SALE AND SERVICING AGREEMENT
Dated as of June 29, 2001
among
BLUEGREEN RECEIVABLES FINANCE CORPORATION V,
as Depositor
BXG RECEIVABLES NOTE TRUST 2001-A,
as Issuer
BLUEGREEN CORPORATION,
as Seller and Servicer
CONCORD SERVICING CORPORATION,
as Backup Servicer
VACATION TRUST, INC.,
as Club Trustee,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Indenture Trustee and Custodian
BXG RECEIVABLES NOTE TRUST 2001-A
ASSET BACKED NOTES, SERIES 2001-A
SALE AND SERVICING AGREEMENT dated as of June 29, 2001 by and among BXG
RECEIVABLES NOTE TRUST 2001-A, a Delaware business trust (the "Issuer" or the
"Trust"), BLUEGREEN RECEIVABLES FINANCE CORPORATION V, a Delaware corporation
(the "Depositor"), BLUEGREEN CORPORATION, a Massachusetts corporation, in its
capacities as the Seller and the Servicer (respectively, together with its
permitted successors and assigns in such capacities, the "Seller" or the
"Servicer"), CONCORD SERVICING CORPORATION, an Arizona corporation, in its
capacity as Backup Servicer (together with its successors and assigns in such
capacity, the "Backup Servicer"), Vacation Trust, Inc., a Florida corporation,
as Club Trustee under the Club Trust Agreement (the "Club Trustee"), and U.S.
BANK TRUST NATIONAL ASSOCIATION, a national banking association, in its capacity
as the indenture trustee on behalf of the Owners of the Notes (together with its
successors and assigns in such capacity, the "Indenture Trustee") and in its
capacity as Custodian under the Custodial Agreement (together with its
successors and assigns in such capacity, the "Custodian").
WHEREAS, the Seller is engaged in the business of originating, purchasing
and servicing contracts and mortgage loans secured by time share Intervals (as
defined herein);
WHEREAS, the Seller desires to sell to the Depositor and the Depositor
desires to purchase from the Seller, and the Depositor desires to sell to the
Issuer and the Issuer desires to purchase from the Depositor, from time to time,
certain contracts and mortgage loans and certain monies received with respect
thereto after the applicable Cut-Off Date or Additional Cut-Off Date; and
WHEREAS, the Club Trustee is a limited purpose entity which, on behalf of
the Beneficiaries, holds title to certain Intervals and Deeds relating to
Receivables sold pursuant to this Agreement; and
WHEREAS, the Servicer has agreed to service the Receivables, in accordance
with the terms of this Agreement; and
WHEREAS, Concord Servicing Corporation is willing to serve as Backup
Servicer hereunder; and
WHEREAS, U.S. Bank Trust National Association is willing to serve as
Custodian under the Custodial Agreement and Indenture Trustee under the
Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Issuer, the Depositor, the Seller, the Servicer, the
Backup Servicer, the Custodian, and the Indenture Trustee hereby agree as
follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.1. Definitions. For all purposes of this Agreement, the following
terms shall have the meanings set forth below: Except as otherwise specified
herein or as the context may
otherwise require, for all purposes of this Agreement, capitalized terms used
but not otherwise defined herein have the meanings set forth in the Indenture.
"Accommodation": As defined in the Club Trust Agreement.
"Account": Any account established in accordance with Section 3.1 hereof.
"Addition Agreement": As defined in Section 2.5.
"Additional Cut-Off Date": With respect to any Addition Date the 15th day
of the month immediately preceding such Addition Date.
"Additional Receivable": Each Receivable which pursuant to Section 2.5 is
included as an Additional Receivable and Substitute Receivables.
"Additional Resorts": Those certain timeshare vacation resorts which the
Agent may approve in the future and with respect to which Receivables may be
purchased under this Agreement, which written approval shall be in the Agent's
reasonable discretion and for which the Seller and the Depositor shall provide
the closing materials described in Exhibit I-2 to Schedule III hereto.
"Addition Date": Any date on which Additional Receivables are conveyed to
the Issuer pursuant to Section 2.5, such date not to be later than the Facility
Termination Date, including the Initial Addition Date.
"Addition Date Notice": The Addition Date Notice, substantially in the form
of Exhibit A attached hereto and delivered pursuant to Section 2.5 hereof.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent": Credit Suisse First Boston, New York Branch, in its capacity as
agent for the purchasers parties to the Note Purchase Agreement and its
successors and assigns in such capacity.
"Aggregate Outstanding Receivable Balance": With respect to any group of
Receivables as of any date, the sum of the outstanding Receivable Balances of
all such Receivables in such group as of such date.
"Agreement": This Sale and Servicing Agreement, as it may be amended from
time to time, including the Exhibits and Schedules hereto.
"Aruba Receivables": A Receivable relating to the Resort commonly known as
LaCabana Beach and Racquet Club.
-2-
"Asset Pool": At any time, all then outstanding Assets which have been
conveyed to the Trust under this Agreement.
"Assets": As defined in Section 2.3 of this Agreement.
"Assignment": With respect to the Receivables, the original instruments of
assignment of such Receivables in recordable form by the Seller in blank or in
the name of the Indenture Trustee on behalf of the Owners.
"Authorized Officer": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon, such Person; with respect to the
Depositor or the Servicer, initially including those individuals whose names
appear on the lists of Authorized Officers delivered on or before the Initial
Addition Date; with respect to the Indenture Trustee or Custodian, any officer
assigned to the Corporate Trust Division (or any successor thereto), including
any Vice President, Assistant Vice President, Trust Officer, any Assistant
Secretary, any trust officer or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this Agreement.
"Available Funds": As to any Payment Date, the sum of all amounts described
in clauses (i) through (vii) inclusive, of Section 4.2(b) received by the
Servicer (including any amounts paid by the Servicer and the Seller and
excluding any amounts not required to be deposited in the Note Account pursuant
to Section 4.2(b) or withdrawn by the Indenture Trustee or the Servicer pursuant
to Sections 4.3 (b), (c), (d), (e) or (f) in respect of the Receivables) during
the related Collection Period. No amount included in this definition by virtue
of being described by any component of the definition thereof shall be included
twice by virtue of also being described by any other component or otherwise.
"Backup Servicer": Concord Servicing Corporation, an Arizona corporation,
and any successor hereunder.
"Backup Servicing Agreement": The Backup Servicing Agreement dated as of
June 29, 2001, among the Issuer, the Depositor, the Servicer, Credit Suisse
First Boston, New York Branch, as agent. the Backup Servicer and the Indenture
Trustee, as the same may be amended, supplemented or otherwise modified from
time to time.
"Backup Servicing Fee": As defined in the Backup Servicing Agreement.
"Beneficiary": As defined in the Club Trust Agreement.
"BIF": The Bank Insurance Fund, as from time to time constituted, created
under the Financial Institutions Reform, Recovery and Enhancement Act of 1989,
or, if at any time after the execution of this Agreement the Bank Insurance Fund
is not existing and performing duties now assigned to it, the body performing
such duties on such date.
"Business Day": Any day other than (i) a Saturday or a Sunday or (ii) a day
on which commercial banking institutions in the states of Delaware, New York,
Massachusetts or the state
-3-
in which the Corporate Trust Office is located are authorized or obligated by
law or executive order to be closed.
"Capital Stock": With respect to a Person, any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, but excluding any debt securities convertible into such equity.
"Carry-Forward Amount": As to any Payment Date, the sum of (i) the amount,
if any, by which (x) the Current Interest for the immediately preceding Payment
Date exceeded (y) the amount of the actual distribution made to the Owners of
the Notes on such immediately preceding Payment Date pursuant to Section
3.2(a)(iv) or 3.2(b)(iv) hereof plus (ii) 30 days' interest on such excess at
the Base Rate (as defined and calculated in the Note Purchase Agreement) plus
1.0% per annum to the extent permitted by law.
"Charge Card Fee Payment": With respect to each payment made by an Obligor
by use of a credit card, the aggregate of all processing and transaction fees
deducted from such payment.
"Closing Date": June 29, 2001.
"Club": The club formed pursuant to the Club Trust Agreement as well as any
other club approved by the Trust.
"Club Management Agreement": The Amended and Restated Management Agreement
between Bluegreen Resorts Management, Inc. and Vacation Trust, Inc. dated as of
May 18, 1994, as amended from time to time.
"Club Managing Entity": Bluegreen Resorts Management, Inc., a Delaware
corporation, in its capacity as manager of the Club and owner of the Club's
reservation system and its permitted successors and assigns.
"Club Trust Agreement": Collectively, that certain Bluegreen Vacation Club
Amended and Restated Trust Agreement, dated as of May 18, 1994, among Bluegreen
Vacations Unlimited, Inc., the Club Trustee, Bluegreen Resorts Management, Inc.
and Bluegreen Vacation Club, Inc., as amended, restated or otherwise modified
from time to time, set forth on Exhibit B to this Agreement together with all
other agreements, documents and instruments governing the operation of the Club.
"Club Trustee": Vacation Trust, Inc., a Florida corporation, in its
capacity as trustee under the Club Trust Agreement and its permitted successors
and assigns.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to each Payment Date, the period
commencing on the sixteenth (16th) day of the second month preceding the month
of such Payment Date and ending on the fifteenth (15th) day of the month
immediately preceding the month of such Payment Date; provided that the
Collection Period with respect to the initial Payment Date shall commence on
-4-
the day after the initial Cut-Off Date and end on the fifteenth day of the month
prior to the first Payment Date.
"Collection Policy":. The Collection Policy attached hereto as Exhibit C,
as amended or supplemented from time to time with the prior written consent of
the Agent.
"Collections": With respect to any Receivable and related Assets, all cash
collections and other cash proceeds of such Assets received after the Cut-Off
Date.
"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.
"Computer Disk": The computer disk generated by the Servicer which provides
information relating to the Receivables and which is used by the Servicer in
servicing the Receivables conveyed to the Depositor pursuant to this Agreement
(and any Addition Agreement or Substitution Agreement), and includes the master
file and the history file as well as servicing information with respect to the
Receivables.
"Consolidated Net Worth": On a consolidated basis for Bluegreen and its
subsidiaries, at any date, (i) the sum of (a) capital stock taken at par or
stated value plus (b) capital of Bluegreen in excess of par or stated value
relating to capital stock plus (c) retained earnings (or minus any retained
earning deficit) of Bluegreen minus (ii) the sum of treasury stock, capital
stock subscribed for and unissued and other contra-equity accounts, all
determined in accordance with GAAP.
"Corporate Trust Office": The meaning specified in the Indenture.
"Credit Policy": The Seller's credit policy or policies and practices,
existing on the date hereof and attached hereto as Exhibit D, as amended,
supplemented or otherwise modified and in effect from time to time in compliance
with the terms of the Note Purchase Agreement.
"Current Interest": With respect to any Payment Date, the Note Monthly
Interest with respect to the related Interest Period plus the related
Carry-Forward Amount.
"Custodial Agreement": That certain Custodial Agreement dated as of June
29, 2001 by and among the Indenture Trustee, the Agent, the other Persons from
time to time parties thereto, the Issuer, the Custodian and Bluegreen
Corporation, as the same may be amended, supplemented or otherwise modified from
time to time providing for the custody and maintenance of the Receivables
Documents relating to the Receivables.
"Custodian": As defined in recitals.
"Cut-Off Date": With respect to each Purchased Receivable (including
Additional Receivables), the date specified in the related List of Receivables,
after which Collections on such Purchased Receivable are to constitute part of
the Asset Pool.
-5-
"Cut-Off Date Principal Balance": As to any Receivable, the original
principal amount of such Receivable minus all payments applied to reduce such
original principal amount on or before the Cut-Off Date or Additional Cut-Off
Date, as the case may be.
"Deeds": The writing evidencing title in the Club Trustee on behalf of the
Beneficiaries referred to in, and subject to the other provisions of, the Club
Trust Agreement, with respect to Intervals relating to Receivables.
"Defaulted Receivable": A Receivable in the Asset Pool as to which the
earlier of the following shall have occurred (i) the Servicer has determined in
its sole discretion, in accordance with its customary and usual practices, that
such Receivable is not collectible, or (ii) all or part of any payment due
thereunder is 90 days or more Delinquent.
"Default Ratio (Serviced)": As of any Test Date, the product of (i) 12 and
(ii) the ratio, (expressed as a percentage) the numerator of which is the
aggregate outstanding principal balance of all Tested Assets which became
defaulted during the related Fiscal Month and, pursuant to the Servicer's
procedures, were placed into inventory and made available for re-sale (less any
reinstatements), and the denominator of which is the aggregate outstanding
principal balance of all Tested Assets as of the end of such Fiscal Month.
"Defective Receivable": Any Receivable subject to repurchase by the Seller
pursuant to Section 2.1 or 2.2.
"Delinquency Ratio (Serviced)": With respect to any Test Date, the ratio
(expressed as a percentage) of (i) the aggregate outstanding receivables balance
of all Tested Assets that were 30 days Delinquent or greater (excluding Test
Assets that were included in the calculation of Default Ratio (Serviced) and are
serviced by the Servicer divided by (ii) the aggregate outstanding receivables
balance of all such Test Assets, in each case as of the last day of the related
Fiscal Month.
"Delinquent": A Receivable is Delinquent if, with respect to such
Receivable, any payment thereon is not made by the Obligor by the close of
business on the related Due Date. A Receivable is "30 days Delinquent" if such
payment has not been received by the close of business on the 30th day following
the related Due Date. By way of example, an Obligor whose Due Date is April 1
and did not make such payment as of the close of business on May 1 (30 days past
the related Due Date) would be considered "30 days Delinquent" as of the open of
business on May 2nd.
"Delinquent Receivable": Any Receivable, other than a Defaulted
Receivables, that is Delinquent 31 days or more.
"Deposit Amount": With respect to any substitution of Receivables pursuant
to Section 2.5, the positive excess, if any, of (i) the Aggregate Outstanding
Receivable Balance of the Replaced Receivables over (ii) the Aggregate
Outstanding Receivable Balance as of the related Cut-Off Date of the Receivables
being transferred to the Asset Pool on any Business Day in respect of such
substitution.
-6-
"Depositor": Bluegreen Receivables Finance Corporation V, a Delaware
corporation, or any permitted successor or assign.
"Determination Date": With respect to any Payment Date, the day which is
three (3) Business Days prior to such Payment Date.
"Due Date": With respect to any Receivable, the day of the month on which
the Monthly Payment is due from the Obligor exclusive of any days of grace.
"Eligible Account": A segregated trust or direct deposit account with a
Qualified Institution.
"Eligible Investments": One or more of the following:
(a) Federal funds, certificates of deposit, time deposits, and
bankers' acceptances (having original maturities of not more than 365 days)
of any domestic bank, the short-term debt obligations of which have been
rated at least A-1 by Standard & Poor's and P-1 by Moody's (a "Qualified
Bank");
(b) Deposits of any bank or savings and loan association (the
long-term deposit rating of which is Baa2 or better by Moody's and BBB or
better by Standard & Poor's) which has combined capital, surplus and
undivided profits of at least $50,000,000 which deposits are insured by the
FDIC and made in aggregate amounts less than the limits insured by the
FDIC;
(c) Commercial paper (having original maturities of not more than 270
days) rated in the highest short-term rating categories of Standard &
Poor's and Moody's;
(d) Investments in no-load money market funds registered under the
Investment Company Act of 1940 whose shares are registered under the
Securities Act and rated AAAm or AAAm-G by Standard & Poor's and Aaa by
Moody's;
(e) direct obligations of, and obligations fully guaranteed by, the
United States of America;
(f) repurchase agreements fully collateralized by possession of
obligations of the type specified in clause (e) above; provided, however,
that investments in such repurchase agreements shall mature within three
days of the acquisition thereof and; provided further, that such agreements
shall be entered into with a Qualified Bank;
(g) money market accounts or money market mutual funds investing
primarily in obligations of the United States government, and further
investing exclusively in debt obligations, provided, however, that such
money market accounts or money market mutual funds shall be rated at least
A-1 by Standard & Poor's and P-1 by Moody's;
(h) Demand and time deposits in, certificates of deposit of, bankers'
acceptances issued by, or federal funds sold by any depository institution
or trust company (including the Indenture Trustee or any Affiliate of the
Indenture Trustee, acting in its commercial capacity) incorporated under
the laws of the United States of America or any State
-7-
thereof and subject to supervision and examination by federal and /or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, the commercial paper or other
short-term deposits of such depository institution or trust company (or, in
the case of a depository institution which is the principal subsidiary of a
holding company, the commercial paper or other short term debt obligations
of such holding company) are rated at least P-1 by Moody's and at least A-1
by Standard & Poor's; and
(i) such other investments as may from time to time be agreed to by
the Servicer and the Agent in writing;
provided that no instrument described above shall evidence either the right
to receive (i) only interest with respect to the obligations underlying such
instrument or (ii) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that all instruments described hereunder shall mature at par on or prior to the
next succeeding Payment Date unless otherwise provided in this Agreement and
that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
"Eligible Receivable": For any date of determination, any Receivable which
satisfies the following conditions:
(i) each representation and warranty with respect to such
Receivable set forth in Section 2.2 hereof, on such date of
determination, is true and correct; provided that representations
2.2(a)(iii) (payments past due), and 2.2(a)(lv) (Defaulted Receivable)
shall not be included in this definition because such Receivables are
addressed in clauses (ii) below;
(ii) such Receivable is not a Defaulted Receivable.
For purposes of this definition and the calculation of the Borrowing Base, the
eligibility of Receivables will be determined from time to time, such that a
Receivable that was an Eligible Receivable at one time but that subsequently
fails to meet all applicable eligibility requirements (including the truth and
accuracy of each of the representations and warranties described in (i) above)
will no longer be an Eligible Receivable (unless and until it again meets all
applicable eligibility requirements). It being further agreed and understood
that the sole remedy against the Seller under the Sale and Servicing Agreement
for a breach of a representation or warranty by the Seller in Section 2.2(a)
shall be the repurchase or substitution of the related Receivable in accordance
with the terms hereof.
"Equity Offering": An offering by Bluegreen Corporation of any of its
Capital Stock.
"Event of Default": As defined in Section 5.1 of the Indenture.
