Document:

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                                                                  Exhibit 10.49

                                DATED 27 MAY 2000
                                -----------------

                                  (1) EMESS PLC

                                       and

                                   (2) SLI INC

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                                    AGREEMENT
                                   Relating to
              The sale and purchase of (i) the entire share capital
                 of Brilliant Holdings GmbH and (ii) the Marlin
                      Business and Emess Lighting Business

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                              ASHURST MORRIS CRISP
                                 Broadwalk House
                                 5 Appold Street
                                 London EC2A 2HA

                               Tel: 020-7638 1111
                               Fax: 020-7972 7990

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THIS AGREEMENT is made on                                                   2000

BETWEEN:

(1)      EMESS PLC a company registered in England and Wales with number
         00164213 whose registered office is at Ariel House, 74A Charlotte
         Street, London W1P 1LR (the "VENDOR"); and

(2)      SLI INC a company incorporated in the State of Oklahoma, whose
         principal place of business is at 500 Chapman Street, Canton,
         Massachusetts, USA (the "PURCHASER" which shall include its permitted
         successors and assigns).

WHEREAS

The Vendor has agreed to sell, or procure the sale of, and the Purchaser has
agreed to purchase, or procure the purchase of (i) the Shares and (ii) the
Marlin Business and the Emess Lighting Business (both to be effected by way of
sale as a going concern).

IT IS HEREBY AGREED:

1.       DEFINITIONS AND INTERPRETATION
1.1      In this Agreement:

                  "ACCOUNTS" means the Business Accounts and the Brilliant
                  Accounts.

                  "ACTIVITIES" means any activity, operation or process, act or
                  omission carried out or made by any Asset Vendor in relation
                  to the Businesses or any member of the Brilliant (AG Excluded
                  Group) Group

                  "AFFILIATED COMPANY" means a company which is a subsidiary of
                  the party concerned or which is a holding company of such
                  party or a subsidiary of such holding company.

                  "AG GROUP" means Brilliant AG and any subsidiary or subsidiary
                  undertaking of Brilliant AG.

                  "APPORTIONMENT SCHEDULE" means the schedule setting out the
                  apportionment of the Consideration payable by the Purchaser to
                  the Vendor under this Agreement, to be agreed between the
                  Vendor and Purchaser on or before 23 June 2000 and drawn up in
                  compliance with clause 4.4.

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                  "ASSET VENDOR" means the Vendor in relation to the Marlin
                  Business and Emess Lighting Inc in relation to the Emess
                  Lighting Business.

                  "ASSETS" means the Business Assets and the Brilliant Assets.

                  "ASSUMPTION OF LIABILITY AGREEMENT" means the agreement to be
                  entered into by the Purchaser or its nominee(s) at Completion
                  in order to assume certain liabilities associated with the
                  Emess Lighting Business in such form as may be agreed between
                  the Vendor and the Purchaser.

                  "AUSTCO" means Brilliant Lighting (Aust) Pty Ltd ACN 006 203
                  694.

                  "BRILLIANT ACCOUNTS" means the audited consolidated profit and
                  loss account and cash flow statement of Brilliant Holding for
                  the accounting period ended on, and the consolidated audited
                  balance sheet of Brilliant Holding as at, the Latest
                  Accounting Date in the agreed form.

                  "BRILLIANT AG" means Brilliant AG a company incorporated in
                  Germany, whose principal place of business is at
                  Brilliantstrasse 1, D-27442 Gnarrenburg, Germany details of
                  which are set out at Part 2 of Schedule 4.

                  "BRILLIANT (AG GROUP EXCLUDED) ASSETS" means the Brilliant
                  Assets other than the property rights and assets relating to
                  any member of the AG Group.

                  "BRILLIANT (AG GROUP EXCLUDED) BUSINESS" means the Brilliant
                  Business other than the businesses carried on by any member of
                  the AG Group.

                  "BRILLIANT (AG GROUP EXCLUDED) GROUP" means the Brilliant
                  Group other than any member of the AG Group.

                  "BRILLIANT (AG GROUP EXCLUDED) GROUP CONTRACTS" means all
                  contracts, undertakings, arrangements and engagements of any
                  member of the Brilliant (AG Group Excluded) Group whether
                  written or verbal relating to the Brilliant (AG Group
                  Excluded) Business which are wholly or partly unperformed at
                  the date of Completion including, without limitation, supply
                  and distribution agreements, customer and supplier contracts,
                  lease, hire and hire purchase agreements but excluding
                  contracts of employment with the employees, agreements with
                  trade unions or employee representatives in respect of the
                  employees, leases of the properties and

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                  loan agreements (any one of these being a "BRILLIANT (AG GROUP
                  EXCLUDED) GROUP CONTRACT").

                  "BRILLIANT ASSETS" means all the property rights and assets
                  relating to any member of the Brilliant Group.

                  "BRILLIANT BUSINESS" means the businesses carried on by any
                  member of the Brilliant Group.

                  "BRILLIANT GROUP" means Brilliant Holding and each of the
                  Brilliant Subsidiaries.

                  "BRILLIANT HOLDING" means Brilliant Holding GmbH a company
                  incorporated in Germany, whose principal place of business is
                  at Brilliantstrasse 1, D-27442 Gnarrenburg, Germany details of
                  which are set out at Part 1 of Schedule 4.

                  "BRILLIANT INTELLECTUAL PROPERTY RIGHTS" means Intellectual
                  Property and the Brilliant Know-How owned by the Brilliant (AG
                  Group Excluded) Group including without prejudice to that
                  generality the registered Intellectual Property set out in
                  Schedule 2.

                  "BRILLIANT KNOW-HOW" means know-how used in the Brilliant (AG
                  Group Excluded) Business.

                  "BRILLIANT RECEIVABLES" means the aggregate amount as at
                  Completion of all outstanding loans and, borrowings or any
                  other amount in the nature of borrowing owed to any member of
                  the Brilliant Group.

                  "BRILLIANT RECORDS" means all bought and sold ledgers,
                  purchase and sales day books and purchase and sales invoices
                  and other books and records of any member of the Brilliant (AG
                  Group Excluded) Group relating exclusively to the Brilliant
                  (AG Group Excluded) Business.

                  "BRILLIANT SUBSIDIARY" means a subsidiary or subsidiary
                  undertaking of Brilliant Holding as listed in Part 2 of
                  Schedule 4 and "BRILLIANT SUBSIDIARIES" shall be construed
                  accordingly.

                  "BRILLIANT SUBSIDIARY (AG GROUP EXCLUDED) EMPLOYEES" means the
                  employees of any member of The Brilliant Group, other than the
                  employees of the AG Group, as at Completion;

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                  "BRILLIANT SUBSIDIARY EMPLOYEES" means the employees of any
                  member of the Brilliant Group at Completion.

                  "BUSINESSES" means either or both of the Marlin Business and
                  the Emess Lighting Business as the context so requires.

                  "BUSINESS ACCOUNTS" means the audited profit and loss account
                  and cash flow statement of each of the Vendor and Emess
                  Lighting Inc. in the agreed form for the accounting period
                  ended on, and the audited balance sheet of each of the Vendor
                  and Emess Lighting Inc. in the agreed form as at, the Latest
                  Accounting Date.

                  "BUSINESS ASSETS" means all the property rights and assets
                  relating to the Marlin Business and/or the Emess Lighting
                  Business (as the context so requires) agreed to be sold and
                  purchased as more particularly set out in clause 2.1of this
                  Agreement;

                  "BUSINESS DAY" means a day (other than a Saturday or Sunday)
                  on which clearing banks are open for business in London.

                  "BUSINESS INTELLECTUAL PROPERTY RIGHTS" means all Intellectual
                  Property and rights in Know-How owned and used exclusively by
                  the Asset Vendor in, or in connection with, the relevant
                  Business at the date of this Agreement including any rights to
                  proceed for the infringement of such Intellectual Property,
                  and without limitation, those registered rights set out in
                  Schedule 2.

                  "BUSINESS RECORDS" means all bought and sold ledgers, purchase
                  and sales day books and purchase and sales invoices and other
                  books and records of the Asset Vendor relating exclusively to
                  the relevant Business as at the date of Completion.

                  "COMPLETION" means completion of the sale and purchase of the
                  Shares and each of the Businesses in accordance with this
                  Agreement.

                  "COMPLETION STATEMENT" means the statement agreed between the
                  Vendor and the Purchaser or determined, in each case, in
                  accordance with clause 6.

                  "COMPULSORY CONTAMINATION PENALTIES" means any fine penalty or
                  order to pay damages imposed by a Regulatory Authority under
                  Environmental Law or any court under Environmental Law to the
                  extent any of the same relates to Pre-Completion Contamination
                  costs, expenses, losses, fines, penalties or damages
                  (including

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                  reasonable legal or other professional fees) incurred in
                  defending or resolving any contamination claim.

                  "COMPULSORY REMEDIATION COSTS" means reasonable costs
                  (including legal and professional fees) incurred in complying
                  with an enforceable order or notice pursuant to a
                  Contamination Claim imposed by a Regulatory Authority under
                  Environmental Law to the extent the same requires the
                  recipient to clean-up, investigate, monitor, or remediate
                  Pre-Completion Contamination.

                  "COMPUTER SYSTEMS" means the computer systems used exclusively
                  by or for the benefit of any of the Operations or computer
                  processors associated and peripheral equipment computer
                  programs including technical and other documentation and data
                  entered into or created for and used by or for the benefit of
                  any of the Operations from time to time.

                  "CONDITIONS" means the conditions contained or referred to in
                  clause 3.1.

                  "CONFIDENTIAL INFORMATION" means all information not at
                  present in the public domain used in or otherwise relating to
                  the Business or the Brilliant Business or customers or
                  financial or other affairs of the Business or the Brilliant
                  Business including, without limitation, information relating
                  to:

                  (a)   the marketing of any goods or services including,
                        without limitation, customer names and lists and any
                        other details of customers, sales targets, sales
                        statistics, market share statistics, prices, market
                        research reports and surveys and advertising or other
                        promotional materials; or

                  (b)   future projects, business development or planning,
                        commercial relationships and negotiations.

                  "CONTRACTS" means all contracts, undertakings, arrangements
                  and engagements of the Asset Vendor whether written or verbal
                  relating to the relevant Business which are wholly or partly
                  unperformed at the date of Completion including, without
                  limitation, supply and distribution agreements, customer and
                  supplier contracts, lease, hire and hire purchase agreements
                  but excluding contracts of employment with the Emess
                  Employees, Marlin Employees, agreements with trade unions or
                  employee representatives in respect of the Emess Employees or
                  Marlin Employees, leases of the Properties and loan agreements
                  (any one of these being a "CONTRACT").

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                  "CONTAMINATION CLAIM" means any proceeding or claim formerly
                  instituted under Environmental Law by a Regulatory Authority
                  or third party to the extent the same relates to
                  Pre-Completion Contamination.

                  "CRESSWELL LICENCE" means the licence of the "CRESSWELL" name
                  between the Purchaser or its nominee and the Vendor or its
                  nominee in the agreed form.

                  "DISCLOSED DOCUMENTS" means those documents appended to the
                  Disclosure Letter.

                  "DISCLOSURE LETTER" means the letter of today's date from the
                  Vendor to the Purchaser in relation to the Warranties.

                  "EMESS ASSETS" mean the property and assets referred to in
                  clause 2.1 in relation to the Emess Lighting Business.

                  "EMESS EMPLOYEES" means the employees employed in the Emess
                  Lighting Business at the date of this Agreement whose names
                  are included in the Disclosure Documents subject to such
                  amendments before Completion as have been agreed by the
                  Purchaser.

                  "EMESS LIGHTING BUSINESS" means the business of designing,
                  manufacturing, selling, distributing and importing consumer
                  lighting, principally to retailers in the United States of
                  America, under the brand names of "Alsy" and "Cresswell"
                  carried on by Emess Lighting Inc or any member of the Vendor's
                  Group. "EMESS LIGHTING LOYALTY BONUSES" means the loyalty
                  bonuses together with the costs of any related social security
                  obligations to be paid by the Purchaser to certain Emess
                  Employees the amount of which shall be disclosed to the
                  Purchaser by the Vendor five Business Days before Completion.

                  "EMESS LIGHTING INC" means Emess Lighting Inc a company
                  incorporated in Delaware, The United States of America, whose
                  principal place of business is at 1 Early Street, Ellwood
                  City, Pennsylvania 16117, USA details of which are set out in
                  Part 3 of Schedule 4.

                  "EMESS LIGHTING NET ASSETS" means the amount of the net assets
                  as shown in the balance sheet in respect of Emess Lighting Inc
                  constituting part of the Completion Statement.

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                  "EMESS PROPERTY" means the property or properties short
                  particulars of which are set out in schedule 3 and reference
                  to the Emess Property includes reference to the individual
                  properties comprising the Emess Property and any part or parts
                  of individual properties.

                  "EMPLOYEES" means the Emess Employees, the Marlin Employees
                  and the Brilliant Subsidiary Employees.

                  "ENCUMBRANCE" means any mortgage, charge, pledge, lien,
                  option, restriction, right of first refusal, right of
                  pre-emption, third party right or interest, any other
                  encumbrance or security interest of any kind, and any other
                  type of preferential arrangement (including, without
                  limitation, title transfer and retention arrangements) having
                  a similar effect.

                  "ENVIRONMENT" means any and all living organisms (including
                  without limitation, man), ecosystems, property and the media
                  of air (including without limitation air in buildings, natural
                  or man-made structures, below or above ground) water,
                  (including, without limitation, groundwater, rivers, canals,
                  streams, lakes, coastal waters and within water drains and
                  sewers) and land.

                  "ENVIRONMENTAL INDEMNITY" means the indemnity at clauses 8.1
                  to 8.8 of this Agreement.

                  "ENVIRONMENTAL LAW" means all statutes or subordinate
                  legislation, or civil or common law, EU Directives or
                  Regulations, all court orders, ordinances, decrees or
                  regulatory codes of practice, circulars, guidance notes and
                  equivalent controls which are enforceable as at Completion,
                  are applicable in the jurisdiction to which they relate and
                  which have as a purpose or effect

                  (i)   the protection or prevention of harm to human health or
                        the Environment; or

                  (ii)  the regulation of emissions, discharges or threatened
                        releases or escapes of Hazardous Substances into the
                        Environment; or

                  (iii) the regulation of production, processing, treatment,
                        storage, disposal, transport, packaging of, labelling of
                        or handling of any Hazardous Substances including laws
                        relating to nuisance but not including law pursuant

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                        to the Town and Country Planning Act 1990 or its
                        equivalent in the relevant jurisdiction; or

                  (iv)  the protection of worker health & safety.

                  "EUROPEAN BUSINESSES" means the Marlin Business and the
                  business of designing, manufacturing, selling, distributing
                  and importing commercial light fittings under the name Marlin
                  carried on in Europe by Marlin BV and the business of
                  designing, manufacturing, selling, distributing and importing
                  street lighting carried on in Europe by Eclatec SA.

                  "EXCLUDED ASSETS" means the assets set out in Schedule 1.

                  "FIXED PLANT" means the fixed plant and machinery, and
                  leasehold improvements at the Properties, owned or used by the
                  Target Owners in connection with the Operations at the date of
                  Completion.

                  "FORMER PROPERTIES" means any site(s) formerly owned, occupied
                  or used by any member of the Brilliant (AG Group Excluded)
                  Group prior to Completion, but not including the Properties.

                  "GOODWILL" means the goodwill of the Businesses together with
                  the right for the Purchaser to use the names "Marlin",
                  "Eclatec", "Brilliant", "Alsy" and "Cresswell" (subject to
                  licence) and to represent itself as carrying on the relevant
                  Business in continuation of and in succession to the Asset
                  Vendor or any member of the Vendors Group.

                  "GROUP" means in relation to a company its direct or indirect
                  subsidiaries, holding company and any direct or indirect
                  subsidiary of its holding company.

                  "GROUP INTELLECTUAL PROPERTY RIGHTS" means for the purposes of
                  Schedule 5, the Business Intellectual Property Rights and the
                  Brilliant Intellectual Property Rights.

                  "HAZARDOUS SUBSTANCES" means any natural or artificial
                  substance (whether solid, liquid, gas, noise, ion, vapour,
                  electromagnetic radiation or ionising radiation and whether
                  alone or in combination with any other substance) which is
                  capable of causing harm or to have a deleterious effect on the
                  Environment, or being a nuisance.

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                  "INDEBTEDNESS" means the aggregate amount as at Completion of
                  (i) all outstanding loans or borrowings or any other amount in
                  the nature of borrowings owed by any member of the Brilliant
                  Group; and (ii) all outstanding loans or borrowings or any
                  other amount in the nature of borrowings owed by an Asset
                  Vendor in relation to the Business and the Business Assets
                  other than the Trade Credits.

                  "INTERCOMPANY INDEBTEDNESS" means the aggregate of all sums
                  owing by members of the Target Group to members of the
                  Vendor's Group at Completion and specified in the Indebtedness
                  Schedule other than those in respect of trade creditors
                  arising through normal business transactions.

                  "INDEBTEDNESS SCHEDULE" means the schedule to be prepared by
                  the Vendor and delivered to the Purchaser on or before
                  Completion setting out the amount of the Intercompany
                  Indebtedness and shall include a breakdown of each amount
                  comprising the Intercompany Indebtedness and in respect of
                  each such amount, the relevant member of the Target Group
                  which owes the amount and the relevant member of the Vendor's
                  Group to which it is owed;

                  "INDEMNIFIED PERSON" means each of the Purchaser, Brilliant
                  Holding and the Brilliant Subsidiaries.

                  "INTELLECTUAL PROPERTY" means patents, trade marks, service
                  marks, registered designs, applications for any of the
                  foregoing, rights in trade and business names, domain name
                  registrations, unregistered trade marks, trade dress, logos
                  and corporate names, copyrights, rights in computer software,
                  designs, databases and inventions, and rights of the same or
                  similar effect or nature, in any part of the world.

                  "INTELLECTUAL PROPERTY ASSIGNMENTS" means the assignments of
                  registered Business Intellectual Property in the agreed form;

                  "KNOW-HOW" means all information not at present in the public
                  domain owned by the Asset Vendor and used exclusively by the
                  Asset Vendor in, or in connection with, the Operations held in
                  any form (including, without limitation, that comprised in or
                  derived from drawings, data, formulae, specifications,
                  component lists, instructions, manuals, brochures, catalogues
                  and process descriptions) and relating to:

                  (a)   the manufacture or production of goods or the provision
                        of services;

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                  (b)   the selection, procurement, construction, installation
                        or use of any raw material, plant, machinery or other
                        equipment or processes;

                  (c)   the supply, storage, assembly or packing of raw
                        materials, components or partly manufactured or finished
                        products;

                  (d)   quality control, testing or certification; or

                  (e)   the rectification, repair or service of products, plant,
                        machinery or other equipment.

                  "LATEST ACCOUNTING DATE" means 31 December 1999.

                  "LIBOR" means:

                  (A)   the rate per annum which appears on Telerate Page 3750;
                        or

                  (B)   if no such rate appears, the arithmetic mean (round
                        upward to four decimal places) of the offered quotations
                        which appear on the relevant page (if any) on the
                        Reuters Monitor Money Rates Service (or such other
                        service as may replace the Reuter Monitor Money Rates
                        Service for the purpose of displaying London interbank
                        offered rates of leading banks); or

                  (C)   if no such rate appears on the Telerate Screen and one
                        only or no such offered quotation appears on the
                        relevant page of the Reuters Screen or there is no
                        relevant page on the Reuters Screen the arithmetic mean
                        (rounded upward to four decimal places) of the rates, as
                        supplied to the Agent at its request, quoted by the
                        reference Banks to leading banks in the London interbank
                        market,

                  at or about 11.00 am two Business Days before the first day of
                  the relevant interest period for the offering of deposits in
                  Sterling for a period comparable to the relevant interest
                  period.

                  For the purpose of this definition "TELERATE PAGE 3750" means
                  the display designated as "PAGE 3750" on the Telerate Service
                  (or such other page as may replace Page 3750 that service) or
                  such other service as may be nominated by the British Bankers'
                  Association Interest Settlement Rates for deposits in the
                  currency concerned.

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                  "MACHINERY" means the loose plant, machinery, tools, moulds,
                  dies, equipment and other like articles owned or used by the
                  Asset Vendor in connection with the relevant Business at the
                  date of Completion.

                  "MANAGEMENT ACCOUNTS" means the unaudited consolidated profit
                  and loss account of the Asset Vendor and the consolidated
                  unaudited profit and loss amount of Brilliant Holding
                  accounting period ended on, and the unaudited consolidated
                  balance sheet of the Asset Vendor and each member of the
                  Brilliant Group, in the agreed form as at 25 February 2000;

                  "MARLIN ASSETS" means the property and assets referred to in
                  clause 2.1 in relation to the Marlin Business.

                  "MARLIN BUSINESS" means the businesses of designing,
                  manufacturing, selling, distributing and importing of
                  commercial light fittings carried on by the Asset Vendor or
                  any member of the Vendor's Group under the name Marlin;

                  "MARLIN EMPLOYEES" means the employees ordinarily employed in
                  the Marlin Business as at the date of this Agreement whose
                  names are included in the Disclosed Documents subject to such
                  amendments before Completion as have been agreed by the
                  Purchaser.

                  "MARLIN NET ASSETS" means the amount of the net assets as
                  shown in respect of the Marlin Business constituting part of
                  the Completion Statement.

                  "MARLIN PROPERTY" means the property or properties short
                  particulars of which are set out in Section 1 of Part A of
                  Schedule 3 and a reference to the Marlin Property includes a
                  reference to the individual properties comprising the Marlin
                  Property and any part or parts of individual properties;

                  "MOTOR VEHICLES" means the motor vehicles owned or used by the
                  Asset Vendor in connection with the relevant Business at the
                  date of this Agreement subject to such amendments up to date
                  of Completion as have been agreed by the Purchaser;

                  "NOTARIAL DEED" means the deed notarising the agreement of the
                  Brilliant Shares to be delivered at Completion.

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                  "OFFICE EQUIPMENT" means the office equipment and furnishings
                  and other like articles owned or used by the Asset Vendor in
                  connection with the relevant Business at the date of
                  Completion.

                  "OPERATIONS" means the Businesses and the Brilliant (AG Group
                  Excluded) Business.

                  "PRE-COMPLETION CONTAMINATION" means Hazardous Substances
                  which are present prior to Completion at in on or under the
                  Properties or Former Properties or the migration of such
                  Hazardous Substances therefrom, whether before or after
                  Completion.

                  "PRE-SALE REORGANISATION" means the following steps to be
                  taken by the Vendor's Group prior to Completion:-

                  (a)   The sale by Brilliant Holding of the entire issue share
                        capital of First Square Management Limited to Emess Plc
                        for consideration of (pound)6,000;

                  (b)   The sale by Brilliant Holding of the entire issue share
                        capital of EITS (Hong Kong) Limited to Emess Plc for
                        consideration of Dm110,000;

                  (c)   The sale by Ecletec SA of the entire issue share capital
                        of Emess SCI for consideration of FF9,990;

                  (d)   If required, the transfer by Emess Group Trading Limited
                        of the Marlin business as a going concern to Emess Plc;

                  (e)   If required, intra-group transfer of shares in Brilliant
                        Holding to Emess Europe Limited, Emess Overseas Limited
                        and Emess Plc.

                  "PROPERTIES" means the property or properties short
                  particulars of which are set out in Part A of Schedule 3 and a
                  reference to the Emess Property or Marlin Property includes a
                  reference to the individual properties comprising the Emess
                  Property or the Marlin Property respectively and any part or
                  parts of individual properties.

                  "PURCHASER'S ACCOUNTANTS" means Ernst & Young of Apex Plaza,
                  Reading RG1 1YE.

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                  "PURCHASER'S GROUP" means the Purchaser and any subsidiary or
                  associated companies from time to time of the Purchaser (and
                  shall include each member of the Brilliant Group with effect
                  from the date of Completion and any reference to "MEMBER OF
                  THE PURCHASER'S GROUP" shall be construed accordingly.

                  "PURCHASER'S SOLICITORS" means DLA of 3 Noble Street, London
                  EC2V 7EE.

                  "REGULATORY AUTHORITY" means any legal person or body of
                  persons (including any government department or government
                  agency or court or tribunal) having jurisdiction to determine
                  any matter arising under Environmental Laws and/or relating to
                  the Environment.

                  "SHARES" means 50,000 fully-paid ordinary shares of 500 DM
                  each of Brilliant Holding comprising the whole of the issued
                  share capital of Brilliant Holding.

                  "STOCKS" means the stock of raw materials, partly finished and
                  finished goods acquired or produced exclusively in the course
                  of the relevant Business as at the date of Completion.

                  "TAXATION" OR "TAX" means as defined in part 1 of Schedule 10.

                  "TARGET GROUP" means the Brilliant Group, the Marlin Business
                  and the Emess Lighting Business.

                  "TARGET OWNERS" means the Asset Vendor and the Brilliant (AG
                  Group Excluded) Group.

                  "TAXES ACT" means Income and Corporation Taxes Act 1988;

                  "TRADE CREDITS" means the amounts due from the Asset Vendor in
                  connection with the Marlin Business and the Emess Lighting
                  Business at the date of Completion in respect of trade
                  creditors arising through normal business transactions
                  (whether or not yet payable).

                  "TRADE DEBTS" means the amounts due to the Asset Vendor in
                  connection with the Marlin Business and the Emess Lighting
                  Business at the date of Completion in respect of trade debtor
                  accounts arising through normal business transactions (whether
                  or not yet payable).

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                  "TRANSFER REGULATIONS" means the Transfer of Undertakings
                  (Protection of Employment) Regulations 1981 (as amended), the
                  Acquired Rights Directive, and national legislation
                  implementing the Acquired Rights Directive in other EU member
                  states (other than the United Kingdom) and EEA territories.

                  "TWICKENHAM PROPERTY" means the property more particularly
                  described in the part 1 of Schedule 3.

                  "UK PROPERTIES" means such of the Properties as are located in
                  the United Kingdom.

                  "VATA" means Value Added Tax Act 1994.

                  "VENDOR'S ACCOUNTANTS" means BDO Stoy Hayward of 8 Baker
                  Street, London W1M 1DA.

                  "VENDOR'S GROUP" means the Vendor and any subsidiary or
                  associated companies from time to time of the Vendor but
                  excluding any member of the Brilliant Group with effect from
                  the date of Completion and any reference to "MEMBER OF THE
                  VENDOR'S GROUP" shall be construed accordingly.

                  "VENDOR'S SOLICITORS" means Ashurst Morris Crisp of Broadwalk
                  House, 5 Appold Street, London EC2A 2HA.

                  "VOLUNTARY REMEDIATION COSTS" means reasonable costs
                  (including reasonable legal and profession fees) incurred in:

                  (i)   undertaking the minimum works necessary to clean up,
                        investigate, monitor or remediate in relation to
                        Pre-Completion Contamination which are required in order
                        to avoid the incurring of Compulsory Remediation Costs
                        or Compulsory Contamination Penalties (the "Minimum
                        Works") PROVIDED that where there is any failure of the
                        Vendor and Purchaser to agree what constitutes such
                        works the determination of an independent environmental
                        consultant jointly appointed by the Vendor and Purchaser
                        as to what constitutes "Minimum Works" shall be binding;
                        and

                  (ii)  defending or resolving any Contamination Claim to the
                        extent the same relates to Pre-Completion Contamination;
                        and

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                  (iii) any losses suffered or incurred as a result of the
                        necessary relocation or cessation of Operations due to
                        the carrying out of the Minimum Works but excluding loss
                        of profits.

                  "WARRANTIES" means the warranties contained in Schedule 5.

1.2   In this Agreement, a reference to:

      (a)   a "subsidiary" or "holding company" shall be construed in accordance
            with section 736 of the Companies Act 1985 and a reference to
            "subsidiary undertaking" shall be construed in accordance with
            section 258 of the Companies Act 1985;
      (b)   "associated companies" shall be construed in accordance with section
            416 of the Income and Corporation Taxes Act 1988;
      (c)   a document in the "agreed form" is a reference to a document in a
            form approved and for the purpose of identification initialled by or
            on behalf of the parties or their solicitors;
      (d)   a statutory provision includes a reference to:
            (i)   the statutory provision as modified or re-enacted or both from
                  time to time before the date of this Agreement; and
            (ii)  any subordinate legislation made under the statutory provision
                  before the date of this Agreement;
      (e)   persons includes a reference to any body corporate, unincorporated
            association or partnership;
      (f)   a person includes a reference to that person's legal personal
            representatives and successors;
      (g)   a clause or Schedule, unless the context otherwise requires, is a
            reference to a clause of and Schedules to this Agreement;
      (h)   an agreement or other document is a reference to that agreement or
            document as from time to time supplemented or amended.

1.3   If a period of time is specified and dates from a given day or the day of
      an act or event, such period shall be calculated exclusive of that day.
1.4   The headings in this Agreement shall not affect the interpretation of this
      Agreement.
1.5   Reference in clause 7 and Schedule 5 to the knowledge, information, belief
      or awareness of any person shall be deemed to include any knowledge,
      information, belief or awareness which the person would have at the date
      hereof if the person had made all usual and reasonable enquiry of:
            (A)   in relation to the Warranties Michael Meyer, Nigel Singer and
                  Liz Richardson;
            (B)   in relation to the Warranties given with respect to the Marlin
                  Business only, Richard Harrison, Jerome Fester and Peter
                  Denny;
            (C)   in relation to the Warranties given with respect to Marlin BV
                  only, Dieter Kuenen and Ernie Tijssen;
            (D)   in relation to the Warranties given with respect to the
                  Brilliant (AG Group Excluded) Group only Friederich-Wilhelm
                  Wentrot and Timm Grotheer;
            (E)   in relation to the Warranties given with respect to Eclatec SA
                  only Daniel Serra and Sandrine Naumann;

                                     - 16 -
<PAGE>   17

            (F)   in relation to the Warranties given with respect to the Emess
                  Lighting Business only, Lee Hudson Charles Klass, Norman Levin
                  and Bill Swindon into the subject matter of that Warranty.

1.6       References to any English legal term for any action, remedy, method of
          judicial proceeding, legal document, legal status, court, official or
          any legal concept or things shall in respect of any jurisdiction other
          than England be deemed to include what most nearly approximates in
          that jurisdiction to the English legal term.

2.       SALE AND PURCHASE

2.1      In accordance with and subject to the provisions of this Agreement, the
         Vendor shall with full title guarantee sell or procure the sale of, and
         the Purchaser or an Affiliated Company or Affiliated Companies (a
         "RELEVANT PURCHASER") of the Purchaser nominated by it shall purchase,
         with effect from Completion (i) the entire legal and beneficial
         interest in Shares and each accrued benefit and right attaching to the
         Shares at Completion free of any Encumbrance and together with all
         dividends declared after the Latest Accounting Date (other than the
         dividends declared in respect of Brilliant AG on on or about 14 March
         2000); (ii) the Marlin Business as a going concern and the Marlin
         Assets as at the date of Completion free from all Encumbrances; and
         (iii) the Emess Lighting Business as a going concern and the Emess
         Assets as at the date of Completion free from all Encumbrances (except,
         in the case of the Properties, the Subsisting Interests as defined in
         Part B of Schedule 3 or any encumbrances to which the sale of the
         Property is subject by Schedule 3) which, in respect of each of the
         Marlin Business and Emess Lighting Business comprises:

         (a)      the benefit of each Contract (subject to the burden attaching
                  to each of them);
         (b)      the Fixed Plant;
         (c)      the Goodwill;
         (d)      the Business Intellectual Property Rights;
         (e)      the Know-How;
         (f)      the Machinery;
         (g)      the Motor Vehicles;
         (h)      the Office Equipment;
         (i)      the Properties;
         (j)      the Stocks;
         (k)      the Trade Debts and all cheques, bills, notes and securities
                  for the Trade Debts;
         (l)      the benefit of any sum to which the Asset Vendor are entitled
                  either from third parties or insurers in respect of damage or
                  injury to any of the Marlin Assets or the Emess Assets other
                  than any sum expended before Completion in making good the
                  damage or injury;
         (m)      all other property and assets of the Asset Vendor used
                  exclusively in connection with the Emess Lighting Business or
                  the Marlin Business (whether in or about the Properties or
                  otherwise), other than the Excluded Assets.

