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EXHIBIT 10.133
[EXEMPT FROM ALL EXCISE TAXES AS A WHOLESALE WAREHOUSE MORTGAGE AGREEMENT UNDER
SECTION 201.21, F.S. COLLATERAL OBLIGATIONS GREATER THAN PRIMARY OBLIGATIONS.]
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LOAN AND SECURITY AGREEMENT
DATED AS OF OCTOBER 20, 1998
BY
BLUEGREEN CORPORATION
BLUEGREEN RESORTS, INC.,
AS BORROWERS,
AND
▇▇▇▇▇▇ FINANCIAL, INC.
AS LENDER
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TABLE OF CONTENTS
PAGE
RECITALS........................................................................................................-1-
SECTION 1 ..............................................................................................-1-
THE LOAN...............................................................................................-1-
1.1 LOAN AVAILABILITY.............................................................................-1-
1.2 TERM..........................................................................................-1-
1.3 INTEREST RATE.................................................................................-2-
1.4 FUNDING ADVANCES..............................................................................-2-
1.5 NOTE..........................................................................................-2-
1.6 PAYMENTS......................................................................................-2-
1.7 PREPAYMENTS...................................................................................-3-
1.8 FEES..........................................................................................-3-
1.9 INCREASED COSTS...............................................................................-3-
1.10 [OMITTED].....................................................................................-5-
1.11 INTEREST LOANS................................................................................-5-
SECTION 2 ..............................................................................................-6-
COLLATERAL.............................................................................................-6-
2.1 GRANT OF SECURITY INTEREST....................................................................-6-
2.2 EXCHANGE MECHANICS............................................................................-7-
2.3 SECURITY AGREEMENT............................................................................-7-
SECTION 3 ..............................................................................................-7-
CONDITIONS PRECEDENT TO ADVANCES.......................................................................-7-
3.1 CLOSING DELIVERIES............................................................................-7-
3.2 DELIVERIES PRIOR TO EACH ADVANCE..............................................................-8-
3.3 SECURITY INTERESTS............................................................................-8-
3.4 REPRESENTATIONS AND WARRANTIES................................................................-8-
3.5 NO DEFAULT....................................................................................-8-
3.6 PERFORMANCE OF AGREEMENTS.....................................................................-8-
3.7 GOVERNMENTAL APPROVALS........................................................................-8-
3.8 INTERCREDITOR AGREEMENTS......................................................................-8-
SECTION 4 ..............................................................................................-9-
GENERAL REPRESENTATIONS AND WARRANTIES.................................................................-9-
4.1 EXISTENCE.....................................................................................-9-
4.2 AUTHORIZATION AND ENFORCEABILITY..............................................................-9-
4.3 FINANCIAL STATEMENTS AND BUSINESS CONDITION...................................................-9-
4.4 TAXES........................................................................................-10-
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4.5 LITIGATION AND PROCEEDINGS...................................................................-10-
4.6 LICENSES AND PERMITS.........................................................................-10-
4.7 FULL DISCLOSURE..............................................................................-10-
4.8 EMPLOYEE BENEFIT PLANS.......................................................................-11-
4.9 REPRESENTATIONS AS TO THE RESORTS AND ADDITIONAL RESORTS.....................................-11-
4.10 TIMESHARE INTERVAL EXCHANGE NETWORK..........................................................-12-
4.11 COLLATERAL...................................................................................-12-
4.12 INVESTMENT COMPANY ACT, ETC..................................................................-12-
4.13 TRADE NAMES..................................................................................-12-
4.14 MARGIN REGULATIONS...........................................................................-13-
4.15 [OMITTED]....................................................................................-13-
SECTION 5 .............................................................................................-13-
AFFIRMATIVE COVENANTS.................................................................................-13-
5.1 PAYMENT OF INDEBTEDNESS......................................................................-13-
5.2 MAINTENANCE OF INSURANCE.....................................................................-13-
5.3 INSPECTIONS AND AUDITS.......................................................................-13-
5.4 REPORTING REQUIREMENTS.......................................................................-14-
5.5 RECORDS......................................................................................-16-
5.6 MANAGEMENT; CONTRACTS........................................................................-16-
5.7 NET WORTH....................................................................................-16-
5.8 FIXED RATE COVERAGE RATIO....................................................................-16-
5.9 LEVERAGE RATIO TEST..........................................................................-16-
5.10 MAINTENANCE..................................................................................-16-
5.11 RELEASE AND BONDING OF LIENS.................................................................-16-
5.12 CLAIMS.......................................................................................-17-
5.13 USE OF LENDER NAME...........................................................................-17-
5.14 OTHER DOCUMENTS..............................................................................-17-
5.15 ADDITIONAL INDEBTEDNESS FOR BORROWED MONEY; ADDITIONAL OBLIGATIONS AFFILIATED
WITH SUBORDINATED OBLIGATIONS..............................................................-17-
5.16 LOAN SERVICING...............................................................................-17-
5.17 CUSTODIAN....................................................................................-17-
5.18 COMPLIANCE WITH LAWS.........................................................................-18-
5.19 COMPLIANCE DOCUMENTS.........................................................................-18-
5.20 REAL ESTATE TAXES............................................................................-18-
5.21 OMITTED......................................................................................-18-
5.22 OMITTED......................................................................................-18-
5.23 BORROWERS' FINANCIAL MAINTENANCE REQUIREMENT.................................................-18-
5.24 YEAR 2000....................................................................................-18-
5.25 AUTHORIZED SIGNATORY.........................................................................-18-
5.26 ALLONGE/ASSIGNMENT REQUIREMENTS..............................................................-18-
5.27 ENVIRONMENTAL................................................................................-19-
SECTION 6 .............................................................................................-19-
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NEGATIVE COVENANTS....................................................................................-19-
6.1 CONSOLIDATION AND MERGER.....................................................................-19-
6.2 RESTRICTIONS ON TRANSFERS....................................................................-19-
6.3 COLLATERAL...................................................................................-20-
SECTION 7 .............................................................................................-20-
EVENTS OF DEFAULT.....................................................................................-20-
7.1 PAYMENTS.....................................................................................-20-
7.2 FAILURE TO PERMIT INSPECTIONS................................................................-20-
7.3 COVENANT DEFAULTS............................................................................-20-
7.4 WARRANTIES OR REPRESENTATIONS................................................................-20-
7.5 BANKRUPTCY...................................................................................-20-
7.6 ATTACHMENT, JUDGMENT, TAX LIENS..............................................................-21-
7.7 OMITTED......................................................................................-21-
7.8 DEFAULT BY BORROWERS IN OTHER AGREEMENTS.....................................................-21-
7.9 OMITTED......................................................................................-21-
7.10 TAX LIENS; ERISA LIENS.......................................................................-21-
7.11 LOAN EXCEEDS MAXIMUM EXPOSURE FOR FIVE DAYS..................................................-21-
7.12 VALIDITY OF TRANSACTION DOCUMENTS............................................................-21-
7.13 DEFAULT UNDER THE PROJECT LOAN...............................................................-21-
SECTION 8 .............................................................................................-22-
REMEDIES..............................................................................................-22-
8.1 REMEDIES UPON DEFAULT........................................................................-22-
8.2 APPLICATION OF COLLATERAL; TERMINATION OF AGREEMENTS.........................................-23-
8.3 WAIVERS......................................................................................-23-
8.4 SET OFF OF PAYMENTS..........................................................................-23-
8.5 CUMULATIVE RIGHTS............................................................................-24-
SECTION 9 .............................................................................................-24-
CERTAIN RIGHTS AND OBLIGATIONS OF LENDER..............................................................-24-
9.1 PROTECTION OF COLLATERAL.....................................................................-24-
9.2 PERFORMANCE BY LENDER........................................................................-24-
9.3 FEES AND EXPENSES............................................................................-24-
9.4 RELEASE OF SECURITY INTEREST.................................................................-24-
9.5 NOTICE TO OBLIGOR............................................................................-24-
9.6 COLLECTION OF RECEIVABLES...................................................................-24-
9.7 POWER OF ATTORNEY............................................................................-25-
9.8 INDEMNIFICATION OF LENDER....................................................................-25-
9.9 LENDER'S RIGHT TO PROVIDE FINANCING..........................................................-26-
SECTION 10 .............................................................................................-26-
PARTICIPATION AND ASSIGNMENTS.........................................................................-26-
10.1 PARTICIPATIONS IN LOAN AND ASSIGNMENTS IN LOAN...............................................-26-
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SECTION 11 .............................................................................................-28-
MISCELLANEOUS.........................................................................................-28-
11.1 NOTICE.......................................................................................-28-
11.2 SURVIVAL.....................................................................................-29-
11.3 GOVERNING LAW................................................................................-29-
11.4 INVALID PROVISIONS...........................................................................-29-
11.5 COUNTERPARTS; EFFECTIVENESS..................................................................-29-
11.6 LENDER NOT FIDUCIARY.........................................................................-29-
11.7 ENTIRE AGREEMENT.............................................................................-29-
11.8 CONSENT TO ADVERTISING AND PUBLICITY.........................................................-30-
11.9 [OMITTED]....................................................................................-30-
11.10 HEADINGS.....................................................................................-30-
11.11 BROKER'S FEES................................................................................-30-
11.12 VENUE........................................................................................-30-
11.13 JURY TRIAL WAIVER............................................................................-30-
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LIST OF EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Assignment of Pledged Receivables and Pledged
Receivables Collateral
Exhibit C Form of Reassignment of Pledged Receivables
Exhibit D Form of Request for Advances
Exhibit E Form of Allonge
Exhibit F Servicing Agreement
Exhibit G Reserved
Exhibit H List of Permitted Liens
(including therein the Condominium Declarations)
Exhibit I List of Resorts Encumbered by Resort Blanket Mortgages
Exhibit J List of Project Loan Documents
Exhibit K Structuring Fee Letter
Exhibit L Time Share Documents
Exhibit M Legal Description of Resorts
Exhibit N Commitment Letter dated March 30, 1998
Exhibit O Borrower Closing Checklist
Exhibit P Resort Closing Checklist
Exhibit Q Additional Resort Closing Checklist
Exhibit R Club Closing Checklist
LIST OF SCHEDULES
Schedule 2.1 Definition of "Material Project Loan Default" to be utilized
in the Project Loan Agreement
Schedule 3.2 List of Deliveries for all Advances
Schedule 4.5 List of Litigation Matters
Schedule 4.13(a) Trade Names Other than Name of Borrower
Schedule 4.13(b) Mergers and Corporate Reorganizations
Schedule 5.2 Insurance
Schedule 5.15 Additional Indebtedness for Borrowed Money;
Additional Obligations
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HSF Loan No. 98-087
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement (this "AGREEMENT") dated as of
October 20, 1998, is made by and between Bluegreen Corporation, a Massachusetts
corporation whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
("BLUEGREEN CORPORATION") and Bluegreen Resorts, Inc., a Delaware corporation
whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BLUEGREEN
RESORTS" and together with Bluegreen Corporation and the Additional Borrowers
(as hereinafter defined) collectively referred to herein as the "BORROWERS" and
sometimes referred to herein individually as a "BORROWER"), and ▇▇▇▇▇▇
Financial, Inc., a Delaware corporation ("LENDER"), whose address is ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
A. Borrowers desire Lender to extend a revolving secured credit
facility to Borrowers in accordance with the terms of this Agreement.
B. Borrowers' obligations under the Loan Documents will be secured
INTER ALIA by a security interest in the Pledged Receivables (as hereinafter
defined).
C. All capitalized terms used herein shall have the meanings ascribed
thereto in the Appendix attached hereto and made a part hereof by this
reference.
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements, provisions and covenants herein contained, Borrowers and Lender
agree as follows:
SECTION 1
THE LOAN
1.1 LOAN AVAILABILITY. During the period commencing on the date hereof
and ending on June 26, 2000, Lender shall make Advances to the Borrowers not in
excess of Availability provided that the Borrowers satisfy all conditions, as
applicable, set forth in Section 3 hereof. Advances shall be (a) in minimum
amounts of $100,000 each or such lesser amount equal to Availability hereunder,
and (b) made no more frequently than four (4) times each month nor more than
one (1) time each week; provided, however, that, subject to Availability, any
request for an Advance of less than $100,000 or for any Advance in excess of
the number of Advances permitted in any week or month shall be honored by
Lender if accompanied by payment to Lender of a fee (the "SERVICE CHARGE") of
$3,000 for each such Advance. Except in connection with a prepayment mandated
under Section 1.7(b)(i) below, any amounts repaid during the Term may be
reborrowed during the Term.
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1.2 TERM. The Loan shall be for a term of two (2) years from June 26,
1998 to the end of the Fiscal Month of Bluegreen Corporation in which the date
hereof occurs (the "TERM").
1.3 INTEREST RATE. The outstanding principal balance of the Loan
together with all other Indebtedness shall bear interest at the Interest Rate;
provided, however, that after the occurrence and during the continuance of an
Event of Default the Loan will bear interest at the Default Rate which interest
shall be payable on a Payment Date.
1.4 FUNDING ADVANCES. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof with respect to Advances hereunder and
the limitations set forth in Section 1.1, the Lender shall make the proceeds of
an Advance available to the Borrowers by wiring funds to such account or such
other destination or directive as Bluegreen Corporation on its own behalf or on
behalf of the Borrowers as it may direct in writing.
1.5 NOTE. The Loan shall be evidenced by a promissory grid note
(herein, as amended, modified, extended or replaced from time to time, called
the "NOTE") substantially in the form set forth in EXHIBIT A, with appropriate
insertions, payable to the order of the Lender. The Borrowers hereby
irrevocably authorize the Lender to make (or cause to be made) appropriate
notations on the grid attached to the Note (or on any continuation of such
grid, or at the Lender's option, in its records), which notations, if made,
shall evidence, INTER ALIA, the date of, the outstanding principal of, and the
interest rate and interest period applicable to the Advance evidenced thereby.
Such notations shall be rebuttably presumptive evidence of the subject matter
thereof absent manifest error; PROVIDED, HOWEVER, that the failure to make any
such notations shall not limit or otherwise affect any obligations of the
Borrowers.
1.6 PAYMENTS.
(a) WEEKLY PAYMENTS. All funds collected by the Lockbox Bank from the
Pledged Receivables shall be paid to Lender at least weekly pursuant to the
Lockbox Agreement, and applied in the following order: first to the payment of
accrued and unpaid interest on the Indebtedness and then to the reduction of
the principal balance of the Loan; provided, however, that after the occurrence
and during the continuance of an Event of Default hereunder, such amounts shall
be applied in the following order: first to the payment of costs and expenses
incurred by Lender in collecting any amounts due in connection with the Loan;
second, to the payment of accrued but unpaid interest on the Loan; and
thereafter to the reduction of the principal balance of the Loan. If the funds
received by Lender from the Lockbox Bank with respect to any month are
insufficient to pay interest in full, Borrowers shall pay the difference to
Lender within five (5) Business Days of written notice from Lender. Payments
received by Borrowers directly from any Obligor shall be delivered to the
Lockbox Bank within two (2) Business Days. Notwithstanding anything in this
Section 1.6 to the contrary, in the event of the occurrence and during the
continuance of an Event of Default, Lender shall have sole discretion as to the
order in which said payments shall be applied.
(b) FINAL PAYMENT. The Indebtedness shall be payable in full on the
Maturity Date.
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1.7 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. Borrowers may not make any voluntary
prepayments except (i) in accordance with Section 1.6(a), (ii) as may result
from the sale of Pledged Receivables financed under this Agreement into the
Purchase Facility, (iii) in the event the Purchase Limit is reached under the
Purchase Facility and Lender, in its capacity as Purchaser thereunder, has
refused to increase the Purchase Limit in accordance with Section 2.12(b) of
the Purchase Facility or (iv) in the event Lender has reviewed and rejected
Receivables associated with the Club. In connection with any sale to the
Purchase Facility of Pledged Receivables, Lender shall release its lien and
security interest in and to such Pledged Receivable and the related Pledged
Receivables Collateral if but only if the Repayment Price in respect to such
Pledged Receivable is paid to Lender. All Repayment Prices shall be applied as
prepayments of the Loan. From time to time Lender shall also cause to be
released from the lien of a Resort Blanket Mortgage those Intervals with
respect to which the related Pledged Receivable has been fully paid and fully
performed. Additionally, in the event a Pledged Receivable is no longer an
Eligible Completed Unit Receivable or an Eligible Uncompleted Unit Receivable
and the Borrowers take the action described in Section 1.7(b), the Lender will
release its lien on the Pledged Receivable. All out of pocket costs and
expenses in connection with any partial releases shall be for the expense of
the Borrowers.
