Document:

EXHIBIT 10.155

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                                 LOAN AGREEMENT
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                                     between

                        RESIDENTIAL FUNDING CORPORATION,
                             a Delaware corporation

                                   ("Lender")

                                       and

                      BLUEGREEN VACATIONS UNLIMITED, INC.,
                              a Florida corporation

                                  ("Borrower")

                                   $15,000,000
                                 Amount of Loan

                                February 10, 2003
                                      Date

                                 RESORT FINANCE

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                                TABLE OF CONTENTS

ARTICLE I     DEFINITIONS......................................................2

Section 1.1   Certain Defined Terms............................................2
Section 1.2   Other Definitional Provisions...................................15

ARTICLE II    THE LOAN........................................................17

Section 2.1   Agreement to Lend and Borrow and Project Loan Maturity..........17
Section 2.2   Disbursements of the Loan.......................................17
Section 2.3   Use of Disbursements............................................17
Section 2.4   Commitment Fee..................................................17
Section 2.5   No Reduction in Commitment Fee..................................17
Section 2.6   Interest........................................................18
Section 2.7   Interest Rate Limitation........................................18
Section 2.8   Repayment of Principal..........................................18
Section 2.9   Adjustment to Lender's Release Price............................19
Section 2.10  Prepayment of the Loan..........................................19
Section 2.11  Payments........................................................19
Section 2.12  Applications of Payments; Late Charges..........................20
Section 2.13  Approval Period.................................................21
Section 2.14  Revolving Nature of Loan........................................21
Section 2.15  Security........................................................21

ARTICLE III   APPROVAL OF PROJECTS; DISBURSEMENTS OF THE LOAN.................22

Section 3.1   Project Approvals; Project Commitments and Project Documents....22
Section 3.2   Project Closings................................................23
Section 3.3   Disbursements of Loan Proceeds to Acquire Land and for
              Development Work................................................23
Section 3.4   Provisions Applicable to All Disbursements......................25
Section 3.5   Application of Disbursements....................................26
Section 3.6   The Lender May Make Disbursement Notwithstanding
              Noncompliance...................................................26

ARTICLE IV    REPRESENTATIONS AND WARRANTIES..................................27

Section 4.1   Consideration...................................................27
Section 4.2   Organization....................................................27
Section 4.3   Authorization...................................................27
Section 4.4   Governmental Consents...........................................27
Section 4.5   Validity........................................................27
Section 4.6   Financial Position..............................................28
Section 4.7   Governmental Regulations........................................28
Section 4.8   Employee Benefit Plans..........................................28
Section 4.9   Securities Activities...........................................28
Section 4.10  No Material Adverse Change......................................28
Section 4.11  Payment of Taxes................................................28

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Section 4.12  Litigation......................................................29
Section 4.13  Environmental Matters...........................................29
Section 4.14  No Burdensome Restrictions......................................29
Section 4.15  Full Disclosure.................................................29
Section 4.16  Adequate Consideration..........................................30
Section 4.17  Compliance with Laws and Regulations............................30
Section 4.18  Survival and Additional Representations and Warranties..........30

ARTICLE V     COVENANTS OF THE BORROWER.......................................31

Section 5.1   Consideration...................................................31
Section 5.2   Reporting Requirements..........................................31
Section 5.3   Borrower's Operations and Management............................33
Section 5.4   Insurance.......................................................34
Section 5.5   Financial Covenants.............................................35
Section 5.6   No Encumbrance; No Transfers....................................35
Section 5.7   Further Assurances..............................................36
Section 5.8   Survival of Covenants...........................................36

ARTICLE VI    THE PROJECTS....................................................37

Section 6.1   Consideration...................................................37
Section 6.2   Title to Project................................................37
Section 6.3   No Prior Liens or Claims........................................37
Section 6.4   Access to the Project...........................................38
Section 6.5   Compliance with Project Requirements and Laws and
              Regulations.....................................................38
Section 6.6   Covenants, Zoning, Codes, Permits and Consents..................38
Section 6.7   Utilities.......................................................38
Section 6.8   Map, Permits, Licenses and Approvals............................39
Section 6.9   Approval of Plans and Specifications and Approval of Budget.....39
Section 6.10  Adequacy of Loan Amount.........................................39
Section 6.11  Construction Start and Completion...............................39
Section 6.12  Personal Property Incorporation.................................40
Section 6.13  Contractors and Contracts.......................................40
Section 6.14  Evidence of Ownership of Materials..............................40
Section 6.15  Changes to Plans and Specifications and Budget..................40
Section 6.16  Lender Inspections, Appraisal and Information...................42
Section 6.17  Correction of Defects...........................................42
Section 6.18  Protection Against Lien Claims..................................43
Section 6.19  Conveyance, Lease or Encumbrance................................43
Section 6.20  Security Instruments............................................44
Section 6.21  Further Assurances; Cooperation.................................44
Section 6.22  Negative Covenants..............................................44
Section 6.23  Signs...........................................................44

ARTICLE VII   SALES OF TIME-SHARE INTERESTS AND RELEASES FROM DEED OF
              TRUST...........................................................45

Section 7.1   Sales and Closings..............................................45

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Section 7.2   Sales Operations and Seller's Obligations.......................45
Section 7.3   Sales Office....................................................45
Section 7.4   Releases from Lien of Deed of Trust.............................45

ARTICLE VIII  EVENTS OF DEFAULT AND REMEDIES..................................48

Section 8.1   Events of Default...............................................48
Section 8.2   Remedies........................................................50
Section 8.3   Application of Proceeds During an Event of Default..............54
Section 8.4   Uniform Commercial Code Remedies; Sale; Assembly of
              Collateral......................................................54
Section 8.5   Application of UCC Sale Proceeds................................55
Section 8.6   Authorization to Apply Assets to Payment of Loan................55

ARTICLE IX    MISCELLANEOUS...................................................56

Section 9.1   Successors and Assigns; No Assignment by the Borrower...........56
Section 9.2   Notices.........................................................56
Section 9.3   Borrower's Representative.......................................57
Section 9.4   Changes, Waivers, Discharge and Modifications in Writing........58
Section 9.5   No Waiver; Remedies Cumulative..................................58
Section 9.6   Costs, Expenses and Taxes.......................................58
Section 9.7   Disclaimer by the Lender; No Joint Venture......................59
Section 9.8   Indemnification.................................................60
Section 9.9   Consultants.....................................................60
Section 9.10  Titles and Headings.............................................60
Section 9.11  Counterparts....................................................60
Section 9.12  The Lender's Rights with Respect to Loan........................61
Section 9.13  Confidentiality.................................................61
Section 9.14  Time is of the Essence..........................................61
Section 9.15  No Third Parties Benefited......................................61
Section 9.16  Severability....................................................61
Section 9.17  FORUM SELECTION; JURISDICTION; CHOICE OF LAW....................62
Section 9.18  WAIVER OF JURY TRIAL............................................62
Section 9.19  Interpretation..................................................63
Section 9.20  Destruction of Note.............................................63
Section 9.21  Cross-Collateralization of Loans................................63
Section 9.22  Entire Agreement................................................63

EXHIBIT A CONDITIONS TO OBLIGATION OF THE LENDER TO MAKE THE LOAN............A-1

EXHIBIT B PROJECT REQUIREMENTS...............................................B-1

EXHIBIT C PROJECT UNDERWRITING DOCUMENTS.....................................C-1

EXHIBIT D FORM OF PROJECT COMMITMENT.........................................D-1

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EXHIBIT E FORM OF DRAW REQUEST CERTIFICATION.................................E-1

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                                 LOAN AGREEMENT

      THIS LOAN AGREEMENT (this "Loan Agreement") is made as of February 10,
2003 by and between BLUEGREEN VACATIONS UNLIMITED, INC., a Florida corporation
(the "Borrower") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the "Lender").

                                    RECITALS:

      A. The Borrower has applied to the Lender for a revolving loan in the
principal amount of $15,000,000 (the "Loan") to finance various time-share
acquisition, development and construction projects which the Borrower
anticipates undertaking.

      B. The Lender is willing to make the requested loan upon and subject to
the terms and conditions set forth in this Loan Agreement.

                                   AGREEMENT:

      NOW, THEREFORE, in consideration of the covenants and conditions herein
contained, the parties agree as follows:

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ARTICLE I DEFINITIONS

Section 1.1 Certain Defined Terms

      As used herein (including any Exhibits attached hereto), the following
terms have the meanings set forth below (unless expressly stated to the
contrary):

"Affiliate" means a Person that, directly or indirectly, controls, is controlled
by, or is under common control with, a referenced Person.

"Addendum to Note" means the Addendum to Note that a Project Owner will be
required to sign if such Project Owner is not already a Borrower, as the same
may be amended or otherwise modified from time to time.

"Appraisal Report" means, with respect to a Project in which the Lender requires
an appraisal report, a real estate appraisal report which (i) has been prepared
by an Appraiser, (ii) at the time it is submitted to the Lender is not more than
3 months old, or was updated by letter not more than 3 months prior to the date
of submission to the Lender, (iii) states that it is prepared in accordance with
the applicable standards of the American Institute of Real Estate Appraisers for
such reports, (iv) provides an appraisal of the Project or portion thereof
required to be appraised thereunder, and (v) employs a customary methodology and
provides limiting conditions satisfactory to the Lender.

"Appraiser" means, with respect to a Project in which the Lender requires an
Appraisal Report, a Person who is qualified to appraise property similar in size
and scope to the Project which such Person is acceptable to the Lender in its
sole and absolute discretion.

"Approval Period" means the period during which new projects will be considered
for approval for funding from proceeds of the Loan, which period will commence
on the Effective Date of this Loan Agreement and will end on the Approval Period
Termination Date.

"Approval Period Termination Date" means the date which is 24 months after the
Effective Date of this Loan Agreement.

"Approved Costs" means the categories of costs in the Budget identified by the
Lender as approved costs, which shall include Land acquisition costs (including
reasonable closing costs actually paid to unaffiliated third parties),
acquisition commissions, capitalized interest, and hard development costs
(including engineering and architectural costs, permit and impact fees, and
bonding costs), but shall exclude soft costs such as marketing costs,
advertising costs, Borrower's overhead costs, and carrying costs.

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

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"Assignment" means, with respect to a Project, that certain Assignment of
Construction Items previously executed or to be executed by the Borrower in
favor of the Lender, as the same may be amended or otherwise modified from time
to time.

"Available Amount" means the amount of the Loan which is available with respect
to any project which is proposed to be included as a Project, which amount will
equal the Loan Amount less the total of all Project Loan Committed Amounts.

"Bluegreen Corporation" means Bluegreen Corporation, a Massachusetts
corporation.

"Borrower" means, initially, Bluegreen Vacations Unlimited, Inc., a Florida
corporation, together with all Project Owners, jointly and severally.

"Budget" means, with respect to a Project, the itemized acquisition, development
and construction budget for such Project submitted to and approved by the
Lender, as such budget may be amended in accordance with the provisions of this
Loan Agreement.

"Business Day" means a day other than Saturday, Sunday or a day on which
national banks are legally closed for business in the States of Illinois,
Minnesota or Arizona.

"Change" means, with respect to a Project, any material extra work not
contemplated by the Plans and Specifications, the installation of materially
additional or different materials from that set forth in the Plans and
Specifications, or any other material change in the Plans and Specifications.

"CLPI Assignment" means with respect to a Project a written assignment executed
and delivered to Lender or to be executed and delivered to Lender by Borrower
and creating in favor of Lender a perfected, direct, first and exclusive
assignment of the Contracts, Licenses, Permits and Other Intangibles with
respect to such Project in order to facilitate performance of the Borrower's
obligations under the Loan Documents, as it may be from time to time renewed,
amended, restated or replaced.

"Commitment Fee" means 3/4 of 1% of the Loan Amount, i.e. $112,500. Borrower and
Lender agree that (i) Lender has earned the entire amount of the Commitment Fee
as of the Effective Date and (ii) Borrower is required to pay the Commitment Fee
in advance on the dates set forth in Section 2.4.

"Construction Agreements" means, with respect to a Project, all agreements
(including, without limitation, construction contracts) entered into between the
Borrower and any contractor, architect, engineer, supplier or other Person with
respect to the development or construction of the Project, as such agreements
may be amended or otherwise modified from time to time in accordance with the
Loan Agreement.

"Construction Progress Schedule" means, with respect to a Project, the schedule
for the Development Work submitted to and approved by the Lender, as such
schedule may be adjusted in accordance with the provisions of this Loan
Agreement.

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"Contracts, Licenses, Permits and Other Intangibles" means all contracts,
licenses, permits and other intangibles (excluding the reservation system) in
which Borrower now or hereafter has rights and are now or hereafter used in
connection with the marketing and sale of Time-Share Interests corresponding to
a Project and the management and/or operation of a Project .

"Debt" means, for any Person, without duplication, the sum of the following:

            (1) indebtedness for borrowed money,

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

            (3) obligations to pay the deferred purchase price of property or
      services,

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

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

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

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

            (8) obligations under direct or indirect guaranties in respect of,
      and obligations (contingent or otherwise) to purchase or otherwise
      acquire, or otherwise to assure a creditor against loss in respect of,
      indebtedness or obligations of others of the kinds referred to in clauses
      (1) through (7) above, and

            (9) liabilities in respect of unfunded vested benefits under plans
      covered by Title IV of ERISA.

"Deed of Trust" means, with respect to a Project, that certain Deed of Trust,
Security Agreement and Fixture Filing with Assignment of Rents, Proceeds and
Agreements (or substantially similar mortgage, if a deed of trust is not
available under state law) previously executed or to be executed by the
Borrower, or the applicable Project Owner, as trustor, for the benefit of the
Lender, as the same may be amended or otherwise modified from time to time,
including but not limited to any modifications entered into between the Borrower
or the Project Owner, as applicable and the Lender.

"Default Rate" means 2% above the Interest Rate.

"Development Work" means, with respect to a Project, the renovation of existing
Improvements and/or the construction of Improvements all to be performed on or
with respect to the Land, all

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of which work and construction will be completed by or on behalf of the Borrower
in accordance with the Plans and Specifications.

"Draw Request Certification" means, with respect to a requested disbursement of
the Loan to fund Approved Costs for acquisition of Land, Improvements or
Development Work, a certification of the Borrower delivered to the Lender
substantially in the form of Exhibit E.

"Effective Date" means the date of this Loan Agreement.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations and rulings issued thereunder.

"Environmental Indemnity" means that certain Hazardous Substances Remediation
and Indemnification Agreement dated as of the date hereof executed by the
Borrower and Guarantor, if any, in favor of the Lender, as the same may be
amended or otherwise modified from time to time.

"Event of Default" means the occurrence, after any applicable grace period, of
any of the events listed in Section 8.1.

"Force Majeure Event" means fire, flood, labor dispute, weather, governmental
action or other cause beyond the reasonable control of the Borrower that delays
the Development Work.

"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession
prevalent in the United States of America.

"Guarantor" means Bluegreen Corporation and any other Person who executes a
Guaranty with respect to the Loan or any portion thereof at any time after the
Effective Date.

"Guaranty" means that primary, joint and several guaranty and subordination
agreement of even date herewith executed by the Guarantor in favor of the
Lender, as the same may be amended or otherwise modified from time to time.

"Hazardous Materials" means the following:

            (1) any oil, flammable substances, explosives, radioactive
      materials, hazardous wastes or substances, toxic wastes or substances or
      any other materials or pollutants, exposure to which is prohibited,
      limited or regulated by any governmental authority pursuant to any
      Hazardous Materials Law;

            (2) asbestos in any form which is or could become friable, urea
      formaldehyde foam insulation, transformers or other equipment which
      contain dielectric fluid containing levels of polychlorinated biphenyls in
      excess of fifty (50) parts per million, exposure to which is prohibited,
      limited or regulated by any governmental authority pursuant to any
      Hazardous Materials Law;

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            (3) any chemical, material or substance defined as or included in
      the definition of "hazardous substances", "hazardous wastes", "hazardous
      materials", "extremely hazardous waste", "restricted hazardous waste", or
      "toxic substances" or words of similar import under any Hazardous Material
      Laws; and

            (4) any other chemical, material or substance, exposure to which is
      prohibited, limited or regulated by any governmental authority pursuant to
      any Hazardous Materials Law.

"Hazardous Materials Claims" means any and all enforcement, clean-up, removal or
other governmental or regulatory actions or orders threatened, instituted or
completed pursuant to any Hazardous Materials Laws, together with all claims
made or threatened by any third party relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any Hazardous Materials.

"Hazardous Materials Laws" means any federal, state or local laws, ordinances
and the regulations, policies or publications promulgated pursuant thereto
relating to (i) the environment, (ii) health and safety, (iii) any Hazardous
Materials (including, without limitation, the use, handling, transportation,
production, disposal, discharge or storage thereof), (iv) industrial hygiene or
(v) environmental conditions on, under or about property, including, without
limitation, soil and groundwater conditions; including, but not limited to: the
Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Clean Water Act,
33 U.S.C. Section 1251, et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Section 11001, et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251, et seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Section 5101, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.; the Safe Drinking Water Act, 42 U.S.C.
Sections 300f to 300j; the Solid Waste Disposal Act, 42 U.S.C. Section 3251, et
seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss.ss. 136 et seq.; the
Endangered Species Act, 16 U.S.C. ss.ss. 1531 et seq. and the National
Environmental Policy Act, 42 U.S.C. ss. 4321 et seq.

"Improvements" means all buildings, structures and improvements of every nature
whatsoever situated on or to be constructed on the Land in accordance with the
Plans and Specifications, inclusive of the Units to be used as part of the
Time-Share Program.

"Indemnified Party" means the Lender and any Affiliate of Lender and any
successors or assigns of Lender or any such Affiliate and each of their
officers, directors, employees, agents, attorneys, consultants and advisors.

"Inspector" means, with respect to a Project, the inspector(s) or engineer(s)
engaged by the Lender, at the expense of the Borrower, to provide to Lender
consultation services in connection with the Project.

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"Interest Due Date" means the 15th calendar day of each month in which the
Lender has sent a statement of interest due pursuant to the terms of Section
2.6(b).

"Interest Rate" means the variable interest rate per annum equal to LIBOR plus
4.75%.

"Interest Reserve" means, with respect to a Project, the amount within the
Budget which has been designated by the Borrower and approved by the Lender as
available to pay the interest on the Loan.

