Exhibit 10.188
EXECUTION COPY
(Bluegreen to Depositor - Closing Date Eligible Investments,
Initial Timeshare Loans and Subsequent Timeshare Loans)
PURCHASE AND CONTRIBUTION AGREEMENT
This PURCHASE AND CONTRIBUTION AGREEMENT (this "Agreement"), dated
as of September 15, 2007, is by and among Bluegreen Corporation, a Massachusetts
corporation ("Bluegreen" or a "Seller") and BRF Corporation 2007-A, a Delaware
corporation (the "Depositor") and their respective permitted successors and
assigns.
W I T N E S S E T H:
WHEREAS, on the Closing Date, the Depositor, as seller, intends to
enter into that certain Sale Agreement dated as of September 15, 2007 (the "Sale
Agreement"), by and between the Depositor and BXG Receivables Note Trust 2007-A,
a Delaware statutory trust (the "Issuer") pursuant to which the Depositor
intends to sell to the Issuer the timeshare loans and certain eligible
investments acquired pursuant to the terms of this Agreement and certain other
timeshare loans acquired by the Depositor pursuant to a transfer agreement,
dated as of September 15, 2007, by and among the Depositor, Bluegreen and BXG
Timeshare Trust I from time to time pursuant to the terms thereof;
WHEREAS, on the Closing Date, Bluegreen intends to enter into that
certain Indenture dated as of September 15, 2007 (the "Indenture"), by and among
the Issuer, Bluegreen, as servicer (in such capacity, the "Servicer"), Vacation
Trust, Inc., a Florida corporation, as club trustee (the "Club Trustee"),
Concord Servicing Corporation, as backup servicer, and U.S. Bank National
Association, as indenture trustee (the "Indenture Trustee"), paying agent and
custodian, whereby the Issuer will pledge the Trust Estate (as defined in the
Indenture) to the Indenture Trustee to secure the Issuer's 5.828% Timeshare
Loan-Backed Notes, Series 2007-A, Class A, 6.474% Timeshare Loan-Backed Notes,
Series 2007-A, Class B, 7.463% Timeshare Loan-Backed Notes, Series 2007-A, Class
C, 7.611% Timeshare Loan-Backed Notes, Series 2007-A, Class D, 8.283% Timeshare
Loan-Backed Notes, Series 2007-A, Class E, 9.680% Timeshare Loan-Backed Notes,
Series 2007-A, Class F and 11.149% Timeshare Loan-Backed Notes, Series 2007-A,
Class G (collectively, the "Notes");
WHEREAS, (A) on the Closing Date (i) the Seller desires to sell, and
the Depositor desires to purchase Timeshare Loans originated by the Seller or an
Affiliate thereof (the "Initial Timeshare Loans") and the Closing Date Eligible
Investments and (ii) Bluegreen, as the sole shareholder of the Depositor,
desires to make a contribution of capital pursuant to the terms hereof and (B)
on each Transfer Date during the Prefunding Period (i) the Seller desires to
sell, and the Depositor desires to purchase Timeshare Loans originated by the
Seller or an Affiliate thereof (the "Subsequent Timeshare Loans") and (ii)
Bluegreen, as the sole shareholder of the Depositor, desires to make a
contribution of capital pursuant to the terms hereof;
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WHEREAS, pursuant to the terms of (i) the Sale Agreement, the
Depositor shall sell to the Issuer the Initial Timeshare Loans and the Closing
Date Eligible Investments on the Closing Date and any Subsequent Timeshare Loans
acquired from the Seller and (ii) the Indenture, the Issuer shall pledge the
Initial Timeshare Loans, the Closing Date Eligible Investments and the
Subsequent Timeshare Loans, as part of the Trust Estate, to the Indenture
Trustee to secure the Notes;
WHEREAS, the Seller may, and in certain circumstances will be
required, to cure, repurchase or substitute and provide one or more Qualified
Substitute Timeshare Loans for a Timeshare Loan that is a Defective Timeshare
Loan, previously sold to the Depositor hereunder and pledged to the Indenture
Trustee pursuant to the Indenture;
WHEREAS, to the extent the Seller has breached certain
representations and warranties herein, the Seller may, and in certain
circumstances will, be required to repurchase certain Closing Date Eligible
Investments previously sold to the Depositor hereunder and pledged to the
Indenture Trustee pursuant to the Indenture; and
WHEREAS, the Depositor may, at the direction of the Seller, be
required to exercise the Seller's option to purchase or replace Timeshare Loans
that become subject to an Upgrade or Defaulted Timeshare Loans previously sold
to the Issuer and pledged to the Indenture Trustee pursuant to the Indenture.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto covenant and agree as follows:
Definitions; Interpretation. Capitalized terms used but not
defined herein shall have the meanings specified in "Standard Definitions"
attached as Annex A to the Indenture.
Acquisition of Timeshare Loans and Closing Date Eligible
Investments and Contribution of Capital to the Depositor.
Timeshare Loans and Contribution of Capital. On the Closing
Date (with respect to the Initial Timeshare Loans) and on each Transfer Date
during the Prefunding Period (with respect to the Subsequent Timeshare Loans),
the Seller hereby agrees to (x) sell in part and contribute in part to the
Depositor in return for the Timeshare Loan Acquisition Price for each Timeshare
Loan to be sold on the Closing Date or such Transfer Date, as applicable, to be
paid in part in cash and in part as an increase in its equity ownership of the
Depositor and (y) transfer, assign, sell and grant to the Depositor, without
recourse (except as provided in Section 6 and Section 8 hereof), any and all of
the Seller's right, title and interest in and to (i) any Timeshare Loans listed
on Schedule III hereto or the related Subsequent Transfer Notice, as applicable,
(ii) the Receivables in respect of such Timeshare Loans due after the related
Cut-Off Date, (iii) the related Timeshare Loan Documents (excluding any rights
as developer or declarant under the Timeshare Declaration, the Timeshare Program
Consumer Documents or the Timeshare Program Governing Documents), (iv) all
Related Security in respect of each such Timeshare Loan and (v) all income,
payments, proceeds and other benefits and rights related to any of the
foregoing.
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Upon such contribution, sale and transfer, the ownership of each Timeshare Loan
and all collections allocable to principal and interest thereon after the
related Cut-Off Date and all other property interests or rights conveyed
pursuant to and referenced in this Section 2(a) shall immediately vest in the
Depositor, its successors and assigns. The Seller shall not take any action
inconsistent with such ownership nor claim any ownership interest in any
Timeshare Loan for any purpose whatsoever other than for federal and state
income tax reporting, if applicable. The parties to this Agreement hereby
acknowledge that the "credit risk" of the Timeshare Loans conveyed hereunder
shall be borne by the Depositor and its subsequent assignees.
Closing Date Eligible Investments. On the Closing Date, in
return for an amount equal to the sum of the Prefunding Account Initial Deposit
and the Capitalized Interest Account Initial Deposit, the Seller does hereby
transfer, assign, sell and grant to the Depositor, without recourse (except as
provided in Section 6 and Section 8 hereof), any and all of the Seller's right,
title and interest in and to the Closing Date Eligible Investments (the property
in Section 2(a) and this Section 2(b), the "Assets"). The Seller shall not take
any action inconsistent with such ownership nor claim any ownership interest in
any Closing Date Eligible Investment for any purpose whatsoever other than for
federal and state income tax reporting, if applicable.
Delivery of Timeshare Loan Documents. In connection with the
contribution, sale, transfer, assignment and conveyance of any Timeshare Loan
hereunder, the Seller hereby agrees to deliver or cause to be delivered, on the
Closing Date (with respect to any Initial Timeshare Loan), at least five
Business Days prior to each Transfer Date during the Prefunding Period (with
respect to any Subsequent Timeshare Loan) and on or within five Business Days
from each Transfer Date (with respect to any Qualified Substitute Timeshare
Loan), as applicable, to the Custodian all related Timeshare Loan Files and to
the Servicer all related Timeshare Loan Servicing Files.
Collections. The Seller shall deposit or cause to be deposited
all collections in respect of Timeshare Loans received by the Seller or its
Affiliates after the related Cut-Off Date in the Lockbox Account and, with
respect to Credit Card Timeshare Loans, direct each applicable credit card
vendor to deposit all payments in respect of such Credit Card Timeshare Loans to
the Credit Card Account (net of the Servicer Credit Card Processing Costs).
Limitation of Liability. Neither the Depositor nor any
subsequent assignee of the Depositor shall have any obligation or liability with
respect to any Timeshare Loan nor shall the Depositor or any subsequent assignee
have any liability to any Obligor in respect of any Timeshare Loan. No such
obligation or liability is intended to be assumed by the Depositor or any
subsequent assignee herewith and any such liability is hereby expressly
disclaimed.
