Exhibit 10.212
Execution Copy
BXG TIMESHARE TRUST I,
as Issuer
BLUEGREEN CORPORATION,
as Servicer
VACATION TRUST, INC.,
as Club Trustee
CONCORD SERVICING CORPORATION,
as Backup Servicer
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee, Paying Agent and Custodian
and
BRANCH BANKING AND TRUST COMPANY,
as Agent
--------------
INDENTURE
Dated as of May 1, 2006
--------------
Timeshare Loan-Backed VFN Notes, Series I
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............3
SECTION 1.1. General Definitions and Usage of Terms.......................3
SECTION 1.2. Compliance Certificates and Opinions.........................3
SECTION 1.3. Form of Documents Delivered to Indenture Trustee.............4
SECTION 1.4. Acts of Noteholders, etc.....................................5
SECTION 1.5. Notice to Noteholders; Waiver................................5
SECTION 1.6. Effect of Headings and Table of Contents.....................6
SECTION 1.7. Successors and Assigns.......................................6
SECTION 1.8. GOVERNING LAW................................................6
SECTION 1.9. Legal Holidays...............................................6
SECTION 1.10. Execution in Counterparts....................................7
SECTION 1.11. Inspection...................................................7
SECTION 1.12. Survival of Representations and Warranties...................7
SECTION 1.13. Effective Date...............................................7
ARTICLE II. THE NOTES..........................................................8
SECTION 2.1. General Provisions...........................................8
SECTION 2.2. Definitive Notes.............................................8
SECTION 2.3. [RESERVED]...................................................8
SECTION 2.4. Registration, Transfer and Exchange of Notes.................9
SECTION 2.5. Mutilated, Destroyed, Lost and Stolen Notes.................10
SECTION 2.6. Payment of Interest and Principal; Rights Preserved.........11
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SECTION 2.7. Persons Deemed Owners.......................................12
SECTION 2.8. Cancellation................................................12
SECTION 2.9. Noteholder Lists............................................12
SECTION 2.10. Treasury Notes..............................................12
SECTION 2.11. [RESERVED]..................................................12
SECTION 2.12. Confidentiality.............................................12
ARTICLE III. ACCOUNTS; COLLECTION AND APPLICATION OF MONEYS; REPORTS..........13
SECTION 3.1. Trust Accounts; Investments by Indenture Trustee............13
SECTION 3.2. Establishment and Administration of the Trust Accounts......14
SECTION 3.3. [Reserved]..................................................16
SECTION 3.4. Distributions...............................................16
SECTION 3.5. Reports to Noteholders......................................19
SECTION 3.6. [RESERVED]..................................................20
SECTION 3.7. Withholding Taxes...........................................20
ARTICLE IV. THE TRUST ESTATE..................................................20
SECTION 4.1. Acceptance by Indenture Trustee.............................20
SECTION 4.2. Acquisition of Timeshare Loans..............................21
SECTION 4.3. [RESERVED]..................................................21
SECTION 4.4. Tax Treatment...............................................21
SECTION 4.5. Further Action Evidencing Grant of Security Interest
and Assignments.............................................21
SECTION 4.6. Substitution and Repurchase of Timeshare Loans..............22
SECTION 4.7. Release of Lien.............................................24
SECTION 4.8. Appointment of Custodian and Paying Agent...................24
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ARTICLE V. SERVICING OF TIMESHARE LOANS.......................................25
SECTION 5.1. Appointment of Servicer and Backup Servicer; Servicing
Standard....................................................25
SECTION 5.2. Payments on the Timeshare Loans.............................25
SECTION 5.3. Duties and Responsibilities of the Servicer.................26
SECTION 5.4. Servicer Events of Default..................................29
SECTION 5.5. Accountings; Statements and Reports.........................31
SECTION 5.6. Records.....................................................33
SECTION 5.7. Fidelity Bond and Errors and Omissions Insurance............33
SECTION 5.8. Merger or Consolidation of the Servicer.....................34
SECTION 5.9. Sub-Servicing...............................................34
SECTION 5.10. Servicer Resignation........................................35
SECTION 5.11. Fees and Expenses...........................................35
SECTION 5.12. Access to Certain Documentation.............................35
SECTION 5.13. No Offset...................................................36
SECTION 5.14. Account Statements..........................................36
SECTION 5.15. Indemnification; Third Party Claim..........................36
SECTION 5.16. Backup Servicer.............................................37
SECTION 5.17. Aruba Notices...............................................38
SECTION 5.18. Recordation.................................................38
ARTICLE VI. EVENTS OF DEFAULT; REMEDIES.......................................38
SECTION 6.1. [RESERVED]..................................................38
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment..........38
SECTION 6.3. Remedies....................................................40
SECTION 6.4. Indenture Trustee May File Proofs of Claim..................41
SECTION 6.5. Indenture Trustee May Enforce Claims Without Possession
of Notes....................................................41
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SECTION 6.6. Application of Money Collected..............................42
SECTION 6.7. Limitation on Suits.........................................46
SECTION 6.8. Unconditional Right of Noteholders to Receive Principal
and Interest................................................46
SECTION 6.9. Restoration of Rights and Remedies..........................47
SECTION 6.10. Rights and Remedies Cumulative..............................47
SECTION 6.11. Delay or Omission Not Waiver................................47
SECTION 6.12. Control by Agent............................................47
SECTION 6.13. Waiver of Events of Default.................................48
SECTION 6.14. Undertaking for Costs.......................................48
SECTION 6.15. Waiver of Stay or Extension Laws............................49
SECTION 6.16. Sale of Trust Estate........................................49
SECTION 6.17. Action on Notes.............................................50
SECTION 6.18. Performance and Enforcement of Certain Obligations..........50
ARTICLE VII. THE INDENTURE TRUSTEE............................................50
SECTION 7.1. Certain Duties..............................................50
SECTION 7.2. Notice of Events of Default.................................52
SECTION 7.3. Certain Matters Affecting the Indenture Trustee.............52
SECTION 7.4. Indenture Trustee Not Liable for Notes or Timeshare Loans...53
SECTION 7.5. Indenture Trustee May Own Notes.............................53
SECTION 7.6. Indenture Trustee's Fees and Expenses.......................54
SECTION 7.7. Eligibility Requirements for Indenture Trustee..............54
SECTION 7.8. Resignation or Removal of Indenture Trustee.................54
SECTION 7.9. Successor Indenture Trustee.................................55
SECTION 7.10. Merger or Consolidation of Indenture Trustee................56
SECTION 7.11. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.....................................................56
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SECTION 7.12. Paying Agent and Note Registrar Rights......................58
SECTION 7.13. Authorization...............................................58
SECTION 7.14. Maintenance of Office or Agency.............................58
ARTICLE VIII. COVENANTS OF THE ISSUER.........................................59
SECTION 8.1. Payment of Principal, Interest and Other Amounts............59
SECTION 8.2. Reserved....................................................59
SECTION 8.3. Money for Payments to Noteholders to Be Held in Trust.......59
SECTION 8.4. Existence; Merger; Consolidation, etc.......................60
SECTION 8.5. Protection of Trust Estate; Further Assurances..............61
SECTION 8.6. Additional Covenants........................................63
SECTION 8.7. Taxes.......................................................64
SECTION 8.8. Restricted Payments.........................................64
SECTION 8.9. Treatment of Notes as Debt for Tax Purposes.................65
SECTION 8.10. Further Instruments and Acts................................65
ARTICLE IX. SUPPLEMENTAL INDENTURES...........................................65
SECTION 9.1. Supplemental Indentures.....................................65
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.........66
SECTION 9.3. Execution of Supplemental Indentures........................67
SECTION 9.4. Effect of Supplemental Indentures...........................67
SECTION 9.5. Reference in Notes to Supplemental Indentures...............67
ARTICLE X. BORROWINGS.........................................................67
SECTION 10.1. Optional Borrowings.........................................67
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ARTICLE XI. SATISFACTION AND DISCHARGE........................................68
SECTION 11.1. Satisfaction and Discharge of Indenture.....................68
SECTION 11.2. Application of Trust Money; Repayment of Money Held by
Paying Agent................................................69
SECTION 11.3. Trust Termination Date......................................70
ARTICLE XII. REPRESENTATIONS AND WARRANTIES AND COVENANTS.....................70
SECTION 12.1. Representations and Warranties of the Issuer................70
SECTION 12.2. Representations and Warranties of the Servicer..............71
SECTION 12.3. Representations and Warranties of the Indenture Trustee.....74
SECTION 12.4. Multiple Roles..............................................75
SECTION 12.5. [Reserved]..................................................75
SECTION 12.6. Covenants of the Club Trustee...............................75
SECTION 12.7. Representations and Warranties of the Backup Servicer.......78
ARTICLE XIII. MISCELLANEOUS...................................................80
SECTION 13.1. Officer's Certificate and Opinion of Counsel as to
Conditions Precedent........................................80
SECTION 13.2. Statements Required in Certificate or Opinion...............81
SECTION 13.3. Notices.....................................................81
SECTION 13.4. No Proceedings..............................................83
SECTION 13.5. Limitation of Liability of Owner Trustee....................84
ARTICLE XIV. REDEMPTION OF NOTES..............................................84
SECTION 14.1. Clean-up Call; Optional Redemption; Election to Redeem......84
SECTION 14.2. Notice to Indenture Trustee.................................84
SECTION 14.3. Notice of Redemption by the Servicer........................84
SECTION 14.4. Deposit of Redemption Price.................................85
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SECTION 14.5. Notes Payable on Redemption Date............................85
ARTICLE XV....................................................................85
NON-PETITION AND LIMITED RECOURSE..........................................85
SECTION 15.1. Limited Recourse Against the Structured Purchaser...........85
SECTION 15.2. No Bankruptcy Petition Against Structured Purchaser.........86
Exhibit A Form of Notes
Exhibit B Form of Investor Representation Letter
Exhibit C Reserved
Exhibit D Form of Monthly Servicer Report
Exhibit E Servicing Officer's Certificate
Exhibit F Form of Investor Certification
Exhibit G Form of ROAP Waiver Letter
Exhibit H Form of Aruba Notice
Exhibit I Resort Ratings
Exhibit J Collection Policy dated March 31, 2006
Exhibit K Credit Policy dated March 31, 2006
Annex A Standard Definitions
Schedule I Schedule of Timeshare Loans
Schedule 12.2(e) Pending Litigation/Proceedings
vii
INDENTURE
This INDENTURE, dated as of May 1, 2006 (this "Indenture"), is among
BXG TIMESHARE TRUST I, a statutory trust formed under the laws of the State of
Delaware, as issuer (the "Issuer"), BLUEGREEN CORPORATION ("Bluegreen"), a
Massachusetts corporation, in its capacity as servicer (the "Servicer"),
VACATION TRUST, INC., a Florida corporation, as trustee under the Club Trust
Agreement (the "Club Trustee"), CONCORD SERVICING CORPORATION, an Arizona
corporation, as backup servicer (the "Backup Servicer"), U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as indenture trustee (the
"Indenture Trustee"), paying agent (the "Paying Agent") and as custodian (the
"Custodian") and BRANCH BANKING AND TRUST COMPANY, a North Carolina corporation,
as agent of the Purchasers pursuant to the Note Funding Agreement (the "Agent").
RECITALS OF THE ISSUER
WHEREAS, the Issuer has duly authorized the execution and delivery
of this Indenture to provide for the issuance of five classes of variable
funding notes designated as the Timeshare Loan-Backed VFN Notes, Series I, Class
A (the "Class A Notes"), the Timeshare Loan-Backed VFN Notes, Series I, Class B
(the "Class B Notes"), the Timeshare Loan-Backed VFN Notes, Series I, Class C
(the "Class C Notes"), the Timeshare Loan-Backed VFN Notes, Series I, Class D
(the "Class D Notes") and the Timeshare Loan-Backed VFN Notes, Series I, Class E
(the "Class E Notes", and together with the Class A Notes, the Class B Notes,
the Class C Notes and the Class D Notes, the "Notes");
WHEREAS, the Notes will evidence Borrowings made from time to time
prior to the Facility Termination Date by the Issuer in accordance with the
terms described herein and in the Note Funding Agreement;
WHEREAS, the Servicer has agreed to service and administer the
Timeshare Loans securing the Notes and the Backup Servicer has agreed to, among
other things, service and administer the Timeshare Loans if the Servicer shall
no longer be the Servicer hereunder;
WHEREAS, the Club Trustee is a limited purpose entity which, on
behalf of Beneficiaries of the Club, holds title to the Timeshare Properties
related to the Club Loans;
WHEREAS, the Agent, as nominee of the Purchasers shall, as sole
Noteholder of each Class of Notes, be entitled to exercise certain rights and
remedies under this Indenture; and
WHEREAS, all things necessary to make the Notes, when executed by
the Issuer and authenticated and delivered by the Indenture Trustee hereunder,
the valid recourse obligations of the Issuer, and to make this Indenture a valid
agreement of the Issuer, in accordance with its terms, have been done.
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NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the holders thereof, it is mutually covenanted and agreed, for the
benefit of the Noteholders, as follows:
GRANTING CLAUSE
To secure the payment of the principal of and interest on the Notes
in accordance with their terms, the payment of all of the sums payable under
this Indenture and the performance of the covenants contained in this Indenture,
the Issuer hereby Grants to the Indenture Trustee, for the benefit of the
Noteholders, all of the Issuer's right, title and interest in and to the
following whether now owned or hereafter acquired and any and all benefits
accruing to the Issuer from, (i) all Timeshare Loans acquired by the Issuer from
time to time pursuant to the Sale Agreement, (ii) any Qualified Substitute
Timeshare Loans, (iii) the Receivables in respect of each Timeshare Loan due
after the related Cut-Off Date, (iv) the related Timeshare Loan Documents
(excluding any rights as developer or declarant under the Timeshare Declaration,
the Timeshare Program Consumer Documents or the Timeshare Program Governing
Documents), (v) all Related Security in respect of each Timeshare Loan, (vi) all
rights and remedies under the Purchase Agreement, the Sale Agreement, the
Lockbox Agreement, the Backup Servicing Agreement, the Administration Agreement,
the Custodial Agreement or any Hedge Agreement, (vii) all amounts in or to be
deposited to the Lockbox Account, the Collection Account, the Credit Card
Account and the General Reserve Account, and (viii) proceeds of the foregoing
(including, without limitation, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds (as applicable), condemnation awards, rights to payment of
any and every kind, and other forms of obligations and receivables which at any
time constitute all or part or are included in the proceeds of any of the
foregoing) (collectively, the "Trust Estate"). Notwithstanding the foregoing,
the Trust Estate shall not include (i) any Timeshare Loan released from the lien
of this Indenture in accordance with the terms hereof and any Related Security,
Timeshare Loan Documents, income or proceeds related to such released Timeshare
Loan, (ii) any amount distributed pursuant to Section 3.4 or Section 6.6 hereof
or (iii) any Misdirected Deposits.
Such Grant is made in trust to secure (i) the payment of all amounts
due on the Notes in accordance with their terms, equally and ratably except as
otherwise may be provided in this Indenture, without prejudice, priority, or
distinction between any Note of the same Class and any other Note of the same
Class by reason of differences in time of issuance or otherwise, and (ii) the
payment of all other sums payable under the Notes and this Indenture.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions hereof, and agrees to perform the
duties herein required to the best of its ability and to the end that the
interests of the Noteholders may be adequately and effectively protected as
hereinafter provided.
The Custodian shall hold the Timeshare Loan Documents in trust, for
the use and benefit of the Issuer and all present and future Noteholders, and
shall retain possession thereof. The Custodian further agrees and acknowledges
that each other item making up the Trust Estate
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that is physically delivered to the Custodian will be held by the Custodian in
the State of Minnesota or in any other location acceptable to the Indenture
Trustee and the Servicer.
The Indenture Trustee further acknowledges that in the event the
conveyance of the Timeshare Loans by the Depositor to the Issuer pursuant to the
Sale Agreement is determined to constitute a loan and not a sale as it is
intended by all the parties hereto, the Custodian will be holding each of the
Timeshare Loans as bailee of the Issuer; provided, however, that with respect to
the Timeshare Loans, the Custodian will not act at the direction of the Issuer
without the written consent of the Indenture Trustee.
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. General Definitions and Usage of Terms.
(a) In addition to the terms defined elsewhere in this Indenture,
capitalized terms shall have the meanings given them in the "Standard
Definitions" attached hereto as Annex A.
(b) With respect to all terms in this Indenture, the singular
includes the plural and the plural the singular; words importing any gender
including the other genders; references to "writing" include printing, typing,
lithography and other means of reproducing words in a visible form; references
to agreements and other contractual instruments include all amendments,
modifications and supplements thereto or any changes therein entered into in
accordance with their respective terms and not prohibited by this Indenture;
references to Persons include their successors and assigns; and the term
"including" means "including without limitation."
SECTION 1.2. Compliance Certificates and Opinions.
Upon any written application or request (or oral application with
prompt written or telecopied confirmation) by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, other than any
request that (a) the Indenture Trustee authenticate the Notes specified in such
request, (b) the Indenture Trustee invest moneys in any of the Trust Accounts
pursuant to the written directions specified in such request or (c) the
Indenture Trustee pay moneys due and payable to the Issuer hereunder to the
Issuer's assignee specified in such request, the Indenture Trustee shall require
the Issuer to furnish to the Indenture Trustee an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and that the request otherwise is
in accordance with the terms of this Indenture, and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that, in the case of any such requested
action as to which other evidence of satisfaction of the conditions precedent
thereto is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
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SECTION 1.3. Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer delivered to
the Indenture Trustee may be based, insofar as it relates to legal matters, upon
an Opinion of Counsel, unless such officer knows that the opinion with respect
to the matters upon which his/her certificate or opinion is based is erroneous.
Any such officer's certificate or opinion and any Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Issuer as to such
factual matters unless such officer or counsel knows that the certificate or
opinion or representations with respect to such matters is erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such other
counsel believes that such counsel and the Indenture Trustee may reasonably rely
upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of compliance with any term hereof, it is intended that the truth
and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 7.1(b) hereof.
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default, Event of Default or Servicer Event of
Default is a condition precedent to the taking of any action by the Indenture
Trustee at the request or direction of the Issuer, then, notwithstanding that
the satisfaction of such condition is a condition precedent to the Issuer's
right to make such request or direction, the Indenture Trustee shall be
protected in acting in accordance with such request or direction if it does not
have knowledge of the occurrence and continuation of such event. For all
purposes of this Indenture, the Indenture Trustee shall not be deemed to have
knowledge of any Default, Event of Default or Servicer Event of Default nor
shall the Indenture Trustee have any duty to monitor or investigate to determine
whether a default has occurred (other than an Event of Default of the kind
described in subparagraph (a) of
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the definition of Event of Default) or Servicer Event of Default has occurred
unless a Responsible Officer of the Indenture Trustee shall have actual
knowledge thereof or shall have been notified in writing thereof by the Issuer,
the Servicer or any secured party.
SECTION 1.4. Acts of Noteholders, etc.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 7.1 hereof) conclusive
in favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Indenture Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
(d) By accepting the Notes issued pursuant to this Indenture, each
Noteholder irrevocably appoints the Indenture Trustee hereunder as the special
attorney-in-fact for such Noteholder vested with full power on behalf of such
Noteholder to effect and enforce the rights of such Noteholder for the benefit
of such Noteholder; provided, that nothing contained in this Section 1.4(d)
shall be deemed to confer upon the Indenture Trustee any duty or power to vote
on behalf of the Noteholders with respect to any matter on which the Noteholders
have a right to vote pursuant to the terms of this Indenture.
SECTION 1.5. Notice to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of any
event, or the mailing of any report to Noteholders, such notice or report shall
be sufficiently given (unless
5
otherwise herein expressly provided) if in writing and mailed, via first class
mail, or sent by private courier or confirmed telecopy to each Noteholder
affected by such event or to whom such report is required to be mailed, at its
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice or
the mailing of such report. In any case where a notice or report to Noteholders
is mailed, neither the failure to mail such notice or report, nor any defect in
any notice or report so mailed, to any particular Noteholder shall affect the
sufficiency of such notice or report with respect to other Noteholders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Noteholders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
(b) In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.5(a) hereof, of any event or any
report to Noteholders when such notice or report is required to be delivered
pursuant to any provision of this Indenture, then such notification or delivery
as shall be made with the approval of the Indenture Trustee shall constitute a
sufficient notification for every purpose hereunder.
SECTION 1.6. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.7. Successors and Assigns.
All covenants and agreements in this Indenture by each of the
parties hereto shall bind its respective successors and permitted assigns,
whether so expressed or not.
SECTION 1.8. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK. UNLESS MADE APPLICABLE
IN A SUPPLEMENT HERETO, THIS INDENTURE IS NOT SUBJECT TO THE TRUST INDENTURE ACT
OF 1939, AS AMENDED, AND SHALL NOT BE GOVERNED THEREBY AND CONSTRUED IN
ACCORDANCE THEREWITH.
SECTION 1.9. Legal Holidays.
In any case where any Payment Date or the Stated Maturity or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) such payment need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, Stated Maturity or other date on which
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principal of or interest on any Note is proposed to be paid; provided, that no
penalty interest shall accrue for the period from and after such Payment Date,
Stated Maturity, or any other date on which principal of or interest on any Note
is proposed to be paid, as the case may be, until such next succeeding Business
Day.
SECTION 1.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.11. Inspection.
The Issuer agrees that, on ten Business Days' prior notice (or, one
Business Day's prior notice after the occurrence and during the occurrence of an
Event of Default or a Servicer Event of Default), it will permit the
representatives of the Indenture Trustee or any Noteholder, during the Issuer's
normal business hours, to examine all of the books of account, records, reports
and other papers of the Issuer, to make copies thereof and extracts therefrom,
and to discuss its affairs, finances and accounts with its designated officers,
employees and independent accountants in the presence of such designated
officers and employees (and by this provision the Issuer hereby authorizes its
independent accountants to discuss with such representatives such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested for the purpose of reviewing or evaluating the financial
condition or affairs of the Issuer or the performance of and compliance with the
covenants and undertakings of the Issuer and the Servicer in this Indenture or
any of the other documents referred to herein or therein. Any reasonable expense
incident to the exercise by the Indenture Trustee at any time or any Noteholder
during the continuance of any Default or Event of Default, of any right under
this Section 1.11 shall be borne by the Issuer and distributed in accordance
with Section 3.4 or Section 6.6, as applicable. Nothing contained herein shall
be construed as a duty of the Indenture Trustee to perform such inspection.
SECTION 1.12. Survival of Representations and Warranties.
The representations, warranties and certifications of the Issuer
made in this Indenture or in any certificate or other writing delivered by the
Issuer pursuant hereto shall survive the authentication and delivery of the
Notes hereunder.
SECTION 1.13. Effective Date.
This Indenture shall be effective as of May 5, 2006.
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ARTICLE II.
THE NOTES
SECTION 2.1. General Provisions.
(a) Form of Notes. The Notes shall be designated as the "BXG
Timeshare Trust I, Timeshare Loan-Backed VFN Notes, Series I". The Notes shall
be issued in five Classes and, together with their certificates of
authentication, shall be in substantially the form set forth in Exhibit A
attached hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or are permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may consistently herewith, be determined by the
officer executing such Notes, as evidenced by such officer's execution of such
Notes.
(b) Maximum Outstanding Note Balance and Denominations. The
Outstanding Note Balance of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes and the Class E Notes shall not exceed the Maximum
Outstanding Class A Note Balance, the Maximum Outstanding Class B Note Balance,
the Maximum Outstanding Class C Note Balance, the Maximum Outstanding Class D
Note Balance and the Maximum Outstanding Class E Note Balance, respectively. The
Notes shall be issuable only as registered Notes, without interest coupons, in
the denominations of at least $50,000 and in integral multiples of $1,000;
provided, however, that the foregoing shall not restrict or prevent the transfer
in accordance with Section 2.4 hereof of any Note with a remaining Outstanding
Note Balance of less than $50,000.
(c) Execution, Authentication, Delivery and Dating. The Notes shall
be manually executed by an Authorized Officer of the Owner Trustee on behalf of
the Issuer. Any Note bearing the signature of an individual who was at the time
of execution thereof an Authorized Officer of the Owner Trustee on behalf of the
Issuer shall bind the Issuer, notwithstanding that such individual ceases to
hold such office prior to the authentication and delivery of such Note or did
not hold such office at the date of such Note. No Note shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Note a certificate of authentication substantially in the
form set forth in Exhibit A hereto, executed by the Indenture Trustee by manual
signature, and such certificate upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder. Each Note shall be dated the date of its authentication. The Notes
may from time to time be executed by the Issuer and delivered to the Indenture
Trustee for authentication together with an Issuer Order to the Indenture
Trustee directing the authentication and delivery of such Notes and thereupon
the same shall be authenticated and delivered by the Indenture Trustee in
accordance with such Issuer Order.
