Exhibit 10.188
TRANSFER AGREEMENT
This TRANSFER AGREEMENT (this "Agreement"), dated as of September
15, 2006, is by and among Bluegreen Corporation, a Massachusetts corporation
("Bluegreen"), BXG Timeshare Trust I, a statutory trust formed under the laws of
the State of Delaware ("BXG Timeshare I" or the "Seller") and Bluegreen
Receivables Finance Corporation XII, a Delaware corporation (the "Depositor"),
and their respective permitted successors and assigns.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, in connection with the transactions contemplated by (i)
that certain purchase and contribution agreement, dated as of May 1, 2006 (the
"Warehouse Purchase and Contribution Agreement") by and between Bluegreen
Timeshare Finance Corporation I, as depositor (the "Warehouse Depositor") and
Bluegreen, as seller, (ii) that certain sale agreement, dated as of May 1, 2006
(the "Warehouse Sale Agreement") by and between the Warehouse Depositor and BXG
Timeshare I, (iii) that certain indenture, dated as of May 1, 2006 (the
"Warehouse Indenture"), by and among BXG Timeshare I, Bluegreen, as servicer
(the "Warehouse Servicer"), Vacation Trust, Inc., as club trustee, Concord
Servicing Corporation, as backup servicer, U.S. Bank National Association, as
indenture trustee, and Branch Banking and Trust Company, as agent, and (iv) that
certain note funding agreement, dated as of May 1, 2006 (the "Warehouse Note
Funding Agreement") by and among BXG Timeshare I, as issuer, Bluegreen, as
seller and as servicer, the Warehouse Depositor, Branch Banking and Trust
Company, as agent, and the purchasers named therein, (A) Bluegreen sold,
transferred and conveyed, from time to time, all of its right, title and
interest in, to and under certain timeshare loans, receivables and related
security (the "Warehouse Timeshare Loans") to the Warehouse Depositor, (B) the
Warehouse Depositor sold the Warehouse Timeshare Loans to BXG Timeshare I and
(C) BXG Timeshare I issued five classes of notes (the "Warehouse Notes") secured
by the Warehouse Timeshare Loans;
WHEREAS, in connection with each sale of the Warehouse Timeshare
Loans to the Warehouse Depositor under the Warehouse Purchase and Contribution
Agreement, Bluegreen made certain representations and warranties with respect to
the Warehouse Timeshare Loans as of the related transfer dates;
WHEREAS, the Depositor has been established as a bankruptcy-remote
entity owned by Bluegreen for the purpose of acquiring the Warehouse Timeshare
Loans and, from time to time, other Timeshare Loans sold and/or contributed to
it by Bluegreen, as the case may be, in accordance with the provisions of the
Bluegreen Purchase Agreement;
WHEREAS, on the Closing Date, (i) the Seller wishes to sell all of
its right, title and interest in and to the Warehouse Timeshare Loans (the
"Initial Timeshare Loans") to the Depositor in accordance with the provisions of
this Agreement, (ii) the Depositor intends, concurrently with the purchase of
the Initial Timeshare Loans from the Seller, to sell, transfer and
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otherwise absolutely convey, and BXG Receivables Note Trust 2006-B (the
"Issuer") intends to purchase the Initial Timeshare Loans and other timeshare
loans, and (ii) the Issuer intends to pledge such Initial Timeshare Loans and
other timeshare loans acquired thereby to U.S. Bank, National Association, as
indenture trustee (in such capacity, the "Indenture Trustee") and custodian (in
such capacity, the "Custodian"), pursuant to an indenture, dated as of September
15, 2006 (the "Indenture"), by and among the Issuer, Bluegreen, as servicer (the
"Servicer"), the Club Trustee and the Indenture Trustee, to secure the Issuer's
5.605% Timeshare Loan-Backed Notes, Series 2006-B, Class A, 5.704% Timeshare
Loan-Backed Notes, Series 2006-B, Class B, 5.952% Timeshare Loan-Backed Notes,
Series 2006-B, Class C, 6.468% Timeshare Loan-Backed Notes, Series 2006-B, Class
D, 7.210% Timeshare Loan-Backed Notes, Series 2006-B, Class E and 9.377%
Timeshare Loan-Backed Notes, Series 2006-B, Class F (collectively, the "Notes");
WHEREAS, Bluegreen originated the Initial Timeshare Loans, is
familiar with the terms of the Initial Timeshare Loans and is the Warehouse
Servicer and has been servicing each of the Initial Timeshare Loans in
accordance with the Servicing Standard and the applicable provisions of the
Warehouse Indenture and it has not taken or failed to take any action to cause a
breach of the representations and warranties set forth in the Warehouse Purchase
and Contribution Agreement;
WHEREAS, in consideration for providing the representations and
warranties set forth in Section 5 of this Agreement and having the obligation to
cure any material breaches thereof, or to repurchase or substitute any Defective
Timeshare Loans, and to provide the indemnities set forth hereunder, Bluegreen
desires: (i) to act as the Servicer on behalf of the holders of the Notes, for
which Bluegreen shall be entitled to receive a Servicing Fee and Additional
Servicing Compensation in accordance with the provisions of the Indenture, (ii)
to act as the Administrator on behalf of the Issuer and the Owner Trustee, for
which Bluegreen shall be entitled to an Administrator Fee, (iii) to have the
option, but not the obligation, to purchase or substitute Upgrade Club Loans
pursuant to the terms and conditions set forth in this Agreement and the
Transaction Documents and (iv) to have the option, but not the obligation, to
purchase or substitute Defaulted Timeshare Loans, which such option may be
waived with respect to any Defaulted Timeshare Loan, in each case, pursuant to
the terms and conditions set forth herein; and
WHEREAS, Bluegreen, as the sole stockholder of the Depositor, who is
the residual interest owner of the Issuer, will derive an economic benefit from
the sale hereunder of the Initial Timeshare Loans to the Depositor.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto covenant and agree as follows:
SECTION 1. Definitions; Interpretation. Capitalized terms used but
not defined herein shall have the meanings specified in "Standard Definitions"
attached as Annex A to the Indenture.
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SECTION 2. Acquisition of Timeshare Loans.
(a) Initial Timeshare Loans. On the Closing Date, in return for the
Timeshare Loan Acquisition Price for each of the Initial Timeshare Loans, the
Seller does hereby transfer, assign, sell and grant to the Depositor, without
recourse (except as provided in Section 6 and Section 8 hereof), any and all of
the Seller's right, title and interest in and to (i) the Initial Timeshare Loans
listed on Schedule III hereto, (ii) the Receivables in respect of such Initial
Timeshare Loans due after the related Cut-Off Date, (iii) the related Timeshare
Loan Documents (excluding any rights as developer or declarant under the
Timeshare Declaration, the Timeshare Program Consumer Documents or the Timeshare
Program Governing Documents), (iv) all Related Security in respect of each such
Initial Timeshare Loan and (v) all income, payments, proceeds and other benefits
and rights related to any of the foregoing (the property in clauses (i)-(v),
being the "Assets"). Upon such sale and transfer, the ownership of each Initial
Timeshare Loan and all collections allocable to principal and interest thereon
after the related Cut-Off Date and all other property interests or rights
conveyed pursuant to and referenced in this Section 2(a) shall immediately vest
in the Depositor, its successors and assigns. The Seller shall not take any
action inconsistent with such ownership nor claim any ownership interest in any
Initial Timeshare Loan for any purpose whatsoever other than for federal and
state income tax reporting, if applicable. The parties to this Agreement hereby
acknowledge that the "credit risk" of the Initial Timeshare Loans conveyed
hereunder shall be borne by the Depositor and its subsequent assignees.
(b) Delivery of Timeshare Loan Documents. In connection with the
sale, transfer, assignment and conveyance of any Timeshare Loan hereunder, the
Seller hereby agrees to deliver or cause to be delivered, on the Closing Date
(with respect to any Initial Timeshare Loan) and Bluegreen hereby agrees to
deliver or cause to be delivered, on or within five Business Days from each
Transfer Date (with respect to any Qualified Substitute Timeshare Loan), to the
Custodian, all related Timeshare Loan Files and to the Servicer all related
Timeshare Loan Servicing Files.
(c) Collections. The Seller shall deposit or cause to be deposited
all collections in respect of the Timeshare Loans received by the Seller or its
Affiliates after the related Cut-Off Date in the Lockbox Account and, with
respect to Credit Card Timeshare Loans, direct each applicable credit card
vendor to deposit all payments in respect of such Credit Card Timeshare Loans to
the Credit Card Account (net of the Servicer Credit Card Processing Costs).
(d) Limitation of Liability. Neither the Depositor nor any
subsequent assignee of the Depositor shall have any obligation or liability with
respect to any Timeshare Loan nor shall the Depositor or any subsequent assignee
have any liability to any Obligor in respect of any Timeshare Loan. No such
obligation or liability is intended to be assumed by the Depositor or any
subsequent assignee herewith and any such liability is hereby expressly
disclaimed.
SECTION 3. Intended Characterization; Grant of Security Interest. It
is the intention of the parties hereto that the transfer of Timeshare Loans to
be made pursuant to the
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terms hereof shall constitute a sale by the Seller to the Depositor and not a
loan secured by such Timeshare Loans. In the event, however, that a court of
competent jurisdiction were to hold that any such transfer constitutes a loan
and not a sale, it is the intention of the parties hereto that the Seller shall
be deemed to have granted to the Depositor as of the date hereof a first
priority perfected security interest in all of Seller's right, title and
interest in, to and under the Assets specified in Section 2 hereof and the
proceeds thereof and that with respect to such transfer, this Agreement shall
constitute a security agreement under applicable law. In the event of the
characterization of any such transfer as a loan, the amount of interest payable
or paid with respect to such loan under the terms of this Agreement shall be
limited to an amount which shall not exceed the maximum non-usurious rate of
interest allowed by the applicable state law or any applicable law of the United
States permitting a higher maximum non-usurious rate that preempts such
applicable state law, which could lawfully be contracted for, charged or
received (the "Highest Lawful Rate"). In the event any payment of interest on
any such loan exceeds the Highest Lawful Rate, the parties hereto stipulate that
(a) to the extent possible given the term of such loan, such excess amount
previously paid or to be paid with respect to such loan be applied to reduce the
principal balance of such loan, and the provisions thereof immediately be deemed
reformed and the amounts thereafter collectible thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for thereunder and (b) to the extent that the reduction of the principal
balance of, and the amounts collectible under, such loan and the reformation of
the provisions thereof described in the immediately preceding clause (a) is not
possible given the term of such loan, such excess amount will be deemed to have
been paid with respect to such loan as a result of an error and upon discovery
of such error or upon notice thereof by any party hereto such amount shall be
refunded by the recipient thereof.
