FINAL EXECUTION COPY

 

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Acquisition LOAN and security AGREEMENT

By and Between

ZB, N.A. DBA NATIONAL BANK OF ARIZONA

AS LENDER

and

BLUEGREEN VACATIONS CORPORATION

and

BLUEGREEN VACATIONS UNLIMITED, INC.,

jointly and severally

﻿

AS BORROWER

﻿

Dated April 17, 2018

_________________________________

﻿

 

 

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TABLE OF CONTENTS

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1.

DEFINITIONS

2 

﻿

 

 

﻿

1.1

Certain Defined Terms

2 

﻿

1.2

Other Definitional Provisions

15 

﻿

 

 

2

LOAN COMMITMENT; USE OF PROCEEDS

15 

﻿

 

 

﻿

2.1

Acquisition Loan

15 

﻿

2.2

Continuation of Obligations Throughout Term

15 

﻿

2.3

Use of Proceeds

15 

﻿

2.4

Repayment of Loan

16 

﻿

2.5

Interest

16 

﻿

2.6

Payments

16 

﻿

2.7

Minimum Required Payments

17 

﻿

 

(a)

Interest Payments

17 

﻿

 

(b)

Reserved

17 

﻿

 

(c)

Release Process

17 

﻿

 

(d)

Minimum Principal Reductions

18 

﻿

 

(e)

Reserved

19 

﻿

 

(f)

Final Payment

19 

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2.8

Prepayment

19 

﻿

2.9

Loan Fee

19 

﻿

2.10

Application of Proceeds of Collateral and Payments

19 

﻿

2.11

Reserved

20 

﻿

2.12

Reserved

20 

﻿

2.13

Release of Mortgage

20 

﻿

 

 

3

SECURITY

20 

﻿

 

 

﻿

3.1

Grant of Mortgage and Security Interests

20 

﻿

3.2

Perfection

23 

﻿

3.3

Location

23 

﻿

3.4

Maintenance of Security

23 

﻿

 

 

4

CONDITIONS PRECEDENT TO ADVANCE; METHOD OF DISBURSEMENT

23 

﻿

 

 

﻿

4.1

Closing Conditions

23 

﻿

 

(a)

Checklist Items

23 

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(b)

Payment of Expenses

23 

﻿

 

(c)

Litigation

23 

﻿

 

(d)

Closing of Acquisition

24 

﻿

 

(e)

No Prohibited Actions

24 

﻿

 

(f)

Borrower Equity

24 

﻿

 

(g)

Terms and Conditions

24 

﻿

 

(h)

Loan Documents

24 

﻿

 

(i)

Appraisal

24 

﻿

 

(j)

Title Policy

25 

﻿

 

(k)

Franchise Agreement

25 

﻿

4.2

Closings

25 

﻿

 

 

﻿

﻿

 

 

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5

REPRESENTATIONS AND WARRANTIES

25 

﻿

 

 

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5.1

Good Standing

25 

﻿

5.2

Power and Authority; Enforceability

25 

﻿

5.3

Borrower's Principal Place of Business

26 

﻿

5.4

Collateral

26 

﻿

 

(a)

Title

26 

﻿

 

(b)

Perfection of Security Interest

26 

﻿

5.5

No Misrepresentations

26 

﻿

5.6

No Default for Third Party Obligations

26 

﻿

5.7

Payment of Taxes and Other Impositions

26 

﻿

5.8

Governmental Regulations

27 

﻿

5.9

Employee Benefit Plans

27 

﻿

5.10

Securities Activities

27 

﻿

5.11

Minimum Number of Vacation Points

28 

﻿

5.12

Common Enterprise

28 

﻿

5.13

Representations as to the Property

28 

﻿

 

(a)

Access

28 

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(b)

Utilities

28 

﻿

 

(c)

Improvements

28 

﻿

 

(d)

Zoning Laws, Building Codes, Etc.

28 

﻿

5.14

Litigation and Proceedings

28 

﻿

5.15

Subsidiaries, Affiliates and Capital Structure

29 

﻿

5.16

Solvency

29 

﻿

5.17

No Material Adverse Change in Financial Condition

29 

﻿

5.18

Brokers; Payment of Commissions

29 

﻿

5.19

Foreign Assets Control Regulations

29 

﻿

5.20

Reserved

30 

﻿

5.21

Acquisition.

30 

﻿

5.22

Survival and Additional Representations and Warranties

31 

﻿

 

 

6

COVENANTS

31 

﻿

 

 

﻿

6.1

Affirmative Covenants

31 

﻿

 

(a)

Good Standing

31 

﻿

 

(b)

Compliance with Legal Requirements

31 

﻿

 

(c)

Insurance, Casualty and Condemnation

31 

﻿

 

(d)

Reports

33 

﻿

 

(e)

Reserved

35 

﻿

 

(f)

Payment of Taxes

35 

﻿

 

(g)

Payment of Impositions

35 

﻿

 

(h)

Further Assurance

36 

﻿

 

(i)

Fulfillment of Obligations Under Project and Consumer Documents

36 

﻿

 

(j)

Material Increases to Assessments

36 

﻿

 

(k)

Maintenance of Property and Other Property

36 

﻿

 

(l)

Maintenance of Larger Tract

36 

﻿

 

(m)

Financial Covenants

36 

﻿

 

(n)

Exchange Affiliation

36 

﻿

 

(o)

Right to Inspect

36 

﻿

 

(p)

Management and Marketing

37 

﻿

 

(q)

Reserved

37 

﻿

 

(r)

Reserved

37 

﻿

 

(s)

Reserved

37 

﻿

 

(t)

Purchase and Sale Agreement

37 

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(u)

WARN Act

37 

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(v)

Timeshare Association

38 

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(w)

Timeshare Declaration

38 

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(x)

Timeshare Project

38 

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6.2

Negative Covenants

38 

﻿

 

(a)

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

38 

﻿

 

(b)

Restrictions on Additional Indebtedness

39 

﻿

 

(c)

Ownership and Control

39 

﻿

 

(d)

Making Loans

39 

﻿

 

(e)

Negative Pledge

39 

﻿

 

(f)

Reserved

40 

﻿

 

(g)

Prohibited Drug Law Activities

40 

﻿

6.3

Survival of Covenants

40 

﻿

 

 

7

DEFAULT

40 

﻿

 

 

﻿

7.1

Events of Default

40 

﻿

 

(a)

Payments

40 

﻿

 

(b)

Covenant Defaults

40 

﻿

 

(c)

Cross-Default

41 

﻿

 

(d)

Environmental Default

41 

﻿

 

(e)

Default by Borrower in Other Agreements

41 

﻿

 

(f)

Warranties or Representations

41 

﻿

 

(g)

Termination of Borrower

41 

﻿

 

(h)

Enforceability of Liens

41 

﻿

 

(i)

Creditor or Forfeiture Proceedings

41 

﻿

 

(j)

Reserved

42 

﻿

 

(k)

Event of Default

42 

﻿

 

(l)

Bankruptcy

42 

﻿

 

(m)

Attachment, Judgment, Tax Liens

42 

﻿

 

(n)

Material Adverse Change

42 

﻿

 

(o)

Criminal Proceedings

42 

﻿

 

(p)

Loss of License

42 

﻿

 

(q)

Suspension of Sales

42 

﻿

 

(r)

Reserved

42 

﻿

 

(s)

Timeshare Documents

43 

﻿

 

(t)

Removal of Collateral

43 

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(u)

Operating Contracts

43 

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(v)

Vacation Club

43 

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7.2

Effect of an Event of Default; Remedies

43 

﻿

7.3

Application of Proceeds During an Event of Default

45 

﻿

7.4

Notice of Sale

45 

﻿

7.5

Application of Proceeds

45 

﻿

7.6

Lender's Right to Perform

45 

﻿

7.7

Waiver of Marshalling

46 

﻿

7.8

Waiver in Legal Actions

46 

﻿

7.9

Set-Off

46 

﻿

7.10

License for Use of Software and Other Intellectual Property

46 

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8

COSTS AND EXPENSES; INDEMNIFICATION; DUTIES OF LENDER; POST-CLOSING
IMPROVEMENTS; DISBURSEMENT OF IMPROVEMENT FUNDS; TIMESHARE CONVERSION

47 

﻿

 

 

﻿

8.1

Costs and Expenses

47 

﻿

﻿

 

 

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8.2

Indemnification

47 

﻿

8.3

Reserved

48 

﻿

8.4

Delegation of Duties and Rights

48 

﻿

8.5

Foreign Assets Control

48 

﻿

8.6

Post-Closing Improvements and Disbursement of Improvement Funds

48 

﻿

 

(a)

Post-Closing Improvements

48 

﻿

 

(b)

Requesting Disbursements of the Improvement Funds

49 

﻿

 

(c)

Completion of Post-Closing Improvements

49 

﻿

 

(d)

Disbursement of the Improvement Funds

49 

﻿

8.7

Conversion of Hotel Into Vacation Ownership Timeshare Resort

50 

﻿

8.8

Additional Representations, Warranties and Covenants Regarding Timeshare Project

50 

﻿

 

(a)

Compliance with Legal Requirements

50 

﻿

 

(b)

Sales Activities

51 

﻿

 

(c)

Timeshare Inventory Not a Security

51 

﻿

 

(d)

Zoning Laws, Building Codes, Etc

51 

﻿

 

 

9

CONSTRUCTION AND GENERAL TERMS

51 

﻿

 

 

﻿

9.1

Payment

51 

﻿

9.2

Entire Agreement

51 

﻿

9.3

Powers Coupled with an Interest

52 

﻿

9.4

Counterparts; Facsimile Signatures

52 

﻿

9.5

Notices

52 

﻿

9.6

Borrower's Representative

54 

﻿

9.7

General Submission Requirements

54 

﻿

9.8

Successors and Assigns; Participation

54 

﻿

9.9

Successors and Assigns

56 

﻿

9.10

Severability

56 

﻿

9.11

Time of Essence

56 

﻿

9.12

Miscellaneous

56 

﻿

9.13

Forum Selection; Jurisdiction; Choice of Law

56 

﻿

9.14

Dispute Resolution

57 

﻿

9.15

Interpretation

59 

﻿

9.16

Destruction of Acquisition Note; Substitute Acquisition Note

59 

﻿

9.17

Compliance With Applicable Usury Law

59 

﻿

9.18

Reference to Lender

59 

﻿

9.19

No Joint Venture

60 

﻿

9.20

Scope of Reimbursable Attorney's Fees

60 

﻿

9.21

Reserved

60 

﻿

9.22

Relief from Automatic Stay, Etc.

60 

﻿

9.23

Reliance

60 

﻿

9.24

Limitation of Damages

60 

﻿

9.25

Waiver of Right of First Refusal

61 

﻿

9.26

Consents, Approvals and Discretion

61 

﻿

9.27

Patriotic Act Provisions

61 

﻿

9.28

Errors and Omissions

62 

﻿

9.29

Background Statements

62 

﻿

9.30

Waiver of Defenses and Release of Claims

62 

﻿

9.31

Document Imaging

62 

﻿

9.32

Dealing with Multiple Parties

63 

﻿

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ACQUISITION LOAN AND SECURITY AGREEMENT

﻿

THIS ACQUISITION LOAN AND SECURITY AGREEMENT is made as of April 17, 2018 by and
among BLUEGREEN VACATIONS CORPORATION, a Florida corporation (“BXG”) and
BLUEGREEN VACATIONS UNLIMITED, INC., a Florida corporation (“BVU”), jointly and
severally (individually and collectively, as the context requires “Borrower”)
and ZB, N.A. DBA NATIONAL BANK OF ARIZONA, a national banking association
(“Lender”).

﻿

BACKGROUND

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A.    Prior to the effective date of the Acquisition (as hereinafter defined),
LSREF2 Windmill REO (Eilan Hotel), LLC, a Delaware limited liability company
(the “Seller”) (and LSREF2 Windmill Hotel TRS, LLC, a Delaware limited liability
company (“Tenant”) to the extent of its interest therein) owned the Transferred
Property.

﻿

B.    Seller and BVU (as successor to Bluegreen/Big Cedar Vacations, LLC, a
Delaware limited liability company pursuant to that certain Assignment of
Purchase and Sale Agreement, dated March 20, 2018) are parties to that certain
Purchase and Sale Agreement dated as of February 12, 2018 (as amended, the
“PSA”), pursuant to which BVU intends to purchase, and Seller intends to sell,
the Transferred Property on the terms and pursuant to the conditions set forth
in the PSA. 

﻿

C.    Borrower has requested financing from Lender, in the amount of
$27,500,000, for purposes of partially financing BVU’s purchase of the
Transferred Property and paying other costs and expenses in connection with the
Property and the transaction evidenced by this Agreement.  Lender has agreed to
provide such financing to BVU, with BXG as a co‑borrower, subject to the terms
and conditions set forth below, including, inter alia, the granting of a
security interest and mortgage lien on the Collateral (as hereinafter defined),
which includes the Transferred Property. 

﻿

D.    The Bluegreen Vacation Club (the “Vacation Club”) is a multi-site
timeshare plan established by BVU 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. 

﻿

E.    BVU intends to add the Property as a component site resort within the
Vacation Club. 

﻿

F.    When a Purchaser purchases Timeshare Inventory in a component site within
the Bluegreen Vacation Club, the purchased Timeshare Inventory is conveyed by
BVU 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.

﻿

﻿

 

 

 

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AGREEMENT:

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NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and the other Acquisition 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:

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1.    DEFINITIONS

﻿

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

﻿

Acquisition:  the acquisition by BVU of the Transferred Property pursuant to the
PSA.

﻿

Acquisition Loan Documents:    collectively, this Agreement, the Security
Documents, the Acquisition Note, the Environmental Indemnity, the Patriot Act
Certificate and Agreement, UCC Financing Statements and the other documents,
agreements and instruments relating to the Loan, as they may be amended,
supplemented or restated from time to time.

