Execution Copy

(BXG Timeshare I to Depositor - Initial Timeshare Loans)

 

TRANSFER AGREEMENT

 

This TRANSFER AGREEMENT (this “Agreement”), dated as of November 15, 2010, is by
and among Bluegreen Corporation, a Massachusetts corporation (“Bluegreen”), BXG
Timeshare Trust I, a statutory trust formed under the laws of the State of
Delaware (“BXG Timeshare I” or the “Seller”) and BRFC 2010-A LLC, a Delaware
limited liability company (the “Depositor”), and their respective permitted
successors and assigns.

W I T N E S S E T H:

WHEREAS, in connection with the transactions contemplated by (i) that certain
purchase and contribution agreement, dated as of May 1, 2006 (as amended from
time to time in accordance with the terms thereof, the “Warehouse Purchase and
Contribution Agreement”) by and between Bluegreen Timeshare Finance Corporation
I, as depositor (the “Warehouse Depositor”) and Bluegreen, as seller, (ii) that
certain sale agreement, dated as of May 1, 2006 (as amended from time to time in
accordance with the terms thereof, the “Warehouse Sale Agreement”) by and
between the Warehouse Depositor and BXG Timeshare I, (iii) that certain third
amended and restated indenture, dated as of August 1, 2010 (as amended from time
to time in accordance with the terms thereof, the “Warehouse Indenture”), by and
among BXG Timeshare I, Bluegreen, as servicer (the “Warehouse Servicer”),
Vacation Trust, Inc., as club trustee, Concord Servicing Corporation, as backup
servicer, U.S. Bank National Association, as indenture trustee, and Branch
Banking and Trust Company, as agent, and (iv) that certain third amended and
restated note funding agreement, dated as of August 1, 2010 (as amended from
time to time in accordance with the terms thereof, the “Warehouse Note Funding
Agreement”) by and among BXG Timeshare I, as issuer, Bluegreen, as seller and as
servicer, the Warehouse Depositor, Branch Banking and Trust Company, as agent,
and the purchasers named therein, (A) Bluegreen sold, transferred and conveyed,
from time to time, all of its right, title and interest in, to and under certain
timeshare loans, receivables and related security (the “Warehouse Timeshare
Loans”) to the Warehouse Depositor, (B) the Warehouse Depositor sold the
Warehouse Timeshare Loans to BXG Timeshare I and (C) BXG Timeshare I issued five
classes of notes (the “Warehouse Notes”) secured by the Warehouse Timeshare
Loans;

WHEREAS, in connection with each sale of the Warehouse Timeshare Loans to the
Warehouse Depositor under the Warehouse Purchase and Contribution Agreement,
Bluegreen made certain representations and warranties with respect to the
Warehouse Timeshare Loans as of the related transfer dates;

WHEREAS, the Depositor has been established as a bankruptcy-remote entity owned
by Bluegreen for the purpose of acquiring the Warehouse Timeshare Loans and,
from time to time, other Timeshare Loans sold and/or contributed to it by
Bluegreen, as the case may be, in accordance with the provisions of the
Bluegreen Purchase Agreement;

 

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WHEREAS, on the Closing Date, (i) the Seller wishes to sell all of its right,
title and interest in and to certain of the Warehouse Timeshare Loans (the
“Initial Timeshare Loans”) to the Depositor in accordance with the provisions of
this Agreement, (ii) the Depositor intends, concurrently with the purchase of
the Initial Timeshare Loans from the Seller, to sell, transfer and otherwise
absolutely convey, and BXG Receivables Note Trust 2010-A (the “Issuer”) intends
to purchase the Initial Timeshare Loans and other timeshare loans, and (ii) the
Issuer intends to pledge such Initial Timeshare Loans and other timeshare loans
acquired thereby to U.S. Bank, National Association, as indenture trustee (in
such capacity, the “Indenture Trustee”), paying agent and custodian (in such
capacity, the “Custodian”), pursuant to an indenture, dated as of November 15,
2010 (the “Indenture”), by and among the Issuer, Bluegreen, as servicer (the
“Servicer”), the Club Trustee, the Backup Servicer and the Indenture Trustee, to
secure the Issuer’s 5.10% Timeshare Loan-Backed Notes, Series 2010-A, Class A
and 7.50% Timeshare Loan-Backed Notes, Series 2010-A, Class B (collectively, the
“Notes”);

WHEREAS, Bluegreen originated substantially all of the Initial Timeshare Loans,
is familiar with the terms of the Initial Timeshare Loans and is the Warehouse
Servicer and has been servicing each of the Initial Timeshare Loans in
accordance with the Servicing Standard and the applicable provisions of the
Warehouse Indenture and it has not taken or failed to take any action to cause a
breach of the representations and warranties set forth in the Warehouse Purchase
and Contribution Agreement;

WHEREAS, in consideration for providing the representations and warranties set
forth in Section 5 of this Agreement and having the obligation to cure any
material breaches thereof, or to repurchase or substitute any Defective
Timeshare Loans, and to provide the indemnities set forth hereunder, Bluegreen
desires: (i) to act as the Servicer on behalf of the holders of the Notes, for
which Bluegreen shall be entitled to receive a Servicing Fee and Additional
Servicing Compensation in accordance with the provisions of the Indenture, (ii)
to act as the Administrator on behalf of the Issuer and the Owner Trustee, for
which Bluegreen shall be entitled to an Administrator Fee, (iii) to have the
option, but not the obligation, to purchase or substitute Upgrade Club Loans
pursuant to the terms and conditions set forth in this Agreement and the other
Transaction Documents and (iv) to have the option, but not the obligation, to
purchase or substitute Defaulted Timeshare Loans, which such option may be
waived with respect to any Defaulted Timeshare Loan, in each case, pursuant to
the terms and conditions set forth herein; and

WHEREAS, Bluegreen, as the sole member of the Depositor, who is the residual
interest owner of the Issuer, will derive an economic benefit from the sale
hereunder of the Initial Timeshare Loans to the Depositor.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and
for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:

SECTION 1.  Definitions; Interpretation. Capitalized terms used but not defined
herein shall have the meanings specified in “Standard Definitions” attached as
Annex A to the Indenture.

 

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SECTION 2. Acquisition of Timeshare Loans.

(a)       Initial Timeshare Loans. On the Closing Date, in return for the
Timeshare Loan Acquisition Price for each of the Initial Timeshare Loans, the
Seller does hereby transfer, assign, sell and grant to the Depositor, without
recourse (except as provided in Section 6 and Section 8 hereof), any and all of
the Seller’s right, title and interest in and to (i) the Initial Timeshare Loans
listed on Schedule III hereto, (ii) the Receivables in respect of such Initial
Timeshare Loans due after the related Cut-Off Date, (iii) 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), (iv) all Related Security in respect of each such
Initial Timeshare Loan and (v) all income, payments, proceeds and other benefits
and rights related to any of the foregoing (the property in clauses (i)-(v),
being the “Assets”). Upon such sale and transfer, the ownership of each Initial
Timeshare Loan and all collections allocable to principal and interest thereon
after the related Cut-Off Date and all other property interests or rights
conveyed pursuant to and referenced in this Section 2(a) shall immediately vest
in the Depositor, its successors and assigns. The Seller shall not take any
action inconsistent with such ownership nor claim any ownership interest in any
Initial Timeshare Loan for any purpose whatsoever other than for federal and
state income tax reporting, if applicable. The parties to this Agreement hereby
acknowledge that the “credit risk” of the Initial Timeshare Loans conveyed
hereunder shall be borne by the Depositor and its subsequent assignees.

(b)       Delivery of Timeshare Loan Documents. In connection with the sale,
transfer, assignment and conveyance of any Timeshare Loan hereunder, the Seller
hereby agrees to deliver or cause to be delivered, on or by the Closing Date
(with respect to any Initial Timeshare Loan) and Bluegreen hereby agrees to
deliver or cause to be delivered, on or within five Business Days from each
Transfer Date (with respect to any Qualified Substitute Timeshare Loan), to the
Custodian, all related Timeshare Loan Files and to the Servicer all related
Timeshare Loan Servicing Files.

(c)       Collections. The Seller or Bluegreen, as applicable, shall deposit or
cause to be deposited all collections in respect of the Initial Timeshare Loans
and the Qualified Substitute Timeshare Loans (together the “Timeshare Loans”)
received by the Seller, Bluegreen or its Affiliates after the related Cut-Off
Date in the Lockbox Account 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 (net of the Servicer
Credit Card Processing Costs).

(d)       Limitation of Liability. Neither the Depositor nor any subsequent
assignee of the Depositor shall have any obligation or liability with respect to
any Timeshare Loan nor shall the Depositor or any subsequent assignee have any
liability to any Obligor in respect of any Timeshare Loan. No such obligation or
liability is intended to be assumed by the Depositor or any subsequent assignee
herewith and any such liability is hereby expressly disclaimed.

 

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SECTION 3.  Intended Characterization; Grant of Security Interest. It is the
intention of the parties hereto that the transfer of Timeshare Loans to be made
pursuant to the terms hereof shall constitute a sale by the Seller or Bluegreen,
as applicable, to the Depositor and not a loan secured by such Timeshare Loans.
In the event, however, that a court of competent jurisdiction were to hold that
any such transfer constitutes a loan and not a sale, it is the intention of the
parties hereto that the Seller and Bluegreen, as applicable, shall be deemed to
have granted to the Depositor as of the date hereof a first priority perfected
security interest in all of Seller’s and Bluegreen’s, as applicable, right,
title and interest in, to and under the Assets or QSTL Assets (as hereinafter
defined), as applicable, specified in Section 2 and Section 6(f) hereof,
respectively and the proceeds thereof and that with respect to such transfer,
this Agreement shall constitute a security agreement under applicable law. In
the event of the characterization of any such transfer as a loan, the amount of
interest payable or paid with respect to such loan under the terms of this
Agreement shall be limited to an amount which shall not exceed the maximum
non-usurious rate of interest allowed by the applicable state law or any
applicable law of the United States permitting a higher maximum non-usurious
rate that preempts such applicable state law, which could lawfully be contracted
for, charged or received (the “Highest Lawful Rate”). In the event any payment
of interest on any such loan exceeds the Highest Lawful Rate, the parties hereto
stipulate that (a) to the extent possible given the term of such loan, such
excess amount previously paid or to be paid with respect to such loan be applied
to reduce the principal balance of such loan, and the provisions thereof
immediately be deemed reformed and the amounts thereafter collectible thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for thereunder and (b) to the extent that the
reduction of the principal balance of, and the amounts collectible under, such
loan and the reformation of the provisions thereof described in the immediately
preceding clause (a) is not possible given the term of such loan, such excess
amount will be deemed to have been paid with respect to such loan as a result of
an error and upon discovery of such error or upon notice thereof by any party
hereto such amount shall be refunded by the recipient thereof.

The characterization of the Seller and Bluegreen as “debtor” and the Depositor
as “secured party” in any such security agreement and any related financing
statements required hereunder is solely for protective purposes and shall in no
way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale to the Depositor of the Seller’s and
Bluegreen’s entire right, title and interest in and to the Assets and QSTL
Assets, respectively.

Each of the Seller, Bluegreen, the Club, the Club Trustee and any of its
Affiliates hereby agrees to make the appropriate entries in its general
accounting records and to indicate that the Timeshare Loans have been
transferred to the Depositor and its subsequent assignees.

SECTION 4.  Conditions Precedent to Acquisition of Timeshare Loans by the
Depositor. The obligations of the Depositor to purchase any Timeshare Loans
hereunder shall be subject to the satisfaction of the following conditions:

(a)       On the Closing Date, with respect to the Initial Timeshare Loans, and
on each Transfer Date, with respect to any Qualified Substitute Timeshare Loan
replacing a Timeshare Loan, all representations and warranties of Bluegreen
contained in Section 5(a) hereof shall be true and correct on such date as if
made on such date, and all representations and warranties as to the Timeshare
Loans contained in Section 5(b) hereof and all information provided in the
Schedule of Timeshare Loans in respect of each such Timeshare Loan conveyed on
the Closing Date or such Transfer Date, as applicable, shall be true and correct
on such date.