SECTION 2.2. Definitive Notes.
The Notes shall be issued in definitive form only.
SECTION 2.3. [RESERVED]
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SECTION 2.4. Registration, Transfer and Exchange of Notes.
(a) The Issuer shall cause to be kept at the Corporate Trust Office
a register (the "Note Register") for the registration, transfer and exchange of
Notes. The Indenture Trustee is hereby appointed "Note Registrar" for purposes
of registering Notes and transfers of Notes as herein provided. The names and
addresses of all Noteholders and the names and addresses of the transferees of
any Notes shall be registered in the Note Register. The Person in whose name any
Note is so registered shall be deemed and treated as the sole owner and
Noteholder thereof for all purposes of this Indenture and the Note Registrar,
the Issuer, the Indenture Trustee, the Servicer and any agent of any of them
shall not be affected by any notice or knowledge to the contrary. The Notes are
transferable or exchangeable only upon the surrender of such Note to the Note
Registrar at the Corporate Trust Office together with an assignment and transfer
(executed by the Noteholder or his duly authorized attorney), subject to the
applicable requirements of this Section 2.4. Upon request of the Indenture
Trustee, the Note Registrar shall provide the Indenture Trustee with the names
and addresses of the Noteholders.
(b) Upon surrender for registration of transfer of any Note, subject
to the applicable requirements of this Section 2.4, the Issuer shall execute and
the Indenture Trustee shall duly authenticate in the name of the designated
transferee or transferees, one or more new Notes in denominations of a like
aggregate denomination as the Note being surrendered. Each Note surrendered for
registration of transfer shall be canceled and subsequently destroyed by the
Note Registrar. Each new Note issued pursuant to this Section 2.4 shall be
registered in the name of any Person as the transferring Noteholder may request,
subject to the applicable provisions of this Section 2.4. All Notes issued upon
any registration of transfer or exchange of Notes shall be entitled to the same
benefits under this Indenture as the Notes surrendered upon such registration of
transfer or exchange.
(c) The issuance of the Notes will not be registered or qualified
under the Securities Act or the securities laws of any state. No resale or
transfer of any Note may be made unless such resale or transfer is made in
accordance with this Indenture and only if (i) in the United States to a person
whom the transferor reasonably believes is a "qualified institutional buyer" (as
defined in Rule 144A) that is purchasing for its own account or for the account
of a qualified institutional buyer in a transaction meeting the requirements of
Rule 144A as certified by the transferee (other than the Agent) in a letter in
the form of Exhibit B hereto, (ii) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if available) or (iii) pursuant
to an effective registration statement under the Securities Act, in each of
cases (i) through (iii) in accordance with any applicable securities laws of any
state of the United States. Each transferee and each subsequent transferee will
be required to notify any subsequent purchaser of such Notes from it of the
resale restrictions described herein. None of the Issuer, the Servicer or the
Indenture Trustee is obligated to register or qualify the Notes under the
Securities Act or any other securities law or to take any action not otherwise
required under this Indenture to permit the transfer of any Note without
registration.
(d) No resale or other transfer of any Note may be made to any
transferee unless (i) such transferee is not, and will not acquire such Note on
behalf or with the assets of, any Benefit Plan or (ii) no "prohibited
transaction" under ERISA or section 4975 of the Code or Similar Law that is not
subject to a statutory, regulatory or administrative exemption will occur
9
in connection with purchaser's or such transferee's acquisition or holding of
such Note. In addition, the Notes may not be purchased by or transferred to any
Benefit Plan or person acting on behalf of or with assets of any Benefit Plan,
unless it represents that it is not sponsored (within the meaning of Section
3(16)(B) of ERISA) by the Issuer, the Depositor, the Originators, the Servicer,
the Indenture Trustee, the Owner Trustee, the Administrator, the Paying Agent,
the Custodian, the Backup Servicer, the Lockbox Bank or the Agent, or by any
affiliate of any such person. In addition to the applicable provisions of this
Section 2.4, the exchange, transfer and registration of transfer of Notes shall
only be made in accordance with Section 2.4(c) and this Section 2.4(d).
(e) No fee or service charge shall be imposed by the Note Registrar
for its services in respect of any registration of transfer or exchange referred
to in this Section 2.4. The Note Registrar may require payment by each
transferor of a sum sufficient to cover any tax, expense or other governmental
charge payable in connection with any such transfer.
(f) None of the Issuer, the Indenture Trustee, the Servicer or the
Note Registrar is obligated to register or qualify the Notes under the
Securities Act or any other securities law or to take any action not otherwise
required under this Indenture to permit the transfer of such Notes without
registration or qualification. Any such Noteholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Issuer, the Indenture
Trustee, the Servicer and the Note Registrar against any loss, liability or
expense that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
(g) The Servicer agrees to cause the Issuer, and the Issuer agrees
to provide, such information as required under Rule 144A under the Securities
Act so as to allow resales of Notes to "qualified institutional buyers" (as
defined therein) in accordance herewith.
(h) The Notes represent the sole obligation of the Issuer payable
from the Trust Estate and do not represent the obligations of the Originators,
the Servicer, the Depositor, the Backup Servicer, the Owner Trustee, the
Indenture Trustee, the Administrator or the Custodian.
(i) Notwithstanding anything in this Section 2.4 or elsewhere in
this Indenture or the Notes, the transfer restrictions described herein shall
apply only to the Noteholders and shall not apply to the Purchasers whose rights
to transfer interests in the Notes are governed solely by Section 8 of the Note
Funding Agreement.
SECTION 2.5. Mutilated, Destroyed, Lost and Stolen Notes.
(a) If any mutilated Note is surrendered to the Indenture Trustee,
the Issuer shall execute and the Indenture Trustee shall authenticate and
deliver in exchange therefore a replacement Note of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Issuer and the Indenture
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Note and (ii) such security or indemnity as may be reasonably required by
them to save each of them and any agent of either of them harmless (which
security and indemnity shall be provided by the Agent to the extent such
10
loss or theft occurs while it holds the Note on behalf of a Noteholder), then,
in the absence of actual notice to the Issuer or the Indenture Trustee that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Indenture Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Note, a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
(c) In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next Payment
Date become due and payable, the Issuer, in its discretion, may, instead of
issuing a replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section
2.5, the Issuer or the Indenture Trustee may require the payment by the
Noteholder of a sum sufficient to cover any Tax or other governmental charge
that may be imposed as a result of the issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section 2.5 in
lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder.
(f) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6. Payment of Interest and Principal; Rights Preserved.
(a) Any installment of interest or principal, payable on any Note
that is punctually paid or duly provided for by or on behalf of the Issuer on
the applicable Payment Date shall be paid to the Person in whose name such Note
was registered at the close of business on the Record Date for such Payment Date
by check mailed to the address specified in the Note Register (or, if the
Noteholder is the Agent, at such addresses as the Agent shall specify in
writing), or if a Noteholder has provided wire transfer instructions to the
Indenture Trustee at least five Business Days prior to the applicable Payment
Date, upon the request of a Noteholder, by wire transfer of federal funds to the
accounts and numbers specified in the Note Register (or, if the Noteholder is
the Agent, at such accounts and numbers as the Agent shall specify in writing),
in each case on such Record Date for such Person.
(b) All reductions in the principal amount of a Note affected by
payments of principal made on any Payment Date shall be binding upon all
Noteholders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof, whether or not
such payment is noted on such Note. All payments on the Notes shall be paid
without any requirement of presentment, but each Noteholder shall be deemed to
agree, by its acceptance of the same, to surrender such Note at the Corporate
Trust Office within 30 days after receipt of the final principal payment of such
Note.
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SECTION 2.7. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Issuer, the Indenture Trustee, and any agent of the Issuer or the Indenture
Trustee may treat the registered Noteholder as the owner of such Note for the
purpose of receiving payment of principal of and interest on such Note and for
all other purposes whatsoever, whether or not such Note is overdue, and neither
the Issuer, the Indenture Trustee, nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.8. Cancellation.
All Notes surrendered for registration of transfer or exchange or
following final payment shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly
canceled by it. The Issuer may at any time deliver to the Indenture Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 2.8, except as expressly permitted by this Indenture. All canceled
Notes held by the Indenture Trustee may be disposed of in the normal course of
its business or as directed by an Issuer Order.
SECTION 2.9. Noteholder Lists.
The Indenture Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of the Noteholders. In the event the Indenture Trustee no longer
serves as the Note Registrar, the Issuer (or any other obligor upon the Notes)
shall furnish to the Indenture Trustee at least five Business Days before each
Payment Date (and in all events in intervals of not more than six months) and at
such other times as the Indenture Trustee may request in writing a list in such
form and as of such date as the Indenture Trustee may reasonably require of the
names and addresses of the Noteholders.
SECTION 2.10. Treasury Notes.
In determining whether the Noteholders of the required Outstanding
Note Balance of the Notes have concurred in any direction, waiver or consent,
Notes held or redeemed by the Issuer or any other obligor in respect of the
Notes or held by an Affiliate of the Issuer or such other obligor shall be
considered as though not Outstanding, except that for the purposes of
determining whether the Indenture Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which a Responsible Officer of the
Indenture Trustee knows are so owned shall be so disregarded.
SECTION 2.11. [RESERVED].
SECTION 2.12. Confidentiality.
Each Noteholder covenants and agrees that any information obtained
pursuant to, or otherwise in connection with, this Indenture or the other
Transaction Documents shall be held in confidence (it being understood that
documents provided to the Agent hereunder may in all
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cases be distributed by the Agent to the Purchasers) except that the Noteholder
(or Purchasers) may disclose such information (i) to its officers, directors,
members, employees, agents, counsel, accountants, auditors, advisors or
representatives who have an obligation to maintain the confidentiality of such
information, (ii) to the extent such information has become available to the
public other than as a result of a disclosure by or through the Noteholder,
Agent or such Purchaser, (iii) to the extent such information was available to
the Noteholder, Agent or such Purchaser on a non-confidential basis prior to its
disclosure to the Noteholder, Agent or such Purchaser in connection with this
transaction, (iv) with the consent of the Servicer, (v) to the extent the
Noteholder, Agent or such Purchaser should be (A) required in connection with
any legal or regulatory proceeding or (B) requested by any Governmental
Authority to disclose such information; provided, that, in the case of this
clause (v), the Noteholder, the Agent or such Purchaser, as the case may be,
will (unless otherwise prohibited by law or in connection with regular
regulatory reviews) notify the Issuer and the Servicer of its intention to make
any such disclosure as early as practicable prior to making such disclosure and
cooperate with the Servicer in connection with any action to obtain a protective
order with respect to such disclosure; or (vi) in the case of the Structured
Purchaser, to any rating agency rating or proposing to rate any commercial paper
issued by the Structured Purchaser or a related Liquidity Institution.
ARTICLE III.
ACCOUNTS; COLLECTION AND
APPLICATION OF MONEYS; REPORTS
SECTION 3.1. Trust Accounts; Investments by Indenture Trustee.
(a) On or before the Initial Funding Date, the Indenture Trustee
shall establish in the name of the Indenture Trustee for the benefit of the
Noteholders as provided in this Indenture, the Trust Accounts, which accounts
(other than the Lockbox Account and the Credit Card Account) shall be Eligible
Bank Accounts maintained at the Corporate Trust Office.
Subject to the further provisions of this Section 3.1(a), the
Indenture Trustee shall, upon receipt or upon transfer from another account, as
the case may be, deposit into such Trust Accounts all amounts received by it
which are required to be deposited therein in accordance with the provisions of
this Indenture. All such amounts and all investments made with such amounts,
including all income and other gain from such investments, shall be held by the
Indenture Trustee in such accounts as part of the Trust Estate as herein
provided, subject to withdrawal by the Indenture Trustee in accordance with, and
for the purposes specified in the provisions of, this Indenture.
(b) The Indenture Trustee shall assume that any amount remitted to
it in respect of the Trust Estate is to be deposited into the Collection Account
pursuant to Section 3.2(a) hereof unless a Responsible Officer of the Indenture
Trustee receives written instructions from the Servicer to the contrary.
(c) None of the parties hereto shall have any right of set-off with
respect to any Trust Account or any investment therein.
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(d) So long as no Event of Default shall have occurred and be
continuing, all or a portion of the amounts in any Trust Account (other than the
Lockbox Account and the Credit Card Account) shall be invested and reinvested by
the Indenture Trustee pursuant to an Issuer Order in one or more Eligible
Investments. Subject to the restrictions on the maturity of investments set
forth in Section 3.1(f) hereof, each such Issuer Order may authorize the
Indenture Trustee to make the specific Eligible Investments set forth therein,
to make Eligible Investments from time to time consistent with the general
instructions set forth therein, in each case, in such amounts as such Issuer
Order shall specify.
(e) In the event that either (i) the Issuer shall have failed to
give investment directions to the Indenture Trustee by 9:30 A.M., New York City
time on any Business Day on which there may be uninvested cash or (ii) an Event
of Default shall be continuing, the Indenture Trustee shall promptly invest and
reinvest the funds then in the designated Trust Account to the fullest extent
practicable in those obligations or securities described in clause (e) of the
definition of "Eligible Investments". All investments made by the Indenture
Trustee shall mature no later than the maturity date therefor permitted by
Section 3.1(f) hereof.
(f) No investment of any amount held in any Trust Account shall
mature later than the Business Day immediately preceding the Payment Date which
is scheduled to occur immediately following the date of investment. All income
or other gains (net of losses) from the investment of moneys deposited in any
Trust Account shall be deposited by the Indenture Trustee in such account
immediately upon receipt.
(g) Subject to Section 3.1(d) hereof, any investment of any funds in
any Trust Account shall be made under the following terms and conditions:
(i) each such investment shall be made in the name of the
Indenture Trustee, in each case in such manner as shall be necessary
to maintain the identity of such investments as assets of the Trust
Estate; and
(ii) any certificate or other instrument evidencing such
investment shall be delivered directly to the Indenture Trustee, and
the Indenture Trustee shall have sole possession of such instrument,
and all income on such investment.
(h) The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in any Trust Account resulting from losses on
investments made in accordance with the provisions of this Section 3.1
including, but not limited to, losses resulting from the sale or depreciation in
the market value of such investments (but the institution serving as Indenture
Trustee shall at all times remain liable for its own obligations, if any,
constituting part of such investments). The Indenture Trustee shall not be
liable for any investment or liquidation of an investment made by it in
accordance with this Section 3.1 on the grounds that it could have made a more
favorable investment or a more favorable selection for sale of an investment.
SECTION 3.2. Establishment and Administration of the Trust Accounts.
(a) Collection Account. The Issuer hereby directs and the Indenture
Trustee hereby agrees to cause to be established and maintained an account (the
"Collection Account") for the benefit of the Noteholders. The Collection Account
shall be an Eligible Bank Account
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initially established at the corporate trust department of the Indenture
Trustee, bearing the following designation "BXG Timeshare Trust I, Timeshare
Loan-Backed VFN Notes, Series I -- Collection Account, U.S. Bank National
Association, as Indenture Trustee for the benefit of the Noteholders". The
Indenture Trustee on behalf of the Noteholders shall possess all right, title
and interest in all funds on deposit from time to time in the Collection Account
and in all proceeds thereof. The Collection Account shall be under the sole
dominion and control of the Indenture Trustee for the benefit of the Noteholders
as their interests appear in the Trust Estate. If, at any time, the Collection
Account ceases to be an Eligible Bank Account, the Indenture Trustee shall
within two Business Days establish a new Collection Account which shall be an
Eligible Bank Account, transfer any cash and/or any investments to such new
Collection Account, and from the date such new Collection Account is
established, it shall be the "Collection Account". The Indenture Trustee agrees
to immediately deposit any amounts received by it into the Collection Account.
Amounts on deposit in the Collection Account shall be invested in accordance
with Section 3.1 hereof. Withdrawals and payments from the Collection Account
will be made on each Payment Date as provided in Section 3.4 or Section 6.6
hereof, as applicable. The Indenture Trustee, at the written direction of the
Servicer, shall withdraw (no more than once per calendar week) from the
Collection Account and return to the Servicer or as directed by the Servicer,
any amounts which (i) were mistakenly deposited in the Collection Account,
including, without limitation, amounts representing Misdirected Payments and
(ii) represent Additional Servicing Compensation. The Indenture Trustee may
conclusively rely on such written direction.
(b) General Reserve Account. The Issuer hereby directs and the
Indenture Trustee hereby agrees to cause to be established and maintained an
account (the "General Reserve Account") for the benefit of the Noteholders. The
General Reserve Account shall be an Eligible Bank Account initially established
at the corporate trust department of the Indenture Trustee, bearing the
following designation "BXG Timeshare Trust I, Timeshare Loan-Backed VFN Notes,
Series I -- General Reserve Account, U.S. Bank National Association, as
Indenture Trustee for the benefit of the Noteholders". The Indenture Trustee on
behalf of the Noteholders shall possess all right, title and interest in all
funds on deposit from time to time in the General Reserve Account and in all
proceeds thereof. The General Reserve Account shall be under the sole dominion
and control of the Indenture Trustee for the benefit of the Noteholders as their
interests appear in the Trust Estate. If, at any time, the General Reserve
Account ceases to be an Eligible Bank Account, the Indenture Trustee shall
within two Business Days establish a new General Reserve Account which shall be
an Eligible Bank Account, transfer any cash and/or any investments to such new
General Reserve Account and from the date such new General Reserve Account is
established, it shall be the "General Reserve Account". Amounts on deposit in
the General Reserve Account shall be invested in accordance with Section 3.1
hereof. Deposits to the General Reserve Account shall be made in accordance with
Section 3.4 hereof. Withdrawals and payments from the General Reserve Account
shall be made in the following manner:
(i) Withdrawals. Subject to Sections 3.2(b)(ii) and (iii)
hereof, if on any Payment Date, Available Funds (without giving
effect to any deposit from the General Reserve Account) would be
insufficient to pay any portion of the Required Payments on such
Payment Date, the Indenture Trustee shall, based on the Monthly
Servicer Report, withdraw from the General Reserve Account an amount
equal to
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the lesser of such insufficiency and the amount on deposit in the
General Reserve Account and deposit such amount in the Collection
Account.
(ii) Sequential Pay Event. Upon the occurrence of a Sequential
Pay Event, the Indenture Trustee shall withdraw all amounts on
deposit in the General Reserve Account and shall deposit such
amounts to the Collection Account for distribution in accordance
with Section 6.6 hereof.
(iii) Stated Maturity or Payment in Full. On the earlier to
occur of the Stated Maturity and the Payment Date on which the
Outstanding Note Balance of all Classes of Notes will be reduced to
zero, the Indenture Trustee shall withdraw all amounts on deposit in
the General Reserve Account and shall deposit such amounts to the
Collection Account for distribution in accordance with Section 3.4
or Section 6.6, as applicable.
SECTION 3.3. [Reserved].
SECTION 3.4. Distributions.
(a) So long as no Sequential Pay Event has occurred, on each Payment
Date, to the extent of Available Funds and based on the Monthly Servicer Report,
the Indenture Trustee shall withdraw funds from the Collection Account to make
the following disbursements and distributions to the following parties, in the
following order of priority:
(i) to the Indenture Trustee, the Indenture Trustee Fee, plus any
accrued and unpaid Indenture Trustee Fees with respect to prior Payment
Dates, and any extraordinary out-of-pocket expenses of the Indenture
Trustee (up to $10,000 per Payment Date and no more than a cumulative
total of $100,000 for Servicer Termination Costs) incurred and not
reimbursed in connection with its obligations and duties under this
Indenture;
(ii) to the Owner Trustee, the Owner Trustee Fee, if due, plus any
accrued and unpaid Owner Trustee Fees with respect to prior Payment Dates;
(iii) to the Administrator, the Administrator Fee, plus any accrued
and unpaid Administrator Fees with respect to prior Payment Dates;
(iv) to the Custodian, the Custodian Fee, plus any accrued and
unpaid Custodian Fees with respect to prior Payment Dates;
(v) to the Lockbox Bank, the Lockbox Fee, plus any accrued and
unpaid Lockbox Fees with respect to prior Payment Dates;
(vi) to the Trust Owner, the Trust Owner Fee, if due, plus any
accrued and unpaid Trust Owner Fees with respect to prior Payment Dates;
(vii) to the Servicer, the Servicing Fee, plus any accrued and
unpaid Servicing Fees with respect to prior Payment Dates;
16
(viii) to the Backup Servicer, the Backup Servicing Fee, plus any
accrued and unpaid Backup Servicing Fees with respect to prior Payment
Dates (less any amounts received from the Indenture Trustee, as successor
Servicer);
(ix) to the Agent and the Placement Agent, any Fees, plus any
accrued and unpaid Fees with respect to prior Payment Dates;
(x) on a pari passu basis, to the Class A Noteholders holding LIBOR
Notes and CP Notes, the Class A LIBOR Interest Distribution Amount and
Class A CP Interest Distribution Amount, respectively; provided, however,
that amounts distributable to the Class A Noteholders holding LIBOR Notes
and CP Notes shall not exceed the Class A Maximum LIBOR Interest
Distribution Amount and the Class A Maximum CP Interest Distribution
Amount, respectively;
(xi) on a pari passu basis, to the Class B Noteholders holding LIBOR
Notes and CP Notes, the Class B LIBOR Interest Distribution Amount and the
Class B CP Interest Distribution Amount, respectively; provided, however,
that amounts distributable to the Class B Noteholders holding LIBOR Notes
and CP Notes shall not exceed the Class B Maximum LIBOR Interest
Distribution Amount and the Class B Maximum CP Interest Distribution
Amount, respectively;
(xii) on a pari passu basis, to the Class C Noteholders holding
LIBOR Notes and CP Notes, the Class C LIBOR Interest Distribution Amount
and the Class C CP Interest Distribution Amount, respectively; provided,
however, that amounts distributable to the Class C Noteholders holding
LIBOR Notes and CP Notes shall not exceed the Class C Maximum LIBOR
Interest Distribution Amount and the Class C Maximum CP Interest
Distribution Amount, respectively;
(xiii) on a pari passu basis, to the Class D Noteholders holding
LIBOR Notes and CP Notes, the Class D LIBOR Interest Distribution Amount
and the Class D CP Interest Distribution Amount, respectively; provided,
however, that amounts distributable to the Class D Noteholders holding
LIBOR Notes and CP Notes shall not exceed the Class D Maximum LIBOR
Interest Distribution Amount and the Class D Maximum CP Interest
Distribution Amount, respectively;
(xiv) on a pari passu basis, to the Class E Noteholders holding
LIBOR Notes and CP Notes, the Class E LIBOR Interest Distribution Amount
and the Class E CP Interest Distribution Amount, respectively; provided,
however, that amounts distributable to the Class E Noteholders holding
LIBOR Notes and CP Notes shall not exceed the Class E Maximum LIBOR
Interest Distribution Amount and Class E Maximum CP Interest Distribution
Amount, respectively;
(xv) to the Class A Noteholders, the Class A Principal Distribution
Amount;
(xvi) to the Class B Noteholders, the Class B Principal Distribution
Amount
17
(xvii) to the Class C Noteholders, the Class C Principal
Distribution Amount
(xviii) to the Class D Noteholders, the Class D Principal
Distribution Amount;
(xix) to the Class E Noteholders, the Class E Principal Distribution
Amount;
(xx) on a pari passu basis, to the Class A Noteholders holding LIBOR
Notes and CP Notes, the Class A LIBOR Interest Distribution Amount
Shortfall and the Class A CP Interest Distribution Amount Shortfall,
respectively, if any;
(xxi) on a pari passu basis, to the Class B Noteholders holding
LIBOR Notes and CP Notes, the Class B LIBOR Interest Distribution Amount
Shortfall and the Class B CP Interest Distribution Amount Shortfall,
respectively, if any;
(xxii) on a pari passu basis, to the Class C Noteholders holding
LIBOR Notes and CP Notes, the Class C LIBOR Interest Distribution Amount
Shortfall and the Class C CP Interest Distribution Amount Shortfall,
respectively, if any;
(xxiii) on a pari passu basis, to the Class D Noteholders holding
LIBOR Notes and CP Notes, the Class D LIBOR Interest Distribution Amount
Shortfall and the Class D CP Interest Distribution Amount Shortfall,
respectively, if any;
(xxiv) on a pari passu basis, to the Class E Noteholders holding
LIBOR Notes and CP Notes, the Class E LIBOR Interest Distribution Amount
Shortfall and the Class E CP Interest Distribution Amount Shortfall,
respectively, if any;
(xxv) to the Class A Noteholders, the Class B Noteholders, the Class
C Noteholders, the Class D Noteholders and the Class E Noteholders, to the
extent applicable, amounts specified by the Agent and the Servicer as
payable to such Noteholders pursuant to Sections 6.1, 6.2 and 6.3 of the
Note Funding Agreement;
(xxvi) if a Cash Accumulation Event or an Event of Default shall
have occurred and is continuing, to the General Reserve Account, all
remaining Available Funds;
(xxvii) to the Indenture Trustee, any extraordinary out-of-pocket
expenses of the Indenture Trustee not paid in accordance with clause (i)
above;
(xxviii) any amounts due and payable by the Issuer under the
Transaction Documents, but not paid above (including, but not limited to,
amounts owed by the Issuer in respect of its indemnification obligations);
and
(xxix) any remaining Available Funds to the Certificate Distribution
Account for distribution pursuant to the Trust Agreement.
