Exhibit 10.186
EXECUTION COPY
(Depositor to Issuer)
SALE AGREEMENT
This SALE AGREEMENT (this "Agreement"), dated as of September 15,
2007 is by and among BRF Corporation 2007-A, a Delaware corporation (the
"Depositor"), and BXG Receivables Note Trust 2007-A, a statutory trust formed
under the laws of the State of Delaware (the "Issuer"), and their respective
permitted successors and assigns.
W I T N E S S E T H:
WHEREAS, on the Closing Date, (i) the Depositor intends to sell and
the Issuer intends to purchase the Initial Timeshare Loans and the Closing Date
Eligible Investments, and (ii) the Issuer intends to pledge the Trust Estate
(including all Subsequent Timeshare Loans acquired by the Issuer from time to
time) to U.S. Bank National Association, a national banking association, as
Indenture Trustee (the "Indenture Trustee"), pursuant to an indenture, dated as
of September 15, 2007 (the "Indenture"), by and among the Issuer, Bluegreen
Corporation ("Bluegreen" or the "Club Originator"), a Massachusetts corporation,
in its capacity as Servicer (the "Servicer"), Vacation Trust, Inc., a Florida
corporation, as Club Trustee (the "Club Trustee") and the Indenture Trustee, to
secure the Issuer's 5.828% Timeshare Loan-Backed Notes, Series 2007-A, Class A,
6.474% Timeshare Loan-Backed Notes, Series 2007-A, Class B, 7.463% Timeshare
Loan-Backed Notes, Series 2007-A, Class C, 7.611% Timeshare Loan-Backed Notes,
Series 2007-A, Class D, 8.283% Timeshare Loan-Backed Notes, Series 2007-A, Class
E, 9.680% Timeshare Loan-Backed Notes, Series 2007-A, Class F and 11.149%
Timeshare Loan-Backed Notes, Series 2007-A, Class G (collectively, the "Notes");
WHEREAS, on each Transfer Date during the Prefunding Period (i) the
Depositor intends to sell and the Issuer intends to purchase one or more
Subsequent Timeshare Loans and (ii) by operation of the Indenture, the Issuer
shall pledge such Subsequent Timeshare Loans to the Indenture Trustee to secure
the Issuer's Notes.
WHEREAS, the Depositor may, and in certain circumstances will be
required to cure, repurchase or substitute and provide Qualified Substitute
Timeshare Loans for Defective Timeshare Loans, previously sold to the Issuer
hereunder and pledged to the Indenture Trustee pursuant to the Indenture; and
WHEREAS, the Depositor may, at the direction of the Club Originator,
be required to exercise the Club Originator's option to purchase or substitute
Timeshare Loans that become subject to an Upgrade or Defaulted Timeshare Loans
previously sold to the Issuer hereunder and pledged to the Indenture Trustee
pursuant to the Indenture.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto covenant and agree as follows:
Definitions; Interpretation. Capitalized terms used but not
defined herein shall have the meanings specified in "Standard Definitions"
attached as Annex A to the Indenture.
Acquisition of Timeshare Loans and Closing Date Eligible
Investments.
(i) Initial Timeshare Loans. On the Closing Date, in return
for the Timeshare Loan Acquisition Price for each Timeshare Loan to be sold on
the Closing Date, to be paid in part in cash and in part as an increase in the
value of the Residual Interest Certificate held by the Depositor, the Depositor
does hereby transfer, assign, sell and grant to the Issuer, without recourse
(except as provided in Section 6 and Section 8 hereof), any and all of the
Depositor'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 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 Initial
Timeshare Loan, (v) the Depositor's rights and remedies under the Transfer
Agreement and the Bluegreen Purchase Agreement including, but not limited to,
its rights with respect to the representations and warranties of the Club
Originator therein, together with all rights of the Depositor with respect to
any breach thereof including any right to require the Club Originator to cure,
repurchase or substitute any Defective Timeshare Loans in accordance with the
provisions of the Transfer Agreement and the Bluegreen Purchase Agreement, and
(vi) all income, payments, proceeds and other benefits and rights related to any
of the foregoing. 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)(i) shall immediately
vest in the Issuer, its successors and assigns. The Depositor 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 Issuer and its subsequent assignees.
(ii) Subsequent Timeshare Loans. On the related Transfer Date during the
Prefunding Period, in return for an amount equal to the Timeshare Loan
Acquisition Price of each of the Subsequent Timeshare Loans to be sold on such
date, to be paid in part in cash and in part as an increase in the value of the
Residual Interest Certificate held by the Depositor, the Depositor does hereby
transfer, assign, sell and grant to the Issuer, without recourse (except as
provided in Section 6 and Section 8 hereof), any and all of the Depositor's
right, title and interest in and to (i) the Subsequent Timeshare Loans listed on
the Schedule of Timeshare Loans attached to the related Subsequent Transfer
Notice, (ii) the Receivables in respect of the Subsequent 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 Subsequent Timeshare
Loan, (v) the Depositor's rights and remedies under the Bluegreen Purchase
Agreement including, but not limited to, its rights with respect to the
representations and warranties of the Club Originator therein, together
2
with all rights of the Depositor with respect to any breach thereof including
any right to require the Club Originator to cure, repurchase or substitute any
Defective Timeshare Loans in accordance with the provisions of the Bluegreen
Purchase Agreement, and (vi) all income, payments, proceeds and other benefits
and rights related to any of the foregoing. Upon such sale and transfer, the
ownership of each Subsequent 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)(ii) shall immediately vest in the Issuer, its successors and assigns. The
Depositor shall not take any action inconsistent with such ownership nor claim
any ownership interest in any Subsequent 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
Subsequent Timeshare Loans conveyed hereunder shall be borne by the Issuer and
its subsequent assignees.
(iii) Closing Date Eligible Investments. On the Closing Date, in return
for an amount equal to the sum of the Prefunding Account Initial Deposit and the
Capitalized Interest Account Initial Deposit, the Depositor does hereby
transfer, assign, sell and grant to the Issuer, without recourse (except as
provided in Section 6 and Section 8 hereof), any and all of the Depositor's
right, title and interest in and to the Closing Date Eligible Investments (the
property in Section 2(a)(i), 2(a)(ii) and this Section 2(a)(iii), the "Assets").
The Depositor shall not take any action inconsistent with such ownership nor
claim any ownership interest in any Closing Date Eligible Investment for any
purpose whatsoever other than for federal and state income tax reporting, if
applicable.
Delivery of Timeshare Loan Documents. In connection with the
sale, transfer, assignment and conveyance of any Timeshare Loan hereunder, the
Issuer hereby directs the Depositor and the Depositor hereby agrees to deliver
or cause to be delivered, on the Closing Date (with respect to any Initial
Timeshare Loan), at least five Business Days prior to each Transfer Date during
the Prefunding Period (with respect to any Subsequent Timeshare Loan) and on or
within five Business Days from each Transfer Date (with respect to any Qualified
Substitute Timeshare Loan), as applicable, to the Custodian all related
Timeshare Loan Files and to the Servicer all related Timeshare Loan Servicing
Files.
Collections. The Depositor shall deposit or cause to be
deposited all collections in respect of the Timeshare Loans received by the
Depositor or its Affiliates after the related Cut-Off Date in the Lockbox
Account and, with respect to Credit Card Timeshare Loans, direct each applicable
credit card vendor to deposit all payments in respect of such Credit Card
Timeshare Loans to the Credit Card Account (net of the Servicer Credit Card
Processing Costs).
Limitation of Liability. None of the Issuer, the Depositor or
any subsequent assignee of the Issuer shall have any obligation or liability
with respect to any Timeshare Loan nor shall the Issuer, 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
Issuer, the Depositor or any subsequent assignee herewith and any such liability
is hereby expressly disclaimed.