﻿

Acquisition Note:  a Promissory Note (Acquisition Loan) dated of even date
herewith, in a principal amount of $27,500,000 with respect to the Loan executed
and delivered by the Borrower to the order of Lender, as amended, supplemented
or restated from time to time.

﻿

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.

﻿

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 BXG be deemed an
Affiliate of any 5% or greater shareholder of BXG or any Affiliate of such
shareholder who is not a Direct Affiliate (as defined herein) of BXG, nor shall
any such shareholder be deemed to be an Affiliate of BXG.  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 BXG’s GAAP consolidated financial
statements shall be Affiliates of BXG (a “Direct Affiliate”), (ii) BXG shall be
deemed to be an Affiliate of BVU and (iii)  BVU shall be deemed an Affiliate of
BXG.

﻿

Agreement:  this Acquisition 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.

 

 

 

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﻿

Approvals: as defined in Section 5.21 hereof.

﻿

Appurtenances:  all easements, rights of way, privileges, covenants, Common
Elements and other rights appurtenant to the Land and any land lying in the bed
of any street, road, avenue or alley, open or closed, in front of or adjoining
the Land and to the center line thereof.

﻿

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.

﻿

Bankruptcy Code:  as defined in Section 9.22 hereof.

﻿

Base Rate:  the rates per annum quoted by Lender as Lender's one (1) month 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 Base Rate
is not necessarily the lowest rate charged by Lender on its loans.  If the
foregoing one (1) month LIBOR rate becomes unavailable during the Term, Lender
may designate a substitute index that results in a Basic Interest Rate that is
materially comparable to the Basic Interest Rate that was determined immediately
prior to the date that the one (1) month LIBOR rate becomes unavailable, after
notifying Borrower.  The one (1) month 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:  the variable interest rate per annum, adjusted as of the
first day of each calendar month, equal to the Base Rate in effect as of the
immediately preceding Base Rate Determination Date plus 325 basis points, but in
no event shall the Basic Interest Rate exceed the rate permitted by the
Applicable Usury Law or fall below 4.75% per annum.

﻿

BBX:  BBX Capital Corporation, a Florida corporation, f/k/a BFC Financial
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 Timeshare Inventory.

﻿

Bookings:  all contracts, reservations and sales files for the use or occupancy
of guest rooms and/or the banquet facilities and/or other services of the Hotel.

 

 

 

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﻿

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

﻿

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

﻿

BVU: as defined in the preamble to this Agreement.

﻿

BXG: as defined in the preamble to this Agreement.

﻿

Closing Timeshare:  as defined in Section 2.7(c) hereof.

﻿

Closing:  as defined in Section 4.2 of this Agreement.

﻿

Collateral:  as defined in Section 3.1 of this Agreement.

﻿

Collateral Assignment of Declarant’s Rights: the Collateral Assignment of
Declarant’s Rights delivered to Lender pursuant to Section 6.1(w) hereof.

﻿

Common Elements: as defined in the Declaration for Eilan Condominium.

﻿

Consumables:  all food and beverages (non-alcoholic and alcoholic) located at
the Property or for use in connection with the operation of the Hotel.

﻿

Code:  the Uniform Commercial Code as adopted and in effect in the States of
Texas and  Florida with respect to Collateral located in or subject to the Code
in those States, and, with respect to Collateral located in any other State, the
Uniform Commercial Code as adopted and in effect in that State, as amended from
time to time.

﻿

Cut-Off Time:  11:59 p.m., Dallas, Texas time, on the date preceding the closing
date under the PSA.

﻿

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.

﻿

Declaration for Eilan Condominium:  that certain Declaration of Condominium for
the Eilan Condominium dated as of December 27, 2013, recorded on December 27,
2013, at Book 16492, Page 1672, as Instrument No. 20130261123, in the real
property records of Bexar County, Texas, as amended by that certain First
Amendment to the Declaration of Condominium for the Eilan Condominium dated as
of June 13, 2017, recorded on June 14, 2017, at Book 18568, Page 1675, as
Instrument No. 20170114255, in the real property records of Bexar County, Texas,
as amended by

 

 

 

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that certain Second Amendment to the Declaration of Condominium for the Eilan
Condominium dated February 16, 2018, recorded on February 16, 2018, at Book
18993, Page 1653, as Instrument No. 20180029792, in the real property records of
Bexar County, Texas, as further amended, supplemented or restated from time to
time.

﻿

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%).

Effective Date:  the date of this Agreement. 

﻿

Encumbered Timeshare Product:  the Timeshare Inventory that is, from time to
time, subject to the lien of the Mortgage.

﻿

Environmental Indemnity:  a Hazardous Substance Remediation and Indemnification
Agreement dated of even date herewith, executed and delivered by Borrower
containing representations, warranties and covenants regarding the environmental
condition of the Property and the Collateral, as it 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 5.19 hereof.

﻿

Expendables:  all china, glassware, linens, silverware, kitchen and bar small
goods, paper goods, guest supplies, housekeeping and cleaning supplies,
operating supplies, printing, stationery, uniforms and similar items located at
the Property or used in connection with the operation of the Hotel.

Fifth Third Loan Agreement:  that certain Amended and Restated Credit Agreement,
dated December 16, 2016, among BXG as borrower, the guarantors from time to time
as party thereto, the lenders from time to time a party thereto and Fifth Third
Bank, as Administrative Agent and L/C Issuer, with Bank of America, N.A. and
Lender as Co-Syndication Agents and Fifth Third Bank, as Lead Arranger and Sole
Bookrunner, as such credit agreement is amended or restated from time to time.

﻿

Foreign Assets Control Regulations:  as defined in Section 5.19 hereof.

﻿

Franchise Agreement:  that certain Autograph Collection Hotel Franchise
Agreement between Marriott International, Inc., a Delaware corporation, as
franchisor, and Tenant, as assignee from LSREF2 Windmill REO (Eilan Land), LLC,
as franchisee, as it has been previously assigned, assumed, supplemented and
amended.

﻿

Franchisor:  Marriott International, Inc., a Delaware corporation, as to the
existing Franchise Agreement.

﻿

Furnishings:  mean all fixtures, furniture, furnishings, fittings, equipment,
machinery, apparatus, appliances, vehicles, tools and other articles of personal
property (other than the

 

 

 

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Expendables, the Consumables, the Retail Merchandise and personal property that
is leased from or provided by third parties) located at the Property or used in
connection with the Hotel, subject to such depletions, substitutions and
replacements as shall be made in the ordinary course of business.

﻿

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 in the United States.

﻿

General Intangibles:  to the extent assignable, all telephone exchange numbers,
telephone numbers, websites and URLs (including www.eilanhotel.com), tradenames,
the names “Sustenio” and “Mercato,” service marks, designs, logos and similar
proprietary rights that exist as of the closing date under the PSA and relate to
the Land, Improvements or the Hotel; provided, however, the foregoing items
shall exclude (i) any items that are leased, licensed or supplied by third
parties pursuant to any of the Hotel Contracts, (ii) any items that are owned by
Franchisor, Manager or any of their respective affiliates, and (iii) the name
“Eilan” and related registered marks and logos.

﻿

Hotel:  the hotel and all of its facilities located at 18603 La Cantera Terrace,
San Antonio, Texas 78256, and currently known as the Éilan Hotel & Spa.

﻿

Hotel Contracts:  all service and maintenance contracts, equipment leases, and
other contracts or agreements, relating to the maintenance, operation,
provisioning or equipping of the Hotel (as may be supplemented and amended)
including those listed on Exhibit A attached hereto and made a part hereof,
together with all related written warranties and guaranties, plus any new,
replacement or amended contracts or agreements relating to similar matters;
provided, however, the Bookings, the Parking Rights, the License Agreement, the
Services Agreement, the Tenant Lease, the Management Agreement, the Franchise
Agreement and any documents of record in the real property records of Bexar
County, Texas relating to the Property shall be excluded from this definition.

﻿

Improvements:  the buildings, structures (surface and subsurface), installations
and other improvements, including such fixtures and Appurtenances as shall
constitute real property located on the Land.

﻿

Improvement Funds: as defined in Section 2.3 hereof.

﻿

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 in connection with
the Loan, the Collateral or the Acquisition Loan Documents.  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

 

 

 

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governmental authority of the United States upon or in connection with or
measured by the Acquisition Loan Documents, the Collateral, or the principal or
accrued interest under the Loan, Loan Fee,  collection fees or other amounts
payable by Borrower to Lender under the Acquisition Loan 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);

﻿

(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.

﻿

Land:  the land having a street address at 18603 La Cantera Terrace, San
Antonio, Texas 78256, as more particularly described in Exhibit B to this
Agreement upon which the Hotel is situated together with all Appurtenances to
the Land.

﻿

Legal Requirements:  (a) all present and future judicial decisions, statutes,
regulations, permits, approvals, registrations and licenses or certificates of
any governmental authority (including

 

 

 

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from any state regulatory agency, department or division in any jurisdiction in
which the Hotel is located which has the power and authority to regulate the
Hotel in such jurisdiction) in any way applicable to Borrower or its property,
including any applicable state statute or other law in any jurisdiction where
the Hotel 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
Acquisition Loan Documents, by which Borrower or its property becomes bound with
Lender's prior written consent.

﻿

Lender:  ZB, N.A. DBA NATIONAL BANK OF ARIZONA, a national banking association,
and its successors and assigns.

﻿

License Agreement:  that certain License Agreement dated effective as of
December 27, 2013, between LSREF2 Windmill REO (Eilan Land), LLC and Tenant with
respect to the use of certain registered service marks.

﻿

Loan:  the secured nonrevolving loan in a principal amount of up to $27,500,000
made by Lender in favor of Borrower as evidenced and governed by this Agreement
and the other Acquisition Loan Documents.

﻿

Loan Fee:  as defined in Section 2.9 hereof.

﻿

Loan to Value: as defined in Section 4.1(i) hereof.

﻿

Management Agreement: that certain management agreement in effect between
Manager and Tenant, as may be supplemented and amended.

﻿

Manager:  Aimbridge Hospitality, LLC, a Delaware limited liability company.

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 either Borrower, which, with the giving of notice or the passage
of time, or both, could reasonably be expected to result in either (i) BXG
failing to comply with any of the financial covenants contained in Section
6.1(m) or (ii) the Borrower's inability to perform the Obligations pursuant to
the terms of the Acquisition Loan Documents; or

﻿

(b)    the legal or financial ability of the Borrower to perform the Obligations
under the Acquisition Loan Documents and to avoid any Incipient Default or Event
of Default; or

﻿

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

﻿

Maturity Date:  the first to occur of (a) April 17, 2023 or (b) the date on
which the Loan is required to be repaid pursuant to the terms of this Agreement.

﻿

 

 

 

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Maximum Disbursement Amount: as defined in Section 8.6(b) hereof.

﻿

Maximum Loan Amount:  $27,500,000.

﻿

Minimum Cumulative Semi-Annual Payments:  as defined in Section 2.7(d) hereof.

﻿

Monthly Payment Date:  the 20th day of each calendar month (or if such 20th day
is not a Business Day, then on the first Business Day thereafter).  The first
Monthly Payment Date shall be May 21, 2018.

﻿

Mortgage:  the Deed of Trust, Assignment of Leases, Rents and Proceeds, Security
Agreement, Fixture Filing and Assignment of Development Rights executed and
delivered by BVU to Lender, and recorded in the real property records of Bexar
County, Texas, as amended, supplemented, restated, replaced, or substituted from
time to time, and which encumbers among other Collateral, the Land and the
Improvements, and existing or to be developed buildings and other improvements
relating to the Property, and which among other Acquisition Loan Documents,
secures the Loan.

﻿

Obligations:  all obligations, agreements, duties, covenants and conditions of
Borrower to Lender which Borrower is now or hereafter required to Perform under
the Acquisition 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.

Owner Beneficiary:  the Purchaser under the Purchase Contract who purchases
Timeshare Inventory in the 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 related documents, which
Owner Beneficiary Rights shall specifically include as an appurtenance thereto
Vacation Points.

﻿

Parking Rights:  the parking easement rights in favor of BVU and/or the Property
arising under (i) that certain Declaration of Easements and Covenant to Share
Services and Costs for Eilan Development dated December 27, 2013, recorded in
Book 16492, Page 2345 of the real property records of Bexar County, Texas, as
amended by that certain First Amendment to Declaration of Easements and Covenant
to Share Services and Costs for Eilan Development dated July 25, 2017,

 

 

 

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recorded in Book 18653, Page 1509 of the real property records of Bexar County,
Texas, and (ii) that certain Parking Easement dated July 25, 2017, recorded in
Book 18653, Page 1496 of the real property records of Bexar County Texas, as may
be amended from time to time.

﻿

Patriot Act Certificate and Agreement:  the Patriot Act Certificate and
Agreement by and among Borrower and Lender, dated of even date herewith, as
amended, supplemented or restated from time to time.

﻿

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

﻿

Permits:  all licenses, franchises (other than the Franchise Agreement),
permits, certificates of occupancy, authorizations and approvals used in or
relating to the ownership, occupancy or operation of any part of the Hotel.    

﻿

Permitted Encumbrances:  with respect to the Collateral (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 Effective Date), and
(iii) those exceptions listed on the attached Exhibit C.

﻿

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.

﻿

Pledged Leases: as defined in Section 3.1(e) hereof.

﻿

Post-Closing Improvements: as defined in Section 8.6(a) hereof.

﻿

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

﻿

Property:  the Land and Improvements.

﻿

Property Value: as defined in Section 4.1(i) hereof.

﻿

PSA:  as defined in the Background Statements.