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(b) On and after the Assumption Date, the Indenture Trustee, as
successor Servicer, shall pay the Backup Servicing Fee from amounts received in
respect of the Servicing Fee.
(c) Upon the occurrence of a Sequential Pay Event, distributions
shall be made in accordance with Section 6.6 hereof.
SECTION 3.5. Reports to Noteholders.
On each Payment Date, the Indenture Trustee shall account to the
Agent, each Noteholder and the Rating Agency (to the extent that any Notes are
rated) the portion of payments then being made which represents principal and
the amount which represents interest, and shall contemporaneously advise the
Issuer of all such payments. The Indenture Trustee may satisfy its obligations
under this Section 3.5 by making available electronically the Monthly Servicer
Report to the Agent, the Noteholders, the Rating Agency (to the extent that any
Notes are rated) and the Issuer; provided, however, the Indenture Trustee shall
have no obligation to provide such information described in this Section 3.5
until it has received the requisite information from the Issuer or the Servicer.
On or before the fifth day prior to the final Payment Date with respect to any
Class, the Indenture Trustee shall send notice of such Payment Date to the
Agent, the Rating Agency (to the extent that any Notes are rated) and the
Noteholders of such Class. Such notice shall include a statement that if such
Notes are paid in full on the final Payment Date, interest shall cease to accrue
as of the day immediately preceding such final Payment Date. In addition, the
Indenture Trustee shall deliver to the Noteholders, all notices, compliance
reports and other certificates delivered by the Servicer or the Issuer pursuant
to this Indenture. At a Noteholder's request, the Indenture Trustee agrees to
provide such Noteholder an accounting of balances in the General Reserve
Account.
The Indenture Trustee may make available to the Noteholders and the
Agent, via the Indenture Trustee's internet website, the Monthly Servicer Report
available each month and, with the consent or at the direction of the Issuer,
such other information regarding the Notes and/or the Timeshare Loans as the
Indenture Trustee may have in its possession, but only with the use of a
password provided by the Indenture Trustee or its agent to such Person upon
receipt by the Indenture Trustee from such Person of a certification in the form
of Exhibit F; provided, however, that the Indenture Trustee or its agent shall
provide such password to the parties to this Indenture, the Rating Agency (to
the extent that any Notes are rated) and the Agent without requiring such
certification. The Indenture Trustee will make no representation or warranties
as to the accuracy or completeness of such documents and will assume no
responsibility therefor.
The Indenture Trustee's internet website shall be specified by the
Indenture Trustee from time to time in writing to the Issuer, the Servicer, the
Rating Agency (to the extent that any Notes are rated) and the Noteholders. For
assistance with this service, Noteholders may call the customer service desk at
(▇▇▇) ▇▇▇-▇▇▇▇. In connection with providing access to the Indenture Trustee's
internet website, the Indenture Trustee may require registration and the
acceptance of a disclaimer. The Indenture Trustee shall not be liable for the
dissemination of information in accordance with this Indenture.
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The Indenture Trustee shall have the right to change the way Monthly
Servicer Reports are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Indenture Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes.
Annually (and more often, if required by applicable law), the
Indenture Trustee shall distribute to the Noteholders any Form 1099 or similar
information returns required by applicable tax law to be distributed to the
Noteholders. The Paying Agent shall prepare or cause to be prepared all such
information for distribution by the Indenture Trustee to the Noteholders.
SECTION 3.6. [RESERVED].
SECTION 3.7. Withholding Taxes.
The Indenture Trustee, on behalf of the Issuer, shall comply with
all requirements of the Code and applicable Treasury Regulations and applicable
state and local law with respect to the withholding from any distributions made
by it to any Noteholder of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith.
ARTICLE IV.
THE TRUST ESTATE
SECTION 4.1. Acceptance by Indenture Trustee.
(a) Concurrently with the execution and delivery of this Indenture,
the Indenture Trustee does hereby acknowledge and accept the conveyance by the
Issuer of the assets constituting the Trust Estate. The Indenture Trustee shall
hold the Trust Estate in trust for the benefit of the Noteholders, subject to
the terms and provisions hereof. Prior to each Funding Date and in accordance
with the Custodial Agreement, the Issuer will deliver or cause to be delivered
to the Custodian, the Timeshare Loan Files for all related Timeshare Loans to be
conveyed on such Funding Date. On or prior to each Funding Date, the Issuer will
deliver or cause to be delivered to the Servicer, the Timeshare Loan Servicing
Files, for all related Timeshare Loans or Qualified Substitute Timeshare Loans
to be conveyed on such Funding Date.
(b) The Indenture Trustee shall perform its duties under this
Section 4.1 and hereunder on behalf of the Trust Estate and for the benefit of
the Noteholders in accordance with the terms of this Indenture and applicable
law and, in each case, taking into account its other obligations hereunder, but
without regard to:
(i) any relationship that the Indenture Trustee or any
Affiliate of the Indenture Trustee may have with an Obligor;
(ii) the ownership of any Note by the Indenture Trustee or any
Affiliate of the Indenture Trustee;
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(iii) the Indenture Trustee's right to receive compensation
for its services hereunder or with respect to any particular
transaction; or
(iv) the ownership, or holding in trust for others, by the
Indenture Trustee of any other assets or property.
SECTION 4.2. Acquisition of Timeshare Loans.
The Issuer covenants that it shall only acquire Timeshare Loans in
accordance with the provisions of the Sale Agreement and, without limiting the
generality of the Granting Clause, upon any such acquisition, such Timeshare
Loans shall be deemed to be a part of the Trust Estate.
SECTION 4.3. [RESERVED].
SECTION 4.4. Tax Treatment.
(a) The conveyance by the Issuer of the Timeshare Loans to the
Indenture Trustee shall not constitute and is not intended to result in an
assumption by the Indenture Trustee or any Noteholder of any obligation of the
Issuer or the Servicer to the Obligors, the insurers under any insurance
policies, or any other Person in connection with the Timeshare Loans.
(b) It is the intention of the parties hereto that, with respect to
all taxes, the Notes will be treated as indebtedness of the Issuer to the
Noteholders secured by the Timeshare Loans (the "Intended Tax
Characterization"). The provisions of this Indenture shall be construed in
furtherance of the Intended Tax Characterization. Each of the Issuer, the
Servicer, the Indenture Trustee, the Club Trustee and the Backup Servicer by
entering into this Indenture, and each Noteholder by the purchase of a Note,
agree to report such transactions for purposes of all taxes in a manner
consistent with the Intended Tax Characterization, unless otherwise required by
applicable law.
(c) None of the Issuer, the Servicer, the Club Trustee or the Backup
Servicer shall take any action inconsistent with the Indenture Trustee's
interest in the Timeshare Loans and shall indicate or shall cause to be
indicated in its books and records held on its behalf that each Timeshare Loan
and the other Timeshare Loans constituting the Trust Estate has been assigned to
the Indenture Trustee on behalf of the Noteholders.
SECTION 4.5. Further Action Evidencing Grant of Security Interest and
Assignments.
(a) The Issuer and the Indenture Trustee each agrees that, from time
to time, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or appropriate, or
that the Noteholders representing a majority of the Outstanding Note Balance of
each Class of Notes may reasonably request, in order to perfect, protect or more
fully evidence the security interest in the Timeshare Loans or to enable the
Indenture Trustee to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Issuer will, without the necessity
of a request and upon the
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request of the Indenture Trustee, execute and file or record (or cause to be
executed and filed or recorded) such Assignments of Mortgage, financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate to create and
maintain in the Indenture Trustee a first priority perfected security interest,
at all times, in the Trust Estate, including, without limitation, recording and
filing UCC-1 financing statements, amendments or continuation statements prior
to the effective date of any change of the name, identity or structure or
relocation of its chief executive office or any change that would or could
affect the perfection pursuant to any financing statement or continuation
statement or assignment previously filed or make any UCC-1 or continuation
statement previously filed pursuant to this Indenture seriously misleading
within the meaning of applicable provisions of the UCC (and the Issuer shall
give the Indenture Trustee at least 30 Business Days prior notice of the
expected occurrence of any such circumstance). The Issuer shall deliver promptly
to the Indenture Trustee file-stamped copies of any such filings.
(b) (i) The Issuer hereby grants to each of the Servicer and the
Indenture Trustee a power of attorney to execute, file and record all documents
including, but not limited to, Assignments of Mortgage, UCC-1 financing
statements, amendments or continuation statements, on behalf of the Issuer as
may be necessary or desirable to effectuate the foregoing and (ii) the Servicer
hereby grants to the Indenture Trustee a power of attorney to execute, file and
record all documents on behalf of the Servicer as may be necessary or desirable
to effectuate the foregoing; provided, however, that such grant shall not create
a duty on the part of the Indenture Trustee or the Servicer to file, prepare,
record or monitor, or any responsibility for the contents or adequacy of, any
such documents.
SECTION 4.6. Substitution and Repurchase of Timeshare Loans.
(a) Mandatory Substitution and Repurchase of Timeshare Loans for
Breach of Representation or Warranty. If at any time, any party hereto obtains
knowledge, discovers, or is notified by any other party hereto, that any of the
representations and warranties of the Depositor in the Sale Agreement were
incorrect at the time such representations and warranties were made, then the
party discovering such defect, omission, or circumstance shall promptly notify
the other parties to this Indenture, the Depositor and the Club Originator. In
the event any such representation or warranty of the Depositor is incorrect and
materially and adversely affects the value of a Timeshare Loan or the interests
of the Noteholders therein, then the Issuer and the Indenture Trustee shall
require the Depositor, within 30 days (or, if the Depositor shall have provided
satisfactory evidence to the Agent (at its sole discretion) that (1) such breach
can not be cured within the 30 day period, (2) such breach can be cured within
an additional 30 day period and (3) it is diligently pursuing a cure, then 60
days) after the date it is first notified of, or otherwise obtains Knowledge of
such breach, to eliminate or otherwise cure in all material respects the
circumstance or condition which has caused such representation or warranty to be
incorrect or if the breach relates to a particular Timeshare Loan and is not
cured in all material respects (such Timeshare Loan, a "Defective Timeshare
Loan"), either (i) repurchase the Issuer's interest in such Defective Timeshare
Loan at the Repurchase Price or (ii) provide one or more Qualified Substitute
Timeshare Loans and pay the Substitution Shortfall Amounts, if any. The
Indenture Trustee is hereby appointed attorney-in-fact, which appointment is
coupled with an interest and is therefore irrevocable, to act on behalf and in
the name of the Issuer to enforce the Depositor's repurchase or substitution
obligations if the Depositor has not complied with its
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repurchase or substitution obligations under the Sale Agreement within the
aforementioned 30 day or 60-day period.
(b) Optional Purchase or Substitution of Club Loans. Pursuant to the
Purchase Agreement, with respect to any Original Club Loan, on any date, the
Club Originator, as designee of the Depositor, will (at its option), if the
related Obligor has elected to effect and the Club Originator has agreed to
effect an Upgrade, (i) pay to the Collection Account the Repurchase Price for
such Original Club Loan or (ii) substitute one or more Qualified Substitute
Timeshare Loans for such Original Club Loan and pay the related Substitution
Shortfall Amounts, if any; provided, however, that the option to substitute one
or more Qualified Substitute Timeshare Loans for an Original Club Loan is
limited on any date to (A) 20% of the sum of the Aggregate Initial Loan Balance,
less (B) the Loan Balances of Original Club Loans previously substituted by the
Club Originator pursuant to this Section 4.6(b) on the related substitution
dates. The Club Originator, as designee of the Depositor, shall deposit the
related Repurchase Price and Substitution Shortfall Amounts, if any, in the
Collection Account as set forth in Section 4.6(d) below. The Issuer acknowledges
that the Club Originator has agreed to use best efforts to exercise its
substitution option with respect to Original Club Loans prior to exercise of its
repurchase option, and to the extent that the Club Originator shall elect to
substitute Qualified Substitute Timeshare Loans for an Original Club Loan, the
Club Originator shall use best efforts to cause each such Qualified Substitute
Timeshare Loan to be, in the following order of priority, (i) the Upgrade Club
Loan related to such Original Club Loan (in which case, clause (rr) of Schedule
I to the Purchase Agreement and the Sale Agreement shall not apply as an
eligibility requirement) and (ii) an Upgrade Club Loan unrelated to such
Original Club Loan.
(c) Optional Purchase or Substitution of Defaulted Timeshare Loans.
Pursuant to the Purchase Agreement, with respect to any Defaulted Timeshare
Loans, on any date, the Club Originator, as designee of the Depositor shall have
the option, but not the obligation, to either (i) purchase the Defaulted
Timeshare Loan at the Repurchase Price for such Defaulted Timeshare Loan or (ii)
substitute one or more Qualified Substitute Timeshare Loans for such Defaulted
Timeshare Loan and pay the related Substitution Shortfall Amounts, if any;
provided, however, that the option to repurchase a Defaulted Timeshare Loan or
to substitute one or more Qualified Substitute Timeshare Loans for a Defaulted
Timeshare Loan is limited on any date to the Optional Purchase Limit and the
Optional Substitution Limit, respectively. The Club Originator, as designee of
the Depositor, shall purchase or substitute Defaulted Timeshare Loans as
provided herein and the Club Originator shall deposit the related Repurchase
Price and Substitution Shortfall Amounts, if any, in the Collection Account as
set forth in Section 4.6(d) hereof. The Club Originator, may irrevocably waive
the Club Originator's option to purchase or substitute a Defaulted Timeshare
Loan by delivering or causing to be delivered to the Indenture Trustee a Waiver
Letter in the form of Exhibit G attached hereto.
(d) Payment of Repurchase Prices and Substitution Shortfall Amounts.
The Issuer and the Indenture Trustee shall direct that the Depositor remit or
cause to be remitted all amounts in respect of Repurchase Prices and
Substitution Shortfall Amounts payable during the related Due Period in
immediately available funds to the Indenture Trustee on the Funding Date for
deposit in the Collection Account.
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(e) Schedule of Timeshare Loans. The Issuer and Indenture Trustee
shall direct the Depositor to provide or cause to be provided to the Indenture
Trustee on any date on which a Timeshare Loan is purchased, repurchased or
substituted with an electronic supplement to the Schedule of Timeshare Loans
reflecting the removal and/or substitution of Timeshare Loans and subjecting any
Qualified Substitute Timeshare Loans to the provisions thereof.
(f) Officer's Certificate. No substitution of a Timeshare Loan shall
be effective unless the Issuer and the Indenture Trustee shall have received an
Officer's Certificate from the Club Originator indicating that (i) the new
Timeshare Loan meets all the criteria of the definition of "Qualified Substitute
Timeshare Loan", (ii) the Timeshare Loan Files for such Qualified Substitute
Timeshare Loan have been delivered to the Custodian or shall be delivered within
five Business Days, and (iii) the Timeshare Loan Servicing Files for such
Qualified Substitute Timeshare Loan have been delivered to the Servicer.
(g) Qualified Substitute Timeshare Loans. Within five Business Days
after a Transfer Date, the Issuer and the Indenture Trustee shall direct the
Depositor to deliver or cause the delivery of the Timeshare Loan Files of the
related Qualified Substitute Timeshare Loans to the Custodian in accordance with
the provisions of this Indenture and the Custodial Agreement.
SECTION 4.7. Release of Lien.
(a) The Issuer shall be entitled to obtain a release from the Lien
of the Indenture for any Timeshare Loan purchased, repurchased or substituted
under Section 4.6 hereof, (i) upon satisfaction of each of the applicable
provisions of Section 4.6 hereof, (ii) in the case of any purchase or
repurchase, after a payment by the Depositor of the Repurchase Price of the
Timeshare Loan, and (iii) in the case of any substitution, after payment by the
Depositor of the applicable Substitution Shortfall Amounts, if any, pursuant to
Section 4.6 hereof.
(b) The Issuer shall be entitled to obtain a release from the Lien
of the Indenture for any Timeshare Loan which has been paid in full.
(c) In connection with (a) and (b) above, the Issuer and Indenture
Trustee will execute and deliver such releases, endorsements and assignments as
are provided to it by the Depositor, in each case, without recourse,
representation or warranty, as shall be necessary to vest in the Depositor or
its designee, the legal and beneficial ownership of each Timeshare Loan being
released pursuant to this Section 4.7. The Servicer shall deliver a Request for
Release to the Custodian with respect to the related Timeshare Loan Files and
Timeshare Loan Servicing Files being released pursuant to this Section 4.7, and
such files shall be transferred to the Depositor or its designee.
SECTION 4.8. Appointment of Custodian and Paying Agent.
(a) The Indenture Trustee may appoint a Custodian to hold all or a
portion of the Timeshare Loan Files as agent for the Indenture Trustee. Each
Custodian shall be a depository institution supervised and regulated by a
federal or state banking authority, shall have combined capital and surplus of
at least $100,000,000, shall be qualified to do business in the jurisdiction in
which it holds any Timeshare Loan File and shall not be the Issuer or an
Affiliate of the Issuer. The initial Custodian shall be U.S. Bank National
Association. The Indenture
24
Trustee shall not be responsible for paying the Custodian Fee or any other
amounts owed to the Custodian.
(b) The Issuer hereby appoints the Indenture Trustee as a Paying
Agent. The Issuer may appoint other Paying Agents from time to time. Any such
other Paying Agent shall be appointed by Issuer Order with written notice
thereof to the Indenture Trustee. Any Paying Agent appointed by the Issuer shall
be a Person who would be eligible to be Indenture Trustee hereunder as provided
in Section 7.7 hereof.
ARTICLE V.
SERVICING OF TIMESHARE LOANS
SECTION 5.1. Appointment of Servicer and Backup Servicer; Servicing
Standard.
(a) Subject to the terms and conditions herein, the Issuer and the
Indenture Trustee hereby appoint Bluegreen as the initial Servicer hereunder.
The Servicer shall service and administer the Timeshare Loans and perform all of
its duties hereunder in accordance with the Servicing Standard.
(b) Subject to the terms and conditions herein and in the Backup
Servicing Agreement, the Issuer hereby appoints Concord Servicing Corporation to
act as the initial Backup Servicer hereunder. The Backup Servicer shall service
and administer the Timeshare Loans and perform all of its duties hereunder and
under the Backup Servicing Agreement in accordance with the Servicing Standard.
SECTION 5.2. Payments on the Timeshare Loans.
(a) The Servicer shall, in a manner consistent with the Servicing
Standard, collect all payments made under each Timeshare Loan and direct each
applicable Obligor to timely make all payments in respect of his or her
Timeshare Loan to the Lockbox Account maintained at the Lockbox Bank and, with
respect to Credit Card Timeshare Loans, direct each applicable credit card
vendor to deposit all payments in respect of such Credit Card Timeshare Loans to
the Credit Card Account.
(b) On each Funding Date, the Servicer shall cause to be deposited
to the Collection Account all amounts collected and received in respect of the
related Timeshare Loans after the related Cut-Off Date (without deduction for
any Liquidation Expenses).
(c) Subject to subsection (d) below, the Indenture Trustee shall
direct the Lockbox Bank to remit all collections in respect of the Timeshare
Loans on deposit in the Lockbox Account to the Collection Account on each
Business Day via automated repetitive wire.
(d) Liquidation Expenses shall be reimbursed as Additional Servicing
Compensation to the Servicer in accordance with Section 3.2(a) hereof. To the
extent that the Servicer has received any Liquidation Expenses as Additional
Servicing Compensation and shall subsequently recover any portion of such
Liquidation Expenses from the related Obligor, the
25
Servicer shall deposit such amounts into the Collection Account in accordance
with Section 5.3(b) hereof.
(e) The Servicer agrees that to the extent it receives any amounts
in respect of any insurance policies which are not payable to the Obligor or
otherwise necessary for the intended use, or any other collections relating to
the Trust Estate, it shall deposit such amounts to the Collection Account within
two Business Days of receipt thereof (unless otherwise expressly provided
herein).
SECTION 5.3. Duties and Responsibilities of the Servicer.
(a) In addition to any other customary services which the Servicer
may perform or may be required to perform hereunder, the Servicer shall perform
or cause to be performed through sub-servicers, the following servicing and
collection activities in accordance with the Servicing Standard:
(i) perform standard accounting services and general record
keeping services with respect to the Timeshare Loans;
(ii) respond to telephone or written inquiries of Obligors
concerning the Timeshare Loans;
(iii) keep Obligors informed of the proper place and method
for making payment with respect to the Timeshare Loans;
(iv) contact Obligors to effect collections and to discourage
delinquencies in the payment of amounts owed under the Timeshare
Loans and doing so by any lawful means;
(v) report tax information to Obligors and taxing authorities
to the extent required by law;
(vi) take such other action as may be necessary or appropriate
in the Servicer's judgment (which shall be consistent with the
Servicing Standard) for the purpose of collecting and transferring
to the Indenture Trustee for deposit into the Collection Account all
payments received by the Servicer or remitted to the Lockbox Account
or the Credit Card Account in respect of the Timeshare Loans (except
as otherwise expressly provided herein), and to carry out the duties
and obligations imposed upon the Servicer pursuant to the terms of
this Indenture;
(vii) arranging for Liquidations of Timeshare Properties
related to Defaulted Timeshare Loans and the remarketing of such
Timeshare Properties as provided in Section 5.3(a)(xiii) hereof;
(viii) use reasonable best efforts to enforce the purchase and
substitution obligations of the Club Originator under the Purchase
Agreement and the Depositor under the Sale Agreement with respect to
breaches of representations and warranties related to the Timeshare
Loans;
26
(ix) refrain from modifying, waiving or amending the terms of
any Timeshare Loan; provided, however, the Servicer may modify,
waive or amend a Timeshare Loan for which a default on such
Timeshare Loan has occurred or is imminent and such modification,
amendment or waiver will not (i) materially alter the interest rate
on or the principal balance of such Timeshare Loan, (ii) shorten the
final maturity of, lengthen the timing of payments of either
principal or interest, or any other terms of, such Timeshare Loan in
any manner which would have a material adverse affect on the
Noteholders, (iii) adversely affect the Timeshare Property
underlying such Timeshare Loan or (iv) reduce materially the
likelihood that payments of interest and principal on such Timeshare
Loan shall be made when due; provided, further, the Servicer may
grant a single extension of the final maturity of a Timeshare Loan
if the Servicer, in its reasonable discretion, determines that (A)
such Timeshare Loan is in default or a default on such Timeshare
Loan is likely to occur in the foreseeable future and (B) the value
of such Timeshare Loan will be enhanced by such extension; provided,
further, the Servicer shall not be permitted to modify, waive or
amend the terms of any Timeshare Loan if the sum of the Cut-Off Date
Loan Balance of such Timeshare Loan and the Cut-Off Date Loan
Balances of all other Timeshare Loans for which the Servicer has
modified, waived or amended the terms thereof exceeds 1% of the
Aggregate Initial Loan Balance;
(x) work with Obligors in connection with any transfer of
ownership of a Timeshare Property by an Obligor to another Person
(to the extent permitted), whereby the Servicer may, only if
required by law, consent to the assumption by such Person of the
Timeshare Loan related to such Timeshare Property (to the extent
permitted); provided, however, in connection with any such
assumption, the rate of interest borne by, the maturity date of, the
principal amount of, the timing of payments of principal and
interest in respect of, and all other material terms of, the related
Timeshare Loan shall not be changed other than as permitted in (ix)
above;
(xi) to the extent that the Custodian Fees or the Lockbox Fees
are, in the Servicer's reasonable business judgment, no longer
commercially reasonable, use commercially reasonable efforts to
exercise its rights under the Custodial Agreement or the Lockbox
Agreement to replace the Custodian or Lockbox Bank, as applicable.