"Excluded Receivables Balance": With respect to any day, the sum, without
duplication, of the following amounts:
-8-
(i) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to an Obligor or group of
Affiliate Obligors exceeds 0.20% of the Aggregate Outstanding
Receivables Balance of all Eligible Receivables, plus
(ii) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables other than Land Receivables with an
initial term to maturity of more than 120 months exceeds 1% of the
Aggregate Outstanding Receivables Balance of all Eligible Receivables,
plus
(iii) the amount by which the Aggregate Outstanding Receivables
Balance of any Eligible Receivables relating to any Obligor or
Affiliate Obligors exceeds $100,000, plus
(iv) the amount by which the Aggregate Outstanding Receivables
Balance of Aruba Receivables relating to Obligors that are non-United
States resident exceeds 40% of the Aggregate Outstanding Receivables
Balance of all Aruba Receivables, plus
(v) the amount by which the Aggregate Outstanding Receivables
Balance of Receivables relating to Obligors that are non-United States
resident exceeds 10% of the Aggregate Outstanding Receivables Balance
of all Eligible Receivables, plus
(vi) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to Land Receivables exceeds
15% of the Aggregate Outstanding Receivables Balance of all Eligible
Receivables, plus
(vii) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to Land Receivables exceeds
10% of the Facility Limit, plus
(viii) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to Aruba Receivables exceeds
15% of the Aggregate Outstanding Receivables Balance of all Eligible
Receivables, plus
(ix) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to Aruba Receivables exceeds
6% of the Facility Limit, plus
(x) the amount of the Aggregate Outstanding Receivables Balance
of Eligible Receivables with a Receivable Rate of less than 14.90%
necessary to increase the weighted average Receivable Rate (weighted
on the basis of Receivable Balance) of all Eligible Receivables to at
least 14.90%, plus
(xi) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to any one Resort exceeds 40%
of the Aggregate Outstanding Receivables Balance of all Eligible
Receivables, plus
-9-
(xii) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables relating to Obligors with billing
addresses in any one state exceeds 20% of the Aggregate Outstanding
Receivables Balance of all Eligible Receivables, plus
(xiii) the amount by which the Aggregate Outstanding Receivables
Balance of all Eligible Receivables for which the related Obligor is
an employee or a relative of an employee of Bluegreen or any
Subsidiary exceeds 0.5% of the Aggregate Outstanding Receivables
Balance of all Eligible Receivables, plus
(xiv) the amount by which the Aggregate Outstanding Receivables
Balance of Eligible Receivables which have been impaired, waived,
altered, or modified more than once exceeds 1% of the Aggregate
Outstanding Receivables Balance of all Eligible Receivables.
"Facility Limit": As of the Closing Date $75,000,000, and thereafter
aggregate amount of the Commitments (as defined in the Note Purchase Agreement
and as such Commitments may be reduced from time to time pursuant to the Note
Purchase Agreement).
"Facility Termination Date": As defined in the Note Purchase Agreement.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"Fees": As defined in the Note Purchase Agreement.
"Finance Charges": With respect to a Receivable, any finance, interest, or
similar charges owing by an Obligor or another Person pursuant to such
Receivable.
"Fiscal Month": The fiscal month of the Servicer pursuant to the Servicer's
financial statements, which for each fiscal quarter shall consist of two fiscal
months of four weeks each and one fiscal month of five weeks.
"Fitch": Fitch, Inc.
"Force Majeure Delay": With respect to the Servicer, any cause or event
which is beyond the control and not due to the negligence of the Servicer, which
delays, prevents or prohibits such Person's delivery of the Reports required to
be delivered herein or the performance of any other duty or obligation of the
Servicer hereunder as the case may be, including, without limitation, computer,
electrical and mechanical failures, acts of God or the elements and fire;
provided, that no such cause or event shall be deemed to be a Force Majeure
Delay unless the Servicer shall have given the Agent written notice thereof as
soon as possible after the beginning of such delay.
"Hedge Agreement": Any interest rate cap agreement, which the Agent may
require the Issuer to enter into at any time, pursuant to Section 5.7 hereof.
"Indebtedness": With respect to any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than
-10-
current liabilities incurred in the ordinary course of business and payable in
accordance with customary trade practices) or which is evidenced by a note,
bond, debenture or similar instrument, (b) all obligations of such Person under
capital leases, (c) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, (d) all liabilities secured by
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof., and (e) all
Indebtedness of other Persons to the extent guaranteed by such Person
"Indenture": The Indenture, dated as of June 29, 2001, between the Issuer
and the Indenture Trustee, as the same may be amended, supplemented or otherwise
modified from time to time.
"Indenture Trustee": U.S. Bank Trust National Association, a national
banking association, the Corporate Trust Office of which is located on the date
of execution of this Agreement at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
not in its individual capacity but solely as Indenture Trustee under the
Indenture, and any successor hereunder.
"Initial Addition Date": The first Addition Date after the Closing Date
pursuant to which the Initial Receivables are purchased by the Depositor.
"Initial Receivables": Each Receivable identified on the List of
Receivables delivered on the Initial Addition Date.
"Insurance Policy": With respect to any Receivable, an insurance policy
covering physical damage to or loss of the related Interval or, if applicable,
any title commitment or title policy covering the Mortgage, if any, securing
such Receivable.
"Insurance Proceeds": Any proceeds received by the Servicer as a result of
the payment of a claim on an Insurance Policy.
"Insured Expenses": Expenses incurred by the Servicer in connection with a
Receivable under which the Obligor is in default, which expenses are covered by
a Standard Hazard Insurance Policy and are paid by an insurer under any such
policy.
"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 Period": As defined in the Note Purchase Agreement.
"Interval": With respect to any Resort or Additional Resort, (i) an
undivided fee simple ownership interest as a tenant in common or (ii) a Resort
Interest that is an ownership interest in real property substantially similar to
an ownership interest described in clause (i) above, 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 or biannually, together with all
appurtenant rights and
-11-
interests as more particularly described in the Receivables Documents. The term
"Interval" shall also include interests in Land Receivables purchased hereunder.
"Issuer" or "Trust": BXG Receivables Note Trust 2001-A, a Delaware business
trust.
"Land Receivable": Receivables arising in connection with and secured by
Mortgages on parcels of real property.
"Leverage Ratio": With respect to any Person as of a date of determination,
the ratio of (i) the Indebtedness of such person on such date to (ii) the
Tangible Net Worth of such person on such date.
"Lien": Any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), equity interest,
participation interest, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement or any
financing lease having substantially the same economic effect as any of the
foregoing.
"List of Receivables": The list identifying each Receivable constituting
part of the Assets, which list shall consist of the initial List of Receivables
reflecting the Receivables purchased on the initial Purchase Date, together with
any Additional Receivables set forth on each Subsequent List of Receivables
transferred to the Trust on the related Addition Date, and which list in each
case (a) identifies each Receivable included in the Asset Pool, and (b) sets
forth as to each such Receivable (i) the Receivable Balance as of the applicable
Cut-Off Date, and (ii) the maturity date for each listed Receivable.
"Loan-to-Sale Ratio": As to each Land Receivable, the ratio, expressed as a
percentage, of the principal amount of such Receivable as of the applicable
Cut-Off Date to the purchase price paid by the related Obligor for the parcel of
land (including taxes, insurance and any land improvements).
"Lock-Box Account": An account maintained in the name of the Indenture
Trustee at a Lock-Box Bank for the purpose of receiving Collections from
Receivables.
"Lock-Box Bank": Fleet Bank, N.A., or any successor thereto appointed in
accordance with the terms if this Agreement.
"Majority Noteholders": As defined in Section 6.3 hereof.
"Monthly Payment": With respect to each Receivable and any Collection
Period, the payment of principal, if any, and interest due on the Due Date in
such Collection Period with respect thereto.
"Monthly Report": The meaning provided in Section 4.12.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
"Mortgage": Any mortgage, deed of trust, purchase money deed of trust or
deed creating a first lien on an Interval to secure debt granted by an Obligor
to the originator of the Receivable
-12-
with respect to the purchase of such Interval and/or the contribution of the
same to the Club and otherwise encumbering the related Interval to secure
payments or other obligations under such Receivable.
"Mortgage Note": The original note or other instrument of indebtedness
evidencing the indebtedness of an Obligor under a Mortgage.
"Net Income": The aggregate, for all years ending after the Closing Date,
of the consolidated net income (loss) of Bluegreen Corporation and its
consolidated Subsidiaries determined in accordance with GAAP.
"New Equity": The aggregate proceeds of all Equity Offerings after the
Closing Date.
"Note": Any one of the notes substantially in the form attached to the
Indenture as Exhibit A.
"Note Account": The segregated note account established in accordance with
Section 3.1 hereof and maintained at the Corporate Trust Office.
"Note Monthly Interest": The "Note Monthly Interest" as defined in the Note
Purchase Agreement.
"Note Principal Balance": The meaning set forth in the Indenture.
"Note Purchase Agreement": The Note Purchase Agreement dated as of June 29,
2001, among the Issuer, the Depositor, the Seller, the Servicer, the Purchasers
parties thereto and the Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"Obligor": A Person obligated to make payments with respect to a Receivable
including any guarantor thereof.
"Officer's Certificate": A certificate signed by any Authorized Officer of
any Person delivering such certificate and delivered to the Indenture Trustee.
"Operative Documents": Collectively, this Agreement, the Indenture, the
Certificate of Trust, the Trust Agreement, the Note Purchase Agreement
(including the related Fee Letter and all Joinder Supplements and Transfer
Supplements), the Custodial Agreement, the Notes, the Certificates, the Backup
Servicing Agreement and the Lockbox Agreement.
"Opinion of Counsel": One or more written opinions of counsel who may,
except as otherwise expressly provided herein, be counsel to the Seller or an
affiliate of the Seller and who shall be satisfactory to the Indenture Trustee
and the Majority Noteholders.
"Original Aggregate Receivable Balance": The aggregate Cut-Off Date
Principal Balance of all Initial Receivables.
"Original Note Principal Balance": The amount set forth on the Note..
"Outstanding": The meaning provided in the Indenture.
-13-
"Owner Trustee": Wilmington Trust Company, as owner trustee under the Trust
Agreement, and any successor owner trustee under the Trust Agreement.
"Owner": The Person in whose name a Note is registered in the Register.
"Payment Date": The first Business Day of each month, commencing (i) if the
Initial Addition Date is prior to the 15th day of any month, the first calendar
month after the Initial Addition Date or (ii) otherwise the second calendar
month after the Initial Addition Date.
"Percentage Interest": With respect to any Note at any time, a fraction,
expressed as a decimal, the numerator of which is the Note Principal Balance
represented by such Note and the denominator of which is the aggregate Note
Principal Balance represented by all the Notes. With respect to the
Certificates, the portion evidenced thereby, expressed as a percentage, as
stated on the face of such Certificate, all of which shall total 100% with
respect to the Certificates.
"Permitted Liens":
(a) with respect to Receivables in the Asset Pool:
(i) Liens for state, municipal or other local taxes if such
taxes shall not at the time be due and payable, (ii) Liens
in favor of the Depositor created pursuant to this
Agreement, and (iii) Liens in favor of the Trust and the
Indenture Trustee created pursuant to the Indenture and this
Agreement;
(b) with respect to the related Interval:
(i) materialmen's, warehousemen's, mechanics' and other Liens
arising by operation of law in the ordinary course of
business for sums not due, (ii) Liens for state, municipal
or other local taxes if such taxes shall not at the time be
due and payable, (iii) Liens in favor of the Depositor
created pursuant to this Agreement, (iv) Liens in favor of
the Trust and the Indenture Trustee created pursuant to the
Indenture and this Agreement, and (v) the Obligor's interest
in the Interval under the Receivable whether pursuant to the
Club Trust Agreement or otherwise; and
(c) with respect to Receivables and related Assets in the Asset Pool,
any and all rights of the Beneficiaries referred to in the Club
Trust Agreement under such Club Trust Agreement.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Principal Distribution Amount": As defined in the Indenture.
-14-
"Purchase": A purchase by the Trust of Receivables and related Assets from
the Depositor pursuant to Article II of this Agreement, as described in Section
2.1(a) thereof.
"Purchase Date": The Initial Purchase Date and any Addition Date
thereafter.
"Purchase Documents": Any purchase agreement and related sale and escrow
documents executed and delivered by an Obligor to the Seller or the Additional
Resort owners with respect to the purchase of an Interval which is the subject
of a Receivable.
"Purchase Price": With respect to a Receivable, the fair market value of
such Receivable as mutually agreed by the Seller, the Depositor and the Issuer,
provided that, upon the request of the Agent, from time to time the Seller, the
Depositor and the Issuer shall discuss the basis for establishing such fair
market value.
"Purchased Receivable": Any Receivable purchased pursuant to Article II of
this Agreement.
"Qualified Hedge Counterparty": Any financial institution with a short term
rating of at least "A-1+" from S&P (or "A-1" if such institution has a long term
credit rating of "AA" or higher) and "P-1" from Moody's.
"Qualified Institution": Either (a) the corporate trust department of the
Indenture Trustee, or (b) a depository institution organized under the laws of
the United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (i)(A) which has either (1)
a long-term unsecured debt rating of BBB or better by Standard & Poor's and Baa2
or better by Moody's or (2) a short-term unsecured debt rating or certificate of
deposit rating of A-2 or better by Standard & Poor's or P-2 or better by Moody's
or (B) the parent corporation of which has either (1) a long-term unsecured debt
rating of BBB or better by Standard & Poor's and Baa2 or better by Moody's or
(2) a short-term unsecured debt rating or certificate deposit rating of A-2 or
better by Standard & Poor's and P-2 or better by Moody's and (ii) whose deposits
are insured by the Federal Deposit Insurance Corporation.
"Qualified Insurer": Any insurance company or surety or bonding company
licensed to do business and issue insurance in all relevant jurisdictions
(including, in the case of an insurer under a Standard Hazard Insurance Policy,
the jurisdiction in which each Interval covered by such policy is located).
"Rating Agency": Fitch, Moody's or Standard & Poor's.
"RDI Receivable": Receivables which have been originated by RDI Group, Inc.
"Receivable": A promissory note or other contract and its related security,
if any, including but not limited to any Mortgage or security interest in the
related Interval (any accessions thereto) and any and all rights to payments
thereunder including any assignment documents relating thereto (i.e. an allonge
relating to a note). Receivables includes Additional Receivables. The term
"Receivables" shall also include "Aruba Receivables" and "Land Receivables".
-15-
"Receivable Balance": The actual unpaid principal balance of a Receivable.
"Receivable Rate": With respect to each Receivable, the interest rate
specified in the related Mortgage Note.
"Receivables Documents": With respect to a Receivable, the Receivable and
all documents related to such Receivable, including
(i) the original of all applicable promissory notes with the
related allonge or other assignment attached as required by this
Agreement or the Custodial Agreement, signed (which maybe by
facsimile) by an authorized officer of the Seller and showing a
complete chain of endorsements from the original payee of the
promissory note to the Indenture Trustee: "Pay to the order of
_____________, without recourse representation or warranty except as
provided in the Sale and Servicing Agreement",
(ii) the original recorded or unrecorded Mortgage with evidence
of delivery for filing (or, if the original of the recorded or
unrecorded Mortgage is not available, a copy of such recorded or
unrecorded Mortgage (with evidence of delivery for filing), in each
case certified by an authorized officer of the Seller to be a true and
correct copy)
(iii) an original assignment of the original Mortgage (which may
be a part of a blanket assignment of more than one Mortgage Loan),
from the Seller to the Indenture Trustee, with evidence of proper
recordation, signed by an authorized officer of the Seller (or
evidence from a third party that such assignment has been submitted
for recordation),
(iv) the UCC financing statement, if any, evidencing that the
security interest granted under such Receivable, if any, has been
perfected under applicable state law,
(v) a copy of any recorded or unrecorded warranty deed
transferring legal title to the related Interval or parcel, as
applicable, to the Obligor,
(vi) an original lender's title insurance policy or title
commitment or master policy referencing such Receivable and covering
the Indenture Trustee for the benefit of the Agent on behalf of the
Noteholders, (vii) payment records,
(vii) the original of any related assignment, modification,
guarantee or assumption agreement or, if such original is unavailable,
a copy thereof certified by an authorized officer of the Seller to be
a true and correct copy, current and historical computerized data
files,
(viii) the original of any assumption agreement or any
modification extension or refinancing agreement,
(ix) the Purchase Documents,
-16-
(x) the Assignment of such Receivable,
(xi) the application of the related Obligor to obtain the
financing extended by such Receivable,
(xii) all other papers and records of whatever kind or
description, whether developed or originated by Bluegreen, the Seller
or another Person, required to document, service or enforce a
Receivable and
(xiii) any additional amendments, supplements, extensions,
modifications or waiver agreements required to be added to the
Receivables Document pursuant to this Agreement, the Credit Policy or
the other Operative Documents.
"Recoveries": Any and all recoveries on account of a Defaulted Receivable,
including, without limitation, any and all cash proceeds from the sale of
repossessed or foreclosed Interval or other property, Insurance Proceeds and
amounts related to overdue interest, as well as any amounts received from the
Servicer Purchase Option.
"Register": The note register maintained by the Registrar in accordance
with Section 2.3 of the Indenture, in which the names of the Owners are set
forth.
"Registrar": The Indenture Trustee, acting in its capacity as Registrar
appointed pursuant to the Indenture, or any duly appointed and eligible
successor thereto.
"Remarketing Fees": With respect to the Servicer's activities of
remarketing an Interval relating to a Defaulted Receivable an amount equal to
50% of the gross resale proceeds of such Interval.
"Replaced Receivable": Any Receivable which is removed from the Trust
Estate pursuant to a substitution as set forth in Section 2.5.
"Repurchase Price": With respect to any Receivable purchased from the
Issuer on any date pursuant to Section 2.2 or 2.4 hereof, an amount equal to the
sum of (i) the Receivable Balance of such Receivable as of the date of purchase;
and (ii) all accrued and unpaid interest on such Receivable to the end of the
Collection Period preceding the Payment Date on which such Repurchase Price is
included in Available Funds. With respect to any Defaulted Receivable purchased
from the Issuer on any date pursuant to Section 4.11 hereof, an amount equal to
the greater of (A) the product of (i) 24% and (ii) the initial Receivables
Balance for such Receivable at origination and (B) the fair market value of such
Defaulted Receivable, as determined by the Servicer.
"Required Hedge Amount": means 85% of the Eligible Receivable Balance or
such lesser amounts specified by the Agent in writing.
"Required Payment": With respect to any Payment Date, the aggregate amounts
owed and distributable pursuant to Section 3.2(a)(i) through (vii) on such
Payment Date.
-17-
"Reservation System": The reservation system utilized by the Club and owned
and managed by the Club Managing Entity or the services contracted by the Club
Managing Entity with a third party.
"Reserve Account": The segregated reserve account established in accordance
with Section 3.1 hereof and maintained at the Corporate Trust Office.
"Reserve Requirement": With respect to any Payment Date, if the Borrowing
Base is less than $5,000,000 as of the related Determination Date, $500,000,
otherwise zero.
"Resort Interest": As defined in the Club Trust Agreement.
"Resorts": Those certain timeshare vacation resorts listed on Exhibit E
hereto and any Additional Resorts.
"SAIF": The Savings Association Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989 or, if at any time after the execution of this Agreement
the Savings Association Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": As defined in the preamble.
"Servicer": As defined in the preamble.
"Servicer Extension Notice": As defined in Section 4.23 hereof.
"Servicer Purchase Option": The Servicer's (so long as the Servicer is
Bluegreen or an Affiliate thereof) right (but not the obligation) to repurchase
the Interval relating to a Defaulted Receivable for an amount equal to
twenty-four percent (24%) of the Obligor's initial Receivable Balance for the
Interval.
"Servicer Termination Event": As defined in Section 6.1 hereof.
"Servicing Certificate": A certificate completed and executed by a
Servicing Officer on behalf of the Servicer.
"Servicing Fee Rate": 1.50% per annum.
"Servicing Fee": With respect to any Payment Date, an amount equal to the
product of (i) 1/12, (ii) the Servicing Fee Rate, and (iii) the Aggregate
Outstanding Receivable Balance of all Receivables held by the Issuer as of the
first day of the preceding Collection Period.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
and specimen signature appear on a list of servicing officers furnished to the
Indenture Trustee by the Servicer, as such list may be amended from time to
time, initially set forth in Exhibit F hereto.