The characterization of the Seller as "debtor" and the Depositor as
"secured party" in any such security agreement and any related financing
statements required hereunder is solely for protective purposes and shall in no
way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale to the Depositor of the Seller's entire right,
title and interest in and to the Assets.
Each of the Seller, Bluegreen, the Club, the Club Trustee and any of
its Affiliates hereby agrees to make the appropriate entries in its general
accounting records and to indicate that the Timeshare Loans have been
transferred to the Depositor and its subsequent assignees.
SECTION 4. Conditions Precedent to Acquisition of Timeshare Loans by
the Depositor. The obligations of the Depositor to purchase any Timeshare Loans
hereunder shall be subject to the satisfaction of the following conditions:
(a) On the Closing Date, with respect to the Initial Timeshare
Loans, and on each Transfer Date, with respect to any Qualified Substitute
Timeshare Loan replacing a Timeshare Loan, all representations and warranties of
Bluegreen contained in Section 5(a) hereof shall be true and correct on such
date as if made on such date, and all representations and warranties as to the
Timeshare Loans contained in Section 5(b) hereof and all information provided in
the Schedule of Timeshare Loans in respect of each such Timeshare Loan conveyed
on the Closing Date or such Transfer Date, as applicable, shall be true and
correct on such date.
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(b) On or prior to the Closing Date (with respect to the Initial
Timeshare Loans) or, as provided for in Section 6(g) hereof (with respect to
Qualified Substitute Timeshare Loans), the Seller shall have delivered or shall
have caused the delivery of (i) the related Timeshare Loan Files to the
Custodian and the Custodian shall have delivered a Custodian's Certification
therefor pursuant to the Custodial Agreement and (ii) the Timeshare Loan
Servicing Files to the Servicer.
(c) The Seller shall have delivered or caused to be delivered all
other information theretofore required or reasonably requested by the Depositor
to be delivered by the Seller or performed or caused to be performed all other
obligations required to be performed as of the Closing Date or Transfer Date, as
the case may be, including all filings, recordings and/or registrations as may
be necessary in the reasonable opinion of the Depositor, the Issuer or the
Indenture Trustee to establish and preserve the right, title and interest of the
Depositor, the Issuer or the Indenture Trustee, as the case may be, in the
related Timeshare Loans.
(d) On or before the Closing Date and on each Transfer Date, the
Indenture shall be in full force and effect.
(e) With respect to the Initial Timeshare Loans, the Notes shall be
issued and sold on the Closing Date, and the Issuer and the Depositor shall
receive the full consideration due it upon the issuance of the Notes, and the
Issuer and the Depositor shall have applied their respective consideration to
the extent necessary, to pay the Timeshare Loan Acquisition Price for each
Timeshare Loan.
(f) Each Initial Timeshare Loan shall be an Eligible Timeshare Loan
and each of the conditions herein and in the Indenture for the purchases of such
Timeshare Loans shall have been satisfied.
(g) Each Qualified Substitute Timeshare Loan replacing a Timeshare
Loan shall satisfy each of the criteria specified in the definition of
"Qualified Substitute Timeshare Loan" and each of the conditions herein and in
the Indenture for substitution of Timeshare Loans shall have been satisfied.
(h) The Depositor shall have received such other certificates and
opinions as it shall reasonably request.
SECTION 5. Representations and Warranties and Certain Covenants of
Bluegreen.
(a) Bluegreen represents and warrants to the Depositor and the
Indenture Trustee for the benefit of the Noteholders as follows:
(i) Due Incorporation; Valid Existence; Good Standing. As of
the Closing Date and as of each Transfer Date, it is a corporation duly
organized and validly existing in good standing under the laws of the
jurisdiction of its incorporation; and is duly qualified to do business as
a foreign corporation and in good standing under the laws of each
jurisdiction where the character of its property, the nature of its
business or the performance of its obligations under this Agreement makes
such qualification necessary,
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except where the failure to be so qualified will not have a material
adverse effect on its business or its ability to perform its obligations
under this Agreement or any other Transaction Document to which it is a
party or under the transactions contemplated hereunder or thereunder or
the validity or enforceability of any Timeshare Loans. To Bluegreen's
Knowledge, as of the Closing Date, the Seller is a statutory trust duly
organized and validly existing in good standing under the laws of the
jurisdiction of its formation and is duly qualified to do business as a
foreign entity and in good standing under the laws of each jurisdiction
where the performance of its obligations under this Agreement makes such
qualification necessary, except where the failure to be so qualified will
not have a material adverse effect on its ability to perform its
obligations under this Agreement or any other Transaction Document to
which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of any Timeshare Loans.
(ii) Possession of Licenses, Certificates, Franchises and
Permits. As of the Closing Date with respect to the Seller and Bluegreen
and as of each Transfer Date with respect to Bluegreen, each of Bluegreen
and the Seller holds all material licenses, certificates, franchises and
permits from all governmental authorities necessary for the conduct of its
business, and has received no notice of proceedings relating to the
revocation of any such license, certificate, franchise or permit, which
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect its ability to
perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of any Timeshare
Loans.
(iii) Corporate Authority and Power. As of the Closing Date
and as of each Transfer Date, it has, and at all times during the term of
this Agreement will have, all requisite corporate power and authority to
own its properties, to conduct its business, to execute and deliver this
Agreement and all documents and transactions contemplated hereunder and to
perform all of its obligations under this Agreement and any other
Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder. To Bluegreen's Knowledge, as of the
Closing Date, the Seller has all requisite corporate power and authority
to own its properties, to conduct its business, to execute and deliver
this Agreement and all documents and transactions contemplated hereunder
and to perform all of its obligations under this Agreement and any other
Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder. To Bluegreen's Knowledge, as of the
Closing Date, the Seller has all requisite power and authority to acquire,
own, transfer and convey Timeshare Loans to the Depositor.
(iv) Authorization, Execution and Delivery Valid and Binding.
As of the Closing Date and as of each Transfer Date, this Agreement and
all other Transaction Documents and instruments required or contemplated
hereby to be executed and delivered by Bluegreen have been duly
authorized, executed and delivered by Bluegreen and, assuming the due
execution and delivery by, the other party or parties hereto and thereto,
constitute legal, valid and binding agreements enforceable against
Bluegreen in
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accordance with their respective terms subject, as to enforceability, to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
moratorium and other similar applicable laws affecting the enforceability
of creditors' rights generally applicable in the event of the bankruptcy,
insolvency, reorganization, liquidation or dissolution, as applicable, of
Bluegreen and to general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law. To
Bluegreen's Knowledge, as of the Closing Date, this Agreement and all
other Transaction Documents and instruments required or contemplated
hereby to be executed and delivered by the Seller have been duly
authorized, executed and delivered by the Seller and, assuming the due
execution and delivery by, the other party or parties hereto and thereto,
constitute legal, valid and binding agreements enforceable against the
Seller in accordance with their respective terms subject, as to
enforceability, to bankruptcy, insolvency, reorganization, liquidation,
dissolution, moratorium and other similar applicable laws affecting the
enforceability of creditors' rights generally applicable in the event of
the bankruptcy, insolvency, reorganization, liquidation or dissolution as
applicable, of the Seller and to general principles of equity, regardless
of whether such enforceability shall be considered in a proceeding in
equity or at law. To Bluegreen's Knowledge, as of the Closing Date, this
Agreement constitutes a valid transfer of the Seller's interest in the
Timeshare Loans to the Depositor or, in the event of the characterization
of any such transfer as a loan, the valid creation of a first priority
perfected security interest in such Timeshare Loans in favor of the
Depositor.
(v) No Violation of Law, Rule, Regulation, etc. As of the
Closing Date and as of each Transfer Date, the execution, delivery and
performance by Bluegreen of this Agreement and any other Transaction
Document to which it is a party do not and will not (A) violate any of the
provisions of its articles of incorporation or bylaws, (B) violate any
provision of any law, governmental rule or regulation currently in effect
applicable to it or its properties or by which it or its properties may be
bound or affected, including, without limitation, any bulk transfer laws,
where such violation would have a material adverse effect on its ability
to perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of the Timeshare
Loans, (C) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect applicable to it or its
properties or by which it or its properties are bound or affected, where
such violation would have a material adverse effect on its ability to
perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of any Timeshare
Loans, (D) conflict with, or result in a breach of, or constitute a
default under, any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which it is a party or by which it
is bound where such violation would have a material adverse effect on its
ability to perform its obligations under this Agreement or any other
Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of
any Timeshare Loans or (E) result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, mortgage,
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deed of trust, contract or other instrument. To Bluegreen's Knowledge, as
of the Closing Date, the execution, delivery and performance by the Seller
of this Agreement and any other Transaction Document to which the Seller
is a party do not and will not (1) violate any of the provisions of its
certificate of trust, trust agreement or other related organizational
document, (2) violate any provision of any law, governmental rule or
regulation currently in effect applicable to the Seller or its properties
by which the Seller or its properties may be bound or affected, including,
without limitation, any bulk transfer laws, where such violation would
have a material adverse effect on the Seller's ability to perform its
obligations under this Agreement or any other Transaction Document to
which the Seller is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of any Timeshare
Loans, (3) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect applicable to the Seller or its
properties or by which the Seller or its properties are bound or affected,
where such violation would have a material adverse effect on the Seller's
ability to perform its obligations under this Agreement or any other
Transaction Document to which the Seller is a party or under the
transactions contemplated hereunder or thereunder or the validity or
enforceability of Timeshare Loans or (4) conflict with, or result in a
breach of, or constitute a default under, any of the provisions of any
sale and servicing agreement, indenture, mortgage, deed of trust, contract
or other instrument to which the Seller is a party or by which it is bound
where such violation would have a material adverse effect on the Seller's
ability to perform its obligations under this Agreement or any other
Transaction Document to which the Seller is a party or under the
transactions contemplated hereunder or thereunder or the validity or
enforceability of Timeshare Loans.
(vi) Governmental Consent. As of the Closing Date and as of
each Transfer Date, no consent, approval, order or authorization of, and
no filing with or notice to, any court or other Governmental Authority in
respect of Bluegreen is required which has not been obtained in connection
with the authorization, execution, delivery or performance by Bluegreen of
this Agreement or any of the other Transaction Documents to which
Bluegreen is a party or under the transactions contemplated hereunder or
thereunder, including, without limitation, the transfer of the Timeshare
Loans and the creation of the security interest of the Depositor therein
pursuant to Section 3 hereof. To Bluegreen's Knowledge, as of the Closing
Date, no consent, approval, order or authorization of, and no filing with
or notice to, any court or other Governmental Authority in respect of the
Seller is required which has not been obtained in connection with the
authorization, execution, delivery or performance by the Seller of this
Agreement or any of the other Transaction Documents to which the Seller is
a party or under the transactions contemplated hereunder or thereunder,
including, without limitation, the transfer of Timeshare Loans and the
creation of the security interest of the Depositor therein pursuant to
Section 3 hereof.