Any such successor shall be reasonably acceptable to the Indenture
Trustee;
(xii) delivery of such information and data to the Backup
Servicer as is required under the Backup Servicing Agreement; and
(xiii) in the event that a Defaulted Timeshare Loan is not or
cannot be released from the Lien of the Indenture pursuant to
Section 4.7 hereof, the Servicer shall, in accordance with the
Servicing Standard, promptly institute collection procedures, which
may include, but is not limited to, cancellation, forfeiture,
termination or foreclosure proceedings or obtaining a deed-in-lieu
of foreclosure (each, a "Foreclosure Property"). Upon the Timeshare
Property becoming a Foreclosure Property, the Servicer shall cause
the Remarketing Agent to promptly
27
attempt to remarket such Foreclosure Property in accordance with and
pursuant to the Remarketing Agreement. The Remarketing Fees due
under the Remarketing Agreement shall constitute Liquidation
Expenses and upon reimbursement to the Servicer shall be paid by the
Servicer to the Remarketing Agent.
(b) The Servicer shall, at least once each week, for each applicable
Credit Card Timeshare Loan, deposit to the Credit Card Account, the service
charge imposed by the applicable credit card vendor for processing the payment
due from the Obligor (such amount, the "Servicer Credit Card Processing Cost")
and shall immediately cause all amounts on deposit therein to be transferred to
the Lockbox Account. The Agent may, at any time direct the Indenture Trustee to
cause the Lockbox Bank to restrict the Servicer's access and rights to the
Credit Card Account, and shall instruct the Indenture Trustee to instruct the
Lockbox Bank to sweep all amounts on deposit in the Credit Card Account to be
transferred to the Lockbox Account on a daily basis. The Servicer hereby agrees
that if such direction is given by the Agent, the Servicer shall not provide any
contrary instruction to the Lockbox Bank with respect to the Credit Card
Account.
(c) For so long as Bluegreen or any of its Affiliates controls the
Resorts, the Servicer shall use commercially reasonable best efforts to maintain
or cause to maintain the Resorts in good repair, working order and condition
(ordinary wear and tear excepted).
(d) For so long as Bluegreen or any of its Affiliates controls the
Resorts, the manager, related management contract and master marketing and sale
contract (if applicable) for each Resort at all times shall be reasonably
satisfactory to the Noteholders representing a majority of the Outstanding Note
Balance of each Class of Notes. For so long as Bluegreen or any of its
Affiliates controls the Association for a Resort, and Bluegreen or an Affiliate
thereof is the manager, (i) if an amendment or modification to the related
management contract and master marketing and sale contract materially and
adversely affects the Noteholders, then it may only be amended or modified with
the prior written consent of the Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes, which consent shall not be
unreasonably withheld or delayed and (ii) if an amendment or modification to the
related management contract and master marketing and sale contract does not
materially and adversely affect the Noteholders, Bluegreen shall send a copy of
such amendment or modification to the Agent with the Monthly Report to be
delivered subsequent to the effective date of such amendment or modification.
(e) In the event any Lien (other than a Permitted Lien) attaches to
any Timeshare Loan or related collateral from any Person claiming from and
through Bluegreen or one of its Affiliates which materially adversely affects
the Issuer's interest in such Timeshare Loan, Bluegreen shall, within the
earlier to occur of ten Business Days after such attachment or the respective
lienholders' action to foreclose on such lien, either (i) cause such Lien to be
released of record, (ii) provide the Indenture Trustee with a bond in accordance
with the applicable laws of the state in which the Timeshare Property is
located, issued by a corporate surety acceptable to the Indenture Trustee, in an
amount and in form reasonably acceptable to the Indenture Trustee or (iii)
provide the Indenture Trustee with such other security as the Indenture Trustee
may reasonably require.
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(f) The Servicer shall: (i) promptly notify the Indenture Trustee of
(A) any claim, action or proceeding which may be reasonably expected to have a
material adverse effect on the Trust Estate, or any material part thereof, and
(B) any action, suit, proceeding, order or injunction of which Servicer becomes
aware after the date hereof pending or threatened against or affecting Servicer
or any Affiliate which may be reasonably expected to have a material adverse
effect on the Trust Estate or the Servicer's ability to service the same; (ii)
at the request of Indenture Trustee with respect to a claim or action or
proceeding which arises from or through the Servicer or one of its Affiliates,
appear in and defend, at Servicer's expense, any such claim, action or
proceeding which would have a material adverse effect on the Timeshare Loans or
the Servicer's ability to service the same; and (iii) comply in all respects,
and shall cause all Affiliates to comply in all respects, with the terms of any
orders imposed on such Person by any governmental authority the failure to
comply with which would have a material adverse effect on the Timeshare Loans or
the Servicer's ability to service the same.
(g) Except as contemplated by the Transaction Documents, the
Servicer shall not, and shall not permit the Club Managing Entity to, encumber,
pledge or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ or security interest in and to the Reservation
System (including, without limitation, all hardware, software and data in
respect thereof) and furthermore agrees, and shall cause the Club Managing
Entity, to use commercially reasonable efforts to keep the Reservation System
operational, not to dispose of the same and to allow the Club the use of, and
access to, the Reservation System in accordance with the terms of the Club
Management Agreement.
(h) The Servicer shall comply in all material respects with the
Collection Policy and the Credit Policy attached hereto as Exhibit J and Exhibit
K, respectively, in regard to each Timeshare Loan. The Servicer shall (i) notify
the Agent ten days prior to any material amendment or change to the Collection
Policy or the Credit Policy and (ii) obtain the Agent's prior written consent
(which consent will not be unreasonably withheld or delayed) if such amendment
or change has a material and adverse affect on the Noteholders; provided, that
the Servicer may immediately implement any changes (and provide notice to the
Agent subsequent thereto) as may be required under applicable law from time to
time upon the reasonable determination of the Servicer; and provided, further,
that the Servicer shall deliver a copy of any non-material amendments or changes
to the Collection Policy or the Credit Policy to the Agent with the Monthly
Report to be delivered subsequent to the effective date of such amendments or
changes. All notices delivered to the Agent pursuant to this Section 5.3(h)
shall also be delivered to the Rating Agency, to the extent that any Class of
Notes Outstanding is rated by the Rating Agency.
(i) The Servicer shall comply in all material respects with the
terms of the Timeshare Loans.
SECTION 5.4. Servicer Events of Default.
(a) If any Servicer Event of Default shall have occurred and not
been waived hereunder, the Indenture Trustee may, and upon notice from
Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes shall, terminate, on behalf of the Noteholders, by notice in
writing to the Servicer, all of the rights and obligations of the Servicer, as
Servicer under this Indenture. The Indenture Trustee shall immediately give
written notice of
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such termination to the Backup Servicer. Unless consented to by the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes,
the Issuer may not waive any Servicer Event of Default.
(b) Replacement of Servicer. From and after the receipt by the
Servicer of such written termination notice or the resignation of the Servicer
pursuant to Section 5.10 hereof, all authority and power of the Servicer under
this Indenture, whether with respect to the Timeshare Loans or otherwise, shall,
pass to and be vested in the Indenture Trustee, and the Indenture Trustee shall
be the successor Servicer hereunder and the duties and obligations of the
Servicer shall terminate. The Servicer shall perform such actions as are
reasonably necessary to assist the Indenture Trustee and the Backup Servicer in
such transfer. If the Servicer fails to undertake such action as is reasonably
necessary to effectuate such a transfer, the Indenture Trustee is hereby
authorized and empowered to execute and deliver, on behalf of and at the expense
of the Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things reasonably
necessary to effect the purposes of such notice of termination. The Servicer
agrees that if it is terminated pursuant to this Section 5.4, it shall promptly
(and, in any event, no later than five Business Days subsequent to its receipt
of the notice of termination from the Indenture Trustee) provide the Indenture
Trustee, the Backup Servicer or their respective designees (with reasonable
costs being borne by the Servicer) with all documents and records (including,
without limitation, those in electronic form) reasonably requested by it to
enable the Indenture Trustee to assume the Servicer's functions hereunder and
for the Backup Servicer to assume the functions required by the Backup Servicing
Agreement, and the Servicer shall cooperate with the Indenture Trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder and the assumption by a successor of the Servicer's obligations
hereunder, including, without limitation, the transfer within one Business Day
to the Indenture Trustee or its designee for administration by it of all cash
amounts which shall at the time or thereafter received by it with respect to the
Timeshare Loans (provided, however, that the Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Indenture on
or prior to the date of such termination). The Indenture Trustee shall be
entitled to renegotiate the Servicing Fee; provided, however, no change to the
Servicing Fee may be made unless the Indenture Trustee shall have (i) submitted
a servicing fee proposal (a "New Servicing Fee Proposal") to S&P seeking written
confirmation as to whether or not the New Servicing Fee Proposal would result in
a qualification, downgrade or withdrawal of any rating assigned to a Class of
Notes, to the extent there are Notes Outstanding that are rated, (ii) notified
the Noteholders of S&P's response, and (iii) received the written consent of
Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes. Notwithstanding anything herein to the contrary, in no event
shall the Indenture Trustee or Bluegreen be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and the
amount necessary to induce any successor Servicer to assume the obligations of
Servicer under this Indenture.
The Indenture Trustee shall be entitled to be reimbursed by the
Servicer, (or by the Trust Estate to the extent set forth in Section 3.4(a)(i)
or Section 6.6(a)(i) hereof) if the Servicer is unable to fulfill its
obligations hereunder for all Servicer Termination Costs.
The successor Servicer shall have (i) no liability with respect to
any obligation which was required to be performed by the terminated Servicer
prior to the date that the
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successor Servicer becomes the Servicer or any claim of a third party based on
any alleged action or inaction of the terminated Servicer, (ii) no obligation to
perform any repurchase obligations, if any, of the Servicer, (iii) no obligation
to pay any taxes required to be paid by the Servicer, (iv) no obligation to pay
any of the fees and expenses of any other party involved in this transaction
that were incurred by the prior Servicer and (v) no liability or obligation with
respect to any Servicer indemnification obligations of any prior Servicer
including the original Servicer.
Notwithstanding anything contained in the Indenture to the contrary,
any successor Servicer is authorized to accept and rely on all of the
accounting, records (including computer records) and work of the prior Servicer
relating to the Timeshare Loans (collectively, the "Predecessor Servicer Work
Product"), without any audit or other examination thereof, and such successor
Servicer shall have no duty, responsibility, obligation or liability for the
acts and omissions of the prior Servicer. If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, "Errors") exist
in any Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the successor
Servicer making or continuing any Errors (collectively, "Continued Errors"), the
successor Servicer shall have no duty, responsibility, obligation or liability
for such Continued Errors; provided, however, that each successor Servicer shall
agree to use its best efforts to prevent further Continued Errors. In the event
that the successor Servicer becomes aware of Errors or Continued Errors, the
successor Servicer shall, with the prior consent of the Indenture Trustee, use
its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continued Errors and to prevent future
Continued Errors and to recover its costs thereby.
The Indenture Trustee may appoint an Affiliate as the successor
Servicer and the provisions of this Section 5.4(b) related to the Indenture
Trustee shall apply to such Affiliate.
(c) Any successor Servicer, including the Indenture Trustee, shall
not be deemed to be in default or to have breached its duties as successor
Servicer hereunder if the predecessor Servicer shall fail to deliver any
required deposit to the Collection Account or otherwise fail to cooperate with,
or take any actions required by such successor Servicer related to the transfer
of servicing hereunder.
SECTION 5.5. Accountings; Statements and Reports.
(a) Monthly Servicer Report. Not later than four Business Days prior
to the Payment Date, the Servicer shall deliver to the Issuer, the Indenture
Trustee, the Rating Agency (to the extent that any Notes are rated) and the
Agent, a report (the "Monthly Servicer Report") substantially in the form of
Exhibit D hereto, detailing certain activity relating to the Timeshare Loans.
The Monthly Servicer Report shall be completed with the information specified
therein for the related Due Period and shall contain such other information as
may be reasonably requested by the Issuer, the Indenture Trustee or the Agent in
writing at least five Business Days prior to such Determination Date. Each such
Monthly Servicer Report shall be accompanied by an Officer's Certificate of the
Servicer in the form of Exhibit E hereto, certifying the accuracy of the
computations reflected in such Monthly Servicer Report. The Servicer agrees to
consult and cooperate with the Agent in the preparation of the Monthly Servicer
Report.
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(b) Certification as to Compliance. The Servicer shall deliver to
the Issuer, the Indenture Trustee, the Rating Agency (to the extent that any
Notes are rated) and the Agent, an Officer's Certificate on or before April 30
of each year commencing in 2007: (x) to the effect that a review of the
activities of the Servicer during the preceding calendar year, and of its
performance under this Indenture during such period has been made under the
supervision of the officers executing such Officer's Certificate with a view to
determining whether during such period, to the best of such officer's knowledge,
the Servicer had performed and observed all of its obligations under this
Indenture, and (y) either (A) stating that based on such review, no Servicer
Event of Default is known to have occurred and is continuing, or (B) if such a
Servicer Event of Default is known to have occurred and is continuing,
specifying such Servicer Event of Default and the nature and status thereof.
(c) Annual Accountants' Reports. On or before each April 30 of each
year commencing in 2007, the Servicer shall (i) cause a firm of independent
public accountants to furnish a certificate or statement (and the Servicer shall
provide a copy of such certificate or statement to the Issuer, the Rating Agency
(to the extent that any Notes are rated), the Indenture Trustee and the Agent),
to the effect that (1) such firm has examined and audited the Servicer's
servicing controls and procedures for the previous calendar year and that such
independent public accountants have examined certain documents and records
(including computer records) and servicing procedures of the Servicer relating
to the Timeshare Loans, (2) they have examined the most recent Monthly Servicer
Report prepared by the Servicer and three other Monthly Servicer Reports chosen
at random by such firm and compared such Monthly Servicer Reports with the
information contained in such documents and records, (3) their examination
included such tests and procedures as they considered necessary in the
circumstances, (4) their examinations and comparisons described under clauses
(1) and (2) above disclosed no exceptions which, in their opinion, were
material, relating to such Timeshare Loans or such Monthly Servicer Reports, or,
if any such exceptions were disclosed thereby, setting forth such exceptions
which, in their opinion, were material, and (5) on the basis of such
examinations and comparisons, such firm is of the opinion that the Servicer has,
during the relevant period, serviced the Timeshare Loans in compliance with this
Indenture and the other Transaction Documents in all material respects and that
such documents and records have been maintained in accordance with this
Indenture and the other Transaction Documents in all material respects, except
in each case for (A) such exceptions as such firm shall believe to be immaterial
and (B) such other exceptions as shall be set forth in such written report. The
report will also indicate that such firm is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. The Agent shall agree (prior to the delivery of
any report) to the procedures to be performed by independent public accountants
in any of the reports required to be prepared pursuant to this Section 5.5(c).
(d) Report on Proceedings and Servicer Event of Default. (i)
Promptly upon a Responsible Officer of the Servicer's obtaining Knowledge of any
proposed or pending investigation of it by any Governmental Authority or any
court or administrative proceeding which involves or is reasonably likely to
involve the possibility of materially and adversely affecting the properties,
business, prospects, profits or conditions (financial or otherwise) of the
Servicer and its subsidiaries, as a whole, the Servicer shall send written
notice specifying the nature of such investigation or proceeding and what action
the Servicer is taking or proposes to take with respect thereto and evaluating
its merits, or (ii) immediately upon obtaining
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Knowledge of the existence of any condition or event which constitutes a
Servicer Event of Default, the Servicer shall send written notice to the Issuer,
the Indenture Trustee and the Agent describing its nature and period of
existence and what action the Servicer is taking or proposes to take with
respect thereto.
(e) Quarterly Financial Reports. Within 45 days after the end of
each of Servicer's (provided the Servicer is Bluegreen or an Affiliate thereof)
first three fiscal calendar periods each year (or, if later, that date by which
Bluegreen is required to file financial statements with the Securities and
Exchange Commission), the Servicer shall deliver to the Agent, unaudited
financial statements of Servicer (provided the Servicer is Bluegreen or an
Affiliate thereof) certified by its chief financial officer as well as, to the
extent requested by the Agent and available to Servicer (provided the Servicer
is Bluegreen or an Affiliate thereof), unaudited bi-annual financial statements
of the Association managed by the Club Managing Entity.
(f) Audit Reports. To the extent Bluegreen or its Affiliate is the
Servicer, the Servicer shall deliver to the Indenture Trustee and the Agent
promptly upon receipt thereof, one copy of each other report submitted to the
Servicer by its independent public accountants in connection with any annual,
interim or special audit made by them of the books of the Servicer.
(g) Other Reports. To the extent Bluegreen Corporation or its
Affiliate is the Servicer, the Servicer shall deliver to the Indenture Trustee
and the Agent, such other reports, statements, notices or written communications
relating to the Servicer, the Associations, the Resorts or the Additional
Approved Resorts as are available to Servicer and as the Agent may reasonably
require.
SECTION 5.6. Records.
The Servicer shall maintain all data for which it is responsible
(including, without limitation, computerized tapes or disks) relating directly
to or maintained in connection with the servicing of the Timeshare Loans (which
data and records shall be clearly marked to reflect that the Timeshare Loans
have been Granted to the Indenture Trustee on behalf of the Noteholders and
constitute property of the Trust Estate) at the address specified in Section
13.3 hereof or, upon 15 days' notice to the Issuer and the Indenture Trustee, at
such other place where any Servicing Officer of the Servicer is located (or upon
24 hours' written notice if an Event of Default or Servicer Event of Default
shall have occurred).
SECTION 5.7. Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall maintain or cause to be maintained fidelity bond
and errors and omissions insurance with respect to the Servicer in such form and
in amounts as is customary for institutions acting as custodian of funds in
respect of timeshare loans or receivables on behalf of institutional investors;
provided that such insurance shall be in a minimum amount of $1,000,000 per
policy and shall name the Indenture Trustee as an additional insured. No
provision of this Section 5.7 requiring such fidelity bond or errors and
omissions insurance shall diminish or relieve the Servicer from its duties and
obligations as set forth in this Indenture. The Servicer shall be deemed to have
complied with this provision if one of its respective Affiliates has such
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fidelity bond or errors and omissions insurance coverage and, by the terms of
such fidelity bond or errors and omissions insurance policy, the coverage
afforded thereunder extends to the Servicer. Upon a request of the Indenture
Trustee, the Servicer shall deliver to the Indenture Trustee, a certification
evidencing coverage under such fidelity bond and the errors and omissions
insurance. Any such fidelity bond or errors and omissions insurance policy shall
not be canceled or modified in a materially adverse manner without 30 days'
prior written notice to the Indenture Trustee; provided, that the Servicer
agrees to use commercially reasonable efforts to require the applicable insurer
to provide 10 days' prior written notice of any cancellation or materially
adverse modification initiated by such insurer.
SECTION 5.8. Merger or Consolidation of the Servicer.
(a) The Servicer shall promptly provide written notice to the
Indenture Trustee, the Agent and the Rating Agency (to the extent that any Notes
are rated) of any merger or consolidation of the Servicer. The Servicer shall
keep in full effect its existence, rights and franchise as a corporation under
the laws of the state of its incorporation except as permitted herein, and shall
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture or any of the
Timeshare Loans and to perform its duties under this Indenture.
(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person (i)
is a company whose business includes the servicing of assets similar to the
Timeshare Loans and shall be authorized to lawfully transact business in the
state or states in which the related Timeshare Properties it is to service are
situated; (ii) is a U.S. Person, and (iii) delivers to the Indenture Trustee (A)
an agreement, in form and substance reasonably satisfactory to the Indenture
Trustee, which contains an assumption by such successor entity of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by the Servicer under this Indenture and the other
Transaction Documents to which the Servicer is a party and (B) an opinion of
counsel as to the enforceability of such agreement; provided, however, that, to
the extent that a Note is rated, the Rating Agency shall have confirmed that
such action will not result in a downgrade or withdrawal of any rating assigned
to any rated Class of Notes.
SECTION 5.9. Sub-Servicing.
(a) The Servicer may enter into one or more sub-servicing agreements
with a sub-servicer upon the consent of the Agent and a written confirmation
from the Rating Agency (to the extent that any Notes are rated) that the
execution of such sub-servicing agreement and the retention of such sub-servicer
would not result in a qualification, downgrade or withdrawal of any rating
assigned to a Class of Notes. References herein to actions taken or to be taken
by the Servicer in servicing the Timeshare Loans include actions taken or to be
taken by a sub-servicer on behalf of the Servicer. Any sub-servicing agreement
will be upon such terms and conditions
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as the Servicer may reasonably agree and as are not inconsistent with this
Indenture. The Servicer shall be solely responsible for any sub-servicing fees
due and payable to such sub-servicer.
(b) Notwithstanding any sub-servicing agreement, the Servicer shall
remain obligated and liable for the servicing and administering of the Timeshare
Loans in accordance with this Indenture, without diminution of such obligation
or liability by virtue of such sub-servicing agreement, and to the same extent
and under the same terms and conditions as if the Servicer alone were servicing
and administering the Timeshare Loans.
SECTION 5.10. Servicer Resignation.
The Servicer shall not resign from the duties and obligations hereby
imposed on it under this Indenture unless and until (i) a successor servicer,
acceptable to the Issuer, the Indenture Trustee and the Noteholders representing
a majority of the Outstanding Note Balance of each Class of Notes, enters into
an agreement in form and substance satisfactory to the Indenture Trustee and the
Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes, which contains an assumption by such successor servicer of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by the Servicer under this Indenture from and after the
date of assumption, (ii) the Issuer, the Indenture Trustee and Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
consent to the assumption of the duties, obligations and liabilities of this
Indenture by such successor Servicer, and (iii) to the extent that any Note is
rated, the rating of such Notes will not be qualified, downgraded or withdrawn
(as evidenced by a letter from the Rating Agency to the Indenture Trustee or the
Agent to such effect, which letter shall be obtained at the expense of the
Servicer without right of reimbursement). Upon such resignation, the Servicer
shall comply with Section 5.4(b) hereunder.
Except as provided in the immediately preceding paragraph or
elsewhere in this Indenture, or as provided with respect to the survival of
indemnifications herein, the duties and obligations of a Servicer under this
Indenture shall continue until this Indenture shall have been terminated as
provided herein. The duties and obligations of a Servicer hereunder shall
survive the exercise by the Indenture Trustee of any right or remedy under this
Indenture or the enforcement by the Indenture Trustee of any provision of this
Indenture.
SECTION 5.11. Fees and Expenses.
As compensation for the performance of its obligations under this
Indenture, the Servicer shall be entitled to receive on each Payment Date, from
amounts on deposit in the Collection Account and in the priorities described in
Sections 3.2(a) and 3.4 hereof, the Servicing Fee and any Additional Servicing
Compensation. Other than Liquidation Expenses, the Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder.
SECTION 5.12. Access to Certain Documentation.
Upon ten Business Days' prior written notice (or, one Business Day's
prior written notice after the occurrence and during the continuance of an Event
35
of Default or a Servicer Event of Default), the Servicer will, from time to time
during regular business hours, as requested by the Issuer, the Indenture Trustee
or any Noteholder and, prior to the occurrence of a Servicer Event of Default,
at the expense of the Issuer or such Noteholder and upon the occurrence and
continuance of a Servicer Event of Default, at the expense of the Servicer,
permit the Issuer, the Indenture Trustee or any Noteholder or its agents or
representatives (i) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of the Servicer relating to the servicing
of the Timeshare Loans serviced by it and (ii) to visit the offices and
properties of the Servicer for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to the Timeshare Loans with
any of the officers, employees or accountants of the Servicer having knowledge
of such matters. Nothing in this Section 5.12 shall affect the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section 5.12.
SECTION 5.13. No Offset.
Prior to the termination of this Indenture, the obligations of
Servicer under this Indenture shall not be subject to any defense, counterclaim
or right of offset which the Servicer has or may have against the Issuer, the
Indenture Trustee or any Noteholder, whether in respect of this Indenture, any
Timeshare Loan or otherwise.
SECTION 5.14. Account Statements.
In connection with the Servicer's preparation of the Monthly
Servicer Reports, the Indenture Trustee agrees to deliver to the Servicer a
monthly statement providing account balances of each of the Trust Accounts.
SECTION 5.15. Indemnification; Third Party Claim.