-18-
"Servicing Standard": As defined in Section 4.1(b) hereof.
"Stale Intervals": An Interval which has not been remarketed by the
Servicer which relates to a Receivable which is 360 days delinquent.
"Standard Hazard Insurance Policy": With respect to each Receivable, the
policy of fire and extended coverage insurance (and any federal flood insurance,
if and to the extent applicable) required to be maintained for the related
Interval as provided herein.
"Standard & Poor's": Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or any successor thereto.
"Subordinated Indebtedness": Indebtedness of Bluegreen which is denoted in
Bluegreen's audited financial statements as "subordinated indebtedness".
"Subsequent List of Receivables": A list, in the form of the initial List
of Receivables delivered on the Initial Purchase Date, but which list includes
and separately identifies, with respect to such list delivered in connection
with a conveyance of Additional Receivables, each Additional Receivable
transferred to the Trust pursuant to the related Addition Agreement or
Substitution Agreement.
"Substitute Receivable" Any Receivable delivered in substitution for a
Replaced Receivable pursuant to Section 2.5 hereof.
"Subsidiary": With respect to a Person, (i) any corporation more than 50%
of the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, joint venture, limited liability company
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Bluegreen Corporation but in no event will the term
"Subsidiary" include the Trust.
"Substitution Agreement": As defined in Section 2.5.
"Tangible Net Worth": Consolidated Net Worth minus Intangible Assets plus
Subordinated Indebtedness.
"Test Date": With respect to any Fiscal Month, the 10th of the month
immediately following such Fiscal Month, or if such day is not a Business Day,
the next succeeding Business Day. For example, if a Fiscal Month ended on July
28th, the related Test Date would be August 10th and if such Fiscal Month ended
on August 2nd , the related Test Date would also August 10th.
"Tested Asset": Each asset serviced by the Servicer other than land
receivables, RDI Receivables, sampler loans and conversion loans.
-19-
"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 a declaration and/or time share
declaration.
"Time Share Documents": With respect to any Resort, the documents relating
to the sale of Intervals by the Seller, its Subsidiaries or RDI Group, Inc.
"Transfer Condition": With respect to any date of determination and any
Substitute Receivable or Defaulted Receivable repurchased from the Trust
pursuant to Section 2.5 or 4.11 hereof, the transfer condition shall be
satisfied if that after giving effect to such transfer, the Aggregate
Outstanding Receivable Balance (determined as of the applicable Cut-Off Date for
each such Receivable) of all Substitute Receivables and all Defaulted
Receivables repurchased pursuant to Section 2.5 or 4.11 hereof is less than 20%
of the Aggregate Outstanding Receivable Balance all Eligible Receivables as of
such date of determination.
"Trust Agreement": The Trust Agreement dated as of June 29, 2001 between
the Depositor, GSS Holdings, Inc. and the Owner Trustee, as the same may be
amended, supplemented or otherwise modified from time to time.
"Trust Estate": As defined in the Indenture.
"UCC": The Uniform Commercial Code as in effect on the date hereof and from
time to time in effect in New York; provided, however, in the event that, by
reason of mandatory provisions of law, any and all of the attachment, perfection
or priority of the Lien of the Depositor, the Trust or the Indenture Trustee in
and to the Assets is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term UCC shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"Unit(s)": One individual air-space condominium unit, cabin, villa, cottage
or townhome within a Resort or Additional Resort, together with all furniture,
fixtures and furnishings therein, and together with any and all interests in
common elements appurtenant thereto, as provided in the related Declaration;
provided that the definition of "Unit" shall not include or apply to those units
relating a campground/tent site, recreational vehicle site or other
non-permanent building or structure.
"Upgrade": An event whereby an Obligor purchases a greater number of
Vacation Points than such Obligor previously had.
"Vacation Points": As defined in the Club Trust Agreement.
Section 1.2. Use of Words and Phrases. "Herein", "hereby", "hereunder",
"hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this
Agreement as a whole and not solely to the particular section of this Agreement
in which any such word is used. The definitions set forth in Section 1.1 hereof
include both the singular and the plural. Whenever used in this Agreement, any
pronoun shall be deemed to include both singular and plural and to
-20-
cover all genders. The words "including" and "include" shall be deemed to be
followed by the words "without limitation".
Section 1.3. Captions; Table of Contents. The captions or headings in this
Agreement and the Table of Contents are for convenience only and in no way
define, limit or describe the scope and intent of any provisions of this
Agreement. Section references are to this Agreement unless otherwise stated.
Section 1.4. Opinions. Each opinion with respect to the validity, binding
nature and enforceability of documents or Notes may be qualified to the extent
that the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law) and may state that no
opinion is expressed on the availability of the remedy of specific enforcement,
injunctive relief or any other equitable remedy. Any opinion required to be
furnished by any Person hereunder must be delivered by counsel upon whose
opinion the addressee of such opinion may reasonably rely, and such opinion may
state that it is given in reasonable reliance upon an opinion of another, a copy
of which must be attached, concerning the laws of a foreign jurisdiction. Any
opinion delivered hereunder shall be addressed to the Indenture Trustee in
addition to other addressees.
END OF ARTICLE I
-21-
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE DEPOSITOR, THE SERVICER, THE SELLER,
THE CLUB TRUST, THE CLUB TRUSTEE AND CONVEYANCE
OF THE RECEIVABLES
Section 2.1. Representations and Warranties of the Depositor, the Seller
and the Servicer. (a) Each of the Depositor, the Seller, the Servicer and the
Backup Servicer individually, and not jointly and severally, represents and
warrants as to itself that, as of the Closing Date and each Addition Date:
(i) It is duly organized, validly existing and in good standing
under the laws of its state of incorporation and has the power and
authority to own its assets and to transact the business in which it
is currently engaged. It is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a
material adverse effect on (a) its business, properties, assets or
condition (financial or other), (b) its performance of its obligations
under this Agreement and the other Operative Documents to which it is
a party, (c) the enforceability of the Receivables or (d) the ability
to foreclose on the related Intervals;
(ii) It has the power and authority to make, execute, deliver and
perform this Agreement and the other Operative Documents to which it
is a party and to consummate all of the transactions contemplated
under this Agreement and the other Operative Documents to which it is
a party, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other
Operative Documents to which it is a party. When executed and
delivered, this Agreement and the other Operative Documents to which
it is a party will constitute its legal, valid and binding obligation
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) It holds all necessary licenses, certificates and permits
from all government authorities necessary for conducting its business
as it is presently conducted. It is not required to obtain the consent
of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement and the
other Operative Documents to which it is a party, except for such
consents, licenses, approvals or authorizations, or registrations or
declarations, as shall have been obtained or filed, as the case may
be, prior to the Closing Date;
-22-
(iv) The execution, delivery and performance of this Agreement
and the other Operative Documents to which it is a party by it will
not conflict with or result in a breach of, or constitute a default
under, any provision of any existing law or regulation or any order or
decree of any court applicable to it or any of its properties or any
provision of its organizational documents, or constitute a material
breach of, or result in the creation or imposition of any lien, charge
or encumbrance upon any of its properties pursuant to, any mortgage,
indenture, contract or other agreement to which it is a party or by
which it may be bound;
(v) No certificate of an officer, statement furnished in writing
or report delivered pursuant to the terms hereof by it for use in
connection with the purchase of the Receivables and the transactions
contemplated hereunder and by the other Operative Documents will
contain any untrue statement of a material fact, or omit a material
fact necessary to make the certificate, statement or report not
misleading;
(vi) The transactions contemplated by this Agreement and the
other Operative Documents to which it is a party are in the ordinary
course of its respective businesses;
(vii) It is not insolvent, nor will it be made insolvent by the
transfer of the Receivables, nor is it aware of any pending insolvency
as to itself;
(viii) It is not in violation of, and the execution and delivery
of this Agreement by it and its performance and compliance with the
terms of this Agreement and the other Operative Documents to which it
is a party will not constitute a violation with respect to, any order
or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction, which
violation would materially and adversely affect its condition
(financial or otherwise) or operations or any of its properties or
materially and adversely affect the performance of any of its duties
hereunder;
(ix) There are no actions or proceedings against, or
investigations of it, pending or, to its knowledge, threatened, before
any court, administrative agency or other tribunal (A) that, if
determined adversely, would prohibit it from entering into this
Agreement and the other Operative Documents to which it is a party,
(B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (C) that, if determined adversely,
would prohibit or materially and adversely affect its performance of
its obligations under, or the validity or enforceability of, this
Agreement and the other Operative Documents to which it is a party;
(x) The Seller represents and warrants that it did not and will
not sell the Receivables to the Depositor and the Depositor represents
and warrants that it did not and will not sell the Receivables to the
Issuer with any intent to hinder, delay or defraud any of their
respective creditors;
-23-
(xi) Each of the Depositor and the Seller represents and warrants
that it acquired title to the Receivables in good faith, without
notice of any adverse claim; and
(xii) Each of the Depositor and the Seller represents and
warrants that the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller and the Depositor pursuant to
this Agreement are not subject to the bulk transfer laws or any
similar statutory provisions in effect in any applicable jurisdiction.
(xiii) All pension or profit sharing plans of the Seller have
been fully funded in accordance with applicable obligations.
(xiv) Neither the Depositor nor the Seller has dealt with any
broker, banker, agent or other person (other than the Agent and its
Affiliates, the Indenture Trustee and the Custodian and their
respective counsel) that may be entitled to any commission or
compensation in connection with the sale of the Receivables.
(xv) The names and addresses of all the Lock-Box Banks, together
with the account numbers of the lock-box accounts of Servicer
(provided that Bluegreen or its Affiliate corporation is the Servicer)
maintained in connection with the Operative Documents at such Lock-Box
Banks, are specified in Schedule II (or have been notified to the
Indenture Trustee in accordance with Section 8.10).
(xvi) Reservation System. The Seller represents and warrants that
other than with respect to the services contracted for by the Club
Managing Entity with a third party which rights under such contracts
shall be licensed (on a non-exclusive basis) to the Indenture Trustee
for the benefit of the Noteholders, the Reservation System is owned by
the Club Managing Entity free and clear of any liens or security
interests, but subject to the provisions of the Club Management
Agreement and the Club Trust Agreement, and the Club has the right to
utilize such system under and pursuant to Club Management Agreement.
The Club Management Agreement is in full force and effect and no
default on the part of the Club Trustee or the Club Managing Entity
exists thereunder. Bluegreen owns 100% of the equity capital of the
Club Managing Entity.
(xvii) Club Trust Agreement. The Seller represents and warrants
that the Club Trust Agreement, of which a true and correct copy is
attached hereto as Exhibit B, is in full force and effect.
(xviii) The Seller represents and warrants that the Bluegreen
Vacation Club Trust is a an arrangement of contractual rights and
obligations duly established in accordance with the Club Trust
Agreement under the laws of the State of Florida for the purpose of
holding and preserving certain property for the benefit of the
beneficiaries referred to in the Club Trust Agreement. The Club
Trustee has all necessary trust and other authorizations and powers
required to
-24-
carry out its obligations under the Club Trust Agreement in the State
of Florida and in all other states in which it owns Resort Interests.
The Bluegreen Vacation Club Trust is not a corporation or business
trust under the laws of the State of Florida. The Bluegreen Vacation
Club Trust is not taxable as an association, corporation or business
trust under federal law or the laws of the State of Florida;
(xix) The Seller represents and warrants that the Club Trustee is
a corporation duly formed, validly existing and in good standing under
the laws of the State of Florida. The Club Trustee is authorized to
transact business in no other state. The Club Trustee is not an
affiliate of the Servicer and is in compliance with the requirements
of Chapter 721, Florida Statutes, that it be independent of the
Servicer;
(xx) The Seller represents and warrants that the Club Trustee had
all necessary corporate power to execute and deliver, and has all
necessary corporate power to perform its obligations under this
Agreement, the other Operative Documents to which it is a party, the
Club Trust Agreement and the Club Management Agreement. The Club
Trustee possesses all requisite franchises, operating rights,
licenses, permits, consents, authorizations, exemptions and orders as
are necessary to discharge its obligations under the Club Trust
Agreement;
(xxi) The Seller represents and warrants that a certified copy of
the Club Trust Agreement has been delivered to the Agent together with
all amendments and supplements in respect thereof;
(xxii) The Seller represents and warrants that the Club Trustee
holds all right, title and interest in and to all of the Resort
Interests related to the Receivables solely for the benefit of the
Beneficiaries referred to in, and subject in each case to the
provisions of, the Club Trust Agreement and the other documents and
agreements related thereto. Except with respect to the Mortgages, the
Club Trustee has permitted none of such Resort Interests to be made
subject to any lien or encumbrance during the time it has been a part
of the trust estate under the Club Trust Agreement;
(xxiii) The Seller represents and warrants that there are no
actions, suits, proceedings, orders or injunctions pending against the
Bluegreen Vacation Club Trust or the Club Trustee, at law or in
equity, or before or by any governmental authority which, if adversely
determined, could reasonably be expect to have a material adverse
effect on the Trust Assets or the Club Trustee's ability to perform
its obligations under the Operative Documents;
(xxiv) The Seller represents and warrants that neither the
Bluegreen Vacation Club Trust nor the Club Trustee has incurred any
indebtedness for borrowed money (directly, by guarantee, or
otherwise);
(xxv) The Seller represents and warrants that all ad valorem
taxes and other taxes and assessments against the Bluegreen Vacation
Club Trust and/or its
-25-
trust estate have been paid when due and neither the Servicer nor the
Club Trustee knows of any basis for any additional taxes or
assessments against any such property. The Bluegreen Vacation Club
Trust has filed all required tax returns and has paid all taxes shown
to be due and payable on such returns, including all taxes in respect
of sales of Owner Beneficiary Rights (as defined in the Club Trust
Agreement) and Vacation Points;
(xxvi) The Seller represents and warrants that the Bluegreen
Vacation Club Trust and the Club Trustee are in compliance in all
material respects with all applicable laws, statutes, rules and
governmental regulations applicable to it and in compliance with each
material instrument, agreement or document to which it is a party or
by which it is bound, including, without limitation, the Club Trust
Agreement;
(xxvii) The Seller represents and warrants that except as
expressly permitted in the Club Trust Agreement, the Club Trustee has
maintained the One-to-One Beneficiary to Accommodation Ratio (as such
terms are defined in the Club Trust Agreement);
(xxviii) The Seller represents and warrants that Bluegreen
Vacation Club, Inc. is a non-stock corporation duly formed, validly
existing and in good standing under the laws of the State of Florida;
(xxix) The Seller represents and warrants that upon purchase of
the Receivables and related Trust Estate hereunder, the Issuer is an
"Interest Holder Beneficiary" under the Club Trust Agreement and each
of the Receivables constitutes "Lien Debt", "Purchase Money Lien Debt"
and "Owner Beneficiary Obligations" under the Club Trust Agreement;
(xxx) The Seller represents and warrants that except as disclosed
to the Agent in writing, each Mortgage associated with a Receivable
and granted by the Club Trustee or the Obligor on the related
Receivable, as applicable, has been duly executed, delivered and
recorded by or pursuant to the instructions of the Club Trustee under
the Club Trust Agreement and such Mortgage is valid and binding and
effective to create the lien and security interests in favor of the
Indenture Trustee. Each of such Mortgages was granted in connection
with the financing of a sale of a Resort Interest.
(b) The representations and warranties set forth in this Section shall
survive each sale and assignment of Receivables to the Issuer. Upon
discovery of a breach of any representations and warranties which
materially and adversely affects the interests of the Owners, the Person
discovering such breach shall give prompt written notice to the other
parties. Within 30 days of its discovery or its receipt of notice of breach
or, with the prior written consent of the Agent, such longer period
specified in such consent, the Depositor, the Seller or the Servicer
(provided that Bluegreen Corporation or its Affiliate is the Servicer), as
appropriate, shall cure such breach in all material respects or repurchase
or substitute any Receivable as to which the interests of the Owners are
materially and adversely affected pursuant to Section 2.4 of this
Agreement.
-26-
Section 2.2. Representations and Warranties of the Seller Regarding the
Receivables. (a) The Seller represents and warrants to the Issuer and the
Indenture Trustee for the benefit of the Owners, as follows, with respect to
each Initial Receivable as of the Initial Addition Date and, with respect to
each Additional Receivable, as of the related Addition Date that:
(i) payments due under the Receivable are fully-amortizing and
payable in level monthly installments, and such obligation bears a
fixed rate of interest;
(ii) the Obligor thereunder has made a down payment by cash,
check or credit card of at least 10% percent of the actual purchase
price (including closing costs) of the Interval (which cash down
payment may, in the case of Upgrades only, 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
Bluegreen, the Depositor or an Affiliate thereof;
(iii) as of the related Cut-Off Date, no principal or interest
due with respect to the Receivable is more than thirty (30) days
Delinquent;
(iv) the Obligor is not an Affiliate of Bluegreen or any
Subsidiary; provided that solely for the purposes of this
representation, a relative of an employee and employees of Bluegreen
or any Subsidiary (or any of its Affiliates) shall not be deemed to be
an "Affiliate";
(v) immediately prior to the conveyance of the Receivable to the
Depositor, the Seller will own full legal and equitable title to such
Receivable, and the Receivable (and the Interval related thereto) is
free and clear of adverse claims, liens and encumbrances and is not
subject to claims of rescission, invalidity, unenforceability,
illegality, defense, offset, abatement, diminution, recoupment,
counterclaim or participation or ownership interest in favor of any
other Person;
(vi) the Receivable (other than an Aruba Receivable) is secured
directly by a first priority Mortgage on the purchased Interval;
(vii) the timeshare estate mortgaged by or at the direction of
each Obligor constitutes a fee interest in real property at the
related Resort that entitles the holder of the interest to the use of
a specific property for a specified number of days each year or every
other year; the related Mortgage has been delivered for filing and
recordation with all appropriate governmental authorities in all
jurisdictions in which such Mortgage is required to be filed and
recorded to create a valid, binding and enforceable first Lien on the
related Interval and such Mortgage creates a valid, binding and
enforceable first Lien on the related Interval, subject only to
Permitted Liens; and the Seller is in compliance with any Permitted
Lien respecting the right to the use of such Interval; each of the
Assignments of such related Mortgage and each related endorsement of
the related Mortgage Note constitutes a duly executed, legal, valid,
binding and enforceable assignment or endorsement, as the case may be,
of such related
-27-
Mortgage and related Mortgage Note, and all monies due or to become
due thereunder, and all proceeds thereof;
(viii) with respect to an Obligor and a particular single
Interval purchased by such Obligor, there is only one original
Mortgage and Mortgage Note (and in the case of an Aruba Receivable,
only one purchase and finance agreement); all parties to the related
Mortgage and the related Mortgage Note (and in the case of an Aruba
Receivable, purchase and finance agreement) had legal capacity to
enter into such Receivables Documents and to execute and deliver such
related Receivables Documents, and such related Receivables Documents
have been duly and properly executed by such parties; any amendments
to such related Receivables Documents required as a result of any
mergers involving the Seller or its predecessors, to maintain the
rights of the Seller or its predecessors thereunder as a mortgagee (or
seller in the case of the Aruba Receivables) have been completed;
(ix) at the time the related originator originated such
Receivable to the related Obligor, such originator had full power and
authority to originate such Receivable and the Obligor had good and
indefeasible fee title or good and marketable fee simple title or in
the case of Aruba Receivables a cooperative interest, as applicable,
to the Interval securing such Receivable, free and clear of all Liens,
except for Permitted Liens;
(x) the related Mortgage (or, in the case of an Aruba Receivable,
the related purchase and finance agreement) contains customary and
enforceable provisions so as to render the rights and remedies of the
holder thereof adequate for the realization against the related
Interval of the benefits of the security interests intended to be
provided thereby, including (a) if the Mortgage is a deed of trust, by
trustee's sale, including power of sale and/or (b) otherwise by
judicial foreclosure or power of sale; there is no exemption available
to the related Obligor which would interfere with the mortgagee's
right to sell at a trustee's sale or power of sale or right to
foreclose such related Mortgage, as applicable (or, in the case of an
Aruba Receivable, the seller's right to sell or power of sale or right
to foreclose in respect of the related Interval);
(xi) the related Mortgage Note or promissory note, as applicable,
is not and has not been secured by any collateral except the Lien of
the related Mortgage or purchase and finance agreement, as applicable.