2.2      Nothing in this Agreement shall have the effect of transferring any
         trade name or other rights in Intellectual Property whatsoever in or
         including the words or the names "EMESS", "Emess" (save to the extent
         permitted in clause 16) and "Cresswell" (save to the extent permitted
         under the Cresswell Licence) in any of their variation. Save provided
         in clause 16

                                     - 17 -
<PAGE>   18

         the Purchaser shall, and shall procure that no member of the
         Purchaser's Group shall, either alone or jointly with, through or as
         manager, adviser, consultant or agent for any person, directly or
         indirectly, use the names of "EMESS" and "Emess" and "Cresswell" (save
         to the extent permitted under the Creswell Licence) or any other name
         intended or likely to be confused with any such name (save to the
         extent permitted under the Cresswell Licence).

2.3      Risk in, title to and possession and use of the Marlin Assets and Emess
         Assets shall pass to the Purchaser or, as the case may be, to the
         relevant member of the Purchaser's Group upon and with effect from
         Completion. The Vendor undertakes to maintain in place until Completion
         all existing insurance policies or policies relating to the Marlin
         Business and Emess Lighting Business.

3.       CONDITIONS

3.1      Completion is subject to and conditional upon:

         (a)      the due convening of a general meeting of the Vendor and the
                  passing at that meeting of a resolution to approve the
                  transactions to be entered into pursuant to this Agreement;

         (b)      the Secretary of State for Trade and Industry confirming in
                  terms reasonably satisfactory to the Purchaser that it is not
                  his intention to refer any of the transactions contemplated
                  hereby or matters arising therefrom to the Competition
                  Commission in exercise of his powers under the Fair Trading
                  Act 1973;

         (c)      all applicable waiting periods (and any extensions thereof)
                  under the Hart-Scott-Rodino Antitrust Improvements Act of
                  1976, as amended, shall have expired or otherwise been
                  terminated;

         (d)      One of the following having taken place:

                  (i)      receipt of a notice or a decision from the German
                           Federal Cartel Office ("FCO") that the prohibition
                           requirements of S36(1) of the German Act against
                           Restrictions of Competition ("ARC") are not fulfilled
                           in relation to the transactions contemplated hereby;
                           or
                  (ii)     expiry of the one month time limit laid down in
                           S40(1) ARC without the parties having been notified
                           by the FCO that the FCO have entered into an
                           examination of the transactions contemplated hereby;
                           or
                  (iii)    expiry of the four months time limit (or any
                           extension thereof) as laid down in S40(2) ARC without
                           the FCO having issued a prohibition order in relation
                           to the transactions contemplated hereby.

3.2      The Vendor shall use its reasonable endeavours to procure the
         fulfilment of the Condition set out in clause (a) and assist in the
         fulfilment of Conditions (b) to (d) (inclusive) as soon as possible and
         in any event before 30 June 2000.
3.3      The Purchaser shall use its reasonable endeavours to procure the
         fulfilment of Conditions set out in clause(s) (b) to (d)(inclusive) as
         soon as possible and in any event before 30 June 2000.
3.4      If at any time the Vendor or the Purchaser becomes aware of any
         circumstances that may give rise to non-fulfilment of any of the
         Conditions, that party shall immediately give to the other party
         written particulars of those circumstances and the Vendor and the
         Purchaser shall co-operate fully with a view to procuring fulfilment of
         the relevant Condition(s) in a prompt manner.
3.5      The Purchaser may at any time waive in writing any of the Conditions
         set out in clause(s) (b) to (d) (inclusive) and such waiver may be made
         subject to such terms and conditions as are determined by the Purchaser
         (acting reasonably).

                                     - 18 -
<PAGE>   19

3.6      If the Conditions (which have not previously been waived pursuant to
         clause 3.5) have not been fulfilled on or before 12 noon on the date
         set for Completion in clause 5.1 then on that date the Purchaser may at
         its option by notice in writing to the Vendor elect to postpone the
         date for Completion to a date to be agreed with the Vendor but falling
         not more than 20 Business Days after the date set for Completion in
         clause 5.1;
3.7      If the Purchaser elects to postpone the date for Completion in
         accordance with clause 3.6 then the provisions of this Agreement shall
         apply as if the date set for Completion in clause 5.1 were the date to
         which Completion is so postponed.
3.8      In the event that the Conditions have not been fulfilled or waived or
         postponed in accordance with this clause 3 by 30 June 2000 (or as may
         be agreed between the parties) then all rights and obligations of the
         parties under this Agreement (other than clauses 3.2 and 3.3 (as the
         case may be), 15, 17, 18, 21, 23 and 24) shall cease to have effect
         immediately and no party shall have any liability under the provisions
         of this Agreement (without prejudice to any provisions necessary for
         the interpretation of this Agreement or to the rights of any party
         hereto in respect of antecedent breaches) provided that the exclusivity
         agreement dated 7 March 2000 between the parties shall remain in full
         force and effect save where this Agreement has not become unconditional
         due to the failure by the Purchaser to satisfy or waive the Conditions
         set out in clauses 3.1.2 to 3.1.4 the Vendor shall have terminated this
         Agreement in accordance with its terms.

4.       CONSIDERATION
4.1      The Consideration payable by the Purchaser to the Vendor for the Shares
         and the Marlin Business and the Marlin Assets and Emess Lighting
         Business and Emess Assets (the "CONSIDERATION") shall be aggregate of:-

         (A)      the sum of (pound)81,000,000 less the Emess Lighting Loyalty
                  Bonus and an amount equal to the Intercompany Indebtedness
                  (subject to adjustment as provided in clauses 4.2 and 4.3) and
                  shall be allocated among the Shares, the Marlin Business, the
                  Marlin Assets, the Emess Lighting Business and the Emess
                  Assets as set out in the Apportionment Schedule; and
         (B)      the assumption by the Purchaser of the Trade Credits.

         To the extent that the portion of the Consideration attributable to the
         Shares, the Marlin Business, the Marlin Assets, the Emess Lighting
         Business and/or the Emess Assets is adjusted as provided in clauses 4.2
         or 4.3, the apportionment specified in the Apportionment Schedule
         shall, subject to clause 4.4, be adjusted as agreed between the parties
         and failing agreement on a pro rata basis to reflect the apportionments
         specified in the Completion Statement.

4.2      If the aggregate of the Marlin Net Assets and the consolidated net
         assets of the Brilliant Group as shown in the Completion Statement
         calculated in accordance with clause 6 and Schedule 6 shall be less
         than US$74,380,000, the Vendor shall repay to the Purchaser the amount
         of the shortfall. The Consideration shall not be adjusted upwards.
4.3      If the Emess Lighting Net Assets as shown in the Completion Statement
         calculated in accordance with clause 6 and as set out in Schedule 6:

         (a)      exceed US$15,000,000 the Purchaser shall pay or procure the
                  payment to the Vendor the amount of the excess; and

                                     - 19 -
<PAGE>   20

         (b)      are less then US$15,000,000 the Vendor shall repay to the
                  Purchaser the amount of the shortfall.

4.4      For the purposes of the Apportionment Schedule, the Vendor and the
         Purchaser agree that the amount of the Consideration to be allocated
         to:
                  (A)      the Emess Lighting Business and Emess Assets shall be
                           US$9,000,000; and
                  (B)      the Business Intellectual Property attributable to
                           the Marlin Business shall be US$5,000,000;

                  and, for the avoidance of doubt, if any or both of the
                  attributed values specified in (a) and/or (b) above (an
                  "ATTRIBUTED VALUE") differ from the value which such Business
                  or Asset or Business Intellectual Property would otherwise
                  have had there been no attribution pursuant to this clause 4.4
                  (an "ACTUAL VALUE"), the difference between the Attributed
                  Value and the Actual Value shall not be construed as an
                  adjustment to the Consideration payable under this clause 4
                  but shall instead be allocated to the other Assets or
                  Businesses or the Shares in such manner as agreed by the
                  Vendor and the Purchaser.

4.5      The Purchaser shall pay the Vendor the sum of (pound)81,000,000 less
         the Emess Loyalty Bonus and an amount equal to the Intercompany
         Indebtedness on 3 July 2000 (or the date of Completion if later) on
         account of the Consideration payable in accordance with clause 4.1.
4.6      On 3 July 2000 (or the date of Completion if later) the Purchaser shall
         procure that each of the relevant members of the Brilliant Group repay
         to the relevant member of the Vendor's Group the amount of the
         Intercompany Indebtedness attributable to it in the Indebtedness
         Schedule.
4.7      The Vendor shall indemnify the Purchaser and each member of the
         Brilliant Group against all losses, liabilities and costs which the
         Purchaser or any member of the Brilliant Group may incur arising out of
         or in connection with any Indebtedness other the Intercompany
         Indebtedness.
4.8      If a party fails to pay any sum due and payable by it under this
         Agreement on the due date of payment in accordance with the terms of
         this Agreement, the party shall pay interest on the sum from the due
         date until the date upon which the obligation of the party to pay the
         sum is discharged at the rate of 2 per cent. per annum above LIBOR
         (whether before or after judgment).
4.9      Any payment to be made under this clause shall be made by banker's
         draft on the branch of a London clearing bank or by telegraphic
         transfer to such account as shall be notified by the party due to
         receive the payment to the other party not later than two Business Days
         before the date of the payment. Any payment to the Vendor shall be made
         to the Vendor's Solicitors Client Account at National Westminster Bank
         Plc, Bishopsgate Business Centre, P.O. Box 34, 15 Bishopsgate, London
         EC2P 2AP account number 00404241, sort code 50-00-00. Any payment made
         pursuant to clauses 4.2 and/or 4.3 shall be made in US Dollars and
         shall be made within 5 Business Days after agreement of determination
         of the Completion Statement in accordance with clause 6. Any payment
         made by the Purchaser to the Vendor or the Vendor's Solicitors shall be
         a good discharge to the Purchaser and each member of the Brilliant
         Group (and those on whose behalf such payment is made) and neither the
         Purchaser nor any member of the Brilliant Group (and those on whose
         behalf

                                     - 20 -
<PAGE>   21

         such payment is made) shall not be obliged to see to the application
         between the Vendors and members of the Vendor's Group.

5.       COMPLETION

5.1      Completion shall take place at the offices of the Vendor's Solicitors
         on 30 June 2000 or such other date in accordance with clause 5.4 or as
         the parties may agree following satisfaction or waiver of the
         Conditions.
5.2      At Completion effective control of the Emess Lighting Business and
         Marlin Business and the Shares shall pass to the Purchaser or as it may
         nominate and the Vendor shall:

         (a)      deliver to the Purchaser evidence in a form reasonably
                  satisfactory to the Purchaser (whether by way of a certificate
                  of the Vendor's Solicitors or otherwise) of satisfaction of
                  the Condition set out in clause (a);
         (b)      complete the sale of the Properties in accordance with the
                  provisions of Part B of Schedule 3 (it being acknowledged that
                  completion of the sale of certain Properties may not take
                  place at Completion);
         (c)      give possession to the Purchaser or as it may nominate of
                  those Marlin Assets and Emess Assets which are transferable by
                  delivery;
         (d)      execute and deliver to the Purchaser or as it may nominate
                  Cresswell Licence and the Intellectual Property Assignment;
         (e)      deliver to the Purchaser or as it may nominate a release or
                  certificate of non-crystallisation in the form reasonably
                  satisfactory to the Purchaser in respect of any Encumbrance
                  affecting any of the Marlin Assets and Emess Assets;
         (f)      (if requested by the Purchaser in writing prior to the date
                  hereof) deliver to the Purchaser or as it may nominate in a
                  form reasonably acceptable to the Purchaser duly executed
                  assignments or bills of sale or otherwise vest in the
                  Purchaser those Marlin Assets and Emess Assets which are not
                  transferable by delivery including, without limitation the
                  Intellectual Property Assignments;
         (g)      deliver to the Purchaser the Business Records;
         (h)      deliver or procure delivery to the Purchaser each item
                  specified in Schedule 9;
         (i)      ensure that at Completion the directors of each of Brilliant
                  Holding and the Brilliant Subsidiaries excluding Brilliant AG
                  and its subsidiaries hold such meetings of the shareholders
                  and directors as may be required:
                  (i)      vote in favour of the registration of the Purchaser
                           or its nominee(s) as member(s) of that company in
                           respect of the Shares (subject to the production of
                           properly stamped transfers);
                  (ii)     change that company's registered office to a place
                           nominated by the Purchaser;
                  (iii)    change that company's accounting reference date to a
                           date nominated by the Purchaser;
                  (iv)     appoint persons nominated by the Purchaser as
                           directors, secretary and auditors of that company
                           with effect from the end of the meeting; and
                  (v)      revoke each existing mandate given by that company
                           for the operation of its bank accounts and pass the
                           resolutions contained in new mandate(s) giving
                           authority to persons nominated by the Purchaser.

         (j)      ensure that Marlin B.V. acknowledges the transfer of its
                  shares to the Purchaser and that the transfer of the shares
                  will be recorded in the shareholders register;

                                     - 21 -
<PAGE>   22

         (k)      procure that the Management Board of Eclatec SA shall meet to
                  convene a general ordinary shareholders' meeting that will
                  appoint new members of the Supervisory Board;
         (l)      pay or procure the repayment to the relevant member of the
                  Brilliant Group of any Brilliant Receivable; and
         (m)      pay or procure the repayment of the Indebtedness other than
                  the Intercompany Indebtedness.

5.3      At or as soon as practicable after Completion, the parties shall take
         all reasonable steps including the execution of documents to transfer
         to the Purchaser all rights of the Vendor or any member of the Vendor's
         Group in domain names included in the Business Intellectual Property
         Rights.

5.4      At Completion the Purchaser shall:

         (a)      deliver to the Vendor (in a form satisfactory to the Vendor in
                  its absolute discretion) a copy of:
                  (i)      an irrevocable instruction to its bank to pay the
                           amount specified in clause 4.5 in accordance with
                           clause 4.9; and
                  (ii)     the Purchasers contract(s) to buy pounds sterling in
                           an amount equal to the consideration payable in
                           accordance with clause 4.5; and
                  (iii)    the Purchasers banks letter of commitment to pay the
                           full amount of the consideration payable in
                           accordance with clause 4.5,

                  and if the Purchaser fails to provide the documents referred
                  to in this clause (a) or if the documents are not in a form
                  that is satisfactory to the Vendor, the Vendor shall be
                  entitled to postpone the date of Completion to 3 July 2000 in
                  which event all the provisions of this clause 5 shall operate
                  as drafted save that this clause 5.4.1 shall be deemed amended
                  so that the Purchasers' obligations to satisfy the
                  consideration under clause 4.5 and repay the Intercompany
                  Indebtedness under clause 4.6 shall arise at Completion as
                  postponed to 3 July 2000;
         (b)      deliver to the Vendor the Cresswell Licence duly executed by
                  the relevant member of the Purchaser's Group;
         (c)      deliver to the Vendor the Intellectual Property Assignments
                  duly executed by the relevant member of the Purchaser's Group;
         (d)      deliver to the Vendor the Assumption of Liability Agreement,
                  duly executed by the Purchaser or the relevant member of the
                  Purchaser's Group.
5.5      On 3 July 2000 (or the date of Completion if later) the Purchaser shall
         pay the amounts specified in clauses 4.5 and 4.6 in accordance with its
         clause 4 or this clause 5 (as appropriate).
5.6      The Vendor and the Purchaser or their duly authorised representatives
         shall execute a notarial deed in the form of a notary public assigning
         title to the Shares from the Vendor to the Purchaser or its nominee
         effective as of the date of Completion, where the same is required by
         the jurisdiction governing such assignment.
5.7      The Purchaser shall not be obliged to complete this Agreement unless:
         (a)      the Vendor complies in all material respects with all its
                  obligations under clause 5; and

                                     - 22 -
<PAGE>   23

         (b)      the purchase of all of the Shares and the Marlin Assets and
                  Emess Assets is completed simultaneously (but so that if the
                  Purchaser exercises its option pursuant to clause 5.8
                  completion of the purchase of some of the Shares and/or the
                  Marlin Assets and Emess Assets will not affect the rights of
                  the Purchaser with respect to the others).

5.8      Subject to clause 3.8 if Completion does not take place on the date set
         for Completion in clause 5.1 as a result of the Vendor failing to
         comply fully with any of its obligations under clause 5, the Purchaser
         may at its option (but without prejudice to any other right or remedy
         it may have) by notice in writing to the Vendor elect to proceed to
         Completion in so far as reasonably practicable.

6.       COMPLETION STATEMENT AND ADJUSTMENTS TO PURCHASE PRICE
6.1      As soon as possible after Completion the Purchaser shall prepare a
         statement (the "Statement") showing:
         (a)      as at the close of business on date of Completion the Marlin
                  Net Assets and the Emess Net Assets in accordance with the
                  principles referred to in clause 6.2;
         (b)      a consolidated profit and loss account of the Brilliant Group
                  for the period starting on the day after the Latest Accounting
                  Date and ending close of business on the date of Completion
                  and a consolidated balance sheet of the Brilliant Group as at
                  the date of Completion and all attached notes prepared in
                  accordance with the principles referred to in clause 6.3; and
                  during the preparation of the Statement the Vendors
                  Accountants shall be consulted as appropriate.

6.2      Except as provided in Schedule 6 (which, in the event of any conflict,
         shall override the provisions of this clause 6.2), the Marlin Net
         Assets and the Emess Net Assets shall be calculated and the profit and
         loss account, balance sheet and notes shall be prepared on a basis
         consistent with the same accounting principles, policies and practices
         that are normally adopted in the preparation of the Business Accounts
         and otherwise prepared in accordance with the requirements of generally
         accepted accounting principles in the United Kingdom.
6.3      Except as provided in Schedule 6 (which, in the event of any conflict,
         shall override the provisions of this clause 6.3), the accounts
         referred to in clause (b) in relation to each member of the Brilliant
         Group shall be prepared on a basis consistent with and using the same
         accounting principles, policies and practices, that are normally
         adopted in the preparation of the Brilliant Accounts and otherwise
         prepared in accordance with the requirements of generally accepted
         accounting principles in the United Kingdom.
6.4      The Purchaser shall or shall procure that within 30 days after
         Completion there is submitted to the Vendor the Statement and working
         papers prepared in accordance therewith. The Vendor shall or shall
         procure that within 30 days of receipt of the Statement and working
         papers it or the Vendor's Accountants on its behalf certify whether or
         not they agree with the Statement. The Purchaser shall procure that the
         Vendor and the Vendor's Accountants are given all such assistance and
         access to all such information as they may reasonably require in order
         to enable them to prepare their certificate for the purposes of this
         clause 6.4.
6.5      If the Vendor or the Vendor's Accountants certify their agreement with
         the Statement, it shall constitute the Completion Statement. If the
         Vendor or the Vendor's Accountants certify that they disagree with the
         Statement, then the provisions of clause 6.6 shall apply and the
         decision of the independent firm of chartered accountants produced in
         accordance with

                                     - 23 -
<PAGE>   24

         clause 6.6 shall constitute the Completion Statement. If the Vendor nor
         the Vendor's Accountants do not give the Purchaser the certificate
         required by clause 6.4 within the prescribed time limit, the statement
         shall constitute the Completion Statement, provided always that, in the
         event that the time limits prescribed in this clause 6 are varied by
         written agreement between the parties to this Agreement, the provisions
         of this clause 6 shall apply as if the varied dates were those
         prescribed hereunder.
6.6      If any dispute arises between the parties as to the amount of
         consideration payable under clause 4 or between the Vendor or the
         Vendor's Accountants and the Purchaser or the Purchaser's Accountants
         as to any matter to be included in the Completion Statement either
         party may give notice that a dispute exists (a "DISPUTE NOTICE") to the
         other party and if the parties have not resolved the dispute within 10
         Business Days of the date of receipt of the Dispute Notice by the other
         party, the following provisions shall apply. Either party may refer the
         dispute to an independent firm of chartered accountants agreed by the
         parties or in default of agreement within 20 Business Days of the date
         of the Dispute Notice, an independent firm of chartered accountants
         nominated by the President for the time being of the Institute of
         Chartered Accountants in England and Wales (the "EXPERT"), with a
         request that the Expert make a decision on the dispute within 20
         Business Days of receiving the reference. In any reference, the Expert
         shall act as an expert and not as an arbitrator. The decision of the
         Expert shall, in the absence of fraud or manifest error, be final and
         binding on both parties. The costs of the Expert shall be borne equally
         by the parties.

7.       WARRANTIES
7.1      The Vendor warrants to the Purchaser in the terms of the Warranties.
         Each of the Warranties shall be deemed to have been repeated
         immediately prior to Completion by reference to the facts then
         existing.
7.2      The Vendor acknowledges that the Purchaser is entering into this
         Agreement in reliance upon each of the Warranties.
7.3      The Warranties shall be qualified by reference to those matters fairly
         disclosed in the Disclosure Letter. A matter shall only be regarded as
         having been fairly disclosed in relation to any document received by
         the Purchaser or its advisers after 5 pm on Tuesday, 23 May 2000 if the
         importance of the matter has been brought to the attention of the
         Purchaser in the Disclosure Letter.
7.4      Save in respect of any rights the Vendor may have against the
         directors, employees, agents or advisers of the Target Group in respect
         of fraud or fraudulent concealment the Vendor agrees with the Purchaser
         that it shall waive and not enforce any right which it may have in
         respect of any misrepresentation, inaccuracy or omission in or from any
         information or advice supplied or given by any officer, employee or
         adviser of or to the Target Group for the purpose of assisting the
         Vendor to give any of the Warranties or to prepare the Disclosure
         Letter.
7.5      Each of the Warranties shall be construed separately and independently
         and (save where expressly provided to the contrary) shall not be
         limited or restricted by reference to any of the other Warranties.
7.6      During the period beginning on the execution of this Agreement and
         ending on the date of Completion the Vendor shall and shall procure
         that each members of the Vendor's Group shall comply with the
         provisions of Schedule 7 and the Vendor shall not and shall procure
         that no member of the Vendor's Group or their respective officers or
         employees shall, do or allow any act or omission which would constitute
         a breach of any of the Warranties if the Warranties were given at any
         time up to the date of Completion.

                                     - 24 -
<PAGE>   25

7.7      The only Warranties given by the Vendor in respect of or relating to
         the Marlin Property are contained in paragraph 7 of part 1 of Schedule
         5 and the only Warranties given by the Vendor in respect of or relating
         to environmental matters are contained in paragraph 8 of part 1 of
         Schedule 5 and the only Warranties given by the Vendor in respect of or
         relating to the tax are contained in paragraph 4 of Part 1 of Schedule
         5 and Part 2 of Schedule 10.
7.8      The Purchaser warrants to the Vendor in the following terms (which
         shall remain in full force and effect after Completion):

         (A)      ORGANISATION
         The Purchaser is a corporation duly organised, validly existing and in
         good standing under the laws of the State of Oklahoma and has the
         corporate power to carry on its business as it is now being conducted
         or presently proposed to be conducted.

         (B)      AUTHORISATION
         The Purchaser has all requisite corporate power to enter into and
         perform this Agreement, each document to be executed by the Purchaser
         at or before Completion and the transactions and matters contemplated
         thereby and has taken all necessary action to authorise the entry into
         and performance of, and has obtained all applicable governmental,
         statutory, regulatory or other consents, licences, waivers or
         exemptions required to empower it to enter into and perform, this
         Agreement, each document to be executed by the Purchaser at or before
         Completion and the transactions and matters contemplated thereby.

         (C)      PROPERTY EXECUTION
         The Purchaser's obligations under this agreement and each document to
         be executed at or before Completion are or when the relevant document
         is executed, will be enforceable in accordance with their terms, except
         as the same may be limited by (i) bankruptcy, insolvency,
         re-organisation, moratorium or similar laws now or hereafter in effect
         relating to creditors rights generally; and (ii) general equitable
         principles.

8.       INDEMNITIES
8.1      Subject to the limitations below the Vendor shall fully and effectively
         indemnify and keep indemnified the Purchaser's Group and any member of
         the Brilliant (AG Group Excluded) Group against:-

         (A)      Compulsory Remediation Costs and Compulsory Contamination
                  Penalties;
         (B)      Voluntary Remediation Costs.

8.2      [Clause not used.]

8.3      The Purchaser shall inform the Vendor in writing of any Pre-Completion
         Contamination of which the Purchaser has become aware and any
         circumstances or state of affairs including any Contamination Claim
         giving reasonable details of the same which indicates the Vendor may
         incur liability under 8.1 above giving full written particulars of the
         same within 21 days of the Purchaser becoming aware of the same
         PROVIDED that no notification under this

                                     - 25 -
<PAGE>   26

         clause shall be effective to the extent that it is a general
         notification that does not relate to and provide details of a specific
         issue of actual Pre-Completion Contamination;

8.4      No claim under the indemnity at 8.1 above shall be permitted to the
         extent that:-
         (A)      the claim arises from any act or omission of the Purchaser's
                  Group which is not in the ordinary course of business of the
                  relevant company;
         (B)      the claim arises as a result of any change in use or
                  development of a Property or any voluntary investigation by or
                  on behalf of the Purchaser's Group (the cost of which is not
                  covered by this Environmental Indemnity), any Affiliated
                  Company and any member of the Brilliant (AG Group Excluded)
                  Group of the state and condition of the soil or groundwater at
                  such Properties;
         (C)      the Purchaser's Group is entitled to recover sums otherwise
                  recoverable under the Environmental Indemnity from any other
                  party;
         (D)      it is limited by the application of clause 9.2 of this
                  Agreement;
         (E)      the claim is in relation to Hazardous Substances which are not
                  Pre-Completion Contamination;
         (F)      the claim is increased by or arises as a result of the
                  Purchaser, any Affiliated Company and any member of the
                  Brilliant  Group failing to take all reasonable steps to
                  mitigate the claim or to comply with the provisions of this
                  Environmental Indemnity and/or the Agreement;
         (G)      the claim arises or is increased by any change in
                  Environmental Law or remediation standards from those in force
                  or followed as at the date of this Agreement;

8.5      No claim under the indemnity at 8.1 above shall be permitted if:-
         (A)      notice is given pursuant to 8.3 above in respect of a Property
                  more than four years after the date of Completion and in
                  relation to Former Properties more than six years after the
                  date of Completion;
         (B)      the matter in question has been disclosed to any Regulatory
                  Authority or third party by the Purchaser's Group or its
                  agents (save where disclosure is required under the
                  Environmental Law);

8.6      Save to the extent the Operations or a member of the Brilliant (AG
         Group Excluded) Group would be materially prejudiced, in which case the
         Purchaser shall retain conduct subject to the Vendor accepting, subject
         to the terms and limitations of this Environmental Indemnity, liability
         in relation to any matter for which notice is given pursuant to 8.3
         above, the Vendor may at its absolute discretion assume sole conduct of
         any actual or potential Contamination Claim (and any claim arising
         against any third party in relation to the same matter (for the
         purposes of this sub-clause (a "Third Party Claim")) provided that the
         Vendor keeps the Purchaser informed of the conduct of any such
         Environmental Claim or Third Party Claim and complies with the
         reasonable requests of the Purchaser in relation to the conduct of the
         same;
8.7      Save to the extent where the Operations or a member of the Brilliant
         (AG Group Excluded) Group would be materially prejudiced, in which case
         the Purchaser shall retain conduct subject to the Vendor accepting,
         subject to the terms and limitations of this Environmental Indemnity,
         liability in relation to any matter for which notice is given pursuant
         to 8.3 above, the Vendor may at its absolute discretion assume sole
         conduct of any works which will give rise to Voluntary Remediation
         Costs or Contamination Claim (and any claim arising against any third
         party in relation to the same matter (for the purposes of this
         sub-clause a "Third Party Claim")) provided that the Vendor keeps the
         Purchaser informed of the conduct of any

                                     - 26 -
<PAGE>   27

         such Minimum Works and Third Party Claim and complies with the
         reasonable requests of the Purchaser in relation to the conduct of the
         same;
8.8      Where the Vendor does not assume conduct under 8.6 or 8.7 above, the
         Purchaser shall be obliged, in relation to any proposed works for which
         a claim for Voluntary Remediation Costs may arise, to obtain the
         agreement of the Vendor that the proposed works constitute the Minimum
         Works before commencing any such works and in the event of a failure to
         obtain agreement, then the Vendor and the Purchaser shall jointly
         appoint an independent environmental consultant to determine what
         constitutes the Minimum Works whose determination thereof shall be
         binding on the parties.
8.9      The Vendor shall fully indemnify and keep indemnified the Purchaser and
         each member of the Purchaser's Group against any liability, loss,
         damage, penalty, cost or expense (including any reasonable legal and
         other professional fees) incurred in defending or resolving any actions
         or claims (civil or criminal) or in appealing against any judgment,
         notice or award which are suffered or incurred by the Purchaser or any
         member of the Purchaser's Group which arise out of:-
         (a)      any re-organisation of the corporate structure of the Vendor's
                  Group prior to Completion;
         (b)      the attachment of CE quality mark stickers attached to lamps
                  manufactured by Marlin Lighting B.V;
         (c)      any action taken by the ING Bank to crystallise its right to
                  have a lien on the machinery and goods of the Marlin Lighting
                  B.V. as a result of the repayment of any inter-company
                  indebtedness;
         (d)      any right of Mr Levin to subscribe for or sell any interest in
                  the shares of Brilliant (Aust) Pty Limited.

9.       LIMITATIONS ON THE VENDOR'S LIABILITY
9.1      The Vendor shall have no liability whatsoever in respect of any
         Relevant Claim save in relation to any claim under the Tax Schedule
         unless and until the amount that would otherwise be recoverable from
         the Vendor in respect of that Relevant Claim, when aggregated with any
         other amounts so recoverable in respect of other Relevant Claims,
         exceeds an aggregate threshold of US$1,000,000 in which event all
         Relevant Claims including Relevant Claims previously notified, shall be
         recoverable.

9.2      The aggregate liability of the Vendor in respect of all Relevant Claims
         which for the purposes of this clause shall include any claim under the
         Environmental Indemnity shall not exceed the aggregate of the
         consideration payable under the provisions of clause 4.1.

9.3      The Vendor shall have no liability for any Relevant Claim unless notice
         in writing of the Relevant Claim (stating in reasonable detail the
         nature of the Relevant Claim including an estimate of the amount of
         such claim if practicable) has been given to the Vendor (i) in the case
         of a claim under the Tax Schedule or a Warranty relating to Tax on or
         before the seventh anniversary of the date of Completion; and (ii) in
         the case of any other Relevant Claim, on or before the second
         anniversary of the date of Completion.

9.4      In respect of clause 9.3 the Vendor shall have no liability for any
         such Relevant Claim (other than a claim under the Tax Schedule or the
         Warranties relating to Tax in respect of the sale of Shares) unless (if
         it has not been previously satisfied, settled or withdrawn) legal
         proceedings have been instituted in respect of such claim by the due
         service of process on the Vendor within six months of the date of
         receipt of the written notice of the Relevant Claim.