 

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(b)       On or prior to the Closing Date (with respect to the Initial Timeshare
Loans) or, as provided for in Section 6(g) hereof (with respect to Qualified
Substitute Timeshare Loans), the Seller shall have delivered or shall have
caused the delivery of (i) the related Timeshare Loan Files to the Custodian and
the Custodian shall have delivered a Custodian’s Certification therefor pursuant
to the Custodial Agreement and (ii) the Timeshare Loan Servicing Files to the
Servicer.

(c)       The Seller shall have delivered or caused to be delivered all other
information theretofore required or reasonably requested by the Depositor to be
delivered by the Seller or performed or caused to be performed all other
obligations required to be performed as of the Closing Date or the Transfer
Date, as the case may be, including all filings, recordings and/or registrations
as may be necessary in the reasonable opinion of the Depositor, the Issuer or
the Indenture Trustee to establish and preserve the right, title and interest of
the Depositor, the Issuer or the Indenture Trustee, as the case may be, in the
related Timeshare Loans.

(d)       On or before the Closing Date and on each Transfer Date, the
Transaction Documents shall be in full force and effect.

(e)       With respect to the Initial Timeshare Loans, the Notes shall be issued
and sold on the Closing Date, and the Issuer and the Depositor shall receive the
full consideration due it upon the issuance of the Notes, and the Issuer and the
Depositor shall have applied their respective consideration to the extent
necessary, to pay the Timeshare Loan Acquisition Price for each Timeshare Loan.

(f)        Each Initial Timeshare Loan shall be an Eligible Timeshare Loan and
each of the conditions herein and in the Indenture for the purchases of such
Timeshare Loans shall have been satisfied.

(g)       Each Qualified Substitute Timeshare Loan replacing a Timeshare Loan
shall satisfy each of the criteria specified in the definition of “Qualified
Substitute Timeshare Loan” and each of the conditions herein and in the
Indenture for substitution of Timeshare Loans shall have been satisfied.

(h)       The Depositor shall have received such other certificates and opinions
as it shall reasonably request.

SECTION 5.  Representations and Warranties and Certain Covenants of Bluegreen.

(a)       Bluegreen represents and warrants to the Depositor and the Indenture
Trustee for the benefit of the Noteholders as follows:

 

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(i)          Due Incorporation; Valid Existence; Good Standing. As of the
Closing Date and as of each Transfer Date, it is a corporation duly organized
and validly existing in good standing under the laws of the jurisdiction of its
incorporation; and is duly qualified to do business as a foreign corporation and
in good standing under the laws of each jurisdiction where the character of its
property, the nature of its business or the performance of its obligations under
this Agreement makes such qualification necessary, except where the failure to
be so qualified will not have a material adverse effect on its business or its
ability to perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated hereunder
or thereunder or the validity or enforceability of any Timeshare Loans. To
Bluegreen’s Knowledge, as of the Closing Date, the Seller is a statutory trust
duly organized and validly existing in good standing under the laws of the
jurisdiction of its formation and is duly qualified to do business as a foreign
entity and in good standing under the laws of each jurisdiction where the
performance of its obligations under this Agreement makes such qualification
necessary, except where the failure to be so qualified will not have a material
adverse effect on its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of any
Timeshare Loans.

(ii)         Possession of Licenses, Certificates, Franchises and Permits. As of
the Closing Date with respect to the Seller and Bluegreen and as of each
Transfer Date with respect to Bluegreen, each of Bluegreen and the Seller holds
all material licenses, certificates, franchises and permits from all
governmental authorities necessary for the conduct of its business, and has
received no notice of proceedings relating to the revocation of any such
license, certificate, franchise or permit, which singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would materially and
adversely affect its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of any
Timeshare Loans.

(iii)        Corporate Authority and Power. As of the Closing Date and as of
each Transfer Date, it has, and at all times during the term of this Agreement
will have, all requisite corporate power and authority to own its properties, to
conduct its business, to execute and deliver this Agreement and all documents
and transactions contemplated hereunder and to perform all of its obligations
under this Agreement and any other Transaction Document to which it is a party
or under the transactions contemplated hereunder or thereunder. To Bluegreen’s
Knowledge, as of the Closing Date, the Seller has all requisite corporate power
and authority to own its properties, to conduct its business, to execute and
deliver this Agreement and all documents and transactions contemplated hereunder
and to perform all of its obligations under this Agreement and any other
Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder. To Bluegreen’s Knowledge, as of the
Closing Date, the Seller has all requisite power and authority to acquire, own,
transfer and convey Timeshare Loans to the Depositor.

 

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(iv)        Authorization, Execution and Delivery Valid and Binding. As of the
Closing Date and as of each Transfer Date, this Agreement and all other
Transaction Documents and instruments required or contemplated hereby to be
executed and delivered by Bluegreen have been duly authorized, executed and
delivered by Bluegreen and, assuming the due execution and delivery by, the
other party or parties hereto and thereto, constitute legal, valid and binding
agreements enforceable against Bluegreen in accordance with their respective
terms subject, as to enforceability, to bankruptcy, insolvency, reorganization,
liquidation, dissolution, moratorium and other similar applicable laws affecting
the enforceability of creditors’ rights generally applicable in the event of the
bankruptcy, insolvency, reorganization, liquidation or dissolution, as
applicable, of Bluegreen and to general principles of equity, regardless of
whether such enforceability shall be considered in a proceeding in equity or at
law. To Bluegreen’s Knowledge, as of the Closing Date, this Agreement and all
other Transaction Documents and instruments required or contemplated hereby to
be executed and delivered by the Seller have been duly authorized, executed and
delivered by the Seller and, assuming the due execution and delivery by, the
other party or parties hereto and thereto, constitute legal, valid and binding
agreements enforceable against the Seller in accordance with their respective
terms subject, as to enforceability, to bankruptcy, insolvency, reorganization,
liquidation, dissolution, moratorium and other similar applicable laws affecting
the enforceability of creditors’ rights generally applicable in the event of the
bankruptcy, insolvency, reorganization, liquidation or dissolution as
applicable, of the Seller and to general principles of equity, regardless of
whether such enforceability shall be considered in a proceeding in equity or at
law. To Bluegreen’s Knowledge, as of the Closing Date, this Agreement
constitutes a valid transfer of the Seller’s interest in the Timeshare Loans to
the Depositor or, in the event of the characterization of any such transfer as a
loan, the valid creation of a first priority perfected security interest in such
Timeshare Loans in favor of the Depositor.

(v)         No Violation of Law, Rule, Regulation, etc. As of the Closing Date
and as of each Transfer Date, the execution, delivery and performance by
Bluegreen of this Agreement and any other Transaction Document to which it is a
party do not and will not (A) violate any of the provisions of its articles of
incorporation or bylaws, (B) violate any provision of any law, governmental rule
or regulation currently in effect applicable to it or its properties or by which
it or its properties may be bound or affected, including, without limitation,
any bulk transfer laws, where such violation would have a material adverse
effect on its ability to perform its obligations under this Agreement or any
other Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of the
Timeshare Loans, (C) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect applicable to it or its properties or
by which it or its properties are bound or affected, where such violation would
have a material adverse effect on its ability to perform its obligations under
this Agreement or any other Transaction Document to which it is a party or under
the transactions contemplated hereunder or thereunder or the validity or
enforceability of any Timeshare Loans, (D) conflict with, or result in a breach
of, or constitute a default under, any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which it is a party or
by which it is bound where such violation would have a material adverse effect
on its ability to perform its obligations under this Agreement or any other
Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of any
Timeshare Loans or (E) result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, mortgage, deed of
trust, contract or other instrument. To Bluegreen’s Knowledge, as of the Closing
Date, the execution, delivery and performance by the Seller of this Agreement
and any other Transaction Document to which the Seller is a party do not and
will not (1) violate any of the provisions of its certificate of trust, trust
agreement or other related organizational document, (2) violate any provision of
any law, governmental rule or regulation currently in effect applicable to the
Seller or its properties by which the Seller or its properties may be bound or
affected, including, without limitation, any bulk transfer laws, where such
violation would have a material adverse effect on the Seller’s ability to
perform its obligations under this Agreement or any other Transaction Document
to which the Seller is a party or under the transactions contemplated hereunder
or thereunder or the validity or enforceability of any Timeshare Loans, (3)
violate any judgment, decree, writ, injunction, award, determination or order
currently in effect applicable to the Seller or its properties or by which the
Seller or its properties are bound or affected, where such violation would have
a material adverse effect on the Seller’s ability to perform its obligations
under this Agreement or any other Transaction Document to which the Seller is a
party or under the transactions contemplated hereunder or thereunder or the
validity or enforceability of Timeshare Loans or (4) conflict with, or result in
a breach of, or constitute a default under, any of the provisions of any sale
and servicing agreement, indenture, mortgage, deed of trust, contract or other
instrument to which the Seller is a party or by which it is bound where such
violation would have a material adverse effect on the Seller’s ability to
perform its obligations under this Agreement or any other Transaction Document
to which the Seller is a party or under the transactions contemplated hereunder
or thereunder or the validity or enforceability of Timeshare Loans.

 

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(vi)        Governmental Consent. As of the Closing Date and as of each Transfer
Date, no consent, approval, order or authorization of, and no filing with or
notice to, any court or other Governmental Authority in respect of Bluegreen is
required which has not been obtained in connection with the authorization,
execution, delivery or performance by Bluegreen of this Agreement or any of the
other Transaction Documents to which Bluegreen is a party or under the
transactions contemplated hereunder or thereunder, including, without
limitation, the transfer of the Timeshare Loans and the creation of the security
interest of the Depositor therein pursuant to Section 3 hereof. To Bluegreen’s
Knowledge, as of the Closing Date, no consent, approval, order or authorization
of, and no filing with or notice to, any court or other Governmental Authority
in respect of the Seller is required which has not been obtained in connection
with the authorization, execution, delivery or performance by the Seller of this
Agreement or any of the other Transaction Documents to which the Seller is a
party or under the transactions contemplated hereunder or thereunder, including,
without limitation, the transfer of Timeshare Loans and the creation of the
security interest of the Depositor therein pursuant to Section 3 hereof.

(vii)       Defaults. As of the Closing Date and as of each Transfer Date, it 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, in each case, which would have a material adverse effect on
the transactions contemplated hereunder or on its business, operations,
financial condition or assets, and 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. To
Bluegreen’s Knowledge, as of the Closing Date, the Seller 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, in
each case, which would have a material adverse effect on the transactions
contemplated hereunder, and 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.

 

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(viii)      Insolvency. As of the Closing Date and as of each Transfer Date, it
is solvent and will not be rendered insolvent by the transfer of any Timeshare
Loans hereunder. On and after the Closing Date, it will not engage in any
business or transaction the result of which would cause the property remaining
with it to constitute an unreasonably small amount of capital. To Bluegreen’s
Knowledge, as of the Closing Date the Seller is solvent and will not be rendered
insolvent by the transfer of any Timeshare Loans hereunder. To Bluegreen’s
Knowledge, on and after the Closing Date, the Seller will not engage in any
business or transaction, the result of which would cause the property remaining
with it to constitute an unreasonably small amount of capital.

(ix)        Pending Litigation or Other Proceedings. Other than as described on
Schedule 5 attached hereto, as of the Closing Date, there is no pending or, to
its Knowledge, threatened action, suit, proceeding or investigation before any
court, administrative agency, arbitrator or governmental body against or
affecting it which, if decided adversely, would materially and adversely affect
(A) its condition (financial or otherwise), business or operations, (B) its
ability to perform its obligations under, or the validity or enforceability of,
this Agreement or any other documents or transactions contemplated under this
Agreement, (C) any Timeshare Loan or title of any Obligor to any related
Timeshare Property pursuant to the applicable Owner Beneficiary Agreement or (D)
the Depositor’s or any of its assigns’ ability to foreclose or otherwise enforce
the liens of the related Mortgage Notes and the rights of the Obligors to use
and occupy the related Timeshare Properties pursuant to the applicable Owner
Beneficiary Agreement. To Bluegreen’s Knowledge, as of the Closing Date, there
is no pending or threatened action, suit, proceeding or investigation before any
court, administrative agency, arbitrator or governmental body against or
affecting the Seller which, if decided adversely, would materially and adversely
affect (A) the Seller’s ability to perform its obligations under, or the
validity or enforceability of, this Agreement or any other documents or
transactions contemplated under this Agreement, (B) any Timeshare Loan or title
of any Obligor to any related Timeshare Property pursuant to the applicable
Owner Beneficiary Agreement or (C) the Depositor’s or any of its assigns’
ability to foreclose or otherwise enforce the liens of the related Mortgage
Notes and the rights of the Obligors to use and occupy the related Timeshare
Properties pursuant to the applicable Owner Beneficiary Agreement.