(b) MANDATORY PREPAYMENTS. If at any time the outstanding principal
balance of the Loan exceeds the Maximum Exposure, Borrowers shall, within five
(5) Business Days after notice, prepay the Loan in an amount necessary to
reduce the principal balance of the Loan to the Maximum Exposure; provided,
however, that Borrowers, at their option within five (5) Business Days after
notice, may deliver to Lender one (1) or more Pledged Receivables such that,
after delivery of such Pledged Receivable(s), the outstanding principal balance
of the Loan does not exceed the Maximum Exposure.
1.8 FEES. The Borrowers shall pay to Lender the structuring fees as
described in the Structuring Fee Letter attached hereto as EXHIBIT K.
1.9 INCREASED COSTS. (a) If (i) any change in Regulation D of the
Board, or (ii) any Regulatory Change, in each case occurring after the date
hereof:
(A) shall subject the Affected Party to any additional tax, duty
or other charge with respect to Advances made hereunder or a
participation purchased hereunder, or shall change the basis
of taxation of payments to such party of the interest on
Advances funded by it or any participation purchased
hereunder in any material respect, or any other amounts due
under this Agreement in respect of any Advances made or
funded by it or participations purchased by it (except for
changes in the rate of tax on the overall net income of such
party imposed by the jurisdiction of such party's principal
executive office); or
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(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the
Board of Governors of the Federal Reserve System), but
excluding any reserve included in the determination of
interest rates, special deposit or similar requirement
against assets of, deposits with or for the account of, or
credit extended by, any Affected Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party;
or
(D) shall impose on any Affected Party any other condition
affecting any Advance or participation made or funded by any
Affected Party; and the result of any of the foregoing is or
would be to increase the cost to (or in the case of
Regulation D referred to above, to impose a cost on) (a) an
Affected Party funding or making or maintaining any Advances
or purchasing participations, or (b) the Lender for
continuing its relationship with the Borrowers, to reduce the
amount of any sum received or contracted by an Affected Party
under this Agreement, the Note, or any other Loan Document
with respect thereto, or in the good faith determination of
such Affected Party, to reduce the rate of return on the
capital of an Affected Party as a consequence of its
obligations hereunder or arising in connection herewith to a
level below that which such Affected Party would otherwise
have achieved, then within five Business Days after demand by
the Lender on behalf of such Affected Party to Borrowers
(which demand shall be accompanied by a written statement of
such Affected Party, subject to the second sentence of
subsection (e) below), Borrowers shall pay the Affected Party
such additional amount or amounts as will (in the reasonable
determination of such Affected Party) compensate such
Affected Party for such increased cost or such reduction.
Such written statement (which shall include calculations in
reasonable detail) shall, in the absence of manifest error,
be rebuttably presumptive evidence of the subject matter
thereof; and
(E) Each Affected Party will promptly notify the Lender (which
shall promptly notify the Borrowers) within 90 days after
such Affected Party has actual knowledge of any event
occurring after the date hereof that will entitle such
Affected Party to such additional amounts as compensation
pursuant to this Section 1.9. Such additional amounts shall
accrue from the date of such event (or if such notice is not
given within 90 days after such Affected Party's knowledge of
such event, from the date which is 90 days prior to
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the date such notice is given by such Affected Party).
(F) If any Lender requests compensation under this Section 1.9
which materially increases the Borrowers' cost of funds with
respect to the Loan or if any Lender defaults in its
obligation to fund loans hereunder, then the Borrowers may
upon five (5) Business Days notice to such Lender, require
such Lender to assign and delegate, without payment by
Borrowers of any prepayment fee or premium, all its
interests, rights and obligations under this Agreement to an
Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if another Lender accepts
such assignment); provided that (i) such transferring Lender
shall have received payment of an amount equal to the
outstanding principal amount of its loans, accrued interest
thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest) or Borrowers (in
the case of all other amounts) and (ii) in the case of any
such assignment resulting from a claim for compensation under
Section 1.9, such assignment will result in a reduction in
such compensation or payments. A Lender shall not be required
to make any such assignment and delegation if, prior thereto,
as a result of a waiver by such lender or otherwise, the
circumstances entitling Borrowers to require such assignment
and delegation ceases to apply.
1.10 [OMITTED]
1.11 INTEREST LOANS. Notwithstanding any provision to the contrary
contained in this Agreement or any other Loan Document, Borrowers shall not be
required to pay, and the Lender shall not be permitted to collect, any amount
of interest in excess of the maximum amount of interest permitted by applicable
law ("EXCESS INTEREST"). If any Excess Interest is provided for or determined
by a court of competent jurisdiction to have been provided for in this
Agreement or in any other Loan Document, then in such event: (1) the provisions
of this subsection shall govern and control; (2) the Borrowers shall not be
obligated to pay any Excess Interest; (3) any Excess Interest that the Lender
may have received hereunder shall be, at the Lender's option, (a) applied as a
credit against the outstanding principal balance of the Indebtedness or accrued
and unpaid interest (not to exceed the maximum amount permitted by law), (b)
refunded to the payor thereof, or (c) any combination of the foregoing; (4) the
interest rate(s) provided for herein shall be automatically reduced to the
maximum lawful rate allowed from time to time under applicable law (the
"MAXIMUM RATE"), and this Agreement and the other Loan Documents shall be
deemed to have been and shall be, reformed and modified to reflect such
reduction; and (5) the Borrowers shall not have any action against the Lender
for any damages arising out of the payment or collection of any Excess
Interest. Notwithstanding the foregoing, if for any period of time interest on
any Indebtedness is calculated at the Maximum Rate rather than the applicable
rate under this
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Agreement, and thereafter such applicable rate becomes less than the Maximum
Rate, the rate of interest payable on the Indebtedness shall remain at the
Maximum Rate until the Lender shall have received the amount of interest which
such Lender would have received during such period on the Indebtedness had the
rate of interest not been limited to the Maximum Rate during such period.
SECTION 2
COLLATERAL
2.1 GRANT OF SECURITY INTEREST. To secure the payment and performance
of the Indebtedness and, subject to the last sentence of this Section 2.1,
Project Indebtedness, Borrowers do hereby, subject to the terms of this
Agreement unconditionally and irrevocably assign, pledge and grant to Lender a
first priority continuing security interest and lien in and to the right, title
and interest of Borrowers in the following property of Borrowers with respect
to the Resorts and Additional Resorts, whether now owned or existing or
hereafter acquired regardless of where located (collectively, the
"COLLATERAL"):
(a) All Pledged Receivables;
(b) All Pledged Receivables Collateral;
(c) All Project Loan Collateral;
(d) All "MORTGAGED PROPERTY", as such term is defined in each of
the Resort Blanket Mortgages;
(e) All Club Collateral (except to the extent the assignment,
pledge or granting of a security interest in any Club
Collateral would constitute a default under any license or
lease of any such Club Collateral);
(f) All cash, other monies and property of Borrowers in the
possession or under the control of Lender other than cash and
other monies and property delivered to the Lender in error;
(g) All books, records, ledger cards, files, correspondence,
computer tapes, disks and software (subject to licensing
agreements) relating to the Pledged Receivables and Pledged
Receivable Collateral or any other Collateral (except to the
extent the assignment, pledge or granting of a security
interest in any Club Collateral would constitute a default
under any license or lease of any such Club Collateral); and
(h) All proceeds, extensions, amendments, additions,
improvements, betterments, renewals, substitutions and
replacements of the foregoing.
So long as there is no "MATERIAL PROJECT LOAN DEFAULT" (as the same is defined
on Schedule 2.1 hereto which definition shall be included in the Project Loan
Agreement), the Collateral shall not
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secure the Project Indebtedness and the Lender, upon the Borrowers' written
request, shall release its lien hereunder.
2.2 EXCHANGE MECHANICS. This Agreement contemplates the financing of
Pledged Receivables associated with the Club. The Borrowers anticipate
exchanging certain conditional land sale contracts for notes and Purchase Money
Mortgages to facilitate Obligors joining the Club. Notwithstanding anything to
the contrary contained herein, in no event shall such exchange affect the
Lender's first perfected security interest in a Pledged Receivable. Lender
hereby agrees to cooperate with Borrowers to facilitate the exchange
contemplated in the second sentence of this Section 2.2; provided such exchange
has no negative impact on the Lender's first priority perfected lien and
security interest on the Collateral (I.E. the Lender shall have a first
priority perfected lien and security interest in the new Pledged Receivable
which has been exchanged for the prior Pledged Receivable) and provided further
that the Borrowers pay all of Lender's reasonable costs (including but not
limited to legal expenses) associated with the exchange contemplated in the
second sentence of this Section 2.2.
2.3 SECURITY AGREEMENT. This Agreement shall be deemed a security
agreement as defined in the Code, and the remedies for any violation of the
covenants, terms and conditions of the agreements herein contained shall be
cumulative and be as prescribed (a) herein, or (b) by applicable law, or (c) as
to such part of the Collateral which is also reflected in any filed financing
statement, by the specific provisions of the Code now or hereafter enacted, all
at Lender's sole election.
SECTION 3
CONDITIONS PRECEDENT TO ADVANCES
The obligation of Lender to make Advances is subject to satisfaction
of all of the conditions set forth below (to the extent applicable to the
Pledged Receivables being financed hereby). Notwithstanding anything contained
in this Agreement to the contrary, in no event shall the execution of this
Agreement on the date hereof be deemed a waiver by Lender of any of the
conditions set forth below with respect to any Advance.
3.1 CLOSING DELIVERIES. (a) Lender shall have received, in form and
substance satisfactory to Lender, all documents, instruments and information
identified on the Closing Checklist attached hereto as EXHIBIT O, including,
without limitation, one or more executed legal opinions, issued by counsel
acceptable to Lender, in form and content acceptable to Lender.
(b) Lender shall have received, in form and substance satisfactory to
Lender, all documents, instruments and information identified on the Resort
Closing Checklist attached hereto as EXHIBIT P with respect to the Resorts
(including, without limitation, one or more executed legal opinions, issued by
counsel acceptable to Lender in each of the states wherein the
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Resorts are located, in form and content acceptable to Lender).
(c) Lender shall have received, in form and substance satisfactory to
Lender, all documents, instruments and information identified on the Additional
Resort Closing Checklist attached hereto as EXHIBIT Q including, without
limitation, one or more executed legal opinions, issued by counsel acceptable
to Lender in each of the states wherein the Additional Resorts are located, in
form and content acceptable to Lender).
(d) Lender shall have received, in form and substance satisfactory to
Lender, all documents, instruments and information identified on the Club
Closing Checklist attached hereto as EXHIBIT R with respect to the Club
(including, without limitation, one or more executed legal opinions, issued by
counsel acceptable to Lender in the state wherein the Club is located, in form
and content acceptable to Lender).
3.2 DELIVERIES PRIOR TO EACH ADVANCE. Prior to each Advance, Lender
shall have received all documents, instruments and information identified on
SCHEDULE 3.2 attached hereto. Requests for Advance ("ADVANCE REQUEST") shall be
made at least five (5) Business Days prior to the requested date of
disbursement and shall be in the form of EXHIBIT D hereto. Any Advance Request
given by a Borrower pursuant to this Section 3.2 shall be irrevocable and
binding on such Borrower. Such Advance Request shall designate a specific
account for the respective Borrower and designate the specific Resort relating
to the respective Borrower's Pledged Receivables.
3.3 SECURITY INTERESTS. Lender shall have received satisfactory
evidence that all security interests and liens granted to Lender pursuant to
this Agreement or the other Loan Documents have been duly perfected and
constitute first priority liens on the Collateral.
3.4 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained herein and in the Loan Documents shall be true, correct and complete
in all material respects on and as of the date of funding of each Advance
except for any representation or warranty limited by its terms to a specific
date or affected by the transactions permitted by this Agreement and taking
into account any amendments to the SCHEDULES or EXHIBITS as a result of any
disclosures made by the Borrowers to Lender after the date hereof and approved
by Lender, and except to the extent of changes occurring in the ordinary course
of business that, either singly or in the aggregate, have not had and could not
reasonably be expected to have a Material Adverse Effect.
3.5 NO DEFAULT. No Event of Default shall have occurred and be
continuing.
3.6 PERFORMANCE OF AGREEMENTS. Borrowers shall have performed in all
material respects all agreements, paid all fees, costs and expenses and
satisfied all conditions which any Loan Document provides shall be paid or
performed by it as of such date.
3.7 GOVERNMENTAL APPROVALS. Borrowers shall have obtained all
approvals, licenses, permits and consents for the sale of Intervals to Obligors
which are the subject of any requested Advance.
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3.8 INTERCREDITOR AGREEMENTS. To the extent the Borrowers or one of
their respective Affiliates has incurred, or will incur, debt for borrowed
money secured by the Resorts, Additional Resorts or Project Loan Collateral
from a source other than the Lender, the Lender shall have the opportunity to
review such other financing sources loan documentation and, to the extent
necessary to maintain its first perfected security interest in the Collateral,
shall have the opportunity to enter into a satisfactory Intercreditor Agreement
or other arrangement with the Borrowers and the party extending such credit.
Such Intercreditor Agreement or other arrangements shall provide satisfactory
assurances to the Lender that the Collateral shall not be adversely affected by
the security securing such other financing source.
SECTION 4
GENERAL REPRESENTATIONS AND WARRANTIES
Borrowers hereby jointly and severally represent and warrant to Lender
as follows, which representations and warranties shall remain true throughout
the term of the Loan:
4.1 EXISTENCE.
(a) Bluegreen Corporation is a corporation duly formed, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts with its principal place of business at Boca Raton, Florida.
Bluegreen Corporation is in good standing under the laws of the State of
Florida and is authorized to transact business in the States of Florida, and in
each other state where the failure to be so authorized would have a Material
Adverse Effect.
(b) Bluegreen Resorts, Inc., a Delaware corporation, is a corporation
duly formed, validly existing and in good standing under the laws of the State
of Delaware with its principal place of business at Boca Raton, Florida.
Bluegreen Resorts, Inc. is in good standing under the laws of the State of
Florida and is authorized to transact business in each state where the failure
to be so authorized would have a Material Adverse Effect.
4.2 AUTHORIZATION AND ENFORCEABILITY.
(a) EXECUTION. The Loan Documents have been duly authorized,
executed and delivered and constitute the duly authorized,
valid and legally binding obligations of the Borrowers,
enforceable against the Borrowers and the other parties
signatory thereto (other than Lender) in accordance with
their respective terms subject, as to enforceability, to the
effect of bankruptcy and other laws generally affecting
creditors' rights.
(b) OTHER AGREEMENTS. The execution, delivery and compliance with
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the terms and provisions of the Loan Documents will not (i)
to the best of Borrowers' knowledge, violate any provisions
of law or any applicable regulation, order or other decree of
any court or governmental entity, or (ii) conflict or be
inconsistent with, or result in any default under, any
material contract, agreement or commitment to which the
Borrowers are bound.
4.3 FINANCIAL STATEMENTS AND BUSINESS CONDITION. Bluegreen Corporation
has delivered to Lender its financial statements for the Fiscal Year ending
March 29, 1998. Such financial statements fairly present the financial
condition and (if applicable) results of operations of Bluegreen Corporation as
of the date or dates thereof and for the periods covered thereby. All such
financial statements were prepared in accordance with GAAP. Except for any such
changes heretofore expressly disclosed in writing to Lender, there has been no
material adverse change in the financial condition of Bluegreen Corporation
since March 29, 1998. Borrowers are able to pay all of their respective debts
as they become due, and Borrowers shall maintain such solvent financial
condition, giving effect to all obligations, absolute and contingent, of each
such Borrowers. Each such Borrower's obligations under this Agreement and under
the Loan Documents will not render the respective Borrower unable to pay its
debts as they become due. The present fair market value of each Borrower's
assets is greater than the amount required to pay its total liabilities.
4.4 TAXES. All ad valorem taxes and other taxes and assessments
against each Resort, Additional Resort and the Collateral have been paid and
the Borrowers know of no basis for any additional taxes or assessments against
any Resort, Additional Resort or the Collateral. Borrowers have filed all
required tax returns and has paid all taxes shown to be due and payable on such
returns, including interest and penalties, and all other taxes which are
payable by it, to the extent the same have become due and payable except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrowers have set aside on their books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.