3
Intended Characterization; Grant of Security Interest. It is
the intention of the parties hereto that each transfer of the Closing Date
Eligible Investments and Timeshare Loans to be made pursuant to the terms hereof
shall constitute a sale by the Depositor to the Issuer and not a loan secured by
the Closing Date Eligible Investments and the Timeshare Loans. In the event,
however, that a court of competent jurisdiction were to hold that any such
transfer constitutes a loan and not a sale, it is the intention of the parties
hereto that the Depositor shall be deemed to have granted to the Issuer as of
the date hereof a first priority perfected security interest in all of the
Depositor'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 Depositor as "debtor" and the Issuer 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 Issuer of the Depositor's entire right,
title and interest in and to the Assets.
Each of the Depositor, the Club, the Club Trustee and any of their
Affiliates, hereby agrees to make the appropriate entries in its general
accounting records to indicate that the Closing Date Eligible Investments and
the Timeshare Loans have been transferred to the Issuer, pledged to the
Indenture Trustee and constitute a part of the Issuer's estate in accordance
with the terms of the Trust created under the Trust Agreement.
Conditions Precedent to Acquisition of Timeshare Loans and
Closing Date Eligible Investments by the Issuer. The obligations of the Issuer
to purchase any Timeshare Loans and Closing Date Eligible Investments hereunder
shall be subject to the satisfaction of the following conditions:
4
All representations and warranties of the Depositor contained
in Section 5 and in Schedule I hereof, and all information provided in the
Schedule of Timeshare Loans or as updated with respect to the related Subsequent
Transfer Notice or the Schedule of Eligible Investments shall be true and
correct as of the Closing Date or Transfer Date, as applicale, and the Depositor
shall have delivered to the Issuer, the Indenture Trustee and the Initial
Purchaser an Officer's Certificate to such effect.
On or prior to the Closing Date or a Transfer Date (or, with
respect to Qualified Substitute Timeshare Loans, as provided for in Section 6(g)
hereof), as applicable, the Depositor shall have delivered or shall have caused
the delivery of (i) the related Timeshare Loan Files to the Custodian and the
Custodian shall have delivered a Custodian's Certification therefor pursuant to
the Custodial Agreement and (ii) the Timeshare Loan Servicing Files to the
Servicer.
The Depositor shall have delivered or caused to be delivered
all other information theretofore required or reasonably requested by the Issuer
to be delivered by the Depositor or performed or caused to be performed all
other obligations required to be performed as of the Closing Date or the
Transfer Date, as the case may be, including all filings, recordings and/or
registrations as may be necessary in the reasonable opinion of the Issuer or the
Indenture Trustee to establish and preserve the right, title and interest of the
Issuer or the Indenture Trustee, as the case may be, in the related Timeshare
Loans and Closing Date Eligible Investments.
On or before the Closing Date, the Issuer, the Servicer, the
Club Trustee, the Backup Servicer and the Indenture Trustee shall have entered
into the Indenture.
The Notes shall be issued and sold on the Closing Date, the
Issuer shall receive the full consideration due it upon the issuance of the
Notes, and the Issuer shall have applied such consideration, to the extent
necessary, to pay the Timeshare Loan Acquisition Price for each Initial
Timeshare Loan and to pay for the Closing Date Eligible Investments.
With respect to Subsequent Timeshare Loans, the Issuer shall
apply funds from the Prefunding Account, to the extent necessary, to pay the
Depositor the Timeshare Loan Acquisition Price for each Subsequent Timeshare
Loan.
Each Subsequent Timeshare Loan conveyed on a Transfer Date
shall be an Eligible Timeshare Loan and each of the conditions herein and in the
Indenture for the purchase of Subsequent Timeshare Loans shall have been
satisfied.
Each Qualified Substitute Timeshare Loan replacing a Timeshare
Loan shall satisfy each of the criteria specified in the definition of
"Qualified Substitute Timeshare Loan" and each of the conditions herein and in
the Indenture for substitution of Timeshare Loans shall have been satisfied.
The Issuer shall have received such other certificates and
opinions as it shall reasonably request.
5
Representations and Warranties and Certain Covenants of the
Depositor.
The Depositor represents and warrants to the Issuer and the
Indenture Trustee for the benefit of the Noteholders, on the Closing Date and on
each Transfer Date (with respect to only the Subsequent Timeshare Loans or
Qualified Substitute Timeshare Loans transferred on such Transfer Date) as
follows:
(i) Due Incorporation; Valid Existence; Good Standing. It is a
corporation duly organized and validly existing in good standing under the
laws of the jurisdiction of its incorporation; and is duly qualified to do
business as a foreign corporation and in good standing under the laws of
each jurisdiction where the character of its property, the nature of its
business or the performance of its obligations under this Agreement makes
such qualification necessary, except where the failure to be so qualified
will not have a material adverse effect on its business or its ability to
perform its obligations under this Agreement or any other Transaction
Document to which it is a party or under the transactions contemplated
hereunder or thereunder or the validity or enforceability of any Timeshare
Loans.
(ii) Possession of Licenses, Certificates, Franchises and
Permits. It holds, and at all times during the term of this Agreement will
hold, all material licenses, certificates, franchises and permits from all
governmental authorities necessary for the conduct of its business, and
has received no notice of proceedings relating to the revocation of any
such license, certificate, franchise or permit, which singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially and adversely affect its ability to perform its
obligations under this Agreement or any other Transaction Document to
which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of any Timeshare Loans.
(iii) Corporate Authority and Power. It has, and at all times
during the term of this Agreement will have, all requisite corporate power
and authority to own its properties, to conduct its business, to execute
and deliver this Agreement and all documents and transactions contemplated
hereunder and to perform all of its obligations under this Agreement and
any other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder. It has all requisite
corporate power and authority to acquire, own, transfer and convey the
Timeshare Loans to the Issuer.
(iv) Authorization, Execution and Delivery Valid and Binding.
This Agreement and all other Transaction Documents and instruments
required or contemplated hereby to be executed and delivered by it have
been duly authorized, executed and delivered by it and, assuming the due
execution and delivery by, the other party or parties hereto and thereto,
constitute legal, valid and binding agreements enforceable against it in
accordance with their respective terms subject, as to enforceability, to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
moratorium and other similar applicable laws affecting the enforceability
of creditors' rights generally applicable in the event of the bankruptcy,
insolvency, reorganization, liquidation or dissolution, as applicable, of
it and to general principles of equity,
6
regardless of whether such enforceability shall be considered in a
proceeding in equity or at law. This Agreement constitutes a valid
transfer of its interest in the Timeshare Loans to the Issuer 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 Issuer.
(v) No Violation of Law, Rule, Regulation, etc. The execution,
delivery and performance by it of this Agreement and any other Transaction
Document to which it is a party do not and will not (A) violate any of the
provisions of its articles of incorporation or bylaws, (B) violate any
provision of any law, governmental rule or regulation currently in effect
applicable to it or its properties or by which 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
Timeshare Loans or (E) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.
(vi) Governmental Consent. No consent, approval, order or
authorization of, and no filing with or notice to, any court or other
Governmental Authority in respect of it is required which has not been
obtained in connection with the authorization, execution, delivery or
performance by it of this Agreement or any of the other Transaction
Documents to which it is a party or under the transactions contemplated
hereunder or thereunder, including, without limitation, the transfer of
Timeshare Loans and the creation of the security interest of the Issuer
therein pursuant to Section 3 hereof.
(vii) Defaults. It is not in default under any material
agreement, contract, instrument or indenture to which it is a party or by
which it or its properties is or are bound, or with respect to any order
of any court, administrative agency, arbitrator or governmental body, in
each case, which would have a material adverse effect on the 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
7
indenture, or with respect to any such order of any court, administrative
agency, arbitrator or governmental body.
(viii) Insolvency. It is solvent and will not be rendered
insolvent by the transfer of any Timeshare Loans hereunder. On and after
the Closing Date, it will not engage in any business or transaction the
result of which would cause the property remaining with it to constitute
an unreasonably small amount of capital.
(ix) Pending Litigation or Other Proceedings. Other than as
described in the Offering Circular, 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
Issuer's or the Indenture Trustee's ability to foreclose or otherwise
enforce the liens of the Mortgage Notes and the rights of the Obligors to
use and occupy the related Timeshare Properties pursuant to the applicable
Owner Beneficiary Agreement.