                                     - 27 -
<PAGE>   28

9.5      For the purposes of clause 9, "RELEVANT CLAIM" means any claim by an
         Indemnified Person in respect of breach of any of the Warranties or any
         claim made under the terms of the Tax Schedule.
9.6      No liability shall attach to the Vendor in respect of any claim under
         the Tax Schedule to the extent that sums in respect of the matter
         giving rise to the claim have been recovered under the Warranties and
         no liability shall attach to the Vendor in respect of any claim under
         or in connection with the Warranties to the extent that sums in respect
         of the matter giving rise to the claim have been recovered under the
         Tax Schedule.
9.7      No liability (whether in contract, tort or otherwise) shall attach to
         the Vendor in respect of any claim under the Warranties other than the
         Warranties relating to Tax in respect of the sale of the Shares to the
         extent that:
         (a)      the claim or the events giving rise to the claim would not
                  have arisen but for an act, omission or transaction of the
                  Purchaser's Group otherwise than (i) in the ordinary and
                  proper course of the business of the Target Group or (ii) an
                  act of the Purchaser or any member of the Purchaser's Group at
                  the request of the Vendor or any member of the Vendor's Group;
         (b)      the claim is based upon a liability which is contingent only,
                  unless and until such contingent liability becomes an actual
                  liability (provided that nothing in this clause shall prevent
                  notice being given of any Relevant Claim);
         (c)      provision or reserve shall have been made in the Accounts or
                  the Completion Statement in respect of the matter giving rise
                  to the claim;
         (d)      the claim would not have occurred but for or the amount
                  thereof is increased as a result of:
                  (i)      any change in the accounting principles or practices
                           of the Purchaser's Group introduced or having effect
                           after the date of Completion unless the same is
                           introduced to bring the accounting principles and the
                           practices into line with generally accepted
                           accounting principles and practices in the relevant
                           jurisdiction in relation to a business of the type
                           carried on by any member of the Brilliant Group; or
                  (ii)     any increase in the rates of taxation made after the
                           date hereof; or
                  (iii)    any change in law or regulation or in its
                           interpretation or administration by the courts of any
                           relevant jurisdiction, by the Inland Revenue, the
                           Internal Revenue Service or by any other fiscal,
                           monetary or regulatory authority (whether or not
                           having the force of law) within the relevant
                           jurisdictions;
         (e)      the loss or damage giving rise to the claim is recoverable by
                  any member of the Purchaser's Group under any policy of
                  insurance after deduction of the reasonable costs of recovery
                  of the Purchaser or any member of the Purchaser's Group and
                  for such purposes, the Purchaser's Group shall be obliged to
                  use its reasonable endeavours to make such recovery under all
                  available policies of insurance provided that this provision
                  shall not apply to the extent that the relevant member of the
                  Purchaser's Group shall not have recovered under any policy of
                  insurance within 6 months of the date that notice of the
                  Relevant Claim is given to the Vendor;
         (f)      the claim relates to a claim or liability for Taxation and
                  would not have arisen but for any winding-up or cessation
                  after Completion of any of the Businesses or part of it except
                  to the extent that such winding-up or cessation is occasioned
                  by the facts or circumstances giving rise to one or more
                  claims under the Warranties.
         (g)      No liability will arise and no claim may be made under any of
                  the Warranties to the extent that the matter giving rise to
                  such claim is remediable unless within period of

                                     - 28 -
<PAGE>   29

                  30 Business Days following the Purchaser becoming aware of
                  such matter the Purchaser shall have given written notice
                  thereof to Vendor and such matter shall not have been remedied
                  to the reasonable satisfaction of the Purchaser within the
                  period of 30 Business Days following the date of service of
                  such notice.

9.8      Clause 9.9 shall apply in circumstances where:

         (a)      any claim is made against the Purchaser's Group which may give
                  rise to a claim by any member of the Purchaser's Group against
                  the Vendor under the Warranties other than the Warranties
                  relating to Tax in respect of the sale of Shares (the "GENERAL
                  WARRANTIES"); or
         (b)      the Purchaser's Group is or may be entitled to make recovery
                  from some other person any sum in respect of any facts or
                  circumstances by reference to which any member of the
                  Purchaser's Group has or may have a claim against the Vendor
                  under the General Warranties; or
         (c)      the Vendor shall have paid to any member of the Purchaser's
                  Group an amount in respect of a claim under the General
                  Warranties and subsequent to the making of such payment the
                  Purchaser's Group becomes or shall become entitled to recover
                  from some other person a sum which is referable to that
                  payment. For the avoidance of doubt any claim under the
                  Warranties relating to Tax in respect of the sale of shares
                  shall be governed by clause 1 of part 4 of Schedule 10.

9.9      The Purchaser shall and shall procure after Completion that the
         Purchaser's Group shall:
         (a)      without prejudice to the validity of the claim or alleged
                  claim in question and subject to the Purchaser's Group being
                  indemnified to the reasonable satisfaction of the Purchaser by
                  the Vendor against all reasonable costs and expenses which may
                  properly be incurred by reason of such action) promptly and
                  diligently take all such action as the Vendor may reasonably
                  request including the institution of proceedings and the
                  instruction of professional advisers approved by the Vendor to
                  act on behalf of the Purchaser's Group to avoid, dispute,
                  resist, compromise, defend or appeal against any such claim
                  against the Purchaser's Group as is referred to in clause (a)
                  or to make such recovery by the Purchaser's Group as is
                  referred to in clause (b) or clause (c) as the case may be;
                  and
         (b)      not settle or compromise any liability or claim to which such
                  action is referable without the prior written consent of the
                  Vendor which consent shall not be unreasonably withheld or
                  delayed; and
         (c)      in the case of clause (c) only, promptly repay to the Vendor
                  an amount equal to the amount so recovered or, if lower, the
                  amount paid by the Vendor to the Purchaser.

9.10     Save as expressly provided in this Agreement the Purchaser shall not
         Agreement the Purchaser shall not have any right to rescind or
         terminate this Agreement or any other documents referred to in this
         Agreement either for breach of contract or for negligent or innocent
         misrepresentation or otherwise.
9.11     Without prejudice to the validity of any claim or alleged claim in the
         event that the Vendor at any time after the date hereof shall wish to
         take out insurance against its liability hereunder the Purchaser
         undertakes to provide such information as the prospective insurer may
         reasonably require before effecting such insurance.
9.12     The Purchaser will take or procure the taking of all such reasonable
         steps and action as are necessary in order to mitigate any claim under
         the Warranties. Nothing in this agreement shall or shall be deemed to
         relieve the Purchaser of any common law duty to mitigate any loss or
         damage incurred by it.

                                     - 29 -
<PAGE>   30

9.13     The Purchaser warrants that as at the date hereof it has no knowledge
         of any facts which it is aware will or could with reasonable certainty
         give rise to a claim against the Vendor under the Warranties.

10.      LIABILITIES
10.1     Subject to clauses 10.3 and 11, the Vendor shall or shall procure that
         the relevant Asset Vendor shall:
         (a)      save in relation to matters covered under the Environmental
                  Indemnity or the Environmental Warranties continue to be
                  responsible for, and shall duly and promptly pay and
                  discharge, all debts payable by the relevant Asset Vendor and
                  claims by and liabilities to third parties outstanding against
                  the relevant Asset Vendor as at the date of Completion or
                  arising by reason of the operation of the Marlin Business or
                  the Emess Lighting Business (as appropriate) or any act or
                  omission by the Asset Vendor or any fact, event or condition
                  existing on or before the date of Completion except for such
                  debts, claims or liabilities that are assumed by the Purchaser
                  in the assumption of liabilities agreement and the Trade
                  Credits; and
         (b)      save in relation to matters covered under the Environmental
                  Indemnity or the Environmental Warranties indemnify the
                  Purchaser against all losses, liabilities and costs which the
                  Purchaser may incur arising out of, or as a consequence of,
                  the ownership or operation of the Marlin Business or Marlin
                  Assets or the Emess Lighting Business or Emess Assets before
                  the date of Completion (including, without limitation, all
                  losses, liabilities and reasonable costs incurred as a result
                  of defending or settling any claim (a "SPECIFIED CLAIM")
                  alleging any such liability) other than those arising out of
                  the breach by the Vendor of any of the Warranties or other
                  provisions of this Agreement and except for such losses,
                  liabilities and costs that are assumed by the Purchaser in the
                  assumption of liabilities agreement and the Trade Credits.

10.2     Subject to clauses 10.3, and 11 the Purchaser shall:
         (a)      be responsible for all Trade Credits and debts falling due
                  after the date of Completion in respect of the Marlin Business
                  and Marlin Assets and the Emess Lighting Business and Marlin
                  Assets; and
         (b)      indemnify the Vendor and the Asset Vendor against all losses,
                  liabilities and reasonable costs which the Vendor and the
                  Asset Vendor may incur to the extent arising out of, or as a
                  consequence of, the ownership or operation of the Marlin
                  Business or Marlin Assets of the Emess Lighting Business and
                  Emess Assets or the Trade Credits after the date of Completion
                  (including, without limitation, all losses, liabilities and
                  costs incurred as a result of defending or settling any claim
                  (a "SPECIFIED CLAIM") alleging any such liability).

10.3     If either party (the "INDEMNIFIED PARTY") becomes aware of any matter
         which might give rise to a Specified Claim, the following provisions
         shall apply:
         (a)      the Indemnified Party shall immediately give written notice to
                  the other party (the "INDEMNIFYING Party") of the matter
                  (stating in reasonable detail the nature of the matter and
                  (including the grounds on which such claim is based and the
                  amount claimed to be payable in respect thereof and shall
                  consult with the Indemnifying Party with respect to the
                  matter. If the matter has become the subject of any
                  proceedings the Indemnified Party shall give the notice within
                  sufficient time to enable the Indemnifying Party time to
                  contest the proceedings before any final judgment;

                                     - 30 -
<PAGE>   31

         (b)      the Indemnified Party shall:
                  (i)      take such action and institute such proceedings, and
                           give such information and assistance, as the
                           Indemnifying Party or its insurers may reasonably
                           request to:
                           (A)      dispute, resist, appeal, compromise, defend,
                                    remedy or mitigate the matter; or
                           (B)      enforce against any person (other than the
                                    Indemnifying Party) the rights of the
                                    Indemnified Party or its insurers in
                                    relation to the matter; and
                  (ii)     in connection with any proceedings related to the
                           matter (other than against the Indemnifying Party)
                           use professional advisers nominated by the
                           Indemnifying Party or its insurers and, if the
                           Indemnifying Party so requests, allow the
                           Indemnifying Party or its insurers the exclusive
                           conduct of the proceedings, in each case on the basis
                           that the Indemnifying Party shall fully indemnify the
                           Indemnified Party for all reasonable costs incurred
                           as a result of any request or nomination by the
                           Indemnifying Party or its insurers;

         (c)      if the Purchaser is the Indemnified Party, clause (b) shall
                  not apply if the request or nomination by the Vendor would in
                  the Purchaser's reasonable opinion materially prejudice its
                  relationship with any customer or supplier either of the
                  Businesses;
         (d)      the Indemnified Party shall not admit liability in respect of
                  or settle the matter without the prior written consent of the
                  Indemnifying Party, such consent not to be unreasonably
                  withheld or delayed.

11.      CONTRACTS
11.1     Subject to clause (c), after Completion the Purchaser shall perform or
         shall procure the performance of all the obligations under the
         Contracts in a proper and workmanlike manner and shall indemnify the
         Vendor and each member of the Vendor's Group against all losses,
         liabilities and costs which the Vendor or any member of the Vendor's
         Group may incur arising out of, or as a consequence of, the performance
         of the Purchaser's obligations under each Contract to the extent that
         the loss, liability or cost is attributable to any act, default or
         omission of the Purchaser or any member of the Purchaser's Group after
         the date of Completion (including, without limitation, all losses,
         liabilities and costs incurred as a result of defending or settling any
         claim alleging any such liability).
11.2     The Vendor shall indemnify the Purchaser and each member of the
         Purchaser's Group against all losses, liabilities and costs which the
         Purchaser or any member of the Purchaser's Group may incur arising out
         of, or as a consequence of the performance by the Vendor and/or the
         Asset Vendor of the Vendor's obligations or the obligations of any
         member of the Vendor's Group under each Contract to the extent that the
         loss, liability or cost is attributable to any act, default or omission
         of the Vendor or any member of the Vendor's Group (including, without
         limitation, all losses, liabilities and costs incurred as a result of
         defending or settling any claim alleging any such liability).
11.3     If any of the Contracts cannot be transferred to the Purchaser or to a
         member of the Purchaser's Group except by an assignment made with the
         consent of another party or by an agreement of novation, then the
         following provisions shall apply:

                                     - 31 -
<PAGE>   32

         (a)      this Agreement shall not constitute an assignment or an
                  attempted assignment of the Contract if the assignment or
                  attempted assignment would constitute a breach of the
                  Contract;
         (b)      both before and after Completion the parties shall use their
                  respective reasonable endeavours to obtain the consent of the
                  other party to the assignment, or to procure the novation, of
                  the Contract;
         (c)      until the consent or novation is obtained, the Vendor shall do
                  or shall procure that the relevant Asset Vendor shall do all
                  such acts and things as the Purchaser may reasonably require
                  to enable due performance of the Contract and to provide for
                  the Purchaser or the relevant member of the Purchaser's Group
                  the benefits of the Contract (including enforcement at the
                  cost and for the account of the Purchaser of any right of the
                  Vendor or the relevant Asset Vendor against the other party to
                  the Contract arising out of its termination by the other party
                  or otherwise); and
         (d)      if the arrangements in clauses (b) and (c) cannot be made in
                  respect of the Contract the parties shall use their respective
                  reasonable endeavours to procure that the Contract is
                  terminated without liability to either of them and neither the
                  Vendor nor the Purchaser nor any member of their respective
                  Groups shall have any further obligation to the other relating
                  to the Contract except that the Vendor shall forthwith repay
                  or procure the repayment to the Purchaser any amount paid by
                  the Purchaser to the Vendor in respect of any such Contract.
         (e)      this clause 11.3 is without prejudice to the rights of the
                  Purchaser in respect of any Contract which the Vendor has
                  warranted is assignable, or may be performed by the Purchaser
                  in substitution for the Vendor, or the Asset Vendor without an
                  agreement of novation.

12.      EMPLOYEES AND PENSIONS

12.1     The parties accept and agree that at Completion the Transfer
         Regulations shall operate to transfer the contract of employment of
         each Marlin Employee to the Purchaser.
12.2     The Vendor will perform and discharge all employer's obligations in
         respect of each Marlin Employee due to be performed or discharged prior
         to Completion (which shall for the avoidance of doubt include, but not
         be limited to payment of salary, bonus, commission, pension
         contributions and taxes arising out of the employment relationship).
12.3     The parties acknowledge and agree that pursuant to the Transfer
         Regulations the contracts of employment between the Vendor and the
         Marlin Employees will with effect from completion have effect as if
         originally made between the Purchaser and the Marlin Employees.
12.4     Before Completion the Vendor will inform and consult with
         representatives of its employees who will be affected by this
         Agreement, in accordance with its obligations under the Transfer
         Regulations.
12.5     Prior to Completion the Vendor will deliver to each of the Marlin
         Employees a letter in terms to be agreed with the Purchaser informing
         them that the Purchaser is to become their employer upon Completion.
12.6     In the event that any person (whether or not a Marlin Employee or an
         Emess Employee) brings a claim against the Vendor and/or the Purchaser
         or any member of their respective Groups arising out of or in
         connection with or alleging the transfer or termination of that
         person's employment, the Vendor and the Purchaser shall give to each
         other as soon as practicable after any request thereof all information
         which may reasonably be relevant to such claim and shall render to each
         other such assistance and co-operation as either shall reasonably
         require in contesting, settling or dealing with any such claims.

                                     - 32 -
<PAGE>   33

12.7     The Vendor shall not terminate or in any way amend (whether orally or
         in writing and whether expressly or impliedly) the contracts of
         employment of any of the Marlin Employees without the prior written
         consent of the Purchaser, such consent not to be unreasonably withheld
         or delayed.
12.8     The Vendor shall fully indemnify the Purchaser and keep the Purchaser
         fully indemnified against each and every action, proceeding, liability,
         cost, claim, loss, expense (including legal expenses and other
         professional fees together with any VAT thereon) and demand arising out
         of or in connection with any claim by the Marlin Employees (or any of
         them) and/or their representatives whether in contract or in tort or
         under statute (including the Treaty of Rome and any Directives made
         under the authority of that Treaty) for any remedy including without
         limitation pursuant to the Transfer Regulations (including without
         limitation, Regulation 10 save to the extent that any failure to comply
         with the terms of Regulation 10 is a consequence of the Purchaser's
         failure to comply with Regulation 10 (3)) or the Employment Rights Act
         1996 or for unfair dismissal, redundancy, statutory redundancy, equal
         pay, sex or race or disability discrimination or under the Working Time
         Regulations 1998 or under the National Minimum Wage Act 1998 as a
         result of any act or omission by any person (other than the Purchaser
         or any officers, employees or advisers of the Purchaser's Group) before
         or at Completion (including without limitation the termination of their
         employment by the Vendor or the relevant Asset Vendor and including
         without limitation anything done or omitted to be done by the Vendor or
         the relevant Asset Vendor which is deemed to have been done by the
         Purchaser or any member of the Purchaser's Group by virtue of the
         Regulations).
12.9     The Purchaser shall fully indemnify the Vendor and each member of the
         Vendor's Group and keep the Vendor and each member of the Vendor's
         Group fully indemnified against each and every action, proceeding,
         liability, cost, claim, loss, expense (including legal expenses and
         other professional fees together with any VAT thereon) and demand
         arising out of or in connection with any claim by the Marlin Employees
         (or any of them) and/or their representatives whether in contract or in
         tort or under statute (including the Treaty of Rome and any Directives
         made under the authority of that Treaty) for any remedy including
         without limitation pursuant to the Transfer Regulations or the
         Employment Rights Act 1996 or for unfair dismissal, redundancy,
         statutory redundancy, equal pay, sex or race or disability
         discrimination or under the Working Time Regulations 1998 or under the
         National Minimum Wage Act 1998 as a result of any act or omission by
         the Purchaser or any member of the Purchaser's Group at or after
         Completion (including without limitation the termination of their
         employment by the Purchaser or any member of the Purchaser's Group)
12.10    The Vendor shall fully indemnify the Purchaser and each member of the
         Purchaser's Group and keep the Purchaser and each member of the
         Purchaser's Group fully indemnified against each and every action,
         proceeding, liability, cost, claim, loss, expense (including legal
         expenses on an indemnity basis and other professional fees together
         with any VAT thereon) and demand arising out of or in connection with
         any claim by any person who is not a Marlin Employee who shall claim to
         have become an employee of or have rights against the Purchaser or any
         member of the Purchaser's Group by virtue of the Transfer Regulations
         and/or their representatives whether in contract or in tort or under
         statute (including the Treaty of Rome and any Directives made under the
         authority of that Treaty) for any remedy including without limitation
         pursuant to the Transfer Regulations (including without limitation
         Regulation 10) or the Employment Rights Act 1996 or for unfair
         dismissal, redundancy, statutory redundancy, equal pay, sex or race or
         disability discrimination or under the Working Time Regulations 1998 or
         under the National Minimum Wage Act 1998

                                     - 33 -
<PAGE>   34

         (including without limitation claims relating to anything done or
         omitted to be done by the Vendor or any member of the Vendor's Group
         which is deemed to have been done by the Purchaser or any member of the
         Purchaser's Group by virtue of the Regulations).
12.11    As soon as practicable after Completion the Vendor shall deliver to the
         Purchaser either originals or (if originals no longer exist or are not
         under the Vendor's custody or control or that of any member of the
         Vendor's Group) copies of all records in relation to taxes arising out
         of the employment relationship and of any other documents or records
         (including, but not limited to, personnel records and files) which
         concern or are relevant to the Marlin Employees and which are in the
         possession or control of the Vendor or any member of the Vendor's
         Group.
12.12    The Vendor and the Purchaser shall implement the pension arrangements
         set out in Schedule 8.
12.13    With respect to the Emess Employees the Purchaser shall assume such
         obligations of Emess Lighting with respect thereto as shall reflect
         normal custom and practice.

13.      VALUE ADDED TAX
13.1     The parties shall use their respective reasonable endeavours to secure
         that the transfer of the Marlin Assets under this Agreement is treated
         under act 5(1) of the Value Added Tax (Special Provisions) Order 1995
         and sections 49 VATA as neither a supply of goods nor a supply of
         services.
13.2     Notwithstanding clause 13.1 if value added tax is chargeable on the
         transfer of any of the Marlin Assets under this Agreement, the
         Purchaser shall (against delivery of tax invoices in respect of the
         Marlin Assets) pay the amount of the value added tax in addition to the
         consideration in respect of the Marlin Assets payable under clause 4.
13.3     At Completion the Vendor shall deliver or shall procure that there is
         delivered to the Purchaser all records referred to in section 49 of the
         VATA. After Completion the Vendor shall not and shall procure that each
         member of its Group shall not make any request to H.M. Customs and
         Excise for the records to be taken out of the custody of the Purchaser.
         During the period for which the records are required to be preserved
         under paragraph 6 of Schedule 11 to the VATA (duty to keep records),
         the Purchaser shall give the Vendor and any relevant member of its
         Group reasonable access to the records for the purpose of inspecting
         the records and making copies of them.
13.4     In the event that HM Customs and Excise determine that VAT is
         chargeable on the sale of the Marlin Business and the Marlin Assets
         hereunder then the Vendor shall immediately notify the Purchaser of
         such determination and the Vendor agrees that such Value Added Tax (and
         any interest or penalties thereon to the extent that the same was
         caused by a delay by the Purchaser in paying such VAT having been
         presented with a valid invoice or to the extent that such VAT or
         interest or penalties thereon is caused by the Purchaser being wholly
         or partly in breach of clause 13.5) shall be in addition to the
         consideration and the Purchaser shall (against production by the Vendor
         of VAT invoices in respect thereof) pay the amount of any such VAT (and
         any interest or penalties thereon to the extent that the same was
         caused by a delay by the Purchaser in paying such VAT having been
         presented with a valid invoice or to the extent that such VAT or
         interest and penalties thereon is caused by the Purchaser being wholly
         or partly in breach of clauses 13.5 within 10 business days after
         receipt of such notification to the Vendor.
13.5     The Purchaser warrants that at Completion it will be taxable person for
         the purposes of article 5(1) of the Value Added Tax (Special
         Provisions) Order 1995 and further that it will use the assets acquired
         under this Agreement for the purposes as carrying on the same kind of
         business as carried on by the Vendor and that it has elected to waive
         the exemption

                                     - 34 -
<PAGE>   35

         pursuant to paragraph 2 of Schedule 10 of the VATA in respect of the
         relevant Marlin Properties and shall properly notify HM Customs and
         Excise of such election before the date of Completion.
13.6     All transfer taxes and sales taxes incurred in connection with the
         transfer of Emess Lighting Business and Emess Property shall be borne
         by the Purchaser. Emess Lighting Inc. and the Purchaser (and its
         relevant Affiliated Companies) shall co-operate to file all tax returns
         and other documentation as required by law and to obtain all applicable
         exemptions by filing required certificates or otherwise.
         Notwithstanding the foregoing, the Vendor and the Purchaser acknowledge
         that Emess Lighting Inc. may not comply with any requirements relating
         to a bulk sale notice for tax purposes.

14.      POST-COMPLETION OBLIGATIONS
14.1     As from Completion until title in the Marlin Assets and Emess Assets
         have effectively been vested in the Purchaser the Vendor shall hold or
         shall procure that the Asset Vendor shall hold the Marlin Assets and
         Emess Assets in trust for the Purchaser.
14.2     For a period of six years from Completion the Purchaser shall procure
         that at all reasonable times during usual business hours the Business
         Records are open to the inspection of the Vendor and the relevant
         member of the Vendor's Group, their respective employees and agents and
         such other persons as may be authorised by the Vendor who may take, at
         the Vendor cost, such copies of the Business Records as the Vendor may
         reasonably require. For a period of six years from Completion the
         Vendor shall procure that at all reasonable times during usual business
         hours any brought and sold ledgers, purchase and sales day books and
         purchase and sales invoices and other books and records relating to the
         Target Group retained by it or any member of the Vendor's Group shall
         be open to the inspection of the Purchaser, its employees and agents
         and such other persons as may be authorised by the Purchaser who may
         take, at the Purchaser's cost, such copies of those Business Records as
         the Purchaser may reasonably require.
14.3     Each party shall forthwith pass to the other any payment, notice,
         correspondence, information or enquiry in relation to each of the
         Marlin Business, the Emess Lighting Business, or the Marlin Assets and
         the Emess Lighting Assets or any member of the Brilliant Group or in
         relation to the Brilliant Business which it or any member of its Group
         receives after Completion and which properly belongs to the other party
         or any member of the other party's Group.
14.4     At or as soon as practicable after Completion the parties shall send a
         joint letter in the agreed form to each customer, client and supplier
         of the Marlin Business and the Emess Lighting Business advising it of
         the purchase of the Marlin Business and the Emess Lighting Business by
         the Purchaser.
14.5     For a period of up to six months after Completion the Vendor shall give
         to or shall procure the giving to the Purchaser, subject to the payment
         by the Purchaser of any direct costs involved, such information and
         assistance as the Purchaser may reasonably require relating to each of
         the Businesses.

15.      CONFIDENTIAL INFORMATION
15.1     The Vendor shall:

         (a)      not, and shall procure that no member of the Vendor's Group
                  will, at any time after the date of this Agreement use or
                  disclose to any person any Confidential Information or
                  Know-How or Brilliant Know-How which may be within or may come
                  to its knowledge; and

                                     - 35 -
<PAGE>   36

         (b)      use its, and shall procure that each member of the Vendor's
                  Group will use its, best endeavours to prevent the disclosure
                  of any Confidential Information or Know-How or Brilliant
                  Know-How.

15.2     clause 15.1 shall not apply to:
         (a)      disclosure of any Confidential Information or Know-How or
                  Brilliant Know-How to officers or employees of the Purchaser
                  whose province it is to know about the Confidential
                  Information or Know-How or Brilliant Know-How on terms that
                  this clause 15 shall apply to any use or disclosure by the
                  employee or officer;
         (b)      use or disclosure of any Confidential Information or Know-How
                  or Brilliant Know-How required by law or the London Stock
                  Exchange or any other recognised exchange;
         (c)      disclosure of any Confidential Information or Know-How or
                  Brilliant Know-How to any professional adviser for the purpose
                  of advising the Vendor on terms that this clause 15 shall
                  apply to any use or disclosure by the professional adviser; or
         (d)      any Confidential Information or Know-How or Brilliant Know-How
                  which comes into the public domain otherwise than by breach of
                  this clause 15 by the Vendor their employees, officers or
                  professional advisors.

16.      FURTHER VENDOR'S UNDERTAKINGS

16.1     At Completion or as soon as practicable thereafter the Vendor shall
         procure that the names of its relevant subsidiaries are changed so as
         not to include any of the words "Marlin", "Brilliant" or "Alsy" and
         shall co-operate with the Purchaser in ensuring that the Purchaser is
         able to simultaneously change the name of its relevant subsidiaries to
         include the words "Marlin", "Brilliant" or "Alsy" as the case may be.
         The Vendor acknowledges the reputation and goodwill is attached to the
         names "Marlin", "Brilliant" and "Alsy" and that the Purchaser is
         acquiring all rights in that name pursuant to this Agreement. The
         Vendor shall not and shall procure that no member of the Vendor's Group
         will at any time after Completion, directly or indirectly, use, or
         authorise, encourage, allow or assist any person to use any of the name
         or names identical or confusingly similar to "Marlin", "Brilliant" or
         "Alsy") in connection with any activity whatsoever. The Purchaser or
         its nominee, as the case may be, is permitted to use the name "Emess"
         in relation to the Emess Lighting Business for a period of 3 months
         immediately after the date of Completion.
16.2     Save that the Purchaser acknowledges that the business carried on in
         the names of Poole Lighting and Cresswell Lighting have been and may
         continue to be engaged in the sale of products which compete with those
         of the Purchaser and of the Businesses and of the Brilliant Business
         and the Vendor shall not, and shall procure that no member of the
         Vendor's Group nor any successor to its or their business other than
         each of the Businesses and the Brilliant Businesses will, for a period
         of three years after this Agreement, either alone or jointly with,
         through or as manager, adviser or agent for any persons, directly or
         indirectly;
         (a)      solicit with a view to offering employment or an engagement on
                  behalf of itself or any other person or organisation any of
                  the staff employed in the Businesses or the Brilliant Business
                  in the 12 months before the date of this Agreement without the
                  prior consent in writing of the Purchaser save that nothing in
                  this clause (a) shall prevent the Vendor or any member of the
                  Vendor's Group from making an offer of employment to any
                  member of staff of the Businesses of the Brilliant Group who
                  applies in response to a general public advertisement;

                                     - 36 -
<PAGE>   37

         (b)      disclose or use to its advantage or to the disadvantage of the
                  Purchaser any information about the Businesses or the
                  Brilliant Business or any member of the Brilliant Group or any
                  Intellectual Property or of other confidential information
                  about the Businesses and/or the Brilliant Business or their
                  finances or transactions;
         (c)      carry on, promote or be engaged, concerned or interested in,
                  or assist, any business which competes, directly or
                  indirectly, with the business of Eclatec SA or the Marlin
                  Business as carried on at the date of this Agreement in any
                  territory in which the business of Eclatec SA or the Marlin
                  Business was carried on at that date;
         (d)      in competition with the Businesses or the Brilliant Businesses
                  as carried on at the date of this Agreement engage in
                  commercial activity intended to procure orders from customers
                  located in the United States of America.

17.      ANNOUNCEMENTS
17.1     Subject to clause 17.2, no public announcement, communication or
         circular concerning the transactions referred to in this Agreement
         shall be made or despatched at any time (whether before or after
         Completion) by either party without the prior written consent of the
         other party (such consent not to be unreasonably withheld or delayed).
17.2     Where the announcement, communication or circular is required by law or
         any regulation or rule of any stock exchange or regulatory body it
         shall be made by a party after consultation with the other party (where
         practicable) and taking into account the reasonable requirements (as to
         timing, contents and manner of making or despatch of the announcement,
         communication or circular) of the other party.

18.      COSTS
         Except as otherwise expressly provided in this Agreement, each party
         shall pay its own costs of and incidental to the negotiation,
         preparation, execution and implementation by it of this Agreement and
         of all other documents referred to in it.

19.      ENTIRE AGREEMENT
         Each party on behalf of itself and as agent for each of its Affiliated
         Companies acknowledges and agrees with the other party (each such party
         acting on behalf of itself and as agent for each of its Affiliated
         Companies) that:

19.1     this agreement together with any other documents referred to in this
         agreement (together the "TRANSACTION DOCUMENTS") constitute the entire
         and only agreement between the parties and their respective Affiliated
         Companies relating to the subject matter of the Transaction Documents;
19.2     neither it nor any of its Affiliated Companies have been induced to
         enter into any Transaction Document in reliance upon, nor have they
         been given, any warranty, representation, statement, assurance,
         covenant, agreement, undertaking, indemnity or commitment of any nature
         whatsoever other than as are expressly set out in the Transaction
         Documents and, to the extent that any of them have been, it (acting on
         behalf of itself and as agent on behalf of each of its Affiliated
         Companies) unconditionally and irrevocably waives any claims, rights or
         remedies which any of them might otherwise have had in relation
         thereto;

                                     - 37 -
<PAGE>   38

         PROVIDED THAT the provisions of this clause 19 shall not exclude any
         liability which any of the parties or, where appropriate, their
         Affiliated Companies would otherwise have to any other party or, where
         appropriate, to any other party's Affiliated Companies or any right
         which any of them may have in respect of any statements made
         fraudulently by any of them prior to the execution of this Agreement or
         any rights which any of them may have in respect of fraudulent
         concealment by any of them.

20.      FURTHER ASSURANCE
20.1     At any time (whether before or after Completion) each party shall (at
         its own cost) do and execute, or procure to be done and executed, all
         necessary acts, deeds, documents and things as may be reasonably
         requested of it by the other party to give effect to this Agreement.
20.2     Pending Completion the Vendor shall give the Purchaser and any person
         authorised by it reasonable access to the Properties and the Business
         Records and the Brilliant Records other than in relation to the AG
         Group (including the right to take copies at the Purchaser's cost) and
         the Vendor shall procure that the directors and employees of the Target
         Owners other than AG Group will promptly give such information and
         explanations as the Purchaser or any authorised person may reasonably
         request.

21.      GENERAL
21.1     No variation of this Agreement or of any of the documents in the agreed
         form shall be valid unless it is in writing and signed by or on behalf
         of each of the parties.
21.2     The failure to exercise or delay in exercising a right or remedy under
         this Agreement shall not constitute a waiver of the right or remedy or
         a waiver of any other rights or remedies and no single or partial
         exercise of any right or remedy under this Agreement shall prevent any
         further exercise of the right or remedy or the exercise of any other
         right or remedy.
21.3     The rights and remedies of the Purchaser provided in this Agreement are
         cumulative and not exclusive of any rights and remedies provided by
         law.
21.4     The invalidity, illegality or unenforceability of any provision of this
         Agreement shall not affect or impair the continuation in force of the
         remainder of this Agreement.
21.5     Except to the extent that they have been performed and except as
         expressly provided in this Agreement the Warranties, indemnities,
         undertakings, and obligations contained in this Agreement shall remain
         in full force and effect notwithstanding Completion.

