such debt or loan.  The annual financial
statements for Borrower, Guarantor and each Timeshare Association shall be
audited by a Certified Public Accountant acceptable to Lender and shall be
accompanied by an unqualified opinion as to going concern and scope of audit (if
such scope limitation would be reasonably deemed to have an adverse impact on
such financial statements taken as a whole) of such accountant. 

 

(iv)Officer's Certificate.  Together with each set of quarterly and annual
Financial Statements or reports delivered to the Lender pursuant to this
Agreement, a Compliance Certificate from the president, chief executive officer,
chief financial officer or treasurer of the Borrower in the form attached hereto
as Exhibit R. 

 

(v)Borrowing Base Certificate.  As soon as possible and in any event within
fifteen (15) days after the end of each calendar month, a Borrowing Base
Certificate

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for the immediately preceding calendar month, certified correct by an authorized
agent of the Servicing Agent.

 

(vi)Timeshare Project and Sales Information.  Upon Lender’s request,   Borrower
will deliver to Lender from time to time, as available, sales literature,
registrations/consents to sell, and final subdivision public reports/public
offering statements/prospectuses relating to the Timeshare Projects.  Borrower
will deliver to Lender any material changes which Borrower makes to the
Timeshare Program Consumer Documents and/or the Timeshare Program Governing
Documents relating to the Timeshare Projects last delivered to Lender.

 

(vii)Material Increases to Assessments.  A written notification to Lender if
Borrower has knowledge that an event (other than general changes in the economy)
has occurred which would give rise to a material increase in assessments to
cover the then current costs of operation of a Timeshare Project and to
establish and maintain a reasonable reserve for capital improvements to such
Timeshare Project.

 

(viii)Audit Reports; SEC Filing.  Promptly upon receipt thereof, one (1) copy of
each audit report submitted to Borrower or Guarantor by independent public
accountants or auditors in connection with any annual audit made by them of the
books of Borrower or Guarantor, and a copy of the Independent Certified Public
Accountant's Report that accompanies the audit.  If applicable, promptly upon
request thereof by Lender, Borrower shall cause to be furnished to Lender one
(1) copy of any reports filed with the United States Securities and Exchange
Commission and related to Guarantor. 

 

(ix)Tax Returns and Tax Receipts.  Promptly upon request, copies of filed tax
returns and tax statements and evidence of payment of all taxes levied on each
Timeshare Project (including transient occupancy taxes and real estate taxes)
prior to the date such taxes become delinquent.  Furthermore, promptly upon
request, Borrower shall furnish to Lender a copy of Borrower's tax returns as
filed with the Internal Revenue Service.

 

(x)Notice of Incipient Default or Event of Default.  Promptly upon becoming
aware of the existence of any condition or event which constitutes an Incipient
Default or an Event of Default or of any event which would cause any
representation or warranty to be incorrect or materially misleading if made at
that time, a written notice specifying the nature and period of existence
thereof and what action the Borrower is taking or proposes to take with respect
thereto. 

 

(xi)Notice of Claimed Default.  Promptly upon becoming aware that the holder of
any material obligation or of any other evidence of material Indebtedness of
Borrower or Guarantor has given notice or taken any other action with respect to
a claimed default or event of default thereunder, a written notice specifying
the notice given or action taken by such holder and the nature of the claimed
default or event of default and what action the Borrower or Guarantor are taking
or proposes to take with respect thereto.  

 

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(xii)Material Adverse Developments.  Promptly upon becoming aware of any
development or other information which may result in a Material Adverse Change
to the Borrower, Guarantor, a Timeshare Association, a Timeshare Project, the
Collateral or the business, prospects, profits or condition (financial or
otherwise) of the Borrower or Guarantor or the ability of the Borrower or
Guarantor to perform its Obligations under this Agreement, telephonic or
telefaxed notice, followed by mailed written confirmation, specifying the nature
of such development or information and such anticipated effect.  

 

(xiii)Other Reports.  Promptly upon request of Lender, copies of each written
notice or request, financial statement, budget or other information received by
the Borrower under or with respect to a Timeshare Declaration and/or a Timeshare
Association's Articles of Incorporation or By-Laws, whether in its capacity as
Declarant, owner of a Unit, owner of a Timeshare Interest or
otherwise.  Promptly upon request of Lender, Borrower shall furnish to the
Lender such other reports, statements, notices or written communications
relating to the Borrower, the Guarantor, each Timeshare Project, each Timeshare
Association or the Loan as the Lender may require, in its reasonable
discretion. 

 

(xiv)Timeshare Association Reports.  Promptly upon request, copies of budgets
for the operation of the applicable Timeshare Association and applicable
Timeshare Project (which budget shall include projections for operating
expenses, capital improvements, maintenance and replacement reserves, dues and
assessments and developer subsidies or guarantees).

 

(xv)Notes Receivable Trial Balance.  Not later than the fifteenth (15th) day of
each month, three (3) copies of a report in form and content acceptable to
Lender prepared by Borrower or the Servicing Agent and showing, with respect to
each of the Notes Receivable assigned to Lender as of the close of business on
the last day of the calendar month last ended: (A) Purchaser's Account Number;
(B) name(s) of Purchasers; (C) date of purchase; (D) original purchase price;
(E) amount of down payment; (F) monthly payment; (G) original principal amount
and current principal amount; (H) any payment, including any prepayment,
received during the period covered by the statement on account of such Notes
Receivable; (I) number of payments made and number of payments remaining; (J) a
cash receipts journal; (K) the opening and closing principal balance; (L) any
cancellation during the period covered by such statement; (M) any delinquency of
principal and interest payments on a 31-60-90 day basis; (N) any delinquency of
principal, or interest in excess of 90 days; (O) original and remaining term of
such Notes Receivable; (P) interest rate for such Notes Receivable; (Q) the
weighted average interest rate for such Notes Receivable; (R) any extensions,
refinances or other adjustments to such Notes Receivable; (S) the outstanding
balances with respect to Non-Resident Notes Receivable, No FICO Score Notes
Receivable, 620/575 FICO Score Notes Receivable and Jumbo Notes Receivable;
(T) qualifying FICO Score for the loan; (U) the weighted average FICO Score; (V)
city and state of residence of Purchaser; (W) country of residence of Purchaser
(if not United States); and (X) such other information as Lender may request. 
Such information shall be certified by Borrower to be accurate and complete. 

 

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(xvi)State Audits.  Within twenty (20) days following its availability, any
audit reports prepared by any state regulatory agency with respect to a
Timeshare Project.

 

(xvii)Purchaser Information.  Within thirty (30) days after the end of each
calendar quarter, at Lender's request, a then current list of names, addresses
and phone numbers of all Purchasers under Notes Receivable assigned to
Lender.  Lender acknowledges and agrees that it shall maintain all of such
information in strict compliance with all Legal Requirements, including without
limitation, all consumer privacy laws, and the Gramm-Leach-Bliley Act of 1999
and the correlative Federal Trade Commission regulations.

 

(xviii)Other Indebtedness.  Upon the request of Lender, Borrower will use its
best efforts to obtain periodic estoppels letters from the holders of any other
Indebtedness owed by Borrower to another Person, together with a confirmation of
the outstanding principal balance of such Indebtedness.  Lender acknowledges and
agrees that it shall maintain all of such information in strict compliance with
all Legal Requirements, including without limitation, all consumer privacy laws,
and the Gramm-Leach-Bliley Act of 1999 and the correlative Federal Trade
Commission regulations. 

 

(xix)Additional Information.  Such other information respecting the business,
properties, assets, operations and condition, financial or otherwise, of
Borrower, Guarantor, any Timeshare Association and any Timeshare Project as
Lender may from time to time reasonably request. 

 

(e)Subordination of Indebtedness Owing to Affiliates.  Borrower will cause any
and all Indebtedness owing by it to its shareholders, directors, officers,
partners, members or managers, as the case may be, to Guarantor, or to the
relatives or Affiliates of Borrower or any of the foregoing, to be subordinated
to the Obligations pursuant to and in accordance with the terms set forth in 
Section 5.30 hereof.  Such Indebtedness shall be unsecured at all times.

 

(f)Payment of Taxes.  Borrower will file all tax returns and will pay and cause
Guarantor to pay all taxes and assessments, if any, required to be filed by them
or paid by them when due, including real estate taxes and assessments relating
to each Timeshare Project or the Collateral. 

 

(g)Payment of Impositions.  Upon the Lender’s delivery of notice to borrower
with reasonable evidence thereof, Borrower will promptly pay upon demand all
Impositions imposed upon Lender by any state of the United States or political
subdivision thereof or the United States by reason of the Loan Documents, the
Collateral and/or any sale, rental, use, delivery or transfer of title to the
Collateral, other than taxes, levies, imposts, deductions, charges or
withholdings imposed on, or measured by reference to, the net income payable or
franchise tax payable by Lender to any state of the United States or political
subdivision thereof or to the United States under Section 11 or 1201 of the
Internal Revenue Code, as amended, or otherwise in consequence of the receipt of
payments provided for in the Loan Documents.  If it is unlawful for Borrower to
pay such Impositions, Borrower shall not be required to pay such Impositions;
but Lender may demand payment of such additional amount as is necessary to
maintain Lender's yields on the Loan in either a single payment or at Lender's
option, in installment payments, and Borrower will pay such amount upon
demand.   

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If Lender has not received evidence satisfactory to it from Borrower that such
Impositions have been paid by Borrower within 5 Business Days after demand was
made upon Borrower to make such payment, Lender may, at its option, pay the
same, and Borrower shall immediately reimburse Lender for such sums so expended,
together with interest at the Default Rate.  If Borrower pays any such
Impositions and Lender subsequently receives a refund or reimbursement of such
amounts, Lender shall promptly deliver such refund or reimbursement (without
interest) to Borrower provided no Incipient Default or Event of Default exists.

 

(h)Further Assurance.  Borrower will execute or cause to be executed all
documents or instruments and do or cause to be done all acts necessary for
Lender to perfect or evidence and to continue the perfection of the liens and
security interest of Lender in the Collateral or otherwise to effect the intent
and purposes of the Loan Documents.

 

(i)Fulfillment of Obligations Under Project and Consumer Documents.  Borrower
will fulfill, and will cause its Affiliates, agents and independent contractors
at all times to fulfill, all their respective material obligations to
Purchasers.  Borrower will Perform all of its material obligations under the
Timeshare Program Consumer Documents and the Timeshare Program Governing
Documents. 

 

(j)Material Increases to Assessments.  Borrower (i) will use its best efforts to
cause each Timeshare Association to (A) discharge its obligations under the
Timeshare Program Governing Documents and (B) maintain a reasonable reserve for
capital improvements to the Timeshare Project affiliated with such Timeshare
Association.  Borrower will pay the maintenance fees and assessments on its
unsold Timeshare Interests related to the Timeshare Projects when due.

(k)Maintenance of Timeshare Project and Other Property.  Borrower will maintain
or cause to be maintained in good condition and repair all common areas in each
Timeshare Project and other on-site amenities which have been promised or
represented as being available to Purchasers in the Timeshare Program Consumer
Documents and, to the extent owned by Borrower or an Affiliate of Borrower, all
portions of improvements in which Units are located and are not part of a
Timeshare Project.  Borrower will maintain or cause the Timeshare Association
affiliated with such Timeshare Project to maintain a reasonable reserve to
assure compliance with the terms of the foregoing sentence.