4.5 LITIGATION AND PROCEEDINGS. Except as disclosed in SCHEDULE 4.5
attached hereto, as of the date hereof there are no actions, suits,
proceedings, orders or injunctions pending or, to the best of Borrowers'
knowledge, threatened against or affecting the Borrowers, the Timeshare
Associations or any Affiliate thereof, at law or in equity, or before or by any
governmental authority the result of which, if adversely determined, would have
a Material Adverse Effect. The Borrowers have not received any notice from any
court or governmental authority alleging that such Person, any Affiliate or any
of the Timeshare Associations has violated the applicable timeshare act, any of
the rules or regulations thereunder, or any other applicable laws, the result
of which, if adversely determined, would have a Material Adverse Effect.
4.6 LICENSES AND PERMITS. Borrowers possess all requisite franchises,
certificates of convenience and necessity, operating rights, licenses, permits,
consents, authorizations,
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exemptions and orders as are necessary to carry on their businesses as now
being conducted, except where the failure to possess the same would not,
individually or in the aggregate, have a Material Adverse Effect.
4.7 FULL DISCLOSURE. No written information or written report
furnished by or on behalf of Borrowers to Lender in connection with the Loan,
when taken together with all other written information provided, contains any
untrue statement of a material fact or omits any material fact necessary to
make the statement contained herein or therein, in light of the circumstances
in which made, not misleading. Borrowers know of no legal or contractual
restriction which will prevent them from offering or selling Intervals in any
state where each Borrowers is selling Intervals.
4.8 EMPLOYEE BENEFIT PLANS. Each Borrower is in compliance in all
material respects with all applicable provisions of the Employee Retirement
Income Security Act, the Internal Revenue Code and all other applicable laws
and the regulations and interpretations thereof with respect to all employee
benefit plans adopted by such Borrower for the benefit of its employees. No
material liability has been incurred by either Borrower which remains
unsatisfied for any funding obligation, taxes or penalties with respect to any
such employee benefit plan.
4.9 REPRESENTATIONS AS TO THE RESORTS AND ADDITIONAL RESORTS.
Borrowers jointly and severally represent and warrant with respect to a Resort
or an Additional Resort the following:
(a) TITLE; PRIOR LIENS. Borrowers have good and marketable title
to the Resorts or Additional Resorts (excluding sold
Intervals and any equitable rights of the Obligors under
applicable state law to the Units under any conditional land
sales contracts which are the subject of any Pledged
Receivable). Borrowers are not in default under any of the
documents evidencing or securing any indebtedness for
borrowed money in an outstanding amount in excess of
$1,000,000 which is secured, wholly or in part, by the
Resorts or Additional Resorts, and no event has occurred
which with the giving of notice, the passage of time or both,
would constitute a default under any of the documents
evidencing or securing any such indebtedness. There are no
liens or encumbrances against the Resorts or Additional
Resorts and relating to the Collateral other than Permitted
Adverse Claims or Permitted Liens.
(b) ACCESS. The Resorts and Additional Resorts relating to
Eligible Completed Unit Receivables have direct access to a
publicly dedicated road over a recorded easement and all
roadways, if any, inside the Resorts and Additional Resorts
are or will be common areas under the Declaration after the
first Advance against Receivables originated at such Resort.
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(c) UTILITIES. Electric, gas, sewer, water facilities and other
necessary utilities are lawfully available in sufficient
capacity to service the Units relating to the Intervals in
the Resorts and Additional Resorts relating to Eligible
Completed Unit Receivables and any easements necessary to the
furnishing of such utility service have been obtained and
duly recorded.
(d) AMENITIES. All amenities described in the sales prospectus
and the "PUBLIC REPORTS" for the Resorts and Additional
Resorts relating to Eligible Completed Unit Receivables are
completed, or will be completed, in the time periods
described in the "PUBLIC REPORTS", or a bond insuring their
completion has been posted. Each Obligor has or will have, in
the time period described in the Public Reports, access to
and the use of all of the amenities and public utilities of
the Resorts and the Additional Resorts relating to Eligible
Completed Unit Receivables as and to the extent provided in
the Declaration and the "PUBLIC REPORTS".
(e) CONSTRUCTION. All costs arising from the construction of any
improvements and the purchase of any equipment, inventory, or
furnishings located in or on the Resorts and Additional
Resorts relating to the Units relating to the Intervals and
relating to Eligible Completed Unit Receivables have been
paid or will be paid when due.
4.10 TIMESHARE INTERVAL EXCHANGE NETWORK. Each Borrower is a member
and participant in respect to each Resort and Additional Resort, pursuant to a
validly executed and, to Borrower's knowledge, enforceable agreement in
writing, in Interval International, Inc. or Resorts Condominium International,
Inc. Borrowers has paid all fees and other amounts due and owing under such
agreement and is not otherwise in default in any respect, the effect of which
could reasonably be expected to have a Material Adverse Effect thereunder.
4.11 COLLATERAL. The Collateral, including without limitation, the
Pledged Receivables and the Pledged Receivables Collateral, in which a security
interest is to be granted to the Lender pursuant to this Agreement shall be
owned by Borrowers free and clear of any Adverse Claim (other than any
Permitted Adverse Claim or Permitted Liens). The Borrowers have a first
priority perfected ownership interest in the Collateral including but not
limited to the Pledged Receivables and the Pledged Receivables Collateral,
subject to Permitted Adverse Claims and Permitted Liens. This Agreement creates
a valid first priority security interest in favor of the Lender (for the
benefit of the Lender) in the Collateral granted by such Borrower, including
without limitation the Pledged Receivables and Pledged Receivables Collateral,
which security interest has been perfected (free and clear of any Adverse Claim
other than any Permitted Adverse Claim or Permitted Lien and any equitable
rights of the Obligors under applicable state law to the Units
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under any conditional land sales contracts which are the subject of any Pledged
Receivable) as security for the Indebtedness. No effective financing statement
or other instrument similar in effect covering any of the Collateral or any
interest therein is on file in any recording office except for financing
statements that may be filed (i) in favor of the Lender in accordance with the
Agreement or (ii) in favor of Borrowers and assigned to the Lender. Borrowers
shall defend Lender against and save it harmless from all claims of any Persons
other than Lender with respect to the Collateral, and this indemnity shall
include all reasonable attorneys' fees and legal expenses.
4.12 INVESTMENT COMPANY ACT, ETC. No Borrower is an "INVESTMENT
COMPANY" within the meaning of the Investment Company Act of 1940, as amended,
or a "HOLDING COMPANY," or a "SUBSIDIARY COMPANY," of a "HOLDING COMPANY," or
an "AFFILIATE" of a "HOLDING COMPANY," or of a "SUBSIDIARY COMPANY" of a
"HOLDING COMPANY," within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
4.13 TRADE NAMES. Except as disclosed on SCHEDULE 4.13(A), no Borrower
uses any trade name other than its actual corporate name. From and after the
date that fell five (5) years before the date hereof, the Borrowers have not
been known by any legal name other than their respective corporate names as of
the date hereof, nor have the Borrowers been the subject of any merger or other
corporate reorganization, except as set forth in SCHEDULE 4.13(B).
4.14 MARGIN REGULATIONS. The Borrowers are not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of the Loan, directly or indirectly, will be used for a purpose
that violates, or would be inconsistent with, Regulations T, U and X
promulgated by the Board from time to time.
4.15 [OMITTED]
SECTION 5
AFFIRMATIVE COVENANTS
So long as any portion of the Indebtedness remains unpaid or Lender is
committed to make Advances hereunder, unless Lender otherwise consents in
writing, Borrowers jointly and severally covenant as follows:
5.1 PAYMENT OF INDEBTEDNESS. Borrowers shall pay all of the
Indebtedness hereunder and under the Loan Documents when due.
5.2 MAINTENANCE OF INSURANCE. For so long as the Borrowers control the
Resorts and Additional Resorts, the Resorts and Additional Resorts shall at all
times and for so long as any Indebtedness remains outstanding be kept insured
with such general liability coverage and such other coverages acceptable to
Lender, by carrier(s), in the amounts described on Schedule 5.2 hereto, which
carrier(s), amounts and form shall not be changed without the prior written
consent of Lender. All insurance required under the preceding sentence for each
Resort and Additional Resorts may be maintained by the Timeshare Association as
required by the applicable
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Declaration or Time Share Declaration, provided that in the event such
Timeshare Association fails to maintain any insurance required under this
Section 5.2, then the Borrowers shall be required to obtain and maintain such
insurance.
5.3 INSPECTIONS AND AUDITS. Borrowers shall, at such reasonable times
during normal business hours and as often as may be reasonably requested,
permit any agents or representatives of Lender to inspect the Resorts and
Additional Resorts and any of Borrowers' assets (including financial and
accounting books and records), to examine and make copies of and abstracts from
the records and books of account of the Borrowers or the Timeshare Association
(to the extent controlled by Borrowers) or serviced under the Servicing
Agreement and to discuss its affairs, finances and accounts with any of its
officers, employees or independent public accountants. Borrowers acknowledge
that Lender intends to conduct such audits and inspections on at least an
annual basis. Borrowers shall make available to Lender all credit information
in Borrowers' possession or under Borrowers' control with respect to Obligors
as Lender may reasonably request. Upon Lender's request, Borrowers shall
furnish to Lender evidence of payment of all real estate taxes relating to the
Resorts and the Additional Resorts. All audits, inspections of the Resorts,
Additional Resorts and credit investigations shall be at Borrowers' expense;
provided, however, that except with respect to any audits, inspections of the
Resorts, Additional Resorts or credit investigations conducted after and during
the continuance of an Event of Default hereunder, Borrowers shall not be
required to pay in excess of Ten Thousand Dollars ($10,000) in any calendar
year for audits performed during such year. After the occurrence and during the
continuance of an Event of Default, Borrowers shall be required to pay all
reasonable fees, costs and expenses incurred by Lender for any and all Resorts
and Additional Resorts inspections, audits and any other diligence relating to
Borrowers' finances or books or records.
5.4 REPORTING REQUIREMENTS. So long as the Indebtedness remains
unpaid, Borrowers shall furnish the following to Lender:
(a) MONTHLY REPORTS. To the extent not provided to Lender
pursuant to the requirements of the Servicing Agreement,
within twelve (12) Business Days after the end of each Fiscal
Month, reports showing through the end of the preceding
month, (i) the following information with respect to each
Pledged Receivable: (A) the opening and closing balances, (B)
all payments received allocated to interest, principal, late
charges, taxes or the like, (C) the rate of interest, (D) an
itemization of delinquencies, extensions, refinances,
prepayments, upgrades, payoffs, cancellations and other
adjustments, (E) the remaining term, (F) the nature and
status of any claims asserted or legal action pending with
respect thereto, and (G) any exchange of one form of Pledged
Receivable for another form of Pledged Receivable (I.E., any
exchange of a conditional sales contract to a note and
mortgage format required by the Club); and (ii) the weighted
average interest rate and the average remaining term of all
Pledged Receivables.
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(b) SALES AND INVENTORY REPORTS. Within twelve (12) Business Days
after the end of each quarter, a quarterly report showing all
sales and cancellations of sales of Intervals on Resorts and
Additional Resorts on a resort by resort basis, in form and
content satisfactory to Lender; and within thirty (30)
Business Days after the end of each fiscal year of Borrowers,
an annual sales and inventory report for the Resorts and
Additional Resorts detailing the sales of all Intervals on a
resort by resort basis during such fiscal year and the
available inventory of Units and Intervals, certified by each
Borrowers to be true, correct and complete and otherwise in
the form approved by Lender.
(c) QUARTERLY FINANCIAL REPORTS. Within forty-five (45) days
after the end of each of Borrowers' first three fiscal
quarterly periods each year (or, if later, that date by which
any Borrower is required to file financial statements with
the Securities and Exchange Commission), unaudited financial
statements of Borrowers certified by its chief financial
officer as well as, to the extent requested by the Lender and
available to Borrowers, unaudited financial statements of the
Timeshare Association.
(d) YEAR-END FINANCIAL REPORTS. As soon as available and in any
event within one hundred and twenty (120) days after the end
of each fiscal year of Bluegreen Corporation: (i) the balance
sheet of Bluegreen Corporation as of the end of such year and
the related statements of income and cash flow for such
Fiscal Year; (ii) a schedule of all outstanding indebtedness
of Bluegreen Corporation describing in reasonable detail each
such debt or loan outstanding and the principal amount and
amount of accrued and unpaid interest with respect to each
such debt or loan; and (iii) a copy of a report from a firm
of independent certified public accountants selected by
Bluegreen Corporation, which report shall be unqualified as
to going concern and scope of audit and shall state that such
financial statements present fairly the financial position of
Bluegreen Corporation as of the dates indicated and the
results of its operations and cash flow for the periods
indicated in conformity with GAAP.
(e) OFFICER'S CERTIFICATE. Each set of financial statements
delivered hereunder shall be accompanied by a certificate of
the Chief Financial Officer of the respective Borrower
setting forth to the extent applicable:
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(i) COVENANT COMPLIANCE. The information (including
detailed calculations) required in order to
establish whether the Borrower was in compliance
with the requirements of Sections 5.7, 5.8 and 5.9
hereof, during the quarterly or annual period
covered by the statements then being furnished;
(ii) EVENT OF DEFAULT. A statement that such officer has
reviewed the relevant terms hereof and has made, or
caused to be made, under his or her supervision, a
review of the transactions and conditions of the
Borrowers and their respective Subsidiaries from the
beginning of the quarterly or annual period covered
by the statements then being furnished to the date
of the certificate and that such review shall not
have disclosed the existence during such period of
any condition or event that constitutes an Event of
Default or, if any such condition or event existed
or exists, specifying the nature and period of
existence thereof and what action the respective
Borrowers shall have taken or proposed to take with
respect thereto.
(f) TIMESHARE ASSOCIATION REPORTS. To the extent the respective
Borrower controls the Resort or Additional Resort the
semiannual and annual financial statements of the Timeshare
Association and to the extent the Resort or Additional Resort
is not in a Borrower's control, the respective Borrower shall
make a good faith effort to obtain the same from the
respective Timeshare Association.
(g) AUDIT REPORTS. Promptly upon receipt thereof, one (1) copy of
each other report submitted to Bluegreen Corporation by their
independent public accountants in connection with any annual,
interim or special audit made by them of the books of
Bluegreen Corporation.
(h) OTHER REPORTS. Such other reports, statements, notices or
written communications relating to the Borrowers, the Time
Share Associations, the Resorts or the Additional Resorts as
are available to Borrowers and as Lender may reasonably
require.
(i) SEC REPORTS. Promptly upon their becoming publicly available,
one (1) copy of each financial statement, report, notice or
proxy statement sent by Borrowers to security holders
generally, and of
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each regular or periodic report and any registration
statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by Borrowers
with, or received by Borrowers in connection therewith from,
any securities exchange or the Securities and Exchange
Commission or any successor agency.
5.5 RECORDS. Borrowers shall keep adequate records and books of
account reflecting all financial transactions of Borrowers and (to the extent
available to the Borrowers) the Time Share Associations, including sales of
Intervals, in which complete entries will be made in accordance with GAAP.
5.6 MANAGEMENT; CONTRACTS. For so long as the Borrowers control the
Resorts and the Additional Resorts, the manager, related management contract
and master marketing and sale contract (if applicable) for each Resort shall at
all times be satisfactory to Lender. For so long as the Borrowers control the
Timeshare Association for the Resorts or Additional Resorts, and the Borrowers
or an Affiliate thereof is the manager, the management contracts and primary
marketing and sale contracts may be amended or modified only with the prior
written consent of Lender, which consent shall not be unreasonably withheld.
5.7 NET WORTH. At all times Indebtedness is outstanding or Lender is
obligated to make Advances, Bluegreen Corporation agrees to maintain a Tangible
Net Worth, determined in accordance with GAAP, of Eighty Million Dollars
($80,000,000).
5.8 FIXED RATE COVERAGE RATIO. Bluegreen Corporation's ratio of EBITDA
to Consolidated Fixed Charges shall not be less than 2.00 to 1.00.
5.9 LEVERAGE RATIO TEST. Bluegreen Corporation's ratio of Total
Indebtedness to Tangible Net Worth shall not be more than 2.00 to 1.00.
5.10 MAINTENANCE. For so long as the Borrowers control the Resorts and
Additional Resorts, the Borrowers shall maintain the Resorts and Additional
Resorts in good repair, working order and condition (ordinary wear and tear
excepted).