(vii) Defaults. As of the Closing Date and as of each Transfer
Date, it is not in default under any material agreement, contract,
instrument or indenture to which it is a party or by which it or its
properties is or are bound, or with respect to any order of any court,
administrative agency, arbitrator or governmental body, in each case,
which would
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have a material adverse effect on the transactions contemplated hereunder
or on its business, operations, financial condition or assets, and no
event has occurred which with notice or lapse of time or both would
constitute such a default with respect to any such agreement, contract,
instrument or indenture, or with respect to any such order of any court,
administrative agency, arbitrator or governmental body. To Bluegreen's
Knowledge, as of the Closing Date, the Seller is not in default under any
material agreement, contract, instrument or indenture to which it is a
party or by which it or its properties is or are bound, or with respect to
any order of any court, administrative agency, arbitrator or governmental
body, in each case, which would have a material adverse effect on the
transactions contemplated hereunder, and no event has occurred which with
notice or lapse of time or both would constitute such a default with
respect to any such agreement, contract, instrument or indenture, or with
respect to any such order of any court, administrative agency, arbitrator
or governmental body.
(viii) Insolvency. As of the Closing Date and as of each
Transfer Date, it is solvent and will not be rendered insolvent by the
transfer of any Timeshare Loans hereunder. On and after the Closing Date,
it will not engage in any business or transaction the result of which
would cause the property remaining with it to constitute an unreasonably
small amount of capital. To Bluegreen's Knowledge, as of the Closing Date
the Seller is solvent and will not be rendered insolvent by the transfer
of any Timeshare Loans hereunder. To Bluegreen's Knowledge, on and after
the Closing Date, the Seller will not engage in any business or
transaction, the result of which would cause the property remaining with
it to constitute an unreasonably small amount of capital.
(ix) Pending Litigation or Other Proceedings. Other than as
described in the Offering Circular and on Schedule 5 attached hereto, as
of the Closing Date, there is no pending or, to its Knowledge, threatened
action, suit, proceeding or investigation before any court, administrative
agency, arbitrator or governmental body against or affecting it which, if
decided adversely, would materially and adversely affect (A) its condition
(financial or otherwise), business or operations, (B) its ability to
perform its obligations under, or the validity or enforceability of, this
Agreement or any other documents or transactions contemplated under this
Agreement, (C) any Timeshare Loan or title of any Obligor to any related
Timeshare Property pursuant to the applicable Owner Beneficiary Agreement
or (D) the Depositor's or any of its assigns' ability to foreclose or
otherwise enforce the liens of the related Mortgage Notes and the rights
of the Obligors to use and occupy the related Timeshare Properties
pursuant to the applicable Owner Beneficiary Agreement. To Bluegreen's
Knowledge, as of the Closing Date, there is no pending or threatened
action, suit, proceeding or investigation before any court, administrative
agency, arbitrator or governmental body against or affecting the Seller
which, if decided adversely, would materially and adversely affect (A) the
Seller's ability to perform its obligations under, or the validity or
enforceability of, this Agreement or any other documents or transactions
contemplated under this Agreement, (B) any Timeshare Loan or title of any
Obligor to any related Timeshare Property pursuant to the applicable Owner
Beneficiary Agreement or (C) the Depositor's or any of its assigns'
ability to foreclose or otherwise enforce the liens of the related
Mortgage Notes and the rights of the Obligors to
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use and occupy the related Timeshare Properties pursuant to the applicable
Owner Beneficiary Agreement.
(x) Information. As of the Closing Date and as of each
Transfer Date, no document, certificate or report furnished or required to
be furnished by or on behalf of it or, to Bluegreen's Knowledge, on behalf
of the Seller pursuant to this Agreement, contains or will contain when
furnished any untrue statement of a material fact or fails or will fail to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which it was made.
As of the Closing Date and as of each Transfer Date, as applicable, there
are no facts known to it which, individually or in the aggregate,
materially adversely affect, or which (aside from general economic trends)
may reasonably be expected to materially adversely affect in the future,
its financial condition or assets or business, or which may impair its or
the Seller's ability to perform its respective obligations under this
Agreement, which have not been disclosed herein or therein or in the
certificates and other documents furnished to the Depositor by or on its
or the Seller's behalf pursuant hereto or thereto specifically for use in
connection with the transactions contemplated hereby or thereby.
(xi) Foreign Tax Liability. As of the Closing Date and as of
each Transfer Date, it is not aware of any Obligor under a Timeshare Loan
who has withheld any portion of payments due under such Timeshare Loan
because of the requirements of a foreign taxing authority, and no foreign
taxing authority has contacted it concerning a withholding or other
foreign tax liability.
(xii) Employee Benefit Plan Liability. As of the Closing Date
and as of each Transfer Date, as applicable, (i) no "accumulated funding
deficiency" (as such term is defined under ERISA and the Code), whether or
not waived, exists with respect to any "employee pension benefit plan" (as
such term is defined under ERISA) sponsored, maintained or contributed to
by Bluegreen or any of its Affiliates, and, to Bluegreen's Knowledge, no
event has occurred or circumstance exists that may result in an
accumulated funding deficiency as of the last day of the current plan year
of any such plan; (ii) Bluegreen and each of its Affiliates has made all
contributions required under each multiemployer plan (as such term is
defined under ERISA) (a "Multiemployer Plan") to which Bluegreen or any of
its Affiliates contributes or in which Bluegreen or any of its Affiliates
participates (a "Bluegreen Multiemployer Plan"); and (iii) neither
Bluegreen nor any of its Affiliates has withdrawn from any Multiemployer
Plan with respect to which there is any outstanding liability and, to
Bluegreen's Knowledge, no event has occurred or circumstance exists that
presents a risk of the occurrence of any withdrawal from, or the
partition, termination, reorganization or insolvency of, any Bluegreen
Multiemployer Plan that could result in any liability to Bluegreen.
(xiii) Taxes. Other than as described on Schedule 5 hereto, as
of the Closing Date, it (A) has filed all tax returns (federal, state and
local) which it reasonably believes are required to be filed and has paid
or made adequate provision in its GAAP financial statements for the
payment of all taxes, assessments and other governmental charges due from
it or is contesting any such tax, assessment or other governmental charge
in good
10
faith through appropriate proceedings or except where the failure to file
or pay will not have a material adverse effect on the rights and interests
of the Depositor, (B) knows of no basis for any material additional tax
assessment for any fiscal year for which adequate reserves in its GAAP
financial statements have not been established and (C) intends to pay all
such taxes, assessments and governmental charges, if any, when due. To
Bluegreen's Knowledge, the Seller has filed, as of the Closing Date all
applicable tax returns which it reasonably believes are required to be
filed.
(xiv) Place of Business. As of the Closing Date (with respect
to Bluegreen and the Seller) and as of each Transfer Date (with respect to
Bluegreen), the principal place of business and chief executive office
where Bluegreen and the Seller keep their records concerning the Timeshare
Loans will be 0000 Xxxxxxxxxx Xxx Xxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000 (or such other place specified by Bluegreen and the Seller by
written notice to the Depositor and the Indenture Trustee). As of the
Closing Date, the Seller is a statutory trust formed under the laws of the
State of Delaware. As of the Closing Date and as of each Transfer Date,
Bluegreen is a corporation formed under the laws of the Commonwealth of
Massachusetts.
(xv) Securities Laws. As of the Closing Date (with respect to
Bluegreen and the Seller) and as of each Transfer Date (with respect to
Bluegreen), neither it nor, to Bluegreen's Knowledge, the Seller is an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended. As
of the Closing Date, no portion of the Timeshare Loan Acquisition Price
for each of the Initial Timeshare Loans will be used by it or the Seller
to acquire any security in any transaction which is subject to Section 13
or Section 14 of the Securities Exchange Act of 1934, as amended.
(xvi) Bluegreen Vacation Club. As of the Closing Date and as
of each Transfer Date, with respect to the Club Loans:
(A) The Club Trust Agreement, of which a true and
correct copy is attached hereto as Exhibit B is in full force and
effect and a certified copy of the Club Trust Agreement has been
delivered to the Indenture Trustee together with all amendments and
supplements in respect thereof;
(B) The arrangement of contractual rights and
obligations (duly established in accordance with the Club Trust
Agreement under the laws of the State of Florida) was established
for the purpose of holding and preserving certain property for the
benefit of the Beneficiaries referred to in the Club Trust
Agreement. The Club Trustee has all necessary trust and other
authorizations and powers required to carry out its obligations
under the Club Trust Agreement in the State of Florida and in all
other states in which it holds Resort Interests. The Club is not a
corporation or business trust under the laws of the State of
Florida. The Club is not taxable as an association, corporation or
business trust under federal law or the laws of the State of
Florida;
11
(C) The Club Trustee is a corporation duly formed,
validly existing and in good standing under the laws of the State of
Florida. As of the Closing Date, the Club Trustee is qualified to do
business as a foreign corporation and is in good standing under the
laws of the state of Tennessee. As of each Transfer Date, the Club
Trustee will be duly qualified to do business as a foreign
corporation and will be in good standing under the laws of each
jurisdiction it is required by law to be. The Club Trustee is not an
affiliate of the Servicer for purposes of Chapter 721, Florida
Statutes and is in compliance with the requirements of such Chapter
721 requiring that it be independent of the Servicer;
(D) The Club Trustee has all necessary corporate power
to execute and deliver, and has all necessary corporate power to
perform its obligations under this Agreement, the other Transaction
Documents to which it is a party, the Club Trust Agreement and the
Club Management Agreement. The Club Trustee possesses all requisite
franchises, operating rights, licenses, permits, consents,
authorizations, exemptions and orders as are necessary to discharge
its obligations under the Club Trust Agreement;
(E) The Club Trustee holds all right, title and interest
in and to all of the Timeshare Properties related to the Club Loans
solely for the benefit of the Beneficiaries referred to in, and
subject in each case to the provisions of, the Club Trust Agreement
and the other documents and agreements related thereto. Except with
respect to the Mortgages, the Club Trustee has permitted none of
such related Timeshare Loans to be made subject to any lien or
encumbrance during the time it has been a part of the trust estate
under the Club Trust Agreement;
(F) There are no actions, suits, proceedings, orders or
injunctions pending against the Club or the Club Trustee, at law or
in equity, or before or by any governmental authority which, if
adversely determined, could reasonably be expect to have a material
adverse effect on the Trust Estate or the Club Trustee's ability to
perform its obligations under the Transaction Documents;
(G) Neither the Club nor the Club Trustee has incurred
any indebtedness for borrowed money (directly, by guarantee, or
otherwise);
(H) All ad valorem taxes and other taxes and assessments
against the Club and/or its trust estate have been paid when due and
neither the Servicer nor, to Bluegreen's Knowledge, the Club Trustee
knows of any basis for any additional taxes or assessments against
any such property. The Club has filed all required tax returns and
has paid all taxes shown to be due and payable on such returns,
including all taxes in respect of sales of Owner Beneficiary Rights
(as defined in the Club Trust Agreement) and Vacation Points, if
any;
(I) The Club and the Club Trustee are in compliance in
all material respects with all applicable laws, statutes, rules and
governmental regulations applicable to it and in compliance with
each material instrument, agreement or
12
document to which it is a party or by which it is bound, including,
without limitation, the Club Trust Agreement;
(J) Except as expressly permitted in the Club Trust
Agreement, the Club has maintained the One-to-One Beneficiary to
Accommodation Ratio (as such terms are defined in the Club Trust
Agreement);
(K) Bluegreen Vacation Club, Inc. is a not-for-profit
corporation duly formed, validly existing and in good standing under
the laws of the State of Florida;
(L) Upon purchase of the Club Loans and related Trust
Estate hereunder, the Depositor is an "Interest Holder Beneficiary"
under the Club Trust Agreement and each of the Club Loans
constitutes "Lien Debt", "Purchase Money Lien Debt" and "Owner
Beneficiary Obligations" under the Club Trust Agreement; and
(M) Except as disclosed to the Indenture Trustee in
writing or noted in the Custodian's Certification, each Mortgage
associated with a Deeded Club Loan and granted by the Club Trustee
or the Obligor on the related Deeded Club Loan, as applicable, has
been duly executed, delivered and recorded by or pursuant to the
instructions of the Club Trustee under the Club Trust Agreement and
such Mortgage is valid and binding and effective to create the lien
and security interests in favor of the Indenture Trustee (upon
assignment thereof to the Indenture Trustee). Each of such Mortgages
was granted in connection with the financing of a sale of a Resort
Interest.