(x) Information. No document, certificate or report furnished
or required to be furnished by or on behalf of it pursuant to this
Agreement, in its capacity as Depositor, contains or will contain when
furnished any untrue statement of a material fact or fails or will fail to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which it was made.
There are no facts known to it which, individually or in the aggregate,
materially adversely affect, or which (aside from general economic trends)
may reasonably be expected to materially adversely affect in the future,
the financial condition or assets or its business, or which may impair the
ability of it to perform its obligations under this Agreement, which have
not been disclosed herein or therein or in the certificates and other
documents furnished to the Issuer by or on behalf of it specifically for
use in connection with the transactions contemplated hereby or thereby.
(xi) Foreign Tax Liability. It is not aware of any Obligor
under a Timeshare Loan who has withheld any portion of payments due under
such Timeshare Loan because of the requirements of a foreign taxing
authority, and no foreign taxing authority has contacted it concerning a
withholding or other foreign tax liability.
(xii) Employee Benefit Plan Liability. As of the Closing Date
and each Transfer Date, as applicable, (i) no "accumulated funding
deficiency" (as such term is defined under ERISA and the Code), whether or
not waived, exists with respect to any "employee pension benefit plan" (as
such term is defined under ERISA) sponsored, maintained or contributed to
by it or any of its Affiliates, and, to its Knowledge, no event has
occurred or circumstance exists that may result in an accumulated funding
deficiency as of the last day of the current plan year of any such plan;
(ii) it and each of its Affiliates has made all contributions required
under each multiemployer plan (as such term is
8
defined under ERISA) (a "Multiemployer Plan") to which it or any of its
Affiliates contributes or in which it or any of its Affiliates
participates (a "Depositor Multiemployer Plan"); and (iii) neither it nor
any of its Affiliates has withdrawn from any Multiemployer Plan with
respect to which there is any outstanding liability and, to its Knowledge,
no event has occurred or circumstance exists that presents a risk of the
occurrence of any withdrawal from, or the partition, termination,
reorganization or insolvency of, any Depositor Multiemployer Plan that
could result in any liability to it.
(xiii) Taxes. It, as of the Closing Date, (i) has filed all
tax returns (federal, state and local) which it reasonably believes are
required to be filed and has paid or made adequate provision in its GAAP
financial statements for the payment of all taxes, assessments and other
governmental charges due from it or is contesting any such tax, assessment
or other governmental charge in good faith through appropriate proceedings
or except where the failure to file or pay will not have a material
adverse effect on the rights and interests of the Issuer or any of its
subsequent assignees, (ii) knows of no basis for any material additional
tax assessment for any fiscal year for which adequate reserves in its GAAP
financial statements have not been established and (iii) intends to pay
all such taxes, assessments and governmental charges, if any, when due.
(xiv) Place of Business. The principal place of business and
chief executive office where it keeps its records concerning Timeshare
Loans will be 0000 Xxxxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000 (or such other place specified by it by written notice to the Issuer
and the Indenture Trustee). It is a corporation formed under the laws of
the State of Delaware.
(xv) Securities Laws. It is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. No portion of the Timeshare
Loan Acquisition Price for each of the Timeshare Loans or the price of the
Closing Date Eligible Investments will be used by it to acquire any
security in any transaction which is subject to Section 13 or Section 14
of the Securities Exchange Act of 1934, as amended.
(xvi) Bluegreen Vacation Club. With respect to the Club Loans:
(A) The Club Trust Agreement, of which a true and
correct copy is attached hereto as Exhibit B is in full force and
effect; and a certified copy of the Club Trust Agreement has been
delivered to the Indenture Trustee together with all amendments and
supplements in respect thereof;
(B) The arrangement of contractual rights and
obligations (duly established in accordance with the Club Trust
Agreement under the laws of the State of Florida) was established
for the purpose of holding and preserving certain 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.
9
The Club is not taxable as an association, corporation or business
trust under federal law or the laws of the State of Florida;
(C) The Club Trustee is a corporation duly formed,
validly existing and in good standing under the laws of the State of
Florida. As of the Closing Date, the Club Trustee is qualified to do
business as a foreign corporation and is in good standing under the
laws of the state of Tennessee. As of each Transfer Date, the Club
Trustee will be duly qualified to do business as a foreign
corporation and will be in good standing under the laws of each
jurisdiction it is required by law to be. The Club Trustee is not an
affiliate of the Servicer for purposes of Chapter 721, Florida
Statutes and is in compliance with the requirements of such Chapter
721 requiring that it be independent of the Servicer;
(D) The Club Trustee has all necessary corporate power
to execute and deliver, and has all necessary corporate power to
perform its obligations under this Agreement, the other Transaction
Documents to which it is a party, the Club Trust Agreement and the
Club Management Agreement. The Club Trustee possesses all requisite
franchises, operating rights, licenses, permits, consents,
authorizations, exemptions and orders as are necessary to discharge
its obligations under the Club Trust Agreement;
(E) The Club Trustee holds all right, title and interest
in and to all of the Timeshare Properties related to the Club Loans
solely for the benefit of the Beneficiaries referred to in, and
subject in each case to the provisions of, the Club Trust Agreement
and the other documents and agreements related thereto. Except with
respect to the Mortgages (or a pledge of the Co-op Shares in
connection with Aruba Club Loans), the Club Trustee has permitted
none of such Timeshare Properties to be made subject to any lien or
encumbrance during the time it has been a part of the trust estate
under the Club Trust Agreement;
(F) There are no actions, suits, proceedings, orders or
injunctions pending against the Club or the Club Trustee, at law or
in equity, or before or by any governmental authority which, if
adversely determined, could reasonably be expected to have a
material adverse effect on the Trust Estate or the Club Trustee's
ability to perform its obligations under the Transaction Documents;
(G) Neither the Club nor the Club Trustee has incurred
any indebtedness for borrowed money (directly, by guarantee, or
otherwise);
(H) All ad valorem taxes and other taxes and assessments
against the Club and/or its trust estate have been paid when due and
neither the Depositor nor 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;
10
(I) The Club and the Club Trustee are in compliance in
all material respects with all applicable laws, statutes, rules and
governmental regulations applicable to it and in compliance with
each material instrument, agreement or document to which it is a
party or by which it is bound, including, without limitation, the
Club Trust Agreement;
(J) Except as expressly permitted in the Club Trust
Agreement, the Club has maintained the One-to-One Beneficiary to
Accommodation Ratio (as such terms are defined in the Club Trust
Agreement);
(K) Bluegreen Vacation Club, Inc. is a not-for-profit
corporation duly formed, validly existing and in good standing under
the laws of the State of Florida;
(L) Upon purchase of the Club Loans and related Trust
Estate hereunder, the Issuer is an "Interest Holder Beneficiary"
under the Club Trust Agreement and each of the Club Loans
constitutes "Lien Debt", "Purchase Money Lien Debt" and "Owner
Beneficiary Obligations" under the Club Trust Agreement; and
(M) Except as disclosed to the Indenture Trustee in
writing or noted in the Custodian's Certification, each Mortgage
associated with a Deeded Club Loan and granted by the Club Trustee
or the Obligor on the related Deeded Club Loan, as applicable, has
been duly executed, delivered and recorded by or pursuant to the
instructions of the Club Trustee under the Club Trust Agreement and
such Mortgage is valid and binding and effective to create the lien
and security interests in favor of the Indenture Trustee (upon
assignment thereof to the Indenture Trustee). Each of such Mortgages
was granted in connection with the financing of a sale of a Resort
Interest.
The Depositor hereby represents and warrants to the Issuer and
the Indenture Trustee that it has entered into the Transfer Agreement and the
Bluegreen Purchase Agreement, that the Club Originator has made the
representations and warranties in the Transfer Agreement and the Bluegreen
Purchase Agreement as set forth therein, that such representations and
warranties run to and are for the benefit of the Depositor, the Issuer, the
Indenture Trustee and the Noteholders, and that pursuant to Section 2 hereof,
the Depositor has transferred and assigned to the Issuer all rights and remedies
under the Transfer Agreement and the Bluegreen Purchase Agreement.