5.11 RELEASE AND BONDING OF LIENS. In the event any lien securing
indebtedness for borrowed money in an amount in excess of $250,000 attaches to
any Collateral (other than Permitted Adverse Claims), Borrowers shall, within
the earlier to occur of ten (10) days after such attachment or the respective
lienholder's action to foreclose on such lien, either (a) cause such lien to be
released of record, or (b) provide Lender with a bond in accordance with the
applicable laws of the state in which the Collateral is located, issued by a
corporate surety acceptable to Lender, in an amount and in form reasonably
acceptable to Lender, or (c) provide Lender with such other security as Lender
may reasonably require.
5.12 CLAIMS. Borrowers shall: (a) promptly notify Lender of (i) any
claim, action or proceeding affecting the Collateral, or any part thereof, or
any of the security interests granted
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hereunder which would have a Material Adverse Effect, and (ii) any action,
suit, proceeding, order or injunction of which Borrowers become aware after the
date hereof pending or threatened against or affecting Borrowers or any
Affiliate which would, if adversely determined, have a Material Adverse Effect;
(b) at the request of Lender, appear in and defend, at Borrowers' expense, any
such claim, action or proceeding which would, if adversely determined, have a
Material Adverse Effect; and (c) comply in all respects, and shall cause all
Affiliates to comply in all respects, with the terms of any orders imposed on
such Person by any governmental authority the failure to comply with which
would have a Material Adverse Effect.
5.13 USE OF LENDER NAME. Borrowers will not, and will not permit any
Affiliate to, without the prior written consent of Lender, use the name of
Lender or the name of any affiliates of Lender in connection with any of their
respective businesses or activities, except in connection with internal
business matters, administration of the Loan and as required in dealings with
governmental agencies including any reports required to be filed with the
Securities and Exchange Commission.
5.14 OTHER DOCUMENTS. To the extent not maintained by the Custodian,
Borrowers will maintain accurate and complete files relating to the Pledged
Receivables, the Pledged Receivables Collateral and other Collateral to the
satisfaction of Lender, and such files (to the extent not computerized) will
contain copies of each Pledged Receivable and the Pledged Receivable Collateral
together with the purchase agreements, truth-in-lending statements, all
relevant credit memoranda and all collection information and correspondence
relating to such Pledged Receivables.
5.15 ADDITIONAL INDEBTEDNESS FOR BORROWED MONEY; ADDITIONAL
OBLIGATIONS AFFILIATED WITH SUBORDINATED OBLIGATIONS. Borrowers will not,
directly or indirectly, permit any payment to be made in respect of any
indebtedness, liabilities or obligations, direct or contingent for borrowed
money (except any payments required or permitted with respect to the
indebtedness on SCHEDULE 5.15), to any Affiliates (excluding trade payables
incurred in the ordinary course of business), which payments shall and are
hereby made subordinate to the payment of principal of, and interest on, the
Note.
5.16 LOAN SERVICING. Borrowers may not amend or terminate the
Servicing Agreement attached hereto as EXHIBIT F without Lender's prior
approval. Borrowers agree not to interfere with a Successor Servicer's
performance of its duties under the Servicing Agreement or to take any action
that would be inconsistent with the terms of the Servicing Agreement. The
Servicing Agreement shall be cancelable by Lender, as applicable under the
terms of the Servicing Agreement. All servicing fees, and the costs and
expenses of the Servicer shall be paid by the Borrowers.
5.17 CUSTODIAN. Lender shall utilize a Custodian to maintain custody
of the Pledged Receivables and the Pledged Receivables Collateral. Borrowers
agree not to interfere with Custodian's performance of its duties under the
Custodial Agreement or to take any action that would conflict with the terms of
the Custodial Agreement. All custodial fees, and the costs and
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expenses of the Custodian, shall be paid by the Borrowers.
5.18 COMPLIANCE WITH LAWS. Borrowers, and each of the Resorts in which
Intervals are being sold, shall comply with, conform to and obey each and every
judgment, law, statute, rule and governmental regulation applicable to it and
each indenture, order, instrument, agreement or document to which it is a party
or by which it is bound except where the failure to comply would not have a
Material Adverse Effect.
5.19 COMPLIANCE DOCUMENTS. Upon request by Lender, Borrowers will
provide Lender with copies of all Compliance Documents relating to the sale of
any Intervals relating to Pledged Receivables outside of the States of South
Carolina, Missouri or Tennessee.
5.20 REAL ESTATE TAXES. Borrowers will pay when due all of the
Borrowers' liabilities in respect of real estate taxes relating to the Resorts
and the Additional Resorts.
5.21 OMITTED.
5.22 OMITTED
5.23 BORROWERS' FINANCIAL MAINTENANCE REQUIREMENT. For as long as any
Borrower controls a Resort or Additional Resort, such Borrower shall be
obligated to pay the Timeshare Association dues relating to such Resort or
Additional Resort and shall provide such monies as are necessary to maintain
services for a Resort or an Additional Resort which is equal to or greater than
one hundred percent (100%) of such Resort's or Additional Resort's total
operating expenses, taxes, utilities and associated reserve fund requirements.
5.24 YEAR 2000. Borrowers have made an assessment of the microchip and
computer-based systems and the software used in their respective businesses and
based upon such assessment believe that they will be "YEAR 2000 COMPLIANT" by
January 1, 2000. For purposes of this Section 5.24, "YEAR 2000 COMPLIANT" means
that all software, embedded microchips and other processing capabilities
utilized by, and material to the business operations or financial condition of,
the respective Borrower are able to interpret, store, transmit, receive and
manipulate data on and involving all calendar dates correctly and without
causing any abnormal ending scenarios in relation to dates in and after the
Year 2000. From time to time, at the request of the Lender, Borrowers shall
provide to Lender such updated information as is requested regarding the status
of its effort to become Year 2000 Compliant.
5.25 AUTHORIZED SIGNATORY. Any person signing an Advance Request on
behalf of such Borrower, as provided in Schedule 3.2 hereof shall have the
requisite power and authority to sign the same on behalf of the related
Borrower.
5.26 ALLONGE/ASSIGNMENT REQUIREMENTS. The Borrower will attach an
Allonge in the form attached hereto as Exhibit E to each Pledged Receivable
with respect to Pledged Receivables which take the form of a Note or other
instrument secured by a Purchase Money
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Mortgage or a master assignment with respect to Receivables which take the form
of conditional sales contracts (the "ASSIGNMENT DOCUMENT"). The signature of
the authorized signatory with respect to an Allonge or an Assignment Document
may be either an original signature, a signature stamp or a computer generated
signature.
5.27 ENVIRONMENTAL. So long as the Loan is outstanding, no Hazardous
Materials may be used, generated, treated, stored or disposed of by any Person
for any purpose upon any Collateral except in material compliance with all
applicable Environmental Laws except where the failure to comply would not have
a Material Adverse Effect. If the Lender, at any time, has a reasonable basis
to believe that Borrowers or any Resort or Additional Resort may be in
violation of any Environmental Law, then Borrowers agree, upon request from the
Lender to provide the Lender with such reports, certificates, engineering
studies or other written material or data as the Lender may require, in its
reasonable discretion, so as to satisfy the Lender that Borrowers, any Resort
or any Additional Resort are in compliance with all applicable Environmental
Laws and that the marketability and value of such Resort or Additional Resort
is adequately maintained.
SECTION 6
NEGATIVE COVENANTS
So long as any portion of the Indebtedness remains unpaid or Lender is
committed to lend hereunder, unless Lender otherwise consents in writing,
Borrowers hereby jointly and severally covenant and agree with Lender as
follows:
6.1 CONSOLIDATION AND MERGER. Each Borrower will not consolidate with
or merge into any other Person or permit any other Person to consolidate with
or merge into it or convey all or substantially all of its assets to any
person, unless (i) either the respective Borrowers shall be the continuing
corporation or the successor corporation or the person which acquires by sale
or conveyance substantially all the assets of the respective Borrowers shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
Indebtedness hereunder, and the due and punctual performance and observance of
all of the covenants and conditions of this Agreement to be performed or
observed by the respective Borrowers, by an amendment hereto in form
satisfactory to the Lender, and (ii) the respective Borrowers or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of
any such covenant or condition.
6.2 RESTRICTIONS ON TRANSFERS. The Borrowers shall not, without
obtaining the prior written consent of Lender, which may be granted or withheld
in Lender's sole discretion, transfer, sell, pledge, convey, assign or encumber
all or any portion of the Collateral except with respect to the sales of
Pledged Receivables to the Purchase Facility and Permitted Adverse Claims and
Permitted Liens.
6.3 COLLATERAL. The Borrowers shall not take any action (nor permit or
consent to the
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taking of any action) which might reasonably be anticipated to impair the value
of the Collateral or any of the rights of Lender in the Collateral. Borrowers
shall not (i) except in connection with a so-called "UPGRADE" or a modification
of a Pledged Receivable with no change in financial terms or an exchange
contemplated by Section 2.2 hereof, provided the conditions in this Agreement
are met, modify or amend any of the Pledged Receivables or the Pledged
Receivables Collateral without Lender's prior written consent, or (ii) grant
extensions of time for the payment of, compromise for less than the full face
value, release in whole or in part any Obligor liable for the payment of, or
allow any credit whatsoever except for the cash to be paid upon, any Collateral
or any instrument or document representing the Collateral other than in the
ordinary course of business in accordance with accepted industry loan servicing
standards.
SECTION 7
EVENTS OF DEFAULT
An "EVENT OF DEFAULT" shall exist if any of the following shall occur:
7.1 PAYMENTS. Borrowers shall fail to make any payment of interest on
the Indebtedness within five (5) Business Days of the date such payment is due
and shall fail to make payments on the principal of the Indebtedness on the
date such payment is due.
7.2 FAILURE TO PERMIT INSPECTIONS. Borrowers shall fail to strictly
comply with the provisions of Section 5.3 of this Agreement.
7.3 COVENANT DEFAULTS. Borrowers shall fail to perform or observe any
covenant, agreement or obligation contained in this Agreement or in any of the
Loan Documents (other than any covenant or agreement obligating Borrowers to
pay the Indebtedness), and such failure shall continue for thirty (30) days
after Lender delivers written notice thereof to Borrowers, provided, however,
if the failure is incapable of cure within such thirty (30) day period and
Borrowers shall be diligently pursuing a cure, such thirty (30) day cure period
shall be extended by an additional period not to exceed sixty (60) days.
7.4 WARRANTIES OR REPRESENTATIONS. Any representation or other
statement made by or on behalf of Borrowers in this Agreement, in any of the
Loan Documents or in any instrument furnished in compliance with or in
reference to the Loan Documents, shall be false, misleading or incorrect in any
material respect as of the date made.
7.5 BANKRUPTCY. A petition under any Chapter of Title 11 of the United
States Code or any similar law or regulation is filed by or against any
Borrower, (and in the case of an involuntary petition in bankruptcy, such
petition is not discharged within sixty (60) days of its filing), or a
custodian, receiver or trustee for any of the Resorts or Additional Resorts is
appointed, or any Borrower makes an assignment for the benefit of creditors, or
any of them are adjudged insolvent by any state or federal court of competent
jurisdiction, or any of them admit
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their insolvency or inability to pay their debts as they become due or an
attachment or execution is levied against any of the Resorts or Additional
Resorts.
7.6 ATTACHMENT, JUDGMENT, TAX LIENS. The issuance, filing or levy
against the Borrowers of one or more attachments, injunctions, executions, tax
liens or judgments for the payment of money cumulatively in excess of
$1,000,000, which is not discharged in full or stayed within thirty (30) days
after issuance or filing.
7.7 OMITTED.
7.8 DEFAULT BY BORROWERS IN OTHER AGREEMENTS. Any default by a
Borrower in the payment of indebtedness for borrowed money in an aggregate
principal amount in excess of $1,000,000 (including, without limitation, any
default by a Borrower or any Affiliate in the payment of indebtedness for
borrowed money owing to Lender under any other agreement) which accelerates or
permits the acceleration (after the giving of notice or passage of time, or
both) of the maturity of such indebtedness.
7.9 OMITTED.
7.10 TAX LIENS; ERISA LIENS. The Internal Revenue Service shall file
notice of a lien pursuant to Section 6323 of the Internal Revenue Code with
regard to any of the assets of Borrowers, and such lien shall not have been
released within 30 days, or the Pension Benefit Guaranty Corporation shall file
notice of a lien pursuant to Section 4068 of ERISA with regard to any of the
assets of Borrowers, and such lien shall not have been released within 30 days.
7.11 LOAN EXCEEDS MAXIMUM EXPOSURE FOR FIVE DAYS. The provisions of
Section 1.7(b) hereof have not been met.
7.12 VALIDITY OF TRANSACTION DOCUMENTS. (a) Any Loan Document, or any
lien or security interest granted thereunder, shall (except in accordance with
its terms), in whole or in part, terminate, cease to be effective or cease to
be the legally valid, binding and enforceable obligation of Borrowers, (b)
Borrowers, or any other party shall, directly or indirectly, contest in any
manner such effectiveness, validity, binding nature or enforceability of any
Loan Document or (c) any security interest securing the Indebtedness shall, in
whole or in part, cease to be a perfected first priority security interest,
except as contemplated by this Agreement.
7.13 DEFAULT UNDER THE PROJECT LOAN. The occurrence and continuance of
an Event of Default under the Project Loan Documents.
SECTION 8
REMEDIES
8.1 REMEDIES UPON DEFAULT. Upon the occurrence and during the
continuance of an
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Event of Default, Lender may take any one or more of the following actions,
without notice to Borrowers except as expressly stated below or required by
applicable law:
(a) ACCELERATION. Declare by written notice to Borrowers, (except
upon the occurrence of any event specified in Section 7.5
above, in which case the Indebtedness shall automatically be
accelerated simultaneously with the occurrence of such event)
the unpaid balance of the Indebtedness, or any part thereof,
immediately due and payable, whereupon the same shall be due
and payable.
(b) TERMINATION OF OBLIGATION TO ADVANCE. Terminate by written
notice to Borrowers any commitment of Lender to lend under
this Agreement in its entirety, or any portion of any such
commitment, to the extent Lender shall deem appropriate.
(c) JUDGMENT. Reduce Lender's claim to judgment, foreclose or
otherwise enforce Lender's security interest in all or any
part of the Collateral by any available judicial procedure.
(d) SALE OF COLLATERAL. Exercise all the rights and remedies of a
secured party on default under the Code (whether or not the
Code applies to the affected Collateral) including (i)
require the Borrowers to, and the Borrowers hereby agree that
they will, at their expense and upon request of Lender
forthwith, assemble all or part of the Collateral as directed
by Lender and make it available to Lender at a place to be
designated by Lender which is reasonably convenient to both
parties; (ii) enter upon any premises of the Borrowers and
take possession of the Collateral; and (iii) sell the
Collateral or any part thereof at public or private sale, at
any of the Lender's offices or elsewhere, at such time or
times, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as Lender may
deem commercially reasonable. Borrowers agree that, whether
or not notice of sale shall be required by law, ten (10) days
notice of the time and place of any sale shall constitute
reasonable notification. At any sale of the Collateral, if
permitted by law, Lender may bid (which bid may be, in whole
or in part, in the form of cancellation of indebtedness) for
the purchase of the Collateral or any portion thereof for the
account of Lender. Subject to compliance by Lender with all
applicable laws, Borrowers shall remain jointly and severally
liable for any deficiency. Lender shall not be required to
proceed against any Collateral but may proceed against the
Borrowers directly. To the extent permitted by law, the
Borrowers hereby specifically waive all rights of redemption,
stay or appraisal which it has or may have under any law now
existing or
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hereafter enacted.
(e) OMITTED.
(f) EXERCISE OF OTHER RIGHTS. Exercise any and all other rights
or remedies afforded by any applicable laws or by the Loan
Documents as Lender shall deem appropriate, at law, in equity
or otherwise, including the right to bring suit or other
proceeding, either for specific performance of any covenant
or condition contained in the Loan Documents or in aid of the
exercise of any right or remedy granted to Lender in the Loan
Documents.
8.2 APPLICATION OF COLLATERAL; TERMINATION OF AGREEMENTS. Upon the
occurrence and during the continuance of an Event of Default and subject to the
conditions provided in Section 2.1 hereof, Lender may apply against the
Indebtedness, any other indebtedness to Lender with respect to any Resort,
Additional Resort or any Project Indebtedness any and all Collateral in its
possession, other than any monies of the Borrowers received in error, any and
all balances, credits, deposits, accounts, reserves, indebtedness or other
moneys due or owing to Borrowers held by Lender hereunder or under any other
financing agreement or otherwise, whether accrued or not.