"Land" means, with respect to a Project, that certain real property which is
suitable for and is substantially entitled for the Improvements and the use
thereof as part of a Time-Share Program, as such real property is legally
described in the Deed of Trust.

"Laws and Regulations" shall mean (i) all laws, regulations, orders, codes,
ordinances, rules, statutes and policies of all local, regional, county, state
and federal governmental authorities having jurisdiction over a Project and (ii)
all restrictive covenants and other title encumbrances, permits and approvals,
leases and other rental agreements which in any case relate to the development,
occupancy, ownership, management, use, and/or operation of a Project.

"Lender" means Residential Funding Corporation, a Delaware corporation, and its
successors or assigns.

"Lender's Escrow Instructions" shall mean, with respect to a Project, the escrow
instructions issued by the Lender, or the Lender's legal counsel on behalf of
the Lender, to the Title Company and accepted in writing by the Title Company,
specifying (i) the terms and conditions under which the Title Company may
disburse the initial disbursement of the Project Loan and (ii) the Lender's
requirements with respect to the title insurance policy to be issued with
respect to the Project.

"Lender's Release Price" means, with respect to a Time-Share Interest within a
Project which Borrower requests Lender to release from the lien of the Deed of
Trust encumbering such Time-Share Interest, an amount acceptable to Lender in
its sole discretion and provided for in the Project Commitment, which amount, as
adjusted from time to time in accordance with Section 2.9 hereof and the terms
of the Project Commitment, will be sufficient to repay the Project Loan Amount
upon the sale of 80% of the planned Time-Share Interests within such Project.

"LIBOR" means the average of interbank offered rates for 30-day dollar deposits
in the London market based on quotations of five major banks, as published from
time to time in The Wall Street Journal. In the event that The Wall Street
Journal ceases to be published or ceases to publish such a compilation of
interbank offered rates, the Borrower and the Lender will agree on a substitute
source and method of determining the interest rate generally known as the
one-month (or 30-day) LIBOR rate.

"Loan" means the revolving loan described in this Loan Agreement in a principal
amount not to exceed the Loan Amount.

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"Loan Agreement" means this Loan Agreement, as the same may be amended or
otherwise modified from time to time in accordance with the terms hereof.

"Loan Amount" means $15,000,000.

"Loan Documents" means, as to the Loan, all documents, instruments, agreements,
assignments and certificates relating thereto, including, without limitation,
any and all loan or credit agreements, promissory notes, deeds of trust,
mortgages, financing statements, security agreements, assignments of rents,
assignments of leases, assignments of contracts, environmental indemnities,
guaranties, contractor's consent agreements, lender's title insurance policies,
opinions of counsel, evidences of authorization or incumbency, escrow
instructions, and architect's consent agreements to be executed (and
acknowledged where applicable) by the Borrower, the Guarantor, if any, and/or
the Lender (where applicable), all in connection with the Lender making the Loan
to the Borrower as the same may be amended or otherwise modified from time to
time in accordance with this Loan Agreement. The Loan Documents will include,
but not be limited to, the following:

            (1) this Loan Agreement;

            (2) the Note;

            (3) the Guaranty;

            (4) the Environmental Indemnity; and

            (5) the Project Documents.

"Map" shall mean, with respect to a Project, a final subdivision, parcel, plat
or condominium map consistent with the Plans and Specifications and with the
Laws and Regulations.

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

            (1) the business, properties, operations or condition (financial or
      otherwise) of the Borrower or any Guarantor which, with the giving of
      notice or the passage of time, or both, could reasonably be expected to
      result in either (i) the Borrower or any Guarantor failing to comply with
      any of the financial covenants contained in Section 5.5 or (ii) the
      Borrower's or any Guarantor's inability to perform its or their respective
      obligations pursuant to the terms of the Loan Documents; or

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

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

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"Maturity Date" means the first to occur of (i) the Project Loan Repayment Date
set forth in the last Project Commitment incorporated into this Loan Agreement,
(ii) the date which is 6 years from the Effective Date, or (iii) any earlier
date on which the Loan is accelerated or otherwise required to be repaid
pursuant to the terms of this Loan Agreement.

"Minimum Required Principal Payment" means, with respect to each Project Loan,
the minimum required principal payment for each loan year as set forth in the
Project Commitment related to such Project Loan.

"Net Worth" means (i) total assets, as would be reflected on a balance sheet
prepared on a consolidated basis and in accordance with GAAP, consistently
applied, exclusive of Intellectual Property, experimental or organization
expenses, franchises, licenses, permits, and other intangible assets, treasury
stock, unamortized underwriters' debt discount and expenses, and goodwill minus
(ii) total liabilities, as would be reflected on a balance sheet prepared on a
consolidated basis and in accordance with GAAP consistently applied.

"Note" means that certain Revolving Promissory Note dated as of the date of this
Agreement executed by the Borrower and made payable to the order of Lender, as
holder, in the Loan Amount and maturing on the Maturity Date, as such Note may
be amended or otherwise modified from time to time.

"Permitted Exceptions" means, with respect to a Project, (i) real estate taxes
and assessments not yet due and payable and possible supplemental assessments
for improvements constructed on the Land, (ii) exceptions to title which are
approved in writing by the Lender (including such easements, dedications,
covenants and such which Lender consents to in writing after the Effective Date
of this Loan Agreement), and (iii) the exceptions set forth in the Title Policy.

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

"Plans and Specifications" means, with respect to a Project, the final set of
architectural, structural, mechanical, electrical, grading, sewer, water, street
and utility plans and specifications for the Development Work, including all
supplements, amendments and modifications thereto signed and affixed with the
architect's registration stamp or seal, all in form and substance reasonably
satisfactory to the Lender and the Inspector.

"Potential Default" means the existence of any event, which with the giving of
notice, the passage of time, or both, would constitute an Event of Default
hereunder or an event of default (however described) under any other of the Loan
Documents.

"Prepayment Premium" means an amount to be paid pursuant to Section 2.10 upon a
prepayment of a Project Loan (Borrower is not required to pay a Prepayment
Premium under the terms of this Loan Agreement).

"Project" means any acquisition, development and/or construction project located
in an area permitted by the Project Requirements or such other area as approved
by Lender in its sole and absolute discretion, as to which the Lender has issued
a Project Commitment and made proceeds

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<PAGE>

of the Loan available for disbursement, which such project shall include (i) the
Land, (ii) the existing Improvements (if any) and (iii) the Development Work to
be completed on the Land, which Project shall be used part of a Time-Share
Program.

"Project Commitment" means, with respect to a Project, the project commitment
issued by the Lender to the Borrower for the Project, wherein the Lender agrees,
subject to the terms and conditions of such project commitment and the other
Loan Documents and subject to Borrower signing such project commitment, to make
proceeds of the Loan available for the Project. The terms of each Project
Commitment, once it is signed by both the Borrower and the Lender, will
supplement the terms of this Loan Agreement with respect to the stated Project,
the related Project Loan and the related Project Security Documents. The Project
Commitments will be substantially in the form of Exhibit D.

"Project Documents" means, with respect to a Project, all documents,
instruments, agreements, assignments and certificates relating thereto,
including, without limitation, any and all loan or credit agreements, promissory
notes, deeds of trust, mortgages, financing statements, security agreements,
assignments of rents, assignments of leases, assignments of contracts,
environmental indemnities, guaranties, contractor's consent agreements, lender's
title insurance policies, opinions of counsel, evidences of authorization or
incumbency, escrow instructions, and architect's consent agreements previously
executed or to be executed (and acknowledged where applicable) by the Borrower,
any Guarantor and/or the Lender (where applicable), all in connection with the
Lender making proceeds of the Loan available to the Borrower for the Project, as
the same may be amended or otherwise modified from time to time in accordance
with this Loan Agreement. The Project Documents will include, but not be limited
to, the following:

            (1) the Project Commitment;

            (2) the Project Security Instruments;

            (3) in the event the Project is to be owned by a new Project Owner,
      the Addendum to Note;

            (4) the Plans and Specifications;

            (5) the Lender's Escrow Instructions; and

            (6) the Title Policy.

The Project Documents will include those forms of documents, instruments,
agreements, assignments and certificates which the Lender approves at the time
of its execution and delivery of this Loan Agreement, as evidenced by a written
certificate executed by the Borrower and the Lender. The forms of the Project
Documents may be supplemented or amended from time to time to add or amend form
Project Documents approved by the Lender.

"Project Loan" or "Project Loan Amount" means the loan or loan amount for the
acquisition and development of a Project with disbursements under such loan not
to exceed the principal amount set forth in the Project Commitment.

                                       10
<PAGE>

"Project Loan Advance Period" means, with respect to a Project Loan, the period
of time commencing on the date of the Project Documents and expiring on the date
set forth in the applicable Project Commitment as the termination date for the
Project Loan Advance Period.

"Project Loan Committed Amount" means the portion of a Project Loan Amount which
(a) has been advanced and not repaid plus (b) is available to be disbursed for
Approved Costs.

"Project Loan Repayment Date" means, with respect to a Project, the first to
occur of (i) the date which is set forth in the Project Commitment as the date
on which all proceeds of the Project Loan Amount must be repaid or (ii) the date
on which the Loan is required to be repaid pursuant to Section 8.2.

"Project Owner" means the Person who owns a particular Project or Projects, and
which Person must also be a Borrower.

"Project Requirements" means, for any project proposed to be included as a
Project pursuant to the terms of this Loan Agreement, the requirements listed in
Exhibit B.

"Project Security Instruments" means, with respect to a Project, all pledge
agreements, guaranties, deeds of trust, mortgages, security agreements,
assignments and other agreements or instruments previously executed or to be
executed by the Borrower and/or the Guarantor, if any granting in favor of the
Lender a lien or encumbrance on or a security interest in any property or right
or interest of the Borrower or any Guarantor as security for the Loan, as the
same may be amended or otherwise modified from time to time in accordance with
this Loan Agreement, including but not limited to the following:

            (1) the Deed of Trust;

            (2) the UCC Financing Statement;

            (3) the CLPI Assignment; and

            (4) the Assignment.

"Project Specific Default" means a default under the Loan related to the
development, operation or management of a particular Project or to a particular
entity forming Borrower, which default is identified in one or more of Section
8.1(a)(10) and Section 8.1(a)(14) through Section 8.1(a)(18).

"Project Underwriting Documents" means, for any project proposed to be included
as a Project pursuant to the terms of this Loan Agreement, the documents listed
in Exhibit C and any other documents relating to the proposed project which the
Lender requests, all in form and substance satisfactory to the Lender.

"Receivables Loan" means the revolving receivables loan made by Lender to
Borrower's Affiliates in the maximum principal amount of $50,000,000 pursuant to
the Receivables Loan Agreement.

                                       11
<PAGE>

"Receivables Loan Agreement" means that certain Loan and Security Agreement
entered into between Lender and Borrower's Affiliates of even date with this
Loan Agreement, whereby Lender agreed to make the Receivables Loan to Borrower's
Affiliates.

"Receivables Loan Documents" means the Receivables Loan Agreement and the other
documents executed in connection with the Receivables Loan to evidence and
secure such loan, as they may be from time to time renewed, amended, restated or
replaced.

"Resolution" means a resolution of a corporation certified as true and correct
by an authorized officer of such corporation, a certificate signed by the
manager of a limited liability company and such members whose approval is
required, or a partnership certificate signed by all of the general partners of
such partnership and such other partners whose approval is required.

"Retainage" means, with respect to a Project, the amount set forth in the
Project Commitment as the amount to be retained or held back from each approved
disbursement on a construction contract until the completion of such
construction contract and the satisfaction of all conditions precedent for the
final payment under such construction contract.

"Sales Agreement" means, with respect to a Project, a written agreement for the
sale of a Time-Share Interest between the Borrower and a Person who is not an
Affiliate of the Borrower.

"Staged Draw Schedule" means, with respect to a Project, the schedule of draws
for the various stages of the Development Work which such schedule, and the
components of the Development Work which fit within each stage, are specified in
the exhibit attached to the Project Commitment.

"Time-Share Interest" means the time-share estate acquired pursuant to a Sales
Agreement, which interest is defined in the Receivables Loan Agreement.

"Time-Share Program" means a program to be created by which Persons may own
Time-Share Interests, enjoy their respective Time-Share Interests on a recurring
basis, and share the expenses associated with the operation and management of
such program.

"Title Insurance Company" means a title insurance company acceptable to the
Lender.

"Title Policy" means, with respect to a Project, that certain policy of title
insurance accepted by the Lender for the Project, which policy of title
insurance shall:

            (1) be an ALTA loan form (10-17-92 or the equivalent thereof) title
      insurance policy;

            (2) be issued in the amount specified by the Lender in the Lender's
      Escrow Instructions;

            (3) be issued by the Title Insurance Company;

            (4) insure the Lender that the applicable Deed of Trust is an
      enforceable first lien against marketable fee simple title to the Project,
      subject only to Permitted Exceptions;

                                       12
<PAGE>

            (5) provide mechanics' lien coverage;

            (6) have all standard exceptions deleted therefrom; and

            (7) have appended thereto the following endorsements (as Lender
      requires):

                  (A) a comprehensive endorsement;

                  (B) a usury endorsement;

                  (C) a revolving loan credit and variable rate endorsement;

                  (D) an environmental lien endorsement;

                  (E) a patent endorsement;

                  (F) a water endorsement;

                  (G) an endorsement deleting the creditors' rights exclusion;

                  (H) an endorsement removing the arbitration provision

                  (I) a tie-in endorsement (as applicable); and

                  (J) such other endorsements as the Lender requires with
            respect to the Project.

"Transfer" means, with respect to any Project and/or the Borrower, the
occurrence of any of the following:

            (1) any sale, conveyance, assignment, transfer, alienation,
      mortgage, conveyance of security title, encumbrance or other disposition
      of any kind of the Project, or any other transaction the result of which
      is, directly or indirectly, to divest the Borrower of any portion of its
      title to or interest in the Project, voluntarily or involuntarily, other
      than transfers and sales of the Time-Share Interests in the ordinary
      course of business, it being the express intention of the Borrower and the
      Lender that the Borrower is prohibited from granting to any Person a lien
      or encumbrance upon the Project (other than Permitted Encumbrances),
      regardless of whether such lien is senior or subordinate to the Lender's
      lien;

            (2) any sale, conveyance, assignment, transfer, alienation,
      mortgage, conveyance of security title, encumbrance or other disposition
      of any kind of any other collateral for the Loan, or any other transaction
      the result of which is, directly or indirectly, to divest the Borrower of
      any portion of its title to or interest in such collateral, voluntarily or
      involuntarily, it being the express intention of the Borrower and the
      Lender that the Borrower is prohibited from granting to any Person a lien
      or encumbrance upon such other collateral, regardless of whether such lien
      is senior or subordinate to the Lender's lien;

                                       13
<PAGE>

            (3) any merger, consolidation or dissolution involving the Borrower;

            (4) the sale or transfer of a majority of the assets of the
      Borrower;

            (5) with respect to any Borrower which is a corporation:

                  (A) the transfer of any portion of the voting stock of the
            Borrower;

                  (B) the transfer of any portion of the voting stock of any
            corporation which is the direct or indirect owner of 10% or more of
            the voting stock of the Borrower, provided that the foregoing
            restriction shall not apply to Guarantor or to any Borrower that is
            wholly owned by Guarantor;

                  (C) the transfer of any partnership interest in any
            partnership which is the direct or indirect owner of 10% or more of
            the voting stock of the Borrower; or

                  (D) the transfer of any membership interest in any limited
            liability company which is the direct or indirect owner of 10% or
            more of the voting stock of the Borrower;

            (6) with respect to any Borrower which is a partnership:

                  (A) any merger, consolidation or dissolution involving the
            general partner of the Borrower;

                  (B) the sale or transfer of a majority of the assets of any
            general partner of the Borrower;

                  (C) the transfer of any general partnership interest in the
            Borrower to another Person;

                  (D) with respect to any general partner of the Borrower which
            is a corporation, the transfer of any portion of the voting stock of
            such general partner to another Person;

                  (E) with respect to any general partner of the Borrower which
            is a general partnership or limited partnership, the transfer of any
            partnership interest of such general partner to another Person;

                  (F) with respect to any general partner of the Borrower which
            is a limited liability company, the transfer of any membership
            interest of such general partner to another Person;

                  (G) the conversion of any general partnership interest of the
            Borrower to a limited partnership interest; or

                                       14
<PAGE>

                  (H) the addition of any general partner or limited partner to
            the Borrower;

            (7) with respect to any Borrower which is a limited liability
      company:

                  (A) any merger, consolidation or dissolution involving the
            managing member of the Borrower;

                  (B) the sale or transfer of a majority of the assets of any
            managing member of the Borrower;

                  (C) the transfer of any managing member interest in the
            Borrower to another Person;

                  (D) with respect to any managing member of the Borrower which
            is a corporation, the transfer of any portion of the voting stock of
            such managing member to another Person;

                  (E) with respect to any managing member of the Borrower which
            is a general partnership or limited partnership, the transfer of any
            partnership interest of such general partner to another Person;

                  (F) with respect to any managing member of the Borrower which
            is a limited liability company, the transfer of any membership
            interest of such general partner to another Person;

                  (G) the conversion of any managing member interest of the
            Borrower to a non-managing member interest; or

                  (H) the addition of any managing member or member to the
            Borrower.

"UCC Financing Statement" means, with respect to a Project, any UCC financing
statement, whether executed or not by the applicable Project Owner, naming such
Project Owner, as debtor, in favor of the Lender, as secured party, in
connection with the Lender making proceeds of the Loan available to the Borrower
for the Project, as such UCC financing statement may be amended or otherwise
modified from time to time with or without Project Owner's signature.

"Unit" means a dwelling unit in the Project.

Section 1.2 Other Definitional Provisions

      (a) Accounting terms not defined herein will have the respective meanings
given to them under GAAP. To the extent that the definitions of accounting terms
herein are inconsistent with the meanings of such terms under GAAP, the
definitions contained herein will control.

      (b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Loan Agreement will refer to this Loan Agreement as a
whole and not to any particular provision of this Loan Agreement.

                                       15
<PAGE>

      (c) In this Loan Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".