(xii) if a Mortgage secures a Receivable, the title to the
related Interval is insured (or a binding commitment for title
insurance, not subject to any conditions other than standard
conditions applicable to all binding commitments, has been issued)
under a mortgagee title insurance policy issued by a title insurer
qualified to do business in the jurisdiction where the related
Interval is located in a form generally acceptable to prudent
originators of similar mortgage loans, insuring the Seller or its
predecessor and its successors and assigns, as to the first priority
mortgage Lien of the related Mortgage in an amount equal to the
outstanding Receivable Balance of such Receivable, and otherwise in
form and substance
-28-
acceptable to the Agent; the Seller or its assign is a named insured
of such mortgagee's title insurance policy; such mortgagee's title
insurance policy is in full force and effect; no claims have been made
under such mortgagee's title insurance policy and no prior holder of
such Receivable has done or omitted to do anything which would impair
the coverage of such mortgagee's title insurance policy; no premiums
for such mortgagee's title insurance policy, endorsements and all
special endorsements are past due;
(xiii) the Seller has not taken (or omitted to take), and has no
notice that the related Obligor has taken (or omitted to take), any
action that would impair or invalidate the coverage provided by any
hazard, title or other insurance policy on the related Interval;
(xiv) all applicable intangible taxes and documentary stamp taxes
were paid as to the related Receivable;
(xv) the proceeds of each Receivable have been fully disbursed,
there is no obligation to make future advances or to lend additional
funds under the originator's commitment or the documents and
instruments evidencing or securing the Receivable and no such advances
or loans have been made since the origination of the Receivable;
(xvi) the terms of each Mortgage, Mortgage Note or other
Receivables Document have not been impaired, waived, altered or
modified in any respect, except (x) by written instruments which are
part of the related Receivables Documents or (y) in accordance with
the Credit Policy or the Servicing Standard (provided that no
Receivable has been impaired, waived, altered, or modified in any
respect more than once). No other instrument has been executed or
agreed to which would effect any such impairment, waiver, alteration
or modification; no Obligor has been released from liability on or
with respect to any Receivable, in whole or in part; if required by
law or prudent originators of similar loans in the jurisdiction where
the related Interval is located, all waivers, alterations and
modifications have been filed and/or recorded in all places necessary
to perfect, maintain and continue a valid first priority Lien of the
Mortgage (or, in the case of the Aruba Receivables, the purchase and
finance agreement) subject only to Permitted Liens;
(xvii) other than Aruba Receivables each Receivable is
principally and directly secured by an interest in real property;
(xviii) each Receivable was originated by the Seller or one of
its Affiliates in the normal course of its business; each Receivable
originated by the Seller or one of its Affiliates was underwritten in
accordance with its underwriting guidelines previously approved by the
Agent; the origination, servicing and collection practices used by the
Seller and its Affiliates with respect to each Receivable have been in
all respects, legal, proper, prudent and customary;
-29-
(xix) the related Receivable is assignable to and by the obligee
and its successors and assigns and the related Interval is assignable
upon liquidation of the related Receivable, without the consent of any
other Person (including any condominium association, homeowners' or
timeshare association), and there are no other restrictions on resale
thereof except as may be imposed by law;
(xx) the related Mortgage (or, in the case of the Aruba
Receivables, the related lien) is and will be prior to any Lien on, or
other interests relating to, the related timeshare estate;
(xxi) there are no delinquent or unpaid taxes, ground rents (if
any), water charges, sewer rents or assessments outstanding with
respect to any of the Intervals, nor any other outstanding Liens or
charges affecting the Intervals that would result in the imposition of
a Lien on the Interval affecting the Lien of the Mortgage (or, in the
case of the Aruba Receivables, the purchase and finance agreement) or
otherwise materially affecting the interests of the Indenture Trustee
on behalf of the Owners in the related Receivables;
(xxii) other than with respect to delinquent payments of
principal or interest 30 or fewer days past due as of the Cut-Off
Date, there is no default, breach, violation or event of acceleration
existing under any Mortgage, the related Mortgage Note or any other
document or instrument evidencing, guaranteeing, insuring or otherwise
securing the Receivable, and no event which, with the lapse of time or
with notice and the expiration of any grace or cure period, would
constitute a material default, breach, violation or event of
acceleration thereunder; and the Seller has not waived any such
material default, breach, violation or event of acceleration under the
Mortgage, the Mortgage Note or any such other document or instrument;
(xxiii) neither the Obligor nor any other Person has the right,
by statute, contract or otherwise, to seek the partition of the
Interval;
(xxiv) the Receivable has not been satisfied, canceled, rescinded
or subordinated, in whole or in part; no portion of the Interval has
been released from the Lien of the Mortgage (or, in the case of the
Aruba Receivables, the purchase and finance agreement), in whole or in
part; no instrument has been executed that would effect any such
satisfaction, cancellation, rescission, subordination or release; the
terms of the Mortgage (or, in the case of the Aruba Receivables, the
purchase and finance agreement) do not provide for a release of any
portion of the Interval from the Lien of the Mortgage (or, in the case
of the Aruba Receivables, the purchase and finance agreement) except
upon the payment of the Receivable in full;
(xxv) the Seller and any of its Affiliates and, to the best of
the Seller's knowledge, each other party which has had an interest in
the Receivable is (or, during the period in which such party held and
disposed of such interest, was) in compliance with any and all
applicable filing, licensing and "doing business" requirements of the
laws of the state wherein the Interval is located to the extent
-30-
necessary to permit the Seller to maintain or defend actions or
proceedings with respect to the Receivable in all appropriate forums
in such state without any further act on the part of any such party;
(xxvi) there is no current obligation on the part of any other
person (including any buy down arrangement) to make payments on behalf
of the Obligor in respect of the Receivable;
(xxvii) the Time Share Associations relating to the Resort in
which the related Interval is located were duly organized and are
validly existing; a manager (the "Manager") manages such Resort and
performs services for the Time Share Associations, pursuant to an
agreement between the Manager and the respective Time Share
Associations, such contract being in full force and effect; the
Manager and the Time Share Associations have performed in all material
respects all obligations under such agreement and are not in default
under such agreement;
(xxviii) the Resort in which the related Interval is located is
insured in the event of fire, earthquake, or other casualty for the
full replacement value thereof, and in the event that the Interval
should suffer any loss covered by casualty or other insurance, upon
receipt of any insurance proceeds, the Time Share Associations are
required, during the time such Interval is covered by such insurance,
under the applicable governing instruments either to repair or rebuild
the portions of the project in which the Interval is located or to pay
such proceeds to the holders of any Mortgage (or, in the case of the
Aruba Receivables, the purchase and finance agreement) secured by a
timeshare estate in the portions of the project in which the Interval
is located; the Resort, if located in a designated flood plain,
maintains flood insurance in an amount not less than the maximum level
available under the National Flood Insurance Act of 1968, as amended;
each Resort has business interruption insurance and general liability
insurance in such amounts generally acceptable in the industry; each
Resort's insurance policies are in full force and effect with a
generally acceptable insurance carrier;
(xxix) the related Mortgage or deed of trust (or, in the case of
the Aruba Receivables, the purchase and finance agreement) gives the
obligee and its successors and assigns the right to receive and direct
the application of insurance and condemnation proceeds received in
respect of the Interval, except where the related condominium
declarations, timeshare declarations or applicable state law provide
that insurance and condemnation proceeds be applied to restoration of
the improvements;
(xxx) each rescission period applicable to the Receivable has
expired;
(xxxi) no selection procedures were intentionally utilized by the
Seller in selecting the Receivables, which the Seller knew were
materially adverse to the Indenture Trustee or the Owners;
(xxxii) the residential units related to the Receivables in the
related Resort have been completed in all material respects as
required by applicable state and
-31-
local laws, free of all defects that could give rise to any claims by
the related Obligors under home warranties or applicable laws or
regulations, whether or not such claims would create valid offset
rights under the law of the State in which the Resort is located; to
the extent required by applicable law, valid certificates of occupancy
for such residential units have been issued and are currently
outstanding; the Seller or its Affiliate has complied in all material
respects with all obligations and duties incumbent upon the developers
under the related timeshare declaration (each a "Declaration"), as
applicable, or similar applicable documents for the related Resort; no
practice, procedure or policy employed by the Time Share Association
in the conduct of its business violates any law, regulation, judgment
or agreement, including, without limitation, those relating to zoning,
building, use and occupancy, fire, health, sanitation, air pollution,
ecological, environmental and toxic wastes, applicable to such Time
Share Association which, if enforced, would reasonably be expected to
(a) have a material adverse impact on such timeshare association or
the ability of such Time Share Association to do business, (b) have a
material adverse impact on the financial condition of the Time Share
Association, or (c) constitute grounds for the revocation of any
license, charter, permit or registration which is material to the
conduct of the business of the Time Share Association; the related
Resort and the present use thereof does not violate any applicable
environmental, zoning or building laws, ordinances, rules or
regulations of any governmental authority, or any covenants or
restrictions of record, so as to materially adversely affect the value
or use of such Resort or the performance by the Time Share Association
of its obligations pursuant to and as contemplated by the terms and
provisions of the related Declaration; there is no condition presently
existing, and to the best knowledge of the Seller, no event has
occurred or failed to occur prior to the date hereof, concerning the
related Resort relating to any hazardous or toxic materials or
condition, asbestos or other environmental or similar matters which
would reasonably be expected to materially and adversely affect the
present use of such Resort or the financial condition or business
operations of the related Time Share Association, or the value of the
Notes;
(xxxiii) except for Land Receivables, the original principal
balance of such Receivable does not exceed $25,000, and with respect
to Land Receivables, the original principal balance of such Receivable
does not exceed $100,000;
(xxxiv) payments with respect to the Receivable are to be in
legal tender of the United States;
(xxxv) all monthly payments on the Receivable have been made by
the Obligor and not by the Seller or any Affiliate of the Seller on
the Obligor's behalf;
(xxxvi) the Receivable relates to a Resort;
(xxxvii) the Receivable constitutes either "chattel paper", a
"general intangible" or an "instrument" as defined in the UCC as in
effect in all applicable jurisdictions;
-32-
(xxxviii) the sale, transfer and assignment of the Receivable and
the related Assets does not contravene or conflict with any law, rule
or regulation or any contractual or other restriction, limitation or
encumbrance, and the sale, transfer and assignment of the Receivable
and related Assets does not require the consent of the Obligor;
(xxxix) each of the Receivable, the related Assets, related
Assignment, related Mortgage, Related Mortgage Note and each other
related Receivables Document are in full force and effect, constitute
the legal, valid and binding obligation of the Obligor thereof
enforceable against such Obligor in accordance with its terms subject
to the effect of bankruptcy, fraudulent conveyance or transfer,
insolvency, reorganization, assignment, liquidation, conservatorship
or moratorium, and is not subject to any dispute, offset, counterclaim
or defense whatsoever;
(xl) the Receivable relates to a Completed Unit and the related
Assets does not, and the origination of each Receivable did not,
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, retail installment sales, truth in
lending, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party
thereto has been or is in violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Receivable and the related Assets; no
Receivable was originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, conveyance or assignment
of such Receivable would be unlawful, void or voidable;
(xli) (i) no bankruptcy is currently existing with respect to the
Obligor, (ii) the Obligor is not insolvent and (iii) the Obligor is
not an Affiliate of the Depositor or the Seller;
(xlii) the Receivable shall not have an initial term to maturity
of more than 180 months;
(xliii) except for Land Receivables, the Receivable shall not
have a Receivable Rate less than 12.90% per annum;
(xliv) the Obligor has made at least two (2) month's aggregate
required payments with respect to the Receivable (not including any
down payment);
(xlv) 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 Receivables which have been sold pursuant to
this Agreement;
(xlvi) such Receivable is not an RDI Receivable;
-33-
(xlvii) the Intervals and the related Resorts are free of
material damage and waste and are in good repair and fully
operational; there is no proceeding pending or threatened for the
total or partial condemnation of or affecting any Interval or taking
of the Interval by eminent domain; the Intervals and the Resorts in
which the Intervals are located are lawfully used and occupied under
applicable law by the owner thereof;
(xlviii) the portions of the Resorts in which the Intervals are
located which represent the common facilities are free of material
damage and waste and are in good repair and condition, ordinary wear
and tear excepted;
(xlix) no foreclosure or similar proceedings have been instituted
and are continuing with respect to such Receivable or the related
Interval;
(l) with respect to Aruba Receivables only, Bluegreen shall own,
directly or indirectly, 100% of the economic and voting interests of
Bluegreen Properties, N.V.;
(li) except for Land Receivables, no Receivable has an original
term to maturity in excess of 180 months;
(lii) the capital reserves and maintenance fee levels of the Time
Share Associations related to the Resorts are adequate in light of the
operating requirements of such Time Share Associations;
(liii) except as required by law, the Receivable may not be
assumed without the consent of the obligee;
(liv) none of the Obligors under the Receivables has had its
rights under the Club Trust Agreement suspended;
(lv) the Receivable is not a Defaulted Receivable; and
(lvi) if such Receivable is a Land Receivable, the related
Loan-to-Sale Ratio is equal to or less than 75%;
(lvii) no selection procedures adverse to the interests of the
Noteholders shall have been utilized in selecting the Receivables for
sale and transfer under the Operative Documents;
(lviii) except as approved by the Agent in writing, such
Receivable when combined with each Purchased Receivable would not
cause any Receivables to be an Excluded Receivable; and
(lix) the payments under Receivables are not subject to
withholding taxes imposed by any foreign governments.
(b) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the conveyance of the
Receivables and the delivery of the
-34-
respective Receivables Documents to the Custodian or Indenture Trustee and
the termination of the rights and obligations of the Servicer pursuant to
Section 5.4 and 6.1. Upon discovery by the Depositor, the Seller, the
Servicer, the Custodian or the Indenture Trustee of a breach of any of the
foregoing representations and warranties, which materially and adversely
affects the interest of the Indenture Trustee in the related Receivable,
the party discovering such breach shall give prompt written notice to the
other parties. Within 60 days of its discovery or its receipt of notice of
breach, the Seller shall cure such breach in all material respects or shall
purchase such Receivable from the Issuer or substitute a new Receivable for
such Receivable pursuant to Section 2.5. Any such repurchase by the Seller
shall be at the Repurchase Price and in each case shall be accomplished in
the manner set forth in Section 2.4. For clarity, it is understood that the
Receivables, related Receivables Documents and other Assets will be
conveyed by the Seller to the Depositor and by the Depositor to the Issuer
pursuant to the terms hererof without recourse, representation on warranty
except as expressly provided therein. Without limiting the foregoing, none
of the Seller, the Depositor or any of their respective subsidiaries shall
be responsible for payments on the Receivables, and any other credit risks
associated therewith shall be borne by the Issuer and the holders of any
obligations of the Issuer.
Section 2.3. Conveyance of the Receivables. By execution of this Agreement,
the Seller does hereby transfer, assign, set over and otherwise convey to the
Depositor, and the Depositor does hereby transfer, assign, set-over and
otherwise convey to the Issuer, (i) all of its respective right, title and
interest in and to each Receivable identified on the List of Receivables,
including the related Receivables Documents, from time to time existing (x) at
the close of business on the Cut-Off Date, in the case of the Initial
Receivables and (y) at the close of business on each Additional Cut-Off Date, in
the case of Additional Receivables sold or transferred pursuant to Section 2.5,
(i) the Mortgages and other instruments or documents securing such Receivables;
(ii) the portions of its interest in any Insurance Policies relating to such
Receivable; (iii) each Assignment; (iv) all rights under any Hedge Agreements;
and (v) all payments on and proceeds of any of the foregoing after the
applicable Cut-Off Date (the property in clauses (i)-(v), being the "Assets").
The transfer by the Seller to the Depositor, by the Depositor to the Issuer of
the Receivables set forth herein is absolute and is intended by all parties
hereto to be treated as a sale by the Seller to the Depositor, by the Depositor
to the Issuer. Pursuant to the Indenture, the Issuer will pledge the Trust
Estate to the Indenture Trustee for the benefit of the Owners of the Notes. The
foregoing does not constitute and is not intended to result in the creation or
assumption by the Issuer, the Custodian, the Indenture Trustee or any Owner of
any obligation of the Seller, the Servicer or any other Person in connection
with the Receivables Documents or under any agreement or instrument relating
thereto, including any obligation to make future advances.
In consideration of such transfers, the Depositor will pay to the Seller in
cash a purchase price equal to the Purchase Price of each Receivable
transferred, and the Issuer will pay to the Depositor in cash a purchase price
equal to the Purchase Price of each Receivable transferred. The Purchase Price
will be paid on the Addition Date related to Receivables transferred on such
date. To the extent that there is no Purchase Price or the cash portion of the
Purchase Price for the Receivables is less than the fair market value thereof,
the difference shall be deemed a capital contribution by the Seller to the
Depositor. The Purchase Price shall be payable in full by wire transfer on the
related Addition Date to an account designated by the Seller and the Depositor
respectively on or before such Addition Date.
-35-
In the event that, despite the express intent of the parties, any such
conveyance is deemed to be a loan and not an absolute sale, each of the Seller,
the Depositor and the Issuer intend that such conveyance be deemed to constitute
a security interest and the Seller hereby grants in favor of the Depositor, and
the Depositor hereby grants in favor of the Issuer a first priority perfected
security interest in and to the Trust Estate and that with respect to such
conveyance this Agreement shall constitute a security agreement under applicable
law, and that any subsequent conveyances pursuant to this Agreement shall be
deemed to be assignments of such secured party's security interest.
In connection with the sale, transfer, assignment, and conveyance from the
Seller to the Depositor, the Seller has filed, in the appropriate office or
offices in the States of Florida and Massachusetts, a UCC-1 financing statement
executed by the Seller as debtor, naming the Depositor as secured party, naming
the Indenture Trustee as assignee of the secured party and listing the
Receivables and the other property described above as collateral. The
characterization of the Seller as the debtor and the Depositor as the secured
party in such financing statements is solely for protective purposes and shall
in no way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale of the Seller's entire right, title and
interest in the Receivables. In connection with such filing, the Seller agrees
that it shall cause to be filed all necessary continuation statements thereof
and to take or cause to be taken such actions and execute such documents as are
necessary to perfect and protect the Depositor's interest in the Receivables.
