EXECUTION COPY

BXG TIMESHARE TRUST I,

as Issuer

BLUEGREEN CORPORATION,

as Servicer

VACATION TRUST, INC.,

as Club Trustee

 

CONCORD SERVICING CORPORATION,

as Backup Servicer

 

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee, Paying Agent and Custodian

 

and

 

BRANCH BANKING AND TRUST COMPANY,

as Agent

 

______________

THIRD AMENDED AND RESTATED INDENTURE

Dated as of August 1, 2010

______________

 

Timeshare Loan-Backed VFN Notes, Series I

 

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TABLE OF CONTENTS

 

 

Page

ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

3

SECTION 1.1.

General Definitions and Usage of Terms.

3

SECTION 1.2.

Compliance Certificates and Opinions.

4

SECTION 1.3.

Form of Documents Delivered to Indenture Trustee.

4

SECTION 1.4.

Acts of Noteholders, etc.

5

SECTION 1.5.

Notice to Noteholders; Waiver.

6

SECTION 1.6.

Effect of Headings and Table of Contents.

6

SECTION 1.7.

Successors and Assigns.

6

SECTION 1.8.

GOVERNING LAW.

7

SECTION 1.9.

Legal Holidays.

7

SECTION 1.10.

Execution in Counterparts.

7

SECTION 1.11.

Inspection.

7

SECTION 1.12.

Survival of Representations and Warranties.

8

SECTION 1.13.

Effective Date

8

ARTICLE II. THE NOTES

8

SECTION 2.1.

General Provisions.

8

SECTION 2.2.

Definitive Notes.

9

SECTION 2.3.

[RESERVED]

9

SECTION 2.4.

Registration, Transfer and Exchange of Notes.

9

SECTION 2.5.

Mutilated, Destroyed, Lost and Stolen Notes.

11

SECTION 2.6.

Payment of Interest and Principal; Rights Preserved.

11

SECTION 2.7.

Persons Deemed Owners.

12

 

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SECTION 2.8.

Cancellation.

12

SECTION 2.9.

Noteholder Lists.

12

SECTION 2.10.

Treasury Notes.

13

SECTION 2.11.

[RESERVED].

13

SECTION 2.12.

Confidentiality.

13

ARTICLE III. ACCOUNTS; COLLECTION AND APPLICATION OF MONEYS; REPORTS

13

SECTION 3.1.

Trust Accounts; Investments by Indenture Trustee.

13

SECTION 3.2.

Establishment and Administration of the Trust Accounts.

15

SECTION 3.3.

[Reserved].

16

SECTION 3.4.

Distributions.

16

SECTION 3.5.

Reports to Noteholders.

18

SECTION 3.6.

[RESERVED].

19

SECTION 3.7.

Withholding Taxes.

19

ARTICLE IV. THE TRUST ESTATE

20

SECTION 4.1.

Acceptance by Indenture Trustee.

20

SECTION 4.2.

Acquisition of Timeshare Loans.

20

SECTION 4.3.

[RESERVED].

20

SECTION 4.4.

Tax Treatment.

20

SECTION 4.5.

Further Action Evidencing Grant of Security Interest and Assignments.

21

SECTION 4.6.

Substitution and Repurchase of Timeshare Loans.

22

SECTION 4.7.

Release of Lien.

24

SECTION 4.8.

Appointment of Custodian and Paying Agent.

24

ARTICLE V. SERVICING OF TIMESHARE LOANS

24

SECTION 5.1.

Appointment of Servicer and Backup Servicer; Servicing Standard.

24

 

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SECTION 5.2.

Payments on the Timeshare Loans.

25

SECTION 5.3.

Duties and Responsibilities of the Servicer.

25

SECTION 5.4.

Servicer Events of Default.

29

SECTION 5.5.

Accountings; Statements and Reports.

31

SECTION 5.6.

Records.

33

SECTION 5.7.

Fidelity Bond and Errors and Omissions Insurance.

33

SECTION 5.8.

Merger or Consolidation of the Servicer.

33

SECTION 5.9.

Sub-Servicing.

34

SECTION 5.10.

Servicer Resignation.

34

SECTION 5.11.

Fees and Expenses.

35

SECTION 5.12.

Access to Certain Documentation.

35

SECTION 5.13.

No Offset.

35

SECTION 5.14.

Account Statements.

35

SECTION 5.15.

Indemnification; Third Party Claim.

36

SECTION 5.16.

Backup Servicer.

36

SECTION 5.17.

Aruba Notices.

37

SECTION 5.18.

Recordation.

37

ARTICLE VI. EVENTS OF DEFAULT; REMEDIES

37

SECTION 6.1.

[RESERVED].

37

SECTION 6.2.

Acceleration of Maturity; Rescission and Annulment.

37

SECTION 6.3.

Remedies.

39

SECTION 6.4.

Indenture Trustee May File Proofs of Claim.

40

SECTION 6.5.

Indenture Trustee May Enforce Claims Without Possession of Notes.

41

SECTION 6.6.

Application of Money Collected.

41

SECTION 6.7.

Limitation on Suits.

44

 

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SECTION 6.8.

Unconditional Right of Noteholders to Receive Principal and Interest.

45

SECTION 6.9.

Restoration of Rights and Remedies.

45

SECTION 6.10.

Rights and Remedies Cumulative.

45

SECTION 6.11.

Delay or Omission Not Waiver.

45

SECTION 6.12.

Control by Agent.

46

SECTION 6.13.

Waiver of Events of Default.

46

SECTION 6.14.

Undertaking for Costs.

46

SECTION 6.15.

Waiver of Stay or Extension Laws.

47

SECTION 6.16.

Sale of Trust Estate.

47

SECTION 6.17.

Action on Notes.

48

SECTION 6.18.

Performance and Enforcement of Certain Obligations.

48

ARTICLE VII. THE INDENTURE TRUSTEE

49

SECTION 7.1.

Certain Duties.

49

SECTION 7.2.

Notice of Events of Default.

50

SECTION 7.3.

Certain Matters Affecting the Indenture Trustee.

50

SECTION 7.4.

Indenture Trustee Not Liable for Notes or Timeshare Loans.

51

SECTION 7.5.

Indenture Trustee May Own Notes.

52

SECTION 7.6.

Indenture Trustee’s Fees and Expenses.

52

SECTION 7.7.

Eligibility Requirements for Indenture Trustee.

52

SECTION 7.8.

Resignation or Removal of Indenture Trustee.

52

SECTION 7.9.

Successor Indenture Trustee.

53

SECTION 7.10.

Merger or Consolidation of Indenture Trustee.

54

SECTION 7.11.

Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

54

SECTION 7.12.

Paying Agent and Note Registrar Rights.

56

SECTION 7.13.

Authorization.

56

 

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SECTION 7.14.

Maintenance of Office or Agency.

57

ARTICLE VIII. COVENANTS OF THE ISSUER

57

SECTION 8.1.

Payment of Principal, Interest and Other Amounts.

57

SECTION 8.2.

Eligible Timeshare Loans.

57

SECTION 8.3.

Money for Payments to Noteholders to Be Held in Trust.

57

SECTION 8.4.

Existence; Merger; Consolidation, etc.

59

SECTION 8.5.

Protection of Trust Estate; Further Assurances.

59

SECTION 8.6.

Additional Covenants.

61

SECTION 8.7.

Taxes.

62

SECTION 8.8.

Restricted Payments.

63

SECTION 8.9.

Treatment of Notes as Debt for Tax Purposes.

63

SECTION 8.10.

Further Instruments and Acts.

63

ARTICLE IX. SUPPLEMENTAL INDENTURES

63

SECTION 9.1.

Supplemental Indentures.

63

SECTION 9.2.

Supplemental Indentures with Consent of Noteholders.

64

SECTION 9.3.

Execution of Supplemental Indentures.

65

SECTION 9.4.

Effect of Supplemental Indentures.

65

SECTION 9.5.

Reference in Notes to Supplemental Indentures.

65

ARTICLE X. BORROWINGS

66

SECTION 10.1.

Optional Borrowings

66

ARTICLE XI. SATISFACTION AND DISCHARGE

67

SECTION 11.1.

Satisfaction and Discharge of Indenture.

67

SECTION 11.2.

Application of Trust Money; Repayment of Money Held by Paying Agent.

68

SECTION 11.3.

Trust Termination Date.

68

 

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ARTICLE XII. REPRESENTATIONS AND WARRANTIES AND COVENANTS

68

SECTION 12.1.

Representations and Warranties of the Issuer.

68

SECTION 12.2.

Representations and Warranties of the Servicer.

70

SECTION 12.3.

Representations and Warranties of the Indenture Trustee.

73

SECTION 12.4.

Multiple Roles.

74

SECTION 12.5.

[Reserved].

74

SECTION 12.6.

Covenants of the Club Trustee.

74

SECTION 12.7.

Representations and Warranties of the Backup Servicer.

76

ARTICLE XIII. MISCELLANEOUS

79

SECTION 13.1.

Officer’s Certificate and Opinion of Counsel as to Conditions Precedent.

79

SECTION 13.2.

Statements Required in Certificate or Opinion.

79

SECTION 13.3.

Notices.

80

SECTION 13.4.

No Proceedings.

82

SECTION 13.5.

Limitation of Liability of Owner Trustee.

82

ARTICLE XIV. REDEMPTION OF NOTES

83

SECTION 14.1.

Clean-up Call; Optional Redemption; Election to Redeem.

83

SECTION 14.2.

Notice to Indenture Trustee.

83

SECTION 14.3.

Notice of Redemption by the Servicer.

83

SECTION 14.4.

Deposit of Redemption Price.

83

SECTION 14.5.

Notes Payable on Redemption Date.

84

 

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Exhibit A

Form of Notes

Exhibit B

Form of Investor Representation Letter

Exhibit C

Reserved

Exhibit D

Form of Monthly Servicer Report

Exhibit E

Servicing Officer’s Certificate

Exhibit F

Form of Investor Certification

Exhibit G

Form of ROAP Waiver Letter

Exhibit H

Form of Aruba Notice

Exhibit I

Resort Ratings

Exhibit J

Collection Policy

Exhibit K

Credit Policy

Annex A

Second Amended and Restated Standard Definitions

Schedule I

Schedule of Timeshare Loans

Schedule 12.2(e)

Pending Litigation/Proceedings

 

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THIRD AMENDED AND RESTATED INDENTURE

This THIRD AMENDED AND RESTATED INDENTURE, dated as of August 1, 2010 (this
“Indenture”), is among BXG TIMESHARE TRUST I, a statutory trust formed under the
laws of the State of Delaware, as issuer (the “Issuer”), BLUEGREEN CORPORATION
(“Bluegreen”), a Massachusetts corporation, in its capacity as servicer (the
“Servicer”), VACATION TRUST, INC., a Florida corporation, as trustee under the
Club Trust Agreement (the “Club Trustee”), CONCORD SERVICING CORPORATION, an
Arizona corporation, as backup servicer (the “Backup Servicer”), U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as indenture trustee (the
“Indenture Trustee”), paying agent (the “Paying Agent”) and as custodian (the
“Custodian”) and BRANCH BANKING AND TRUST COMPANY, a North Carolina corporation,
as agent of the Purchasers pursuant to the Note Funding Agreement (the “Agent”)
and hereby amends and restates in its entirety that certain second amended and
restated indenture, dated as of June 1, 2009, as amended by Omnibus Amendment
No. 4, dated as of June 30, 2009, Omnibus Amendment No. 5, dated as of June 29,
2010 and Omnibus Amendment No. 6, dated as of August 30, 2010, in each case, by
and among the parties hereto and the other parties named therein (the “Second
Amended and Restated Indenture”), among the parties hereto.

RECITALS OF THE ISSUER

WHEREAS, the parties hereto desire to amend and restate in its entirety the
Second Amended and Restated Indenture as provided herein, and all actions
required to do so under the Second Amended and Restated Indenture have been
taken;

WHEREAS, the Issuer had duly authorized the execution and delivery of the Second
Amended and Restated Indenture to provide for the issuance of five classes of
variable funding notes designated as the Timeshare Loan-Backed VFN Notes, Series
I, Class A (the “Second Amended Class A Notes”), the Timeshare Loan-Backed VFN
Notes, Series I, Class B (the “Second Amended Class B Notes”), the Timeshare
Loan-Backed VFN Notes, Series I, Class C (the “Second Amended Class C Notes”),
the Timeshare Loan-Backed VFN Notes, Series I, Class D (the “Second Amended
Class D Notes”) and the Timeshare Loan-Backed VFN Notes, Series I, Class E (the
“Second Amended Class E Notes”, and together with the Second Amended Class A
Notes, the Second Amended Class B Notes, the Second Amended Class C Notes and
the Second Amended Class D Notes, the “Amended Notes”);

WHEREAS, the Issuer has duly authorized (a) the execution and delivery of this
Indenture to provide for the issuance of five classes of variable funding notes
designated as the Timeshare Loan-Backed VFN Notes, Series I, Class A (the “Class
A Notes”), the Timeshare Loan-Backed VFN Notes, Series I, Class B (the “Class B
Notes”), the Timeshare Loan-Backed VFN Notes, Series I, Class C (the “Class C
Notes”), the Timeshare Loan-Backed VFN Notes, Series I, Class D (the “Class D
Notes”) and the Timeshare Loan-Backed VFN Notes, Series I, Class E (the “Class E
Notes”, and together with the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes, the “Notes”) and (b) the exchange of the Amended
Notes for the Notes;

 

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WHEREAS, the Notes will evidence Borrowings made from time to time prior to the
Facility Termination Date by the Issuer in accordance with the terms described
herein and in the Note Funding Agreement;

WHEREAS, the Servicer has agreed to service and administer the Timeshare Loans
securing the Notes and the Backup Servicer has agreed to, among other things,
service and administer the Timeshare Loans if the Servicer shall no longer be
the Servicer hereunder;

WHEREAS, the Club Trustee is a limited purpose entity which, on behalf of
Beneficiaries of the Club, holds title to the Timeshare Properties related to
the Club Loans;

WHEREAS, the Agent, as nominee of the Purchasers shall, as sole Noteholder of
each Class of Notes, be entitled to exercise certain rights and remedies under
this Indenture; and

WHEREAS, all things necessary to make the Notes, when executed by the Issuer and
authenticated and delivered by the Indenture Trustee hereunder, the valid
recourse obligations of the Issuer, and to make this Indenture a valid agreement
of the Issuer, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Notes by the
holders thereof, it is mutually covenanted and agreed, for the benefit of the
Noteholders, as follows:

GRANTING CLAUSE

To secure the payment of the principal of and interest on the Notes in
accordance with their terms, the payment of all of the sums payable under this
Indenture and the performance of the covenants contained in this Indenture, the
Issuer hereby Grants to the Indenture Trustee, for the benefit of the
Noteholders, all of the Issuer’s right, title and interest in and to the
following whether now owned or hereafter acquired and any and all benefits
accruing to the Issuer from, (i) all Timeshare Loans acquired by the Issuer from
time to time pursuant to the Sale Agreement, (ii) any Qualified Substitute
Timeshare Loans, (iii) the Receivables in respect of each Timeshare Loan due
after the related Cut-Off Date, (iv) the related Timeshare Loan Documents
(excluding any rights as developer or declarant under the Timeshare Declaration,
the Timeshare Program Consumer Documents or the Timeshare Program Governing
Documents), (v) all Related Security in respect of each Timeshare Loan, (vi) all
rights and remedies under the Purchase Agreement, the Sale Agreement, the
Lockbox Agreement, the Backup Servicing Agreement, the Administration Agreement,
the Custodial Agreement or any Hedge Agreement, (vii) all amounts in or to be
deposited to the Lockbox Account, the Collection Account, the Credit Card
Account and the General Reserve Account, and (viii) proceeds of the foregoing
(including, without limitation, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds (as applicable), condemnation awards, rights to payment of
any and every kind, and other forms of obligations and receivables which at any
time constitute all or part or are included in the proceeds of any of the
foregoing) (collectively, the “Trust Estate”). Notwithstanding the foregoing,
the Trust Estate shall not include (i) any Timeshare Loan released from the Lien
of this Indenture in

 

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accordance with the terms hereof and any Related Security, Timeshare Loan
Documents, income or proceeds related to such released Timeshare Loan, (ii) any
amount distributed pursuant to Section 3.4 or Section 6.6 hereof or (iii) any
Misdirected Deposits.

Such Grant is made in trust to secure (i) the payment of all amounts due on the
Notes in accordance with their terms, equally and ratably except as otherwise
may be provided in this Indenture, without prejudice, priority, or distinction
between any Note of the same Class and any other Note of the same Class by
reason of differences in time of issuance or otherwise, and (ii) the payment of
all other sums payable under the Notes and this Indenture.

The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
required to the best of its ability and to the end that the interests of the
Noteholders may be adequately and effectively protected as hereinafter provided.

The Custodian shall hold the Timeshare Loan Files in trust, for the use and
benefit of the Issuer and all present and future Noteholders, and shall retain
possession thereof. The Custodian further agrees and acknowledges that each
other item making up the Trust Estate that is physically delivered to the
Custodian will be held by the Custodian in the State of Minnesota or in any
other location acceptable to the Indenture Trustee and the Servicer.

The Indenture Trustee further acknowledges (a) that in the event the conveyance
of the Timeshare Loans by the Depositor to the Issuer pursuant to the Sale
Agreement is determined to constitute a loan and not a sale as it is intended by
all the parties hereto, the Custodian will be holding each of the Timeshare
Loans as bailee of the Issuer; provided, however, that with respect to the
Timeshare Loans, the Custodian will not act at the direction of the Issuer
without the written consent of the Indenture Trustee; and (b) receipt of the
Amended Notes in connection with the authentication and delivery of the Notes.

ARTICLE I.

 

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

 

SECTION 1.1.

General Definitions and Usage of Terms.

(a)       In addition to the terms defined elsewhere in this Indenture,
capitalized terms shall have the meanings given them in the “Third Amended and
Restated Standard Definitions” attached hereto as Annex A.

(b)       With respect to all terms in this Indenture, the singular includes the
plural and the plural the singular; words importing any gender including the
other genders; references to “writing” include printing, typing, lithography and
other means of reproducing words in a visible form; references to agreements and
other contractual instruments include all amendments, modifications and
supplements thereto or any changes therein entered into in accordance with their
respective terms and not prohibited by this Indenture; references to Persons
include their successors and assigns; and the term “including” means “including
without limitation.”

 

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SECTION 1.2.

Compliance Certificates and Opinions.

Upon any written application or request (or oral application with prompt written
or telecopied confirmation) by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, other than any request that (a)
the Indenture Trustee authenticate the Notes specified in such request, (b) the
Indenture Trustee invest moneys in any of the Trust Accounts pursuant to the
written directions specified in such request or (c) the Indenture Trustee pay
moneys due and payable to the Issuer hereunder to the Issuer’s assignee
specified in such request, the Indenture Trustee shall require the Issuer to
furnish to the Indenture Trustee an Officer’s Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and that the request otherwise is in
accordance with the terms of this Indenture, and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any such requested action as to
which other evidence of satisfaction of the conditions precedent thereto is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.

 

 

SECTION 1.3.

Form of Documents Delivered to Indenture Trustee.

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Issuer delivered to the
Indenture Trustee may be based, insofar as it relates to legal matters, upon an
Opinion of Counsel, unless such officer knows that the opinion with respect to
the matters upon which his/her certificate or opinion is based is erroneous. Any
such officer’s certificate or opinion and any Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer as to such factual
matters unless such officer or counsel knows that the certificate or opinion or
representations with respect to such matters is erroneous. Any Opinion of
Counsel may be based on the written opinion of other counsel, in which event
such Opinion of Counsel shall be accompanied by a copy of such other counsel’s
opinion and shall include a statement to the effect that such other counsel
believes that such counsel and the Indenture Trustee may reasonably rely upon
the opinion of such other counsel.

Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

Wherever in this Indenture, in connection with any application or certificate or
report to the Indenture Trustee, it is provided that the Issuer shall deliver
any document as a condition of the granting of such application, or as evidence
of compliance with any term hereof, it is intended that the truth and accuracy,
at the time of the granting of such application or at the

 

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effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 7.1(b) hereof.

Whenever in this Indenture it is provided that the absence of the occurrence and
continuation of a Default, Event of Default or Servicer Event of Default is a
condition precedent to the taking of any action by the Indenture Trustee at the
request or direction of the Issuer, then, notwithstanding that the satisfaction
of such condition is a condition precedent to the Issuer’s right to make such
request or direction, the Indenture Trustee shall be protected in acting in
accordance with such request or direction if it does not have knowledge of the
occurrence and continuation of such event. For all purposes of this Indenture,
the Indenture Trustee shall not be deemed to have knowledge of any Default,
Event of Default or Servicer Event of Default nor shall the Indenture Trustee
have any duty to monitor or investigate to determine whether a default has
occurred (other than an Event of Default of the kind described in subparagraph
(a) of the definition of Event of Default) or Servicer Event of Default has
occurred unless a Responsible Officer of the Indenture Trustee shall have actual
knowledge thereof or shall have been notified in writing thereof by the Issuer,
the Servicer or any secured party.

 

SECTION 1.4.

Acts of Noteholders, etc.

(a)      Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Indenture Trustee and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.1 hereof) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 1.4.

(b)      The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Indenture Trustee deems sufficient.

(c)      Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the holder of any Note shall bind every future holder of the
same Note and the

 

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holder of every Note issued upon the registration of transfer thereof or in
exchange therefore or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.

(d)      By accepting the Notes issued pursuant to this Indenture, each
Noteholder irrevocably appoints the Indenture Trustee hereunder as the special
attorney-in-fact for such Noteholder vested with full power on behalf of such
Noteholder to effect and enforce the rights of such Noteholder for the benefit
of such Noteholder; provided, that nothing contained in this Section 1.4(d)
shall be deemed to confer upon the Indenture Trustee any duty or power to vote
on behalf of the Noteholders with respect to any matter on which the Noteholders
have a right to vote pursuant to the terms of this Indenture.

 

SECTION 1.5.

Notice to Noteholders; Waiver.

(a)      Where this Indenture provides for notice to Noteholders of any event,
or the mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, via first class mail, or sent by private courier or confirmed
telecopy to each Noteholder affected by such event or to whom such report is
required to be mailed, at its address as it appears in the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice or the mailing of such report. In any case where a
notice or report to Noteholders is mailed, neither the failure to mail such
notice or report, nor any defect in any notice or report so mailed, to any
particular Noteholder shall affect the sufficiency of such notice or report with
respect to other Noteholders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholders shall be filed with
the Indenture Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

(b)      In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.5(a) hereof, of any event or any
report to Noteholders when such notice or report is required to be delivered
pursuant to any provision of this Indenture, then such notification or delivery
as shall be made with the approval of the Indenture Trustee shall constitute a
sufficient notification for every purpose hereunder.

 

SECTION 1.6.

Effect of Headings and Table of Contents.

The Article and Section headings herein and in the Table of Contents are for
convenience only and shall not affect the construction hereof.

 

SECTION 1.7.

Successors and Assigns.

All covenants and agreements in this Indenture by each of the parties hereto
shall bind its respective successors and permitted assigns, whether so expressed
or not.

 

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SECTION 1.8.

GOVERNING LAW.

THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK. UNLESS MADE APPLICABLE IN A
SUPPLEMENT HERETO, THIS INDENTURE IS NOT SUBJECT TO THE TRUST INDENTURE ACT OF
1939, AS AMENDED, AND SHALL NOT BE GOVERNED THEREBY AND CONSTRUED IN ACCORDANCE
THEREWITH.

 

SECTION 1.9.

Legal Holidays.

In any case where any Payment Date or the Stated Maturity or any other date on
which principal of or interest on any Note is proposed to be paid shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Notes) such payment need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
Payment Date, Stated Maturity or other date on which principal of or interest on
any Note is proposed to be paid; provided, that no penalty interest shall accrue
for the period from and after such Payment Date, Stated Maturity, or any other
date on which principal of or interest on any Note is proposed to be paid, as
the case may be, until such next succeeding Business Day.

 

SECTION 1.10.

Execution in Counterparts.

This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

 

SECTION 1.11.

Inspection.

The Issuer agrees that, on ten Business Days’ prior notice (or, one Business
Day’s prior notice after the occurrence and during the occurrence of an Event of
Default or a Servicer Event of Default), it will permit the representatives of
the Indenture Trustee or any Noteholder, during the Issuer’s normal business
hours, to examine all of the books of account, records, reports and other papers
of the Issuer, to make copies thereof and extracts therefrom, and to discuss its
affairs, finances and accounts with its designated officers, employees and
independent accountants in the presence of such designated officers and
employees (and by this provision the Issuer hereby authorizes its independent
accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested for the purpose of reviewing or evaluating the financial condition or
affairs of the Issuer or the performance of and compliance with the covenants
and undertakings of the Issuer and the Servicer in this Indenture or any of the
other documents referred to herein or therein. Any reasonable expense incident
to the exercise by the Indenture Trustee at any time or any Noteholder during
the continuance of any Default or Event of Default, of any right under this
Section 1.11 shall be borne by the Issuer and distributed in accordance with
Section 3.4 or

 

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Section 6.6, as applicable. Nothing contained herein shall be construed as a
duty of the Indenture Trustee to perform such inspection.