                                       16
<PAGE>

ARTICLE II THE LOAN

Section 2.1 Agreement to Lend and Borrow and Project Loan Maturity

      (a) The Lender agrees, on the terms and conditions hereinafter set forth,
to make the Loan to the Borrower through one or more Project Loans for the
purpose of providing financing for the acquisition, development and construction
of Projects; provided however, that the obligation of the Lender to make the
Loan is conditioned upon the Lender's receipt of the documents and the
satisfaction of the other items set forth in Exhibit A attached hereto. The
Borrower will repay the Loan pursuant to Section 2.6 and Section 2.9, may prepay
the Loan pursuant to Section 2.10 and may reborrow proceeds of the Loan pursuant
to this Section 2.1(a) and Section 2.14.

      (b) The outstanding principal balance of each Project Loan, together with
accrued and unpaid interest thereon and all other amounts payable by the
Borrower under the terms of the Loan Documents relating to such Project Loan,
will be due and payable on the applicable Project Loan Repayment Date.

      (c) The outstanding principal balance of the Loan (which includes all
outstanding Project Loans), together with accrued and unpaid interest thereon
and all other amounts payable by the Borrower under the terms of the Loan
Documents, will be due and payable on the Maturity Date.

Section 2.2 Disbursements of the Loan

      The Lender shall make disbursements of the Loan in accordance with and
subject to the terms of Article III hereof.

Section 2.3 Use of Disbursements

      The Borrower will ensure the use of disbursements of the Loan only for
Approved Costs.

Section 2.4 Commitment Fee

      Borrower will pay to Lender the Commitment Fee on the following dates: (i)
a good faith deposit of $25,000 was paid by Borrower to Lender on the date that
Borrower accepted the term sheet for the Loan; and (ii) the remaining amount of
the Commitment Fee in the amount of $87,500 shall be paid to Borrower on the
Effective Date.

Section 2.5 No Reduction in Commitment Fee

The Borrower acknowledges that the Commitment Fee, required to be paid to Lender
pursuant to the provisions of Section 2.4, has been earned upon Lender's
execution of this Loan Agreement and is not refundable. Regardless of whether
(a) Lender advances any amounts under the terms of this Loan Agreement or (b)
Borrower repays or is required to repay the Loan on the date required by Section
8.2, the Borrower will not be entitled to any refund of the Commitment Fee
previously paid.

                                       17
<PAGE>

Section 2.6 Interest

      (a) The Loan will bear interest from the date of disbursement hereunder on
the unpaid principal at an annual rate equal to the Interest Rate.

      (b) On or before the 5th Business Day of each month, commencing with the
first month after the Lender has disbursed proceeds of the Loan, the Lender
shall send to the Borrower an invoice setting forth the amount of interest due
for the previous month. The Borrower will pay the interest due for the previous
month on or before the Interest Due Date, except if the Budget for any Project
includes an Interest Reserve, then the Borrower may direct the Lender to make a
disbursement of the Loan to pay the interest due on the Loan with respect to
such Project until such time as such Interest Reserve is fully disbursed, upon
and subject to the terms and conditions contained herein.

      (c) Payments of principal, interest and any other amounts due and payable
under the Loan Documents shall earn interest after they are due at the rate of
the Default Rate. At the option of Lender, while an Event of Default exists,
interest shall accrue at the Default Rate.

Section 2.7 Interest Rate Limitation

      The provisions of this Loan Agreement and the other Loan Documents are
hereby expressly limited so that in no contingency or event whatever will the
amount paid or agreed to be paid to the Lender for the use, forbearance or
detention of the sums evidenced by this Loan Agreement exceed the maximum amount
permissible under applicable law. If from any circumstance whatever the
performance or fulfillment of any provision of this Loan Agreement or of any
other Loan Document should involve or purport to require any payment in excess
of the limit prescribed by law, then the obligation to be performed or fulfilled
is hereby reduced to the limit of such validity. In addition, if, from any
circumstance whatever, the Lender should ever receive as interest an amount
which would exceed the highest lawful rate under applicable law, then the amount
which would be excessive interest will be applied as an optional reduction of
principal (or, at the Lender's option, be paid over to the Borrower), and will
not be counted as interest.

Section 2.8 Repayment of Principal

      Principal of the Loan will be due and payable as follows:

            (1) Concurrent with the closing of the sale of a Time-Share
      Interest, the Borrower will make a principal payment in an amount equal to
      Lender's Release Price, which amount shall be applied, until paid in full,
      to the payment of the outstanding amount of the Project Loan Amount
      corresponding to the Project within which the Time-Share Interest was
      sold.

            (2) In the event that, for any reason, the aggregate payments to
      Lender of the Lender's Release Price for any Project Loan are less than
      the Minimum Required Principal Payment for such Project Loan during any
      loan year, then within fifteen (15) days after the end of such loan year
      (each loan year ends on the anniversary of the

                                       18
<PAGE>

      Effective Date), the Borrower shall make an additional annual payment on
      such Project Loan to the Lender from Borrower's own funds of an amount
      equal to the difference between the Minimum Required Principal Payment for
      such loan year and the aggregate payments to Lender of Lender's Release
      Price for such loan year with respect to such Project Loan.

            (3) Upon a Project Specific Default and so long as there is no other
      Event of Default or Potential Default, the Borrower may, at its option
      (but only if exercised prior to the earlier of (i) the Lender's exercise
      of its remedies under Section 8.2 and (ii) 30 days after the occurrence of
      the Project Specific Default), repay the outstanding balance of the
      Project Loan Amount corresponding to the Project Specific Default.

            (4) If the Project Loan Amount has not been repaid on or before the
      Project Loan Repayment Date for such Project, the Borrower must on such
      date repay the entire outstanding principal amount of the Project Loan
      together with all accrued and unpaid interest relating thereto.

            (5) In the event that the sum of the Project Loan Committed Amounts
      for all Projects at any time exceeds the Loan Amount, the Borrower must
      immediately make a principal repayment in an amount sufficient to
      eliminate any such excess, which payment shall be applied by Lender in its
      discretion.

            (6) On the Maturity Date, the Borrower is required to repay the
      entire outstanding principal amount of the Loan together with all accrued
      and unpaid interest and all other amounts owed to Lender under the Loan
      Documents.

Section 2.9 Adjustment to Lender's Release Price.

      Lender, in its sole and absolute discretion, reserves the right to adjust
the Lender's Release Price applicable to a Project at any time before the
applicable Project Loan Repayment Date to ensure that such fee is sufficient to
repay the Project Loan Amount upon the sale of 80% of the planned Time-Share
Interests within such Project.

Section 2.10 Prepayment of the Loan

      The Borrower shall have the option to prepay each Project Loan in full but
not in part without penalty upon 30 days prior written notice to the Lender.

Section 2.11 Payments

      (a) All payments of principal, interest and fees on the Loan must be made
to the Lender by federal funds wire transfer as instructed by the Lender in
immediately available funds not later than 1:00 p.m. (Minneapolis time) on the
dates such payments are to be made. Any payment received after 1:00 p.m.
(Minneapolis Time) will be deemed received by the Lender on the next Business
Day.

                                       19
<PAGE>

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

      (c) Throughout the term of the Loan, interest and fees will be calculated
on the basis of the actual number of days elapsed during the period for which
interest and fees are being charged predicated on a year consisting of 365 days.

Section 2.12 Applications of Payments; Late Charges

      (a) Payments received by the Lender pursuant to the terms hereof will be
applied in the following manner:

            (1) first, to the payment of all expenses, charges, costs and fees
      incurred by or payable to the Lender and for which the Borrower is
      obligated pursuant to the terms of the Loan Documents;

            (2) second, to the payment of all interest accrued to the date of
      such payment, except that the payments made pursuant to Section 2.8(1)
      will be applied to the payment of principal in accordance with
      subparagraph (3) below and not the payment of interest; and

            (3) third to the payment of principal.

Notwithstanding anything to the contrary contained herein, after the occurrence
and during the continuation of an Event of Default, all amounts received by the
Lender from any party will be applied in such order as the Lender, in its sole
discretion, may elect.

      (b) If any installment of interest and/or the payment of principal is not
received by the Lender within 5 Business Days after the due date thereof, then
in addition to the remedies conferred upon the Lender pursuant to Section 8.2
hereof and the other Loan Documents, the Lender may elect to assess a late
charge of 4% of the amount of the installment due and unpaid, which such late
charge will be added to the delinquent amount to compensate the Lender for the
expense of handling the delinquency. The Borrower and the Lender agree that such
late charge represents a good faith and fair and reasonable estimate of the
probable cost to the Lender of such delinquency. The Borrower acknowledges that
during the time that any such amount is in default, the Lender will incur losses
which are impracticable, costly and inconvenient to ascertain and that such late
charge represents a reasonable sum considering all of the circumstances existing
on the Effective Date of this Loan Agreement and represents a reasonable
estimate of the losses the Lender will incur by reason of late payment. The
Borrower further agrees that proof of actual losses would be costly,
inconvenient, impracticable and extremely difficult to fix. Acceptance of such
late charge will not constitute a waiver of the default with respect to the
overdue installment, and will not prevent the Lender from exercising any of the
other rights and remedies available hereunder.

                                       20
<PAGE>

Section 2.13 Approval Period

      (a) During the Approval Period, Borrower may request the approval of a
Project for funding from the proceeds of the Loan by complying with the terms
and conditions of Section 3.1.

      (b) Commencing on the Approval Period Termination Date, Borrower may not
request the approval of new Projects, although proceeds of the Loan will
continue to be disbursed with respect to the then existing Projects in
accordance with the provisions of Article III.

Section 2.14 Revolving Nature of Loan

      The Loan is a revolving loan and any amounts which are repaid may, subject
to the terms of the Loan Documents limiting the amounts which may be drawn for
any Project and the terms restricting disbursements of proceeds of the Loan, be
redrawn.

Section 2.15 Security

      Payment of the Loan by the Borrower and performance of the Borrower's
other obligations under the Loan Documents will be secured by the Guaranty and
the collateral described in the Project Security Instruments. The Borrower
warrants that the Project Security Instruments will create a valid and
first-lien position with respect to the Projects, subject only to Permitted
Exceptions.

                                       21
<PAGE>

ARTICLE III APPROVAL OF PROJECTS; DISBURSEMENTS OF THE LOAN

Section 3.1 Project Approvals; Project Commitments and Project Documents

      (a) During the Approval Period, the Borrower may submit to the Lender
projects proposed to be included as Projects, all pursuant to and in accordance
with the terms of this Loan Agreement. Upon approval as a Project and compliance
with the requirements of Section 3.2 and the other terms and provisions of the
Loan Documents, disbursements of the Loan will be made with respect to the
Approved Costs for such Project in accordance with this Loan Agreement.

      (b) In order to include a proposed project as a Project, the Borrower must
submit to the Lender a complete description of the proposed project, including
the Project Underwriting Documents, and evidence that the proposed project
complies with the Project Requirements.

      (c) In the event that any Project is to be owned by a Person other than
Borrower, the Project Underwriting Documents must specify the Project Owner,
which must be a Person which is owned 100% by Borrower, or is otherwise
acceptable to Lender. The Project Documents relating to that Project will
contain a provision whereby the Project Owner, in addition to Borrower, assumes
all of the obligations of Borrower then, or at any time in the future, contained
in this Loan Agreement and the other Loan Documents and agrees to be bound by
and comply with all the terms hereof and thereof. In such an instance, the
Project Underwriting Documents must include (i) the name of the Project Owner,
(ii) the charter and organizational documents for the Project Owner, including
such documents as will specify who is to manage the Project Owner, and (iii)
such other information as the Lender, in its sole and absolute discretion, will
require regarding the Project Owner.

      (d) Upon its receipt of the Project Underwriting Documents, the Lender
will have 30 days to review and, in its sole and absolute discretion, approve or
disapprove the proposed project as a Project which may be financed from proceeds
of the Loan. Upon any such approval, the Lender will issue a Project Commitment
with respect thereto and such proposed project will become a Project for
purposes of this Loan Agreement upon Borrower returning to Lender a copy of the
Project Commitment containing the original signature of Borrower accepting the
supplemental terms and conditions set forth in the Project Commitment; provided
however, that no Project Commitment will be issued with respect to any proposed
project unless the Available Amount (plus any cash equity provided by the
Borrower (as provided for in the Project Commitment)) is at least equal to the
amount required to complete the acquisition of the Land and the performance of
the Development Work for such proposed project. The terms of each Project
Commitment issued by the Lender and signed by the Borrower shall supplement the
terms of this Loan Agreement and shall be applicable with respect to the stated
Project, the related Project Loan and the related Project Security Documents.

      (e) It is a condition precedent to the approval of any proposed project
that the Lender shall have performed, at Borrower's expense, a site
inspection/market review with respect to

                                       22
<PAGE>

such proposed project, and the Lender must be satisfied with the results of such
inspection and review.

Section 3.2 Project Closings

      Upon issuance of a Project Commitment with respect to a Project, the
Borrower and the Lender shall proceed to execute and deliver the other required
Project Documents for such Project and close the transaction, thereafter
allowing proceeds of the Loan to be disbursed for such Project. The following
shall be the conditions precedent to the closing for each Project:

            (1) The Borrower has delivered to the Lender the Project
      Underwriting Documents, all the documents described in the Project
      Commitment, executed originals of the other Project Documents and such
      other agreements, instruments, certificates and opinions as the Lender
      requires in connection with such Project.

            (2) The Deed of Trust must be duly recorded and in a first-priority
      lien position, which first-priority lien positions shall be evidenced and
      insured by the Title Policy.

            (3) The Lender's security interests in all personal property and any
      fixtures covered by the Deed of Trust must be duly perfected and in a
      first-priority lien position.

            (4) All taxes, fees and other charges in connection with the
      preparation, execution, delivery and recording/filing of the Project
      Documents have been paid by Borrower. All delinquent taxes, assessments or
      other governmental charges or liens affecting the Project, if any, have
      been paid, or if not paid, the Borrower has posted a bond or other
      security acceptable to the Lender with respect to such unpaid taxes.

            (5) An opinion of legal counsel located in the state where the
      Project is located in substantially the form required by paragraph (2) of
      Exhibit A relative to the Project Documents.

            (6) As to any Project Owner for which such resolutions have not
      previously been delivered to the Lender, a certified copy of the
      resolutions adopted by the Project Owner authorizing the Project Owner to
      incur or assume the debt related to the Loan and the Project and
      authorizing certain officers of the Project Owner to execute and deliver
      the Project Documents.

Section 3.3 Disbursements of Loan Proceeds to Acquire Land and for Development
            Work

      (a) Disbursements to finance the Borrower's acquisition of the Land for
each Project will be made upon the terms and conditions set forth in the Project
Commitment for the Project.

      (b) All requests for disbursements of proceeds of the Loan to fund
Development Work must comply with the terms of this Section 3.3, subject to such
Retainage requirements and such conditions precedent, if any, as are set forth
in the Project Commitments and subject to any

                                       23
<PAGE>

additional limitations set forth in the Project Commitments. Disbursements
related to the Development Work with respect to all Projects will be available
twice per month.

      (c) Each disbursement request to fund Development Work must be evidenced
by a Draw Request Certification and must be accompanied by the following:

            (1) a written summary prepared by the Borrower, in detail acceptable
      to the Lender, of the billings of each subcontractor or vendor with
      respect to the Development Work for which a disbursement is being
      requested, together with copies of the billings of each such subcontractor
      or vendor;

            (2) at Lender's request, a written certification from the Inspector
      to Lender, in a form satisfactory to Lender, that (i) the portion of the
      Development Work for which payment is being sought has been completed,
      (ii) all Development Work done for which payment is being sought has been
      completed with sound new materials and fixtures, or refurbished materials
      and fixtures that meet the requirements of the Plans and Specifications,
      and in a good and workmanlike manner, (iii) the Development Work is being
      performed within the Budget and in accordance with the Plans and
      Specifications, and (iv) sufficient funds are available to Borrower to
      complete the Development Work;

            (3) at Borrower's expense, a "date down" endorsement to the Title
      Policy insuring that there are no liens imposed by law for services, labor
      or materials appearing in the public records, and insuring the full amount
      of the disbursement, provided that any such endorsement may show
      mechanics' liens resulting from the Development Work if and only if the
      Title Company will issue an endorsement which insures Lender against any
      loss by reason of such mechanics' liens and Borrower has complied in all
      respects with the requirements of Section 6.18; and

            (4) such other documents specified in the Project Commitment.

The foregoing submissions must reflect the cost of all Development Work for
which payment is to be made. The Draw Request Certification must specify the
portion of such costs which will be paid out of the requested disbursement of
Loan proceeds, and, if any portion of such costs are to be paid by the Borrower,
the portion of such costs to be paid by the Borrower.

      (d) After the expiration of the applicable Project Loan Advance Period,
Lender shall have no further obligations to make any disbursements under the
Project Loan. In addition, the Lender shall have no obligation to make any
disbursement of proceeds under a Project Loan if the initial disbursement of
proceeds under such Project Loan is not made on or before the Approval Period
Termination Date.

      (e) Provided that no Event of Default or Potential Default exists, and
subject to the terms and conditions set forth herein, including the provisions
of Section 3.4, the Lender will use its reasonable best efforts to disburse to
the Borrower the amount requested relating to the Development Work within 5
Business Days after receipt of a Draw Request Certification meeting the
requirements of this Loan Agreement. In the event the Lender is unable to make
the disbursement within such time period, the Lender will disburse the proceeds
of the Loan as soon

                                       24
<PAGE>

thereafter as possible. All disbursements will be delivered to Borrower by
federal funds wire transfer as instructed by Borrower.

Section 3.4 Provisions Applicable to All Disbursements

      The obligation of Lender to make any disbursement requested by the
Borrower of proceeds of the Loan is subject to fulfillment of all of the
following conditions precedent:

            (1) No Event of Default or Potential Default has occurred and is
      continuing, or would result from such disbursements or from the
      application of the proceeds therefrom.

            (2) Following the requested disbursement of proceeds of the Loan,
      (i) the outstanding principal amount of the Loan shall not exceed the Loan
      Amount, and (ii) with respect to any Project, the principal amount
      advanced shall not exceed the Project Loan Amount for that Project.

            (3) Each Project shall comply with all requirements set forth in the
      Project Commitment for such Project and the other Loan Documents.