Intended Characterization; Grant of Security Interest. It is
the intention of the parties hereto that each transfer of the Closing Date
Eligible Investments and Timeshare Loans to be made pursuant to the terms hereof
shall constitute a sale, in part, and a capital contribution, in part, by the
Seller to the Depositor and not a loan secured by the Closing Date Eligible
Investments and the Timeshare Loans. In the event, however, that a court of
competent jurisdiction were to hold that any such transfer constitutes a loan
and not a sale and contribution,
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it is the intention of the parties hereto that the Seller shall be deemed to
have granted to the Depositor as of the date hereof a first priority perfected
security interest in all of the Seller's right, title and interest in, to and
under the Assets specified in Section 2 hereof and the proceeds thereof and that
with respect to such transfer, this Agreement shall constitute a security
agreement under applicable law. In the event of the characterization of any such
transfer as a loan, the amount of interest payable or paid with respect to such
loan under the terms of this Agreement shall be limited to an amount which shall
not exceed the maximum non-usurious rate of interest allowed by the applicable
state law or any applicable law of the United States permitting a higher maximum
non-usurious rate that preempts such applicable state law, which could lawfully
be contracted for, charged or received (the "Highest Lawful Rate"). In the event
any payment of interest on any such loan exceeds the Highest Lawful Rate, the
parties hereto stipulate that (a) to the extent possible given the term of such
loan, such excess amount previously paid or to be paid with respect to such loan
be applied to reduce the principal balance of such loan, and the provisions
thereof immediately be deemed reformed and the amounts thereafter collectible
thereunder reduced, without the necessity of the execution of any new document,
so as to comply with the then applicable law, but so as to permit the recovery
of the fullest amount otherwise called for thereunder and (b) to the extent that
the reduction of the principal balance of, and the amounts collectible under,
such loan and the reformation of the provisions thereof described in the
immediately preceding clause (a) is not possible given the term of such loan,
such excess amount will be deemed to have been paid with respect to such loan as
a result of an error and upon discovery of such error or upon notice thereof by
any party hereto such amount shall be refunded by the recipient thereof.
The characterization of the Seller as "debtor" and the Depositor as
"secured party" in any such security agreement and any related financing
statements required hereunder is solely for protective purposes and shall in no
way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale and contribution to the Depositor of the
Seller's entire right, title and interest in and to the Assets.
Each of the Seller, the Club, the Club Trustee and any of their Affiliates
hereby agrees to make the appropriate entries in its general accounting records
to indicate that the Closing Date Eligible Investments and the Timeshare Loans
have been transferred to the Depositor and its subsequent assignees.
Conditions Precedent to Acquisition of Timeshare Loans and
Closing Date Eligible Investments by the Depositor. The obligations of the
Depositor to purchase any Timeshare Loans and Closing Date Eligible Investments
hereunder shall be subject to the satisfaction of the following conditions:
On the Closing Date, with respect to the Initial Timeshare
Loans, and on each Transfer Date, with respect to each Subsequent Timeshare Loan
or any Qualified Substitute Timeshare Loan replacing a Timeshare Loan, all
representations and warranties of the Seller contained in Section 5(a) hereof
shall be true and correct on such date as if made on such date, and all
representations and warranties as to the Timeshare Loans contained in Section
5(b) hereof and all information provided in the Schedule of Timeshare Loans in
respect of each such Timeshare Loan conveyed on the Closing Date or such
Transfer Date, as applicable, shall be true
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and correct on such date. On the Closing Date, with respect to the Closing Date
Eligible Investments, all representations and warranties of the Seller contained
in Section 5(a) hereof shall be true and correct on such date as if made on such
date, and all representations and warranties as to the Closing Date Eligible
Investments contained in Section 5(b) hereof and all information provided in the
Schedule of Eligible Investments in respect of each such Closing Date Eligible
Investment conveyed on the Closing Date shall be true and correct on such date.
On or prior to the Closing Date or a Transfer Date (or, with
respect to Qualified Substitute Timeshare Loans, as provided for in Section 6(g)
hereof), as applicable, the Seller shall have delivered or shall have caused the
delivery of (i) the related Timeshare Loan Files to the Custodian and the
Custodian shall have delivered a Custodian's Certification therefor pursuant to
the Custodial Agreement and (ii) the Timeshare Loan Servicing Files to the
Servicer.
The Seller shall have delivered or caused to be delivered all
other information theretofore required or reasonably requested by the Depositor
to be delivered by the Seller or performed or caused to be performed all other
obligations required to be performed as of the Closing Date or Transfer Date, as
the case may be, including all filings, recordings and/or registrations as may
be necessary in the reasonable opinion of the Depositor, the Issuer or the
Indenture Trustee to establish and preserve the right, title and interest of the
Depositor, the Issuer or the Indenture Trustee, as the case may be, in the
related Timeshare Loans and Closing Date Eligible Investments.
On or before the Closing Date and on each Transfer Date, the
Indenture shall be in full force and effect.
With respect to the Initial Timeshare Loans, the Notes shall
be issued and sold on the Closing Date, and the Issuer and the Depositor shall
receive the full consideration due it upon the issuance of the Notes, and the
Issuer and the Depositor shall have applied their respective consideration to
the extent necessary, to pay the Timeshare Loan Acquisition Price for each
Initial Timeshare Loan and to pay for the Closing Date Eligible Investments;
With respect to the Subsequent Timeshare Loans, the Depositor
shall apply funds received from the Issuer withdrawn from the Prefunding
Account, to the extent necessary, to pay the Seller the Timeshare Loan
Acquisition Price for each Subsequent Timeshare Loan.
Each Timeshare Loan conveyed on the Closing Date or a Transfer
Date shall be an Eligible Timeshare Loan and each of the conditions herein and
in the Indenture for the purchases of Initial Timeshare Loans and Subsequent
Timeshare Loans shall have been satisfied.
Each Qualified Substitute Timeshare Loan replacing a Timeshare
Loan shall satisfy each of the criteria specified in the definition of
"Qualified Substitute Timeshare Loan" and each of the conditions herein and in
the Indenture for substitution of Timeshare Loans shall have been satisfied.
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The Depositor shall have received such other certificates and
opinions as it shall reasonably request.
Representations and Warranties and Certain Covenants of the
Seller.
The Seller represents and warrants to the Depositor and the
Indenture Trustee for the benefit of the Noteholders, on the Closing Date and on
each Transfer Date (with respect to any Subsequent Timeshare Loans or Qualified
Substitute Timeshare Loans transferred on such Transfer Date) as follows:
(i) Due Incorporation; Valid Existence; Good Standing. It is a
corporation duly organized and validly existing in good standing under the
laws of the jurisdiction of its incorporation; and is duly qualified to do
business as a foreign corporation and in good standing under the laws of
each jurisdiction where the character of its property, the nature of its
business or the performance of its obligations under this Agreement makes
such qualification necessary, except where the failure to be so qualified
will not have a material adverse effect on its business or its ability to
perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of any Timeshare
Loans.
(ii) Possession of Licenses, Certificates, Franchises and
Permits. It holds, and at all times during the term of this Agreement will
hold, all material licenses, certificates, franchises and permits from all
governmental authorities necessary for the conduct of its business, and
has received no notice of proceedings relating to the revocation of any
such license, certificate, franchise or permit, which singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially and adversely affect its ability to perform its
obligations under this Agreement or any other Transaction Document to
which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of any Timeshare Loans.
(iii) Corporate Authority and Power. It has, and at all times
during the term of this Agreement will have, all requisite corporate power
and authority to own its properties, to conduct its business, to execute
and deliver this Agreement and all documents and transactions contemplated
hereunder and to perform all of its obligations under this Agreement and
any other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder. It has all requisite
corporate power and authority to acquire, own, transfer and convey
Timeshare Loans to the Depositor.
(iv) Authorization, Execution and Delivery Valid and Binding.
This Agreement and all other Transaction Documents and instruments
required or contemplated hereby to be executed and delivered by it have
been duly authorized, executed and delivered by it and, assuming the due
execution and delivery by, the other party or parties hereto and thereto,
constitute legal, valid and binding agreements enforceable against it in
accordance with their respective terms subject, as to enforceability, to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
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moratorium and other similar applicable laws affecting the
enforceability of creditors' rights generally applicable in the
event of the bankruptcy, insolvency, reorganization, liquidation or
dissolution, as applicable, of it and to general principles of
equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law. This Agreement
constitutes a valid transfer of its interest in the Timeshare Loans
to the Depositor or, in the event of the characterization of any
such transfer as a loan, the valid creation of a first priority
perfected security interest in such Timeshare Loans in favor of the
Depositor.
(v) No Violation of Law, Rule, Regulation, etc. The execution,
delivery and performance by it of this Agreement and any other Transaction
Document to which it is a party do not and will not (A) violate any of the
provisions of its articles of incorporation or bylaws, (B) violate any
provision of any law, governmental rule or regulation currently in effect
applicable to it or its properties or by which the Seller or its
properties may be bound or affected, including, without limitation, any
bulk transfer laws, where such violation would have a material adverse
effect on its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or
enforceability of the Timeshare Loans, (C) violate any judgment, decree,
writ, injunction, award, determination or order currently in effect
applicable to it or its properties or by which it or its properties are
bound or affected, where such violation would have a material adverse
effect on its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or
enforceability of any Timeshare Loans, (D) conflict with, or result in a
breach of, or constitute a default under, any of the provisions of any
indenture, mortgage, deed of trust, contract or other instrument to which
it is a party or by which it is bound where such violation would have a
material adverse effect on its ability to perform its obligations under
this Agreement or any other Transaction Document to which it is a party or
under the transactions contemplated hereunder or thereunder or the
validity or enforceability of Timeshare Loans or (E) result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, mortgage, deed of trust, contract or
other instrument.
(vi) Governmental Consent. No consent, approval, order or
authorization of, and no filing with or notice to, any court or other
Governmental Authority in respect of the Seller is required which has not
been obtained in connection with the authorization, execution, delivery or
performance by it of this Agreement or any of the other Transaction
Documents to which it is a party or under the transactions contemplated
hereunder or thereunder, including, without limitation, the transfer of
Timeshare Loans and the creation of the security interest of the Depositor
therein pursuant to Section 3 hereof.