 

SECTION 1.12.

Survival of Representations and Warranties.

The representations, warranties and certifications of the Issuer made in this
Indenture or in any certificate or other writing delivered by the Issuer
pursuant hereto shall survive the authentication and delivery of the Notes
hereunder.

 

SECTION 1.13.

Effective Date.

This Indenture shall be effective as of the Amendment Date.

ARTICLE II.

 

THE NOTES

 

SECTION 2.1.

General Provisions.

(a)      Form of Notes. The Notes shall be designated as the “BXG Timeshare
Trust I, Timeshare Loan-Backed VFN Notes, Series I”. The Notes shall be issued
in five Classes and, together with their certificates of authentication, shall
be in substantially the form set forth in Exhibit A attached hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or are permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon, as may consistently herewith, be determined by the officer executing
such Notes, as evidenced by such officer’s execution of such Notes.

(b)      Maximum Outstanding Note Balance and Denominations. The Outstanding
Note Balance of the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes and the Class E Notes shall not exceed the Maximum Outstanding
Class A Note Balance, the Maximum Outstanding Class B Note Balance, the Maximum
Outstanding Class C Note Balance, the Maximum Outstanding Class D Note Balance
and the Maximum Outstanding Class E Note Balance, respectively. The Notes shall
be issuable only as registered Notes, without interest coupons, in the
denominations of at least $50,000 and in integral multiples of $1,000; provided,
however, that the foregoing shall not restrict or prevent the transfer in
accordance with Section 2.4 hereof of any Note with a remaining Outstanding Note
Balance of less than $50,000.

(c)      Execution, Authentication, Delivery and Dating. The Amended Notes are
hereby exchanged for the Notes. For the avoidance of doubt, the indebtedness
evidenced by the Amended Notes remains outstanding and is consolidated with the
indebtedness evidenced by the Notes. The Notes shall be manually executed by an
Authorized Officer of the Owner Trustee on behalf of the Issuer. Any Note
bearing the signature of an individual who was at the time of execution thereof
an Authorized Officer of the Owner Trustee on behalf of the Issuer shall bind
the Issuer, notwithstanding that such individual ceases to hold such office
prior to the authentication and delivery of such Note or did not hold such
office at the date of such Note. No Note shall be entitled to any benefit under
this Indenture or be valid or obligatory for any

 

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purpose unless there appears on such Note a certificate of authentication
substantially in the form set forth in Exhibit A hereto, executed by the
Indenture Trustee by manual signature, and such certificate upon any Note shall
be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder. Each Note shall be dated the date of its
authentication. The Notes may from time to time be executed by the Issuer and
delivered to the Indenture Trustee for authentication together with an Issuer
Order to the Indenture Trustee directing the authentication and delivery of such
Notes and thereupon the same shall be authenticated and delivered by the
Indenture Trustee in accordance with such Issuer Order.

 

SECTION 2.2.

Definitive Notes.

The Notes shall be issued in definitive form only.

 

SECTION 2.3.

[RESERVED]

 

SECTION 2.4.

Registration, Transfer and Exchange of Notes.

(a)      The Issuer shall cause to be kept at the Corporate Trust Office a
register (the “Note Register”) for the registration, transfer and exchange of
Notes. The Indenture Trustee is hereby appointed “Note Registrar” for purposes
of registering Notes and transfers of Notes as herein provided. The names and
addresses of all Noteholders and the names and addresses of the transferees of
any Notes shall be registered in the Note Register. The Person in whose name any
Note is so registered shall be deemed and treated as the sole owner and
Noteholder thereof for all purposes of this Indenture and the Note Registrar,
the Issuer, the Indenture Trustee, the Servicer and any agent of any of them
shall not be affected by any notice or knowledge to the contrary. The Notes are
transferable or exchangeable only upon the surrender of such Note to the Note
Registrar at the Corporate Trust Office together with an assignment and transfer
(executed by the Noteholder or his duly authorized attorney), subject to the
applicable requirements of this Section 2.4. Upon request of the Indenture
Trustee, the Note Registrar shall provide the Indenture Trustee with the names
and addresses of the Noteholders.

(b)      Upon surrender for registration of transfer of any Note, subject to the
applicable requirements of this Section 2.4, the Issuer shall execute and the
Indenture Trustee shall duly authenticate in the name of the designated
transferee or transferees, one or more new Notes in denominations of a like
aggregate denomination as the Note being surrendered. Each Note surrendered for
registration of transfer shall be canceled and subsequently destroyed by the
Note Registrar. Each new Note issued pursuant to this Section 2.4 shall be
registered in the name of any Person as the transferring Noteholder may request,
subject to the applicable provisions of this Section 2.4. All Notes issued upon
any registration of transfer or exchange of Notes shall be entitled to the same
benefits under this Indenture as the Notes surrendered upon such registration of
transfer or exchange.

(c)      The issuance of the Notes will not be registered or qualified under the
Securities Act or the securities laws of any state. No resale or transfer of any
Note may be made unless such resale or transfer is made in accordance with this
Indenture and only if (i) in the United States to a person whom the transferor
reasonably believes is a “qualified institutional buyer” (as defined in Rule
144A) that is purchasing for its own account or for the account of a

 

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qualified institutional buyer in a transaction meeting the requirements of Rule
144A as certified by the transferee (other than the Agent) in a letter in the
form of Exhibit B hereto, (ii) pursuant to an exemption from registration under
the Securities Act provided by Rule 144 (if available) or (iii) pursuant to an
effective registration statement under the Securities Act, in each of cases (i)
through (iii) in accordance with any applicable securities laws of any state of
the United States. Each transferee and each subsequent transferee will be
required to notify any subsequent purchaser of such Notes from it of the resale
restrictions described herein. None of the Issuer, the Servicer or the Indenture
Trustee is obligated to register or qualify the Notes under the Securities Act
or any other securities law or to take any action not otherwise required under
this Indenture to permit the transfer of any Note without registration.

(d)      No resale or other transfer of any Note may be made to any transferee
unless (i) such transferee is not, and will not acquire such Note on behalf or
with the assets of, any Benefit Plan or (ii) no “prohibited transaction” under
ERISA or section 4975 of the Code or Similar Law that is not subject to a
statutory, regulatory or administrative exemption will occur in connection with
purchaser’s or such transferee’s acquisition or holding of such Note. In
addition, the Notes may not be purchased by or transferred to any Benefit Plan
or person acting on behalf of or with assets of any Benefit Plan, unless it
represents that it is not sponsored (within the meaning of Section 3(16)(B) of
ERISA) by the Issuer, the Depositor, the Originators, the Servicer, the
Indenture Trustee, the Owner Trustee, the Administrator, the Paying Agent, the
Custodian, the Backup Servicer, the Lockbox Bank or the Agent, or by any
affiliate of any such person. In addition to the applicable provisions of this
Section 2.4, the exchange, transfer and registration of transfer of Notes shall
only be made in accordance with Section 2.4(c) and this Section 2.4(d).

(e)      No fee or service charge shall be imposed by the Note Registrar for its
services in respect of any registration of transfer or exchange referred to in
this Section 2.4. The Note Registrar may require payment by each transferor of a
sum sufficient to cover any tax, expense or other governmental charge payable in
connection with any such transfer.

(f)       None of the Issuer, the Indenture Trustee, the Servicer or the Note
Registrar is obligated to register or qualify the Notes under the Securities Act
or any other securities law or to take any action not otherwise required under
this Indenture to permit the transfer of such Notes without registration or
qualification. Any such Noteholder desiring to effect such transfer shall, and
does hereby agree to, indemnify the Issuer, the Indenture Trustee, the Servicer
and the Note Registrar against any loss, liability or expense that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.

(g)      The Servicer agrees to cause the Issuer, and the Issuer agrees to
provide, such information as required under Rule 144A under the Securities Act
so as to allow resales of Notes to “qualified institutional buyers” (as defined
therein) in accordance herewith.

(h)      The Notes represent the sole obligation of the Issuer payable from the
Trust Estate and do not represent the obligations of the Originators, the
Servicer, the Depositor, the Backup Servicer, the Owner Trustee, the Indenture
Trustee, the Administrator or the Custodian.

 

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(i)       Notwithstanding anything in this Section 2.4 or elsewhere in this
Indenture or the Notes, the transfer restrictions described herein shall apply
only to the Noteholders and shall not apply to the Purchasers whose rights to
transfer interests in the Notes are governed solely by Section 8 of the Note
Funding Agreement.

 

 

SECTION 2.5.

Mutilated, Destroyed, Lost and Stolen Notes.

(a)      If any mutilated Note is surrendered to the Indenture Trustee, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefore a replacement Note of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

(b)      If there shall be delivered to the Issuer and the Indenture Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such security or indemnity as may be reasonably required by them to save
each of them and any agent of either of them harmless (which security and
indemnity shall be provided by the Agent to the extent such loss or theft occurs
while it holds the Note on behalf of a Noteholder), then, in the absence of
actual notice to the Issuer or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, the Issuer shall execute and upon its request
the Indenture Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Note, a replacement Note of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

(c)      In case the final installment of principal on any such mutilated,
destroyed, lost or stolen Note has become or will at the next Payment Date
become due and payable, the Issuer, in its discretion, may, instead of issuing a
replacement Note, pay such Note.

(d)      Upon the issuance of any replacement Note under this Section 2.5, the
Issuer or the Indenture Trustee may require the payment by the Noteholder of a
sum sufficient to cover any Tax or other governmental charge that may be imposed
as a result of the issuance of such replacement Note.

(e)      Every replacement Note issued pursuant to this Section 2.5 in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.

(f)       The provisions of this Section 2.5 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

SECTION 2.6.

Payment of Interest and Principal; Rights Preserved.

(a)      Any installment of interest or principal, payable on any Note that is
punctually paid or duly provided for by or on behalf of the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such Note was
registered at the close of business on the Record Date for such Payment Date by
check mailed to the address specified in the Note Register (or, if the
Noteholder is the Agent, at such addresses as the Agent shall specify in

 

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writing), or if a Noteholder has provided wire transfer instructions to the
Indenture Trustee at least five Business Days prior to the applicable Payment
Date, upon the request of a Noteholder, by wire transfer of federal funds to the
accounts and numbers specified in the Note Register (or, if the Noteholder is
the Agent, at such accounts and numbers as the Agent shall specify in writing),
in each case on such Record Date for such Person.

(b)      All reductions in the principal amount of a Note affected by payments
of principal made on any Payment Date shall be binding upon all Noteholders of
such Note and of any Note issued upon the registration of transfer thereof or in
exchange therefore or in lieu thereof, whether or not such payment is noted on
such Note. All payments on the Notes shall be paid without any requirement of
presentment, but each Noteholder shall be deemed to agree, by its acceptance of
the same, to surrender such Note at the Corporate Trust Office within 30 days
after receipt of the final principal payment of such Note.

 

SECTION 2.7.

Persons Deemed Owners.

Prior to due presentment of a Note for registration of transfer, the Issuer, the
Indenture Trustee, and any agent of the Issuer or the Indenture Trustee may
treat the registered Noteholder as the owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and neither the
Issuer, the Indenture Trustee, nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.

 

SECTION 2.8.

Cancellation.

All Notes surrendered for registration of transfer or exchange or following
final payment shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by
it. The Issuer may at any time deliver to the Indenture Trustee for cancellation
any Notes previously authenticated and delivered hereunder which the Issuer may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Indenture Trustee. No Notes shall be authenticated in
lieu of or in exchange for any Notes canceled as provided in this Section 2.8,
except as expressly permitted by this Indenture. All canceled Notes held by the
Indenture Trustee may be disposed of in the normal course of its business or as
directed by an Issuer Order.

 

SECTION 2.9.

Noteholder Lists.

The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Noteholders. In the event the Indenture Trustee no longer serves as the Note
Registrar, the Issuer (or any other obligor upon the Notes) shall furnish to the
Indenture Trustee at least five Business Days before each Payment Date (and in
all events in intervals of not more than six months) and at such other times as
the Indenture Trustee may request in writing a list in such form and as of such
date as the Indenture Trustee may reasonably require of the names and addresses
of the Noteholders.

 

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SECTION 2.10.

Treasury Notes.

In determining whether the Noteholders of the required Outstanding Note Balance
of the Notes have concurred in any direction, waiver or consent, Notes held or
redeemed by the Issuer or any other obligor in respect of the Notes or held by
an Affiliate of the Issuer or such other obligor shall be considered as though
not Outstanding, except that for the purposes of determining whether the
Indenture Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes which a Responsible Officer of the Indenture Trustee knows
are so owned shall be so disregarded.

 

SECTION 2.11.

[RESERVED].

 

SECTION 2.12.

Confidentiality.

Each Noteholder covenants and agrees that any information obtained pursuant to,
or otherwise in connection with, this Indenture or the other Transaction
Documents shall be held in confidence (it being understood that documents
provided to the Agent hereunder may in all cases be distributed by the Agent to
the Purchasers) except that the Noteholder (or Purchasers) may disclose such
information (i) to its officers, directors, members, employees, agents, counsel,
accountants, auditors, advisors or representatives who have an obligation to
maintain the confidentiality of such information, (ii) to the extent such
information has become available to the public other than as a result of a
disclosure by or through the Noteholder, Agent or such Purchaser, (iii) to the
extent such information was available to the Noteholder, Agent or such Purchaser
on a non-confidential basis prior to its disclosure to the Noteholder, Agent or
such Purchaser in connection with this transaction, (iv) with the consent of the
Servicer, or (v) to the extent the Noteholder, Agent or such Purchaser should be
(A) required in connection with any legal or regulatory proceeding or (B)
requested by any Governmental Authority to disclose such information; provided,
that, in the case of this clause (v), the Noteholder, the Agent or such
Purchaser, as the case may be, will (unless otherwise prohibited by law or in
connection with regular regulatory reviews) notify the Issuer and the Servicer
of its intention to make any such disclosure as early as practicable prior to
making such disclosure and cooperate with the Servicer in connection with any
action to obtain a protective order with respect to such disclosure.

ARTICLE III.

 

ACCOUNTS; COLLECTION AND

APPLICATION OF MONEYS; REPORTS

 

SECTION 3.1.

Trust Accounts; Investments by Indenture Trustee.

(a)      The Indenture Trustee has established in the name of the Indenture
Trustee for the benefit of the Noteholders as provided in this Indenture, the
Trust Accounts, which accounts (other than the Lockbox Account and the Credit
Card Account) are Eligible Bank Accounts maintained at the Corporate Trust
Office.

Subject to the further provisions of this Section 3.1(a), the Indenture Trustee
shall, upon receipt or upon transfer from another account, as the case may be,
deposit into such Trust Accounts all amounts received by it which are required
to be deposited therein in accordance

 

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with the provisions of this Indenture. All such amounts and all investments made
with such amounts, including all income and other gain from such investments,
shall be held by the Indenture Trustee in such accounts as part of the Trust
Estate as herein provided, subject to withdrawal by the Indenture Trustee in
accordance with, and for the purposes specified in the provisions of, this
Indenture.

(b)      The Indenture Trustee shall assume that any amount remitted to it in
respect of the Trust Estate is to be deposited into the Collection Account
pursuant to Section 3.2(a) hereof unless a Responsible Officer of the Indenture
Trustee receives written instructions from the Servicer to the contrary.

(c)      None of the parties hereto shall have any right of set-off with respect
to any Trust Account or any investment therein.

(d)      So long as no Event of Default shall have occurred and be continuing,
all or a portion of the amounts in any Trust Account (other than the Lockbox
Account and the Credit Card Account) shall be invested and reinvested by the
Indenture Trustee pursuant to an Issuer Order in one or more Eligible
Investments. Subject to the restrictions on the maturity of investments set
forth in Section 3.1(f) hereof, each such Issuer Order may authorize the
Indenture Trustee to make the specific Eligible Investments set forth therein,
to make Eligible Investments from time to time consistent with the general
instructions set forth therein, in each case, in such amounts as such Issuer
Order shall specify.

(e)      In the event that either (i) the Issuer shall have failed to give
investment directions to the Indenture Trustee by 9:30 A.M., New York City time
on any Business Day on which there may be uninvested cash or (ii) an Event of
Default shall be continuing, the Indenture Trustee shall promptly invest and
reinvest the funds then in the designated Trust Account to the fullest extent
practicable in those obligations or securities described in clause (e) of the
definition of “Eligible Investments”. All investments made by the Indenture
Trustee shall mature no later than the maturity date therefor permitted by
Section 3.1(f) hereof.

(f)       No investment of any amount held in any Trust Account shall mature
later than the Business Day immediately preceding the Payment Date which is
scheduled to occur immediately following the date of investment. All income or
other gains (net of losses) from the investment of moneys deposited in any Trust
Account shall be deposited by the Indenture Trustee in such account immediately
upon receipt.

(g)      Subject to Section 3.1(d) hereof, any investment of any funds in any
Trust Account shall be made under the following terms and conditions:

(i)        each such investment shall be made in the name of the Indenture
Trustee, in each case in such manner as shall be necessary to maintain the
identity of such investments as assets of the Trust Estate; and

(ii)       any certificate or other instrument evidencing such investment shall
be delivered directly to the Indenture Trustee, and the Indenture Trustee shall
have sole possession of such instrument, and all income on such investment.

 

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(h)      The Indenture Trustee shall not in any way be held liable by reason of
any insufficiency in any Trust Account resulting from losses on investments made
in accordance with the provisions of this Section 3.1 including, but not limited
to, losses resulting from the sale or depreciation in the market value of such
investments (but the institution serving as Indenture Trustee shall at all times
remain liable for its own obligations, if any, constituting part of such
investments). The Indenture Trustee shall not be liable for any investment or
liquidation of an investment made by it in accordance with this Section 3.1 on
the grounds that it could have made a more favorable investment or a more
favorable selection for sale of an investment.

(i)       The parties agree that each Trust Account (other than the Lockbox
Account and the Credit Card Account) is a “securities account” within the
meaning of Article 8 of the UCC and that all property (including without
limitation all uninvested funds, securities and other investment property) at
any time deposited or carried in or credited to the Trust Accounts (other than
the Lockbox Account and the Credit Card Account) shall be treated as “financial
assets” within the meaning of Article 8 of the UCC. The Account Intermediary
agrees that (A) it is a “securities intermediary” within the meaning of Article
8 of the UCC and will at all times act in such capacity with respect to the
Trust Accounts and (B) the Indenture Trustee is the entitlement holder of the
Trust Accounts (other than the Lockbox Account and the Credit Card Account). The
parties agree that the Account Intermediary shall follow all “entitlement
orders” (as such term is defined in Article 8 of the UCC) originated by the
Indenture Trustee with respect to the Trust Accounts (other than the Lockbox
Account and the Credit Card Account) and all financial assets deposited or
carried in or credited to any Trust Account (other than the Lockbox Account and
the Credit Card Account). The parties agree that the “securities intermediary’s
jurisdiction”, within the meaning of Section 8-110 of the UCC, with respect to
security entitlements to financial assets credited to the Trust Accounts (other
than the Lockbox Account and the Credit Card Account) shall be the State of New
York.

 

SECTION 3.2.

Establishment and Administration of the Trust Accounts.

(a)      Collection Account. The Issuer hereby directs and the Indenture Trustee
hereby agrees to continue to maintain an account (the “Collection Account”) for
the benefit of the Noteholders. The Collection Account is an Eligible Bank
Account initially established at the corporate trust department of the Indenture
Trustee, bearing the following designation “BXG Timeshare Trust I, Timeshare
Loan-Backed VFN Notes, Series I — Collection Account, U.S. Bank National
Association, as Indenture Trustee for the benefit of the Noteholders”. The
Indenture Trustee on behalf of the Noteholders shall possess all right, title
and interest in all funds on deposit from time to time in the Collection Account
and in all proceeds thereof. The Collection Account shall be under the sole
dominion and control of the Indenture Trustee for the benefit of the Noteholders
as their interests appear in the Trust Estate. If, at any time, the Collection
Account ceases to be an Eligible Bank Account, the Indenture Trustee shall
within two Business Days establish a new Collection Account which shall be an
Eligible Bank Account, transfer any cash and/or any investments to such new
Collection Account, and from the date such new Collection Account is
established, it shall be the “Collection Account”. The Indenture Trustee agrees
to immediately deposit any amounts received by it into the Collection Account.
Amounts on deposit in the Collection Account shall be invested in accordance
with Section 3.1 hereof. Withdrawals and payments from the Collection Account
will be made on each Payment Date as provided in Section 3.4 or Section 6.6
hereof, as applicable. The Indenture Trustee, at

 

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the written direction of the Servicer, shall withdraw (no more than once per
calendar week) from the Collection Account and return to the Servicer or as
directed by the Servicer, any amounts which (i) were mistakenly deposited in the
Collection Account, including, without limitation, amounts representing
Misdirected Payments and (ii) represent Additional Servicing Compensation. The
Indenture Trustee may conclusively rely on such written direction.

(b)      General Reserve Account. The Issuer hereby directs and the Indenture
Trustee hereby agrees to continue to maintain an account (the “General Reserve
Account”) for the benefit of the Noteholders. The General Reserve Account is an
Eligible Bank Account initially established at the corporate trust department of
the Indenture Trustee, bearing the following designation “BXG Timeshare Trust I,
Timeshare Loan-Backed VFN Notes, Series I — General Reserve Account, U.S. Bank
National Association, as Indenture Trustee for the benefit of the Noteholders”.
The Indenture Trustee on behalf of the Noteholders shall possess all right,
title and interest in all funds on deposit from time to time in the General
Reserve Account and in all proceeds thereof. The General Reserve Account shall
be under the sole dominion and control of the Indenture Trustee for the benefit
of the Noteholders as their interests appear in the Trust Estate. If, at any
time, the General Reserve Account ceases to be an Eligible Bank Account, the
Indenture Trustee shall within two Business Days establish a new General Reserve
Account which shall be an Eligible Bank Account, transfer any cash and/or any
investments to such new General Reserve Account and from the date such new
General Reserve Account is established, it shall be the “General Reserve
Account”. Amounts on deposit in the General Reserve Account shall be invested in
accordance with Section 3.1 hereof. Deposits to the General Reserve Account
shall be made in accordance with Section 3.4 hereof. Withdrawals and payments
from the General Reserve Account shall be made in the following manner:

(i)        Withdrawals. Subject to Sections 3.2(b)(ii) and (iii) hereof, if on
any Payment Date, Available Funds (without giving effect to any deposit from the
General Reserve Account) would be insufficient to pay any portion of the
Required Payments on such Payment Date, the Indenture Trustee shall, based on
the Monthly Servicer Report, withdraw from the General Reserve Account an amount
equal to the lesser of such insufficiency and the amount on deposit in the
General Reserve Account and deposit such amount in the Collection Account.

(ii)       Sequential Pay Event. Upon the occurrence of a Sequential Pay Event,
the Indenture Trustee shall withdraw all amounts on deposit in the General
Reserve Account and shall deposit such amounts to the Collection Account for
distribution in accordance with Section 6.6 hereof.

(iii)      Stated Maturity or Payment in Full. On the earlier to occur of the
Stated Maturity and the Payment Date on which the Outstanding Note Balance of
all Classes of Notes will be reduced to zero, the Indenture Trustee shall
withdraw all amounts on deposit in the General Reserve Account and shall deposit
such amounts to the Collection Account for distribution in accordance with
Section 3.4 or Section 6.6, as applicable.

 

SECTION 3.3.

[Reserved].

 

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SECTION 3.4.

Distributions.