In connection with the sale, transfer, assignment, and conveyance from the
Depositor to the Issuer, the Depositor has filed, in the appropriate office or
offices in the States of Florida and Massachusetts, a UCC-1 financing statement
executed by the Depositor as debtor, naming the Issuer as secured party, naming
the Indenture Trustee as assignee of the secured party and listing the
Receivables and the other property described above as collateral. The
characterization of the Depositor as the debtor and the Issuer as the secured
party in such financing statements is solely for protective purposes and shall
in no way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale of the Depositor's entire right, title and
interest in the Trust Estate. In connection with such filing, the Depositor
agrees that it shall cause to be filed all necessary continuation statements
thereof and to take or cause to be taken such actions and execute such documents
as are necessary to perfect and protect the Issuer's interest in the Trust
Estate.
In connection with the pledge of the Trust Estate from the Issuer to the
Indenture Trustee, on behalf of the Owners of the Notes, the Issuer has filed,
in the appropriate office or offices in the State of Delaware, a UCC-1 Financing
Statement executed by the Issuer as debtor, naming the Indenture Trustee, for
the benefit of the Owners of the Notes, as the secured party and listing the
Receivables and the other property described above as collateral. In connection
with such filing, the Issuer agrees that it shall cause to be filed all
necessary continuation statements thereof and to take or cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Indenture Trustee's interest in the Trust Estate for the benefit of the Owners
of the Notes.
(a) Each of the Club Trust, the Club Trustee, the Depositor and the
Seller hereby agrees (i) on or prior to the Initial Addition Date, in the
case of the Initial Receivables and (ii) on or prior to the applicable
Addition Date, in the case of Additional Receivables, to
-36-
make the appropriate entries in its general accounting records, to indicate
that Receivables have been transferred to the Indenture Trustee and
constitute part of the Issuer in accordance with the terms of the trust
created thereunder.
(b) Neither the Custodian nor Indenture Trustee shall have any
responsibility for reviewing any Receivables Document except as expressly
provided in this Section 2.3 or the Custodial Agreement. In reviewing any
Receivables Document pursuant to this Section, the Custodian shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or
recordable form (except, if applicable, to determine if the Indenture
Trustee is the assignee or endorsee), whether any document has been
recorded in accordance with the requirements of any applicable
jurisdiction, or whether a blanket assignment is permitted in any
applicable jurisdiction, whether any Person executing any document is
authorized to do so or whether any signature thereon is genuine, but shall
only be required to determine whether a document has been executed, that it
appears to be what it purports to be, and, where applicable, that it
purports to be recorded.
Section 2.4. Acceptance by Indenture Trustee. The Indenture Trustee hereby
acknowledges the sale and assignment of the Receivables. If the Seller or the
Servicer is given notice under Section 2.1(b) or 2.2(b) of a breach of a
representation as provided therein and if the Seller does not correct or cure
such omission or defect within the 30-day or 60-day period specified in Section
2.1(b) or 2.2(b), as the case may be, the Seller shall purchase such Receivable
from the Issuer as of the Determination Date in the month in which such period
expired at the Repurchase Price of such Receivable or substitute such Receivable
pursuant to this Section 2.5. In addition, pursuant to Section 4.19, the
Servicer may, but shall have no obligation to, repurchase certain other
Receivables by paying to the Indenture Trustee for deposit to the Note Account
the Repurchase Price therefor. The Repurchase Price for the repurchased
Receivable shall be deposited in the Note Account no later than the Business Day
prior the date on which such repurchase occurs. Upon receipt by the Indenture
Trustee of written notification of such deposit signed by an officer of the
Seller or the Servicer, the Indenture Trustee or the Custodian shall release to
the Seller or the Servicer, as applicable, the related Receivables Document and
the Indenture Trustee shall execute and deliver a release of lien in the form of
Exhibit G hereto. It is understood and agreed that the obligation of the Seller
to repurchase or substitute any Receivable as to which a material defect in or
breach exists pursuant to Section 2.2(b) shall constitute the sole remedy
hereunder against the Seller respecting such defect or omission available to the
Depositor, the Issuer, the Owners and the Indenture Trustee on behalf of Owners.
The Servicer (provided that Bluegreen Corporation or its Affiliate is the
Servicer) promptly following the transfer of a repurchased Receivable from the
Issuer pursuant to this Section 2.4 shall make appropriate entries in its
records to reflect such repurchase.
Section 2.5. Additional Purchases, Transfers and Substitution of
Receivables. On each Business Day on or prior to the Facility Termination Date,
subject to and in compliance with the conditions set forth below and in Section
2.3, the Seller and the Depositor may at their option (x) replace a Receivable
currently in the Asset Pool (a "Replaced Receivable") with one or more
Additional Receivables (provided that the Aggregate Outstanding Receivable
Balance as of the related Cut-Off Date for the Receivables being transferred to
the Asset Pool on any Business Day plus any Deposit Amount shall not be less
than the Aggregate Outstanding Receivable
-37-
Balance of the Replaced Receivables); or (y) sell and transfer Additional
Receivables to the Issuer. On the Initial Addition Date in the case of the
Initial Receivables and Addition Date with respect to any Additional
Receivables, the Depositor shall purchase from the Seller, and the Seller shall
sell to the Depositor, and the Issuer shall purchase from the Depositor, and the
Depositor will sell to the Issuer, such Initial Receivables and Additional
Receivables, in each case the Receivable Balance sold being established as of
the close of business on the applicable Cut-Off Date as set forth in Section
2.3. As a condition to each transfer and purchase of Receivables:
(i) the Seller and the Depositor shall have provided the
Indenture Trustee and the Agent with an Addition Date Notice.
(ii) the Servicer shall have delivered to the Indenture Trustee,
the Backup Servicer and the Agent an updated Computer Disk.
(iii) the Seller and the Depositor shall have delivered to the
Indenture Trustee a duly executed written assignment in favor of the
Issuer, in substantially the form of Exhibit H hereto (the "Addition
Agreement") or, in the case of substitute Receivables, substantially
in the form of Exhibit I hereto (the "Substitution Agreement"), which
shall include a Subsequent List of Receivables listing the Additional
Receivables;
(iv) after giving effect to such conveyance, the Additional
Receivables, the Transfer Condition shall remain satisfied;
(v) the Seller and the Issuer shall remit to the Indenture
Trustee for deposit in the Note Account all principal and interest
collected in respect of such Initial Receivables or Additional
Receivables after the related Cut-Off Date;
(vi) each of the representations and warranties made by the
Seller and the Depositor pursuant to Article II hereof shall be true
and correct as of the related Addition Date, and the Seller and the
Depositor shall have performed all obligations to be performed by them
hereunder on or prior to such Addition Date;
(vii) with respect to any substitution and replacement of
Receivables, the Seller shall have deposited into the Lock-Box Account
any Deposit Amount applicable thereto; and
(viii) the Seller and the Depositor shall, at their own expense,
on or prior to the Addition Date, have indicated in their Computer
Disk and Records that the Additional Receivables identified on the
Subsequent List of Receivables in the Addition Agreement or
Substitution Agreement as applicable, have been sold to the Trust
through the Depositor pursuant to this Agreement.
Upon satisfaction of the preceding conditions in connection with any
replacement of existing Receivables in the Asset Pool with substitute
Receivables effected in accordance with this Section 2.5, the Indenture Trustee
shall, automatically and without further action, be deemed to transfer to the
Depositor, free and clear of any Lien created pursuant to this Agreement or the
-38-
Indenture, all of the right, title and interest of the Issuer in, to and under
the related Replaced Receivable and the Indenture Trustee shall be deemed to
represent and warrant that it has the corporate authority and has taken all
necessary corporate action to accomplish such transfer, but without any other
recourse, representation or warranty, express or implied.
END OF ARTICLE II
-39-
ARTICLE III
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 3.1. Establishment of Accounts. The Indenture Trustee shall
establish and maintain, at the Corporate Trust Office (i) a separate trust
account (the "Note Account") titled "U.S. Bank Trust National Association, as
Indenture Trustee of BXG Receivables Note Trust 2001-A, Note Account" and (ii) a
separate trust account (the "Reserve Account") titled "U.S. Bank Trust National
Association, as Indenture Trustee of BXG Receivables Note Trust 2001-A, Note
Reserve". Each of the Note Account and the Reserve Account shall be an Eligible
Account.
Section 3.2. Flow of Funds. On each Payment Date, after giving effect to
(i) Borrowings on such day and the disbursements of the proceeds of such
Borrowings, (ii) the purchase of Receivables and the payment of the Purchase
Price for Receivables transferred pursuant hereto as reflected in the Computer
Disk delivered on such day and (iii) any purchases or repurchases of Receivables
by the Seller or Servicer pursuant to the terms hereof on such day and the
payment of the Purchase Price therefor, the Indenture Trustee shall withdraw
Available Funds from the Note Account and any amounts transferred from the
Reserve Account to the Note Account pursuant to Section 3.3(f) and make the
following allocations or disbursements from such Available Funds in the
following order of priority, and each such disbursement shall be treated as
having occurred only after all preceding allocations or disbursements have
occurred:
(a) If such Payment Date is before the Facility Termination Date,
(i) First, to the Servicer, if not Bluegreen or an Affiliate
thereof, the accrued and unpaid Servicing Fee;
(ii) Second, to the Backup Servicer, the accrued and unpaid
Backup Servicing Fee, and to the Owner Trustee, the Indenture Trustee
and the Custodian, the related accrued and unpaid fees then due;
(iii) Third, to the Agent for the benefit of the Noteholders for
distribution pursuant to the Indenture, the Current Interest;
(iv) Fourth, to the Agent, any Fees due and owing;
(v) Fifth, to the Agent for the benefit of the Noteholders for
distribution pursuant to the Indenture, the Principal Distribution
Amount for such Payment Date;
(vi) Sixth, to the Agent, any other amounts due and owing under
the Note Purchase Agreement;
(vii) Seventh, to the Reserve Account, the excess, if any, of the
Reserve Requirement over the amount on deposit in the Reserve Account
after making the distributions in clauses (i) through (vi) above;
-40-
(viii) Eighth, to the Servicer, if Bluegreen or an Affiliate
thereof, the Servicing Fee and any amounts previously paid by the
Servicer pursuant to Section 3.4 below;
(ix) Ninth, to the Custodian, the Backup Servicer, the Indenture
Trustee and the Owner Trustee, to the extent not previously paid, for
the reimbursement of the fees and expenses of the Custodian, the
Backup Servicer, the Indenture Trustee and the Owner Trustee incurred
under the Operative Documents;
(x) Tenth, if Bluegreen or an Affiliate thereof is the Servicer,
to the Servicer, but only to the extent the Servicer Purchase Option
has been declined by the Servicer, any accrued and unpaid Remarketing
Fees;
(xi) Eleventh, to the Certificate Distribution Account, the
remainder or such lesser amount as the Issuer (acting at the direction
of the Residual Interest Owner), by prior written notice to the
Indenture Trustee, elects to have distributed to the Residual
Certificateholders; and
(xii) Twelfth, any remainder to remain on deposit in the Note
Account.
(b) If such Payment Date is on or after the Facility Termination Date,
(i) First, to the Servicer the accrued and unpaid Servicing Fee;
(ii) Second, to the Backup Servicer, the accrued and unpaid
Backup Servicing Fee, and to the Owner Trustee, the Indenture Trustee
and the Custodian, the related accrued and unpaid fees then due;
(iii) Third, for distribution pursuant to the Indenture, the
Current Interest;
(iv) Fourth, to the Agent, any Fees due and owing;
(v) Fifth, to the Agent, any other amounts due and owing under
the Note Purchase Agreement;
(vi) Sixth, for distribution pursuant to the Indenture, the
Principal Distribution Amount until the Note Principal Balance is
reduced to zero;
(vii) Seventh, to the Custodian, the Backup Servicer, the
Indenture Trustee and the Owner Trustee, to the extent not previously
paid, for the reimbursement of the fees and expenses of the Custodian,
the Backup Servicer, the Indenture Trustee and the Owner Trustee
incurred under the Operative Documents;
(viii) Eighth, if Bluegreen or an Affiliate thereof is the
Servicer, to the Servicer, but only to the extent the Servicer
Purchase Option has been declined by the Servicer, any accrued and
unpaid Remarketing Fees; and
(ix) Ninth, to the Certificate Distribution Account, the
remainder.
-41-
Section 3.3. Investment of Accounts; Reserve Account.
(a) Consistent with any requirements of the Code, all or a portion of
any Account held by the Indenture Trustee for the benefit of the Owners
shall be invested and reinvested by the Indenture Trustee in trust for the
benefit of the Owners, as directed in writing by the Servicer (provided
that Bluegreen Corporation or its Affiliate is the Servicer), in one or
more Eligible Investments. The bank serving as Indenture Trustee or any
Affiliate thereof may be the obligor on any investment which otherwise
qualifies as an Eligible Investment. No investment in any Account shall
mature later than the Business Day immediately preceding the next Payment
Date (except that if such Eligible Investment is an obligation of the
Indenture Trustee, then such Eligible Investment shall mature not later
than such Payment Date).
(b) If any amounts are needed for disbursement from any Account held
by the Indenture Trustee and sufficient uninvested funds are not available
to make such disbursement, the Indenture Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
Account. No investments will be liquidated prior to maturity unless the
proceeds thereof are needed for disbursement.
(c) Subject to the terms of the Indenture, the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any Account
held by the Indenture Trustee resulting from any loss on any Eligible
Investment included therein (except to the extent that the bank serving as
Indenture Trustee is the obligor thereon).
(d) If the Servicer shall have failed to give investment directions to
the Indenture Trustee as specified in section (a) above then the Indenture
Trustee shall invest in federal funds described in clause (a) of the
definition of "Eligible Investments" to be redeemable without penalty no
later than the Business Day immediately preceding the next Payment Date.
(e) All income or other gain from investments in any Account held by
the Indenture Trustee shall be deposited in such Account immediately on
receipt, and any loss resulting from such investments shall be charged to
such Account.
(f) If on any Determination Date or Addition Date the Borrowing Base
is less than $5,000,000 the Issuer shall deliver to the Indenture Trustee
and the Indenture Trustee shall deposit into the Reserve Account an amount
equal to the Reserve Requirement. If on any Payment Date before the
Facility Termination Date the amount of Available Funds available for
distribution on such Payment Date is less than the amount necessary to make
the Required Payment for such Payment Date, the Indenture Trustee shall
withdraw from the Reserve Account and deposit into the Note Account for
distribution on such Payment Date the lesser of the amount then on deposit
in the Reserve Account and the amount necessary to make the Required
Payment for such Payment Date. If on any Payment Date the amount on deposit
in the Reserve Account is greater than the Required Reserve Amount, the
Indenture Trustee shall withdraw the amount of such excess and deposit it
into the Note Account for distribution on such Payment Date. Upon
satisfaction of all amounts owing under the Operative Documents and
termination of the Indenture, the Indenture Trustee shall release to the
Issuer or its designee any amounts remaining on deposit in the Reserve
Account.
-42-
Section 3.4. Payment of Issuer Expenses.
(a) The Servicer (provided that Bluegreen Corporation or its Affiliate
is the Servicer) shall promptly pay the amount of the fees and expenses of
the Indenture Trustee, Backup Servicer, the Owner Trustee and the Custodian
not covered or paid by Section 3.2.
(b) The Seller shall pay directly on the Closing Date the reasonable
fees and expenses of counsel to the Indenture Trustee, the Custodian, the
Backup Servicer and the Owner Trustee.
(c) Each of the Seller and Servicer (provided that Bluegreen
Corporation or its Affiliate is the Servicer) accepts its obligations and
agrees to perform the duties assigned to it in the Trust Agreement and the
Indenture.
Section 3.5. Accounting and Directions by Servicer. By 12:00 noon, New York
time, on the Business Day preceding each Payment Date (or such earlier date as
shall be agreed by the Servicer and the Indenture Trustee), the Servicer
(provided that Bluegreen Corporation is the Servicer) shall notify the
Depositor, the Seller, the Indenture Trustee and the Agent, of the following
information with respect to such Payment Date (which notification may be given
by facsimile):
(1) The Current Interest (based upon the Note Monthly Interest
Calculation provided by the Agent pursuant to Section 2.6 of the
Note Purchase Agreement); and
(2) The Note Principal Balance before giving effect to payments on
such Payment Date.
Section 3.6. Reports by the Servicer to Agent.
(a) Provided that Bluegreen Corporation or its Affiliate is the
Servicer, on each Payment Date, the Servicer shall prepare and transmit to
the Owner Trustee, the Indenture Trustee and the Agent a report that
contains the following:
(i) the amount of all distributions allocable to principal on the
Notes;
(ii) the amount of all distributions allocable to interest on the
Notes;
(iii) the amount of the distribution of any other amounts with
respect to the Owners of the Notes;
(iv) all other amounts distributed pursuant to Section 3.2;
(v) if the interest amount portion paid to the Owners of the
Notes on such Payment Date was less than the Current Interest on such
Payment Date, the Carry Forward Amount resulting therefrom;
(vi) the principal amount of the Notes which will be Outstanding
after giving effect to any payment of principal on such Payment Date
and the
-43-
Borrowing Base as of the close of business on the second preceding
Business Day;
(vii) the weighted average Receivable Rate of the Receivables
based on the Receivable Balances of the Receivables as of the close of
business on the second preceding Business Day; and
(viii) any other information reasonably requested by the Agent.
(b) Provided that Bluegreen Corporation or its Affiliate is the
Servicer, in addition, on each Payment Date, the Servicer will furnish to
the Owner Trustee, the Indenture Trustee and the Agent, together with the
information described in subsection (a) preceding, the following
information:
(i) the number and aggregate principal balances of Receivables
(a) 30-59 days Delinquent, (b) 60-89 days Delinquent and (c) 90 or
more days Delinquent, as of the close of business on the last day of
the related Collection Period, (d) the numbers and aggregate
Receivable Balances of all Receivables as of the last day of the
related Collection Period and (e) the percentage that each of the
amounts represented by clauses (a), (b) and (c) represent as a
percentage of the respective amounts in clause (d); and
(ii) all Repurchase Prices paid with respect to the preceding
Collection Period.
Section 3.7. Reports by Servicer.
(a) Provided that Bluegreen Corporation or one of its Affiliate is the
Servicer, the Servicer shall report to the Indenture Trustee, the
Depositor, the Seller and the Agent, with respect to the amount on deposit
in the Note Account and the identity of the investments included therein,
as any of them may from time to time reasonably request. Without limiting
the generality of the foregoing, the Servicer shall, at the reasonable
request of the Issuer, the Indenture Trustee, the Depositor, the Seller or
the Agent transmit promptly to each of them copies of all accountings of
receipts in respect of the Receivables.
(b) Provided that Bluegreen Corporation or one of its Affiliate is the
Servicer, the Indenture Trustee shall report to the Agent, the Servicer,
the Seller and the Depositor with respect to any written notices it may
from time to time receive which provide an Authorized Officer with actual
knowledge that any of the statements set forth in Section 2.2(a) hereof are
inaccurate.
END OF ARTICLE III
-44-
ARTICLE IV
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 4.1. The Servicer.