The Servicer agrees to indemnify the Issuer, the Indenture Trustee
and the Noteholders from and against any and all actual damages (excluding
economic losses related to the collectibility of any Timeshare Loan), claims,
reasonable attorneys' fees and related costs, judgments, and any other costs,
fees and expenses that each may sustain because of the failure of the Servicer
to service the Timeshare Loans in accordance with the Servicing Standard or
otherwise perform its obligations and duties hereunder in compliance with the
terms of this Indenture, or because of any act or omission by the Servicer due
to its negligence or willful misconduct in connection with its maintenance and
custody of any funds, documents and records under this Indenture, or its release
thereof except as contemplated by this Indenture. The Servicer shall immediately
notify the Issuer and the Indenture Trustee if it has Knowledge of a claim made
by a third party with respect to the Timeshare Loans, and, if such claim relates
to the servicing of the Timeshare Loans by the Servicer, the Servicer shall
assume, with the consent of the Indenture Trustee, the defense of any such claim
and pay all expenses in connection therewith, including reasonable counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it. This Section 5.15 shall survive the termination of this
Indenture or the resignation or removal of the Servicer hereunder.
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SECTION 5.16. Backup Servicer.
(a) Backup Servicing Agreement. The Issuer, the Indenture Trustee,
the Servicer, the Depositor and the Backup Servicer hereby agree to execute the
Backup Servicing Agreement. The Backup Servicer shall be responsible for each of
the duties and obligations imposed upon it by the provisions of the Backup
Servicing Agreement and shall have no duties or obligations under any
Transaction Document to which it is not a party.
(b) Termination of Servicer; Cooperation. In the event that the
Servicer is terminated or resigns in accordance with the terms of this
Indenture, the Backup Servicer agrees to continue to perform it duties and
obligations hereunder and in the Backup Servicing Agreement without
interruption. The Backup Servicer agrees to cooperate in good faith with any
successor Servicer to effect a transition of the servicing obligations by the
Servicer to any successor Servicer. The Indenture Trustee agrees to provide such
information regarding the Trust Accounts as the Backup Servicer shall require to
produce the Monthly Servicer Report on and after the Assumption Date.
(c) Backup Servicer Duties After Assumption Date. In the event that
the Servicer is terminated or resigns in accordance with this Indenture, the
Backup Servicer agrees that it shall undertake those servicing duties and
obligations as set forth in and subject to Section 2 and Schedule V of the
Backup Servicing Agreement. Notwithstanding Section 5.9 hereof, so long as
Concord Servicing Corporation is the Backup Servicer, the Indenture Trustee, as
successor Servicer, will not be obligated or liable for the servicing and
administration activities to the extent that the Backup Servicer is responsible
for such activities under the Backup Servicing Agreement.
(d) Backup Servicing Fee. Prior to the Assumption Date, the Backup
Servicer should receive its Backup Servicing Fee in accordance with Sections 3.4
or 6.6 hereof, as applicable. On and after the Assumption Date, the Indenture
Trustee, as successor Servicer, will be obligated to distribute the Backup
Servicing Fee to the Backup Servicer from amounts received by the Indenture
Trustee in respect of the Servicing Fee.
(e) Termination of Backup Servicer. Notwithstanding anything to the
contrary herein, the Indenture Trustee shall have the right to remove the Backup
Servicer with or without cause at any time and replace the Backup Servicer
pursuant to the provisions of the Backup Servicing Agreement. In the event that
the Indenture Trustee shall exercise its rights to remove and replace Concord
Servicing Corporation as Backup Servicer or Concord Servicing Corporation shall
have terminated the Backup Servicing Agreement in accordance with the terms
thereof, Concord Servicing Corporation shall have no further obligation to
perform the duties of the Backup Servicer under this Indenture. In the event of
a termination of the Backup Servicing Agreement, the Indenture Trustee shall
appoint a successor Backup Servicer reasonably acceptable to the Indenture
Trustee and with the approval of the Agent at the written direction of the
Required Purchasers. Upon the termination or resignation of the Backup Servicer,
the Indenture Trustee shall be deemed to represent, warrant and covenant that it
will service or engage a subservicer to perform each of the servicing duties and
responsibilities described in this Indenture.
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SECTION 5.17. Aruba Notices. Within 30 days of the related Funding Date,
the Servicer shall confirm that notices have been mailed out to each Obligor
under a Timeshare Loan with respect to any Resort in the country of Aruba that
such Timeshare Loan has been transferred and assigned to the Issuer and that the
Issuer has in turn, pledged such Timeshare Loan to the Indenture Trustee, in
trust, for the benefit of the Noteholders. Such notice may include any notice or
notices that the Aruba Originator's predecessors in title to the Timeshare Loan
may give to the same Obligor with respect to any transfers and assignments of
the Timeshare Loan by such predecessors. Such notice shall be in the form
attached hereto as Exhibit H, as the same may be amended, revised or substituted
by the Indenture Trustee and the Servicer from time to time.
SECTION 5.18. Recordation. The Servicer agrees to cause all evidences of
recordation of the original Mortgage to be delivered to the Custodian to be held
as part of the Timeshare Loan Files. Upon the direction of the Noteholders, the
Indenture Trustee shall cause either the Custodian or a third party appointed by
the Indenture Trustee to complete the assignments of mortgage and (at the
Servicer's expense) record such assignments of mortgage in all appropriate
jurisdictions.
ARTICLE VI.
EVENTS OF DEFAULT; REMEDIES
SECTION 6.1. [RESERVED].
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment.
(a) Upon the occurrence and continuance of an Event of Default, if
(i) such Event of Default of the kind specified in subparagraph (d) or (e) of
the definition of Event of Default occurs or (ii) an Event of Default of the
kind specified in subparagraph (a) of the definition of Event of Default occurs
and either (x) the Agent has, in its good faith judgment, determined that the
value of the assets comprising the Trust Estate is less than the Aggregate
Outstanding Note Balance or (y) such Event of Default continues for two
consecutive Payment Dates, then each Class of Notes shall automatically become
due and payable at its Outstanding Note Balance together with all accrued and
unpaid interest thereon.
(b) Upon the occurrence and continuance of an Event of Default, if
such Event of Default is of the kind specified in subparagraph (a) of the
definition of Event of Default (other than as described in Section 6.2(a)
hereof), the Indenture Trustee shall, upon notice from Noteholders representing
a majority of the Outstanding Note Balance of the most senior Class of Notes
then Outstanding (and, if payment of interest and principal on the most senior
Class of Notes then Outstanding is current, the consent of the Noteholders
representing a majority of the Outstanding Note Balance of the most senior Class
of Notes which has failed to receive one or more payments of interest or
principal), declare each Class of Notes to be immediately due and payable at its
Outstanding Note Balance plus all accrued and unpaid interest thereon.
(c) Upon the occurrence and continuance of an Event of Default, if
such Event of Default (other than an Event of Default of the kind described in
Sections 6.2(a) or (b) hereof) shall occur and is continuing, the Indenture
Trustee shall, upon notice from Noteholders
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representing a majority of the Outstanding Note Balance of the most senior Class
of Notes then Outstanding, declare each Class of Notes to be immediately due and
payable at its Outstanding Note Balance plus all accrued and unpaid interest
thereon.
(d) Upon any such declaration or automatic acceleration, the
Outstanding Note Balance of each Class of Notes together with all accrued and
unpaid interest thereon shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Issuer. The Indenture Trustee shall promptly send a notice
of any declaration or automatic acceleration to the Agent.
(e) At any time after such a declaration of acceleration has been
made but before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article VI provided,
the Noteholders representing a majority of the Outstanding Note Balance of the
most senior Class Outstanding (and, if the consent of another Class shall have
been required for such declaration, Noteholders representing a majority of the
Outstanding Note Balance of such Class) by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(1) all principal due on any Class of Notes which has
become due otherwise than by such declaration of
acceleration and interest thereon from the date
when the same first became due until the date of
payment or deposit,
(2) all interest due with respect to any Class of
Notes and, to the extent that payment of such
interest is lawful, interest upon overdue interest
from the date when the same first became due until
the date of payment or deposit at a rate per annum
equal to the applicable Note Rate, and
(3) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation,
expenses, disbursements, and advances of each of
the Indenture Trustee and the Servicer, its agents
and counsel;
and
(ii) all Events of Default with respect to the Notes, other
than the non-payment of the Outstanding Note Balance of each Class
of Notes which became due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.13
hereof.
(f) An automatic acceleration under Section 6.2(a) hereof may only
be rescinded and annulled by Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes then Outstanding.
39
(g) Notwithstanding Section 6.2(d) and (e) hereof, (i) if the
Indenture Trustee shall have commenced making payments as described in Section
6.6 hereof, no acceleration may be rescinded or annulled and (ii) no rescission
shall affect any subsequent Events of Default or impair any rights consequent
thereon.
SECTION 6.3. Remedies.
(a) If an Event of Default with respect to the Notes occurs and is
continuing of which a Responsible Officer of the Indenture Trustee has
Knowledge, the Indenture Trustee shall immediately give notice to each
Noteholder as set forth in Section 7.2 hereof and shall solicit such Noteholders
for advice. The Indenture Trustee shall then take such action as so directed by
the Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes then Outstanding subject to the provisions of this Indenture.
(b) Following any acceleration of the Notes, the Indenture Trustee
shall have all of the rights, powers and remedies with respect to the Trust
Estate as are available to secured parties under the UCC or other applicable
law, subject to the limitations set forth in subsection (d) below and provided
such action is not inconsistent with any other provision of this Indenture. Such
rights, powers and remedies may be exercised by the Indenture Trustee in its own
name as trustee of an express trust.
(c) If an Event of Default specified in subparagraph (a) of the
definition of Event of Default occurs and is continuing, the Indenture Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Issuer for the Aggregate Outstanding Note Balance and interest
remaining unpaid with respect to the Notes.
(d) Subject to the provisions set forth herein, if an Event of
Default occurs and is continuing, the Indenture Trustee may, in its discretion,
and at the instruction of the Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes shall, proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
judicial or other proceedings as the Indenture Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy. The Indenture
Trustee shall notify the Issuer, the Agent, the Servicer and the Noteholders of
any such action.
(e) If the Indenture Trustee shall have received instructions,
within 45 days from the date notice pursuant to Section 6.3(a) hereof is first
given, from Noteholders representing at least 66-2/3% of the Outstanding Note
Balance of each Class of Notes that such Persons approve of or request the
liquidation of the Trust Estate, the Indenture Trustee shall to the extent
lawful, promptly sell, dispose of or otherwise liquidate all of the Trust Estate
in a commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids from third parties including
any Noteholder (other than Bluegreen or any Affiliates thereof), such bids to be
approved by the Noteholders representing a majority of the Outstanding Note
Balance of each Class of Notes. The Indenture Trustee may obtain a prior
determination from any conservator, receiver or liquidator of the Issuer that
the terms and manner of any proposed sale, disposition or liquidation are
commercially reasonable.
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Notwithstanding anything to the contrary herein, unless such bidding has been
approved in advance by a majority of the Noteholders, neither Bluegreen nor any
of its Affiliates may make a bid in connection with the disposition of the
Timeshare Loans in accordance with this Section 6.3(e).
SECTION 6.4. Indenture Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding related to the Issuer, or any other obligor in respect
of the Notes, or the property of the Issuer, or such other obligor or their
creditors, the Indenture Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand on the Issuer for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee and
any predecessor Indenture Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and any predecessor Indenture Trustee, their
agents and counsel) and of the Noteholders allowed in such judicial
proceeding;
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same; and
(iii) to participate as a member, voting or otherwise, of any
official committee of creditors appointed in such matter;
and any custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Indenture Trustee and to pay to the
Indenture Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and any predecessor
Indenture Trustee, their agents and counsel, and any other amounts due the
Indenture Trustee and any predecessor Indenture Trustee under Section 7.6
hereof.
(b) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize, consent to, accept or adopt on behalf of any
Noteholder any plan of reorganization, agreement, adjustment or composition
affecting the Notes or the rights of any Noteholder thereof or affecting the
Timeshare Loans or the other assets constituting the Trust Estate or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
SECTION 6.5. Indenture Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture, the Notes, the
Timeshare Loans or the other assets constituting the Trust Estate may be
prosecuted and enforced by the
41
Indenture Trustee without the possession of any of the Notes or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provisions for the
payment of reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and any predecessor Indenture Trustee, their agents and
counsel, be for the benefit of the Noteholders in respect of which such judgment
has been recovered, and distributed pursuant to the priorities contemplated by
Section 3.4 and Section 6.6 hereof, as applicable.
SECTION 6.6. Application of Money Collected.
(a) If a Payment Default Event shall have occurred and the Indenture
Trustee has not yet effected the remedies under Section 6.3(d) and Section 6.16
hereof, any money collected by the Indenture Trustee in respect of the Trust
Estate and any other money that may be held thereafter by the Indenture Trustee
as security for the Notes, including, without limitation, the amounts on deposit
in the General Reserve Account, shall be applied in the following order on each
Payment Date:
(i) to the Indenture Trustee, any unpaid Indenture Trustee
Fees and any extraordinary out-of-pocket expenses of the Indenture
Trustee related to a servicing transfer (up to $10,000 per Payment
Date, and no more than a cumulative total of $100,000) incurred and
not reimbursed as of such date;
(ii) to the Owner Trustee, any accrued and unpaid Owner
Trustee Fees;
(iii) to the Administrator, any accrued and unpaid
Administrator Fees;
(iv) to the Custodian, any accrued and unpaid Custodian Fees;
(v) to the Lockbox Bank, any accrued and unpaid Lockbox Fees;
(vi) to the Trust Owner, any accrued and unpaid Trust Owner
Fees;
(vii) to the Servicer, any accrued and unpaid Servicing Fees;
(viii) to the Backup Servicer, any accrued and unpaid Backup
Servicing Fees;
(ix) to the Agent and the Placement Agent, any accrued and
unpaid Fees;
(x) on a pari passu basis, to the Class A Noteholders holding
LIBOR Notes and CP Notes, the Class A LIBOR Interest Distribution
Amount and Class A CP Interest Distribution Amount, respectively,
provided, however, that amounts distributable to the Class A
Noteholders holding LIBOR Notes and CP Notes shall not exceed the
Class A Maximum LIBOR Interest Distribution Amount and the Class A
Maximum CP Interest Distribution Amount, respectively;
42
(xi) on a pari passu basis, to the Class B Noteholders holding
LIBOR Notes and CP Notes, the Class B LIBOR Interest Distribution
Amount and Class B CP Interest Distribution Amount, respectively,
provided, however, that amounts distributable to the Class B
Noteholders holding LIBOR Notes and CP Notes shall not exceed the
Class B Maximum LIBOR Interest Distribution Amount and the Class B
Maximum CP Interest Distribution Amount, respectively;
(xii) on a pari passu basis, to the Class C Noteholders
holding LIBOR Notes and CP Notes, the Class C LIBOR Interest
Distribution Amount and Class C CP Interest Distribution Amount,
respectively, provided, however, that amounts distributable to the
Class C Noteholders holding LIBOR Notes and CP Notes shall not
exceed the Class C Maximum LIBOR Interest Distribution Amount and
the Class C Maximum CP Interest Distribution Amount, respectively;
(xiii) on a pari passu basis, to the Class D Noteholders
holding LIBOR Notes and CP Notes, the Class D LIBOR Interest
Distribution Amount and Class D CP Interest Distribution Amount,
respectively, provided, however, that amounts distributable to the
Class D Noteholders holding LIBOR Notes and CP Notes shall not
exceed the Class D Maximum LIBOR Interest Distribution Amount and
the Class D Maximum CP Interest Distribution Amount, respectively;
(xiv) on a pari passu basis, to the Class E Noteholders
holding LIBOR Notes and CP Notes, the Class E LIBOR Interest
Distribution Amount and Class E CP Interest Distribution Amount,
respectively, provided, however, that amounts distributable to the
Class E Noteholders holding LIBOR Notes and CP Notes shall not
exceed the Class E Maximum LIBOR Interest Distribution Amount and
the Class E Maximum CP Interest Distribution Amount, respectively;
(xv) to the Class A Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class A Notes is reduced to
zero;
(xvi) to the Class B Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class B Notes is reduced to
zero;
(xvii) to the Class C Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class C Notes is reduced to
zero;
(xviii) to the Class D Noteholders, all remaining amounts
until the Outstanding Note Balance of the Class D Notes is reduced
to zero;
(xix) to the Class E Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class E Notes is reduced to
zero;
(xx) on a pari passu basis, to the Class A Noteholders holding
LIBOR Notes and CP Notes, the Class A LIBOR Interest Distribution
Amount Shortfall and the Class A CP Interest Distribution Amount
Shortfall, respectively, if any;
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(xxi) on a pari passu basis, to the Class B Noteholders
holding LIBOR Notes and CP Notes, the Class B LIBOR Interest
Distribution Amount Shortfall and the Class B CP Interest
Distribution Amount Shortfall, respectively, if any;
(xxii) on a pari passu basis, to the Class C Noteholders
holding LIBOR Notes and CP Notes, the Class C LIBOR Interest
Distribution Amount Shortfall and the Class C CP Interest
Distribution Amount Shortfall, respectively, if any;
(xxiii) on a pari passu basis, to the Class D Noteholders
holding LIBOR Notes and CP Notes, the Class D LIBOR Interest
Distribution Amount Shortfall and the Class D CP Interest
Distribution Amount Shortfall, respectively, if any;
(xxiv) on a pari passu basis, to the Class E Noteholders
holding LIBOR Notes and CP Notes, the Class E LIBOR Interest
Distribution Amount Shortfall and the Class E CP Interest
Distribution Amount Shortfall, respectively, if any;
(xxv) to the Indenture Trustee, any extraordinary
out-of-pocket expenses of the Indenture Trustee not paid in
accordance with clause (i) above;
(xxvi) to the Class A Noteholders, the Class B Noteholders,
the Class C Noteholders, the Class D Noteholders and the Class E
Noteholders, to the extent applicable, amounts specified by the
Agent and the Servicer as payable to such Noteholders pursuant to
Sections 6.1, 6.2 and 6.3 of the Note Funding Agreement;
(xxvii) any amounts due and payable by the Issuer under the
Transaction Documents, but not paid above (including, but not
limited to, amounts owed by the Issuer in respect of its
indemnification obligations); and
(xxviii) any remaining Available Funds to the Certificate
Distribution Account for distribution pursuant to the Trust
Agreement.
(b) If (i) (A) a Payment Default Event shall have occurred or (B)
each Class of Notes shall otherwise have been declared due and payable following
an Event of Default and (ii) the Indenture Trustee shall have effected a sale of
the Trust Estate under Section 6.3(d) and Section 6.16 hereof ((i) and (ii), a
"Trust Estate Liquidation Event"), any money collected by the Indenture Trustee
in respect of the Trust Estate and any other money that may be held thereafter
by the Indenture Trustee as security for the Notes, including without limitation
the amounts on deposit in the General Reserve Account, shall be applied in the
following order on each Payment Date:
(i) to the Indenture Trustee, any accrued and unpaid Indenture
Trustee Fees and certain expenses incurred and charged and unpaid as
of such date;
(ii) to the Owner Trustee, any accrued and unpaid Owner
Trustee Fees;
(iii) to the Administrator, any accrued and unpaid
Administrator Fees;
(iv) to the Custodian, any accrued and unpaid Custodian Fees;
44
(v) to the Lockbox Bank, any accrued and unpaid Lockbox Fees;
(vi) to the Trust Owner, any accrued and unpaid Trust Owner
Fees;
(vii) to the Servicer, any accrued and unpaid Servicing Fees;
(viii) to the Backup Servicer, any accrued and unpaid Backup
Servicing Fees;
(ix) to the Agent, any accrued and unpaid Fees;
(x) on a pari passu basis, to the Class A Noteholders holding
LIBOR Notes and CP Notes, the Class A LIBOR Interest Distribution
Amount and the Class A CP Interest Distribution Amount,
respectively;
(xi) to the Class A Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class A Notes is reduced to
zero;
(xii) on a pari passu basis, to the Class B Noteholders
holding LIBOR Notes and CP Notes, the Class B LIBOR Interest
Distribution Amount and the Class B CP Interest Distribution Amount,
respectively;
(xiii) to the Class B Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class B Notes is reduced to
zero;
(xiv) on a pari passu basis, to the Class C Noteholders
holding LIBOR Notes and CP Notes, the Class C LIBOR Interest
Distribution Amount and the Class C CP Interest Distribution Amount,
respectively;
(xv) to the Class C Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class C Notes is reduced to
zero;
(xvi) on a pari passu basis, to the Class D Noteholders
holding LIBOR Notes and CP Notes, the Class D LIBOR Interest
Distribution Amount and the Class D CP Interest Distribution Amount,
respectively;
(xvii) to the Class D Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class D Notes is reduced to
zero;
(xviii) on a pari passu basis, to the Class E Noteholders
holding LIBOR Notes and CP Notes, the Class E LIBOR Interest
Distribution Amount and the Class E CP Interest Distribution Amount,
respectively;
(xix) to the Class E Noteholders, all remaining amounts until
the Outstanding Note Balance of the Class E Notes is reduced to
zero;
(xx) to the Class A Noteholders, the Class B Noteholders, the
Class C Noteholders, the Class D Noteholders and the Class E
Noteholders, to the extent
45
applicable, amounts specified by the Agent and the Servicer as
payable to such Noteholders pursuant to Sections 6.1, 6.2 and 6.3 of
the Note Funding Agreement;
(xxi) any amounts due and payable by the Issuer under the
Transaction Documents, but not paid above (including, but not
limited to, amounts owed by the Issuer in respect of its
indemnification obligations); and
(xxii) any remaining Available Funds to the Certificate
Distribution Account for distribution pursuant to the Trust
Agreement.
SECTION 6.7. Limitation on Suits.
No Noteholder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture or for any other remedy
hereunder, unless:
(a) there is a continuing Event of Default and such Noteholder has
previously given written notice to the Indenture Trustee of a continuing Event
of Default;
(b) such Noteholder or Noteholders have offered to the Indenture
Trustee reasonable indemnity (which may be in the form of written assurances)
against the costs, expenses and liabilities to be incurred in compliance with
such request;
(c) the Indenture Trustee, for 30 days after its receipt of such
notice, request and offer of indemnity, has failed to institute any such
proceeding; and
(d) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 30-day period by the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
Outstanding;
it being understood and intended that no one or more of such Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders, or to obtain or to seek to obtain priority or preference over
any other Noteholders or to enforce any right under this Indenture, except in
the manner herein provided and for the ratable benefit of all such Noteholders.
It is further understood and intended that so long as any portion of the Notes
remains Outstanding, the Servicer shall not have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture (other than
for the enforcement of Section 3.4 hereof) or for the appointment of a receiver
or trustee (including without limitation a proceeding under the Bankruptcy
Code), or for any other remedy hereunder. Nothing in this Section 6.7 shall be
construed as limiting the rights of otherwise qualified Noteholders to petition
a court for the removal of a Indenture Trustee pursuant to Section 7.8 hereof.
SECTION 6.8. Unconditional Right of Noteholders to Receive Principal and
Interest.
Notwithstanding any other provision in this Indenture, other than
the provisions hereof limiting the right to recover amounts due on the Notes to
recoveries from the property comprising the Trust Estate, the Noteholder of any
Note shall have the absolute and unconditional right to receive payment of the
principal of, and interest on, such Note as such
46
payments of principal and interest become due, including on the Stated Maturity,
and such right shall not be impaired without the consent of such Noteholder.
SECTION 6.9. Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and,
in every such case, subject to any determination in such proceeding, the Issuer,
the Indenture Trustee and the Noteholders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders continue as though no such
proceeding had been instituted.
SECTION 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph of
Section 2.5 hereof, no right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Noteholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.11. Delay or Omission Not Waiver.
No delay or omission of the Indenture Trustee or of any Noteholder
of any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article VI or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 6.12. Control by Agent.
Until such time as the conditions specified in Sections 11.1(a)(i)
and (ii) hereof have been satisfied in full, the Agent shall have the right to
either direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or directly exercise any trust or
power conferred on the Indenture Trustee, with respect to the Notes. The parties
to this Indenture acknowledge and agree to the foregoing. Notwithstanding the
foregoing, if the Agent shall elect to direct the Indenture Trustee rather than
directly exercising such rights:
(i) no such direction shall be in conflict with any rule of
law or with this Indenture;
(ii) the Indenture Trustee shall not be required to follow any
such direction which the Indenture Trustee reasonably believes might
result in any
47
personal liability on the part of the Indenture Trustee for which
the Indenture Trustee is not adequately indemnified; and
(iii) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee which is not inconsistent with any
such direction; provided that the Indenture Trustee shall give
notice of any such action to the Agent.
SECTION 6.13. Waiver of Events of Default.