The Transfer Agreement and the Bluegreen Purchase Agreement,
including the other Transaction Documents contemplated thereby, are the only
agreements pursuant to which the Depositor acquires ownership of the Timeshare
Loans. To the Knowledge of the Depositor, the representations and warranties of
the Club Originator under the Transfer Agreement and the Bluegreen Purchase
Agreement are true and correct.
In consideration of Sections 5(b) and (c) above, (i) the
Depositor hereby makes the representations and warranties relating to the
Timeshare Loans contained in Schedule
11
I hereto for the benefit of the Issuer and the Indenture Trustee for the benefit
of the Noteholders as of the Closing Date (with respect to each Initial
Timeshare Loan transferred on the Closing Date) and as of each Transfer Date
(with respect to each Subsequent Timeshare Loan or Qualified Substitute
Timeshare Loan transferred on such Transfer Date), as applicable, and (ii) the
Depositor hereby represents and warrants that each Closing Date Eligible
Investment is an Eligible Investment for the benefit of the Issuer and the
Indenture Trustee for the benefit of the Noteholders as of the Closing Date.
It is understood and agreed that the representations and
warranties set forth in this Section 5 shall survive the sale of each Timeshare
Loan sold hereunder to the Issuer and any assignment of such Timeshare Loan by
the Issuer to the Indenture Trustee on behalf of the Noteholders 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. The
Depositor acknowledges that it has been advised that the Issuer intends to
assign all of its right, title and interest in and to each Timeshare Loan sold
hereunder and its rights and remedies under this Agreement to the Indenture
Trustee on behalf of the Noteholders. The Depositor agrees that, upon any such
assignment, the Indenture Trustee may enforce directly, without joinder of the
Issuer (but subject to any defense that the Depositor may have under this
Agreement) all rights and remedies hereunder.
With respect to any representations and warranties contained
in Section 5 which are made to the Depositor's Knowledge, if it is discovered
that any representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of a Timeshare Loan or the interests
of the Issuer or any subsequent assignee thereof, then notwithstanding such lack
of Knowledge of the accuracy of such representation and warranty at the time
such representation or warranty was made (without regard to any Knowledge
qualifiers), such inaccuracy shall be deemed a breach of such representation or
warranty for purposes of the repurchase or substitution obligations described in
Sections 6(a)(i) or (ii) below.
Repurchases and Substitutions.
Mandatory Repurchases and Substitutions for Breaches of
Representations and Warranties. Upon the receipt of notice by the Depositor of a
breach of any of the representations and warranties in Section 5 hereof (on the
date on which such representation or warranty was made) which materially and
adversely affects the value of a Timeshare Loan or a Closing Date Eligible
Investment or the interests of the Issuer or any subsequent assignee of the
Issuer (including the Indenture Trustee on behalf of the Noteholders) therein,
the Depositor 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 Issuer's
interest in such Defective Timeshare Loan or such Closing Date Eligible
Investment at the Repurchase Price, or (ii) in the case of a Defective Timeshare
Loan only, provide one or more Qualified Substitute Timeshare Loans and pay the
related Substitution Shortfall Amounts, if any. It is understood and agreed that
the Depositor shall have the right and will enforce such right to require the
Club Originator to repurchase or substitute a Defective Timeshare Loan or a
Closing Date Eligible Investment in the event of a breach of any of the
12
representations and warranties in Section 5 hereof which materially and
adversely affects the value of a Timeshare Loan or a Closing Date Eligible
Investment or the interests of the Issuer or any subsequent assignee of the
Issuer (including the Indenture Trustee on behalf of the Noteholders) in
accordance with the provisions of the Transfer Agreement and Bluegreen Purchase
Agreement, as applicable.
Optional Purchases or Substitutions of Club Loans. The Issuer
hereby acknowledges that pursuant to the Transfer Agreement and the Bluegreen
Purchase Agreement, the Depositor has irrevocably granted to the Club Originator
an option to repurchase or substitute Original Club Loans it has thereunder and
as described in the following sentence. The Issuer acknowledges that with
respect to any Original Club Loans for which the related Obligor has elected to
effect and the Club Originator has agreed to effect an Upgrade, the Club
Originator 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 the Club Originator's option to
substitute one or more Qualified Substitute Timeshare Loans for an Original Club
Loan is limited on any date to (x) 20% of the Aggregate Closing Date Collateral
Balance less (y) the aggregate Loan Balances of all Original Club Loans
previously substituted by the Club Originator on prior Transfer Dates pursuant
to this Agreement, the Transfer Agreement or the Bluegreen Purchase Agreement.
In addition, the Issuer acknowledges that the Club Originator shall use its best
efforts to exercise its substitution option with respect to Original Club Loans
prior to exercise of its repurchase option. To the extent that the Club
Originator shall elect to substitute Qualified Substitute Timeshare Loans for an
Original Club Loan, the Club Originator shall use its best efforts to cause each
such Qualified Substitute Timeshare Loan to be, in the following order of
priority, (i) the Upgrade Club Loan related to such Original Club Loan and (ii)
an Upgrade Club Loan unrelated to such Original Club Loan.
Optional Purchases or Substitutions of Defaulted Timeshare
Loans. The Issuer acknowledges that pursuant to the Transfer Agreement and the
Bluegreen Purchase Agreement, the Depositor has irrevocably granted the Club
Originator an option to repurchase or substitute Defaulted Timeshare Loans it
has thereunder and as described in the following sentence. With respect to
Defaulted Timeshare Loans on any date, the Club Originator will have the option,
but not the obligation, to either (i) purchase such Defaulted Timeshare Loan at
the Repurchase Price of such Defaulted Timeshare Loan or (ii) substitute one or
more Qualified Substitute Timeshare Loans for such Defaulted Timeshare Loan and
pay the related Substitution Shortfall Amount, if any; provided, however, that
the Club Originator's option to purchase a Defaulted Timeshare Loan or to
substitute one or more Qualified Substitute Timeshare Loans for a Defaulted
Timeshare Loan is limited on any date to the Optional Purchase Limit and the
Optional Substitution Limit, respectively. The Club Originator may irrevocably
waive its option to purchase or substitute a Defaulted Timeshare Loan by
delivering or causing to deliver to the Indenture Trustee a Waiver Letter in the
form of Exhibit A attached hereto.
Payment of Repurchase Prices and Substitution Shortfall
Amounts. The Issuer hereby directs and the Depositor 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
13
Collection Account on the Business Day immediately preceding the related Payment
Date for such Due Period in accordance with the provisions of the Indenture. In
the event that more than one Timeshare Loan is replaced pursuant to Sections
6(a), (b) or (c) hereof on any Transfer Date, the Substitution Shortfall Amounts
and the Loan Balances of Qualified Substitute Timeshare Loans shall be
calculated on an aggregate basis for all substitutions made on such Transfer
Date.
Schedule of Timeshare Loans. The Issuer hereby directs and the
Depositor 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
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.
Qualified Substitute Timeshare Loans. Pursuant to Section 6(g)
hereof, on the related Transfer Date, the Issuer hereby directs and the
Depositor hereby agrees to deliver or to cause the delivery of the Timeshare
Loan Files relating to the Qualified Substitute Timeshare Loans to the Indenture
Trustee or to the Custodian, at the direction of the Indenture Trustee, in
accordance with the provisions of the Indenture and the Custodial Agreement. As
of such related Transfer Date, the Depositor does hereby transfer, assign, sell
and grant to the Issuer, without recourse (except as provided in Section 6 and
Section 8 hereof), any and all of the Depositor's right, title and interest in
and to (i) each Qualified Substitute Timeshare Loan conveyed to the Issuer 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, (v) the Depositor's rights and remedies
under the Bluegreen Purchase Agreement, the Transfer Agreement and this
Agreement, as the case may be, with respect to such Qualified Substitute
Timeshare Loan, and (vi) 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 Issuer, its successors and assigns. The Depositor
shall not take any action inconsistent with such ownership nor claim any
ownership interest in any Qualified Substitute Timeshare Loan for any purpose
whatsoever other than consolidated federal and state income tax reporting. The
Depositor agrees that such Qualified Substitute Timeshare Loans shall be subject
to the provisions of this Agreement and shall thereafter be deemed a "Timeshare
Loan" for the purposes of this Agreement.