 

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(x)         Information. As of the Closing Date and as of each Transfer Date, no
document, certificate or report furnished or required to be furnished by or on
behalf of it or, to Bluegreen’s Knowledge, on behalf of the Seller pursuant to
this Agreement, 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 not misleading in light of the
circumstances in which it was made. As of the Closing Date and as of each
Transfer Date, as applicable, there are no facts known to it which, individually
or in the aggregate, materially adversely affect, or which (aside from general
economic trends) may reasonably be expected to materially adversely affect in
the future, its financial condition or assets or business, or which may impair
its or the Seller’s ability to perform its respective obligations under this
Agreement, which have not been disclosed herein or therein or in the
certificates and other documents furnished to the Depositor by or on its or the
Seller’s behalf pursuant hereto or thereto specifically for use in connection
with the transactions contemplated hereby or thereby.

(xi)        Foreign Tax Liability. As of the Closing Date and as of each
Transfer Date, it is not aware of any Obligor under a Timeshare Loan who has
withheld any portion of payments due under such Timeshare Loan because of the
requirements of a foreign taxing authority, and no foreign taxing authority has
contacted it concerning a withholding or other foreign tax liability.

(xii)      Employee Benefit Plan Liability. As of the Closing Date and as of
each Transfer Date, as applicable, (A) with respect to plan years beginning
before January 1, 2008, neither Bluegreen nor any of its Commonly Controlled
Affiliates incurred any “accumulated funding deficiency” (as such term was
defined under ERISA and the Code for such years), whether or not waived, with
respect to any Employee Pension Benefit Plan (as defined below) that either
individually or in the aggregate could Cause a Material Adverse Effect (as
defined below), and, to Bluegreen’s Knowledge, for any such year, no event has
occurred or circumstance exists that resulted or may result in any accumulated
funding deficiency of any such plan that either individually or in the aggregate
could Cause a Material Adverse Effect; (B) with respect to plan years beginning
after December 31, 2007, neither Bluegreen nor any of its Commonly Controlled
Affiliates has any unpaid “minimum required contribution” (as such term is
defined under ERISA and the Code) with respect to any Employee Pension Benefit
Plan, whether or not such unpaid minimum required contribution is waived, that
either individually or in the aggregate could Cause a Material Adverse Effect,
and, to Bluegreen’s Knowledge for any such year, no event has occurred or
circumstance exists that resulted or may result in any unpaid minimum required
contribution as of the last day of the current plan year of any such plan that
either individually or in the aggregate could Cause a Material Adverse Effect;
(C) Bluegreen and each of its Commonly Controlled Affiliates have no outstanding
liability for any undisputed contribution required under any Bluegreen
Multiemployer Plan (as defined below) that either individually or in the
aggregate could Cause a Material Adverse Effect; and (D) Bluegreen and each of
its Commonly Controlled Affiliates have no outstanding liability for any
disputed contribution required under any Bluegreen Multiemployer Plan that
either individually or in the aggregate could Cause a Material Adverse Effect.
As of the Closing Date and as of each Transfer Date, as applicable, to
Bluegreen’s Knowledge (1) neither Bluegreen nor any of its Commonly Controlled
Affiliates has incurred any Withdrawal Liability (as defined below) that either
individually or in the aggregate could Cause a Material Adverse Effect, and (2)
no event has occurred or circumstance exists that could result in any Withdrawal
Liability that either individually or in the aggregate could Cause a Material
Adverse Effect. As of the Closing Date and as of each Transfer Date, as
applicable, to Bluegreen’s Knowledge, neither Bluegreen nor any of its Commonly
Controlled Affiliates has received notification of the reorganization,
termination, partition, or insolvency of any Multiemployer Plan that could
either individually or in the aggregate Cause a Material Adverse Effect. For
purposes of this subsection (a)(xii), “Cause a Material Adverse Effect” means
reasonably be expected to result in a material adverse effect on Bluegreen and
its Commonly Controlled Affiliates in the aggregate; “Commonly Controlled
Affiliates” means those direct or indirect affiliates of Bluegreen that would be
considered a single employer with Bluegreen under Section 414(b), (c), (m), or
(o) of the Code; “Employee Pension Benefit Plan” means an employee pension
benefit plan as such term is defined in Section 3(2) of ERISA that is sponsored,
maintained or contributed to by Bluegreen or any of its Commonly Controlled
Affiliates (other than a Bluegreen Multiemployer Plan); “Multiemployer Plan”
means a multiemployer plan as such term is defined in Section 3(37) of ERISA;
“Bluegreen Multiemployer Plan” means a Multiemployer Plan to which Bluegreen or
any of its Commonly Controlled Affiliates contributes or in which Bluegreen or
any of its Commonly Controlled Affiliates participates; and “Withdrawal
Liability” means liability as determined under ERISA for the complete or partial
withdrawal of Bluegreen or any of its Commonly Controlled Affiliates from a
Multiemployer Plan.

 

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(xiii)      Taxes. Other than as described on Schedule 5 hereto, as of the
Closing Date, it (A) has filed all tax returns (federal, state and local) which
it reasonably believes are required to be filed and has paid or made adequate
provision in its GAAP financial statements for the payment of all taxes,
assessments and other governmental charges due from it or is contesting any such
tax, assessment or other governmental charge in good faith through appropriate
proceedings or except where the failure to file or pay will not have a material
adverse effect on the rights and interests of the Depositor, (B) knows of no
basis for any material additional tax assessment for any fiscal year for which
adequate reserves in its GAAP financial statements have not been established and
(C) intends to pay all such taxes, assessments and governmental charges, if any,
when due. To Bluegreen’s Knowledge, the Seller has filed, as of the Closing Date
all applicable tax returns which it reasonably believes are required to be
filed.

(xiv)      Place of Business. As of the Closing Date and as of each Transfer
Date, the principal place of business and chief executive office where Bluegreen
keeps its records concerning the Timeshare Loans will be 4960 Conference Way
North, Suite 100, Boca Raton, Florida 33431 (or such other place specified by
Bluegreen by written notice to the Depositor and the Indenture Trustee). As of
the Closing Date and as of each Transfer Date, Bluegreen is a corporation formed
under the laws of the Commonwealth of Massachusetts. As of the Closing Date and
as of each Transfer Date, the Seller keeps its records concerning the Timeshare
Loans with U.S. Bank National Association, as custodian, pursuant to that
certain custodial agreement, dated as of May 1, 2006, as amended, supplemented
or otherwise modified from time to time in accordance with the terms thereof, by
and among the Seller, U.S. Bank National Association and the other parties named
therein. As of the Closing Date, the Seller is a statutory trust formed under
the laws of the State of Delaware.

 

 

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(xv)      Securities Laws. As of the Closing Date (with respect to Bluegreen and
the Seller) and as of each Transfer Date (with respect to Bluegreen), neither it
nor, to Bluegreen’s Knowledge, the Seller is an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. As of the Closing Date, no portion
of the Timeshare Loan Acquisition Price for each of the Initial Timeshare Loans
will be used by it or the Seller to acquire any security in any transaction
which is subject to Section 13 or Section 14 of the Securities Exchange Act of
1934, as amended.

(xvi)      Bluegreen Vacation Club. As of the Closing Date and as of each
Transfer Date, with respect to the Club Loans:

(A)  The Club Trust Agreement, of which a true and correct copy is attached
hereto as Exhibit B is in full force and effect and a certified copy of the Club
Trust Agreement has been delivered to the Indenture Trustee together with all
amendments and supplements in respect thereof;

(B)  The arrangement of contractual rights and obligations (duly established in
accordance with the Club Trust Agreement under the laws of the State of Florida)
was established for the purpose of holding and preserving certain property for
the benefit of the Beneficiaries referred to in the Club Trust Agreement. The
Club Trustee has all necessary trust and other authorizations and powers
required to carry out its obligations under the Club Trust Agreement in the
State of Florida and in all other states in which it holds Resort Interests. The
Club is not a corporation or business trust under the laws of the State of
Florida. The Club is not taxable as an association, corporation or business
trust under federal law or the laws of the State of Florida;

(C)  The Club Trustee is a corporation duly formed, validly existing and in good
standing under the laws of the State of Florida. As of the Closing Date, the
Club Trustee is qualified to do business as a foreign corporation and is in good
standing under the laws of the state of Tennessee. As of each Transfer Date, the
Club Trustee will be duly qualified to do business as a foreign corporation and
will be in good standing under the laws of each jurisdiction it is required by
law to be. The Club Trustee is not an affiliate of the Servicer for purposes of
Chapter 721, Florida Statutes and is in compliance with the requirements of such
Chapter 721 requiring that it be independent of the Servicer;

(D)  The Club Trustee has all necessary corporate power to execute and deliver,
and has all necessary corporate power to perform its obligations under this
Agreement, the other Transaction Documents to which it is a party, the Club
Trust Agreement and the Club Management Agreement. The Club Trustee possesses
all requisite franchises, operating rights, licenses, permits, consents,
authorizations, exemptions and orders as are necessary to discharge its
obligations under the Club Trust Agreement;

 

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(E)  The Club Trustee holds all right, title and interest in and to all of the
Timeshare Properties related to the Club Loans solely for the benefit of the
Beneficiaries referred to in, and subject in each case to the provisions of, the
Club Trust Agreement and the other documents and agreements related thereto.
Except with respect to the Mortgages (or a pledge of the Co-op Shares in
connection with Aruba Club Loans), the Club Trustee has permitted none of such
Timeshare Properties to be made subject to any lien or encumbrance during the
time it has been a part of the trust estate under the Club Trust Agreement;

(F)  There are no actions, suits, proceedings, orders or injunctions pending
against the Club or the Club Trustee, at law or in equity, or before or by any
governmental authority which, if adversely determined, could reasonably be
expected to have a material adverse effect on the Trust Estate or the Club
Trustee’s ability to perform its obligations under the Transaction Documents;

(G)  Neither the Club nor the Club Trustee has incurred any indebtedness for
borrowed money (directly, by guarantee, or otherwise);

(H)  All ad valorem taxes and other taxes and assessments against the Club
and/or its trust estate have been paid when due and neither the Servicer nor, to
Bluegreen’s Knowledge, the Club Trustee knows of any basis for any additional
taxes or assessments against any such property. The Club has filed all required
tax returns and has paid all taxes shown to be due and payable on such returns,
including all taxes in respect of sales of Owner Beneficiary Rights (as defined
in the Club Trust Agreement) and Vacation Points, if any;

(I)   The Club and the Club Trustee are in compliance in all material respects
with all applicable laws, statutes, rules and governmental regulations
applicable to it and in compliance with each material instrument, agreement or
document to which it is a party or by which it is bound, including, without
limitation, the Club Trust Agreement;

(J)   Except as expressly permitted in the Club Trust Agreement, the Club has
maintained the One-to-One Beneficiary to Accommodation Ratio (as such terms are
defined in the Club Trust Agreement);

(K)  Bluegreen Vacation Club, Inc. is a not-for-profit corporation duly formed,
validly existing and in good standing under the laws of the State of Florida;

(L)  Upon purchase of the Club Loans and related Trust Estate hereunder, the
Depositor is an “Interest Holder Beneficiary” under the Club Trust Agreement and
each of the Club Loans constitutes “Lien Debt”, “Purchase Money Lien Debt” and
“Owner Beneficiary Obligations” under the Club Trust Agreement; and

 

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(M) Except as disclosed to the Indenture Trustee in writing or noted in the
Custodian’s Certification, each Mortgage associated with a Deeded Club Loan and
granted by the Club Trustee or the Obligor on the related Deeded Club Loan, as
applicable, has been duly executed, delivered and recorded by or pursuant to the
instructions of the Club Trustee under the Club Trust Agreement and such
Mortgage is valid and binding and effective to create the lien and security
interests in favor of the Indenture Trustee (upon assignment thereof to the
Indenture Trustee). Each of such Mortgages was granted in connection with the
financing of a sale of a Resort Interest.