﻿

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

﻿

Purchase Contract:  a purchase contract by and between a Purchaser and BVU,
pursuant to which BVU has agreed to sell and a Purchaser has agreed to purchase
Timeshare Inventory 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.

﻿

 

 

 

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

﻿

Regulations: as defined in Section 5.21 hereof.

﻿

Release Payment(s):  as defined in Section 2.7(c) hereof. 

﻿

Release Percentage: with respect to each item of Timeshare Inventory and the
release of the same from the lien of the Mortgage, the following percentages, as
applicable, subject to adjustment under the conditions set forth in Section
2.7(c)(i) hereof:

﻿

(1)    prior to the time the Release Percentage is recalculated as set forth in
(2) below, the Release Percentage shall be equal to 18.7% of the sales price of
each Closing Timeshare that is sold to a Purchaser and is to be released from
the lien of the Mortgage;

﻿

(2)    Effective as of the Monthly Payment Date occurring in each of April,
July, October and January throughout the Term commencing following the making of
the first Advance, and at the written request of the Borrower to the Lender, the
Release Percentage shall be recalculated to equal (a) the then unpaid principal
balance of the Loan (plus the portion remaining to be advanced, if any) divided
by (b) the product of (i) the total unsold Vacation Points in the then
Encumbered Timeshare Product (ii) multiplied by $1.99 per Vacation Point (iii)
multiplied by 80%.  Notwithstanding periodic recalculations of the Release
Percentage, in no event shall the Release Percentage ever fall below 5% or
exceed 18.7%.

﻿

Rents: as defined in Section 3.1(e) hereof.

﻿

Request for Release of Improvement Funds: as defined in Section 8.6(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 the Timeshare Project in accordance with the
provisions and conditions set forth therein. 

﻿

Retail Merchandise:  all merchandise located at the Property and held for sale
at the Property and as sold and replenished in the ordinary course of business.

﻿

Retained Liabilities:  liabilities pertaining to any Terminated Contracts or
Hotel Contracts not assumed by Purchaser, (b) the Franchise Agreement,
Management Agreement and Tenant Lease, and (c) any liabilities with respect to
the Transferred Property accruing prior to the Cut‑off Time, unless Purchaser
receives a proration credit for such liability prior to the Cut-Off Time and
agrees to assume same at closing under the PSA.

﻿

Rooms Component: as defined in Section 8.6(a) hereof.

﻿

Sales Center Component: as defined in Section 8.6(a) hereof.

﻿

 

 

 

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Security Documents:  the Mortgage, the Assignment of Declarant’s Rights, this
Agreement and all other documents now or hereafter securing the Obligations, as
they may be from time to time be amended, supplemented or restated.

﻿

Seller:  as defined in the Background Statements.

﻿

Services Agreement:  that certain Services Agreement dated July 24, 2017 between
Seller, Tenant and LSREF2 Windmill Residences TRS, LLC.

﻿

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

﻿

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

﻿

Term:  the duration of this Agreement, commencing on the Effective Date and
ending when all of the payment Obligations under the Acquisition Loan Documents
have been Performed (other than the portion of the Obligations that survive
repayment of the Acquisition Note, such as indemnities given under the
Acquisition Loan Documents, which have not accrued prior to the repayment of the
Acquisition Note).

﻿

Terminated Contracts:  those Hotel Contracts that BVU did not assume or accept
an assignment of at the closing under the PSA.

﻿

Tenant: as defined in the preamble to this Agreement.

﻿

Tenant Lease: that certain lease agreement in effect between Seller and Tenant,
as may be supplemented and amended.

﻿

Timeshare Association:  a not-for-profit corporation to be established in the
future in accordance with the Timeshare Declaration to manage the Timeshare
Program and in which all owners of Timeshare Inventory at the Timeshare Project
will be members.

﻿

Timeshare Declaration:  a timeshare declaration to be recorded against the
Property following the Effective Date, converting the Hotel to a timeshare
regime, as such declaration is amended from time to time.

﻿

Timeshare Inventory:  a timeshare fee simple estate in the Timeshare Project as
established and provided in the Timeshare Declaration at such time as the
Timeshare Declaration has been recorded, which consists of an undivided interest
as tenant in common with other owners in the 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

 

 

 

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subject to the then existing reservation rules and regulations of the Timeshare
Association, together with all appurtenant rights and interests, including
without limitation, the right to make reservations pursuant to the reservation
system pertaining thereto, and appurtenant use rights in and to common elements
at the Timeshare Project, easements, licenses, access and use rights in and to
all of the facilities at the Timeshare Project, all of which the Purchaser
thereof directs BVU 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:  the management agreement from time to time
entered into between the Timeshare Association and the Timeshare Manager for the
management of the Timeshare Program. 

﻿

Timeshare Manager:  the Person from time to time employed by the Timeshare
Association to manage the Timeshare Program. As of the Effective Date, the
Timeshare Manager is anticipated to be Bluegreen Resorts Management, Inc., a
Delaware corporation.

﻿

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

﻿

Timeshare Program Consumer Documents: the various documents that will be used by
Borrower in connection with the credit sale of Timeshare Interests at the
Timeshare Project.  The Timeshare Program Consumer Documents will not constitute
Collateral.

﻿

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

﻿

Timeshare Project:  the Property after such time as the same has been converted
to a timeshare regime pursuant to the Timeshare Declaration. 

﻿

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

 

 

 

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﻿

Title Policy:  an extended coverage ALTA lender's policy of title insurance
(6-17-06) in an amount not less than $27,500,000 insuring that the Mortgage is a
valid first lien on the property intended to be encumbered thereby, subject only
to the Permitted Encumbrances, issued by Title Insurer and in form and substance
and with such endorsements as are reasonably acceptable to Lender, a proforma
copy of which is attached hereto as Exhibit D

﻿

Trading With the Enemy Act:  as defined in Section 5.19 hereof.

﻿

Transferred Property: the Property, the Furnishings, the Retail Merchandise, the
General Intangibles, the Warranties, the Appurtenances, the Parking Rights, the
Consumables, the Expendables, the assignable (including assignable by consent)
Hotel Contracts (other than the Terminated Contracts), the Bookings, the License
Agreement, the Services Agreement and the Permits, to the extent transferred to
BVU under the PSA.  The term “Transferred Property” shall not include Retained
Liabilities or the Terminated Contracts which were not transferred to BVU at the
closing under the PSA.

Unit:  a dwelling unit in the Timeshare Project.

﻿

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 BVU, 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.

﻿

 

 

 

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WARN Act:  Worker Adjustment and Retraining Notification Act or any state law
analogue.

﻿

Warranties:  all rights, titles and interests in and to all bonds, guarantees
and warranties, if any, issued by any manufacturer or contractor in connection
with construction or installation of equipment or any component of the
Improvements included as part of the Transferred Property.

1.2    Other Definitional Provisions. 

﻿

Capitalized terms used in this Agreement or in any Acquisition 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 Acquisition 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

﻿

2.1    Acquisition Loan.  Upon the terms and subject to the conditions set forth
in this Agreement, Lender shall loan to or for the account of Borrower, and
Borrower shall borrow and repay, the Loan in the maximum principal amount of
$27,500,000, the proceeds of which will be used by Borrower (together with
equity) for the purposes set forth in Section 2.3 below.  The Loan does not
revolve.

﻿

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

﻿

2.3    Use of Proceeds.  By way of background, Borrower has advised Lender that
the projected costs to be incurred by Borrower in connection with the closing of
the Acquisition and the Loan and in connection with the making of the
Post-Closing Improvements are as follows:

 

 

 

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﻿

AMOUNT

DESCRIPTION

$34,025,000

Purchase Price

$3,900,000

Sales Center Component of Post-Closing Improvements (See Section 8.6)

$700,000

Rooms Component of Post‑Closing Improvements (See Section 8.6)

$700,000

Estimated Closing Costs (i.e. loan fees, legal fees, title fees and other
closing costs)

$39,325,000

Total

﻿

The initial Advance will not exceed 70% of the Purchase Price and Closing Costs,
identified above (established by evidence reasonably satisfactory to Lender)
with the balance of the Purchase Price and Closing Costs to be paid by an equity
contribution made to BVU.  Subject to the conditions to an advance contained
Section 8.6, subsequent Advances (“Improvement Funds”) will be made quarterly to
fund a portion of the Post-Closing Improvements cost, as more fully set forth in
Section 8.6 hereof.  In no event shall the initial Advance cause the unpaid
principal balance of the Loan to exceed the Maximum Loan Amount and in no event
shall cumulative Advances over the Term exceed the Maximum Loan Amount. To the
extent there is cost savings in the construction of the Sales Center Component,
such savings may be reallocated to fund any cost overruns in the construction of
the Rooms Component, upon written notice to Lender. Similarly, to the extent
there is cost savings in the construction of the Rooms Component, such savings
may be reallocated to fund any cost overruns in the construction of the Sales
Center Component, upon written notice to Lender.

﻿

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

﻿

2.5    Interest.  Except as otherwise provided in the Acquisition 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 such funds.  Payments of principal and any
other amounts due and payable under the Acquisition 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.

﻿

2.6    Payments. 

﻿

(a)    Borrower agrees punctually to pay or cause to be paid to Lender all
principal and interest due under this Agreement and the Acquisition Note,
respectively, with respect to the Loan.  All payments of principal, interest and
fees on the Loan shall be made to Lender by federal funds wire

 

 

 

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transfer as instructed by Lender in immediately available funds.  If any 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 Acquisition 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.  Borrower
will pay a fee to Lender of $25.00 if Borrower makes a payment on the Loan and
the check or preauthorized charge with which Borrower pays is later dishonored. 

﻿

2.7    Minimum Required Payments.  Borrower shall make the following payments on
the Loan:

﻿

(a)    Interest Payments.  On the Monthly Payment Date beginning May 2018, a
monthly payment of interest only shall be due and payable, at the Basic Interest
Rate, on the aggregate outstanding principal balance of the Loan in an amount
equal to interest which accrued during the immediately preceding calendar month.

﻿

(b)    Reserved. 

﻿

(c)    Release Process.  In connection with each closing of a sale of an item of
Timeshare Inventory (“Closing Timeshare”), Borrower shall pay to Lender an
amount calculated in respect of each Closing Timeshare, until the earlier of the
Maturity Date or until the Loan is paid in full (as to each Closing Timeshare,
such amount is called the “Release Payment” and as to all Closing Timeshares,
the aggregate of such amounts is called the “Release Payments”).

﻿

(i)    The Release Payment per Closing Timeshare shall be an amount equal to the
greater of (a) the Release Percentage multiplied by the sales price of each
Closing Timeshare that is sold to a Purchaser or (b) an amount, calculated from
time to time by Lender in good faith, as may be necessary to cause the Loan to
be paid in full upon the initial sale of 93.8% of the total Vacation Points
(such total equaling 78,794,000 and 93.8% of such total equaling 73,908,772)
attributable to the Timeshare Inventory at the Property.  To the extent the then
Release Percentage is not adequate to meet the 93.8% sellout requirement set
forth in

 

 

 

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clause (b) above, the Release Percentage shall either be appropriately adjusted
upward in good faith or Borrower shall make a prepayment of the Loan (without a
prepayment premium) to such a degree that the 93.8% sellout requirement will be
met. To the extent that previously-sold Timeshare Inventory is recovered by
Borrower through foreclosure, forfeiture or other means (including as a trade-in
in connection with an upgrade), a Release Payment in the amount set forth above
shall be paid upon the re-sale of Timeshare Inventory; however Borrower shall
not be required to re-encumber such Timeshare Inventory under the lien of the
Mortgage when such Timeshare Inventory is recovered.

(ii)    On or before the Monthly Payment Date subsequent to the month in which
the sale of a Closing Timeshare occurs, Borrower shall deliver, or cause to be
delivered, to Lender the required Release Payment for such Closing
Timeshare.  Upon the payment of the required Release Payment, Lender shall
credit the Release Payment as provided in Section 2.10.  Borrower acknowledges
that Lender shall have no obligation to execute or deliver or authorize the
recording of any partial release of the Mortgage related to a Closing Timeshare
prior to Lender's receipt of the Release Payment for such Closing Timeshare in
good collected funds in U.S. dollars.  In connection with the sale of a Closing
Timeshare to a Purchaser, Lender agrees to execute and deliver to Borrower the
partial release referenced below, pursuant to which the security interest in
such Closing Timeshare created by the Mortgage will be released if, and only if,
all of the following conditions have been satisfied:

(A)    The full Release Payment in respect of such Closing Timeshare shall have
been paid to and received by Lender in good and collected funds; and

(B)    If the Closing Timeshare is subject to the lien of the Mortgage, a
partial release of Mortgage, in the form attached hereto as Exhibit E shall have
been completed by Borrower and submitted to Lender with the aforesaid request,
and Lender or Lender's attorneys, shall have reasonably approved the form of
legal description to be included in such partial release.

Borrower shall bear the responsibility of recording any and all documents
executed and delivered pursuant to this section.  Borrower shall also pay all
escrow costs and recording and transfer costs in respect to such documents.

(iii)    For the avoidance of doubt, and notwithstanding anything to the
contrary set forth in this Agreement or the other Acquisition Loan Documents,
(A) the Timeshare Program Consumer Documents are not secured by the Mortgage or
by the other Acquisition Loan Documents and (B) Retail Merchandise, Consumables
and Expendables may be utilized, sold or otherwise disposed of in the ordinary
course of business, free of the lien of the Mortgage and other Acquisition Loan
Documents and without the payment of a Release Payment.

