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

--------------------------------------------------------------------------------

SECOND AMENDED AND RESTATED INDENTURE

Dated as of June 1, 2009

--------------------------------------------------------------------------------

Timeshare Loan-Backed VFN Notes, Series I

--------------------------------------------------------------------------------

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

i

--------------------------------------------------------------------------------

 

 

 

 

 

 

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

 

19

 

 

 

 

 

 

SECTION 4.1.

Acceptance by Indenture Trustee

 

19

 

 

 

 

 

 

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

 

21

 

 

 

 

 

 

SECTION 4.7.

Release of Lien

 

23

 

 

 

 

 

 

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

ii

--------------------------------------------------------------------------------

 

 

 

 

 

 

SECTION 5.2.

Payments on the Timeshare Loans

 

24

 

 

 

 

 

 

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

 

35

 

 

 

 

 

 

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

iii

--------------------------------------------------------------------------------

 

 

 

 

 

 

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

 

45

 

 

 

 

 

 

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

iv

--------------------------------------------------------------------------------

 

 

 

 

 

   

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

v

--------------------------------------------------------------------------------

 

 

 

 

 

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

 

 

Exhibit A

Form of Notes

 

 

Exhibit B

Form of Investor Representation Letter

 

 

Exhibit C

Reserved

 

 

Exhibit D

Form of Monthly Servicer Report

vi

--------------------------------------------------------------------------------

 

 

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

vii

--------------------------------------------------------------------------------

SECOND AMENDED AND RESTATED INDENTURE

                    This SECOND AMENDED AND RESTATED INDENTURE, dated as of June
1, 2009 (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 amended and restated indenture, dated as of March 1, 2008,
as amended by Omnibus Amendment No. 2, dated as of May 22, 2009, by and among
the parties hereto and the other parties named therein and as further amended by
Omnibus Amendment No. 3, dated as of June 25, 2009, by and among the parties
hereto and the other parties named therein (the “First 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 First Amended and Restated Indenture as provided herein, and
all actions required to do so under the First Amended and Restated Indenture
have been taken;

                    WHEREAS, the Issuer had duly authorized the execution and
delivery of the First 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 “Amended Class A Notes”), the
Timeshare Loan-Backed VFN Notes, Series I, Class B (the “Amended Class B
Notes”), the Timeshare Loan-Backed VFN Notes, Series I, Class C (the “Amended
Class C Notes”), the Timeshare Loan-Backed VFN Notes, Series I, Class D (the
“Amended Class D Notes”) and the Timeshare Loan-Backed VFN Notes, Series I,
Class E (the “Amended Class E Notes”, and together with the Amended Class A
Notes, the Amended Class B Notes, the Amended Class C Notes and the 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;

1

--------------------------------------------------------------------------------

                    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

2

--------------------------------------------------------------------------------

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 “Second
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.”

3

--------------------------------------------------------------------------------

          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

4

--------------------------------------------------------------------------------

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

5

--------------------------------------------------------------------------------

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.

6

--------------------------------------------------------------------------------

          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

7

--------------------------------------------------------------------------------

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

8

--------------------------------------------------------------------------------

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

9

--------------------------------------------------------------------------------

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.

10

--------------------------------------------------------------------------------

                    (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

11

--------------------------------------------------------------------------------

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.

12

--------------------------------------------------------------------------------

          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

13

--------------------------------------------------------------------------------

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.

14

--------------------------------------------------------------------------------

                    (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.

          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 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

15

--------------------------------------------------------------------------------

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].

          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;

16

--------------------------------------------------------------------------------

 

 

 

          (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 Fees, plus any accrued
and unpaid 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;

 

 

 

          (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

17

--------------------------------------------------------------------------------

 

 

 

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; and

 

 

 

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

                    (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,

18

--------------------------------------------------------------------------------

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.

                    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

19

--------------------------------------------------------------------------------

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.

          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.

20

--------------------------------------------------------------------------------

                    (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) such Assignments of Mortgage, 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 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

21

--------------------------------------------------------------------------------

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
(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 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;

22

--------------------------------------------------------------------------------

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.

                    (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.

23

--------------------------------------------------------------------------------

                     (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 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 shall service and administer the Timeshare Loans and
perform all of its duties hereunder in accordance with the Servicing Standard.

                    (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
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

24

--------------------------------------------------------------------------------

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.

                    (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;

25

--------------------------------------------------------------------------------

 

 

 

          (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
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;

26

--------------------------------------------------------------------------------

 

 

 

          (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 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

27

--------------------------------------------------------------------------------

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 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

28

--------------------------------------------------------------------------------

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.

          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

29

--------------------------------------------------------------------------------

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.

                    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 the 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.

30

--------------------------------------------------------------------------------

                    (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.

          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 2010: (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 2010, 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

31

--------------------------------------------------------------------------------

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 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.

                    (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, the Resorts or the
Additional Approved Resorts as are available to Servicer and as the Agent may
reasonably require.