22.      ASSIGNMENT AND RELEVANT PURCHASER
22.1     Neither party shall assign or transfer or purport to assign or transfer
         any of its rights or obligations under this Agreement except that
         either party may assign to an Affiliated Company the benefit of all or
         any of the other party's obligations under this Agreement provided
         however that such assignment shall not be absolute but shall be
         expressed to have effect only for so long as the assignee remains an
         Affiliated Company.
22.2     In the event that the Purchaser shall nominate a Relevant Purchaser to
         acquire part or the whole of the Target Group any reference to the
         Purchaser shall be deemed to be to the Relevant Purchaser as
         appropriate.
22.3     In the event that the Asset Vendor proposes to reorganise the ownership
         within the Vendor's Group of any Assets the Purchaser shall not
         unreasonably withhold its consent and after such reorganisation the
         Asset Vendor shall be regarded as including in addition the transferor
         in respect of such Assets.

                                     - 38 -
<PAGE>   39

23.      NOTICES
23.1     Any notice or other communication under or in connection with this
         Agreement shall be in writing and shall be delivered personally or sent
         by first class post pre-paid recorded delivery (and air mail if
         overseas) or by fax, to the party due to receive the notice or
         communication at its address set out in this Agreement or such other
         address as either party may specify by notice in writing to the other.
23.2     In the absence of evidence of earlier receipt, any notice or other
         communication shall be deemed to have been duly given:
         (a)      if delivered personally, when left at the address referred to
                  in clause 23.1;
         (b)      if sent by mail other than air mail, two days after posting
                  it;
         (c)      if sent by air mail, six days after posting it; and
         (d)      if sent by fax, on completion of its transmission.

24.      GOVERNING LAW AND JURISDICTION
24.1     This Agreement is governed by, and shall be construed in accordance
         with, English law.
24.2     Each party irrevocably agrees for the benefit of the Purchaser that the
         courts of England shall have exclusive jurisdiction to hear and
         determine any suit, action or proceedings, and to settle any disputes,
         which may arise out of or in connection with this Agreement
         (respectively, "PROCEEDINGS" and "DISPUTES") and, for such purposes,
         irrevocably submits to the jurisdiction of the courts of England.
24.3     Each party irrevocably waives any objection which it might at any time
         have to the courts of England being nominated as the forum to hear and
         determine any Proceedings and to settle any Disputes and agrees not to
         claim that the courts of England are not a convenient or appropriate
         forum.
24.4     Each party agrees that the process by which any Proceedings are begun
         in England may be served on any of the Vendor by being delivered to
         Company Secretary, Emess plc at Ariel House, 74A Charlotte Street,
         London W1P 1LR and may be served on the Purchaser by being delivered to
         the Purchaser's Solicitors. Nothing contained in this clause 24.4 shall
         affect the right to serve process in any other manner permitted by law.
24.5     The submission to the jurisdiction of the courts of England shall not
         (and shall not be construed so as to) limit the right of the Purchaser
         to take Proceedings against the Vendor in any other court of competent
         jurisdiction, nor shall the taking of Proceedings by the Purchaser in
         any one or more jurisdictions preclude the Purchaser taking Proceedings
         in any other jurisdiction (whether concurrently or not) if and to the
         extent permitted by applicable law.

25.      COUNTERPARTS
         This Agreement may be executed in any number of counterparts, each of
         which when executed and delivered shall be an original, but all the
         counterparts together shall constitute one and the same instrument.

                                     - 39 -
<PAGE>   40

IN WITNESS WHEREOF this Agreement has been duly entered in to on the day and
year first above written.

SCHEDULES

/s/ NIGEL SINGER
----------------
SIGNED by Nigel Singer
duly authorised for and on behalf of
EMESS PLC in the presence of:
Robert Ogilvy Watson
Broadwalk House
5 Appold Street
London
EC2A 2HA

/s/ ANDY SMITH
--------------
SIGNED by Andy Smith
duly authorised for and on behalf of
SLI INC in the presence of:
Robert Ogilvy Watson
Broadwalk House
5 Appold Street
London
EC2A 2HA

                                     - 40 -<PAGE>   1

                                                                  EXHIBIT 10.138

[EXEMPT FROM ALL EXCISE TAXES AS A WHOLESALE WAREHOUSE MORTGAGE AGREEMENT UNDER
SECTION 201.21, F.S. COLLATERAL OBLIGATIONS GREATER THAN PRIMARY OBLIGATIONS.]

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

                              AMENDED AND RESTATED

                           LOAN AND SECURITY AGREEMENT

                            DATED AS OF JUNE 30, 1999

                              BLUEGREEN CORPORATION

                       BLUEGREEN VACATIONS UNLIMITED, INC.

                                  AS BORROWERS,

                                       AND

                             HELLER FINANCIAL, INC.

                                    AS LENDER

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

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----

<S>               <C>                                                                      <C>
SECTION 1.        THE LOAN...................................................................1
         1.1      Loan Availability..........................................................1
         1.2      Term.......................................................................2
         1.3      Interest Rate..............................................................2
         1.4      Funding Advances...........................................................2
         1.5      Note.......................................................................2
         1.6      Payments...................................................................2
         1.7      Prepayments................................................................3
         1.8      Fees.......................................................................3
         1.9      Increased Costs............................................................3
         1.10     [Omitted]..................................................................5
         1.11     Interest Loans.............................................................5
SECTION 2.        COLLATERAL.................................................................6
         2.1      Grant of Security Interest.................................................6
         2.2      Exchange Mechanics.........................................................7
         2.3      Security Agreement.........................................................7
SECTION 3.        CONDITIONS PRECEDENT TO ADVANCES...........................................7
         3.1      Closing Deliveries.........................................................8
         3.2      Deliveries Prior to Each Advance...........................................8
         3.3      Security Interests.........................................................8
         3.4      Representations and Warranties.............................................8
         3.5      No Default.................................................................9
         3.6      Performance of Agreements..................................................9
         3.7      Governmental Approvals.....................................................9
         3.8      Intercreditor Agreements...................................................9
SECTION 4.        GENERAL REPRESENTATIONS AND WARRANTIES.....................................9
         4.1      Existence..................................................................9
         4.2      Authorization and Enforceability..........................................10
         4.3      Financial Statements and Business Condition...............................10
         4.4      Taxes.....................................................................10
         4.5      Litigation and Proceedings................................................10
         4.6      Licenses and Permits......................................................11
         4.7      Full Disclosure...........................................................11
         4.8      Employee Benefit Plans....................................................11
         4.9      Representations as to the Resorts and Additional Resorts..................11
         4.10     Timeshare Interval Exchange Network.......................................12
         4.11     Collateral................................................................12
         4.12     Investment Company Act, Etc...............................................13
         4.13     Trade Names...............................................................13
</TABLE>

                                      -1-
<PAGE>   3

<TABLE>
<S>               <C>                                                                       <C>
         4.14     Margin Regulations........................................................13
         4.15     [Omitted].................................................................13
SECTION 5.        AFFIRMATIVE COVENANTS.....................................................13
         5.1      Payment of Indebtedness...................................................13
         5.2      Maintenance of Insurance..................................................13
         5.3      Inspections and Audits....................................................14
         5.4      Reporting Requirements....................................................14
         5.5      Records...................................................................16
         5.6      Management; Contracts.....................................................16
         5.7      Net Worth.................................................................16
         5.8      Fixed Rate Coverage Ratio.................................................16
         5.9      Leverage Ratio Test.......................................................17
         5.10     Maintenance...............................................................17
         5.11     Release and Bonding of Liens..............................................17
         5.12     Claims....................................................................17
         5.13     Use of Lender Name........................................................17
         5.14     Other Documents...........................................................17
         5.15     Additional Indebtedness for Borrowed Money;
                       Additional Obligations Affiliated with Subordinated Obligations......17
         5.16     Loan Servicing............................................................18
         5.17     Custodian.................................................................18
         5.18     Compliance with Laws......................................................18
         5.19     Compliance Documents......................................................18
         5.20     Real Estate Taxes.........................................................18
         5.21     Omitted...................................................................18
         5.22     Omitted...................................................................18
         5.23     Borrowers' Financial Maintenance Requirement..............................18
         5.24     Year 2000.................................................................19
         5.25     Authorized Signatory......................................................19
         5.26     Allonge/Assignment Requirements...........................................19
         5.27     Environmental.............................................................19
SECTION 6.        NEGATIVE COVENANTS........................................................19
         6.1      Consolidation and Merger..................................................19
         6.2      Restrictions on Transfers.................................................20
         6.3      Collateral................................................................20
SECTION 7.        EVENTS OF DEFAULT.........................................................20
         7.1      Payments..................................................................20
         7.2      Failure to Permit Inspections.............................................20
         7.3      Covenant Defaults.........................................................20
         7.4      Warranties or Representations.............................................21
         7.5      Bankruptcy................................................................21
         7.6      Attachment, Judgment, Tax Liens...........................................21
         7.7      Omitted...................................................................21
         7.8      Default by Borrowers in Other Agreements..................................21
</TABLE>

                                      -2-
<PAGE>   4

<TABLE>
<S>               <C>                                                                       <C>
         7.9      Omitted...................................................................21
         7.10     Tax Liens; ERISA Liens....................................................21
         7.11     Loan Exceeds Maximum Exposure For Five Days...............................21
         7.12     Validity of Transaction Documents.........................................21
         7.13     Default under the Project Loan............................................22
SECTION 8.        REMEDIES..................................................................22
         8.1      Remedies Upon Default.....................................................22
         8.2      Application of Collateral; Termination of Agreements......................23
         8.3      Waivers...................................................................23
         8.4      Set Off of Payments.......................................................23
         8.5      Cumulative Rights.........................................................24
SECTION 9.        CERTAIN RIGHTS AND OBLIGATIONS OF LENDER..................................24
         9.1      Protection of Collateral..................................................24
         9.2      Performance by Lender.....................................................24
         9.3      Fees and Expenses.........................................................24
         9.4      Release of Security Interest..............................................24
         9.5      Notice to Obligor.........................................................24
         9.6      Collection of Receivables.................................................24
         9.7      Power of Attorney.........................................................25
         9.8      Indemnification of Lender.................................................25
         9.9      Lender's Right to Provide Financing.......................................26
SECTION 10.       PARTICIPATION AND ASSIGNMENTS.............................................26
        10.1      Participations in Loan and Assignments in Loan............................27
SECTION 11.       MISCELLANEOUS.............................................................28
SECTION 11.       MISCELLANEOUS.............................................................28
         11.1     Notice....................................................................28
         11.2     Survival..................................................................28
         11.3     Governing Law.............................................................29
         11.4     Invalid Provisions........................................................29
         11.5     Counterparts; Effectiveness...............................................29
         11.6     Lender Not Fiduciary......................................................29
         11.7     Entire Agreement..........................................................29
         11.8     Consent to Advertising and Publicity......................................29
         11.9     [Omitted].................................................................30
         11.10    Headings..................................................................30
         11.11    Broker's Fees.............................................................30
         11.12    Venue.....................................................................30
         11.13    Jury Trial Waiver.........................................................30
</TABLE>

                                      -3-
<PAGE>   5

                                LIST OF EXHIBITS

Exhibit A         Form of Note
Exhibit B         Form of Assignment of Pledged Receivables and Pledged
                  Receivables Collateral
Exhibit C         Form of Reassignment of Pledged Receivables
Exhibit D         Form of Request for Advances
Exhibit E         Form of Allonge
Exhibit F         Servicing Agreement
Exhibit G         Reserved
Exhibit H         List of Permitted Liens
                  (including therein the Condominium Declarations)
Exhibit I         List of Resorts Encumbered by Resort Blanket Mortgages
Exhibit J         List of Project Loan Documents
Exhibit K         Structuring Fee Letter
Exhibit L         Time Share Documents
Exhibit M         Legal Description of Resorts
Exhibit N         Commitment Letter dated March 30, 1998
Exhibit O         Borrower Closing Checklist
Exhibit P         Resort Closing Checklist
Exhibit Q         Additional Resort Closing Checklist
Exhibit R         Club Closing Checklist

                                LIST OF SCHEDULES

Schedule 2.1      Definition of "Material Project Loan Default" to be utilized
                  in the Project Loan Agreement
Schedule 3.2      List of Deliveries for all Advances
Schedule 4.5      List of Litigation Matters
Schedule 4.13(a)  Trade Names Other than Name of Borrower
Schedule 4.13(b)  Mergers and Corporate Reorganizations
Schedule 5.2      Insurance
Schedule 5.15     Additional Indebtedness for Borrowed Money; Additional
                  Obligations

                                      -4-
<PAGE>   6

                                                             HSF Loan No. 98-087

                              AMENDED AND RESTATED
                           LOAN AND SECURITY AGREEMENT

         This Amended and Restated Loan and Security Agreement (this
"Agreement") dated as of June 30, 1999 is made by and between Bluegreen
Corporation, a Massachusetts corporation whose address is 4960 Blue Lake Drive,
Boca Raton, Florida 33431, ("Bluegreen Corporation") and Bluegreen Vacations
Unlimited, Inc., a Florida corporation whose address is 4960 Blue Lake Drive,
Boca Raton, Florida 33431 ("Bluegreen Vacations" and together with Bluegreen
Corporation and the Additional Borrowers (as hereinafter defined) collectively
referred to herein as the "Borrowers" and sometimes referred to herein
individually as a "Borrower"), and Heller Financial, Inc., a Delaware
corporation ("Lender"), whose address is 500 West Monroe Street, 31st Floor,
Chicago, Illinois 60661.

                                    RECITALS

         A.       Borrowers and Lender are parties to that certain Loan and
Security Agreement dated as of October 20, 1998 (as now or heretofore amended,
restated, supplemented or otherwise modified, the "Prior Loan Agreement").

         B.       Borrowers and Lender desire to amend and restate the Prior
Loan Agreement for the purpose of reconstituting the Indebtedness outstanding
thereunder, subject to the terms and conditions set forth herein.

         C.       Bluegreen Vacations was the successor by merger with Bluegreen
Resorts, Inc., a Delaware corporation ("Resorts"), and, as such, has become a
"Borrower" hereunder and succeeds to all of the rights and obligations of
Resorts.

         D.       Borrowers' obligations under the Loan Documents will continue
to be secured inter alia by a security interest in the Pledged Receivables (as
hereinafter defined).

         E.       All capitalized terms used herein shall have the meanings
ascribed thereto in the Appendix attached hereto and made a part hereof by this
reference.

         NOW, THEREFORE, in consideration of the foregoing premises and the
agreements, provisions and covenants herein contained, Borrowers and Lender
agree as follows:

                               SECTION 1. THE LOAN

         1.1      Loan Availability. During the period commencing on the date
hereof and ending on June 26, 2000, Lender shall make Advances to the Borrowers
not in excess of Availability provided that the Borrowers satisfy all
conditions, as applicable, set forth in Section 3 hereof. Advances shall be (a)
in minimum amounts of $100,000 each or such lesser amount equal to

<PAGE>   7

Availability hereunder, and (b) made no more frequently than four (4) times each
month nor more than one (1) time each week; provided, however, that, subject to
Availability, any request for an Advance of less than $100,000 or for any
Advance in excess of the number of Advances permitted in any week or month shall
be honored by Lender if accompanied by payment to Lender of a fee (the "Service
Charge") of $3,000 for each such Advance. Except in connection with a prepayment
mandated under Section 1.7(b)(i) below, any amounts repaid during the Term may
be reborrowed during the Term.

         1.2      Term. The Loan shall be for a term of two (2) years from June
26, 1998 to the end of the Fiscal Month of Bluegreen Corporation in which the
date hereof occurs (the "Term").

         1.3      Interest Rate. The outstanding principal balance of the Loan
together with all other Indebtedness shall bear interest at the Interest Rate;
provided, however, that after the occurrence and during the continuance of an
Event of Default the Loan will bear interest at the Default Rate which interest
shall be payable on a Payment Date.

         1.4      Funding Advances. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof with respect to Advances
hereunder and the limitations set forth in Section 1.1, the Lender shall make
the proceeds of an Advance available to the Borrowers by wiring funds to such
account or such other destination or directive as Bluegreen Corporation on its
own behalf or on behalf of the Borrowers as it may direct in writing.

         1.5      Note. The Loan shall be evidenced by a promissory grid note
(herein, as amended, modified, extended or replaced from time to time, called
the "Note") substantially in the form set forth in Exhibit A, with appropriate
insertions, payable to the order of the Lender. The Borrowers hereby irrevocably
authorize the Lender to make (or cause to be made) appropriate notations on the
grid attached to the Note (or on any continuation of such grid, or at the
Lender's option, in its records), which notations, if made, shall evidence,
inter alia, the date of, the outstanding principal of, and the interest rate and
interest period applicable to the Advance evidenced thereby. Such notations
shall be rebuttably presumptive evidence of the subject matter thereof absent
manifest error; provided, however, that the failure to make any such notations
shall not limit or otherwise affect any obligations of the Borrowers.

         1.6      Payments.

                  (a)      Weekly Payments. All funds collected by the Lockbox
Bank from the Pledged Receivables shall be paid to Lender at least weekly
pursuant to the Lockbox Agreement, and applied in the following order: first to
the payment of accrued and unpaid interest on the Indebtedness and then to the
reduction of the principal balance of the Loan; provided, however, that after
the occurrence and during the continuance of an Event of Default hereunder, such
amounts shall be applied in the following order: first to the payment of costs
and expenses incurred by Lender in collecting any amounts due in connection with
the Loan; second, to the payment of accrued but unpaid interest on the Loan; and
thereafter to the reduction of the principal balance of the Loan. If the funds
received by Lender from the Lockbox Bank with

                                       2
<PAGE>   8

respect to any month are insufficient to pay interest in full, Borrowers shall
pay the difference to Lender within five (5) Business Days of written notice
from Lender. Payments received by Borrowers directly from any Obligor shall be
delivered to the Lockbox Bank within two (2) Business Days. Notwithstanding
anything in this Section 1.6 to the contrary, in the event of the occurrence and
during the continuance of an Event of Default, Lender shall have sole discretion
as to the order in which said payments shall be applied.

                  (b)      Final Payment. The Indebtedness shall be payable in
full on the Maturity Date.

         1.7      Prepayments.

                  (a)      Voluntary Prepayments. Borrowers may not make any
voluntary prepayments except (i) in accordance with Section 1.6(a), (ii) as may
result from the sale of Pledged Receivables financed under this Agreement into
the Purchase Facility, (iii) in the event the Purchase Limit is reached under
the Purchase Facility and Lender, in its capacity as Purchaser thereunder, has
refused to increase the Purchase Limit in accordance with Section 2.12(b) of the
Purchase Facility or (iv) in the event Lender has reviewed and rejected
Receivables associated with the Club. In connection with any sale to the
Purchase Facility of Pledged Receivables, Lender shall release its lien and
security interest in and to such Pledged Receivable and the related Pledged
Receivables Collateral if but only if the Repayment Price in respect to such
Pledged Receivable is paid to Lender. All Repayment Prices shall be applied as
prepayments of the Loan. From time to time Lender shall also cause to be
released from the lien of a Resort Blanket Mortgage those Intervals with respect
to which the related Pledged Receivable has been fully paid and fully performed.
Additionally, in the event a Pledged Receivable is no longer an Eligible
Completed Unit Receivable or an Eligible Uncompleted Unit Receivable and the
Borrowers take the action described in Section 1.7(b), the Lender will release
its lien on the Pledged Receivable. All out of pocket costs and expenses in
connection with any partial releases shall be for the expense of the Borrowers.

                  (b)      Mandatory Prepayments. If at any time the outstanding
principal balance of the Loan exceeds the Maximum Exposure, Borrowers shall,
within five (5) Business Days after notice, prepay the Loan in an amount
necessary to reduce the principal balance of the Loan to the Maximum Exposure;
provided, however, that Borrowers, at their option within five (5) Business Days
after notice, may deliver to Lender one (1) or more Pledged Receivables such
that, after delivery of such Pledged Receivable(s), the outstanding principal
balance of the Loan does not exceed the Maximum Exposure.

         1.8      Fees. The Borrowers shall pay to Lender the structuring fees
as described in the Structuring Fee Letter attached hereto as Exhibit K.

         1.9      Increased Costs. (a) If (i) any change in Regulation D of the
Board, or (ii) any Regulatory Change, in each case occurring after the date
hereof:

                                       3
<PAGE>   9

         (A)      shall subject the Affected Party to any additional tax, duty
                  or other charge with respect to Advances made hereunder or a
                  participation purchased hereunder, or shall change the basis
                  of taxation of payments to such party of the interest on
                  Advances funded by it or any participation purchased hereunder
                  in any material respect, or any other amounts due under this
                  Agreement in respect of any Advances made or funded by it or
                  participations purchased by it (except for changes in the rate
                  of tax on the overall net income of such party imposed by the
                  jurisdiction of such party's principal executive office); or

         (B)      shall impose, modify or deem applicable any reserve
                  (including, without limitation, any reserve imposed by the
                  Board of Governors of the Federal Reserve System), but
                  excluding any reserve included in the determination of
                  interest rates, special deposit or similar requirement against
                  assets of, deposits with or for the account of, or credit
                  extended by, any Affected Party; or

         (C)      shall change the amount of capital maintained or required or
                  requested or directed to be maintained by any Affected Party;
                  or

         (D)      shall impose on any Affected Party any other condition
                  affecting any Advance or participation made or funded by any
                  Affected Party; and the result of any of the foregoing is or
                  would be to increase the cost to (or in the case of Regulation
                  D referred to above, to impose a cost on) (a) an Affected
                  Party funding or making or maintaining any Advances or
                  purchasing participations, or (b) the Lender for continuing
                  its relationship with the Borrowers, to reduce the amount of
                  any sum received or contracted by an Affected Party under this
                  Agreement, the Note, or any other Loan Document with respect
                  thereto, or in the good faith determination of such Affected
                  Party, to reduce the rate of return on the capital of an
                  Affected Party as a consequence of its obligations hereunder
                  or arising in connection herewith to a level below that which
                  such Affected Party would otherwise have achieved, then within
                  five Business Days after demand by the Lender on behalf of
                  such Affected Party to Borrowers (which demand shall be
                  accompanied by a written statement of such Affected Party,
                  subject to the second sentence of subsection (e) below),
                  Borrowers shall pay the Affected Party such additional amount
                  or amounts as will (in the reasonable determination of such
                  Affected Party) compensate such Affected Party for such
                  increased cost or such reduction. Such written statement
                  (which shall include calculations in reasonable detail) shall,
                  in the absence of manifest error, be rebuttably presumptive
                  evidence of the subject matter thereof; and

                                       4
<PAGE>   10

         (E)      Each Affected Party will promptly notify the Lender (which
                  shall promptly notify the Borrowers) within 90 days after such
                  Affected Party has actual knowledge of any event occurring
                  after the date hereof that will entitle such Affected Party to
                  such additional amounts as compensation pursuant to this
                  Section 1.9. Such additional amounts shall accrue from the
                  date of such event (or if such notice is not given within 90
                  days after such Affected Party's knowledge of such event, from
                  the date which is 90 days prior to the date such notice is
                  given by such Affected Party).

         (F)      If any Lender requests compensation under this Section 1.9
                  which materially increases the Borrowers' cost of funds with
                  respect to the Loan or if any Lender defaults in its
                  obligation to fund loans hereunder, then the Borrowers may
                  upon five (5) Business Days notice to such Lender, require
                  such Lender to assign and delegate, without payment by
                  Borrowers of any prepayment fee or premium, all its interests,
                  rights and obligations under this Agreement to an Eligible
                  Assignee that shall assume such obligations (which assignee
                  may be another Lender, if another Lender accepts such
                  assignment); provided that (i) such transferring Lender shall
                  have received payment of an amount equal to the outstanding
                  principal amount of its loans, accrued interest thereon,
                  accrued fees and all other amounts payable to it hereunder,
                  from the assignee (to the extent of such outstanding principal
                  and accrued interest) or Borrowers (in the case of all other
                  amounts) and (ii) in the case of any such assignment resulting
                  from a claim for compensation under Section 1.9, such
                  assignment will result in a reduction in such compensation or
                  payments. A Lender shall not be required to make any such
                  assignment and delegation if, prior thereto, as a result of a
                  waiver by such lender or otherwise, the circumstances
                  entitling Borrowers to require such assignment and delegation
                  ceases to apply.

         1.10     [Omitted]

         1.11     Interest Loans. Notwithstanding any provision to the contrary
contained in this Agreement or any other Loan Document, Borrowers shall not be
required to pay, and the Lender shall not be permitted to collect, any amount of
interest in excess of the maximum amount of interest permitted by applicable law
("Excess Interest"). If any Excess Interest is provided for or determined by a
court of competent jurisdiction to have been provided for in this Agreement or
in any other Loan Document, then in such event: (1) the provisions of this
subsection shall govern and control; (2) the Borrowers shall not be obligated to
pay any Excess Interest; (3) any Excess Interest that the Lender may have
received hereunder shall be, at the Lender's option, (a) applied as a credit
against the outstanding principal balance of the Indebtedness or accrued and
unpaid interest (not to exceed the maximum amount permitted by law), (b)
refunded to the payor thereof,

                                       5
<PAGE>   11

or (c) any combination of the foregoing; (4) the interest rate(s) provided for
herein shall be automatically reduced to the maximum lawful rate allowed from
time to time under applicable law (the "Maximum Rate"), and this Agreement and
the other Loan Documents shall be deemed to have been and shall be, reformed and
modified to reflect such reduction; and (5) the Borrowers shall not have any
action against the Lender for any damages arising out of the payment or
collection of any Excess Interest. Notwithstanding the foregoing, if for any
period of time interest on any Indebtedness is calculated at the Maximum Rate
rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on the Indebtedness shall remain at the Maximum Rate until the Lender shall have
received the amount of interest which such Lender would have received during
such period on the Indebtedness had the rate of interest not been limited to the
Maximum Rate during such period.

                              SECTION 2. COLLATERAL

         2.1      Grant of Security Interest. To secure the payment and
performance of the Indebtedness and, subject to the last sentence of this
Section 2.1, Project Indebtedness, Borrowers do hereby, subject to the terms of
this Agreement unconditionally and irrevocably assign, pledge and grant to
Lender a first priority continuing security interest and lien in and to the
right, title and interest of Borrowers in the following property of Borrowers
with respect to the Resorts and Additional Resorts, whether now owned or
existing or hereafter acquired regardless of where located (collectively, the
"Collateral"):

                  (a)      All Pledged Receivables;

                  (b)      All Pledged Receivables Collateral;

                  (c)      All Project Loan Collateral;

                  (d)      All "Mortgaged Property", as such term is defined in
each of the Resort Blanket Mortgages;

                  (e)      All Club Collateral (except to the extent the
assignment, pledge or granting of a security interest in any Club Collateral
would constitute a default under any license or lease of any such Club
Collateral);

                  (f)      All cash, other monies and property of Borrowers in
the possession or under the control of Lender other than cash and other monies
and property delivered to the Lender in error;

                                       6
<PAGE>   12

                  (g)      All books, records, ledger cards, files,
correspondence, computer tapes, disks and software (subject to licensing
agreements) relating to the Pledged Receivables and Pledged Receivable
Collateral or any other Collateral (except to the extent the assignment, pledge
or granting of a security interest in any Club Collateral would constitute a
default under any license or lease of any such Club Collateral); and

                  (h)      All proceeds, extensions, amendments, additions,
improvements, betterments, renewals, substitutions and replacements of the
foregoing.

So long as there is no "Material Project Loan Default" (as the same is defined
on Schedule 2.1 hereto which definition shall be included in the Project Loan
Agreement), the Collateral shall not secure the Project Indebtedness and the
Lender, upon the Borrowers' written request, shall release its lien hereunder.

         Lender shall execute such releases and termination statements, to the
extent deemed necessary by Lender, so as to facilitate the purchase and sale of
Receivables under the Purchase Facility, it being the intent of the parties
hereto that this Agreement contemplates the financing of Pledged Receivables
until such time as such Pledged Receivables and Pledged Receivables Collateral
are sold pursuant to the terms of the Purchase Facility.

         2.2      Exchange Mechanics. This Agreement contemplates the financing
of Pledged Receivables associated with the Club. The Borrowers anticipate
exchanging certain conditional land sale contracts for notes and Purchase Money
Mortgages to facilitate Obligors joining the Club. Notwithstanding anything to
the contrary contained herein, in no event shall such exchange affect the
Lender's first perfected security interest in a Pledged Receivable. Lender
hereby agrees to cooperate with Borrowers to facilitate the exchange
contemplated in the second sentence of this Section 2.2; provided such exchange
has no negative impact on the Lender's first priority perfected lien and
security interest on the Collateral (i.e. the Lender shall have a first priority
perfected lien and security interest in the new Pledged Receivable which has
been exchanged for the prior Pledged Receivable) and provided further that the
Borrowers pay all of Lender's reasonable costs (including but not limited to
legal expenses) associated with the exchange contemplated in the second sentence
of this Section 2.2.

         2.3      Security Agreement. This Agreement shall be deemed a security
agreement as defined in the Code, and the remedies for any violation of the
covenants, terms and conditions of the agreements herein contained shall be
cumulative and be as prescribed (a) herein, or (b) by applicable law, or (c) as
to such part of the Collateral which is also reflected in any filed financing
statement, by the specific provisions of the Code now or hereafter enacted, all
at Lender's sole election.

                   SECTION 3. CONDITIONS PRECEDENT TO ADVANCES

         The obligation of Lender to make Advances is subject to satisfaction of
all of the conditions set forth below (to the extent applicable to the Pledged
Receivables being financed

                                       7
<PAGE>   13

hereby). Notwithstanding anything contained in this Agreement to the contrary,
in no event shall the execution of this Agreement on the date hereof be deemed a
waiver by Lender of any of the conditions set forth below with respect to any
Advance.

         3.1      Closing Deliveries.

                  (a)      Lender shall have received, in form and substance
satisfactory to Lender, all documents, instruments and information identified on
the Closing Checklist attached hereto as Exhibit O, including, without
limitation, one or more executed legal opinions, issued by counsel acceptable to
Lender, in form and content acceptable to Lender.

                  (b)      Lender shall have received, in form and substance
satisfactory to Lender, all documents, instruments and information identified on
the Resort Closing Checklist attached hereto as Exhibit P with respect to the
Resorts (including, without limitation, one or more executed legal opinions,
issued by counsel acceptable to Lender in each of the states wherein the Resorts
are located, in form and content acceptable to Lender).

                  (c)      Lender shall have received, in form and substance
satisfactory to Lender, all documents, instruments and information identified on
the Additional Resort Closing Checklist attached hereto as Exhibit Q including,
without limitation, one or more executed legal opinions, issued by counsel
acceptable to Lender in each of the states wherein the Additional Resorts are
located, in form and content acceptable to Lender).

                  (d)      Lender shall have received, in form and substance
satisfactory to Lender, all documents, instruments and information identified on
the Club Closing Checklist attached hereto as Exhibit R with respect to the Club
(including, without limitation, one or more executed legal opinions, issued by
counsel acceptable to Lender in the state wherein the Club is located, in form
and content acceptable to Lender).

         3.2      Deliveries Prior to Each Advance. Prior to each Advance,
Lender shall have received all documents, instruments and information identified
on Schedule 3.2 attached hereto. Requests for Advance ("Advance Request") shall
be made at least five (5) Business Days prior to the requested date of
disbursement and shall be in the form of Exhibit D hereto. Any Advance Request
given by a Borrower pursuant to this Section 3.2 shall be irrevocable and
binding on such Borrower. Such Advance Request shall designate a specific
account for the respective Borrower and designate the specific Resort relating
to the respective Borrower's Pledged Receivables.

         3.3      Security Interests. Lender shall have received satisfactory
evidence that all security interests and liens granted to Lender pursuant to
this Agreement or the other Loan Documents have been duly perfected and
constitute first priority liens on the Collateral.

         3.4      Representations and Warranties. The representations and
warranties contained herein and in the Loan Documents shall be true, correct and
complete in all material respects on and as of the date of funding of each
Advance except for any representation or warranty limited

                                       8
<PAGE>   14

by its terms to a specific date or affected by the transactions permitted by
this Agreement and taking into account any amendments to the Schedules or
Exhibits as a result of any disclosures made by the Borrowers to Lender after
the date hereof and approved by Lender, and except to the extent of changes
occurring in the ordinary course of business that, either singly or in the
aggregate, have not had and could not reasonably be expected to have a Material
Adverse Effect.