(vii) Defaults. It is not in default under any material
agreement, contract, instrument or indenture to which it is a party or by
which it or its properties is or are bound, or with respect to any order
of any court, administrative agency, arbitrator or governmental body, in
each case, which would have a material adverse effect on the
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transactions contemplated hereunder or on its business, operations,
financial condition or assets, and no event has occurred which with notice
or lapse of time or both would constitute such a default with respect to
any such agreement, contract, instrument or indenture, or with respect to
any such order of any court, administrative agency, arbitrator or
governmental body.
(viii) Insolvency. It is solvent and will not be rendered
insolvent by the transfer of any Timeshare Loans hereunder. On and after
the Closing Date, it will not engage in any business or transaction the
result of which would cause the property remaining with it to constitute
an unreasonably small amount of capital.
(ix) Pending Litigation or Other Proceedings. Other than as
described in the Offering Circular and on Schedule 5 attached hereto, as
of the Closing Date, there is no pending or, to its Knowledge, threatened
action, suit, proceeding or investigation before any court, administrative
agency, arbitrator or governmental body against or affecting it which, if
decided adversely, would materially and adversely affect (A) its condition
(financial or otherwise), business or operations, (B) its ability to
perform its obligations under, or the validity or enforceability of, this
Agreement or any other documents or transactions contemplated under this
Agreement, (C) any Timeshare Loan or title of any Obligor to any related
Timeshare Property pursuant to the applicable Owner Beneficiary Agreement
or (D) the Depositor's or any of its assigns' ability to foreclose or
otherwise enforce the liens of the Mortgage Notes and the rights of the
Obligors to use and occupy the related Timeshare Properties pursuant to
the applicable Owner Beneficiary Agreement.
(x) Information. No document, certificate or report furnished
or required to be furnished by or on behalf of it pursuant to this
Agreement, in its capacity as Seller, contains or will contain when
furnished any untrue statement of a material fact or fails or will fail to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which it was made.
There are no facts known to it which, individually or in the aggregate,
materially adversely affect, or which (aside from general economic trends)
may reasonably be expected to materially adversely affect in the future,
the financial condition or assets or its business, or which may impair the
ability of it to perform its obligations under this Agreement, which have
not been disclosed herein or therein or in the certificates and other
documents furnished to the Depositor by or on behalf of it specifically
for use in connection with the transactions contemplated hereby or
thereby.
(xi) Foreign Tax Liability. It is not aware of any Obligor
under a Timeshare Loan who has withheld any portion of payments due under
such Timeshare Loan because of the requirements of a foreign taxing
authority, and no foreign taxing authority has contacted it concerning a
withholding or other foreign tax liability.
(xii) Employee Benefit Plan Liability. As of the Closing Date
and each Transfer Date, as applicable, (i) no "accumulated funding
deficiency" (as such term is defined under ERISA and the Code), whether or
not waived, exists with respect to any "employee pension benefit plan" (as
such term is defined under ERISA) sponsored,
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maintained or contributed to by it or any of its Affiliates, and, to its
Knowledge, no event has occurred or circumstance exists that may result in
an accumulated funding deficiency as of the last day of the current plan
year of any such plan; (ii) it and each of its Affiliates has made all
contributions required under each multiemployer plan (as such term is
defined under ERISA) (a "Multiemployer Plan") to which it or any of its
Affiliates contributes or in which it or any of its Affiliates
participates (a "Seller Multiemployer Plan"); and (iii) neither it nor any
of its Affiliates has withdrawn from any Multiemployer Plan with respect
to which there is any outstanding liability and, to its Knowledge, no
event has occurred or circumstance exists that presents a risk of the
occurrence of any withdrawal from, or the partition, termination,
reorganization or insolvency of, any Seller Multiemployer Plan that could
result in any liability to it.
(xiii) Taxes. Other than as described on Schedule 5 hereto, as
of the Closing Date, it (i) has filed all tax returns (federal, state and
local) which it reasonably believes are required to be filed and has paid
or made adequate provision in its GAAP financial statements for the
payment of all taxes, assessments and other governmental charges due from
it or is contesting any such tax, assessment or other governmental charge
in good faith through appropriate proceedings or except where the failure
to file or pay will not have a material adverse effect on the rights and
interests of the Depositor, (ii) knows of no basis for any material
additional tax assessment for any fiscal year for which adequate reserves
in its GAAP financial statements have not been established and (iii)
intends to pay all such taxes, assessments and governmental charges, if
any, when due.
(xiv) Place of Business. The principal place of business and
chief executive office where it keeps its records concerning Timeshare
Loans will be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (or such other place specified by it by written notice to the
Depositor and the Indenture Trustee). It is a corporation formed under the
laws of the Commonwealth of Massachusetts.
(xv) Securities Laws. It 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. No portion of the Timeshare
Loan Acquisition Price for each of the Timeshare Loans or the price of the
Closing Date Eligible Investments will be used by it to acquire any
security in any transaction which is subject to Section 13 or Section 14
of the Securities Exchange Act of 1934, as amended.
(xvi) Bluegreen Vacation Club. With respect to the Club Loans:
(A) The Club Trust Agreement, of which a true and
correct copy is attached hereto as Exhibit B is in full force and
effect; and a certified copy of the Club Trust Agreement has been
delivered to the Indenture Trustee together with all amendments and
supplements in respect thereof;
(B) The arrangement of contractual rights and
obligations (duly established in accordance with the Club Trust
Agreement under the laws of the State of Florida) was established
for the purpose of holding and preserving certain
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property for the benefit of the Beneficiaries referred to in the
Club Trust Agreement. The Club Trustee has all necessary trust and
other authorizations and powers required to carry out its
obligations under the Club Trust Agreement in the State of Florida
and in all other states in which it holds Resort Interests. The Club
is not a corporation or business trust under the laws of the State
of Florida. The Club is not taxable as an association, corporation
or business trust under federal law or the laws of the State of
Florida;
(C) The Club Trustee is a corporation duly formed,
validly existing and in good standing under the laws of the State of
Florida. As of the Closing Date, the Club Trustee is qualified to do
business as a foreign corporation and is in good standing under the
laws of the state of Tennessee. As of each Transfer Date, the Club
Trustee will be duly qualified to do business as a foreign
corporation and will be in good standing under the laws of each
jurisdiction it is required by law to be. The Club Trustee is not an
affiliate of the Servicer for purposes of Chapter 721, Florida
Statutes and is in compliance with the requirements of such Chapter
721 requiring that it be independent of the Servicer;
(D) The Club Trustee has all necessary corporate power
to execute and deliver, and has all necessary corporate power to
perform its obligations under this Agreement, the other Transaction
Documents to which it is a party, the Club Trust Agreement and the
Club Management Agreement. The Club Trustee possesses all requisite
franchises, operating rights, licenses, permits, consents,
authorizations, exemptions and orders as are necessary to discharge
its obligations under the Club Trust Agreement;
(E) The Club Trustee holds all right, title and interest
in and to all of the Timeshare Properties related to the Club Loans
solely for the benefit of the Beneficiaries referred to in, and
subject in each case to the provisions of, the Club Trust Agreement
and the other documents and agreements related thereto. Except with
respect to the Mortgages (or a pledge of the Co-op Shares in
connection with Aruba Club Loans), the Club Trustee has permitted
none of such Timeshare Properties to be made subject to any lien or
encumbrance during the time it has been a part of the trust estate
under the Club Trust Agreement;
(F) There are no actions, suits, proceedings, orders or
injunctions pending against the Club or the Club Trustee, at law or
in equity, or before or by any governmental authority which, if
adversely determined, could reasonably be expected to have a
material adverse effect on the Trust Estate or the Club Trustee's
ability to perform its obligations under the Transaction Documents;
(G) Neither the Club nor the Club Trustee has incurred
any indebtedness for borrowed money (directly, by guarantee, or
otherwise);
(H) All ad valorem taxes and other taxes and assessments
against the Club and/or its trust estate have been paid when due and
neither the Seller nor the Club Trustee knows of any basis for any
additional taxes or assessments
10
against any such property. The Club has filed all required tax
returns and has paid all taxes shown to be due and payable on such
returns, including all taxes in respect of sales of Owner
Beneficiary Rights (as defined in the Club Trust Agreement) and
Vacation Points, if any;
(I) The Club and the Club Trustee are in compliance in
all material respects with all applicable laws, statutes, rules and
governmental regulations applicable to it and in compliance with
each material instrument, agreement or document to which it is a
party or by which it is bound, including, without limitation, the
Club Trust Agreement;
(J) Except as expressly permitted in the Club Trust
Agreement, the Club has maintained the One-to-One Beneficiary to
Accommodation Ratio (as such terms are defined in the Club Trust
Agreement);
(K) Bluegreen Vacation Club, Inc. is a not-for-profit
corporation duly formed, validly existing and in good standing under
the laws of the State of Florida;
(L) Upon purchase of the Club Loans and related Trust
Estate hereunder, the Depositor is an "Interest Holder Beneficiary"
under the Club Trust Agreement and each of the Club Loans
constitutes "Lien Debt", "Purchase Money Lien Debt" and "Owner
Beneficiary Obligations" under the Club Trust Agreement; and
(M) Except as disclosed to the Indenture Trustee in
writing or noted in the Custodian's Certification, each Mortgage
associated with a Deeded Club Loan and granted by the Club Trustee
or the Obligor on the related Deeded Club Loan, as applicable, has
been duly executed, delivered and recorded by or pursuant to the
instructions of the Club Trustee under the Club Trust Agreement and
such Mortgage is valid and binding and effective to create the lien
and security interests in favor of the Indenture Trustee (upon
assignment thereof to the Indenture Trustee). Each of such Mortgages
was granted in connection with the financing of a sale of a Resort
Interest.