 

(l)Maintenance of Larger Tract.  To the extent that a Timeshare Project is
either (i) part of a larger common ownership regime or planned development or
(ii) parts of buildings in which Units are located are not part of a Timeshare
Project, Borrower will pay its commercially reasonable share of common expenses
to be allocated to such Timeshare Project.  Borrower will use commercially
reasonable efforts to cause all such property which is not part of a Timeshare
Project to be professionally managed in a first class manner substantially
similar to the manner in which the Timeshare Projects are managed.

 

(m)Collection of Receivables Collateral.  Borrower will undertake or cause the
Servicing Agent to undertake the diligent and timely collection of amounts
delinquent under each Note Receivable which constitutes part of the Collateral
and will bear the entire expense of such collection.  Lender shall have no
obligation to undertake any action to collect under any Note Receivable.

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(n)Loan File  Borrower will, at the time of the assignment thereof to Lender,
have in its possession a complete Loan File (which may be in electronic
form).  In respect of each of the Notes Receivable and Borrower will have
delivered to Custodian all documents required to be delivered pursuant to
Borrower's Request for Loan Advance.  Borrower shall maintain, in trust for the
benefit of Lender, continuous possession of all documents comprising the Loan
File for each Note Receivable assigned to Lender, which have not been delivered
to Lender (or to a custodian for Lender) and shall deliver to Lender (or to a
custodian for Lender) a copy of any documents in such Loan Files as Lender may
request.

 

(o)Financial Covenants.  Throughout the Term, Borrower shall:

 

(i) Reserved.

(ii) maintain a tangible net worth (determined on a consolidated basis in
accordance with GAAP as set forth under total members' equity in the most recent
year end consolidated balance sheets of Borrower) of not less than $57,077,000,
which covenant shall (A) be tested annually as of the end of each fiscal year of
Borrower and (B) increase annually, commencing as of December 31, 2014 and
continuing annually, as of December 31 of each calendar year thereafter, by 25%
of Borrower's net income for the Borrower's then-ended fiscal year (the
"Borrower Measuring Period").  For clarification purposes, if the net income of
Borrower for its fiscal year ending December 31, 2014 equals $4,000,000, the
tangible net worth required to be maintained by Borrower shall be increased as
of December 31, 2014 to equal $58,077,000 (i.e. $57,077,000 + (25% x $4,000,000)
= $58,077,000).  Borrower's tangible net worth (determined on a consolidated
basis in accordance with GAAP as set forth under total members' equity in the
most recent year end consolidated balance sheets of Borrower) as of December 31,
2013, was $85,287,000.  For the avoidance of doubt, in no event shall the
foregoing tangible net worth covenant of Borrower be decreased in the event
Borrower incurs a net loss in any Borrower Measuring Period; and

 

(iii)cause Guarantor to maintain a Tangible Net Worth of not less than
$245,885,000 which covenant shall be tested as of the last day of the calendar
quarter immediately prior to the Effective Date and as a condition to closing
and thereafter annually as of the end of each fiscal year of Guarantor. 
Guarantor's Tangible Net Worth as of December 31,  2014,  was $358,840,000.  

 

(p)Exchange Affiliation.  Borrower shall provide Lender with (i) evidence that
the Big Cedar Project and the Long Creek Project have been designated as RCI
Gold Crown Resorts as of the Effective Date, and (ii) evidence that the Paradise
Point Project has been designated as an Interval International Premier Resort as
of the Effective Date. 

 

(q)Right to Inspect.  Borrower will permit Lender and its representatives and
consultants at all reasonable times to inspect each Timeshare Project and to
inspect and audit Borrower's books, records, operations and sales and copy
Borrower's books and records, on an annual basis (or on a more frequent basis
during the continuance of an Event of Default).  In

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addition, Lender and its representatives and consultants shall have the right to
audit the Servicing Agent's (including Bluegreen's), the Backup Servicing
Agent's or the Custodial Agent's servicing and custodial activities on an annual
basis (or on a more frequent basis during the continuance of an Event of
Default) as provided, respectively, in the Servicing Agreement, Backup Servicing
Agreement and in the Custodial Agreement.  In connection with such audits and
inspections, Borrower shall supply to Lender any documents, bank statements or
other records within the custody or control of Borrower as is reasonably
requested by Lender.  All such audits and inspections shall be performed at
Borrower's expense, which shall include reimbursement of all reasonable travel
and transportation, lodging and food expenses incurred in connection
therewith.  In addition, Lender acknowledges that the information produced by
Borrower in response to any such inspection or audit contains information which
Borrower and Lender deem "confidential," "proprietary" and "secret".  Lender
shall hold and, shall at all times ensure that it and its Affiliates, including,
without limitation, its employees, agents, representatives and consultants, hold
in confidence all such information, and will prevent (a) the disclosure by it or
its Affiliates, including, without limitation, its employees, agents,
representatives and consultants, to other Persons of any proprietary,
confidential or secret information of Borrower or Purchasers or (b) the use of
such information other than for the purposes set forth in this subsection
6.1(q), unless authorized to do so in writing by the Borrower. 

 

(r)Management and Marketing.  At all times during the Term, the Timeshare
Manager shall have substantial experience and expertise in the hospitality
industry and with respect to timeshare operations of a type and quality
substantially similar to the Timeshare Project and shall be a Person reasonably
acceptable to Lender (notwithstanding the fact that a Timeshare Association may
be responsible for the management of a Timeshare Project).  At all times during
the Term, the Vacation Club Manager shall have substantial experience and
expertise in the hospitality industry, with respect to an operation
substantially similar to the Vacation Club.  Lender approves Bluegreen Resorts
Management, Inc. as the Timeshare Manager for the Big Cedar Project, as the
Timeshare Manager for the Long Creek Project, as the Timeshare Manager for the
Paradise Point Project and as the Vacation Club Manager. 

 

6.2Negative Covenants.

 

(a)Change in Borrower's Name, Principal Place of Business, Jurisdiction of
Organization or Business.  Borrower will not change its name or jurisdiction of
organization or move its principal place of business or chief executive office
except upon not less than 60 days' prior written notice to Lender.  Borrower's
sole business shall be the development, construction, ownership, management and
sale of Timeshare Interests in the Timeshare Project, and in such other
timeshare projects as it may develop, construct, own, manage and sell from time
to time, or as may otherwise be contemplated by the Borrower’s limited liability
company agreement.

 

(b)Restrictions on Additional Indebtedness.  Subject to the additional
restrictions set forth in Section 6.2(c) below, Borrower will not incur any
additional Indebtedness, including any liability under any capitalized lease or
any liability as a guarantor or other contingent liability, except for the
following ("Permitted Debt"): any (a) unsecured Indebtedness or any other
unsecured indebtedness, (b) secured indebtedness relating to the Timeshare
Projects, provided that an intercreditor agreement reasonably acceptable to
Lender is executed by the Person providing such secured indebtedness containing
customary provisions including, for example, notice and cure rights,

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and agreements providing nondisturbance and quiet enjoyment rights to owners of
Timeshare Interests, and (c) secured indebtedness, including capitalized leases,
not collateralized by the Timeshare Projects.  Any Permitted Debt relating to
clause (b) above that would encumber Timeshare Interests pertaining to Notes
Receivable that may be pledged to Lender shall, if applicable, have release
provisions which would result in any blanket lien encumbering such Timeshare
Interests to be released prior to the Note Receivable pertaining thereto being
pledged to Lender. 

 

(c)Ownership and Control.  Without the prior written consent of Lender, Borrower
will not: (i) sell, convey, lease, pledge, hypothecate, encumber or otherwise
transfer Collateral, other than in accordance with and as permitted by the terms
of this Agreement; (ii) permit or suffer to exist any liens, security interests
or other encumbrances on the Collateral, except for the Permitted Encumbrances
and liens and security interests expressly granted to Lender; (iii) permit the
sale, conveyance, lease, transfer or disposition of a Timeshare Project, other
than the sale of Timeshare Interests in arms-length transactions in Borrower's
ordinary course of business; (iv) permit or suffer to exist any change in (A)
the legal or beneficial ownership of Borrower or any Person controlling Borrower
(whether directly or indirectly through one or more intermediaries) that results
in Bluegreen owning, directly or indirectly, less than 51% of the ownership
interest in Borrower or which results in Big Cedar, L.L.C. owning, directly or
indirectly, less than 25% of the ownership interest in Borrower unless such
ownership interest is then held by Bluegreen or (B) any change in the power to
manage or control Borrower or any Person controlling Borrower (whether directly
or indirectly, through one or more intermediaries);  (v) cease operation,
liquidate or dissolve; or (vi) merge or consolidate with or into another Person,
unless the Borrower is the surviving Person. 

 

(d)Approval of Certain Sales Activities Relating to Pledged Notes
Receivable.  Borrower will not pledge Notes Receivable to Lender that arise from
the sale of Timeshare Interests outside the State of Missouri unless:  (i)
Borrower has delivered to Lender true and complete copies of the Minimum
Required Timeshare Approvals required in such new jurisdiction for its proposed
conduct and all other evidence required by Lender that Borrower has complied
with all Legal Requirements of such jurisdiction governing its proposed conduct;
and (ii) Borrower has delivered to Lender the Timeshare Program Consumer
Documents and the Timeshare Program Governing Documents which Borrower will be
using in connection with such Timeshare Project and the sale or offering for
sale of Timeshare Interests in such new jurisdiction and such documents have
been approved by Lender, which approval shall not be unreasonably withheld,
conditioned or delayed.

 

(e)No Modification of Receivables Collateral or Payments by Borrower.  Other
than in respect to a Permitted Modification or a Delinquency Modification,
Borrower will not cancel or materially modify, or consent to or acquiesce in any
material modification (including any change in the interest rate or amount,
frequency or number of payments) to, or solicit the prepayment of, any Note
Receivable which constitutes part of the Receivables Collateral; or waive the
timely performance of the obligations of the Purchaser under any such Note
Receivable or its security; or release the security for any such Note
Receivable.  Borrower will not pay or advance directly or indirectly for the
account of any Purchaser any sum required to be deposited or owing by the
Purchaser either under any Purchase Contract or under any Note Receivable which
constitutes part of the Receivables Collateral.  In the event Borrower desires
to modify a Note Receivable that is otherwise prohibited pursuant to the
provisions of this Section 6.2(e) and provided that Borrower

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delivers to Lender one or more Eligible Notes Receivable having an aggregate
Borrowing Base not less than the Borrowing Base of the Note Receivable with
respect to which such modification is desired, Lender will reassign and endorse
to Borrower, without recourse or warranty of any kind, such Note Receivable with
respect to which a modification is desired.  Borrower will prepare the
reassignment document which shall be in form and substance substantially
identical to Exhibit F-1,  F-2 or F-3 (attached hereto) as to the Big Cedar
Project, the Long Creek Project and the Paradise Point Project, respectively,
and will deliver it to Lender for execution.  Lender will send or cause to be
sent to Borrower the reassignment documents and the Note Receivable being
reassigned within a reasonable time (not to exceed 20 days) after satisfaction
of the conditions precedent specified above.  Simultaneously with the delivery
by Borrower to Lender of such new Eligible Notes Receivable, Borrower will
deliver to Lender all of the items (except for a Request for Loan Advance)
required to be delivered by Borrower to Lender pursuant to Section 4.2, together
with a "Borrower's Certificate" in form and substance identical to Exhibit E
attached hereto.