         3.5      No Default. No Event of Default shall have occurred and be
continuing.

         3.6      Performance of Agreements. Borrowers shall have performed in
all material respects all agreements, paid all fees, costs and expenses and
satisfied all conditions which any Loan Document provides shall be paid or
performed by it as of such date.

         3.7      Governmental Approvals. Borrowers shall have obtained all
approvals, licenses, permits and consents for the sale of Intervals to Obligors
which are the subject of any requested Advance.

         3.8      Intercreditor Agreements. To the extent the Borrowers or one
of their respective Affiliates has incurred, or will incur, debt for borrowed
money secured by the Resorts, Additional Resorts or Project Loan Collateral from
a source other than the Lender, the Lender shall have the opportunity to review
such other financing sources loan documentation and, to the extent necessary to
maintain its first perfected security interest in the Collateral, shall have the
opportunity to enter into a satisfactory Intercreditor Agreement or other
arrangement with the Borrowers and the party extending such credit. Such
Intercreditor Agreement or other arrangements shall provide satisfactory
assurances to the Lender that the Collateral shall not be adversely affected by
the security securing such other financing source.

                SECTION 4. GENERAL REPRESENTATIONS AND WARRANTIES

         Borrowers hereby jointly and severally represent and warrant to Lender
as follows, which representations and warranties shall remain true throughout
the term of the Loan:

         4.1      Existence.

                  (a)      Bluegreen Corporation is a corporation duly formed,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts with its principal place of business at Boca Raton, Florida.
Bluegreen Corporation is in good standing under the laws of the State of Florida
and is authorized to transact business in the States of Florida, and in each
other state where the failure to be so authorized would have a Material Adverse
Effect.

                  (b)      Bluegreen Vacations Unlimited, Inc., a Florida
corporation, is a corporation duly formed, validly existing and in good standing
under the laws of the State of Florida with its principal place of business at
Boca Raton, Florida. Bluegreen Vacations Unlimited, Inc. is in good standing
under the laws of the State of Florida and is authorized to

                                       9
<PAGE>   15

transact business in each state where the failure to be so authorized would have
a Material Adverse Effect.

         4.2      Authorization and Enforceability.

                  (a)      Execution. The Loan Documents have been duly
authorized, executed and delivered and constitute the duly authorized, valid and
legally binding obligations of the Borrowers, enforceable against the Borrowers
and the other parties signatory thereto (other than Lender) in accordance with
their respective terms subject, as to enforceability, to the effect of
bankruptcy and other laws generally affecting creditors' rights.

                  (b)      Other Agreements.The execution, delivery and
compliance with the terms and provisions of the Loan Documents will not (i) to
the best of Borrowers' knowledge, violate any provisions of law or any
applicable regulation, order or other decree of any court or governmental
entity, or (ii) conflict or be inconsistent with, or result in any default
under, any material contract, agreement or commitment to which the Borrowers are
bound.

         4.3      Financial Statements and Business Condition. Bluegreen
Corporation has delivered to Lender its financial statements for the Fiscal Year
ending March 29, 1998. Such financial statements fairly present the financial
condition and (if applicable) results of operations of Bluegreen Corporation as
of the date or dates thereof and for the periods covered thereby. All such
financial statements were prepared in accordance with GAAP. Except for any such
changes heretofore expressly disclosed in writing to Lender, there has been no
material adverse change in the financial condition of Bluegreen Corporation
since March 29, 1998. Borrowers are able to pay all of their respective debts as
they become due, and Borrowers shall maintain such solvent financial condition,
giving effect to all obligations, absolute and contingent, of each such
Borrowers. Each such Borrower's obligations under this Agreement and under the
Loan Documents will not render the respective Borrower unable to pay its debts
as they become due. The present fair market value of each Borrower's assets is
greater than the amount required to pay its total liabilities.

         4.4      Taxes. All ad valorem taxes and other taxes and assessments
against each Resort, Additional Resort and the Collateral have been paid and the
Borrowers know of no basis for any additional taxes or assessments against any
Resort, Additional Resort or the Collateral. Borrowers have filed all required
tax returns and has paid all taxes shown to be due and payable on such returns,
including interest and penalties, and all other taxes which are payable by it,
to the extent the same have become due and payable except where (a) the validity
or amount thereof is being contested in good faith by appropriate proceedings,
(b) the Borrowers have set aside on their books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

         4.5      Litigation and Proceedings. Except as disclosed in Schedule
4.5 attached hereto, as of the date hereof there are no actions, suits,
proceedings, orders or injunctions pending or, to

                                       10
<PAGE>   16

the best of Borrowers' knowledge, threatened against or affecting the Borrowers,
the Timeshare Associations or any Affiliate thereof, at law or in equity, or
before or by any governmental authority the result of which, if adversely
determined, would have a Material Adverse Effect. The Borrowers have not
received any notice from any court or governmental authority alleging that such
Person, any Affiliate or any of the Timeshare Associations has violated the
applicable timeshare act, any of the rules or regulations thereunder, or any
other applicable laws, the result of which, if adversely determined, would have
a Material Adverse Effect.

         4.6      Licenses and Permits. Borrowers possess all requisite
franchises, certificates of convenience and necessity, operating rights,
licenses, permits, consents, authorizations, exemptions and orders as are
necessary to carry on their businesses as now being conducted, except where the
failure to possess the same would not, individually or in the aggregate, have a
Material Adverse Effect.

         4.7      Full Disclosure. No written information or written report
furnished by or on behalf of Borrowers to Lender in connection with the Loan,
when taken together with all other written information provided, contains any
untrue statement of a material fact or omits any material fact necessary to make
the statement contained herein or therein, in light of the circumstances in
which made, not misleading. Borrowers know of no legal or contractual
restriction which will prevent them from offering or selling Intervals in any
state where each Borrowers is selling Intervals.

         4.8      Employee Benefit Plans. Each Borrower is in compliance in all
material respects with all applicable provisions of the Employee Retirement
Income Security Act, the Internal Revenue Code and all other applicable laws and
the regulations and interpretations thereof with respect to all employee benefit
plans adopted by such Borrower for the benefit of its employees. No material
liability has been incurred by either Borrower which remains unsatisfied for any
funding obligation, taxes or penalties with respect to any such employee benefit
plan.

         4.9      Representations as to the Resorts and Additional Resorts.
Borrowers jointly and severally represent and warrant with respect to a Resort
or an Additional Resort the following:

                  (a)      Title; Prior liens. Borrowers have good and
marketable title to the Resorts or Additional Resorts (excluding sold Intervals
and any equitable rights of the Obligors under applicable state law to the Units
under any conditional land sales contracts which are the subject of any Pledged
Receivable). Borrowers are not in default under any of the documents evidencing
or securing any indebtedness for borrowed money in an outstanding amount in
excess of $1,000,000 which is secured, wholly or in part, by the Resorts or
Additional Resorts, and no event has occurred which with the giving of notice,
the passage of time or both, would constitute a default under any of the
documents evidencing or securing any such indebtedness. There are no liens or
encumbrances against the Resorts or Additional Resorts and relating to the
Collateral other than Permitted Adverse Claims or Permitted Liens.

                  (b)      Access. The Resorts and Additional Resorts relating
to Eligible Completed Unit Receivables have direct access to a publicly
dedicated road over a recorded easement and all

                                       11
<PAGE>   17

roadways, if any, inside the Resorts and Additional Resorts are or will be
common areas under the Declaration after the first Advance against Receivables
originated at such Resort.

                  (c)      Utilities. Electric, gas, sewer, water facilities and
other necessary utilities are lawfully available in sufficient capacity to
service the Units relating to the Intervals in the Resorts and Additional
Resorts relating to Eligible Completed Unit Receivables and any easements
necessary to the furnishing of such utility service have been obtained and duly
recorded.

                  (d)      Amenities. All amenities described in the sales
prospectus and the "Public Reports" for the Resorts and Additional Resorts
relating to Eligible Completed Unit Receivables are completed, or will be
completed, in the time periods described in the "Public Reports", or a bond
insuring their completion has been posted. Each Obligor has or will have, in the
time period described in the Public Reports, access to and the use of all of the
amenities and public utilities of the Resorts and the Additional Resorts
relating to Eligible Completed Unit Receivables as and to the extent provided in
the Declaration and the "Public Reports".

                  (e)      Construction. All costs arising from the construction
of any improvements and the purchase of any equipment, inventory, or furnishings
located in or on the Resorts and Additional Resorts relating to the Units
relating to the Intervals and relating to Eligible Completed Unit Receivables
have been paid or will be paid when due.

         4.9A     Representations as to the Units. No Unit or Pledged Receivable
relating to a Unit relates to a campground/tent site, recreational vehicle site
or other non-permanent building or structure.

         4.10     Timeshare Interval Exchange Network. Each Borrower is a member
and participant in respect to each Resort and Additional Resort, pursuant to a
validly executed and, to Borrower's knowledge, enforceable agreement in writing,
in Interval International, Inc. or Resorts Condominium International, Inc.
Borrowers has paid all fees and other amounts due and owing under such agreement
and is not otherwise in default in any respect, the effect of which could
reasonably be expected to have a Material Adverse Effect thereunder.

         4.11     Collateral. The Collateral, including without limitation, the
Pledged Receivables and the Pledged Receivables Collateral, in which a security
interest is to be granted to the Lender pursuant to this Agreement shall be
owned by Borrowers free and clear of any Adverse Claim (other than any Permitted
Adverse Claim or Permitted Liens). The Borrowers have a first priority perfected
ownership interest in the Collateral including but not limited to the Pledged
Receivables and the Pledged Receivables Collateral, subject to Permitted Adverse
Claims and Permitted Liens. This Agreement creates a valid first priority
security interest in favor of the Lender (for the benefit of the Lender) in the
Collateral granted by such Borrower, including without limitation the Pledged
Receivables and Pledged Receivables Collateral, which security interest has been
perfected (free and clear of any Adverse Claim other than any Permitted Adverse
Claim or

                                       12
<PAGE>   18

Permitted Lien and any equitable rights of the Obligors under applicable state
law to the Units under any conditional land sales contracts which are the
subject of any Pledged Receivable) as security for the Indebtedness. No
effective financing statement or other instrument similar in effect covering any
of the Collateral or any interest therein is on file in any recording office
except for financing statements that may be filed (i) in favor of the Lender in
accordance with the Agreement or (ii) in favor of Borrowers and assigned to the
Lender. Borrowers shall defend Lender against and save it harmless from all
claims of any Persons other than Lender with respect to the Collateral, and this
indemnity shall include all reasonable attorneys' fees and legal expenses.

         4.12     Investment Company Act, Etc. No Borrower is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company," or a "subsidiary company," of a "holding company," or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

         4.13     Trade Names. Except as disclosed on Schedule 4.13(a), no
Borrower uses any trade name other than its actual corporate name. From and
after the date that fell five (5) years before the date hereof, the Borrowers
have not been known by any legal name other than their respective corporate
names as of the date hereof, nor have the Borrowers been the subject of any
merger or other corporate reorganization, except as set forth in Schedule
4.13(b).

         4.14     Margin Regulations. The Borrowers are not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of the Loan, directly or indirectly, will be used for a
purpose that violates, or would be inconsistent with, Regulations T, U and X
promulgated by the Board from time to time.

         4.15     [Omitted]

                        SECTION 5. AFFIRMATIVE COVENANTS

         So long as any portion of the Indebtedness remains unpaid or Lender is
committed to make Advances hereunder, unless Lender otherwise consents in
writing, Borrowers jointly and severally covenant as follows:

         5.1      Payment of Indebtedness. Borrowers shall pay all of the
Indebtedness hereunder and under the Loan Documents when due.

         5.2      Maintenance of Insurance. For so long as the Borrowers control
the Resorts and Additional Resorts, the Resorts and Additional Resorts shall at
all times and for so long as any Indebtedness remains outstanding be kept
insured with such general liability coverage and such other coverages acceptable
to Lender, by carrier(s), in the amounts described on Schedule 5.2 hereto, which
carrier(s), amounts and form shall not be changed without the prior written
consent of Lender. All insurance required under the preceding sentence for each
Resort and Additional Resorts may be maintained by the Timeshare Association as
required by the applicable

                                       13
<PAGE>   19

Declaration or Time Share Declaration, provided that in the event such Timeshare
Association fails to maintain any insurance required under this Section 5.2,
then the Borrowers shall be required to obtain and maintain such insurance.

         5.3      Inspections and Audits. Borrowers shall, at such reasonable
times during normal business hours and as often as may be reasonably requested,
permit any agents or representatives of Lender to inspect the Resorts and
Additional Resorts and any of Borrowers' assets (including financial and
accounting books and records), to examine and make copies of and abstracts from
the records and books of account of the Borrowers or the Timeshare Association
(to the extent controlled by Borrowers) or serviced under the Servicing
Agreement and to discuss its affairs, finances and accounts with any of its
officers, employees or independent public accountants. Borrowers acknowledge
that Lender intends to conduct such audits and inspections on at least an annual
basis. Borrowers shall make available to Lender all credit information in
Borrowers' possession or under Borrowers' control with respect to Obligors as
Lender may reasonably request. Upon Lender's request, Borrowers shall furnish to
Lender evidence of payment of all real estate taxes relating to the Resorts and
the Additional Resorts. All audits, inspections of the Resorts, Additional
Resorts and credit investigations shall be at Borrowers' expense; provided,
however, that except with respect to any audits, inspections of the Resorts,
Additional Resorts or credit investigations conducted after and during the
continuance of an Event of Default hereunder, Borrowers shall not be required to
pay in excess of Ten Thousand Dollars ($10,000) in any calendar year for audits
performed during such year. After the occurrence and during the continuance of
an Event of Default, Borrowers shall be required to pay all reasonable fees,
costs and expenses incurred by Lender for any and all Resorts and Additional
Resorts inspections, audits and any other diligence relating to Borrowers'
finances or books or records.

         5.4      Reporting Requirements. So long as the Indebtedness remains
unpaid, Borrowers shall furnish the following to Lender:

                  (a)      Monthly Reports. To the extent not provided to Lender
pursuant to the requirements of the Servicing Agreement, within twelve (12)
Business Days after the end of each Fiscal Month, reports showing through the
end of the preceding month, (i) the following information with respect to each
Pledged Receivable: (A) the opening and closing balances, (B) all payments
received allocated to interest, principal, late charges, taxes or the like, (C)
the rate of interest, (D) an itemization of delinquencies, extensions,
refinances, prepayments, upgrades, payoffs, cancellations and other adjustments,
(E) the remaining term, (F) the nature and status of any claims asserted or
legal action pending with respect thereto, and (G) any exchange of one form of
Pledged Receivable for another form of Pledged Receivable (i.e., any exchange of
a conditional sales contract to a note and mortgage format required by the
Club); and (ii) the weighted average interest rate and the average remaining
term of all Pledged Receivables.

                  (b)      Sales and Inventory Reports. Within twelve (12)
Business Days after the end of each quarter, a quarterly report showing all
sales and cancellations of sales of Intervals on Resorts and Additional Resorts
on a resort by resort basis, in form and content satisfactory to Lender; and
within thirty (30) Business Days after the end of each fiscal year of Borrowers,
an

                                       14
<PAGE>   20

annual sales and inventory report for the Resorts and Additional Resorts
detailing the sales of all Intervals on a resort by resort basis during such
fiscal year and the available inventory of Units and Intervals, certified by
each Borrowers to be true, correct and complete and otherwise in the form
approved by Lender.

                  (c)      Quarterly Financial Reports. Within forty-five (45)
days after the end of each of Borrowers' first three fiscal quarterly periods
each year (or, if later, that date by which any Borrower is required to file
financial statements with the Securities and Exchange Commission), unaudited
financial statements of Borrowers certified by its chief financial officer as
well as, to the extent requested by the Lender and available to Borrowers,
unaudited financial statements of the Timeshare Association.

                  (d)      Year-End Financial Reports. As soon as available and
in any event within one hundred and twenty (120) days after the end of each
fiscal year of Bluegreen Corporation: (i) the balance sheet of Bluegreen
Corporation as of the end of such year and the related statements of income and
cash flow for such Fiscal Year; (ii) a schedule of all outstanding indebtedness
of Bluegreen Corporation describing in reasonable detail each such debt or loan
outstanding and the principal amount and amount of accrued and unpaid interest
with respect to each such debt or loan; and (iii) a copy of a report from a firm
of independent certified public accountants selected by Bluegreen Corporation,
which report shall be unqualified as to going concern and scope of audit and
shall state that such financial statements present fairly the financial position
of Bluegreen Corporation as of the dates indicated and the results of its
operations and cash flow for the periods indicated in conformity with GAAP.

                  (e)      Officer's Certificate. Each set of financial
statements delivered hereunder shall be accompanied by a certificate of the
Chief Financial Officer of the respective Borrower setting forth to the extent
applicable:

                           (i)      Covenant Compliance. The information
                  (including detailed calculations) required in order to
                  establish whether the Borrower was in compliance with the
                  requirements of Sections 5.7, 5.8 and 5.9 hereof, during the
                  quarterly or annual period covered by the statements then
                  being furnished;

                           (ii)     Event of Default. A statement that such
                  officer has reviewed the relevant terms hereof and has made,
                  or caused to be made, under his or her supervision, a review
                  of the transactions and conditions of the Borrowers and their
                  respective Subsidiaries from the beginning of the quarterly or
                  annual period covered by the statements then being furnished
                  to the date of the certificate and that such review shall not
                  have disclosed the existence during such period of any
                  condition or event that constitutes an Event of Default or, if
                  any such condition or event existed or exists, specifying the
                  nature and period of existence thereof and what action the
                  respective Borrowers shall have taken or proposed to take with
                  respect thereto.

                                       15
<PAGE>   21

                  (f)      Timeshare Association Reports. To the extent the
respective Borrower controls the Resort or Additional Resort the semiannual and
annual financial statements of the Timeshare Association and to the extent the
Resort or Additional Resort is not in a Borrower's control, the respective
Borrower shall make a good faith effort to obtain the same from the respective
Timeshare Association.

                  (g)      Audit Reports. Promptly upon receipt thereof, one (1)
copy of each other report submitted to Bluegreen Corporation by their
independent public accountants in connection with any annual, interim or special
audit made by them of the books of Bluegreen Corporation.

                  (h)      Other Reports. Such other reports, statements,
notices or written communications relating to the Borrowers, the Time Share
Associations, the Resorts or the Additional Resorts as are available to
Borrowers and as Lender may reasonably require.

                            (i)      SEC Reports. Promptly upon their becoming
                   publicly available, one (1) copy of each financial statement,
                   report, notice or proxy statement sent by Borrowers to
                   security holders generally, and of each regular or periodic
                   report and any registration statement, prospectus or written
                   communication (other than transmittal letters) in respect
                   thereof filed by Borrowers with, or received by Borrowers in
                   connection therewith from, any securities exchange or the
                   Securities and Exchange Commission or any successor agency.

         5.5      Records. Borrowers shall keep adequate records and books of
account reflecting all financial transactions of Borrowers and (to the extent
available to the Borrowers) the Time Share Associations, including sales of
Intervals, in which complete entries will be made in accordance with GAAP.

         5.6      Management; Contracts. For so long as the Borrowers control
the Resorts and the Additional Resorts, the manager, related management contract
and master marketing and sale contract (if applicable) for each Resort shall at
all times be satisfactory to Lender. For so long as the Borrowers control the
Timeshare Association for the Resorts or Additional Resorts, and the Borrowers
or an Affiliate thereof is the manager, the management contracts and primary
marketing and sale contracts may be amended or modified only with the prior
written consent of Lender, which consent shall not be unreasonably withheld.

         5.7      Net Worth. At all times Indebtedness is outstanding or Lender
is obligated to make Advances, Bluegreen Corporation agrees to maintain a
Tangible Net Worth, determined in accordance with GAAP, of Eighty Million
Dollars ($80,000,000).

         5.8      Fixed Rate Coverage Ratio. Bluegreen Corporation's ratio of
EBITDA to Consolidated Fixed Charges shall not be less than 2.00 to 1.00.

                                       16
<PAGE>   22

         5.9      Leverage Ratio Test. Bluegreen Corporation's ratio of Total
Indebtedness to Tangible Net Worth shall not be more than 2.00 to 1.00.

         5.10     Maintenance. For so long as the Borrowers control the Resorts
and Additional Resorts, the Borrowers shall maintain the Resorts and Additional
Resorts in good repair, working order and condition (ordinary wear and tear
excepted).

         5.11     Release and Bonding of Liens. In the event any lien securing
indebtedness for borrowed money in an amount in excess of $250,000 attaches to
any Collateral (other than Permitted Adverse Claims), Borrowers shall, within
the earlier to occur of ten (10) days after such attachment or the respective
lienholder's action to foreclose on such lien, either (a) cause such lien to be
released of record, or (b) provide Lender with a bond in accordance with the
applicable laws of the state in which the Collateral is located, issued by a
corporate surety acceptable to Lender, in an amount and in form reasonably
acceptable to Lender, or (c) provide Lender with such other security as Lender
may reasonably require.

         5.12     Claims. Borrowers shall: (a) promptly notify Lender of (i) any
claim, action or proceeding affecting the Collateral, or any part thereof, or
any of the security interests granted hereunder which would have a Material
Adverse Effect, and (ii) any action, suit, proceeding, order or injunction of
which Borrowers become aware after the date hereof pending or threatened against
or affecting Borrowers or any Affiliate which would, if adversely determined,
have a Material Adverse Effect; (b) at the request of Lender, appear in and
defend, at Borrowers' expense, any such claim, action or proceeding which would,
if adversely determined, have a Material Adverse Effect; and (c) comply in all
respects, and shall cause all Affiliates to comply in all respects, with the
terms of any orders imposed on such Person by any governmental authority the
failure to comply with which would have a Material Adverse Effect.

         5.13     Use of Lender Name. Borrowers will not, and will not permit
any Affiliate to, without the prior written consent of Lender, use the name of
Lender or the name of any affiliates of Lender in connection with any of their
respective businesses or activities, except in connection with internal business
matters, administration of the Loan and as required in dealings with
governmental agencies including any reports required to be filed with the
Securities and Exchange Commission.

         5.14     Other Documents. To the extent not maintained by the
Custodian, Borrowers will maintain accurate and complete files relating to the
Pledged Receivables, the Pledged Receivables Collateral and other Collateral to
the satisfaction of Lender, and such files (to the extent not computerized) will
contain copies of each Pledged Receivable and the Pledged Receivable Collateral
together with the purchase agreements, truth-in-lending statements, all relevant
credit memoranda and all collection information and correspondence relating to
such Pledged Receivables.

         5.15     Additional Indebtedness for Borrowed Money; Additional
Obligations Affiliated with Subordinated Obligations. Borrowers will not,
directly or indirectly, permit any payment to

                                       17
<PAGE>   23

be made in respect of any indebtedness, liabilities or obligations, direct or
contingent for borrowed money (except any payments required or permitted with
respect to the indebtedness on Schedule 5.15), to any Affiliates (excluding
trade payables incurred in the ordinary course of business), which payments
shall and are hereby made subordinate to the payment of principal of, and
interest on, the Note.

         5.16     Loan Servicing. Borrowers may not amend or terminate the
Servicing Agreement attached hereto as Exhibit F without Lender's prior
approval. Borrowers agree not to interfere with a Successor Servicer's
performance of its duties under the Servicing Agreement or to take any action
that would be inconsistent with the terms of the Servicing Agreement. The
Servicing Agreement shall be cancelable by Lender, as applicable under the terms
of the Servicing Agreement. All servicing fees, and the costs and expenses of
the Servicer shall be paid by the Borrowers.

         5.17     Custodian. Lender shall utilize a Custodian to maintain
custody of the Pledged Receivables and the Pledged Receivables Collateral.
Borrowers agree not to interfere with Custodian's performance of its duties
under the Custodial Agreement or to take any action that would conflict with the
terms of the Custodial Agreement. All custodial fees, and the costs and expenses
of the Custodian, shall be paid by the Borrowers.

         5.18     Compliance with Laws. Borrowers, and each of the Resorts in
which Intervals are being sold, shall comply with, conform to and obey each and
every judgment, law, statute, rule and governmental regulation applicable to it
and each indenture, order, instrument, agreement or document to which it is a
party or by which it is bound except where the failure to comply would not have
a Material Adverse Effect.

         5.19     Compliance Documents. Upon request by Lender, Borrowers will
provide Lender with copies of all Compliance Documents relating to the sale of
any Intervals relating to Pledged Receivables outside of the States of South
Carolina, Missouri or Tennessee.

         5.20     Real Estate Taxes. Borrowers will pay when due all of the
Borrowers' liabilities in respect of real estate taxes relating to the Resorts
and the Additional Resorts.

         5.21     Omitted.

         5.22     Omitted.

         5.23     Borrowers' Financial Maintenance Requirement. For as long as
any Borrower controls a Resort or Additional Resort, such Borrower shall be
obligated to pay the Timeshare Association dues relating to such Resort or
Additional Resort and shall provide such monies as are necessary to maintain
services for a Resort or an Additional Resort which is equal to or greater than
one hundred percent (100%) of such Resort's or Additional Resort's total
operating expenses, taxes, utilities and associated reserve fund requirements.

                                       18
<PAGE>   24

         5.24     Year 2000. Borrowers have made an assessment of the microchip
and computer-based systems and the software used in their respective businesses
and based upon such assessment believe that they will be "Year 2000 Compliant"
by January 1, 2000. For purposes of this Section 5.24, "Year 2000 Compliant"
means that all software, embedded microchips and other processing capabilities
utilized by, and material to the business operations or financial condition of,
the respective Borrower are able to interpret, store, transmit, receive and
manipulate data on and involving all calendar dates correctly and without
causing any abnormal ending scenarios in relation to dates in and after the Year
2000. From time to time, at the request of the Lender, Borrowers shall provide
to Lender such updated information as is requested regarding the status of its
effort to become Year 2000 Compliant.

         5.25     Authorized Signatory. Any person signing an Advance Request on
behalf of such Borrower, as provided in Schedule 3.2 hereof shall have the
requisite power and authority to sign the same on behalf of the related
Borrower.

         5.26     Allonge/Assignment Requirements. The Borrower will attach an
Allonge in the form attached hereto as Exhibit E to each Pledged Receivable with
respect to Pledged Receivables which take the form of a Note or other instrument
secured by a Purchase Money Mortgage or a master assignment with respect to
Receivables which take the form of conditional sales contracts (the "Assignment
Document"). The signature of the authorized signatory with respect to an Allonge
or an Assignment Document may be either an original signature, a signature stamp
or a computer generated signature.

         5.27     Environmental. So long as the Loan is outstanding, no
Hazardous Materials may be used, generated, treated, stored or disposed of by
any Person for any purpose upon any Collateral except in material compliance
with all applicable Environmental Laws except where the failure to comply would
not have a Material Adverse Effect. If the Lender, at any time, has a reasonable
basis to believe that Borrowers or any Resort or Additional Resort may be in
violation of any Environmental Law, then Borrowers agree, upon request from the
Lender to provide the Lender with such reports, certificates, engineering
studies or other written material or data as the Lender may require, in its
reasonable discretion, so as to satisfy the Lender that Borrowers, any Resort or
any Additional Resort are in compliance with all applicable Environmental Laws
and that the marketability and value of such Resort or Additional Resort is
adequately maintained.

         SECTION 6.                                   NEGATIVE COVENANTS

         So long as any portion of the Indebtedness remains unpaid or Lender is
committed to lend hereunder, unless Lender otherwise consents in writing,
Borrowers hereby jointly and severally covenant and agree with Lender as
follows:

         6.1      Consolidation and Merger. Each Borrower will not consolidate
with or merge into any other Person or permit any other Person to consolidate
with or merge into it or convey all or substantially all of its assets to any
person, unless (i) either the respective Borrowers shall be the continuing
corporation or the successor corporation or the person which acquires by sale or

                                       19
<PAGE>   25

conveyance substantially all the assets of the respective Borrowers shall be a
corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
Indebtedness hereunder, and the due and punctual performance and observance of
all of the covenants and conditions of this Agreement to be performed or
observed by the respective Borrowers, by an amendment hereto in form
satisfactory to the Lender, and (ii) the respective Borrowers or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of
any such covenant or condition.

         6.2      Restrictions on Transfers. The Borrowers shall not, without
obtaining the prior written consent of Lender, which may be granted or withheld
in Lender's sole discretion, transfer, sell, pledge, convey, assign or encumber
all or any portion of the Collateral except with respect to the sales of Pledged
Receivables to the Purchase Facility and Permitted Adverse Claims and Permitted
Liens.

         6.3      Collateral. The Borrowers shall not take any action (nor
permit or consent to the taking of any action) which might reasonably be
anticipated to impair the value of the Collateral or any of the rights of Lender
in the Collateral. Borrowers shall not (i) except in connection with a so-called
"upgrade" or a modification of a Pledged Receivable with no change in financial
terms or an exchange contemplated by Section 2.2 hereof, provided the conditions
in this Agreement are met, modify or amend any of the Pledged Receivables or the
Pledged Receivables Collateral without Lender's prior written consent, or (ii)
grant extensions of time for the payment of, compromise for less than the full
face value, release in whole or in part any Obligor liable for the payment of,
or allow any credit whatsoever except for the cash to be paid upon, any
Collateral or any instrument or document representing the Collateral other than
in the ordinary course of business in accordance with accepted industry loan
servicing standards.

         SECTION 7.                                   EVENTS OF DEFAULT

         An "Event of Default" shall exist if any of the following shall occur:

         7.1      Payments. Borrowers shall fail to make any payment of interest
on the Indebtedness within five (5) Business Days of the date such payment is
due and shall fail to make payments on the principal of the Indebtedness on the
date such payment is due.

         7.2      Failure to Permit Inspections. Borrowers shall fail to
strictly comply with the provisions of Section 5.3 of this Agreement.

         7.3      Covenant Defaults. Borrowers shall fail to perform or observe
any covenant, agreement or obligation contained in this Agreement or in any of
the Loan Documents (other than any covenant or agreement obligating Borrowers to
pay the Indebtedness), and such failure shall continue for thirty (30) days
after Lender delivers written notice thereof to Borrowers, provided, however, if
the failure is incapable of cure within such thirty (30) day period and
Borrowers shall

                                       20
<PAGE>   26

be diligently pursuing a cure, such thirty (30) day cure period shall be
extended by an additional period not to exceed sixty (60) days.

         7.4      Warranties or Representations. Any representation or other
statement made by or on behalf of Borrowers in this Agreement, in any of the
Loan Documents or in any instrument furnished in compliance with or in reference
to the Loan Documents, shall be false, misleading or incorrect in any material
respect as of the date made.

         7.5      Bankruptcy. A petition under any Chapter of Title 11 of the
United States Code or any similar law or regulation is filed by or against any
Borrower, (and in the case of an involuntary petition in bankruptcy, such
petition is not discharged within sixty (60) days of its filing), or a
custodian, receiver or trustee for any of the Resorts or Additional Resorts is
appointed, or any Borrower makes an assignment for the benefit of creditors, or
any of them are adjudged insolvent by any state or federal court of competent
jurisdiction, or any of them admit their insolvency or inability to pay their
debts as they become due or an attachment or execution is levied against any of
the Resorts or Additional Resorts.

         7.6      Attachment, Judgment, Tax Liens. The issuance, filing or levy
against the Borrowers of one or more attachments, injunctions, executions, tax
liens or judgments for the payment of money cumulatively in excess of
$1,000,000, which is not discharged in full or stayed within thirty (30) days
after issuance or filing.

         7.7      Omitted.

         7.8      Default by Borrowers in Other Agreements. Any default by a
Borrower in the payment of indebtedness for borrowed money in an aggregate
principal amount in excess of $1,000,000 (including, without limitation, any
default by a Borrower or any Affiliate in the payment of indebtedness for
borrowed money owing to Lender under any other agreement) which accelerates or
permits the acceleration (after the giving of notice or passage of time, or
both) of the maturity of such indebtedness.