(a)      So long as no Sequential Pay Event has occurred, on each Payment Date,
to the extent of Available Funds and based on the Monthly Servicer Report, the
Indenture Trustee shall withdraw funds from the Collection Account to make the
following disbursements and distributions to the following parties, in the
following order of priority:

(i)                to the Indenture Trustee, the Indenture Trustee Fee, plus any
accrued and unpaid Indenture Trustee Fees with respect to prior Payment Dates,
and any extraordinary out-of-pocket expenses of the Indenture Trustee (up to
$10,000 per Payment Date and no more than a cumulative total of $100,000 for
Servicer Termination Costs) incurred and not reimbursed in connection with its
obligations and duties under this Indenture;

(ii)               to the Owner Trustee, the Owner Trustee Fee, if due, plus any
accrued and unpaid Owner Trustee Fees with respect to prior Payment Dates;

(iii)              to the Administrator, the Administrator Fee, plus any accrued
and unpaid Administrator Fees with respect to prior Payment Dates;

(iv)              to the Custodian, the Custodian Fee, plus any accrued and
unpaid Custodian Fees with respect to prior Payment Dates;

(v)               to the Lockbox Bank, the Lockbox Fee, plus any accrued and
unpaid Lockbox Fees with respect to prior Payment Dates;

(vi)              to the Trust Owner, the Trust Owner Fee, if due, plus any
accrued and unpaid Trust Owner Fees with respect to prior Payment Dates;

(vii)             to the Servicer, the Servicing Fee, plus any accrued and
unpaid Servicing Fees with respect to prior Payment Dates;

(viii)            to the Backup Servicer, the Backup Servicing Fee, plus any
accrued and unpaid Backup Servicing Fees with respect to prior Payment Dates
(less any amounts received from the Indenture Trustee, as successor Servicer);

(ix)              to the Agent and the Placement Agent, any Program Fees, plus
any accrued and unpaid Program Fees with respect to prior Payment Dates;

(x)               to the Class A Noteholders, the Class A Interest Distribution
Amount;

(xi)              to the Class B Noteholders, the Class B Interest Distribution
Amount;

(xii)             to the Class C Noteholders, the Class C Interest Distribution
Amount;

(xiii)            to the Class D Noteholders, the Class D Interest Distribution
Amount;

 

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(xiv)            to the Class E Noteholders, the Class E Interest Distribution
Amount;

(xv)             to the Class A Noteholders, the Class A Principal Distribution
Amount;

(xvi)            to the Class B Noteholders, the Class B Principal Distribution
Amount;

(xvii)           to the Class C Noteholders, the Class C Principal Distribution
Amount;

(xviii)          to the Class D Noteholders, the Class D Principal Distribution
Amount;

(xix)            to the Class E Noteholders, the Class E Principal Distribution
Amount;

(xx)             to the Class A Noteholders, the Class B Noteholders, the Class
C Noteholders, the Class D Noteholders and the Class E Noteholders, to the
extent applicable, amounts specified by the Agent and the Servicer as payable to
such Noteholders pursuant to Sections 6.1, 6.2 and 6.3 of the Note Funding
Agreement;

(xxi)            if a Cash Accumulation Event or an Event of Default shall have
occurred and is continuing, to the General Reserve Account, all remaining
Available Funds;

(xxii)           to the Indenture Trustee, any extraordinary out-of-pocket
expenses of the Indenture Trustee not paid in accordance with clause (i) above;

(xxiii)          any amounts due and payable by the Issuer under the Transaction
Documents, but not paid above (including, but not limited to, amounts owed by
the Issuer in respect of its indemnification obligations);

(xxiv)          pro rata, to each of the Class A Noteholders, Class B
Noteholders, Class C Noteholders, Class D Noteholders and Class E Noteholders,
50% of any remaining Available Funds as a distribution of principal on such
Notes until the Borrowing Base Percentage is equal to 67.5%;

(xxv)           to the Agent and the Placement Agent, any Fees not paid in
clause (ix) above;

(xxvi)          on the Stated Maturity, pro rata, to each of the Class A
Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders and
Class E Noteholders, any remaining Available Funds until all amounts due to each
Noteholder at Stated Maturity is paid in full; and

(xxvii)         any remaining Available Funds to the Certificate Distribution
Account for distribution pursuant to the Trust Agreement.

 

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(b)      On and after the Assumption Date, the Indenture Trustee, as successor
Servicer, shall pay the Backup Servicing Fee from amounts received in respect of
the Servicing Fee.

(c)      Upon the occurrence of a Sequential Pay Event, distributions shall be
made in accordance with Section 6.6 hereof.

 

SECTION 3.5.

Reports to Noteholders.

On each Payment Date, the Indenture Trustee shall account to the Agent and each
Noteholder the portion of payments then being made which represents principal
and the amount which represents interest, and shall contemporaneously advise the
Issuer of all such payments. The Indenture Trustee may satisfy its obligations
under this Section 3.5 by making available electronically the Monthly Servicer
Report to the Agent, the Noteholders and the Issuer; provided, however, the
Indenture Trustee shall have no obligation to provide such information described
in this Section 3.5 until it has received the requisite information from the
Issuer or the Servicer. On or before the fifth day prior to the final Payment
Date with respect to any Class, the Indenture Trustee shall send notice of such
Payment Date to the Agent and the Noteholders of such Class. Such notice shall
include a statement that if such Notes are paid in full on the final Payment
Date, interest shall cease to accrue as of the day immediately preceding such
final Payment Date. In addition, the Indenture Trustee shall deliver to the
Noteholders, all notices, compliance reports and other certificates delivered by
the Servicer or the Issuer pursuant to this Indenture. At a Noteholder’s
request, the Indenture Trustee agrees to provide such Noteholder an accounting
of balances in the General Reserve Account.

The Indenture Trustee may make available to the Noteholders and the Agent, via
the Indenture Trustee’s internet website, the Monthly Servicer Report available
each month and, with the consent or at the direction of the Issuer, such other
information regarding the Notes and/or the Timeshare Loans as the Indenture
Trustee may have in its possession, but only with the use of a password provided
by the Indenture Trustee or its agent to such Person upon receipt by the
Indenture Trustee from such Person of a certification in the form of Exhibit F;
provided, however, that the Indenture Trustee or its agent shall provide such
password to the parties to this Indenture and the Agent without requiring such
certification. The Indenture Trustee will make no representation or warranties
as to the accuracy or completeness of such documents and will assume no
responsibility therefor.

The Indenture Trustee’s internet website shall be specified by the Indenture
Trustee from time to time in writing to the Issuer, the Servicer and the
Noteholders. For assistance with this service, Noteholders may call the customer
service desk at (800) 934-6802. In connection with providing access to the
Indenture Trustee’s internet website, the Indenture Trustee may require
registration and the acceptance of a disclaimer. The Indenture Trustee shall not
be liable for the dissemination of information in accordance with this
Indenture.

The Indenture Trustee shall have the right to change the way Monthly Servicer
Reports are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Indenture Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.

 

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Annually (and more often, if required by applicable law), the Indenture Trustee
shall distribute to the Noteholders any Form 1099 or similar information returns
required by applicable tax law to be distributed to the Noteholders. The Paying
Agent shall prepare or cause to be prepared all such information for
distribution by the Indenture Trustee to the Noteholders.

 

SECTION 3.6.

[RESERVED].

 

SECTION 3.7.

Withholding Taxes.

The Indenture Trustee, on behalf of the Issuer, shall comply with all
requirements of the Code and applicable Treasury Regulations and applicable
state and local law with respect to the withholding from any distributions made
by it to any Noteholder of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith.

ARTICLE IV.

 

THE TRUST ESTATE

 

SECTION 4.1.

Acceptance by Indenture Trustee.

(a)      The Indenture Trustee does hereby re-acknowledge and re-confirm its
acceptance of the conveyance by the Issuer of the assets constituting the Trust
Estate. The Indenture Trustee shall hold the Trust Estate in trust for the
benefit of the Noteholders, subject to the terms and provisions hereof. Prior to
each Funding Date and in accordance with the Custodial Agreement, the Issuer
will deliver or cause to be delivered to the Custodian, the Timeshare Loan Files
for all related Timeshare Loans to be conveyed on such Funding Date. On or prior
to each Funding Date, the Issuer will deliver or cause to be delivered to the
Servicer, the Timeshare Loan Servicing Files, for all related Timeshare Loans or
Qualified Substitute Timeshare Loans to be conveyed on such Funding Date.

(b)      The Indenture Trustee shall perform its duties under this Section 4.1
and hereunder on behalf of the Trust Estate and for the benefit of the
Noteholders in accordance with the terms of this Indenture and applicable law
and, in each case, taking into account its other obligations hereunder, but
without regard to:

(i)        any relationship that the Indenture Trustee or any Affiliate of the
Indenture Trustee may have with an Obligor;

(ii)       the ownership of any Note by the Indenture Trustee or any Affiliate
of the Indenture Trustee;

(iii)      the Indenture Trustee’s right to receive compensation for its
services hereunder or with respect to any particular transaction; or

(iv)      the ownership, or holding in trust for others, by the Indenture
Trustee of any other assets or property.

 

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SECTION 4.2.

Acquisition of Timeshare Loans.

                      The Issuer covenants that it shall only acquire Timeshare
Loans in accordance with the provisions of the Sale Agreement and, without
limiting the generality of the Granting Clause, upon any such acquisition, such
Timeshare Loans shall be deemed to be a part of the Trust Estate.

 

SECTION 4.3.

[RESERVED].

 

SECTION 4.4.

Tax Treatment.

(a)      The conveyance by the Issuer of the Timeshare Loans to the Indenture
Trustee shall not constitute and is not intended to result in an assumption by
the Indenture Trustee or any Noteholder of any obligation of the Issuer or the
Servicer to the Obligors, the insurers under any insurance policies, or any
other Person in connection with the Timeshare Loans.

(b)      It is the intention of the parties hereto that, with respect to all
taxes, the Notes will be treated as indebtedness of the Issuer to the
Noteholders secured by the Timeshare Loans (the “Intended Tax
Characterization”). The provisions of this Indenture shall be construed in
furtherance of the Intended Tax Characterization. Each of the Issuer, the
Servicer, the Indenture Trustee, the Club Trustee and the Backup Servicer by
entering into this Indenture, and each Noteholder by the purchase of a Note,
agree to report such transactions for purposes of all taxes in a manner
consistent with the Intended Tax Characterization, unless otherwise required by
applicable law.

(c)      None of the Issuer, the Servicer, the Club Trustee or the Backup
Servicer shall take any action inconsistent with the Indenture Trustee’s
interest in the Timeshare Loans and shall indicate or shall cause to be
indicated in its books and records held on its behalf that each Timeshare Loan
and the other Timeshare Loans constituting the Trust Estate has been assigned to
the Indenture Trustee on behalf of the Noteholders.

 

SECTION 4.5.   

Further Action Evidencing Grant of Security Interest and Assignments.

(a)      The Issuer and the Indenture Trustee each agrees that, from time to
time, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or appropriate, or
that the Noteholders representing a majority of the Outstanding Note Balance of
each Class of Notes may reasonably request, in order to perfect, protect or more
fully evidence the security interest in the Timeshare Loans or to enable the
Indenture Trustee to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Issuer will, without the necessity
of a request and upon the request of the Indenture Trustee, execute and file or
record (or cause to be executed and filed or recorded) financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate to create and
maintain in the Indenture Trustee a first priority perfected security interest,
at all times, in the Trust Estate, including, without limitation, recording and
filing UCC-1 financing statements, amendments or continuation statements prior
to the effective date of any change of the name, identity or

 

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structure or relocation of its chief executive office or any change that would
or could affect the perfection pursuant to any financing statement or
continuation statement or assignment previously filed or make any UCC-1 or
continuation statement previously filed pursuant to this Indenture seriously
misleading within the meaning of applicable provisions of the UCC (and the
Issuer shall give the Indenture Trustee at least 30 Business Days prior notice
of the expected occurrence of any such circumstance). The Issuer shall deliver
promptly to the Indenture Trustee file-stamped copies of any such filings.

(b)      (i) The Issuer hereby grants to each of the Servicer and the Indenture
Trustee a power of attorney to execute, file and record all documents including,
but not limited to, Assignments of Mortgage, UCC-1 financing statements,
amendments or continuation statements, on behalf of the Issuer as may be
necessary or desirable to effectuate the foregoing and (ii) the Servicer hereby
grants to the Indenture Trustee a power of attorney to execute, file and record
all documents on behalf of the Servicer as may be necessary or desirable to
effectuate the foregoing; provided, however, that such grant shall not create a
duty on the part of the Indenture Trustee or the Servicer to file, prepare,
record or monitor, or any responsibility for the contents or adequacy of, any
such documents.

 

SECTION 4.6.

Substitution and Repurchase of Timeshare Loans.

(a)      Mandatory Substitution and Repurchase of Timeshare Loans for Breach of
Representation or Warranty. If at any time, any party hereto obtains knowledge,
discovers, or is notified by any other party hereto, that any of the
representations and warranties of the Depositor in the Sale Agreement were
incorrect at the time such representations and warranties were made, then the
party discovering such defect, omission, or circumstance shall promptly notify
the other parties to this Indenture, the Depositor and the Club Originator. In
the event any such representation or warranty of the Depositor is incorrect and
materially and adversely affects the value of a Timeshare Loan or the interests
of the Noteholders therein, then the Issuer and the Indenture Trustee shall
require the Depositor, within 30 days (or, if the Depositor shall have provided
satisfactory evidence to the Agent (at its sole discretion) that (1) such breach
can not be cured within the 30 day period, (2) such breach can be cured within
an additional 30 day period and (3) it is diligently pursuing a cure, then 60
days) after the date it is first notified of, or otherwise obtains Knowledge of
such breach, to eliminate or otherwise cure in all material respects the
circumstance or condition which has caused such representation or warranty to be
incorrect or if the breach relates to a particular Timeshare Loan and is not
cured in all material respects (such Timeshare Loan, a “Defective Timeshare
Loan”), either to (i) repurchase the Issuer’s interest in such Defective
Timeshare Loan at the Repurchase Price or (ii) provide one or more Qualified
Substitute Timeshare Loans and pay the Substitution Shortfall Amounts, if any.
The Indenture Trustee is hereby appointed attorney-in-fact, which appointment is
coupled with an interest and is therefore irrevocable, to act on behalf and in
the name of the Issuer to enforce the Depositor’s repurchase or substitution
obligations if the Depositor has not complied with its repurchase or
substitution obligations under the Sale Agreement within the aforementioned 30
day or 60-day period.

(b)      Optional Purchase or Substitution of Club Loans. Pursuant to the
Purchase Agreement, with respect to any Original Club Loan, on any date, the
Club Originator, as designee of the Depositor, will (at its option), if the
related Obligor has elected to effect and

 

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the Club Originator has agreed to effect an Upgrade, either (i) pay to the
Collection Account the Repurchase Price for such Original Club Loan or (ii)
substitute one or more Qualified Substitute Timeshare Loans for such Original
Club Loan and pay the related Substitution Shortfall Amounts, if any; provided,
however, that the option to substitute one or more Qualified Substitute
Timeshare Loans for an Original Club Loan is limited on any date to (A) 20% of
the sum of the Aggregate Initial Loan Balance, less (B) the Loan Balances of
Original Club Loans previously substituted by the Club Originator pursuant to
this Section 4.6(b) on the related substitution dates. The Club Originator, as
designee of the Depositor, shall deposit the related Repurchase Price and
Substitution Shortfall Amounts, if any, in the Collection Account as set forth
in Section 4.6(d) below. The Issuer acknowledges that the Club Originator has
agreed to use best efforts to exercise its substitution option with respect to
Original Club Loans prior to exercise of its repurchase option, and to the
extent that the Club Originator shall elect to substitute Qualified Substitute
Timeshare Loans for an Original Club Loan, the Club Originator shall use best
efforts to cause each such Qualified Substitute Timeshare Loan to be, in the
following order of priority, (i) the Upgrade Club Loan related to such Original
Club Loan (in which case, clause (rr) of Schedule I to the Purchase Agreement
and the Sale Agreement shall not apply as an eligibility requirement) and (ii)
an Upgrade Club Loan unrelated to such Original Club Loan.

(c)      Optional Purchase or Substitution of Defaulted Timeshare Loans.
Pursuant to the Purchase Agreement, with respect to any Defaulted Timeshare
Loans, on any date, the Club Originator, as designee of the Depositor shall have
the option, but not the obligation, to either (i) purchase the Defaulted
Timeshare Loan at the Repurchase Price for such Defaulted Timeshare Loan or (ii)
substitute one or more Qualified Substitute Timeshare Loans for such Defaulted
Timeshare Loan and pay the related Substitution Shortfall Amounts, if any;
provided, however, that the option to repurchase a Defaulted Timeshare Loan or
to substitute one or more Qualified Substitute Timeshare Loans for a Defaulted
Timeshare Loan is limited on any date to the Optional Purchase Limit and the
Optional Substitution Limit, respectively. The Club Originator, as designee of
the Depositor, shall purchase or substitute Defaulted Timeshare Loans as
provided herein and the Club Originator shall deposit the related Repurchase
Price and Substitution Shortfall Amounts, if any, in the Collection Account as
set forth in Section 4.6(d) hereof. The Club Originator, may irrevocably waive
the Club Originator’s option to purchase or substitute a Defaulted Timeshare
Loan by delivering or causing to be delivered to the Indenture Trustee a Waiver
Letter in the form of Exhibit G attached hereto.

(d)      Payment of Repurchase Prices and Substitution Shortfall Amounts. The
Issuer and the Indenture Trustee shall direct that the Depositor remit or cause
to be remitted all amounts in respect of Repurchase Prices and Substitution
Shortfall Amounts payable during the related Due Period in immediately available
funds to the Indenture Trustee on the Funding Date for deposit in the Collection
Account.

(e)      Schedule of Timeshare Loans. The Issuer and Indenture Trustee shall
direct the Depositor to provide or cause to be provided to the Indenture Trustee
on any date on which a Timeshare Loan is purchased, repurchased or substituted
with an electronic supplement to the Schedule of Timeshare Loans reflecting the
removal and/or substitution of Timeshare Loans and subjecting any Qualified
Substitute Timeshare Loans to the provisions thereof.

 

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(f)       Officer’s Certificate. No substitution of a Timeshare Loan shall be
effective unless the Issuer and the Indenture Trustee shall have received an
Officer’s Certificate from the Club Originator indicating that (i) the new
Timeshare Loan meets all the criteria of the definition of “Qualified Substitute
Timeshare Loan”, (ii) the Timeshare Loan Files for such Qualified Substitute
Timeshare Loan have been delivered to the Custodian or shall be delivered within
five Business Days, and (iii) the Timeshare Loan Servicing Files for such
Qualified Substitute Timeshare Loan have been delivered to the Servicer.

(g)      Qualified Substitute Timeshare Loans. Within five Business Days after a
Transfer Date, the Issuer and the Indenture Trustee shall direct the Depositor
to deliver or cause the delivery of the Timeshare Loan Files of the related
Qualified Substitute Timeshare Loans to the Custodian in accordance with the
provisions of this Indenture and the Custodial Agreement.

 

SECTION 4.7.

Release of Lien.

(a)      The Issuer shall be entitled to obtain a release from the Lien of the
Indenture for any Timeshare Loan purchased, repurchased or substituted under
Section 4.6 hereof, (i) upon satisfaction of each of the applicable provisions
of Section 4.6 hereof, (ii) in the case of any purchase or repurchase, after a
payment by the Depositor of the Repurchase Price of the Timeshare Loan, and
(iii) in the case of any substitution, after payment by the Depositor of the
applicable Substitution Shortfall Amounts, if any, pursuant to Section 4.6
hereof.

(b)      The Issuer shall be entitled to obtain a release from the Lien of the
Indenture for any Timeshare Loan which has been paid in full.

(c)      In connection with (a) and (b) above, the Issuer and Indenture Trustee
will execute and deliver such releases, endorsements and assignments as are
provided to it by the Depositor, in each case, without recourse, representation
or warranty, as shall be necessary to vest in the Depositor or its designee, the
legal and beneficial ownership of each Timeshare Loan being released pursuant to
this Section 4.7. The Servicer shall deliver a Request for Release to the
Custodian with respect to the related Timeshare Loan Files and Timeshare Loan
Servicing Files being released pursuant to this Section 4.7, and such files
shall be transferred to the Depositor or its designee.

 

SECTION 4.8.

Appointment of Custodian and Paying Agent.

(a)      The Indenture Trustee may appoint a custodian to hold all or a portion
of the Timeshare Loan Files as agent for the Indenture Trustee. Each custodian
shall be a depository institution supervised and regulated by a federal or state
banking authority, shall have combined capital and surplus of at least
$100,000,000, shall be qualified to do business in the jurisdiction in which it
holds any Timeshare Loan File and shall not be the Issuer or an Affiliate of the
Issuer. The Indenture Trustee has appointed U.S. Bank National Association as
the Custodian. The Indenture Trustee shall not be responsible for paying the
Custodian Fee or any other amounts owed to the Custodian.

(b)      The Issuer has appointed the Indenture Trustee as a Paying Agent. The
Issuer may appoint other Paying Agents from time to time. Any such other Paying
Agent shall be appointed by Issuer Order with written notice thereof to the
Indenture Trustee. Any Paying

 

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Agent appointed by the Issuer shall be a Person who would be eligible to be
Indenture Trustee hereunder as provided in Section 7.7 hereof.

ARTICLE V.

 

SERVICING OF TIMESHARE LOANS

SECTION 5.1.    Appointment of Servicer and Backup Servicer; Servicing Standard.

(a)      Subject to the terms and conditions herein, the Issuer and the
Indenture Trustee has appointed Bluegreen as the initial Servicer hereunder. The
Servicer, as an independent contractor, shall service, administer and collect
all payments made in respect of the Timeshare Loans and perform all of its
duties hereunder in accordance with the Servicing Standard. Each of the Issuer
and the Indenture Trustee grants to the Servicer a revocable power of attorney
to take any and all steps on behalf of the Issuer or the Indenture Trustee, as
applicable, necessary or desirable, to service and administer the Timeshare
Loans.

(b)      Subject to the terms and conditions herein and in the Backup Servicing
Agreement, the Issuer has appointed Concord Servicing Corporation to act as the
initial Backup Servicer hereunder. The Backup Servicer, as an independent
contractor, shall service and administer the Timeshare Loans and perform all of
its duties hereunder and under the Backup Servicing Agreement in accordance with
the Servicing Standard.

 

SECTION 5.2.

Payments on the Timeshare Loans.

(a)      The Servicer shall, in a manner consistent with the Servicing Standard,
collect all payments made under each Timeshare Loan and direct each applicable
Obligor to timely make all payments in respect of his or her Timeshare Loan to
the Lockbox Account maintained at the Lockbox Bank and, with respect to Credit
Card Timeshare Loans, direct each applicable credit card vendor to deposit all
payments in respect of such Credit Card Timeshare Loans to the Credit Card
Account.

(b)      On each Funding Date, the Servicer shall cause to be deposited to the
Collection Account all amounts collected and received in respect of the related
Timeshare Loans after the related Cut-Off Date (without deduction for any
Liquidation Expenses).

(c)      Subject to subsection (d) below, the Indenture Trustee shall direct the
Lockbox Bank to remit all collections in respect of the Timeshare Loans on
deposit in the Lockbox Account to the Collection Account on each Business Day
via automated repetitive wire.

(d)      Liquidation Expenses shall be reimbursed as Additional Servicing
Compensation to the Servicer in accordance with Section 3.2(a) hereof. To the
extent that the Servicer has received any Liquidation Expenses as Additional
Servicing Compensation and shall subsequently recover any portion of such
Liquidation Expenses from the related Obligor, the Servicer shall deposit such
amounts into the Collection Account in accordance with Section 5.3(b) hereof.

 

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(e)      The Servicer agrees that to the extent it receives any amounts in
respect of any insurance policies which are not payable to the Obligor or
otherwise necessary for the intended use, or any other collections relating to
the Trust Estate, it shall deposit such amounts to the Collection Account within
two Business Days of receipt thereof (unless otherwise expressly provided
herein).

 

 

SECTION 5.3.

Duties and Responsibilities of the Servicer.