(xvii) As of the Closing Date, Bluegreen is the Warehouse
Servicer and has been servicing the Warehouse Timeshare Loans in
accordance with the Servicing Standard and the applicable provisions of
the Warehouse Indenture and it has not taken or failed to take any action
to cause a breach of the representations and warranties set forth in
Sections 12.2 of the Warehouse Indenture.
(b) Bluegreen hereby makes the representations and warranties
relating to the Timeshare Loans contained in Schedule I hereto for the benefit
of the Depositor, the Issuer and the Indenture Trustee for the benefit of the
Noteholders as of the Closing Date (only with respect to the Initial Timeshare
Loans) and each Transfer Date (only with respect to each Qualified Substitute
Timeshare Loan transferred on such Transfer Date), as applicable.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 5 shall survive the (i) sale of each
Timeshare Loan to the Depositor and (ii) any assignment of such Timeshare Loans
by the Depositor and shall continue so long as any such Timeshare Loans shall
remain outstanding or until such time as such Timeshare Loans are repurchased,
purchased or a Qualified Substitute Timeshare Loan is provided pursuant to
Section 6 hereof. Each of the Seller and Bluegreen acknowledges that it has been
advised that the Depositor intends to assign all of its right, title and
interest in and to each Timeshare Loan and its
13
rights and remedies under this Agreement to the Issuer. The Seller and Bluegreen
jointly agree that, upon any such assignment, the Depositor and any of its
assignees may enforce directly, without joinder of the Depositor (but subject to
any defense that Bluegreen may have under this Agreement) all rights and
remedies hereunder.
(d) With respect to any representations and warranties contained in
Section 5 which are made to Bluegreen's Knowledge, if it is discovered that any
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of a Warehouse Timeshare Loan or the interests of
the Depositor or any subsequent assignee thereof, then notwithstanding such lack
of Knowledge of the accuracy of such representation and warranty at the time
such representation or warranty was made (without regard to any Knowledge
qualifiers), such inaccuracy shall be deemed a breach of such representation or
warranty for purposes of the repurchase or substitution obligations described in
Sections 6(a)(i) or (ii) below.
SECTION 6. Repurchases and Substitutions.
(a) Mandatory Repurchases and Substitutions for Breaches of
Representations and Warranties. Upon the receipt of notice by Bluegreen from the
Depositor, the Issuer or the Indenture Trustee of a breach of any of the
representations and warranties in Section 5 hereof (on the date on which such
representation or warranty was made) which materially and adversely affects the
value of a Timeshare Loan or the interests of the Depositor or any subsequent
assignee of the Depositor (including the Issuer and the Indenture Trustee on
behalf of the Noteholders) therein, Bluegreen shall within 60 days of receipt of
such notice, cure in all material respects the circumstance or condition which
has caused such representation or warranty to be incorrect or either (i)
repurchase the Depositor's interest in such Defective Timeshare Loan from the
Depositor at the Repurchase Price or (ii) provide one or more Qualified
Substitute Timeshare Loans and pay the related Substitution Shortfall Amounts,
if any. Bluegreen and the Seller acknowledge that the Depositor shall, pursuant
to the Sale Agreement sell Timeshare Loans and rights and remedies acquired
hereunder to the Issuer and that the Issuer shall pledge such Timeshare Loans
and rights to the Indenture Trustee. Bluegreen and the Seller further
acknowledge that the Indenture Trustee will be appointed attorney in fact under
the Indenture and may enforce Bluegreen's repurchase or substitution obligations
if Bluegreen has not complied with its repurchase and substitution obligations
under this Agreement within the aforementioned 60 day period.
(b) Optional Purchases or Substitutions of Club Loans. The Depositor
hereby irrevocably grants Bluegreen an option to repurchase or substitute
Original Club Loans it has under the Sale Agreement, the Bluegreen Purchase
Agreement and as described in the following sentence. With respect to any
Original Club Loans for which the related Obligor has elected to effect and
Bluegreen has agreed to effect an Upgrade, Bluegreen will (at its option) either
(i) pay the Repurchase Price for such Original Club Loan or (ii) substitute one
or more Qualified Substitute Timeshare Loans for such Original Club Loan and pay
the related Substitution Shortfall Amounts, if any; provided, however, that
Bluegreen's option to substitute one or more Qualified Substitute Timeshare
Loans for an Original Club Loan is limited on any date to (x) 20% of the
Aggregate Closing Date Collateral Balance less (y) the Loan Balances of all
Original Club Loans previously substituted by Bluegreen on the related
substitution dates pursuant to this
14
Agreement, the Sale Agreement and/or the Bluegreen Purchase Agreement. Bluegreen
shall use its best efforts to exercise its substitution option with respect to
Original Club Loans prior to exercise of its repurchase option. To the extent
that Bluegreen shall elect to substitute Qualified Substitute Timeshare Loans
for an Original Club Loan, Bluegreen shall use its best efforts to cause each
such Qualified Substitute Timeshare Loan to be, in the following order of
priority, (i) the Upgrade Club Loan related to such Original Club Loan and (ii)
an Upgrade Club Loan unrelated to such Original Club Loan.
(c) Optional Purchases or Substitutions of Defaulted Timeshare
Loans. The Depositor hereby irrevocably grants Bluegreen an option to repurchase
or substitute Defaulted Timeshare Loans it has under the Sale Agreement, the
Bluegreen Purchase Agreement and as described in the following sentence. With
respect to Defaulted Timeshare Loans, on any date, Bluegreen will have the
option, but not the obligation, to either (i) purchase a related Defaulted
Timeshare Loan at the Repurchase Price for such related Defaulted Timeshare Loan
or (ii) substitute one or more Qualified Substitute Timeshare Loans for such
related Defaulted Timeshare Loan and pay the related Substitution Shortfall
Amounts, if any; provided, however, that Bluegreen's option to purchase a
related Defaulted Timeshare Loan or to substitute one or more Qualified
Substitute Timeshare Loans for a related Defaulted Timeshare Loan is limited on
any date to the Optional Purchase Limit and the Optional Substitution Limit,
respectively. Bluegreen may irrevocably waive its option to purchase or
substitute a related Defaulted Timeshare Loan by delivering to the Indenture
Trustee a Waiver Letter in the form of Exhibit A attached hereto.
(d) Payment of Repurchase Prices and Substitution Shortfall Amounts.
Bluegreen hereby agrees to remit or cause to be remitted all amounts in respect
of Repurchase Prices and Substitution Shortfall Amounts payable during the
related Due Period in immediately available funds to the Indenture Trustee to be
deposited in the Collection Account on the Business Day immediately preceding
the related Payment Date for such Due Period in accordance with the provisions
of the Indenture. In the event that more than one Timeshare Loan is replaced
pursuant to Sections 6(a), (b) or (c) hereof on any Transfer Date, the
Substitution Shortfall Amounts and the Loan Balances of Qualified Substitute
Timeshare Loans shall be calculated on an aggregate basis for all substitutions
made on such Transfer Date.
(e) Schedule of Timeshare Loans. Bluegreen hereby agrees, on each
date on which a Timeshare Loan has been repurchased, purchased or substituted,
to provide or cause to be provided to the Depositor, the Issuer and the
Indenture Trustee with a electronic supplement to Schedule III hereto and the
Schedule of Timeshare Loans reflecting the removal and/or substitution of
Timeshare Loans and subjecting any Qualified Substitute Timeshare Loans to the
provisions of this Agreement.
(f) Qualified Substitute Timeshare Loans. Pursuant to Section 6(g)
hereof, on the related Transfer Date, Bluegreen hereby agrees to deliver or to
cause the delivery of the Timeshare Loan Files relating to the Qualified
Substitute Timeshare Loans to the Indenture Trustee or to the Custodian, at the
direction of the Indenture Trustee, in accordance with the provisions of the
Indenture and the Custodial Agreement. As of such related Transfer Date,
Bluegreen does hereby transfer, assign, sell and grant to the Depositor, without
recourse (except
15
as provided in Section 6 and Section 8 hereof), any and all of Bluegreen's
right, title and interest in and to (i) each Qualified Substitute Timeshare Loan
conveyed to the Depositor on such Transfer Date, (ii) the Receivables in respect
of the Qualified Substitute Timeshare Loans due after the related Cut-Off Date,
(iii) the related Timeshare Loan Documents (excluding any rights as developer or
declarant under the Timeshare Declaration, the Timeshare Program Consumer
Documents or the Timeshare Program Governing Documents), (iv) all Related
Security in respect of such Qualified Substitute Timeshare Loans, and (v) all
income, payments, proceeds and other benefits and rights related to any of the
foregoing. Upon such sale, the ownership of each Qualified Substitute Timeshare
Loan and all collections allocable to principal and interest thereon after the
related Cut-Off Date and all other property interests or rights conveyed
pursuant to and referenced in this Section 6(f) shall immediately vest in the
Depositor, its successors and assigns. Bluegreen shall not take any action
inconsistent with such ownership nor claim any ownership interest in any
Qualified Substitute Timeshare Loan for any purpose whatsoever other than
consolidated financial and federal and state income tax reporting. Bluegreen
agrees that such Qualified Substitute Timeshare Loans shall be subject to the
provisions of this Agreement and shall thereafter be deemed a "Timeshare Loan"
for the purposes of this Agreement.