Officer's Certificate for Qualified Substitute Timeshare
Loans. The Depositor shall, on each related Transfer Date, certify or cause to
be certified in writing to 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.
14
Subsequent Transfer Notices. The Depositor shall, on each
related Transfer Date, deliver a Subsequent Transfer Notice in the form attached
as Exhibit J to the Indenture, as specified by Section 4.3 of the Indenture.
Release. In connection with any repurchase, purchase or
substitution of one or more Timeshare Loans contemplated by this Section 6, upon
satisfaction of the conditions contained in this Section 6, the Issuer and the
Indenture Trustee shall execute and deliver or shall cause the execution and
delivery of such releases and instruments of transfer or assignment presented to
it by the Depositor, in each case, without recourse, as shall be necessary to
vest in the Depositor 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 Issuer and the
Indenture Trustee shall cause the Custodian to release the related Timeshare
Loan Files to the Depositor or its designee and the Servicer to release the
related Timeshare Loan Servicing Files to the Depositor or its designee;
provided, however, that with respect to any Timeshare Loan File or Timeshare
Loan Servicing File related to a Timeshare Loan that has been substituted by a
Qualified Substitute Timeshare Loan, the Issuer and the Indenture Trustee shall
not cause the Custodian and the Servicer to release the related Timeshare Loan
File and the Timeshare Loan Servicing File, respectively, until the Indenture
Trustee and the Servicer receive a Custodian's Certification for such Qualified
Substitute Timeshare Loan.
Sole Remedy. It is understood and agreed that the obligations
of the Depositor contained in Section 6(a) to cure a breach, or to repurchase or
substitute Defective Timeshare Loans or to repurchase Closing Date Eligible
Investments and the obligation of the Depositor to indemnify pursuant to Section
8, shall constitute the sole remedies available to the Issuer or its subsequent
assignees for the breaches of any representation or warranty contained in
Section 5 and such remedies are not intended to and do not constitute "credit
recourse" to the Depositor.
Additional Covenants of the Depositor. The Depositor hereby
covenants and agrees with the Issuer as follows:
It shall comply with all laws, rules, regulations and orders
applicable to it and its business and properties except where the failure to
comply will not have a material adverse effect on its business or its ability to
perform its obligations under this Agreement or any other Transaction Document
to which it is a party or under the transactions contemplated hereunder or
thereunder or the validity or enforceability of the Timeshare Loans or the
Closing Date Eligible Investments.
It shall preserve and maintain its existence (corporate or
otherwise), rights, franchises and privileges in the jurisdiction of its
organization and except where the failure to so preserve and maintain will not
have a material adverse effect on its business or its ability to perform its
obligations under this Agreement or any other Transaction Document to which it
is a
15
party or under the transactions contemplated hereunder or thereunder or the
validity or enforceability of the Timeshare Loans or the Closing Date Eligible
Investments.
On the Closing Date and each Transfer Date, as applicable, it
shall indicate in its and its Affiliates' computer files and other records that
each Timeshare Loan and each Closing Date Eligible Investment has been sold to
the Issuer.
It shall respond to any inquiries with respect to ownership of
a Timeshare Loan or Closing Date Eligible Investment by stating that such
Timeshare Loan or Closing Date Eligible Investment has been sold to the Issuer
and that the Issuer is the owner of such Timeshare Loan or Closing Date Eligible
Investment.
On or prior to the Closing Date, it shall file or cause to be
filed, at its own expense, financing statements in favor of the Issuer, and, if
applicable, the Indenture Trustee on behalf of the Noteholders, with respect to
the Timeshare Loans and the Closing Date Eligible Investments, in the form and
manner reasonably requested by the Issuer or its assigns. The Depositor shall
deliver file-stamped copies of such financing statements to the Issuer and the
Indenture Trustee on behalf of the Noteholders.
It agrees from time to time, at its expense, to promptly
execute and deliver all further instruments and documents, and to take all
further actions, that may be necessary, or that the Issuer or the Indenture
Trustee may reasonably request, to perfect, protect or more fully evidence the
sale of the Timeshare Loans and the Closing Date Eligible Investments to the
Issuer, or to enable the Issuer or the Indenture Trustee to exercise and enforce
its rights and remedies hereunder or under any Timeshare Loan or Closing Date
Eligible Investment including, but not limited to, powers of attorney, UCC
financing statements and assignments of mortgage. It hereby appoints the 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 Depositor under this Section 7(f).
Any change in the legal name of the Depositor 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 (but no later than ten
Business Days) disclosed to the Issuer and the Indenture Trustee in writing.
Upon the discovery or receipt of notice by a Responsible
Officer of the Depositor of a breach of any of its representations or warranties
and covenants contained herein, the Depositor shall promptly disclose to the
Issuer and the Indenture Trustee, in reasonable detail, the nature of such
breach.
Except to the extent of any payments received with respect to
a Credit Card Timeshare Loan, in the event that the Depositor shall receive any
payments in respect of a Timeshare Loan after the Closing Date or Transfer Date,
as applicable, the Depositor shall, within two Business Days of receipt,
transfer or cause to be transferred, such payments to the Lockbox Account.
Payments received by the Depositor with respect to Credit Card Timeshare Loans,
without regard to any discount fees, shall be transferred to the Lockbox Account
within five Business Days.
16
In the event that the Depositor or the Issuer or any assignee
of the Issuer receives actual notice of any transfer taxes arising out of the
transfer, assignment and conveyance of a Timeshare Loan to the Issuer, on
written demand by the Issuer, or upon the Depositor otherwise being given notice
thereof, the Depositor shall pay, and otherwise indemnify and hold the Issuer,
or any subsequent assignee harmless, on an after-tax basis, from and against any
and all such transfer taxes.
The Depositor 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 the Depositor listed herein and shall notify
the parties hereto of any change to the same at least 30 days prior thereto.
The Depositor authorizes the Issuer and the Indenture Trustee
to file continuation statements, and amendments thereto, relating to the
Timeshare Loans and the Closing Date Eligible Investments and all payments made
with regard to the related Timeshare Loans and Closing Date Eligible Investments
without the signature of the Depositor where permitted by law. A photocopy or
other reproduction of this Agreement shall be sufficient as a financing
statement where permitted by law. The Issuer confirms that it is not its present
intention to file a photocopy or other reproduction of this Agreement as a
financing statement, but reserves the right to do so if, in its good faith
determination, there is at such time no reasonable alternative remaining to it.
Indemnification.
The Depositor agrees to indemnify 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 Issuer, the
Indenture Trustee, the Noteholders or the Initial Purchaser may sustain directly
related to any breach of the representations and warranties of the Depositor
under Section 5 hereof (the "Indemnified Amounts") excluding, however (i)
Indemnified Amounts to the extent resulting from the gross negligence or willful
misconduct on the part of such Indemnified Party; (ii) any recourse for any
uncollectible Timeshare Loan not related to a breach of representation or
warranty; (iii) recourse to the Depositor for a Defective Timeshare Loan so long
as the same is cured, substituted or repurchased pursuant to Section 6 hereof,
(iv) income, franchise or similar taxes by such Indemnified Party arising out of
or as a result of this Agreement or the transfer of the Timeshare Loans and the
Closing Date Eligible Investments; (v) Indemnified Amounts attributable to any
violation by an Indemnified Party of any Requirement of Law related to an
Indemnified Party; or (vi) the operation or administration of the Indemnified
Party generally and not related to the enforcement of this Agreement. The
Depositor shall (A) promptly notify 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 (i) the failure by the Depositor to perform its duties in
accordance with the terms of this Agreement or (ii) a breach of the Depositor's
representations, covenants and warranties contained in this Agreement, (B)
assume (with the consent of 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
17
promptly pay, discharge and satisfy any judgment, order or decree which may be
entered against it or the Issuer, the Indenture Trustee, the Noteholders or the
Initial Purchaser in respect of such claim. If the Depositor shall have made any
indemnity payment pursuant to this Section 8 and the recipient thereafter
collects from another Person any amount relating to the matters covered by the
foregoing indemnity, the recipient shall promptly repay such amount to the
Depositor.