(d)    Minimum Principal Reductions.  Borrower hereby agrees to pay to Lender,
by each Semi-Annual Payment Date (set forth in the table below), cumulative
principal reduction payments equal to at least the amounts set forth in the
table below (the “Minimum Cumulative Semi-Annual Payments”). The first
Semi-Annual Payment Date will occur in October 2018.  Release Payments paid by
Borrower on or prior to a Semi-Annual Payment Date and previously paid Minimum
Cumulative Semi‑Annual Payments paid by Borrower prior to a particular
Semi-Annual Payment Date

 

 

 

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shall be taken into account in determining whether or not Borrower has paid the
required Minimum Cumulative Semi-Annual Payment. The Minimum Cumulative
Semi-Annual Payments shall be in addition to any interest owed or paid to Lender
pursuant to the Acquisition Loan Documents.

﻿

Semi-Annual Payment Date

Minimum Cumulative Semi-Annual Payment

The date that is 6 months after the Effective Date

$350,000

The date that is 12 months after the Effective Date

$2,700,000

The date that is 18 months after the Effective Date

$4,825,000

The date that is 24 months after the Effective Date

$6,950,000

The date that is 30 months after the Effective Date

$10,100,000

The date that is 36 months after the Effective Date

$13,250,000

The date that is 42 months after the Effective Date

$16,675,000

The date that is 48 months after the Effective Date

$20,100,000

The date that is 54 months after the Effective Date

$23,800,000

Maturity Date

$27,500,000

﻿

In the event at the end of any semi-annual time period (i.e. the Semi-Annual
Payment Date), the required Minimum Cumulative Semi-Annual Payment has not
occurred, Borrower shall pay any shortfall to Lender within 20 days thereafter,
other than the payment due on the Maturity Date which shall be due on that date,
with no 20-day extension.  All such payments of principal will be applied by
Lender as provided in Section 2.10.

﻿

(e)    Reserved. 

﻿

(f)    Final Payment.  The entire outstanding principal amount of the Loan,
together with all other monetary Obligations due in respect of the Loan, shall
be paid in full by not later than the earliest of: (i) the Maturity Date or (ii)
the occurrence of an Event of Default (and Lender's election to accelerate the
Loan).  

﻿

2.8    Prepayment.  Borrower may prepay the Loan, in full or in part, at any
time, without any prepayment premium or penalty.

﻿

2.9    Loan Fee .   A fee of $309,375 (which is equal to one and one-eights
percent (1.125%) of the amount of the Loan (i.e. $27,500,000)) shall be paid to
Lender by Borrower (the “Loan Fee”), concurrently with the Closing of the
Loan.  The Loan Fee was fully earned as of the Effective Date in consideration
for Lender's agreement to make the Loan to Borrower 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.

﻿

2.10    Application of Proceeds of Collateral and Payments.  Notwithstanding
anything in the Acquisition Loan Documents to the contrary, the amount of all
payments or amounts received by Lender with respect to the Loan 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 under the Acquisition

 

 

 

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Loan Documents in connection with the Loan; and (c) to the unpaid principal
balance of the Loan.  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
Acquisition 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 Acquisition 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 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 Acquisition Loan Documents as to the application of
proceeds of the Collateral following an Event of Default.

﻿

2.11    Reserved.  

﻿

2.12    Reserved. 

﻿

2.13    Release of Mortgage.  Notwithstanding anything to the contrary in this
Agreement, upon payment in full of all amounts owed under this Agreement (other
than obligations intended to survive the repayment of the Acquisition Note),
Lender shall promptly release the lien of the Mortgage and shall terminate all
financing statements and other documents or instruments relating to the
Collateral and take such other actions as may be necessary to release any such
Collateral from Lender's lien at the sole cost and expense of Borrower.

﻿

3.    SECURITY

﻿

3.1    Grant of Mortgage and Security Interests.  To secure the payment and
performance of the Loan and the other Obligations, for value received, BVU
unconditionally and irrevocably mortgages, assigns, pledges and grants to Lender
a continuing first priority mortgage and security interest in and to and lien
upon all of Borrower’s rights, title and interest in and to the Transferred
Property together with all of the following, whether now owned or existing or
hereafter acquired or arising (the Transferred Property together with the
following, collectively, the “Collateral”) (subject however to the release of an
item of Timeshare Inventory from the lien of the Mortgage under the conditions
set forth in Section 2.7(c) hereof):

 

(a)    The Property or portions thereof, as may be subsequently described based
on platting or re-platting, and as the Property or portions thereof may be
converted into a condominium or timeshare form of ownership, and developed,
improved and configured, and including all structures, installations, fixtures
and improvements now or hereafter erected, installed or located on the Land, and
the utilities, utility agreements, water and sewer capacity reservation
agreements, land use, zoning, vested rights and other governmental approvals,
entitlements, special exceptions or variances relating to the Property and all
tenements, hereditaments, easements, riparian and other rights and appurtenances
pertaining to or benefiting the Property, whether now owned or existing or
hereafter

 

 

 

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arising and acquired, and all present or future rights, title and interests in
and to condominium or interval ownership (timeshare) property or developer
retained property on the Property, and common elements, as may be established
from time to time in connection with any condominium or timeshare regime,
together with all existing or arising appurtenant rights and interests, and
appurtenant and easement or related rights in and to the common elements, common
areas or common amenities, each as may be established by any condominium or
timeshare plan, and including any existing or future parking areas, recreational
areas and amenities, roadways and walkways, lobby and common areas, and all
installations, fixtures and improvements presently existing or hereafter
constructed, erected, installed or located in or on or appurtenant to the
Property;

﻿

(b)    Easements, servitudes, licenses, leasehold interests (whether as lessor
or lessee), and access and use rights in and to all Property facilities and
amenities, and further including all rights of way, strips, gores of land,
streets, ways, passages, alleys, and transport systems, and all water rights,
mains, lines, laterals and any storm water, wastewater or sanitary sewer
systems, installations, or fixtures, and related rights, and all riparian
rights, appropriative rights, irrigation rights, water allocations and water
stock, and all other utilities, utility agreements, easements, access and use
agreements or licenses, water, sewer and other facilities, capacities,
reservations, rights or deposits, and all related agreements and development
orders or approvals, and all rights, title, licenses, permits or rights in, to
or with respect to mineral, oil, gas or other hydrocarbons on, in or beneath the
Property, along with rights of surface or subsurface entry, and other rights and
appurtenances, tenements and hereditaments pertaining to or benefiting the
Property; 

﻿

(c)    The utilities, utility agreements, “will-serve” agreements, tenements,
hereditaments, easements, access and use agreements or licenses, water, sewer
and other facilities, capacities, reservations or deposits, and all related
agreements, and riparian and other rights and appurtenances pertaining to or
benefiting the Property;

﻿

(d)    All post-closing obligations owed by Seller and Tenant to BVU under the
PSA, including all rights under any post-closing covenants, representations,
warranties and indemnities which survive the closing of the Acquisition;

﻿

(e)    All written or unwritten tenancies, leases, subleases, rentals, rental
agreements, licenses (including any liquor licenses, to the extent assignable by
law), arrangements or obligations, or leasehold interests of, from or pertaining
to the Property or other agreement which grant a possessory interest in and to
or right to use the Property, whether BVU is landlord, tenant or other party
(all of the foregoing, collectively, “Pledged Leases”), and all rents, deposits,
credits, issues, income, accounts, profits, concessions, entry fees, revenues,
royalties, proceeds and benefits thereof or with respect thereto or deriving
therefrom, all damages received upon the occurrence of a default under any of
the Pledged Leases and all proceeds payable under any policy of insurance
covering loss of rents with respect thereto (collectively, “Rents”);

﻿

(f)    All credits, fees, rebates, revenues, payments, monies, contract
rights,  deposits, options, privileges and rights of BVU under or with respect
to the overall development of the Property, including all monetary deposits
which BVU has been required to give to any public or private utility with
respect to utility services furnished to the Property, and all fees paid to or
on behalf of

 

 

 

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governmental or quasi‑governmental agencies, for whatever purposes and by
whatever means, together in any case with all rights to receive a refund of such
monetary deposits;

﻿

(g)    All owned or leased furniture, furnishings, fixtures, equipment and
machinery of every kind and description located in or on or used in connection
with the Property;

﻿

(h)    Rights and benefits in, to and under heating, ventilating and air cooling
and air conditioning equipment and apparatus, electrical equipment,
switchboards, plumbing equipment, lifting apparatus, gas and electric fixtures
and installations, elevators, escalators, fittings and machinery, together with
any and all replacements thereof, substitutions therefor and additions thereto;

﻿

(i)    All management, maintenance, service, utility, development, amenities
(including golf course access and use), amenity usage, security or technical
service and other agreements or arrangements relating to the use, occupancy,
maintenance, construction, management, operation, service or enjoyment of or the
sale of timeshare interests from, the Property, or relating to BVU’s business at
the Property, and any agreements guaranteeing the performance of any of them,
unless such agreement are subject to the negative pledge as set forth in Section
6.2(e) hereof;

﻿

(j)     Any casualty, hazard, liability, builders’ risk, business interruption
or other insurance and insurance policies, including payment, performance and
completion bonds, insuring against claims or loss with respect to the Property
or the other Collateral, or for business interruption or otherwise relating to
BVU or its business at the Property;

﻿

(k)    Documents, instruments, goods, equipment, accounts, accounts receivable,
inventory, supplies, chattel paper, general intangibles, contract rights and
agreements relating to the use, occupancy, maintenance, sale, or enjoyment of
the Property, including contracts for sale of any portion of the Property and
receivables deriving therefrom, and any other tangible or intangible personal
property located at, arising out of, or used or useful in connection with the
Property, relating to the Property, or the other Collateral, and all payments or
proceeds (exclusive of the Timeshare Program Consumer Documents);

﻿

(l)    Extensions, additions, improvements, accessions, betterments, renewals,
substitutions and replacements of, for or to any of the Collateral, wherever
located, together with the products, proceeds, issues, rents and profits
thereof, including insurance proceeds and the proceeds of any condemnation or
eminent domain awards, or any agreements in lieu of condemnation of eminent
domain, or in respect of injury or waste to, or taking of, or decrease in value
of, the Property, and of any claims or rights regarding any of the other
Collateral;

﻿

(m)    All books and records, and all written or computer information, computer
tapes, disks and software relating to the Collateral;

﻿

(n)    The right of BVU to collect and receive all sums which may be due to BVU
or which BVU may have or thereafter become entitled to demand or claim under the
any of the foregoing;

﻿

(o)    The rights of BVU to terminate, perform, compel the performance of or
exercise remedies under, any of the foregoing; and

 

 

 

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﻿

(p)    All replacements and substitutions for, modifications of, supplements,
addenda and additions to, the foregoing.

﻿

3.2    Perfection.  BVU agrees, at its own expense, to execute, deliver and
record/file the Mortgage and the financing statements provided for by the Code
and to take such other action as may be required to perfect and continue the
perfection of the Mortgage and security interests in the Collateral, including,
without limitation, executing, delivering, and recording/filing any and all
other instruments or documents required by Lender.

﻿

3.3    Location.  All tangible Collateral which is personal property is to
remain at all times at the Property, and Borrower may not transfer the
Collateral from such premises without the prior written approval of Lender,
which will not be unreasonably withheld or delayed.  Notwithstanding the
foregoing, BVU shall have the right to sell, consume, replace and replenish
items of Collateral in the nature of Furnishings, Consumables, Retail
Merchandise and Expendables (constituting part of the Transferred Property and
those subsequently acquired by BVU), in the ordinary course of business, and
modify, cancel and renew Hotel Contracts (constituting part of the Transferred
Property and those arising after the Effective Date), in the ordinary course of
business, without the prior written consent of Lender.

﻿

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

﻿

4.    CONDITIONS PRECEDENT TO ADVANCE; METHOD OF DISBURSEMENT

﻿

4.1    Closing 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)    Checklist Items.  Lender shall have received those documents,
instruments, information and other items of due diligence listed on the Closing
Checklist attached hereto as Exhibit F and each of the agreements to be
delivered thereunder shall be in full force and effect, unless otherwise agreed
in writing by Lender.

﻿

(b)    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 Lender in connection with the documentation, negotiation,
and closing of the Loan, including the Loan Fee, all reasonable attorneys' fees
and expenses and all recording fees, taxes, title premiums, and other expenses
associated therewith.

﻿

(c)    Litigation.  Except as disclosed in BXG’s most recent SEC filing and as
otherwise disclosed to Lender in the Litigation Summary attached hereto as
Exhibit G approved by Lender, there shall be no bankruptcy, foreclosure action
or other material litigation or judgments pending or outstanding against
Borrower or any Affiliates (each a “Material Party”), or the Property.  Material

 

 

 

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litigation shall not include matters in which (a) a Material Party is plaintiff
and no counterclaim is pending or (b) Lender determines in its sole discretion
that such litigation is immaterial due to settlement, insurance coverage,
frivolity or amount of claim.

﻿

(d)    Closing of Acquisition.  All conditions precedent to the closing of the
Acquisition are satisfied (or waived with the prior written approval of Lender)
and the Seller is irrevocably committed to transfer the Transferred Property to
Borrower contingent solely upon payment of the applicable purchase price
contained in the PSA. All of the deliverables required of the Seller under
Section 6.5 of the PSA have delivered in the manner contemplated under that
section.  Other than to the extent disclosed to Lender in writing prior to the
Closing to Borrower’s knowledge, Seller has performed all of the obligations of
Seller that were required to be performed by it prior to the closing under the
PSA.

﻿

(e)    No Prohibited Actions.  Borrower shall not have taken any action or
permitted any condition to exist which would have been prohibited by any
provision of or constitute an Event of Default under the Acquisition Loan
Documents if such documents had been binding and effective.

﻿

(f)    Borrower Equity.  Lender shall have received satisfactory evidence
immediately prior to the closing of the Acquisition, that Borrower has deposited
with the escrow agent handling the Acquisition the amount necessary to close the
Acquisition (after taking into account the funding of the Loan) as more fully
reflected in its settlement statement prepared by such escrow agent and approved
by Lender.