(xvii)     As of the Closing Date, Bluegreen is the Warehouse Servicer and has
been servicing the Warehouse Timeshare Loans in accordance with the Servicing
Standard and the applicable provisions of the Warehouse Indenture and it has not
taken or failed to take any action to cause a breach of the representations and
warranties set forth in Section 12.2 of the Warehouse Indenture.

(b)       Bluegreen hereby makes the representations and warranties relating to
the Timeshare Loans contained in Schedule I hereto for the benefit of the
Depositor, the Issuer and the Indenture Trustee for the benefit of the
Noteholders as of the Closing Date (only with respect to the Initial Timeshare
Loans) and each Transfer Date (only with respect to each Qualified Substitute
Timeshare Loan transferred on such Transfer Date), as applicable.

(c)       It is understood and agreed that the representations and warranties
set forth in this Section 5 shall survive the (i) sale of each Timeshare Loan to
the Depositor and (ii) any assignment of such Timeshare Loans by the Depositor
and shall continue so long as any such Timeshare Loans shall remain outstanding
or until such time as such Timeshare Loans are repurchased, purchased or a
Qualified Substitute Timeshare Loan is provided pursuant to Section 6 hereof.
Each of the Seller and Bluegreen acknowledges that it has been advised that the
Depositor intends to assign all of its right, title and interest in and to each
Timeshare Loan and its rights and remedies under this Agreement to the Issuer.
The Seller and Bluegreen jointly agree that, upon any such assignment, the
Depositor and any of its assignees may enforce directly, without joinder of the
Depositor (but subject to any defense that Bluegreen may have under this
Agreement) all rights and remedies hereunder.

(d)       With respect to any representations and warranties contained in
Section 5 which are made to Bluegreen’s Knowledge, if it is discovered that any
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of a Warehouse Timeshare Loan or the interests of
the Depositor or any subsequent assignee thereof, then notwithstanding such lack
of Knowledge of the accuracy of such representation and warranty at the time
such representation or warranty was made (without regard to any Knowledge
qualifiers), such inaccuracy shall be deemed a breach of such representation or
warranty for purposes of the repurchase or substitution obligations described in
Sections 6(a)(i) or (ii) hereof.

 

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SECTION 6. Repurchases and Substitutions.

(a)       Mandatory Repurchases and Substitutions for Breaches of
Representations and Warranties. Upon the receipt of notice by Bluegreen from the
Depositor, the Issuer or the Indenture Trustee of a breach of any of the
representations and warranties in Section 5 hereof (on the date on which such
representation or warranty was made) which materially and adversely affects the
value of a Timeshare Loan or the interests of the Depositor or any subsequent
assignee of the Depositor (including the Issuer and the Indenture Trustee on
behalf of the Noteholders) therein, Bluegreen shall within 60 days of receipt of
such notice, 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 such
Defective Timeshare Loan at the Repurchase Price or (ii) provide one or more
Qualified Substitute Timeshare Loans and pay the related Substitution Shortfall
Amount, if any. Bluegreen and the Seller acknowledge that the Depositor shall,
pursuant to the Sale Agreement sell Timeshare Loans and rights and remedies
acquired hereunder to the Issuer and that the Issuer shall pledge such Timeshare
Loans and rights to the Indenture Trustee for the benefit of the Noteholders.
Bluegreen and the Seller further acknowledge that the Indenture Trustee will be
appointed attorney in fact under the Indenture and may enforce Bluegreen’s
repurchase or substitution obligations if Bluegreen has not complied with its
repurchase and substitution obligations under this Agreement within the
aforementioned 60 day period.

(b)       Optional Purchases or Substitutions of Club Loans. The Depositor
hereby irrevocably grants Bluegreen an option to repurchase or substitute
Original Club Loans it has under the Sale Agreement, the Bluegreen Purchase
Agreement and as described in the following sentence. With respect to any
Original Club Loans for which the related Obligor has elected to effect and
Bluegreen has agreed to effect an Upgrade, Bluegreen will (at its option) either
(i) pay 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
Bluegreen’s option to substitute one or more Qualified Substitute Timeshare
Loans for an Original Club Loan is limited on any date to (x) 20% of the
Aggregate Closing Date Collateral Balance less (y) the aggregate Loan Balances
of all Original Club Loans previously substituted by Bluegreen on prior Transfer
Dates pursuant to this Agreement, the Sale Agreement and/or the Bluegreen
Purchase Agreement. Bluegreen shall use its best efforts to exercise its
substitution option with respect to Original Club Loans prior to exercise of its
repurchase option. To the extent that Bluegreen shall elect to substitute
Qualified Substitute Timeshare Loans for an Original Club Loan, Bluegreen shall
use its 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 and (ii) an Upgrade Club Loan unrelated to such Original
Club Loan.

(c)       Optional Purchases or Substitutions of Defaulted Timeshare Loans. The
Depositor hereby irrevocably grants Bluegreen an option to repurchase or
substitute Defaulted Timeshare Loans it has under the Sale Agreement, the
Bluegreen Purchase Agreement and as described in the following sentence. With
respect to a Defaulted Timeshare Loan, on any date, Bluegreen will have the
option, but not the obligation, to either (i) purchase a 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 Amount, if any;
provided, however, that Bluegreen’s option to purchase 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. Bluegreen may irrevocably
waive its option to purchase or substitute a Defaulted Timeshare Loan by
delivering to the Indenture Trustee a Waiver Letter in the form of Exhibit A
attached hereto.

 

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(d)       Payment of Repurchase Prices and Substitution Shortfall Amounts.
Bluegreen hereby agrees to 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 to be
deposited in the Collection Account on the Business Day immediately preceding
the related Payment Date for such Due Period in accordance with the provisions
of the Indenture. In the event that more than one Timeshare Loan is replaced
pursuant to Sections 6(a), (b) or (c) hereof on any Transfer Date, the
Substitution Shortfall Amounts and the Loan Balances of Qualified Substitute
Timeshare Loans shall be calculated on an aggregate basis for all substitutions
made on such Transfer Date.

(e)       Schedule of Timeshare Loans. Bluegreen hereby agrees, on each date on
which a Timeshare Loan has been repurchased, purchased or substituted, to
provide or cause to be provided to the Depositor, the Issuer and the Indenture
Trustee with an electronic supplement to Schedule III hereto and the Schedule of
Timeshare Loans reflecting the removal and/or substitution of Timeshare Loans
and subjecting any Qualified Substitute Timeshare Loans to the provisions of
this Agreement.

(f)        Qualified Substitute Timeshare Loans. Pursuant to Section 6(g)
hereof, on the related Transfer Date, Bluegreen hereby agrees to deliver or to
cause the delivery of the Timeshare Loan Files relating to the Qualified
Substitute Timeshare Loans to the Indenture Trustee or to the Custodian, at the
direction of the Indenture Trustee, in accordance with the provisions of the
Indenture and the Custodial Agreement. As of such related Transfer Date,
Bluegreen does hereby transfer, assign, sell and grant to the Depositor, without
recourse (except as provided in Section 6 and Section 8 hereof), any and all of
Bluegreen’s right, title and interest in and to (i) each Qualified Substitute
Timeshare Loan conveyed to the Depositor on such Transfer Date, (ii) the
Receivables in respect of the Qualified Substitute Timeshare Loans due after the
related Cut-Off Date, (iii) 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), (iv)
all Related Security in respect of such Qualified Substitute Timeshare Loans,
and (v) all income, payments, proceeds and other benefits and rights related to
any of the foregoing (the property in clauses (i) – (v), being the “QSTL
Assets”). Upon such sale, the ownership of each Qualified Substitute Timeshare
Loan and all collections allocable to principal and interest thereon after the
related Cut-Off Date and all other property interests or rights conveyed
pursuant to and referenced in this Section 6(f) shall immediately vest in the
Depositor, its successors and assigns. Bluegreen shall not take any action
inconsistent with such ownership nor claim any ownership interest in any
Qualified Substitute Timeshare Loan for any purpose whatsoever other than
consolidated federal and state income tax reporting. Bluegreen agrees that such
Qualified Substitute Timeshare Loans shall be subject to the provisions of this
Agreement and shall thereafter be deemed a “Timeshare Loan” for the purposes of
this Agreement.

 

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(g)       Officer’s Certificate for Qualified Substitute Timeshare Loans.
Bluegreen shall, on each related Transfer Date, certify or cause to be certified
in writing to the Depositor, the Issuer and the Indenture Trustee that each new
Timeshare Loan meets all the criteria of the definition of “Qualified Substitute
Timeshare Loan” and that (i) the Timeshare Loan Files for such Qualified
Substitute Timeshare Loans have been delivered to the Custodian or shall be
delivered within five Business Days of the applicable Transfer Date, and (ii)
the Timeshare Loan Servicing Files for such Qualified Substitute Timeshare Loans
have been delivered to the Servicer.

(h)       Release. In connection with any repurchase, purchase or substitution
of one or more Timeshare Loans contemplated by this Section 6, upon satisfaction
of the conditions contained in this Section 6, the Depositor, the Issuer and the
Indenture Trustee shall execute and deliver or shall cause the execution and
delivery of such releases and instruments of transfer or assignment presented to
it by Bluegreen, in each case, without recourse, as shall be necessary to vest
in Bluegreen or its designee the legal and beneficial ownership of such
Timeshare Loans; provided, however, that with respect to any release of a
Timeshare Loan that is substituted for by one or more Qualified Substitute
Timeshare Loans, the Issuer and the Indenture Trustee shall not execute and
deliver or cause the execution and delivery of such releases and instruments of
transfer or assignment until the Indenture Trustee and the Servicer receive a
Custodian’s Certification for such Qualified Substitute Timeshare Loan. The
Depositor, the Issuer and the Indenture Trustee shall cause the Custodian to
release the related Timeshare Loan Files to Bluegreen or its designee and the
Servicer to release the related Timeshare Loan Servicing Files to Bluegreen or
its designee; provided, however, that with respect to any Timeshare Loan File or
Timeshare Loan Servicing File related to a Timeshare Loan that has been
substituted by a Qualified Substitute Timeshare Loan, the Issuer and the
Indenture Trustee shall not cause the Custodian and the Servicer to release the
related Timeshare Loan File and the Timeshare Loan Servicing File, respectively,
until the Indenture Trustee and the Servicer receive a Custodian’s Certification
for such Qualified Substitute Timeshare Loan.

(i)        Sole Remedy. It is understood and agreed that the obligations of
Bluegreen contained in Section 6(a) hereof to cure a breach, or to repurchase or
substitute related Defective Timeshare Loans and the obligation of Bluegreen to
indemnify pursuant to Section 8 hereof shall constitute the sole remedies
available to the Depositor or its subsequent assignees for the breaches of any
representation or warranty contained in Section 5 hereof , and such remedies are
not intended to and do not constitute “credit recourse” to Bluegreen.

SECTION 7. Additional Covenants of Bluegreen and the Seller.

(a)     Bluegreen hereby covenants and agrees with the Depositor as follows:

 

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(i)       It shall comply with all laws, rules, regulations and orders
applicable to it and its business and properties except where the failure to
comply will not have a material adverse effect on its business or its ability to
perform its obligations under this Agreement or any other Transaction Document
to which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of the Timeshare Loans.

(ii)      It shall preserve and maintain its existence (corporate or otherwise),
rights, franchises and privileges in the jurisdiction of its organization and
except where the failure to so preserve and maintain will not have a material
adverse effect on its business or its ability to perform its obligations under
this Agreement or any other Transaction Document to which it is a party or under
the transactions contemplated hereunder or thereunder or the validity or
enforceability of the Timeshare Loans.

(iii)     On the Closing Date and each Transfer Date, as applicable, it shall
indicate in its and its Affiliates’ computer files and other records that each
Timeshare Loan has been sold to the Depositor.

(iv)     It shall respond to any inquiries with respect to ownership of a
Timeshare Loan by stating that such Timeshare Loan has been sold to the
Depositor and that the Depositor is the owner of such Timeshare Loan.

(v)      On or prior to the Closing Date, it shall file or cause to be filed, at
Bluegreen's expense, financing statements in favor of the Depositor and, if
applicable, the Issuer and the Indenture Trustee on behalf of the Noteholders,
with respect to the Timeshare Loans, in the form and manner reasonably requested
by the Depositor or its assigns. It shall deliver or cause the Seller to deliver
file-stamped copies of such financing statements to the Depositor, the Issuer
and the Indenture Trustee on behalf of the Noteholders.