The Seller hereby makes the representations and warranties
relating to the Timeshare Loans contained in Schedule I hereto for the benefit
of the Depositor, the Issuer and the Indenture Trustee for the benefit of the
Noteholders as of the Closing Date (only with respect to the Initial Timeshare
Loans) and each Transfer Date (only with respect to each Subsequent Timeshare
Loan or Qualified Substitute Timeshare Loan transferred on such Transfer Date),
as applicable. The Seller hereby represents and warrants that each Closing Date
Eligible Investment is an Eligible Investment for the benefit of the Depositor,
the Issuer and the Indenture Trustee for the benefit of the Noteholders as of
the Closing Date.
It is understood and agreed that the representations and
warranties set forth in this Section 5 shall survive the sale and contribution
of each Timeshare Loan to the Depositor and any assignment of such Timeshare
Loans by the Depositor and shall continue so
11
long as any such Timeshare Loans shall remain outstanding or until such time as
such Timeshare Loans are repurchased, purchased or a Qualified Substitute
Timeshare Loan is provided pursuant to Section 6 hereof. The Seller acknowledges
that it has been advised that the Depositor intends to assign all of its right,
title and interest in and to each Timeshare Loan and its rights and remedies
under this Agreement to the Issuer. The Seller agrees that, upon any such
assignment, the Depositor and any of its assignees may enforce directly, without
joinder of the Depositor (but subject to any defense that the Seller may have
under this Agreement) all rights and remedies hereunder.
With respect to any representations and warranties contained
in Section 5 which are made to the Seller's Knowledge, if it is discovered that
any representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of a Timeshare Loan or the interests of the
Depositor or any subsequent assignee thereof, then notwithstanding such lack of
Knowledge of the accuracy of such representation and warranty at the time such
representation or warranty was made (without regard to any Knowledge
qualifiers), such inaccuracy shall be deemed a breach of such representation or
warranty for purposes of the repurchase or substitution obligations described in
Sections 6(a)(i) or (ii) below.
Repurchases and Substitutions.
Mandatory Repurchases and Substitutions for Breaches of
Representations and Warranties. Upon the receipt of notice by the Seller from
the Depositor, the Issuer or the Indenture Trustee, of a breach of any of the
representations and warranties in Section 5 hereof (on the date on which such
representation or warranty was made) which materially and adversely affects the
value of a Timeshare Loan or a Closing Date Eligible Investment or the interests
of the Depositor or any subsequent assignee of the Depositor (including the
Issuer and the Indenture Trustee on behalf of the Noteholders) therein, the
Seller shall, within 60 days of receipt of such notice, cure in all material
respects the circumstance or condition which has caused such representation or
warranty to be incorrect or either (i) repurchase the Depositor's interest in
such Defective Timeshare Loan or such Closing Date Eligible Investment from the
Depositor at the Repurchase Price or (ii) in the case of a Defective Timeshare
Loan only, provide one or more Qualified Substitute Timeshare Loans and pay the
related Substitution Shortfall Amounts, if any. The Seller acknowledges that the
Depositor shall, pursuant to the Sale Agreement sell Timeshare Loans and the
Closing Date Eligible Investments and rights and remedies acquired hereunder to
the Issuer and that the Issuer shall pledge such Timeshare Loans and the Closing
Date Eligible Investments and rights to the Indenture Trustee for the benefit of
the Noteholders. The Seller further acknowledges that the Indenture Trustee will
be appointed attorney-in-fact under the Indenture and may enforce the Seller's
repurchase or substitution obligations if the Seller has not complied with its
repurchase or substitution obligations under this Agreement within the
aforementioned 60-day period.
Optional Purchases or Substitutions of Club Loans. The
Depositor hereby irrevocably grants to the Seller an option to repurchase or
substitute Original Club Loans it has under the Sale Agreement, the Transfer
Agreement and as described in the following sentence. With respect to any
Original Club Loans for which the related Obligor has elected to effect and the
Seller has agreed to effect an Upgrade, the Seller will (at its option) either
(i) pay the
12
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
Seller's option to substitute one or more Qualified Substitute Timeshare Loans
for an Original Club Loan is limited on any date to (x) 20% of the Aggregate
Closing Date Collateral Balance less (y) the aggregate Loan Balances of all
Original Club Loans previously substituted by the Seller on prior Transfer Dates
pursuant to this Agreement, the Transfer Agreement and/or the Sale Agreement.
The Seller shall use its best efforts to exercise its substitution option with
respect to Original Club Loans prior to exercise of its repurchase option. To
the extent that the Seller shall elect to substitute Qualified Substitute
Timeshare Loans for an Original Club Loan, the Seller shall use its best efforts
to cause each such Qualified Substitute Timeshare Loan to be, in the following
order of priority, (i) the Upgrade Club Loan related to such Original Club Loan
and (ii) an Upgrade Club Loan unrelated to such Original Club Loan.
Optional Purchases or Substitutions of Defaulted Timeshare
Loans. The Depositor hereby irrevocably grants to the Seller an option to
repurchase or substitute Defaulted Timeshare Loans it has under the Sale
Agreement, the Transfer Agreement and as described in the following sentence.
With respect to Defaulted Timeshare Loans on any date, the Seller will have the
option, but not the obligation, to either (i) purchase such Defaulted Timeshare
Loan at the Repurchase Price for such Defaulted Timeshare Loan or (ii)
substitute one or more Qualified Substitute Timeshare Loans for such Defaulted
Timeshare Loan and pay the related Substitution Shortfall Amount, if any;
provided, however, that the Seller's option to purchase a Defaulted Timeshare
Loan or to substitute one or more Qualified Substitute Timeshare Loans for a
Defaulted Timeshare Loan is limited on any date to the Optional Purchase Limit
and the Optional Substitution Limit, respectively. The Seller may irrevocably
waive its option to purchase or substitute a Defaulted Timeshare Loan by
delivering to the Indenture Trustee a Waiver Letter in the form of Exhibit A
attached hereto.
Payment of Repurchase Prices and Substitution Shortfall
Amounts. The Seller hereby agrees to remit or cause to be remitted all amounts
in respect of Repurchase Prices and Substitution Shortfall Amounts payable
during the related Due Period in immediately available funds to the Indenture
Trustee to be deposited in the Collection Account on the Business Day
immediately preceding the related Payment Date for such Due Period in accordance
with the provisions of the Indenture. In the event that more than one Timeshare
Loan is replaced pursuant to Sections 6(a), (b) or (c) hereof on any Transfer
Date, the Substitution Shortfall Amounts and the Loan Balances of Qualified
Substitute Timeshare Loans shall be calculated on an aggregate basis for all
substitutions made on such Transfer Date.
Schedule of Timeshare Loans. The Seller hereby agrees, on each
date on which a Timeshare Loan has been repurchased, purchased or substituted,
to provide or cause to be provided to the Depositor, the Issuer and the
Indenture Trustee with a electronic supplement to Schedule III hereto and the
Schedule of Timeshare Loans reflecting the removal and/or substitution of
Timeshare Loans and subjecting any Qualified Substitute Timeshare Loans to the
provisions of this Agreement.
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Qualified Substitute Timeshare Loans. Pursuant to Section 6(g)
hereof, on the related Transfer Date, the Seller hereby agrees to deliver or to
cause the delivery of the Timeshare Loan Files relating to the Qualified
Substitute Timeshare Loans to the Indenture Trustee or to the Custodian, at the
direction of the Indenture Trustee, in accordance with the provisions of the
Indenture and the Custodial Agreement. As of such related Transfer Date, the
Seller does hereby transfer, assign, sell and grant to the Depositor, without
recourse (except as provided in Section 6 and Section 8 hereof), any and all of
the Seller's right, title and interest in and to (i) each Qualified Substitute
Timeshare Loan conveyed to the Depositor on such Transfer Date, (ii) the
Receivables in respect of the Qualified Substitute Timeshare Loans due after the
related Cut-Off Date, (iii) the related Timeshare Loan Documents (excluding any
rights as developer or declarant under the Timeshare Declaration, the Timeshare
Program Consumer Documents or the Timeshare Program Governing Documents), (iv)
all Related Security in respect of such Qualified Substitute Timeshare Loans and
(v) all income, payments, proceeds and other benefits and rights related to any
of the foregoing. Upon such sale, the ownership of each Qualified Substitute
Timeshare Loan and all collections allocable to principal and interest thereon
after the related Cut-Off Date and all other property interests or rights
conveyed pursuant to and referenced in this Section 6(f) shall immediately vest
in the Depositor, its successors and assigns. The Seller shall not take any
action inconsistent with such ownership nor claim any ownership interest in any
Qualified Substitute Timeshare Loan for any purpose whatsoever other than
consolidated federal and state income tax reporting. The Seller agrees that such
Qualified Substitute Timeshare Loans shall be subject to the provisions of this
Agreement and shall thereafter be deemed a "Timeshare Loan" for the purposes of
this Agreement.
Officer's Certificate for Qualified Substitute Timeshare
Loans. The Seller shall, on each related Transfer Date, certify or cause to be
certified in writing to the Depositor, the Issuer and the Indenture Trustee that
each new Timeshare Loan meets all the criteria of the definition of "Qualified
Substitute Timeshare Loan" and that (i) the Timeshare Loan Files for such
Qualified Substitute Timeshare Loans have been delivered to the Custodian or
shall be delivered within five Business Days, and (ii) the Timeshare Loan
Servicing Files for such Qualified Substitute Timeshare Loans have been
delivered to the Servicer.