 

(f)No Modification of Timeshare Documents.  Other than in respect to a Permitted
Modification or a Delinquency Modification, Borrower will not cancel or
materially modify, or consent to or suffer to exist any cancellation or material
modification of any Timeshare Program Consumer Document or any Timeshare Program
Governing Document (other than the Vacation Club Trust Agreement and the
Vacation Club Management Agreement), in connection with any Notes Receivable
that are collaterally assigned to Lender.  Borrower shall use its best efforts
to ensure that neither of the Vacation Club Trust Agreement nor the Vacation
Club Management Agreement will be amended, modified or supplemented unless any
such amendment, modification or supplement is permitted in accordance with the
terms of, respectively, the Vacation Club Trust Agreement or the Vacation Club
Management Agreement, and applicable law, and a copy has been delivered to
Lender.  In addition, Borrower shall deliver or cause to be delivered to Lender
copies of any written approval of any amendment to the Vacation Club Management
Agreement or the Vacation Club Trust Agreement not more than ten (10) Business
Days after Borrower's receipt of any written approval of any such amendment from
an applicable governmental authority.

 

(g)Maintenance of Larger Tract.  To the extent either Timeshare Project is part
of a larger common ownership regime or planned development or parts of buildings
in which Units are located are not part of such Timeshare Project, Borrower will
not permit common expenses to be allocated to such Timeshare Project in an
unreasonably disproportionate manner.

 

(h)Making Loans.  Other than the providing of purchase money financing to
Purchasers of Timeshare Interests, commission advances to sales associates in
the ordinary course of business and other than loans to a member of Borrower or
Guarantor which are subject to the Subordination Agreement, Borrower shall not
loan funds to any Person. 

 

(i)Negative Pledge.  Until such time as all of the payment Obligations of the
Borrower have been Performed in full, Borrower agrees not to pledge, encumber or
assign (either collaterally or outright) (or permit such pledge, encumbrance or
assignment) to any Person or grant to any Person (or permit the granting to any
Person) of a lien on or a security interest in (i) any developer or declarant's
rights under a Timeshare Declaration, (unless an intercreditor agreement, in
form and substance reasonably satisfactory to Lender and such other lender, is
executed, addressing

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such developer or declarant's rights), (ii) any contracts, licenses, permits,
plans or other intangibles used in connection with a Timeshare Project, the
marketing and sale of Timeshare Interests and/or the management and/or
operations of a Timeshare Project, (iii) the Reservation System (except that a
non-exclusive license to use the Reservation System granted to any Person,
including Lender, shall not be deemed a pledge, encumbrance or assignment
(either collaterally or outright) or the granting of a lien or security interest
in violation of this subsection 6.2(i)), (iv) any property management agreements
in any way relating to any of the Timeshare Projects including without
limitation that certain Management Agreement dated January 1, 2002, by and
between Big Cedar Wilderness Club Condominium Association, Inc. and Bluegreen
Resorts Management, Inc. and all replacements and substitutions thereof, that
certain Management Agreement dated September 21, 2007, by and between Bluegreen
Wilderness Club at Long Creek Ranch Condominium Association, Inc. and Bluegreen
Resorts Management, Inc. and all replacements and substitutions thereof and that
certain Management Agreement dated September 30, 2010, by and between Paradise
Point Resort Property Owners Association, Inc. and Bluegreen Resorts Management,
Inc. and all replacements and substitutions thereof, (v) any sales or marketing
agreements in effect from time to time concerning the sale and marketing of
Timeshare Interests at either of the Timeshare Projects, (vi) any other
agreements now or hereafter in existence related to the development or operation
of a Timeshare Project, including management, marketing, maintenance and service
contracts, (vii) any intangibles, licenses and permits with respect to a
Timeshare Project; or (viii) any right to vote on matters with respect to which
owners of Timeshare Interests may vote, and Borrower shall not grant any proxy
rights in that regard.  The aforementioned negative pledge shall be included
within the financing statements that are filed and recorded against Borrower. 

 

(j)Continuity of Operations.  Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender: (i) engage in the type of business activities substantially
different than those in which Borrower is presently engaged, (ii) cease
operations, liquidate,  dissolve or transfer or sell Collateral out of the
ordinary course of business, or (iii) during the occurrence and continuance of
an Event of Default, or event that with the giving of notice or the passage of
time, or both, would become an Event of Default, make any distribution with
respect to any capital account, whether by reduction of capital or otherwise.
 Borrower covenants and agrees with Lender that while this Agreement is in
effect, Borrower shall not, without 10 Business Days' written notice to Lender,
change Borrower's name.  In the event Borrower desires to merge, acquire or
consolidate with any other entity, Borrower shall give Lender written notice to
that effect and permit the Lender to underwrite the new borrowing entity as the
borrower hereunder and under the Inventory Loan.  Lender shall have a period of
60 days following the delivery by Borrower of all information reasonably
requested by Lender with respect to such merger, acquisition or consolidation
and such new borrowing entity in order to complete such underwriting.  In the
event Lender approves such new borrowing entity as the borrower hereunder and
under the Inventory Loan, this Agreement, the other Loan Documents, the
Inventory Loan Agreement and the other Inventory Loan Documents shall be
modified in a reasonable manner in order to reflect the assumption by such new
borrowing entity of the Loan and the Inventory Loan, at the sole cost and
expense of Borrower.  In the event Lender gives Borrower written notice within
the aforementioned 60-day period that it does not approve such new borrowing
entity as the borrower hereunder or under the Inventory Loan Agreement, Borrower
shall prepay the Loan and the Inventory Loan in full together with the
Prepayment Premiums outlined in Section 2.8 

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of the Receivables Loan Agreement, concurrently with the consummation of such
merger, acquisition or consolidation.

 

(k)Prohibited Drug Law Activities.  Borrower shall not enter into any lease,
license, sublease, occupancy agreement or other agreement with any Person
involving or relating to the use or occupancy of the Timeshare Projects (or any
portion thereof) which would be a violation of any state and/or federal laws
relating to the use, sale, possession, cultivation and/or distribution of any
controlled substances, including without limitation any Person engaged or
intending to engage in activities (whether for commercial or personal purposes)
regulated under any Arizona law or other applicable law relating to the
medicinal use and/or distribution of marijuana ("Prohibited Drug Law
Activities").  Borrower shall keep Lender advised of each action it takes or
plans to take in compliance with the requirements of this Section
6.2(k).  Compliance with the covenants in this Section 6.2(k) is a material
consideration and inducement to Lender in its agreement to make the Loan to
Borrower, and any failure of Borrower to comply with the foregoing requirements
shall constitute an Event of Default hereunder.  In addition, and not by way of
limitation, Borrower hereby agrees to indemnify, defend and hold Lender harmless
for, from and against any loss, claim, damage or liability arising from or
related to Borrower's breach or violation of said covenants, including without
limitation any seizure and forfeiture to the United States without compensation
to Lender, free and clear of Lender's first lien security interest in and to the
Timeshare Projects, or any action taken by the state or federal government to
accomplish same.  Borrower shall, within 10 Business Days following a request
from Lender, provide Lender with a written statement setting forth its efforts
to comply with the provisions of this Section 6.2(k) and stating whether to
Borrower's knowledge any Prohibited Drug Law Activities are or may be on-going
and/or have occurred in, on or around the Timeshare Projects.    

 

6.3Survival of Covenants.  The covenants contained in this Article 6 are in
addition to, and not in derogation of, the covenants contained elsewhere in the
Loan Documents and shall be deemed to be made and reaffirmed prior to the making
of each Advance.

 

7.DEFAULT

 

7.1Events of Default.  The occurrence of any of the following events or
conditions shall constitute an event of default (an "Event of Default") by
Borrower under the Loan Documents:

 

(a)Payments.    (i) If Borrower fails to make any payment of interest under the
Loan within 3 Business Days of its respective due date, (ii) except to the
extent provided in clause (iii) hereof,  if Borrower fails to make any payment
of fees or other amounts with respect to the Loan within 3 Business Days of the
required due date, or if not sooner due and payable, on the Maturity Date or if
the Servicing Agent fails to remit to Lender the proceeds of any Collateral in
accordance with the provisions of the Servicing Agreement or (iii) if Borrower
fails to make any reimbursement payment to Lender within the lesser of the
number of days following written demand by Lender as set forth in the relevant
section dealing with such reimbursement obligation or 10 days following written
demand for payment.  

(b)Covenant Defaults.    Borrower fails to perform or observe any covenant,
agreement or obligation contained in this Agreement or in any of the Loan
Documents.  However, if any default described in this Section 7.1(b) is curable
and if Borrower or Guarantor, as the case may

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be, has not been given a notice of a similar default within the preceding 12
months, such default shall be deemed cured if Borrower or Guarantor, as the case
may be, after receiving written notice from Lender demanding cure of such
default: (1) cures the default within 30 days; or (2) if the cure requires more
than 30 days, immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical, which, in all events, must occur within 60 days of
such failure.   The foregoing notice and cure period shall not apply to a breach
by Borrower of any covenant or agreement obligating Borrower to pay the Loan or
any other amounts due under the Loan Documents, the covenants, agreements, and
obligations in Sections 2.7(c),  3.2(b),  6.1(c)(i), (ii) or (iii) (provided,
however, that, in connection with Sections 6.1(c)(i),  (ii) or (iii), in all
circumstances other than the lapse of insurance, the foregoing notice and cure
period specified above shall apply), 6.1(g),  6.1(o),  6.2(b) or 6.2(c), or the
covenants, agreements and obligations that are otherwise specifically addressed
in other subsections of this Section 7.1. 

(c)Cross-Default.  The occurrence of an Event of Default, or any similar event
under the Inventory Loan Agreement, subject to any applicable cure periods.

(d)Environmental Default.  Failure of any party to comply with or perform when
due any term, obligation, covenant or condition contained in the Environmental
Indemnity which is not cured within the cure period in Section 7.1(b). 

(e)Default by Borrower in Other Agreements.    (i) any default by Borrower
resulting in a declared event of default in respect of any other Indebtedness of
Borrower to any Person in excess of $5,000,000 in the aggregate after the
expiration of any applicable grace or cure period which has not been waived and
which results in the acceleration of the maturity of such Indebtedness or (ii)
or any default under the terms of the Existing Indebtedness which permits the
holders of such Indebtedness to elect a majority of the voting control of the
Borrower or of managing member or managing partner of Borrower. 

(f)Warranties or Representations.  Any material statement, representation or
warranty made by or on behalf of Borrower or Guarantor in the Loan Documents,
any financial statements or any other writing delivered to Lender in connection
with the Loan is false, misleading or erroneous in any material respect as of
the date made or reaffirmed.

(g)Termination of Borrower.  The dissolution of Borrower (regardless of whether
election to continue is made), the withdrawal of any member of Borrower from
Borrower, the dissolution of any member of Borrower, or any other termination of
Borrower's existence as a going business.

(h)Enforceability of Liens.    If (i) this Agreement or any of the Loan
Documents ceases to be in full force and effect; or (ii) any lien or security
interest granted by Borrower to Lender in connection with the Loan is or becomes
invalid or unenforceable or is not, or ceases to be, a perfected first priority
lien or security interest in favor of Lender encumbering the asset to which it
is intended to encumber and Borrower does not execute such documents to correct
same within 10 days of written demand by Lender. 

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(i)Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency,
including a garnishment of any of Borrower's accounts, including deposit
accounts, with Lender which is not dismissed within the earlier of (i) 30 days
of filing or commencement of such proceeding or (ii) 10 days prior to any action
which would result in an actual forfeiture or foreclosure of the property of
Borrower which is the subject matter of such action. 

(j)Guaranty.  Any default under the Guaranty Agreement or the revocation or
attempted revocation or repudiation thereof, in whole or part, by the Guarantor
or Guarantor disputes the validity of the Guaranty.