(vi)     It agrees from time to time to, or cause the Seller to, at Bluegreen's
expense, promptly execute and deliver all further instruments and documents, and
to take all further actions, that may be necessary, or that the Depositor, the
Issuer or the Indenture Trustee may reasonably request, to perfect, protect or
more fully evidence the sale of the Timeshare Loans to the Depositor, or to
enable the Depositor to exercise and enforce its rights and remedies hereunder
or under any Timeshare Loan including, but not limited to, powers of attorney,
UCC financing statements and assignments of mortgage. Bluegreen hereby appoints
the Depositor, the Issuer and the Indenture Trustee as attorneys in fact, which
appointment is coupled with an interest and is therefore irrevocable, to act on
behalf and in the name of Bluegreen under this Section 7(a)(vi).

(vii)    On the Closing Date, Bluegreen does not have any tradenames, fictitious
names, assumed names or “doing business as” names other than “Bluegreen Patten
Corporation” in North Carolina, “Bluegreen Corporation of Massachusetts” in
Louisiana and “BXG California, Inc.” in California. After the Closing Date, any
change in the legal name of Bluegreen or the use by it of any tradename,
fictitious name, assumed name or “doing business as” name other than the
foregoing shall be promptly (but no later than ten Business Days) disclosed to
the Depositor and the Indenture Trustee in writing.

 

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(viii)     Upon the discovery or receipt of notice by a Responsible Officer of
Bluegreen of a breach of any of its representations or warranties and covenants
contained herein, Bluegreen shall promptly disclose to the Depositor, the Issuer
and the Indenture Trustee, in reasonable detail, the nature of such breach.

(ix)        Except to the extent of any payments received with respect to a
Credit Card Timeshare Loan, in the event that Bluegreen shall receive any
payments in respect of a Timeshare Loan after the Closing Date or a Transfer
Date, as applicable, it shall, within two Business Days of receipt, transfer or
cause to be transferred, such payments to the Lockbox Account. Payments received
by Bluegreen with respect to Credit Card Timeshare Loans, without regard to any
discount fees, shall be transferred to the Lockbox Account within five Business
Days.

(x)         Bluegreen will keep its principal place of business and chief
executive office and the office where it keeps its records concerning the
Timeshare Loans at the address of Bluegreen listed herein and shall notify the
parties hereto of any change to the same at least 30 days prior thereto.

(xi)        In the event that Bluegreen, the Seller or the Depositor or any
assignee of the Depositor receives actual notice of any transfer taxes arising
out of the transfer, assignment and conveyance of a Timeshare Loan to the
Depositor, on written demand by the Depositor, or upon Bluegreen or the Seller
otherwise being given notice thereof, Bluegreen shall cause the Seller to pay,
and otherwise indemnify and hold the Depositor, or any subsequent assignee
harmless, on an after-tax basis, from and against any and all such transfer
taxes.

 

(b)

The Seller hereby covenants and agrees with the Depositor as follows:

(i)          The Seller authorizes the Depositor, the Issuer, and the Indenture
Trustee to file continuation statements, and amendments thereto, relating to the
Timeshare Loans and all payments made with regard to the related Timeshare Loans
without the signature of the Seller where permitted by law. A photocopy or other
reproduction of this Agreement shall be sufficient as a financing statement
where permitted by law. The Depositor confirms that it is not its present
intention to file a photocopy or other reproduction of this Agreement as a
financing statement, but reserves the right to do so if, in its good faith
determination, there is at such time no reasonable alternative remaining to it.

(ii)         It shall comply with all applicable laws, rules, regulations and
orders applicable to it and its business and properties except where the failure
to comply will not have a material adverse effect on its business or its ability
to perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated hereunder
or thereunder or the validity or enforceability of the Timeshare Loans.

 

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(iii)      So long as the Warehouse Notes are outstanding, it shall preserve and
maintain for itself its existence (corporate or otherwise), rights, franchises
and privileges in the jurisdiction of its organization and except where the
failure to so preserve and maintain will not have a material adverse effect on
its business or its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of the
Timeshare Loans.

(iv)      Any change in the legal name of the Seller and any use by it of any
tradename, fictitious name, assumed name or “doing business as” name occurring
after the Closing Date shall be promptly, within 10 Business Days, disclosed to
the Depositor and the Indenture Trustee in writing.

(v)      On the Closing Date, it shall indicate in computer files and other
records to indicate that each Initial Timeshare Loan has been sold to the
Depositor.

(vi)     It shall respond to any inquiries with respect to ownership of an
Initial Timeshare Loan by stating that such Timeshare Loan has been sold to the
Depositor and that the Depositor is the owner of such Timeshare Loan.

(vii)    Except to the extent of any payments received with respect to a Credit
Card Timeshare Loan, in the event that the Seller shall receive any payments in
respect of a Timeshare Loan after the Closing Date, it shall, within two
Business Days of receipt, transfer or cause to be transferred, such payments to
the Lockbox Account. Payments received by the Seller with respect to Credit Card
Timeshare Loans, without regard to any discount fees, shall be transferred to
the Lockbox Account within five Business Days.

(viii)   It agrees and authorizes the filing, at Bluegreen's expense, of the
financing statements specified in Section 7(a)(v) and (vi) hereof in favor of
the Depositor, the Issuer and the Indenture Trustee on behalf of the
Noteholders, with respect to the Timeshare Loans.

(ix)     It agrees from time to time to, at Bluegreen's expense, promptly
execute and deliver all further instruments and documents, and to take all
further actions, that may be necessary, or that the Depositor, the Issuer or the
Indenture Trustee may reasonably request, to perfect, protect or more fully
evidence the sale of the Timeshare Loans, or to enable the Depositor, the Issuer
or the Indenture Trustee to exercise and enforce its rights and remedies
hereunder or under any Timeshare Loan including, but not limited to, powers of
attorney, UCC financing statements and assignments of mortgage. The Seller
hereby appoints Bluegreen, the Depositor, the Issuer and the Indenture Trustee
as attorneys-in-fact, which appointment is coupled with an interest and is
therefore irrevocable, to act on behalf and in the name of the Seller under this
Section 7(b)(ix).

SECTION 8. Indemnification.

 

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(a)       Bluegreen hereby agrees to indemnify the Depositor, the Issuer, the
Indenture Trustee, the Noteholders and the Initial Purchaser (collectively, the
“Indemnified Parties”) against any and all claims, losses, liabilities,
(including reasonable legal fees and related costs) that the Depositor, the
Issuer, the Indenture Trustee, the Noteholders or the Initial Purchaser may
sustain directly related to any breach of the representations and warranties of
Bluegreen under Section 5 hereof (the “Indemnified Amounts”) excluding, however
(i) Indemnified Amounts to the extent resulting from the gross negligence or
willful misconduct on the part of such Indemnified Party; (ii) any recourse for
any uncollectible Timeshare Loan not related to a breach of representation or
warranty; (iii) recourse to Bluegreen for a related Defective Timeshare Loan so
long as the same is cured, substituted or repurchased pursuant to Section 6
hereof; (iv) income, franchise or similar taxes by such Indemnified Party
arising out of or as a result of this Agreement or the transfer of the Timeshare
Loans; (v) Indemnified Amounts attributable to any violation by an Indemnified
Party of any Requirement of Law related to an Indemnified Party; or (vi) the
operation or administration of the Indemnified Party generally and not related
to the enforcement of this Agreement. The parties hereto shall (A) promptly
notify the other parties hereto, the Issuer and the Indenture Trustee if a claim
is made by a third party with respect to this Agreement or the Timeshare Loans,
and relating to (1) the failure by Bluegreen to perform its duties in accordance
with the terms of this Agreement or (2) a breach of Bluegreen’s representations,
covenants and warranties contained in this Agreement, (B) assume (with the
consent of the Depositor, the Issuer, the Indenture Trustee, the Noteholders or
the Initial Purchaser, as applicable, which consent shall not be unreasonably
withheld) the defense of any such claim and (C) pay all expenses in connection
therewith, including reasonable legal counsel fees and promptly pay, discharge
and satisfy any judgment, order or decree which may be entered against it or the
Depositor, the Issuer, the Indenture Trustee, the Noteholders or the Initial
Purchaser in respect of such claim. If Bluegreen shall have made any indemnity
payment pursuant to this Section 8 and the recipient thereafter collects from
another Person any amount relating to the matters covered by the foregoing
indemnity, the recipient shall promptly repay such amount to Bluegreen.

(b)       The obligations of Bluegreen under this Section 8 to indemnify the
Depositor, the Issuer, the Indenture Trustee, the Noteholders and the Initial
Purchaser shall survive the termination of this Agreement and continue until the
Notes are paid in full or otherwise released or discharged.

SECTION 9.  No Proceedings. Each of the Seller and Bluegreen hereby agrees that
it will not, directly or indirectly, institute, or cause to be instituted, or
join any Person in instituting, against the Depositor or any Association, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any federal or state bankruptcy or similar law so
long as there shall not have elapsed one year plus one day since the latest
maturing Notes issued by the Issuer.

SECTION 10. Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing and mailed or
telecommunicated, or delivered as to each party hereto, at its address set forth
below or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall
not be effective until received by the party to whom such notice or
communication is addressed.

 

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Seller

 

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) 651-8882

 

Depositor

 

BRFC 2010-A LLC

4950 Communication Avenue, Suite 900

Boca Raton, Florida 33431

Attention: Allan J. Herz, President and Assistant Treasurer

Fax: (561) 443-8743

 

Bluegreen

 

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

 

SECTION 11. No Waiver; Remedies. No failure on the part of Bluegreen, the
Seller, the Depositor or any assignee thereof to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any other remedies provided by law.

SECTION 12. Binding Effect; Assignability. This Agreement shall be binding upon
and inure to the benefit of the Depositor and its respective successors and
assigns. Any assignee of the Depositor shall be an express third party
beneficiary of this Agreement, entitled to directly enforce this Agreement.
Neither the Seller nor Bluegreen may assign any of their rights and obligations
hereunder or any interest herein without the prior written consent of the
Depositor and any assignee thereof. The Depositor may, and intends to, assign
all of its rights hereunder to the Issuer and each of the Seller and Bluegreen
consents to any such assignment. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until its termination (or, in the case of
the Seller, so long as the Warehouse Notes are outstanding) provided, however,
that the rights and remedies with respect to any breach of any representation
and warranty made by Bluegreen pursuant to Section 5 hereof, and the repurchase
or substitution and indemnification obligations shall be continuing and shall
survive any termination of this Agreement, but such rights and remedies may be
enforced only by the Depositor, the Issuer and the Indenture Trustee.

 

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SECTION 13. Amendments; Consents and Waivers. No modification, amendment or
waiver of, or with respect to, any provision of this Agreement, and all other
agreements, instruments and documents delivered thereto, nor consent to any
departure by the Seller or Bluegreen from any of the terms or conditions thereof
shall be effective unless it shall be in writing and signed by each of the
parties hereto, the written consent of the Indenture Trustee on behalf of the
Noteholders is given and confirmation from the Rating Agency that such action
will not result in a downgrade, withdrawal or qualification of any rating
assigned to a Class of Notes is received. The Seller and Bluegreen shall provide
to the Indenture Trustee and the Rating Agency with such proposed modifications,
amendments or waivers. Any waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No consent to or demand
by the Seller or Bluegreen in any case shall, in itself, entitle it to any other
consent or further notice or demand in similar or other circumstances. Each of
the Seller and Bluegreen acknowledges that in connection with the intended
assignment by the Depositor of all of its right, title and interest in and to
each Timeshare Loan to the Issuer, the Issuer intends to issue the Notes, the
proceeds of which will be used by the Issuer to purchase the Timeshare Loans
from the Depositor under the terms of the Sale Agreement.

SECTION 14. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation, shall not in any way be
affected or impaired thereby in any other jurisdiction. Without limiting the
generality of the foregoing, in the event that a Governmental Authority
determines that the Depositor may not purchase or acquire Timeshare Loans, the
transactions evidenced hereby shall constitute a loan and not a purchase and
sale, notwithstanding the otherwise applicable intent of the parties hereto, and
the Seller shall be deemed to have granted to the Depositor as of the date
hereof, a first priority perfected security interest in all of the Seller’s
right, title and interest in, to and under such Timeshare Loans and the related
property as described in Section 2 hereof.