﻿

(g)    Terms and Conditions.  Immediately prior to the closing of the
Acquisition, the terms and conditions to closing set forth in this Agreement and
the other Acquisition Loan Documents shall have been satisfied, all covenants
and agreements to have been complied with and performed by Borrower shall have
been fully complied with and performed to the satisfaction of Lender, and the
representations and warranties contained in the Acquisition Loan Documents shall
be true and correct in all material respects.

﻿

(h)    Loan Documents.  At Closing, Borrower shall have duly authorized,
executed, acknowledged and delivered to Lender and, where required, recorded,
all of the Acquisition Loan Documents and all documentary stamp taxes,
intangible taxes and other taxes, fees and expenses shall have been fully paid
by the Borrower.  All Acquisition Loan Documents shall be in form and content
satisfactory to Lender.

﻿

(i)    Appraisal.  Lender shall have received an appraisal of the Property, from
an appraiser selected by Lender and in form and content and with an effective
date satisfactory to Lender, reflecting (i) the “as-completed” value of the
Property as a vacation ownership timeshare resort, including the value of all
commercial space at the Property and the improvements to be undertaken by
Borrower, less (ii) the value of personal property and other furniture, fixtures
and equipment contained in the Property (the “Property Value”). The appraisal
shall demonstrate that the Loan to Value does not exceed 75%. As used herein,
the term “Loan to Value” means the ratio, expressed as a percentage, determined
by dividing (i) the amount of the Loan (i.e. $27,500,000) by (ii) the
as-completed Property Value.  Such appraisal shall comply with all federal and
state standards for appraisals and otherwise

 

 

 

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shall be satisfactory to Lender in all material respects.  Borrower agrees to
pay the costs and expenses for all appraisals and reviews thereof as ordered by
Lender pursuant to this paragraph.

﻿

(j)    Title Policy.  Title Insurer is irrevocably committed to issue the Title
Policy to Lender.

﻿

(k)    Franchise Agreement.  That certain Autograph Collection Hotel Franchise
Agreement between Marriott International, Inc., as franchisor, and Tenant, as
assignee from LSREF2 Windmill REO, (Eilan Land), LLC, as franchisee, is
terminated, subject only to the payment of a termination fee, as outlined in the
PSA, (which termination fee, Borrower agrees to pay or cause to be paid at the
Closing.)

﻿

4.2    Closing.  Subject to satisfaction of all of the foregoing conditions to
closing relating to the Loan, “Closing” under the Loan shall occur on April 17,
2018.  Such Closing shall occur at a place designated by mutual agreement of
Borrower and Lender, and may occur pursuant to escrow arrangements agreed to by
Lender. 

﻿

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.

﻿

5.1    Good Standing.  Borrower is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and is in good
standing and authorized to do business in each jurisdiction where at any time
the location or nature of its properties or its 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 Borrower or the validity or enforceability of the Acquisition Loan
Documents.  Borrower has full power and authority to carry on its business and
own its property. 

﻿

5.2    Power and Authority; Enforceability.  Borrower has full power and
authority to execute and deliver the applicable Acquisition Loan Documents and
to Perform the Obligations, and to own, pledge, mortgage, hypothecate and
otherwise encumber and operate its property, including the Collateral.  BVU has
the full power and authority to execute and deliver the PSA and to perform its
obligations thereunder.  All action necessary and required by Borrower's
Articles of Organization and all other Legal Requirements for Borrower to obtain
the Loan and close the Acquisition, and for Borrower to execute and deliver the
Acquisition Loan Documents and all other documents and instruments which have
been or will be executed and delivered in connection with the Acquisition Loan
Documents and to Perform the Obligations has been duly and effectively
taken.  The applicable Acquisition Loan Documents are and, to Borrower's
knowledge, shall be, legal, valid, binding and enforceable against Borrower and
do not violate the Applicable Usury Law and the execution and delivery of the
applicable Acquisition Loan Documents by Borrower does not constitute a default
or result in the imposition of a lien under the terms or provisions of any
agreements to which Borrower 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 Acquisition Loan
Documents or to the closing by BVU of the Acquisition.

 

 

 

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﻿

5.3    Borrower's Principal Place of Business.  Borrower's principal place of
business and chief executive office are as follows:   C/O Bluegreen Vacations
Corporation, 4960 Conference North, Suite 100, Boca Raton, Florida,
33431.  During the past five (5) years, Borrower has not been known by any other
name (exclusive of fictitious names and "d/b/a's") other than as set forth in
Exhibit H or located in any address other than as set forth in this Agreement.

﻿

5.4    Collateral. 

﻿

(a)    Title.  Borrower has and will have good and marketable title to the
Collateral, free and clear of any lien, security interest, charge or encumbrance
except for (i) the security interest created by this Agreement or otherwise
created in favor of Lender, (ii) the sale of Consumables, Retail Merchandise and
Expendables in the ordinary course of business, and (iii) the Permitted
Encumbrances.   After Closing of the Acquisition, no financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
Lender.  Borrower shall defend Lender against and save Lender harmless for, from
and against all claims of any Persons other than Lender with respect to the
Collateral, and this indemnity shall include all reasonable attorneys’ fees and
legal expenses incurred by Lender in connection therewith.

﻿

(b)    Perfection of Security Interest.  The execution and delivery of this
Agreement and the other Acquisition Loan Documents, the filing or recording of
UCC‑1 Financing Statements and, if required, UCC‑3 amendments in the applicable
public records in Florida and the recording in the public records in Bexar
County, Texas of the Mortgage and the fixture filing will create in favor of
Lender a valid and perfected continuing first priority security interest in the
Collateral.  The Collateral secures and shall secure the full payment and
performance of the Obligations.

﻿

5.5    No Misrepresentations.  The Acquisition Loan Documents and all
certificates, financial statements and written materials furnished to Lender by
or on behalf of Borrower 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 the Property, the Collateral, the business or financial
condition of Borrower, or the ability of Borrower to Perform the
Obligations.  All financial statements furnished to Lender by or on behalf of
Borrower in connection with the Loan will be prepared in accordance with GAAP. 

﻿

5.6    No Default for Third Party Obligations.  Borrower is not 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. 

﻿

5.7    Payment of Taxes and Other Impositions.  Borrower has filed all tax
returns and have paid all Impositions, if any, required to be filed by it or
paid by it when due, including real estate taxes and assessments relating to the
Property or the Collateral, after the Closing of the Acquisition, unless the
same is being appealed or contested in good faith and unless as a result of such
appeal, the

 

 

 

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execution and enforcement of such taxes and assessments is stayed pending the
outcome of such appeal. 

﻿

5.8    Governmental Regulations.  Borrower is not 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.

﻿

5.9    Employee Benefit Plans.  BVU 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.  BXG has a pension, profit
sharing or other compensatory or similar plan of BXG (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 BXG
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 BXG 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 Acquisition Loan Documents 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.  BXG 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 BXG as that term is defined in Section 406 of the
Pension Reform Act, except a prohibited transaction that qualifies for an
exemption under the Pension Reform Act.  BXG 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 BXG
pursuant to Section 4068 of the Pension Reform Act.

5.10    Securities Activities.  Borrower is not engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any “margin stock” (as 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

 

 

 

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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.

5.11    Minimum Number of Vacation Points. Following conversion of the Hotel to
timeshare use, the Property shall yield no fewer than 78,794,000 Vacation
Points.

﻿

5.12    Common Enterprise.  To the extent that more than one Person is named as
Borrower hereunder, each such Borrower acknowledges that the successful
operation and condition of Borrowers are partially dependent on the continued
successful performance of the functions of the Borrowers as a whole and the
successful operation of each Borrower is dependent on the successful performance
and operation of the other Borrowers.  Each Borrower expects to derive benefit
(and the board of directors or other governing body of each such Borrower has
determined that it may reasonably be expected to derive benefit), directly and
indirectly, from the credit extended by Lender hereunder, both in their separate
capacities and as members with the other Borrowers of an interrelated group of
companies.  Each Borrower has determined that execution, delivery and
performance of this Agreement and any other Acquisition Loan Documents to be
executed by such Borrower is within its corporate or company purpose, will be of
direct and indirect benefit to such Borrower and is in its best interest. 

5.13    Representations as to the Property.

﻿

(a)    Access.  The Property (including all amenities) has access over easements
to a publicly dedicated road and all roadways, and parking lots that serve the
Property are and will be common elements or easement parcels appurtenant to the
Property.

﻿

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

﻿

(c)    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 the Property have been or
will be promptly and timely paid.

﻿

(d)    Zoning Laws, Building Codes, Etc.  The Property has been, and Borrower
hereby covenants that all future improvements to the Property (including,
without limitation, the Post-Closing Improvements) 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 for the
existing improvements to the Property have been issued by the appropriate
governmental authority.

﻿

5.14    Litigation and Proceedings.  Other than as disclosed in Exhibit G, and
other than as disclosed in BXG’s most recent SEC filing and quarterly updates
thereafter, there are no actions, suits, proceedings, orders, injunctions,
bankruptcy actions, or foreclosure actions pending or, to the

 

 

 

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knowledge of Borrower, threatened, in any court, at law or in equity, or before
or by any governmental authority, against or affecting Borrower, the Vacation
Club, the Timeshare Manager, Bluegreen Inc. or the Property, which, if adversely
determined, would result in a Material Adverse Change to Borrower, the Vacation
Club, the Timeshare Manager, Bluegreen Inc. or the Property or which would
materially impair the ability of Borrower to complete its Obligations under the
Acquisition Loan Documents and PSA (as to BVU), or which would attack the
validity, enforceability, or priority of any of Lender's liens or of any
material provisions of the Acquisition Loan Documents, at law or in
equity.  None of the matters reflected on Exhibit G or as disclosed in BXG’s
most recent SEC filing are reasonably expected to result in a Material Adverse
Change to Borrower, the Vacation Club, the Timeshare Manager, Bluegreen Inc. or
the Property or are reasonably expected to materially impair the ability of
Borrower to complete its or their Obligations under the Acquisition Loan
Documents, or would attack the validity, enforceability, or priority of any of
Lender's liens or of any material provisions of the Acquisition Loan Documents,
at law or in equity.  Borrower has not received any notice the import of which
would result in a Material Adverse Change to its financial condition or the
performance of its Obligations, or to the Property 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 filings made with the United States Securities &
Exchange Commission and related to BXG, Borrower shall be deemed to be in
compliance with this Section 5.14.

﻿

5.15    Subsidiaries, Affiliates and Capital Structure.  BVU is wholly‑owned by
BXG.  Lender acknowledges that BXG is publicly traded.

﻿

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

﻿

5.17    No Material Adverse Change in Financial Condition.  There has been no
Material Adverse Change in the financial condition of Borrower or
its subsidiaries since the date of the most recent financial statements
delivered to Lender.

﻿

5.18    Brokers; 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
indemnify 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. 

﻿

5.19    Foreign 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

 

 

 

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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 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; and (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. 

5.20    Reserved. 

5.21    Acquisition. Borrower has performed to its satisfaction such
investigations, inspections, analyses and research of the Property concerning
the condition, ownership, use and operation of the Property, including, but not
limited to, investigations, inspections, analyses and research of: (i) present
and future laws, statutes, rules, regulations, ordinances, limitations,
restrictions or requirements concerning the use, location and suitability of the
Property or any existing or proposed development or build-out or condition
thereof (collectively, “Regulations”), including, but not limited to, zoning,
environmental and other such Regulations; (ii) the necessity and availability of
any building permits, environmental impact reports, or any other governmental
permits, approvals, entitlements or acts in respect of the Property
(collectively, “Approvals”); (iii) the necessity or existence of any
dedications, fees, charges, costs or assessments that may be imposed in
connection with any Regulations or the obtaining of any Approvals; (iv) the
economic value of the Property; (v) the seismic and structural integrity of the
improvements forming the Property; (vi) any surface, soil, subsoil, geologic or
ground water conditions or other physical conditions of or affecting the
Property; (vii) the extent or condition of title to the Property and the extent
of existing encumbrances against the Property; (viii) the operation and
management of the Hotel; (ix) any labor union or employment matters affecting
the Hotel; (x) the terms and conditions of the Hotel Contracts, and (xi) the
presence, use, transportation or storage of hazardous materials on, over, under
or nearby the Property. To the extent that Borrower has learned of any material
adverse matters as a result of such investigations, inspections, analyses and
research, Borrower has disclosed such adverse matters to Lender in writing prior
to the Closing.  Borrower has disclosed to Lender in writing prior to the
Closing, any material obligations of Seller or Tenant that were required to be
performed by it prior to the closing under the PSA, that were either not
performed

 

 

 

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or waived by Borrower that would affect BVU’s right to purchase the Transferred
Property.  To the actual knowledge of Borrower, there are no condemnation
proceedings relating to the Property that are either pending or threatened.

5.22    Survival 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 Acquisition Loan Documents.

6.    COVENANTS

﻿

6.1    Affirmative Covenants.

﻿

(a)    Good Standing.  Borrower will maintain its 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.  Borrower will 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 the Acquisition Loan Documents 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 Texas
and all other jurisdictions in which Timeshare Inventory 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 Property, 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 Property by
fire and other hazards covered by such insurance (with deductibles reasonably
acceptable to Lender).  All such insurance shall be payable to Lender under a
standard mortgagee loss payable endorsement.  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,

 

 

 

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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 $10,000,000 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 Property 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
“Probable 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 which shall not
be unreasonably withheld.  Such companies should be authorized to insure
property located in the State of Texas.  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 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

 

 

 

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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 Property is damaged or destroyed, the provisions of the Mortgage shall
govern the repair and restoration obligations and the disposition of insurance
proceeds.