32

--------------------------------------------------------------------------------

          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 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. 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

33

--------------------------------------------------------------------------------

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.

          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

34

--------------------------------------------------------------------------------

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) and 3.4 hereof, the Servicing Fee and any
Additional Servicing Compensation. Other than Liquidation Expenses, 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 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

35

--------------------------------------------------------------------------------

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 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.

36

--------------------------------------------------------------------------------

                     (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 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

37

--------------------------------------------------------------------------------

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 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

38

--------------------------------------------------------------------------------

 

 

 

 

(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
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

39

--------------------------------------------------------------------------------

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 commercially reasonable manner and on commercially reasonable terms,
which shall include the solicitation of competitive bids from third parties
including any Noteholder (other than Bluegreen or any Affiliates thereof), 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. Notwithstanding anything to the
contrary herein, unless such bidding has been approved in advance by a majority
of the Noteholders, neither Bluegreen nor any of its Affiliates may make a bid
in connection with the disposition of the Timeshare Loans in accordance with
this Section 6.3(e).

          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

40

--------------------------------------------------------------------------------

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.

          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;

41

--------------------------------------------------------------------------------

 

 

 

          (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;

 

 

 

          (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.

42

--------------------------------------------------------------------------------

                    (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;

 

 

 

          (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;

43

--------------------------------------------------------------------------------

 

 

 

          (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;

 

 

 

          (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

44

--------------------------------------------------------------------------------

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.

          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

45

--------------------------------------------------------------------------------

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

 

 

 

          (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

46

--------------------------------------------------------------------------------

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 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(d) hereof.

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

 

 

 

          (i) any one or more Noteholders (other than Bluegreen or any
Affiliates thereof unless consented to by a majority of the 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 (other than Bluegreen or any
Affiliates thereof) 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;

47

--------------------------------------------------------------------------------

 

 

 

          (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.

 

 

 

          (vi) none of Bluegreen or its Affiliates may bid for and purchase the
Timeshare Loans offered for sale by the Indenture Trustee in Section 6.16(c)(i)
hereof, unless consented to by a majority of the Noteholders.

          SECTION 6.17. Action on Notes.

                    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.

48

--------------------------------------------------------------------------------

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 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

49

--------------------------------------------------------------------------------

 

 

 

          (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.

          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;

50

--------------------------------------------------------------------------------

                     (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 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 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

51

--------------------------------------------------------------------------------

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.

          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

52

--------------------------------------------------------------------------------

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.

                    (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

53

--------------------------------------------------------------------------------

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.

                    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 into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation succeeding to the corporate trust
business of the Indenture Trustee, shall be the successor of the Indenture
Trustee hereunder, provided such corporation 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.

54

--------------------------------------------------------------------------------

          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 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

55

--------------------------------------------------------------------------------

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.

                    (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.

56

--------------------------------------------------------------------------------

                    (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.

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

57

--------------------------------------------------------------------------------

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 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

58

--------------------------------------------------------------------------------

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.

                    (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

59

--------------------------------------------------------------------------------

 

 

 

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 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

60

--------------------------------------------------------------------------------

(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 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

61

--------------------------------------------------------------------------------

 

 

 

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
(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.

62

--------------------------------------------------------------------------------

          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 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

63

--------------------------------------------------------------------------------

 

 

 

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.

                    (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

64

--------------------------------------------------------------------------------

 

 

 

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.

                    (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

65

--------------------------------------------------------------------------------

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;

 

 

 

          (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 once
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.

66

--------------------------------------------------------------------------------

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) 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.

67

--------------------------------------------------------------------------------

                    (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 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

68

--------------------------------------------------------------------------------

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);

                    (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.

69

--------------------------------------------------------------------------------

          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 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 certificate 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

70

--------------------------------------------------------------------------------

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.

                    (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.

71

--------------------------------------------------------------------------------

                    (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 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, each is materially consistent with the customary standard of prudent
servicers of loans secured by timeshare interests.

72

--------------------------------------------------------------------------------

          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.

                    (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

73

--------------------------------------------------------------------------------

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 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.

                    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 stockholders, 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

74

--------------------------------------------------------------------------------

 

 

 

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 stockholders 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 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:

75

--------------------------------------------------------------------------------

 

 

 

          (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
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.

76

--------------------------------------------------------------------------------

 

 

 

          (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 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

77

--------------------------------------------------------------------------------

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.

                    (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

78

--------------------------------------------------------------------------------

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.

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;

79

--------------------------------------------------------------------------------

                    (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:

 

 

 

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

80

--------------------------------------------------------------------------------

 

 

 

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

 

 

 

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

81

--------------------------------------------------------------------------------

 

 

 

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 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.

82

--------------------------------------------------------------------------------

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 of the Notes and thereby cause the early
repayment of the Notes at any time 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) using cash from any source, including the
Depositor.

          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).

83

--------------------------------------------------------------------------------

          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.

84

--------------------------------------------------------------------------------

                    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]

85

--------------------------------------------------------------------------------