8.3 WAIVERS. No waiver by Lender of any Event of Default shall be
deemed to be a waiver of any other or subsequent Event of Default. No delay or
omission by Lender in exercising any right or remedy under the Loan Documents
shall impair such right or remedy or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such
right or remedy preclude other or further exercise thereof, or the exercise of
any other right or remedy under the Loan Documents or otherwise. Further,
Borrowers waive notice of the occurrence of any Event of Default, presentment
and demand for payment, protest, and notice of protest, notice of intention to
accelerate, acceleration and nonpayment, and agree that their liability shall
not be affected by any renewal or extension in the time of payment of the
Indebtedness, or by any release or change in any security for the payment or
performance of the Indebtedness, regardless of the number of such renewals,
extensions, releases or changes. Borrowers also hereby waive the right to
assert any statute of limitations as a bar to the enforcement of the lien
created by any of the Loan Documents or to any action brought to enforce the
Note or any other obligation secured by the Loan Documents.
8.4 SET OFF OF PAYMENTS. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default, the
Lender is hereby authorized by Borrowers at any time or from time to time, with
reasonably prompt subsequent notice to Borrowers or to any other Person (any
prior or contemporaneous notice being hereby expressly waived) to set off and
to appropriate and to apply any and all (A) balances held by the Lender or such
holder at any of its offices for the account of Borrowers (regardless of
whether such balances are then due to Borrowers), and (B) other property at any
time held or owing by the Lender or such holder to or
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for the credit or for the account of Borrowers, against and on account of any
of the Indebtedness which are not paid when due other than monies of the
Borrowers received by Lender in error.
8.5 CUMULATIVE RIGHTS. All rights and remedies available to Lender
under the Loan Documents shall be cumulative and in addition to all other
rights and remedies granted to Lender at law or in equity, whether or not the
Indebtedness is due and payable and whether or not Lender shall have instituted
any suit for collection or other action in connection with the Loan Documents.
SECTION 9
CERTAIN RIGHTS AND OBLIGATIONS OF LENDER
9.1 PROTECTION OF COLLATERAL. Lender may at any time and from time to
time take such actions as Lender deems necessary or appropriate to protect
Lender's liens and security interests in and to preserve the Collateral.
Borrowers agree to cooperate fully with all of Lender's efforts to preserve the
Collateral and Lender's liens and security interests therein.
9.2 PERFORMANCE BY LENDER. If Borrowers fail to perform any agreement
contained herein, Lender may, but shall not be obligated to, cause the
performance of, such agreement, and the expenses of Lender incurred in
connection therewith shall be payable by Borrowers pursuant to Section 9.3
below.
9.3 FEES AND EXPENSES. Borrowers agree to promptly pay all reasonable
Costs and all such Costs shall be included as additional Indebtedness .
9.4 RELEASE OF SECURITY INTEREST. Upon satisfaction in full of an
Obligor's obligations under a Receivable, Lender shall release its security
interest in such Obligor's Receivable and, in connection therewith, shall
execute such amendments or partial releases to the related Resort Blanket
Mortgage as shall be necessary to enable the applicable Borrower to convey an
unencumbered deed to the related Interval to such Obligor. Lender's security
interest in all other Pledged Receivables shall remain in full force and
effect. Lender's obligations under this Section 9.4 shall be unaffected by the
pendency of an Event of Default hereunder.
9.5 NOTICE TO OBLIGOR. After the occurrence of and during the
continuance of an Event of Default, Borrowers authorize both the Lender and the
Custodian (but neither the Lender nor the Custodian shall be obligated) to
communicate at any time and from time to time, after a sale of an Interval,
with any Obligor or any other Person primarily or secondarily liable under a
Pledged Receivable with regard to the lien of Lender thereon and any other
matter relating thereto.
9.6 COLLECTION OF RECEIVABLES. Following the occurrence of and during
the continuance of an Event of Default, Lender shall have the right to (a)
require that all payments due under the Pledged Receivables be paid directly to
Lender or to such party as Lender may
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designate, and to receive, collect, hold and apply the same in accordance with
the provisions of this Agreement or to such party as Lender may designate, and
(b) take such remedial action available to it for the enforcement of any
defaulted Pledged Receivables including the foreclosure of any Pledged
Receivable Collateral securing the payment thereof. Borrowers hereby further
irrevocably authorize, direct and empower Lender, after the occurrence and
during the continuance of an Event of Default, to collect and receive all
checks and drafts evidencing such payments and to endorse such checks or drafts
in the name of Borrowers and upon such endorsements, to collect and receive the
money therefor.
Upon payment and satisfaction in full of all Indebtedness and subject
to Section 2.1 hereof, Lender will, at Borrowers' request and sole expense,
give written notice as necessary to redirect payment of the Pledged Receivables
as requested by Borrowers.
9.7 POWER OF ATTORNEY. The Borrowers do hereby irrevocably constitute
and appoint Lender as Borrowers' true and lawful agent and attorney-in-fact,
with full power of substitution, for Borrowers and in Borrowers' name, place
and stead, or otherwise, to following the occurrence and during the continuance
of an Event of Default (a) endorse any checks or drafts payable to Borrowers in
the name of Borrowers and in favor of Lender as provided in Section 9.6 above;
(b) to demand and receive from time to time any and all property, rights,
titles, interests and liens hereby sold, assigned and transferred, or intended
so to be, and to give receipts for same; and (c) to institute and prosecute in
the name of Borrowers or otherwise, but for the benefit of Lender, any and all
proceedings at law, in equity, or otherwise, that Lender may deem proper in
order to collect, assert or enforce any claim, right or title, of any kind, in
and to the property, rights, titles, interests and liens hereby sold, assigned
or transferred, or intended so to be, and to defend and compromise any and all
actions, suits or proceedings in respect of any of the said property, rights,
titles, interests and liens. Borrowers hereby declare that the appointment made
and the powers granted pursuant to this Section are coupled with an interest
and are and shall be irrevocable by the Borrowers in any manner, or for any
reason, unless and until all obligations of the Borrowers to Lender have been
satisfied.
9.8 INDEMNIFICATION OF LENDER. Borrowers shall jointly and severally
indemnify Lender and hold Lender harmless from and against any and all
liabilities, indebtedness, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses, and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Lender, in
any way relating to or arising out of (a) this Agreement and the Loan Documents
and/or (b) any of the transactions contemplated therein or thereby (including
those in any way relating to or arising out of the violation by Borrowers of
any federal or state laws including the Interstate Land Sales Full Disclosure
Act or any applicable timeshare acts) other than liabilities, indebtedness,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements which are caused by the Lender's material breach of, or gross
negligence or willful misconduct with respect to its actions or inactions under
this Agreement or any other Loan Document. Upon receiving knowledge of any
suit, claim or demand asserted by a third party that Lender believes is covered
by this indemnity, Lender shall give Borrowers notice of the matter and an
opportunity to defend
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it, at Borrowers' sole cost and expense, with legal counsel satisfactory to
Lender. Notwithstanding any defense by Borrowers of any such suit, claim or
demand, Lender shall have the right to participate in any material decision
affecting the conduct or settlement of any dispute or proceeding for which
indemnification may be claimed.
9.9 LENDER'S RIGHT TO PROVIDE FINANCING. Borrowers hereby covenant
with Lender that, from the date hereof until the first to occur of (a) the
Maturity Date, (b) the date on which an event occurs which relieves the
Purchaser from making purchases under the Asset Purchase Agreement and the
Purchaser ceases making purchases thereunder, (c) the acceleration of the
Indebtedness following an Event of Default, or (d) the termination of the
Lender's commitment under Section 8.1(b) of this Agreement, Lender shall have,
and Lender is hereby granted, the right and option, subject to the terms set
forth below (the "FUNDING OPTION") to provide secured financing for Eligible
Receivables (which for this purpose shall obligate the Borrowers, as well as
any Affiliate thereof, to disclose to Lender all resorts developed by the
Borrowers or any Affiliate thereof in order to provide Lender the opportunity
to make a determination whether such resort may be an Additional Resort).
Lender shall notify the Borrowers within forty-five (45) days of its receipt of
satisfactory information with respect to a resort whether such resort qualifies
as an Additional Resort.
The Funding Option may be exercised or not exercised in Lender's sole
discretion. If Lender declines to exercise the Funding Option, Lender shall
have no further Funding Option with respect to the Receivables; PROVIDED,
HOWEVER, Lender shall have no Funding Option with respect to (i) Receivables
relating to resorts for which Lender has reviewed and denied financing pursuant
to the terms of the Project Loan Agreement, (ii) Receivables from a resort that
does not qualify as an Additional Resort after Lender has reviewed such resort
in accordance with the preceding paragraph or (iii) Receivables associated with
the Club after the date on which Lender has reviewed and rejected the Club and
associated Receivables. Lender's decision to decline to exercise the Funding
Option shall be deemed to be a decision to decline to exercise the Purchase
Option (as defined in the Purchase Facility) under the Purchase Facility.
Notwithstanding anything contained herein to the contrary, it is expressly
agreed and understood that any financing to be extended pursuant to the Funding
Option shall be subject to approval by Lender's loan committees in accordance
with Lender's standard credit guidelines and it is further expressly understood
and agreed that Lender is under no obligation to exercise the Funding Option
and that nothing in this Section 9.9 shall be deemed or construed to create any
such obligation.
SECTION 10
PARTICIPATION AND ASSIGNMENTS
10.1 PARTICIPATIONS IN LOAN AND ASSIGNMENTS IN LOAN.
(A) Lender may sell Participations in all or any part of Advances made
hereunder to another Person; provided, that such Person is not a competitor of
the Borrowers as determined by
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the Borrowers in their reasonable discretion all amounts payable by Borrowers
hereunder shall be determined as if that Lender had not sold such
participation. Borrowers hereby acknowledges and agree that the participant
under each participation shall for purposes of subsection 1.9, 1.10, 1.11 and
9.8 be considered to be a "LENDER".
(B) Lender shall have the right to assign all or any portion of its
rights in this Agreement and the Loan hereunder to an Eligible Assignee;
provided that Lender and its Affiliates agree to retain 30 % of the Advances
hereunder at all times, and provided that there shall not be more than five (5)
Eligible Assignees at any time. Any Eligible Assignee may assign its rights and
delegate its obligations under this Agreement to any other Eligible Assignee;
provided that such assigning Eligible Assignee shall first obtain the written
consent of Lender. In all events ▇▇▇▇▇▇ Financial, Inc. shall be the agent for
the Loan hereunder.
(C) Except as otherwise provided in this Section 10.1 the Lender shall
not, as between Borrowers and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loan or
other Indebtedness owed to the Lender.
(D) Lender agrees to take and to cause its Affiliates to take normal
and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "CONFIDENTIAL" or "secret" by
the Borrowers and neither Lender nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Borrowers; except to the extent
such information (i) was or becomes generally available to the public other
than as a result of disclosure by Lender, or (ii) was or becomes available on a
non-confidential basis from a source other than the Borrowers, provided that
such source is not bound by a confidentiality agreement with the Borrowers
known to the Lender; PROVIDED, HOWEVER, that the Lender may disclose such
information (A) at the request or pursuant to any request of a regulatory
authority of which Lender is subject or in connection with an examination of
such Lender by any such authority; (B) pursuant to subpoena or other court
process; (C) when required to do so in accordance with the provisions of any
applicable requirement of law; (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Lender or any
Affiliates may be party in connection with the transactions contemplated by
this Agreement; (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (F) to the
Lender's independent auditors and other professional advisors; (G) to any
participant or Eligible Assignee, actual or potential, provided that such
participant or Eligible Assignee agrees in writing to keep such information
confidential to the same extent required of the Lender hereunder; (H) as to the
Lender or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower is party
or is deemed party with the Lender as its Affiliates; and (I) to its Affiliates
provided such Affiliates agree in writing to be bound by the confidentiality
provisions hereof.
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SECTION 11
MISCELLANEOUS
11.1 NOTICE. Any notice or other communication required or permitted
to be given shall be in writing addressed to the respective party as set forth
below and may be personally served, telecopied or sent by overnight courier or
U.S. Mail and shall be deemed given: (a) if served in person, when served; (b)
if telecopied, on the date of transmission if before 3:00 p.m. (Chicago time)
on a Business Day, otherwise on the next Business Day; provided that a hard
copy of such notice is also sent pursuant to (c) or (d) below; (c) if by
overnight courier, on the first business day after delivery to the courier; or
(d) if by U.S. Mail, certified or registered mail, return receipt requested on
the fourth (4th) day after deposit in the mail postage prepaid.
Notices to Borrowers: Bluegreen Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Bluegreen Resorts, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Lender: ▇▇▇▇▇▇ Financial, Inc.
Attn: Portfolio Manager, Vacation Ownership
HSF Loan No. 98-087
500 West Monroe St., 31st Fl.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ Financial, Inc.
Vacation Ownership Finance
Attn: Legal Department - Relationship Manager
HSF Loan No. 98-087
500 West Monroe St., 31st Fl.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 SURVIVAL. All representations, warranties, covenants and
agreements made by Borrowers herein, in the other Loan Documents or in any
other agreement, document, instrument
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or certificate delivered by or on behalf of Borrowers under or pursuant to the
Loan Documents shall be considered to have been relied upon by Lender and shall
survive the delivery to Lender of such Loan Documents and the extension of the
Indebtedness (and each part thereof), regardless of any investigation made by
or on behalf of Lender.
11.3 GOVERNING LAW. This Agreement shall be governed by and shall be
construed and enforced in accordance with the internal laws of the State of
Illinois, (without regard to conflicts of law principles) and applicable laws
of the United States.
11.4 INVALID PROVISIONS. If any provision of this Agreement or any of
the other Loan Documents is held to be illegal, invalid or unenforceable under
present or future laws effective during the term thereof, such provision shall
be fully severable, this Agreement and the other Loan Documents shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof or thereof, and the remaining provisions
hereof or thereof shall remain in full force and effect.
11.5 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signature thereto and hereto were on the same instrument. This
Agreement shall become effective upon Lender's receipt of one or more
counterparts hereof signed by Borrowers and Lender.
11.6 LENDER NOT FIDUCIARY. The relationship between Borrowers and
Lender is solely that of debtor and creditor, and Lender has no fiduciary or
other special relationship with Borrowers, and no term or provision of any of
the Loan Documents shall be construed so as to deem the relationship between
Borrowers and Lender to be other than that of debtor and creditor.
11.7 ENTIRE AGREEMENT. This Agreement, including the EXHIBITS,
SCHEDULES and other Loan Documents and agreements referred to herein embody the
entire agreement between the parties hereto, supersedes all prior agreements
and understandings between the parties whether written or oral relating to the
subject matter hereof and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no oral
agreements among Lender or Borrowers. This Agreement may be modified or changed
only in a writing executed by both Lender and Borrowers and/or the other
affected parties.
11.8 CONSENT TO ADVERTISING AND PUBLICITY. Lender may issue and
disseminate to the public information describing the credit accommodation
entered into pursuant to this Agreement; provided the Borrowers shall have
approved the description of such credit accommodation which approval shall not
be unreasonably withheld.
11.9 [OMITTED]
11.10 HEADINGS. Section headings have been inserted in the Agreement
as a matter of convenience of reference only; such section headings are not a
part of the Agreement and shall not be used in the interpretation of this
Agreement.
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11.11 BROKER'S FEES. There are no brokers, finders' or other similar
fees or commitments due with respect to the transactions described in the
Agreement. Borrowers shall defend Lender and save and hold it harmless from all
claims of any Persons for any such fees which indemnity shall include
reasonable attorneys' fees and legal expenses.
11.12 VENUE. BORROWERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE
OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF ▇▇▇▇ STATE OF ILLINOIS. BORROWERS
EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND
WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWERS HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE UPON BORROWERS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO BORROWERS, AT THE ADDRESS SET FORTH IN THIS AGREEMENT
AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN
POSTED.
11.13 JURY TRIAL WAIVER. BORROWERS AND LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. BORROWERS AND
LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON
THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWERS AND LENDER WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.
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The parties hereto have executed this Agreement or has caused the same
to be executed by their duly authorized representatives as of the date first
above written.