SECTION 15. GOVERNING LAW; CONSENT TO JURISDICTION.

(A)  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
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.

 

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(B)  THE PARTIES TO THIS AGREEMENT HEREBY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY AND EACH
PARTY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO ITS ADDRESS
SET FORTH IN SECTION 10 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS,
POSTAGE PREPAID. THE PARTIES HERETO EACH WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 15 SHALL AFFECT THE RIGHT OF
THE PARTIES TO THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY OF THEM TO BRING ANY ACTION OR
PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.

SECTION 16. WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING DIRECTLY
OR INDIRECTLY TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT RELATED
HERETO AND FOR ANY COUNTERCLAIM THEREIN.

SECTION 17. Heading. The headings herein are for purposes of reference only and
shall not otherwise affect the meaning or interpretation of any provision
hereof.

SECTION 18. Execution in Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and both of which when taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of this
Agreement by facsimile or other electronic transmission (i.e., a “pdf” or “tif”)
shall be effective as delivery of a manually executed counterpart hereof.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

BRFC 2010-A LLC, as Depositor

 

By:_______________________________________

Name: Allan J. Herz

Title: President and Assistant Treasurer

BXG TIMESHARE TRUST I

 

By: Wilmington Trust Company,

as Owner Trustee

 

By:_______________________________________

Name:

Title:

BLUEGREEN CORPORATION

 

By:_______________________________________

Name: Anthony M. Puleo

Title: Senior Vice President, CFO and Treasurer

Agreed and acknowledged as to

the last paragraph of Section 3

herein only:

BLUEGREEN VACATION CLUB TRUST

By: Vacation Trust, Inc., individually and as Club Trustee

 

By:___________________________________

Name: Tonya Wardak

Title: Vice President, Treasurer and Secretary

 

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Schedule I

 

Representations and Warranties of Bluegreen Regarding the Timeshare Loans

 

With respect to each Timeshare Loan, as of the Closing Date or the related
Transfer Date, as applicable:

 

(a)

other than certain 50/50 Loans, payments due under such Timeshare Loan are
fully-amortizing and payable in level monthly
installments;                                          
                              

(b)

the payment obligations under such Timeshare Loan bear a fixed rate of interest;

(c)

the Obligor thereunder has made a down payment by cash, check, credit card or
otherwise of at least 10% of the actual purchase price (including closing costs)
of the related Timeshare Property (which down payment may, (i) in the case of
Upgrade Club Loans, be represented in whole or in part by the down payment made
and principal payments paid in respect of the related Original Club Loan, (ii)
in the case of a Sampler Converted Loan, be represented in whole or in part by
the principal payments and down payment made on the related Sampler Loan since
its date of origination, and (iii) in the case of an Upgrade or any Sampler
Conversion, be represented in whole or in part by the amount paid where the
Obligor has paid in full at the point of sale for the original Timeshare
Property or Sampler Membership, as applicable) and no part of such payment has
been made or loaned to the Obligor by Bluegreen, the Seller or an Affiliate
thereof;

(d)

such Timeshare Loan is not a Defaulted Timeshare Loan and as of the related
Cut-Off Date, no principal or interest due with respect to such Timeshare Loan
is more than 60 days delinquent;

(e)

the Obligor related to such Timeshare Loan is not an Affiliate of Bluegreen or
any Subsidiary; provided, that solely for the purposes of this representation, a
relative of an employee and employees of Bluegreen or any Subsidiary (or any of
its Affiliates) shall not be deemed to be an “Affiliate”;

(f)

immediately prior to the conveyance of such Timeshare Loan to the Depositor, the
Seller will own full legal and equitable title to such Timeshare Loan, and the
Timeshare Loan (and the related Timeshare Property) is free and clear of adverse
claims, liens and encumbrances and is not subject to claims of rescission,
invalidity, unenforceability, illegality, defense, offset, abatement,
diminution, recoupment, counterclaim or participation or ownership interest in
favor of any other Person;

(g)

such Timeshare Loan (other than an Aruba Club Loan) is secured directly by a
first priority Mortgage on the related purchased Timeshare Property;

 

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(h)

with respect to each Deeded Club Loan, the Timeshare Property mortgaged by or at
the direction of the related Obligor constitutes a fractional fee simple
timeshare interest in real property at the related Resort or an undivided
interest in a Resort (or a phase thereof) associated with a Unit that entitles
the holder of the interest to the use of a specific property for a specified
number of days each year or every other year, subject to the rules of the
Bluegreen Vacation Club; the related Mortgage has been delivered for filing and
recordation with all appropriate governmental authorities in all jurisdictions
in which such Mortgage is required to be filed and recorded to create a valid,
binding and enforceable first Lien on the related Timeshare Property and such
Mortgage creates a valid, binding and enforceable first Lien on the related
Timeshare Property, subject only to Permitted Liens; and the Seller (or
Bluegreen, as the case may be) is in compliance with any Permitted Lien
respecting the right to the use of such Timeshare Property; the Assignment of
Mortgage and each related endorsement of the related Mortgage Note constitutes a
duly executed, legal, valid, binding and enforceable assignment or endorsement,
as the case may be, of such related Mortgage and related Mortgage Note, and all
monies due or to become due thereunder, and all proceeds thereof;

(i)

with respect to the Obligor related to such Timeshare Loan and the related
Timeshare Property purchased by such Obligor, there is only one original
Mortgage and Mortgage Note, in the case of a Deeded Club Loan, and only one
Owner Beneficiary Agreement, in the case of an Aruba Club Loan; all parties to
the related Mortgage and the related Mortgage Note (and, in the case of an Aruba
Club Loan, Owner Beneficiary Agreement) had legal capacity to enter into such
Timeshare Loan Documents and to execute and deliver such related Timeshare Loan
Documents, and such related Timeshare Loan Documents have been duly and properly
executed by such parties; any amendments to such related Timeshare Loan
Documents required as a result of any mergers involving the Seller or Bluegreen
or any of their predecessors, to maintain the rights of the Seller or Bluegreen
or their predecessors thereunder as a mortgagee (or a Seller, in the case of an
Aruba Club Loan) have been completed;

(j)

at the time of origination of such Timeshare Loan, the applicable Originator had
full power and authority to originate such Timeshare Loan and the Obligor or the
Club Trustee had good and indefeasible fee title or good and marketable fee
simple title, or, in the case of an Aruba Club Loan, a cooperative interest, as
applicable, to the Timeshare Property related to such Timeshare Loan, free and
clear of all Liens, except for Permitted Liens;

(k)

the Mortgage (or, in the case of an Aruba Club Loan, the related Owner
Beneficiary Agreement) related to such Timeshare Loan contains customary and
enforceable provisions so as to render the rights and remedies of the holder
thereof adequate for the realization against the related Timeshare Property of
the benefits of the security interests or lender’s contractual rights intended
to be provided thereby, including (a) if the Mortgage is a deed of trust, by
trustee’s sale, including power of sale, (b) otherwise by judicial foreclosure
or power of sale and/or (c) termination of the contract, retention of Obligor
deposits and payments towards the related Timeshare Loan by the Originator or
the lender, as the case may be, and expulsion from the Club; in the case of the
Deeded Club Loans, there is no exemption available to the related Obligor which
would interfere with the mortgagee’s right to sell at a trustee’s sale or power
of sale or right to foreclose such related Mortgage, as applicable;

 

I-2

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(l)

any Mortgage Note related to such Timeshare Loan is not and has not been secured
by any collateral except the Lien of the related Mortgage;

(m)

if a Mortgage secures such Timeshare Loan, the title to the related Timeshare
Property is insured (or a binding commitment, which may be a master commitment
referencing one or more Mortgages, for title insurance, not subject to any
conditions other than standard conditions applicable to all binding commitments,
has been issued) under a mortgagee title insurance policy (which may consist of
one master policy referencing one or more such Mortgages) issued by a title
insurer qualified to do business in the jurisdiction where the related Timeshare
Property is located in a form generally acceptable to prudent originators of
similar mortgage loans, insuring the Seller (or Bluegreen, as the case may be)
or its predecessor and its successors and assigns, as to the first priority
mortgage Lien of the related Mortgage in an amount equal to the original
outstanding Loan Balance of such Timeshare Loan, and otherwise in form and
substance acceptable to the Indenture Trustee; the Club Originator and its
assignees is a named insured of such mortgagee’s title insurance policy; such
mortgagee’s title insurance policy is in full force and effect; no claims have
been made under such mortgagee’s title insurance policy and no prior holder of
such Timeshare Loan has done or omitted to do anything which would impair the
coverage of such mortgagee’s title insurance policy; no premiums for such
mortgagee’s title insurance policy, endorsements and all special endorsements
are past due;

(n)

the Seller or Bluegreen has not taken (or omitted to take), and has no notice
that the Obligor related to such Timeshare Loan has taken (or omitted to take),
any action that would impair or invalidate the coverage provided by any hazard,
title or other insurance policy on the related Timeshare Property;

(o)

all applicable intangible taxes and documentary stamp taxes have been paid on
such Timeshare Loan;

(p)

the proceeds of such Timeshare Loan have been fully disbursed, there is no
obligation to make future advances or to lend additional funds under the
applicable Originator’s commitment or the documents and instruments evidencing
or securing such Timeshare Loan and no such advances or loans have been made
since the origination of such Timeshare Loan;

(q)

the terms of each Timeshare Loan Document related to such Timeshare Loan have
not been impaired, waived, altered or modified in any respect, except (x) by
written instruments which are part of the related Timeshare Loan Documents or
(y) in accordance with the Credit Policy in effect at the time of origination,
the Collection Policy or the Servicing Standard (provided that no Timeshare Loan
has been impaired, waived, altered, or modified in any respect more than once).
No other instrument has been executed or agreed to which would effect any such
impairment, waiver, alteration or modification; the Obligor has not been
released from liability on or with respect to such Timeshare Loan, in whole or
in part; if required by law or prudent originators of similar loans in the
jurisdiction where the related Timeshare Property is located, all waivers,
alterations and modifications have been filed and/or recorded in all places
necessary to perfect, maintain and continue a valid first priority Lien of the
related Mortgage subject only to Permitted Liens;

 

I-3

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(r)

other than if it is an Aruba Club Loan, such Timeshare Loan is principally and
directly secured by an interest in real property;

(s)

such Timeshare Loan was originated by Bluegreen or one of its Affiliates in the
normal course of its business; was originated and underwritten in accordance
with its underwriting guidelines and the Credit Policy in effect at the time of
origination; and to Bluegreen’s Knowledge, the origination, servicing and
collection practices used by Bluegreen and its Affiliates with respect to such
Timeshare Loan have been in all respects, legal, proper, prudent and customary;

(t)

such Timeshare Loan is assignable to and by the obligee and its successors and
assigns and the related Timeshare Property is assignable upon liquidation of the
related Timeshare Loan, without the consent of any other Person (including any
Association, condominium association, homeowners’ or timeshare association);

(u)

the Mortgage related to such Timeshare Loan is and will be prior to any Lien on,
or other interests relating to, the related Timeshare Property;

(v)

to Bluegreen’s Knowledge, there are no delinquent or unpaid taxes, ground rents
(if any), water charges, sewer rents or assessments outstanding with respect to
any of the Timeshare Properties, nor any other outstanding Liens or charges
affecting the Timeshare Properties related to such Timeshare Loan that would
affect the Lien of the related Mortgage or otherwise materially affect the
interests of the Indenture Trustee on behalf of the Noteholders in such
Timeshare Loan;

(w)

other than with respect to delinquent payments of principal or interest 60 or
fewer days past due as of the Cut-Off Date, there is no default, breach,
violation or event of acceleration existing under the Mortgage, the related
Mortgage Note or any other document or instrument evidencing, guaranteeing,
insuring or otherwise securing such Timeshare Loan, and no event which, with the
lapse of time or with notice and the expiration of any grace or cure period,
would constitute a material default, breach, violation or event of acceleration
thereunder; and the Seller or Bluegreen has not waived any such material
default, breach, violation or event of acceleration under the Owner Beneficiary
Agreement, Mortgage, the Mortgage Note or any such other document or instrument,
as applicable;