The obligations of the Depositor under this Section 8 to
indemnify 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.
No Proceedings. The Depositor hereby agrees that it will not,
directly or indirectly, institute, or cause to be instituted, or join any Person
in instituting, against the Issuer or any Association, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law so long as
there shall not have elapsed one year plus one day since the latest maturing
Notes issued by the Issuer.
Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing and mailed or
telecommunicated, or delivered as to each party hereto, at its address set forth
below or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall
not be effective until received by the party to whom such notice or
communication is addressed.
Depositor
BRF Corporation 2007-A
0000 Xxxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, President & Assistant Treasurer
Fax: (000) 000-0000
Issuer
BXG Receivables Note Trust 2007-A
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Fax: (000) 000-0000
No Waiver; Remedies. No failure on the part of the Depositor,
the Issuer or any assignee thereof to exercise, and no delay in exercising, any
right hereunder shall operate
18
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any other remedies provided by law.
Binding Effect; Assignability. This Agreement shall be binding
upon and inure to the benefit of the Depositor, the Issuer and their respective
successors and assigns. Any assignee of the Issuer shall be an express third
party beneficiary of this Agreement, entitled to directly enforce this
Agreement. The Depositor may not assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of the Issuer
and any assignee thereof. The Issuer may, and intends to, assign all of its
rights hereunder to the Indenture Trustee on behalf of the Noteholders and the
Depositor consents to any such assignment. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until its termination;
provided, however, that the rights and remedies with respect to any breach of
any representation and warranty made by the Depositor 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 Issuer and the Indenture Trustee.
Amendments; Consents and Waivers. No modification, amendment
or waiver of, or with respect to, any provision of this Agreement, and all other
agreements, instruments and documents delivered thereto, nor consent to any
departure by the Depositor 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 Issuer shall provide the Indenture
Trustee and the Rating Agencies with such proposed modifications, amendments or
waivers. Any waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No consent to or demand by the Depositor in
any case shall, in itself, entitle it to any other consent or further notice or
demand in similar or other circumstances. The Depositor acknowledges that in
connection with the intended assignment by the Issuer of all of its right, title
and interest in and to each Timeshare Loan and Closing Date Eligible Investment
to the Indenture Trustee on behalf of the Noteholders, the Issuer intends to
issue the Notes, the proceeds of which will be used by the Issuer to purchase
the Timeshare Loans and Closing Date Eligible Investments hereunder.
Notwithstanding anything to the contrary in this Section 13, no amendment shall
cause the Issuer to fail to be treated as a "qualified special purpose entity"
as defined in Statement of Financial Accounting Standards No. 140 (or any
successor Statement of Financial Accounting Standard).
Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation, shall not in any way be
affected or impaired thereby in any other jurisdiction. Without limiting the
generality of the foregoing, in the event that a Governmental Authority
determines that the Issuer may not purchase or acquire the Timeshare Loans or
the Closing Date Eligible Investments, the transactions evidenced hereby shall
constitute a loan and not a purchase and sale,
19
notwithstanding the otherwise applicable intent of the parties hereto, and the
Depositor shall be deemed to have granted to the Issuer as of the date hereof, a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under such Timeshare Loans and the Closing Date
Eligible Investments and the related property as described in Section 2 hereof.
GOVERNING LAW; CONSENT TO JURISDICTION.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
(B) THE PARTIES TO THIS AGREEMENT HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW
YORK CITY AND EACH PARTY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO ITS ADDRESS SET FORTH IN SECTION 10 HEREOF AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE PARTIES
HERETO EACH WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION 15 SHALL AFFECT THE RIGHT OF THE PARTIES TO
THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF ANY OF THEM TO BRING ANY ACTION OR PROCEEDING IN
THE COURTS OF ANY OTHER JURISDICTION.
WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.
Heading. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Execution in Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and both of which when taken together shall
constitute one and the same agreement.
20
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
Very truly yours,
BRF CORPORATION 2007-A
By:_______________________________________
Name: Xxxxx X. Xxxx
Title: President and Assistant Treasurer
BXG RECEIVABLES NOTE TRUST 2007-A
By: Wilmington Trust Company,
as Owner Trustee
By:_______________________________________
Name:
Title:
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 Sale Agreement]
21
Schedule I
Representations and Warranties of the Depositor Regarding the Timeshare Loans
With respect to each Timeshare Loan, as of the Closing Date or the related
Transfer Date, as applicable:
(a) other than certain 50/50 Loans, payments due under the Timeshare
Loan are fully-amortizing and payable in level monthly installments;
(b) the payment obligations under the Timeshare Loan bear a fixed rate
of interest;
(c) the Obligor thereunder has made a down payment by cash, check or
credit card of at least 10% of the actual purchase price (including
closing costs) of the Timeshare Property (which cash down payment
may, (i) in the case of Upgrade Club Loans, be represented in whole
or in part by the down payment made and principal payments paid in
respect of the related Original Club Loan and (ii) in the case of a
Sampler Converted Loan, be represented in whole or in part by the
principal payments and down payment made on the related Sampler Loan
since its date of origination) and no part of such payment has been
made or loaned to the Obligor by Bluegreen, the Seller or an
Affiliate thereof;
(d) as of the related Cut-Off Date, no principal or interest due with
respect to the Timeshare Loan is more than 60 days delinquent;
(e) the Obligor is not an Affiliate of Bluegreen or any Subsidiary;
provided, that solely for the purposes of this representation, a
relative of an employee and employees of Bluegreen or any Subsidiary
(or any of its Affiliates) shall not be deemed to be an "Affiliate";
(f) immediately prior to the conveyance of the Timeshare Loan to the
Issuer, the Depositor will own full legal and equitable title to
such Timeshare Loan, and the Timeshare Loan (and the related
Timeshare Property) is free and clear of adverse claims, liens and
encumbrances and is not subject to claims of rescission, invalidity,
unenforceability, illegality, defense, offset, abatement,
diminution, recoupment, counterclaim or participation or ownership
interest in favor of any other Person;
(g) the Timeshare Loan (other than an Aruba Club Loan) is secured
directly by a first priority Mortgage on the related purchased
Timeshare Property;
(h) with respect to each Deeded Club Loan, the Timeshare Property
mortgaged by or at the direction of the related Obligor constitutes
a fractional fee simple timeshare interest in real property at the
related Resort or an undivided interest in a Resort associated with
a Unit that entitles the holder of the interest to the use of a
specific property for a specified number of days each year or every
other year, subject to the rules of the Bluegreen Vacation Club; the
related Mortgage has
I-1
been delivered for filing and recordation with all appropriate
governmental authorities in all jurisdictions in which such Mortgage
is required to be filed and recorded to create a valid, binding and
enforceable first Lien on the related Timeshare Property and such
Mortgage creates a valid, binding and enforceable first Lien on the
related Timeshare Property, subject only to Permitted Liens; and the
Depositor is in compliance with any Permitted Lien respecting the
right to the use of such Timeshare Property; the Assignment of
Mortgage and each related endorsement of the related Mortgage Note
constitutes a duly executed, legal, valid, binding and enforceable
assignment or endorsement, as the case may be, of such related
Mortgage and related Mortgage Note, and all monies due or to become
due thereunder, and all proceeds thereof;
(i) with respect to the Obligor and a particular Timeshare Property
purchased by such Obligor, there is only one original Mortgage and
Mortgage Note, in the case of a Deeded Club Loan, and, only one
Owner Beneficiary Agreement, in the case of an Aruba Club Loan; all
parties to the related Mortgage and the related Mortgage Note (and,
in the case of an Aruba Club Loan, Owner Beneficiary Agreement) had
legal capacity to enter into such Timeshare Loan Documents and to