(k)Governmental Actions.   In the event any attorney general or other
governmental authority provides written notice to Guarantor that Guarantor is in
breach of the terms of any final and binding order from or written agreement
with such attorney general or other governmental authority which requires that
Guarantor address or resolve consumer complaints, and Guarantor fails to cure
such breach within thirty (30) days of receiving such written notice unless
Guarantor is, in good faith, pursuing permissible judicial or other recourse for
the purpose of contesting any such written notice, but only for so long as any
such proceeding continues and provided that such judicial or other recourse
stays the effectiveness of such order or agreement. 

(l)Bankruptcy.  A petition under any Chapter of Title 11 of the United States
Code or any similar law or regulation is filed by or against Borrower, Bluegreen
Vacations Unlimited, Inc. or Guarantor (and in the case of an involuntary
petition in bankruptcy, such petition is not discharged within forty‑five (45)
days of its filing), or a custodian, receiver or trustee for Borrower,
Guarantor, a Timeshare Project or any Collateral is appointed, or Borrower or
Guarantor makes an assignment for the benefit of creditors, or any of them are
adjudged insolvent by any state or federal court of competent jurisdiction, or
any of them admit their insolvency or inability to pay their debts as they
become due, or an attachment or execution is levied against a Timeshare Project
or any Collateral.

(m)Attachment, Judgment, Tax Liens.  The issuance, filing or levy or seizure
against Borrower of one or more attachments, executions, tax liens or judgments
for the payment of money in excess of $250,000 on an individual basis or
$1,000,000 in the aggregate, which is not discharged in full or stayed (through
appeal or otherwise) within thirty (30) days after issuance or filing, or the
issuance by a court of competent jurisdiction of an injunction or similar
restraint that is reasonably likely to result in a Material Adverse Change to
the Borrower, Guarantor or a Timeshare Project.

(n)Material Adverse Change.  Any Material Adverse Change as determined by Lender
in good faith occurs in the financial condition of Borrower, Guarantor, a
Timeshare Project or in the condition of the Collateral.

(o)Criminal Proceedings.  The indictment of Borrower or Guarantor under any
criminal statute, or the commencement of criminal or civil proceedings against
Borrower or Guarantor pursuant to which statute or proceedings the penalties or
remedies sought or available

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include forfeiture of any Collateral, or Borrower or Guarantor engages or
participates in any "check kiting" activity regardless of whether a criminal
investigation has been commenced.

(p)Loss of License.    The loss, revocation or failure to renew or file for
renewal of any material registration, approval, license, permit or franchise now
held or hereafter acquired by the Borrower or with respect to a Timeshare
Project, or the failure to pay any fee, which is necessary for the continued
operation of a Timeshare Project or the Borrower's business in the same manner
as it is being conducted at the time of such loss, revocation, failure to renew
or failure to pay, except, in any of the foregoing cases, where any such failure
would not reasonably be expected to result in a Material Adverse Change or where
the same is corrected within 30 days of written notice thereof.  

(q)Suspension of Sales.   The issuance of any stay order, cease and desist order
or similar judicial or nonjudicial sanction that materially adversely limits or
otherwise affects any Timeshare Interest sales or financing activities or the
ability of Borrower to own or operate the Timeshare Project, and, with respect
to any such sanction only, which sanction is not dismissed, terminated or
rescinded within thirty (30) calendar days, and as a consequence thereof
Borrower  ceases its day-to-day timeshare business operations.

(r)Reserved 

(s)Timeshare Documents.  If the Timeshare Declaration, any of the other
documents creating or governing a Timeshare Project, its timeshare regime, or
the Association, or the restrictive covenants with respect to a Timeshare
Project, shall be terminated, amended or modified in any material adverse manner
with respect to the Lender’s Collateral or the ability of the Borrower to
Perform its Obligations. 

(t)Removal of Collateral.  If Borrower conceals, removes, transfers, conveys,
assigns or permits to be concealed, removed, transferred, conveyed or assigned,
or interferes with Lender's rights in any of the Collateral in violation of the
terms of the Loan Documents or with the intent to hinder, delay or defraud any
of its creditors including Lender. 

(u)Operating Contracts.  If any material default shall occur by Borrower under
material agreements or arrangements relating to the use, operation, maintenance,
service or enjoyment of a Timeshare Project, including with respect to
management, marketing and sales, in any material adverse manner with respect to
the Lender’s Collateral or the ability of the Borrower to Perform its
Obligations. 

(v)Vacation Club.  (i) The Vacation Club Trust Agreement is modified in a manner
material and adverse to the interest of the Lender with respect to any of its
rights as an Interest Holder Beneficiary thereunder; (ii) the Vacation Club
Trustee violates or breaches any material agreement within the Vacation Club
Trust Agreement that is for the benefit of (a) the Lender with respect to any of
its rights as an Interest Holder Beneficiary thereunder or (b) an Owner
Beneficiary related to a Note Receivable pledged to the Lender pursuant to the
applicable Loan Documents; (iii)  there occurs a loss, revocation or failure to
renew or failure to file a renewal of any necessary and proper registration,
approval, license, permit or franchise now held or hereafter held with respect
to the Vacation Club that materially and adversely affects Lender, as an
Interest Holder Beneficiary thereunder or materially and adversely affects any
Owner Beneficiary related to a Note Receivable

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pledged to Lender pursuant to the applicable Loan Documents; (iv) there is
issued any stay order, cease and desist order, injunction, temporary restraining
order or similar judicial or nonjudicial sanction with respect to the Vacation
Club that materially and adversely affects Lender, as an Interest Holder
Beneficiary thereunder or materially and adversely affects any Owner Beneficiary
related to a Note Receivable pledged to Lender pursuant to the applicable Loan
Documents; (v) there occurs a termination or dissolution of the Vacation Club;
or (vi) either Timeshare Project ceases to be a component resort of the Vacation
Club.

(w)Other Defaults.  The occurrence or nonoccurrence of any act or event which
pursuant to the specific provisions of any of the Loan Documents constitutes an
Event of Default. 

7.2Effect of an Event of Default; Remedies.  At any time after an Event of
Default has occurred (including an Event of Default arising from a failure to
pay the Loan in full on the Maturity Date) and while such Event of Default is
continuing, Lender may but without obligation, in addition to the rights and
powers granted elsewhere in the Loan Documents and not in limitation thereof, do
any one or more of the following: 

 

(a)declare the Note and all other sums owing by Borrower to Lender in connection
with the Loan, immediately due and payable without further notice, presentment,
demand or protest, which are hereby waived by Borrower; except that in the case
of an Event of Default of the type described in Section 7.1(l), such
acceleration shall be automatic and not optional; 

 

(b)with respect to the Receivables Collateral, (i) after any applicable
delinquency on a Purchase Contract, institute collection, foreclosure and other
enforcement actions against Purchasers and other Persons obligated on the
Receivables Collateral, (ii) enter into modification agreements and make
extension agreements with respect to payments and other performances, (iii)
release Persons liable for performance, (iv) settle and compromise disputes with
respect to payments and performances claimed due, all without notice to
Borrower, without being called to account therefor by Borrower and without
relieving Borrower from Performance of the Obligations, (v) [omitted],
(vi) verify the validity and amount of or any other matter relating to the
Receivables Collateral, by mail, telephone, telegraph or otherwise, (vii) direct
all Purchasers to make payment of all Receivables Collateral directly to Lender
or a Person designated by Lender, forward invoices directly to such Purchasers
and receive and collect all monies due or to become due with respect to such
Receivables Collateral, (viii) take control in any manner of any cash or
non-cash items of payment or proceeds of the Receivables Collateral; and
(ix) enforce payment of and collect any of the Receivables Collateral assigned
to Lender pursuant to this Agreement, by legal proceedings or otherwise, and for
such purpose, Lender may:  (A) demand payment of any of such Receivables
Collateral in accordance with the terms thereof; (B) settle, adjust, compromise,
extend, renew, discharge or release any of the Receivables Collateral; (C) sell
or assign any of the Receivables Collateral on such terms, for such amount and
at such times as Lender deems advisable; (D) prepare, file and sign Borrower's
name on any proof of claim or similar document in any proceeding filed under any
Debtor Relief Laws as to any of the Receivables Collateral; (E) endorse the name
of Borrower upon any documents, instruments or similar documents or agreements
relating to the Receivables Collateral or upon any checks or other media of
payment that may come into Lender's possession; or (F) take all other actions
necessary or desirable to protect Lender's interest in the Receivables
Collateral;

 

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(c)proceed to protect and enforce its rights and remedies under the Loan
Documents and to foreclose or otherwise realize upon its security for the
Performance of the Obligations, or to exercise any other rights and remedies
available to it at law, in equity or by statute;

 

(d)request and have appointed a receiver with respect to Borrower and/or the
Collateral, and to that end, Borrower hereby consents to the appointment of a
receiver by Lender in any action initiated by Lender pursuant to this Agreement,
and Borrower waives any notice and posting of a bond in connection therewith;

 

(e)at its discretion, retain all or part of the Collateral in partial or full
satisfaction of the Obligations to the extent permitted by applicable law;
however, Lender will not be considered to have offered to retain the Collateral
in satisfaction of the Obligations, unless Lender has entered into a written
agreement with Borrower to that effect;

 

(f)Reserved.  

 

(g) to the extent permitted by applicable law, exercise a right of setoff in all
Borrower's accounts with Lender (whether checking, savings, or some other
account), including all accounts Borrower holds jointly with someone else with
Lender and all accounts Borrower may open in the future with Lender
(collectively, the "Borrower Bank Accounts"); exclusive, however, of any IRA or
Keogh accounts, or any trust accounts for which setoff would be prohibited by
law;

 

(h) increase the rate of interest accruing under the Loan to the applicable
Default Rate;  

 

(i) immediately cease to make further Advances and from time to time apply all
or any portion of the undisbursed amount of the Loan to the payment of accrued
interest under the  Note and/or upon any other obligations of Borrower hereunder
or under the Loan Document.  Lender may also withhold any one or more Advances
after the occurrence of an Incipient Default, unless Borrower cures or corrects
such event or condition to the reasonable satisfaction of Lender prior to the
occurrence of an Event of Default; and/or

 

(j) exercise any and all other rights and remedies provided in the Loan
Documents or available at law, in equity or otherwise. 

 

For the purpose of carrying out the provisions and exercising the rights, powers
and privileges granted by Section 7.2(b), Borrower hereby unconditionally and
irrevocably constitutes and appoints Lender true and lawful attorney-in-fact to
enter into such contracts, perform such acts and incur such liabilities as are
referred to in said subsection in the name and on behalf of Borrower.  This
power of attorney is coupled with an interest.

 

All remedies of Lender provided for herein and in any other Loan Documents are
cumulative and shall be in addition to all other rights and remedies provided by
law or in equity. Except as may be prohibited by applicable law, all of Lender's
rights and remedies shall be cumulative and may be exercised singularly or
concurrently.  The exercise of any right or remedy by Lender hereunder shall not
in any way constitute a cure or waiver of default hereunder or under any other
Loan Document

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or invalidate any act done pursuant to any notice of default, or prejudice
Lender in the exercise of any of its rights hereunder or under any other Loan
Document.  If Lender exercises any of the rights or remedies provided in this
Article 7, that exercise shall not make Lender, or cause Lender to be deemed to
be, a partner or joint venturer of Borrower.  No disbursement of loan funds by
Lender shall cure any default of Borrower, unless Lender agrees otherwise in
writing in each instance.  Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Borrower or of any Guarantor shall not
affect Lender's right to declare a default and to exercise its rights and
remedies. 

 

Upon the occurrence of any Event of Default, all of Borrower's obligations under
the Loan Documents may become immediately due and payable without notice of
default, presentment or demand for payment, protest or notice of nonpayment or
dishonor, or other notices or demands of any kind or character, at Lender's
option, exercisable in its sole discretion. 