(a) The Servicer, as independent contract servicer, shall, for the
period described in Section 4.23, service and administer the Receivables
and shall have full power and authority, acting alone (except as provided
by Section 5.5), to do any and all things in connection with such servicing
and administration which the Servicer may deem necessary or desirable and
consistent with the terms of this Agreement, the terms of the Receivables
and applicable law.
(b) Servicing Standard. Notwithstanding anything to the contrary
contained herein, the Servicer, in servicing and administering the
Receivables, shall employ or cause to be employed procedures and exercise
the same care that it customarily employs and exercises in servicing and
administering Receivables for its own account, and shall otherwise service
and administer the Receivables in accordance with accepted servicing
practices of prudent servicers of timeshare receivables and, (provided that
Bluegreen Corporation or its Affiliate is the Servicer), giving due
consideration to the Owners' reliance on the Servicer (the "Servicing
Standard"). Provided that Bluegreen Corporation or its Affiliate is the
Servicer, without limiting the generality of the foregoing, the Servicer
shall:
(i) Maintenance. For so long as the Servicer controls the Resorts
and Additional Resorts, the Servicer shall use commercially reasonable
best efforts to maintain the Resorts and Additional Resorts in good
repair, working order and condition (ordinary wear and tear excepted).
(ii) Management Contract. For so long as the Servicer controls
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 reasonably
satisfactory to the Agent. For so long as the Servicer controls the
Time Share Association for the Resorts or Additional Resorts, and the
Servicer or an Affiliate thereof is the manager, the related
management contract and master marketing and sale contract may be
amended or modified only with the prior written consent of the Agent,
which consent shall not be unreasonably withheld or delayed.
(iii) Release and Bonding of Liens. In the event any lien (other
than a Permitted Lien) attaches to any Receivable or related Asset
from any Person claiming from and through the Servicer or one of its
Affiliates which materially adversely affects the Trust's interest in
the Receivable, Servicer shall, within the earlier to occur of ten
(10) days after such attachment or the respective lienholders action
to foreclose on such lien, either (a) cause such lien to be released
of record, or (b) provide the Indenture Trustee with a bond in
accordance with the applicable laws of the state in which the
Receivable or related Asset is located, issued by a corporate surety
acceptable to the Indenture Trustee, in an amount and in form
-45-
reasonably acceptable to the Indenture Trustee, or (c) provide the
Indenture Trustee with such other security as the Indenture Trustee
may reasonably require.
(iv) Claims. Servicer shall: (a) promptly notify the Indenture
Trustee and the Agent of (i) any claim, action or proceeding which may
be reasonably expected to have a material adverse effect on the
Receivables or related Assets, or any material part thereof, and (ii)
any action, suit, proceeding, order or injunction of which Servicer
becomes aware after the date hereof pending or threatened against or
affecting Servicer or any Affiliate which may be reasonably expected
to have a material adverse effect on the Assets or the Servicer's
ability to service the same; (b) at the request of Trust with respect
to a claim or action or proceeding which arises from or through the
Servicer or one of its Affiliates, appear in and defend, at Servicer's
expense, any such claim, action or proceeding which would have a
material adverse effect on the Assets or the Servicer's ability to
service the same; 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 on the Assets
or the Servicer's ability to service the same.
(v) Negative Pledge on Reservation System. Except as contemplated
by the Operative Documents, the Servicer shall not, and shall not
permit the Club Managing entity to, encumber, pledge or otherwise
▇▇▇▇▇ ▇ ▇▇▇▇ or security interest in and to the Reservation System
(including, without limitation, all hardware, software and data in
respect thereof) and furthermore agrees, and shall cause the Club
Managing Entity, to use commercially reasonable efforts to keep the
Reservation System operational, not to dispose of the same and to
allow the Club the use of, and access to, the Reservation System in
accordance with the terms of Club Management Agreement.
(vi) Modifications of Receivables. The Servicer shall not
reschedule, revise downward or defer payments on a Receivable or
modify the terms or conditions of the related contract in a manner
adverse to the Trust unless the Agent shall have consented in writing
to the same, provided that terminating or initiating electronic
deductions from bank accounts of Obligors and adjustment in the
related Receivable Rate, each in accordance with the terms of the
related Receivables Documents, will not constitute a modification of
the related Receivable.
(vii) General. At all times during the term of this Agreement to
the extent not required to be retained by the Custodian, Servicer
shall maintain complete and accurate files and records pertaining to
each Receivable and related Assets and of all business activities and
operations conducted by Servicer in connection with its performance
under this Agreement. All such files and records shall, upon the
Indenture Trustee's request, be delivered to the Indenture Trustee or
its designee upon early termination of this Agreement.
(viii) Compliance With Collection Policy. The Servicer shall
comply in all material respects with the Collection Policy in effect
on the Closing Date (or as
-46-
amended from time to time with the consent of the Agent) and with the
terms of the Receivables.
(ix) Notices to Obligors. Promptly after the Initial Addition
Date and, in any event, not later than five (5) Business Days
thereafter, the Servicer will direct all Obligors of Receivables, and
shall instruct all future Obligors of such Receivables, to remit all
payments with respect to such Receivables only (i) by check, money
order, phone payment, or Western Union Quick Collect mailed to, or
generated by, an office of the Servicer, (ii) by check, wire transfer,
money order or moneygram to the Lock-Box or Lock-Box Account or (iii)
by pre-authorized checking or credit card payment for deposit into the
Lock-Box Account.
(x) Compliance with Agreements and Applicable Laws. The Servicer
shall perform each of its obligations under this Agreement and the
other Operative Documents and comply with all federal, state and local
laws and regulations applicable to it and the Receivables, including
those relating to truth in lending, time share, real estate, retail
installment sales, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and environmental laws,
except to the extent that the failure to so comply, individually or in
the aggregate, could not reasonably be expected to have a material
adverse effect on its ability to perform its obligations hereunder or
on its business, properties, assets, or condition (financial or
otherwise) of the Servicer and its Subsidiaries taken as a whole.
(c) On and after such time as the Indenture Trustee receives the
resignation of, or notice of the removal of, the Servicer from its rights
and obligations under this Agreement, and with respect to resignation
pursuant to Section 5.4, after receipt by the Indenture Trustee of the
Opinion of Counsel required pursuant to Section 5.4, the Backup Servicer or
the Indenture Trustee's designee shall assume all of the rights and
obligations of the Servicer, subject to Section 6.2. Upon any such
resignation or removal, the Servicer shall, upon request of the Indenture
Trustee but at the expense of the Servicer, deliver to the Backup Servicer
or the Indenture Trustee all documents and records relating to the
Receivables and an accounting of amounts collected and held by the Servicer
and otherwise effect the orderly and efficient transfer of servicing rights
and obligations to the assuming party.
(d) The Servicer shall deliver a list of Servicing Officers to the
Indenture Trustee on or before the Initial Addition Date and shall revise
such list from time to time, as appropriate, and shall deliver all
revisions promptly to the Indenture Trustee.
(e) The Servicer (unless the Backup Servicer is acting as Servicer
hereunder) agrees to deposit into the Lock-Box Account pursuant to Section
4.2(b)(iii) from its own funds an amount equal to the Charge Card Fee
Payment assessed against each payment on a Receivable made by credit card.
-47-
Section 4.2. Collection of Certain Receivable Payments.
(a) The Servicer shall make reasonable efforts consistent with the
Servicing Standards to collect all payments called for under the terms and
provisions of the Receivables and shall follow such collection procedures
as shall be consistent with the Servicing Standard and without limiting the
generality of the foregoing, the Servicer may in its discretion (i) waive
any prepayment penalty or late payment charge or any assumption fees or
other fees which may be collected in the ordinary course of servicing such
Receivable and (ii) arrange with an Obligor a schedule for the payment of
interest, principal and other amounts due and unpaid; provided that such
arrangement is consistent with the Servicer's policies with respect to the
timeshare receivables it owns or services and with Section 4.1; provided,
further, that notwithstanding such arrangement such Receivables will be
included in the monthly information delivered by the Servicer to the
Indenture Trustee pursuant to Section 4.12.
(b) Provided that Bluegreen Corporation or one of its Affiliate is the
Servicer, no later than two Business Days following receipt thereof the
Servicer (other than payments made by credit card which shall be processed
and deposited at least once per week) shall instruct Lock-Box Banks to
transfer into the Note Account the following payments and collections
received or made by it with respect to each Receivable (without
duplication):
(i) all payments received after the applicable Cut-Off Date or
Additional Cut-Off Date on account of principal on the Receivables;
(ii) all payments received after the applicable Cut-Off Date or
Additional Cut-Off Date on account of interest on the Receivables;
(iii) all Charge Card Fee Payments, Recoveries and Insurance
Proceeds;
(iv) any amounts payable in connection with the repurchase of any
Receivable pursuant to Sections 2.1, 2.2, 2.5 and 4.11;
(v) amounts received in respect of the Hedge Agreement;
(vi) to the extent not set forth above, any amount required to be
deposited in the Note Account pursuant to Sections 3.3(e) or any other
provision of this Agreement; and
(vii) any amounts deposited by the Issuer in the Note Account
pursuant to the last sentence of this Section 4.2(b).
The foregoing requirements respecting deposits to the Note Account are
exclusive, it being understood that, without limiting the generality of the
foregoing, the Servicer need not deposit, or instruct the Lock-Box Banks to
deposit, in the Note Account amounts representing fees (including annual fees),
late charge penalties or other amounts to which the Servicer is entitled
pursuant hereto or other amounts received by the Servicer for the accounts of
Obligors for application toward the payment of taxes, insurance premiums,
assessments and similar items. On any day, the Issuer may deposit such amounts
as it may elect, in its sole discretion, in the Note Account.
-48-
(c) All funds in the Note Account shall be invested as provided in
Section 3.3.
(d) Provided that Bluegreen Corporation or its Affiliate is the
Servicer, each of the Servicer and Seller will instruct all Obligors to
cause all Collections of Receivables to be deposited directly to a Lock-Box
Account with a Lock-Box Bank in accordance with Section 4.1(b)(ix) above.
Each Lock-Box Account will be maintained in the name of the Indenture
Trustee, in trust for, among others, the Indenture Trustee. Neither the
Servicer nor Seller will add or terminate any bank as a Lock-Box Bank from
those listed in Schedule II or make any change in its instructions to
Obligors regarding payments to be made in respect of the Receivables or
payments to be made to any Lock-Box Bank, unless the Indenture Trustee and
the Agent shall have received notice of, and the Agent shall have consented
in writing to, such addition, termination or change and duly executed
copies of agreements with each new Lock-Box Bank. If there shall be any
dispute as the application of funds in the Lock-Box Account allocable to
the Receivables among any of the Seller, the Servicer, the Depositor, the
Owners or the Agent, the Indenture Trustee shall follow the instructions of
the Agent with respect thereto.
Section 4.3. Withdrawals from the Note Account. Provided that Bluegreen
Corporation or its Affiliate is the Servicer, the Indenture Trustee and, to the
extent provided by the last sentence of this Section 4.3, the Servicer shall
withdraw or cause to be withdrawn funds from the Note Account for the following
purposes pursuant to the written direction of the Servicer:
(a) to make distributions pursuant to Section 3.2;
(b) to withdraw any amount received from a Obligor that is recoverable
and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with
a final, nonappealable order of a court having competent jurisdiction;
(c) subject to Section 3.3 hereof, to make investments in Eligible
Investments;
(d) to withdraw any funds deposited in the Note Account that were not
required to be deposited therein or were deposited therein in error and to
pay such funds to the appropriate Person; and
(e) to clear and terminate the Note Account upon the termination of
this Agreement and to pay any amounts remaining therein to the Certificate
Distribution Account.
The Servicer shall be permitted to withdraw amounts from the Note Account for
the purposes set forth in clauses (b), (c) and (d), out of proceeds of the
related Receivable.
Section 4.4. Maintenance of Hazard Insurance; Property Protection Expenses.
Provided that Bluegreen Corporation or its Affiliate is the Servicer, the
Servicer shall cause to be maintained with respect to each Receivable one or
more Standard Hazard Insurance Policies that provide, at a minimum, the same
coverage as that provided by a standard form fire and extended coverage
insurance policy that is customary for resort timeshares, providing coverage in
an amount at least equal to the lesser of (1) the maximum insurable value of the
-49-
related Interval or (2) the principal balance due from the Obligor under such
Receivable; provided, however, that in any event the amount of coverage provided
by each Standard Hazard Insurance Policy must be sufficient to avoid the
application of any co-insurance clause contained therein. As part of its
collection responsibilities, the Servicer shall proceed to collect the premiums
due on the Standard Hazard Insurance Policies from the Obligors in accordance
with the Servicing Standard. Each Standard Hazard Insurance Policy caused to be
maintained by the Servicer shall contain a standard loss payee clause in favor
of the Servicer and its successors and assigns. Any amounts received under any
such policies in respect of the Receivables shall be deposited initially into
the Note Account within one Business Day of receipt.
Section 4.5. Fidelity Bond. Provided that Bluegreen Corporation or its
Affiliate is the Servicer, the Servicer shall keep in force throughout the term
of this Agreement a policy or policies of insurance issued by a Qualified
Insurer covering errors and omissions in the performance of its obligations as
Servicer hereunder, including failure to maintain insurance as required by this
Agreement, and a fidelity bond in an aggregate amount of at least $5,000,000
covering the Servicer's performance under this Agreement. Such policy or
policies and bond shall be in such form and amount as is generally customary
among Persons that service pools of timeshare receivables and which Persons are
generally regarded as servicers acceptable to institutional investors. The
Servicer shall cause to be delivered to the Indenture Trustee and the Agent a
certificate of insurance with respect to such fidelity bond and insurance
policy.
Section 4.6. Indenture Trustee to Cooperate. Provided that Bluegreen
Corporation or its Affiliate is the Servicer, upon any payment of the
outstanding principal balance thereof in full or other satisfaction of a
Receivable in accordance with the Credit Policy, the Servicer is authorized to
execute, pursuant to the authorization contained in Section 4.1(b), an
instrument of satisfaction regarding the related Mortgage, which instrument of
satisfaction shall be recorded by the Servicer if required by applicable law and
be delivered to the Person entitled thereto. It is understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or transfer
shall be reimbursed from amounts deposited in the Note Account. If the Indenture
Trustee or the Custodian is holding the Receivables Documents, from time to time
and as appropriate for the servicing or foreclosure of any Receivable, the
Indenture Trustee or the Custodian, as the case may be, shall, upon request of
the Servicer and delivery to the Indenture Trustee or the Custodian, as the case
may be, of a Request for Release, in the form attached as Exhibit D to the
Custodial Agreement, signed by a Servicing Officer, release the related
Receivables Document to the Servicer, and the Indenture Trustee shall execute
such documents in the forms provided by the Servicer, as shall be necessary for
the prosecution of any such proceedings or the taking of other servicing
actions. Such Request for Release shall obligate the Servicer to return the
Receivables Document to the Indenture Trustee or the Custodian when the need
therefor by the Servicer no longer exists unless the Receivable shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that herein above specified, the Request for Release shall be
released by the Indenture Trustee or the Custodian holding such Request for
Release to the Servicer.
Section 4.7. Servicing Compensation; Payment of Certain Expenses by
Servicer. Provided that Bluegreen Corporation or its Affiliate is the Servicer,
the Servicer shall be entitled to receive the Servicing Fee as compensation for
its services in connection with servicing the Receivables. Moreover, additional
servicing compensation in the form of prepayment penalties,
-50-
late payment charges, bad check charges or assumption fees or other receipts not
required to be deposited in the Note Account and, subject to Section 4.2(b),
investment income on the Note Account shall be retained by the Servicer. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder (including payment of all other fees and expenses not
expressly stated hereunder to be for the account of the Issuer or the Owners)
and shall not be entitled to reimbursement therefor except as specifically
provided herein.
Section 4.8. Annual Statement as to Compliance.
(a) The Servicer (in the event the Servicer is Bluegreen or an
Affiliate thereof) will deliver to the Agent and the Indenture Trustee, on
or before April 30 of each year commencing April 30, 2002, an Officer's
Certificate stating that (a) a review of the activities of the Servicer
during the prior calendar year and of its performance under this Agreement
was made under the supervision of the officer signing such certificate and
(b) to such officer's knowledge, based on such review, the Servicer has
fully performed all its obligations under this Agreement, or, if there has
been a default in the performance of any such obligation, specifying each
such default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Indenture Trustee, promptly
after having obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice by means of an Officer's
Certificate of any event which, with the giving of notice or the lapse of
time or both, would become a Servicer Termination Event.
(c) Annual Servicing Report.
(i) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent
Accountants") (provided that if the Backup Servicer becomes the
Servicer hereunder, such accountants need not be required to be
nationally recognized) to deliver to the Agent and the Indenture
Trustee beginning on or about March 31, 2002, or April 30, 2002 with
respect to the Backup Service), with respect to the twelve months
ended the immediately preceding March 31, 2002 (or other applicable
date), a statement (the "Accountant's Report") addressed to the Board
of Directors of the Servicer and Servicer will promptly provide a copy
to the Agent and the Indenture Trustee to the effect that such firm
has audited the financial statements of the Servicer and issued its
report thereon and that such audit:
(1) was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting
records and such other auditing procedures as such firm
considered necessary in the circumstances; and
(2) so long as the Backup Servicer is not the Servicer, included an
examination of documents and records relating to the servicing of
the Receivables and the related Assets under this Agreement.
(ii) The Accountant's Report shall further state that (so long as
the Backup Servicer is not the Servicer):
-51-
(1) a review in accordance with agreed upon procedures was made of
one randomly selected Monthly Report; and
(2) except as disclosed in the Report, no exceptions or errors in the
Monthly Report so examined were found.
(iii) The Accountant's Report shall also indicate that the firm
is independent of the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.
Section 4.9. Access to Certain Documentation and Information Regarding the
Receivables. The Servicer shall, at such reasonable times during normal business
hours and as often as may be reasonably requested, permit any agents or
representatives of the Agent to inspect the Resorts and Additional Resorts and
any of the Servicer's assets (including financial and accounting books and
records) relating thereto, to examine and make copies of and abstracts from the
records and books of account of the Servicer or the Time Share Association (to
the extent controlled by the Servicer) or serviced under this Agreement and to
discuss its affairs, finances and accounts with any of its officers, employees
or independent public accountants. The Servicer acknowledges that the Agent
intends to conduct such audits and inspections on at least an annual basis. The
Servicer shall make available to the Agent all credit information in the
Servicer's possession or under the Servicer's control with respect to Obligors
as the Agent may reasonably request. Upon the Agent's request, Servicer shall
furnish to Agent evidence of payment of all real estate taxes relating to the
Resorts and Additional Resorts (except if the Backup Servicer becomes the
Servicer and does not possess such information). The Servicer (to the extent
Bluegreen or an Affiliate thereof is the Servicer hereunder) shall be required
to pay all reasonable fees, costs and expenses incurred by the Agent for any and
all Resorts and Additional Resorts inspections, audits and any other diligence
relating to Servicer's finances or books or records.
Section 4.10. Payment of Taxes Insurance and Other Charges. With respect to
each Receivable, the Servicer shall not be required to maintain records relating
to payment of taxes or insurance.