(vi)    Condemnation.  Borrower shall immediately notify Lender of the
institution of any proceeding for the condemnation or other taking of the
Property or any portion thereof.  The provisions of the Mortgage shall govern
the repair and restoration obligations and the disposition of condemnation
proceeds.

(d)    Reports.  Borrower shall keep adequate records and books of account
reflecting all financial transactions of Borrower and with respect to the
Property, 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:

(i)    Inventory Reports.  Once sales of Timeshare Inventory have commenced,
within 30 days after the end of each calendar quarter, a quarterly report
showing (with respect to the Encumbered Timeshare Product): (i) all sales of
Timeshare Inventory (including cash sales); (ii) all remaining available
inventory of Units and Timeshare Inventory; and (iii) a schedule of sales prices
per Vacation Point (based on historical data).  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 BXG (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 BXG:  (i) the balance sheets of BXG 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 BXG and prepared on a consolidated basis, 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 BXG, describing in reasonable detail each
such debt or loan outstanding and

 

 

 

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the principal amount with respect to each such debt or loan.  The annual
financial statements for BXG 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 I.

(v)    Reserved.   

(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
the Property (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.

(vii)    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.

(viii)    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 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 is taking or proposes
to take with respect thereto.

(ix)    Material Adverse Developments.  Promptly upon becoming aware of any
development or other information which may result in a Material Adverse Change
to the Borrower, the Timeshare Association, the Property, the Collateral or the
business, prospects, profits or condition (financial or otherwise) of the
Borrower or the ability of the Borrower 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.

(x)    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 the Timeshare Declaration and/or the
Timeshare Association's Articles of Incorporation or By-Laws, whether in its
capacity as Declarant, owner of a Unit, owner of Timeshare Inventory or
otherwise.  Promptly upon request of Lender, Borrower shall furnish to the
Lender such other reports, statements, notices or written communications
relating to the

 

 

 

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Borrower, the Property, the Timeshare Association or the Loan as the Lender may
require, in its reasonable discretion.

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

(xii)    State Audits.  Within twenty (20) days following its availability, any
audit reports prepared by any state regulatory agency with respect to the
Property.

(xiii)    Annual Timeshare Association Financial Statements.  Borrower shall
deliver to Lender, as soon as available and in any event within one hundred
eighty (180) days after the end of each fiscal year: (a) the income and retained
earnings statements of the Timeshare Association, for such fiscal year, (b) the
balance sheets of the Timeshare Association as at the end of such fiscal year,
and (c) the audited statements of cash flow of the Timeshare Association for
such fiscal year; setting forth in comparative form the corresponding figures as
at the end of the previous fiscal year, all in reasonable detail, including all
supporting schedules and comments.  Such statements shall be prepared in
accordance with GAAP.  Such statements shall be audited by Templeton & Company
or another independent certified public accountant of recognized standing
acceptable to Lender, with respect to which such accountants shall deliver their
unqualified opinion. 

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

﻿

(e)    Reserved.  

﻿

(f)    Payment of Taxes.  Borrower will file all tax returns and will pay all
taxes and assessments, if any, required to be filed by it or paid by it when
due, including real estate taxes and assessments relating to the Property 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 Acquisition 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 Acquisition 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.    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

 

 

 

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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 Acquisition 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 the Timeshare Association to (A) discharge its obligations
under the applicable Timeshare Program Governing Documents and (B) maintain a
reasonable reserve for capital improvements to the Timeshare Project.  Borrower
will pay the maintenance fees and assessments on its unsold Timeshare Inventory
when due.

(k)    Maintenance of Property and Other Property.  Borrower will maintain or
use reasonable efforts to have others maintain, in good condition and repair the
Property and all common areas in the Property and other on-site amenities which
have been or will be promised or represented as being available to
Purchasers.  Borrower will maintain or cause the Timeshare Association to
maintain a reasonable reserve to assure compliance with the terms of the
foregoing sentence.

﻿

(l)    Maintenance of Larger Tract.  To the extent that the Property 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 the Property,
Borrower will pay its commercially reasonable share of common expenses to be
allocated to the Property.  Borrower will use commercially reasonable efforts to
cause all such property which is not part of the Property to be professionally
managed in a first class manner substantially similar to the manner in which the
Property is managed.

﻿

(m)    Financial Covenants.  Throughout the Term, BXG shall maintain a Tangible
Net Worth of not less than $239,000,000, 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 BXG. 

(n)    Exchange Affiliation.  Promptly upon written request, Borrower shall
provide Lender with evidence that the Timeshare Project is affiliated with a
nationally recognized exchange program at such time as the Property has been
converted to timeshare use.

(o)    Right to Inspect.  Borrower will permit Lender and its representatives
and consultants at all reasonable times to inspect the Property and to inspect
and audit Borrower's books,

 

 

 

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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 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(o), unless authorized to
do so in writing by the Borrower. 

(p)    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 the Timeshare Association
may be responsible for the management of the 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 Timeshare Project and as the
Vacation Club Manager. 

(q)    Reserved. 

(r)    Reserved. 

(s)    Reserved.  

(t)    Purchase and Sale Agreement.  BVU agrees to diligently enforce all
post-closing obligations owed to it by Seller and/or Tenant under the PSA,
including indemnity obligations and obligations arising from breaches of any
representations and warranties.  Without Lender’s prior written consent, BVU
agrees not to waive any rights it has against Seller or Tenant under the
PSA.  BVU hereby appoints Lender as its true and lawful attorney-in-fact, with
full rights and powers, for purposes of enforcing BVU’s rights against the
Seller and Tenant under the PSA in the name of BVU or Lender, upon the
occurrence and during the continuance of an Event of Default.  This power of
attorney is coupled with an interest and is irrevocable.  The foregoing power of
attorney is material inducement to the agreement of Lender to enter into this
Agreement and to consummate the transaction contemplated hereby.  Any proceeds
received by Lender as a result of the exercise of exercise of such an
enforcement action, during the pendency of an Event of Default, shall be paid to
Lender and applied against the outstanding Obligations.

﻿

(u)    WARN Act.  BVU shall (i) rehire and continue to employ a sufficient
number of Hotel employees after the closing under the PSA so as to prevent the
application of the WARN Act

 

 

 

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or (ii) timely pay any amounts owed to the Hotel employees and any other costs,
fees and penalties arising from BVU's violation of the WARN Act.

(v)    Timeshare Association.  Lender acknowledges that at the time of the
execution of this Agreement, no Timeshare Association has been formed with
respect to the Timeshare Project and the covenants, representations, warranties
and other provisions contained this Agreement and the other Acquisition Loan
Documents that pertain to or are intended to bind a Timeshare Association are
presently of no force or effect, given the absence of a Timeshare
Association.  However, in the event Borrower subsequently forms a Timeshare
Association for the Timeshare Project, such covenants, representations,
warranties and other provisions contained this Agreement and the other
Acquisition Loan Documents that pertain to or are intended to bind a Timeshare
Association shall then become applicable to such Timeshare
Association.  Borrower agrees to give Lender prompt written notice at such time
as a Timeshare Association has been formed and promptly furnish Lender with a
copy of the filed Articles of Incorporation (certified by the filing office) and
Bylaws (certified by an officer) for the Timeshare Association.

(w)    Timeshare Declaration.  Lender acknowledges that at the time of the
execution of this Agreement, no Timeshare Declaration has been recorded against
the Land and all references to a Timeshare Declaration that are contained in
this Agreement and the other Acquisition Loan Documents are presently of no
force or effect, given the absence of a Timeshare Declaration.  However, in the
event Borrower subsequently prepares a Timeshare Declaration for recording
against the Land, such references shall then become applicable to such Timeshare
Declaration.  Borrower agrees to give Lender prompt written notice at such time
as Borrower intends to record a Timeshare Declaration against the Land and
promptly furnish Lender with a copy of the unrecorded Timeshare Declaration for
Lender’s review and approval before the same is recorded against the Land and
upon Lender’s reasonable approval of such Timeshare Declaration and related
documents, Lender shall execute a consent to such Timeshare Declaration for
recording in the public records. Furthermore, at such time as the Timeshare
Declaration is recorded, BVU agrees to collaterally assign its declarant’s
rights to Lender as further security for the payment and performance of the
Obligations, pursuant to the Collateral Assignment of Declarant’s Rights, in a
form reasonably acceptable to Lender and Borrower, which assignment will be
recorded in in the Official Public Records of Bexar County, Texas.

(x)    Timeshare Project. For the avoidance of doubt, all provisions of this
Agreement and the other Acquisition Loan Documents that are applicable to the
Property shall also apply to the Timeshare Project at such time that the
Timeshare Project exists.

6.2    Negative 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.  BVU's
business shall include the development, construction, ownership, management and
sale of Timeshare Inventory in the Timeshare Project, and in such other
timeshare projects as it may develop, construct, own, manage and sell from time
to time.

﻿

 

 

 

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(b)    Restrictions on Additional Indebtedness.  Subject to the additional
restrictions set forth in Section 6.2(c) below, BVU will not incur any
additional Indebtedness, in connection with the Property, including any
liability under any capitalized lease or any liability as a guarantor or other
contingent liability, except for (a) unsecured Indebtedness incurred in the
ordinary course of business and (b) secured Indebtedness incurred in the
ordinary course of business, including capitalized leases, not secured by the
Collateral.

﻿

(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 the Property or
other Collateral, other than the sale of Timeshare Inventory in arms-length
transactions in Borrower's ordinary course of business under the conditions set
forth in Section 2.7(c) this Agreement and other than the use, sale and disposal
of Consumables, Retail Merchandise and Expendables in the ordinary course of
business; (iv) permit or suffer to exist any change in the legal or beneficial
ownership of BVU from that which existed on the Effective Date; (v) cease
operation, liquidate or dissolve; or (vi) merge or consolidate with or into
another Person, unless the Borrower is the surviving Person. 

﻿

(d)    Making Loans.  Other than the providing of purchase money financing to
Purchasers of Timeshare Inventory, commission advances to sales associates in
the ordinary course of business and other than inter‑company loans to BXG or to
subsidiaries of either BXG or BVU, BVU shall not loan funds to any Person. 

﻿

(e)    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 the Timeshare Declaration other than in favor of
Lender (unless an intercreditor agreement, in form and substance reasonably
satisfactory to Lender and such other lender, is executed, addressing such
developer or declarant's rights), (ii) any contracts, licenses, permits, plans
or other intangibles used in connection with the Property, the marketing and
sale of Timeshare Inventory and/or the management and/or operations of the
Property, (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(e)), (iv) any property management agreements in any way relating to the
Property, including, without limitation, the Timeshare Management Agreement, 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 Inventory at the Property, (vi) any other agreements now or hereafter
in existence related to the development or operation of a timeshare project at
the Property, including management, marketing, maintenance and service
contracts, (vii) any intangibles, licenses and permits with respect to the
Property; or (viii) any right to vote on matters with respect to which owners of
Timeshare Inventory 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. 

 

 

 

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﻿

(f)    Reserved. 

﻿

(g)    Prohibited Drug Law Activities.  BVU 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 Property (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”).  BVU shall
keep Lender advised of each action it takes or plans to take in compliance with
the requirements of this Section 6.2(g).  Compliance with the covenants in this
Section 6.2(g) is a material consideration and inducement to Lender in its
agreement to make the Loan to Borrower, and any failure of BVU 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 BVU'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 Property, or any action taken by the state or
federal government to accomplish same.  BVU 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(g) and
stating whether to BVUs knowledge any Prohibited Drug Law Activities are or may
be on-going and/or have occurred in, on or around the Property.

﻿

6.3    Survival of Covenants.  The covenants contained in this Article 6 are in
addition to, and not in derogation of, the covenants contained elsewhere in the
Acquisition Loan Documents.

﻿

7.    DEFAULT

﻿

7.1    Events 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 Acquisition Loan Documents:

﻿

(a)    Payments.  (i) Borrower fails to make any payment of principal or
interest under the Loan within 3 Business Days of its respective due date, (ii)
except to the extent provided in clause (iii) hereof, Borrower fails to make any
payment of fees or other amounts with respect to the Loan (including Release
Payments) within 3 Business Days of its respective due date or (iii) 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 Acquisition
Loan Documents.  However, if any default described in this Section 7.1(b) is
curable and if Borrower has not been given a notice of a similar default within
the preceding 12 months, such default may be cured if Borrower 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

 

 

 

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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 Acquisition Loan Documents,
the covenants, agreements, and obligations in Sections 6.1(c)(i) (provided,
however, that, in connection with Sections 6.1(c)(i), in all circumstances other
than the lapse of insurance, the foregoing notice and cure period specified
above shall apply),  6.1(g),  6.1(m),  6.1(u),  6.2(b),  6.2(c),  8.6(c) or 8.7
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 any other loan facility or arrangement between BVU and/or BXG and
Lender or any of Lender's Affiliates.  For the avoidance of doubt, in no event
shall the Loan be cross‑defaulted with the inventory or receivables loan
facilities supplied by Lender to Bluegreen/Big Cedar Vacations,
LLC.  Furthermore, in no event shall the inventory or receivables loan
facilities supplied by Lender to Bluegreen/Big Cedar Vacations, LLC be
cross‑defaulted with the Loan.

(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.  Any default by BXG resulting in
a declared event of default in respect to the Indebtedness of BXG under the
Fifth Third Loan Agreement, until such default is cured under the Fifth Third
Loan Agreement.

(f)    Warranties or Representations.  Any material statement, representation or
warranty made by or on behalf of Borrower in the Acquisition 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 either Borrower (regardless
of whether election to continue is made) or any other termination of Borrower's
existence as a going business.

(h)    Enforceability of Liens.  If (i) this Agreement or any of the Acquisition
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. 

(i)    Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
forfeiture proceedings with regard to the Collateral, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of BVU
or by any governmental agency, including a garnishment of any of BVU'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 any Collateral.