            (4) The proceeds of the Loan which remain available for disbursement
      for the Development Work for the Projects shall be sufficient to complete
      the Development Work related to such Projects; provided, however, that the
      Lender will be obligated to make a disbursement notwithstanding such a
      deficiency in the event that (i) the Budget for the acquisition of the
      Land and the Development Work of the applicable Project and the amount of
      the Loan available for such acquisition of the Land and such Development
      Work have been increased by an amount at least equal to such deficiency in
      accordance with the terms of Section 6.15(e),or (ii) the Borrower provides
      to the Lender evidence that it has paid from its own funds, in addition to
      any Borrower funds which the Budget for such Project requires, an amount
      at least equal to the amount of such deficiency.

            (5) All costs requested to be funded from the proceeds of such
      disbursement shall relate to costs which are Approved Costs for such
      Project.

            (6) No liens (other than liens for real property taxes that are not
      yet delinquent) have been filed against the Project, except as permitted
      by Section 6.18.

            (7) All statements made in the applicable Draw Request Certification
      shall be true and correct on and as of the date of the requested
      disbursement, before and after giving effect thereto and to the
      application of the proceeds therefrom.

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

            (9) The interest rate applicable to the disbursement (before giving
      effect to any savings clause) will not exceed the maximum rate permitted
      by law.

                                       25
<PAGE>

            (10) All disbursements must comply with the Retainage requirements
      for such Project as set forth in the applicable Project Commitment.

Section 3.5 Application of Disbursements

      All Loan proceeds disbursed to the Borrower will be used only for payment
(or for reimbursement to Borrower for prior payment) of those items specified in
the Draw Request Certification for which the particular disbursement was made.
The Borrower will not use any such disbursement to pay or reimburse itself,
directly or indirectly, for any amounts paid by the Borrower or any other Person
but not included in the applicable Budget.

Section 3.6 The Lender May Make Disbursement Notwithstanding Noncompliance

      Notwithstanding the failure of any condition precedent to the Lender's
obligation to make any disbursement hereunder, the Lender may make such
disbursement if the Lender, in its sole discretion, determines the making of the
same to be advisable. The making of any disbursement, either before or after the
satisfaction of all conditions precedent with respect to the Lender's obligation
to make the same, will not be deemed to constitute an approval or acceptance by
the Lender of the Development Work theretofore completed or a waiver of such
condition with respect to a subsequent disbursement.

                                       26
<PAGE>

ARTICLE IV REPRESENTATIONS AND WARRANTIES

Section 4.1 Consideration

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

Section 4.2 Organization

      The Borrower is duly organized, validly existing and in good standing
under the laws of its state of organization, is duly qualified to do business
and is in good standing in every jurisdiction where its business or properties
require such qualification. The Borrower has all requisite power and authority
to own and operate its properties and to carry on its business as now conducted
or proposed to be conducted.

Section 4.3 Authorization

      The execution, delivery and performance by the Borrower of the Loan
Documents have been duly authorized by all necessary action and do not and will
not (i) contravene the Articles of Organization of the Borrower, (ii) contravene
any law, rule or regulation or any order, writ, judgment, injunction or decree
or any contractual restriction binding on or affecting the Borrower, (iii)
require any approval or consent of any member, partner, shareholder or any other
Person, other than approvals or consents which have been previously obtained and
disclosed in writing to the Lender, (iv) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which the Borrower or
its properties may be bound or affected, or (v) result in, or require the
creation or imposition of, any lien of any nature (other than the liens
contemplated hereby) upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower. The Borrower is not in default under any
such law, rule, regulation, order, writ, judgment, injunction, decree or
contractual restriction or any such indenture, agreement, lease or instrument.

Section 4.4 Governmental Consents

      No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower and any Guarantor of the
Loan Documents or any other document executed pursuant thereto or in connection
therewith.

Section 4.5 Validity

      The Loan Documents have been duly executed and delivered by and constitute
the legal, valid and binding obligations of the Borrower and Guarantor, if any,
enforceable in accordance with their respective terms.

                                       27
<PAGE>

Section 4.6 Financial Position

      As of the dates prepared, the financial statements and all financial data
heretofore delivered to the Lender in connection with the Loan and/or relating
to the Borrower and Guarantor, if any, are true, correct and complete in all
material respects and were prepared in accordance with GAAP consistently
applied. Such financial statements fairly present the financial position of the
Persons who are the subject thereof as of the dates thereof.

Section 4.7 Governmental Regulations

      Neither the Borrower nor any Guarantor is subject to regulation under the
Investment Company Act of 1940, the Federal Power Act, the Public Utility
Holding Company Act of 1935, the Interstate Commerce Act, as the same may be
amended from time to time, or any federal or state statute or regulation
limiting its ability to incur Debt.

Section 4.8 Employee Benefit Plans

      Neither the Borrower nor any Guarantor maintains any pension, retirement,
profit sharing or similar employee benefit plan that is subject to ERISA other
than a plan pursuant to which such entity's contribution requirement is made
contemporaneously with the employees' contributions.

Section 4.9 Securities Activities

      Neither the Borrower nor any Guarantor is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System in effect from time to time)
and not more than 25% of the value of the assets of either such entity consists
of such margin stock.

Section 4.10 No Material Adverse Change

      No Material Adverse Change has occurred.

Section 4.11 Payment of Taxes

      All tax returns and reports required to be filed by the Borrower and any
Guarantor have been timely filed, or proper extensions for filing have been
obtained. All taxes, assessments, fees and other governmental charges upon the
Borrower, any Guarantor and their properties, assets, income and franchises
which are due and payable have been paid when due and payable, or proper
extensions for payment have been obtained, except to the extent that such taxes,
assessments, fees and other governmental charges or the failure to pay the same
would not be material to the respective business, properties, assets,
operations, condition (financial or otherwise) or business prospects of the
Borrower or any Guarantor. Neither the Borrower nor any Guarantor has any
knowledge of any proposed tax assessment against the Borrower or any Guarantor
that could be material to its business, properties, assets, operations,
condition (financial or otherwise) or business prospects.

                                       28
<PAGE>

Section 4.12 Litigation

      There is no pending or, to the knowledge of the Borrower, threatened
action, suit, proceeding or arbitration against or affecting the Borrower or any
Guarantor before any court, governmental agency or arbitrator, which may result
in a Material Adverse Change.

Section 4.13 Environmental Matters

      (a) Projects. The Borrower's representations, warranties and covenants
with respect to all environmental matters relating to the Projects are set forth
in the Environmental Indemnity.

      (b) Non-Projects. As to each "Non-Project" (defined as any project to be
developed, under development, or developed by the Borrower or the Guarantor
other than a Project), the operations of the Borrower and Guarantor, if any,
comply in all respects with all Hazardous Materials Laws except such
noncompliance which would not (if enforced in accordance with applicable law)
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Change. As of the Effective Date of this Loan Agreement, (i)
neither the Borrower, any Guarantor nor their present properties or operations
is subject to any outstanding written order from, or settlement or consent
agreement with, any governmental authority or other Person, nor is any of the
foregoing subject to any judicial or docketed administrative proceeding
respecting any Hazardous Materials Law, Hazardous Materials Claim or Hazardous
Material, which would (if enforced in accordance with applicable law) reasonably
be expected to result, individually or in the aggregate, in a Material Adverse
Change and (ii) there are no other conditions or circumstances known to the
Borrower which may give rise to any Hazardous Materials Claim arising from the
operations of the Borrower or any Guarantor, which would (if enforced in
accordance with applicable law) reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Change.

Section 4.14 No Burdensome Restrictions

      Neither the Borrower nor any Guarantor is a party to or bound by any
contract or agreement, or subject to any charter or corporate restriction or any
requirement of law, which would reasonably be expected to result in a Material
Adverse Change.

Section 4.15 Full Disclosure

      None of the statements contained in any exhibit, report, statement or
certificate furnished by or on behalf of the Borrower or any Guarantor in
connection with the Loan Documents contains any untrue statement of a material
fact, or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading; provided, however, that it is recognized by the Lender
that projections and forecasts provided and to be provided by the Borrower and
any Guarantor, while reflecting the Borrower's and any Guarantor's good faith
projections and forecasts, based upon methods and data the Borrower and
Guarantor believes to be reasonable and accurate, are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections and forecasts may differ from the projected or forecasted results.

                                       29
<PAGE>

Section 4.16 Adequate Consideration

      The Borrower represents and warrants to the Lender that prior to entering
into this Loan Agreement, it has reviewed the benefits to be provided to it as a
result of the Lender making the Loan and has concluded that such benefits are
reasonably equivalent in value to the collateral to be pledged to secure the
Loan and the obligations assumed and to be assumed by the Borrower pursuant to
the Loan Documents.

Section 4.17 Compliance with Laws and Regulations

      Borrower and the Project are in compliance in all material respects with
all Laws and Regulations, and there are no, nor are there any alleged or
asserted, violations of law, regulations, ordinances, codes, declarations,
covenants, conditions, or restrictions of record, or other agreements relating
to Borrower, any Guarantor, the Project, the Land, Improvements or the
Development Work, or any part thereof.

Section 4.18 Survival and Additional Representations and Warranties

      The representations and warranties and contained in this Article IV are in
addition to, and not in derogation of, the representations and warranties
contained elsewhere in the Loan Documents and shall be deemed to be made and
reaffirmed as of the making of each disbursement of proceeds of the Loan.

                                       30
<PAGE>

ARTICLE V COVENANTS OF THE BORROWER

Section 5.1 Consideration

      As an inducement to the Lender to execute this Loan Agreement, make the
Loan and make each disbursement of the Loan, the Borrower hereby covenants that,
so long as any amount payable hereunder or under any other Loan Document remains
unpaid or the Lender has any commitment to disburse the Loan hereunder, Borrower
shall comply with the covenants set forth in this Article V.

Section 5.2 Reporting Requirements

      Borrower shall furnish or cause to be furnished to the Lender the
following notices and reports:

            (1) Quarterly Financial Reports. As soon as possible after each
      fiscal quarter of Bluegreen Corporation (other than the last quarter of
      any fiscal year) and in any event within 5 days after submission to the
      Securities and Exchange Commission, the following: (i) a copy of Bluegreen
      Corporation's 10Q filing certified by the Chief Financial Officer of
      Bluegreen Corporation to fairly present the financial condition of said
      entity on a fully consolidated basis as at the end of such fiscal quarter
      and the results of the operations of Bluegreen Corporation on a fully
      consolidated basis for the period ending on such date; (ii) copies of any
      and all other financial reports and corrections thereto and to the 10Q
      filings required of Bluegreen Corporation under federal laws and
      regulations.

            (2) Annual Financial Statements. As soon as possible after each
      fiscal year of Bluegreen Corporation and in any event within 5 days after
      submission to the Securities and Exchange Commission, the following: (i) a
      copy of Bluegreen Corporation's 10K filing certified by the Chief
      Financial Officer of Bluegreen Corporation to fairly present the financial
      condition of said entity on a fully consolidated basis at the end of such
      fiscal year and the results of the operations of such entity on a fully
      consolidated basis at the end of such fiscal year and the results of the
      operations of such entity on a fully consolidated basis for the period
      ending on such date; and (ii) copies of any and all other financial
      reports and corrections thereto and to the 10K filings required of
      Bluegreen Corporation under federal laws and regulations.

            (3) Monthly Sales Reports and Sales Information. On or before the
      20th day after the end of each month, Borrower will cause to be furnished
      to Lender, if requested by Lender, a sales report showing the number of
      sales and closings of Time-Share Interests and the aggregate dollar amount
      thereof, including down payments, during such month. Borrower will deliver
      current price lists for Time-Share Interests to Lender from to time to
      time within 10 Business Days after receipt of a written request from
      Lender to do so. Borrower will deliver to Lender from time to time, as
      available and promptly upon amendment or effective date, sales literature,
      consumer documents forms,

                                       31
<PAGE>

      registrations/consents to sell, and final subdivision public
      reports/public offering statements/prospectuses.

            (4) Notice of Labor Controversy or other Force Majeure Event. As
      soon as possible and in any event within 5 Business Days after the
      Borrower has knowledge of its occurrence, written notice of any labor
      controversy or other force majeure event resulting in a material strike,
      work stoppage, shutdown or other material disruption against or involving
      the Borrower, any Guarantor, or any Project.

            (5) Notice of Material Adverse Change. As soon as possible after its
      occurrence, written notice and a description of any matter which has
      resulted, or may result, in a Material Adverse Change.

            (6) Notice of Defaults or Potential Defaults. As soon as possible
      and in any event within 5 Business Days after the Borrower has knowledge
      of the occurrence of any Potential Default (however described) or Event of
      Default hereunder or an event of default (however described) under any
      other of the Loan Documents, written notice and a description of such
      Potential Default, Event of Default or event of default and the action
      which the Borrower proposes to take with respect thereto.

            (7) Notices of Default Regarding Other Development Projects. As soon
      as possible and in any event within 5 Business Days after the Borrower has
      knowledge of the occurrence of (i) any event of default under any loan or
      other financing facility, including seller financing, made for a
      development or construction project comparable to a Project and involving
      the Borrower, any Guarantor or any of their Affiliates which event of
      default might result in a Material Adverse Change, or (ii) any material
      event of default under any other loan or credit agreement relating to
      other debt incurred by the Borrower, any Guarantor or any of their
      Affiliates which event of default might result in a Material Adverse
      Change. The written notice required herein shall contain a description of
      such event of default, the cure period and the action which the Borrower
      proposes to take with respect thereto.

            (8) Notice of Litigation. As soon as possible and in any event
      within 5 Business Days after institution thereof, written notice and a
      description of any material adverse litigation, action or proceeding
      commenced against the Borrower, any Guarantor or any of their Affiliates
      or relating to any Project, and any adverse determination in any such
      litigation, action or proceeding.

            (9) Notices Regarding Hazardous Materials. As soon as possible after
      the Borrower obtains knowledge of any material occurrence, written notice
      and a description of the release of any Hazardous Material, or any
      liability with respect thereto, on, under or in connection with a Project
      and the action which the Borrower proposes to take with respect thereto.

            (10) Notices Regarding Projects. As soon as possible and in any
      event within 5 Business Days after receipt by the Borrower, copies of all
      (i) notices of violation relating to and adversely affecting any Project
      that the Borrower receives from any

                                       32
<PAGE>

      governmental agency or authority, (ii) notices of default that the
      Borrower receives under the Construction Agreements or any other agreement
      relating to and adversely affecting any Project, and (iii) notices of
      default that the Borrower receives under any agreement relating to the
      borrowing of money by the Borrower for any Project from any Person.

            (11) Other Information. Such other information respecting the
      business, properties, assets, operations and condition, financial or
      otherwise, of the Borrower, any Guarantor, their Affiliates and the
      Projects, including, without limitation, copies of Project construction
      and sales reports, and any other rights or interests subject to the Loan
      Documents, as the Lender may from time to time reasonably request.

Section 5.3 Borrower's Operations and Management

      Borrower shall:

            (1) Compliance with Laws, Etc. Comply in all material respects, with
      all applicable laws, rules, regulations and orders of any governmental
      authority, including but not limited to the Laws and Regulations, the
      noncompliance with which may result in a Material Adverse Change.

            (2) Payment of Taxes and Claims. Pay (i) all taxes, assessments and
      other governmental charges imposed upon it or any of its properties or
      assets or in respect of any of its franchises, business, income or profits
      before any penalty accrues thereon, and (ii) subject to, with respect to
      the Projects, Section 6.18, all claims (including, without limitation,
      claims for labor, services, materials and supplies) for sums which have
      become due and payable and which by law have or may become a lien upon any
      of its properties or assets, except for those claims disputed by any of
      the entities comprising the Borrower in accordance with Section 6.18(b),
      but only so long as there is no threat of foreclosure of such lien.

            (3) Maintenance of Properties; Books and Records. Maintain or cause
      to be maintained:

                  (A) in good repair, working order and condition all properties
            and assets material to the continued conduct of the business of the
            Borrower, and from time to time make or cause to be made all
            necessary repairs, renewals and replacements thereof; and

                  (B) proper books, records and accounts in which full, true and
            correct entries in accordance with GAAP consistently applied are
            made of all financial transactions and matters involving its assets
            and business.

            (4) Change in Nature of Business. Make no material change in the
      nature of its business as carried on at the Effective Date hereof.

            (5) Maintenance of Existence. Maintain and preserve its existence
      and all rights, privileges, qualifications, permits, licenses, franchises
      and other rights material to its business.

                                       33
<PAGE>

            (6) Change in State of Registration or location of Executive
      Offices. Make no change to its state of organization or the location of
      its executive offices without giving the Lender at least 30 days' prior
      written notice.

            (7) Management. Maintain professional and qualified management and
      staff to manage, operate and maintain its assets and business, including
      but not limited to the Projects.

            (8) Inspection. At Borrower's expense, permit Lender and its
      representatives at all reasonable times to inspect each Project and to
      inspect, audit and copy Borrower's books and records, including, without
      limitation, the reasonable costs of travel, lodging and meals for
      representatives of Lender with respect to such inspections and audits.

Section 5.4 Insurance

      (a) The Borrower will maintain or cause its contractors to maintain the
insurance required by the terms of this Loan Agreement and will deposit with the
Lender original, duplicate original or certified copies of insurance
certificates issued by insurance companies with current Best's Key Ratings of
not less than A/IX (as to those policies maintained by the Borrower) and A/VII
(as to those policies maintained by its contractors) and written in form and
content acceptable to the Lender, providing the following minimum insurance
coverages:

            (1) "Comprehensive General Liability" insurance in the minimum
      "general aggregate" amount of $2,000,000 for the Borrower and $1,000,000
      for its contractors, in the minimum "occurrence" limit of $2,000,000 for
      the Borrower and $1,000,000 for its contractors, and in the minimum
      "umbrella" amount of $10,000,000 for the Borrower, all against claims for
      "personal injury" liability, including bodily injury, death or damage to
      the project liability, including completed operations and contractual
      liability and also including owners' and contractors' protective coverage
      naming the Lender as an additional insured.

            (2) Insurance with respect to its properties, assets and business
      against loss or damage of the kinds customarily insured against by Persons
      of established reputation engaged in the same or similar business and
      similarly situated, of such types and in such amounts as are customarily
      carried under similar circumstances by such other Persons, all in
      accordance with reasonably prudent industry standards.