 

7.3Application of Proceeds During an Event of Default.  Notwithstanding anything
in the Loan Documents to the contrary, but subject to Section 7.5, while an
Event of Default exists, any cash received and retained by Lender in connection
with the Receivables Collateral or any other Collateral may be applied to
payment of such of the Obligations as Lender in its discretion may determine.

 

7.4Uniform Commercial Remedies; Sale; Assembly of Receivables Collateral.

 

(a)UCC Remedies; Sale of Collateral.  Lender shall have all of the rights and
remedies of a secured party under the applicable Uniform Commercial Code and all
other rights and remedies accorded to a secured party at equity or law.  Any
notice of sale or other disposition of the Receivables Collateral given not less
than 10 days prior to such proposed action in connection with the exercise of
Lender's rights and remedies shall constitute reasonable and fair notice of such
action.  Lender may postpone or adjourn any such sale from time to time by
announcement at the time and place of sale stated on the notice of sale or by
announcement of any adjourned sale, without being required to give a further
notice of sale.  Any such sale may be for cash or, unless prohibited by
applicable law, upon such credit or installment as Lender may
determine.  Borrower shall be credited with the net proceeds of such sale only
when such proceeds are actually received by Lender in good current
funds.  Despite the consummation of any such sale, Borrower shall remain liable
for any deficiency on the Obligations which remains outstanding following such
sale.  All net proceeds recovered pursuant to a sale shall be applied in
accordance with the provisions of Section 7.5.  

 

(b)Lender's Right to Execute Conveyances.  Lender may, in the name of Borrower
or in its own name, make and execute all conveyances, assignments and transfers
of the Receivables Collateral sold in connection with the exercise of Lender's
rights and remedies; and Lender is hereby appointed Borrower's attorney‑in‑fact
for this purpose, which power of attorney is coupled with an interest.

 

(c)Obligation to Assemble Receivables Collateral.  Upon request of Lender when
an Event of Default exists, Borrower shall assemble the Receivables Collateral
or any portion thereof (in its possession) and make it available to Lender at a
time and place designated by Lender, if it is not already in Lender's
possession.

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(d)Registration.  Borrower recognizes that registration of certain of the
Receivables Collateral or other Collateral under the federal and state
securities laws may be impractical because of the expenses or delays involved in
the registration process and that in the absence of such registration, Lender
may be unable to effect a public sale of all or a part of the Collateral, but
may be compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof.  Borrower agrees that private sales so made may
be at prices and other terms less favorable to the seller than if such
Collateral were sold at public sales, and that Lender has no obligation to delay
sale of any such Collateral for a period of time necessary to permit such
Collateral to be registered for public sale under the Securities Act of 1933, as
amended, and any applicable Blue Sky or other state securities laws.  Borrower
agrees that sales made under the foregoing circumstances shall not be deemed to
have been made in a commercially unreasonable manner by virtue of any terms less
favorable to the seller resulting from the private nature of such sales.

 

7.5Application of Proceeds.  The proceeds of any sale of all or any part of the
Collateral made in connection with the exercise of Lender's rights and remedies
shall be applied in the following order of priorities; first, to the payment of
all costs and expenses of such sale, including compensation to Lender’s agents,
reasonable attorneys' fees, and all other reasonable expenses, liabilities and
advances incurred or made by Lender, its agents and attorneys, in connection
with such sale, and any other unreimbursed expenses for which Lender may be
reimbursed pursuant to the Loan Documents; second, to the payment of the
Obligations in such order and manner as Lender may determine; and last, to the
payment to Borrower, its successors or assigns, or to whosoever may be lawfully
entitled to receive the same, or as a court of competent jurisdiction may
direct, of any surplus then remaining from such proceeds.

 

7.6Lender's Right to Perform.  Lender may, at its option, and without any
obligation to do so, pay, perform and discharge any and all obligations agreed
to be paid or Performed in the Loan Documents by Borrower or any surety for the
Performance of the Obligations if (a) such Person fails to do so and (b) (i) an
Event of Default exists and at least 5 Business Days' notice has been given to
such Person of Lender's intention to take such action, (ii) the action taken by
Lender involves obtaining insurance which such Person has failed to maintain in
accordance with the Loan Documents or to deliver evidence thereof, or (iii) in
the opinion of Lender, such action must be taken because an emergency exists or
to preserve any of the Collateral or its value.  For such purposes Lender may
use the proceeds of the Collateral.  All amounts expended by Lender in so doing
or in exercising its remedies under the Loan Documents following an Event of
Default shall become part of the Obligations, shall be immediately due and
payable by Borrower to Lender upon demand, and shall bear interest at the
Default Rate from the dates of such expenditures until paid.

 

7.7Waiver of Marshalling.  Borrower, for itself and for all who may claim
through or under it, hereby expressly waives and releases all right to have the
Collateral, or any part of the Collateral, marshalled on any foreclosure, sale
or other enforcement of Lender's rights and remedies.

 

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7.8Waiver in Legal Actions.  In connection with any proceedings related to the
enforcement of remedies under this Agreement or the documents collateral hereto
or the transactions contemplated hereunder, Borrower irrevocably waives:

 

(a)All procedural errors, defects and imperfections in such proceedings;

 

(b)Any requirement of bonds, and any surety or security relating thereto,
required by any statute, court rule or otherwise as incident to such possession;

 

(c)Except as otherwise provided in the Loan Documents, demand, presentment and
protest, notice of demand, presentment or protest of the Note, the Guaranty or
any other Loan Document; 

 

(d)The benefit of any valuation, appraisal and exemption law; and

 

(e)Any right to subrogation, reimbursement, contribution or indemnity.

 

7.9Set-Off.  Without limiting the rights of Lender under applicable law, Lender
has and may exercise a right of set-off, a lien against and a security interest
in all property of Borrower or Guarantor now or at any time in Lender's
possession in any capacity whatsoever, including but not limited to any balance
of any deposit, trust or agency account, or any other bank account with Lender,
as security for all Obligations.  At any time and from time to time following
the occurrence of an Event of Default, or an event which with the giving of
notice or passage of time or both would constitute an Event of Default, Lender
may without notice or demand, set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Lender to or for the credit of Borrower or
Guarantor against any or all of the Obligations.

 

8.COSTS AND EXPENSES; INDEMNIFICATION; DUTIES OF LENDER

 

8.1Costs and Expenses.  Borrower shall promptly pay all taxes and assessments
and all reasonable expenses, charges, costs and fees provided for in this
Agreement or relating to the Loan, including, without limitation, fees and costs
incurred in connection with protective advances made by Lender under this
Agreement, any reasonable fees incurred for recording or filing any of the Loan
Documents, title insurance premiums and charges, tax service contract fees, fees
of any consultants, reasonable fees and expenses of Lender's counsel,
documentation, closing, and processing fees, printing, photostating and
duplicating expenses, air freight charges, escrow fees, costs of surveys,
premiums of hazard insurance policies and surety bonds and fees for any
appraisal and appraisal review, environmental report and environmental report
review, inspection report review, and market or feasibility study required by
Lender.  Borrower hereby authorizes Lender to disburse the proceeds of the Loan
to pay such expenses, charges, costs and fees notwithstanding that Borrower may
not have requested a disbursement of such amount.  Lender shall make such
disbursements notwithstanding the fact that the Loan is not "in balance" or that
Borrower is in default under the terms of this Agreement or any other Loan
Document.  Such disbursement shall be added to the outstanding principal balance
of the Note.  The authorization hereby granted shall be irrevocable, and no
further direction or authorization from Borrower shall be necessary for Lender
to make such

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disbursements.  However, the provision of this Section 8.1 shall not prevent
Borrower from paying such expense, charges, costs and fees from its own
funds.  All such expenses, charges, costs and fees shall be Borrower's
obligation regardless of whether or not Borrower has requested and met the
conditions for a disbursement of the Loan.  The obligations on the part of
Borrower under this Section 8.1 shall survive the closing of the Loan and the
repayment thereof.  Borrower hereby authorizes Lender, in its discretion, to pay
such expenses, charges, costs and fees at any time by a disbursement of the
Loan.

 

8.2Indemnification.  Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS, and defend
Lender, its successors, assigns and shareholders (including corporate
shareholders), and the directors, officers, employees, servants and agents of
any of the foregoing, for, from and against:  (a) any and all liability, damage,
penalties, or fines, loss, costs or expenses (including court costs and
attorneys' fees, whether incurred in a third party action or in an action to
enforce this Agreement), claims, demands, suits, proceedings (whether civil or
criminal), orders, judgments, penalties, fines and other sanctions whatsoever
asserted against it as a result of actions, claims, counterclaims, fines,
penalties or otherwise and arising from or brought in connection with a
Timeshare Project, the Collateral, Lender's status by virtue of the Loan
Documents, sales of Timeshare Interests or the financing of such sales, in
either case, in violation of or in noncompliance with any Legal Requirements,
the breach by Borrower of any terms and provisions of the Loan Documents, the
sale or financing of Timeshare Interests, the creation of liens and security
interests, the terms of the Loan Documents or the transactions related thereto,
any assertion that Lender is a partner or joint venturer of Borrower or any
other Person by virtue of the making of the Loan, or any act or omission of
Borrower or an Agent, or their respective employees or agents, whether actual or
alleged ("Losses"), except to the extent that any of the foregoing Losses
described in this clause (a)  are caused by Lender's gross negligence or willful
misconduct or first accrue after foreclosure or deed in lieu of foreclosure; and
(b) any and all brokers' commissions or finders' fees or other costs of similar
type by any party in connection with the Loan, other than those owed to Ward
Financial.  On written request by a Person covered by the above agreement of
indemnity, Borrower will undertake, at its own cost and expense, on behalf of
such indemnitee, using counsel reasonably satisfactory to the indemnitee, the
defense of any legal action or proceeding to which such Person shall be a
party.  At Lender's option, Lender may at Borrower's expense prosecute or defend
any action within the scope of the indemnification contained in this Section 8.2
to the extent Borrower does not promptly prosecute or defend such action with
counsel reasonably acceptable to Lender.  No termination of this Agreement or
the other Loan Documents shall affect or impair the indemnification provisions
contained in this Section 8.2 and all such provisions shall survive such
termination. 

 

8.3Duties of Lender  Lender shall not be liable or responsible in any way for
any loss or damage to the Notes Receivable or Receivables Collateral caused by
any warehouseman, carrier, forwarding agency, the Lockbox Agent (while the
Lockbox Agent is any Person other than Lender or any of its Affiliates),
Servicing Agent, Custodial Agent or any other Person whomsoever, excluding
damages or losses that occur as a result of Lender's gross negligence or willful
misconduct. 

 

8.4Delegation of Duties and Rights.  Lender may execute any of its duties and/or
exercise any of its rights or remedies under the Loan Documents by or through
its officers, directors, employees, attorneys, agents, representatives or
through other Persons. 

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8.5Foreign Assets Control.  Lender may disclose any and all information
regarding Borrower and a Purchaser in connection with any regulatory examination
of Lender or to the extent Lender deems advisable to disclose such information
to such applicable regulatory agencies involving matters relating to the Trading
With the Enemy Act, the Foreign Assets Control Regulations or the Executive
Order; provided, however, that if Lender is legally permitted to do so, no such
disclosure shall be made prior to the Lender (x) giving the Borrower prior
written notification within one (1) Business Day after Lender's receipt of
notice of any such required disclosure or decision of the Lender to make such
disclosure, that explains in reasonable detail (if known to Lender), the basis
for such disclosure, which notification shall include the following: (i) the
contents of the disclosure, (ii) the Person to whom the disclosure must be made,
and (iii) if known to Lender, the legal basis for the disclosure; (y) using
commercially reasonable efforts to require that any recipient of such disclosure
maintain such information on a confidential basis in accordance with all Legal
Requirements, including all applicable consumer privacy laws; and (z) if Lender
is legally permitted to do so, providing Borrower with an opportunity to redact
all of the names, social security numbers and bank account numbers of, and all
non-public personal information pertaining to, any Purchasers. 