 

 

 

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(j)    Reserved.  

(k)    Event of Default.  The occurrence of any Event of Default, as such term
is defined in any other Acquisition Loan Document.

(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 either
Borrower (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 either Borrower the Property or any
Collateral is appointed, or either Borrower makes an assignment for the benefit
of creditors, or is adjudged insolvent by any state or federal court of
competent jurisdiction, or admits its insolvency or inability to pay its debts
as they become due, or an attachment or execution is levied against the Property
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 $500,000 on an individual basis and
$2,000,000 in the aggregate (as to either Borrower) 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 either Borrower or the Property.

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

(o)    Criminal Proceedings.  The indictment of either Borrower under any
criminal statute, or the commencement of criminal or civil proceedings against
either Borrower pursuant to which statute or proceedings the penalties or
remedies sought or available include forfeiture of any Collateral, or Borrower
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 the Property, or
the failure to pay any fee, which is necessary for the continued operation of
the Property or the BVU’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 Inventory sales or financing
activities or the ability of BVU to own or operate the Property, 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, except where such
suspension would not be reasonably expected to result in a Material Adverse
Change.

(r)    Reserved. 

 

 

 

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(s)    Timeshare Documents.  If after recording of the Timeshare Declaration,
any of the other documents creating or governing the Property, its timeshare
regime, or the Timeshare Association, or the restrictive covenants with respect
to the Property, 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 Acquisition 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 the Property, 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) There occurs a termination or dissolution of the
Vacation Club; or (ii) once the Timeshare Project exists, the Timeshare Project
ceases to be a component resort of the Vacation Club.

7.2    Effect 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 Acquisition Loan Documents and not in limitation
thereof, do any one or more of the following:

﻿

(a)    declare the Acquisition 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)    proceed to protect and enforce its rights and remedies under the
Acquisition 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;

﻿

(c)    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;

﻿

(d)    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;

﻿

 

 

 

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(e)    exercise all the rights and remedies of a secured party upon default
under the Code (whether or not the Code applies to the affected Collateral)
including (i) require Borrower to, and Borrower hereby agrees that it will, at
its expense and upon request of Lender forthwith, assemble all or part of the
Collateral as directed by Lender and make it available to Lender at a place to
be designated by Lender which is reasonably convenient to both parties; (ii)
enter upon any premises of Borrower and take possession of the Collateral; and
(iii) sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Lender’s offices or elsewhere, at such time or
times, for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as Lender may deem commercially reasonable.  Borrower
agrees that, to the extent notice of sale shall be required by law, ten (10)
days’ notice of the time and place of any sale shall constitute reasonable
notification.  At any sale of the Collateral, if permitted by law, Lender may
bid (which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for the purchase of the Collateral or any portion thereof for the
account of Lender.  Borrower shall remain liable for any deficiency.  Lender
shall not be required to proceed against any Collateral but may proceed against
Borrower directly.  To the extent permitted by law, Borrower hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter enacted. 

﻿

(f)    exercise a right of setoff in all Borrower's accounts with Lender
established under or in connection with this Loan;

﻿

(g)    increase the rate of interest accruing under the Loan to the Default
Rate; and/or

﻿

(h)    exercise any and all other rights or remedies provided in the other
Acquisition 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 Acquisition 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 Acquisition Loan Document 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 Acquisition 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 Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

﻿

 

 

 

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7.3    Application of Proceeds During an Event of Default.  Notwithstanding
anything in the Acquisition 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 any Collateral may be applied to payment of such of
the Obligations as Lender in its discretion may determine.

﻿

7.4    Notice of Sale.  Notification of time and place of any public sale of the
Collateral or reasonable notification of the time after which any private sale
or other intended disposition of the Collateral is to be made shall be sent to
Borrower and to any other person entitled under the Code to notice.  Out of
money arising from any such sale, Lender shall retain an amount equal to all
costs and charges, including reasonable attorneys’ fees for advice, counsel or
other legal services or for pursuing, reclaiming, seeking to reclaim, taking,
keeping, removing, storing and advertising such Collateral for sale, selling
same and any and all other charges and expenses in connection therewith and in
satisfying any prior liens thereon.  Any balance shall be applied upon the
Obligations, and in the event of deficiency, the Borrower shall remain liable to
Lender.  In the event of any surplus, such surplus shall be paid to the Borrower
or to such other Persons as may be legally entitled to such surplus.  If, by
reason of any suit or proceeding of any kind, nature or description against the
Borrower, or by the Borrower or any other party against Lender, which in
Lender’s sole discretion makes it advisable for Lender to seek counsel for the
protection and preservation of its security interest, or to defend its own
interest, such expenses and counsel fees shall be allowed to Lender and the same
shall be made a further charge and lien upon the Collateral.

﻿

In view of the fact that federal and state securities laws may impose certain
restrictions on the methods by which a sale of Collateral comprised of
securities may be effected after an Event of Default, Borrower agrees that upon
the occurrence or existence of an Event of Default, Lender may, from time to
time, attempt to sell all or any part of such Collateral by means of a private
placement restricting the bidding and prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for, or
with a view to, distribution.  In so doing, Lender may solicit offers to buy
such Collateral, or any part of it for cash, from a limited number of investors
deemed by Lender, in its reasonable judgment, to be responsible parties who
might be interested in purchasing the Collateral, and if Lender solicits such
offers from not less than 2 such investors, then the acceptance by Lender of the
highest offer obtained therefrom shall be deemed to be a commercially reasonable
method of disposition of such Collateral.

﻿

7.5    Application 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 Acquisition 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.

﻿

7.6    Lender'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

 

 

 

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Acquisition 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 Acquisition 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 Acquisition 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.

﻿

7.7    Waiver 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.

﻿

7.8    Waiver 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 Acquisition Loan Documents, demand,
presentment and protest, notice of demand, presentment or protest of the
Acquisition Note or any other Acquisition Loan Document;

﻿

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

﻿

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

﻿

7.9    Set-Off.  Lender reserves a right of setoff in all Borrower's accounts
with Lender established under or in connection with this Loan.

﻿

7.10    License for Use of Software and Other Intellectual Property.  Upon the
occurrence and continuance of an Event of Default and continuing until such time
as all Obligations have been repaid in full, Borrower hereby grants to the
Lender a license or other right to use, without charge, all computer software
programs, data bases, processes, trademarks, tradenames, copyrights, labels,
trade secrets, service marks, advertising materials and other rights, assets and
materials used by Borrower in connection with the Collateral which may be
exercised upon and during the continuance of an Event of Default.

﻿

 

 

 

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8.    COSTS AND EXPENSES; INDEMNIFICATION; DUTIES OF LENDER; POST-CLOSING
IMPROVEMENTS; DISBURSEMENT OF IMPROVEMENT FUNDS; TIMESHARE CONVERSION

﻿

8.1    Costs 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
Acquisition 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
Acquisition Loan Document.  Such disbursement shall be added to the outstanding
principal balance of the Acquisition Note.  The authorization hereby granted
shall be irrevocable, and no further direction or authorization from Borrower
shall be necessary for Lender to make such 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.

﻿

8.2    Indemnification.  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 the
Property, the Collateral, Lender's status by virtue of the Acquisition Loan
Documents, sales of Timeshare Inventory 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 Acquisition Loan
Documents, the sale or financing of Timeshare Inventory, the creation of liens
and security interests, the terms of the Acquisition 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,
the failure of BVU to abide by its obligations under the WARN Act 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;

 

 

 

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(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 arising from the acts of Lender; and (c) any mechanics liens filed
against the Property.  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 Acquisition Loan Documents shall affect or impair
the indemnification provisions contained in this Section 8.2 and all such
provisions shall survive such termination.

﻿

8.3    Reserved. 

﻿

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

﻿

8.5    Foreign 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. 

﻿

8.6    Post-Closing Improvements and Disbursement of Improvement Funds.  

﻿

(a)    Post-Closing Improvements. In connection with Borrower’s conversion of
the Hotel to include a vacation ownership timeshare resort and sales center,
Lender acknowledges that Borrower and/or its Affiliates will be (i) making
various improvements and upgrades to guest rooms including replacing carpet,
replacing or acquiring case goods, furniture, fixtures and equipment, and other
guest room supplies and amenities; (ii) converting certain existing meeting
space in the Hotel into a sales center; and (iii) making such other improvements
and alterations to the Property as may be necessary to convert the Hotel into a
vacation ownership timeshare resort and sales center (the improvements described
in clause (i), the “Rooms Component”, and the improvements described in clauses
(ii) and (iii), the “Sales Center Component”, and collectively, the
“Post-Closing Improvements”). Upon commencing the Post-Closing Improvements,
Borrower shall diligently

 

 

 

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pursue the same to completion utilizing good workmanship and quality
materials.  Borrower  shall supply such sums of money and perform such duties as
may be necessary for completion of the Post-Closing Improvements in full
compliance with all applicable Legal Requirements, and without any lien, claim
or assessment (actual or contingent) asserted against the Property for any
material, labor or other items furnished in connection therewith and further in
compliance with all construction, use, building, zoning and other similar
requirements of any pertinent governmental authority. 

﻿

(b)    Requesting Disbursements of the Improvement Funds. Provided no Event of
Default or Incipient Default then exists, Borrower may request, not more than
once per calendar quarter, a release of the Improvement Funds in an amount not
to exceed (a) the 70% of the cumulative hard and soft costs actually incurred by
Borrower for the Post-Closing Improvements (as established by evidence
reasonably satisfactory to Lender and certified correct by BVU), less (b) any
Improvement Funds already disbursed to Borrower for payment of the Post-Closing
Improvements (the “Maximum Disbursement Amount”).  If Borrower desires to
request a release of the Improvement Funds, Borrower shall deliver to Lender a
Request for Release of Improvement Funds, in the form attached hereto as Exhibit
J (the “Request for Release of Improvement Funds”). In addition to the Request
for Release of Improvement Funds, Borrower shall deliver to Lender, prior to the
last disbursement of the Improvement Funds: (a) a certification and such other
reasonable evidence of the costs actually incurred by Borrower for the
Post-Closing Improvements that Lender may reasonably require, (b) an updated
title search (obtained at Borrower’s expense) confirming that no mechanics’ or
other liens have been recorded against the Property, (c) if applicable, receipt
of any certificates of occupancy (or other appropriate certificate evidencing
such work was completed), with respect to the completed Post-Closing
Improvements, issued by the applicable governmental authorities and (d) a
satisfactory inspection report (as to the Post-Closing Improvements) from an
inspector reasonably satisfactory to Lender, the reasonable cost of which shall
be borne by Borrower.  In no event shall Improvement Funds be available for
disbursement beyond the date which occurs nine (9) months following the
Effective Date, unless the time for completion of the Sales Center Component of
the Post-Closing Improvements is extended by three (3) additional months (up to
a total of twelve (12) months following the Effective Date), as provided in
Section 8.6 below, in which case, the Improvement Funds shall be available for
disbursement up to twelve (12) months following the Effective Date, but not
beyond that date.

﻿

(c)    Completion of Post-Closing Improvements. Borrower shall complete all of
the Sales Center Component of the Post-Closing Improvements on or before the
date that is nine (9) months after the Effective Date, in a manner and as
established by evidence reasonably satisfactory to Lender.  Notwithstanding the
foregoing, in the event Borrower commenced construction of the Post-Closing
Improvements within a reasonable period of time following the Effective Date and
pursued diligently pursued completion of the same, Borrower shall be entitled to
a three (3) month extension of the foregoing nine (9) month completion date upon
written notice from Borrower to Lender requesting such extension.  In such a
circumstance, Borrower shall complete the Sales Center Component of the
Post-Closing Improvements on or before the date that is twelve (12) months after
the Effective Date, in a manner and as established by evidence reasonably
satisfactory to Lender.  

(d)    Disbursement of the Improvement Funds. Within ten (10) Business Days
after Lender's receipt of a signed Request for Release of Improvement Funds, and
Lender's review and approval of any other items required by Lender as set forth
in Section 8.6(b) above, Lender shall disburse to Borrower the portion of the
Improvement Funds equal to the Maximum Disbursement

 

 

 

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Amount, whereupon receipt Borrower shall use such portion of the Improvement
Funds to pay for hard and soft costs incurred with respect to the Post‑Closing
Improvements or, to the extent such costs have already been paid by
Borrower,  Borrower may retain the appropriate portion of the Improvement Funds
in reimbursement of Borrower’s prior payment. Lender’s release of the
Improvement Funds or other acknowledgment of completion of all or any portion of
the Post-Closing Improvements shall not be deemed a certification by Lender that
any portion of the Post-Closing Improvements have been completed in accordance
with applicable Legal Requirements. Notwithstanding anything to the contrary
contained in this Agreement or in any Request for Release of Improvement Funds,
the Maximum Disbursement Amount shall not cause the cumulative Advances over the
Term exceed the Maximum Loan Amount.

8.7    Conversion of Hotel Into Vacation Ownership Timeshare Resort. Within six
(6) months after the Effective Date, Borrower shall have satisfied all
applicable Legal Requirements necessary to convert portions of the Hotel into a
vacation ownership timeshare resort and shall have added such portions (as so
converted) as a component site within the Vacation Club, so as to permit
Borrower and/or its Affiliates to commence sales of the Timeshare Inventory at
the Timeshare Project to Purchasers through the Vacation Club.  Such steps shall
include, without limitation, recording the Timeshare Declaration, forming the
Timeshare Association, amending the Multi-State Public Offering Statement (to
add the Property as a Vacation Club component site) and filing all applicable
documents, reports, and registrations with any applicable governmental
authorities (including the Florida Department of Business and Professional
Regulation and the Texas Real Estate Commission, if applicable).  Lender
acknowledges that such conversion and registration may occur through one or more
applicable filings.  BVU will begin the sale of Timeshare Inventory through the
Vacation Club within twelve (12) months from the Effective Date.