Section 4.11. Optional Purchase of Defaulted Receivables. Provided that
Bluegreen Corporation or its Affiliate is the Servicer, with respect to any
Defaulted Receivable, the Servicer shall have the right, but not the obligation,
to elect (by written notice sent to the Indenture Trustee) (i) to purchase such
Defaulted Receivable from the Issuer at the Repurchase Price, for its own
account, in the manner specified in Section 2.4 or (ii) to substitute one or
more Receivables for such Defaulted Receivable in the manner specified in
Section 2.5, in each case provided that no Borrowing Base Deficiency exists and
the Transfer Condition remains satisfied. The Repurchase Price for any
Receivable purchased hereunder shall be deposited in the Note Account. The
Indenture Trustee, upon receipt of such deposit, shall execute a release or
cause to be released to the purchaser of such Receivable the related Receivables
Document and shall execute a release of lien in the form of Exhibit G hereto and
the purchaser of such Receivable shall succeed to all the Issuer's right, title
and interest in and to such Receivable and all security and documents related
thereto. Such assignment shall be an assignment outright and not for security.
The purchaser of such Receivable shall thereupon own such Receivable, and all
-52-
security and documents, free of any further obligation to the Indenture Trustee
or the Owners with respect thereto.
Section 4.12. Monthly Report. For each Collection Period during the term of
this Agreement, Servicer will prepare the following standard industry reports
and submit them to the Agent and the Indenture Trustee no later than the second
Business Day prior to the related Payment Date (collectively, the "Monthly
Report"), a form of which is attached hereto as Exhibit L.
The Monthly Report shall be accompanied by an Officer's Certificate,
certifying the accuracy of the Monthly Report and that no Servicer Termination
Event or event that with notice or lapse of time or both would become a Servicer
Termination Event has occurred, or if such event has occurred and is continuing,
specifying the event and its status; provided however that this subparagraph of
Section 4.12 shall not apply if the Backup Servicer is acting as Servicer
hereunder.
Section 4.13. Sales and Inventory Reports. Provided that the Backup
Servicer is not the Servicer, 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 reasonably satisfactory to the
Agent; and within thirty (30) Business Days after the end of each fiscal year 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 the
Servicer to be true, correct and complete and otherwise in the form approved by
the Trust.
Section 4.14. Quarterly Financial Reports. Within forty-five (45) days
after the end of each of Servicer's (provided the Servicer is Bluegreen or an
Affiliate thereof) first three fiscal quarterly periods each year (or, if later,
that date by which Bluegreen is required to file financial statements with the
Securities and Exchange Commission), unaudited financial statements of Servicer
(provided the Servicer is Bluegreen or an Affiliate thereof) certified by its
chief financial officer as well as, to the extent requested by the Agent and
available to Servicer (provided the Servicer is Bluegreen or an Affiliate
thereof), unaudited bi-annual financial statements of the Time Share
Association.
Section 4.15.
Section 4.16. Audit Reports. To the extent Bluegreen or its Affiliate is
the Servicer, promptly upon receipt thereof, one (1) copy of each other report
submitted to the Servicer by its independent public accountants in connection
with any annual, interim or special audit made by them of the books of the
Servicer.
Section 4.17. Other Reports. To the extent Bluegreen Corporation or its
Affiliate is the Servicer, such other reports, statements, notices or written
communications relating to the Servicer, the Time Share Associations, the
Resorts or the Additional Resorts as are available to Servicer and as the Agent
may reasonably require.
Section 4.18. SEC Reports. To the extent Bluegreen Corporation or its
Affiliate is the Servicer, promptly upon their becoming publicly available one
(1) copy of each financial
-53-
statement, report, notice or proxy statement sent by Servicer to security
holders generally, and of each regular or periodic report and any registration
statement, prospectus or written communication (other than transmittal letters)
in respect thereof filed by Servicer with, or received by Servicer in connection
therewith from, any securities exchange or the Securities and Exchange
Commission or any successor agency.
Section 4.19. Servicer Remarketing. To the extent Bluegreen Corporation or
its Affiliate is the Servicer, the Servicer shall be obligated to use
commercially reasonable efforts to remarket the Intervals related to Defaulted
Receivables. The Servicer shall not, with respect to the remarketing of the
Intervals associated with the Defaulted Receivables and related Assets, make any
"adverse selection" (i.e. the Servicer shall remarket the Intervals relating to
Assets with the same degree of care as Servicer's own portfolio of Intervals)
with respect to such Assets vis-a-vis other receivables serviced by the
Servicer. The Servicer (if Bluegreen Corporation or its Affiliate is acting as
Servicer) on behalf of the Trust and at the discretion of the Agent, shall take
all necessary steps to have the record title of the applicable Resort Interests
subject to such Defaulted Receivables continue to be held by the Club Trustee.
In such event, the Servicer shall direct the Club Trustee, directly or through
its agents to exercise the remedies provided for in the Club Trust Agreement, in
the Receivables themselves or in the other Club documents with respect to such
Defaulted Receivables and the obligors thereunder and the Servicer will remarket
the "Owner Beneficiary Rights" (as defined in the Club Trust Agreement) of the
obligors under such Defaulted Receivables with the purpose of effecting a
recovery in respect of such Defaulted Receivables or finding replacements
therefor. The Servicer, at the request of the Agent, shall reserve its rights
under the Club Trust Agreement and/or the applicable Mortgages to obtain, at any
time, record title and all beneficial interests in respect of the Intervals
related to Defaulted Receivables. All actions taken by the Servicer in respect
of any Defaulted Receivable shall, at all times, be carried out in a manner such
that none of the Trust, the Agent, the Owner Trustee or the Indenture Trustee
shall, under applicable law, be deemed to be the developer or declarant of any
Resort, Additional Resort or the Club. The Servicer shall deposit the proceeds
associated with the remarketing of the Interval related to a Defaulted
Receivable into the Lock-Box Account and shall be paid the "Remarketing Fee"
associated with such Interval from the proceeds of the remarketing thereof
pursuant to Section 3.2 or pursuant to the Servicer Purchase Option. The
Servicer (in the event the Servicer is Bluegreen or an Affiliate thereof other
than the Depositor) shall at all times have the right (but not the obligation)
to utilize the Servicer Purchase Option in lieu of performing the remarketing
functions set forth in this Section.
Section 4.20. Administrative Duties of the Issuer. The Servicer will
monitor all of the administrative duties of the Issuer pursuant to the Operative
Documents, and advise the Issuer of all actions required to be taken pursuant
thereto. In this regard, the Servicer will prepare or cause to be prepared for
execution and deliver to the Issuer any and all forms, reports, notices or other
documents required of the Issuer pursuant to the Operative Documents. The Backup
Servicer shall have no responsibility for any duties under this Section 4.20;
the Depositor shall assume the duties of the Servicer under this Section 4.20
upon any termination of the Servicer pursuant to Section 6.1.
Section 4.21. Financial Covenants of the Servicer. So long as the Servicer
is Bluegreen, the Servicer makes the following covenants:
-54-
(a) Minimum Tangible Net Worth. The Servicer agrees to maintain a
minimum Tangible Net Worth of $110,000,000 plus 50% of Net Income and 100%
of New Equity.
(b) Leverage Ratio. The Servicer agrees to maintain a Leverage Ratio
of no more than 6:1.
(c) On any Determination Date, (A) the 3 month rolling average
Delinquency Ratio (Serviced) exceeds 8.0% or (B) the 3 month rolling
average Default Ratio (Serviced) exceeds 10.0%.
Section 4.22. Backup Servicer.
(a) Prior to assuming any of the Servicer's rights and obligations
hereunder the Backup Servicer shall only be responsible to perform those
duties and for only those obligations specifically imposed upon it by the
provisions of the Backup Servicing Agreement herein, and shall have no
obligations or duties under any agreement to which it is not a party,
including but not limited to the various agreements named herein.
In the event of the Termination of the Backup Servicing Agreement, the
Servicer shall appoint a successor Backup Servicer reasonably acceptable to the
Agent and the Seller.
(b) The Servicer shall have no liability, direct or indirect, to any
party, for the acts or omissions of the Backup Servicer, whenever such acts
or omissions occur whenever such liability is imposed.
(c) Notwithstanding anything to the contrary herein, the Agent shall
have the right to remove the Backup Servicer with or without cause at any
time and replace the Backup Servicer pursuant to the provisions of the
Backup Servicing Agreement. In the event that the Agent exercises its right
to remove and replace Concord Servicing Corporation as Backup Servicer,
Concord Servicing Corporation shall have no further obligation to perform
the duties of the Backup Servicer under this Agreement.
(d) The Servicer shall provide monthly, or as otherwise requested, to
the Backup Servicer, or its agent, information on the Receivables
sufficient to enable the Backup Servicer to assume the responsibilities as
successor servicer and collect on the Receivables.
(e) Except as provided in this Agreement, the Backup Servicer may
accept and reasonably rely on all accounting, records and work of the
Servicer without audit, and the Backup Servicer shall have no liability for
the acts or omissions of the Servicer. If any error, inaccuracy or omission
(collectively, "Errors") exists in any information received from the
Servicer, and such Errors should cause or materially contribute to the
Backup Servicer making or continuing any Errors (collectively, "Continued
Errors"), the Backup Servicer shall have no liability for such Continued
Errors; provided, however, that this provision shall not protect the Backup
Servicer against any liability that would otherwise be imposed by reason of
willful misconduct, bad faith or gross negligence in discovering or
correcting any Error or in the performance of its or their duties hereunder
or under this Agreement.
-55-
(f) The Backup Servicer and its officers, directors, employees,
representatives and agents shall be indemnified by the Servicer from and
against all claims, damages, losses or expenses incurred by the Backup
Servicer (including reasonable attorney's fees and expenses) arising out of
claims asserted against the Backup Servicer by third parties on any matter
arising out of this Agreement to the extent the act or omission giving rise
to the claim relates to an act or omission of the Servicer, the Seller, the
Depositor or any of their Affiliates and accrues before the date on which
the Backup Servicer assumes the duties of Servicer hereunder, and all
claims, expenses, obligations, liabilities, losses, damages, injuries,
penalties, stamp or other similar taxes, actions, suits, judgments,
reasonable costs and expenses (including reasonable attorney's and agent's
fees and expenses) of whatever kind or nature regardless of their merit,
demanded, asserted or claimed against the Backup Servicer directly or
indirectly relating to, or arising from, claims against the Backup Servicer
by reason of its participation in the transactions contemplated hereby,
including without limitation all reasonable costs required to be associated
with claims for damages to persons or property, and reasonable attorneys'
and consultants' fees and expenses and court costs except for any claims,
damages, losses or expenses arising from the Backup Servicer's own gross
negligence, bad faith or willful misconduct. The obligations of the
Servicer under this Section 4.22(g) shall survive the satisfaction and
discharge of this Agreement or the earlier resignation or removal of the
Backup Servicer.
In the absence of bad faith on the part of the Backup Servicer, the Backup
Servicer may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Backup Servicer which conform to the requirements of this
Agreement.
The Backup Servicer shall not be liable for any error of judgment made in
good faith by an officer or officers of the Backup Servicer, unless it shall be
conclusively determined by a court of competent jurisdiction that the Backup
Servicer was grossly negligent in ascertaining the pertinent facts.
Whenever in the administration of the provisions of this Agreement the
Backup Servicer shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action to be taken hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or bad faith on the part of
the Backup Servicer, be deemed to be conclusively proved and established by a
certificate signed by one of the Servicer's officers, and delivered to the
Backup Servicer and such certificate, in the absence of gross negligence or bad
faith on the part of the Backup Servicer, shall be full warrant to the Backup
Servicer of any action taken, suffered or omitted by it under the provisions of
this Agreement upon the faith thereof.
The Backup Servicer, in its capacity as such, may consult with counsel and
the advice or any opinion of counsel shall be full and complete authorization
and protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or opinion of counsel.
The Backup Servicer, in its capacity as such, shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
entitlement order, approval or other paper or document.
-56-
The Backup Servicer, in its capacity as such, may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees appointed with due care, and
shall not be responsible for any willful misconduct or negligence on the part of
any agent, attorney, custodian or nominee so appointed.
Section 4.23. Retention of Servicer. Bluegreen hereby covenants and agrees
to act as Servicer under this Agreement for an initial term, commencing on the
Initial Addition Date and ending on the third Payment Date, which term shall be
extendible by the Agent, acting at the direction of a majority of the Percentage
Interests of the Notes, for successive three-month terms ending on each third
successive Payment Date (or, pursuant to revocable written standing instructions
from time to time to Bluegreen, for any specified number of terms greater than
one). Each such notice (including each notice pursuant to standing instructions,
which shall be deemed delivered at the end of successive monthly terms for so
long as such instructions are in effect) (a "Servicer Extension Notice") shall
be delivered by the Agent to the Servicer and shall be in substantially the form
of Exhibit K hereto. Bluegreen hereby agrees that, as of the date hereof and
upon its receipt of any such Servicer Extension Notice, Bluegreen shall become
bound, for the initial term beginning on the Initial Addition Date and for the
duration of the term covered by such notice, to continue as the Servicer subject
to and in accordance with the other provisions of this Agreement.
Section 4.24. Continuation of Servicing. Upon any sale or other disposition
of some or all of the Receivables by the Indenture Trustee following an Event of
Default under the Indenture, if requested by the Indenture Trustee (acting at
the direction of the Agent on behalf of the Majority Noteholders) in writing,
the Servicer will continue to service such Receivables in accordance with the
terms hereof in consideration for continued payment of the Servicing Fee to the
Servicer in accordance with the terms hereof.
END OF ARTICLE IV
-57-
ARTICLE V
THE SELLER, THE DEPOSITOR, THE SERVICER
AND THE CLUB TRUSTEE
Section 5.1. Liability. The Seller, the Depositor and the Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Seller, the Depositor or the Servicer, as the
case may be herein.
Section 5.2. Merger or Consolidation. Any Person into which the Depositor,
the Seller or the Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Depositor,
the Seller or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor, the Seller or the Servicer shall be the successor of
the Depositor, the Seller, the Servicer, as the case may be, hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor Servicer shall satisfy all the requirements of
Section 6.2(a) with respect to the qualifications of a successor Servicer. The
Depositor, the Seller or the Servicer shall provide the Agent with 30 days'
prior notice of any such merger or consolidation.
Section 5.3. Limitation on Liability of the Servicer and Others. Neither
the Servicer, the Seller, the Depositor or any of their respective directors or
officers or employees or agents shall be under any liability to the Issuer, the
Indenture Trustee, the Owner Trustee, the Certificateholders or the Owners for
any action taken or for refraining from the taking of any action by such Person
in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Seller, the Depositor or any
of their respective directors or officers or employees or agents against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or negligence in the performance of its duties hereunder or by reason
of its reckless disregard of its obligations and duties hereunder and that this
provision shall not protect the Servicer or any of their respective directors or
officers or employees or agents against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of its duties hereunder or by reason of its reckless disregard
of its obligations and duties hereunder. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
Section 5.4. Servicer Not to Resign. Provided that Bluegreen Corporation or
its Affiliate is the Servicer, subject to the provisions of Sections 4.23 and
5.2, the Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) the Servicer has proposed a successor servicer to the
Indenture Trustee and the Owners in writing and such proposed successor servicer
is reasonably acceptable to the Majority Noteholders; provided, however, that no
such resignation by the Servicer shall become effective
-58-
until such successor servicer or, in the case of (i) above, the Backup Servicer
shall have assumed the Servicer's responsibilities and obligations hereunder or
the Indenture Trustee shall have designated a successor servicer in accordance
with Section 6.2. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 6.1 and 6.2 as
obligations that survive the resignation or termination of the Servicer. Any
such determination permitting the resignation of the Servicer pursuant to clause
(i) above shall be evidenced by an Opinion of Counsel to such effect delivered
to the Indenture Trustee. Notwithstanding anything in this Agreement to the
contrary, in the event the Backup Servicer becomes the Servicer hereunder, at
any time thereafter, the Backup Servicer may resign from its duties as Servicer
upon not less than 90 days' written notice to the Agent, the Depositor and the
Indenture Trustee.
Section 5.5. Delegation of Duties. In the ordinary course of business, the
Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, who agrees to conduct such duties in accordance
with standards comparable to those set forth in Section 4.1. Such delegation
shall not relieve the Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the meaning
of Section 5.4. The Servicer shall provide the Indenture Trustee and the Backup
Servicer with written notice prior to the delegation of any of its duties to any
Person other than any of the Servicer's Affiliates or their respective
successors and assigns. Notwithstanding anything to the contrary in this
Agreement, the Backup Servicer, if acting as Servicer hereunder, shall have the
right to resign from its duties hereunder upon 90 days' written notice to the
Servicer, the Depositor, the Indenture Trustee and the Agent.
Section 5.6. Indemnification of the Issuer by the Servicer. The Servicer
shall indemnify and hold harmless the Issuer, the Owners, the Custodian and the
Indenture Trustee for the benefit of the Owners and their respective officers,
directors, agents and employees from and against any loss, liability, expense,
damage or injury suffered or sustained by reason of the Servicer's willful
misfeasance, bad faith or gross negligence in the performance of its activities
in servicing or administering the Receivables pursuant to this Agreement,
including, but not limited to, any judgment, award, settlement, reasonable fees
of counsel of its selection and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim related
to the Servicer's willful misfeasance, bad faith or gross negligence. Any such
indemnification shall not be payable from the assets of the Issuer. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
5.6 shall survive termination of the Agreement or the earlier of the resignation
or removal of the Indenture Trustee. To the extent not paid in accordance with
Article VIII of the Trust Agreement, the Seller shall be secondarily liable for
amounts owing under such Article VIII.
Section 5.7. Hedging Requirements. Upon prior written notice from the Agent
to the Issuer and the Servicer, the Depositor shall enter into a Hedge Agreement
with a Qualified Hedge Counterparty and upon execution thereof shall pledge all
of the Issuer's right, title and interest under such Hedge Agreement to the
Indenture Trustee for the benefit of the Owners pursuant to Section 2.3 hereof
and the Indenture. Each Hedge Agreement must satisfy the Required Hedge Amount
and shall otherwise be in form and substance satisfactory to the Agent.
-59-
Section 5.8. General Covenants of the Club Trustee.
Until the date on which the Note Principal Balance has been indefeasibly
paid in full, the Club Trustee hereby covenants that:
(a) No Conveyance. The Club Trustee agrees not to convey any Resort
Interest in the Club relating to a Receivable which has been sold and
assigned to the Trust unless the Indenture Trustee shall have issued an
instruction to the Club Trustee pursuant to Section 8.07(c) of the Club
Trust Agreement in connection with its exercise of its rights as an
Interest Holder Beneficiary (as defined in the Club Trust Agreement) under
Section 7.02 of the Club Trust Agreement.
(b) Separate Corporate Existence. The Club Trustee shall:
(i) Maintain its own deposit account or accounts, separate from
those of any Affiliate, with commercial banking institutions. The
funds of the Club Trustee will not be diverted to any other Person or
for other than trust or corporate uses of the Club Trustee, as
applicable.
(ii) Ensure that, to the extent that it shares the same officers
or other employees as any of its stockholders, beneficiaries or
Affiliates, the salaries of and the expenses related to providing
benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its
fair share of the salary and benefit costs associated with all such
common officers and employees.