         7.9      Omitted.

         7.10     Tax Liens; ERISA Liens. The Internal Revenue Service shall
file notice of a lien pursuant to Section 6323 of the Internal Revenue Code with
regard to any of the assets of Borrowers, and such lien shall not have been
released within 30 days, or the Pension Benefit Guaranty Corporation shall file
notice of a lien pursuant to Section 4068 of ERISA with regard to any of the
assets of Borrowers, and such lien shall not have been released within 30 days.

         7.11     Loan Exceeds Maximum Exposure For Five Days. The provisions of
Section 1.7(b) hereof have not been met.

         7.12     Validity of Transaction Documents. (a) Any Loan Document, or
any lien or security interest granted thereunder, shall (except in accordance
with its terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable

                                       21
<PAGE>   27

obligation of Borrowers, (b) Borrowers, or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding nature
or enforceability of any Loan Document or (c) any security interest securing the
Indebtedness shall, in whole or in part, cease to be a perfected first priority
security interest, except as contemplated by this Agreement.

         7.13     Default under the Project Loan. The occurrence and continuance
of an Event of Default under the Project Loan Documents.

         SECTION 8.                                   REMEDIES

         8.1      Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, Lender may take any one or more of the
following actions, without notice to Borrowers except as expressly stated below
or required by applicable law:

                  (a)      Acceleration. Declare by written notice to Borrowers,
(except upon the occurrence of any event specified in Section 7.5 above, in
which case the Indebtedness shall automatically be accelerated simultaneously
with the occurrence of such event) the unpaid balance of the Indebtedness, or
any part thereof, immediately due and payable, whereupon the same shall be due
and payable.

                  (b)      Termination of Obligation to Advance. Terminate by
written notice to Borrowers any commitment of Lender to lend under this
Agreement in its entirety, or any portion of any such commitment, to the extent
Lender shall deem appropriate.

                  (c)      Judgment. Reduce Lender's claim to judgment,
foreclose or otherwise enforce Lender's security interest in all or any part of
the Collateral by any available judicial procedure.

                  (d)      Sale of Collateral. Exercise all the rights and
remedies of a secured party on default under the Code (whether or not the Code
applies to the affected Collateral) including (i) require the Borrowers to, and
the Borrowers hereby agree that they will, at their expense and upon request of
Lender forthwith, assemble all or part of the Collateral as directed by Lender
and make it available to Lender at a place to be designated by Lender which is
reasonably convenient to both parties; (ii) enter upon any premises of the
Borrowers and take possession of the Collateral; and (iii) sell the Collateral
or any part thereof at public or private sale, at any of the Lender's offices or
elsewhere, at such time or times, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as Lender may deem
commercially reasonable. Borrowers agree that, whether or not notice of sale
shall be required by law, ten (10) days notice of the time and place of any sale
shall constitute reasonable notification. At any sale of the Collateral, if
permitted by law, Lender may bid (which bid may be, in whole or in part, in the
form of cancellation of indebtedness) for the purchase of the Collateral or any
portion thereof for the account of Lender. Subject to compliance by Lender with
all applicable laws, Borrowers shall remain jointly and severally liable for any
deficiency. Lender shall not be required to proceed against any Collateral but
may proceed against the Borrowers directly. To the extent permitted

                                       22
<PAGE>   28

by law, the Borrowers hereby specifically waive all rights of redemption, stay
or appraisal which it has or may have under any law now existing or hereafter
enacted.

                  (e)      Omitted.

                  (f)      Exercise of Other Rights. Exercise any and all other
rights or remedies afforded by any applicable laws or by the Loan Documents as
Lender shall deem appropriate, at law, in equity or otherwise, including the
right to bring suit or other proceeding, either for specific performance of any
covenant or condition contained in the Loan Documents or in aid of the exercise
of any right or remedy granted to Lender in the Loan Documents.

         8.2      Application of Collateral; Termination of Agreements. Upon the
occurrence and during the continuance of an Event of Default and subject to the
conditions provided in Section 2.1 hereof, Lender may apply against the
Indebtedness, any other indebtedness to Lender with respect to any Resort,
Additional Resort or any Project Indebtedness any and all Collateral in its
possession, other than any monies of the Borrowers received in error, any and
all balances, credits, deposits, accounts, reserves, indebtedness or other
moneys due or owing to Borrowers held by Lender hereunder or under any other
financing agreement or otherwise, whether accrued or not.

         8.3      Waivers. No waiver by Lender of any Event of Default shall be
deemed to be a waiver of any other or subsequent Event of Default. No delay or
omission by Lender in exercising any right or remedy under the Loan Documents
shall impair such right or remedy or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such right
or remedy preclude other or further exercise thereof, or the exercise of any
other right or remedy under the Loan Documents or otherwise. Further, Borrowers
waive notice of the occurrence of any Event of Default, presentment and demand
for payment, protest, and notice of protest, notice of intention to accelerate,
acceleration and nonpayment, and agree that their liability shall not be
affected by any renewal or extension in the time of payment of the Indebtedness,
or by any release or change in any security for the payment or performance of
the Indebtedness, regardless of the number of such renewals, extensions,
releases or changes. Borrowers also hereby waive the right to assert any statute
of limitations as a bar to the enforcement of the lien created by any of the
Loan Documents or to any action brought to enforce the Note or any other
obligation secured by the Loan Documents.

         8.4      Set Off of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
the Lender is hereby authorized by Borrowers at any time or from time to time,
with reasonably prompt subsequent notice to Borrowers or to any other Person
(any prior or contemporaneous notice being hereby expressly waived) to set off
and to appropriate and to apply any and all (A) balances held by the Lender or
such holder at any of its offices for the account of Borrowers (regardless of
whether such balances are then due to Borrowers), and (B) other property at any
time held or owing by the Lender or such holder to or

                                       23
<PAGE>   29

for the credit or for the account of Borrowers, against and on account of any of
the Indebtedness which are not paid when due other than monies of the Borrowers
received by Lender in error.

         8.5      Cumulative Rights. All rights and remedies available to Lender
under the Loan Documents shall be cumulative and in addition to all other rights
and remedies granted to Lender at law or in equity, whether or not the
Indebtedness is due and payable and whether or not Lender shall have instituted
any suit for collection or other action in connection with the Loan Documents.

         SECTION 9.                                   CERTAIN RIGHTS AND
                                                     OBLIGATIONS OF LENDER

         9.1      Protection of Collateral. Lender may at any time and from time
to time take such actions as Lender deems necessary or appropriate to protect
Lender's liens and security interests in and to preserve the Collateral.
Borrowers agree to cooperate fully with all of Lender's efforts to preserve the
Collateral and Lender's liens and security interests therein.

         9.2      Performance by Lender. If Borrowers fail to perform any
agreement contained herein, Lender may, but shall not be obligated to, cause the
performance of, such agreement, and the expenses of Lender incurred in
connection therewith shall be payable by Borrowers pursuant to Section 9.3
below.

         9.3      Fees and Expenses. Borrowers agree to promptly pay all
reasonable Costs and all such Costs shall be included as additional
Indebtedness.

         9.4      Release of Security Interest. Upon satisfaction in full of an
Obligor's obligations under a Receivable, Lender shall release its security
interest in such Obligor's Receivable and, in connection therewith, shall
execute such amendments or partial releases to the related Resort Blanket
Mortgage as shall be necessary to enable the applicable Borrower to convey an
unencumbered deed to the related Interval to such Obligor. Lender's security
interest in all other Pledged Receivables shall remain in full force and effect.
Lender's obligations under this Section 9.4 shall be unaffected by the pendency
of an Event of Default hereunder.

         9.5      Notice to Obligor. After the occurrence of and during the
continuance of an Event of Default, Borrowers authorize both the Lender and the
Custodian (but neither the Lender nor the Custodian shall be obligated) to
communicate at any time and from time to time, after a sale of an Interval, with
any Obligor or any other Person primarily or secondarily liable under a Pledged
Receivable with regard to the lien of Lender thereon and any other matter
relating thereto.

         9.6      Collection of Receivables. Following the occurrence of and
during the continuance of an Event of Default, Lender shall have the right to
(a) require that all payments due under the Pledged Receivables be paid directly
to Lender or to such party as Lender may designate, and to receive, collect,
hold and apply the same in accordance with the provisions of this Agreement or
to such party as Lender may designate, and (b) take such remedial action

                                       24
<PAGE>   30

available to it for the enforcement of any defaulted Pledged Receivables
including the foreclosure of any Pledged Receivable Collateral securing the
payment thereof. Borrowers hereby further irrevocably authorize, direct and
empower Lender, after the occurrence and during the continuance of an Event of
Default, to collect and receive all checks and drafts evidencing such payments
and to endorse such checks or drafts in the name of Borrowers and upon such
endorsements, to collect and receive the money therefor.

         Upon payment and satisfaction in full of all Indebtedness and subject
to Section 2.1 hereof, Lender will, at Borrowers' request and sole expense, give
written notice as necessary to redirect payment of the Pledged Receivables as
requested by Borrowers.

         9.7      Power of Attorney. The Borrowers do hereby irrevocably
constitute and appoint Lender as Borrowers' true and lawful agent and
attorney-in-fact, with full power of substitution, for Borrowers and in
Borrowers' name, place and stead, or otherwise, to (i) attach an Allonge in the
form attached hereto as Exhibit E to each Pledged Receivable with respect to
Pledged Receivables which take the form of a note or other instrument secured by
a Purchase Money Mortgage and (ii) following the occurrence and during the
continuance of an Event of Default (a) endorse any checks or drafts payable to
Borrowers in the name of Borrowers and in favor of Lender as provided in Section
9.6 above; (b) to demand and receive from time to time any and all property,
rights, titles, interests and liens hereby sold, assigned and transferred, or
intended so to be, and to give receipts for same; and (c) to institute and
prosecute in the name of Borrowers or otherwise, but for the benefit of Lender,
any and all proceedings at law, in equity, or otherwise, that Lender may deem
proper in order to collect, assert or enforce any claim, right or title, of any
kind, in and to the property, rights, titles, interests and liens hereby sold,
assigned or transferred, or intended so to be, and to defend and compromise any
and all actions, suits or proceedings in respect of any of the said property,
rights, titles, interests and liens. Borrowers hereby declare that the
appointment made and the powers granted pursuant to this Section are coupled
with an interest and are and shall be irrevocable by the Borrowers in any
manner, or for any reason, unless and until all obligations of the Borrowers to
Lender have been satisfied.

         9.8      Indemnification of Lender. Borrowers shall jointly and
severally indemnify Lender and hold Lender harmless from and against any and all
liabilities, indebtedness, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses, and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Lender, in
any way relating to or arising out of (a) this Agreement and the Loan Documents
and/or (b) any of the transactions contemplated therein or thereby (including
those in any way relating to or arising out of the violation by Borrowers of any
federal or state laws including the Interstate Land Sales Full Disclosure Act or
any applicable timeshare acts) other than liabilities, indebtedness, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements which are caused by the Lender's material breach of, or gross
negligence or willful misconduct with respect to its actions or inactions under
this Agreement or any other Loan Document. Upon receiving knowledge of any suit,
claim or demand asserted by a third party that Lender believes is covered by
this indemnity, Lender shall give Borrowers notice of the matter and an
opportunity to defend it, at Borrowers' sole cost and expense, with legal
counsel satisfactory to Lender.

                                       25
<PAGE>   31

Notwithstanding any defense by Borrowers of any such suit, claim or demand,
Lender shall have the right to participate in any material decision affecting
the conduct or settlement of any dispute or proceeding for which indemnification
may be claimed.

         9.9      Lender's Right to Provide Financing. Borrowers hereby covenant
with Lender that, from the date hereof until the first to occur of (a) the
Maturity Date, (b) the date on which an event occurs which relieves the
Purchaser from making purchases under the Asset Purchase Agreement and the
Purchaser ceases making purchases thereunder, (c) the acceleration of the
Indebtedness following an Event of Default, or (d) the termination of the
Lender's commitment under Section 8.1(b) of this Agreement, Lender shall have,
and Lender is hereby granted, the right and option, subject to the terms set
forth below (the "Funding Option") to provide secured financing for Eligible
Receivables (which for this purpose shall obligate the Borrowers, as well as any
Affiliate thereof, to disclose to Lender all resorts developed by the Borrowers
or any Affiliate thereof in order to provide Lender the opportunity to make a
determination whether such resort may be an Additional Resort). Lender shall
notify the Borrowers within forty-five (45) days of its receipt of satisfactory
information with respect to a resort whether such resort qualifies as an
Additional Resort.

         The Funding Option may be exercised or not exercised in Lender's sole
discretion. If Lender declines to exercise the Funding Option, Lender shall have
no further Funding Option with respect to the Receivables; provided, however,
Lender shall have no Funding Option with respect to (i) Receivables relating to
resorts for which Lender has reviewed and denied financing pursuant to the terms
of the Project Loan Agreement, (ii) Receivables from a resort that does not
qualify as an Additional Resort after Lender has reviewed such resort in
accordance with the preceding paragraph or (iii) Receivables associated with the
Club after the date on which Lender has reviewed and rejected the Club and
associated Receivables. Lender's decision to decline to exercise the Funding
Option shall be deemed to be a decision to decline to exercise the Purchase
Option (as defined in the Purchase Facility) under the Purchase Facility.
Notwithstanding anything contained herein to the contrary, it is expressly
agreed and understood that any financing to be extended pursuant to the Funding
Option shall be subject to approval by Lender's loan committees in accordance
with Lender's standard credit guidelines and it is further expressly understood
and agreed that Lender is under no obligation to exercise the Funding Option and
that nothing in this Section 9.9 shall be deemed or construed to create any such
obligation.

         SECTION 10.                                  PARTICIPATION AND
                                                         ASSIGNMENTS

                                       26
<PAGE>   32

         10.1     Participations in Loan and Assignments in Loan.

                  (a)      Lender may sell Participations in all or any part of
Advances made hereunder to another Person; provided, that such Person is not a
competitor of the Borrowers as determined by the Borrowers in their reasonable
discretion all amounts payable by Borrowers hereunder shall be determined as if
that Lender had not sold such participation. Borrowers hereby acknowledges and
agree that the participant under each participation shall for purposes of
subsection 1.9, 1.10, 1.11 and 9.8 be considered to be a "Lender".

                  (b)      Lender shall have the right to assign all or any
portion of its rights in this Agreement and the Loan hereunder to an Eligible
Assignee; provided that Lender and its Affiliates agree to retain 30% of the
Advances hereunder at all times, and provided that there shall not be more than
five (5) Eligible Assignees at any time. Any Eligible Assignee may assign its
rights and delegate its obligations under this Agreement to any other Eligible
Assignee; provided that such assigning Eligible Assignee shall first obtain the
written consent of Lender. In all events Heller Financial, Inc. shall be the
agent for the Loan hereunder.

                  (c)      Except as otherwise provided in this Section 10.1 the
Lender shall not, as between Borrowers and that Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loan or
other Indebtedness owed to the Lender.

                  (d)      Lender agrees to take and to cause its Affiliates to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Borrowers and neither Lender nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Borrowers; except to the extent such
information (i) was or becomes generally available to the public other than as a
result of disclosure by Lender, or (ii) was or becomes available on a
non-confidential basis from a source other than the Borrowers, provided that
such source is not bound by a confidentiality agreement with the Borrowers known
to the Lender; provided, however, that the Lender may disclose such information
(A) at the request or pursuant to any request of a regulatory authority of which
Lender is subject or in connection with an examination of such Lender by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Lender or any Affiliates may be party in
connection with the transactions contemplated by this Agreement; (E) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to the Lender's independent
auditors and other professional advisors; (G) to any participant or Eligible
Assignee, actual or potential, provided that such participant or Eligible
Assignee agrees in writing to keep such information confidential to the same
extent required of the Lender hereunder; (H) as to the Lender or its Affiliate,
as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower is party or is deemed party with
the

                                       27
<PAGE>   33

Lender as its Affiliates; and (I) to its Affiliates provided such Affiliates
agree in writing to be bound by the confidentiality provisions hereof.

         SECTION 11.                                  MISCELLANEOUS

         11.1     Notice. Any notice or other communication required or
permitted to be given shall be in writing addressed to the respective party as
set forth below and may be personally served, telecopied or sent by overnight
courier or U.S. Mail and shall be deemed given: (a) if served in person, when
served; (b) if telecopied, on the date of transmission if before 3:00 p.m.
(Chicago time) on a Business Day, otherwise on the next Business Day; provided
that a hard copy of such notice is also sent pursuant to (c) or (d) below; (c)
if by overnight courier, on the first business day after delivery to the
courier; or (d) if by U.S. Mail, certified or registered mail, return receipt
requested on the fourth (4th) day after deposit in the mail postage prepaid.

Notices to Borrowers:             Bluegreen Corporation
                                  4960 Blue Lake Drive
                                  Boca Raton, Florida  33431
                                  Attn: Patrick E. Rondeau, Esq.
                                  Telephone No.: (561) 912-8005
                                  Telecopy: (561) 912-8100

                                  Bluegreen Vacations Unlimited, Inc.
                                  4960 Blue Lake Drive
                                  Boca Raton, Florida 33431
                                  Attn: Patrick E. Rondeau, Esq.
                                  Telephone No.: (561) 912-8005
                                  Telecopy: (561) 912-8100

Notices to Lender:                Heller Financial, Inc.
                                  Attn: Portfolio Manager, Vacation Ownership
                                  HSF Loan No. 98-087
                                  500 West Monroe St., 31st Fl.
                                  Chicago, Illinois 60661
                                  Telecopy: (312) 441-7924

With a copy to:                   Heller Financial, Inc.
                                  Vacation Ownership Finance
                                  Attn: Legal Department - Relationship Manager
                                  HSF Loan No. 98-087
                                  500 West Monroe St., 31st Fl.
                                  Chicago, Illinois 60661
                                  Telecopy: (312) 441-7924

         11.2     Survival. All representations, warranties, covenants and
agreements made by Borrowers herein, in the other Loan Documents or in any other
agreement, document, instrument

                                       28
<PAGE>   34

or certificate delivered by or on behalf of Borrowers under or pursuant to the
Loan Documents shall be considered to have been relied upon by Lender and shall
survive the delivery to Lender of such Loan Documents and the extension of the
Indebtedness (and each part thereof), regardless of any investigation made by or
on behalf of Lender.

         11.3     Governing Law. This Agreement shall be governed by and shall
be construed and enforced in accordance with the internal laws of the State of
Illinois, (without regard to conflicts of law principles) and applicable laws of
the United States.

         11.4     Invalid Provisions. If any provision of this Agreement or any
of the other Loan Documents is held to be illegal, invalid or unenforceable
under present or future laws effective during the term thereof, such provision
shall be fully severable, this Agreement and the other Loan Documents shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof or thereof, and the remaining provisions
hereof or thereof shall remain in full force and effect.

         11.5     Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signature thereto and hereto were on the same instrument. This
Agreement shall become effective upon Lender's receipt of one or more
counterparts hereof signed by Borrowers and Lender.

         11.6     Lender Not Fiduciary. The relationship between Borrowers and
Lender is solely that of debtor and creditor, and Lender has no fiduciary or
other special relationship with Borrowers, and no term or provision of any of
the Loan Documents shall be construed so as to deem the relationship between
Borrowers and Lender to be other than that of debtor and creditor.

         11.7     Entire Agreement. This Agreement, including the Exhibits,
Schedules and other Loan Documents and agreements referred to herein embody the
entire agreement between the parties hereto, supersedes all prior agreements and
understandings between the parties whether written or oral relating to the
subject matter hereof and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no oral
agreements among Lender or Borrowers. This Agreement may be modified or changed
only in a writing executed by both Lender and Borrowers and/or the other
affected parties.

         11.8     Consent to Advertising and Publicity. Lender may issue and
disseminate to the public information describing the credit accommodation
entered into pursuant to this Agreement; provided the Borrowers shall have
approved the description of such credit accommodation which approval shall not
be unreasonably withheld.

                                       29
<PAGE>   35

         11.9     [Omitted]

         11.10    Headings. Section headings have been inserted in the Agreement
as a matter of convenience of reference only; such section headings are not a
part of the Agreement and shall not be used in the interpretation of this
Agreement.

         11.11    Broker's Fees. There are no brokers, finders' or other similar
fees or commitments due with respect to the transactions described in the
Agreement. Borrowers shall defend Lender and save and hold it harmless from all
claims of any Persons for any such fees which indemnity shall include reasonable
attorneys' fees and legal expenses.

         11.12    Venue. BORROWERS HEREBY CONSENT TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK STATE OF ILLINOIS.
BORROWERS EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWERS HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON BORROWERS BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO BORROWERS, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS
BEEN POSTED.

         11.13    Jury Trial Waiver. BORROWERS AND LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. BORROWERS AND LENDER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. BORROWERS AND LENDER WARRANT AND REPRESENT
THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

                                       30
<PAGE>   36

         The parties hereto have executed this Agreement or has caused the same
to be executed by their duly authorized representatives as of the date first
above written.

                                             BORROWERS:

                                             BLUEGREEN CORPORATION

                                             By:
                                                --------------------------------
                                             Printed Name:
                                                          ----------------------
                                             Its:
                                                 -------------------------------

                                             BLUEGREEN VACATIONS UNLIMITED, INC.

                                             By:
                                                --------------------------------
                                             Printed Name:
                                                          ----------------------
                                             Its:
                                                 -------------------------------

                                             LENDER:

                                             HELLER FINANCIAL, INC.

                                             By:
                                                --------------------------------
                                             Printed Name:
                                                          ----------------------
                                             Its:
                                                 -------------------------------

                                       31
<PAGE>   37

                                    APPENDIX

                                  Defined Terms

         The following terms used in this Agreement shall have the following
meanings:

         Additional Borrowers. Such other Subsidiaries and/or Affiliates of the
Borrowers which may own a Resort or an Additional Resort and become a "Borrower"
hereunder with the approval of Lender.

         Additional Resorts. Those certain timeshare vacation resorts which the
Lender may approve in the future which Intervals may be financed hereunder,
which approval shall be in the Lender's reasonable discretion.

         Advance. Proceeds of the Loan advanced from time to time by Lender to
Borrowers in accordance with this Agreement.

         Adverse Claim. A Lien, security interest, pledge, charge or
encumbrance, or similar right or claim of any Person.

         Affected Party. The Lender and any permitted assignee of Lender
including any person who purchases a Loan participation or an assignment of the
Loan pursuant to Section 10 hereof, an Eligible Assignee, the holding company of
any such Person and any successor holding company thereof; provided, however, in
no event shall Heller Financial, Inc. or its Affiliates be an "Affected Party."

         Affiliate. Any individual, trust, estate, partnership, limited
liability company, corporation or any other incorporated or unincorporated
organization (each, a "Person") that directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with
Borrowers; any officer, director or partner of Borrowers; or any relative of any
of the foregoing. The term "control" means possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

         Assignment. The Assignment of Pledged Receivables and Pledged
Receivables Collateral in the form set forth on Exhibit B of this Agreement.

         Availability. At all times during the term of this Agreement, the
lesser of (i) $35,000,000 minus outstanding Advances, or (ii) an amount equal to
95% of the principal balance of Pledged Receivables; provided, that
notwithstanding anything to the contrary contained herein the amounts advanced
against Pledged Receivables (i) relating to Eligible Uncompleted Unit
Receivables shall not at any time represent in the aggregate more than the
lesser of $5,000,000.00 or 30% of the aggregate principal amount of all Advances
outstanding under this Agreement and (ii) relating to Managed Resorts shall not
at any time represent in the aggregate more than $5,000,000 of the aggregate
principal amount of all Advances outstanding under this Agreement.

                                       32
<PAGE>   38

After the Maturity Date or at the option of Lender in accordance with Section
8.10, after the occurrence and during the continuance of an Event of Default
hereunder, Availability shall be zero ($0).

         Board. Board of Governors of the Federal Reserve System.

         Business Day. Any day which is not a Saturday or Sunday or a legal
holiday under the laws of the State of Illinois, the Commonwealth of
Pennsylvania, the State of Florida or the United States and which is a London
Banking Day.

         Capital Lease. At any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

         Capitalized Lease Obligations. With respect to any Person, all
outstanding obligations of such Person in respect of all Capital Leases, taken
at the capitalized amount thereof accounted for as indebtedness in accordance
with GAAP.

         Club. The RDI Club formed pursuant to the RDI Vacation Club Trust
Agreement dated the 2nd day of August, 1995 by and among RDI Resources, Inc.,
Vacation Trust, Inc. and the beneficiaries named therein, as amended from time
to time as well as such other clubs as the Lender shall approve.

         Club Collateral. With respect to the Club, and to the extent owned by a
Borrower, the reservation systems and related computer software and hardware.

         Code. The Uniform Commercial Code as adopted and in force in the State
of Illinois as the same may be amended from time to time.

         Collateral. Has the meaning assigned in Section 2.1.

         Completed Units. A Unit at a Resort or Additional Resort which has been
fully constructed and furnished, has received a valid permanent certificate of
occupancy, is ready for occupancy and is subject to a Time Share Declaration.

         Compliance Documents. With respect to sales of Intervals in any state
or jurisdiction: (i) evidence satisfactory to Lender that the governmental
authority of such state or jurisdiction having jurisdiction over sales of
timeshare intervals has issued all required approvals of Borrowers' offering
materials, sales and financing documents and sales practices, and (ii) copies of
Borrowers' offering materials, sales and financing documents as approved by such
state.

         Consolidated Fixed Charge. The sum for Bluegreen Corporation and its
subsidiaries, determined on a consolidated basis in accordance with GAAP, of all
amounts which would be deducted in computing Consolidated Net Income on account
of interest on indebtedness (including imputed interest in respect of
Capitalized Lease Obligations and amortization of debt discount and expenses).

                                       33
<PAGE>   39

         Consolidated Net Income. The net income of Bluegreen Corporation and
its subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, excluding:

         (i)      the proceeds of any life insurance policy,

         (ii)     any gains arising from (a) the sale or other disposition of
                  any assets (other than land, timeshare intervals, current
                  assets and other receivables sold in the ordinary course of
                  business, including without limitation under the Purchase
                  Facility, to the extent that the aggregate amount of the gains
                  during such period exceeds the aggregate amount of the losses
                  during such period from the sale, abandonment or other
                  disposition of assets (other than current assets and other
                  receivables sold in the ordinary course of business), (b) any
                  write-up of assets or (c) the acquisition of outstanding
                  securities of Bluegreen Corporation or any subsidiary,

         (iii)    any amount representing any interest in the undistributed
                  earnings of any other person (other than a subsidiary),

         (iv)     any earnings, prior to the date of acquisition, of any person
                  acquired in any manner, and any earnings of any subsidiary
                  acquired prior to its becoming a subsidiary,

         (v)      any earnings of a successor to or transferee of the assets of
                  Bluegreen Corporation prior to its becoming such successor or
                  transferee,

         (vi)     any deferred credit (or amortization of a deferred credit)
                  arising from the acquisition of any person, and

         (vii)    any extraordinary gains not covered by clause (ii) above.

         Consolidated Net Worth. On a consolidated basis for Bluegreen
Corporation and its subsidiaries, at any date, (i) the sum of (a) capital stock
taken at par or stated value plus (b) capital in excess of par or stated value
relating to capital stock plus (c) retained earnings (or minus any retained
earning deficit) minus (ii) the sum of treasury stock, capital stock subscribed
for and unissued and other contra-equity accounts, all determined in accordance
with GAAP.

         Costs. All expenditures and expenses which may be paid or incurred by
or on behalf of Lender in connection with the documentation, modification,
workout, collection or enforcement of the Loan or any of the Loan Documents.
Notwithstanding the foregoing, Costs payable on the date of the initial Advance
shall be limited to (i) the fees and costs of Lender's attorneys in connection
with the documentation of the Loan and the due diligence review of Borrowers'
deliveries; (ii) the costs of the Back-up Servicer, if applicable; and (iii) all
applicable title, filing and recording fees and other closing costs. During the
term of the Loan, Costs payable by Borrowers shall include: payments to remove
or protect against liens; attorneys' fees; receivers'

                                       34
<PAGE>   40

fees; engineers' fees; accountants' fees; independent consultants' fees
(including environmental consultants); fees of the Custodian, the Servicer and
the Back-up Servicer; all costs and expenses incurred in connection with any of
the foregoing; outlays for documentary and expert evidence; stenographers'
charges; stamp taxes; publication costs; and costs (which may be estimates as to
items to be expended after entry of an order or judgment) for procuring all such
abstracts of title, title and UCC searches, and examination, title insurance
policies, and similar data and assurances with respect to title as Lender may
deem reasonably necessary either to prosecute any action or to evidence to
bidders at any foreclosure sale a true condition of the title to, or the value
of, the Collateral.

         Credit Policy. Bluegreen's Credit Scoring Matrix dated July 7, 1997 and
the collection policies with respect to the Receivables and the Receivables
Collateral, which policies may not be amended or supplemented without the
Lender's written approval, which shall not be unreasonably withheld.

         Custodial Agreement. An agency and custodial agreement; in such form as
shall be reasonably satisfactory to both the Lender and the Borrowers which
Agreement shall be by and among Borrowers, Lender and Custodian providing for
the maintenance of the Receivables File relating to the Pledged Receivables.

         Custodian. Norwest Bank Minnesota, N.A. or such other Person designated
by Lender and approved by Borrowers to maintain physical possession of the
Pledged Receivables and the Pledged Receivables Collateral.

         Declaration. With respect to each Resort, the Condominium Declaration
set forth on Exhibit H.

         Deed of Trust. An instrument by which legal title to an Interval is
placed in one or more trustees to secure an Obligor's payment performance with
respect to a Pledged Receivable.

         Default Rate. A per annum rate of interest equal to the Interest Rate
plus two percent (2%).

         Determination Date. The last day of each Fiscal Month.

         Due Period. Each period consisting of a Fiscal Month.

         EBITDA. Consolidated Net Income plus all amounts deducted in the
computation of Consolidated Net Income on account of (i) Consolidated Fixed
Charges, (ii) depreciation and amortization expenses and other non-cash charges
and (iii) income and profits taxes; provided, however, with respect to Bluegreen
Corporation's 1999 Fiscal Year (ending March 28, 1999) the approximately
$3,000,000 associated with prepayments penalties associated with its
$110,000,000 Rule 144A debt offering shall be added back into income.

         Eligible Assignee. Any of (a) a commercial bank organized under the
laws of the United States, or any state thereof or the District of Columbia, and
having total assets in excess of

                                       35
<PAGE>   41

$1,000,000,000; (b) a savings and loan association or savings bank organized
under the laws of the United States, or any state thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with GAAP; (c) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; and (d) the
central bank of any country which is a member of the OECD.