﻿

8.8    Additional Representations, Warranties and Covenants Regarding Timeshare
Project. At such time as the Timeshare Project exists, the following
representations, warranties and covenants shall be deemed to have been made by
Borrower:

﻿

(a)    Compliance with Legal Requirements. Borrower has complied with all Legal
Requirements in all material respects, including all Legal Requirements of the
state in which the Timeshare Project is located and all other jurisdictions in
which Timeshare Inventory 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,

 

 

 

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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 Texas governing condominiums,
timeshares and time-sharing activities; (xxviii) all laws, rules and regulations
promulgated by the Texas Real Estate Commission; (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
the Timeshare Project, or the sale, offering for sale, marketing or financing of
Timeshare Inventory 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.  Borrower has
not 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. 

﻿

(b)    Sales Activities. All sales of Timeshare Inventory 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.

﻿

(c)    Timeshare Inventory Not a Security. Borrower has not sold or offered for
sale, and will not sell or offer for sale, any Timeshare Inventory 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.

﻿

(d)    Zoning Laws, Building Codes, Etc. Except during periods of construction
or repair, 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 completion of the closing
of the sale of any Timeshare Inventory in such Unit.  The timeshare use and
occupancy of Units does not, and Borrower hereby covenants will 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 the Timeshare Project.

﻿

﻿

9.    CONSTRUCTION AND GENERAL TERMS

﻿

9.1    Payment.  All monies payable under the Acquisition Loan Documents shall
be paid to Lender in lawful monies of the United States of America.

﻿

9.2    Entire Agreement.  The Acquisition 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 Acquisition 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 Acquisition Loan Documents
supersede any and all prior representations, warranties and/or inducements,
written or oral, heretofore made by Lender and Borrower concerning this
transaction, including any commitment for financing. 

 

 

 

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To the extent there is a conflict or inconsistency between the Timeshare
Declaration (as it pertains to the right of Borrower to affect the rights of
mortgagees) and the Acquisition Loan Documents, then, as between Borrower and
Lender, the provisions of the Acquisition Loan Documents shall prevail.

﻿

9.3    Powers 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.

﻿

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

﻿

9.5    Notices.   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 to 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:

﻿

﻿

 

 

 

 

 

 

 

 

 

 

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To Lender:

ZB, N.A. DBA 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:

ZB, N.A. DBA 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

Two North Central Avenue

Fifteenth Floor

Phoenix, Arizona  85004

Attention:  Randall S. Dalton

Telephone No.:  (602) 256-4482

Telecopier No.:  (602) 256-0566

 

To Borrower:

Bluegreen Vacations Unlimited, Inc.

Bluegreen Vacations 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

 

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

Greenspoon Marder LLP

200 East Broward Boulevard, Suite 1800

Fort Lauderdale, Florida 33302

Attention:  Barry E. Somerstein

Telephone No.:  (954) 527-2405

Telecopier No.:  (954) 333-4005

 

            and

 

﻿

Bluegreen Vacations Corporation

4960 Conference Way North, Suite 100

Boca Raton, Florida 33431

Attention:  General Counsel

Telephone No.: (561) 912-8000

Telecopier No.: (561) 912-8299

﻿

 

 

 

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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.

﻿

9.6    Borrower's Representative.  Borrower hereby designates the following
natural persons, each acting alone, as its representative for purposes of (i)
making all decisions with respect to the Loan and the Acquisition Loan
Documents, (ii) delivering all notices, certificates, requests for advance and
other documents required by the terms of the Acquisition 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 Acquisition
Loan Documents:

﻿

 

 

 

 

 

﻿

Paul Humphrey

Anthony M. Puleo

Allan J. Herz

 

﻿

In taking action pursuant to the terms of this Agreement and the other
Acquisition 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.  Borrower may change such representative upon written notice to
Lender.

﻿

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

9.8    Successors and Assigns; Participation. 

﻿

(a)    At any time either concurrently with or subsequent to the execution and
delivery of this Agreement, ZB, N.A. DBA 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
Acquisition 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 Acquisition 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

 

 

 

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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 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 Acquisition 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 the Loan 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 Acquisition Loan Documents, and the obligations of NBA and
such Affiliate to fund the Loan 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, (A) such selling
party's obligations to the Borrower under this Agreement and the Acquisition
Loan Documents shall remain unchanged; (B) such selling party shall remain
solely responsible to the other parties hereto for the performance of such
obligations; and (C) parties to this Agreement and the Acquisition 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 Acquisition 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 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
with all of the Assignees establishing (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 Acquisition 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 Acquisition 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 pursuant to the
Acquisition 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 shall be in favor of  NBA and Assignees in accordance
with their pro rata interests and in

 

 

 

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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 Borrower,
which will not be unreasonably withheld or delayed.

﻿

9.9    Successors and Assigns.  All the covenants of Borrower and all the rights
and remedies of Lender contained in the Acquisition Loan Documents shall bind
Borrower, and, subject to the restrictions on merger, consolidation and
assignment contained in the Acquisition 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
Acquisition Loan Documents in whole or in part.  Except as may be expressly
provided in an Acquisition Loan Document, no Person shall be deemed a third
party beneficiary of any provision of the Acquisition Loan Documents.

﻿

9.10    Severability.  If any provision of any Acquisition 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
Acquisition 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 Acquisition 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.

﻿

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

﻿

9.12    Miscellaneous.  All headings are inserted for convenience only and shall
not affect any construction or interpretation of the Acquisition Loan
Documents.  Unless otherwise indicated, all references in an Acquisition Loan
Document to clauses and other subdivisions refer to the corresponding
paragraphs, clauses and other subdivisions of the Acquisition 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 ACQUISITION 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 ACQUISITION LOAN DOCUMENTS WERE
SUBSTANTIALLY NEGOTIATED IN THE STATE OF ARIZONA, THIS AGREEMENT AND THE OTHER
ACQUISITION 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

 

 

 

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THIS AGREEMENT OR ANY OF THE OTHER ACQUISITION 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 ACQUISITION 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 ACQUISITION LOAN DOCUMENTS.

﻿

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

﻿

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

﻿

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

 

 

 

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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 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,

 

 

 

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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.

﻿

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

﻿

9.16    Destruction of Acquisition Note; Substitute Acquisition Note.  In the
event the Acquisition 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 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 Acquisition Note subdivided into notes of lesser denominations or
substituted for new notes, all containing the same terms as the original
Acquisition Note being substituted or subdivided, in connection with an
assignment of all or any portion of the Loan pursuant to the terms of
Section 9.8 hereof.

﻿

9.17    Compliance 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 Acquisition Loan Documents, in no event
shall the Acquisition Loan Documents require the payment or permit the
collection of interest in excess of the maximum contract rate permitted by the
Applicable Usury Law.

﻿

9.18    REFERENCE TO LENDER.  EXCEPT AS REQUIRED BY LAW AND FOR FILINGS MADE
WITH THE SECURITIES & EXCHANGE COMMISSION OR ANY STOCK EXCHANGE ON WHICH BXG'S
OR BXG’S PARENT'S 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 THE

 

 

 

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PROPERTY, THE SALE OF TIMESHARE INVENTORY OR OTHERWISE, WITHOUT THE EXPRESS
WRITTEN CONSENT OF LENDER.

﻿

9.19    NO 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 ACQUISITION 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.

﻿

9.20    Scope of Reimbursable Attorneys’ Fees.  As used in the Acquisition 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 Acquisition Loan
Documents, attorneys' fees incurred by Lender in the enforcement of any remedy
or covenant include attorneys' fees incurred in any foreclosure of the
Acquisition Loan Documents, in enforcing any rights of indemnification under the
Acquisition 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.

﻿

9.21    Reserved. 

﻿

9.22    Relief 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 Acquisition Loan
Documents.

﻿

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

﻿

9.24    Limitation 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 Acquisition 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

 

 

 

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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).

﻿

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.

﻿

9.25    Waiver 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 Inventory (including without limitation the right of first
refusal contained in the Timeshare Declaration in favor of Borrower, as
declarant) with respect to any Timeshare Inventory 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 Acquisition Loan
Documents.  Borrower agrees that in the event that Lender, or its nominee or
assignee, acquires title to any such Timeshare Inventory under the circumstances
described in the foregoing sentence, such Timeshare Inventory may be assigned,
transferred or sold free and clear of any right of first refusal in favor of
Borrower.

﻿

9.26    Consents, 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.

﻿

9.27    Patriotic Act Provisions.  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

 

 

 

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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 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.

﻿

9.28    Errors 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.

﻿

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

﻿

9.30    Waiver 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.

﻿

9.31    Document 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 Acquisition Loan Documents, and Lender may destroy or archive the
paper originals; however, no original promissory notes shall be destroyed.  The
parties hereto to the extent permitted by applicable law (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
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certification thereof under oath that such image is a true and correct copy of
the original.  Upon payment of the Loan, the Lender shall deliver the original
Acquisition Note to Borrower marked “paid in full” and mark its records that the
Loan has been paid.

﻿

9.32    Dealing with Multiple Parties.    

﻿

(a)    If more than one Person is named as a Borrower hereunder, all
obligations, representations, warranties, covenants and indemnities set forth in
this Agreement and other Acquisition Loan Documents to which such Persons are a
party, shall be the joint and several obligations, representations, warranties,
covenants and indemnities of all such Persons named as Borrowers, except to the
extent otherwise specifically set forth to the contrary in this Agreement or the
other Acquisition Loan Documents.  Lender shall have the right to deal with any
individual Borrower with respect to all matters concerning the rights and
obligations of Lender hereunder and with respect to the transactions
contemplated under this Agreement or the other Acquisition Loan Documents.  All
actions or inactions of the officers, managers, members, and/or partners of any
Borrower with respect to the transactions contemplated under this Agreement or
other Acquisition Loan Documents shall be deemed to be with full authority of
and binding upon all Borrowers.  Each Borrower hereby appoints each other
Borrower as its true and lawful attorney-in-fact, with full rights and power,
for purposes of exercising all rights of such Person under this Agreement and
the other Acquisition Loan Documents and under applicable law with respect to
the transactions contemplated under the Agreement and the other Acquisition Loan
Documents.  This power of attorney is coupled with an interest.  The foregoing
is a material inducement to the agreement of Lender to enter into this Agreement
and to consummate the transaction contemplated hereby.

(b)    Although Lender and Borrower intend that each entity constituting
Borrower shall be jointly and severally liable for all Obligations, to the
extent that this Agreement or the other Acquisition Loan Documents may be
determined to secure indebtedness of any Borrower for which any other Borrower
is not primarily liable, each Borrower expressly waives the benefit of any and
all defenses available to a guarantor, surety, endorser or accommodation party
dependent on an obligor's character as such.  Without limiting the generality of
the foregoing, each such other Borrower's liability hereunder shall not be
affected or impaired in any way by any of the following acts or things (which
Lender is hereby expressly authorized to do, omit or suffer from time to time
without notice to or consent of anyone):

(i)    any acceptance of collateral security, guarantors, accommodation parties
or sureties for any or all Obligations;

(ii)    any extension or renewal of any Obligations (whether or not for longer
than the original period) or any modification of the interest rate, maturity or
other terms of the Obligations;

(iii)    any waiver or indulgence granted to any Borrower, and any delay or lack
of diligence in the enforcement of any or all Obligations owed by any Borrower;

(iv)    any full or partial release of, compromise or settlement with, or
agreement not to sue, any Borrower or other person liable on any Obligations;

(v)    any release, surrender, cancellation or other discharge of any or all
Obligations of Borrower or the acceptance of any instrument in renewal or
substitution for any instrument evidencing any Obligations;

 

 

 

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(vi)    any failure to obtain collateral security (including rights of setoff)
for any Obligations or to see to the proper or sufficient creation and
perfection thereof, or to establish the priority thereof, or to preserve,
protect, insure, care for, exercise or enforce any collateral security for any
Obligations;

(vii)    any modification, alteration, substitution, exchange, surrender,
cancellation, termination, release or other change, impairment, limitation, loss
or discharge of any collateral security for any Obligations;

(viii)    any assignment, sale, pledge or other transfer of any of the
Obligations owed by any Borrower; or

(ix)    any manner, order or method of application of any payments or credits on
any Obligations. 

Each Borrower waives all rights that it may now have or hereafter acquire,
whether by subrogation, contribution, reimbursement, recourse, exoneration,
contract or otherwise, to recover from any other Borrower or from any property
of any other Borrower any sums paid under this Agreement.  No Borrower will
exercise or enforce any right of contribution to recover any such sums from any
person who is a co-obligor with any Borrower or a guarantor or surety of the
Obligations or from any property of any such person or entity until all of the
Obligations shall have been fully paid and discharged.

﻿

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SIGNATURE PAGE TO ACQUISITION 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.

﻿

﻿

 

 

BORROWER:

 

﻿

 

 

BLUEGREEN VACATIONS UNLIMITED,

INC., a Florida corporation

 

﻿

 

 

By:

/S/ ANTHONY M. PULEO

 

Name:

Anthony M. Puleo

 

Title:

Vice President and Treasurer

 

﻿

 

 

﻿

 

 

BLUEGREEN VACATIONS

CORPORATION, a Florida corporation

 

﻿

 

 

By:

/S/ ANTHONY M. PULEO

 

Name:

Anthony M. Puleo

 

Title:

Executive Vice President, CFO and Treasurer

 

﻿

 

 

 

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SIGNATURE PAGE TO ACQUISITION 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.

﻿

﻿

 

LENDER:

 

ZB, N.A. DBA NATIONAL BANK OF

ARIZONA, a national banking association

By:

/S/ KRISTEN CARRENO

Name:

Kristen Carreno

Title:

Sr. Vice President

﻿

 

 

 

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