(g) Officer's Certificate for Qualified Substitute Timeshare Loans.
Bluegreen shall, on each related Transfer Date, certify or cause to be certified
in writing to the Depositor, the Issuer and the Indenture Trustee that each new
Timeshare Loan meets all the criteria of the definition of "Qualified Substitute
Timeshare Loan" and that (i) the Timeshare Loan Files for such Qualified
Substitute Timeshare Loans have been delivered to the Custodian or shall be
delivered within five Business Days, and (ii) the Timeshare Loan Servicing Files
for such Qualified Substitute Timeshare Loans have been delivered to the
Servicer.
(h) Release. In connection with any repurchase, purchase or
substitution of one or more Timeshare Loans contemplated by this Section 6, upon
satisfaction of the conditions contained in this Section 6, the Depositor, the
Issuer and the Indenture Trustee shall execute and deliver or shall cause the
execution and delivery of such releases and instruments of transfer or
assignment presented to it by Bluegreen, in each case, without recourse, as
shall be necessary to vest in Bluegreen or its designee the legal and beneficial
ownership of such Timeshare Loans; provided, however, that with respect to any
release of a Timeshare Loan that is substituted by a Qualified Substitute
Timeshare Loan, the Issuer and the Indenture Trustee shall not execute and
deliver or cause the execution and delivery of such releases and instruments of
transfer or assignment until the Indenture Trustee and the Servicer receive a
Custodian's Certification for such Qualified Substitute Timeshare Loan. The
Depositor, the Issuer and the Indenture Trustee shall cause the Custodian to
release the related Timeshare Loan Files to Bluegreen or its designee and the
Servicer to release the related Timeshare Loan Servicing Files to Bluegreen or
its designee; provided, however, that with respect to any Timeshare Loan File or
Timeshare Loan Servicing File related to a Timeshare Loan that has been
substituted by a Qualified Substitute Timeshare Loan, the Issuer and the
Indenture Trustee shall not cause the Custodian and the Servicer to release the
related Timeshare Loan File and the Timeshare Loan Servicing File, respectively,
until the Indenture Trustee and the Servicer receive a Custodian's Certification
for such Qualified Substitute Timeshare Loan.
16
(i) Sole Remedy. It is understood and agreed that the obligations of
Bluegreen contained in Section 6(a) to cure a material breach, or to repurchase
or substitute related Defective Timeshare Loans and the obligation of Bluegreen
to indemnify pursuant to Section 8 shall constitute the sole remedies available
to the Depositor or its subsequent assignees for the breaches of any
representation or warranty contained in Section 5, and such remedies are not
intended to and do not constitute "credit recourse" to Bluegreen.
SECTION 7. Additional Covenants of Bluegreen and the Seller.
(a) Bluegreen hereby covenants and agrees with the Depositor as
follows:
(i) It shall comply with all laws, rules, regulations and
orders applicable to it and its business and properties except where the
failure to comply will not have a material adverse effect on its business
or its ability to perform its obligations under this Agreement or any
other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or
enforceability of the Timeshare Loans.
(ii) It shall preserve and maintain its existence (corporate
or otherwise), rights, franchises and privileges in the jurisdiction of
its organization and except where the failure to so preserve and maintain
will not have a material adverse effect on its business or its ability to
perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of the Timeshare
Loans.
(iii) On the Closing Date and each Transfer Date, as
applicable, it shall indicate in its and its Affiliates' computer files
and other records that each Timeshare Loan has been sold to the Depositor.
(iv) It shall respond to any inquiries with respect to
ownership of a Timeshare Loan by stating that such Timeshare Loan has been
sold to the Depositor and that the Depositor is the owner of such
Timeshare Loan.
(v) On or prior to the Closing Date, it shall file or cause to
be filed, at Bluegreen's expense, financing statements in favor of the
Depositor and, if applicable, the Issuer and the Indenture Trustee on
behalf of the Noteholders, with respect to the Timeshare Loans, in the
form and manner reasonably requested by the Depositor or its assigns. It
shall deliver or cause the Seller to deliver file-stamped copies of such
financing statements to the Depositor, the Issuer and the Indenture
Trustee on behalf of the Noteholders.
(vi) It agrees from time to time to, or cause the Seller to,
at Bluegreen's expense, promptly execute and deliver all further
instruments and documents, and to take all further actions, that may be
necessary, or that the Depositor, the Issuer or the Indenture Trustee may
reasonably request, to perfect, protect or more fully evidence the sale of
the Timeshare Loans to the Depositor, or to enable the Depositor to
exercise and enforce its
17
rights and remedies hereunder or under any Timeshare Loan including, but
not limited to, powers of attorney, UCC financing statements and
assignments of mortgage. Bluegreen hereby appoints the Depositor, the
Issuer and the Indenture Trustee as attorneys in fact, which appointment
is coupled with an interest and is therefore irrevocable, to act on behalf
and in the name of Bluegreen under this Section 7(a)(vi).
(vii) Any change in the legal name of Bluegreen and any use by
it of any tradename, fictitious name, assumed name or "doing business as"
name occurring after the Closing Date shall be promptly, within 10
Business Days, disclosed to the Depositor and the Indenture Trustee in
writing.
(viii) Upon the discovery or receipt of notice by a
Responsible Officer of Bluegreen of a breach of any of its representations
or warranties and covenants contained herein, Bluegreen shall promptly
disclose to the Depositor, the Issuer and the Indenture Trustee, in
reasonable detail, the nature of such breach.
(ix) Except to the extent of any payments received with
respect to a Credit Card Timeshare Loan, in the event that Bluegreen shall
receive any payments in respect of a Timeshare Loan after the Closing Date
or a Transfer Date, as applicable, it shall, within two Business Days of
receipt, transfer or cause to be transferred, such payments to the Lockbox
Account. Payments received by Bluegreen with respect to Credit Card
Timeshare Loans, without regard to any discount fees, shall be transferred
to the Lockbox Account within five Business Days.
(x) Bluegreen will keep its principal place of business and
chief executive office and the office where it keeps its records
concerning the Timeshare Loans at the address of Bluegreen listed herein
and shall notify the parties hereto of any change to the same at least 30
days prior thereto.
(xi) In the event that Bluegreen, the Seller or the Depositor
or any assignee of the Depositor receives actual notice of any transfer
taxes arising out of the transfer, assignment and conveyance of a
Timeshare Loan to the Depositor, on written demand by the Depositor, or
upon Bluegreen or the Seller otherwise being given notice thereof,
Bluegreen shall cause the Seller to pay, and otherwise indemnify and hold
the Depositor, or any subsequent assignee harmless, on an after-tax basis,
from and against any and all such transfer taxes.
(b) The Seller hereby covenants and agrees with the Depositor as
follows:
(i) The Seller authorizes the Depositor, the Issuer, and the
Indenture Trustee to file continuation statements, and amendments thereto,
relating to the Timeshare Loans and all payments made with regard to the
related Timeshare Loans without the signature of the Seller where
permitted by law. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement where permitted by law. The
Depositor confirms that it is not its present intention to file a
photocopy or other reproduction of this Agreement as a financing
statement, but reserves the right to do so if,
18
in its good faith determination, there is at such time no reasonable
alternative remaining to it.
(ii) It shall comply with all applicable laws, rules,
regulations and orders applicable to it and its business and properties
except where the failure to comply will not have a material adverse effect
on its business or its ability to perform its obligations under this
Agreement or any other Transaction Document to which it is a party or
under the transactions contemplated hereunder or thereunder or the
validity or enforceability of the Timeshare Loans.
(iii) So long as the Warehouse Notes are outstanding, it shall
preserve and maintain for itself its existence (corporate or otherwise),
rights, franchises and privileges in the jurisdiction of its organization
and except where the failure to so preserve and maintain will not have a
material adverse effect on its business or its ability to perform its
obligations under this Agreement or any other Transaction Document to
which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of the Timeshare Loans.
(iv) Any change in the legal name of the Seller and any use by
it of any tradename, fictitious name, assumed name or "doing business as"
name occurring after the Closing Date shall be promptly, within 10
Business Days, disclosed to the Depositor and the Indenture Trustee in
writing.
(v) On or prior to the Closing Date, it shall indicate in
computer files and other records to indicate that each Initial Timeshare
Loan has been sold to the Depositor.
(vi) It shall respond to any inquiries with respect to
ownership of an Initial Timeshare Loan by stating that such Timeshare Loan
has been sold to the Depositor and that the Depositor is the owner of such
Timeshare Loan.
(vii) Except to the extent of any payments received with
respect to a Credit Card Timeshare Loan, in the event that the Seller
shall receive any payments in respect of a Timeshare Loan after the
Closing Date, it shall, within two Business Days of receipt, transfer or
cause to be transferred, such payments to the Lockbox Account. Payments
received by the Seller with respect to Credit Card Timeshare Loans,
without regard to any discount fees, shall be transferred to the Lockbox
Account within five Business Days.
(viii) It agrees and authorizes the filing, at Bluegreen's
expense, of the financing statements specified in Section 7(a)(v) hereof
in favor of the Depositor, the Issuer and the Indenture Trustee on behalf
of the Noteholders, with respect to the Timeshare Loans.
(ix) It agrees from time to time to, at Bluegreen's expense,
promptly execute and deliver all further instruments and documents, and to
take all further actions, that may be necessary, or that the Depositor,
the Issuer or the Indenture Trustee may reasonably request, to perfect,
protect or more fully evidence the sale of the Timeshare Loans, or to
19
enable the Depositor, the Issuer or the Indenture Trustee to exercise and
enforce its rights and remedies hereunder or under any Timeshare Loan
including, but not limited to, powers of attorney, UCC financing
statements and assignments of mortgage. The Seller hereby appoints
Bluegreen, the Depositor, the Issuer and the Indenture Trustee as
attorneys-in-fact, which appointment is coupled with an interest and is
therefore irrevocable, to act on behalf and in the name of the Seller
under this Section 7(b)(ix).