execute and deliver such related Timeshare Loan Documents, and such
related Timeshare Loan Documents have been duly and properly
executed by such parties; any amendments to such related Timeshare
Loan Documents required as a result of any mergers involving the
Depositor or its predecessors, to maintain the rights of the
Depositor or its predecessors thereunder as a mortgagee (or the
Depositor, in the case of an Aruba Club Loan) have been completed;
(j) at the time the related Originator originated such Timeshare Loan to
the related Obligor, such Originator had full power and authority to
originate such Timeshare Loan and the Obligor or the Club Trustee
had good and indefeasible fee title or good and marketable fee
simple title, or, in the case of an Aruba Club Loan, a cooperative
interest, as applicable, to the Timeshare Property related to such
Timeshare Loan, free and clear of all Liens, except for Permitted
Liens;
(k) the related Mortgage (or, in the case of an Aruba Club Loan, the
related Owner Beneficiary Agreement) contains customary and
enforceable provisions so as to render the rights and remedies of
the holder thereof adequate for the realization against the related
Timeshare Property of the benefits of the security interests or
lender's contractual rights intended to be provided thereby,
including (a) if the Mortgage is a deed of trust, by trustee's sale,
including power of sale, (b) otherwise by judicial foreclosure or
power of sale and/or (c) termination of the contract, retention of
Obligor deposits and payments towards the related Timeshare Loan by
the Originator or the lender, as the case may be, and expulsion from
the Club; in the case of the Deeded Club Loans, there is no
exemption available to the related Obligor which would interfere
with the mortgagee's right to sell at a trustee's sale or power of
sale or right to foreclose such related Mortgage, as applicable;
I-2
(l) the related Mortgage Note is not and has not been secured by any
collateral except the Lien of the related Mortgage;
(m) if a Mortgage secures a Timeshare Loan, the title to the related
Timeshare Property is insured (or a binding commitment, which may be
a master commitment referencing one or more Mortgages, for title
insurance, not subject to any conditions other than standard
conditions applicable to all binding commitments, has been issued)
under a mortgagee title insurance policy (which may consist of one
master policy referencing one or more such Mortgages) issued by a
title insurer qualified to do business in the jurisdiction where the
related Timeshare Property is located in a form generally acceptable
to prudent originators of similar mortgage loans, insuring the
Depositor or its predecessor and its successors and assigns, as to
the first priority mortgage Lien of the related Mortgage in an
amount equal to the original outstanding Loan Balance of such
Timeshare Loan, and otherwise in form and substance acceptable to
the Indenture Trustee; the Club Originator and its assignees is a
named insured of such mortgagee's title insurance policy; such
mortgagee's title insurance policy is in full force and effect; no
claims have been made under such mortgagee's title insurance policy
and no prior holder of such Timeshare Loan has done or omitted to do
anything which would impair the coverage of such mortgagee's title
insurance policy; no premiums for such mortgagee's title insurance
policy, endorsements and all special endorsements are past due;
(n) the Depositor has not taken (or omitted to take), and has no notice
that the related Obligor has taken (or omitted to take), any action
that would impair or invalidate the coverage provided by any hazard,
title or other insurance policy on the related Timeshare Property;
(o) all applicable intangible taxes and documentary stamp taxes were
paid as to the related Timeshare Loan;
(p) the proceeds of the Timeshare Loan have been fully disbursed, there
is no obligation to make future advances or to lend additional funds
under the originator's commitment or the documents and instruments
evidencing or securing the Timeshare Loan and no such advances or
loans have been made since the origination of the Timeshare Loan;
(q) the terms of each Timeshare Loan Document have not been impaired,
waived, altered or modified in any respect, except (x) by written
instruments which are part of the related Timeshare Loan Documents
or (y) in accordance with the Credit Policy, the Collection Policy
or the Servicing Standard (provided that no Timeshare Loan has been
impaired, waived, altered, or modified in any respect more than
once). No other instrument has been executed or agreed to which
would effect any such impairment, waiver, alteration or
modification; the Obligor has not been released from liability on or
with respect to the Timeshare Loan, in whole or in part; if required
by law or prudent originators of similar loans in the jurisdiction
where the related Timeshare Property is located, all waivers,
I-3
alterations and modifications have been filed and/or recorded in all
places necessary to perfect, maintain and continue a valid first
priority Lien of the related Mortgage, subject only to Permitted
Liens;
(r) other than if it is an Aruba Club Loan, the Timeshare Loan is
principally and directly secured by an interest in real property;
(s) the Timeshare Loan was originated by one of the Depositor's
Affiliates in the normal course of its business; the Timeshare Loan
originated by the Depositor's Affiliates was underwritten in
accordance with the Depositor's Affiliates' underwriting guidelines
and the Credit Policy; to the Depositor's Knowledge the origination,
servicing and collection practices used by the Depositor's
Affiliates with respect to the Timeshare Loan have been in all
respects, legal, proper, prudent and customary;
(t) the related Timeshare Loan is assignable to and by the obligee and
its successors and assigns and the related Timeshare Property is
assignable upon liquidation of the related Timeshare Loan, without
the consent of any other Person (including any Association,
condominium association, homeowners' or timeshare association);
(u) the related Mortgage is and will be prior to any Lien on, or other
interests relating to, the related Timeshare Property;
(v) to the Depositor'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 Depositor has not waived
any such material default, breach, violation or event of
acceleration under the Owner Beneficiary Agreement, Mortgage, the
Mortgage Note or any such other document or instrument, as
applicable;
(x) neither the Obligor nor any other Person has the right, by statute,
contract or otherwise, to seek the partition of the Timeshare
Property;
I-4
(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 Depositor and any of its Affiliates and, to the Depositor's
Knowledge, each other party which has had an interest in the
Timeshare Loan is (or, during the period in which such party held
and disposed of such interest, was) in compliance with any and all
applicable filing, licensing and "doing business" requirements of
the laws of the state wherein the Timeshare Property is located to
the extent necessary to permit the Depositor to maintain or defend
actions or proceedings with respect to the Timeshare Loan in all
appropriate forums in such state without any further act on the part
of any such party;
(aa) there is no current obligation on the part of any other person
(including any buy down arrangement) to make payments on behalf of
the Obligor in respect of the Timeshare Loan;
(bb) the related Associations were duly organized and are validly
existing; a manager (the "Manager") manages such Resort and performs
services for the Associations, pursuant to an agreement between the
Manager and the respective Associations, such contract being in full
force and effect; to the Depositor'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 the Bluegreen Owned Resorts (other than La Cabana
Resort and Casa del Mar Resort) and to the Depositor's Knowledge
with respect to the Non-Bluegreen Owned Resorts, La Cabana Resort
and Casa del Mar Resort, (i) the related Resort is insured in the
event of fire, earthquake, or other casualty for the full
replacement value thereof, and in the event that the Timeshare
Property should suffer any loss covered by casualty or other
insurance, upon receipt of any insurance proceeds, the Associations
at the Resorts are required, during the time such Resort is covered
by such insurance, under the applicable governing instruments either
to repair or rebuild the portions of the Resort in which the
Timeshare Property is located or to pay such proceeds to the holders
of any related Mortgage secured by a Timeshare Property located at
such Resort; (ii) the related Resort, if located in a designated
flood plain, maintains flood insurance in an amount not less than
the maximum level available (without regard to reasonable
deductibles) under the National Flood Insurance Act of 1968, as
amended or any applicable laws; (iii) the related Resort has
business interruption insurance and general liability insurance in
such amounts generally acceptable in
I-5
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;
(ff) no selection procedures were intentionally utilized by the Depositor
in selecting the Timeshare Loan which the Depositor knew were
materially adverse to the Indenture Trustee or the Noteholders;
(gg) except as set forth on Schedule II hereto, the Units related to the
Timeshare Loan in the related Resort have been completed in all
material respects as required by applicable state and local laws,