(iii) Ensure that, to the extent that the Club Trustee and the
Servicer (together with their respective stockholders or Affiliates)
jointly do business with vendors or service providers or share
overhead expenses, the costs incurred in so doing shall be allocated
fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Club Trustee and the
Servicer (together with their respective stockholders or Affiliates)
do business with vendors or service providers when the goods and
services provided are partially for the benefit of any other Person,
the costs incurred in so doing shall be fairly allocated to or among
such entities for whose benefit the goods and services are provided,
and each such entity shall bear its fair share of such costs. All
material transactions between Club Trustee and any of its Affiliates
shall be only on an arms' length basis.
(iv) To the extent that the Club Trustee and any of its
stockholders, beneficiaries or Affiliates have offices in the same
location, there shall be a fair and appropriate allocation of overhead
costs among them, and each such entity shall bear its fair share of
such expenses.
(v) Conduct its affairs strictly in accordance with the Club
Trust Agreement, the covenants set forth on Schedule VI hereto or its
Amended and Restated Articles of Incorporation, as applicable, and
observe all necessary, appropriate and customary corporate
formalities, including, but not limited to,
-60-
holding all regular and special stockholders', trustees' and
directors' meetings appropriate to authorize all trust and corporate
action, keeping separate and accurate minutes of its meetings, passing
all resolutions or consents necessary to authorize actions taken or to
be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany
transaction accounts.
(c) Merger or Consolidation. The Club Trustee shall not consolidate
with or merge into any other corporation or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless the
corporation formed by such consolidation or into which the Club Trustee, as
the case may be, has merged or the Person which acquires by conveyance,
transfer or lease substantially all the assets of the Club Trustee, as the
case may be, as an entirety, can lawfully perform the obligations of the
Club Trustee hereunder and executes and delivers to the Indenture Trustee
an agreement in form and substance reasonably satisfactory to the Indenture
Trustee which contains an assumption by such successor entity of the due
and punctual performance and observance of each covenant and condition to
be performed or observed by the Club Trustee under this Agreement.
(d) Corporate Matters. Notwithstanding any other provision of this
Section and any provision of law, the Club Trustee shall not do any of the
following:
(i) engage in any business or activity other than as set forth
herein or in or as contemplated by the Club Trust Agreement or its
Amended and Restated Articles of Incorporation, as applicable;
(ii) without the affirmative vote of a majority of the members of
the board of directors (or Persons performing similar functions) of
the Club Trustee (which must include the affirmative vote of at least
one duly appointed Independent Director (as defined in the Club Trust
Agreement)), (A) dissolve or liquidate, in whole or in part, or
institute proceedings to be adjudicated bankrupt or insolvent, (B)
consent to the institution of bankruptcy or insolvency proceedings
against it, (C) file a petition seeking or consent to reorganization
or relief under any applicable federal or state law relating to
bankruptcy, (D) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
corporation or a substantial part of its property, (E) make a general
assignment for the benefit of creditors, (F) admit in writing its
inability to pay its debts generally as they become due, (G) terminate
the Club Managing Entity as manager under the Club Management
Agreement or (H) take any corporate action in furtherance of the
actions set forth in clauses (A) through (G) above; provided, however,
that no director may be required by any shareholder or beneficiary of
the Club Trustee to consent to the institution of bankruptcy or
insolvency proceedings against the Club Trustee so long as it is
solvent;
(iii) merge or consolidate with any other corporation, company or
entity or sell all or substantially all of its assets or acquire all
or substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity; or
-61-
(iv) with respect to the Club Trustee, amend or otherwise modify
its Amended and Restated Articles of Incorporation or any definitions
contained therein in a manner adverse to the Indenture Trustee or any
Noteholder without the prior written consent of the Agent.
(e) The Club Trustee shall not incur any Indebtedness other than (i)
trade payables and operating expenses (including taxes) incurred in the
ordinary course of business or (ii) in connection with servicing Resort
Interests included in the Club's trust estate in the ordinary course of
business consistent with past practices; provided, that in no event shall
the Club Trustee incur Indebtedness for borrowed money.
END OF ARTICLE V
-62-
ARTICLE VI
DEFAULT
Section 6.1. Servicer Termination Events.
(a) If any one of the following events ("Servicer Termination Events")
shall occur and be continuing:
(i) The failure by the Servicer to make any payment or deposit
required to be made by the Servicer hereunder, under the Lock-Box
Agreement or any other Operative Document and the continuance of such
failure for a period of two (2) Business Day after the date on which
such payment or deposit was due and not made; or
(ii) The failure by the Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements
of the Servicer (except those not applicable to Backup Servicer if its
becomes Servicer hereunder) as set forth in this Agreement, which
failure continues unremedied for a period of 30 days, after the date
on which notice of such failure is delivered to the Servicer or the
Servicer otherwise has actual knowledge of such fact; or
(iii) Any assignment by the Servicer of its duties or rights
hereunder, under the Lock-Box Agreement, or any other Operative
Document, except as specifically permitted hereunder or thereunder, or
any attempt to make such an assignment; or
(iv) The entry against the Servicer or the Seller (if an
Affiliate of the Servicer) of a decree or order by a court or agency
or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding up or liquidation of its affairs and the failure of such
decree or order to be discharged or stayed for 60 days; or
(v) The Servicer or the Seller (if an Affiliate of the Servicer)
shall voluntarily go into liquidation, consent to the appointment of a
conservator or receiver or liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or
the Seller or of or relating to all or substantially all of its
property, or the Servicer or the Seller shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(vi) So long as the Seller is the Servicer, any failure of the
Seller to repurchase any Receivable as required by Section 2.4; or
-63-
(vii) Any representation, warranty or statement of the Servicer
(except those not applicable to Backup Servicer if its becomes
Servicer hereunder) made in this Agreement or any certificate, report
or other writing delivered pursuant hereto shall prove to be incorrect
in any material respect as of the time when the same shall have been
made and, within 30 days after written notice thereof shall have been
given to the Servicer or the Servicer otherwise has actual knowledge
thereof, the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured; or
(viii) Either of the Servicer or the Depositor shall consolidate
or merge with or into any other Person other than as contemplated in
Section 5.2; or
(ix) Any failure by the Servicer to deliver the reports described
in Article IV of this Agreement which remains uncured for three
Business Days after the date on which such failure commences;
provided, however that the period within which Servicer shall deliver
such reports shall be extended to such longer period as is appropriate
in the event of a Force Majeure Delay; provided further, that such
longer period shall not exceed seven (7) Business Days; or
(x) Any default of a payment obligation under any other loan
facility, debt instrument or any similar financing arrangement (such
facility, instrument or financing arrangement to be an obligation of
$5,000,000 or greater) of the Servicer or any "event of default",
"early amortization event" or similar event under any indenture,
facility or agreement to which the Servicer is a party and the lapse
of all relevant grace periods thereunder if the effect of the default
is to cause, or permit the holders of such obligation to cause, such
loan facility, debt instrument or any similar financing arrangement to
become due and payable; or
(xi) There shall have occurred any material adverse change in the
operations of the Servicer since March 31, 2001, or any other event
shall have occurred which materially affects the Servicer's ability to
either collect the Receivables or to perform under this Agreement; or
(xii) A default or breach shall occur under any other agreement,
document or instrument to which the Servicer is a party or by which
the Servicer or its property is bound that is not cured within any
applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any
Indebtedness of the Servicer in excess of five percent (5%) of the
Servicer's Tangible Net Worth, or (ii) causes, or permits any holder
of such Indebtedness or a trustee or agent to cause, Indebtedness or a
portion thereof in excess of five percent (5%) of the Servicer's
Tangible Net Worth to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment, regardless of whether
such default is waived, or such right is exercised, by such holder,
trustee or agent; or
(xiii) the Servicer (excluding Backup Servicer if it becomes the
Servicer) ceases to own at least 100% of the Depositor; or
-64-
(xiv) Any failure by the Servicer to meet the financial covenants
contained in Section 4.21; or
(xv) The Agent shall not have delivered a Servicer Extension
Notice pursuant to Section 4.23.
(b) then, and in each and every such case, so long as a Servicer
Termination Event shall not have been remedied within the applicable grace
period, the Indenture Trustee shall, at the direction of the Agent on
behalf of the Majority Noteholders, by notice then given in writing to the
Servicer, terminate all of the rights and obligations of the Servicer as
servicer under this Agreement. Any such notice to the Servicer shall also
be given to the Seller, the Issuer, the Depositor and the Backup Servicer.
On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with
respect to the Notes or the Receivables or otherwise, shall pass to and be
vested in the Backup Servicer pursuant to and under this Section; and,
without limitation, the Backup Servicer is hereby authorized and empowered
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer
and endorsement of each Receivable and related documents or otherwise. The
Servicer agrees to cooperate with the Backup Servicer in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the transfer to the Backup Servicer for the
administration by it of all cash amounts that shall at the time be held by
the Servicer and to be deposited by it in the Note Account, or that have
been deposited by the Servicer in the Lock-Box Account or thereafter
received by the Servicer with respect to the Receivables. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivables Documents to the successor servicer and
amending this Agreement to reflect such succession as servicer pursuant to
this Section shall be paid by the Servicer (or if the Servicer is the
Backup Servicer, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Section 6.2. Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 6.1 or 5.4, the Backup Servicer shall be
the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof
(except those not applicable to the Backup Servicer if the Backup Servicer
becomes the Servicer hereunder) arising on and after its succession. As
compensation therefor, the Backup Servicer shall be entitled to such
compensation as Servicer as is provided for in Schedule V hereof "Servicing
Fee" and the exhibits thereto. Notwithstanding the above, if the Backup
Servicer is legally unable so to act, the Indenture Trustee shall appoint
or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution, bank or other mortgage loan or
contract servicer having a net worth of not less than $50,000,000 as the
successor to the Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Servicer hereunder. In
the event that Concord Servicing Corporation, as Backup Servicer, is
legally unable to act as Servicer under this Agreement and another entity
is appointed as successor servicer under this Section, Concord Servicing
Corporation shall have no further
-65-
obligation to perform the obligations of Servicer or Backup Servicer under
this Agreement. Pending appointment of a successor to the Servicer
hereunder, unless the Backup Servicer is prohibited by law from so acting,
the Backup Servicer shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Receivables in an
amount equal to the compensation which the Servicer would otherwise have
received pursuant to Section 4.7 (or such lesser compensation as the
Indenture Trustee and such successor shall agree). The appointment of a
successor servicer shall not affect any liability of the Servicer which may
have arisen under this Agreement prior to its termination as Servicer to
pay any deductible under an insurance policy pursuant to Section 4.4 or to
indemnify the Indenture Trustee pursuant to Section 5.6, nor shall any
successor servicer be liable for any acts or omissions of the Servicer or
for any breach by the Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Trustee and
such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.
(b) Any successor, including the Backup Servicer, to the Servicer as
servicer shall during the term of its service as servicer continue to
service and administer the Receivables for the benefit of the Issuer and
the Indenture Trustee, for the benefit of the Owners.
Section 6.3. Waiver of Defaults. The Owners of a majority of the Percentage
Interests of the Notes (the "Majority Noteholders") may, on behalf of all
Owners, waive any events permitting removal of the Servicer as servicer pursuant
to this Article VI, provided, however, that the Majority Noteholders may not
waive a default in making a required distribution on a Note without the consent
of the Owner of such Note. Upon any waiver of a past default, such default shall
cease to exist and any Servicer Termination Event arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto except to the extent expressly so waived.
Section 6.4. Notification to Owners. Upon any termination or appointment of
a successor to the Servicer pursuant to this Article VI or Section 5.4, the
Indenture Trustee shall give prompt written notice thereof to the Owners at
their respective addresses appearing in the Register.
Notwithstanding anything else herein to the contrary, in no event shall the
Indenture Trustee or the Backup Servicer be liable for any servicing fee or for
any differential in the amount of the servicing fee paid hereunder and the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement and the transactions set forth or provided for herein.
END OF ARTICLE VI
-66-
ARTICLE VII
TERMINATION
Section 7.1. Termination. This Agreement will terminate upon notice to the
Indenture Trustee of the later of (i) the satisfaction and discharge of the
Indenture pursuant to Section 4.1 of the Indenture or (ii) the disposition of
all funds with respect to the last Receivable and the remittance of all funds
due hereunder and the payment of all amounts due and payable to the Indenture
Trustee, the Custodian, the Owner Trustee and the Issuer.
END OF ARTICLE VII
-67-
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Acts of Owners. Except as otherwise specifically provided
herein, whenever Owner action, consent or approval is required under this
Agreement, such action, consent or approval shall be deemed to have been taken
or given on behalf of, and shall be binding upon, all Owners if the Majority
Noteholders agree to take such action or give such consent or approval.
Section 8.2. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the Resorts are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Owners' expense on direction of the Majority Noteholders, but
only when accompanied by an opinion of counsel to the effect that such
recordation materially and beneficially affects the interests of the Owners or
is necessary for the administration or servicing of the Receivables.
Section 8.3. Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 8.4. Successors and Assigns. All covenants and agreements in this
Agreement by any party hereto shall bind its successors and assigns, whether so
expressed or not.
Section 8.5. Severability. In case any provision in this Agreement or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 8.6. Governing Law; Submission to Jurisdiction.
(a) This Agreement and each Note shall be construed in accordance with
and governed by the laws of the State of New York applicable to agreements
made and to be performed therein.
(b) The parties hereto hereby irrevocably submit to the jurisdiction
of the United States District Court for the Southern District of New York
and any court in the State of New York located in the City and County of
New York, and any appellate court from any thereof, in any action, suit or
proceeding brought against it or in connection with this Agreement or any
of the related documents or the transactions contemplated hereunder or for
recognition or enforcement of any judgment, and the parties hereto hereby
irrevocably and unconditionally agree that all claims in respect of any
such action or proceeding may be heard or determined in such New York State
court or, to the extent permitted by law, in such federal court. The
parties hereto agree that a final judgment in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. To the
extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any
-68-
claim that it is not personally subject to the jurisdiction of such courts,
that the suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper or that the
related documents or the subject matter thereof may not be litigated in or
by such courts.
(c) Nothing contained in this Agreement shall limit or affect the
right of the (i) Depositor, the Issuer, the Seller or the Servicer or
third-party beneficiary hereunder, as the case may be, to start legal
proceedings relating to any of the Receivables against any Obligor in the
courts of any jurisdiction, or (ii) Backup Servicer in such capacity, or as
successor Servicer, to ▇▇▇ for accrued but unpaid fees.
Section 8.7. Counterparts. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 8.8. Amendment. The Indenture Trustee, the Custodian, the
Depositor, the Issuer, the Seller and the Servicer, may at any time and from
time to time, with the prior written consent of the Agent on behalf of the
Majority Noteholders, amend this Agreement, and the Indenture Trustee shall
consent to the amendment for the purposes of (i) curing any ambiguity, (ii)
correcting or supplementing any provisions of this Agreement which are
inconsistent with any other provisions of this Agreement or adding provisions to
this Agreement which are not inconsistent with the provisions of this Agreement,
or (iii) adding any other provisions with respect to matters or questions
arising under this Agreement. Notwithstanding anything to the contrary, no such
amendment shall (A) change in any manner the amount of, or delay the timing of,
payments which are required to be distributed to any Owner without the consent
of the Owner of such Note or (B) change the percentages of Percentage Interest
which are required to consent to any such amendments, without the consent of the
Owners of all Notes then outstanding.
Prior to the execution of any amendment to this Agreement, the Indenture
Trustee and the Backup Servicer shall be entitled to receive and conclusively
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
such execution and delivery have been satisfied. The Indenture Trustee and the
Backup Servicer may, but shall not be obligated to enter into any such amendment
which affects the Indenture Trustee's and the Backup Servicer's own rights,
duties or immunities under this Agreement.
Section 8.9. Specification of Certain Tax Matters. Each Owner shall provide
the Indenture Trustee with a completed and executed Form W-8IMY, W-9, W-8EXP,
W-8ECI or W-8BEN (or any successor form), as applicable, prior to purchasing a
Note. The Indenture Trustee shall comply with all requirements of the Code, and
applicable state and local law, with respect to the withholding from any
distributions made to any Owner of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith.
Section 8.10. Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including bank wire, telex,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other party at its address or telecopy number set forth below or at
such other address or telecopy number as such party may
-69-
hereafter specify for the purpose of notice to such party. All notices hereunder
shall be given as follows, until any superseding instructions are given to all
other Persons listed below:
Indenture Trustee or Custodian U.S. Bank Trust
National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Structured Finance
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuer: BXG Receivables Note Trust
2001-A
c/o Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration/
BXG Receivables Note Trust
2001-A
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Depositor: Bluegreen Receivables Finance
Corporation V
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Club Trustee: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Servicer
and Seller: Bluegreen Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Backup Servicer Concord Servicing Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. Pink, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.11. Benefits of Agreement. Nothing in this Agreement or in the
Notes, expressed or implied, shall give to any Person, other than the Owners,
the Owner Trustee and the
-70-
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 8.12. Legal Holidays. In any case where the date of any Payment
Date, any other date on which any distribution to any Owner is proposed to be
paid, or any date on which a notice is required to be sent to any Person
pursuant to the terms of this Agreement shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Agreement) payment or
mailing need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made or mailed on the nominal
date of any such Payment Date, or such other date for the payment of any
distribution to any Owner or the mailing of such notice, as the case may be, and
no interest shall accrue for the period from and after any such nominal date,
provided such payment is made in full on such next succeeding Business Day.
Section 8.13. No Petition. The parties hereto, by entering into this
Agreement, and each Owner, by accepting a Note, hereby covenant and agree that
they will not institute against the Depositor, the Issuer or the Club Trustee,
or join in any institution against the Depositor, the Issuer or the Club Trustee
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Agreement or any of the Operative Documents for one year and one day
after the payment in full of the Notes.
Section 8.14. Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein or in any other Operative Document to the contrary, it
is expressly understood and agreed by the parties hereto that (a) this Agreement
is executed and delivered by Wilmington Trust Company, not individually or
personally but solely as Owner Trustee, in the exercise of the powers and
authority conferred and vested in it under the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as a personal representation, undertaking or
agreement by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer and the Trust Estate, and (c) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Agreement or any other related documents.
END OF ARTICLE VIII
-71-
IN WITNESS WHEREOF, the Issuer, the Depositor, the Seller, the Servicer,
the Backup Servicer, the Club Trustee, the Custodian and the Indenture Trustee
have caused this Agreement to be duly executed by their respective officers
thereunto duly authorized, all as of the day and year first above written.
BXG Receivables Note Trust
2001-A
By: Wilmington Trust Company,
not individually, but
solely in its capacity as
Owner Trustee
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Senior Financial Services Officer
----------------------------------
BLUEGREEN RECEIVABLES FINANCE
CORPORATION V,
as Depositor
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President, Treasurer
----------------------------------
and Chief Financial Officer
----------------------------------
BLUEGREEN CORPORATION,
as Seller and Servicer
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President, Treasurer
----------------------------------
and Chief Financial Officer
----------------------------------
-S-1-
VACATION TRUST, INC., for
itself and as Club Trustee
under the Club Trust Agreement
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Secretary and Treasurer
----------------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION,
solely as Indenture Trustee
and Custodian
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
----------------------------------
Title: Vice President
----------------------------------
CONCORD SERVICING CORPORATION,
as Backup Servicer
By: /S/ ▇▇▇▇ PINK
----------------------------------
Name: ▇▇▇▇ Pink
----------------------------------
Title: Vice President
----------------------------------
-S-2-