SECTION 8. Indemnification.
(a) Bluegreen hereby agrees to indemnify the Depositor, the Issuer,
the Indenture Trustee, the Noteholders and the Initial Purchaser (collectively,
the "Indemnified Parties") against any and all claims, losses, liabilities,
(including reasonable legal fees and related costs) that the Depositor, the
Issuer, the Indenture Trustee, the Noteholders or the Initial Purchaser may
sustain directly related to any breach of the representations and warranties of
Bluegreen under Section 5 hereof (the "Indemnified Amounts") excluding, however
(i) Indemnified Amounts to the extent resulting from the gross negligence or
willful misconduct on the part of such Indemnified Party; (ii) any recourse for
any uncollectible Timeshare Loan not related to a breach of representation or
warranty; (iii) recourse to Bluegreen for a related Defective Timeshare Loan so
long as the same is cured, substituted or repurchased pursuant to Section 6
hereof; (iv) income, franchise or similar taxes by such Indemnified Party
arising out of or as a result of this Agreement or the transfer of the Timeshare
Loans; (v) Indemnified Amounts attributable to any violation by an Indemnified
Party of any Requirement of Law related to an Indemnified Party; or (vi) the
operation or administration of the Indemnified Party generally and not related
to the enforcement of this Agreement. The parties hereto shall (A) promptly
notify the other parties hereto, the Issuer and the Indenture Trustee if a claim
is made by a third party with respect to this Agreement or the Timeshare Loans,
and relating to (1) the failure by Bluegreen to perform its duties in accordance
with the terms of this Agreement or (2) a breach of Bluegreen's representations,
covenants and warranties contained in this Agreement, (B) assume (with the
consent of the Depositor, the Issuer, the Indenture Trustee, the Noteholders or
the Initial Purchaser, as applicable, which consent shall not be unreasonably
withheld) the defense of any such claim and (C) pay all expenses in connection
therewith, including reasonable legal counsel fees and promptly pay, discharge
and satisfy any judgment, order or decree which may be entered against it or the
Depositor, the Issuer, the Indenture Trustee, the Noteholders or the Initial
Purchaser in respect of such claim. If Bluegreen shall have made any indemnity
payment pursuant to this Section 8 and the recipient thereafter collects from
another Person any amount relating to the matters covered by the foregoing
indemnity, the recipient shall promptly repay such amount to Bluegreen.
(b) The obligations of Bluegreen under this Section 8 to indemnify
the Depositor, the Issuer, the Indenture Trustee, the Noteholders and the
Initial Purchaser shall survive the termination of this Agreement and continue
until the Notes are paid in full or otherwise released or discharged.
SECTION 9. No Proceedings. Each of the Seller and Bluegreen hereby
agrees that it will not, directly or indirectly, institute, or cause to be
instituted, or join any Person in instituting, against the Depositor or any
Association, any bankruptcy, reorganization,
20
arrangement, insolvency or liquidation proceedings, or other proceedings under
any federal or state bankruptcy or similar law so long as there shall not have
elapsed one year plus one day since the latest maturing Notes issued by the
Issuer.
SECTION 10. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing and
mailed or telecommunicated, or delivered as to each party hereto, at its address
set forth below or at such other address as shall be designated by such party in
a written notice to the other parties hereto. All such notices and
communications shall not be effective until received by the party to whom such
notice or communication is addressed.
Seller
BXG Timeshare Trust I
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopier: (000) 000-0000
Depositor
Bluegreen Receivables Finance Corporation XII
0000 Xxxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, President and Assistant Treasurer
Telecopier: (000) 000-0000
Bluegreen
Bluegreen Corporation
0000 Xxxxxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Senior Vice President,
CFO and Treasurer
Telecopier: (000) 000-0000
SECTION 11. No Waiver; Remedies. No failure on the part of
Bluegreen, the Seller, the Depositor or any assignee thereof to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any other remedies provided
by law.
SECTION 12. Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Depositor and its respective
successors and assigns. Any
21
assignee of the Depositor shall be an express third party beneficiary of this
Agreement, entitled to directly enforce this Agreement. Neither the Seller nor
Bluegreen may assign any of their rights and obligations hereunder or any
interest herein without the prior written consent of the Depositor and any
assignee thereof. The Depositor may, and intends to, assign all of its rights
hereunder to the Issuer and each of the Seller and Bluegreen consents to any
such assignment. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until its termination (or, in the case of the Seller,
so long as the Warehouse Notes are outstanding) provided, however, that the
rights and remedies with respect to any breach of any representation and
warranty made by Bluegreen pursuant to Section 5, and the repurchase or
substitution and indemnification obligations shall be continuing and shall
survive any termination of this Agreement, but such rights and remedies may be
enforced only by the Depositor, the Issuer and the Indenture Trustee.
SECTION 13. Amendments; Consents and Waivers. No modification,
amendment or waiver of, or with respect to, any provision of this Agreement, and
all other agreements, instruments and documents delivered thereto, nor consent
to any departure by the Seller or Bluegreen from any of the terms or conditions
thereof shall be effective unless it shall be in writing and signed by each of
the parties hereto, the written consent of the Indenture Trustee on behalf of
the Noteholders is given and confirmation from the Rating Agencies that such
action will not result in a downgrade, withdrawal or qualification of any rating
assigned to a Class of Notes is received. The Seller and Bluegreen shall provide
to the Indenture Trustee and the Rating Agencies with such proposed
modifications, amendments or waivers. Any waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No consent to
or demand by the Seller or Bluegreen in any case shall, in itself, entitle it to
any other consent or further notice or demand in similar or other circumstances.
Each of the Seller and Bluegreen acknowledges that in connection with the
intended assignment by the Depositor of all of its right, title and interest in
and to each Timeshare Loan to the Issuer, the Issuer intends to issue the Notes,
the proceeds of which will be used by the Issuer to purchase the Timeshare Loans
from the Depositor under the terms of the Sale Agreement.
SECTION 14. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation, shall not in any
way be affected or impaired thereby in any other jurisdiction. Without limiting
the generality of the foregoing, in the event that a Governmental Authority
determines that the Depositor may not purchase or acquire Timeshare Loans, the
transactions evidenced hereby shall constitute a loan and not a purchase and
sale, notwithstanding the otherwise applicable intent of the parties hereto, and
the Seller shall be deemed to have granted to the Depositor as of the date
hereof, a first priority perfected security interest in all of the Seller's
right, title and interest in, to and under such Timeshare Loans and the related
property as described in Section 2 hereof.
SECTION 15. GOVERNING LAW; CONSENT TO JURISDICTION.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS
22
OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK.
(B) THE PARTIES TO THIS AGREEMENT HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY AND EACH PARTY WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO ITS ADDRESS SET FORTH
IN SECTION 10 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE
U.S. MAILS, POSTAGE PREPAID. THE PARTIES HERETO EACH WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE
OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION 15 SHALL AFFECT THE RIGHT OF THE
PARTIES TO THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY OF THEM TO BRING ANY
ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 16. WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 17. Heading. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 18. Execution in Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and both of which when taken together
shall constitute one and the same agreement.
23
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
Very truly yours,
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XII, as Depositor
By:
------------------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Assistant Treasurer
BXG TIMESHARE TRUST I
By: Wilmington Trust Company,
as Owner Trustee
By:
------------------------------------------------
Name:
Title:
BLUEGREEN CORPORATION
By:
------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President, CFO and Treasurer
Agreed and acknowledged as to
the last paragraph of Section 3
herein only:
BLUEGREEN VACATION CLUB TRUST
By: Vacation Trust, Inc., Individually and as Club Trustee
By:
-----------------------------------
Name:
Title:
[Signature Page to the Transfer Agreement]
24
Schedule I
Representations and Warranties of Bluegreen Regarding the Timeshare Loans
With respect to each Timeshare Loan, as of the Closing Date or the related
Transfer Date, as applicable:
(a) other than certain 50/50 Loans, payments due under the Timeshare Loan are
fully-amortizing and payable in level monthly installments;
(b) the payment obligations under the Timeshare Loan bear a fixed rate of
interest;
(c) the Obligor thereunder has made a down payment by cash, check or credit
card of at least 10% of the actual purchase price (including closing
costs) of the Timeshare Property (which cash down payment may, (i) in the
case of Upgrade Club Loans, be represented in whole or in part by the
principal payments and down payment on such timeshare loan since its date
of origination and (ii) in the case of a Sampler Converted Loan, be
represented in whole or in part by the principal payments and down payment
made on the related Sampler Loan since its date of origination) and no
part of such payment has been made or loaned to the Obligor by Bluegreen,
the Seller or an Affiliate thereof;
(d) as of the related Cut-Off Date, no principal or interest due with respect
to the Timeshare Loan is more than 60 days delinquent;
(e) the Obligor is not an Affiliate of Bluegreen or any Subsidiary; provided,
that solely for the purposes of this representation, a relative of an
employee and employees of Bluegreen or any Subsidiary (or any of its
Affiliates) shall not be deemed to be an "Affiliate";
(f) immediately prior to the conveyance of the Timeshare Loan to the
Depositor, the Seller will own full legal and equitable title to such
Timeshare Loan, and the Timeshare Loan (and the related Timeshare
Property) is free and clear of adverse claims, liens and encumbrances and
is not subject to claims of rescission, invalidity, unenforceability,
illegality, defense, offset, abatement, diminution, recoupment,
counterclaim or participation or ownership interest in favor of any other
Person;
(g) the Timeshare Loan (other than an Aruba Loan) is secured directly by a
first priority Mortgage on the related purchased Timeshare Property;
(h) with respect to each Deeded Club Loan, the Timeshare Property mortgaged by
or at the direction of the related Obligor constitutes a fractional fee
simple timeshare interest in real property at the related Resort 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, subject to the
rules of the Bluegreen Vacation Club; the related Mortgage has been
delivered for filing and recordation with all appropriate governmental
authorities in all jurisdictions in which such Mortgage is required to be
filed and recorded to create a valid, binding and enforceable first Lien
on the related Timeshare Property and such Mortgage creates a valid,
binding and
I-1
enforceable first Lien on the related Timeshare Property, subject only to
Permitted Liens; and the Seller (or Bluegreen, as the case may be) is in
compliance with any Permitted Lien respecting the right to the use of such
Timeshare Property; the Assignment of Mortgage and each related
endorsement of the related Mortgage Note constitutes a duly executed,