(x)

neither the Obligor related to such Timeshare Loan nor any other Person has the
right, by statute, contract or otherwise, to seek the partition of the related
Timeshare Property;

(y)

such Timeshare Loan has not been satisfied, canceled, rescinded or subordinated,
in whole or in part; no portion of the related Timeshare Property has been
released from the Lien of the related Mortgage, in whole or in part; no
instrument has been executed that would effect any such satisfaction,
cancellation, rescission, subordination or release; the terms of the related
Mortgage do not provide for a release of any portion of the related Timeshare
Property from the Lien of the related Mortgage except upon the payment of such
Timeshare Loan in full;

 

I-4

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(z)

the Seller and, to Bluegreen’s Knowledge, each other party which has had an
interest in such Timeshare Loan is (or, during the period in which such party
held and disposed of such interest, was) in compliance with any and all
applicable filing, licensing and “doing business” requirements of the laws of
the state wherein the related Timeshare Property is located to the extent
necessary to permit the Seller to maintain or defend actions or proceedings with
respect to such Timeshare Loan in all appropriate forums in such state without
any further act on the part of any such party;

(aa)

there is no current obligation on the part of any other person (including any
buy down arrangement) to make payments on behalf of the Obligor in respect of
such Timeshare Loan;

(bb)

the Associations related to such Timeshare Loan were duly organized and are
validly existing; a manager (the “Manager”) manages such Resort and performs
services for the Associations, pursuant to an agreement between the Manager and
the respective Associations, such contract being in full force and effect; to
Bluegreen’s Knowledge, the Manager and the Associations have performed in all
material respects all obligations under such agreement and are not in default
under such agreement;

(cc)

in the case of Bluegreen Club Resorts (other than La Cabana Resort) and to
Bluegreen’s Knowledge with respect to the Non-Bluegreen Club Resorts, La Cabana
Resort, (i) the Resort related to such Timeshare Loan is insured in the event of
fire, earthquake, or other casualty for the full replacement value thereof, and
in the event that the related Timeshare Property should suffer any loss covered
by casualty or other insurance, upon receipt of any insurance proceeds, the
Associations at the Resorts are required, during the time such Resort is covered
by such insurance, under the applicable governing instruments either to repair
or rebuild the portions of the Resort in which the related Timeshare Property is
located or to pay such proceeds to the holders of any related Mortgage secured
by the Timeshare Property located at such Resort; (ii) the related Resort, if
located in a designated flood plain, maintains flood insurance in an amount not
less than the maximum level available (without regard to reasonable deductibles)
under the National Flood Insurance Act of 1968, as amended or any applicable
laws; (iii) the related Resort has business interruption insurance and general
liability insurance in such amounts generally acceptable in the industry; and
(iv) the related Resort’s insurance policies are in full force and effect with a
generally acceptable insurance carrier;

(dd)

the obligee of the Mortgage related to such Timeshare Loan, and its successors
and assigns, has the right to receive and direct the application of insurance
and condemnation proceeds received in respect of the related Timeshare Property,
except where the related condominium declarations, timeshare declarations, the
Club Trust Agreement or applicable state law provide that insurance and
condemnation proceeds be applied to restoration or replacement of the
improvements or acquisition of similar improvements, as the case may be;

 

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(ee)

each rescission period applicable to such Timeshare Loan has expired;

(ff)

no selection procedures were intentionally utilized by the Seller in selecting
such Timeshare Loan, which the Seller knew were materially adverse to the
Depositor, the Indenture Trustee or the Noteholders;

(gg)

except as set forth in Schedule II hereto, the Units related to such Timeshare
Loan in the related Resort have been completed in all material respects as
required by applicable state and local laws, free of all defects that could give
rise to any claims by the related Obligors under home warranties or applicable
laws or regulations, whether or not such claims would create valid offset rights
under the law of the State in which the Resort is located; to the extent
required by applicable law, valid certificates of occupancy for such Units have
been issued and are currently outstanding; the Seller or any of its Affiliates
have complied in all material respects with all obligations and duties incumbent
upon the developers under the related timeshare declaration (each a
“Declaration”), as applicable, or similar applicable documents for the related
Resort; no practice, procedure or policy employed by the related Association in
the conduct of its business violates any law, regulation, judgment or agreement,
including, without limitation, those relating to zoning, building, use and
occupancy, fire, health, sanitation, air pollution, ecological, environmental
and toxic wastes, applicable to such Association which, if enforced, would
reasonably be expected to (a) have a material adverse impact on such Association
or the ability of such Association to do business, (b) have a material adverse
impact on the financial condition of such Association, or (c) constitute grounds
for the revocation of any license, charter, permit or registration which is
material to the conduct of the business of such Association; the related Resort
and the present use thereof does not violate any applicable environmental,
zoning or building laws, ordinances, rules or regulations of any governmental
authority, or any covenants or restrictions of record, so as to materially
adversely affect the value or use of such Resort or the performance by the
related Association of its obligations pursuant to and as contemplated by the
terms and provisions of the related Declaration; there is no condition presently
existing, and, to Bluegreen’s Knowledge, no event has occurred or failed to
occur prior to the date hereof, concerning the related Resort relating to any
hazardous or toxic materials or condition, asbestos or other environmental or
similar matters which would reasonably be expected to materially and adversely
affect the present use of such Resort or the financial condition or business
operations of the related Association, or the value of the Notes;

(hh)

except if such Timeshare Loan is listed on Schedule II hereto, the original Loan
Balance of such Timeshare Loan does not exceed $35,000;

(ii)

payments with respect to such Timeshare Loan are to be in legal tender of the
United States;

(jj)

all monthly payments (as applicable) made with respect to such Timeshare Loan
have been made by the Obligor and not by the Seller, Bluegreen or any Affiliates
thereof on the Obligor’s behalf;

(kk)

such Timeshare Loan relates to a Resort;

 

I-6

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(ll)

such Timeshare Loan constitutes either “chattel paper”, a “general intangible”
or an “instrument” as defined in the UCC as in effect in all applicable
jurisdictions;

(mm)

the sale, transfer and assignment of such Timeshare Loan and the Related
Security does not contravene or conflict with any law, rule or regulation or any
contractual or other restriction, limitation or encumbrance, and the sale,
transfer and assignment of such Timeshare Loan and the Related Security do not
require the consent of the Obligor;

(nn)

such Timeshare Loan, the Related Security, related Assignment of Mortgage,
related Mortgage, related Mortgage Note, related Owner Beneficiary Agreement
(each as applicable) and each other related Timeshare Loan Document are in full
force and effect, constitute the legal, valid and binding obligation of the
Obligor thereof enforceable against such Obligor in accordance with its terms
subject to the effect of bankruptcy, fraudulent conveyance or transfer,
insolvency, reorganization, assignment, liquidation, conservatorship or
moratorium, and is not subject to any dispute, offset, counterclaim or defense
whatsoever;

(oo)

such Timeshare Loan relates to a Completed Unit; such Timeshare Loan and the
Related Security do not, and the origination of each Timeshare Loan did not,
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, retail installment sales, truth in lending, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and with respect
to which no party thereto has been or is in violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Timeshare Loan and the Related Security; no Timeshare
Loan was originated in, or is subject to the laws of, any jurisdiction under
which the sale, transfer, conveyance or assignment of such Timeshare Loan would
be unlawful, void or voidable;

(pp)

to Bluegreen’s Knowledge, (i) no bankruptcy is currently existing with respect
to the Obligor related to such Timeshare Loan, (ii) such Obligor is not
insolvent and (iii) such Obligor is not an Affiliate of Bluegreen;

(qq)

except if such Timeshare Loan is listed on Schedule II hereto, such Timeshare
Loan shall not have a Timeshare Loan Rate less than 6% per annum;

(rr)

except in the case of certain 50/50 Loans or an Upgrade Club Loan, the Obligor
related to such Timeshare Loan has made at least one required payment with
respect to the Timeshare Loan (not including any down payment);

(ss)

if a Resort (other than La Cabana Resort) is subject to a construction loan, the
construction lender shall have signed and delivered a non-disturbance agreement
(which may be contained in such lender’s mortgage) pursuant to which such
construction lender agrees not to foreclose on any Timeshare Properties relating
to such Timeshare Loan or by the terms of the construction loan, the related
Timeshare Property has been released from the lien created thereby, which have
been sold pursuant to this Agreement;

(tt)

except as set forth in Schedule II hereto, the Timeshare Properties and the
Resorts related to such Timeshare Loan are free of material damage and waste and
are in good repair, ordinary wear and tear excepted, and fully operational,
subject to renovations for improvements from time to time; there is no
proceeding pending or threatened for the total or partial condemnation of or
affecting any Timeshare Property or taking of the Timeshare Property by eminent
domain; the Timeshare Properties and the Resorts in which the Timeshare
Properties are located are lawfully used and occupied under applicable law by
the owner thereof;

 

I-7

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(uu)

except as set forth in Schedule II hereto, the portions of the Resorts in which
the Timeshare Properties are located which represent the common facilities are
free of material damage and waste and are in good repair and condition, ordinary
wear and tear excepted, subject to renovations for improvements from time to
time;

(vv)

no foreclosure or similar proceedings have been instituted and are continuing
with respect to such Timeshare Loan or the related Timeshare Property;

(ww)

if such Timeshare Loan is an Aruba Club Loan, Bluegreen shall own, directly or
indirectly, 100% of the economic and voting interests of the Aruba Originator;

(xx)

such Timeshare Loan does not have an original term to maturity in excess of 120
months;

(yy)

to Bluegreen’s Knowledge, the capital reserves and maintenance fee levels of the
Associations of the Resorts related to such Timeshare Loan are adequate in light
of the operating requirements of such Associations;

(zz)

except as required by law, such Timeshare Loan may not be assumed without the
consent of the obligee;

(aaa)

for each Club Loan, the Obligor under such Timeshare Loan does not have its
rights under the Club Trust Agreement suspended;

(bbb)

the payments under such Timeshare Loan are not subject to withholding taxes
imposed by any foreign governments;

(ccc)

each entry with respect to such Timeshare Loan as set forth on Schedule II and
Schedule III hereof is true and correct. If such Timeshare Loan is a Qualified
Substitute Timeshare Loan, each entry with respect to such Qualified Substitute
Timeshare Loan as set forth on Schedule II and Schedule III hereof, as revised,
is true and correct;

(ddd)

if such Timeshare Loan relates to a Timeshare Property located in Aruba, a
notice has been mailed or will be mailed within 30 days of the Closing Date or
the related Transfer Date, as applicable, to the related Obligor indicating that
such Timeshare Loan has been transferred to the Depositor and has ultimately
been transferred to the Issuer and pledged to the Indenture Trustee for the
benefit of the Noteholders;

(eee)

no broker is, or will be, entitled to any commission or compensation in
connection with the transfer of such Timeshare Loans hereunder.

 

I-8

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(fff)

if the Obligor related to such Timeshare Loan is paying its scheduled payments
by pre-authorized debit or charge, such Obligor has executed an ACH Form
substantially in the form attached hereto as Exhibit C;

(ggg)

if such Timeshare Loan relates to a Timeshare Property located in the State of
Michigan and was originated prior to Bluegreen obtaining a license under the
Michigan Mortgage Brokers, Lenders and Servicers Licensing Act, Bluegreen shall
have confirmed that the interest rate on such Timeshare Loan is enforceable in
the manner specified as effective in an opinion by Michigan local counsel;

(hhh)

if such Timeshare Loan is a 50/50 Loan, the related Obligor has made a
downpayment of at least 50%, the balance of the 50/50 Loan is due no later than
the one year anniversary of the origination date of such 50/50 Loan and the
coupon rate is at least 8.25% per annum;

(iii)

if such Timeshare Loan is an Aruba Club Loan, such Timeshare Loan was originated
on or after January 26, 2004; and

(jjj)

with respect to such Timeshare Loan, there exists a Timeshare Loan File and such
Timeshare Loan File contains or will contain each item listed in the definition
of Timeshare Loan File with respect to such Timeshare Loan and such Timeshare
Loan File is in the possession of the Custodian, subject to the Custodian’s
exception report pursuant to the Custodial Agreement.