Subsequent Transfer Notices. The Seller shall, on each related
Transfer Date, deliver a Subsequent Transfer Notice in the form attached as
Exhibit J to the Indenture, as specified by Section 4.3 of the Indenture.
Release. In connection with any repurchase, purchase or
substitution of one or more Timeshare Loans contemplated by this Section 6, upon
satisfaction of the conditions contained in this Section 6, the Depositor, the
Issuer and the Indenture Trustee shall execute and deliver or shall cause the
execution and delivery of such releases and instruments of transfer or
assignment presented to it by the Seller, in each case without recourse, as
shall be necessary to vest in the Seller or its designee the legal and
beneficial ownership of such Timeshare Loans; provided, however, that with
respect to any release of a Timeshare Loan that is substituted by a Qualified
Substitute Timeshare Loan, the Issuer and the Indenture Trustee shall not
execute and deliver or cause the execution and delivery of such releases and
instruments of transfer or assignment until the Indenture Trustee and the
Servicer receive a Custodian's Certification for such Qualified Substitute
Timeshare Loan. The Depositor, the Issuer and the Indenture Trustee
14
shall cause the Custodian to release the related Timeshare Loan Files to the
Seller or its designee and the Servicer to release the related Timeshare Loan
Servicing Files to the Seller or its designee; provided, however, that with
respect to any Timeshare Loan File or Timeshare Loan Servicing File related to a
Timeshare Loan that has been substituted by a Qualified Substitute Timeshare
Loan, the Issuer and the Indenture Trustee shall not cause the Custodian and the
Servicer to release the related Timeshare Loan File and the Timeshare Loan
Servicing File, respectively, until the Indenture Trustee and the Servicer
receive a Custodian's Certification for such Qualified Substitute Timeshare
Loan.
Sole Remedy. It is understood and agreed that the obligations
of the Seller contained in Section 6(a) to cure a breach, or to repurchase or
substitute Defective Timeshare Loans or to repurchase Closing Date Eligible
Investments, and the obligation of the Seller to indemnify pursuant to Section
8, shall constitute the sole remedies available to the Depositor or its
subsequent assignees for the breaches of any representation or warranty
contained in Section 5 and such remedies are not intended to and do not
constitute "credit recourse" to the Seller.
Additional Covenants of the Seller. The Seller hereby
covenants and agrees with the Depositor as follows:
It shall comply with all laws, rules, regulations and orders
applicable to it and its business and properties except where the failure to
comply will not have a material adverse effect on its business or its ability to
perform its obligations under this Agreement or any other Transaction Document
to which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of the Timeshare Loans or the
Closing Date Eligible Investments.
It shall preserve and maintain its existence (corporate or
otherwise), rights, franchises and privileges in the jurisdiction of its
organization and except where the failure to so preserve and maintain will not
have a material adverse effect on its business or its ability to perform its
obligations under this Agreement or any other Transaction Document to which it
is a party or under the transactions contemplated hereunder or thereunder or the
validity or enforceability of the Timeshare Loans or the Closing Date Eligible
Investments.
On the Closing Date and each Transfer Date, as applicable, it
shall indicate in its and its Affiliates' computer files and other records that
each Timeshare Loan and each Closing Date Eligible Investment has been sold to
the Depositor.
It shall respond to any inquiries with respect to ownership of
a Timeshare Loan or Closing Date Eligible Investment by stating that such
Timeshare Loan or Closing Date Eligible Investment has been sold to the
Depositor and that the Depositor is the owner of such Timeshare Loan or Closing
Date Eligible Investment.
On or prior to the Closing Date, it shall file or cause to be
filed, at its own expense, financing statements in favor of the Depositor, and,
if applicable, the Issuer and the Indenture Trustee on behalf of the
Noteholders, with respect to the Timeshare Loans and the Closing Date Eligible
Investments, in the form and manner reasonably requested by the
15
Depositor or its assigns. The Seller shall deliver file-stamped copies of such
financing statements to the Depositor, the Issuer and the Indenture Trustee on
behalf of the Noteholders.
It agrees from time to time to, at its expense, promptly
execute and deliver all further instruments and documents, and to take all
further actions, that may be necessary, or that the Depositor, the Issuer or the
Indenture Trustee may reasonably request, to perfect, protect or more fully
evidence the sale and contribution of the Timeshare Loans and the Closing Date
Eligible Investments to the Depositor, or to enable the Depositor to exercise
and enforce its rights and remedies hereunder or under any Timeshare Loan or
Closing Date Eligible Investment including, but not limited to, powers of
attorney, UCC financing statements and assignments of mortgage. It hereby
appoints the Depositor, the Issuer and the Indenture Trustee as
attorneys-in-fact, which appointment is coupled with an interest and is
therefore irrevocable, to act on behalf and in the name of the Seller under this
Section 7(f).
On the Closing Date, the Seller 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. After the Closing Date, any change in the legal
name of the Seller or the use by it of any tradename, fictitious name, assumed
name or "doing business as" name other than the foregoing shall be promptly (but
no later than ten Business Days) disclosed to the Depositor and the Indenture
Trustee in writing.
Upon the discovery or receipt of notice by a Responsible
Officer of the Seller of a breach of any of its representations or warranties
and covenants contained herein, the Seller shall promptly disclose to the
Depositor, the Issuer and the Indenture Trustee, in reasonable detail, the
nature of such breach.
Except to the extent of any payments received with respect to
a Credit Card Timeshare Loan, in the event that the Seller shall receive any
payments in respect of a Timeshare Loan after the Closing Date or a Transfer
Date, as applicable, the Seller shall, within two Business Days of receipt,
transfer or cause to be transferred, such payments to the Lockbox Account.
Payments received by the Seller with respect to Credit Card Timeshare Loans,
without regard to any discount fees, shall be transferred to the Lockbox Account
within five Business Days.
The Seller will keep its principal place of business and chief
executive office and the office where it keeps its records concerning the
Timeshare Loans at the address of Bluegreen listed herein and shall notify the
parties hereto of any change to the same at least 30 days prior thereto.
In the event that the Seller or the Depositor or any assignee
of the Depositor receives actual notice of any transfer taxes arising out of the
transfer, assignment and conveyance of a Timeshare Loan to the Depositor, on
written demand by the Depositor, or upon the Seller otherwise being given notice
thereof, the Seller shall pay, and otherwise indemnify and hold the Depositor,
or any subsequent assignee, harmless, on an after-tax basis, from and against
any and all such transfer taxes.
16
The Seller authorizes the Depositor, the Issuer and the
Indenture Trustee to file continuation statements, and amendments thereto,
relating to the Timeshare Loans and Closing Date Eligible Investments and all
payments made with regard to the related Timeshare Loans and Closing Date
Eligible Investments without the signature of the Seller where permitted by law.
A photocopy or other reproduction of this Agreement shall be sufficient as a
financing statement where permitted by law. The Depositor confirms that it is
not its present intention to file a photocopy or other reproduction of this
Agreement as a financing statement, but reserves the right to do so if, in its
good faith determination, there is at such time no reasonable alternative
remaining to it.
Indemnification.
The Seller agrees to indemnify the Depositor, the Issuer, the
Indenture Trustee, the Noteholders and the Initial Purchaser (collectively, the
"Indemnified Parties") against any and all claims, losses, liabilities,
(including reasonable legal fees and related costs) that the Depositor, the
Issuer, the Indenture Trustee, the Noteholders or the Initial Purchaser may
sustain directly related to any breach of the representations and warranties of
the Seller under Section 5 hereof (the "Indemnified Amounts") excluding, however
(i) Indemnified Amounts to the extent resulting from the gross negligence or
willful misconduct on the part of such Indemnified Party; (ii) any recourse for
any uncollectible Timeshare Loan not related to a breach of representation or
warranty; (iii) recourse to the Seller for a Defective Timeshare Loan so long as
the same is cured, substituted or repurchased pursuant to Section 6 hereof, (iv)
income, franchise or similar taxes by such Indemnified Party arising out of or
as a result of this Agreement or the transfer of the Timeshare Loans and the
Closing Date Eligible Investments; (v) Indemnified Amounts attributable to any
violation by an Indemnified Party of any Requirement of Law related to an
Indemnified Party; or (vi) the operation or administration of the Indemnified
Party generally and not related to the enforcement of this Agreement. The Seller
shall (A) promptly notify the Depositor and the Indenture Trustee if a claim is
made by a third party with respect to this Agreement or the Timeshare Loans, and
relating to (i) the failure by the Seller to perform its duties in accordance
with the terms of this Agreement or (ii) a breach of the Seller's
representations, covenants and warranties contained in this Agreement, (B)
assume (with the consent of the Depositor, the Issuer, the Indenture Trustee,
the Noteholders or the Initial Purchaser, as applicable, which consent shall not
be unreasonably withheld) the defense of any such claim and (C) pay all expenses
in connection therewith, including reasonable legal counsel fees and promptly
pay, discharge and satisfy any judgment, order or decree which may be entered
against it or the Depositor, the Issuer, the Indenture Trustee, the Noteholders
or the Initial Purchaser in respect of such claim. If the Seller shall have made
any indemnity payment pursuant to this Section 8 and the recipient thereafter
collects from another Person any amount relating to the matters covered by the
foregoing indemnity, the recipient shall promptly repay such amount to the
Seller.
The obligations of the Seller under this Section 8 to
indemnify the Depositor, the Issuer, the Indenture Trustee, the Noteholders and
the Initial Purchaser shall survive the termination of this Agreement and
continue until the Notes are paid in full or otherwise released or discharged.