9.CONSTRUCTION AND GENERAL TERMS

 

9.1Payment Location.  All monies payable under the Loan Documents shall be paid
to Lender in lawful monies of the United States of America, through the Lockbox
Agent pursuant to the Lockbox Agreement, unless otherwise designated in the Loan
Documents or by Lender by notice.

 

9.2Entire Agreement.  The Loan Documents exclusively and completely state the
rights and obligations of Lender and Borrower with respect to the Loan.  No
modification, variation, termination, discharge, abandonment or waiver of any of
the provisions or conditions of the Loan Documents shall be valid unless in
writing and signed by a duly authorized representative of the party sought to be
bound by such action.  The Loan Documents supersede any and all prior
representations, warranties and/or inducements, written or oral, heretofore made
by Lender, Borrower and Guarantor concerning this transaction, including any
commitment for financing.  To the extent there is a conflict or inconsistency
between any Timeshare Declaration (as it pertains to the right of Borrower to
affect the rights of mortgagees) and the Loan Documents, then, as between
Borrower and Lender, the provisions of the Loan Documents shall prevail.

 

9.3Powers Coupled with an Interest.  The powers and agency hereby granted by
Borrower are coupled with an interest and are irrevocable until the Obligations
have been paid in full and are granted as cumulative to Lender's other remedies
for collection and enforcement of the Obligations.

 

9.4Counterparts; Facsimile Signatures.  Any Loan Document may be executed in
counterpart, and any number of copies of such Loan Document which have been
executed by all parties shall constitute one original.  Delivery of an executed
counterpart of any Loan Document by telefacsimile or other electronic means
shall be equally as effective as delivery of a manually executed counterpart of
such Loan Document. 

 

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9.5Notices.   All notices, requests and demands to be made hereunder to the
parties hereto must be in writing (at the addresses set forth below) and may be
given by any of the following means:

 

(a)personal delivery;

(b)reputable overnight courier service;

(c)telecopying (if confirmed in writing sent by registered or certified, first
class mail, return receipt requested); or

(d)registered or certified, first class mail, return receipt requested. 

 

Any notice, demand or request sent pursuant to the terms of this Agreement will
be deemed received (i) if sent pursuant subsection (a), upon such personal
delivery, (ii) if sent pursuant to subsection (b), on the next Business Day
following delivery to the courier service, (iii) if sent pursuant to subsection
(c), upon receipt if such receipt occurs between the hours of 9:00 a.m. and 5:00
p.m. (recipient's time zone) on a Business Day, and if such receipt occurs other
than during such hours, on the next Business Day following receipt and (iv) if
sent pursuant to subsection (d), 3 Business Days following deposit in the mail.

 

The addresses for notices are as follows:

 

To Lender:

National Bank of Arizona

6001 N. 24th Street, Building B

Phoenix, AZ 85016

Attention:  Kristen Carreno

Telephone No.:  (602) 212-5404

Telecopier No.:  (602) 287-0722

 

With a copy to:

National Bank of Arizona

6001 N. 24th Street, Building B

Phoenix, AZ 85016

Attention:  Legal Department

Telephone No.:(602) 212-5404

Telecopier No.:(602) 212-0722

 

With a copy to (which shall not constitute notice):

Gammage & Burnham, PLC

Two North Central Avenue – 15th Floor

Phoenix, Arizona  85004

Attention:  Randall S. Dalton, Esq.

Telephone No.:  (602) 256-4482

Telecopier No.:  (602) 256-0566 

 

To Borrower:

Bluegreen/Big Cedar Vacations, LLC

C/O Bluegreen Corporation

4960 Conference Way North, Suite 100

Boca Raton, Florida 33431

Attention:  Anthony M. Puleo

Telephone No.:  (561) 912-8270

Telecopier No.:  (561) 912) 8123

 

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With a courtesy copy to (but such notice shall not constitute notice to
Borrower):

Taylor English Duma LLP

1600 Parkwood Drive – Suite 400

Atlanta, Georgia  30339

Attention:  Mark I. Sanders, Esq.

Telephone No.:  (678) 336-7281

Telecopier No.:  (770) 434-7376 

 

 

Bluegreen Corporation

4960 Conference Way North, Suite 100

Boca Raton, Florida 33431

Attention:  Legal Department

Telephone No.: (561) 912-8000

Telecopier No.: (561) 912-8299

 

The failure to provide courtesy copies will not affect or impair Lender's rights
and remedies against Borrower.  Such addresses may be changed by notice to the
other parties given in the same manner as provided above.

 

Notwithstanding the foregoing, a request for an Advance of the Loan pursuant to
Article 2 above will be deemed received only upon actual receipt

 

9.6Borrower's Representative.Borrower hereby designates the following natural
person as its representative for purposes of (i) making all decisions with
respect to the Loan and the Loan Documents, (ii) other than as permitted
pursuant to subsection 6.1(d)(v), delivering all notices, certificates, requests
for advance and other documents required by the terms of the Loan Documents or
requested by Borrower in connection with the Loan and (iii) taking all other
actions requested by Borrower in connection with the Loan and the Loan
Documents:

 

Bluegreen/Big Cedar Vacations, LLC

C/O Bluegreen Corporation

4960 Conference Way North, Suite 100

Boca Raton, Florida 33431

Attention:  Anthony M. Puleo

Telephone No.:  (561) 912-8270

Telecopier No.:  (561) 912) 8123

 

In taking action pursuant to the terms of this Agreement and the other Loan
Documents, Lender shall be entitled to rely, without further investigation, upon
any notice, certificate, request for advance or other document delivered in
writing and executed or signed by such representative of Borrower.  In addition,
Lender may, at its option, refuse to take action in the event a notice,
certificate, request for advance or other document is delivered to Lender which
has not been executed or delivered by such representative of Borrower (other
than as permitted pursuant to subsection 6.1(d)(v)).  Borrower may change such
representative upon written notice to Lender. 

 

9.7General Submission Requirements.  All documents, agreements, reports,
surveys, appraisal, insurance, references, financial information or other
submissions (collectively the "Submissions") required under the Loan Documents
shall be in form and content reasonably

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satisfactory to Lender and prepared and performed at Borrower's expense.  Lender
shall have the prior right of approval of any person, firm or entity responsible
for preparing each Submission ("Preparer") and may reject any Submission if
Lender believes in its sole opinion that the experience, skill, reputation or
other aspect of the Preparer is unsatisfactory in any respect. 

9.8Participation.    

 

(a) At any time either concurrently with or subsequent to the execution and
delivery of this Agreement, National Bank of Arizona and its successors ("NBA")
may assign to one or more banks or other financial institutions (such banks and
other financial institutions together with their permitted successors and
assigns, each, an "Assignee") all or portions of its rights and obligations as a
lender under this Agreement and the other Loan Documents, provided, however,
that (i) each such assignment shall be of a constant, not a varying, percentage
of such rights and obligations under this Agreement and the other Loan
Documents, (ii) the parties to each such assignment shall execute and deliver to
NBA, for its acceptance, such assignment documents (which shall include, without
limitation, an assumption of NBA's obligations hereunder to the extent of such
assignment) as NBA may require, (iii) Borrower shall execute and deliver (A)
such replacement promissory notes as NBA may require to evidence such assignment
and the respective portions of the Loan held by NBA and each Assignee and (B)
such other documents as NBA may reasonably require in connection with such
assignment; and (iv), such assignments shall be subject to the Borrower's
approval which shall not be unreasonably withheld or delayed, provided that
Borrower shall not have a right to approve the Assignee or the assignment if (A)
an Event of Default has occurred and is continuing, or (B) the Borrowing Term
has expired, or (C) the Assignee is an Eligible Assignee.  If any such approval
is not withheld in writing with a statement of the reasons therefor within ten
(10) days after NBA gives notice of such an assignment, such approval shall be
deemed given.  Upon such assignment and assumption, (i) to the extent of the
interest assigned the (A) Assignee shall have the rights and obligations of a
lender under the Loan Documents and (B) the assignor (including, without
limitation, NBA) shall be relieved of such obligations and (ii) the obligations
of NBA and Assignee to fund Advances shall be several in accordance with the
portion of the Loan held by each, and not joint.  Notwithstanding the foregoing
sentence, in the event the Assignee is an Eligible Assignee and also an
Affiliate of NBA, NBA shall not be relieved of its obligations under the Loan
Documents, and the obligations of NBA and such Affiliate to fund Advances shall
be joint and not several obligations.  NBA and each Assignee may also transfer
interests by way of participation; provided, in the case of the transfer of such
a participation interest, (i) such selling party's obligations to the Borrower
under this Agreement and the Loan Documents shall remain unchanged; (ii) such
selling party shall remain solely responsible to the other parties hereto for
the performance of such obligations; and (iii) parties to this Agreement and the
Loan Documents shall continue to deal solely and directly with such selling
party in connection with such selling party's rights and obligations under this
Agreement and the Loan Documents.  In order to facilitate such assignments and
participations, the Borrower shall execute such further documents, instruments
or agreements as Lender may reasonably require; provided, however, that Borrower
shall not be responsible for any costs or expenses incurred in connection with
any such assignment or participation.

 

(b) Upon any assignment of less than all of NBA's interest in the Loan, (i) NBA
will continue to act as administrative agent on behalf of all of lenders and
 (ii) NBA and each Assignee may enter into such co-lending or other agreements
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(among other things) procedures for administration and enforcement of the Loan,
voting on various matters, the terms under which NBA will act as administrative
agent (and if applicable, collateral agent), the terms and conditions governing
further assignments and participations by Assignee (if and to the extent further
assignments are permitted by NBA), and enforcement of the Loan Documents;
provided, however, that under no circumstances will any such agreements between
NBA and any Assignee alter, amend, change or result in the alteration, amendment
or change to any of the terms and conditions of this Agreement, without
Borrower's prior written consent.  So long as NBA is acting as administrative
agent, Borrower shall only be required and permitted to provide notices to and
seek consents and approvals through NBA and Borrower shall not communicate
directly with the Assignees, unless expressly approved by NBA.

(c) Without limiting the other provisions of this Section, from and after each
assignment permitted pursuant to this Section (other than assignments by NBA of
its entire interest in the Loan): (i) all grants of collateral security
(including, without limitation, each deed of trust, mortgage, security
agreement, assignment of rents and leases, and other assignments for security in
the Loan Documents shall be deemed made to NBA in its capacity as administrative
agent for the pro rata benefit of NBA and the Assignees as lenders; (ii) all
obligations and liabilities of Borrower and Guarantor pursuant to the Loan
Documents shall be deemed to inure to the pro rata benefit of NBA and the
Assignees as lenders; and (iii) all indemnity and reimbursement obligations of
Borrower and guarantor shall be in favor of  NBA and Assignees in accordance
with their pro rata interests and in the case of indemnities shall include all
named indemnified parties of NBA and Assignee (for example an indemnity in favor
of a party and its officers, directors, agents, and employees shall be for the
benefit of the officers, directors, agents, and employees of each of NBA and the
Assignee); provided that any obligation of the Borrower to reimburse for out of
pocket costs and expenses of any party shall be deemed to refer to the party
incurring such costs and expenses.