         Eligible Completed Unit Receivable. A Receivable which satisfies all of
the following criteria:

         (a)      payments due under the Receivable shall be self-amortizing and
                  payable in monthly installments;

         (b)      the weighted average term to maturity of all Receivables
                  financed hereunder from the date when such receivable is
                  pledged to Lender as Collateral pursuant to this Agreement is
                  at least thirty-six (36) months at the time the Receivable is
                  pledged hereunder;

         (c)      as of the date of Funding, the Obligor thereunder has made a
                  cash down payment of at least 10% percent of the actual
                  purchase price of the Interval (which cash down payment may be
                  represented by the principal payments on such Receivable since
                  its date of origination) and no part of such payment has been
                  made or loaned to Obligor by Borrowers or an Affiliate
                  thereof;

         (d)      the weighted average interest rate of all Receivables financed
                  under this Agreement is not less than 13.90% per annum at the
                  time and inclusive of the Receivable to be financed hereunder;

         (e)      no principal or interest with respect to the receivable is
                  more than thirty (30) days past due on a contractual basis at
                  the time of Lender's Advance against such Receivable
                  hereunder, nor becomes more than sixty (60) days past due;

         (f)      the Obligor is not an Affiliate of the Borrowers; provided
                  that an Obligor may be related to or employed by the Borrowers
                  if such Receivables do not, in the aggregate, exceed
                  $1,000,000, but only if such Obligor purchases the Interval on
                  no less than the same terms and conditions offered to any
                  non-Affiliate purchaser; provided that solely for the purposes
                  of this clause (f) a relative of an employee of the Borrowers
                  (or any of their Affiliates) shall not be deemed to be an
                  "Affiliate";

                                       36
<PAGE>   42

         (g)      the Receivable is free and clear of adverse claims, liens and
                  encumbrances and is not currently, subject to claims of
                  rescission, invalidity, unenforceability, illegality, defense,
                  offset or counterclaim;

         (h)      if the Receivable is evidenced by a promissory note separate
                  from the conditional sales contract, the Receivable is secured
                  directly by a first priority Purchase Money Mortgage or Deed
                  of Trust on the purchased Interval;

         (i)      if the Purchase Money Mortgage secures a Pledged Receivable,
                  the title to the Interval is insured under a mortgagee title
                  insurance policy in form and substance acceptable to Lender;

         (j)      no Receivable hereunder shall be in excess of $25,000 and no
                  Obligor shall be the payor of aggregate Receivables herein and
                  in the Purchase Facility in excess of $50,000;

         (k)      payments with respect to the Receivable are to be in legal
                  tender of the United States;

         (l)      at least 90% of the aggregate outstanding principal balance of
                  all Receivables arise from Obligors who are either residents
                  of the U.S. or Canada at the time the Pledged Receivable is
                  financed hereunder;

         (m)      all monthly payments on the Receivable have been made by the
                  Obligor and not by Borrowers or any Affiliate of Borrowers on
                  the Obligor's behalf;

         (n)      the Receivable relates to a Resort or any Additional Resort;

         (o)      the Receivable constitutes either "chattel paper", a "general
                  intangible" or an "instrument" as defined in the Code as in
                  effect in all applicable jurisdictions;

         (p)      the assignment of the Receivable and the Receivables
                  Collateral does not contravene or conflict with any law, rule
                  or regulation or any contractual or other restriction,
                  limitation or encumbrance, and the sale or assignment of the
                  Receivable and Receivable Collateral does not require the
                  consent of the Obligor;

         (q)      the Receivable and Receivables Collateral is in full force and
                  effect, constitutes the legal, valid and binding obligation of
                  the Obligor thereof enforceable against such Obligor in
                  accordance with its terms subject to the effect of bankruptcy,
                  fraudulent conveyance or transfer, insolvency, reorganization,
                  assignment, liquidation,

                                       37
<PAGE>   43

                  conservatorship and moratorium laws, is not, to the Borrowers'
                  actual knowledge, subject to any dispute, offset,
                  counterclaim, defense or assignment whatsoever;

         (r)      the Receivable relates to a Completed Unit and the Receivables
                  Collateral does not contravene in any material respect any
                  laws, rules or regulations applicable thereto (including,
                  without limitation, laws, rules and regulations relating to
                  usury, retail installment sales, truth in lending, fair credit
                  reporting, equal credit opportunity, fair debt collection
                  practices and privacy) and with respect to which no party
                  thereto is in violation of any such law, rule or regulation in
                  any material respect if such violation would impair the
                  collectibility of such Receivable and Receivable Collateral;

         (s)      the Receivable and Receivable Collateral satisfies all
                  applicable requirements of the Credit Policy and was acquired
                  by Borrowers in compliance with the underwriting guidelines
                  set forth therein and has not been modified in any respect due
                  to the deteriorative credit quality of the Obligor;

         (t)      as to which to the Seller's knowledge (i) no bankruptcy is
                  currently existing with respect to the Obligor and (ii) as to
                  which the Obligor is not insolvent;

         (u)      the Receivable shall not have an initial term to maturity of
                  more than 120 months;

         (v)      the Receivable has not been pledged as Collateral under this
                  Agreement for more than one year except Receivables in respect
                  of an Interval at Christmas Mountain Campground, The Timbers
                  at Christmas Mountain and The Villas at Christmas Mountain;

         (w)      the Receivable shall not have a contractual interest rate less
                  than 12.90% per annum;

         (x)      if a Resort is subject to a construction loan, the
                  construction lender shall have signed and delivered a
                  non-disturbance agreement (which may be contained in such
                  lender's mortgage) pursuant to which such construction lender
                  agrees not to foreclose on any Intervals relating to Pledged
                  Receivables; and

         (y)      the Receivable shall meet the Minimum Credit Scoring Standard.

         Eligible Receivable. Shall mean Eligible Completed Unit Receivables and
Eligible Uncompleted Unit Receivables.

         Eligible Uncompleted Unit Receivable. A Receivable in respect of an
Interval in and to an Uncompleted Unit at a Resort which satisfies all of the
following criteria:

                                       38
<PAGE>   44

         (a)      payments due under the Receivable (after the Receivable shall
                  have been released from any document or Payment Escrow in
                  respect thereof) shall be self-amortizing and payable in
                  monthly installments;

         (b)      the weighted average term to maturity of all Receivables
                  financed hereunder from the date when such receivable is
                  pledged to Lender as Collateral pursuant to this Agreement is
                  at least thirty-six (36) months at the time the Receivable is
                  pledged hereunder;

         (c)      as of the date of Funding, the Obligor thereunder has made a
                  cash down payment (in the Payment Escrow if required by
                  applicable law) of at least ten (10%) percent of the actual
                  purchase price of the Interval (which cash down payment may be
                  represented by the principal payments on such Receivable since
                  its date of origination) and no part of such payment has been
                  made or loaned to Obligor by Borrowers or an Affiliate
                  thereof;

         (d)      the weighted average interest rate of all Receivables financed
                  under this Agreement is not less than 13.90% per annum at the
                  time and inclusive of the Receivable to be financed hereunder;

         (e)      no installment with respect to the Receivable (after the
                  Receivable shall have been released from any document or
                  Payment Escrow in respect thereof) is more than thirty (30)
                  days past due on a contractual basis at the time of such
                  release nor becomes more than sixty (60) days past due;

         (f)      the Obligor is not an Affiliate of the Borrowers; provided
                  that an Obligor may be related to or employed by the Borrowers
                  if such Receivables do not, in the aggregate, exceed
                  $1,000,000, but only if such Obligor purchases the Interval on
                  no less than the same terms and conditions offered to any
                  non-Affiliate purchaser; provided that solely for the purposes
                  of this clause (f), a relative of an employee of the Borrowers
                  (or any of their Affiliates) shall not be deemed to be an
                  "Affiliate".

         (g)      the Receivable (after the Receivable shall have been released
                  from any document or Payment Escrow in respect thereof) is
                  free and clear of adverse claims, liens and encumbrances and
                  is not currently, nor shall it (after such release) be
                  potentially in the future, subject to claims of rescission,
                  invalidity, unenforceability, illegality, defense, offset or
                  counterclaim;

                                       39
<PAGE>   45

         (h)      if the Receivable is evidenced by a promissory note separate
                  from the conditional sales contract, the Receivable (after the
                  Pledged Receivable shall have been released from any document
                  or Payment Escrow in respect thereof) is secured directly by a
                  first priority Purchase Money Mortgage or Deed of Trust on the
                  purchased Interval;

         (i)      if the Purchase Money Mortgage secures a Receivable, the title
                  to the Interval is insured under a mortgagee title insurance
                  policy in form and substance acceptable to Lender;

         (j)      no Receivable hereunder shall be in excess of $25,000 and no
                  Obligor shall be the payor of aggregate Pledged Receivables
                  herein and in the Purchase Facility in excess of $50,000;

         (k)      payments with respect to the Pledged Receivable are to be in
                  legal tender of the United States;

         (l)      at least 90% of the aggregate outstanding principal balance of
                  all Receivables arise from Obligors who are either residents
                  of the U.S. or Canada at the time the Receivable is financed
                  hereunder;

         (m)      all monthly payments on the Receivable (including, without
                  limitation, any payments held in the Payment Escrow) have been
                  made by the Obligor and not by Borrowers or any Affiliate of
                  Borrowers on the Obligor's behalf;

         (n)      the Receivable constitutes either "chattel paper", a "general
                  intangible" or an "instrument" as defined in the Code as in
                  effect in all applicable jurisdictions;

         (o)      the Assignment of the Receivable and the Receivables
                  Collateral does not contravene or conflict with any law, rule
                  or regulation or any contractual or other restriction,
                  limitation or encumbrance, and the Assignment of the
                  Receivable and Receivable Collateral does not require the
                  consent of the Obligor, provided that any such Assignment
                  shall be subject to the terms of any document or Payment
                  Escrow in respect of such Receivable;

         (p)      the Receivable and Receivables Collateral after the Receivable
                  shall have been released from any document or Payment Escrow
                  in respect thereof is in full force and effect, constitutes
                  the legal, valid and binding obligation of the Obligor thereof
                  enforceable against such Obligor in accordance with its terms
                  subject to the effect of bankruptcy, fraudulent conveyance or
                  transfer, insolvency, reorganization, assignment, liquidation,
                  conservatorship and

                                       40
<PAGE>   46

                  moratorium laws, is after the Receivable shall have been
                  released from any document or Payment Escrow in respect
                  thereof is not to the Borrowers' actual knowledge, subject to
                  any dispute, offset, counterclaim, defense or assignment
                  whatsoever;

         (q)      the Receivable relates to an Uncompleted Unit at a Resort and
                  the Receivable and Receivables Collateral does not contravene
                  in any material respect any laws, rules or regulations
                  applicable thereto (including, without limitation, laws, rules
                  and regulations relating to usury, retail installment sales,
                  truth in lending, fair credit billing, fair credit reporting,
                  equal credit opportunity, fair debt collection practices and
                  privacy) and with respect to which no party thereto is in
                  violation of any such law, rule or regulation in any material
                  respect if such violation would impair the collectibility of
                  such Receivable and Receivable Collateral;

         (r)      the Receivable and Receivable Collateral satisfies all
                  applicable requirements of the Credit Policy and was acquired
                  by Borrowers in compliance with the underwriting guidelines
                  set forth therein and has not been modified in any respect due
                  to the deteriorative credit quality of the Obligor or
                  otherwise;

         (s)      as to which to the Seller's knowledge (i) no bankruptcy is
                  currently existing with respect to the Obligor and (ii) as to
                  which the Obligor is not insolvent;

         (t)      the Receivable shall not have an initial term to maturity of
                  more than 120 months;

         (u)      the Receivable has not been pledged under this Agreement for
                  more than one year except Receivables in respect of an
                  Interval at Christmas Mountain Campground, The Timbers at
                  Christmas Mountain and The Villas at Christmas Mountain;

         (v)      the Receivable shall not have a contractual interest rate less
                  than 12.90% per annum;

         (w)      a valid permanent certificate of occupancy in respect of the
                  Uncompleted Unit related to the Receivable shall have been
                  issued within 365 days of the date on which such Receivable
                  was initially pledged to Lender under this Agreement;

         (x)      at the time of the initial pledge of the Receivable to Lender
                  under this Agreement, the construction of the Resort in which
                  the Uncompleted Unit related to such Receivable is located
                  shall have commenced, all permits and licensing in respect of
                  such construction shall have been obtained

                                       41
<PAGE>   47

                  (including, without limitation, all construction permits, all
                  zoning, density, accommodation and design approvals, all
                  subdivision approvals, all utility approvals and all pre-sale
                  marketing approvals and registrations) and all acquisition and
                  construction financing, if any, shall have been obtained,
                  shall be available and in place and shall be sufficient to
                  acquire and fully construct and furnish the Resort and all
                  amenities in respect thereof.

                  If at any time during which a Receivable shall be held in
                  document or Payment Escrow such Receivable would, in the
                  opinion of the Lender and without giving effect to such
                  Payment Escrow, be subject to any Adverse Claims, liens or
                  encumbrances, be subject to claims of rescission, invalidity,
                  unenforceability, illegality, defense, offset or counterclaim,
                  not be in full force and effect, not constitute the legal,
                  valid and binding obligation of the Obligor thereunder, be
                  subject to any dispute, offset, counterclaim or defense
                  whatsoever, contravene in any material respect any laws, rules
                  or regulations applicable thereto so as to materially impair
                  the collectibility of such Pledged Receivable, such Pledged
                  Receivable shall be deemed not to have satisfied this
                  definition of "Eligible Uncompleted Unit Receivable."

                  After the Receivable shall have been released from any
                  document or Payment Escrow in respect thereof and as soon as
                  such Receivable satisfies the requirements of an "Eligible
                  Competed Unit Receivable" and Borrowers certify the same in
                  writing to Lender, such Pledged Receivable shall no longer be
                  considered an "Eligible Uncompleted Unit Receivable."; and

         (y)      the Receivable shall meet the Minimum Credit Scoring Standard.

         Environmental Laws. Means and includes the following as now in effect
or hereafter amended: the Comprehensive Environmental Response Compensation and
Liability Act, ("CERCLA"), 42 U.S.C. ss.9601 et. seq.; the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. ss.6901 et. seq.; the Toxic Substances Control Act ("TSCA"), 15 U.S.C.
ss.2601, et. seq.; the Clean Air Act, 42 U.S.C. ss.7401 et. seq.; the Federal
Water Pollution Control Act ("Clean Water Act"), 33 U.S.C. ss.1251 et. seq.; the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. ss.11001 et. seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. ss.1801 et. seq.; the
Atomic Energy Act, 42 U.S.C. ss.2011 et. seq.; the Safe Drinking Water Act, 42
U.S.C. ss.300f et. seq. and the state law equivalents; any so-called "Superfund"
or "Superlien" law; and any statute, ordinance, code, rule, regulation, order,
decree or requirement under international, federal, state, regional, provincial
or local law (including, without limitation, administrative orders and consent
decrees) in effect and as amended regulating, relating to or imposing liability
or standards of conduct concerning public health and safety, protection of the
environment, or any pollutant or contaminant or hazardous, toxic or dangerous
substance, waste, chemical or material, as now or any time hereafter may be
existing.

                                       42
<PAGE>   48

         Event of Bankruptcy. A petition under any Chapter of Title 11 of the
United States Code or any similar law or regulation is filed by or against an
Obligor (and in the case of an involuntary petition in bankruptcy, such petition
is not discharged within sixty (60) days of its filing), or a custodian,
receiver or trustee for an Obligor is appointed, or an obligor makes an
assignment for the benefit of creditors, or obligor is adjudged insolvent by any
state or federal court of competent jurisdiction, or Obligor admits its
insolvency or inability to pay its debts as they become due or an attachment or
execution is levied against the Unit by a creditor of an Obligor.

         Event of Default. Has the meaning set forth in Section 8.1 of this
Agreement.

         Fiscal Month. With respect to any Fiscal Year, the monthly fiscal
periods utilized by the Borrowers as of the date hereof which may not be
modified without the Lender's written consent, which consent will not be
unreasonably withheld.

         Fiscal Quarter. With respect to any Fiscal Year, the quarterly fiscal
periods utilized by the Borrowers as of the date hereof which may not be
modified without the Lender's written consent, which consent will not be
unreasonably withheld.

         Fiscal Year. The annual fiscal periods utilized by the Borrowers as of
the date hereof which may not be modified without the Lender's written consent,
which consent will not be unreasonably withheld.

         GAAP. Generally accepted accounting principles, applied on a consistent
basis, set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board which are applicable in the circumstances as of the
date in question; and the requisite that such principles be applied on a
consistent basis means that the accounting principles in a current period are
comparable in all material respects to those applied in a preceding period, with
any exceptions thereto noted.

         Guaranty. With respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

         (a)      to purchase such indebtedness or obligation or any property
                  constituting security therefor;

         (b)      to advance or supply funds (i) for the purchase or payment of
                  such indebtedness or obligation, or (ii) to maintain any
                  working capital or other balance sheet condition or any income
                  statement condition of any other Person or otherwise to
                  advance or make available funds for the purchase or payment of
                  such indebtedness or obligation;

                                       43
<PAGE>   49

         (c)      to lease properties or to purchase properties or services
                  primarily for the purpose of assuring the owner of such
                  indebtedness or obligation of the ability of any other Person
                  to make payment of the indebtedness or obligation; or

         (d)      otherwise to assure the owner of such indebtedness or
                  obligation against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

         Hazardous Materials. Means the following: hazardous substances;
hazardous wastes; polychlorinated biphenyls ("PCB's") or any substance or
compound containing PCB's; asbestos or any asbestos-containing materials in any
form or condition; radon; any other radioactive materials including any source,
special nuclear or by-product material; petroleum, crude oil or any fraction
thereof which is liquid at standard conditions of temperature and pressure (60
degrees Fahrenheit and 14.7 pounds per square inch absolute); and any other
pollutant or contaminant or hazardous, toxic or dangerous chemicals, materials
or substances, as all such terms are defined by Environmental Laws.

         Indebtedness. All payment obligations of Borrowers to Lender under the
Loan Documents.

         Insurance Proceeds. Proceeds, paid by any insurer pursuant to any
insurance policy covering a Unit, Receivable or Receivables Collateral.

         Intangible Asset. A nonphysical, noncurrent right that gives Bluegreen
or any of its subsidiaries an exclusive or preferred position in the marketplace
including but not limited to a copyright, patent, trademark, goodwill,
organization costs, capitalized advertising cost, computer programs, licenses
for any of the preceding, government licenses (e.g., broadcasting or the right
to sell liquor), leases, franchises, mailing lists, exploration permits, import
and export permits, construction permits, and marketing quotas.

         Interest Rate. A floating rate per annum equal to the Base Rate plus
2.75% (the aggregate rate referred to as the "Interest Rate"). "Base Rate" shall
mean the rate published each business day in The Wall Street Journal for
deposits maturing ninety (90) days after issuance under the caption "Money
Rates, London Interbank Offered Rates (LIBOR)" as the same may be adjusted by
the Statutory Reserve Rate. The Interest Rate for each Fiscal Month shall be
fixed based upon the Interest Rate published prior to and in effect on the first
(1st) Business Day of such Fiscal Month. Interest shall be calculated based on a
360 day year and charged for the actual number of days elapsed.

         Interval. With respect to any Resort or Additional Resort, (i) an
undivided fee simple ownership interest as a tenant in common or (ii) with
respect to Christmas Mountain

                                       44
<PAGE>   50

Campground, The Timbers at Christmas Mountain, The Villas at Christmas Mountain,
an undivided fee simple ownership interest as a tenant in common and the
applicable Resort Interest, in either case, with respect to any Unit in such
Resort or Additional Resort, with a right to use such Unit, or a Unit of such
type, generally for one week annually, together with all appurtenant rights and
interests as more particularly described in the Timeshare Documents.

         Lien. With respect to any Collateral, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

         Loan. The Thirty-five Million Dollar ($35,000,000) credit facility
described in this Agreement.

         Loan Documents. Collectively, this Agreement, the Note, the Servicing
Agreement, the Structuring Fee Letter, the Resort Blanket Mortgages and any and
all other agreements, documents, instruments and certificates delivered or
contemplated to be delivered in connection with this Agreement, as such may be
amended, renewed, extended, restated or supplemented from time to time.

         Lockbox Bank. Such banking institution selected by Borrowers and
approved by Lender to act as the depositary of payments on the Pledged
Receivables and the Pledged Receivables Collateral under the Lockbox Agreement.

         Lockbox Agreement. An agreement among Bluegreen Corporation, Lender and
Lockbox Bank providing for the receipt by Lockbox Bank of payments on the
Pledged Receivables and the Pledged Receivables Collateral and disbursement of
such payments to Lender.

         London Banking Day. Any day on which dealings in deposits in U.S.
Dollars are transacted in the London interbank market.

         Managed Resorts. Those certain timeshare vacation resorts commonly
known as Landmark Holiday Beach Resort, Ocean Towers Beach Club, Panama City
Resort and Club, Surfrider Beach Club, Tropical Sands Resort, Resort Sixty Six,
Via Roma Beach Resort, Orlando's Sunshine Resort, Gulfstream Manor, Dolphin
Beach Club, Fantasy Island Resort II, Outrigger Beach Club, Petit Crest Resort,
and any other Resort approved in writing by the Lender.

         Mandatory Prepayment. Any prepayment required by Section 1.7(b) of this
Agreement.

         Material Adverse Effect. With respect to any event or circumstance, a
material adverse effect on:

                                       45
<PAGE>   51

         (a)      the business, assets, financial condition or operations of
                  Borrowers and their respective subsidiaries, taken as a whole;

         (b)      the ability of Borrowers or its direct or indirect
                  subsidiaries to perform their respective obligations under
                  this Agreement or any other Loan Document;

         (c)      the validity, enforceability or collectibility against
                  Borrowers of this Agreement or the other Loan Documents;

         (d)      the status, existence, perfection or priority of (i) the
                  Lender's security interest in the Collateral, or (ii)
                  Borrowers' ownership interest in the Pledged Receivables or
                  Pledged Receivables Collateral; or

         (e)      the validity, enforceability or collectibility of the Pledged
                  Receivables or Pledged Receivables Collateral.

         Maturity Date. June 26, 2000.

         Maximum Exposure. The lesser of (a) $35,000,000, or (b) ninety-five
percent (95%) of the outstanding principal balance of all Pledged Receivables;
provided, however, notwithstanding anything to the contrary contained herein the
outstanding principal amount of Advances made (i) with respect to Eligible
Uncompleted Unit Receivables shall not in the aggregate represent more than the
lesser of $5,000,000 or thirty percent (30%) of the aggregate principal amount
of Advances outstanding hereunder, and (ii) relating to Managed Resorts shall
not at any time represent in the aggregate more than $5,000,000 of the aggregate
principal amount of all Advances outstanding under this Agreement and, in each
such case, any such excess shall require a prepayment of the Loan or the pledge
of Eligible Receivables consistent with Section 1.7(b) hereof.

         Minimum Credit Scoring Standard. The Receivable does not have a "20,"
"25" or "99" designation under the Credit Policy provided that no more than
thirty percent (30%) of the Receivables shall have a designation of "10."
Notwithstanding the preceding sentence, any Receivable shall satisfy the Minimum
Credit Scoring Standard if the Obligor relating to such Receivable has made the
aggregate required payments over the most recent twelve (12) months with respect
to the Receivable.

         Monthly Reports. The monthly reports required pursuant to Section
5.4(a) of this Agreement.

         Note. The promissory note evidencing the Loan executed and delivered by
Borrowers to Lender concurrently herewith and attached hereto as Exhibit A.

         Obligor. Any Person who purchases one or more Intervals and finances
the purchase of the same.

                                       46
<PAGE>   52

         Payment Date. Wednesday of each week; provided, however, in the event
such date is not a Business Day the next succeeding Business Day.

         Payment Escrow. An escrow into which payments made by an Obligor under
an Eligible Uncompleted Unit Receivable are required to be made pursuant to
applicable state law.

         Permitted Adverse Claims means (a) any Adverse Claim created under any
Loan Document; (b) any Adverse Claim for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without penalty,
provided that no notice of Adverse Claim has been filed or recorded under the
Code of any of the states wherein the Resorts or Additional Resorts are located;
(c) carriers, warehousemen's, mechanics', landlords', materialmen's, repairmen's
or other similar Adverse Claims arising in the ordinary course of business which
are not delinquent or remain payable without penalty; and (d) Permitted Liens.

         Permitted Liens. Each of the liens listed on Exhibit H attached hereto.

         Person. Natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.

         Pledged Receivables. At any date of determination, (i) all Eligible
Receivables against which Lender shall have made an Advance which remains
outstanding as of such date, and (ii) all Receivables which are no longer
Eligible Receivables and for which a mandatory prepayment under Section
1.7(b)(i) is required and has not occurred; provided, however, in no event shall
the Receivables described in this clause (ii) be utilized in the definition of
"Availability" or in the definition of "Maximum Exposure" in which case the
references to "Pledged Receivable" therein shall be only to Eligible
Receivables.

         Pledged Receivables Collateral. Receivables Collateral relating to
Pledged Receivables.

         Preferred Stock. Shall mean stock that takes priority over common stock
in regard to the payment of dividends.

         Project Indebtedness. All payment obligations of Borrowers under or in
respect of any of the Project Loan Documents.

         Project Loan. The Loan which may be made by Lender pursuant to the
Project Loan Agreement by and between Lender and Borrowers.

         Project Loan Agreement. The Agreement by and between Lender and
Borrowers pursuant to which the Project Loan may be made.

         Project Loan Collateral. Each of the Project Loan Mortgages associated
with the Project Loans.

                                       47
<PAGE>   53

         Project Loan Mortgages. The mortgages and deeds of trust made by
Borrowers for the benefit of Lender required pursuant to the Project Loan
Agreement.

         Purchase Documents. Any purchase agreement and related sale and escrow
documents executed and delivered by an Obligor to any Borrower or the Additional
Resort Owners with respect to the purchase of an Interval which is the subject
of a Pledged Receivable.

         Purchase Facility. The Asset Purchase Agreement dated June 26, 1998 by
and among Bluegreen Receivables Finance Corporation III, as seller, BRFC III
Deed Corporation, as deed custodian solely for the benefit of Heller Financial,
Inc., Heller Financial, Inc., as purchaser, Bluegreen Corporation, as originator
and servicer, and U.S. Bank National Association, as cash administrator.

         Purchase Limit. $100,000,000, as such amount may be adjusted from time
to time pursuant to Section 2.12(b) of the Purchase Facility.

         Purchase Money Mortgage. Any mortgage or deed of trust executed and
delivered by an Obligor to Borrowers or an Additional Resort Owner with respect
to the purchase of an Interval, encumbering all of the right, title and interest
of each such Obligor in and to the purchased Interval as security for the
Obligor's obligations under any Receivable.

         Reassignment of Pledged Receivables. The Reassignment of Receivables
and Receivables Collateral in the form set forth on Exhibit C of this Agreement.

         Receivables. A conditional sale contract or note and its related
security, including but not limited to any Purchase Money Mortgage, Deed of
Trust or security interest in the related Interval (any accessions thereto) and
any and all rights to payments thereunder.

         Receivables Collateral. The Receivables, including: (i) all interest,
finance charges, and principal received on or with respect to the Receivables;
(ii) the Receivables Files; (iii) property which secured a Receivable and which
has been acquired by repossession or otherwise; (iv) all rights to Insurance
Proceeds and Liquidation Proceeds; and (v) the proceeds of the foregoing and the
rights to enforce the foregoing.

         Receivables File. With respect to a Receivable, such Receivable; the
Assignment of such Receivable; the Purchase Money Mortgage or UCC financing
statement, if any, evidencing that the security interest granted under such
Receivable has been perfected under applicable state law; the original of any
assumption agreement or any modification extension or refinancing agreement; the
application of the related Obligor to obtain the financing extended by such
Receivable; and the Purchase Documents.

         Regulatory Change means relative to any Affected Party:

         (a)      any change in (or the adoption, implementation, change in the
                  phase-in or commencement of effectiveness of) any:

                                       48
<PAGE>   54

                  (i)      United States Federal or state law or foreign law
                           applicable to such Affected Party,

                  (ii)     regulation, interpretation, directive, requirement or
                           request (whether or not having the force of law)
                           applicable to such Affected Party of (A) any court or
                           government authority charged with the interpretation
                           or administration of any law referred to in clause
                           (a)(i), or of (B) any rating agency, fiscal, monetary
                           or other authority having jurisdiction over such
                           Affected Party, or

                  (iii)    GAAP or regulatory accounting principles applicable
                           to such Affected Party and affecting the application
                           to such Affected Party of any law, regulation,
                           interpretation, directive, requirement or request
                           referred to in clause (a)(i) or (a)(ii) above; or

         (b)      any change in the application to such Affected Party of any
                  existing law, regulation, interpretation, directive,
                  requirement, request or accounting principles referred to in
                  clause (a)(i), (a)(ii) or (a)(iii) above.

         Repayment Price. With respect to any Receivable, 95% of the outstanding
principal amount of the Receivable at the time of any prepayment of the same
under Section 1.7(a) or such lesser amount as may be equal to outstanding
Advances provided Advances do not exceed Maximum Exposure.

         Resorts. Those certain timeshare vacation resorts commonly known as
Shore Crest (Myrtle Beach, South Carolina), Harbour Lights (Myrtle Beach, South
Carolina), Mountain Loft (Gatlinburg, Tennessee), Laurel Crest (Pigeon Forge,
Tennessee), Falls Village (Branson, Missouri) Christmas Mountain Campground
(Wisconsin Dells, Wisconsin), The Timbers at Christmas Mountain (Wisconsin
Dells, Wisconsin), The Villas at Christmas Mountain (Wisconsin Dells, Wisconsin)
as more particularly described on Exhibit M and shall include the Managed
Resorts.

         Resort Blanket Mortgage. Each of the mortgages and deeds of trust made
by Borrowers, or the Additional Resort Owners, for the benefit of Lender,
encumbering at each Resort or Additional Resort listed on Exhibit I the
Intervals which are the subject of a Pledged Receivable.

         Resort Interest. With respect to Christmas Mountain Campground, a 1/3
divided interest in an undivided fee simple ownership interest, with respect to
The Timbers at Christmas Mountain, a 1/3 divided interest in an undivided fee
simple ownership interest and a 1/6 divided interest in an undivided fee simple
ownership interest relating to the usage of a townhome, and

                                       49
<PAGE>   55

with respect to The Villas at Christmas Mountain, a 1/3 divided interest in an
undivided fee simple ownership interest, all as more particularly described in
the Timeshare Documents.

         Servicer. Initially means Bluegreen Corporation, a Massachusetts
corporation, together with its successors and assigns.

         Servicing Agreement. A servicing agreement between Lender, Borrowers
and the Servicer approved by Lender providing for the servicing of the Pledged
Receivables and the Pledged Receivables Collateral in the form attached hereto
as Exhibit F.

         Statutory Reserve Rate. A fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board, for advances (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D and shall be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to the Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

         Structuring Fee Letter. That certain letter agreement between Borrowers
and Lender dated as of the date of this Agreement, a copy of which is attached
hereto as Exhibit K, setting forth therein the structuring fees required to be
paid by Borrowers to Lender.

         Subordinated Indebtedness. Indebtedness of Borrowers or its
subsidiaries, whether direct or indirect, to non-affiliated Persons which is
subordinated to the Indebtedness on a basis acceptable to the Lender. No
indebtedness shall be considered Subordinated Indebtedness unless the
obligations of each of the Borrowers or its subsidiaries (whether direct,
indirect or contingent) is subordinated on a basis acceptable to the Lender.

         Successor Servicer. Any Servicer other than the Borrowers or an
Affiliate of the Borrowers appointed pursuant to the terms of the Servicing
Agreement.

         Tangible Net Worth. Consolidated Net Worth minus Intangible Assets plus
Subordinated Indebtedness.

         Term. Has the meaning set forth in Section 1.2 of this Agreement.

         Time Share Association. A not-for-profit corporation under applicable
state law which is responsible for operating and maintaining a Resort or an
Additional Resort pursuant to the terms of the Declaration and/or Time Share
Declaration in respect thereof.

         Time Share Declaration. With respect to each Resort, the Time Share
Declaration set forth on Exhibit L.

                                       50
<PAGE>   56

         Time Share Documents. With respect to any Resort, the documents
relating to the sale of Intervals by Borrowers, including without limitation the
documents on Exhibit L.

         Total Indebtedness. With respect to the Borrowers and its subsidiaries
means, at any time, without duplication,

         (a)      its liabilities for borrowed money (exclusive of Advances
                  hereunder and Subordinated Indebtedness) and its redemption
                  obligations in respect of mandatorily redeemable Preferred
                  Stock;

         (b)      its liabilities for the deferred purchase price of property
                  acquired by such Person (excluding accounts payable arising in
                  the ordinary course of business but including all liabilities
                  created or arising under any conditional sale or other title
                  retention agreement with respect to any such property);

         (c)      all Capitalized Lease Obligations;

         (d)      all liabilities for borrowed money secured by any Lien with
                  respect to any property owned by such Person (whether or not
                  it has assumed or otherwise become liable for such
                  liabilities);

         (e)      all its liabilities in respect of letters of credit or
                  instruments serving a similar function issued or accepted for
                  its account by banks and other financial institutions (whether
                  or not representing obligations for borrowed money);

         (f)      Interest Rate Swaps of such Person; and

         (g)      any Guaranty of such Person with respect to liabilities of a
                  type described in any of clauses (a) through (f) hereof.

         Uncompleted Unit. Any Unit that is not a Completed Unit.

         Unit. One individual air-space condominium unit, cabin, villa, cottage
or townhome within a Resort or Additional Resort, together with all furniture,
fixtures and furnishings therein, and together with any and all interests in
common elements appurtenant thereto, as provided in a Declaration; provided that
the definition of "Unit" shall not include or apply to those units relating a
campground/tent site, recreational vehicle site or other non-permanent building
or structure.