17
No Proceedings. The Seller hereby agrees that it will not,
directly or indirectly, institute, or cause to be instituted, or join any Person
in instituting, against the Depositor or any Association, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law so long as
there shall not have elapsed one year plus one day since the latest maturing
Notes issued by the Issuer.
Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing and mailed or
telecommunicated, or delivered as to each party hereto, at its address set forth
below or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall
not be effective until received by the party to whom such notice or
communication is addressed.
Seller
Bluegreen Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President, CFO & Treasurer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Depositor
BRF Corporation 2007-A
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, President & Assistant Treasurer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
No Waiver; Remedies. No failure on the part of the Seller, the
Depositor or any assignee thereof to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any other remedies provided by law.
Binding Effect; Assignability. This Agreement shall be binding
upon and inure to the benefit of the Depositor and its respective successors and
assigns. Any assignee of the Depositor shall be an express third party
beneficiary of this Agreement, entitled to directly enforce this Agreement. The
Seller may not assign any of its rights and obligations hereunder or any
interest herein without the prior written consent of the Depositor and any
assignee thereof. The Depositor may, and intends to, assign all of its rights
hereunder to the Issuer and the Seller consents to any such assignment. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until its termination; provided, however, that the rights and remedies with
respect to any breach of any representation and warranty made by the Seller
pursuant to Section 5 and the repurchase or substitution and indemnification
obligations shall be continuing and shall survive
18
any termination of this Agreement but such rights and remedies may be enforced
only by the Depositor, the Issuer and the Indenture Trustee.
Amendments; Consents and Waivers. No modification, amendment
or waiver of, or with respect to, any provision of this Agreement, and all other
agreements, instruments and documents delivered thereto, nor consent to any
departure by the Seller from any of the terms or conditions thereof shall be
effective unless it shall be in writing and signed by each of the parties
hereto, the written consent of the Indenture Trustee on behalf of the
Noteholders is given and confirmation from the Rating Agencies that such action
will not result in a downgrade, withdrawal or qualification of any rating
assigned to a Class of Notes is received. The Seller shall provide the Indenture
Trustee and the Rating Agencies with such proposed modifications, amendments or
waivers. Any waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No consent to or demand by the Seller in
any case shall, in itself, entitle it to any other consent or further notice or
demand in similar or other circumstances. The Seller acknowledges that in
connection with the intended assignment by the Depositor of all of its right,
title and interest in and to each Timeshare Loan and Closing Date Eligible
Investment to the Issuer, the Issuer intends to issue the Notes, the proceeds of
which will be used by the Issuer to purchase the Timeshare Loans and the Closing
Date Eligible Investments from the Depositor under the terms of the Sale
Agreement. Notwithstanding anything to the contrary in this Section 13, no
amendment shall cause the Issuer to fail to be treated as a "qualified special
purpose entity" as defined in Statement of Financial Accounting Standards No.
140 (or any successor Statement of Financial Accounting Standard).
Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation, shall not in any way be
affected or impaired thereby in any other jurisdiction. Without limiting the
generality of the foregoing, in the event that a Governmental Authority
determines that the Depositor may not purchase or acquire Timeshare Loans or
Closing Date Eligible Investments, the transactions evidenced hereby shall
constitute a loan and not a purchase and sale and contribution to capital,
notwithstanding the otherwise applicable intent of the parties hereto, and the
Seller shall be deemed to have granted to the Depositor as of the date hereof, a
first priority perfected security interest in all of the Seller's right, title
and interest in, to and under such Timeshare Loans and the Closing Date Eligible
Investments and the related property as described in Section 2 hereof.
GOVERNING LAW; CONSENT TO JURISDICTION.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
(B) THE PARTIES TO THIS AGREEMENT HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE
19
BOROUGH OF MANHATTAN IN NEW YORK CITY AND EACH PARTY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE
OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO ITS ADDRESS SET FORTH IN
SECTION 10 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE
DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE
PREPAID. THE PARTIES HERETO EACH WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER
AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 15 SHALL AFFECT
THE RIGHT OF THE PARTIES TO THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY OF THEM TO BRING
ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.
Heading. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Execution in Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and both of which when taken together shall
constitute one and the same agreement.
20
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
Very truly yours,
BRF CORPORATION 2007-A, as Depositor
By:_______________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Assistant Treasurer
BLUEGREEN CORPORATION, as Seller
By:_______________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President, CFO and Treasurer
Agreed and acknowledged as to
the last paragraph of Section 3
herein only:
BLUEGREEN VACATION CLUB TRUST
By: Vacation Trust, Inc., Individually and as Club Trustee
By:_______________________________________
Name:
Title:
[Signature Page to the Purchase and Contribution Agreement]
Schedule I
Representations and Warranties of the Seller Regarding the Timeshare Loans
With respect to each Timeshare Loan, as of the Closing Date or the related
Transfer Date, as applicable:
(a) other than certain 50/50 Loans, payments due under the Timeshare
Loan are fully-amortizing and payable in level monthly installments;
(b) the payment obligations under the Timeshare Loan bear a fixed rate
of interest;
(c) the Obligor thereunder has made a down payment by cash, check or
credit card of at least 10% of the actual purchase price (including
closing costs) of the Timeshare Property (which cash down payment
may, (i) in the case of Upgrade Club Loans, be represented in whole
or in part by the down payment made and principal payments paid in
respect of the related Original Club Loan and (ii) in the case of a
Sampler Converted Loan, be represented in whole or in part by the
principal payments and down payment made on the related Sampler Loan
since its date of origination) and no part of such payment has been
made or loaned to the Obligor by Bluegreen, the Seller or an
Affiliate thereof;
(d) as of the related Cut-Off Date, no principal or interest due with
respect to the Timeshare Loan is more than 60 days delinquent;
(e) the Obligor is not an Affiliate of Bluegreen or any Subsidiary;
provided, that solely for the purposes of this representation, a
relative of an employee and employees of Bluegreen or any Subsidiary
(or any of its Affiliates) shall not be deemed to be an "Affiliate";
(f) immediately prior to the conveyance of the Timeshare Loan to the
Depositor, the Seller will own full legal and equitable title to
such Timeshare Loan, and the Timeshare Loan (and the related
Timeshare Property) is free and clear of adverse claims, liens and
encumbrances and is not subject to claims of rescission, invalidity,
unenforceability, illegality, defense, offset, abatement,
diminution, recoupment, counterclaim or participation or ownership
interest in favor of any other Person;
(g) the Timeshare Loan (other than an Aruba Club Loan) is secured
directly by a first priority Mortgage on the related purchased
Timeshare Property;
(h) with respect to each Deeded Club Loan, the Timeshare Property
mortgaged by or at the direction of the related Obligor constitutes
a fractional fee simple timeshare interest in real property at the
related Resort or an undivided interest in a Resort associated with
a Unit that entitles the holder of the interest to the use of a
specific property for a specified number of days each year or every
other year,
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subject to the rules of the Bluegreen Vacation Club; the related
Mortgage has been delivered for filing and recordation with all
appropriate governmental authorities in all jurisdictions in which
such Mortgage is required to be filed and recorded to create a
valid, binding and enforceable first Lien on the related Timeshare
Property and such Mortgage creates a valid, binding and enforceable
first Lien on the related Timeshare Property, subject only to
Permitted Liens; and the Seller is in compliance with any Permitted
Lien respecting the right to the use of such Timeshare Property; the
Assignment of Mortgage and each related endorsement of the related
Mortgage Note constitutes a duly executed, legal, valid, binding and
enforceable assignment or endorsement, as the case may be, of such
related Mortgage and related Mortgage Note, and all monies due or to
become due thereunder, and all proceeds thereof;
(i) with respect to the Obligor and a particular Timeshare Property
purchased by such Obligor, there is only one original Mortgage and
Mortgage Note, in the case of a Deeded Club Loan, and, only one
Owner Beneficiary Agreement, in the case of an Aruba Club Loan; all
parties to the related Mortgage and the related Mortgage Note (and,
in the case of an Aruba Club Loan, Owner Beneficiary Agreement) had
legal capacity to enter into such Timeshare Loan Documents and to
execute and deliver such related Timeshare Loan Documents, and such
related Timeshare Loan Documents have been duly and properly
executed by such parties; any amendments to such related Timeshare
Loan Documents required as a result of any mergers involving the
Seller or its predecessors, to maintain the rights of the Seller or
its predecessors thereunder as a mortgagee (or a Seller, in the case
of an Aruba Club Loan) have been completed;
(j) at the time the related Originator originated such Timeshare Loan to
the related Obligor, such Originator had full power and authority to
originate such Timeshare Loan and the Obligor or the Club Trustee
had good and indefeasible fee title or good and marketable fee
simple title, or, in the case of an Aruba Club Loan, a cooperative
interest, as applicable, to the Timeshare Property related to such
Timeshare Loan, free and clear of all Liens, except for Permitted
Liens;
(k) the related Mortgage (or, in the case of an Aruba Club Loan, the
related Owner Beneficiary Agreement) contains customary and
enforceable provisions so as to render the rights and remedies of
the holder thereof adequate for the realization against the related
Timeshare Property of the benefits of the security interests or