(a)      In addition to any other customary services which the Servicer may
perform or may be required to perform hereunder, the Servicer shall perform or
cause to be performed through sub-servicers, the following servicing and
collection activities in accordance with the Servicing Standard:

(i)        perform standard accounting services and general record keeping
services with respect to the Timeshare Loans;

(ii)       respond to telephone or written inquiries of Obligors concerning the
Timeshare Loans;

(iii)      keep Obligors informed of the proper place and method for making
payment with respect to the Timeshare Loans;

(iv)      contact Obligors to effect collections and to discourage delinquencies
in the payment of amounts owed under the Timeshare Loans and doing so by any
lawful means;

(v)       report tax information to Obligors and taxing authorities to the
extent required by law;

(vi)      take such other action as may be necessary or appropriate in the
Servicer’s judgment (which shall be consistent with the Servicing Standard) for
the purpose of collecting and transferring to the Indenture Trustee for deposit
into the Collection Account all payments received by the Servicer or remitted to
the Lockbox Account or the Credit Card Account in respect of the Timeshare Loans
(except as otherwise expressly provided herein), and to carry out the duties and
obligations imposed upon the Servicer pursuant to the terms of this Indenture;

(vii)     arranging for Liquidations of Timeshare Properties related to
Defaulted Timeshare Loans and the remarketing of such Timeshare Properties as
provided in Section 5.3(a)(xiii) hereof;

(viii)    use reasonable best efforts to enforce the purchase and substitution
obligations of the Club Originator under the Purchase Agreement and the
Depositor under the Sale Agreement with respect to breaches of representations
and warranties related to the Timeshare Loans;

(ix)      refrain from modifying, waiving or amending the terms of any Timeshare
Loan; provided, however, the Servicer may modify, waive or amend a

 

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Timeshare Loan for which a default on such Timeshare Loan has occurred or is
imminent and such modification, amendment or waiver will not (i) materially
alter the interest rate on or the principal balance of such Timeshare Loan, (ii)
shorten the final maturity of, lengthen the timing of payments of either
principal or interest, or any other terms of, such Timeshare Loan in any manner
which would have a material adverse affect on the Noteholders, (iii) adversely
affect the Timeshare Property underlying such Timeshare Loan or (iv) reduce
materially the likelihood that payments of interest and principal on such
Timeshare Loan shall be made when due; provided, further, the Servicer may grant
a single extension of the final maturity of a Timeshare Loan if the Servicer, in
its reasonable discretion, determines that (A) such Timeshare Loan is in default
or a default on such Timeshare Loan is likely to occur in the foreseeable future
and (B) the value of such Timeshare Loan will be enhanced by such extension;
provided, further, the Servicer shall not be permitted to modify, waive or amend
the terms of any Timeshare Loan if the sum of the Cut-Off Date Loan Balance of
such Timeshare Loan and the Cut-Off Date Loan Balances of all other Timeshare
Loans for which the Servicer has modified, waived or amended the terms thereof
exceeds 1% of the Aggregate Initial Loan Balance;

(x)       work with Obligors in connection with any transfer of ownership of a
Timeshare Property by an Obligor to another Person (to the extent permitted),
whereby the Servicer may, only if required by law, consent to the assumption by
such Person of the Timeshare Loan related to such Timeshare Property (to the
extent permitted); provided, however, in connection with any such assumption,
the rate of interest borne by, the maturity date of, the principal amount of,
the timing of payments of principal and interest in respect of, and all other
material terms of, the related Timeshare Loan shall not be changed other than as
permitted in (ix) above;

(xi)      to the extent that the Custodian Fees or the Lockbox Fees are, in the
Servicer’s reasonable business judgment, no longer commercially reasonable, use
commercially reasonable efforts to exercise its rights under the Custodial
Agreement or the Lockbox Agreement to replace the Custodian or Lockbox Bank, as
applicable. Any such successor shall be reasonably acceptable to the Indenture
Trustee;

(xii)     delivery of such information and data to the Backup Servicer as is
required under the Backup Servicing Agreement; and

(xiii)    in the event that a Defaulted Timeshare Loan is not or cannot be
released from the Lien of the Indenture pursuant to Section 4.7 hereof, the
Servicer shall, in accordance with the Servicing Standard, promptly institute
collection procedures, which may include, but is not limited to, cancellation,
forfeiture, termination or foreclosure proceedings or obtaining a deed-in-lieu
of foreclosure (each, a “Foreclosure Property”). Upon the Timeshare Property
becoming a Foreclosure Property, the Servicer shall cause the Remarketing Agent
to promptly attempt to remarket such Foreclosure Property in accordance with and
pursuant to the Remarketing Agreement.   The Remarketing Fees due under the
Remarketing

 

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Agreement shall constitute Liquidation Expenses and upon reimbursement to the
Servicer shall be paid by the Servicer to the Remarketing Agent.

(b)      The Servicer shall, at least once each week, for each applicable Credit
Card Timeshare Loan, deposit to the Credit Card Account, the service charge
imposed by the applicable credit card vendor for processing the payment due from
the Obligor (such amount, the “Servicer Credit Card Processing Cost”) and shall
immediately cause all amounts on deposit therein to be transferred to the
Lockbox Account. The Agent may, at any time direct the Indenture Trustee to
cause the Lockbox Bank to restrict the Servicer’s access and rights to the
Credit Card Account, and shall instruct the Indenture Trustee to instruct the
Lockbox Bank to sweep all amounts on deposit in the Credit Card Account to be
transferred to the Lockbox Account on a daily basis. The Servicer hereby agrees
that if such direction is given by the Agent, the Servicer shall not provide any
contrary instruction to the Lockbox Bank with respect to the Credit Card
Account.

(c)      For so long as Bluegreen or any of its Affiliates controls the Resorts,
the Servicer shall use commercially reasonable best efforts to cause the Club
Managing Entity to maintain or cause to maintain the Resorts in good repair,
working order and condition (ordinary wear and tear excepted).

(d)      For so long as Bluegreen or any of its Affiliates controls the Resorts,
the manager, related management contract and master marketing and sale contract
(if applicable) for each Resort at all times shall be reasonably satisfactory to
the Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes. For so long as Bluegreen or any of its Affiliates controls the
Association for a Resort, and Bluegreen or an Affiliate thereof is the manager,
(i) if an amendment or modification to the related management contract and
master marketing and sale contract materially and adversely affects the
Noteholders, then it may only be amended or modified with the prior written
consent of the Noteholders representing a majority of the Outstanding Note
Balance of each Class of Notes, which consent shall not be unreasonably withheld
or delayed and (ii) if an amendment or modification to the related management
contract and master marketing and sale contract does not materially and
adversely affect the Noteholders, Bluegreen shall send a copy of such amendment
or modification to the Agent with the Monthly Report to be delivered subsequent
to the effective date of such amendment or modification.

(e)      In the event any Lien (other than a Permitted Lien) attaches to any
Timeshare Loan or related collateral from any Person claiming from and through
Bluegreen or one of its Affiliates which materially adversely affects the
Issuer’s interest in such Timeshare Loan, Bluegreen shall, within the earlier to
occur of ten Business Days after such attachment or the respective lienholders’
action to foreclose on such lien, either (i) cause such Lien to be released of
record, (ii) provide the Indenture Trustee with a bond in accordance with the
applicable laws of the state in which the Timeshare Property is located, issued
by a corporate surety acceptable to the Indenture Trustee, in an amount and in
form reasonably acceptable to the Indenture Trustee or (iii) provide the
Indenture Trustee with such other security as the Indenture Trustee may
reasonably require.

(f)       The Servicer shall: (i) promptly notify the Indenture Trustee of (A)
any claim, action or proceeding which may be reasonably expected to have a
material adverse effect

 

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on the Trust Estate, or any material part thereof, and (B) any action, suit,
proceeding, order or injunction of which Servicer becomes aware after the date
hereof pending or threatened against or affecting Servicer or any Affiliate
which may be reasonably expected to have a material adverse effect on the Trust
Estate or the Servicer’s ability to service the same; (ii) at the request of
Indenture Trustee with respect to a claim or action or proceeding which arises
from or through the Servicer or one of its Affiliates, appear in and defend, at
Servicer’s expense, any such claim, action or proceeding which would have a
material adverse effect on the Timeshare Loans or the Servicer’s ability to
service the same; and (iii) comply in all respects, and shall cause all
Affiliates to comply in all respects, with the terms of any orders imposed on
such Person by any governmental authority the failure to comply with which would
have a material adverse effect on the Timeshare Loans or the Servicer’s ability
to service the same.

(g)      Except as contemplated by the Transaction Documents, the Servicer shall
not, and shall not permit the Club Managing Entity to, encumber, pledge or
otherwise grant a Lien or security interest in and to the Reservation System
(including, without limitation, all hardware, software and data in respect
thereof) and furthermore agrees, and shall cause the Club Managing Entity, to
use commercially reasonable efforts to keep the Reservation System operational,
not to dispose of the same and to allow the Club the use of, and access to, the
Reservation System in accordance with the terms of the Club Management
Agreement. Notwithstanding the foregoing, should the Club Managing Entity
determine that it is desirable to replace the existing hardware and software
related to the Reservation System, it will be allowed to enter into a lease or
finance arrangement in connection with the lease or purchase of such hardware
and software.

(h)      The Servicer shall comply in all material respects with the Collection
Policy and the Credit Policy attached hereto as Exhibit J and Exhibit K,
respectively, in regard to each Timeshare Loan. The Servicer shall (i) notify
the Agent ten days prior to any material amendment or change to the Collection
Policy or the Credit Policy and (ii) obtain the Agent’s prior written consent
(which consent will not be unreasonably withheld or delayed) if such amendment
or change has a material and adverse affect on the Noteholders; provided, that
the Servicer may immediately implement any changes (and provide notice to the
Agent subsequent thereto) as may be required under applicable law from time to
time upon the reasonable determination of the Servicer; and provided, further,
that the Servicer shall deliver a copy of any non-material amendments or changes
to the Collection Policy or the Credit Policy to the Agent with the Monthly
Report to be delivered subsequent to the effective date of such amendments or
changes.

(i)        The Servicer shall comply in all material respects with the terms of
the Timeshare Loans.

(j)        In connection with the Servicer’s duties under (vii) and (xiii) of
subsection (a) above, the Servicer will undertake such duties in the ordinary
course in a manner similar and consistent with (or better than) the manner in
which the Servicer performs any such duties with respect to Timeshare Loans
owned by it or its Affiliates.

 

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SECTION 5.4.

Servicer Events of Default.

(a)      If any Servicer Event of Default shall have occurred and not been
waived hereunder, the Indenture Trustee may, and upon notice from Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
shall, terminate, on behalf of the Noteholders, by notice in writing to the
Servicer, all of the rights and obligations of the Servicer, as Servicer under
this Indenture. The Indenture Trustee shall immediately give written notice of
such termination to the Backup Servicer. Unless consented to by the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes,
the Issuer may not waive any Servicer Event of Default.

(b)      Replacement of Servicer. From and after the receipt by the Servicer of
such written termination notice or the resignation of the Servicer pursuant to
Section 5.10 hereof, all authority and power of the Servicer under this
Indenture, whether with respect to the Timeshare Loans or otherwise, shall, pass
to and be vested in the Indenture Trustee, and the Indenture Trustee shall be
the successor Servicer hereunder and the duties and obligations of the Servicer
shall terminate. The Servicer shall perform such actions as are reasonably
necessary to assist the Indenture Trustee and the Backup Servicer in such
transfer. If the Servicer fails to undertake such action as is reasonably
necessary to effectuate such a transfer, the Indenture Trustee is hereby
authorized and empowered to execute and deliver, on behalf of and at the expense
of the Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things reasonably
necessary to effect the purposes of such notice of termination. The Servicer
agrees that if it is terminated pursuant to this Section 5.4, it shall promptly
(and, in any event, no later than five Business Days subsequent to its receipt
of the notice of termination from the Indenture Trustee) provide the Indenture
Trustee, the Backup Servicer or their respective designees (with reasonable
costs being borne by the Servicer) with all documents and records (including,
without limitation, those in electronic form) reasonably requested by it to
enable the Indenture Trustee to assume the Servicer’s functions hereunder and
for the Backup Servicer to assume the functions required by the Backup Servicing
Agreement, and the Servicer shall cooperate with the Indenture Trustee in
effecting the termination of the Servicer’s responsibilities and rights
hereunder and the assumption by a successor of the Servicer’s obligations
hereunder, including, without limitation, the transfer within one Business Day
to the Indenture Trustee or its designee for administration by it of all cash
amounts which shall at the time or thereafter received by it with respect to the
Timeshare Loans (provided, however, that the Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Indenture on
or prior to the date of such termination). The Indenture Trustee shall be
entitled to renegotiate the Servicing Fee; provided, however, no change to the
Servicing Fee may be made unless the Indenture Trustee shall have received the
written consent of Noteholders representing a majority of the Outstanding Note
Balance of each Class of Notes. Notwithstanding anything herein to the contrary,
in no event shall the Indenture Trustee or Bluegreen be liable for any Servicing
Fee or for any differential in the amount of the Servicing Fee paid hereunder
and the amount necessary to induce any successor Servicer to assume the
obligations of Servicer under this Indenture.

The Indenture Trustee shall be entitled to be reimbursed by the Servicer, (or by
the Trust Estate to the extent set forth in Section 3.4(a)(i) or Section
6.6(a)(i) hereof) if the Servicer is unable to fulfill its obligations hereunder
for all Servicer Termination Costs.

 

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The successor Servicer shall have (i) no liability with respect to any
obligation which was required to be performed by the terminated Servicer prior
to the date that the successor Servicer becomes the Servicer or any claim of a
third party based on any alleged action or inaction of the terminated Servicer,
(ii) no obligation to perform any repurchase obligations, if any, of the
Servicer, (iii) no obligation to pay any taxes required to be paid by the
Servicer, (iv) no obligation to pay any of the fees and expenses of any other
party involved in this transaction that were incurred by the prior Servicer and
(v) no liability or obligation with respect to any Servicer indemnification
obligations of any prior Servicer including the original Servicer.

Notwithstanding anything contained in this Indenture to the contrary, any
successor Servicer is authorized to accept and rely on all of the accounting,
records (including computer records) and work of the prior Servicer relating to
the Timeshare Loans (collectively, the “Predecessor Servicer Work Product”),
without any audit or other examination thereof, and such successor Servicer
shall have no duty, responsibility, obligation or liability for the acts and
omissions of the prior Servicer. If any error, inaccuracy, omission or incorrect
or non-standard practice or procedure (collectively, “Errors”) exist in any
Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the successor
Servicer making or continuing any Errors (collectively, “Continued Errors”), the
successor Servicer shall have no duty, responsibility, obligation or liability
for such Continued Errors; provided, however, that each successor Servicer shall
agree to use its best efforts to prevent further Continued Errors. In the event
that the successor Servicer becomes aware of Errors or Continued Errors, the
successor Servicer shall, with the prior consent of the Indenture Trustee, use
its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continued Errors and to prevent future
Continued Errors and to recover its costs thereby.

The Indenture Trustee may appoint an Affiliate as the successor Servicer and the
provisions of this Section 5.4(b) related to the Indenture Trustee shall apply
to such Affiliate.

(c)      Any successor Servicer, including the Indenture Trustee, shall not be
deemed to be in default or to have breached its duties as successor Servicer
hereunder if the predecessor Servicer shall fail to deliver any required deposit
to the Collection Account or otherwise fail to cooperate with, or take any
actions required by such successor Servicer related to the transfer of servicing
hereunder.

(d)      Any successor Servicer appointed pursuant to this Indenture (i) as a
condition to any such appointment (other than the Indenture Trustee), shall be a
nationally recognized and licensed servicer of timeshare loan receivables that
(a) is actively servicing a portfolio of loans with an aggregate principal
balance of not less than $200,000,000, (b) has servicing and collection
capabilities for all categories of delinquent and defaulted loans (including
through foreclosure) and (c) is not an Affiliate of any Noteholder, and (ii)
shall be subject to all of the terms and conditions of the Servicer under this
Indenture (other than such terms and conditions as are unique to the initial
Servicer), including, without limitation, the requirement to adhere to the
Servicing Standard in the performance of the services to be furnished by it
under this Indenture.

 

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SECTION 5.5.

Accountings; Statements and Reports.

(a)      Monthly Servicer Report. Not later than four Business Days prior to the
Payment Date, the Servicer shall deliver to the Issuer, the Indenture Trustee
and the Agent, a report (the “Monthly Servicer Report”) substantially in the
form of Exhibit D hereto, detailing certain activity relating to the Timeshare
Loans. The Monthly Servicer Report shall be completed with the information
specified therein for the related Due Period and shall contain such other
information as may be reasonably requested by the Issuer, the Indenture Trustee
or the Agent in writing at least five Business Days prior to such Determination
Date. Each such Monthly Servicer Report shall be accompanied by an Officer’s
Certificate of the Servicer in the form of Exhibit E hereto, certifying the
accuracy of the computations reflected in such Monthly Servicer Report. The
Servicer agrees to consult and cooperate with the Agent in the preparation of
the Monthly Servicer Report.

(b)      Certification as to Compliance. The Servicer shall deliver to the
Issuer, the Indenture Trustee and the Agent, an Officer’s Certificate on or
before April 30 of each year commencing in 2011: (x) to the effect that a review
of the activities of the Servicer during the preceding calendar year, and of its
performance under this Indenture during such period has been made under the
supervision of the officers executing such Officer’s Certificate with a view to
determining whether during such period, to the best of such officer’s knowledge,
the Servicer had performed and observed all of its obligations under this
Indenture, and (y) either (A) stating that based on such review, no Servicer
Event of Default is known to have occurred and is continuing, or (B) if such a
Servicer Event of Default is known to have occurred and is continuing,
specifying such Servicer Event of Default and the nature and status thereof.

(c)      Annual Accountants’ Reports. On or before each April 30 of each year
commencing in 2011, the Servicer shall (i) cause a firm of independent public
accountants to furnish a certificate or statement (and the Servicer shall
provide a copy of such certificate or statement to the Issuer, the Indenture
Trustee and the Agent) to the effect that (1) such firm has examined and audited
the Servicer’s servicing controls and procedures for the previous calendar year
and that such independent public accountants have examined certain documents and
records (including computer records) and servicing procedures of the Servicer
relating to the Timeshare Loans, (2) they have examined the most recent Monthly
Servicer Report prepared by the Servicer and three other Monthly Servicer
Reports chosen at random by such firm and compared such Monthly Servicer Reports
with the information contained in such documents and records, (3) their
examination included such tests and procedures as they considered necessary in
the circumstances, (4) their examinations and comparisons described under
clauses (1) and (2) above disclosed no exceptions which, in their opinion, were
material, relating to such Timeshare Loans or such Monthly Servicer Reports, or,
if any such exceptions were disclosed thereby, setting forth such exceptions
which, in their opinion, were material, and (5) on the basis of such
examinations and comparisons, such firm is of the opinion that the Servicer has,
during the relevant period, serviced the Timeshare Loans in compliance with this
Indenture and the other Transaction Documents in all material respects and that
such documents and records have been maintained in accordance with this
Indenture and the other Transaction Documents in all material respects, except
in each case for (A) such exceptions as such firm shall believe to be immaterial
and (B) such other exceptions as shall be set forth in such written report. The
report will also indicate that such firm is independent of the Servicer within
the meaning of the Code of

 

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Professional Ethics of the American Institute of Certified Public Accountants.
The Agent shall agree (prior to the delivery of any report) to the procedures to
be performed by independent public accountants in any of the reports required to
be prepared pursuant to this Section 5.5(c).

(d)      Report on Proceedings and Servicer Event of Default. (i) Promptly upon
a Responsible Officer of the Servicer’s obtaining Knowledge of any proposed or
pending investigation of it by any Governmental Authority or any court or
administrative proceeding which involves or is reasonably likely to involve the
possibility of materially and adversely affecting the properties, business,
prospects, profits or conditions (financial or otherwise) of the Servicer and
its subsidiaries, as a whole, the Servicer shall send written notice specifying
the nature of such investigation or proceeding and what action the Servicer is
taking or proposes to take with respect thereto and evaluating its merits, or
(ii) immediately upon obtaining Knowledge of the existence of any condition or
event which constitutes a Servicer Event of Default, the Servicer shall send
written notice to the Issuer, the Indenture Trustee and the Agent describing its
nature and period of existence and what action the Servicer is taking or
proposes to take with respect thereto.

(e)      Quarterly Financial Reports. Within 45 days after the end of each of
Servicer’s (provided the Servicer is Bluegreen or an Affiliate thereof) first
three fiscal calendar periods each year (or, if later, that date by which
Bluegreen is required to file financial statements with the Securities and
Exchange Commission), the Servicer shall deliver to the Agent, unaudited
financial statements of Servicer (provided the Servicer is Bluegreen or an
Affiliate thereof) certified by its chief financial officer as well as, to the
extent requested by the Agent and available to Servicer (provided the Servicer
is Bluegreen or an Affiliate thereof), unaudited bi-annual financial statements
of the Association managed by the Club Managing Entity; provided, however, the
Servicer shall be deemed to be in compliance with this Section 5.5(e) to the
extent the documents required to be filed pursuant to this Section 5.5(e) are
filed publicly within the time periods required by this Section 5.5(e).

(f)       Audit Reports. To the extent Bluegreen or its Affiliate is the
Servicer, the Servicer shall deliver to the Indenture Trustee and the Agent
promptly upon receipt thereof, one copy of each other report submitted to the
Servicer by its independent public accountants in connection with any annual,
interim or special audit made by them of the books of the Servicer.

(g)      Other Reports. To the extent Bluegreen Corporation or its Affiliate is
the Servicer, the Servicer shall deliver to the Indenture Trustee and the Agent,
such other reports, statements, notices or written communications relating to
the Servicer, the Associations or the Resorts as are available to Servicer and
as the Agent may reasonably require.

 

SECTION 5.6.

Records.

The Servicer shall maintain all data for which it is responsible (including,
without limitation, computerized tapes or disks) relating directly to or
maintained in connection with the servicing of the Timeshare Loans (which data
and records shall be clearly marked to reflect that the Timeshare Loans have
been Granted to the Indenture Trustee on behalf of the Noteholders and
constitute property of the Trust Estate) at the address specified in Section
13.3 hereof or, upon 15 days’ notice to the Issuer and the Indenture Trustee, at
such other place where any

 

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Servicing Officer of the Servicer is located (or upon 24 hours’ written notice
if an Event of Default or Servicer Event of Default shall have occurred).

 

SECTION 5.7.

Fidelity Bond and Errors and Omissions Insurance.

The Servicer shall maintain or cause to be maintained fidelity bond and errors
and omissions insurance with respect to the Servicer in such form and in amounts
as is customary for institutions acting as custodian of funds in respect of
timeshare loans or receivables on behalf of institutional investors; provided
that such insurance shall be in a minimum amount of $1,000,000 per policy and
shall name the Indenture Trustee as an additional insured or certificateholder.
No provision of this Section 5.7 requiring such fidelity bond or errors and
omissions insurance shall diminish or relieve the Servicer from its duties and
obligations as set forth in this Indenture. The Servicer shall be deemed to have
complied with this provision if one of its respective Affiliates has such
fidelity bond or errors and omissions insurance coverage and, by the terms of
such fidelity bond or errors and omissions insurance policy, the coverage
afforded thereunder extends to the Servicer. Upon a request of the Indenture
Trustee, the Servicer shall deliver to the Indenture Trustee, a certification
evidencing coverage under such fidelity bond and the errors and omissions
insurance. Any such fidelity bond or errors and omissions insurance policy shall
not be canceled or modified in a materially adverse manner without 30 days’
prior written notice to the Indenture Trustee; provided, that the Servicer
agrees to use commercially reasonable efforts to require the applicable insurer
to provide 10 days’ prior written notice of any cancellation or materially
adverse modification initiated by such insurer.

 

SECTION 5.8.

Merger or Consolidation of the Servicer.

(a)      The Servicer shall promptly provide written notice to the Indenture
Trustee and the Agent of any merger or consolidation of the Servicer. The
Servicer shall keep in full effect its existence, rights and franchise as a
corporation under the laws of the state of its incorporation except as permitted
herein, and shall obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Indenture or any
of the Timeshare Loans and to perform its duties under this Indenture.

(b)      Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person (i) is a company whose business
includes the servicing of assets similar to the Timeshare Loans and shall be
authorized to lawfully transact business in the state or states in which the
related Timeshare Properties it is to service are situated; (ii) is a U.S.
Person, and (iii) delivers to the Indenture Trustee (A) an agreement, in form
and substance reasonably satisfactory to the Indenture Trustee, which contains
an assumption by such successor entity of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Indenture and the other Transaction Documents to which the
Servicer is a party and (B) an opinion of counsel as to the enforceability of
such agreement.

 

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SECTION 5.9.

Sub-Servicing.

(a)      The Servicer may enter into one or more sub-servicing agreements with a
sub-servicer upon the consent of the Agent that the execution of such
sub-servicing agreement and the retention of such sub-servicer would not result
in a qualification, downgrade or withdrawal of any rating assigned to a Class of
Notes. References herein to actions taken or to be taken by the Servicer in
servicing the Timeshare Loans include actions taken or to be taken by a
sub-servicer on behalf of the Servicer. Any sub-servicing agreement will be upon
such terms and conditions as the Servicer may reasonably agree and as are not
inconsistent with this Indenture. The Servicer shall be solely responsible for
any sub-servicing fees due and payable to such sub-servicer.

(b)      Notwithstanding any sub-servicing agreement, the Servicer shall remain
obligated and liable for the servicing and administering of the Timeshare Loans
in accordance with this Indenture, without diminution of such obligation or
liability by virtue of such sub-servicing agreement, and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing and
administering the Timeshare Loans.

 

SECTION 5.10.

Servicer Resignation.

The Servicer shall not resign from the duties and obligations hereby imposed on
it under this Indenture unless and until (i) a successor servicer, acceptable to
the Issuer, the Indenture Trustee and the Noteholders representing a majority of
the Outstanding Note Balance of each Class of Notes, enters into an agreement in
form and substance satisfactory to the Indenture Trustee and the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes,
which contains an assumption by such successor servicer of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Indenture from and after the date of
assumption, and (ii) the Issuer, the Indenture Trustee and Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
consent to the assumption of the duties, obligations and liabilities of this
Indenture by such successor Servicer. Upon such resignation, the Servicer shall
comply with Section 5.4(b) hereunder.

Except as provided in the immediately preceding paragraph or elsewhere in this
Indenture, or as provided with respect to the survival of indemnifications
herein, the duties and obligations of a Servicer under this Indenture shall
continue until this Indenture shall have been terminated as provided herein. The
duties and obligations of a Servicer hereunder shall survive the exercise by the
Indenture Trustee of any right or remedy under this Indenture or the enforcement
by the Indenture Trustee of any provision of this Indenture.