(d) As used herein, "Eligible Assignee" means (i) NBA or any of its Affiliates
or (ii) any other bank or financial institution that has assets of at least
$5,000,000,000; provided that    the identity of the Eligible Assignee (in the
case of clause (ii))  shall be subject to prior written approval of each of
Borrower and Guarantor, which will not be unreasonably withheld or delayed.

 

9.9Successors and Assigns.  All the covenants of Borrower and all the rights and
remedies of Lender contained in the Loan Documents shall bind Borrower, and,
subject to the restrictions on merger, consolidation and assignment contained in
the Loan Documents, its successors and assigns, and shall inure to the benefit
of Lender, its successors and assigns, whether so expressed or not.  Borrower
may not assign its rights in the Loan Documents in whole or in part.  Except as
may be expressly provided in a Loan Document, no Person shall be deemed a third
party beneficiary of any provision of the Loan Documents. 

 

9.10Severability.  If any provision of any Loan Document is held to be invalid,
illegal or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of the Loan Documents shall not
in any way be affected or impaired thereby.  In lieu of each such illegal,
invalid or unenforceable provision, there shall be added to the Loan Document
affected, a provision that is legal, valid and enforceable and as similar in
terms to such illegal, invalid and unenforceable provision as may be possible.

 

9.11Time of Essence.  Time is of the essence in the Performance of the
Obligations.

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9.12Miscellaneous.  All headings are inserted for convenience only and shall not
affect any construction or interpretation of the Loan Documents.  Unless
otherwise indicated, all references in a Loan Document to clauses and other
subdivisions refer to the corresponding paragraphs, clauses and other
subdivisions of the Loan Document.  All Schedules and Exhibits referred to in
this Agreement are incorporated in this Agreement by reference. 

 

9.13 FORUM SELECTION; JURISDICTION; CHOICE OF LAW.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ARIZONA, THE PRIMARY PLACE OF BUSINESS OF LENDER, WITHOUT GIVING
EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES.  BORROWER ACKNOWLEDGES THAT THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS WERE SUBSTANTIALLY NEGOTIATED IN THE
STATE OF ARIZONA, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS WERE DELIVERED BY
BORROWER IN THE STATE OF ARIZONA, EXECUTED BY LENDER IN THE STATE OF ARIZONA AND
ACCEPTED BY LENDER IN THE STATE OF ARIZONA AND THAT THERE ARE SUBSTANTIAL
CONTACTS BETWEEN THE PARTIES AND THE TRANSACTIONS CONTEMPLATED HEREIN AND THE
STATE OF ARIZONA.  SUBJECT TO THE PROVISIONS OF SECTION 9.14, FOR PURPOSES OF
ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, THE PARTIES HERETO HEREBY EXPRESSLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ALL FEDERAL AND STATE COURTS LOCATED IN THE STATE OF ARIZONA AND
BORROWER CONSENTS THAT IT MAY BE SERVED WITH ANY PROCESS OR PAPER BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ARIZONA IN ACCORDANCE WITH APPLICABLE
LAW.  FURTHERMORE, BORROWER WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH ACTION,
SUIT OR PROCEEDING THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH
COURTS, THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT VENUE OF THE ACTION, SUIT OR PROCEEDING IS IMPROPER.  TO THE EXTENT THAT
A COURT OF COMPETENT JURISDICTION FINDS ARIZONA LAW INAPPLICABLE WITH RESPECT TO
ANY PROVISIONS OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, THEN, AS TO THOSE
PROVISIONS ONLY, THE LAWS OF THE STATES WHERE THE COLLATERAL IS LOCATED SHALL BE
DEEMED TO APPLY.  NOTHING IN THIS SECTION SHALL LIMIT OR RESTRICT THE RIGHT OF
LENDER TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS LOCATED IN THE
STATES IN WHICH THE COLLATERAL IS LOCATED TO THE EXTENT LENDER DEEMS SUCH
PROCEEDING NECESSARY OR ADVISABLE TO EXERCISE REMEDIES AVAILABLE UNDER THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE INTERPRETED WITHOUT REGARD
TO ANY RULE OR CANON OF CONSTRUCTION WHICH INTERPRETS AGREEMENTS AGAINST A
DRAFTSMAN.

9.14DISPUTE RESOLUTION.  This section contains a jury waiver, arbitration
clause, and a class action waiver.  READ IT CAREFULLY.

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This dispute resolution provision shall supersede and replace any prior "Jury
Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration," "Dispute
Resolution," or similar alternative dispute agreement or provision between or
among the parties.

 

JURY TRIAL WAIVER; CLASS ACTION WAIVER. As permitted by applicable law, each
party waives their respective rights to a trial before a jury in connection with
any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be
resolved by a judge sitting without a jury.  If a court determines that this
provision is not enforceable for any reason and at any time prior to trial of
the Dispute, but not later than 30 days after entry of the order determining
this provision is unenforceable, any party shall be entitled to move the court
for an order compelling arbitration and staying or dismissing such litigation
pending arbitration ("Arbitration Order"). If permitted by applicable law, each
party also waives the right to litigate in court or an arbitration proceeding
any Dispute as a class action, either as a member of a class or as a
representative, or to act as a private attorney general.

 

ARBITRATION. If a claim, dispute, or controversy arises between us with respect
to this Agreement, related agreements, or any other agreement or business
relationship between any of us whether or not related to the subject matter of
this Agreement (all of the foregoing, a "Dispute"), and only if a jury trial
waiver is not permitted by applicable law or ruling by a court, any of us may
require that the Dispute be resolved by binding arbitration before a mutually
agreed upon single arbitrator at the request of any party. By agreeing to
arbitrate a Dispute, each party gives up any right that party may have to a jury
trial, as well as other rights that party would have in court that are not
available or are more limited in arbitration, such as the rights to discovery
and to appeal.

 

Arbitration shall be commenced by filing a petition with, and in accordance with
the applicable arbitration rules of, JAMS or National Arbitration Forum
("Administrator") as selected by the initiating party. If the parties agree,
arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an
Administrator. Disputes include matters (i) relating to a deposit account,
application for or denial of credit, enforcement of any of the obligations we
have to each other, compliance with applicable laws and/or regulations,
performance or services provided under any agreement by any party, (ii) based on
or arising from an alleged tort, or (iii) involving either of our employees,
agents, affiliates, or assigns of a party.  However, Disputes do not include the
validity, enforceability, meaning, or scope of this arbitration provision and
such matters may be determined only by a court. If a third party is a party to a
Dispute, we each will consent to including the third party in the arbitration
proceeding for resolving the Dispute with the third party. Venue for the
arbitration proceeding shall be at a location determined by mutual agreement of
the parties or, if no agreement, in the city and state where Lender is
headquartered.

 

After entry of an Arbitration Order, the non-moving party shall commence
arbitration (but shall not be required to commence arbitration in the event of
the moving party's decision not to do so as set forth in the next sentence). The
moving party shall, at its discretion, also be entitled to commence arbitration
but is under no obligation to do so, and the moving party shall not in any way
be adversely prejudiced by electing not to commence arbitration. The arbitrator:
(i) will hear and rule on appropriate dispositive motions for judgment on the
pleadings, for failure to state a claim, or for

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full or partial summary judgment; (ii) will render a decision and any award
applying applicable law; (iii) will give effect to any limitations period in
determining any Dispute or defense; (iv) shall enforce the doctrines of
compulsory counterclaim, res judicata, and collateral estoppels, if applicable;
(v) with regard to motions and the arbitration hearing, shall apply rules of
evidence governing civil cases; and (vi) will apply the law of the state
specified in the agreement giving rise to the Dispute. Filing of a petition for
arbitration shall not prevent any party from (i) seeking and obtaining from a
court of competent jurisdiction (notwithstanding ongoing arbitration)
provisional or ancillary remedies including but not limited to injunctive
relief, property preservation orders, foreclosure, eviction, attachment,
replevin, garnishment, and/or the appointment of a receiver, (ii) pursuing
non-judicial foreclosure, or (iii) availing itself of any self-help remedies
such as setoff and repossession. The exercise of such rights shall not
constitute a waiver of the right to submit any Dispute to arbitration.

 

Judgment upon an arbitration award may be entered in any court having
jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three
arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator
will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo
appeal must be filed with the arbitrator within 30 days following the date of
the arbitration award; if such a request is not made within that time period,
the arbitration decision shall become final and binding. On appeal, the
arbitrators shall review the award de novo, meaning that they shall reach their
own findings of fact and conclusions of law rather than deferring in any manner
to the original arbitrator. Appeal of an arbitration award shall be pursuant to
the rules of the Administrator or, if the Administrator has no such rules, then
the JAMS arbitration appellate rules shall apply.

 

Arbitration under this provision concerns a transaction involving interstate
commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. This arbitration provision shall survive any termination, amendment, or
expiration of this Agreement. If the terms of this provision vary from the
Administrator's rules, this arbitration provision shall control.

 

RELIANCE. Each party (i) certifies that no one has represented to such party
that the other party would not seek to enforce jury and class action waivers in
the event of suit, and (ii) acknowledges that it and the other party have been
induced to enter into this Agreement by, among other things, the mutual waivers,
agreements, and certifications in this section.

 

9.15Interpretation.  This Agreement and the other Loan Documents will not be
construed against Lender merely because of Lender's involvement in the
preparation of such documents and agreements.

 

9.16Destruction of Note; Substitute Note.  In the event the Note is mutilated or
destroyed by any cause whatsoever, or otherwise lost or stolen and regardless of
whether due to the act or neglect of Lender, Borrower will execute and deliver
to Lender in substitution therefor a duplicate promissory note containing the
same terms and conditions as the promissory note so mutilated, destroyed, lost
or stolen, within 10 days after Lender notifies Borrower of any such mutilation,
destruction, loss or theft of such note and delivery to Borrower of an affidavit
certifying that the

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same was not negotiated and Borrower will only be liable on the replaced note
executed by Borrower.  Upon Borrower's delivery of such duplicate promissory
note, Borrower will be relieved of all obligations under the original promissory
note so mutilated, destroyed, lost or stolen and will thereafter be bound solely
by the provisions of such duplicate promissory note.  The Lender shall be
entitled to have the Note subdivided into notes of lesser denominations or
substituted for new notes, all containing the same terms as the original Note
being substituted or subdivided, in connection with an assignment of all or any
portion of the Loan pursuant to the terms of Section 9.9 hereof. 

 

9.17Compliance With Applicable Usury Law.  It is the intent of the parties
hereto to comply with the Applicable Usury Law.  Accordingly, notwithstanding
any provisions to the contrary in the Loan Documents, in no event shall the Loan
Documents require the payment or permit the collection of interest in excess of
the maximum contract rate permitted by the Applicable Usury Law.

 

9.18NO RELATIONSHIP WITH PURCHASERS.  LENDER DOES NOT HEREBY ASSUME AND SHALL
HAVE NO RESPONSIBILITY, OBLIGATION OR LIABILITY TO PURCHASERS, LENDER'S
RELATIONSHIP BEING THAT ONLY OF A CREDITOR WHO HAS TAKEN AN ASSIGNMENT FROM
BORROWER OF THE NOTES RECEIVABLE IN ORDER TO FACILITATE PERFORMANCE OF THE
OBLIGATIONS.  EXCEPT AS REQUIRED BY LAW AND FOR FILINGS MADE WITH THE SECURITIES
& EXCHANGE COMMISSION, OR ANY STOCK EXCHANGE ON WHICH GUARANTOR'S OR GUARANTOR'S
PARENTS OR INDIRECT PARENT'S STOCK OR OTHER OWNERSHIP INTEREST IS OR MAY BE
TRADED, BORROWER WILL NOT, AT ANY TIME, USE THE NAME OF OR MAKE REFERENCE TO
LENDER WITH RESPECT TO A TIMESHARE PROJECT, THE SALE OF TIMESHARE INTERESTS OR
OTHERWISE, WITHOUT THE EXPRESS WRITTEN CONSENT OF LENDER.