            (3) Workers' compensation insurance as prescribed by the laws of
      each state in which the Borrower is required to maintain such insurance,
      and employers' liability with limits as prescribed by law.

            (4) For each Project, broad form course of construction insurance
      covering all risks in the minimum amount of the proposed construction cost
      for such Project on a replacement cost basis, against loss or damage by
      hazards customarily included within "extended coverage" policies, and any
      other risks or hazards which in the Lender's reasonable judgment should be
      insured against, with a Lender's Loss Payable

                                       34
<PAGE>

      Endorsement naming the Lender as an additional insured, together with a
      full replacement cost endorsement (without provisions for co-insurance).

            (5) For each Project, flood insurance in the maximum amount of the
      budgeted construction costs or the maximum coverage available, whichever
      is less, designating the Lender as payee, or evidence satisfactory to the
      Lender that the Project is not located within an area designated as within
      the 100 year flood plain under the National Flood Insurance Program.

      (b) Each policy of insurance required under this Section 5.4 must contain
the "standard non-contributory mortgagee clause" and the "standard lenders' loss
payable clause," or their equivalents, in favor of the Lender and/or its
assignees, and must provide that it will not be modified or canceled without 30
days' prior written notice to the Lender. The Borrower must also furnish the
Lender with receipts for the payment of premiums on such policies or other
evidence of such payment reasonably satisfactory to the Lender.

      (c) In the event the Borrower does not deposit with the Lender a new
policy of insurance with evidence of payment of premiums thereon at least 30
days prior to the expiration of any expiring policy, then the Lender may, but
will not be obligated to, procure such insurance, and the Borrower will pay the
premiums thereon to the Lender promptly upon demand.

      (d) The Lender will not, by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any such insurance, incur
any liability for the form or legal sufficiency of insurance contracts, solvency
of insurers or payment of losses, and the Borrower hereby expressly assumes full
responsibility therefor and all liability related thereto, if any.

Section 5.5 Financial Covenants

      Borrower shall comply with, or ensure compliance with, the following:

            (1) Net Worth. Bluegreen Corporation will maintain a Net Worth equal
      to or in excess of $130,000,000; and

            (2) Ratio of Total Liabilities to Net Worth. At all times, the ratio
      of the Debt of Bluegreen Corporation determined in accordance with GAAP
      consistently applied on a consolidated basis, and not including but not
      limited to contingent liabilities, to its Net Worth shall not exceed
      2.5:1.

Section 5.6 No Encumbrance; No Transfers

      None of the entities comprising the Borrower (including the Project
Owners) may encumber all or any portion of a Project or the Land that is
encumbered by the Project Security Instruments for the benefit of a lender other
than the Lender, except for leases and purchase money loans for equipment
purchased in the ordinary course of business. The entities comprising Borrower
will not make any Transfer unless the Borrower has obtained the written consent
of the Lender, which consent may be granted or withheld in the Lender's sole and
absolute discretion.

                                       35
<PAGE>

Section 5.7 Further Assurances

      The Borrower shall execute and deliver, or cause the execution and
delivery, at any time and from time to time any and all instruments, agreements
and documents, and will take such other action, or cause such other action to be
taken, as the Lender reasonably requires to maintain, perfect or insure the
Lender's security provided for under the Loan Documents, including, without
limitation, the execution of amendments to the Loan Documents.

Section 5.8 Survival of Covenants

      The covenants contained in this Article V are in addition to, and not in
derogation of, the covenants contained elsewhere in the Loan Documents and shall
be deemed to be made and reaffirmed prior to the making of each disbursement of
proceeds of the Loan.

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<PAGE>

ARTICLE VI THE PROJECTS

Section 6.1 Consideration

      As an inducement to the Lender to finance each Project and to make each
disbursement of the Loan for the Projects, the Borrower represents and warrants
the truth and accuracy of the matters regarding each Project set forth in this
Article VI and hereby covenants regarding each Project as set forth in this
Article VI. Each of the representations, warranties and covenants in this
Article VI is made by the Borrower with respect to each Project individually,
and as to all Projects collectively. The Borrower's execution and delivery to
the Lender of the Project Commitment and other Project Documents for a Project
shall be deemed a reaffirmation by the Borrower of the representations,
warranties and covenants in this Article VI as to that Project.

Section 6.2 Title to Project

      Except as may be otherwise provided in the conditions, covenants and
restrictions governing the Time-Share Program, the Project Owner is, or will be
upon acquisition of the Land, the Improvements, and the Development Work as
contemplated by the Project Commitment, the sole legal and beneficial owner of
the Land, the Improvements, and the Development Work, free and clear of all
claims, liens and encumbrances other than Permitted Exceptions. Except as may be
otherwise provided in the conditions, covenants and restrictions governing the
Time-Share Program, all of the personal property which forms a part of the
Improvements and the Development Work is or will be vested solely in the Project
Owner, free and clear of all claims, liens and encumbrances, and the security
interest of the Lender in such personal property is a first lien thereon

Section 6.3 No Prior Liens or Claims

      (a) As to Projects as to which no prior work has commenced, except as
otherwise may have been approved in writing by the Lender and as to which the
Lender shall have received such endorsements (including mechanics lien coverage)
to the Title Policy as the Lender may require to assure the priority of the Deed
of Trust as a valid first lien on the Project, prior to recordation of the Deed
of Trust, neither the Project Owner, nor anyone acting on the Project Owner's
behalf has (i) commenced construction of the Development Work, or any grading or
site clearance related thereto, (ii) purchased, contracted for or otherwise
brought upon the Land any materials, specially fabricated or otherwise, to be
incorporated into the Development Work, or (iii) entered into any contract or
arrangement, the performance of which by any other party thereto could give rise
to a lien or claim on the Project or any portion thereof.

      (b) As to Projects as to which the Project Owner has disclosed that prior
work has commenced and Lender has consented to such prior work, and
notwithstanding that, prior to recordation of the Deed of Trust, the Project
Owner has (i) commenced certain construction activity on the Land, (ii)
purchased, contracted for or otherwise brought upon the Land materials,
specially fabricated or otherwise, to be incorporated into the Development Work,
and/or (iii) entered into certain contracts or arrangements, the performance of
which by any other party

                                       37
<PAGE>

thereto could give rise to a lien or claim on the Project or any portion
thereof, the Borrower represents none of such activities have given rise, nor
shall any such activities give rise in the future, to any liens against the
Project which could impair the priority of the Deed of Trust as a valid first
lien on the Project.

Section 6.4 Access to the Project

      All roads, streets, traffic turn lanes, and access ways necessary for the
full utilization of the Project for its intended purpose have either been bonded
around or completed or the necessary rights of way have either been acquired by
the appropriate governmental authority or have been dedicated to public use and
accepted by the appropriate governmental authority, and all necessary steps have
been taken by the Project Owner and the appropriate governmental authority to
assure the complete construction and installation thereof by the time needed for
construction and/or occupancy and operation of the Project.

Section 6.5 Compliance with Project Requirements and Laws and Regulations

      The Project and the Improvements, the proposed and actual use thereof, and
the Development Work when completed will comply in all material respects with
the Project Requirements and with the Laws and Regulations, and there is no
action or proceeding pending or, to the knowledge of the Borrower (after due
inquiry), threatened before any court, quasi-judicial body or administrative
agency at the time of any disbursement by the Lender relating to the validity of
the Loan or the proposed or actual use of the Project.

Section 6.6 Covenants, Zoning, Codes, Permits and Consents

      The Borrower is familiar and has complied with all of the Laws and
Regulations to be complied with in connection with the construction of the
Development Work. All permits, licenses, consents, approvals or authorizations
by, or registrations, declarations, withholding of objections or filings with
any governmental body necessary in connection with the valid execution, delivery
and performance of the Loan Documents, and any and all other documents executed
in connection with any of the foregoing, necessary for the development of the
Land and necessary for the construction of the Development Work, or in a timely
manner will be obtained, and are valid, adequate and in full force and effect.
Construction of the Development Work and the intended use of the Project as part
of a Time-Share Program will in all respects conform to and comply with all Laws
and Regulations, including without limitation all applicable zoning,
subdivision, environmental protection, use and building codes, laws, regulations
and ordinances.

Section 6.7 Utilities

      All utility services and facilities necessary for the construction, sale
and occupancy of the Project and the operation thereof for its intended purpose
are either available at the boundaries of the Land, or, if not, all necessary
steps have been taken by the Project Owner and the local authority or public
utility company which provides such services to assure the complete installation
and availability thereof when needed for construction, sale, occupancy and
operation of the Project.

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<PAGE>

Section 6.8 Map, Permits, Licenses and Approvals

      The Project Owner has obtained, or will in a timely manner obtain, the
Map. Project Owner shall properly comply with and keep in effect the Map and all
permits, licenses and approvals which are required to be obtained from
governmental bodies in order to construct, occupy, operate, market and sell the
Project. Project Owner shall promptly deliver copies of the Map and all such
permits, licenses and approvals to Lender.

Section 6.9 Approval of Plans and Specifications and Approval of Budget

      (a) The Plans and Specifications are a true, complete and accurate
reflection of the Development Work that the Project Owner will construct. The
Plans and Specifications are satisfactory to the Project Owner and have been
reviewed and approved by the Project Owner and the general contractor for the
Project (if different from the Project Owner ), and have also been approved as
required by all governmental bodies or agencies having jurisdiction (including,
without limitation, any local design review boards) and, if required, by the
beneficiary of any restrictive covenant affecting the Project. There are no
structural defects in the Development Work as shown in the Plans and
Specifications, and no violation of any of the Laws and Regulations exists with
respect to the Plans and Specifications.

      (b) After diligent investigation of all relevant conditions and due
consultation with such parties as the Project Owner deems appropriate, the
Project Owner represents that the Budget identifies on a line item basis all
costs to be incurred in connection with the Development Work and all costs for
which proceeds of the Loan are to be disbursed. The Budget reflects the Project
Owner's best, true, accurate and complete estimate of the costs shown therein
and of the costs estimated to be necessary to construct the Development Work in
accordance with the Plans and Specifications.

Section 6.10 Adequacy of Loan Amount

      The Loan Amount, when combined with Borrower's invested cash equity, is
sufficient to pay all costs of the acquisition of the Land and the Improvements
and all costs of the Development Work in accordance with the Plans and
Specifications and all remaining costs related thereto, except as has been
specifically disclosed to and approved in writing by the Lender.

Section 6.11 Construction Start and Completion

      Subject to a Force Majeure Event (but not having any effect on Section
8.1(a)(14) and Section 8.1(a)(16)) the Project Owner shall commence construction
of the Development Work no later than the date set forth in the Project
Commitment and shall thereafter diligently proceed with construction and
completion of the Development Work in a good and workmanlike manner in normal
course of business as a prudent developer. The Project Owner shall cause the
Development Work at all times to materially conform to the Laws and Regulations
and shall accomplish completion of the Development Work in the manner of a
prudent developer. The Project Owner shall cooperate at all times with Lender in
bringing about the timely completion of each element of the Development Work,
and Project Owner shall use best efforts to resolve all

                                       39
<PAGE>

disputes arising during the work of construction in a manner which shall allow
work to proceed expeditiously.

Section 6.12 Personal Property Incorporation

      All personal property for which the Lender disburses Loan proceeds for the
Project is to be stored on the Land and in the Lender's judgment must be
reasonably secure from damage and theft and fully insured at all times.

Section 6.13 Contractors and Contracts

      Upon demand by the Lender, the Project Owner shall furnish to the Lender,
from time to time, correct lists of all contractors and subcontractors employed
in connection with the Development Work. Each such list shall show the name,
address and telephone number of each such contractor or subcontractor, a general
statement of the nature of the work to be done, the labor and materials to be
supplied, the names of materialmen, if known, and the approximate dollar value
of such labor, work and materials with respect to each. Upon an Event of
Default, the Lender shall have the right, and at any time the Inspector shall
have the right (in both cases without either the obligation or the duty), to
contact directly each contractor, subcontractor and materialman to verify the
facts disclosed by said list or for any other purpose.

Section 6.14 Evidence of Ownership of Materials

      If requested by the Lender, the Project Owner shall promptly deliver to
Lender any bills of sale, statements, receipts, contracts or agreements under
which the Project Owner claims title to any materials, fixtures or articles
incorporated into the Development Work.

Section 6.15 Changes to Plans and Specifications and Budget

      (a) The following Changes, whether made by change order or otherwise, to
any of (i) the Budget or the schedule of the costs of the Development Work, (ii)
the Plans and Specifications and/or (iii) working drawings relating to the
Development Work, shall require the prior written approval of the Lender, and
any request for such approval shall be accompanied by a written report from the
Inspector stating that the Inspector has reviewed and approved such Changes:

            (1) any Change which, together with all prior increases, will result
      in an increase to the total Budget for the Development Work of 5% or more,
      it being understood that the foregoing shall not apply to increases to
      particular line items of the Budget unless such increase to the line item
      will result in an increase to the total Budget for the Development Work of
      5% or more;

            (2) any Change which, together with all prior decreases, will result
      in a decrease to the total Budget for the Development Work of 5% or more,
      it being understood that the foregoing shall not apply to decreases to
      particular line items of the Budget unless such decrease to the line item
      will result in a decrease to the total Budget for the Development Work of
      5% or more; provided, however, that the Project Owner shall not offset
      against each other increases and decreases in the total Budget for the
      Development Work, it

                                       40
<PAGE>

      being the intent that an increase or a decrease in the total Budget for
      the Development Work which meets either the threshold set forth in
      subparagraph (a)(1) or the threshold set forth in this subparagraph (a)(2)
      shall require the prior approval of the Lender; and

      (b) As a condition to its approval of any Change described in subparagraph
(a), Lender may require verification that such Change:

            (1) is a Change as to which the Project Owner has complied with the
      terms of subparagraph (c) of this Section 6.15;

            (2) will not adversely affect the value of the Lender's security;

            (3) is not a material change in structure, design, exterior
      appearance, square footage, or function;

            (4) would not cause an increase in any line item or category of the
      Budget in excess of the contingencies (if any) specifically contained in
      the Budget for that line item or category; and

            (5) would be consistent with the Laws and Regulations.

      (c) The Lender is under no duty to review or inform the Borrower of the
quality or suitability of the Plans and Specifications, any contract or
subcontract or any changes thereto. Without limitation of the foregoing, the
Project Owner shall obtain the Lender's prior written approval of any alteration
in the Plans and Specifications which might adversely affect the value of the
Lender's security or which, regardless of cost, is a material change in
structure, design, function or exterior appearance.

      (d) The Project Owner agrees to provide the Lender with copies of all
change orders, together with all additional documents that the Lender may
require in order to evaluate a request for approval of a Change of a type
described in subparagraph (a) above. These documents may include the following:
(i) a written description of the Change and related working drawings and (ii) a
written estimate of the cost of the Change and the time necessary to complete
it. The Lender may take a reasonable time to evaluate any requests for approval
of a Change, and may require that all other approvals required from other
parties be obtained before it reviews any requested Change. The Lender may
approve or disapprove Changes in the exercise of its reasonable judgment. The
Project Owner acknowledges that any requested Changes may result in delays and
agrees that any delays caused by the Lender or otherwise shall not affect the
Project Owner's obligation to complete each element of the Development Work in
accordance with the Construction Progress Schedule.

      (e) In the event that either:

            (1) the proceeds of the Loan which are available for disbursement
      will not be sufficient to complete the Development Work as scheduled; or

            (2) the costs of the Project have increased over the amount set
      forth in the Budget by an amount in excess of the amount set forth in
      subparagraph (a)(1),

                                       41
<PAGE>

      then the Project Owner shall submit to the Lender a revised budget for the
      Project, together with (i) a request that the Lender approve an increase
      in the Project Loan Amount, which request the Lender may approve or
      disapprove in its absolute and sole discretion, or (ii) evidence that the
      Project Owner has sufficient funds to pay the increased costs, in which
      event the Lender shall not be obligated to disburse additional amounts of
      the Loan pursuant to Section 3.3 until such time as the Borrower provides
      to the Lender evidence that it has paid from its own funds, in addition to
      any Project Owner funds which the Budget requires, an amount at least
      equal to the increase. Any such revised Budget for the Project submitted
      to the Lender shall be accompanied by a written report from the Inspector
      stating that the Inspector has reviewed and approved the revised Budget.

            (f) In addition to obtaining the prior written approval of the
      Lender in connection with any Change described in this Section 6.15, the
      Project Owner shall also obtain, to the extent that such approvals may be
      required, (i) the approvals of the appropriate governmental authorities to
      any Change and (ii) from the appropriate persons or entities approvals of
      any alterations in the Map, the Plans and Specifications or any work,
      materials or contracts that are required by any of the Laws and
      Regulations or under the terms of the Project Commitment or the other Loan
      Documents.

Section 6.16 Lender Inspections, Appraisal and Information

      During normal business hours, the Project Owner shall arrange for the
Lender, the Inspector or any other authorized representative of Lender, at the
expense of the Borrower, to visit, inspect or appraise the Project, the
materials to be used thereon or therein, contracts, records, plans,
specifications and shop drawings relating thereto, whether kept at the
Borrower's offices or at the Project construction site or elsewhere, and the
books, records, accounts and other financial and accounting records of the
Borrower wherever kept, and to make copies and take extracts thereof and
therefrom as often as may be reasonably requested by the Lender. The Borrower
will cooperate with the Lender to enable the Lender, the Inspector or such other
authorized representatives of the Lender to conduct such visits, inspections and
appraisals. The costs of the Inspector and the other authorized representatives
of the Lender, and of such inspections and appraisals shall be borne by the
Borrower and shall be paid within 30 days of the Borrower's receipt of any
invoice with respect thereto. Borrower agrees to keep at its offices or at the
Project, and to make available to the Lender, the Inspector of any other
representative of Lender during normal business hours, the Plans and
Specifications on an as-built basis or, if unavailable, the final set of plans
and specifications from which the Development Work were constructed
("As-Builts"), certified by a licensed architect or licensed contractor as true,
correct and complete As-Builts.