 

SECTION 5.11.

Fees and Expenses.

As compensation for the performance of its obligations under this Indenture, the
Servicer shall be entitled to receive on each Payment Date, from amounts on
deposit in the Collection Account and in the priorities described in Sections
3.2(a), 3.4 and 6.6 hereof, the Servicing Fee and any Additional Servicing
Compensation. Other than Liquidation Expenses,

 

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the Servicer shall pay all expenses incurred by it in connection with its
servicing activities hereunder.

 

SECTION 5.12.

Access to Certain Documentation.

Upon ten Business Days’ prior written notice (or, one Business Day’s prior
written notice after the occurrence and during the continuance of an Event of
Default or a Servicer Event of Default), the Servicer will, from time to time
during regular business hours, as requested by the Issuer, the Indenture Trustee
or any Noteholder and, prior to the occurrence of a Servicer Event of Default,
at the expense of the Issuer or such Noteholder and upon the occurrence and
continuance of a Servicer Event of Default, at the expense of the Servicer,
permit the Issuer, the Indenture Trustee or any Noteholder or its agents or
representatives (i) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of the Servicer relating to the servicing
of the Timeshare Loans serviced by it and (ii) to visit the offices and
properties of the Servicer for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to the Timeshare Loans with
any of the officers, employees or accountants of the Servicer having knowledge
of such matters. Nothing in this Section 5.12 shall affect the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section 5.12.

 

SECTION 5.13.

No Offset.

Prior to the termination of this Indenture, the obligations of the Servicer
under this Indenture shall not be subject to any defense, counterclaim or right
of offset which the Servicer has or may have against the Issuer, the Indenture
Trustee or any Noteholder, whether in respect of this Indenture, any Timeshare
Loan or otherwise.

 

SECTION 5.14.

Account Statements.

In connection with the Servicer’s preparation of the Monthly Servicer Reports,
the Indenture Trustee agrees to deliver to the Servicer a monthly statement
providing account balances of each of the Trust Accounts.

 

SECTION 5.15.

Indemnification; Third Party Claim.

The Servicer agrees to indemnify the Issuer, the Indenture Trustee and the
Noteholders from and against any and all actual damages (excluding economic
losses related to the collectibility of any Timeshare Loan), claims, reasonable
attorneys’ fees and related costs, judgments, and any other costs, fees and
expenses that each may sustain because of the failure of the Servicer to service
the Timeshare Loans in accordance with the Servicing Standard or otherwise
perform its obligations and duties hereunder in compliance with the terms of
this Indenture, or because of any act or omission by the Servicer due to its
negligence or willful misconduct in connection with its maintenance and custody
of any funds, documents and records under this Indenture, or its release thereof
except as contemplated by this Indenture. The Servicer shall immediately notify
the Issuer and the Indenture Trustee if it has Knowledge of a claim made by a
third party with respect to the Timeshare Loans, and, if such claim relates to
the

 

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servicing of the Timeshare Loans by the Servicer, the Servicer shall assume,
with the consent of the Indenture Trustee, the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it. This Section 5.15 shall survive the termination of this Indenture or
the resignation or removal of the Servicer hereunder.

 

SECTION 5.16.

Backup Servicer.

(a)      Backup Servicing Agreement. The Issuer, the Indenture Trustee, the
Servicer, the Depositor and the Backup Servicer have executed the Backup
Servicing Agreement. The Backup Servicer shall be responsible for each of the
duties and obligations imposed upon it by the provisions of the Backup Servicing
Agreement and shall have no duties or obligations under any Transaction Document
to which it is not a party.

(b)      Termination of Servicer; Cooperation. In the event that the Servicer is
terminated or resigns in accordance with the terms of this Indenture, the Backup
Servicer agrees to continue to perform it duties and obligations hereunder and
in the Backup Servicing Agreement without interruption. The Backup Servicer
agrees to cooperate in good faith with any successor Servicer to effect a
transition of the servicing obligations by the Servicer to any successor
Servicer. The Indenture Trustee agrees to provide such information regarding the
Trust Accounts as the Backup Servicer shall require to produce the Monthly
Servicer Report on and after the Assumption Date.

(c)      Backup Servicer Duties After Assumption Date. In the event that the
Servicer is terminated or resigns in accordance with this Indenture, the Backup
Servicer agrees that it shall undertake those servicing duties and obligations
as set forth in and subject to Section 2 and Schedule V of the Backup Servicing
Agreement. Notwithstanding Section 5.9 hereof, so long as Concord Servicing
Corporation is the Backup Servicer, the Indenture Trustee, as successor
Servicer, will not be obligated or liable for the servicing and administration
activities to the extent that the Backup Servicer is responsible for such
activities under the Backup Servicing Agreement.

(d)      Backup Servicing Fee. Prior to the Assumption Date, the Backup Servicer
should receive its Backup Servicing Fee in accordance with Sections 3.4 or 6.6
hereof, as applicable. On and after the Assumption Date, the Indenture Trustee,
as successor Servicer, will be obligated to distribute the Backup Servicing Fee
to the Backup Servicer from amounts received by the Indenture Trustee in respect
of the Servicing Fee.

(e)      Termination of Backup Servicer. Notwithstanding anything to the
contrary herein, the Indenture Trustee shall have the right to remove the Backup
Servicer with or without cause at any time and replace the Backup Servicer
pursuant to the provisions of the Backup Servicing Agreement. In the event that
the Indenture Trustee shall exercise its rights to remove and replace Concord
Servicing Corporation as Backup Servicer or Concord Servicing Corporation shall
have terminated the Backup Servicing Agreement in accordance with the terms
thereof, Concord Servicing Corporation shall have no further obligation to
perform the duties of the Backup Servicer under this Indenture. In the event of
a termination of the Backup Servicing Agreement, the Indenture Trustee shall
appoint a successor Backup Servicer reasonably

 

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acceptable to the Indenture Trustee and with the approval of the Agent at the
written direction of the Required Purchasers. Upon the termination or
resignation of the Backup Servicer, the Indenture Trustee shall be deemed to
represent, warrant and covenant that it will service or engage a subservicer to
perform each of the servicing duties and responsibilities described in this
Indenture.

SECTION 5.17.        Aruba Notices. Within 30 days of the related Funding Date,
the Servicer shall confirm that notices have been mailed out to each Obligor
under a Timeshare Loan with respect to any Resort in the country of Aruba that
such Timeshare Loan has been transferred and assigned to the Issuer and that the
Issuer has in turn, pledged such Timeshare Loan to the Indenture Trustee, in
trust, for the benefit of the Noteholders. Such notice may include any notice or
notices that the Aruba Originator’s predecessors in title to the Timeshare Loan
may give to the same Obligor with respect to any transfers and assignments of
the Timeshare Loan by such predecessors. Such notice shall be in the form
attached hereto as Exhibit H, as the same may be amended, revised or substituted
by the Indenture Trustee and the Servicer from time to time.

SECTION 5.18.        Recordation. The Servicer agrees to cause all evidences of
recordation of the original Mortgage to be delivered to the Custodian to be held
as part of the Timeshare Loan Files. Upon the direction of the Noteholders, the
Indenture Trustee shall cause either the Custodian or a third party appointed by
the Indenture Trustee to complete the assignments of mortgage and (at the
Servicer’s expense) record such assignments of mortgage in all appropriate
jurisdictions.

ARTICLE VI.

 

EVENTS OF DEFAULT; REMEDIES

 

SECTION 6.1.

[RESERVED].

 

SECTION 6.2.

Acceleration of Maturity; Rescission and Annulment.

(a)      Upon the occurrence and continuance of an Event of Default, if (i) such
Event of Default of the kind specified in subparagraph (d) or (e) of the
definition of Event of Default occurs or (ii) an Event of Default of the kind
specified in subparagraph (a) of the definition of Event of Default occurs and
either (x) the Agent has, in its good faith judgment, determined that the value
of the assets comprising the Trust Estate is less than the Aggregate Outstanding
Note Balance or (y) such Event of Default continues for two consecutive Payment
Dates, then each Class of Notes shall automatically become due and payable at
its Outstanding Note Balance together with all accrued and unpaid interest
thereon.

(b)      Upon the occurrence and continuance of an Event of Default, if such
Event of Default is of the kind specified in subparagraph (a) of the definition
of Event of Default (other than as described in Section 6.2(a) hereof), the
Indenture Trustee shall, upon notice from Noteholders representing a majority of
the Outstanding Note Balance of the most senior Class of Notes then Outstanding
(and, if payment of interest and principal on the most senior Class of Notes
then Outstanding is current, the consent of the Noteholders representing a
majority of the

 

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Outstanding Note Balance of the most senior Class of Notes which has failed to
receive one or more payments of interest or principal), declare each Class of
Notes to be immediately due and payable at its Outstanding Note Balance plus all
accrued and unpaid interest thereon.

(c)      Upon the occurrence and continuance of an Event of Default, if such
Event of Default (other than an Event of Default of the kind described in
Sections 6.2(a) or (b) hereof) shall occur and is continuing, the Indenture
Trustee shall, upon notice from Noteholders representing a majority of the
Outstanding Note Balance of the most senior Class of Notes then Outstanding,
declare each Class of Notes to be immediately due and payable at its Outstanding
Note Balance plus all accrued and unpaid interest thereon.

(d)      Upon any such declaration or automatic acceleration, the Outstanding
Note Balance of each Class of Notes together with all accrued and unpaid
interest thereon shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Issuer. The Indenture Trustee shall promptly send a notice of any
declaration or automatic acceleration to the Agent.

(e)      At any time after such a declaration of acceleration has been made but
before a judgment or decree for payment of the money due has been obtained by
the Indenture Trustee as hereinafter in this Article VI provided, the
Noteholders representing a majority of the Outstanding Note Balance of the most
senior Class Outstanding (and, if the consent of another Class shall have been
required for such declaration, Noteholders representing a majority of the
Outstanding Note Balance of such Class) by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:

(i)        the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:

 

(1)

all principal due on any Class of Notes which has become due otherwise than by
such declaration of acceleration and interest thereon from the date when the
same first became due until the date of payment or deposit,

 

(2)

all interest due with respect to any Class of Notes and, to the extent that
payment of such interest is lawful, interest upon overdue interest from the date
when the same first became due until the date of payment or deposit at a rate
per annum equal to the Note Rate, and

 

(3)

all sums paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements, and advances of each of the Indenture
Trustee and the Servicer, its agents and counsel;

and

(ii)       all Events of Default with respect to the Notes, other than the
non-payment of the Outstanding Note Balance of each Class of Notes which became

 

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due solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.13 hereof.

(f)       An automatic acceleration under Section 6.2(a) hereof may only be
rescinded and annulled by Noteholders representing a majority of the Outstanding
Note Balance of each Class of Notes then Outstanding.

(g)      Notwithstanding Section 6.2(d) and (e) hereof, (i) if the Indenture
Trustee shall have commenced making payments as described in Section 6.6 hereof,
no acceleration may be rescinded or annulled and (ii) no rescission shall affect
any subsequent Events of Default or impair any rights consequent thereon.

 

SECTION 6.3.

Remedies.

(a)      If an Event of Default with respect to the Notes occurs and is
continuing of which a Responsible Officer of the Indenture Trustee has
Knowledge, the Indenture Trustee shall immediately give notice to each
Noteholder as set forth in Section 7.2 hereof and shall solicit such Noteholders
for advice. The Indenture Trustee shall then take such action as so directed by
the Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes then Outstanding subject to the provisions of this Indenture.

(b)      Following any acceleration of the Notes, the Indenture Trustee shall
have all of the rights, powers and remedies with respect to the Trust Estate as
are available to secured parties under the UCC or other applicable law, subject
to the limitations set forth in subsection (d) below and provided such action is
not inconsistent with any other provision of this Indenture. Such rights, powers
and remedies may be exercised by the Indenture Trustee in its own name as
trustee of an express trust.

(c)      If an Event of Default specified in subparagraph (a) of the definition
of Event of Default occurs and is continuing, the Indenture Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuer for the Aggregate Outstanding Note Balance and interest
remaining unpaid with respect to the Notes.

(d)      Subject to the provisions set forth herein, if an Event of Default
occurs and is continuing, the Indenture Trustee may, in its discretion, and at
the instruction of the Noteholders representing a majority of the Outstanding
Note Balance of each Class of Notes shall, proceed to protect and enforce its
rights and the rights of the Noteholders by such appropriate judicial or other
proceedings as the Indenture Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy. The Indenture Trustee shall
notify the Issuer, the Agent, the Servicer and the Noteholders of any such
action.

(e)      If the Indenture Trustee shall have received instructions, within 45
days from the date notice pursuant to Section 6.3(a) hereof is first given, from
Noteholders representing at least 66-2/3% of the Outstanding Note Balance of
each Class of Notes that such Persons approve of or request the liquidation of
the Trust Estate, the Indenture Trustee shall to the extent lawful, promptly
sell, dispose of or otherwise liquidate all of the Trust Estate in a

 

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commercially reasonable manner and on commercially reasonable terms, which shall
include the solicitation of competitive bids from third parties including any
Noteholder, such bids to be approved by the Noteholders representing a majority
of the Outstanding Note Balance of each Class of Notes. The Indenture Trustee
may obtain a prior determination from any conservator, receiver or liquidator of
the Issuer that the terms and manner of any proposed sale, disposition or
liquidation are commercially reasonable.

 

SECTION 6.4.

Indenture Trustee May File Proofs of Claim.

(a)      In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding related to the Issuer, or any other obligor in respect of
the Notes, or the property of the Issuer, or such other obligor or their
creditors, the Indenture Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand on the Issuer for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

(i)        to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and any predecessor Indenture Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and any predecessor Indenture Trustee, their agents and
counsel) and of the Noteholders allowed in such judicial proceeding;

(ii)       to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and

(iii)      to participate as a member, voting or otherwise, of any official
committee of creditors appointed in such matter;

and any custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Indenture Trustee and to pay to the
Indenture Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and any predecessor
Indenture Trustee, their agents and counsel, and any other amounts due the
Indenture Trustee and any predecessor Indenture Trustee under Section 7.6
hereof.

(b)      Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize, consent to, accept or adopt on behalf of any Noteholder
any plan of reorganization, agreement, adjustment or composition affecting the
Notes or the rights of any Noteholder thereof or affecting the Timeshare Loans
or the other assets constituting the Trust Estate or to authorize the Indenture
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding.

 

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SECTION 6.5.

Indenture Trustee May Enforce Claims Without Possession of Notes.

All rights of action and claims under this Indenture, the Notes, the Timeshare
Loans or the other assets constituting the Trust Estate may be prosecuted and
enforced by the Indenture Trustee without the possession of any of the Notes or
the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Indenture Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provisions for the payment of reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and any predecessor Indenture Trustee,
their agents and counsel, be for the benefit of the Noteholders in respect of
which such judgment has been recovered, and distributed pursuant to the
priorities contemplated by Section 3.4 and Section 6.6 hereof, as applicable.

 

SECTION 6.6.

Application of Money Collected.

(a)      If a Payment Default Event shall have occurred and the Indenture
Trustee has not yet effected the remedies under Section 6.3(d) and Section 6.16
hereof, any money collected by the Indenture Trustee in respect of the Trust
Estate and any other money that may be held thereafter by the Indenture Trustee
as security for the Notes, including, without limitation, the amounts on deposit
in the General Reserve Account, shall be applied in the following order on each
Payment Date:

(i)        to the Indenture Trustee, any unpaid Indenture Trustee Fees and any
extraordinary out-of-pocket expenses of the Indenture Trustee related to a
servicing transfer (up to $10,000 per Payment Date, and no more than a
cumulative total of $100,000) incurred and not reimbursed as of such date;

(ii)       to the Owner Trustee, any accrued and unpaid Owner Trustee Fees;

(iii)      to the Administrator, any accrued and unpaid Administrator Fees;

(iv)     to the Custodian, any accrued and unpaid Custodian Fees;

(v)     to the Lockbox Bank, any accrued and unpaid Lockbox Fees;

(vi)    to the Trust Owner, any accrued and unpaid Trust Owner Fees;

(vii)   to the Servicer, any accrued and unpaid Servicing Fees;

(viii)    to the Backup Servicer, any accrued and unpaid Backup Servicing Fees;

(ix)      to the Agent and the Placement Agent, any accrued and unpaid Fees;

(x)       to the Class A Noteholders, the Class A Interest Distribution Amount;

(xi)      to the Class B Noteholders, the Class B Interest Distribution Amount;

 

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(xii)     to the Class C Noteholders, the Class C Interest Distribution Amount;

(xiii)    to the Class D Noteholders, the Class D Interest Distribution Amount;

(xiv)    to the Class E Noteholders, the Class E Interest Distribution Amount;

(xv)     to the Class A Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class A Notes is reduced to zero;

(xvi)    to the Class B Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class B Notes is reduced to zero;

(xvii)   to the Class C Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class C Notes is reduced to zero;

(xviii)  to the Class D Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class D Notes is reduced to zero;

(xix)    to the Class E Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class E Notes is reduced to zero;

(xx)     to the Indenture Trustee, any extraordinary out-of-pocket expenses of
the Indenture Trustee not paid in accordance with clause (i) above;

(xxi)    to the Class A Noteholders, the Class B Noteholders, the Class C
Noteholders, the Class D Noteholders and the Class E Noteholders, to the extent
applicable, amounts specified by the Agent and the Servicer as payable to such
Noteholders pursuant to Sections 6.1, 6.2 and 6.3 of the Note Funding Agreement;

(xxii)   any amounts due and payable by the Issuer under the Transaction
Documents, but not paid above (including, but not limited to, amounts owed by
the Issuer in respect of its indemnification obligations); and

(xxiii)  any remaining Available Funds to the Certificate Distribution Account
for distribution pursuant to the Trust Agreement.

(b)      If (i) (A) a Payment Default Event shall have occurred or (B) each
Class of Notes shall otherwise have been declared due and payable following an
Event of Default and (ii) the Indenture Trustee shall have effected a sale of
the Trust Estate under Section 6.3(d) and Section 6.16 hereof ((i) and (ii), a
“Trust Estate Liquidation Event”), any money collected by the Indenture Trustee
in respect of the Trust Estate and any other money that may be held thereafter
by the Indenture Trustee as security for the Notes, including without limitation
the amounts on deposit in the General Reserve Account, shall be applied in the
following order on each Payment Date:

(i)        to the Indenture Trustee, any accrued and unpaid Indenture Trustee
Fees and certain expenses incurred and charged and unpaid as of such date;

 

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(ii)       to the Owner Trustee, any accrued and unpaid Owner Trustee Fees;

(iii)      to the Administrator, any accrued and unpaid Administrator Fees;

(iv)    to the Custodian, any accrued and unpaid Custodian Fees;

(v)     to the Lockbox Bank, any accrued and unpaid Lockbox Fees;

(vi)    to the Trust Owner, any accrued and unpaid Trust Owner Fees;

(vii)    to the Servicer, any accrued and unpaid Servicing Fees;

(viii)    to the Backup Servicer, any accrued and unpaid Backup Servicing Fees;

(ix)    to the Agent, any accrued and unpaid Fees;

(x)       to the Class A Noteholders, the Class A Interest Distribution Amount;

(xi)      to the Class A Noteholders, all remaining amounts until the
Outstanding Note Balance of the Class A Notes is reduced to zero;

(xii)     to the Class B Noteholders, the Class B Interest Distribution Amount;

(xiii)    to the Class B Noteholders, all remaining amounts until the
Outstanding Note Balance of the Class B Notes is reduced to zero;

(xiv)    to the Class C Noteholders, the Class C Interest Distribution Amount;

(xv)     to the Class C Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class C Notes is reduced to zero;

(xvi)    to the Class D Noteholders, the Class D Interest Distribution Amount;

(xvii)   to the Class D Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class D Notes is reduced to zero;

(xviii)  to the Class E Noteholders, the Class E Interest Distribution Amount;

(xix)    to the Class E Noteholders, all remaining amounts until the Outstanding
Note Balance of the Class E Notes is reduced to zero;

(xx)     to the Class A Noteholders, the Class B Noteholders, the Class C
Noteholders, the Class D Noteholders and the Class E Noteholders, to the extent
applicable, amounts specified by the Agent and the Servicer as payable to such
Noteholders pursuant to Sections 6.1, 6.2 and 6.3 of the Note Funding Agreement;

 

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(xxi)    any amounts due and payable by the Issuer under the Transaction
Documents, but not paid above (including, but not limited to, amounts owed by
the Issuer in respect of its indemnification obligations); and

(xxii)   any remaining Available Funds to the Certificate Distribution Account
for distribution pursuant to the Trust Agreement.

 

SECTION 6.7.

Limitation on Suits.

No Noteholder shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture or for any other remedy hereunder,
unless:

(a)      there is a continuing Event of Default and such Noteholder has
previously given written notice to the Indenture Trustee of a continuing Event
of Default;

(b)      such Noteholder or Noteholders have offered to the Indenture Trustee
reasonable indemnity (which may be in the form of written assurances) against
the costs, expenses and liabilities to be incurred in compliance with such
request;

(c)      the Indenture Trustee, for 30 days after its receipt of such notice,
request and offer of indemnity, has failed to institute any such proceeding; and

(d)      no direction inconsistent with such written request has been given to
the Indenture Trustee during such 30-day period by the Noteholders representing
a majority of the Outstanding Note Balance of each Class of Notes Outstanding;

it being understood and intended that no one or more of such Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders, or to obtain or to seek to obtain priority or preference over
any other Noteholders or to enforce any right under this Indenture, except in
the manner herein provided and for the ratable benefit of all such Noteholders.
It is further understood and intended that so long as any portion of the Notes
remains Outstanding, the Servicer shall not have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture (other than
for the enforcement of Section 3.4 hereof) or for the appointment of a receiver
or trustee (including without limitation a proceeding under the Bankruptcy
Code), or for any other remedy hereunder. Nothing in this Section 6.7 shall be
construed as limiting the rights of otherwise qualified Noteholders to petition
a court for the removal of a Indenture Trustee pursuant to Section 7.8 hereof.

 

SECTION 6.8.

Unconditional Right of Noteholders to Receive Principal and Interest.

Notwithstanding any other provision in this Indenture, other than the provisions
hereof limiting the right to recover amounts due on the Notes to recoveries from
the property comprising the Trust Estate, the Noteholder of any Note shall have
the absolute and unconditional right to receive payment of the principal of, and
interest on, such Note as such payments of principal and interest become due,
including on the Stated Maturity, and such right shall not be impaired without
the consent of such Noteholder.

 

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SECTION 6.9.

Restoration of Rights and Remedies.

If the Indenture Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Indenture Trustee or to such Noteholder, then and, in every such case,
subject to any determination in such proceeding, the Issuer, the Indenture
Trustee and the Noteholders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders continue as though no such proceeding had
been instituted.

 

SECTION 6.10.

Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost, or stolen Notes in the last paragraph of Section 2.5
hereof, no right or remedy herein conferred upon or reserved to the Indenture
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

 

 

SECTION 6.11.

Delay or Omission Not Waiver.

No delay or omission of the Indenture Trustee or of any Noteholder of any Note
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article VI or by
law to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.

 

SECTION 6.12.

Control by Agent.

Until such time as the conditions specified in Sections 11.1(a)(i) and (ii)
hereof have been satisfied in full, the Agent shall have the right to either
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or directly exercise any trust or power
conferred on the Indenture Trustee, with respect to the Notes. The parties to
this Indenture acknowledge and agree to the foregoing. Notwithstanding the
foregoing, if the Agent shall elect to direct the Indenture Trustee rather than
directly exercising such rights:

(i)        no such direction shall be in conflict with any rule of law or with
this Indenture;

(ii)       the Indenture Trustee shall not be required to follow any such
direction which the Indenture Trustee reasonably believes might result in any
personal liability on the part of the Indenture Trustee for which the Indenture
Trustee is not adequately indemnified; and

 

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(iii)      the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee which is not inconsistent with any such direction; provided
that the Indenture Trustee shall give notice of any such action to the Agent.

 

 

SECTION 6.13.

Waiver of Events of Default.

(a)      Unless a Sequential Pay Event shall have occurred, the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
may, by one or more instruments in writing, waive any Event of Default hereunder
and its consequences, except a continuing Event of Default:

(i)        in respect of the payment of the principal of or interest on any Note
(which may only be waived by the Noteholder of such Note), or

(ii)       in respect of a covenant or provision hereof which under Article IX
hereof cannot be modified or amended without the consent of the Noteholder of
each Outstanding Note affected (which only may be waived by the Noteholders of
all Outstanding Notes affected).

(b)      A copy of each waiver pursuant to Section 6.13(a) hereof shall be
furnished by the Issuer to the Indenture Trustee and each Noteholder. Upon any
such waiver, such Event of Default shall cease to exist and shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereon.

 

SECTION 6.14.

Undertaking for Costs.