lender's contractual rights intended to be provided thereby,
including (a) if the Mortgage is a deed of trust, by trustee's sale,
including power of sale, (b) otherwise by judicial foreclosure or
power of sale and/or (c) termination of the contract, retention of
Obligor deposits and payments towards the related Timeshare Loan by
the Originator or the lender, as the case may be, and expulsion from
the Club; in the case of the Deeded Club Loans, there is no
exemption available to the related Obligor which would interfere
with the mortgagee's right to sell at a trustee's sale or power of
sale or right to foreclose such related Mortgage, as applicable;
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(l) the related Mortgage Note is not and has not been secured by any
collateral except the Lien of the related Mortgage;
(m) if a Mortgage secures a Timeshare Loan, the title to the related
Timeshare Property is insured (or a binding commitment, which may be
a master commitment referencing one or more Mortgages, for title
insurance, not subject to any conditions other than standard
conditions applicable to all binding commitments, has been issued)
under a mortgagee title insurance policy (which may consist of one
master policy referencing one or more such Mortgages) issued by a
title insurer qualified to do business in the jurisdiction where the
related Timeshare Property is located in a form generally acceptable
to prudent originators of similar mortgage loans, insuring the
Seller or its predecessor and its successors and assigns, as to the
first priority mortgage Lien of the related Mortgage in an amount
equal to the original outstanding Loan Balance of such Timeshare
Loan, and otherwise in form and substance acceptable to the
Indenture Trustee; the Club Originator and its assignees is a named
insured of such mortgagee's title insurance policy; such mortgagee's
title insurance policy is in full force and effect; no claims have
been made under such mortgagee's title insurance policy and no prior
holder of such Timeshare Loan has done or omitted to do anything
which would impair the coverage of such mortgagee's title insurance
policy; no premiums for such mortgagee's title insurance policy,
endorsements and all special endorsements are past due;
(n) the Seller has not taken (or omitted to take), and has no notice
that the related Obligor has taken (or omitted to take), any action
that would impair or invalidate the coverage provided by any hazard,
title or other insurance policy on the related Timeshare Property;
(o) all applicable intangible taxes and documentary stamp taxes were
paid as to the related Timeshare Loan;
(p) the proceeds of the Timeshare Loan have been fully disbursed, there
is no obligation to make future advances or to lend additional funds
under the originator's commitment or the documents and instruments
evidencing or securing the Timeshare Loan and no such advances or
loans have been made since the origination of the Timeshare Loan;
(q) the terms of each Timeshare Loan Document have not been impaired,
waived, altered or modified in any respect, except (x) by written
instruments which are part of the related Timeshare Loan Documents
or (y) in accordance with the Credit Policy, the Collection Policy
or the Servicing Standard (provided that no Timeshare Loan has been
impaired, waived, altered, or modified in any respect more than
once). No other instrument has been executed or agreed to which
would effect any such impairment, waiver, alteration or
modification; the Obligor has not been released from liability on or
with respect to the Timeshare Loan, in whole or in part; if required
by law or prudent originators of similar loans in the jurisdiction
where the related Timeshare Property is located, all waivers,
I-3
alterations and modifications have been filed and/or recorded in all
places necessary to perfect, maintain and continue a valid first
priority Lien of the related Mortgage, subject only to Permitted
Liens;
(r) other than if it is an Aruba Club Loan, the Timeshare Loan is
principally and directly secured by an interest in real property;
(s) the Timeshare Loan was originated by one of the Seller's Affiliates
in the normal course of its business; the Timeshare Loan originated
by the Seller's Affiliates was underwritten in accordance with its
underwriting guidelines and the Credit Policy; to the Seller's
Knowledge, the origination, servicing and collection practices used
by the Seller's Affiliates with respect to the Timeshare Loan have
been in all respects, legal, proper, prudent and customary;
(t) the related Timeshare Loan is assignable to and by the obligee and
its successors and assigns and the related Timeshare Property is
assignable upon liquidation of the related Timeshare Loan, without
the consent of any other Person (including any Association,
condominium association, homeowners' or timeshare association);
(u) the related Mortgage is and will be prior to any Lien on, or other
interests relating to, the related Timeshare Property;
(v) to the Seller's Knowledge, there are no delinquent or unpaid taxes,
ground rents (if any), water charges, sewer rents or assessments
outstanding with respect to any of the Timeshare Properties, nor any
other outstanding Liens or charges affecting the Timeshare
Properties that would result in the imposition of a Lien on the
Timeshare Property affecting the Lien of the related Mortgage or
otherwise materially affecting the interests of the Indenture
Trustee on behalf of the Noteholders in the related Timeshare Loan;
(w) other than with respect to delinquent payments of principal or
interest 60 or fewer days past due as of the Cut-Off Date, there is
no default, breach, violation or event of acceleration existing
under the Mortgage, the related Mortgage Note or any other document
or instrument evidencing, guaranteeing, insuring or otherwise
securing the related Timeshare Loan, and no event which, with the
lapse of time or with notice and the expiration of any grace or cure
period, would constitute a material default, breach, violation or
event of acceleration thereunder; and the Seller has not waived any
such material default, breach, violation or event of acceleration
under the Owner Beneficiary Agreement, Mortgage, the Mortgage Note
or any such other document or instrument, as applicable;
(x) neither the Obligor nor any other Person has the right, by statute,
contract or otherwise, to seek the partition of the Timeshare
Property;
(y) the Timeshare Loan has not been satisfied, canceled, rescinded or
subordinated, in whole or in part; no portion of the Timeshare
Property has been released from the
I-4
Lien of the related Mortgage, in whole or in part; no instrument has
been executed that would effect any such satisfaction, cancellation,
rescission, subordination or release; the terms of the related
Mortgage do not provide for a release of any portion of the
Timeshare Property from the Lien of the related Mortgage except upon
the payment of the Timeshare Loan in full;
(z) the Seller and any of its Affiliates and, to the Seller's Knowledge,
each other party which has had an interest in the Timeshare Loan is
(or, during the period in which such party held and disposed of such
interest, was) in compliance with any and all applicable filing,
licensing and "doing business" requirements of the laws of the state
wherein the Timeshare Property is located to the extent necessary to
permit the Seller to maintain or defend actions or proceedings with
respect to the Timeshare Loan in all appropriate forums in such
state without any further act on the part of any such party;
(aa) there is no current obligation on the part of any other person
(including any buy down arrangement) to make payments on behalf of
the Obligor in respect of the Timeshare Loan;
(bb) the related Associations were duly organized and are validly
existing; a manager (the "Manager") manages such Resort and performs
services for the Associations, pursuant to an agreement between the
Manager and the respective Associations, such contract being in full
force and effect; to the Seller's Knowledge the Manager and the
Associations have performed in all material respects all obligations
under such agreement and are not in default under such agreement;
(cc) in the case of Bluegreen Owned Resorts (other than La Cabana Resort
and Casa del Mar Resort) and to the Seller's Knowledge with respect
to the Non-Bluegreen Owned Resorts, La Cabana Resort and Casa del
Mar Resort, (i) the related Resort is insured in the event of fire,
earthquake, or other casualty for the full replacement value
thereof, and in the event that the Timeshare Property should suffer
any loss covered by casualty or other insurance, upon receipt of any
insurance proceeds, the Associations at the Resorts are required,
during the time such Resort is covered by such insurance, under the
applicable governing instruments either to repair or rebuild the
portions of the Resort in which the Timeshare Property is located or
to pay such proceeds to the holders of any related Mortgage secured
by a Timeshare Property located at such Resort; (ii) the related
Resort, if located in a designated flood plain, maintains flood
insurance in an amount not less than the maximum level available
(without regard to reasonable deductibles) under the National Flood
Insurance Act of 1968, as amended or any applicable laws; (iii) the
related Resort has business interruption insurance and general
liability insurance in such amounts generally acceptable in the
industry; and (iv) the related Resort's insurance policies are in
full force and effect with a generally acceptable insurance carrier;
I-5
(dd) the obligee of each related Mortgage, and its successors and
assigns, has the right to receive and direct the application of
insurance and condemnation proceeds received in respect of the
related Timeshare Property, except where the related condominium
declarations, timeshare declarations, the Club Trust Agreement or
applicable state law provide that insurance and condemnation
proceeds be applied to restoration or replacement of the
improvements or acquisition of similar improvements, as the case may
be;
(ee) each rescission period applicable to the related Timeshare Loan has
expired;
(ff) no selection procedures were intentionally utilized by the Seller in
selecting the Timeshare Loan which the Seller knew were materially
adverse to the Depositor, the Indenture Trustee or the Noteholders;
(gg) except as set forth in Schedule II hereto, the Units related to the
Timeshare Loan in the related Resort have been completed in all
material respects as required by applicable state and local laws,
free of all defects that could give rise to any claims by the
related Obligors under home warranties or applicable laws or
regulations, whether or not such claims would create valid offset
rights under the law of the State in which the Resort is located; to
the extent required by applicable law, valid certificates of
occupancy for such Units have been issued and are currently
outstanding; the Seller or any of its Affiliates have complied in
all material respects with all obligations and duties incumbent upon
the developers under the related timeshare declaration (each a
"Declaration"), as applicable, or similar applicable documents for
the related Resort; no practice, procedure or policy employed by the
related Association in the conduct of its business violates any law,
regulation, judgment or agreement, including, without limitation,
those relating to zoning, building, use and occupancy, fire, health,