Section 6.17 Correction of Defects

      If Lender in its reasonable judgment determines that any Development Work
or materials fail to conform to the Map, any Laws and Regulations, the Plans and
Specifications, or that they otherwise depart from any of the requirements of
this Loan Agreement, the Lender may require the work to be stopped and withhold
disbursements until the matter is corrected. If this occurs, the Project Owner
shall promptly correct the work to the Lender's satisfaction, and pending
completion of such corrective work shall not allow any other work which is
dependent upon or

                                       42
<PAGE>

directly related to the work requiring correction to proceed. No such action by
the Lender shall affect the Project Owner's obligation to complete each element
of the Development Work within the times required by this Loan Agreement. The
disbursement of any Loan proceeds shall not constitute a waiver of the Lender's
right to require compliance with this covenant.

Section 6.18 Protection Against Lien Claims

      (a) The Project Owner shall pay and discharge, or cause to be paid and
discharged, promptly and fully all claims for labor done and materials and
services furnished in connection with the Development Work, and take or cause to
be taken all reasonable steps to forestall the assertion of claims of lien
against the Project or any part thereof. Upon the request of the Lender, the
Project Owner shall obtain a lien waiver with respect to each payment by or to
the Project Owner and each of the various subcontractors and materialmen (and
the major subcontractors and submaterialmen under them). Lender, at any time, at
its option, may require that any disbursement made hereunder be made by joint
check made payable to the Project Owner and the subcontractor or
sub-subcontractor for whose account such payment is to be made, as joint payees.

      (b) Nothing herein contained shall require the Project Owner to pay any
claims for labor, materials, or services which the Project Owner in good faith
disputes and which the Project Owner, at its own expense, currently and
diligently contests, provided that, in the event the aggregate amount of claims
filed with respect to the Project exceeds $25,000, within 30 days after the
Project Owner's actual receipt of notice of filing of that claim of lien which
exceeds the specified amount, the Project Owner shall take one of the following
actions with respect to all subsequent claims:

            (1) record or cause to be recorded in the office of the recorder of
      the County in which the Project is located a surety bond sufficient to
      release said claim of lien, or

            (2) make or cause to be made a deposit of cash in the amount of 150%
      of the claim of lien with the Lender; or

            (3) deliver or cause to be delivered to Lender a specific
      endorsement to the Title Policy which insures the Lender against any loss
      by reason of such claim of lien, or

            (4) deliver or cause to be delivered to the Lender such other
      assurance as may be acceptable to the Lender.

Section 6.19 Conveyance, Lease or Encumbrance

      The Project Owner shall not sell, agree to sell, convey, transfer, dispose
of or further encumber the Project or any portion thereof or interest therein
(other than the sale of Time-Share Interests on and subject to the terms of this
Loan Agreement), or enter into a lease covering all or any portion thereof or
interest therein, either voluntarily, involuntarily or otherwise, or enter into
an agreement to do so, without the prior written consent of the Lender being
first had and obtained. All easements, declarations, covenants, conditions,
restrictions and dedications affecting the Project shall be submitted to the
Lender for its approval, accompanied by a drawing

                                       43
<PAGE>

or survey showing the precise location thereof, and such approval shall be
obtained prior to the execution or granting of any thereof by the Project Owner.
The Project Owner shall not execute any lease of any portion of the Project
without the prior written consent of the Lender. The Project Owner shall
promptly notify the Lender of any event of default or cancellation under any
lease now or hereafter in effect.

Section 6.20 Security Instruments

      From time to time, upon the request of the Lender, the Project Owner shall
execute and deliver to the Lender a security instrument or instruments naming
the Lender as secured party covering all contracts of any kind entered into in
connection with the Development Work and all other property of any kind
whatsoever owned by the Project Owner and used, or to be used, in the use and
enjoyment of the Project and concerning which the Lender may have any doubt as
to its being subject to the lien of the Project Security Instruments.

Section 6.21 Further Assurances; Cooperation

      The Project Owner will at any time and from time to time upon request of
the Lender take or cause to be taken any action, execute, acknowledge, deliver
or record any further documents, opinions, mortgages, security agreements,
financing statements or other instruments or obtain such additional insurance as
the Lender in its reasonable discretion deems necessary or appropriate to carry
out the purposes of this Loan Agreement and to preserve, protect and perfect the
security interest intended to be created and preserved in the Project, the
Improvements, and the Development Work.

Section 6.22 Negative Covenants

      So long as any amount payable under any Loan Document still remains unpaid
or Lender shall have any commitment to disburse the Loan hereunder, the Project
Owner shall not, unless the Lender shall otherwise consent in writing (i)
create, assume or suffer to exist any lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement, upon the collateral
for the Loan assigned to the Lender pursuant to Project Security Instruments, or
(ii) sell, lease, transfer or otherwise dispose of (A) all or substantially all
of its assets (in a single transaction or a series of related transactions), or
(B) any of the collateral for the Loan assigned to the Lender by the Project
Owner except in the ordinary course of business.

Section 6.23 Signs

      Upon the request of the Lender, the Project Owner shall erect and place on
or in the vicinity of the Project a sign or signs indicating that the Lender has
provided construction financing for the Project. Said sign(s) shall comply with
Laws and Regulations and remain the property of the Lender and shall be required
to be removed only after the Development Work has been completed.

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<PAGE>

ARTICLE VII SALES OF TIME-SHARE INTERESTS AND RELEASES FROM DEED OF TRUST

Section 7.1 Sales and Closings

      The Borrower may enter into Sales Agreements for the sale of Time-Share
Interests in the ordinary course of business with bona fide third party buyers
without the Lender's prior written consent if:

            (1) a Sales Agreement is executed with the buyer which conforms to
      the requirements of this Loan Agreement; and

            (2) the Borrower, acting in good faith following exercise of
      reasonable due diligence, has qualified the buyer under policies
      consistent with the Borrower's business practices applicable to its
      projects, generally.

The Borrower shall, upon the Lender's request, provide to Lender copies of the
Sales Agreements. The Lender in the exercise of its reasonable discretion may
consider any sale to be unsatisfactory if the sale fails to meet any of the
requirements of this Loan Agreement. If this happens, or if any Event of Default
has occurred and is continuing, the Lender may make written demand on Borrower
to submit future Sales Agreements for the Lender's approval prior to execution,
together in each instance with accompanying financial statements for the buyer
and other information that the Borrower may have pertaining to the prospective
buyer. The Borrower shall comply immediately with any such demand by the Lender.

Section 7.2 Sales Operations and Seller's Obligations

      The Borrower shall at all times maintain adequate marketing capability for
the sale of the Time-Share Interests, and shall perform all obligations required
to be performed by it under each Sales Agreement.

Section 7.3 Sales Office

      So long as any proceeds of the Loan remain outstanding with respect to the
Project, the Borrower shall maintain a sales office at or near the Project, as
the Borrower determines, to provide for adequate sales and marketing of the
Project. The Borrower shall insure that sufficient adjacent parking for
customers exists within the vicinity of the sales office. The Borrower shall
maintain insurance coverage regarding the sales office as the Lender shall
reasonably require.

Section 7.4 Releases from Lien of Deed of Trust

      The Borrower may from time to time request that Lender release one or more
Time-Share Interests from the lien of the Deed of Trust and the other Project
Security Instruments encumbering such Time-Share Interests. The Lender agrees
that it will use its best efforts to execute a partial release that releases the
Lender's lien on such Time-Share Interests pursuant to

                                       45
<PAGE>

the Deed of Trust and the other Project Security Instruments within 5 Business
Days after receipt of the release, provided that the following conditions
precedent shall have been satisfied:

            (1) the Lender shall have received a written notice requesting the
      partial release no fewer than 5 Business Days prior to the date on which
      the partial release is to be effective, which notice shall specify (i) the
      Project, (ii) the specific Time-Share Interests to be released, (iii) the
      Person(s) to whom such Time-Share Interests are being sold, which
      Person(s) shall not be an Affiliate of the Borrower or of any Guarantor,
      and (iv) the Lender's Release Price(s) therefor;

            (2) the Lender shall have received evidence satisfactory to the
      Lender that, if the release is being sought precedent to a sale, (i) the
      closing of the sale and/or release of such Time-Share Interests shall be
      conducted through an escrow with a title company or an escrow agent
      specified by the Borrower and satisfactory to the Lender, and (ii) such
      title company shall have been instructed, which instructions shall have
      been acknowledged and agreed to by such title company and which cannot be
      changed or supplemented without the Lender's written concurrence, not to
      record the Lender's partial release until such title company receives in
      respect of such release an amount equal to Lender's Release Price for such
      Time-Share Interests and is irrevocably committed to disburse such amount
      to the Lender;

            (3) the Lender shall have received executed originals of
      instruments, agreements and other documents, in form and substance
      satisfactory to the Lender, which the Lender determines are necessary or
      appropriate, to evidence and/or effectuate the partial release and to
      modify the Loan Documents as a result thereof;

            (4) the Lender shall have received evidence satisfactory to Lender
      that the Borrower has satisfied all conditions precedent in the Loan
      Documents relating to the release of the Time-Share Interests; and

            (5) no Event of Default shall exist, unless the Event of Default is
      a Project Specific Default and the Borrower seeks Lender's release of the
      entire Project as to which the Project Specific Default applies.

In connection with each release of a Time-Share Interest, provided all
conditions to such release have been met, the Lender agrees to provide to the
title insurance company an estoppel letter, in form and substance satisfactory
to the Lender, specifying the Lender's Release Price for the applicable Project.

      (b) In addition to the releases provided for in subparagraph (a), the
Lender agrees that, without requiring payment of any release price, it shall
release from the lien of the Deed of Trust and the other Project Security
Instruments those portions of the Project necessary for utility easements and
dedicated public roads, and Lender shall agree to subordinate its lien of the
Deed of Trust and the other Project Security Instruments and/or to execute a
non-disturbance agreement relative to the Project's common elements (including
any parts of the Project to be transferred to a time-share association or the
like) if required by any governmental agency; provided that the following
conditions precedent shall have been satisfied:

                                       46
<PAGE>

            (1) the Borrower complies with the requirements of subparagraphs
      (1), (3), (4) and (5) of subparagraph (a) above (except that the
      requirement of subparagraph (a)(1) requiring the written notice to specify
      the Lender's Release Price(s) shall not be applicable);

            (2) the Lender is furnished with a survey, or another document
      reasonably satisfactory to the Lender, depicting and describing the real
      property affected; and

            (3) such request is consistent in all material respects with the
      site plan or other depiction of the Project provided to the Lender as part
      of the Project Underwriting Documents.

      (c) In addition to the releases provided for in subparagraphs (a) and (b),
Lender agrees that it shall release the Deed of Trust and the Project Security
Instruments for a particular Project upon the payment in full of the
corresponding Project Loan Amount, provided that no Event of Default or
Potential Default shall exist.

                                       47
<PAGE>

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

Section 8.1 Events of Default

      (a) The occurrence and continuance of any of the following events
constitutes an "Event of Default" hereunder:

            (1) The Borrower fails to pay any installment of principal on the
      Loan when due, whether at stated maturity, as a result of a mandatory
      prepayment requirement, upon acceleration or otherwise, or pay when due
      any interest, fees or other amounts payable hereunder or under the other
      Loan Documents.

            (2) Any representation or warranty made by the Borrower or any
      Guarantor herein or in any other Loan Document is at any time incorrect in
      any material respect.

            (3) The Borrower or any Guarantor fail to perform or observe any
      term, covenant or agreement contained in this Loan Agreement or any other
      Loan Document, and such failure remains unremedied for 30 days after
      notice thereof from the Lender to the Borrower or any Guarantor; provided
      that in the event the Borrower or any Guarantor commences and is
      diligently pursuing to completion action to cure the failure, such 30 day
      period may be extended for such period of time as is necessary to cure the
      failure, but in no event longer then 120 days from the date of the
      Lender's notice; provided further however, that in the event (i) the
      Lender reasonably determines that the failure to immediately declare an
      Event of Default could materially and adversely harm the rights of the
      Lender hereunder or under any other Loan Document, or the rights of the
      Lender with respect to the collateral pledged to secure the Loan, or (ii)
      the Lender reasonably determines that the failure to perform or observe
      the terms of this Loan Agreement or any other Loan Document cannot be
      remedied with the passage of 120 days, then the Lender may declare an
      immediate Event of Default in its notice given pursuant to this Section
      8.1(a)(3).

            (4) The Borrower or any Guarantor asserts the invalidity or
      unenforceability of any Loan Document or any Loan Document is adjudicated
      to be invalid or unenforceable in any material respect.

            (5) Any event of default (however described) under any other Loan
      Document occurs and is not cured within the applicable grace period.

            (6) Any Project Security Instrument, for any reason, ceases to
      create a valid and perfected first priority lien on or in the Land or
      other collateral relating thereto as described in the Loan Documents, or
      the Borrower so states in writing.

            (7) The dissolution or winding up of the Borrower or any Guarantor.

            (8) Any Transfer occurs which has not been consented to in writing
      by Lender.

                                       48
<PAGE>

            (9) The Borrower or any Guarantor fails to comply with any of the
      financial covenants set forth in Section 5.5.

            (10) A Material Adverse Change occurs.

            (11) Any judgment or order for the payment of money in excess of
      $100,000, singularly or in the aggregate, is rendered against the Borrower
      or any Guarantor, and either (i) enforcement proceedings have been
      commenced by any creditor upon such judgment, or (ii) there is a period of
      15 Business Days during which a stay of enforcement of such judgment or
      order, by reason of a pending appeal or otherwise, is not in effect.

            (12) The Borrower or any Guarantor fails to pay any Debt (other than
      the Debt incurred by the Borrower and any Guarantor with respect to the
      Loan, the Events of Default with respect to which are set forth elsewhere
      in this Section 8.1), or any interest or premium thereon, when due
      (whether by scheduled maturity, required prepayment, acceleration, demand
      or otherwise) and such failure continues after the applicable grace
      period, if any, specified in the agreement or instrument relating to such
      Debt; any other default under any agreement or instrument relating to any
      such Debt, or any other event, occurs and continues after the applicable
      grace period, if any, specified in such agreement or instrument, if the
      effect of such failure to pay, default or event results in the
      acceleration, or permits the acceleration of, the maturity of such Debt;
      or any such Debt is declared to be due and payable, or is required to be
      prepaid (other than by a regularly scheduled required prepayment) prior to
      the stated maturity thereof; provided however that none of the foregoing
      events or inactions will constitute an Event of Default unless such event
      or inaction could result in a Material Adverse Change.

            (13) The Borrower or any Guarantor generally does not pay its Debts
      as such Debts become due, or admits in writing its inability to pay its
      Debts generally, or makes a general assignment for the benefit of
      creditors; or any proceeding is instituted by or against the Borrower or
      any Guarantor seeking to adjudicate such party as bankrupt or insolvent,
      or seeking liquidation, winding up, reorganization, arrangement,
      adjustment, protection, relief or composition of such party's Debts under
      any law relating to bankruptcy, insolvency or reorganization or relief of
      debtors, or seeking the entry of an order for relief or the appointment of
      a receiver, trustee or other similar official for such party or for any
      substantial part of such party's property and, in the case of any such
      proceeding instituted against it (but not instituted by it), either such
      proceeding remains undismissed or unstayed for a period of 30 days
      (whether or not consecutive), or any of the actions sought in such
      proceeding (including, without, limitation, the entry of an order for
      relief against, or the appointment of a receiver, trustee, custodian or
      other similar official for, it or for any substantial part of its
      property) occur; or the Borrower or any Guarantor takes any action to
      authorize any of the actions set forth above.

            (14) With respect to any Project, the Borrower fails to commence
      construction of the Development Work or fails to satisfy all of the
      conditions of this Loan Agreement with respect to disbursement of Loan
      proceeds for costs of such construction on or before the expiration of 6
      months after date of the Project Commitment issued for such Project.

                                       49
<PAGE>

            (15) With respect to any Project, there shall occur substantial
      deviations in the Development Work from the Plans and Specifications
      without the prior approval of the Lender, or the existence of materially
      adverse defective workmanship or materials incorporated into the
      Development Work, such deviations and defects to be conclusively
      determined by the Lender after consultation with the Inspector.

            (16) With respect to any Project, cessation of the Development Work
      prior to completion for a continuous period of (i) 90 days or more if such
      cessation is caused by a Force Majeure Event, or (ii) 30 days or more if
      such cessation is not caused by a Force Majeure Event.

            (17) With respect to any Project, a court of competent jurisdiction
      enters an order enjoining construction of the Development Work, or such a
      court or an authorized governmental agency orders that sales of the
      Time-Share Interests be suspended or halted, or any required approval,
      license or permit is withdrawn or suspended, and the order, withdrawal or
      suspension remains in effect for a period of 15 Business Days.

            (18) With respect to any Project, any surety obligated for any
      Development Work is called upon to perform its obligations and/or any
      person demands funds pursuant to any "set-aside" letter or "cash in lieu
      of bond agreement" issued by the Lender with respect to the Project.

            (19) The assignment by the Borrower or any Guarantor of the rents or
      the income of any Project, or any part thereof or of any other revenues or
      sales proceeds relating to the Project (other than to the Lender).

            (20) With respect to any Project, there occurs any attachment, levy,
      execution or other judicial seizure of any portion of the Project, any
      other collateral provided by the Borrower under any of the Loan Documents,
      or any substantial portion of the other assets of the Borrower, which is
      not released, expunged, discharged or dismissed prior to the earlier of
      (i) 20 days after such attachment, levy execution or seizure, or (ii) the
      sale of the assets affected thereby.

            (21) Any event of default (however described) under the Receivables
      Loan Documents occurs and is not cured within the applicable grace period.

            (22) The occurrence of an event of default (however designated or
      defined) with respect to any loan made by Lender or any Affiliate of
      Lender to any one or more of Borrower, Guarantor, or any of their
      respective Affiliates.

      (b) The Borrower acknowledges and agrees that all material non-monetary
defaults are conclusively deemed to be and are defaults which impair the
security of the Deed of Trust, and that the Lender shall be entitled to exercise
any appropriate remedy, including without limitation, foreclosure of the Deed of
Trust upon the occurrence of any such material non-monetary default.

Section 8.2 Remedies

      (a) Upon the occurrence of any Event of Default, the following provisions
apply:

                                       50
<PAGE>

            (1) If such event is an Event of Default specified in Section
      8.1(a)(13), the Lender's commitment to fund the Loan will terminate and
      the indebtedness evidenced by the Note and any other amounts payable under
      this Loan Agreement and the other Loan Documents will immediately and
      automatically become due and payable.