All parties to this Indenture agree (and each Noteholder of any Note by its
acceptance thereof shall be deemed to have agreed) that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.14 shall not apply to (i) any suit
instituted by the Indenture Trustee, (ii) to any suit instituted by any
Noteholder, or group of Noteholders representing a majority of the Outstanding
Note Balance of each Class of Notes Outstanding, or (iii) to any suit instituted
by any Noteholder for the enforcement of the payment of the principal of or
interest on any Note on or after the maturities for such payments, including the
Stated Maturity, as applicable.

 

SECTION 6.15.

Waiver of Stay or Extension Laws.

The Issuer covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and

 

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covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

 

SECTION 6.16.

Sale of Trust Estate.

(a)      The power to effect the sale of the Trust Estate pursuant to Section
6.3 hereof shall continue unimpaired until the entire Trust Estate shall have
been sold or all amounts payable on the Notes shall have been paid or losses
allocated thereto and borne thereby. The Indenture Trustee may from time to
time, upon directions in accordance with Section 6.12 hereof, postpone any
public sale by public announcement made at the time and place of such sale.

(b)      Unless required by applicable law, the Indenture Trustee shall not sell
to a third party the Trust Estate, or any portion thereof except as permitted
under Section 6.3(e) hereof.

(c)      In connection with a sale of the Trust Estate:

(i)         any one or more Noteholders may bid for and purchase the property
offered for sale, and upon compliance with the terms of sale may hold, retain,
and possess and dispose of such property, without further accountability, and
any Noteholder may, in paying the purchase money therefor, deliver in lieu of
cash any Outstanding Notes or claims for interest thereon for credit in the
amount that shall, upon distribution of the net proceeds of such sale, be
payable thereon, and the Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Noteholders after
being appropriately stamped to show such partial payment;

(ii)       the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance prepared by the Servicer transferring the Indenture
Trustee’s interest in the Trust Estate without recourse, representation or
warranty in any portion of the Trust Estate in connection with a sale thereof;

(iii)      the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey the Issuer’s interest in
any portion of the Trust Estate in connection with a sale thereof, and to take
all action necessary to effect such sale;

(iv)      no purchaser or transferee at such a sale shall be bound to ascertain
the Indenture Trustee’s authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys; and

(v)       the method, manner, time, place and terms of any sale of the Trust
Estate shall be commercially reasonable.

 

SECTION 6.17.

Action on Notes.

 

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The Indenture Trustee’s right to seek and recover judgment on the Notes or under
this Indenture or any other Transaction Document shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture or any other Transaction Document. Neither the Lien of this
Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders
shall be impaired by the recovery of any judgment by the Indenture Trustee
against the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate or upon any of the assets of the Issuer. Any money
or property collected by the Indenture Trustee shall be applied in accordance
with the provisions of this Indenture.

 

SECTION 6.18.

Performance and Enforcement of Certain Obligations.

Promptly following a request from the Indenture Trustee, the Issuer shall take
all such lawful action as the Indenture Trustee may request to compel or secure
the performance and observance by the Depositor, the Club Originator and the
Servicer, as applicable, of each of their respective obligations to the Issuer
under or in connection with the Sale Agreement and any other Transaction
Document and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale Agreement
or any other Transaction Document to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on the
part of the Depositor, the Club Originator or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Depositor, the Club Originator or the Servicer of each
of their obligations under the Sale Agreement and the other Transaction
Documents.

ARTICLE VII.

 

THE INDENTURE TRUSTEE

 

SECTION 7.1.

Certain Duties.

(a)      The Indenture Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Indenture Trustee;
except as expressly set forth herein, the Indenture Trustee shall have no
obligation to monitor the performance of the Servicer under the Transaction
Documents.

(b)      In the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture; provided, however, the
Indenture Trustee shall not be required to verify or recalculate the contents
thereof.

(c)      In case an Event of Default or a Servicer Event of Default (resulting
in the appointment of the Indenture Trustee as successor Servicer) has occurred
and is continuing, the Indenture Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and

 

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use the same degree of care and skill in their exercise, as a prudent Person
would exercise or use under the circumstances in the conduct of such Person’s
own affairs; provided, however, that no provision in this Indenture shall be
construed to limit the obligations of the Indenture Trustee to provide notices
under Section 7.2 hereof.

(d)      The Indenture Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Noteholders pursuant to this Indenture, unless such Noteholders
shall have offered to the Indenture Trustee reasonable security or indemnity
acceptable to the Indenture Trustee (which may be in the form of written
assurances) against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction.

(e)      No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

(i)        this Section 7.1(e) shall not be construed to limit the effect of
Section 7.1(a) and (b) hereof;

(ii)       the Indenture Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it shall be proved that the
Indenture Trustee shall have been negligent in ascertaining the pertinent facts;
and

(iii)      the Indenture Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of the requisite principal amount of the outstanding
Notes, or in accordance with any written direction delivered to it under
Sections 6.2(a), (b) or (c) hereof relating to the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.

(f)       Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Indenture Trustee shall be subject to the provisions of this
Section 7.1.

(g)      The Indenture Trustee makes no representations or warranties with
respect to the Timeshare Loans or the Notes or the validity or sufficiency of
any assignment of the Timeshare Loans to the Issuer or to the Trust Estate.

(h)      Notwithstanding anything to the contrary herein, the Indenture Trustee
is not required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

 

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SECTION 7.2.

Notice of Events of Default.

The Indenture Trustee shall promptly (but, in any event, within three Business
Days) notify the Issuer, the Servicer, the Agent and the Noteholders upon a
Responsible Officer obtaining actual knowledge of any event which constitutes an
Event of Default or a Servicer Event of Default or would constitute an Event of
Default or a Servicer Event of Default but for the requirement that notice be
given or time elapse or both.

 

SECTION 7.3.

Certain Matters Affecting the Indenture Trustee.

Subject to the provisions of Section 7.1 hereof:

(a)      The Indenture Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;

(b)      Any request or direction of any Noteholders, the Issuer, or the
Servicer mentioned herein shall be in writing;

(c)      Whenever in the performance of its duties hereunder the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer’s Certificate or an Opinion of
Counsel;

(d)      The Indenture Trustee may consult with counsel, and the advice of such
counsel or any Opinion of Counsel shall be deemed authorization in respect of
any action taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon;

(e)      Prior to the occurrence of an Event of Default or after the curing of
all Events of Default which may have occurred, the Indenture Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper document, unless
requested in writing so to do by Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes; provided, however, that if the
payment within a reasonable time to the Indenture Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such investigation
is, in the reasonable opinion of the Indenture Trustee, not reasonably assured
to the Indenture Trustee by the security afforded to it by the terms of this
Indenture, the Indenture Trustee may require reasonable indemnity against such
cost, expense or liability as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by the Servicer or, if paid by
the Indenture Trustee, shall be reimbursed by the Servicer upon demand;

(f)       The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian (which may be an Affiliate of the Indenture
Trustee), and the Indenture Trustee shall

 

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not be liable for any acts or omissions of such agents, attorneys or custodians
appointed with due care by it hereunder; and

(g)      Delivery of any reports, information and documents to the Indenture
Trustee provided for herein or any other Transaction Document is for
informational purposes only (unless otherwise expressly stated), and the
Indenture Trustee’s receipt of such shall not constitute constructive knowledge
of any information contained therein or determinable from information contained
therein, including the Servicer’s or the Issuer’s compliance with any of its
representations, warranties or covenants hereunder (as to which the Indenture
Trustee is entitled to rely exclusively on Officer’s Certificates).

 

SECTION 7.4.

Indenture Trustee Not Liable for Notes or Timeshare Loans.

(a)      The Indenture Trustee makes no representations as to the validity or
sufficiency of this Indenture or any Transaction Document, the Notes (other than
the authentication thereof) or of any Timeshare Loan. The Indenture Trustee
shall not be accountable for the use or application by the Issuer of funds paid
to the Issuer in consideration of conveyance of the Timeshare Loans and related
assets to the Trust Estate.

(b)      The Indenture Trustee (in its capacity as Indenture Trustee) shall have
no responsibility or liability for or with respect to the validity of any
security interest in any property securing a Timeshare Loan; the existence or
validity of any Timeshare Loan, the validity of the assignment of any Timeshare
Loan to the Trust Estate or of any intervening assignment; the review of any
Timeshare Loan, any Timeshare Loan File, the completeness of any Timeshare Loan
File, the receipt by the Custodian of any Timeshare Loan or Timeshare Loan File
(it being understood that the Indenture Trustee has not reviewed and does not
intend to review such matters); the performance or enforcement of any Timeshare
Loan; the compliance by the Servicer or the Issuer with any covenant or the
breach by the Servicer or the Issuer of any warranty or representation made
hereunder or in any Transaction Document or the accuracy of any such warranty or
representation; the acts or omissions of the Servicer, the Issuer or any
Obligor; or any action of the Servicer or the Issuer taken in the name of the
Indenture Trustee.

 

SECTION 7.5.

Indenture Trustee May Own Notes.

The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Notes with the same rights as it would have if it were not
the Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or
co-paying agent may become the owner or pledgee of Notes with the same rights as
it would have if it were not the Paying Agent, Note Registrar, co-registrar or
co-paying agent.

 

SECTION 7.6.

Indenture Trustee’s Fees and Expenses.

On each Payment Date, the Indenture Trustee shall be entitled to the Indenture
Trustee Fee and reimbursement of out-of-pocket expenses incurred by it in
connection with its responsibilities hereunder in the priorities provided in
Sections 3.4 or 6.6 hereof, as applicable.

 

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SECTION 7.7.

Eligibility Requirements for Indenture Trustee.

Other than the initial Indenture Trustee, the Indenture Trustee hereunder shall
at all times (a) be a corporation, depository institution, or trust company
organized and doing business under the laws of the United States of America or
any state thereof authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000, (b) be subject
to supervision or examination by federal or state authority, (c) be capable of
maintaining an Eligible Bank Account, (d) have a long-term unsecured debt rating
of not less than “Baa2” from Moody’s and “BBB” from S&P, and (e) shall be
acceptable to Noteholders representing a majority of the Outstanding Note
Balance of the each Class of Notes. If such institution publishes reports of
condition at least annually, pursuant to or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 7.7,
the combined capital and surplus of such institution shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.7, the Indenture
Trustee shall resign in the manner and with the effect specified in Section 7.8
below.

 

SECTION 7.8.

Resignation or Removal of Indenture Trustee.

(a)      The Indenture Trustee may at any time resign and be discharged with
respect to the Notes by giving 60 days’ written notice thereof to the Servicer
and the Issuer. Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor Indenture Trustee not objected to by Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
within 30 days after prior written notice, by written instrument, in
sextuplicate, one counterpart of which instrument shall be delivered to each of
the Issuer, the Servicer, the Agent, the Noteholders, the successor Indenture
Trustee and the predecessor Indenture Trustee. If no successor Indenture Trustee
shall have been so appointed and have accepted appointment within 60 days after
the giving of such notice of resignation, the resigning Indenture Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.

(b)      If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of Section 7.7 hereof and shall fail to resign
after written request therefor by the Issuer, or if at any time the Indenture
Trustee shall be legally unable to act, fails to perform in any material respect
its obligations under this Indenture, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Indenture Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Indenture
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Issuer or Noteholders representing a
majority of the Outstanding Note Balance of each Class of Notes may direct the
Issuer to remove the Indenture Trustee. If it removes the Indenture Trustee
under the authority of the immediately preceding sentence, the Issuer shall
promptly appoint a successor Indenture Trustee not objected to by Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes,
within 30 days after prior written notice, by written instrument, in
sextuplicate, one counterpart of which instrument shall be delivered to each of
the Issuer, the Servicer, the Noteholders, the Agent, the successor Indenture
Trustee and the predecessor Indenture Trustee.

 

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(c)      Any resignation or removal of the Indenture Trustee and appointment of
a successor Indenture Trustee pursuant to any of the provisions of this Section
7.8 shall not become effective until acceptance of appointment by the successor
Indenture Trustee as provided in Section 7.9 hereof.

 

SECTION 7.9.

Successor Indenture Trustee.

(a)      Any successor Indenture Trustee appointed as provided in Section 7.8
hereof shall execute, acknowledge and deliver to each of the Servicer, the
Issuer, the Agent, the Noteholders and to its predecessor Indenture Trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor Indenture Trustee hereunder with like effect as if originally named
a Indenture Trustee. The predecessor Indenture Trustee shall deliver or cause to
be delivered to the successor Indenture Trustee or its custodian any Transaction
Documents and statements held by it or its custodian hereunder; and the Servicer
and the Issuer and the predecessor Indenture Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for the
full and certain vesting and confirmation in the successor Indenture Trustee of
all such rights, powers, duties and obligations.

(b)      In case of the appointment hereunder of a successor Indenture Trustee
with respect to the Notes, the Issuer, the retiring Indenture Trustee and each
successor Indenture Trustee with respect to the Notes shall execute and deliver
an indenture supplemental hereto wherein each successor Indenture Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Indenture Trustee all the rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Notes to which the appointment of
such successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee
is not retiring with respect to all Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Indenture Trustee with respect to the Notes as
to which the retiring Indenture Trustee is not retiring shall continue to be
vested in the retiring Indenture Trustee, and (iii) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the Trust Estate hereunder by more than one
Indenture Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Indenture Trustees co-trustees of
the same allocated trust and that each such Indenture Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Indenture Trustee; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Indenture Trustee shall become effective to the extent provided
therein and each such successor Indenture Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes to which the
appointment of such successor Indenture Trustee relates; but, on request of the
Issuer or any successor Indenture Trustee, such retiring Indenture Trustee shall
duly assign, transfer and deliver to such successor Indenture Trustee all
property and money held by such retiring Indenture Trustee hereunder with
respect to the Notes of that or those to which the appointment of such successor
Indenture Trustee relates.

 

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Upon request of any such successor Indenture Trustee, the Issuer shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor indenture trustee all such rights, powers and trusts referred
to in the preceding paragraph.

(c)      No successor Indenture Trustee shall accept appointment as provided in
this Section 7.9 unless at the time of such acceptance such successor Indenture
Trustee shall be eligible under the provisions of Section 7.7 hereof.

(d)      Upon acceptance of appointment by a successor Indenture Trustee as
provided in this Section 7.9, the Servicer shall mail notice of the succession
of such Indenture Trustee hereunder to each Noteholder at its address as shown
in the Note Register. If the Servicer fails to mail such notice within ten days
after acceptance of appointment by the successor Indenture Trustee, the
successor Indenture Trustee shall cause such notice to be mailed at the expense
of the Issuer and the Servicer.

 

SECTION 7.10.

Merger or Consolidation of Indenture Trustee.

Any corporation or other entity into which the Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation or other
entity resulting from any merger, conversion or consolidation to which the
Indenture Trustee shall be a party, or any corporation or other entity
succeeding to the corporate trust business of the Indenture Trustee, shall be
the successor of the Indenture Trustee hereunder, provided such corporation or
other entity shall be eligible under the provisions of Section 7.7 hereof,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

 

SECTION 7.11.

Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

(a)      At any time or times for the purpose of meeting any legal requirement
of any jurisdiction in which any part of the Trust Estate may at the time be
located or in which any action of the Indenture Trustee may be required to be
performed or taken, the Indenture Trustee, the Servicer or the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes,
by an instrument in writing signed by it or them, may appoint, at the reasonable
expense of the Issuer and the Servicer, one or more individuals or corporations
to act as separate trustee or separate trustees or co-trustee, acting jointly
with the Indenture Trustee, of all or any part of the Trust Estate, to the full
extent that local law makes it necessary for such separate trustee or separate
trustees or co-trustee acting jointly with the Indenture Trustee to act.
Notwithstanding the appointment of any separate or co-trustee, the Indenture
Trustee shall remain obligated and liable for the obligations of the Indenture
Trustee under this Indenture.

(b)      The Indenture Trustee and, at the request of the Indenture Trustee, the
Issuer shall execute, acknowledge and deliver all such instruments as may be
required by the legal requirements of any jurisdiction or by any such separate
trustee or separate trustees or co-trustee for the purpose of more fully
confirming such title, rights, or duties to such separate trustee or separate
trustees or co-trustee. Upon the acceptance in writing of such appointment by
any such separate trustee or separate trustees or co-trustee, it, he, she or
they shall be vested with such title to the Trust Estate or any part thereof,
and with such rights, powers, duties and

 

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obligations as shall be specified in the instrument of appointment, and such
rights, powers, duties and obligations shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee, or the Indenture Trustee and
such separate trustee or separate trustees or co-trustees jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate trustee
or separate trustees or co-trustee, as the case may be. Any separate trustee or
separate trustees or co-trustee may, at any time by an instrument in writing,
constitute the Indenture Trustee its attorney-in-fact and agent with full power
and authority to do all acts and things and to exercise all discretion on its
behalf and in its name. In any case any such separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, the title to the
Trust Estate and all assets, property, rights, power duties and obligations and
duties of such separate trustee or co-trustee shall, so far as permitted by law,
vest in and be exercised by the Indenture Trustee, without the appointment of a
successor to such separate trustee or co-trustee unless and until a successor is
appointed.

(c)      All provisions of this Indenture which are for the benefit of the
Indenture Trustee shall extend to and apply to each separate trustee or
co-trustee appointed pursuant to the foregoing provisions of this Section 7.11.

(d)      Every additional trustee and separate trustee hereunder shall, to the
extent permitted by law, be appointed and act and the Indenture Trustee shall
act, subject to the following provisions and conditions: (i) all powers, duties
and obligations and rights conferred upon the Indenture Trustee in respect of
the receipt, custody, investment and payment of monies shall be exercised solely
by the Indenture Trustee; (ii) all other rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be conferred or imposed
and exercised or performed by the Indenture Trustee and such additional trustee
or trustees and separate trustee or trustees jointly except to the extent that
under any law of any jurisdiction in which any particular act or acts are to be
performed, the Indenture Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Timeshare Properties in any such
jurisdiction) shall be exercised and performed by such additional trustee or
trustees or separate trustee or trustees; (iii) no power hereby given to, or
exercisable by, any such additional trustee or separate trustee shall be
exercised hereunder by such trustee except jointly with, or with the consent of,
the Indenture Trustee; and (iv) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee hereunder.

If at any time, the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to such law, the Indenture Trustee shall execute and
deliver all instruments and agreements necessary or proper to remove any
additional trustee or separate trustee.

(e)      Any request, approval or consent in writing by the Indenture Trustee to
any additional trustee or separate trustee shall be sufficient warrant to such
additional trustee or separate trustee, as the case may be, to take such action
as may be so requested, approved or consented to.

 

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(f)       Notwithstanding any other provision of this Section 7.11, the powers
of any additional trustee or separate trustee shall not exceed those of the
Indenture Trustee hereunder.

 

SECTION 7.12.

Paying Agent and Note Registrar Rights.

So long as the Indenture Trustee is the Paying Agent and Note Registrar, the
Paying Agent and Note Registrar shall be entitled to the rights, benefits and
immunities of the Indenture Trustee as set forth in this Article VII to the same
extent and as fully as though named in place of the Indenture Trustee herein.
The Paying Agent shall be compensated out of the Indenture Trustee Fee.

 

 

SECTION 7.13.

Authorization.

(a)       The Issuer has authorized and directed the Indenture Trustee to enter
into the Lockbox Agreement. Pursuant to the Lockbox Agreement, the Indenture
Trustee agrees to cause to be established and maintained an account (the
“Lockbox Account”) for the benefit of the Noteholders. The Lockbox Account is
titled as follows “U.S. Bank National Association, as Indenture Trustee of BXG
Timeshare Trust I–Blocked Account”, Timeshare Loan-Backed Notes, Series I”. The
Indenture Trustee has been authorized and directed to act as titleholder of the
Lockbox Account in accordance with the terms of the Lockbox Agreement for the
benefit of the Noteholders with interests in the funds on deposit in such
accounts. In addition, the Indenture Trustee has been authorized to enter into,
execute, deliver and perform under, each of the applicable Transaction Documents
executed on the Closing Date and is hereby authorized to enter into, execute,
deliver and perform under, each of the applicable Transaction Documents executed
on the Amendment Date. The Lockbox Bank will be required to transfer and will be
permitted to withdraw funds from the Lockbox Account in accordance with the
Lockbox Agreement.

(b)       The Indenture Trustee is authorized and directed to act as titleholder
of the Credit Card Account for the benefit of the Noteholders with interests in
the funds on deposit in such account.

 

SECTION 7.14.

Maintenance of Office or Agency.

The Indenture Trustee will maintain in the Borough of Manhattan, the City of New
York, an office or agency where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Indenture
Trustee in respect of the Notes and this Indenture may be served. The Indenture
Trustee will give prompt written notice to the Issuer, the Servicer and the
Noteholders of the location, and of any change in the location, of any such
office or agency or shall fail to furnish the Issuer or the Servicer with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee
as its agent to receive all such surrenders, notices and demands.

 

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ARTICLE VIII.

 

COVENANTS OF THE ISSUER

 

SECTION 8.1.

Payment of Principal, Interest and Other Amounts.

The Issuer will cause the due and punctual payment of the principal of, and
interest on, the Notes in accordance with the terms of the Notes and this
Indenture.           

 

SECTION 8.2.

Eligible Timeshare Loan.

                      On each Transfer Date, each Subsequent Timeshare Loan or
Qualified Substitute Timeshare Loan, as the case may be, shall be an Eligible
Timeshare Loan.

 

SECTION 8.3.

Money for Payments to Noteholders to Be Held in Trust.

(a)      All payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Trust Accounts pursuant to
Sections 3.4 or 6.6 hereof shall be made on behalf of the Issuer by the
Indenture Trustee, and no amounts so withdrawn from the Collection Account for
payments of Notes shall be paid over to the Issuer under any circumstances,
except as provided in this Section 8.3, in Section 3.4 or Section 6.6 hereof, as
the case may be.

(b)      In making payments hereunder, the Indenture Trustee will hold all sums
held by it for the payment of amounts due with respect to the Notes in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and pay such sums to
such Persons as herein provided.

(c)      Except as required by applicable law, any money held by the Indenture
Trustee or the Paying Agent in trust for the payment of any amount due with
respect to any Note shall not bear interest and if remaining unclaimed for two
years after such amount has become due and payable to the Noteholder shall be
discharged from such trust and, subject to applicable escheat laws, and so long
as no Event of Default has occurred and is continuing, paid to the Issuer upon
request; otherwise, such amounts shall be redeposited in the Collection Account
as Available Funds, and such Noteholder shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the Indenture
Trustee or the Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or the Paying Agent, before
being required to make any such repayment, shall cause to be published once, at
the expense and direction of the Issuer, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee or the Paying Agent shall
also adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Noteholders whose Notes have been called
but have not been surrendered for redemption or whose right to or interest in
moneys due and payable but not claimed is determinable) from the

 

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records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Noteholder.

(d)      The Issuer will cause each Paying Agent to execute and deliver to the
Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee is the Paying Agent, it hereby
so agrees), subject to the provisions of this Section 8.3, that such Paying
Agent will:

(i)        give the Indenture Trustee notice of any occurrence that is, or with
notice or with the lapse of time or both would become, an Event of Default by
the Issuer of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;

(ii)       at any time during the continuance of any such occurrence described
in clause (i) above, upon the written request of the Indenture Trustee, pay to
the Indenture Trustee all sums so held in trust by such Paying Agent;

(iii)      immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying Agent at
the time of its appointment; and

(iv)      comply with all requirements of the Code or any applicable state law
with respect to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.

The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such monies.

 

SECTION 8.4.

Existence; Merger; Consolidation, etc.

(a)      The Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware, and
will obtain and preserve its qualification to do business as a foreign business
trust in each jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Indenture, the Notes or any
of the Timeshare Loans.

(b)      The Issuer shall at all times observe and comply in all material
respects with (i) all laws applicable to it, (ii) all requirements of law in the
declaration and payment of distributions, and (iii) all requisite and
appropriate formalities in the management of its business and affairs and the
conduct of the transactions contemplated hereby.

 

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(c)      The Issuer shall not (i) consolidate or merge with or into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any other Person or (ii) commingle its assets with those of any
other Person.

(d)      The Issuer shall not become an “investment company” or under the
“control” of an “investment company” as such terms are defined in the Investment
Company Act of 1940, as amended (or any successor or amendatory statute), and
the rules and regulations thereunder (taking into account not only the general
definition of the term “investment company” but also any available exceptions to
such general definition); provided, however, that the Issuer shall be in
compliance with this Section 8.4 if it shall have obtained an order exempting it
from regulation as an “investment company” so long as it is in compliance with
the conditions imposed in such order.

 

SECTION 8.5.

Protection of Trust Estate; Further Assurances.