 

I-9

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Schedule II

 

Exceptions

 

With respect to (gg), (tt) and (uu):

For each Timeshare Loan related to the Shore Crest Vacation Villas™ I and II,
Bluegreen brought litigation against a general contractor alleging the existence
of construction defects at the Shore Crest Vacation Villas™ I and II, including
deficiencies in exterior insulating and finishing systems that resulted in water
intrusion. In January of 2009 the parties reached settlement and the general
contractor and various subcontractors and engineers involved in the project
collectively agreed to pay $4,578,000 towards the total cost of repairs to
correct the defects. Bluegreen accrued an additional $1.3 million in expenses
related to this matter. Payment in full of the settlement amount has been made
and Bluegreen entered into construction agreements with a general contractor for
exterior cladding repairs and other repair work to each of Shore Crest I and II.
Repair work for Shore Crest II has been completed within the cost and timing
parameters set forth in the construction contract for Shore Crest II, and the
proper repair work for Shore Crest I is underway with an estimated completion
date in early 2011.

 

With respect to (tt) and (uu):

 

For each Timeshare Loan related to Club La Pension™ in New Orleans, Louisiana
(the “La Pension Resort”), remediation is required due to moisture intrusion
into the project via roof, wall and window entries, and into certain structural
and load-bearing components. Further, La Pension Resort’s A/C system is beyond
its original intended useful life and needs to be replaced. Lastly, updated
building code requirements necessitate substantial improvements to La Pension
Resort’s life-safety systems. Therefore, repairs to La Pension Resort will
include (i) a complete roof replacement, replacement of certain windows, and new
painting of walls and caulking of windows, (ii) most major parts of the A/C
system being removed and replaced with present day materials and parts and (iii)
installation of modern life-safety systems.

 

The present estimated cost of the emergency repairs to the La Pension Resort is
$6.46 million, which is subject to further evaluation. Some additional
remodeling and interior improvements may simultaneously be undertaken but is not
directly related to the above described matters and are primarily cosmetic in
nature. The anticipated start date for the work is March of 2011, immediately
following the conclusion of the 2011 Mardi Gras Festival.  It is estimated the
repairs/remodeling will take eleven months to complete and therefore be
completed by before the commencement of the 2012 Mardi Gras Festival.  It is
possible that the La Pension Resort as a whole, including all resort rooms and
common areas, will be closed to occupancy and use during the repair work.

 

II-1

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Schedule III

 

Schedule of Timeshare Loans

 

[Electronic Schedule of Timeshare Loans on file with the Depositor]

 

III-1

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Schedule 5

 

Bluegreen is currently addressing an inquiry from the Attorney General of the
State of Florida (the "Florida AG") regarding the resolution of certain consumer
complaints received by the Florida AG as far back as 2003. Bluegreen believes
that these complaints were previously addressed in the ordinary course of
business when received and that Bluegreen will be able to reach an amicable
resolution with the Florida AG.

In 2005, the State of Tennessee Audit Division (the "Division") audited certain
subsidiaries within Bluegreen Resorts for the period from December 1, 2001
through December 31, 2004. On September 23, 2006, the Division issued a notice
of assessment for approximately $652,000 of accommodations tax based on the use
of Bluegreen Vacation Club accommodations by Bluegreen Vacation Club members who
became members through the purchase of non-Tennessee property. Bluegreen
believes the attempt to impose such a tax is contrary to Tennessee law, and has
vigorously opposed, and intends to continue to vigorously oppose, such
assessment by the Division. An informal conference was held in December 2007 to
discuss this matter with representatives of the Division. No formal resolution
of the issue was reached during the conference and no further action has to date
been initiated by the State of Tennessee. While the timeshare industry has been
successful in challenging the imposition of sales taxes on the use of
accommodations by timeshare owners, there is no assurance that Bluegreen will be
successful in contesting the current assessment.

On October 28, 2008, the Commonwealth of Pennsylvania acting through its
Attorney General filed a lawsuit against Bluegreen, and its wholly owned
subsidiaries, Bluegreen Vacations Unlimited, Inc. ("Bluegreen Vacations") and
Great Vacation Destinations, Inc. alleging violations of Pennsylvania's Unfair
Trade Practices and Consumer Protection Laws.  The lawsuit alleged that
Bluegreen used sales and marketing methods or practices that were unlawful under
Pennsylvania law and seeks a permanent injunction preventing Bluegreen from
using such methods and practices in the future.  The lawsuit also sought civil
penalties and restitution on behalf of Pennsylvania consumers.  The lawsuit does
not seek to permanently restrain Bluegreen or any of Bluegreen's affiliates from
doing business in the Commonwealth of Pennsylvania.  The parties reached a
settlement of this matter and a consent was signed which received court approval
on May 26, 2010. Pursuant to the terms of the settlement, Bluegreen paid
$200,000 to the Attorney General's Office and agreed to a 30-day tail period
within which additional consumers who meet certain eligibility requirements can
apply for relief. Bluegreen does not currently expect that this amount will be
material.

In 2006, an interpleader action was brought against Bluegreen Vacations seeking
a determination as to whether Bluegreen Vacations, as purchaser, or the
plaintiffs, as seller, were entitled to a $1.4 million escrow deposit being
maintained with the escrow agent pursuant to a purchase and sale contract for
real property located in Destin, Florida. Both Bluegreen Vacations and the
seller have brought cross-claims for breach of the underlying purchase and sale
contract. The seller alleges Bluegreen failed to perform under the terms of the
purchase and sale contract and thus they are entitled to retain the escrow
deposit. Bluegreen maintains that its decision not to close on the purchase of
the subject real property was proper under the terms of the purchase and sale
contract and therefore Bluegreen is entitled to a return of the full escrow
deposit. The seller amended its complaint to include a fraud count. Bluegreen
believes the fraud allegations are without merit and intends to vigorously
defend this claim.

Schedule 5

 

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Bluegreen Southwest One, L.P., ("Southwest"), a subsidiary of Bluegreen, is the
developer of the Mountain Lakes subdivision in Texas. A declaratory judgment
action was filed against Southwest in Texas state court through which the
plaintiffs seek to develop their reserved mineral interests in, on and under the
Mountain Lakes subdivision. The property owners association and some of the
individual landowners have filed cross actions against Bluegreen, Southwest and
individual directors of the property owners association related to the mineral
rights and related to certain amenities in the subdivision as described below.
On January 17, 2007, the court ruled that the restrictions placed on the
development that prohibited oil and gas production and development were invalid
and not enforceable as a matter of law, that such restrictions did not prohibit
the development of the plaintiffs' prior reserved mineral interests and that
Southwest breached its duty to lease the minerals to third parties for
development. The court further ruled that Southwest was the sole holder of the
right to lease the minerals to third parties. Southwest appealed the trial
court's ruling. On January 22, 2009, the appellate court reversed the trial
court's decision and ruled in Southwest's favor and determined that all
executive rights were owned by Southwest and then transferred to the individual
property owners in connection with the sales of land. All property owner claims
were decided in favor of Southwest. It was also decided that Southwest did not
breach a fiduciary duty to the plaintiffs as an executive rights holder. As a
result of this decision, no damages or attorneys' fees are owed to the
plaintiffs. On May 14, 2009, the plaintiffs filed an appeal with the Texas
Supreme Court asking the Court to reverse the Appellate Court's decision in
favor of Bluegreen. On September 15, 2010, the Court heard oral arguments from
the parties on whether the Court should accept the plaintiffs' appeal. No
information is available as to when the Texas Supreme Court will render a
decision. Separately, one of the amenity lakes in the Mountain Lakes development
did not reach the expected level after construction was completed. Owners of
homesites within the Mountain Lakes subdivision and the Property Owners
Association of Mountain Lakes have asserted claims against Southwest and
Bluegreen regarding such failure. This case has been settled and the entire $3.4
million settlement was paid in March of 2010.  Additional claims may be pursued
in the future by certain individual lot owners within the Mountain Lakes
subdivision in connection with these matters, but it is not possible at this
time to estimate the likelihood of loss or amount of potential exposure with
respect to any such matters, including the likelihood that any such loss may
exceed the amount accrued. 

          On October 2, 2008, the Catawba Falls Preserve Homeowners Association
(the "Catawba Association") demanded payment from Bluegreen for (i) construction
of pedestrian pathways and certain equestrian stables allegedly promised by
Bluegreen but never constructed, (ii) repairs to roads and culverts within the
community, and (iii) landscaping improvements to the community's gated entrance.
The parties reached settlement with Bluegreen agreeing to pay the Catawba
Association a nominal sum and convey to the Catawba Association title to two
lots within the Catawba Falls subdivision.

 

 

Schedule 5

 

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          On September 14, 2009, plaintiffs brought suit against Southwest,
Bluegreen Southwest Land, Inc. and Bluegreen Communities of Texas, L.P.,
subsidiaries of Bluegreen, alleging fraud, negligent misrepresentation, breach
of contract, and negligence with regards to the Ridgelake Shores subdivision
developed in Montgomery County, Texas, specifically, the usability of the lakes
within the community for fishing and sporting and the general level of quality
of the community. The lawsuit seeks material damages and the payment of costs to
remediate the lake. Bluegreen intends to vigorously defend the lawsuit. On
September 10, 2010, a tentative settlement of this matter was reached, pursuant
to which Bluegreen agreed to pay $320,000 to provide for improvements to the
fish habitat and general usability of the lake environment. The settlement
agreement remains subject to certain conditions, including court approval.

 

          On September 18, 2008, plaintiffs brought suit against Bluegreen
Communities of Georgia, LLC, a Bluegreen subsidiary ("Bluegreen Georgia"), and
Bluegreen alleging fraud and misrepresentation with regards to the construction
of a marina at the Sanctuary Cove subdivision located in Camden County, Georgia.
Plaintiffs subsequently withdrew the fraud and misrepresentation counts and
replaced them with a count alleging violation of racketeering laws, including
mail fraud and wire fraud. On January 25, 2010, plaintiffs filed a second
complaint seeking approval to proceed with the lawsuit as a class action on
behalf of more than 100 persons claimed to have been harmed by the alleged
activities in a similar manner. Bluegreen has filed a response with the court in
opposition to class certification. No decision has yet been made by the court as
to whether they will certify a class. Bluegreen denies the allegations and
intends to vigorously defend the lawsuit.

 

          On June 3, 2010, plaintiffs filed suit alleging breach by Bluegreen
Georgia and the community association of a bulk cable TV services contract at
Bluegreen's Sanctuary Cove single family residential community being developed
in Waverly, Georgia. In the complaint, the plaintiffs alleged that approximately
$170,000 in unpaid bulk cable fees are due from the defendants, and that the
non-payment of fees will continue to accrue on a monthly basis. Bluegreen and
the community association allege incomplete performance under the contract by
plaintiffs and that the cable system installed was inferior and did not comply
with the requirements of the contract. The case went to mediation on September
20, 2010, but no resolution was reached. Bluegreen intends to vigorously defend
the lawsuit.

Schedule 5

 

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Exhibit A

 

Form of Waiver Letter

 

 

Date:

U.S. Bank National Association, as Indenture Trustee of BXG Receivables Note
Trust 2010-A

60 Livingston Avenue

St. Paul, Minnesota 55107

BXG Receivables Note Trust 2010-A

c/o Wilmington Trust Company, as Owner Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention:

Corporate Trust Services

  BXG Receivables Note Trust 2010-A

 

In accordance with Section 6(c) of that certain Transfer Agreement (the
“Transfer Agreement”), dated as of November 15, 2010, by and among Bluegreen
Corporation, a Massachusetts corporation (“Bluegreen”), BXG Timeshare Trust I, a
statutory trust formed under the laws of the State of Delaware (“BXG Timeshare
I” or the “Seller”) and BRFC 2010-A LLC, a Delaware limited liability company
(the “Depositor”), the undersigned hereby irrevocably waives its option to
repurchase and/or substitute any Defaulted Timeshare Loan listed on Exhibit A
attached hereto.

 

Capitalized terms used herein but not defined shall have the meanings ascribed
to them in the Transfer Agreement.

IN WITNESS WHEREOF, the undersigned has caused its name to be signed hereby by
its duly authorized officer, as of the day and year written above.

 

BLUEGREEN CORPORATION

By:__________________________________ 

Name:

Title:

 

Exhibit A

 

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Exhibit A to Form of ROAP Waiver Letter

 

Exhibit A

 

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Exhibit B

 

Club Trust Agreement

 

 

Exhibit B

 

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Exhibit C

ACH Form

 

 

Exhibit C

 

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