BORROWERS:
BLUEGREEN CORPORATION
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Treasurer & Chief Financial Officer
BLUEGREEN RESORTS, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President
LENDER:
▇▇▇▇▇▇ FINANCIAL, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Executive Vice President
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APPENDIX
Defined Terms
The following terms used in this Agreement shall have the following
meanings:
ADDITIONAL BORROWERS. Such other Subsidiaries and/or Affiliates of the
Borrowers which may own a Resort or an Additional Resort and become a
"BORROWER" hereunder with the approval of Lender.
ADDITIONAL RESORTS. Those certain timeshare vacation resorts which the
Lender may approve in the future which Intervals may be financed hereunder,
which approval shall be in the Lender's reasonable discretion.
ADVANCE. Proceeds of the Loan advanced from time to time by Lender to
Borrowers in accordance with this Agreement.
ADVERSE CLAIM. A Lien, security interest, pledge, charge or
encumbrance, or similar right or claim of any Person.
AFFECTED PARTY. The Lender and any permitted assignee of Lender
including any person who purchases a Loan participation or an assignment of the
Loan pursuant to Section 10 hereof, an Eligible Assignee, the holding company
of any such Person and any successor holding company thereof; provided,
however, in no event shall ▇▇▇▇▇▇ Financial, Inc. or its Affiliates be an
"AFFECTED PARTY."
AFFILIATE. Any individual, trust, estate, partnership, limited
liability company, corporation or any other incorporated or unincorporated
organization (each, a "PERSON") that directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common control
with Borrowers; any officer, director or partner of Borrowers; or any relative
of any of the foregoing. The term "CONTROL" means possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
ASSIGNMENT. The Assignment of Pledged Receivables and Pledged
Receivables Collateral in the form set forth on EXHIBIT B of this Agreement.
AVAILABILITY. At all times during the term of this Agreement, the
lesser of (i) $35,000,000 minus outstanding Advances, or (ii) an amount equal
to 95% of the principal balance of Pledged Receivables; provided, that
notwithstanding anything to the contrary contained herein the amounts advanced
against Pledged Receivables relating to Eligible Uncompleted Unit Receivables
shall not at any time represent in the aggregate more than the lesser of
$5,000,000.00 or 30% of the aggregate principal amount of all Advances
outstanding under this Agreement. After the Maturity Date or at the option of
Lender in accordance with Section 8.10, after the occurrence
Appendix-1
40
and during the continuance of an Event of Default hereunder, Availability shall
be zero ($0).
BOARD. Board of Governors of the Federal Reserve System.
BUSINESS DAY. Any day which is not a Saturday or Sunday or a legal
holiday under the laws of the State of Illinois, the Commonwealth of
Pennsylvania, the State of Florida or the United States and which is a London
Banking Day.
CAPITAL LEASE. At any time, a lease with respect to which the lessee
is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
CAPITALIZED LEASE OBLIGATIONS. With respect to any Person, all
outstanding obligations of such Person in respect of all Capital Leases, taken
at the capitalized amount thereof accounted for as indebtedness in accordance
with GAAP.
CLUB. The RDI Club formed pursuant to the RDI Vacation Club Trust
Agreement dated the 2nd day of August, 1995 by and among RDI Resources, Inc.,
Vacation Trust, Inc. and the beneficiaries named therein, as amended from time
to time as well as such other clubs as the Lender shall approve.
CLUB COLLATERAL. With respect to the Club, and to the extent owned by
a Borrower, the reservation systems and related computer software and hardware.
CODE. The Uniform Commercial Code as adopted and in force in the State
of Illinois as the same may be amended from time to time.
COLLATERAL. Has the meaning assigned in Section 2.1.
COMPLETED UNITS. A Unit at a Resort or Additional Resort which has
been fully constructed and furnished, has received a valid permanent
certificate of occupancy, is ready for occupancy and is subject to a Time Share
Declaration.
COMPLIANCE DOCUMENTS. With respect to sales of Intervals in any state
or jurisdiction: (i) evidence satisfactory to Lender that the governmental
authority of such state or jurisdiction having jurisdiction over sales of
timeshare intervals has issued all required approvals of Borrowers' offering
materials, sales and financing documents and sales practices, and (ii) copies
of Borrowers' offering materials, sales and financing documents as approved by
such state.
CONSOLIDATED FIXED CHARGE. The sum for Bluegreen Corporation and its
subsidiaries, determined on a consolidated basis in accordance with GAAP, of
all amounts which would be deducted in computing Consolidated Net Income on
account of interest on indebtedness (including imputed interest in respect of
Capitalized Lease Obligations and amortization of debt discount and expenses).
Appendix-2
41
CONSOLIDATED NET INCOME. The net income of Bluegreen Corporation and
its subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, excluding:
(i) the proceeds of any life insurance policy,
(ii) any gains arising from (a) the sale or other disposition of
any assets (other than land, timeshare intervals, current
assets and other receivables sold in the ordinary course of
business, including without limitation under the Purchase
Facility, to the extent that the aggregate amount of the
gains during such period exceeds the aggregate amount of the
losses during such period from the sale, abandonment or other
disposition of assets (other than current assets and other
receivables sold in the ordinary course of business), (b) any
write-up of assets or (c) the acquisition of outstanding
securities of Bluegreen Corporation or any subsidiary,
(iii) any amount representing any interest in the undistributed
earnings of any other person (other than a subsidiary),
(iv) any earnings, prior to the date of acquisition, of any person
acquired in any manner, and any earnings of any subsidiary
acquired prior to its becoming a subsidiary,
(v) any earnings of a successor to or transferee of the assets of
Bluegreen Corporation prior to its becoming such successor or
transferee,
(vi) any deferred credit (or amortization of a deferred credit)
arising from the acquisition of any person, and
(vii) any extraordinary gains not covered by clause (ii) above.
CONSOLIDATED NET WORTH. On a consolidated basis for Bluegreen
Corporation and its subsidiaries, at any date, (i) the sum of (a) capital stock
taken at par or stated value plus (b) capital in excess of par or stated value
relating to capital stock plus (c) retained earnings (or minus any retained
earning deficit) minus (ii) the sum of treasury stock, capital stock subscribed
for and unissued and other contra-equity accounts, all determined in accordance
with GAAP.
COSTS. All expenditures and expenses which may be paid or incurred by
or on behalf of Lender in connection with the documentation, modification,
workout, collection or enforcement of the Loan or any of the Loan Documents.
Notwithstanding the foregoing, Costs payable on the date of the initial Advance
shall be limited to (i) the fees and costs of Lender's attorneys in connection
with the documentation of the Loan and the due diligence review of Borrowers'
deliveries; (ii) the costs of the Back-up Servicer, if applicable; and (iii)
all applicable title, filing
Appendix-3
42
and recording fees and other closing costs. During the term of the Loan, Costs
payable by Borrowers shall include: payments to remove or protect against
liens; attorneys' fees; receivers' fees; engineers' fees; accountants' fees;
independent consultants' fees (including environmental consultants); fees of
the Custodian, the Servicer and the Back-up Servicer; all costs and expenses
incurred in connection with any of the foregoing; outlays for documentary and
expert evidence; stenographers' charges; stamp taxes; publication costs; and
costs (which may be estimates as to items to be expended after entry of an
order or judgment) for procuring all such abstracts of title, title and UCC
searches, and examination, title insurance policies, and similar data and
assurances with respect to title as Lender may deem reasonably necessary either
to prosecute any action or to evidence to bidders at any foreclosure sale a
true condition of the title to, or the value of, the Collateral.
CREDIT POLICY. Bluegreen's Credit Scoring Matrix dated July 7, 1997
and the collection policies with respect to the Receivables and the Receivables
Collateral, which policies may not be amended or supplemented without the
Lender's written approval, which shall not be unreasonably withheld.
CUSTODIAL AGREEMENT. An agency and custodial agreement; in such form
as shall be reasonably satisfactory to both the Lender and the Borrowers which
Agreement shall be by and among Borrowers, Lender and Custodian providing for
the maintenance of the Receivables File relating to the Pledged Receivables.
CUSTODIAN. Norwest Bank Minnesota, N.A. or such other Person
designated by Lender and approved by Borrowers to maintain physical possession
of the Pledged Receivables and the Pledged Receivables Collateral.
DECLARATION. With respect to each Resort, the Condominium Declaration
set forth on EXHIBIT H.
DEED OF TRUST. An instrument by which legal title to an Interval is
placed in one or more trustees to secure an Obligor's payment performance with
respect to a Pledged Receivable.
DEFAULT RATE. A per annum rate of interest equal to the Interest Rate
plus two percent (2%).
DETERMINATION DATE. The last day of each Fiscal Month.
DUE PERIOD. Each period consisting of a Fiscal Month.
EBITDA. Consolidated Net Income plus all amounts deducted in the
computation of Consolidated Net Income on account of (i) Consolidated Fixed
Charges, (ii) depreciation and amortization expenses and other non-cash charges
and (iii) income and profits taxes; provided, however, with respect to
Bluegreen Corporation's 1999 Fiscal Year (ending March 28, 1999) the
approximately $3,000,000 associated with prepayments penalties associated with
its
Appendix-4
43
$110,000,000 Rule 144A debt offering shall be added back into income.
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank organized under the
laws of the United States, or any state thereof or the District of Columbia,
and having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any state thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with GAAP; (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is
also a member of the OECD; and (d) the central bank of any country which is a
member of the OECD.
ELIGIBLE COMPLETED UNIT RECEIVABLE. A Receivable which satisfies all
of the following criteria:
(a) payments due under the Receivable shall be self-amortizing
and payable in monthly installments;
(b) the weighted average term to maturity of all Receivables
financed hereunder from the date when such receivable is
pledged to Lender as Collateral pursuant to this Agreement is
at least thirty-six (36) months at the time the Receivable is
pledged hereunder;
(c) as of the date of Funding, the Obligor thereunder has made a
cash down payment of at least 10% percent of the actual
purchase price of the Interval (which cash down payment may
be represented by the principal payments on such Receivable
since its date of origination) and no part of such payment
has been made or loaned to Obligor by Borrowers or an
Affiliate thereof;
(d) the weighted average interest rate of all Receivables
financed under this Agreement is not less than 13.90% per
annum at the time and inclusive of the Receivable to be
financed hereunder;
(e) no principal or interest with respect to the receivable is
more than thirty (30) days past due on a contractual basis at
the time of Lender's Advance against such Receivable
hereunder, nor becomes more than sixty (60) days past due;
(f) the Obligor is not an Affiliate of the Borrowers; provided
that an Obligor may be related to or employed by the
Borrowers if such Receivables do not, in the aggregate,
exceed $1,000,000, but only if such Obligor purchases the
Interval on no less than the same terms
Appendix-5
44
and conditions offered to any non-Affiliate purchaser;
provided that solely for the purposes of this clause (f) a
relative of an employee of the Borrowers (or any of their
Affiliates) shall not be deemed to be an "AFFILIATE";
(g) the Receivable is free and clear of adverse claims, liens and
encumbrances and is not currently, subject to claims of
rescission, invalidity, unenforceability, illegality,
defense, offset or counterclaim;
(h) if the Receivable is evidenced by a promissory note separate
from the conditional sales contract, the Receivable is
secured directly by a first priority Purchase Money Mortgage
or Deed of Trust on the purchased Interval;
(i) if the Purchase Money Mortgage secures a Pledged Receivable,
the title to the Interval is insured under a mortgagee title
insurance policy in form and substance acceptable to Lender;
(j) no Receivable hereunder shall be in excess of $25,000 and no
Obligor shall be the payor of aggregate Receivables herein
and in the Purchase Facility in excess of $50,000;
(k) payments with respect to the Receivable are to be in legal
tender of the United States;
(l) at least 90% of the aggregate outstanding principal balance
of all Receivables arise from Obligors who are either
residents of the U.S. or Canada at the time the Pledged
Receivable is financed hereunder;
(m) all monthly payments on the Receivable have been made by the
Obligor and not by Borrowers or any Affiliate of Borrowers on
the Obligor's behalf;
(n) the Receivable relates to a Resort or any Additional Resort;
(o) the Receivable constitutes either "CHATTEL PAPER", a "GENERAL
INTANGIBLE" or an "INSTRUMENT" as defined in the Code as in
effect in all applicable jurisdictions;
(p) the assignment of the Receivable and the Receivables
Collateral does not contravene or conflict with any law, rule
or regulation or any contractual or other restriction,
limitation or encumbrance, and the sale or assignment of
Appendix-6
45
the Receivable and Receivable Collateral does not require the
consent of the Obligor;
(q) the Receivable and Receivables Collateral is in full force
and effect, constitutes the legal, valid and binding
obligation of the Obligor thereof enforceable against such
Obligor in accordance with its terms subject to the effect of
bankruptcy, fraudulent conveyance or transfer, insolvency,
reorganization, assignment, liquidation, conservatorship and
moratorium laws, is not, to the Borrowers' actual knowledge,
subject to any dispute, offset, counterclaim, defense or
assignment whatsoever;
(r) the Receivable relates to a Completed Unit and the
Receivables Collateral does not contravene in any material
respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations
relating to usury, retail installment sales, truth in
lending, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy) and with respect
to which no party thereto is in violation of any such law,
rule or regulation in any material respect if such violation
would impair the collectibility of such Receivable and
Receivable Collateral;
(s) the Receivable and Receivable Collateral satisfies all
applicable requirements of the Credit Policy and was acquired
by Borrowers in compliance with the underwriting guidelines
set forth therein and has not been modified in any respect
due to the deteriorative credit quality of the Obligor;
(t) as to which to the Seller's knowledge (i) no bankruptcy is
currently existing with respect to the Obligor and (ii) as to
which the Obligor is not insolvent;
(u) the Receivable shall not have an initial term to maturity of
more than 120 months;
(v) the Receivable has not been pledged as Collateral under this
Agreement for more than one year;
(w) the Receivable shall not have a contractual interest rate
less than 12.90% per annum;
(x) if a Resort is subject to a construction loan, the
construction lender shall have signed and delivered a
non-disturbance agreement (which may be contained in such
lender's mortgage) pursuant to which such construction lender
agrees not to foreclose on any Intervals relating to Pledged
Receivables; and
Appendix-7
46
(y) the Receivable shall meet the Minimum Credit Scoring
Standard.
ELIGIBLE RECEIVABLE. Shall mean Eligible Completed Unit Receivables
and Eligible Uncompleted Unit Receivables.
ELIGIBLE UNCOMPLETED UNIT RECEIVABLE. A Receivable in respect of an
Interval in and to an Uncompleted Unit at a Resort which satisfies all of the
following criteria:
(a) payments due under the Receivable (after the Receivable shall
have been released from any document or Payment Escrow in
respect thereof) shall be self-amortizing and payable in
monthly installments;
(b) the weighted average term to maturity of all Receivables
financed hereunder from the date when such receivable is
pledged to Lender as Collateral pursuant to this Agreement is
at least thirty-six (36) months at the time the Receivable is
pledged hereunder;
(c) as of the date of Funding, the Obligor thereunder has made a
cash down payment (in the Payment Escrow if required by
applicable law) of at least ten (10%) percent of the actual
purchase price of the Interval (which cash down payment may
be represented by the principal payments on such Receivable
since its date of origination) and no part of such payment
has been made or loaned to Obligor by Borrowers or an
Affiliate thereof;
(d) the weighted average interest rate of all Receivables
financed under this Agreement is not less than 13.90% per
annum at the time and inclusive of the Receivable to be
financed hereunder;
(e) no installment with respect to the Receivable (after the
Receivable shall have been released from any document or
Payment Escrow in respect thereof) is more than thirty (30)
days past due on a contractual basis at the time of such
release nor becomes more than sixty (60) days past due;
(f) the Obligor is not an Affiliate of the Borrowers; provided
that an Obligor may be related to or employed by the
Borrowers if such Receivables do not, in the aggregate,
exceed $1,000,000, but only if such Obligor purchases the
Interval on no less than the same terms and conditions
offered to any non-Affiliate purchaser; provided that solely
for the purposes of this clause (f), a relative of an
employee of the Borrowers (or any of their Affiliates) shall
not be deemed to
Appendix-8
47
be an "Affiliate".