(a)      The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:

(i)        Grant more effectively the assets comprising all or any portion of
the Trust Estate;

(ii)       maintain or preserve the Lien of this Indenture or carry out more
effectively the purposes hereof;

(iii)      publish notice of, or protect the validity of, any Grant made or to
be made by this Indenture and perfect the security interest contemplated hereby
in favor of the Indenture Trustee in each of the Timeshare Loans and all other
property included in the Trust Estate; provided, that the Issuer shall not be
required to cause the recordation of the Indenture Trustee’s name as Lien holder
on the related title documents for the Timeshare Properties so long as no Event
of Default has occurred and is continuing;

(iv)      enforce or cause the Servicer to enforce any of the Timeshare Loans in
accordance with the Servicing Standard, provided, however, the Issuer will not
cause the Servicer to obtain on behalf of the Indenture Trustee or the
Noteholders, any Timeshare Property or to take any actions with respect to any
property the result of which would adversely affect the interests of the
Indenture Trustee or the Noteholders (including, but not limited to, actions
which would cause the Indenture Trustee or the related Noteholders to be
considered a holder of title, mortgagee-in-possession, or otherwise, or an
“owner” or “operator” of Property not in compliance with applicable
environmental statutes); and

(v)       preserve and defend title to the Timeshare Loans (including the right
to receive all payments due or to become due thereunder), the interests in the
Timeshare Properties, or other property included in the Trust Estate and
preserve and defend the rights of the Indenture Trustee in the Trust Estate
(including the right

 

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to receive all payments due or to become due thereunder) against the claims of
all Persons and parties other than as permitted hereunder.

(b)      The Issuer will not take any action and will use its commercially
reasonable efforts not to permit any action to be taken by others that would
release any Person from any of such Person’s material covenants or obligations
under any instrument or agreement included in the Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture or the Custodial
Agreement or such other instrument or agreement.

(c)      The Issuer may contract with or otherwise obtain the assistance of
other Persons to assist it in performing its duties under this Indenture, and
any performance of such duties by a Person identified to the Indenture Trustee
in an Officer’s Certificate of the Issuer shall be deemed to be action taken by
the Issuer, provided, however, that no appointment of such Person shall relieve
the Issuer of its duties and obligations hereunder. Initially, the Issuer has
contracted with the Servicer, the Indenture Trustee and the Custodian pursuant
to this Indenture to assist the Issuer in performing its duties under this
Indenture and the other Transaction Documents.

(d)      The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Transaction Documents and in the
instruments and agreements included in the Trust Estate.

(e)      Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Indenture Trustee and the Noteholders representing a
majority of the Outstanding Note Balance of each Class of Notes, amend, modify,
waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of any
Timeshare Loan (except to the extent otherwise provided in this Indenture or in
the Timeshare Loan Documents) or the Transaction Documents, or waive timely
performance or observance by the Servicer, the Indenture Trustee, the Custodian,
the Paying Agent or the Depositor under this Indenture; and (ii) that any such
amendment shall not (A) reduce in any manner the amount of, or accelerate or
delay the timing of, distributions that are required to be made for the benefit
of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is
required to consent to any such amendment, without the consent of the
Noteholders of all the Outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee and the
Noteholders, the Issuer agrees, promptly following a request by the Indenture
Trustee, to execute and deliver, at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem
necessary or appropriate in the circumstances.

The Issuer, upon the Issuer’s failure to do so, hereby irrevocably designates
the Indenture Trustee and the Servicer, severally, its agents and
attorneys-in-fact to execute any financing statement or continuation statement
or Assignment of Mortgage required pursuant to this Section 8.5; provided,
however, that such designation shall not be deemed to create a duty

 

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in the Indenture Trustee to monitor the compliance of the Issuer with the
foregoing covenants, and provided, further, that the duty of the Indenture
Trustee or the Servicer to execute any instrument required pursuant to this
Section 8.5 shall arise only if a Responsible Officer of the Indenture Trustee
or the Servicer, as applicable, has Knowledge of any failure of the Issuer to
comply with the provisions of this Section 8.5.

 

 

SECTION 8.6.

Additional Covenants.

(a)                The Issuer will not:

(i)        sell, transfer, exchange or otherwise dispose of any portion of the
Trust Estate except as expressly permitted by this Indenture;

(ii)       claim any credit on, or make any deduction from, the principal of, or
interest on, any of the Notes (other than amounts properly withheld from such
payments under the Code or any applicable state law) or assert any claim against
any present or former Noteholder by reason of the payment of any taxes levied or
assessed upon any portion of the Trust Estate;

(iii)      engage in any business or activity other than as permitted by this
Indenture, the Trust Agreement and the other Transaction Documents and any
activities incidental thereto, or amend the Trust Agreement as in effect on the
Closing Date other than in accordance with Article XI thereof;

(iv)      issue debt of obligations under any indenture other than this
Indenture;

(v)       incur or assume, directly or indirectly, any indebtedness, except for
such indebtedness as may be incurred by the Issuer pursuant to this Indenture,
or guaranty any indebtedness or other obligations of any Person (other than the
Timeshare Loans), or own, purchase, repurchase or acquire (or agree contingently
to do so) any stock, obligations, assets or securities of, or any other interest
in, or make any capital contribution to, any other Person (other than the
Timeshare Loans);

(vi)      dissolve or liquidate in whole or in part or merge or consolidate with
any other Person;

(vii)     (A) permit the validity or effectiveness of this Indenture or any
Grant hereby to be impaired, or permit the Lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations under this Indenture, except as may
be expressly permitted hereby, (B) permit any lien, charge, security interest,
mortgage or other encumbrance to be created on or to extend to or otherwise
arise upon or burden the Trust Estate or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics; liens and
other liens that arise by operation of law, in each case on any of the Resort
Interests and arising solely as a result of an act or omission of the related
Obligor) other than the Lien of this Indenture or (C) except as otherwise
contemplated in this Indenture, permit the Lien of this Indenture

 

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(other than with respect to any Permitted Liens or such tax, mechanic’s or other
lien) not to constitute a valid first priority security interest in the Trust
Estate;

(viii)    take any other action or fail to take any actions which may cause the
Issuer to be taxable as an association pursuant to Section 7701 of the Code and
the corresponding regulations, (b) a publicly traded partnership taxable as a
corporation pursuant to Section 7704 of the Code and the corresponding
regulations or (c) a taxable mortgage pool pursuant to Section 7701(i) of the
Code and the corresponding regulations; or

(ix)      change the location of its principal place of business without the
prior notice to the Indenture Trustee, the Agent and the Noteholders.

(b)      Notice of Events of Default. Immediately upon the Issuer having
Knowledge of the existence of any condition or event which constitutes a Default
or an Event of Default or a Servicer Event of Default, the Issuer shall deliver
to the Indenture Trustee and the Agent a written notice describing its nature
and period of existence and what action the Issuer is taking or proposes to take
with respect thereto.

(c)      Report on Proceedings. Promptly upon the Issuer’s becoming aware of (i)
any proposed or pending investigation of it by any governmental authority or
agency; or (ii) any pending or proposed court or administrative proceeding which
involves or is reasonably likely to involve the possibility of materially and
adversely affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Issuer, the Issuer shall deliver to the
Indenture Trustee and the Agent a written notice specifying the nature of such
investigation or proceeding and what action the Issuer is taking or proposes to
take with respect thereto and evaluating its merits.

 

SECTION 8.7.

Taxes.

The Issuer shall pay all taxes when due and payable or levied against its
assets, properties or income, including any property that is part of the Trust
Estate, except to the extent the Issuer is contesting the same in good faith and
has set aside adequate reserves in accordance with GAAP for the payment thereof.

 

SECTION 8.8.

Restricted Payments.

The Issuer shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest to security in or of the Issuer, the Club Originator, the
Depositor or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire
for value any such ownership or equity interest or security or (iii) set aside
or otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, payments and distributions to or on
behalf of the Servicer, the Club Originator, the Depositor, the Indenture
Trustee, the Owner Trustee, the Noteholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under,
this Indenture, the Sale Agreement, the Trust Agreement or the other Transaction
Documents. The Issuer will

 

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not, directly or indirectly, make or cause to be made payments to or
distributions from the Collection Account except in accordance with this
Indenture and the other Transaction Documents.

 

SECTION 8.9.

Treatment of Notes as Debt for Tax Purposes.

The Issuer shall treat the Notes as indebtedness for all federal, state and
local income and franchise tax purposes.

 

SECTION 8.10.

Further Instruments and Acts.

Upon request of the Indenture Trustee, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.

ARTICLE IX.

 

SUPPLEMENTAL INDENTURES

 

SECTION 9.1.

Supplemental Indentures.

(a)      The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Indenture Trustee, for any of
the following purposes:

(i)        without the consent of any Noteholder; (x) to correct or amplify the
description of any property at any time subject to the Lien of this Indenture,
or to better assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the Lien of this Indenture; provided,
such action pursuant to this clause (i) shall not adversely affect the interests
of the Noteholders in any respect; or

 

(1)

to evidence and provide for the acceptance of appointment hereunder by a
successor Indenture Trustee with respect to the Notes and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Indenture
Trustee, pursuant to the requirements of Section 7.9 hereof; or

 

(2)

to cure any ambiguity, to correct or supplement any provision herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture; provided that such action pursuant to this clause (2) shall not
adversely affect the interests of any of the Noteholders of Notes.

 

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(b)      The Indenture Trustee shall promptly deliver, at least five Business
Days prior to the effectiveness thereof, to each Noteholder and the Agent, a
copy of any supplemental indenture entered into pursuant to this Section 9.1.

 

SECTION 9.2.

Supplemental Indentures with Consent of Noteholders.

(a)      With the consent of Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes then Outstanding and by Act of
said Noteholders delivered to the Issuer and the Indenture Trustee, the Issuer
and the Indenture Trustee may, pursuant to an Issuer Order, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Noteholders under
this Indenture; provided, that no supplemental indenture (including any
supplemental indenture to be entered into pursuant to Section 9.1 hereof) shall,
without the consent of the Noteholder of each Outstanding Note affected thereby,

(i)        change the Stated Maturity or Payment Date of any Note or the amount
of principal payments or interest payments or any other amount due or to become
due on any Payment Date with respect to any Note, or change the priority of
payment thereof as set forth herein, or reduce the principal amount thereof or
the Note Rate thereon, or change the place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity;

(ii)       reduce the percentage of the Outstanding Note Balance, the consent of
the Noteholders of which is required for any supplemental indenture, for any
waiver of compliance with provisions of this Indenture or Events of Default and
their consequences;

(iii)      modify any of the provisions of this Section 9.2 or Section 6.13
hereof except to increase any percentage of Noteholders required for any
modification or waiver or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Noteholder of
each Outstanding Note affected thereby;

(iv)      modify or alter the provisions of the proviso to the definition of the
term “Outstanding”;

(v)       permit the creation of any lien ranking prior to or on a parity with
the Lien of this Indenture with respect to any part of the Trust Estate or
terminate the Lien of this Indenture on any property at any time subject hereto
or deprive any Noteholder of the security afforded by the Lien of this
Indenture; or

(vi)    modify or change Section 2.4 or Article XV hereof;

provided, no such supplemental indenture may modify or change any terms
whatsoever of this Indenture that could be construed as increasing the Issuer’s
or the Servicer’s discretion hereunder.

 

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(b)      The Indenture Trustee shall promptly deliver, at least five Business
Days prior to the effectiveness thereof to each Noteholder and the Agent, a copy
of any supplemental indenture entered into pursuant to Section 9.2(a) hereof.

 

SECTION 9.3.

Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any supplemental
indenture (a) pursuant to Section 9.1 hereof or (b) pursuant to Section 9.2
hereof without the consent of each Noteholder of the Notes to the execution of
the same, or the modifications thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive, and (subject to Section 7.1
hereof) shall be, fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to, enter
into any supplemental indenture which affects the Indenture Trustee’s own
rights, duties, obligations, or immunities under this Indenture or otherwise.

 

SECTION 9.4.

Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article IX, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

 

SECTION 9.5.

Reference in Notes to Supplemental Indentures.

Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Indenture
Trustee, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. New Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.

ARTICLE X.

 

BORROWINGS

SECTION 10.1.  Optional Borrowings. (a) On any Business Day prior to the
Facility Termination Date (each a “Funding Date”), and subject to satisfaction
of the following conditions, additional amounts may be borrowed or reborrowed by
the Issuer under the Notes (a “Borrowing”) and from the Committed Purchasers
under the Note Funding Agreement:

(i)        the Custodian shall have delivered to the Indenture Trustee and the
Agent the Custodian’s Certification pursuant to the Custodial Agreement with
respect to the Timeshare Loan Documents related to the Timeshare Loans being
purchased by the Depositor and the Issuer on such Funding Date;

 

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(ii)       no Event of Default has occurred and is continuing and no such event
would result from the conveyance of such Timeshare Loans under the Purchase
Agreement and the Sale Agreement or hereunder;

(iii)      after giving effect to the purchase and transfer of Timeshare Loans
by the Depositor and the Issuer on such Funding Date, the Outstanding Note
Balance shall not exceed the Maximum Facility Balance and there shall not be a
Borrowing Base Deficiency;

(iv)      after giving effect to the purchase and transfer of Timeshare Loans by
the Depositor and the Issuer on such Funding Date, each Hedge Agreement with
Qualified Hedge Counterparties shall be in full force and effect;

(v)       no Authorized Officer of the Indenture Trustee has actual knowledge or
has received notice on or prior to such Funding Date that any conditions to such
transfer have not been fulfilled and the Indenture Trustee shall have received
such other documents, opinions, certificates and instruments as the Indenture
Trustee may request;

(vi)      the Servicer shall deliver to the Agent and the Indenture Trustee, a
Borrowing Notice;

(vii)     the Borrowing does not exceed the Maximum Borrowing Amount; and

(viii)    each of the conditions set forth in the Note Funding Agreement shall
have been satisfied.

(b)      Funding Dates shall not occur more frequently than twice every calendar
month unless otherwise approved by the Agent. Notice of any Borrowing shall be
given by the Issuer to the Agent as provided for in the Note Funding Agreement.

ARTICLE XI.

 

SATISFACTION AND DISCHARGE

 

SECTION 11.1.

Satisfaction and Discharge of Indenture.

(a)      This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Indenture Trustee, on demand of, and at the
expense of, the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:

 

(i)

either:

 

(1)

all Notes theretofore authenticated and delivered (other than (A) Notes which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.5 hereof and (B)

 

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    Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the Issuer
or discharged from such trust, as provided in Section 8.3(c) hereof) have been
delivered to the Indenture Trustee for cancellation; or

 

(2)

the final installments of principal on all such Notes not theretofore delivered
to the Indenture Trustee for cancellation (x) have become due and payable, or
(y) will become due and payable at their Stated Maturity, as applicable within
one year, and the Issuer has irrevocably deposited or caused to be deposited
with the Indenture Trustee in trust an amount sufficient to pay and discharge
the entire indebtedness on such Notes not theretofore delivered to the Indenture
Trustee for cancellation, for principal and interest to the date of such deposit
(in the case of Notes which have become due and payable) or to the Stated
Maturity thereof;

(ii)       the Issuer and the Servicer have paid or caused to be paid (out of
Available Funds or amounts received pursuant to Article XIV hereof) all other
sums payable hereunder by the Issuer and the Servicer for the benefit of the
Noteholders and the Indenture Trustee; and

(iii)      the Issuer has delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.

At such time, the Indenture Trustee shall deliver to the Issuer all cash,
securities and other property held by it as part of the Trust Estate other than
funds deposited with the Indenture Trustee pursuant to Section 11.1(a)(i)
hereof, for the payment and discharge of the Notes.

(b)      Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Indenture Trustee under Section 7.6 hereof and,
if money shall have been deposited with the Indenture Trustee pursuant to
Section 11.1(a)(i) hereof, the obligations of the Indenture Trustee under
Sections 11.2 and 8.3(c) hereof shall survive.

SECTION 11.2.  Application of Trust Money; Repayment of Money Held by Paying
Agent.

Subject to the provisions of Section 8.3(c) hereof, all money deposited with the
Indenture Trustee pursuant to Sections 11.1 and 8.3 hereof shall be held in
trust and applied by the Indenture Trustee in accordance with the provisions of
the Notes, this Indenture and the Trust Agreement, to the payment, either
directly or through a Paying Agent, as the Indenture Trustee may determine, to
the Persons entitled thereto, of the principal and interest for whose payment
such money has been deposited with the Indenture Trustee.

In connection with the satisfaction and discharge of this Indenture, all moneys
then held by any Paying Agent other than the Indenture Trustee under the
provisions of this

 

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Indenture with respect to the Notes shall, upon demand of the Issuer, be paid to
the Indenture Trustee to be held and applied according to Section 3.4 hereof and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.

 

SECTION 11.3.

Trust Termination Date.

Upon the full application of (a) moneys deposited pursuant to this Article XI or
(b) proceeds of the Timeshare Loans pursuant to Sections 3.4 or 6.6 hereof, the
Trust Estate created by this Indenture shall be deemed to have terminated and
all Liens granted hereunder shall be released.

ARTICLE XII.

 

REPRESENTATIONS AND WARRANTIES AND COVENANTS

 

SECTION 12.1.

Representations and Warranties of the Issuer.

The Issuer represents and warrants to the Indenture Trustee, the Servicer, the
Backup Servicer and the Noteholders as of the Amendment Date and each Funding
Date, as follows:

(a)      Organization and Good Standing. The Issuer has been duly formed and is
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as
presently conducted and has the power and authority to own and convey all of its
properties and to execute and deliver this Indenture and the Transaction
Documents and to perform the transactions contemplated hereby and thereby;

(b)      Binding Obligation. This Indenture and the Transaction Documents to
which it is a party have each been duly executed and delivered on behalf of the
Issuer and this Indenture and each Transaction Document to which it is a party
constitutes a legal, valid and binding obligation of the Issuer enforceable in
accordance with its terms except as may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors’ rights and by general
principles of equity;

(c)      No Consents Required. No consent of, or other action by, and no notice
to or filing with, any Governmental Authority or any other party, is required
for the due execution, delivery and performance by the Issuer of this Indenture
or any of the Transaction Documents or for the perfection of or the exercise by
the Indenture Trustee or the Noteholders of any of their rights or remedies
thereunder which have not been duly obtained;

(d)      No Violation. The consummation of the transaction contemplated by this
Indenture and the fulfillment of the terms hereof shall not conflict with,
result in any material breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
organizational documents of the Issuer, or any indenture, agreement or other
instrument to which the Issuer is a party or by which it is bound; nor result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than this
Indenture);

 

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(e)      No Proceedings. There is no pending or, to the Issuer’s Knowledge,
threatened action, suit or proceeding, nor any injunction, writ, restraining
order or other order of any nature against or affecting the Issuer, its officers
or directors, or the property of the Issuer, in any court or tribunal, or before
any arbitrator of any kind or before or by any Governmental Authority (i)
asserting the invalidity of this Indenture or any of the Transaction Documents,
(ii) seeking to prevent the sale and assignment of any Timeshare Loan or the
consummation of any of the transactions contemplated thereby, (iii) seeking any
determination or ruling that might materially and adversely affect (A) the
performance by the Issuer of this Indenture or any of the Transaction Documents
or the interests of the Noteholders, (B) the validity or enforceability of this
Indenture or any of the Transaction Documents, (C) any Timeshare Loan, or
(D) the Intended Tax Characterization, or (iv) asserting a claim for payment of
money adverse to the Issuer or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by this
Indenture or any of the Transaction Documents;

(f)       Issuer Not Insolvent. The Issuer is solvent and will not become
insolvent after giving effect to the transactions contemplated by this Indenture
and each of the Transaction Documents;

(g)      Name. The legal name of the Issuer is as set forth in the signature
page of this Indenture and the Issuer does not have any tradenames, fictitious
names, assumed names or “doing business as” names.

(h)      Eligible Timeshare Loans. Each Timeshare Loan subject to the Lien of
this Indenture is an Eligible Timeshare Loan.

 

SECTION 12.2.

Representations and Warranties of the Servicer.

The Servicer hereby represents and warrants to the Indenture Trustee, the
Issuer, the Backup Servicer and the Noteholders, as of the Amendment Date and
each Funding Date, the following:

(a)     Organization and Authority. The Servicer:

(i)        is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts;

(ii)       has all requisite power and authority to own and operate its
properties and to conduct its business as currently conducted and as proposed to
be conducted as contemplated by the Transaction Documents to which it is a
party, to enter into the Transaction Documents to which it is a party and to
perform its obligations under the Transaction Documents to which it is a party;
and

(iii)      has made all filings and holds all material franchises, licenses,
permits and registrations which are required under the laws of each jurisdiction
in which the properties owned (or held under lease) by it or the nature of its
activities makes such filings, franchises, licenses, permits or registrations
necessary, except where the failure to make such filing will not have a material
adverse effect on the

 

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Servicer, activities or its ability to perform its obligations under the
Transaction Documents.

(b)      Place of Business.  The address of the principal place of business and
chief executive office of the Servicer is 4960 Conference Way North, Suite 100,
Boca Raton, Florida 33431 and there have been no other such locations during the
immediately preceding four months.

(c)      Compliance with Other Instruments, etc.  The Servicer is not in
violation of any term of its articles of incorporation and by-laws. The
execution, delivery and performance by the Servicer of the Transaction Documents
to which it is a party do not and will not (i) conflict with or violate the
organizational documents of the Servicer, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of, or constitute a default
under, or result in the creation of any Lien on any of the properties or assets
of the Servicer pursuant to the terms of any instrument or agreement to which
the Servicer is a party or by which it is bound where such conflict would have a
material adverse effect on the Servicer’s activities or its ability to perform
its obligations under the Transaction Documents or (iii) require any consent of
or other action by any trustee or any creditor of, any lessor to or any investor
in the Servicer.

(d)      Compliance with Law.  The Servicer is in material compliance with all
statutes, laws and ordinances and all governmental rules and regulations to
which it is subject, the violation of which, either individually or in the
aggregate, could materially adversely affect its business, earnings, properties
or condition (financial or other). The internal policies and procedures employed
by the Servicer are in material compliance with all applicable statutes, laws
and ordinances and all governmental rules and regulations. The execution,
delivery and performance of the Transaction Documents to which it is a party do
not and will not cause the Servicer to be in violation of any law or ordinance,
or any order, rule or regulation, of any federal, state, municipal or other
governmental or public authority or agency where such violation would, either
individually or in the aggregate, materially adversely affect its business,
earnings, properties or condition (financial or other).

(e)      Pending Litigation or Other Proceedings. Other than as disclosed on
Schedule 12.2(e) hereto, there is no pending or, to the best of the Servicer’s
Knowledge, threatened action, suit, proceeding or investigation before any
court, administrative agency, arbitrator or governmental body against or
affecting the Servicer which, if decided adversely, would materially and
adversely affect (i) the condition (financial or otherwise), business or
operations of the Servicer, (ii) the ability of the Servicer to perform its
obligations under, or the validity or enforceability of this Indenture or any
other documents or transactions contemplated under this Indenture, (iii) any
property or title of any Obligor to any Timeshare Property or (iv) the Indenture
Trustee’s ability to foreclose or otherwise enforce the Liens of the Timeshare
Loans.

(f)       Taxes. Other than as disclosed on Schedule 12.2(e), the Servicer has
filed all tax returns (federal, state and local) which are required to be filed
and has paid all taxes related thereto, other than those which are being
contested in good faith or where the failure to file or pay would not have a
material adverse effect on the Servicer’s activities or its ability to perform
its obligations under the Transaction Documents.

 

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(g)      Transactions in Ordinary Course. The transactions contemplated by this
Indenture are in the ordinary course of business of the Servicer.

(h)      Securities Laws. The Servicer is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

(i)       Proceedings.  The Servicer has taken all action necessary to authorize
the execution and delivery by it of the Transaction Documents to which it is a
party and the performance of all obligations to be performed by it under the
Transaction Documents.

(j)       Defaults. The Servicer is not in default under any material agreement,
contract, instrument or indenture to which it is a party or by which it or its
properties is or are bound, or with respect to any order of any court,
administrative agency, arbitrator or governmental body, which default would have
a material adverse effect on the transactions contemplated hereunder; and to the
Servicer’s Knowledge, no event has occurred which with notice or lapse of time
or both would constitute such a default with respect to any such agreement,
contract, instrument or indenture, or with respect to any such order of any
court, administrative agency, arbitrator or governmental body.

(k)      Insolvency. The Servicer is solvent. Prior to the date hereof, the
Servicer did not, and is not about to, engage in any business or transaction for
which any property remaining with the Servicer would constitute an unreasonably
small amount of capital. In addition, the Servicer has not incurred debts that
would be beyond the Servicer’s ability to pay as such debts matured.

(l)       No Consents.  No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is,
was or will be required for the valid execution, delivery and performance by the
Servicer of the Transaction Documents to which it is a party. The Servicer has
obtained all consents, approvals or authorizations of, made all declarations or
filings with, or given all notices to, all federal, state or local governmental
or public authorities or agencies which are necessary for the continued conduct
by the Servicer of its respective businesses as now conducted, other than such
consents, approvals, authorizations, declarations, filings and notices which,
neither individually nor in the aggregate, materially and adversely affect, or
in the future will materially and adversely affect, the business, earnings,
prospects, properties or condition (financial or other) of the Servicer.