(a) Unless a Sequential Pay Event shall have occurred, the
Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes may, by one or more instruments in writing, waive any Event of
Default hereunder and its consequences, except a continuing Event of Default:
(i) in respect of the payment of the principal of or interest
on any Note (which may only be waived by the Noteholder of such
Note), or
(ii) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent
of the Noteholder of each Outstanding Note affected (which only may
be waived by the Noteholders of all Outstanding Notes affected).
(b) A copy of each waiver pursuant to Section 6.13(a) hereof shall
be furnished by the Issuer to the Indenture Trustee and each Noteholder. Upon
any such waiver, such Event of Default shall cease to exist and shall be deemed
to have been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Event of Default or impair any right
consequent thereon.
SECTION 6.14. Undertaking for Costs.
All parties to this Indenture agree (and each Noteholder of any Note
by its acceptance thereof shall be deemed to have agreed) that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Indenture Trustee for any
action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 6.14 shall not apply to (i) any
suit instituted by the Indenture Trustee, (ii) to any suit instituted by any
Noteholder, or group of Noteholders representing a majority of the Outstanding
Note Balance of each Class of Notes Outstanding, or (iii) to any suit instituted
by any Noteholder for the enforcement of the payment of the principal of or
interest on any Note on or after the maturities for such payments, including the
Stated Maturity, as applicable. For the avoidance of doubt, the provisions of
this Section 6.14 shall not apply to the Structured Purchaser.
48
SECTION 6.15. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.16. Sale of Trust Estate.
(a) The power to effect the sale of the Trust Estate pursuant to
Section 6.3 hereof shall continue unimpaired until the entire Trust Estate shall
have been sold or all amounts payable on the Notes shall have been paid or
losses allocated thereto and borne thereby. The Indenture Trustee may from time
to time, upon directions in accordance with Section 6.12 hereof, postpone any
public sale by public announcement made at the time and place of such sale.
(b) Unless required by applicable law, the Indenture Trustee shall
not sell to a third party the Trust Estate, or any portion thereof except as
permitted under Section 6.3(d) hereof.
(c) In connection with a sale of the Trust Estate:
(i) any one or more Noteholders (other than Bluegreen or any
Affiliates thereof unless consented to by a majority of the
Noteholders) may bid for and purchase the property offered for sale,
and upon compliance with the terms of sale may hold, retain, and
possess and dispose of such property, without further
accountability, and any Noteholder (other than Bluegreen or any
Affiliates thereof) may, in paying the purchase money therefor,
deliver in lieu of cash any Outstanding Notes or claims for interest
thereon for credit in the amount that shall, upon distribution of
the net proceeds of such sale, be payable thereon, and the Notes, in
case the amounts so payable thereon shall be less than the amount
due thereon, shall be returned to the Noteholders after being
appropriately stamped to show such partial payment;
(ii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance prepared by the Servicer
transferring the Indenture Trustee's interest in the Trust Estate
without recourse, representation or warranty in any portion of the
Trust Estate in connection with a sale thereof;
(iii) the Indenture Trustee is hereby irrevocably appointed
the agent and attorney-in-fact of the Issuer to transfer and convey
the Issuer's interest in any portion of the Trust Estate in
connection with a sale thereof, and to take all action necessary to
effect such sale;
49
(iv) no purchaser or transferee at such a sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application
of any moneys; and
(v) the method, manner, time, place and terms of any sale of
the Trust Estate shall be commercially reasonable.
(vi) none of Bluegreen or its Affiliates may bid for and
purchase the Timeshare Loans offered for sale by the Indenture
Trustee in Section 6.16(c)(i) hereof, unless consented to by a
majority of the Noteholders.
SECTION 6.17. Action on Notes.
The Indenture Trustee's right to seek and recover judgment on the
Notes or under this Indenture or any other Transaction Document shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture or any other Transaction Document. Neither the
Lien of this Indenture nor any rights or remedies of the Indenture Trustee or
the Noteholders shall be impaired by the recovery of any judgment by the
Indenture Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer. Any money or property collected by the Indenture Trustee shall be
applied in accordance with the provisions of this Indenture.
SECTION 6.18. Performance and Enforcement of Certain Obligations.
Promptly following a request from the Indenture Trustee, the Issuer
shall take all such lawful action as the Indenture Trustee may request to compel
or secure the performance and observance by the Depositor, the Club Originator
and the Servicer, as applicable, of each of their respective obligations to the
Issuer under or in connection with the Sale Agreement and any other Transaction
Document and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale Agreement
or any other Transaction Document to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on the
part of the Depositor, the Club Originator or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Depositor, the Club Originator or the Servicer of each
of their obligations under the Sale Agreement and the other Transaction
Documents.
ARTICLE VII.
THE INDENTURE TRUSTEE
SECTION 7.1. Certain Duties.
(a) The Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Indenture
Trustee; except as expressly set forth herein, the Indenture Trustee shall have
no obligation to monitor the performance of the Servicer under the Transaction
Documents.
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(b) In the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture; provided, however, the
Indenture Trustee shall not be required to verify or recalculate the contents
thereof.
(c) In case an Event of Default or a Servicer Event of Default
(resulting in the appointment of the Indenture Trustee as successor Servicer)
has occurred and is continuing, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own affairs; provided,
however, that no provision in this Indenture shall be construed to limit the
obligations of the Indenture Trustee to provide notices under Section 7.2
hereof.
(d) The Indenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Indenture Trustee reasonable security or
indemnity acceptable to the Indenture Trustee (which may be in the form of
written assurances) against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(e) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this Section 7.1(e) shall not be construed to limit the
effect of Section 7.1(a) and (b) hereof;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it
shall be proved that the Indenture Trustee shall have been negligent
in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the written direction of the holders of the
requisite principal amount of the outstanding Notes, or in
accordance with any written direction delivered to it under Sections
6.2(a), (b) or (c) hereof relating to the time, method and place of
conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the
Indenture Trustee, under this Indenture.
(f) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee shall be subject to the provisions
of this Section 7.1.
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(g) The Indenture Trustee makes no representations or warranties
with respect to the Timeshare Loans or the Notes or the validity or sufficiency
of any assignment of the Timeshare Loans to the Issuer or to the Trust Estate.
(h) Notwithstanding anything to the contrary herein, the Indenture
Trustee is not required to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 7.2. Notice of Events of Default.
The Indenture Trustee shall promptly (but, in any event, within
three Business Days) notify the Issuer, the Servicer, the Agent and the
Noteholders upon a Responsible Officer obtaining actual knowledge of any event
which constitutes an Event of Default or a Servicer Event of Default or would
constitute an Event of Default or a Servicer Event of Default but for the
requirement that notice be given or time elapse or both.
SECTION 7.3. Certain Matters Affecting the Indenture Trustee.
Subject to the provisions of Section 7.1 hereof:
(a) The Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) Any request or direction of any Noteholders, the Issuer, or the
Servicer mentioned herein shall be in writing;
(c) Whenever in the performance of its duties hereunder the
Indenture Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Indenture
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate or an
opinion of counsel;
(d) The Indenture Trustee may consult with counsel, and the advice
of such counsel or any Opinion of Counsel shall be deemed authorization in
respect of any action taken, suffered, or omitted by it hereunder in good faith
and in reliance thereon;
(e) Prior to the occurrence of an Event of Default or after the
curing of all Events of Default which may have occurred, the Indenture Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper document, unless
requested in writing so to do by Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes; provided, however, that if the
payment within a reasonable time to the Indenture Trustee of the costs, expenses
or liabilities likely to be
52
incurred by it in the making of such investigation is, in the reasonable opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the
security afforded to it by the terms of this Indenture, the Indenture Trustee
may require reasonable indemnity against such cost, expense or liability as a
condition to so proceeding. The reasonable expense of every such examination
shall be paid by the Servicer or, if paid by the Indenture Trustee, shall be
reimbursed by the Servicer upon demand;
(f) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian (which may be an Affiliate of the Indenture
Trustee), and the Indenture Trustee shall not be liable for any acts or
omissions of such agents, attorneys or custodians appointed with due care by it
hereunder; and
(g) Delivery of any reports, information and documents to the
Indenture Trustee provided for herein or any other Transaction Document is for
informational purposes only (unless otherwise expressly stated), and the
Indenture Trustee's receipt of such shall not constitute constructive knowledge
of any information contained therein or determinable from information contained
therein, including the Servicer's or Issuer's compliance with any of its
representations, warranties or covenants hereunder (as to which the Indenture
Trustee is entitled to rely exclusively on Officer's Certificates).
SECTION 7.4. Indenture Trustee Not Liable for Notes or Timeshare Loans.
(a) The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture or any Transaction Document, the Notes
(other than the authentication thereof) or of any Timeshare Loan. The Indenture
Trustee shall not be accountable for the use or application by the Issuer of
funds paid to the Issuer in consideration of conveyance of the Timeshare Loans
and related assets to the Trust Estate.
(b) The Indenture Trustee (in its capacity as Indenture Trustee)
shall have no responsibility or liability for or with respect to the validity of
any security interest in any property securing a Timeshare Loan; the existence
or validity of any Timeshare Loan, the validity of the assignment of any
Timeshare Loan to the Trust Estate or of any intervening assignment; the review
of any Timeshare Loan, any Timeshare Loan File, the completeness of any
Timeshare Loan File, the receipt by the Custodian of any Timeshare Loan or
Timeshare Loan File (it being understood that the Indenture Trustee has not
reviewed and does not intend to review such matters); the performance or
enforcement of any Timeshare Loan; the compliance by the Servicer or the Issuer
with any covenant or the breach by the Servicer or the Issuer of any warranty or
representation made hereunder or in any Transaction Document or the accuracy of
any such warranty or representation; the acts or omissions of the Servicer, the
Issuer or any Obligor; or any action of the Servicer or the Issuer taken in the
name of the Indenture Trustee.
SECTION 7.5. Indenture Trustee May Own Notes.
The Indenture Trustee in its individual or any other capacity may
become the owner or pledgee of Notes with the same rights as it would have if it
were not the Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar
or co-paying agent may become the
53
owner or pledgee of Notes with the same rights as it would have if it were not
the Paying Agent, Note Registrar, co-registrar or co-paying agent.
SECTION 7.6. Indenture Trustee's Fees and Expenses.
On each Payment Date, the Indenture Trustee shall be entitled to the
Indenture Trustee Fee and reimbursement of out-of-pocket expenses incurred by it
in connection with its responsibilities hereunder in the priorities provided in
Sections 3.4 or 6.6 hereof, as applicable.
SECTION 7.7. Eligibility Requirements for Indenture Trustee.
Other than the initial Indenture Trustee, the Indenture Trustee
hereunder shall at all times (a) be a corporation, depository institution, or
trust company organized and doing business under the laws of the United States
of America or any state thereof authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $100,000,000,
(b) be subject to supervision or examination by federal or state authority, (c)
be capable of maintaining an Eligible Bank Account, (d) have a long-term
unsecured debt rating of not less than "Baa2" from ▇▇▇▇▇'▇ and "BBB" from S&P,
and (e) shall be acceptable to Noteholders representing a majority of the
Outstanding Note Balance of the each Class of Notes. If such institution
publishes reports of condition at least annually, pursuant to or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 7.7, the combined capital and surplus of such
institution shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Indenture Trustee shall cease to be eligible in accordance with the provisions
of this Section 7.7, the Indenture Trustee shall resign in the manner and with
the effect specified in Section 7.8 below.
SECTION 7.8. Resignation or Removal of Indenture Trustee.
(a) The Indenture Trustee may at any time resign and be discharged
with respect to the Notes by giving 60 days' written notice thereof to the
Servicer, the Issuer, the Agent and the Rating Agency (to the extent any Class
of Notes are rated). Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor Indenture Trustee not objected to by Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes
within 30 days after prior written notice, by written instrument, in
sextuplicate, one counterpart of which instrument shall be delivered to each of
the Issuer, the Servicer, the Agent, the Noteholders, the successor Indenture
Trustee and the predecessor Indenture Trustee. If no successor Indenture Trustee
shall have been so appointed and have accepted appointment within 60 days after
the giving of such notice of resignation, the resigning Indenture Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.
(b) If at any time the Indenture Trustee shall cease to be eligible
in accordance with the provisions of Section 7.7 hereof and shall fail to resign
after written request therefor by the Issuer, or if at any time the Indenture
Trustee shall be legally unable to act, fails to perform in any material respect
its obligations under this Indenture, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Indenture Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Indenture
Trustee or of its property or affairs for
54
the purpose of rehabilitation, conservation or liquidation, then the Issuer or
Noteholders representing a majority of the Outstanding Note Balance of each
Class of Notes may direct the Issuer to remove the Indenture Trustee. If it
removes the Indenture Trustee under the authority of the immediately preceding
sentence, the Issuer shall promptly appoint a successor Indenture Trustee not
objected to by Noteholders representing a majority of the Outstanding Note
Balance of each Class of Notes, within 30 days after prior written notice, by
written instrument, in sextuplicate, one counterpart of which instrument shall
be delivered to each of the Issuer, the Servicer, the Noteholders, the Agent,
the successor Indenture Trustee and the predecessor Indenture Trustee.
(c) Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section 7.8 shall not become effective until acceptance of appointment
by the successor Indenture Trustee as provided in Section 7.9 hereof.
SECTION 7.9. Successor Indenture Trustee.
(a) Any successor Indenture Trustee appointed as provided in Section
7.8 hereof shall execute, acknowledge and deliver to each of the Servicer, the
Issuer, the Agent, the Noteholders and to its predecessor Indenture Trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor Indenture Trustee hereunder with like effect as if originally named
a Indenture Trustee. The predecessor Indenture Trustee shall deliver or cause to
be delivered to the successor Indenture Trustee or its custodian any Transaction
Documents and statements held by it or its custodian hereunder; and the Servicer
and the Issuer and the predecessor Indenture Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for the
full and certain vesting and confirmation in the successor Indenture Trustee of
all such rights, powers, duties and obligations.
(b) In case of the appointment hereunder of a successor Indenture
Trustee with respect to the Notes, the Issuer, the retiring Indenture Trustee
and each successor Indenture Trustee with respect to the Notes shall execute and
deliver an indenture supplemental hereto wherein each successor Indenture
Trustee shall accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Indenture Trustee all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes to which the
appointment of such successor Indenture Trustee relates, (ii) if the retiring
Indenture Trustee is not retiring with respect to all Notes, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Indenture Trustee with respect
to the Notes as to which the retiring Indenture Trustee is not retiring shall
continue to be vested in the retiring Indenture Trustee, and (iii) shall add to
or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the Trust Estate hereunder by
more than one Indenture Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Indenture Trustees co-trustees
of the same allocated trust and that each such Indenture Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
55
any trust or trusts hereunder administered by any other such Indenture Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Indenture Trustee shall become effective
to the extent provided therein and each such successor Indenture Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Indenture Trustee with respect
to the Notes to which the appointment of such successor Indenture Trustee
relates; but, on request of the Issuer or any successor Indenture Trustee, such
retiring Indenture Trustee shall duly assign, transfer and deliver to such
successor Indenture Trustee all property and money held by such retiring
Indenture Trustee hereunder with respect to the Notes of that or those to which
the appointment of such successor Indenture Trustee relates.
Upon request of any such successor Indenture Trustee, the Issuer
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor indenture trustee all such rights, powers and
trusts referred to in the preceding paragraph.
(c) No successor Indenture Trustee shall accept appointment as
provided in this Section 7.9 unless at the time of such acceptance such
successor Indenture Trustee shall be eligible under the provisions of Section
7.7 hereof.
(d) Upon acceptance of appointment by a successor Indenture Trustee
as provided in this Section 7.9, the Servicer shall mail notice of the
succession of such Indenture Trustee hereunder to each Noteholder at its address
as shown in the Note Register. If the Servicer fails to mail such notice within
ten days after acceptance of appointment by the successor Indenture Trustee, the
successor Indenture Trustee shall cause such notice to be mailed at the expense
of the Issuer and the Servicer.
SECTION 7.10. Merger or Consolidation of Indenture Trustee.
Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to the corporate trust business
of the Indenture Trustee, shall be the successor of the Indenture Trustee
hereunder, provided such corporation shall be eligible under the provisions of
Section 7.7 hereof, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 7.11. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) At any time or times for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the Trust Estate may at the
time be located or in which any action of the Indenture Trustee may be required
to be performed or taken, the Indenture Trustee, the Servicer or the Noteholders
representing a majority of the Outstanding Note Balance of each Class of Notes,
by an instrument in writing signed by it or them, may appoint, at the reasonable
expense of the Issuer and the Servicer, one or more individuals or corporations
to act as separate trustee or separate trustees or co-trustee, acting jointly
with the Indenture Trustee, of all or any part of the Trust Estate, to the full
extent that local law makes it necessary for such separate trustee or separate
trustees or co-trustee acting jointly with the Indenture Trustee to act.
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Notwithstanding the appointment of any separate or co-trustee, the Indenture
Trustee shall remain obligated and liable for the obligations of the Indenture
Trustee under this Indenture.
(b) The Indenture Trustee and, at the request of the Indenture
Trustee, the Issuer shall execute, acknowledge and deliver all such instruments
as may be required by the legal requirements of any jurisdiction or by any such
separate trustee or separate trustees or co-trustee for the purpose of more
fully confirming such title, rights, or duties to such separate trustee or
separate trustees or co-trustee. Upon the acceptance in writing of such
appointment by any such separate trustee or separate trustees or co-trustee, it,
he, she or they shall be vested with such title to the Trust Estate or any part
thereof, and with such rights, powers, duties and obligations as shall be
specified in the instrument of appointment, and such rights, powers, duties and
obligations shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee, or the Indenture Trustee and such separate trustee or
separate trustees or co-trustees jointly with the Indenture Trustee subject to
all the terms of this Indenture, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall be
exercised and performed by such separate trustee or separate trustees or
co-trustee, as the case may be. Any separate trustee or separate trustees or
co-trustee may, at any time by an instrument in writing, constitute the
Indenture Trustee its attorney-in-fact and agent with full power and authority
to do all acts and things and to exercise all discretion on its behalf and in
its name. In any case any such separate trustee or co-trustee shall die, become
incapable of acting, resign or be removed, the title to the Trust Estate and all
assets, property, rights, power duties and obligations and duties of such
separate trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
such separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of
the Indenture Trustee shall extend to and apply to each separate trustee or
co-trustee appointed pursuant to the foregoing provisions of this Section 7.11.
(d) Every additional trustee and separate trustee hereunder shall,
to the extent permitted by law, be appointed and act and the Indenture Trustee
shall act, subject to the following provisions and conditions: (i) all powers,
duties and obligations and rights conferred upon the Indenture Trustee in
respect of the receipt, custody, investment and payment of monies shall be
exercised solely by the Indenture Trustee; (ii) all other rights, powers, duties
and obligations conferred or imposed upon the Indenture Trustee shall be
conferred or imposed and exercised or performed by the Indenture Trustee and
such additional trustee or trustees and separate trustee or trustees jointly
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Timeshare Properties in any such jurisdiction) shall be exercised and performed
by such additional trustee or trustees or separate trustee or trustees; (iii) no
power hereby given to, or exercisable by, any such additional trustee or
separate trustee shall be exercised hereunder by such trustee except jointly
with, or with the consent of, the Indenture Trustee; and (iv) no trustee
hereunder shall be personally liable by reason of any act or omission of any
other trustee hereunder.
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If at any time, the Indenture Trustee shall deem it no longer
necessary or prudent in order to conform to such law, the Indenture Trustee
shall execute and deliver all instruments and agreements necessary or proper to
remove any additional trustee or separate trustee.
(e) Any request, approval or consent in writing by the Indenture
Trustee to any additional trustee or separate trustee shall be sufficient
warrant to such additional trustee or separate trustee, as the case may be, to
take such action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 7.11, the
powers of any additional trustee or separate trustee shall not exceed those of
the Indenture Trustee hereunder.
SECTION 7.12. Paying Agent and Note Registrar Rights.
So long as the Indenture Trustee is the Paying Agent and Note
Registrar, the Paying Agent and Note Registrar shall be entitled to the rights,
benefits and immunities of the Indenture Trustee as set forth in this Article
VII to the same extent and as fully as though named in place of the Indenture
Trustee herein. The Paying Agent shall be compensated out of the Indenture
Trustee Fee.
SECTION 7.13. Authorization.
(a) The Issuer hereby authorizes and directs the Indenture Trustee
to enter into the Lockbox Agreement. Pursuant to the Lockbox Agreement, the
Indenture Trustee agrees to cause to be established and maintained an account
(the "Lockbox Account") for the benefit of the Noteholders. The Lockbox Account
will be titled as follows "U.S. Bank National Association, as Indenture Trustee
of BXG Timeshare Trust I-Blocked Account", Timeshare Loan-Backed Notes, Series
I". The Indenture Trustee is authorized and directed to act as titleholder of
the Lockbox Account in accordance with the terms of the Lockbox Agreement for
the benefit of the Noteholders with interests in the funds on deposit in such
accounts. In addition, the Indenture Trustee is hereby authorized to enter into,
execute, deliver and perform under, each of the applicable Transaction
Documents. The Lockbox Bank will be required to transfer and will be permitted
to withdraw funds from the Lockbox Account in accordance with the Lockbox
Agreement.
(b) The Indenture Trustee is authorized and directed to act as
titleholder of the Credit Card Account for the benefit of the Noteholders with
interests in the funds on deposit in such account.
SECTION 7.14. Maintenance of Office or Agency.
The Indenture Trustee will maintain in the Borough of Manhattan, the
City of New York, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Indenture Trustee in respect of the Notes and this Indenture may be served.
The Indenture Trustee will give prompt written notice to the Issuer, the
Servicer and the Noteholders of the location, and of any change in the location,
of any such office or agency or shall fail to furnish the Issuer or the Servicer
with the address
58
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.
ARTICLE VIII.
COVENANTS OF THE ISSUER
SECTION 8.1. Payment of Principal, Interest and Other Amounts.
The Issuer will cause the due and punctual payment of the principal
of, and interest on, the Notes in accordance with the terms of the Notes and
this Indenture.
SECTION 8.2. Reserved.
SECTION 8.3. Money for Payments to Noteholders to Be Held in Trust.
(a) All payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Trust Accounts
pursuant to Sections 3.4 or 6.6 hereof shall be made on behalf of the Issuer by
the Indenture Trustee, and no amounts so withdrawn from the Collection Account
for payments of Notes shall be paid over to the Issuer under any circumstances,
except as provided in this Section 8.3, in Section 3.4 or Section 6.6 hereof, as
the case may be.
(b) In making payments hereunder, the Indenture Trustee will hold
all sums held by it for the payment of amounts due with respect to the Notes in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided.
(c) Except as required by applicable law, any money held by the
Indenture Trustee or the Paying Agent in trust for the payment of any amount due
with respect to any Note shall not bear interest and if remaining unclaimed for
two years after such amount has become due and payable to the Noteholder shall
be discharged from such trust and, subject to applicable escheat laws, and so
long as no Event of Default has occurred and is continuing, paid to the Issuer
upon request; otherwise, such amounts shall be redeposited in the Collection
Account as Available Funds, and such Noteholder shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Indenture Trustee or the Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Indenture Trustee or the Paying
Agent, before being required to make any such repayment, shall cause to be
published once, at the expense and direction of the Issuer, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee or
the Paying Agent shall also adopt and employ, at the expense and direction of
the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Noteholders
whose Notes have been called but have not been surrendered for redemption or
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whose right to or interest in moneys due and payable but not claimed is
determinable) from the records of the Indenture Trustee or of any Paying Agent,
at the last address of record for each such Noteholder.
(d) The Issuer will cause each Paying Agent to execute and deliver
to the Indenture Trustee an instrument in which such Paying Agent shall agree
with the Indenture Trustee (and if the Indenture Trustee is the Paying Agent, it
hereby so agrees), subject to the provisions of this Section 8.3, that such
Paying Agent will:
(i) give the Indenture Trustee notice of any occurrence that
is, or with notice or with the lapse of time or both would become,
an Event of Default by the Issuer of which it has actual knowledge
in the making of any payment required to be made with respect to the
Notes;
(ii) at any time during the continuance of any such occurrence
described in clause (i) above, upon the written request of the
Indenture Trustee, pay to the Indenture Trustee all sums so held in
trust by such Paying Agent;
(iii) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment;
and
(iv) comply with all requirements of the Code or any
applicable state law with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such monies.
SECTION 8.4. Existence; Merger; Consolidation, etc.
(a) The Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware, and
will obtain and preserve its qualification to do business as a foreign business
trust in each jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Indenture, the Notes or any
of the Timeshare Loans.