            (2) Upon the occurrence of any other Event of Default, the Lender
      may, at its option, do any one or more of the following:

                  (A) Immediately terminate any further disbursement of Loan
            funds hereunder, and from time to time apply all or any portion of
            the undisbursed Loan funds to payment of accrued interest under the
            Note and/or upon any other obligations of the Borrower hereunder or
            under the Project Documents. Lender may also withhold any one or
            more disbursements after an event or condition occurs that with
            notice or the passage of time could become an Event of Default,
            unless the Borrower cures or corrects the event or condition to the
            reasonable satisfaction of the Lender prior to the occurrence of an
            Event of Default.

                  (B) Declare the Note to be immediately due and payable and
            record a notice of default under any Deed of Trust.

                  (C) Make any disbursements after the happening of any one or
            more Events of Default, without thereby waiving its right to demand
            payment of the Note and all other sums owing to Lender with respect
            to the Project Documents or any other rights or remedies described
            herein, and without liability to make any other or further
            disbursements, notwithstanding Lender's previous exercise of any
            such rights and remedies.

                  (D) Enter upon the Project and with or without legal process
            take possession of the Project, without breaching the peace, remove
            the Borrower and all employees, contractors and agents of the
            Borrower therefrom, and complete or attempt to complete construction
            of the Development Work in accordance with the Plans and
            Specifications with such changes, additions or corrections therein
            as the Lender may from time to time and in its judgment deem
            appropriate, and market, sell or lease the Project, at the risk and
            expense of the Borrower. The Lender shall have the right at any time
            to discontinue any work commenced by it in respect to the
            Development Work or to change any course of action undertaken by it
            and not be bound by any limitations or requirements of time whether
            set forth herein or otherwise. The Lender shall have the right and
            power (but shall not be obligated) to assume any construction
            contract made by or on behalf of the Borrower in any way relating to
            the Development Work and to take over and use all or any part of the
            labor, materials, supplies and equipment contracted for, by or on
            behalf of the Borrower whether or not previously incorporated into
            the Development Work, in the discretion of the Lender. The Lender
            may also modify or terminate any contractual arrangements, subject
            to its right at any time to discontinue any work without liability.
            If the Lender chooses to complete the Development Work, the Lender
            shall not assume any liability to the Borrower or any other person
            for completing them, or for the manner or quality of their

                                       51
<PAGE>

            construction, and Borrower expressly waives any such liability. In
            connection with any work of construction undertaken by the Lender
            pursuant to the provisions of this subsection (3), the Lender may do
            any of the following:

                        i. engage builders, contractors, subcontractors,
                  architects, engineers, suppliers, inspectors, consultants and
                  others for the purpose of furnishing labor, materials,
                  equipment and other services in connection with the work of
                  construction, for the protection or clearance of title to the
                  Project, or for the protection of the Lender's interests with
                  respect thereto;

                        ii. pay, settle or compromise all bills or claims which
                  may become liens against the Project or which have been or may
                  be incurred in any manner in connection with completing
                  construction of the Development Work or for the protection or
                  clearance of title to the Project, or for the protection of
                  the Lender's interests with respect thereto;

                        iii. prosecute and defend all actions and proceedings in
                  connection with the Project;

                        iv. execute, acknowledge and deliver all other
                  instruments and documents in the name of the Borrower that are
                  necessary or desirable, to exercise the Borrower's rights
                  under contracts concerning the Project; and

                        v. take such other action, including the employment of
                  security personnel to protect the Development Work, or refrain
                  from taking action under this Loan Agreement as the Lender may
                  in its discretion determine from time to time.

            The Borrower shall be liable to the Lender for sums paid or incurred
            for completing construction of the Development Work whether the same
            shall be paid or incurred pursuant to the provisions of this Section
            or otherwise, and all payments made or liabilities incurred by the
            Lender hereunder of any kind whatsoever shall be paid by the
            Borrower to the Lender upon demand with interest at the rate set
            forth in the Note, and all of the foregoing shall be deemed and
            shall constitute disbursements under this Loan Agreement and be
            secured by the Project Documents. For the purpose of carrying out
            the provisions and exercising the rights, powers and privileges
            granted by this subsection (3), the Borrower hereby unconditionally
            and irrevocably constitutes and appoints the Lender its true and
            lawful attorney-in-fact to enter into such contracts, perform such
            acts and incur such liabilities as are referred to in said Section
            in the name and on behalf of the Borrower. This power of attorney is
            coupled with an interest.

                  (E) Where substantial deviations from the Plans and
            Specifications appear which have not been approved as set forth
            herein, or where defective or unworkmanlike labor or materials are
            being used in the construction of the Development Work, or upon
            receipt of knowledge of encroachments to which there has been no
            consent, or if the Lender determines that the Development

                                       52
<PAGE>

            Work is not being constructed in accordance with any governmental
            requirements or any covenants, conditions, restrictions, agreements
            or other matters, whether or not of record, affecting the condition
            of title to the Project, the Lender shall have the right to
            immediately order stoppage of the construction and demand that such
            conditions be corrected. After issuance of such an order in writing,
            no further work shall be done on that portion of the Development
            Work where there is a substantial deviation from the Plans and
            Specifications which has not been approved as set forth herein,
            where there is defective or unworkmanlike labor or materials, or
            which does not comply with governmental requirements or matters
            affecting title to the Project, without the prior written consent of
            the Lender, which consent shall not be unreasonably withheld, unless
            and until said condition has been fully corrected.

                  (F) Foreclose on any security for the Loan without waiving its
            rights to proceed against any other security or other entities or
            individuals directly or indirectly responsible for repayment of the
            Loan, or waive any and all security for the Loan as the Lender may
            in its discretion so determine, and pursue any such other remedy or
            remedies as the Lender may so determine to be in its best interest.

                  (G) If the Lender spends its funds in exercising or enforcing
            any of its rights or remedies under the Project Documents, the
            amount of funds spent shall be payable to the Lender upon demand,
            together with interest at the rate applicable to the principal
            balance of the Note, from the date such funds were spent until
            repaid. Such amounts shall be deemed secured by the Deed of Trust
            and other applicable Project Documents.

                  (H) Request and have appointed a receiver with respect to the
            Borrower and/or the collateral securing the Loan, and to that end,
            Borrower hereby consents to the appointment of a receiver by Lender
            in any action initiated by Lender pursuant to this Loan Agreement,
            and Borrower waives any notice and posting of a bond in connection
            therewith.

                  (I) Any and all other remedies available at law or in equity.

      (b) Whether or not the Lender elects to employ any or all of the remedies
available to it in connection with an Event of Default, the Lender shall not be
liable for (i) the Borrower's or the Project Owner's construction of or failure
to construct, complete or protect the Development Work, (ii) the payment of any
expense incurred by the Lender for the construction or completion of the
Development Work undertaken by the Borrower or the Project Owner, or (iii) the
performance or non-performance of any other obligation of the Borrower.

      (c) All remedies of the Lender provided for herein and in any other Loan
Documents are cumulative and shall be in addition to all other rights and
remedies provided by law or in equity. The exercise of any right or remedy by
the Lender hereunder shall not in any way constitute a cure or waiver of default
hereunder or under any other Loan Document or invalidate any act done pursuant
to any notice of default, or prejudice the Lender in the exercise of any of its
rights hereunder or under any other Loan Document. If the Lender exercises any
of the rights or

                                       53
<PAGE>

remedies provided in this Article VIII, that exercise shall not make the Lender,
or cause the Lender to be deemed to be, a partner or joint venturer of the
Borrower. No disbursement of Loan funds by the Lender shall cure any default of
the Borrower, unless the Lender agrees otherwise in writing in each instance.

      (d) Upon the occurrence of any Event of Default, all of the Borrower' s
obligations under the Loan Documents may become immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
at the Lender's option, exercisable in its sole discretion. If such acceleration
occurs, the Lender may apply the undisbursed Loan funds to the obligations of
the Borrower under the Loan Documents, in any order and proportions that the
Lender in its sole discretion may choose.

Section 8.3 Application of Proceeds During an Event of Default

      Notwithstanding anything in the Loan Documents to the contrary, while an
Event of Default exists, any cash received and retained by Lender in connection
with the collateral securing the Loan may be applied to payment of the
Borrower's obligations under the Loan Documents as Lender in its discretion may
determine.

Section 8.4 Uniform Commercial Code Remedies; Sale; Assembly of Collateral

      (a) UCC Remedies; Sale of Collateral. Lender shall have all of the rights
and remedies of a secured party under the Uniform Commercial Code of the State
of Arizona and all other rights and remedies accorded to a Secured Party at
equity or law. Any notice of sale or other disposition of the Collateral given
not less than 10 Business Days prior to such proposed action in connection with
the exercise of Lender's rights and remedies shall constitute reasonable and
fair notice of such action. Lender may postpone or adjourn any such sale from
time to time by announcement at the time and place of sale stated on the notice
of sale or by announcement of any adjourned sale, without being required to give
a further notice of sale. Any such sale may be for cash or, unless prohibited by
applicable law, upon such credit or installment as Lender may determine.
Borrower shall be credited with the net proceeds of such sale only when such
proceeds are actually received by Lender in good current funds. Despite the
consummation of any such sale, Borrower shall remain liable for any deficiency
on the Borrower's obligations under the Loan Documents which remains outstanding
following such sale. All net proceeds recovered pursuant to a sale shall be
applied in accordance with the provisions of Section 8.5.

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

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

                                       54
<PAGE>

Section 8.5 Application of UCC Sale Proceeds

      Should Lender exercise the rights and remedies specified in Section 8.4,
unless otherwise required by applicable law, any proceeds received thereby shall
be first applied to pay the costs and expenses, including reasonable attorneys'
fees, incurred by Lender as a result of the Event of Default. The remainder of
any proceeds, net of Lender's costs and expenses shall be applied to the
satisfaction of the obligations under the Loan Documents as Lender in its
discretion may determine until fully satisfied with any excess paid over to
Borrower

Section 8.6 Authorization to Apply Assets to Payment of Loan

      The Borrower hereby authorizes the Lender, following the occurrence of an
Event of Default, without notice or demand, to apply any property, balances,
credits, accounts or moneys of the Borrower or any Affiliate of the Borrower
then in the possession of the Lender, or standing to the credit of the Borrower
or any Affiliate of the Borrower, to the payment of the Loan.

                                       55
<PAGE>

ARTICLE IX MISCELLANEOUS

Section 9.1 Successors and Assigns; No Assignment by the Borrower

      The provisions of this Loan Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
provided that the Borrower may not assign or transfer any of its rights or
obligations under this Loan Agreement or any of the other Loan Documents without
the prior written consent of the Lender.

Section 9.2 Notices

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

            (1) personal delivery;

            (2) reputable overnight courier service;

            (3) electronic communication, whether by telex, telegram or
      telecopying (if confirmed in writing sent by registered or certified,
      first class mail, return receipt requested); or

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

Any notice, demand or request sent pursuant to the terms of this Loan Agreement
will be deemed received (i) if sent pursuant subsection (1), upon such personal
delivery, (ii) if sent pursuant to subsection (2), on the next Business Day
following delivery to the courier service, (iii) if sent pursuant to subsection
(3), upon dispatch if such dispatch occurs between the hours of 9:00 a.m. and
5:00 p.m. (recipient's time zone) on a Business Day, and if such dispatch occurs
other than during such hours, on the next Business Day following dispatch and
(iv) if sent pursuant to subsection (4), 3 days following deposit in the mail.

      The addresses for notices are as follows:

      To the Lender:                Residential Funding Corporation
                                    2415 E. Camelback Rd.
                                    Suite 700
                                    Phoenix, AZ 85016
                                    Attention: Managing Director Resort Finance
                                    Telephone No.: (602) 912-8504
                                    Telecopier No.: (602) 912-8506

      With a copy to:               Residential Funding Corporation
                                    8400 Normandale Lake Boulevard, Suite 250
                                    Minneapolis, Minnesota  55437
                                    Attention: Chief Counsel

                                       56
<PAGE>

                                               Business Capital Group
                                    Telephone No.: (952) 857-6911
                                    Telecopier No.: (952) 857-6949

      To the Borrower:              Bluegreen Corporation
                                    4960 Conference Way North, Suite 100
                                    Boca Raton, Florida 33431
                                    Attention: John F. Chiste
                                    Telephone No.: (561) 912-8010
                                    Telecopier No.: (561) 912-8123

      With courtesy copies to:      Bluegreen Corporation
                                    4960 Conference Way North, Suite 100
                                    Boca Raton, FL 33431
                                    Attention: Randi Tompkins
                                    Telephone No.: (561) 912-8012
                                    Telecopier No.: (561) 912-8299

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

      (c) Notwithstanding the foregoing, all requests for disbursements of the
Loan pursuant to Article II above will be deemed received only upon actual
receipt, and such requests for disbursement must be given only to the Lender's
primary addressee.

Section 9.3 Borrower's Representative

      The Borrower hereby designates the following natural persons as its
representatives and the representative of Guarantor, if any, for purposes of (i)
making all decisions with respect to the Loan, the Projects and the Loan
Documents, (ii) delivering all notices, certificates, Draw Request
Certifications, requests and other documents required by the terms of the Loan
Documents or requested by the Borrower or any Guarantor in connection with the
Loan and (iii) taking all other actions requested by the Borrower or any
Guarantor in connection with the Loan, the Projects and the Loan Documents:

         John F. Chiste, Senior Vice President
         Bluegreen Corporation
         4960 Conference Way North
         Suite 100
         Boca Raton, Florida 33431
         Telephone No.: (561) 912-8010
         Telecopier No.: (561) 912-8123
         Allan J. Herz, Vice President
         Bluegreen Corporation
         4960 Conference Way North
         Suite 100
         Boca Raton, FL 33431
         Telephone No.: (561) 912-8210
         Telecopier No.: (561) 912-7915

                                       57
<PAGE>

In taking action pursuant to the terms of this Loan Agreement and the other Loan
Documents, the Lender shall be entitled to rely, without further investigation,
upon any notice, certificate, Draw Request Certification, request or other
document delivered in writing and executed or signed by such representative of
the Borrower and any Guarantor. In addition, the Lender may, at its option,
refuse to take action in the event a notice, certificate, Draw Request
Certification, request or other document is delivered to Lender which has not
been executed or delivered by such representative of the Borrower and the
Lender.

Section 9.4 Changes, Waivers, Discharge and Modifications in Writing

      No provision of this Loan Agreement or any of the other Loan Documents may
be changed, waived, discharged or modified except by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
modification is sought.

Section 9.5 No Waiver; Remedies Cumulative

      No disbursement of proceeds of the Loan will constitute a waiver of any
conditions to the Lender's obligation to make further disbursements nor, in the
event the Borrower is unable to satisfy any such conditions, will any such
waiver have the effect of precluding the Lender from thereafter declaring such
inability to constitute an Event of Default (however described) under this Loan
Agreement or any other Loan Document. No failure or delay on the part of the
Lender in the exercise of any power, right or privilege hereunder or under this
Loan Agreement or any other Loan Document will impair such power, right or
privilege or be construed to be a waiver of any Event of Default (however
described) or acquiescence therein, nor will any single or partial exercise of
any such power, right or privilege preclude any other or further exercise
thereof, or of any other right, power or privilege. Except as specifically
provided herein, all rights and remedies existing under this Loan Agreement and
the other Loan Documents are cumulative to and not exclusive of any rights or
remedies otherwise available.

Section 9.6 Costs, Expenses and Taxes

      (a) The Borrower agrees to pay the costs, and all expenses incurred by the
Lender in connection with the preparation, execution, delivery, administration,
modification and amendment of this Loan Agreement, the other Loan Documents and
any other documents to be delivered hereunder. The costs and expenses to be paid
by the Borrower shall include, without limitation the following:

            (1) the reasonable fees and out-of-pocket expenses of counsel for
      the Lender, including in-house counsel to the Lender, with respect thereto
      and with respect to advising the Lender as to its rights and
      responsibilities under this Loan Agreement and the other Loan Documents;

            (2) any and all stamp and other taxes payable or determined to be
      payable in connection with the execution and delivery of this Loan
      Agreement, the other Loan Documents and the other documents to be
      delivered hereunder;

                                       1
<PAGE>

            (3) the fees, costs and expenses of any Appraisers retained by the
      Lender;

            (4) the fees, costs and expenses of any Inspectors retained by the
      Lender;

            (5) the costs associated with the issuance of the Title Policy and
      the date-down endorsements required by the terms of Section 3.3(c);

            (6) any and all reasonable travel expenses of Lender's employees in
      relation to the Loan; and

            (7) any and all other costs and expenses incurred by Lender.

      (b) The Borrower further agrees to pay all costs and expenses of the
Lender, including, without limitation, reasonable counsel fees and expenses,
court costs and all litigation expenses, (including, but not limited to,
reasonable expert witness fees, document copying expenses, exhibit preparation,
courier expenses, postage expenses and communication expenses) in connection
with the enforcement of this Loan Agreement, the other Loan Documents and any
other documents delivered hereunder, including, without limitation, costs and
expenses incurred in connection with any bankruptcy, insolvency, liquidation,
reorganization, moratorium or other similar proceeding, or any refinancing or
restructuring in the nature of a "workout" of the Loan Documents and any other
documents delivered by the Borrower and any Guarantor related thereto.

      (c) Payment from the Borrower of amounts due pursuant to this Section 9.6
will be due 10 Business Days after it has received from the Lender written
notice of the nature of the item for which payment is required and the amount
due.

Section 9.7 Disclaimer by the Lender; No Joint Venture

      The Borrower acknowledges, understands and agrees as follows:

            (1) The relationship between the Borrower and the Lender is, and
      will at all times remain, solely that of borrower and lender, and the
      Lender neither undertakes nor assumes any responsibility for or duty to
      the Borrower, any Guarantor or any Affiliate to select, review, inspect,
      supervise, pass judgment upon or inform the Borrower of the quality,
      adequacy or suitability of any matter or thing submitted to the Lender for
      its approval.

            (2) The Lender owes no duty of care to protect the Borrower, any
      Guarantor or any Affiliate or any other Person against negligent, faulty,
      inadequate or defective building or construction.

            (3) The Borrower is not and will not be an agent of the Lender for
      any purpose. The Lender is not a joint venture partner with the Borrower
      in any manner whatsoever. Approvals granted by the Lender for any matters
      covered under this Loan Agreement are to be narrowly construed to cover
      only the parties and facts identified in any such approval.