(m)     Name. The legal name of the Servicer is as set forth in the signature
page of this Indenture and the Servicer does not have any tradenames, fictitious
names, assumed names or “doing business as” names other than “Bluegreen Patten
Corporation” in North Carolina and “Bluegreen Corporation of Massachusetts” in
Louisiana.

(n)      Information. No document, certificate or report furnished by the
Servicer, in writing, pursuant to this Indenture or in connection with the
transactions contemplated hereby, contains or will contain when furnished any
untrue statement of a material fact or fails or will fail to state a material
fact necessary in order to make the statements contained therein, in light of

 

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the circumstances under which they were made, not misleading. Other than as
disclosed on Schedule 12.2(e) hereto, there are no facts relating to the
Servicer as of the Amendment Date which when taken as a whole, materially
adversely affect the financial condition or assets or business of the Servicer,
or which may impair the ability of the Servicer to perform its obligations under
this Indenture, which have not been disclosed herein or in the certificates and
other documents furnished by or on behalf of the Servicer pursuant hereto or
thereto specifically for use in connection with the transactions contemplated
hereby or thereby.

(o)      Ratings. Each of the Resorts specified in Exhibit I hereto have, as of
the Amendment Date, ratings at least equal to the ratings specified therein.

(p)      ACH Form. The Servicer has delivered a form of the ACH Form attached to
the Sale Agreement to the Backup Servicer for its review.

(q)      Credit Policy and Collection Policy. Each of the Credit Policy and the
Collection Policy attached hereto as Exhibit J and Exhibit K, respectively (as
the same may be amended from time to time in accordance with the provisions of
this Indenture and the Note Funding Agreement), fairly represent the policies of
the Servicer and, to the best knowledge of the Servicer, the Collection Policy
is materially consistent with the customary standard of prudent servicers of
loans secured by timeshare interests.

 

SECTION 12.3.

Representations and Warranties of the Indenture Trustee.

The Indenture Trustee hereby represents and warrants to the Servicer, the
Issuer, the Backup Servicer and the Noteholders as of the Amendment Date and
each Funding Date, the following:

(a)      The Indenture Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States.

(b)      The execution and delivery of this Indenture and the other Transaction
Documents to which the Indenture Trustee is a party, and the performance and
compliance with the terms of this Indenture and the other Transaction Documents
to which the Indenture Trustee is a party by the Indenture Trustee, will not
violate the Indenture Trustee’s organizational documents or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material agreement or other
material instrument to which it is a party or by which it is bound.

(c)      Except to the extent that the laws of certain jurisdictions in which
any part of the Trust Estate may be located require that a co-trustee or
separate trustee be appointed to act with respect to such property as
contemplated herein, the Indenture Trustee has the full power and authority to
carry on its business as now being conducted and to enter into and consummate
all transactions contemplated by this Indenture and the other Transaction
Documents, has duly authorized the execution, delivery and performance of this
Indenture and the other Transaction Documents to which it is a party, and has
duly executed and delivered this Indenture and the other Transaction Documents
to which it is a party.

 

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(d)      This Indenture, assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance with
the terms hereof, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors’ rights generally and the rights of creditors of banks and (ii)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.

(e)      The Indenture Trustee is not in violation of, and its execution and
delivery of this Indenture and the other Transaction Documents to which it is a
party and its performance and compliance with the terms of this Indenture and
the other Transaction Documents to which it is a party will not constitute a
violation of, any law, any order or decree of any court or arbiter, or any
order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in the Indenture Trustee’s good faith and
reasonable judgment, is likely to affect materially and adversely the ability of
the Indenture Trustee to perform its obligations under any Transaction Document
to which it is a party.

(f)       No litigation is pending or, to the best of the Indenture Trustee’s
knowledge, threatened against the Indenture Trustee that, if determined
adversely to the Indenture Trustee, would prohibit the Indenture Trustee from
entering into any Transaction Document to which it is a party or, in the
Indenture Trustee’s good faith and reasonable judgment, is likely to materially
and adversely affect the ability of the Indenture Trustee to perform its
obligations under any Transaction Document to which it is a party.

(g)      Any consent, approval, authorization or order of any court or
governmental agency or body required for the execution, delivery and performance
by the Indenture Trustee of or compliance by the Indenture Trustee with the
Transaction Documents to which it is a party or the consummation of the
transactions contemplated by the Transaction Documents has been obtained and is
effective.

  SECTION 12.4. Multiple Roles.

The parties expressly acknowledge and consent to U.S. Bank National Association,
acting in the multiple roles of Indenture Trustee, the Paying Agent, the Note
Registrar, the successor Servicer (in the event the Backup Servicer shall not
serve as the successor Servicer) and the Custodian. U.S. Bank National
Association may, in such capacities, discharge its separate functions fully,
without hindrance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by U.S. Bank National Association
of express duties set forth in this Indenture in any of such capacities, all of
which defenses, claims or assertions are hereby expressly waived by the other
parties hereto, except in the case of negligence (other than errors in judgment)
and willful misconduct by U.S. Bank National Association.

  SECTION 12.5. [Reserved].

 

SECTION 12.6.

Covenants of the Club Trustee.

 

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Until the date on which each Class of Notes has been paid in full, the Club
Trustee hereby covenants that:

(a)      No Conveyance. The Club Trustee agrees not to convey any Resort
Interest (as defined in the Club Trust Agreement) in the Club relating to a
Timeshare Loan unless the Indenture Trustee shall have issued an instruction to
the Club Trustee pursuant to Section 8.07(c) of the Club Trust Agreement in
connection with its exercise of its rights as an Interest Holder Beneficiary (as
defined in the Club Trust Agreement) under Section 7.02 of the Club Trust
Agreement.

(b)     Separate Corporate Existence. The Club Trustee shall:

(i)           Maintain its own deposit account or accounts, separate from those
of any Affiliate, with commercial banking institutions. The funds of the Club
Trustee will not be diverted to any other Person or for other than trust or
corporate uses of the Club Trustee, as applicable.

(ii)          Ensure that, to the extent that it shares the same officers or
other employees as any of its shareholders, beneficiaries or Affiliates, the
salaries of and the expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs associated with
all such common officers and employees.

(iii)         Ensure that, to the extent that the Club Trustee and the Servicer
(together with their respective shareholders or Affiliates) jointly do business
with vendors or service providers or share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities, and each such entity
shall bear its fair share of such costs. To the extent that the Club Trustee and
the Servicer (together with their respective stockholders or Affiliates) do
business with vendors or service providers when the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between Club Trustee and any of its
Affiliates shall be only on an arms’ length basis.

(iv)         To the extent that the Club Trustee and any of its stockholders,
beneficiaries or Affiliates have offices in the same location, there shall be a
fair and appropriate allocation of overhead costs among them, and each such
entity shall bear its fair share of such expenses.

(v)          Conduct its affairs strictly in accordance with the Club Trust
Agreement or its amended and restated articles of incorporation, as applicable,
and observe all necessary, appropriate and customary corporate formalities,
including, but not limited to, holding all regular and special stockholders’,
trustees’ and directors’ meetings appropriate to authorize all

 

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trust and corporate action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize actions
taken or to be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany transaction
accounts.

(c)      Merger or Consolidation. The Club Trustee shall not consolidate with or
merge into any other corporation or convey, transfer or lease substantially all
of its assets as an entirety to any Person unless the corporation formed by such
consolidation or into which the Club Trustee, as the case may be, has merged or
the Person which acquires by conveyance, transfer or lease substantially all the
assets of the Club Trustee, as the case may be, as an entirety, can lawfully
perform the obligations of the Club Trustee hereunder and executes and delivers
to the Indenture Trustee an agreement in form and substance reasonably
satisfactory to the Indenture Trustee which contains an assumption by such
successor entity of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Club Trustee under
this Indenture.

(d)      Corporate Matters. Notwithstanding any other provision of this Section
12.6 and any provision of law, the Club Trustee shall not do any of the
following:

(i)           engage in any business or activity other than as set forth herein
or in or as contemplated by the Club Trust Agreement or its amended and restated
articles of incorporation, as applicable;

(ii)          without the affirmative vote of a majority of the members of the
board of directors (or Persons performing similar functions) of the Club Trustee
(which must include the affirmative vote of at least one duly appointed
Independent Director (as defined in the Club Trust Agreement)), (A) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (B) consent to the institution of bankruptcy or
insolvency proceedings against it, (C) file a petition seeking or consent to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (D) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the corporation or a
substantial part of its property, (E) make a general assignment for the benefit
of creditors, (F) admit in writing its inability to pay its debts generally as
they become due, (G) terminate the Club Managing Entity as manager under the
Club Management Agreement or (H) take any corporate action in furtherance of the
actions set forth in clauses (A) through (G) above; provided, however, that no
director may be required by any shareholder or beneficiary of the Club Trustee
to consent to the institution of bankruptcy or insolvency proceedings against
the Club Trustee so long as it is solvent;

(iii)         merge or consolidate with any other corporation, company or entity
or sell all or substantially all of its assets or acquire all or

 

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substantially all of the assets or capital stock or other ownership interest of
any other corporation, company or entity; or

(iv)         with respect to the Club Trustee, amend or otherwise modify its
amended and restated articles of incorporation or any definitions contained
therein in a manner adverse to the Indenture Trustee or any Noteholder without
the prior written consent of the Agent.

(e)      The Club Trustee shall not incur any indebtedness other than (i) trade
payables and operating expenses (including taxes) incurred in the ordinary
course of business or (ii) in connection with servicing Resort Interests
included in the Club’s trust estate in the ordinary course of business
consistent with past practices; provided, that in no event shall the Club
Trustee incur indebtedness for borrowed money.

 

SECTION 12.7.

Representations and Warranties of the Backup Servicer.

The Backup Servicer hereby represents and warrants to the Indenture Trustee, the
Issuer, the Servicer and the Noteholders, as of the Amendment Date and each
Funding Date, the following:

(a)     Corporate Representations.

(i)        is a corporation duly organized, validly existing and in good
standing under the laws of the State of Arizona;

(ii)       has all requisite power and authority to own and operate its
properties and to conduct its business as currently conducted and as proposed to
be conducted as contemplated by the Transaction Documents to which it is a
party, to enter into the Transaction Documents to which it is a party and to
perform its obligations under the Transaction Documents to which it is a party;
and

(iii)      has made all filings and holds all material franchises, licenses,
permits and registrations which are required under the laws of each jurisdiction
in which the properties owned (or held under lease) by it or the nature of its
activities makes such filings, franchises, licenses, permits or registrations
necessary, except where the failure to make such filing will not have a material
adverse effect on the Backup Servicer activities or its ability to perform its
obligations under the Transaction Documents.

(b)      Place of Business.  The address of the principal place of business and
chief executive office of the Backup Servicer is as set forth in Section 13.3
and there have been no other such locations during the immediately preceding
four months.

(c)      Compliance with Other Instruments, etc.  The Backup Servicer is not in
violation of any term of its certificate of incorporation and by-laws. The
execution, delivery and performance by the Backup Servicer of the Transaction
Documents to which it is a party do not and will not (i) conflict with or
violate the organizational documents of the Backup Servicer, (ii) conflict with
or result in a breach of any of the terms, conditions or provisions of, or
constitute a

 

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default under, or result in the creation of any Lien on any of the properties or
assets of the Backup Servicer pursuant to the terms of any instrument or
agreement to which the Backup Servicer is a party or by which it is bound where
such conflict would have a material adverse effect on the Backup Servicer’s
activities or its ability to perform its obligations under the Transaction
Documents or (iii) require any consent of or other action by any trustee or any
creditor of, any lessor to or any investor in the Backup Servicer.

(d)      Compliance with Law.  The Backup Servicer is in material compliance
with all statutes, laws and ordinances and all governmental rules and
regulations to which it is subject, the violation of which, either individually
or in the aggregate, could materially adversely affect its business, earnings,
properties or condition (financial or other). The internal policies and
procedures employed by the Backup Servicer are in material compliance with all
applicable statutes, laws and ordinances and all governmental rules and
regulations. The execution, delivery and performance of the Transaction
Documents to which it is a party do not and will not cause the Backup Servicer
to be in violation of any law or ordinance, or any order, rule or regulation, of
any federal, state, municipal or other governmental or public authority or
agency where such violation would, either individually or in the aggregate,
materially adversely affect its business, earnings, properties or condition
(financial or other).

(e)      Pending Litigation or Other Proceedings. There is no pending or, to the
best of the Backup Servicer’s Knowledge, threatened action, suit, proceeding or
investigation before any court, administrative agency, arbitrator or
governmental body against or affecting the Backup Servicer which, if decided
adversely, would materially and adversely affect (i) the condition (financial or
otherwise), business or operations of the Backup Servicer, (ii) the ability of
the Backup Servicer to perform its obligations under, or the validity or
enforceability of this Indenture or any other documents or transactions
contemplated under this Indenture, (iii) any property or title of any Obligor to
any Timeshare Property or (iv) the Indenture Trustee’s ability to foreclose or
otherwise enforce the Liens of the Timeshare Loans.

(f)       Taxes. The Backup Servicer has filed all tax returns (federal, state
and local) which are required to be filed and has paid all taxes related
thereto, other than those which are being contested in good faith or where the
failure to file or pay would not have a material adverse effect on the Backup
Servicer’s activities or its ability to perform its obligations under the
Transaction Documents.

(g)      Transactions in Ordinary Course. The transactions contemplated by this
Indenture are in the ordinary course of business of the Backup Servicer.

(h)      Securities Laws. The Backup Servicer is not an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

(i)       Proceedings.  The Backup Servicer has taken all action necessary to
authorize the execution and delivery by it of the Transaction Documents to which
it is a party and the performance of all obligations to be performed by it under
the Transaction Documents.

 

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(j)       Defaults. The Backup Servicer is not in default under any material
agreement, contract, instrument or indenture to which it is a party or by which
it or its properties is or are bound, or with respect to any order of any court,
administrative agency, arbitrator or governmental body, which default would have
a material adverse effect on the transactions contemplated hereunder; and to the
Backup Servicer’s Knowledge, no event has occurred which with notice or lapse of
time or both would constitute such a default with respect to any such agreement,
contract, instrument or indenture, or with respect to any such order of any
court, administrative agency, arbitrator or governmental body.

(k)      Insolvency. The Backup Servicer is solvent. Prior to the date hereof,
the Backup Servicer did not, and is not about to, engage in any business or
transaction for which any property remaining with the Backup Servicer would
constitute an unreasonably small amount of capital. In addition, the Backup
Servicer has not incurred debts that would be beyond the Backup Servicer’s
ability to pay as such debts matured.

(l)       No Consents.  No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is,
was or will be required for the valid execution, delivery and performance by the
Backup Servicer of the Transaction Documents to which it is a party. The Backup
Servicer has obtained all consents, approvals or authorizations of, made all
declarations or filings with, or given all notices to, all federal, state or
local governmental or public authorities or agencies which are necessary for the
continued conduct by the Backup Servicer of its respective businesses as now
conducted, other than such consents, approvals, authorizations, declarations,
filings and notices which, neither individually nor in the aggregate, materially
and adversely affect, or in the future will materially and adversely affect, the
business, earnings, prospects, properties or condition (financial or other) of
the Backup Servicer.

(m)     Name. The legal name of the Backup Servicer is as set forth in the
signature page of this Indenture, and the Backup Servicer does not have any
tradenames, fictitious names, assumed names or “doing business as” names.

(n)      Information. No document, certificate or report furnished by the Backup
Servicer, in writing, pursuant to this Indenture or in connection with the
transactions contemplated hereby, contains or will contain when furnished any
untrue statement of a material fact or fails or will fail to state a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading. There are no facts
relating to the Backup Servicer as of the Amendment Date which when taken as a
whole, materially adversely affect the financial condition or assets or business
of the Backup Servicer, or which may impair the ability of the Backup Servicer
to perform its obligations under this Indenture or any other Transaction
Document to which it is a party, which have not been disclosed herein or in the
certificates and other documents furnished by or on behalf of the Servicer
pursuant hereto or thereto specifically for use in connection with the
transactions contemplated hereby or thereby.

 

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ARTICLE XIII.

 

MISCELLANEOUS

SECTION 13.1.  Officer’s Certificate and Opinion of Counsel as to Conditions
Precedent.

Upon any request or application by the Issuer (or any other obligor in respect
of the Notes) to the Indenture Trustee to take any action under this Indenture,
the Issuer (or such other obligor) shall furnish to the Indenture Trustee:

(a)      an Officer’s Certificate (which shall include the statements set forth
in Section 13.2 hereof) stating that all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action have been
complied with; and

(b)      at the request of the Indenture Trustee, an Opinion of Counsel (which
shall include the statements set forth in Section 13.2 hereof) stating that, in
the opinion of such counsel, all such conditions precedent and covenants have
been complied with.

 

SECTION 13.2.

Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:

(a)      a statement that the Person making such certificate or opinion has read
such covenant or condition;

(b)      a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(c)      a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

(d)      a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.

 

SECTION 13.3.

Notices.

(a)      All communications, instructions, directions and notices to the parties
thereto shall be (i) in writing (which may be by telecopy, followed by delivery
of original documentation within one Business Day), (ii) effective when received
and (iii) delivered or mailed first class mail, postage prepaid to it at the
following address:

 

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If to the Issuer:

BXG Timeshare Trust I

c/o Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Corporate Trust Administration

Fax: (302) 636-4140

 

With a copy to:

Weinstock & Scavo P.C.

3405 Piedmont Road, N.E.

Suite 300

Atlanta, Georgia 30305

Attention: Mark I. Sanders, Esq.

Fax: (404) 231-1618

 

If to the Club Trustee:

 

Vacation Trust, Inc.

4950 Communication Avenue

Suite 900

Boca Raton, Florida 33431

Attention: Michael Kaminer, Esq.

Fax: (561) 912-8299

 

If to the Servicer:

 

Bluegreen Corporation

4960 Conference Way North, Suite 100

Boca Raton, Florida 33431

Attention: Anthony M. Puleo, Senior Vice President, CFO and Treasurer

Fax: (561) 912-8123

 

With a copy to:

Weinstock & Scavo P.C.

3405 Piedmont Road, N.E.

Suite 300

Atlanta, Georgia 30305

Attention: Mark I. Sanders, Esq.

Fax: (404) 231-1618

 

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If to the Backup Servicer:

 

Concord Servicing Corporation

4725 North Scottsdale Road

Suite 300

Scottsdale, Arizona 85251

Fax: (480) 281-3141

Attention: Frederick G. Pink, Esq.

If to the Indenture Trustee and Paying Agent:

 

U.S. Bank National Association

60 Livingston Avenue

EP-MN-WS3D

St. Paul, Minnesota 55107

Attention:  Corporate Trust Services/Attn: BXG Timeshare Trust I

Fax:  (651) 495-8090

Telephone Number:  (651) 495-3880

 

If to the Agent:

 

BB&T Capital Markets

1133 Avenue of the Americas, 27th Floor

New York, New York 10036

Attention: Paul Richardson

Fax : (212) 822-8151

 

and

 

Branch Banking and Trust Company

200 West Second Street, 16th Floor

Winston-Salem, North Carolina 27101

Attention: Cory Boyte

Fax: (336) 733-2740

 

or at such other address as the party may designate by notice to the other
parties hereto, which shall be effective when received.

(b)      All communications and notices described hereunder to a Noteholder
shall be in writing and delivered or mailed first class mail, postage prepaid or
overnight courier at the address shown in the Note Register. The Indenture
Trustee agrees to deliver or mail to each Noteholder upon receipt, all notices
and reports that the Indenture Trustee may receive hereunder

 

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and under any Transaction Documents. All notices to Noteholders (or any Class
thereof) shall be sent simultaneously. Expenses for such communications and
notices shall be borne by the Servicer.

 

SECTION 13.4.

No Proceedings.

The Noteholders, the Servicer, the Indenture Trustee, the Agent, the Club
Trustee and the Backup Servicer each hereby agrees that it will not, directly or
indirectly institute, or cause to be instituted, against the Issuer, the Trust
Estate or the Depositor any proceeding of the type referred to in Sections
6.1(d) and (e) hereof, so long as there shall not have elapsed one year plus one
day after payment in full of the Notes.

 

 

SECTION 13.5.

Limitation of Liability of Owner Trustee.

Notwithstanding anything contained herein or in any other Transaction Document
to the contrary, it is expressly understood and agreed by the parties hereto
that (a) this Indenture is executed and delivered by Wilmington Trust Company,
not individually or personally, but solely as Owner Trustee on behalf of the
Issuer, in the exercise of the powers and authority conferred and vested in it
under the Trust Agreement, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as a
personal representation, undertaking or agreement by Wilmington Trust Company
but is made and intended for the purpose for binding only the Issuer and the
Trust Estate, and (c) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Issuer
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Indenture or
any other related documents.

ARTICLE XIV.

 

REDEMPTION OF NOTES

 

SECTION 14.1.

Clean-up Call; Optional Redemption; Election to Redeem.

(a)       Clean-up Call. The Servicer shall have the option to cause the Issuer
to redeem not less than all of the Notes and thereby cause the early repayment
of the Notes on any date after the Clean-up Call Date by payment of an amount
equal to the Redemption Price and any amounts, fees and expenses that are
required to be paid pursuant to Section 6.6(b) hereof (unless amounts in the
Trust Accounts are sufficient to make such payments).

(b)       Optional Redemption. Notwithstanding anything to the contrary herein
or in any other Transaction Document, the Issuer shall have the option to redeem
not less than all (or, with the consent of the Noteholders, a portion) of the
Notes and thereby cause the early repayment of the Notes (or the applicable
portion thereof) at any time by payment of an amount equal to the Redemption
Price (or portion thereof) and any amounts, fees and expenses that are required
to be paid pursuant to Section 6.6(b) hereof (unless amounts in the Trust
Accounts are sufficient to make such payments) using cash from any source,
including the Depositor.

 

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SECTION 14.2.

Notice to Indenture Trustee.

The Servicer shall give written notice of its intention to cause the Issuer to
redeem the Notes to the Indenture Trustee at least 15 days prior to the
Redemption Date (unless a shorter period shall be satisfactory to the Indenture
Trustee).

 

SECTION 14.3.

Notice of Redemption by the Servicer.

Notices of redemption shall be given by first class mail, postage prepaid,
mailed not less than for 15 days prior to the Redemption Date to each
Noteholder, at the address listed in the Note Register. All notices of
redemption shall state (a) the Redemption Date, (b) the Redemption Price, (c)
that on the Redemption Date, the Redemption Price will become due and payable in
respect of each Note, and that interest thereon shall cease to accrue if payment
is made on the Redemption Date and (d) the office of the Indenture Trustee where
the Notes are to be surrendered for payment of the Redemption Price. Failure to
give notice of redemption, or any defect therein, to any Noteholder shall not
impair or affect the validity of the redemption of any other Note.

 

SECTION 14.4.

Deposit of Redemption Price.

On or before the Business Day immediately preceding the Redemption Date, the
Servicer (in the case of a Clean-up Call) or the Issuer (in the case of an
Optional Redemption) shall deposit with the Indenture Trustee an amount equal to
the Redemption Price and any amounts, fees and expenses that are required to be
paid hereunder (less any portion of such payment to be made from funds held in
any of the Trust Accounts (other than the Lockbox Account and the Credit Card
Account).

 

SECTION 14.5.

Notes Payable on Redemption Date.

Notice of redemption having been given as provided in Section 14.3 hereof and
deposit of the Redemption Price with the Indenture Trustee having been made as
provided in Section 14.4 hereof, the Notes shall on the Redemption Date, become
due and payable at the Redemption Price, and, on such Redemption Date, such
Notes shall cease to accrue interest. The Indenture Trustee shall apply all
available funds in accordance with Section 6.6(b) hereof and the Noteholders
shall be paid the Redemption Price by the Indenture Trustee on behalf of the
Servicer or the Issuer, as the case may be, upon presentment and surrender of
their Notes at the office of the Indenture Trustee. If the Servicer or the
Issuer, as the case may be, shall have failed to deposit the Redemption Price
with the Indenture Trustee, the principal and interest with respect to each
Class of Notes shall, until paid, continue to accrue interest at their
respective Note Rates. The Servicer’s or the Issuer’s, as the case may be,
failure to deposit the Redemption Price shall not constitute an Event of Default
hereunder.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the day and year first above written.

 

  BXG TIMESHARE TRUST I,      

 

By:

Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee

          By:           Name:         Title:  

 

  BLUEGREEN CORPORATION, as Servicer       By:         Name: Anthony M. Puleo  
    Title: Senior Vice President, CFO and Treasurer             CONCORD
SERVICING CORPORATION, as Backup Servicer       By:         Name:       Title:  
          VACATION TRUST, INC., as Club Trustee       By:         Name:      
Title:             U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee and
Custodian       By:         Name:       Title:             BRANCH BANKING AND
TRUST COMPANY, as Agent       By:         Name:       Title:  

 

[Signature Page to the Indenture]

 

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