(b) The Issuer shall at all times observe and comply in all material
respects with (i) all laws applicable to it, (ii) all requirements of law in the
declaration and payment of distributions, and (iii) all requisite and
appropriate formalities in the management of its business and affairs and the
conduct of the transactions contemplated hereby.
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(c) The Issuer shall not (i) consolidate or merge with or into any
other Person or convey or transfer its properties and assets substantially as an
entirety to any other Person or (ii) commingle its assets with those of any
other Person.
(d) The Issuer shall not become an "investment company" or under the
"control" of an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (or any successor or amendatory statute), and
the rules and regulations thereunder (taking into account not only the general
definition of the term "investment company" but also any available exceptions to
such general definition); provided, however, that the Issuer shall be in
compliance with this Section 8.4 if it shall have obtained an order exempting it
from regulation as an "investment company" so long as it is in compliance with
the conditions imposed in such order.
SECTION 8.5. Protection of Trust Estate; Further Assurances.
(a) The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively the assets comprising all or any
portion of the Trust Estate;
(ii) maintain or preserve the Lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any Grant
made or to be made by this Indenture and perfect the security
interest contemplated hereby in favor of the Indenture Trustee in
each of the Timeshare Loans and all other property included in the
Trust Estate; provided, that the Issuer shall not be required to
cause the recordation of the Indenture Trustee's name as Lien holder
on the related title documents for the Timeshare Properties so long
as no Event of Default has occurred and is continuing;
(iv) enforce or cause the Servicer to enforce any of the
Timeshare Loans in accordance with the Servicing Standard, provided,
however, the Issuer will not cause the Servicer to obtain on behalf
of the Indenture Trustee or the Noteholders, any Timeshare Property
or to take any actions with respect to any property the result of
which would adversely affect the interests of the Indenture Trustee
or the Noteholders (including, but not limited to, actions which
would cause the Indenture Trustee or the related Noteholders to be
considered a holder of title, mortgagee-in-possession, or otherwise,
or an "owner" or "operator" of Property not in compliance with
applicable environmental statutes); and
(v) preserve and defend title to the Timeshare Loans
(including the right to receive all payments due or to become due
thereunder), the interests in the Timeshare Properties, or other
property included in the Trust Estate and preserve and defend the
rights of the Indenture Trustee in the Trust Estate (including the
right
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to receive all payments due or to become due thereunder) against the
claims of all Persons and parties other than as permitted hereunder.
(b) The Issuer will not take any action and will use its
commercially reasonable efforts not to permit any action to be taken by others
that would release any Person from any of such Person's material covenants or
obligations under any instrument or agreement included in the Trust Estate or
that would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture or the Custodial
Agreement or such other instrument or agreement.
(c) The Issuer may contract with or otherwise obtain the assistance
of other Persons to assist it in performing its duties under this Indenture, and
any performance of such duties by a Person identified to the Indenture Trustee
in an Officer's Certificate of the Issuer shall be deemed to be action taken by
the Issuer, provided, however, that no appointment of such Person shall relieve
the Issuer of its duties and obligations hereunder. Initially, the Issuer has
contracted with the Servicer, the Indenture Trustee and the Custodian pursuant
to this Indenture to assist the Issuer in performing its duties under this
Indenture and the other Transaction Documents.
(d) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Transaction
Documents and in the instruments and agreements included in the Trust Estate.
(e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the
prior written consent of the Indenture Trustee and the Noteholders representing
a majority of the Outstanding Note Balance of each Class of Notes, amend,
modify, waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of any
Timeshare Loan (except to the extent otherwise provided in this Indenture or in
the Timeshare Loan Documents) or the Transaction Documents, or waive timely
performance or observance by the Servicer, the Indenture Trustee, the Custodian,
the Paying Agent or the Depositor under this Indenture; and (ii) that any such
amendment shall not (A) reduce in any manner the amount of, or accelerate or
delay the timing of, distributions that are required to be made for the benefit
of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is
required to consent to any such amendment, without the consent of the
Noteholders of all the Outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee and the
Noteholders, the Issuer agrees, promptly following a request by the Indenture
Trustee, to execute and deliver, at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem
necessary or appropriate in the circumstances.
The Issuer, upon the Issuer's failure to do so, hereby irrevocably
designates the Indenture Trustee and the Servicer, severally, its agents and
attorneys-in-fact to execute any financing statement or continuation statement
or Assignment of Mortgage required pursuant to this Section 8.5; provided,
however, that such designation shall not be deemed to create a duty
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in the Indenture Trustee to monitor the compliance of the Issuer with the
foregoing covenants, and provided, further, that the duty of the Indenture
Trustee or the Servicer to execute any instrument required pursuant to this
Section 8.5 shall arise only if a Responsible Officer of the Indenture Trustee
or the Servicer, as applicable, has Knowledge of any failure of the Issuer to
comply with the provisions of this Section 8.5.
SECTION 8.6. Additional Covenants.
(a) The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture;
(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Notes (other than amounts
properly withheld from such payments under the Code or any
applicable state law) or assert any claim against any present or
former Noteholder by reason of the payment of any taxes levied or
assessed upon any portion of the Trust Estate;
(iii) engage in any business or activity other than as
permitted by this Indenture, the Trust Agreement and the other
Transaction Documents and any activities incidental thereto, or
amend the Trust Agreement as in effect on the Closing Date other
than in accordance with Article XI thereof;
(iv) issue debt of obligations under any indenture other than
this Indenture;
(v) incur or assume, directly or indirectly, any indebtedness,
except for such indebtedness as may be incurred by the Issuer
pursuant to this Indenture, or guaranty any indebtedness or other
obligations of any Person (other than the Timeshare Loans), or own,
purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest
in, or make any capital contribution to, any other Person (other
than the Timeshare Loans);
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (A) permit the validity or effectiveness of this
Indenture or any Grant hereby to be impaired, or permit the Lien of
this Indenture to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any
covenants or obligations under this Indenture, except as may be
expressly permitted hereby, (B) permit any lien, charge, security
interest, mortgage or other encumbrance to be created on or to
extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof (other
than tax liens, mechanics; liens and other liens that arise by
operation of law, in each case on any of the Resort Interests and
arising solely as a result of an act or omission of the related
Obligor) other than the Lien of this Indenture or (C) except as
otherwise contemplated in this Indenture, permit the Lien of this
Indenture
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(other than with respect to any Permitted Liens or such tax,
mechanic's or other lien) not to constitute a valid first priority
security interest in the Trust Estate;
(viii) take any other action or fail to take any actions which
may cause the Issuer to be taxable as an association pursuant to
Section 7701 of the Code and the corresponding regulations, (b) a
publicly traded partnership taxable as a corporation pursuant to
Section 7704 of the Code and the corresponding regulations or (c) a
taxable mortgage pool pursuant to Section 7701(i) of the Code and
the corresponding regulations; or
(ix) change the location of its principal place of business
without the prior notice to the Indenture Trustee, the Agent and the
Noteholders.
(b) Notice of Events of Default. Immediately upon the Issuer having
Knowledge of the existence of any condition or event which constitutes a Default
or an Event of Default or a Servicer Event of Default, the Issuer shall deliver
to the Indenture Trustee and the Agent a written notice describing its nature
and period of existence and what action the Issuer is taking or proposes to take
with respect thereto.
(c) Report on Proceedings. Promptly upon the Issuer's becoming aware
of (i) any proposed or pending investigation of it by any governmental authority
or agency; or (ii) any pending or proposed court or administrative proceeding
which involves or is reasonably likely to involve the possibility of materially
and adversely affecting the properties, business, prospects, profits or
condition (financial or otherwise) of the Issuer, the Issuer shall deliver to
the Indenture Trustee and the Agent a written notice specifying the nature of
such investigation or proceeding and what action the Issuer is taking or
proposes to take with respect thereto and evaluating its merits.
SECTION 8.7. Taxes.
The Issuer shall pay all taxes when due and payable or levied
against its assets, properties or income, including any property that is part of
the Trust Estate, except to the extent the Issuer is contesting the same in good
faith and has set aside adequate reserves in accordance with GAAP for the
payment thereof.
SECTION 8.8. Restricted Payments.
The Issuer shall not, directly or indirectly, (i) pay any dividend
or make any distribution (by reduction of capital or otherwise), whether in
cash, property, securities or a combination thereof, to the Owner Trustee or any
owner of a beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest to security in or of the Issuer, the Club
Originator, the Depositor or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, payments and
distributions to or on behalf of the Servicer, the Club Originator, the
Depositor, the Indenture Trustee, the Owner Trustee, the Noteholders and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under, this Indenture, the Sale Agreement, the Trust Agreement or
the other Transaction Documents. The Issuer will
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not, directly or indirectly, make or cause to be made payments to or
distributions from the Collection Account except in accordance with this
Indenture and the other Transaction Documents.
SECTION 8.9. Treatment of Notes as Debt for Tax Purposes.
The Issuer shall treat the Notes as indebtedness for all federal,
state and local income and franchise tax purposes.
SECTION 8.10. Further Instruments and Acts.
Upon request of the Indenture Trustee, the Issuer will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures.
(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Indenture Trustee,
for any of the following purposes:
(i) without the consent of any Noteholder; (x) to correct or
amplify the description of any property at any time subject to the
Lien of this Indenture, or to better assure, convey and confirm unto
the Indenture Trustee any property subject or required to be
subjected to the Lien of this Indenture; provided, such action
pursuant to this clause (i) shall not adversely affect the interests
of the Noteholders in any respect; or
(1) to evidence and provide for the acceptance of
appointment hereunder by a successor Indenture Trustee
with respect to the Notes and to add to or change any of
the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the
trusts hereunder by more than one Indenture Trustee,
pursuant to the requirements of Section 7.9 hereof; or
(2) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent
with any other provision herein, or to make any other
provisions with respect to matters or questions arising
under this Indenture; provided that such action pursuant
to this clause (2) shall not adversely affect the
interests of any of the Noteholders of Notes.
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(b) The Indenture Trustee shall promptly deliver, at least five
Business Days prior to the effectiveness thereof, to each Noteholder and the
Agent, a copy of any supplemental indenture entered into pursuant to this
Section 9.1.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.
(a) With the consent of Noteholders representing a majority of the
Outstanding Note Balance of each Class of Notes then Outstanding and by Act of
said Noteholders delivered to the Issuer and the Indenture Trustee, the Issuer
and the Indenture Trustee may, pursuant to an Issuer Order, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Noteholders under
this Indenture; provided, that no supplemental indenture (including any
supplemental indenture to be entered into pursuant to Section 9.1 hereof) shall,
without the consent of the Noteholder of each Outstanding Note affected thereby,
(i) change the Stated Maturity or Payment Date of any Note or
the amount of principal payments or interest payments or any other
amount due or to become due on any Payment Date with respect to any
Note, or change the priority of payment thereof as set forth herein,
or reduce the principal amount thereof or the Note Rate thereon, or
change the place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after
the Stated Maturity;
(ii) reduce the percentage of the Outstanding Note Balance,
the consent of the Noteholders of which is required for any
supplemental indenture, for any waiver of compliance with provisions
of this Indenture or Events of Default and their consequences;
(iii) modify any of the provisions of this Section 9.2 or
Section 6.13 hereof except to increase any percentage of Noteholders
required for any modification or waiver or to provide that certain
other provisions of this Indenture cannot be modified or waived
without the consent of the Noteholder of each Outstanding Note
affected thereby;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) permit the creation of any lien ranking prior to or on a
parity with the Lien of this Indenture with respect to any part of
the Trust Estate or terminate the Lien of this Indenture on any
property at any time subject hereto or deprive any Noteholder of the
security afforded by the Lien of this Indenture; or
(vi) modify or change Section 2.4 or Article XV;
provided, no such supplemental indenture may modify or change any terms
whatsoever of this Indenture that could be construed as increasing the Issuer's
or the Servicer's discretion hereunder.
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(b) The Indenture Trustee shall promptly deliver, at least five
Business Days prior to the effectiveness thereof to each Noteholder, the Rating
Agency (to the extent any Notes are rated) and the Agent, a copy of any
supplemental indenture entered into pursuant to Section 9.2(a) hereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture (a) pursuant to Section 9.1 hereof or (b) pursuant to
Section 9.2 hereof without the consent of each Noteholder of the Notes to the
execution of the same, or the modifications thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and (subject
to Section 7.1 hereof) shall be, fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any supplemental indenture which affects the Indenture
Trustee's own rights, duties, obligations, or immunities under this Indenture or
otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
IX, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.5. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Indenture Trustee, bear a notation in form approved by the Indenture Trustee
as to any matter provided for in such supplemental indenture. New Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X.
BORROWINGS
SECTION 10.1. Optional Borrowings. (a) On any Business Day prior to the
Facility Termination Date (each a "Funding Date"), and subject to satisfaction
of the following conditions, additional amounts may be borrowed or reborrowed by
the Issuer under the Notes (a "Borrowing") and from the Committed Purchasers
under the Note Funding Agreement:
(i) the Custodian shall have delivered to the Indenture
Trustee and the Agent the Custodian's Certification pursuant to the
Custodial Agreement with respect to the Timeshare Loan Documents
related to the Timeshare Loans being purchased by the Depositor and
the Issuer on such Funding Date;
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(ii) no Event of Default has occurred and is continuing and no
such event would result from the conveyance of such Timeshare Loans
under the Purchase Agreement and the Sale Agreement or hereunder;
(iii) after giving effect to the purchase and transfer of
Timeshare Loans by the Depositor and the Issuer on such Funding
Date, the Outstanding Note Balance shall not exceed the Maximum
Facility Balance and there shall not be a Borrowing Base Deficiency;
(iv) after giving effect to the purchase and transfer of
Timeshare Loans by the Depositor and the Issuer on such Funding
Date, each Hedge Agreement with Qualified Hedge Counterparties shall
be in full force and effect;
(v) no Authorized Officer of the Indenture Trustee has actual
knowledge or has received notice on or prior to such Funding Date
that any conditions to such transfer have not been fulfilled and the
Indenture Trustee shall have received such other documents,
opinions, certificates and instruments as the Indenture Trustee may
request;
(vi) the Servicer shall deliver to the Agent and the Indenture
Trustee, a Borrowing Notice; and
(vii) each of the conditions set forth in the Note Funding
Agreement shall have been satisfied.
(b) Funding Dates shall not occur more frequently than once every
calendar month unless otherwise approved by the Agent. Notice of any Borrowing
shall be given by the Issuer to the Agent as provided for in the Note Funding
Agreement.
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.1. Satisfaction and Discharge of Indenture.
(a) This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Indenture Trustee, on demand of, and at the
expense of, the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(i) either:
(1) all Notes theretofore authenticated and delivered (other
than (A) Notes which have been destroyed, lost or stolen
and which have been replaced or paid as provided in
Section 2.5 hereof and (B) Notes for whose payment money
has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in
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Section 8.3(c) hereof) have been delivered to the
Indenture Trustee for cancellation; or
(2) the final installments of principal on all such Notes
not theretofore delivered to the Indenture Trustee for
cancellation (x) have become due and payable, or (y)
will become due and payable at their Stated Maturity, as
applicable within one year, and the Issuer has
irrevocably deposited or caused to be deposited with the
Indenture Trustee in trust an amount sufficient to pay
and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation, for principal and interest to the date of
such deposit (in the case of Notes which have become due
and payable) or to the Stated Maturity thereof;
(ii) the Issuer and the Servicer have paid or caused to be
paid (out of Available Funds or amounts received pursuant to Article
XIV) all other sums payable hereunder by the Issuer and the Servicer
for the benefit of the Noteholders and the Indenture Trustee; and
(iii) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with.
At such time, the Indenture Trustee shall deliver to the Issuer all cash,
securities and other property held by it as part of the Trust Estate other than
funds deposited with the Indenture Trustee pursuant to Section 11.1(a)(i)
hereof, for the payment and discharge of the Notes.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Indenture Trustee under Section
7.6 hereof and, if money shall have been deposited with the Indenture Trustee
pursuant to Section 11.1(a)(i) hereof, the obligations of the Indenture Trustee
under Sections 11.2 and 8.3(c) hereof shall survive.
SECTION 11.2. Application of Trust Money; Repayment of Money Held by
Paying Agent.
Subject to the provisions of Section 8.3(c) hereof, all money
deposited with the Indenture Trustee pursuant to Sections 11.1 and 8.3 hereof
shall be held in trust and applied by the Indenture Trustee in accordance with
the provisions of the Notes, this Indenture and the Trust Agreement, to the
payment, either directly or through a Paying Agent, as the Indenture Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Indenture Trustee.
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to the Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.4 hereof and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
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SECTION 11.3. Trust Termination Date.
Upon the full application of (a) moneys deposited pursuant to this
Article XI or (b) proceeds of the Timeshare Loans pursuant to Sections 3.4 or
6.6 hereof, the Trust Estate created by this Indenture shall be deemed to have
terminated and all Liens granted hereunder shall be released.
ARTICLE XII.
REPRESENTATIONS AND WARRANTIES AND COVENANTS
SECTION 12.1. Representations and Warranties of the Issuer.
The Issuer represents and warrants to the Indenture Trustee, the
Servicer, the Backup Servicer and the Noteholders as of the Closing Date and
each Funding Date, as follows:
(a) Organization and Good Standing. The Issuer has been duly formed
and is validly existing and in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to conduct its
business as presently conducted and has the power and authority to own and
convey all of its properties and to execute and deliver this Indenture and the
Transaction Documents and to perform the transactions contemplated hereby and
thereby;
(b) Binding Obligation. This Indenture and the Transaction Documents
to which it is a party have each been duly executed and delivered on behalf of
the Issuer and this Indenture and each Transaction Document to which it is a
party constitutes a legal, valid and binding obligation of the Issuer
enforceable in accordance with its terms except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights and by
general principles of equity;
(c) No Consents Required. No consent of, or other action by, and no
notice to or filing with, any Governmental Authority or any other party, is
required for the due execution, delivery and performance by the Issuer of this
Indenture or any of the Transaction Documents or for the perfection of or the
exercise by the Indenture Trustee or the Noteholders of any of their rights or
remedies thereunder which have not been duly obtained;
(d) No Violation. The consummation of the transaction contemplated
by this Indenture and the fulfillment of the terms hereof shall not conflict
with, result in any material breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
organizational documents of the Issuer, or any indenture, agreement or other
instrument to which the Issuer is a party or by which it is bound; nor result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than this
Indenture);
(e) No Proceedings. There is no pending or, to the Issuer's
Knowledge, threatened action, suit or proceeding, nor any injunction, writ,
restraining order or other order of any nature against or affecting the Issuer,
its officers or directors, or the property of the Issuer, in any court or
tribunal, or before any arbitrator of any kind or before or by any Governmental
70
Authority (i) asserting the invalidity of this Indenture or any of the
Transaction Documents, (ii) seeking to prevent the sale and assignment of any
Timeshare Loan or the consummation of any of the transactions contemplated
thereby, (iii) seeking any determination or ruling that might materially and
adversely affect (A) the performance by the Issuer of this Indenture or any of
the Transaction Documents or the interests of the Noteholders, (B) the validity
or enforceability of this Indenture or any of the Transaction Documents, (C) any
Timeshare Loan, or (D) the Intended Tax Characterization, or (iv) asserting a
claim for payment of money adverse to the Issuer or the conduct of its business
or which is inconsistent with the due consummation of the transactions
contemplated by this Indenture or any of the Transaction Documents;
(f) Issuer Not Insolvent. The Issuer is solvent and will not become
insolvent after giving effect to the transactions contemplated by this Indenture
and each of the Transaction Documents;
(g) Name. The legal name of the Issuer is as set forth in the
signature page of this Indenture and the Issuer does not have any tradenames,
fictitious names, assumed names or "doing business as" names.
SECTION 12.2. Representations and Warranties of the Servicer.
The Servicer hereby represents and warrants to the Indenture
Trustee, the Issuer, the Backup Servicer and the Noteholders, as of the Closing
Date and each Funding Date, the following:
(a) Organization and Authority. The Servicer:
(i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Massachusetts;
(ii) has all requisite power and authority to own and operate
its properties and to conduct its business as currently conducted
and as proposed to be conducted as contemplated by the Transaction
Documents to which it is a party, to enter into the Transaction
Documents to which it is a party and to perform its obligations
under the Transaction Documents to which it is a party; and
(iii) has made all filings and holds all material franchises,
licenses, permits and registrations which are required under the
laws of each jurisdiction in which the properties owned (or held
under lease) by it or the nature of its activities makes such
filings, franchises, licenses, permits or registrations necessary,
except where the failure to make such filing will not have a
material adverse effect on the Servicer, activities or its ability
to perform its obligations under the Transaction Documents.
(b) Place of Business. The address of the principal place of
business and chief executive office of the Servicer is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and there have been no other such
locations during the immediately preceding four months.
71
(c) Compliance with Other Instruments, etc. The Servicer is not in
violation of any term of its certificate of incorporation and by-laws. The
execution, delivery and performance by the Servicer of the Transaction Documents
to which it is a party do not and will not (i) conflict with or violate the
organizational documents of the Servicer, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of, or constitute a default
under, or result in the creation of any Lien on any of the properties or assets
of the Servicer pursuant to the terms of any instrument or agreement to which
the Servicer is a party or by which it is bound where such conflict would have a
material adverse effect on the Servicer's activities or its ability to perform
its obligations under the Transaction Documents or (iii) require any consent of
or other action by any trustee or any creditor of, any lessor to or any investor
in the Servicer.
(d) Compliance with Law. The Servicer is in material compliance with
all statutes, laws and ordinances and all governmental rules and regulations to
which it is subject, the violation of which, either individually or in the
aggregate, could materially adversely affect its business, earnings, properties
or condition (financial or other). The internal policies and procedures employed
by the Servicer are in material compliance with all applicable statutes, laws
and ordinances and all governmental rules and regulations. The execution,
delivery and performance of the Transaction Documents to which it is a party do
not and will not cause the Servicer to be in violation of any law or ordinance,
or any order, rule or regulation, of any federal, state, municipal or other
governmental or public authority or agency where such violation would, either
individually or in the aggregate, materially adversely affect its business,
earnings, properties or condition (financial or other).
(e) Pending Litigation or Other Proceedings. Other than as disclosed
on Schedule 12.2(e) hereto, there is no pending or, to the best of the
Servicer's Knowledge, threatened action, suit, proceeding or investigation
before any court, administrative agency, arbitrator or governmental body against
or affecting the Servicer which, if decided adversely, would materially and
adversely affect (i) the condition (financial or otherwise), business or
operations of the Servicer, (ii) the ability of the Servicer to perform its
obligations under, or the validity or enforceability of this Indenture or any
other documents or transactions contemplated under this Indenture, (iii) any
property or title of any Obligor to any Property or (iv) the Indenture Trustee's
ability to foreclose or otherwise enforce the Liens of the Timeshare Loans.
(f) Taxes. The Servicer has filed all tax returns (federal, state
and local) which are required to be filed and has paid all taxes related
thereto, other than those which are being contested in good faith or where the
failure to file or pay would not have a material adverse effect on the
Servicer's activities or its ability to perform its obligations under the
Transaction Documents.
(g) Transactions in Ordinary Course. The transactions contemplated
by this Indenture are in the ordinary course of business of the Servicer.
(h) Securities Laws. The Servicer is not an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
72
(i) Proceedings. The Servicer has taken all action necessary to
authorize the execution and delivery by it of the Transaction Documents to which
it is a party and the performance of all obligations to be performed by it under
the Transaction Documents.
(j) Defaults. The Servicer is not in default under any material
agreement, contract, instrument or indenture to which it is a party or by which
it or its properties is or are bound, or with respect to any order of any court,
administrative agency, arbitrator or governmental body, which default would have
a material adverse effect on the transactions contemplated hereunder; and to the
Servicer's Knowledge, no event has occurred which with notice or lapse of time
or both would constitute such a default with respect to any such agreement,
contract, instrument or indenture, or with respect to any such order of any
court, administrative agency, arbitrator or governmental body.
(k) Insolvency. The Servicer is solvent. Prior to the date hereof,
the Servicer did not, and is not about to, engage in any business or transaction
for which any property remaining with the Servicer would constitute an
unreasonably small amount of capital. In addition, the Servicer has not incurred
debts that would be beyond the Servicer's ability to pay as such debts matured.