 

9.19NO JOINT VENTURE.  THE RELATIONSHIP OF BORROWER AND LENDER IS THAT OF DEBTOR
AND CREDITOR, AND IT IS NOT THE INTENTION OF EITHER OF SUCH PARTIES BY THIS OR
ANY OTHER LOAN DOCUMENT BEING EXECUTED IN CONNECTION WITH THE LOAN TO ESTABLISH
A PARTNERSHIP OR JOINT VENTURE WITH BORROWER OR ANY OTHER PERSON, AND THE
PARTIES HERETO SHALL NOT UNDER ANY CIRCUMSTANCES BE CONSTRUED TO BE PARTNERS OR
JOINT VENTURERS.

 

9.20Scope of Reimbursable Attorney's Fees.  As used in the Loan Documents, the
term "attorneys' fees" includes the reasonable fees of attorneys licensed to
practice law in any jurisdiction, law clerks, paralegals, investigators and
others not admitted to the bar but performing services under the supervision of
a licensed attorney.  As used in the Loan Documents, attorneys' fees incurred by
Lender in the enforcement of any remedy or covenant include attorneys' fees
incurred in any foreclosure of the Loan Documents, in enforcing any rights of
indemnification under the Loan Documents, in protecting or sustaining the lien
or priority of the Collateral, or in any proceeding arising from or connected
with any such matter, including any bankruptcy, receivership, injunction or
other similar proceeding, or any appeal from or petition for review of any such
matter, and with or without litigation.

 

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9.21Confidentiality.  Borrower and Lender shall mutually agree on the contents
of any press release, public announcement or other public disclosure regarding
this Agreement and the transactions contemplated hereunder to be made following
the mutual execution and delivery of this Agreement; provided that, (a) the
Lender may disclose the terms hereof and give copies of the Loan Documents to
assignees and participants and to prospective assignees and participants, and
(b) Lender acknowledges that the terms hereof may be disclosed in the periodic
filings related to Guarantor with the United States Securities and Exchange
Commission and in the notes to Borrower's and Guarantor's financial
statements.  If either party fails to respond to the other party in writing with
either an approval or a disapproval within five (5) Business Days of a party's
receipt of the other party's request for consent or approval as expressly
contemplated pursuant to this Section 9.21, then such consent or approval will
be deemed to have been given, provided that such five (5) Business Day period
will not commence to run unless and until the other party has received all
information, materials, documents and other matters required to be submitted to
it hereunder, with respect to such consent or approval and all other
information, materials, documents and other matters reasonably essential to its
decision process. 

 

9.22Relief from Automatic Stay, Etc.  To the fullest extent permitted by law, in
the event Borrower shall make application for or seek relief or protection under
the federal bankruptcy code ("Bankruptcy Code") or other Debtor Relief Laws, or
in the event that any involuntary petition is filed against the Borrower under
such Code or other Debtor Relief Laws, and not dismissed with prejudice within
45 days, the automatic stay provisions of Section 362 of the Bankruptcy Code are
hereby modified as to Lender to the extent necessary to implement the provisions
hereof permitting set‑off and the filing of financing statements or other
instruments or documents; and Lender shall automatically and without demand or
notice (each of which is hereby waived) be entitled to immediate relief from any
automatic stay imposed by Section 362 of the Bankruptcy Code or otherwise, on or
against the exercise of the rights and remedies otherwise available to Lender as
provided in the Loan Documents.

 

9.23Reliance.  Lender's examination, inspection, or receipt of information
pertaining to Borrower, any Guarantor, the Collateral or a Timeshare Project
shall not in any way be deemed to reduce the full scope and protection of the
warranties, representations and Obligations contained in the Loan Documents.

 

9.24Limitation of Damages.  Neither Borrower, Lender nor any of its Affiliates
or successors shall be liable for any indirect, special, incidental,
consequential or punitive damages in connection with any breach of contract,
tort or other wrong relating to the Loan Documents (including with limitation
damages for loss of profits, business interruption or the like), whether such
damages are foreseeable or unforeseeable, unless any of such damages arise out
of or the gross negligence or willful misconduct of such party or any of its
Affiliates.  Furthermore, as between Borrower and Lender, Borrower shall be
responsible for and Lender is hereby released from any claim or liability in
connection with: 

 

(a)

safekeeping any Collateral;

(b)

any loss or damage to any Collateral;

(c)

any diminution in value of the Collateral; or

(d)

any act or default of another Person (other than Lender or its Affiliates).

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Lender shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence.  In the event Borrower brings suit
against Lender in connection with the transactions contemplated hereunder and
Lender is found not to be liable, Borrower agrees to indemnify and hold Lender
harmless from all costs and expenses, including attorneys' fees, incurred by
Lender in connection with such suit.  This Agreement is not intended to obligate
Lender to take any action with respect to the Collateral or to incur expenses or
perform any obligation or duty of Borrower.  Borrower's obligations under this
Section shall survive termination of this Agreement and repayment of the Loan. 

 

9.25Waiver of Right of First Refusal.  Borrower (on behalf of itself and its
Affiliates) hereby irrevocably waives any right of first refusal it may have to
purchase Timeshare Interests (including without limitation the right of first
refusal contained in any Timeshare Declaration in favor of Borrower, as
declarant) with respect to any Timeshare Interests acquired by Lender, or its
nominee or assignee, through the exercise or enforcement of the Lender’s rights
related to the Collateral under this Agreement or the other Loan
Documents.  Borrower agrees that in the event that Lender, or its nominee or
assignee, acquires title to any such Timeshare Interests under the circumstances
described in the foregoing sentence, such Timeshare Interests may be assigned,
transferred or sold free and clear of any right of first refusal in favor of
Borrower.

 

9.26Consents, Approvals and Discretion.  Whenever Lender's consent or approval
is required or permitted, or any documents or other items are required to be
acceptable to Lender, such consent, approval or acceptability shall be at the
sole and absolute discretion of Lender, which shall not be unreasonably
withheld, delayed or conditioned.  Whenever any determination or act is at
Lender's discretion, such determination or act shall be at the sole and absolute
discretion of the Lender, which shall not be unreasonably withheld, delayed or
conditioned.

 

9.27USA Patriot Act Notice.  The following notification is provided to Borrower
pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:

 

(i) IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.  To help
the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product.  What this means for
Borrower:  When Borrower opens an account, if Borrower is an individual, Lender
will ask for Borrower's name, taxpayer identification number, residential
address, date of birth, and other information that will allow Lender to identify
Borrower and, if Borrower is not an individual, Lender will ask for Borrower's
name, taxpayer identification number, business address, and other information
that will allow Lender to identify Borrower.  Lender may also ask, if Borrower
is an individual, to see Borrower's driver's license or other identifying
documents and, if Borrower is not an individual, to see Borrower's legal
organizational documents or other identifying documents.

 

(ii)Government Regulation.  Borrower shall not (a) be or become subject at any
time to any law, regulation, or list of any government agency (including,
without limitation, the U.S. Office of Foreign Asset Control list) that
prohibits or limits Lender from making any advance or

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extension of credit to Borrower or from otherwise conducting business with
Borrower, or (b) fail to provide documentary and other evidence of Borrower's
identity as may be requested by Lender at any time to enable Lender to verify
Borrower's identity or to comply with any applicable law or regulation,
including, without limitation, Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318.  

 

9.28Errors and Omissions.  Borrower hereby agrees that it will, within ten (10)
days of a request by Lender, comply with any reasonable request by Lender to
correct documentation errors, omissions or oversights, if any, that occur in any
documentation relating to the Loan. 

 

9.29Background Statements.  The recitals set forth above are hereby incorporated
into the operative provisions of this Agreement.

 

9.30Waiver of Defenses and Release of Claims.  The undersigned hereby (i)
represents that neither the undersigned nor any principal of the undersigned has
any defenses to or setoffs against any indebtedness or other obligations owing
in connection with the Loan by Borrower, or by the undersigned's principals, to
Lender or Lender's affiliates (the "Owed Obligations"), nor any claims against
Lender or Lender's affiliates for any matter whatsoever, related or unrelated to
the Owed Obligations, and (ii) releases Lender and Lender's affiliates,
officers, directors, employees and agents from all claims, causes of action, and
costs, in law or equity, known or unknown, whether or not matured or contingent,
existing as of the date hereof that the undersigned has or may have by reason of
any matter of any conceivable kind or character whatsoever, related or unrelated
to the Owed Obligations, including the subject matter of this Agreement as of
the date hereof. The foregoing release does not apply, however, to claims for
future performance of express contractual obligations that mature after the date
hereof that are owing to the undersigned by Lender or Lender's affiliates. As
used in this paragraph, the word "undersigned" does not include Lender or any
individual signing on behalf of Lender. The undersigned acknowledges that Lender
has been induced to enter into or continue the Owed Obligations by, among other
things, the waivers and releases in this paragraph.

 

9.31Document Imaging.  Lender shall be entitled, in its sole discretion, to
image or make copies of all or any selection of the agreements, instruments,
documents, and items and records governing, arising from or relating to any of
Lender's loans to Borrower, including, without limitation, this Agreement and
the other Loan Documents, and Lender may destroy or archive the paper originals;
however, no original promissory notes shall be destroyed.  The parties hereto
(a) waive any right to insist or require that Lender produce paper originals,
(b) agree that such images shall be accorded the same force and effect as the
paper originals and (c) agree that Lender is entitled to use such images in lieu
of destroyed or archived originals for any purpose, including as admissible
evidence in any demand, presentment or other proceedings.

9.32Prior Loan Agreement.  The Prior Loan Agreement is hereby amended and
restated in its entirety as set forth in this Agreement.  This Agreement
supersedes the Prior Loan Agreement in its entirety.  All of the rights and
undertakings under the Prior Loan Agreement of the parties thereto existing as
of the Effective Date are hereby confirmed and, subject to and, if applicable,
as amended by, the terms and conditions hereof, continued under this Agreement.

 

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[SIGNATURE PAGE TO FIRST AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or have
caused the same to be executed by their duly authorized representatives, and
delivered, as of the date first above written.

 

   

 

, a Delaware limited liability company

 

 

Anthony M. Puleo

Vice President and Treasurer

 

 

 

 

BORROWER:

 

BLUEGREEN/BIG CEDAR VACATIONS, LLC, a Delaware limited liability company

 

By: /s/ Anthony M. Puleo

Name:Anthony M. Puleo

Title:Vice President and Treasurer

 

 

 

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[Counterpart Signature Page TO FIRST AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or have
caused the same to be executed by their duly authorized representatives, and
delivered, as of the date first above written.

 

 

, a national banking association

 

 

 

 

LENDER:

 

NATIONAL BANK OF ARIZONA, a national banking association

 

By:      /s/Kristen Carrero

Name: Kristen Carrero

Title:Senior Vice President

 

 

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CONSENT AND AGREEMENT

The undersigned Guarantor consents to the foregoing First Amended and Restated
Loan and Security Agreement and recognizes and acknowledges the terms,
covenants, conditions and provisions thereof.  

 

/s/ Anthony M. Puleo

 

 

 

 

BLUEGREEN CORPORATION, a Florida corporation

By: /s/ Anthony M. Puleo

Name:  Anthony M. Puleo

Title:    Senior Vice President, CFO and Treasurer

 

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