legal, valid, binding and enforceable assignment or endorsement, as the
case may be, of such related Mortgage and related Mortgage Note, and all
monies due or to become due thereunder, and all proceeds thereof;
(i) with respect to the Obligor and a particular Timeshare Property purchased
by such Obligor, there is only one original Mortgage and Mortgage Note, in
the case of a Deeded Club Loan, and only one Finance Agreement or Owner
Beneficiary Agreement, in the case of an Aruba Loan; all parties to the
related Mortgage and the related Mortgage Note (and, in the case of an
Aruba Loan, Finance Agreement or Owner Beneficiary Agreement) had legal
capacity to enter into such Timeshare Loan Documents and to execute and
deliver such related Timeshare Loan Documents, and such related Timeshare
Loan Documents have been duly and properly executed by such parties; any
amendments to such related Timeshare Loan Documents required as a result
of any mergers involving the Seller or Bluegreen or any of their
predecessors, to maintain the rights of the Seller or Bluegreen or their
predecessors thereunder as a mortgagee (or a Seller, in the case of an
Aruba Loan) have been completed;
(j) at the time the related Originator originated such Timeshare Loan to the
related Obligor, such Originator had full power and authority to originate
such Timeshare Loan and the Obligor or the Club Trustee had good and
indefeasible fee title or good and marketable fee simple title, or, in the
case of an Aruba Loan, a cooperative interest, as applicable, to the
Timeshare Property related to such Timeshare Loan, free and clear of all
Liens, except for Permitted Liens;
(k) the related Mortgage (or, in the case of an Aruba Loan, the related
Finance Agreement or Owner Beneficiary Agreement) contains customary and
enforceable provisions so as to render the rights and remedies of the
holder thereof adequate for the realization against the related Timeshare
Property of the benefits of the security interests or lender's contractual
rights intended to be provided thereby, including (a) if the Mortgage is a
deed of trust, by trustee's sale, including power of sale, (b) otherwise
by judicial foreclosure or power of sale and/or (c) termination of the
contract, retention of Obligor deposits and payments towards the related
Timeshare Loan by the Originator or the lender, as the case may be, and
expulsion from the Bluegreen Vacation Club, Inc.; in the case of the
Deeded Club Loans, there is no exemption available to the related Obligor
which would interfere with the mortgagee's right to sell at a trustee's
sale or power of sale or right to foreclose such related Mortgage, as
applicable;
(l) the related Mortgage Note is not and has not been secured by any
collateral except the Lien of the related Mortgage;
I-2
(m) if a Mortgage secures a Timeshare Loan, the title to the related Timeshare
Property is insured (or a binding commitment, which may be a blanket
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 Timeshare
Property is located in a form generally acceptable to prudent originators
of similar mortgage loans, insuring the Seller (or Bluegreen, as the case
may be) or its predecessor and its successors and assigns, as to the first
priority mortgage Lien of the related Mortgage in an amount equal to the
original outstanding Loan Balance of such Timeshare Loan, and otherwise in
form and substance acceptable to the Indenture Trustee; the Seller (or
Bluegreen, as the case may be) or its assignees is a named insured of such
mortgagee's title insurance policy; such mortgagee's title insurance
policy is in full force and effect; no claims have been made under such
mortgagee's title insurance policy and no prior holder of such Timeshare
Loan has done or omitted to do anything which would impair the coverage of
such mortgagee's title insurance policy; no premiums for such mortgagee's
title insurance policy, endorsements and all special endorsements are past
due;
(n) the Seller or Bluegreen has not taken (or omitted to take), and has no
notice that the related Obligor has taken (or omitted to take), any action
that would impair or invalidate the coverage provided by any hazard, title
or other insurance policy on the related Timeshare Property;
(o) all applicable intangible taxes and documentary stamp taxes were paid as
to the related Timeshare Loan;
(p) the proceeds of the Timeshare Loan have been fully disbursed, there is no
obligation to make future advances or to lend additional funds under the
originator's commitment or the documents and instruments evidencing or
securing the Timeshare Loan and no such advances or loans have been made
since the origination of the Timeshare Loan;
(q) the terms of each Timeshare Loan Document have not been impaired, waived,
altered or modified in any respect, except (x) by written instruments
which are part of the related Timeshare Loan Documents or (y) in
accordance with the Credit Policy, the Collection Policy or the Servicing
Standard (provided that no Timeshare Loan has been impaired, waived,
altered, or modified in any respect more than once). No other instrument
has been executed or agreed to which would effect any such impairment,
waiver, alteration or modification; the Obligor has not been released from
liability on or with respect to the Timeshare Loan, in whole or in part;
if required by law or prudent originators of similar loans in the
jurisdiction where the related Timeshare Property is located, all waivers,
alterations and modifications have been filed and/or recorded in all
places necessary to perfect, maintain and continue a valid first priority
Lien of the related Mortgage subject only to Permitted Liens;
(r) other than if it is an Aruba Loan, the Timeshare Loan is principally and
directly secured by an interest in real property;
I-3
(s) the Timeshare Loan was originated by Bluegreen or one of its Affiliates in
the normal course of its business; the Timeshare Loan originated by
Bluegreen or one of its Affiliates was underwritten in accordance with its
underwriting guidelines and the Credit Policy; to Bluegreen's Knowledge,
the origination, servicing and collection practices used by Bluegreen and
its Affiliates with respect to the Timeshare Loan have been in all
respects, legal, proper, prudent and customary;
(t) the related Timeshare Loan is assignable to and by the obligee and its
successors and assigns and the related Timeshare Property is assignable
upon liquidation of the related Timeshare Loan, without the consent of any
other Person (including any Association, condominium association,
homeowners' or timeshare association);
(u) the related Mortgage is and will be prior to any Lien on, or other
interests relating to, the related Timeshare Property;
(v) to Bluegreen's Knowledge, there are no delinquent or unpaid taxes, ground
rents (if any), water charges, sewer rents or assessments outstanding with
respect to any of the Timeshare Properties, nor any other outstanding
Liens or charges affecting the Timeshare Properties that would result in
the imposition of a Lien on the Timeshare Property affecting the Lien of
the related Mortgage or otherwise materially affecting the interests of
the Indenture Trustee on behalf of the Noteholders in the related
Timeshare Loan;
(w) other than with respect to delinquent payments of principal or interest 60
or fewer days past due as of the Cut-Off Date, there is no default,
breach, violation or event of acceleration existing under the Mortgage,
the related Mortgage Note or any other document or instrument evidencing,
guaranteeing, insuring or otherwise securing the related Timeshare Loan,
and no event which, with the lapse of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration thereunder; and the
Seller or Bluegreen has not waived any such material default, breach,
violation or event of acceleration under the Finance Agreement or Owner
Beneficiary Agreement, Mortgage, the Mortgage Note or any such other
document or instrument, as applicable;
(x) neither the Obligor nor any other Person has the right, by statute,
contract or otherwise, to seek the partition of the Timeshare Property;
(y) the Timeshare Loan has not been satisfied, canceled, rescinded or
subordinated, in whole or in part; no portion of the Timeshare Property
has been released from the Lien of the related Mortgage, in whole or in
part; no instrument has been executed that would effect any such
satisfaction, cancellation, rescission, subordination or release; the
terms of the related Mortgage do not provide for a release of any portion
of the Timeshare Property from the Lien of the related Mortgage except
upon the payment of the Timeshare Loan in full;
(z) the Seller and, to Bluegreen's Knowledge, each other party which has had
an interest in the Timeshare Loan is (or, during the period in which such
party held and disposed of
I-4
such interest, was) in compliance with any and all applicable filing,
licensing and "doing business" requirements of the laws of the state
wherein the Timeshare Property is located to the extent necessary to
permit the Seller to maintain or defend actions or proceedings with
respect to the Timeshare Loan in all appropriate forums in such state
without any further act on the part of any such party;
(aa) there is no current obligation on the part of any other person (including
any buy down arrangement) to make payments on behalf of the Obligor in
respect of the Timeshare Loan;
(bb) the related Associations were duly organized and are validly existing; a
manager (the "Manager") manages such Resort and performs services for the
Associations, pursuant to an agreement between the Manager and the
respective Associations, such contract being in full force and effect; to
Bluegreen's Knowledge, the Manager and the Associations have performed in
all material respects all obligations under such agreement and are not in
default under such agreement;
(cc) in the case of Bluegreen Owned Resorts (other than La Cabana Resort and
Casa del Mar Resort) and to Bluegreen's Knowledge with respect to the
Non-Bluegreen Owned Resorts, La Cabana Resort and Casa del Mar Resort, (i)
the related Resort is insured in the event of fire, earthquake, or other
casualty for the full replacement value thereof, and in the event that the
Timeshare Property should suffer any loss covered by casualty or other
insurance, upon receipt of any insurance proceeds, the Associations at the
Resorts are required, during the time such Resort is covered by such
insurance, under the applicable governing instruments either to repair or
rebuild the portions of the Resort in which the Timeshare Property is
located or to pay such proceeds to the holders of any related Mortgage
secured by a Timeshare Property located at such Resort; (ii) the related
Resort, if located in a designated flood plain, maintains flood insurance
in an amount not less than the maximum level available under the National
Flood Insurance Act of 1968, as amended or any applicable laws; (iii) the
related Resort has business interruption insurance and general liability
insurance in such amounts generally acceptable in the industry; and (iv)
the related Resort's insurance policies are in full force and effect with
a generally acceptable insurance carrier;
(dd) the obligee of each related Mortgage, and its successors and assigns, has
the right to receive and direct the application of insurance and
condemnation proceeds received in respect of the related Timeshare
Property, except where the related condominium declarations, timeshare
declarations, the Club Trust Agreement or applicable state law provide
that insurance and condemnation proceeds be applied to restoration or
replacement of the improvements or acquisition of similar improvements, as
the case may be;
(ee) each rescission period applicable to the related Timeshare Loan has
expired;
I-5
(ff) no selection procedures were intentionally utilized by the Seller in
selecting the Timeshare Loan, which the Seller knew were materially
adverse to the Depositor, the Indenture Trustee or the Noteholders;
(gg) the Units related to the Timeshare Loan in the related Resort have been
completed in all material respects as required by applicable state and
local laws, free of all defects that could give rise to any claims by the
related Obligors under home warranties or applicable laws or regulations,
whether or not such claims would create valid offset rights under the law
of the State in which the Resort is located; to the extent required by
applicable law, valid certificates of occupancy for such Units have been
issued and are currently outstanding; the Seller or any of its Affiliates