(g) the Receivable (after the Receivable shall have been released
from any document or Payment Escrow in respect thereof) is
free and clear of adverse claims, liens and encumbrances and
is not currently, nor shall it (after such release) be
potentially in the future, subject to claims of rescission,
invalidity, unenforceability, illegality, defense, offset or
counterclaim;
(h) if the Receivable is evidenced by a promissory note separate
from the conditional sales contract, the Receivable (after
the Pledged Receivable shall have been released from any
document or Payment Escrow in respect thereof) is secured
directly by a first priority Purchase Money Mortgage or Deed
of Trust on the purchased Interval;
(i) if the Purchase Money Mortgage secures a Receivable, the
title to the Interval is insured under a mortgagee title
insurance policy in form and substance acceptable to Lender;
(j) no Receivable hereunder shall be in excess of $25,000 and no
Obligor shall be the payor of aggregate Pledged Receivables
herein and in the Purchase Facility in excess of $50,000;
(k) payments with respect to the Pledged Receivable are to be in
legal tender of the United States;
(l) at least 90% of the aggregate outstanding principal balance
of all Receivables arise from Obligors who are either
residents of the U.S. or Canada at the time the Receivable is
financed hereunder;
(m) all monthly payments on the Receivable (including, without
limitation, any payments held in the Payment Escrow) have
been made by the Obligor and not by Borrowers or any
Affiliate of Borrowers on the Obligor's behalf;
(n) the Receivable constitutes either "CHATTEL PAPER", a "GENERAL
INTANGIBLE" or an "INSTRUMENT" as defined in the Code as in
effect in all applicable jurisdictions;
(o) the Assignment of the Receivable and the Receivables
Collateral does not contravene or conflict with any law, rule
or regulation or any contractual or other restriction,
limitation or encumbrance, and the Assignment of the
Receivable and Receivable Collateral does not require the
consent of the
Appendix-9
48
Obligor, provided that any such Assignment shall be subject
to the terms of any document or Payment Escrow in respect of
such Receivable;
(p) the Receivable and Receivables Collateral after the
Receivable shall have been released from any document or
Payment Escrow in respect thereof is in full force and
effect, constitutes the legal, valid and binding obligation
of the Obligor thereof enforceable against such Obligor in
accordance with its terms subject to the effect of
bankruptcy, fraudulent conveyance or transfer, insolvency,
reorganization, assignment, liquidation, conservatorship and
moratorium laws, is after the Receivable shall have been
released from any document or Payment Escrow in respect
thereof is not to the Borrowers' actual knowledge, subject to
any dispute, offset, counterclaim, defense or assignment
whatsoever;
(q) the Receivable relates to an Uncompleted Unit at a Resort and
the Receivable and Receivables Collateral does not contravene
in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws,
rules and regulations relating to usury, retail installment
sales, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party
thereto is in violation of any such law, rule or regulation
in any material respect if such violation would impair the
collectibility of such Receivable and Receivable Collateral;
(r) the Receivable and Receivable Collateral satisfies all
applicable requirements of the Credit Policy and was acquired
by Borrowers in compliance with the underwriting guidelines
set forth therein and has not been modified in any respect
due to the deteriorative credit quality of the Obligor or
otherwise;
(s) as to which to the Seller's knowledge (i) no bankruptcy is
currently existing with respect to the Obligor and (ii) as to
which the Obligor is not insolvent;
(t) the Receivable shall not have an initial term to maturity of
more than 120 months;
(u) the Receivable has not been pledged under this Agreement for
more than one year;
(v) the Receivable shall not have a contractual interest rate
less than 12.90% per annum;
(w) a valid permanent certificate of occupancy in respect of the
Uncompleted
Appendix-10
49
Unit related to the Receivable shall have been issued within
365 days of the date on which such Receivable was initially
pledged to Lender under this Agreement;
(x) at the time of the initial pledge of the Receivable to Lender
under this Agreement, the construction of the Resort in which
the Uncompleted Unit related to such Receivable is located
shall have commenced, all permits and licensing in respect of
such construction shall have been obtained (including,
without limitation, all construction permits, all zoning,
density, accommodation and design approvals, all subdivision
approvals, all utility approvals and all pre-sale marketing
approvals and registrations) and all acquisition and
construction financing, if any, shall have been obtained,
shall be available and in place and shall be sufficient to
acquire and fully construct and furnish the Resort and all
amenities in respect thereof.
If at any time during which a Receivable shall be held in
document or Payment Escrow such Receivable would, in the
opinion of the Lender and without giving effect to such
Payment Escrow, be subject to any Adverse Claims, liens or
encumbrances, be subject to claims of rescission, invalidity,
unenforceability, illegality, defense, offset or
counterclaim, not be in full force and effect, not constitute
the legal, valid and binding obligation of the Obligor
thereunder, be subject to any dispute, offset, counterclaim
or defense whatsoever, contravene in any material respect any
laws, rules or regulations applicable thereto so as to
materially impair the collectibility of such Pledged
Receivable, such Pledged Receivable shall be deemed not to
have satisfied this definition of "ELIGIBLE UNCOMPLETED UNIT
RECEIVABLE."
After the Receivable shall have been released from any
document or Payment Escrow in respect thereof and as soon as
such Receivable satisfies the requirements of an "ELIGIBLE
COMPETED UNIT RECEIVABLE" and Borrowers certify the same in
writing to Lender, such Pledged Receivable shall no longer be
considered an "ELIGIBLE UNCOMPLETED UNIT RECEIVABLE."; and
(y) the Receivable shall meet the Minimum Credit Scoring
Standard.
ENVIRONMENTAL LAWS. Means and includes the following as now in effect
or hereafter amended: the Comprehensive Environmental Response Compensation and
Liability Act, ("CERCLA"), 42 U.S.C. Section 9601 et. seq.; the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901 et. SEQ.; the Toxic Substances Control Act
("TSCA"), 15 U.S.C. Section 2601, et. seq.; the Clean Air Act, 42 U.S.C.
Section 7401 ET. SEQ.; the Federal Water Pollution Control Act ("CLEAN WATER
ACT"), 33 U.S.C. Section 1251 et. seq.; the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Section 11001 et. seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et. seq.; the Atomic Energy Act, 42
U.S.C. Section 2011 et. seq.; the Safe Drinking Water Act, 42 U.S.C. Section
300f et. seq. and the state law
Appendix-11
50
equivalents; any so-called "Superfund" or "Superlien" law; and any statute,
ordinance, code, rule, regulation, order, decree or requirement under
international, federal, state, regional, provincial or local law (including,
without limitation, administrative orders and consent decrees) in effect and as
amended regulating, relating to or imposing liability or standards of conduct
concerning public health and safety, protection of the environment, or any
pollutant or contaminant or hazardous, toxic or dangerous substance, waste,
chemical or material, as now or any time hereafter may be existing.
EVENT OF BANKRUPTCY. A petition under any Chapter of Title 11 of the
United States Code or any similar law or regulation is filed by or against an
Obligor (and in the case of an involuntary petition in bankruptcy, such
petition is not discharged within sixty (60) days of its filing), or a
custodian, receiver or trustee for an Obligor is appointed, or an obligor makes
an assignment for the benefit of creditors, or obligor is adjudged insolvent by
any state or federal court of competent jurisdiction, or Obligor admits its
insolvency or inability to pay its debts as they become due or an attachment or
execution is levied against the Unit by a creditor of an Obligor.
EVENT OF DEFAULT. Has the meaning set forth in Section 8.1 of this
Agreement.
FISCAL MONTH. With respect to any Fiscal Year, the monthly fiscal
periods utilized by the Borrowers as of the date hereof which may not be
modified without the Lender's written consent, which consent will not be
unreasonably withheld.
FISCAL QUARTER. With respect to any Fiscal Year, the quarterly fiscal
periods utilized by the Borrowers as of the date hereof which may not be
modified without the Lender's written consent, which consent will not be
unreasonably withheld.
FISCAL YEAR. The annual fiscal periods utilized by the Borrowers as of
the date hereof which may not be modified without the Lender's written consent,
which consent will not be unreasonably withheld.
GAAP. Generally accepted accounting principles, applied on a
consistent basis, set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board which are applicable in the
circumstances as of the date in question; and the requisite that such
principles be applied on a consistent basis means that the accounting
principles in a current period are comparable in all material respects to those
applied in a preceding period, with any exceptions thereto noted.
GUARANTY. With respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any indebtedness, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
Appendix-12
51
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise
to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person
to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obligor.
HAZARDOUS MATERIALS. Means the following: hazardous substances;
hazardous wastes; polychlorinated biphenyls ("PCB'S") or any substance or
compound containing PCB's; asbestos or any asbestos-containing materials in any
form or condition; radon; any other radioactive materials including any source,
special nuclear or by-product material; petroleum, crude oil or any fraction
thereof which is liquid at standard conditions of temperature and pressure (60
degrees Fahrenheit and 14.7 pounds per square inch absolute); and any other
pollutant or contaminant or hazardous, toxic or dangerous chemicals, materials
or substances, as all such terms are defined by Environmental Laws.
INDEBTEDNESS. All payment obligations of Borrowers to Lender under the
Loan Documents.
INSURANCE PROCEEDS. Proceeds, paid by any insurer pursuant to any
insurance policy covering a Unit, Receivable or Receivables Collateral.
INTANGIBLE ASSET. A nonphysical, noncurrent right that gives Bluegreen
or any of its subsidiaries an exclusive or preferred position in the
marketplace including but not limited to a copyright, patent, trademark,
goodwill, organization costs, capitalized advertising cost, computer programs,
licenses for any of the preceding, government licenses (E.G., broadcasting or
the right to sell liquor), leases, franchises, mailing lists, exploration
permits, import and export permits, construction permits, and marketing quotas.
INTEREST RATE. A floating rate per annum equal to the Base Rate plus
2.75% (the
Appendix-13
52
aggregate rate referred to as the "INTEREST RATE"). "BASE RATE" shall mean the
rate published each business day in THE WALL STREET JOURNAL for deposits
maturing ninety (90) days after issuance under the caption "MONEY RATES, LONDON
INTERBANK OFFERED RATES (LIBOR)" as the same may be adjusted by the Statutory
Reserve Rate. The Interest Rate for each Fiscal Month shall be fixed based upon
the Interest Rate published prior to and in effect on the first (1st) Business
Day of such Fiscal Month. Interest shall be calculated based on a 360 day year
and charged for the actual number of days elapsed.
INTERVAL. With respect to any Resort or Additional Resort, an
undivided fee simple ownership interest as a tenant in common with respect to
any Unit in such Resort or Additional Resort, with a right to use such Unit, or
a Unit of such type, generally for one week annually, together with all
appurtenant rights and interests as more particularly described in the
Timeshare Documents.
LIEN. With respect to any Collateral, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
LOAN. The Thirty-five Million Dollar ($35,000,000) credit facility
described in this Agreement.
LOAN DOCUMENTS. Collectively, this Agreement, the Note, the Servicing
Agreement, the Structuring Fee Letter, the Resort Blanket Mortgages and any and
all other agreements, documents, instruments and certificates delivered or
contemplated to be delivered in connection with this Agreement, as such may be
amended, renewed, extended, restated or supplemented from time to time.
LOCKBOX BANK. Such banking institution selected by Borrowers and
approved by Lender to act as the depositary of payments on the Pledged
Receivables and the Pledged Receivables Collateral under the Lockbox Agreement.
LOCKBOX AGREEMENT. An agreement among Bluegreen Corporation, Lender
and Lockbox Bank providing for the receipt by Lockbox Bank of payments on the
Pledged Receivables and the Pledged Receivables Collateral and disbursement of
such payments to Lender.
LONDON BANKING DAY. Any day on which dealings in deposits in U.S.
Dollars are transacted in the London interbank market.
MANDATORY PREPAYMENT. Any prepayment required by Section 1.7(b) of
this Agreement.
MATERIAL ADVERSE EFFECT. With respect to any event or circumstance, a
material adverse
Appendix-14
53
effect on:
(a) the business, assets, financial condition or operations of
Borrowers and their respective subsidiaries, taken as a
whole;
(b) the ability of Borrowers or its direct or indirect
subsidiaries to perform their respective obligations under
this Agreement or any other Loan Document;
(c) the validity, enforceability or collectibility against
Borrowers of this Agreement or the other Loan Documents;
(d) the status, existence, perfection or priority of (i) the
Lender's security interest in the Collateral, or (ii)
Borrowers' ownership interest in the Pledged Receivables or
Pledged Receivables Collateral; or
(e) the validity, enforceability or collectibility of the Pledged
Receivables or Pledged Receivables Collateral.
MATURITY DATE. June 26, 2000.
MAXIMUM EXPOSURE. The lesser of (a) $35,000,000, or (b) ninety-five
percent (95%) of the outstanding principal balance of all Pledged Receivables;
PROVIDED, HOWEVER, notwithstanding anything to the contrary contained herein
the outstanding principal amount of Advances made with respect to Eligible
Uncompleted Unit Receivables shall not in the aggregate represent more than the
lesser of $5,000,000 or thirty percent (30%) of the aggregate principal amount
of Advances outstanding hereunder, and any such excess shall require a
prepayment of the Loan or the pledge of Eligible Receivables consistent with
Section 1.7(b) hereof.
MINIMUM CREDIT SCORING STANDARD. The Receivable does not have a "20,"
"25" or "99" designation under the Credit Policy provided that no more than
thirty percent (30%) of the Receivables shall have a designation of "10."
Notwithstanding the preceding sentence, any Receivable shall satisfy the
Minimum Credit Scoring Standard if the Obligor relating to such Receivable has
made the aggregate required payments over the most recent twelve (12) months
with respect to the Receivable.
MONTHLY REPORTS. The monthly reports required pursuant to Section
5.4(a) of this Agreement.
NOTE. The promissory note evidencing the Loan executed and delivered
by Borrowers to Lender concurrently herewith and attached hereto as EXHIBIT A.
OBLIGOR. Any Person who purchases one or more Intervals and finances
the purchase of the same.
Appendix-15
54
PAYMENT DATE. Wednesday of each week; PROVIDED, HOWEVER, in the event
such date is not a Business Day the next succeeding Business Day.
PAYMENT ESCROW. An escrow into which payments made by an Obligor under
an Eligible Uncompleted Unit Receivable are required to be made pursuant to
applicable state law.
PERMITTED ADVERSE CLAIMS means (a) any Adverse Claim created under any
Loan Document; (b) any Adverse Claim for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without
penalty, provided that no notice of Adverse Claim has been filed or recorded
under the Code of any of the states wherein the Resorts or Additional Resorts
are located; (c) carriers, warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Adverse Claims arising in the
ordinary course of business which are not delinquent or remain payable without
penalty; and (d) Permitted Liens.
PERMITTED LIENS. Each of the liens listed on EXHIBIT H attached
hereto.
PERSON. Natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
PLEDGED RECEIVABLES. At any date of determination, (i) all Eligible
Receivables against which Lender shall have made an Advance which remains
outstanding as of such date, and (ii) all Receivables which are no longer
Eligible Receivables and for which a mandatory prepayment under Section
1.7(b)(i) is required and has not occurred; provided, however, in no event
shall the Receivables described in this clause (ii) be utilized in the
definition of "Availability" or in the definition of "Maximum Exposure" in
which case the references to "Pledged Receivable" therein shall be only to
Eligible Receivables.
PLEDGED RECEIVABLES COLLATERAL. Receivables Collateral relating to
Pledged Receivables.
PREFERRED STOCK. Shall mean stock that takes priority over common
stock in regard to the payment of dividends.
PROJECT INDEBTEDNESS. All payment obligations of Borrowers under or in
respect of any of the Project Loan Documents.
PROJECT LOAN. The Loan which may be made by Lender pursuant to the
Project Loan Agreement by and between Lender and Borrowers.
PROJECT LOAN AGREEMENT. The Agreement by and between Lender and
Borrowers pursuant to which the Project Loan may be made.
PROJECT LOAN COLLATERAL. Each of the Project Loan Mortgages associated
with the Project
Appendix-16
55
Loans.
PROJECT LOAN MORTGAGES. The mortgages and deeds of trust made by
Borrowers for the benefit of Lender required pursuant to the Project Loan
Agreement.
PURCHASE DOCUMENTS. Any purchase agreement and related sale and escrow
documents executed and delivered by an Obligor to any Borrower or the
Additional Resort Owners with respect to the purchase of an Interval which is
the subject of a Pledged Receivable.
PURCHASE FACILITY. The Asset Purchase Agreement dated June 26, 1998 by
and among Bluegreen Receivables Finance Corporation III, as seller, BRFC III
Deed Corporation, as deed custodian solely for the benefit of ▇▇▇▇▇▇ Financial,
Inc., ▇▇▇▇▇▇ Financial, Inc., as purchaser, Bluegreen Corporation, as
originator and servicer, and U.S. Bank National Association, as cash
administrator.
PURCHASE LIMIT. $100,000,000, as such amount may be adjusted from time
to time pursuant to Section 2.12(b) of the Purchase Facility.