                                       51
<PAGE>   57

                                    EXHIBIT A

                              AMENDED AND RESTATED
                                      NOTE

$35,000,000.00                                                    June ___, 1999

         FOR VALUE RECEIVED, BLUEGREEN CORPORATION AND BLUEGREEN VACATIONS
UNLIMITED, INC.("Makers") whose addresses are 4960 Blue Lake Drive, Boca Raton,
Florida 33431, jointly and severally promise to pay to the order of HELLER
FINANCIAL, INC., a Delaware corporation, and its successors and assigns
("Holder") the sum of up to THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000
OR, IF LESS, THE AGGREGATE UNPAID AMOUNT OF ALL ADVANCES SHOWN ON THE SCHEDULE
ATTACHED HERETO), together with all other amounts added thereto pursuant to this
Note or otherwise payable to Holder (the "Loan") (or so much thereof as may from
time to time be outstanding), together with interest thereon as hereinafter set
forth, payable in lawful money of the United States of America. Payments shall
be made to Holder at 500 West Monroe Street, 28th Floor, Chicago, Illinois 60661
(or such other address as Holder may hereafter designate in writing to Makers).

         The repayment of the Loan evidenced by this Note is secured by that
certain Amended and Restated Loan and Security Agreement of even date herewith
(the "Agreement"), which amends and restates that certain Loan and Security
Agreement dated as of October 20, 1998 (the "Prior Loan Agreement") pursuant to
which Makers have granted Lender a first priority lien on the Collateral as of
the Closing Date. This Note, the Agreement, and any other documents evidencing
or securing the Loan or executed in connection therewith, and any modification,
renewal or extension of any of the foregoing are collectively called the "Loan
Documents".

         This Note has been issued pursuant to the Agreement, and all of the
terms, covenants and conditions of the Agreement (including all Exhibits
thereto), and all other instruments evidencing or securing the indebtedness
hereunder are hereby made a part of this Note and are deemed incorporated herein
in full. Defined terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.

1.       Principal and Interest.

         Principal and Interest shall be payable as provided in the Agreement.

2.       Payment.

         Makers shall make payments on the Loan as set forth in the Agreement.
If not sooner repaid, the entire outstanding principal amount of the Loan,
together with all accrued but unpaid interest, fees, and charges shall be
payable by the Maturity Date.

3.       Prepayment.

                                       52
<PAGE>   58

         Makers may prepay the Loan as provided in the Agreement.

4.       Default.

         4.1      Events of Default.

         Events of Default shall be as described in Section 7.1 of the
Agreement.

         4.2      Remedies.

         So long as an Event of Default remains outstanding and subject to the
terms of the Agreement: (a) interest shall accrue at a rate equal to the
Interest Rate plus two percent (2%) per annum; (b) Holder may, at its option and
without notice (such notice being expressly waived) except as provided in the
Agreement, declare the Loan immediately due and payable; and (c) Holder may
pursue all rights and remedies available under the Agreement, or any other Loan
Documents. Holder's rights, remedies and powers, as provided in this Note, and
the other Loan Documents are cumulative and concurrent, and may be pursued
singly, successively or together against Makers, the security described in the
Loan Documents, and any other security given at any time to secure the payment
hereof, all at the sole discretion of Holder. Additionally, Holder may resort to
every other right or remedy available at law or in equity without first
exhausting the rights and remedies contained herein, all in Holder's sole
discretion. Failure of Holder, for any period of time or on more than one
occasion, to exercise its option to accelerate the Maturity Date shall not
constitute a waiver of the right to exercise the same at any time during the
continued existence of any Event of Default or any subsequent Event of Default.

         If any attorney is engaged: (i) to collect the Loan or any sums due
under the Loan Documents whether or not legal proceedings are thereafter
instituted by Holder; (ii) to represent Holder in any bankruptcy,
reorganization, receivership or other proceedings affecting creditors' rights
and involving a claim under this Note; (iii) to protect the liens and security
interests of the Loan Agreement or any of the Loan Documents; (iv) to foreclose
on the Collateral; (v) to represent Holder in any other proceedings whatsoever
in connection with the Agreement or any of the Loan Documents including post
judgment proceedings to enforce any judgment related to the Loan Documents; or
(vi) in connection with seeking an out-of-court workout or settlement of any of
the foregoing, then Makers shall pay to Holder all costs, reasonable attorneys'
fees and expenses in connection therewith, in addition to all other amounts due
hereunder.

5.       Late Charge.

         If payments of principal and/or interest, or any other amounts under
the Loan Documents are not timely made or remain overdue for a period of ten
(10) days, Makers, without notice or demand by Holder, promptly shall pay an
amount ("Late Charge") equal to two percent (2%) of each delinquent payment;
provided, however, the Late Charge shall not be applicable in the event the
Default Rate shall be accruing; provided, further, that nothing in this
paragraph 5 shall give Holder the option to apply the Late Charge if Holder is
entitled to cause the Default Rate to accrue.

                                       53
<PAGE>   59

6.       Governing Law; Severability.

         This Note shall be governed by and construed in accordance with the
internal laws of the State of Illinois. The invalidity, illegality or
unenforceability of any provision of this Note shall not affect or impair the
validity, legality or enforceability of the remainder of this Note, and to this
end, the provisions of this Note are declared to be severable.

7.       Waiver.

         To the extent permitted by law, Makers, for themselves and all
endorsers, guarantors and sureties of this Note, and their heirs, successors and
assigns, legal representatives, hereby waive presentment for payment, demand,
notice of nonpayment, notice of dishonor, protest of any dishonor, notice of
protest and protest of this Note, and all other notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment of this
Note, and agree that their respective liability shall be unconditional and
without regard to the liability of any other party and shall not be in any
manner affected by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by Holder. Makers, for themselves and all
endorsers, guarantors and sureties of this Note, and their heirs, legal
representatives, successors and assigns, hereby consent to every extension of
time, renewal, waiver or modification that may be granted by Holder with respect
to the payment or other provisions of this Note, and to the release of any
makers, endorsers, guarantors or sureties, and of any collateral given to secure
the payment hereof, or any part hereof, with or without substitution, and agrees
that additional makers, endorsers, guarantors or sureties may become parties
hereto without notice to Makers or to any endorser, guarantor or surety and
without affecting the liability of any of them.

8.       Security, Application of Payments.

         This Note is secured by the liens, encumbrances and obligations created
hereby and by the other Loan Documents. Payments will be applied to any fees,
expenses or other costs Makers are obligated to pay under this Note or the other
Loan Documents, to interest due on the Loan and to the outstanding principal
balance of the Loan, in any order that Holder, at its sole option, may deem
appropriate.

9.       Miscellaneous.

         9.1      Amendments.

         This Note may not be terminated or amended orally, but only by a
termination or amendment in writing signed by Holder.

         9.2      Lawful Rate of Interest.

         The maximum amount of interest paid or to be paid to Holder pursuant to
this Note or any Loan Document shall be governed by the Agreement.

         9.3      Captions.

                                       54
<PAGE>   60

         The captions of the Paragraphs of this Note are for convenience of
reference only and shall not be deemed to modify, explain, enlarge or restrict
any of the provisions hereof.

         9.4      Notices.

         Notices shall be given under this Note in conformity with the terms and
conditions of the Agreement.

         9.5      Joint and Several.

         The obligations of Makers under this Note shall be joint and several
obligations of each Maker and of each Maker's heirs, personal representatives,
successors and assigns.

         9.6      Time of Essence.

         Time is of the essence of this Note and the performance of each of the
covenants and agreements contained herein.

10.      Venue.

         MAKERS HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE. MAKERS HEREBY
IRREVOCABLY APPOINT AND DESIGNATE CSC, WHOSE ADDRESS IS MAKERS, C/O CSC, 33
NORTH LASALLE STREET, CHICAGO, ILLINOIS 60602, AS ITS DULY AUTHORIZED AGENT FOR
SERVICE OF LEGAL PROCESS AND AGREE THAT SERVICE OF SUCH PROCESS UPON SUCH PARTY
SHALL CONSTITUTE PERSONAL SERVICE OF PROCESS UPON MAKERS. IN THE EVENT SERVICE
IS UNDELIVERABLE BECAUSE SUCH AGENT MOVES OR CEASES TO DO BUSINESS IN CHICAGO,
ILLINOIS, MAKERS SHALL, WITHIN TEN (10) DAYS AFTER HOLDER'S REQUEST, APPOINT A
SUBSTITUTE AGENT (IN CHICAGO, ILLINOIS) ON THEIR BEHALF AND WITHIN SUCH PERIOD
NOTIFY HOLDER OF SUCH APPOINTMENT. IF SUCH SUBSTITUTE AGENT IS NOT TIMELY
APPOINTED, HOLDER SHALL, IN ITS SOLE DISCRETION, HAVE THE RIGHT TO DESIGNATE A
SUBSTITUTE AGENT UPON FIVE (5) DAYS NOTICE TO MAKERS. MAKERS HEREBY WAIVE ANY
RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT
AGAINST THEM BY HOLDER ON THE LOAN DOCUMENTS OR RELATED LOAN DOCUMENTS IN
ACCORDANCE WITH THIS PARAGRAPH.

11.      Sale of Loan.

         Subject to the terms of the Agreement, Holder, at any time and without
the consent of Makers, may grant Participations in or sell, transfer, assign and
convey all or any portion of its right, title and interest in and to the Loan,
this Note, the Agreement and the other Loan Documents, any guaranties given in
connection with the Loan and any Collateral given to secure the Loan.

                                       55
<PAGE>   61

12.      Jury Trial Waiver.

         MAKERS, AND HOLDER BY ITS ACCEPTANCE OF THIS NOTE, HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR
RELATED TO, THE SUBJECT MATTER OF THIS NOTE AND THE BUSINESS RELATIONSHIP THAT
IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
MADE BY MAKERS AND BY HOLDER, AND MAKERS ACKNOWLEDGE THAT NEITHER HOLDER NOR ANY
PERSON ACTING ON BEHALF OF HOLDER HAS MADE ANY REPRESENTATIONS OF FACT TO
INCLUDE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT. MAKERS AND HOLDER ACKNOWLEDGE THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT MAKERS AND
HOLDER HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS NOTE AND THAT
EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. MAKERS AND HOLDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED
(OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS NOTE AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.

13.      No Novation.

         This Note issued on the date hereof is issued in replacement of and
substitution for any Note issued under the Prior Loan Agreement prior to the
date hereof, and does not represent a repayment, extinguishment or novation of
the Loan. The Loan, including, without limitation, all accrued and unpaid
interest thereon, shall be deemed to continue and shall hereafter be evidenced
by this Note.

                                       56
<PAGE>   62

         IN WITNESS WHEREOF, Makers have executed this Note or have caused the
same to be executed by its duly authorized representatives as of the date set
first forth above.

                                             MAKERS:

                                             BLUEGREEN CORPORATION

                                             By:
                                                 -------------------------------
                                             Printed Name:
                                                           ---------------------
                                             Title:
                                                    ----------------------------

                                             BLUEGREEN VACATIONS UNLIMITED,
                                             INC.

                                             By:
                                                 -------------------------------
                                             Printed Name:
                                                           ---------------------
                                             Title:
                                                    ----------------------------

                                       57
<PAGE>   63

<TABLE>
<CAPTION>
  Schedule attached to Note dated June ___, 1999 of Bluegreen Corporation and Bluegreen Vacations Unlimited, Inc.
                                  payable to the order of Heller Financial, Inc.
-----------------------------------------------------------------------------------------------------------------
             Date of Loan                          Amount of Loan                      Amount of Repayment
             ------------                          --------------                      -------------------
             <S>                                   <C>                                 <C>
</TABLE>

                                       58
<PAGE>   64

                                    EXHIBIT B

                               Form of Assignment

When Recorded Mail To:

[Custodian]

              Assignment of Receivables and Receivables Collateral

         Assignment (this "Assignment") made and executed as of June ___, 1999,
is made by and between Bluegreen Corporation, a Massachusetts corporation, whose
address is 4960 Blue Lake Drive, Boca Raton, Florida 33431 ("Bluegreen
Corporation"), Bluegreen Vacations Unlimited, Inc., whose address is 4960 Blue
Lake Drive, Boca Raton, Florida 33431 ("Bluegreen Vacations" and together with
Bluegreen Corporation and the Additional Borrowers (as hereinafter defined)
collectively referred to herein as the "Makers" or the "Borrowers" and sometimes
referred to herein individually as a "Maker" or "Borrower"), and Heller
Financial, Inc., a Delaware corporation ("Lender"), whose address is 500 West
Monroe Street, 28th Floor, Chicago, Illinois 60661.

                                   WITNESSETH:

         WHEREAS, Borrowers and Lender have entered into an Amended and Restated
Loan and Security Agreement, dated as of June ___, 1999 (as amended from time to
time, the "Agreement"), pursuant to which Lender has agreed to lend, upon the
terms and conditions set forth in the Agreement, up to $35,000,000 (the "Loan")
to Borrowers to be evidenced by a Promissory Note dated June ___, 1999 (together
with any renewals, extensions, substitutions or modifications thereof, the
"Note") and secured by a security interest granted by Borrowers to Lender on
certain Receivables and Receivables Collateral as well as other Collateral of
Borrowers (as such terms are defined in the Agreement).

         NOW THEREFORE, to secure the payment and performance of the
Indebtedness, the Project Indebtedness and other obligations of Borrowers to
Lender under the Agreement, the Note and the other the Project Indebtedness Loan
Documents (as such terms are defined in the Agreement) and in consideration of
the extension of the Loan to Borrowers and subject to the terms of the
Agreement, Borrowers hereby collaterally convey, assign, transfer and set over
unto Lender as collateral security for the Loan, the Indebtedness and the
Project Indebtedness all of its right, title and interest in and to the
Receivables and the Receivables Collateral, set forth on Schedule 1 attached
hereto, and all other Collateral connected therewith collaterally assigned to
Lender pursuant to the terms of the Agreement, together with all proceeds
derived therefrom and other Collateral delivered in substitution or replacement
thereof.

                                       59
<PAGE>   65

         The execution and delivery of this Assignment shall not subject Lender
to, or transfer or pass to Lender, or in any way affect or modify, the liability
of Borrowers under any or all of the Receivables and Receivables Collateral
hereby assigned, it being understood and agreed that notwithstanding this
Assignment or any subsequent collateral assignment, all of the obligations of
the Borrowers to each and every other party under each and every one of such
Receivables and Receivables Collateral shall be and remain enforceable by such
other party, its successors and assigns, only against Borrowers and their
successors and assigns, and that Lender has not assumed any of the obligations
or duties of Borrowers under or with respect to any of such Receivables and
Receivables Collateral.

         Borrowers hereby agree and acknowledge that neither the acceptance of
this Assignment by Lender nor the exercise of, or failure to exercise, any
right, power or remedy in this instrument conferred upon Lender shall be deemed
or construed to obligate Lender, or its successors or assigns, to pay any sum of
money, take any action or incur any liability in connection with any of the
Receivables and Receivables Collateral hereby assigned to Lender. It is further
agreed and understood by Borrowers that neither Lender nor its successors or
assigns shall be liable in any way for any costs, expenses or liabilities
connected with, or any charges or liabilities resulting from, any of such
Receivables and Receivables Collateral.

         If any provision of this Assignment is held to be illegal, invalid or
unenforceable under present or future laws effective during the term thereof,
such provision shall be fully severable, this Assignment shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof or thereof, and the remaining provisions hereof or
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.

         This Assignment shall be binding upon Borrowers and their successors
and assigns, and shall inure to the benefit of Lender and its successors and
assigns.

         This Assignment shall be governed by and shall be construed and
enforced in accordance with the internal laws of the State of Illinois (without
regard to conflicts of law principles) and applicable laws of the United States.

                                       60
<PAGE>   66

         IN WITNESS WHEREOF, Borrowers have executed this Assignment on the date
first written above.

                                    BLUEGREEN CORPORATION

                                    By:
                                        ----------------------------------
                                    Printed Name:
                                                  ------------------------
                                    Title:
                                           -------------------------------

                                    BLUEGREEN VACATIONS UNLIMITED,
                                    INC.

                                    By:
                                        ----------------------------------
                                    Printed Name:
                                                  ------------------------
                                    Title:
                                           -------------------------------

                                       61
<PAGE>   67

STATE OF ________ )
                           ) ss.
COUNTY OF _____            )

         On this day _____ of ______________, 1998 before me, a Notary Public,
personally appeared _______________________, personally known to me, the
________________ of ____________________, a ____________ corporation, who being
by me first duly sworn declared that the foregoing instrument was signed by
him/her on behalf of the aforesaid corporation, acknowledging said instrument to
be its free act and deed.

----------------------------
Notary Public

My term expires:

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

         [NOTARIAL SEAL]

         GIVEN under my hand and Notarial Seal this                         .
                                                    ------------------------

         -----------------------------------
                   NOTARY PUBLIC

My Commission Expires:

                                       62
<PAGE>   68

                                   SCHEDULE 1

                 List of Receivables and Receivables Collateral

                                       63
<PAGE>   69

                                    EXHIBIT C

         Form of Reassignment of Receivables and Receivables Collateral

                         Reassignment of Receivables and
                             Receivables Collateral

         This Reassignment of Receivables and Receivables Collateral
("Reassignment") is made and executed as of _______________, 1999, by Heller
Financial, Inc., a Delaware corporation (the "Lender") to ___________________, a
______________________ (the "Borrowers").

                                   WITNESSETH:

         WHEREAS, the Borrowers and Lender have entered into an Amended and
Restated Loan and Security Agreement, dated as of June ___, 1999 (as amended
from time, to time, the " Agreement"), pursuant to which Lender has agreed to
lend, upon the terms and conditions set forth in the Agreement, up to
$__________ (the "Receivables Loan") to Borrowers, evidenced by a Promissory
Note dated _________, 19__ (the "Note"), which is secured by a security interest
and lien granted by the Borrowers to Lender on certain Receivables and the
Receivables Collateral related thereto, as well as other Collateral of the
Borrowers (as such terms are defined in the Agreement), pursuant to one or more
Assignments of Receivables and Receivables Collateral (collectively, the
"Assignment"); and

         WHEREAS, the Agreement provides that upon the occurrence of certain
events, including but not limited to repayment of any of the Receivables held as
collateral under the Assignment, Lender will reassign such Receivables and the
Receivables Collateral related thereto to the Borrowers.

         NOW THEREFORE, Lender hereby reconveys, reassigns, transfers and sets
over unto the Borrowers all of its right, title and interest in and to the
Receivables and the Receivables Collateral related thereto described in Exhibit
1 attached hereto and incorporated herein by this reference, without recourse
and without warranty of any kind.

                                       64
<PAGE>   70

         IN WITNESS WHEREOF, Lender has executed this Reassignment on the date
first written above.

                                    HELLER FINANCIAL, INC.,
                                    a Delaware corporation

                                    By:
                                        ----------------------------
                                    Its:
                                         ---------------------------

Attest:

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

STATE OF ILLINOIS          )
                           )SS
COUNTY OF _______          )

         I, _________________________________, a notary public in and for said
county, in the State aforesaid, do hereby certify that ____________, personally
known to me to be the _________________ of Heller Financial, Inc., a corporation
of the State of Delaware, whose name is subscribed to the within instrument,
appeared before me this day in person and acknowledged that as such
_____________ he/she signed and delivered the said instrument as
___________________ of said corporation to be thereunto affixed, as their free
and voluntary act and as the free and voluntary act and deed of said
corporation, for the uses and purposes therein set forth.

         Given under my hand and notarial seal this ____ day of
__________________, 1999.

                                           ------------------------------
                                                            Notary Public

My Commission expires:

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

                                       65
<PAGE>   71

                                    EXHIBIT 1

                            Description of Reassigned
                     Receivables and Receivables Collateral

                                       66
<PAGE>   72

                                    EXHIBIT D

                              Requests For Advance

DATE:
     ---------------------------

Heller Financial, Inc.
Attn: Portfolio Administrator,
      Vacation Ownership
500 West Monroe St., 31st Fl.
Chicago, Illinois 60661

                  RE:      HSF Loan No. 98-087
                           $35,000,000 credit facility described in that certain
                           Amended and Restated Loan and
                           Security Agreement (the "Agreement")
                           between Heller Financial, Inc. ("Lender")
                           and Bluegreen Corporation ("Bluegreen") on behalf
                           of the Borrowers described thereunder.

Dear Sir or Madam:

         In accordance with the terms of the Amended and Restated Loan and
Security Agreement, Borrowers wish to obtain an Advance of
$_______________________ on ___________________, 19____. All terms used herein,
unless otherwise specified, shall have the meanings assigned in the Agreement.
In order to induce Lender to make such Advance, Bluegreen on behalf of Borrowers
hereby represent and warrant to Lender:

         1.       No Event of Default exists, and no event exists which, with
the passage of time or notice or both, would constitute an Event of Default or
will occur as a result of the Advance requested herein.

         2.       The representations and warranties contained in the Agreement
are true, correct and complete in all material respects on and as of the date of
funding of each Advance except for any representation or warranty limited by its
terms to a specific date or affected by the transactions permitted by the
Agreement and taking into account any amendments to the schedules or exhibits as
a result of any subsequent disclosures made by Borrowers in writing to and
approved by Lender, and except to the extent of changes occurring in the
ordinary course of business that, either singly or in the aggregate, have not
had and could not reasonably be expected to have a Material Adverse Effect.

         3.       Borrowers are in compliance with each and every one of its
covenants, agreements and obligations under the Agreement.

                                       67
<PAGE>   73

         4.       Borrowers have no defenses or offsets with respect to the
payment of any amounts due Lender.

         6.       Lender has performed all of its obligations to Borrowers.

         7.       All Receivables listed on Schedule A attached hereto meet all
of the requirements of Eligible Receivables and relate to the ________ Resort.

         8.       Borrowers shall grant Lender a security interest in and lien
upon those certain Receivables and Receivables Collateral set forth in Schedule
A attached hereto.

         9.       Advances shall be wired to Bluegreen's account #___________.

         10.      All Receivables arising from the Resorts listed on Schedule A
attached hereto have been originated by the applicable Borrower set forth
opposite such Resort below:

<TABLE>
<CAPTION>
RESORT                                                      BORROWER
------                                                      --------
<S>                                                         <C>
Mountain Loft Resort                                        Bluegreen Corporation
Laurel Crest Resort                                         Bluegreen Corporation
Shore Crest Resort                                          Bluegreen Vacations Unlimited, Inc.
Harbour Lights Resort                                       Bluegreen Vacations Unlimited, Inc.
Falls Village Resort                                        Bluegreen Vacations Unlimited, Inc.
Christmas Mountain Campground                               Bluegreen Vacations Unlimited, Inc.
The Timbers at Christmas Mountain                           Bluegreen Vacations Unlimited, Inc.
Christmas Mountain Campground, The                          Bluegreen Vacations Unlimited, Inc.
Timbers at Christmas Mountain, The Villas at
Christmas Mountain, Mountain Landmark
Holiday Beach Resort, Ocean Towers Beach
Club, Panama City Resort and Club, Surfrider
Beach Club, Tropical Sands Resort, Resort
Sixty Six, Via Roma Beach Resort, Orlando's
Sunshine Resort, Gulfstream Manor, Dolphin
Beach Club, Fantasy Island Resort II,
Outrigger Beach Club, Petit Crest Resort
</TABLE>

BLUEGREEN CORPORATION

By:
      -----------------------------
Name:
      -----------------------------
Its:
      -----------------------------

                                       68
<PAGE>   74

                                   SCHEDULE A

                       Description of Pledged Receivables
                       and Pledged Receivables Collateral

                                       69
<PAGE>   75

                                    EXHIBIT E

                                 Form of Allonge

                                     ALLONGE

         The foregoing note or instrument shall be and is hereby endorsed as
follows with respect to the Loan and Security Agreement:

                  "Pay to the order of Heller Financial, Inc., with recourse."

                                     By:
                                         --------------------------------------
                                     Name:
                                           ------------------------------------
                                     Its:
                                          -------------------------------------

         The foregoing endorsement shall have the same effect as though it were
written directly on the note or instrument identified above.

         The foregoing note or instrument shall be and is hereby endorsed as
follows with respect to the Sale and Contribution Agreement:

         "Pay to the order of Bluegreen Receivables Finance Corporation III,
         without recourse, representation or warranty except as provided in the
         Sale and Contribution Agreement."

                                     By:
                                         --------------------------------------
                                     Name:
                                           ------------------------------------
                                     Its:
                                          -------------------------------------

         The foregoing endorsement shall have the same effect as though it were
written directly on the note or instrument identified above.

         The foregoing note or instrument shall be and is hereby endorsed as
follows with respect to the Purchase Facility:

                  "Pay to the order of Heller Financial, Inc., without recourse,
                  representation or warranty except as provided in the Asset
                  Purchase Agreement."

                                     By:
                                         --------------------------------------
                                     Name:
                                           ------------------------------------
                                     Its:
                                          -------------------------------------

<PAGE>   76

         The foregoing endorsement shall have the same effect as though it were
written directly on the note or instrument identified above.

<PAGE>   77

                                    EXHIBIT F

                               Servicing Agreement

<PAGE>   78

                                    EXHIBIT G

                                    RESERVED

<PAGE>   79

                                    EXHIBIT H

                             List of Permitted Liens
                (including therein the condominium declarations)

(a)      Liens imposed by law for taxes that are not yet due or are being
         contested in compliance with Section 4.4;

(b)      carriers', warehouseman's, mechanics', materialmen's, repairmen' and
         other like Liens imposed by law, arising in the ordinary course of
         business and securing obligations that are not overdue by more than 30
         days or are being contested in compliance with Section 4.4;

(c)      pledges and deposits made in the ordinary course of business in
         compliance with workers' compensation, unemployment insurance and other
         social security laws or regulations;

(d)      deposits to secure the performance of bids, trade contracts, leases,
         statutory obligations, surety and appeal bonds, performance bonds and
         other obligations of a like nature, in each case in the ordinary course
         of business; and

(e)      easements, zoning restrictions, rights-of-way and similar encumbrances
         on real property imposed by law or arising in the ordinary course of
         business that do not secure any monetary obligations and do not
         materially detract from the value of the affected property or interfere
         with the ordinary conduct of business of any Borrower or any
         Subsidiary.

<PAGE>   80

                                    EXHIBIT I

             List of Resorts Encumbered by Resort Blanket Mortgages

<PAGE>   81

                                    EXHIBIT J

                         List of Project Loan Documents

<PAGE>   82

                                    EXHIBIT K

                             Structuring Fee Letter

<PAGE>   83

                                    EXHIBIT L

                              Time Share Documents

<PAGE>   84

                                    EXHIBIT M

                          Legal Description of Resorts

<PAGE>   85

                                    EXHIBIT N

                     Commitment Letter dated March 30, 1998

<PAGE>   86

                                  SCHEDULE 2.1

                          Material Project Loan Default

         A "Material Project Loan Default" shall mean:

         (a)      Any indebtedness evidenced, governed or secured by any of the
                  Project Loan Documents is not paid within five (5) Business
                  Days of the date when due, whether by acceleration or
                  otherwise;

         (b)      Any statement, representation or warranty in the Project Loan
                  Agreement, any of the Project Loan Documents, any financial
                  statement or any other writing delivered by the Borrowers or
                  any Subsidiary thereof to Lender in connection with the
                  Project Loan Agreement is false, misleading or incorrect in
                  any material respect as of the date made and has a Material
                  Adverse Effect; or

         (c)      Any failure to comply with the financial covenants set forth
                  in Section 3 of the Project Loan Agreement (which shall be the
                  same financial covenants as set forth in the Loan and Security
                  Agreement)

<PAGE>   87

                                  SCHEDULE 3.2

                       List of Deliveries For All Advances

         Pursuant to Section 3.2 of the Agreement, Lender shall not be obligated
to fund any Advance unless Lender and Custodian shall have received, in form and
substance satisfactory to Lender, all documents, instruments and information as
follows:

                      To Lender at least five (5) Business
                    Days prior to the requested funding date:

         1.       A Request for Advance (in the form of Exhibit D to the
Agreement) listing all Receivables and Receivables Collateral to be financed.

         2.       A computer diskette or magnetic tape prepared in accordance
and in the form provided by Exhibit 1 attached hereto which shall include, but
not be limited to, the aging report and Credit Code relating to the Receivables
to be pledged in connection with the Advance.

         3.       UCC-1 financing statements, executed by the Borrowers in favor
of the Lender relating to and describing the Lender's security interest in the
contract rights evidenced by the conditional sales contract.

         4.       To the extent that the title commitment hereinafter described
has not been issued with respect to a Resort Blanket Mortgage at a Resort other
than the Resorts approved as of the date of the Closing of the Loan, a
commitment for title insurance insuring each individual Resort Blanket Mortgage
as a valid first lien on such Intervals being financed subject only to the
Permitted Liens; provided that a title policy shall be delivered within sixty
(60) days after the date of the Advance or as soon as practicable.

         5.       Such additional information as Lender may reasonably require.

                     To Custodian at least five (5) Business
                    Days prior to the requested funding date:

         1.       A Request for Advance (in the form of Exhibit D to the
Agreement) listing all Receivables and Receivable Collateral to be financed.

         2.       Originals of all Receivables and Receivables Collateral, and
the form of Assignment attached hereto as Exhibit B (with only such
modifications to such form as are necessary to properly identify the collateral
and to cause the document to be properly recorded), covering all of the
Receivables and Receivables Collateral to be pledged in relation with such
Advance except that copies of the recordable Purchase Money Mortgages and
Assignments, to extent applicable, shall be satisfactory provided that recorded
originals are delivered to the Custodian within sixty (60) days after the
Advance date or as soon as practicable after received), all in forms approved by
Lender, with each Receivable endorsed with (i) an allonge in the form

<PAGE>   88

attached hereto as Exhibit E in respect of Receivables evidenced by notes and
mortgages (which such allonge may be signed via facsimile signature), (ii) an
assignment in the form of Exhibit B in respect of Receivables evidenced by
conditional sales contracts, or (iii) other appropriate form acceptable to
Lender.

         3.       A current aging report for the Receivables and Receivables
Collateral to be pledged in connection with the requested Advance.

         4.       UCC-1 financing statements, executed by Borrowers in favor of
Lender relating to and describing Lender's security interest in the contract
rights evidenced by the CSC.

         All documents to be delivered to Lender should be sent to:

         Carol Gilday
         Portfolio Administrator, Vacation Ownership
         Heller Financial, Inc.
         500 West Monroe, Suite 2800
         Chicago, Illinois 60661
         Tel: (312) 441-7880
         Fax: (312) 441-7924

         All documents to be delivered to the Custodian should be sent to:

         Mark Hammer
         Norwest Bank Minnesota, N.A.
         1015 10th Avenue S.E.
         Minneapolis, MN  55414
         Mail Station 0031
         Tel: (612) 667-1117
         Fax: (612) 667-1068

<PAGE>   89

                                    EXHIBIT O

                           Borrowers Closing Checklist

<PAGE>   90

                                    EXHIBIT P

                            Resort Closing Checklist

<PAGE>   91

                                    EXHIBIT Q

                       Additional Resort Closing Checklist

<PAGE>   92

                                    EXHIBIT R

                             Club Closing Checklist

<PAGE>   93

                                  SCHEDULE 4.5

                           List of Litigation Matters

<PAGE>   94

                                SCHEDULE 4.13(A)

                    Trade Names other than Name of Borrowers

                              Bluegreen Corporation
                             Bluegreen Resorts, Inc.
                       Bluegreen Vacations Unlimited, Inc.
                               Patten Corporation
                              Patten Resorts, Inc.
                              Mountain Loft Resort
                               Laurel Crest Resort
                               Shore Crest Resort
                              Harbour Lights Resort
                              Falls Village Resort
                               RDI Resources, Inc.
                          Christmas Mountain Campground
                        The Timbers at Christmas Mountain
                        The Villas at Christmas Mountain

<PAGE>   95

                                SCHEDULE 4.13(B)

                      Mergers and Corporate Reorganizations

<PAGE>   96

                                  SCHEDULE 5.2

                                    Insurance

<PAGE>   97

                                  SCHEDULE 5.15

       Additional Indebtedness for Borrowed Money; Additional Obligations

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