                                       2
<PAGE>

Section 9.8 Indemnification

      In addition to the separate and independent Environmental Indemnity, the
Borrower agrees to protect, indemnify, defend and hold harmless each Indemnified
Party from and against any and all claims, damages, losses, liabilities,
obligations, penalties, actions, judgments, suits, costs, disbursements and
expenses (including, without limitation, reasonable fees and expenses of counsel
and consultants and allocated costs of internal counsel (but not in duplication
of outside third party legal fees)) that may be incurred by or asserted against
any Indemnified Party, in each case arising out of or in connection with or
related to any of the following:

            (1) the Loan, this Loan Agreement or any other Loan Document;

            (2) any Project;

            (3) the use of funds disbursed under the Loan Documents; or

            (4) the failure of the Borrower, any Guarantor or any other party to
      the Loan Documents (other than the Lender) to comply fully with any and
      all laws applicable to it;

whether or not an Indemnified Party is a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claims, damages, losses, liabilities, obligations, penalties, actions,
judgments, suits, costs, obligations, penalties, disbursements and expenses are
found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the Indemnified
Party. Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 9.8 will survive the termination of this Loan Agreement and the other
Loan Documents and the payment in full of the Loan.

Section 9.9 Consultants

      The Borrower will pay any and all valid claims of any consultants,
advisors, brokers or agents whom it has retained or with whom it has initiated
contact with respect to the Loan who claims a right to any fees in connection
with the Loan, and will indemnify, defend and hold the Lender harmless from such
claims, whether or not they are valid.

Section 9.10 Titles and Headings

      The titles and headings of sections of this Loan Agreement are intended
for convenience only and are not in any way to affect the meaning or
construction of any provision of this Loan Agreement.

Section 9.11 Counterparts

      This Loan Agreement may be executed in any number of counterparts, each of
which will be deemed an original and all of which will constitute one and the
same agreement with the same effect as if all parties had signed the same
signature page.

                                       3
<PAGE>

Section 9.12 The Lender's Rights with Respect to Loan

      Notwithstanding any provision to the contrary contained in this Loan
Agreement or any other Loan Document, the Lender may at any time sell, assign,
grant or transfer to any Person all or a portion of its interest in or rights
with respect to the Loan and in all or part of the obligations of the Borrower
and any other obligated party under the Loan Documents. Lender agrees to use its
best efforts to retain the servicing of the Loan.

Section 9.13 Confidentiality

      The Borrower and the Lender shall mutually agree on the contents of any
press release, public announcement or other public disclosure regarding this
Loan Agreement and the transactions contemplated hereunder to be made following
the mutual execution and delivery of this Loan Agreement; provided that the
Lender may disclose the terms hereof and give copies of the Loan Documents to
assignees and participants and to prospective assignees and participants. If
either party fails to respond to the other party in writing with either an
approval or a disapproval within 5 Business Days of a party's receipt of the
other party's request for consent or approval as expressly contemplated pursuant
to this Section 9.13, then such consent or approval will be deemed to have been
given, provided that such 5 Business Day period will not commence to run unless
and until the other party has received all information, materials, documents and
other matters required to be submitted to it hereunder with respect to such
consent or approval and all other information, materials, documents and other
matters reasonably essential to its decision process.

Section 9.14 Time is of the Essence

      Time is of the essence of this Loan Agreement.

Section 9.15 No Third Parties Benefited

      This Loan Agreement is made and entered into for the sole protection and
legal benefit of the Borrower, the Guarantor, if any, and the Lender and their
permitted successors and assigns, and no other Person will be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with this Loan Agreement or any of the other Loan Documents.
The Lender will not have any obligation to any Person not a party to this Loan
Agreement or the other Loan Documents.

Section 9.16 Severability

      The illegality or unenforceability of any provision of this Loan Agreement
or any instrument or agreement required hereunder will not in any way affect or
impair the legality or enforceability of the remaining provisions of this Loan
Agreement or any instrument or agreement required hereunder.

                                       4
<PAGE>

================================================================================

Section 9.17 FORUM SELECTION; JURISDICTION; CHOICE OF LAW

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

Section 9.18 WAIVER OF JURY TRIAL

WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS LOAN AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.

================================================================================

                                       5
<PAGE>

================================================================================

BORROWER AND LENDER HEREBY AGREE THAT THIS LOAN AGREEMENT CONSTITUTES A WRITTEN
CONSENT TO WAIVER OF TRIAL BY JURY PURSUANT TO THE PROVISIONS OF ALL APPLICABLE
LAWS AND BORROWER DOES HEREBY CONSTITUTE AND APPOINT LENDER ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT, WHICH APPOINTMENT IS COUPLED WITH AN INTEREST. BORROWER DOES
HEREBY AUTHORIZE AND EMPOWER LENDER, IN THE NAME, PLACE AND STEAD OF BORROWER,
TO FILE THIS LOAN AGREEMENT WITH THE CLERK OR JUDGE OF ANY COURT OF COMPETENT
JURISDICTION AS A STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.

Initials:                                                     Lender: __________

Borrower:  __________        __________        __________        __________

================================================================================

Section 9.19 Interpretation

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

Section 9.20 Destruction of Note

      In the event the Note is mutilated or destroyed by any cause whatsoever,
or otherwise lost or stolen and regardless of whether due to the act or neglect
of the Lender, the Borrower will execute and deliver to the Lender in
substitution therefor a duplicate promissory note containing the same terms and
conditions as the Note, within 10 days after the Lender notifies the Borrower of
any such mutilation, destruction, loss or theft of the Note. Upon the Borrower's
delivery of such duplicate promissory note, the Borrower will be relieved of all
obligations under the original Note and will thereafter be bound solely by the
provisions of such duplicate promissory note.

Section 9.21 Cross-Collateralization of Loans.

      The collateral securing the Loan shall also secure the Receivables Loan.
All of the collateral securing the Receivables Loan as provided for in the
Receivables Loan Documents shall secure the Loan and the Receivables Loan.
Notwithstanding the foregoing, or anything to the contrary in any of the Loan
Documents, provided no Event of Default exists, Lender agrees to deliver the
Unit releases in accordance with Section 7.4 and to release the applicable
Project Security Instruments upon repayment in full of the related Project Loan
whether or not the Receivables Loan is paid in full.

Section 9.22 Entire Agreement

      This Loan Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among the Borrower, the Guarantor, if any,
and the Lender and supersedes all prior or contemporaneous agreements and
understandings of such persons, verbal

                                       6
<PAGE>

or written, relating to the subject matter hereof and thereof except for any
prior arrangements made with respect to the payment by the Borrower of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of the Lender.

                                       7
<PAGE>

      IN WITNESS WHEREOF, the Lender and the Borrower have caused this Loan
Agreement to be duly executed and delivered as of the date first above written.

                                           BORROWER:

                                           BLUEGREEN VACATIONS UNLIMITED, INC.,
                                           a Florida corporation

                                           By: /s/ JOHN F. CHISTE
                                               ---------------------------------

                                           Printed Name: John F. Chiste
                                                         -----------------------

                                           Title: Treasurer
                                                  ------------------------------

                                       8
<PAGE>

                                           LENDER:

                                           RESIDENTIAL FUNDING CORPORATION,
                                           a Delaware corporation

                                           By: /s/ JEFF OWINGS
                                               ---------------------------------

                                           Printed Name: Jeff Owings
                                                         -----------------------

                                           Title: Managing Director
                                                  ------------------------------

                                       9--------------------------------------------------------------------------------

                            REVOLVING PROMISSORY NOTE

                                   (AD&C Loan)

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

                                                                Phoenix, Arizona
$15,000,000.00                                                 February 10, 2003

     FOR VALUE RECEIVED, BLUEGREEN VACATIONS UNLIMITED, INC., a Florida
corporation ("Borrower"), promises unconditionally to pay to the order of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Holder"), in lawful
money of the United States of America, in immediately available funds, the
principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00), or the
portion of such principal amount outstanding from time to time, together with
interest on such unpaid principal balance, as more fully provided below.

     This Revolving Promissory Note (this "Note") is executed pursuant to a Loan
Agreement dated as of even date herewith between Borrower and Holder (together
with any and all extensions, renewals, modifications and restatements thereof,
the "Loan Agreement") and evidences advances under a revolving acquisition,
development and construction loan (the "Loan").

Section 1   Definitions

     As used herein, the term "Holder" shall mean Holder and any subsequent
holder of this Note, whichever is applicable from time to time. Initially
capitalized terms used herein without definition shall have the meanings set
forth in the Loan Agreement. The Loan Agreement and all other documents now or
hereafter executed in connection with the Loan are collectively referred to
herein as the "Loan Documents."

Section 2   Interest

     (a) Except as otherwise provided herein, interest shall be computed and
shall accrue at a variable interest rate per annum equal to LIBOR plus 4.75%,
adjusted monthly on the first Business Day of each calendar month. As used
herein, "LIBOR" means the average of interbank offered rates for 30-day dollar
deposits in the London market based on quotations of five major banks, as
published from time to time in The Wall Street Journal. In the event that The
Wall Street Journal ceases to be published or ceases to publish such a
compilation of interbank offered rates, the Borrower and the Lender will agree
on a substitute source and method of determining the interest rate generally
known as the one-month (or 30-day) LIBOR rate.

     (b) Interest shall be computed on the outstanding principal balance of the
Loan on the basis of the actual number of days elapsed during the period for
which interest is being charged predicated on a year consisting of three hundred
sixty five (365) days.

<PAGE>

Section 3   Principal and Interest Payments

     (a) Borrower shall make the principal payments required by Section 2.8 of
the Loan Agreement.

     (b) On or before the 5th Business Day of each month, commencing with the
first month after the Holder has made a disbursement pursuant to the terms of
the Loan Agreement, the Holder shall send to Borrower a statement setting forth
the amount of interest due for the previous month. Borrower shall pay the
interest due for the previous month on or before the 15th calendar day of the
month in which it has received the Holder's statement of interest due.

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

Section 4   Maturity Date

     The unpaid principal balance hereof, together with all unpaid interest
accrued thereon, and all other amounts payable by Borrower under the terms of
the Loan Documents shall be due and payable on the first to occur (the "Maturity
Date") of (i) the date which is 6 years after the date of this Note, or (ii) the
date on which this Note is required to be repaid pursuant to the Loan Agreement,
including, without limitation, Section 8.2 of the Loan Agreement. If the
Maturity Date should fall on a day other than a Business Day, payment of the
outstanding principal and all unpaid interest due under the terms hereof shall
be made on the next succeeding Business Day and such extension of time shall be
included in computing any interest in respect of such payment.

Section 5  Prepayment

     Except as provided in the Loan Agreement, Borrower shall have the option to
prepay a Project Loan in full but not in part upon 30 days prior written notice
to the Holder. No Prepayment Premium or other penalty shall be required for
prepayments of any Project Loan.

Section 6   Manner of Payment

     Principal and interest are payable in lawful money of the United States of
America. Payments shall be made in the manner prescribed in Section 2.11 of the
Loan Agreement or in accordance with such other instructions that Holder may
from time to time designate in writing.

Section 7   Applications of Payments; Late Charges

     (a) Payments received by Holder pursuant to the terms hereof shall be
applied in the manner required by Section 2.12 of the Loan Agreement.

     (b) If any installment of interest and/or the payment of principal is not
received by Holder within 5 Business Days after the due date thereof, then in
addition to the remedies conferred upon Holder pursuant to Section 8 hereof and
the other Loan Documents, the Holder

                                       2
<PAGE>

may elect to assess a late charge of 4% of the amount of the installment due and
unpaid, which such late charge will be added to the delinquent amount to
compensate Holder for the expense of handling the delinquency. Borrower and
Holder agree that such late charge represents a good faith and fair and
reasonable estimate of the probable cost to Holder of such delinquency. Borrower
acknowledges that during the time that any such amount shall be in default,
Holder will incur losses which are impracticable, costly and inconvenient to
ascertain and that such late charge represents a reasonable sum considering all
of the circumstances existing on the date of the execution of this Note and
represents a reasonable estimate of the losses Holder will incur by reason of
late payment. Borrower further agrees that proof of actual losses would be
costly, inconvenient, impracticable and extremely difficult to fix. Acceptance
of such late charge shall not constitute a waiver of the default with respect to
the overdue installment, and shall not prevent Holder from exercising any of the
other rights and remedies available hereunder.

Section 8   Remedies

     Upon the occurrence of an Event of Default and without demand or notice,
Holder shall have the option to declare the entire balance of principal together
with all accrued interest thereon immediately due and payable and to exercise
all rights and remedies available to it under the Loan Agreement and all other
Loan Documents. Upon the occurrence of an Event of Default (and so long as such
Event of Default shall continue), the entire balance of principal together with
all accrued interest thereon shall bear interest at the Interest Rate plus 2%
(the "Default Rate"). No delay or omission on the part of Holder hereof in
exercising any right under this Note or under any of the Loan Documents shall
operate as a waiver of such right. The application of the Default Rate shall not
be interpreted or deemed to extend any cure period set forth in any Loan
Document or otherwise limit in any way any of Holder's remedies hereunder or
thereunder.

Section 9   Waiver

     Borrower hereby waives diligence, presentment, protest and demand, notice
of protest, dishonor and nonpayment of this Note and expressly agrees that,
without in any way affecting the liability of Borrower hereunder, Holder may
extend the Maturity Date or the time for payment of any installment due
hereunder, accept security, release any party liable hereunder and release any
security hereafter securing this Note. Borrower further waives, to the full
extent permitted by law, the right to plead any and all statutes of limitations
as a defense to any demand on this Note, any other Loan Document or on any Deed
of Trust, security agreement or other agreement now or hereafter securing this
Note.

Section 10   Attorneys' Fees

     If this Note is not paid when due or if any Event of Default occurs,
Borrower promises to pay all costs of enforcement and collection, including, but
not limited to, Holder's reasonable attorneys' fees, whether or not any action
or proceeding is brought to enforce the provisions hereof, including, without
limitation, any action or proceeding in connection with any bankruptcy,
insolvency, liquidation, reorganization, moratorium or other similar proceeding.

                                       3
<PAGE>

Section 11   Severability

     Every provision of this Note is intended to be severable. In the event any
term or provision hereof is declared by a court of competent jurisdiction to be
illegal or invalid for any reason whatsoever, such illegality or invalidity
shall not affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable.

Section 12   Interest Rate Limitation

     The provisions of this Note, the Loan Agreement and the other Loan
Documents are hereby expressly limited so that in no contingency or event
whatever shall the amount paid or agreed to be paid to Holder for the use,
forbearance or detention of the sums evidenced by this Note exceed the maximum
amount permissible under applicable law. If from any circumstance whatever the
performance or fulfillment of any provision of this Note, the Loan Agreement or
of any other Loan Document should involve or purport to require any payment in
excess of the limit prescribed by law, then the obligation to be performed or
fulfilled is hereby reduced to the limit of such validity. In addition, if, from
any circumstance whatever, Holder should ever receive as interest an amount
which would exceed the highest lawful rate under applicable law, then the amount
which would be excessive interest shall be applied as an optional reduction of
principal in accordance with the terms of Section 3 of this Note and the
provisions of the Loan Agreement (or, at Holder's option, be paid over to
Borrower), and will not be counted as interest.

Section 13   Headings

     Headings at the beginning of each numbered section of this Note are
intended solely for convenience and are not to be deemed or construed to be a
part of this Note.

Section 14   Time is of the Essence

     Time is of the essence with respect to all obligations under this Note.

Section 15   Successors

     All of the rights, privileges and obligations hereof shall inure to the
benefit of and shall be binding upon Lender and Borrower and any successors and
permitted assigns, if applicable.

Section 16   CHOICE OF LAW; JURISDICTION AND VENUE

     BORROWER ACKNOWLEDGES THAT THIS NOTE WAS SUBSTANTIALLY NEGOTIATED IN THE
STATE OF ARIZONA, DELIVERED BY BORROWER IN THE STATE OF ARIZONA AND ACCEPTED BY
HOLDER IN THE STATE OF ARIZONA AND THAT THERE ARE SUBSTANTIAL CONTACTS BETWEEN
THE PARTIES AND THE TRANSACTIONS CONTEMPLATED HEREIN AND THE STATE OF ARIZONA.
FOR PURPOSES OF ANY ACTION OR PROCEEDING ARISING OUT OF THIS NOTE OR ANY OF THE
OTHER LOAN DOCUMENTS, BORROWER HEREBY EXPRESSLY SUBMITS TO THE JURISDICTION OF
ALL FEDERAL AND STATE COURTS LOCATED IN MARICOPA COUNTY, ARIZONA AND BORROWER
CONSENTS THAT IT MAY BE SERVED WITH ANY PROCESS OR PAPER BY

                                       4
<PAGE>

REGISTERED MAIL OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ARIZONA IN
ACCORDANCE WITH APPLICABLE LAW. FURTHERMORE, BORROWER WAIVES AND AGREES NOT TO
ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURTS, THAT THE ACTION, SUIT OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT VENUE OF THE ACTION, SUIT OR PROCEEDING
IS IMPROPER. IT IS THE INTENT OF THE PARTIES HERETO THAT ALL PROVISIONS OF THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF ARIZONA,
WITHOUT GIVING EFFECT TO ITS PRINCIPLES OF CONFLICTS OF LAW. NOTHING IN THIS
SECTION SHALL LIMIT OR RESTRICT THE RIGHT OF HOLDER TO COMMENCE ANY PROCEEDING
IN THE FEDERAL OR STATE COURTS LOCATED IN THE STATES IN WHICH THE COLLATERAL
SECURING THE LOAN IS LOCATED TO THE EXTENT HOLDER DEEMS SUCH PROCEEDING
NECESSARY OR ADVISABLE TO EXERCISE REMEDIES AVAILABLE UNDER THIS NOTE OR THE
OTHER LOAN DOCUMENTS.

     IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered as of the date first set forth above.

                                  BORROWER:

                                  BLUEGREEN VACATIONS UNLIMITED, INC., a Florida
                                  corporation

                                  By: /S/ JOHN F. CHISTE
                                      ------------------------------------------
                                  Printed Name: John F. Chiste
                                                --------------------------------
                                  Its: Treasurer
                                       -----------------------------------------

                                   Federal ID #:
                                                 -------------------------------

                                       5

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