PURCHASE MONEY MORTGAGE. Any mortgage or deed of trust executed and
delivered by an Obligor to Borrowers or an Additional Resort Owner with respect
to the purchase of an Interval, encumbering all of the right, title and
interest of each such Obligor in and to the purchased Interval as security for
the Obligor's obligations under any Receivable.
REASSIGNMENT OF PLEDGED RECEIVABLES. The Reassignment of Receivables
and Receivables Collateral in the form set forth on EXHIBIT C of this
Agreement.
RECEIVABLES. A conditional sale contract or note and its related
security, including but not limited to any Purchase Money Mortgage, Deed of
Trust or security interest in the related Interval (any accessions thereto) and
any and all rights to payments thereunder.
RECEIVABLES COLLATERAL. The Receivables, including: (i) all interest,
finance charges, and principal received on or with respect to the Receivables;
(ii) the Receivables Files; (iii) property which secured a Receivable and which
has been acquired by repossession or otherwise; (iv) all rights to Insurance
Proceeds and Liquidation Proceeds; and (v) the proceeds of the foregoing and
the rights to enforce the foregoing.
RECEIVABLES FILE. With respect to a Receivable, such Receivable; the
Assignment of such Receivable; the Purchase Money Mortgage or UCC financing
statement, if any, evidencing that the security interest granted under such
Receivable has been perfected under applicable state law; the original of any
assumption agreement or any modification extension or refinancing agreement;
the application of the related Obligor to obtain the financing extended by such
Receivable; and the Purchase Documents.
REGULATORY CHANGE means relative to any Affected Party:
Appendix-17
56
(a) any change in (or the adoption, implementation, change in the
phase-in or commencement of effectiveness of) any:
(i) United States Federal or state law or foreign law
applicable to such Affected Party,
(ii) regulation, interpretation, directive, requirement
or request (whether or not having the force of law)
applicable to such Affected Party of (A) any court
or government authority charged with the
interpretation or administration of any law referred
to in clause (a)(i), or of (B) any rating agency,
fiscal, monetary or other authority having
jurisdiction over such Affected Party, or
(iii) GAAP or regulatory accounting principles applicable
to such Affected Party and affecting the application
to such Affected Party of any law, regulation,
interpretation, directive, requirement or request
referred to in clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive,
requirement, request or accounting principles referred to in
clause (a)(i), (a)(ii) or (a)(iii) above.
REPAYMENT PRICE. With respect to any Receivable, 95% of the
outstanding principal amount of the Receivable at the time of any prepayment of
the same under Section 1.7(a) or such lesser amount as may be equal to
outstanding Advances provided Advances do not exceed Maximum Exposure.
RESORTS. Those certain timeshare vacation resorts commonly known as
Shore Crest (Myrtle Beach, South Carolina), Harbour Lights (Myrtle Beach, South
Carolina), Mountain Loft (Gatlinburg, Tennessee), Laurel Crest (Pigeon Forge,
Tennessee), Falls Village (Branson, Missouri) as more particularly described on
EXHIBIT M.
RESORT BLANKET MORTGAGE. Each of the mortgages and deeds of trust made
by Borrowers, or the Additional Resort Owners, for the benefit of Lender,
encumbering at each Resort or Additional Resort listed on EXHIBIT I the
Intervals which are the subject of a Pledged Receivable.
SERVICER. Initially means Bluegreen Corporation, a Massachusetts
corporation, together with its successors and assigns.
Appendix-18
57
SERVICING AGREEMENT. A servicing agreement between Lender, Borrowers
and the Servicer approved by Lender providing for the servicing of the Pledged
Receivables and the Pledged Receivables Collateral in the form attached hereto
as EXHIBIT F.
STATUTORY RESERVE RATE. A fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board, for advances (currently referred to as "EUROCURRENCY
LIABILITIES" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D and shall be subject to
such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to the Lender
under such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
STRUCTURING FEE LETTER. That certain letter agreement between
Borrowers and Lender dated as of the date of this Agreement, a copy of which is
attached hereto as EXHIBIT K, setting forth therein the structuring fees
required to be paid by Borrowers to Lender.
SUBORDINATED INDEBTEDNESS. Indebtedness of Borrowers or its
subsidiaries, whether direct or indirect, to non-affiliated Persons which is
subordinated to the Indebtedness on a basis acceptable to the Lender. No
indebtedness shall be considered Subordinated Indebtedness unless the
obligations of each of the Borrowers or its subsidiaries (whether direct,
indirect or contingent) is subordinated on a basis acceptable to the Lender.
SUCCESSOR SERVICER. Any Servicer other than the Borrowers or an
Affiliate of the Borrowers appointed pursuant to the terms of the Servicing
Agreement.
TANGIBLE NET WORTH. Consolidated Net Worth minus Intangible Assets
plus Subordinated Indebtedness.
TERM. Has the meaning set forth in Section 1.2 of this Agreement.
TIME SHARE ASSOCIATION. A not-for-profit corporation under applicable
state law which is responsible for operating and maintaining a Resort or an
Additional Resort pursuant to the terms of the Declaration and/or Time Share
Declaration in respect thereof.
TIME SHARE DECLARATION. With respect to each Resort, the Time Share
Declaration set forth on EXHIBIT L.
TIME SHARE DOCUMENTS. With respect to any Resort, the documents
relating to the sale of Intervals by Borrowers, including without limitation
the documents on EXHIBIT L.
TOTAL INDEBTEDNESS. With respect to the Borrowers and its subsidiaries
means, at any
Appendix-19
58
time, without duplication,
(a) its liabilities for borrowed money (exclusive of Advances
hereunder and Subordinated Indebtedness) and its redemption
obligations in respect of mandatorily redeemable Preferred
Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including all
liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such
property);
(c) all Capitalized Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such
liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for
its account by banks and other financial institutions
(whether or not representing obligations for borrowed money);
(f) Interest Rate Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (f) hereof.
UNCOMPLETED UNIT. Any Unit that is not a Completed Unit.
UNIT. One individual air-space condominium unit within a Resort or
Additional Resort, together with all furniture, fixtures and furnishings
therein, and together with any and all interests in common elements appurtenant
thereto, as provided in a Declaration.
Appendix-20
59
EXHIBIT A
NOTE
$35,000,000.00 October ___, 1998
FOR VALUE RECEIVED, BLUEGREEN CORPORATION AND BLUEGREEN RESORTS, INC.
("MAKERS") whose addresses are ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
jointly and severally promise to pay to the order of ▇▇▇▇▇▇ FINANCIAL, INC., a
Delaware corporation, and its successors and assigns ("HOLDER") the sum of up
to THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000 OR, IF LESS, THE
AGGREGATE UNPAID AMOUNT OF ALL ADVANCES SHOWN ON THE SCHEDULE ATTACHED HERETO),
together with all other amounts added thereto pursuant to this Note or
otherwise payable to Holder (the "LOAN") (or so much thereof as may from time
to time be outstanding), together with interest thereon as hereinafter set
forth, payable in lawful money of the United States of America. Payments shall
be made to Holder at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (or such other address as Holder may hereafter designate in writing to
Makers).
The repayment of the Loan evidenced by this Note is secured by that
certain Loan and Security Agreement of even date herewith (the "AGREEMENT")
pursuant to which Makers have granted Lender a first priority lien on the
Collateral as of the Closing Date. This Note, the Agreement, and any other
documents evidencing or securing the Loan or executed in connection therewith,
and any modification, renewal or extension of any of the foregoing are
collectively called the "LOAN DOCUMENTS".
This Note has been issued pursuant to the Agreement, and all of the
terms, covenants and conditions of the Agreement (including all Exhibits
thereto), and all other instruments evidencing or securing the indebtedness
hereunder are hereby made a part of this Note and are deemed incorporated
herein in full. Defined terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
1. PRINCIPAL AND INTEREST.
Principal and Interest shall be payable as provided in the Agreement.
2. PAYMENT.
Makers shall make payments on the Loan as set forth in the Agreement.
If not sooner repaid, the entire outstanding principal amount of the Loan,
together with all accrued but unpaid interest, fees, and charges shall be
payable by the Maturity Date.
▇-▇
▇▇
▇. PREPAYMENT.
Makers may prepay the Loan as provided in the Agreement.
4. DEFAULT.
4.1 EVENTS OF DEFAULT.
Events of Default shall be as described in Section 7.1 of the
Agreement.
4.2 REMEDIES.
So long as an Event of Default remains outstanding and subject to the
terms of the Agreement: (a) interest shall accrue at a rate equal to the
Interest Rate plus two percent (2%) per annum; (b) Holder may, at its option
and without notice (such notice being expressly waived) except as provided in
the Agreement, declare the Loan immediately due and payable; and (c) Holder may
pursue all rights and remedies available under the Agreement, or any other Loan
Documents. Holder's rights, remedies and powers, as provided in this Note, and
the other Loan Documents are cumulative and concurrent, and may be pursued
singly, successively or together against Makers, the security described in the
Loan Documents, and any other security given at any time to secure the payment
hereof, all at the sole discretion of Holder. Additionally, Holder may resort
to every other right or remedy available at law or in equity without first
exhausting the rights and remedies contained herein, all in Holder's sole
discretion. Failure of Holder, for any period of time or on more than one
occasion, to exercise its option to accelerate the Maturity Date shall not
constitute a waiver of the right to exercise the same at any time during the
continued existence of any Event of Default or any subsequent Event of Default.
If any attorney is engaged: (i) to collect the Loan or any sums due
under the Loan Documents whether or not legal proceedings are thereafter
instituted by Holder; (ii) to represent Holder in any bankruptcy,
reorganization, receivership or other proceedings affecting creditors' rights
and involving a claim under this Note; (iii) to protect the liens and security
interests of the Loan Agreement or any of the Loan Documents; (iv) to foreclose
on the Collateral; (v) to represent Holder in any other proceedings whatsoever
in connection with the Agreement or any of the Loan Documents including post
judgment proceedings to enforce any judgment related to the Loan Documents; or
(vi) in connection with seeking an out-of-court workout or settlement of any of
the foregoing, then Makers shall pay to Holder all costs, reasonable attorneys'
fees and expenses in connection therewith, in addition to all other amounts due
hereunder.
5. LATE CHARGE.
If payments of principal and/or interest, or any other amounts under
the Loan Documents are not timely made or remain overdue for a period of ten
(10) days, Makers, without notice or demand by Holder, promptly shall pay an
amount ("LATE CHARGE") equal to two percent (2%) of
A-2
61
each delinquent payment; provided, however, the Late Charge shall not be
applicable in the event the Default Rate shall be accruing; provided, further,
that nothing in this paragraph 5 shall give Holder the option to apply the Late
Charge if Holder is entitled to cause the Default Rate to accrue.
6. GOVERNING LAW; SEVERABILITY.
This Note shall be governed by and construed in accordance with the
internal laws of the State of Illinois. The invalidity, illegality or
unenforceability of any provision of this Note shall not affect or impair the
validity, legality or enforceability of the remainder of this Note, and to this
end, the provisions of this Note are declared to be severable.
7. WAIVER.
To the extent permitted by law, Makers, for themselves and all
endorsers, guarantors and sureties of this Note, and their heirs, successors
and assigns, legal representatives, hereby waive presentment for payment,
demand, notice of nonpayment, notice of dishonor, protest of any dishonor,
notice of protest and protest of this Note, and all other notices in connection
with the delivery, acceptance, performance, default or enforcement of the
payment of this Note, and agree that their respective liability shall be
unconditional and without regard to the liability of any other party and shall
not be in any manner affected by any indulgence, extension of time, renewal,
waiver or modification granted or consented to by Holder. Makers, for
themselves and all endorsers, guarantors and sureties of this Note, and their
heirs, legal representatives, successors and assigns, hereby consent to every
extension of time, renewal, waiver or modification that may be granted by
Holder with respect to the payment or other provisions of this Note, and to the
release of any makers, endorsers, guarantors or sureties, and of any collateral
given to secure the payment hereof, or any part hereof, with or without
substitution, and agrees that additional makers, endorsers, guarantors or
sureties may become parties hereto without notice to Makers or to any endorser,
guarantor or surety and without affecting the liability of any of them.
8. SECURITY, APPLICATION OF PAYMENTS.
This Note is secured by the liens, encumbrances and obligations
created hereby and by the other Loan Documents. Payments will be applied to any
fees, expenses or other costs Makers are obligated to pay under this Note or
the other Loan Documents, to interest due on the Loan and to the outstanding
principal balance of the Loan, in any order that Holder, at its sole option,
may deem appropriate.
9. MISCELLANEOUS.
9.1 AMENDMENTS.
This Note may not be terminated or amended orally, but only by a
termination or
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amendment in writing signed by Holder.
9.2 LAWFUL RATE OF INTEREST.
The maximum amount of interest paid or to be paid to Holder pursuant
to this Note or any Loan Document shall be governed by the Agreement.
9.3 CAPTIONS.
The captions of the Paragraphs of this Note are for convenience of
reference only and shall not be deemed to modify, explain, enlarge or restrict
any of the provisions hereof.
9.4 NOTICES.
Notices shall be given under this Note in conformity with the terms
and conditions of the Agreement.
9.5 JOINT AND SEVERAL.
The obligations of Makers under this Note shall be joint and several
obligations of each Maker and of each Maker's heirs, personal representatives,
successors and assigns.
9.6 TIME OF ESSENCE.
Time is of the essence of this Note and the performance of each of the
covenants and agreements contained herein.
10. VENUE.
MAKERS HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE. MAKERS HEREBY
IRREVOCABLY APPOINT AND DESIGNATE CSC, WHOSE ADDRESS IS MAKERS, ▇/▇ ▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, AS ITS DULY AUTHORIZED AGENT FOR
SERVICE OF LEGAL PROCESS AND AGREE THAT SERVICE OF SUCH PROCESS UPON SUCH PARTY
SHALL CONSTITUTE PERSONAL SERVICE OF PROCESS UPON MAKERS. IN THE EVENT SERVICE
IS UNDELIVERABLE BECAUSE SUCH AGENT MOVES OR CEASES TO DO BUSINESS IN CHICAGO,
ILLINOIS, MAKERS SHALL, WITHIN TEN (10) DAYS AFTER HOLDER'S REQUEST, APPOINT A
SUBSTITUTE AGENT (IN CHICAGO, ILLINOIS) ON THEIR BEHALF AND WITHIN SUCH PERIOD
NOTIFY HOLDER OF SUCH APPOINTMENT. IF SUCH SUBSTITUTE AGENT IS NOT TIMELY
APPOINTED, HOLDER SHALL, IN ITS SOLE DISCRETION, HAVE THE RIGHT TO DESIGNATE A
SUBSTITUTE AGENT UPON FIVE (5) DAYS NOTICE TO MAKERS. MAKERS HEREBY
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WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION
BROUGHT AGAINST THEM BY HOLDER ON THE LOAN DOCUMENTS OR RELATED LOAN DOCUMENTS
IN ACCORDANCE WITH THIS PARAGRAPH.
11. SALE OF LOAN.
Subject to the terms of the Agreement, Holder, at any time and without
the consent of Makers, may grant Participations in or sell, transfer, assign
and convey all or any portion of its right, title and interest in and to the
Loan, this Note, the Agreement and the other Loan Documents, any guaranties
given in connection with the Loan and any Collateral given to secure the Loan.
12. JURY TRIAL WAIVER.
MAKERS, AND HOLDER BY ITS ACCEPTANCE OF THIS NOTE, HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR
RELATED TO, THE SUBJECT MATTER OF THIS NOTE AND THE BUSINESS RELATIONSHIP THAT
IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
MADE BY MAKERS AND BY HOLDER, AND MAKERS ACKNOWLEDGE THAT NEITHER HOLDER NOR
ANY PERSON ACTING ON BEHALF OF HOLDER HAS MADE ANY REPRESENTATIONS OF FACT TO
INCLUDE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT. MAKERS AND HOLDER ACKNOWLEDGE THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT MAKERS AND
HOLDER HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS NOTE AND THAT
EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. MAKERS AND HOLDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED
(OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS NOTE AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.
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IN WITNESS WHEREOF, Makers have executed this Note or have caused the
same to be executed by its duly authorized representatives as of the date set
first forth above.
MAKERS:
BLUEGREEN CORPORATION
By:
----------------------------------
Printed Name:
--------------------
Title:
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BLUEGREEN RESORTS, INC.
By:
----------------------------------
Printed Name:
--------------------
Title:
---------------------------
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