sanitation, air pollution, ecological, environmental and toxic
wastes, applicable to such Association which, if enforced, would
reasonably be expected to (a) have a material adverse impact on such
Association or the ability of such Association to do business, (b)
have a material adverse impact on the financial condition of such
Association, or (c) constitute grounds for the revocation of any
license, charter, permit or registration which is material to the
conduct of the business of such Association; the related Resort and
the present use thereof does not violate any applicable
environmental, zoning or building laws, ordinances, rules or
regulations of any governmental authority, or any covenants or
restrictions of record, so as to materially adversely affect the
value or use of such Resort or the performance by the related
Association of its obligations pursuant to and as contemplated by
the terms and provisions of the related Declaration; there is no
condition presently existing, and to the Seller's Knowledge, no
event has occurred or failed to occur prior to the date hereof,
concerning the related Resort relating to any hazardous or toxic
materials or condition, asbestos or other environmental or similar
matters which would reasonably be expected to materially and
adversely affect the present use of such Resort or the financial
I-6
condition or business operations of the related Association, or the
value of the Notes;
(hh) except if such Timeshare Loan is listed on Schedule II hereto, the
original Loan Balance of such Timeshare Loan does not exceed
$35,000;
(ii) payments with respect to the Timeshare Loan are to be in legal
tender of the United States;
(jj) all monthly payments (as applicable) made on the Timeshare Loan have
been made by the Obligor and not by the Seller or any Affiliate of
the Seller on the Obligor's behalf;
(kk) the Timeshare Loan relates to a Resort;
(ll) the Timeshare Loan constitutes either "chattel paper", a "general
intangible" or an "instrument" as defined in the UCC as in effect in
all applicable jurisdictions;
(mm) the sale, transfer and assignment of the Timeshare Loan and the
Related Security does not contravene or conflict with any law, rule
or regulation or any contractual or other restriction, limitation or
encumbrance, and the sale, transfer and assignment of the Timeshare
Loan and Related Security does not require the consent of the
Obligor;
(nn) each of the Timeshare Loan, the Related Security, related Assignment
of Mortgage, related Mortgage, related Mortgage Note, related Owner
Beneficiary Agreement (each as applicable) and each other related
Timeshare Loan Document are in full force and effect, constitute the
legal, valid and binding obligation of the Obligor thereof
enforceable against such Obligor in accordance with its terms
subject to the effect of bankruptcy, fraudulent conveyance or
transfer, insolvency, reorganization, assignment, liquidation,
conservatorship or moratorium, and is not subject to any dispute,
offset, counterclaim or defense whatsoever;
(oo) the Timeshare Loan relates to a Completed Unit; the Timeshare Loan
and the Related Security do not, and the origination of each
Timeshare Loan did not, contravene in any material respect any laws,
rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to usury, retail
installment sales, truth in lending, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which no party thereto has been or is in violation
of any such law, rule or regulation in any material respect if such
violation would impair the collectibility of such Timeshare Loan and
the Related Security; no Timeshare Loan was originated in, or is
subject to the laws of, any jurisdiction under which the sale,
transfer, conveyance or assignment of such Timeshare Loan would be
unlawful, void or voidable;
I-7
(pp) to the Seller's Knowledge, (i) no bankruptcy is currently existing
with respect to the Obligor, (ii) the Obligor is not insolvent and
(iii) the Obligor is not an Affiliate of the Seller;
(qq) except if such Timeshare Loan is listed on Schedule II hereto, the
Timeshare Loan shall not have a Timeshare Loan Rate less than 6% per
annum;
(rr) except in the case of certain 50/50 Loans or an Upgrade Club Loan,
the Obligor has made at least one required payment with respect to
the Timeshare Loan (not including any down payment);
(ss) if a Resort (other than La Cabana Resort) is subject to a
construction loan, the construction lender shall have signed and
delivered a non-disturbance agreement (which may be contained in
such lender's mortgage) pursuant to which such construction lender
agrees not to foreclose on any Timeshare Properties relating to a
Timeshare Loan or by the terms of the construction loan, such
Timeshare Property has been released from the lien created thereby
which have been sold pursuant to this Agreement;
(tt) except as set forth in Schedule II hereto, the Timeshare Properties
and the related Resorts are free of material damage and waste and
are in good repair, ordinary wear and tear excepted, and fully
operational; there is no proceeding pending or threatened for the
total or partial condemnation of or affecting any Timeshare Property
or taking of the Timeshare Property by eminent domain; the Timeshare
Properties and the Resorts in which the Timeshare Properties are
located are lawfully used and occupied under applicable law by the
owner thereof;
(uu) except as set forth in Schedule II hereto, the portions of the
Resorts in which the Timeshare Properties are located which
represent the common facilities are free of material damage and
waste and are in good repair and condition, ordinary wear and tear
excepted;
(vv) no foreclosure or similar proceedings have been instituted and are
continuing with respect to any Timeshare Loan or the related
Timeshare Property;
(ww) with respect to the Aruba Club Loans only, Bluegreen shall own,
directly or indirectly, 100% of the economic and voting interests of
the Aruba Originator.;
(xx) the Timeshare Loan does not have an original term to maturity in
excess of 120 months;
(yy) to the Seller's Knowledge, the capital reserves and maintenance fee
levels of the Associations related to the Resorts are adequate in
light of the operating requirements of such Associations;
(zz) except as required by law, the Timeshare Loan may not be assumed
without the consent of the obligee;
I-8
(aaa) for each Club Loan, the Obligor under the Timeshare Loan does not
have its rights under the Club Trust Agreement suspended;
(bbb) the payments under the Timeshare Loan are not subject to withholding
taxes imposed by any foreign governments;
(ccc) each entry with respect to the Timeshare Loan as set forth on
Schedule II and Schedule III hereof is true and correct. Each entry
with respect to a Qualified Substitute Timeshare Loan as set forth
on Schedule II and Schedule III hereof, as revised, is true and
correct;
(ddd) if the Timeshare Loan relates to a Timeshare Property located in
Aruba, a notice has been mailed or will be mailed within 30 days of
the Closing Date or the related Transfer Date, as applicable, to the
related Obligor indicating that such Timeshare Loan has been
transferred to the Depositor and has ultimately been transferred to
the Issuer and pledged to the Indenture Trustee for the benefit of
the Noteholders;
(eee) no broker is, or will be, entitled to any commission or compensation
in connection with the transfer of the Timeshare Loans hereunder;
(fff) if the related Obligor is paying its scheduled payments by
pre-authorized debit or charge, such Obligor has executed an ACH
Form substantially in the form attached hereto as Exhibit C;
(ggg) the Timeshare Loan, if a Subsequent Timeshare Loan, when aggregated
with all Timeshare Loans sold to the Depositor pursuant to this
Agreement, satisfies the criteria for Subsequent Timeshare Loans
specified in Section 4.3 of the Indenture;
(hhh) if such Timeshare Loan is a 50/50 Loan, the related Obligor has made
a downpayment of at least 50%, the balance of the 50/50 Loan is due
no later than the one year anniversary of the origination date of
such 50/50 Loan and the coupon rate is at least 8.25% per annum;
(iii) if such Timeshare Loan relates to a Timeshare Property located in
the State of Michigan and was originated prior to Bluegreen
obtaining a license under the Michigan Mortgage Brokers, Lenders and
Servicers Licensing Act, Bluegreen shall have confirmed that the
interest rate on such Timeshare Loan is enforceable in the manner
specified as effective in an opinion by Michigan local counsel;
(jjj) all Aruba Club Loans were originated on or after January 26, 2004;
and
(kkk) if such Timeshare Loan relates to a Timeshare Property at a Future
Resort, a local counsel opinion letter has been delivered that is
addressed to the Issuer, the Indenture Trustee and the Initial
Purchaser and is satisfactory to either ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or
counsel acceptable to the Indenture Trustee.
I-9
Schedule II
Exceptions
With respect to (gg), (tt) and (uu):
Bluegreen has initiated litigation against a general contractor alleging the
existence of construction defects at both phases of the Shore Crest Vacation
Villas(TM), including deficiencies in exterior insulating and finishing systems
that have resulted in water intrusion. Bluegreen has performed certain temporary
repairs to mitigate further damage. It may be required that portions of each
building be closed for certain periods of time in the future while permanent
repairs are completed.
With respect to (hh):
II-1
Schedule III
Schedule of Timeshare Loans
III-1
Schedule IV
Schedule of Eligible Investments
IV-1
Schedule 5
In 2005, the State of Tennessee Audit Division (the "Division") audited
Bluegreen Vacations Unlimited, Inc., Bluegreen's wholly owned subsidiary, for
the period from December 1, 2001 through December 31, 2004. On September 23,
2006, the Division issued a Notice of Assessment for $0.7 million of
accommodations tax based on the use of Bluegreen Vacation Club accommodations by
Bluegreen Vacation Club members who purchased non-Tennessee property. Bluegreen
believes the attempt to impose such a tax is contrary to Tennessee law, and
Bluegreen intends to vigorously oppose such assessment by the Division. While
the timeshare industry has been successful in challenging the imposition of
sales taxes on the use of accommodations by timeshare owners, there is no
assurance that Bluegreen will be successful in contesting the current
assessment.
This year, Bluegreen filed suit in Florida against a software provider for
its failure to deliver software programs in accordance with a Licensing
Agreement between them; styled Bluegreen Corporation v. PC Consulting, Inc.
d/b/a TimeShareWare Case No.: 9:07-cv-80385-KLR. The lawsuit seeks the return of
$1.2 million for various licensing fees and services. After filing of the
lawsuit, the defendant issued to Bluegreen a one-line invoice seeking $1.2
million for alleged additional services provided under the Licensing Agreement.
The defendant has asserted counterclaims for damages in excess of $1.8M for the
alleged additional services and counterclaims for damages in an unspecified
amount for defamation. The defamation claim contends that Bluegreen made
statements to defendant's customers that it received no satisfactory performance
from the software and no longer uses the software, resulting in loss of
contracts to the defendant involving millions of dollars. Bluegreen intends to
vigorously defend the counterclaims.
Schedule 5
Exhibit A
Waiver Letter
Exhibit A
Exhibit B
Club Trust Agreement
Exhibit B
Exhibit C
ACH Form
Exhibit C