free of all defects that could give rise to any claims by the
related Obligors under home warranties or applicable laws or
regulations, whether or not such claims would create valid offset
rights under the law of the State in which the Resort is located; to
the extent required by applicable law, valid certificates of
occupancy for such Units have been issued and are currently
outstanding; the Depositor or any of its Affiliates have complied in
all material respects with all obligations and duties incumbent upon
the developers under the related timeshare declaration (each a
"Declaration"), as applicable, or similar applicable documents for
the related Resort; no practice, procedure or policy employed by the
related Association in the conduct of its business violates any law,
regulation, judgment or agreement, including, without limitation,
those relating to zoning, building, use and occupancy, fire, health,
sanitation, air pollution, ecological, environmental and toxic
wastes, applicable to such Association which, if enforced, would
reasonably be expected to (a) have a material adverse impact on such
Association or the ability of such Association to do business, (b)
have a material adverse impact on the financial condition of such
Association, or (c) constitute grounds for the revocation of any
license, charter, permit or registration which is material to the
conduct of the business of such Association; the related Resort and
the present use thereof does not violate any applicable
environmental, zoning or building laws, ordinances, rules or
regulations of any governmental authority, or any covenants or
restrictions of record, so as to materially adversely affect the
value or use of such Resort or the performance by the related
Association of its obligations pursuant to and as contemplated by
the terms and provisions of the related Declaration; there is no
condition presently existing, and to the Depositor'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
I-6
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 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 Depositor or any Affiliate
of the Depositor on the Obligor's behalf;
(kk) the Timeshare Loan relates to a Resort;
(ll) the Timeshare Loan constitutes either "chattel paper", a "general
intangible" or an "instrument" as defined in the UCC as in effect in
all applicable jurisdictions;
(mm) the sale, transfer and assignment of the Timeshare Loan and the
Related Security does not contravene or conflict with any law, rule
or regulation or any contractual or other restriction, limitation or
encumbrance, and the sale, transfer and assignment of the Timeshare
Loan and Related Security does not require the consent of the
Obligor;
(nn) each of the Timeshare Loan, the Related Security, related Assignment
of Mortgage, related Mortgage, related Mortgage Note, related Owner
Beneficiary Agreement (each as applicable) and each other related
Timeshare Loan Document are in full force and effect, constitute the
legal, valid and binding obligation of the Obligor thereof
enforceable against such Obligor in accordance with its terms
subject to the effect of bankruptcy, fraudulent conveyance or
transfer, insolvency, reorganization, assignment, liquidation,
conservatorship or moratorium, and is not subject to any dispute,
offset, counterclaim or defense whatsoever;
(oo) the Timeshare Loan relates to a Completed Unit; the Timeshare Loan
and the Related Security do not, and the origination of each
Timeshare Loan did not, contravene in any material respect any laws,
rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to usury, retail
installment sales, truth in lending, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which no party thereto has been or is in violation
of any such law, rule or regulation in any material respect if such
violation would impair the collectibility of such Timeshare Loan and
the Related Security; no Timeshare Loan was originated in, or is
subject to the laws of, any jurisdiction under which the sale,
transfer, conveyance or assignment of such Timeshare Loan would be
unlawful, void or voidable;
I-7
(pp) to the Depositor's Knowledge, (i) no bankruptcy is currently
existing with respect to the Obligor, (ii) the Obligor is not
insolvent and (iii) the Obligor is not an Affiliate of the
Depositor;
(qq) except if such Timeshare Loan is listed on Schedule II hereto, the
Timeshare Loan shall not have a Timeshare Loan Rate less than 6% per
annum;
(rr) except in the case of certain 50/50 Loans or an Upgrade Club Loan,
the Obligor has made at least one required payment with respect to
the Timeshare Loan (not including any down payment);
(ss) if a Resort (other than La Cabana Resort) is subject to a
construction loan, the construction lender shall have signed and
delivered a non-disturbance agreement (which may be contained in
such lender's mortgage) pursuant to which such construction lender
agrees not to foreclose on any Timeshare Properties relating to a
Timeshare Loan or by the terms of the construction loan, such
Timeshare Property has been released from the lien created thereby
which have been sold pursuant to this Agreement;
(tt) except as set forth on Schedule II hereto, the Timeshare Properties
and the related Resorts are free of material damage and waste and
are in good repair, ordinary wear and tear excepted, and fully
operational; there is no proceeding pending or threatened for the
total or partial condemnation of or affecting any Timeshare Property
or taking of the Timeshare Property by eminent domain; the Timeshare
Properties and the Resorts in which the Timeshare Properties are
located are lawfully used and occupied under applicable law by the
owner thereof;
(uu) except as set forth on Schedule II hereto, the portions of the
Resorts in which the Timeshare Properties are located which
represent the common facilities are free of material damage and
waste and are in good repair and condition, ordinary wear and tear
excepted;
(vv) no foreclosure or similar proceedings have been instituted and are
continuing with respect to any Timeshare Loan or the related
Timeshare Property;
(ww) with respect to the Aruba Club Loans only, Bluegreen shall own,
directly or indirectly, 100% of the economic and voting interests of
the Aruba Originator;
(xx) the Timeshare Loan does not have an original term to maturity in
excess of 120 months;
(yy) to the Depositor's Knowledge, the capital reserves and maintenance
fee levels of the Associations related to the Resorts are adequate
in light of the operating requirements of such Associations;
(zz) except as required by law, the Timeshare Loan may not be assumed
without the consent of the obligee;
I-8
(aaa) for each Club Loan, the Obligor under the Timeshare Loan does not
have its rights under the Club Trust Agreement suspended;
(bbb) the payments under the Timeshare Loan are not subject to withholding
taxes imposed by any foreign governments;
(ccc) each entry with respect to the Timeshare Loan as set forth on
Schedule II and Schedule III hereof is true and correct. Each entry
with respect to a Qualified Substitute Timeshare Loan as set forth
on Schedule II and Schedule III hereof, as revised, is true and
correct;
(ddd) if the Timeshare Loan is an Initial Timeshare Loan and relates to a
Timeshare Property located in Aruba, a notice has been mailed or
will be mailed within 30 days of the Closing Date to the related
Obligor indicating that such Timeshare Loan has ultimately been
transferred to the Issuer and pledged to the Indenture Trustee for
the benefit of the Noteholders;
(eee) if the Timeshare Loan is a Subsequent Timeshare Loan and relates to
a Timeshare Property located in Aruba, a notice will be mailed
within 30 days of the related Transfer Date to the related Obligor
indicating that such Timeshare Loan has ultimately been transferred
to the Issuer and pledged to the Indenture Trustee for the benefit
of the Noteholders;
(fff) no broker is, or will be, entitled to any commission or compensation
in connection with the transfer of the Timeshare Loans hereunder;
(ggg) 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;
(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) the Timeshare Loan, if a Subsequent Timeshare Loan, when aggregated
with all Timeshare Loans sold to the Issuer pursuant to this
Agreement, satisfies the criteria for Subsequent Timeshare Loans
specified in Section 4.3 of the Indenture;
(jjj) 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;
(kkk) all Aruba Club Loans were originated on or after January 26, 2004;
and
I-9
(lll) if such Timeshare Loan relates to a Timeshare Property at a Future
Resort, a local counsel opinion letter has been delivered that is
addressed to the Issuer, the Indenture Trustee and the Initial
Purchaser and is satisfactory to either Xxxxx & XxXxxxxx LLP or
counsel acceptable to the Indenture Trustee
I-10
Schedule II
Exceptions
With respect to (gg), (tt) and (uu):
Bluegreen has initiated litigation against a general contractor alleging the
existence of construction defects at both phases of the Shore Crest Vacation
Villas(TM), including deficiencies in exterior insulating and finishing systems
that have resulted in water intrusion. Bluegreen has performed certain temporary
repairs to mitigate further damage. It may be required that portions of each
building be closed for certain periods of time in the future while permanent
repairs are completed.
With respect to (hh):
II-1
Schedule III
Schedule of Initial Timeshare Loans
III-1
Exhibit A
Waiver Letter
Exhibit A
Exhibit B
Club Trust Agreement
Exhibit B
Exhibit C
ACH Form
Exhibit C