have complied in all material respects with all obligations and duties
incumbent upon the developers under the related timeshare declaration
(each a "Declaration"), as applicable, or similar applicable documents for
the related Resort; no practice, procedure or policy employed by the
related Association in the conduct of its business violates any law,
regulation, judgment or agreement, including, without limitation, those
relating to zoning, building, use and occupancy, fire, health, sanitation,
air pollution, ecological, environmental and toxic wastes, applicable to
such Association which, if enforced, would reasonably be expected to (a)
have a material adverse impact on such Association or the ability of such
Association to do business, (b) have a material adverse impact on the
financial condition of such Association, or (c) constitute grounds for the
revocation of any license, charter, permit or registration which is
material to the conduct of the business of such Association; the related
Resort and the present use thereof does not violate any applicable
environmental, zoning or building laws, ordinances, rules or regulations
of any governmental authority, or any covenants or restrictions of record,
so as to materially adversely affect the value or use of such Resort or
the performance by the related Association of its obligations pursuant to
and as contemplated by the terms and provisions of the related
Declaration; there is no condition presently existing, and, to Bluegreen's
Knowledge, no event has occurred or failed to occur prior to the date
hereof, concerning the related Resort relating to any hazardous or toxic
materials or condition, asbestos or other environmental or similar matters
which would reasonably be expected to materially and adversely affect the
present use of such Resort or the financial condition or business
operations of the related Association, or the value of the Notes;
(hh) except if such Timeshare Loan is listed on Schedule II(hh) hereto, the
original Loan Balance of such Timeshare Loan does not exceed $35,000;
(ii) payments with respect to the Timeshare Loan are to be in legal tender of
the United States;
(jj) all monthly payments (as applicable) made on the Timeshare Loan have been
made by the Obligor and not by the Seller, Bluegreen or any Affiliates
thereof on the Obligor's behalf;
(kk) the Timeshare Loan relates to a Resort;
I-6
(ll) the Timeshare Loan constitutes either "chattel paper", a "general
intangible" or an "instrument" as defined in the UCC as in effect in all
applicable jurisdictions;
(mm) the sale, transfer and assignment of the Timeshare Loan and the Related
Security does not contravene or conflict with any law, rule or regulation
or any contractual or other restriction, limitation or encumbrance, and
the sale, transfer and assignment of the Timeshare Loan and Related
Security does not require the consent of the Obligor;
(nn) each of the Timeshare Loan, the Related Security, related Assignment of
Mortgage, related Mortgage, related Mortgage Note, related Finance
Agreement or Owner Beneficiary Agreement (each as applicable) and each
other related Timeshare Loan Document are in full force and effect,
constitute the legal, valid and binding obligation of the Obligor thereof
enforceable against such Obligor in accordance with its terms subject to
the effect of bankruptcy, fraudulent conveyance or transfer, insolvency,
reorganization, assignment, liquidation, conservatorship or moratorium,
and is not subject to any dispute, offset, counterclaim or defense
whatsoever;
(oo) the Timeshare Loan relates to a Completed Unit; the Timeshare Loan and the
Related Security do not, and the origination of each Timeshare Loan did
not, contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, retail installment sales, truth in lending,
fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party thereto has been
or is in violation of any such law, rule or regulation in any material
respect if such violation would impair the collectibility of such
Timeshare Loan and the Related Security; no Timeshare Loan was originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer, conveyance or assignment of such Timeshare Loan would be
unlawful, void or voidable;
(pp) to Bluegreen's Knowledge, (i) no bankruptcy is currently existing with
respect to the Obligor, (ii) the Obligor is not insolvent and (iii) the
Obligor is not an Affiliate of Bluegreen;
(qq) except if such Timeshare Loan is listed on Schedule II(qq) hereto, the
Timeshare Loan shall not have a Timeshare Loan Rate less than 6% per
annum;
(rr) except in the case of certain 50/50 Loans or an Upgrade Club Loan, the
Obligor has made at least one required payment with respect to the
Timeshare Loan (not including any down payment);
(ss) if a Resort (other than La Cabana Resort) is subject to a construction
loan, the construction lender shall have signed and delivered a
non-disturbance agreement (which may be contained in such lender's
mortgage) pursuant to which such construction lender agrees not to
foreclose on any Timeshare Properties relating to a Timeshare Loan or by
the terms of the construction loan, such Timeshare Property has been
released from the lien created thereby, which have been sold pursuant to
this Agreement;
I-7
(tt) the Timeshare Properties and the related Resorts are free of material
damage and waste and are in good repair, ordinary wear and tear excepted,
and fully operational; there is no proceeding pending or threatened for
the total or partial condemnation of or affecting any Timeshare Property
or taking of the Timeshare Property by eminent domain; the Timeshare
Properties and the Resorts in which the Timeshare Properties are located
are lawfully used and occupied under applicable law by the owner thereof;
(uu) the portions of the Resorts in which the Timeshare Properties are located
which represent the common facilities are free of material damage and
waste and are in good repair and condition, ordinary wear and tear
excepted;
(vv) no foreclosure or similar proceedings have been instituted and are
continuing with respect to any Timeshare Loan or the related Timeshare
Property;
(ww) with respect to the Aruba Loans only, Bluegreen shall own, directly or
indirectly, 100% of the economic and voting interests of the Aruba
Originator;
(xx) the Timeshare Loan does not have an original term to maturity in excess of
120 months;
(yy) to Bluegreen's Knowledge, the capital reserves and maintenance fee levels
of the Associations related to the Resorts are adequate in light of the
operating requirements of such Associations;
(zz) except as required by law, the Timeshare Loan may not be assumed without
the consent of the obligee;
(aaa) for each Club Loan, the Obligor under the Timeshare Loan does not have its
rights under the Club Trust Agreement suspended;
(bbb) the payments under the Timeshare Loan are not subject to withholding taxes
imposed by any foreign governments;
(ccc) each entry with respect to the Timeshare Loan as set forth on Schedule II
and Schedule III hereof is true and correct. Each entry with respect to a
Qualified Substitute Timeshare Loan as set forth on Schedule II and
Schedule III hereof, as revised, is true and correct;
(ddd) if the Timeshare Loan relates to a Timeshare Property located in Aruba, a
notice has been mailed or will be mailed within 30 days of the Closing
Date or the related Transfer Date, as applicable, to the related Obligor
indicating that such Timeshare Loan has been transferred to the Depositor
and has ultimately been transferred to the Issuer and pledged to the
Indenture Trustee for the benefit of the Noteholders;
(eee) no broker is, or will be, entitled to any commission or compensation in
connection with the transfer of the Timeshare Loans hereunder.
I-8
(fff) if the related Obligor is paying its scheduled payments by pre-authorized
debit or charge, such Obligor has executed an ACH Form substantially in
the form attached hereto as Exhibit C;
(ggg) if such Timeshare Loan relates to a Timeshare Property located in the
State of Michigan and was originated prior to Bluegreen obtaining a
license under the Michigan Mortgage Brokers, Lenders and Servicers
Licensing Act, Bluegreen shall have confirmed that the interest rate on
such Timeshare Loan is enforceable in the manner specified as effective in
an opinion by Michigan local counsel;
(hhh) if such Timeshare Loan is a 50/50 Loan, the related Obligor has made a
downpayment of at least 50%, the balance of the 50/50 Loan is due no later
than the one year anniversary of the origination date of such 50/50 Loan
and the coupon rate is at least 8.25% per annum;
(iii) if the Timeshare Loan is an Aruba Non-Club Loan, such Timeshare Loan was
originated prior to January 26, 2004; and
(jjj) if the Timeshare Loan is an Aruba Club Loan, such Timeshare Loan was
originated on or after January 26, 2004.
I-9
Schedule II
Exceptions
II-1
Schedule III
Schedule of Timeshare Loans
III-1
Schedule 5
The Tennessee Audit Division (the "Division") has advised Bluegreen that
rather than attempting to impose a sales tax on sales of vacation ownership
interests in Tennessee, it intends to seek to impose a sales tax on the use of
accommodations in Bluegreen's Tennessee properties by owners who became members
of Bluegreen Vacation Club through the purchase of non-Tennessee timeshare
interests. The Division has audited the period from December 1, 2001 through
December 21, 2004. Bluegreen has been advised verbally that the Division has
assessed sales taxes of approximately $650,000 for the period under audit for
transient use of Bluegreen Vacation Club properties. In the past, the timeshare
industry has been successful in avoiding the imposition by various states of
sales tax on the reservation and use of accommodations by timeshare owners.
Bluegreen intends to vigorously challenge the assessment of sales taxes by the
Division; however, there is no assurance that Bluegreen will be successful in
challenging the assessment.
Bluegreen Southwest One, L.P., ("Southwest"), a subsidiary of Bluegreen,
is the developer of the Mountain Lakes subdivision in Texas. One of the lakes
that is an amenity in the development has not filled to the expected level. This
condition has resulted in consumer complaints from property owners. Southwest is
investigating the causes for the failure of the lake to fill. Bluegreen is
unable to predict the results of this investigation, the potential cost to
correct the condition or the consequences in the event that the condition cannot
be corrected.
Also related to the Mountain Lakes subdivision is litigation related to
the development of mineral rights within the subdivision. In April 2006, in
Xxxxxx, et xx x. Bluegreen Southwest One, L.P. acting through its general
partner Bluegreen Southwest Land, Inc., et al, Cause No. 00000 Xxxxxxxx Xxxxx of
the 266th Judicial District, Erath County, Texas, plaintiffs filed a First
Amended Original Petition (April 2006). Pursuant to this First Amended Original
Petition, plaintiffs seek to develop mineral interests in the Mountain Lakes
subdivision and to recover damages from Southwest, alleging breach of contract,
breach of fiduciary duty, tortious interference with existing and prospective
relationships and intentional invasion or interference with property rights by
Southwest, for allegedly interfering with the development of mineral rights held
by plaintiffs. Plaintiffs' claims against Bluegreen Southwest One, L.P. total in
the aggregate $25 million. The property owners association has officially filed
a cross complaint against Bluegreen, Southwest and individual directors of the
property owners association asserting various tort claims. While no assurances
can be given with respect to the outcome of litigation, based on the information
currently available, Bluegreen believes that the claims lack merit and intends
to vigorously defend itself in this matter.
A number of shares of Bluegreen's publicly traded common stock was
recently acquired by Central Florida Investments, Inc., Xxxxx X. Xxxxxx and
Xxxxx X. Xxxxxx Revocable Trust (collectively, "CFI"). Bluegreen's Board of
Directors (the "Board"), after considering the best interests of the
corporation, adopted a shareholder rights plan. Bluegreen has initiated
litigation (i) challenging the manner in which the shares were acquired and (ii)
seeking a determination that the shareholder rights plan is valid and
enforceable. CFI has counterclaimed alleging breach of fiduciary duty.
Schedule 5
Exhibit A
Waiver Letter
Exhibit A
Exhibit B
Club Trust Agreement
Exhibit B
Exhibit C
ACH Form
Exhibit C