(l) No Consents. No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is,
was or will be required for the valid execution, delivery and performance by the
Servicer of the Transaction Documents to which it is a party. The Servicer has
obtained all consents, approvals or authorizations of, made all declarations or
filings with, or given all notices to, all federal, state or local governmental
or public authorities or agencies which are necessary for the continued conduct
by the Servicer of its respective businesses as now conducted, other than such
consents, approvals, authorizations, declarations, filings and notices which,
neither individually nor in the aggregate, materially and adversely affect, or
in the future will materially and adversely affect, the business, earnings,
prospects, properties or condition (financial or other) of the Servicer.
(m) Name. The legal name of the Servicer is as set forth in the
signature page of this Indenture and the Servicer does not have any tradenames,
fictitious names, assumed names or "doing business as" names other than
"Bluegreen ▇▇▇▇▇▇ Corporation" in North Carolina and "Bluegreen Corporation of
Massachusetts" in Louisiana.
(n) Information. No document, certificate or report furnished by the
Servicer, in writing, pursuant to this Indenture or in connection with the
transactions contemplated hereby, contains or will contain when furnished any
untrue statement of a material fact or fails or will fail to state a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading. Other than as
disclosed on Schedule 12.2(e) hereto, there are no facts relating to the
Servicer as of the Closing Date which when taken as a whole, materially
adversely affect the financial condition or assets or business of the Servicer,
or which may impair the ability of the Servicer to perform its obligations under
this Indenture, which have not been disclosed herein or in the certificates and
other documents furnished by or on behalf of the Servicer pursuant hereto or
thereto specifically for use in connection with the transactions contemplated
hereby or thereby.
73
(o) Ratings. Each of the Resorts specified in Exhibit I hereto have,
as of the Closing Date, ratings at least equal to the ratings specified therein.
(p) ACH Form. The Servicer has delivered a form of the ACH Form
attached to the Sale Agreement to the Backup Servicer for its review.
(q) Credit Policy and Collection Policy. Each of the Credit Policy
and the Collection Policy attached hereto as Exhibit J and Exhibit K,
respectively, fairly represent the policies of the Servicer and, to the best
knowledge of the Servicer, each is materially consistent with the customary
standard of prudent servicers of loans secured by timeshare interests (it being
understood that the Servicer does not review credit bureau reports or credit
scores issued by Fair ▇▇▇▇▇▇ & Company prior to loan origination).
SECTION 12.3. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee hereby represents and warrants to the
Servicer, the Issuer, the Backup Servicer and the Noteholders as of the Closing
Date and each Funding Date, the following:
(a) The Indenture Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States.
(b) The execution and delivery of this Indenture and the other
Transaction Documents to which the Indenture Trustee is a party, and the
performance and compliance with the terms of this Indenture and the other
Transaction Documents to which the Indenture Trustee is a party by the Indenture
Trustee, will not violate the Indenture Trustee's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in a breach of, any material
agreement or other material instrument to which it is a party or by which it is
bound.
(c) Except to the extent that the laws of certain jurisdictions in
which any part of the Trust Estate may be located require that a co-trustee or
separate trustee be appointed to act with respect to such property as
contemplated herein, the Indenture Trustee has the full power and authority to
carry on its business as now being conducted and to enter into and consummate
all transactions contemplated by this Indenture and the other Transaction
Documents, has duly authorized the execution, delivery and performance of this
Indenture and the other Transaction Documents to which it is a party, and has
duly executed and delivered this Indenture and the other Transaction Documents
to which it is a party.
(d) This Indenture, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid and binding obligation
of the Indenture Trustee, enforceable against the Indenture Trustee in
accordance with the terms hereof, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally and the rights of creditors of banks and (ii)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
74
(e) The Indenture Trustee is not in violation of, and its execution
and delivery of this Indenture and the other Transaction Documents to which it
is a party and its performance and compliance with the terms of this Indenture
and the other Transaction Documents to which it is a party will not constitute a
violation of, any law, any order or decree of any court or arbiter, or any
order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in the Indenture Trustee's good faith and
reasonable judgment, is likely to affect materially and adversely the ability of
the Indenture Trustee to perform its obligations under any Transaction Document
to which it is a party.
(f) No litigation is pending or, to the best of the Indenture
Trustee's knowledge, threatened against the Indenture Trustee that, if
determined adversely to the Indenture Trustee, would prohibit the Indenture
Trustee from entering into any Transaction Document to which it is a party or,
in the Indenture Trustee's good faith and reasonable judgment, is likely to
materially and adversely affect the ability of the Indenture Trustee to perform
its obligations under any Transaction Document to which it is a party.
(g) Any consent, approval, authorization or order of any court or
governmental agency or body required for the execution, delivery and performance
by the Indenture Trustee of or compliance by the Indenture Trustee with the
Transaction Documents to which it is a party or the consummation of the
transactions contemplated by the Transaction Documents has been obtained and is
effective.
SECTION 12.4. Multiple Roles.
The parties expressly acknowledge and consent to U.S. Bank National
Association, acting in the multiple roles of Indenture Trustee, the Paying
Agent, the successor Servicer (in the event the Backup Servicer shall not serve
as the successor Servicer) and the Custodian. U.S. Bank National Association
may, in such capacities, discharge its separate functions fully, without
hindrance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by U.S. Bank National Association
of express duties set forth in this Indenture in any of such capacities, all of
which defenses, claims or assertions are hereby expressly waived by the other
parties hereto, except in the case of negligence (other than errors in judgment)
and willful misconduct by U.S. Bank National Association.
SECTION 12.5. [Reserved].
SECTION 12.6. Covenants of the Club Trustee.
Until the date on which each Class of Notes has been paid in full,
the Club Trustee hereby covenants that:
(a) No Conveyance. The Club Trustee agrees not to convey any Resort
Interest (as defined in the Club Trust Agreement) in the Club relating to a
Timeshare Loan unless the Indenture Trustee shall have issued an instruction to
the Club Trustee pursuant to Section 8.07(c) of the Club Trust Agreement in
connection with its exercise of its rights as an Interest Holder Beneficiary (as
defined in the Club Trust Agreement) under Section 7.02 of the Club Trust
Agreement.
75
(b) Separate Corporate Existence. The Club Trustee shall:
(i) Maintain its own deposit account or accounts, separate
from those of any Affiliate, with commercial banking institutions.
The funds of the Club Trustee will not be diverted to any other
Person or for other than trust or corporate uses of the Club
Trustee, as applicable.
(ii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders,
beneficiaries or Affiliates, the salaries of and the expenses
related to providing benefits to such officers and other employees
shall be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs associated
with all such common officers and employees.
(iii) Ensure that, to the extent that the Club Trustee and the
Servicer (together with their respective stockholders or Affiliates)
jointly do business with vendors or service providers or share
overhead expenses, the costs incurred in so doing shall be allocated
fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Club Trustee and the
Servicer (together with their respective stockholders or Affiliates)
do business with vendors or service providers when the goods and
services provided are partially for the benefit of any other Person,
the costs incurred in so doing shall be fairly allocated to or among
such entities for whose benefit the goods and services are provided,
and each such entity shall bear its fair share of such costs. All
material transactions between Club Trustee and any of its Affiliates
shall be only on an arms' length basis.
(iv) To the extent that the Club Trustee and any of its
stockholders, beneficiaries or Affiliates have offices in the same
location, there shall be a fair and appropriate allocation of
overhead costs among them, and each such entity shall bear its fair
share of such expenses.
(v) Conduct its affairs strictly in accordance with the Club
Trust Agreement or its amended and restated articles of
incorporation, as applicable, and observe all necessary, appropriate
and customary corporate formalities, including, but not limited to,
holding all regular and special stockholders', trustees' and
directors' meetings appropriate to authorize all trust and corporate
action, keeping separate and accurate minutes of its meetings,
passing all resolutions or consents necessary to authorize actions
taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, payroll and
intercompany transaction accounts.
(c) Merger or Consolidation. The Club Trustee shall not consolidate
with or merge into any other corporation or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless the
corporation formed by such consolidation or into which the Club Trustee, as the
case may be, has merged or the Person which acquires by conveyance,
76
transfer or lease substantially all the assets of the Club Trustee, as the case
may be, as an entirety, can lawfully perform the obligations of the Club Trustee
hereunder and executes and delivers to the Indenture Trustee an agreement in
form and substance reasonably satisfactory to the Indenture Trustee which
contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Club Trustee under this Indenture.
(d) Corporate Matters. Notwithstanding any other provision of this
Section 12.6 and any provision of law, the Club Trustee shall not do any of the
following:
(i) engage in any business or activity other than as set forth
herein or in or as contemplated by the Club Trust Agreement or its
amended and restated articles of incorporation, as applicable;
(ii) without the affirmative vote of a majority of the members
of the board of directors (or Persons performing similar functions)
of the Club Trustee (which must include the affirmative vote of at
least one duly appointed Independent Director (as defined in the
Club Trust Agreement)), (A) dissolve or liquidate, in whole or in
part, or institute proceedings to be adjudicated bankrupt or
insolvent, (B) consent to the institution of bankruptcy or
insolvency proceedings against it, (C) file a petition seeking or
consent to reorganization or relief under any applicable federal or
state law relating to bankruptcy, (D) consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the corporation or a substantial part of its
property, (E) make a general assignment for the benefit of
creditors, (F) admit in writing its inability to pay its debts
generally as they become due, (G) terminate the Club Managing Entity
as manager under the Club Management Agreement or (H) take any
corporate action in furtherance of the actions set forth in clauses
(A) through (G) above; provided, however, that no director may be
required by any shareholder or beneficiary of the Club Trustee to
consent to the institution of bankruptcy or insolvency proceedings
against the Club Trustee so long as it is solvent;
(iii) merge or consolidate with any other corporation, company
or entity or sell all or substantially all of its assets or acquire
all or substantially all of the assets or capital stock or other
ownership interest of any other corporation, company or entity; or
(iv) with respect to the Club Trustee, amend or otherwise
modify its amended and restated articles of incorporation or any
definitions contained therein in a manner adverse to the Indenture
Trustee or any Noteholder without the prior written consent of the
Agent.
(e) The Club Trustee shall not incur any indebtedness other than (i)
trade payables and operating expenses (including taxes) incurred in the ordinary
course of business or (ii) in connection with servicing Resort Interests
included in the Club's trust estate in the ordinary
77
course of business consistent with past practices; provided, that in no event
shall the Club Trustee incur indebtedness for borrowed money.
SECTION 12.7. Representations and Warranties of the Backup Servicer.
The Backup Servicer hereby represents and warrants to the Indenture
Trustee, the Issuer, the Servicer and the Noteholders, as of the Closing Date
and each Funding Date, the following:
(i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Arizona;
(ii) has all requisite power and authority to own and operate
its properties and to conduct its business as currently conducted
and as proposed to be conducted as contemplated by the Transaction
Documents to which it is a party, to enter into the Transaction
Documents to which it is a party and to perform its obligations
under the Transaction Documents to which it is a party; and
(iii) has made all filings and holds all material franchises,
licenses, permits and registrations which are required under the
laws of each jurisdiction in which the properties owned (or held
under lease) by it or the nature of its activities makes such
filings, franchises, licenses, permits or registrations necessary,
except where the failure to make such filing will not have a
material adverse effect on the Backup Servicer activities or its
ability to perform its obligations under the Transaction Documents.
(b) Place of Business. The address of the principal place of
business and chief executive office of the Backup Servicer is as set forth in
Section 13.3 and there have been no other such locations during the immediately
preceding four months.
(c) Compliance with Other Instruments, etc. The Backup Servicer is
not in violation of any term of its certificate of incorporation and by-laws.
The execution, delivery and performance by the Backup Servicer of the
Transaction Documents to which it is a party do not and will not (i) conflict
with or violate the organizational documents of the Backup Servicer, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, or result in the creation of any
Lien on any of the properties or assets of the Backup Servicer pursuant to the
terms of any instrument or agreement to which the Backup Servicer is a party or
by which it is bound where such conflict would have a material adverse effect on
the Backup Servicer's activities or its ability to perform its obligations under
the Transaction Documents or (iii) require any consent of or other action by any
trustee or any creditor of, any lessor to or any investor in the Servicer.
(d) Compliance with Law. The Backup Servicer is in material
compliance with all statutes, laws and ordinances and all governmental rules and
regulations to which it is subject, the violation of which, either individually
or in the aggregate, could materially adversely affect its business, earnings,
properties or condition (financial or other). The internal policies and
procedures employed by the Backup Servicer are in material compliance with all
applicable statutes, laws and ordinances and all governmental rules and
regulations. The execution,
78
delivery and performance of the Transaction Documents to which it is a party do
not and will not cause the Backup Servicer to be in violation of any law or
ordinance, or any order, rule or regulation, of any federal, state, municipal or
other governmental or public authority or agency where such violation would,
either individually or in the aggregate, materially adversely affect its
business, earnings, properties or condition (financial or other).
(e) Pending Litigation or Other Proceedings. There is no pending or,
to the best of the Backup Servicer's Knowledge, threatened action, suit,
proceeding or investigation before any court, administrative agency, arbitrator
or governmental body against or affecting the Backup Servicer which, if decided
adversely, would materially and adversely affect (i) the condition (financial or
otherwise), business or operations of the Backup Servicer, (ii) the ability of
the Backup Servicer to perform its obligations under, or the validity or
enforceability of this Indenture or any other documents or transactions
contemplated under this Indenture, (iii) any property or title of any Obligor to
any Property or (iv) the Indenture Trustee's ability to foreclose or otherwise
enforce the Liens of the Timeshare Loans.
(f) Taxes. The Backup Servicer has filed all tax returns (federal,
state and local) which are required to be filed and has paid all taxes related
thereto, other than those which are being contested in good faith or where the
failure to file or pay would not have a material adverse effect on the Backup
Servicer's activities or its ability to perform its obligations under the
Transaction Documents.
(g) Transactions in Ordinary Course. The transactions contemplated
by this Indenture are in the ordinary course of business of the Backup Servicer.
(h) Securities Laws. The Backup Servicer is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(i) Proceedings. The Backup Servicer has taken all action necessary
to authorize the execution and delivery by it of the Transaction Documents to
which it is a party and the performance of all obligations to be performed by it
under the Transaction Documents.
(j) Defaults. The Backup Servicer is not in default under any
material agreement, contract, instrument or indenture to which it is a party or
by which it or its properties is or are bound, or with respect to any order of
any court, administrative agency, arbitrator or governmental body, which default
would have a material adverse effect on the transactions contemplated hereunder;
and to the Backup Servicer's Knowledge, no event has occurred which with notice
or lapse of time or both would constitute such a default with respect to any
such agreement, contract, instrument or indenture, or with respect to any such
order of any court, administrative agency, arbitrator or governmental body.
(k) Insolvency. The Backup Servicer is solvent. Prior to the date
hereof, the Backup Servicer did not, and is not about to, engage in any business
or transaction for which any property remaining with the Backup Servicer would
constitute an unreasonably small amount of capital. In addition, the Backup
Servicer has not incurred debts that would be beyond the Backup Servicer's
ability to pay as such debts matured.
79
(l) No Consents. No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is,
was or will be required for the valid execution, delivery and performance by the
Backup Servicer of the Transaction Documents to which it is a party. The Backup
Servicer has obtained all consents, approvals or authorizations of, made all
declarations or filings with, or given all notices to, all federal, state or
local governmental or public authorities or agencies which are necessary for the
continued conduct by the Backup Servicer of its respective businesses as now
conducted, other than such consents, approvals, authorizations, declarations,
filings and notices which, neither individually nor in the aggregate, materially
and adversely affect, or in the future will materially and adversely affect, the
business, earnings, prospects, properties or condition (financial or other) of
the Backup Servicer.
(m) Name. The legal name of the Backup Servicer is as set forth in
the signature page of this Indenture, and the Backup Servicer does not have any
tradenames, fictitious names, assumed names or "doing business as" names.
(n) Information. No document, certificate or report furnished by the
Backup Servicer, in writing, pursuant to this Indenture or in connection with
the transactions contemplated hereby, contains or will contain when furnished
any untrue statement of a material fact or fails or will fail to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading. There are
no facts relating to the Backup Servicer as of the Closing Date which when taken
as a whole, materially adversely affect the financial condition or assets or
business of the Backup Servicer, or which may impair the ability of the Backup
Servicer to perform its obligations under this Indenture or any other
Transaction Document to which it is a party, which have not been disclosed
herein or in the certificates and other documents furnished by or on behalf of
the Servicer pursuant hereto or thereto specifically for use in connection with
the transactions contemplated hereby or thereby.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Officer's Certificate and Opinion of Counsel as to
Conditions Precedent.
Upon any request or application by the Issuer (or any other obligor
in respect of the Notes) to the Indenture Trustee to take any action under this
Indenture, the Issuer (or such other obligor) shall furnish to the Indenture
Trustee:
(a) an Officer's Certificate (which shall include the statements set
forth in Section 13.2 hereof) stating that all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(b) at the request of the Indenture Trustee, an Opinion of Counsel
(which shall include the statements set forth in Section 13.2 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
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SECTION 13.2. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 13.3. Notices.
(a) All communications, instructions, directions and notices to the
parties thereto shall be (i) in writing (which may be by telecopy, followed by
delivery of original documentation within one Business Day), (ii) effective when
received and (iii) delivered or mailed first class mail, postage prepaid to it
at the following address:
If to the Issuer:
BXG Timeshare Trust I
c/o Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Club Trustee:
Vacation Trust, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Servicer:
Bluegreen Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President, CFO and Treasurer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Backup Servicer:
Concord Servicing Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. Pink, Esq.
If to the Indenture Trustee and Paying Agent:
U.S. Bank National Association
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇-▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services/Attn: BXG Timeshare Trust I
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Agent:
BB&T Capital Markets
1133 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Branch Banking and Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Rating Agency:
Standard & Poor's Ratings Services
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ABS Surveillance Group - New Assets
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the party may designate by notice to the other
parties hereto, which shall be effective when received.
(b) All communications and notices described hereunder to a
Noteholder shall be in writing and delivered or mailed first class mail, postage
prepaid or overnight courier at the address shown in the Note Register. The
Indenture Trustee agrees to deliver or mail to each Noteholder upon receipt, all
notices and reports that the Indenture Trustee may receive hereunder and under
any Transaction Documents. All notices to Noteholders (or any Class thereof)
shall be sent simultaneously. Expenses for such communications and notices shall
be borne by the Servicer.
SECTION 13.4. No Proceedings.
The Noteholders, the Servicer, the Indenture Trustee, the Agent, the
Club Trustee and the Backup Servicer each hereby agrees that it will not,
directly or indirectly institute, or cause to be instituted, against the Issuer,
the Trust Estate or the Depositor any proceeding of the type referred to in
Sections 6.1(d) and (e) hereof, so long as there shall not have elapsed one year
plus one day after payment in full of the Notes.
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SECTION 13.5. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein or in any other
Transaction Document to the contrary, it is expressly understood and agreed by
the parties hereto that (a) this Indenture is executed and delivered by
Wilmington Trust Company, not individually or personally, but solely as Owner
Trustee on behalf of the Issuer, in the exercise of the powers and authority
conferred and vested in it under the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as a personal representation, undertaking or
agreement by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer and the Trust Estate, and (c) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Indenture or any other related documents.
ARTICLE XIV.
REDEMPTION OF NOTES
SECTION 14.1. Clean-up Call; Optional Redemption; Election to Redeem.
(a) Clean-up Call. The Servicer shall have the option to cause the
Issuer to redeem not less than all of the Notes and thereby cause the early
repayment of the Notes on any date after the Clean-up Call Date by payment of an
amount equal to the Redemption Price and any amounts, fees and expenses that are
required to be paid pursuant to Section 6.6(b) hereof (unless amounts in the
Trust Accounts are sufficient to make such payments).
(b) Optional Redemption. Notwithstanding anything to the contrary
herein or in any other Transaction Document, the Issuer shall have the option to
redeem not less than all of the Notes and thereby cause the early repayment of
the Notes at any time by payment of an amount equal to the Redemption Price and
any amounts, fees and expenses that are required to be paid pursuant to Section
6.6(b) hereof (unless amounts in the Trust Accounts are sufficient to make such
payments) using cash from any source, including the Depositor.
SECTION 14.2. Notice to Indenture Trustee.
The Servicer shall give written notice of its intention to cause the
Issuer to redeem the Notes to the Indenture Trustee at least 15 days prior to
the Redemption Date (unless a shorter period shall be satisfactory to the
Indenture Trustee).
SECTION 14.3. Notice of Redemption by the Servicer.
Notices of redemption shall be given by first class mail, postage
prepaid, mailed not less than for 15 days prior to the Redemption Date to each
Noteholder, at the address listed in the Note Register and to the Rating
Agencies, to the extent rated. All notices of redemption shall state (a) the
Redemption Date, (b) the Redemption Price, (c) that on the Redemption Date, the
Redemption Price will become due and payable in respect of each Note, and that
interest thereon shall cease to accrue if payment is made on the Redemption Date
and (d) the office of the
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Indenture Trustee where the Notes are to be surrendered for payment of the
Redemption Price. Failure to give notice of redemption, or any defect therein,
to any Noteholder shall not impair or affect the validity of the redemption of
any other Note.
SECTION 14.4. Deposit of Redemption Price.
On or before the Business Day immediately preceding the Redemption
Date, the Servicer (in the case of a Clean-up Call) or the Issuer (in the case
of an Optional Redemption) shall deposit with the Indenture Trustee an amount
equal to the Redemption Price and any amounts, fees and expenses that are
required to be paid hereunder (less any portion of such payment to be made from
funds held in any of the Trust Accounts (other than the Lockbox Account and the
Credit Card Account).
SECTION 14.5. Notes Payable on Redemption Date.
Notice of redemption having been given as provided in Section 14.3
hereof and deposit of the Redemption Price with the Indenture Trustee having
been made as provided in Section 14.4 hereof, the Notes shall on the Redemption
Date, become due and payable at the Redemption Price, and, on such Redemption
Date, such Notes shall cease to accrue interest. The Indenture Trustee shall
apply all available funds in accordance with Section 6.6(b) hereof and the
Noteholders shall be paid the Redemption Price by the Indenture Trustee on
behalf of the Servicer or the Issuer, as the case may be, upon presentment and
surrender of their Notes at the office of the Indenture Trustee. If the Servicer
or the Issuer, as the case may be, shall have failed to deposit the Redemption
Price with the Indenture Trustee, the principal and interest with respect to
each Class of Notes shall, until paid, continue to accrue interest at their
respective Note Rates. The Servicer's or the Issuer's, as the case may be,
failure to deposit the Redemption Price shall not constitute an Event of Default
hereunder.
ARTICLE XV.
NON-PETITION AND LIMITED RECOURSE
SECTION 15.1. Limited Recourse Against the Structured Purchaser. Each
party to this Indenture hereby acknowledges and agrees that all transactions
with the Structured Purchaser under the Transaction Documents or in connection
herewith shall be without recourse of any kind to the Structured Purchaser. Each
party hereto agrees that no liability or obligation of the Structured Purchaser
hereunder for fees, expenses or indemnities shall constitute a claim (as defined
in Section 101 of Title 11 of the United States Bankruptcy Code) against the
Structured Purchaser unless the Structured Purchaser has received sufficient
amounts pursuant to this Agreement to pay such amounts, and such amounts are not
necessary to pay outstanding commercial paper issued by the Structured
Purchaser. No recourse shall be had for any amount owing hereunder or any other
obligation of, or claim against the Structured Purchaser arising out of or based
upon this Agreement or any agreement or document entered into in connection
herewith or therewith against any equity holder, member, employee, officer,
agent, or manager of the Structured Purchaser or any equity holder, member,
employee, officer, director, or affiliate thereof. The agreements set forth in
this Section 15.1 and the parties' respective obligations under this Section
15.1 shall survive the termination of this Indenture.
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SECTION 15.2. No Bankruptcy Petition Against Structured Purchaser. Each of
the parties to this Indenture hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all outstanding
indebtedness for borrowed money of any Structured Purchaser, it will not
institute against, or join any other Person in instituting against, such
Structured Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the Laws of the United
States or any state of the United States. The agreements set forth in this
Section 15.2 and the parties' respective obligations under this Section 15.2
shall survive the termination of this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
BXG TIMESHARE TRUST I,
By: Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee
By: ___________________________________
Name:
Title:
BLUEGREEN CORPORATION, as Servicer
By: ____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President, CFO and Treasurer
CONCORD SERVICING CORPORATION, as Backup Servicer
By: ____________________________________
Name:
Title:
VACATION TRUST, INC., as Club Trustee
By: ____________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, as Indenture
Trustee and Custodian
By: ____________________________________
Name:
Title:
BRANCH BANKING AND TRUST COMPANY, as Agent
By: ____________________________________
Name:
Title:
[Signature Page to the Indenture]
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