UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2006
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ to _______________________
Commission File Number: 0-19292
BLUEGREEN CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 03-0300793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4960 Conference Way North, Suite 100, Boca Raton, Florida 33431
(Address of principal executive offices) (Zip Code)
(561) 912-8000
(Registrant's telephone number, including area code)
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |X| Yes |_| No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated files. (See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act). (Check one):
Large accelerated filer |_| Accelerated filer [X] Non-accelerated filer |_|
Indicated the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of May 5, 2006, there were 30,512,651 shares of the registrant's common stock, $.01 par value, outstanding.
BLUEGREEN CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at December 31, 2005 and March 31, 2006................... 3
Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2005 and 2006.... 4
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2005 and 2006.... 5
Notes to Condensed Consolidated Financial Statements............................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........... 18
Item 4. Controls and Procedures......................................................................... 36
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................................................... 37
Item 1A. Risk Factors.................................................................................... 37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..................................... 37
Item 6. Exhibits........................................................................................ 37
Signatures................................................................................................. 39
|
TRADEMARKS
The terms "Bluegreen(R)," "Bluegreen Communities(R)," and "Bluegreen Vacation Club(R)" are registered in the U.S. Patent and Trademark Office by Bluegreen Corporation.
The terms "The Hammocks at Marathon(TM)," "Orlando's Sunshine Resort(TM)," "Solara Surfside(TM)," "Mountain Run at Boyne(TM)," "The Falls Village(TM)," "Bluegreen Wilderness Club(TM) at Big Cedar(R)," "The Lodge Alley Inn(TM)," "Carolina Grande(TM)" "Harbour Lights(TM)," "SeaGlass Tower(TM)" "Shore Crest Vacation Villas(TM)," "Laurel Crest(TM)," "MountainLoft(TM)," "Daytona SeaBreeze(TM)," "Shenandoah Crossing(TM)," "Christmas Mountain Village(TM)," "Traditions of Braselton(TM)," "Sanctuary Cove at St. Andrews Sound(TM)," "Catawba Falls Preserve(TM)," "Mountain Lakes Ranch(TM)," "Silver Lakes Ranch(TM)," "Mystic Shores(TM)," "Lake Ridge at Joe Pool Lake(TM)," "Ridge Lake Shores(TM)," "Mountain Springs Ranch(TM)," "Saddle Creek Forest(TM)," "Settlement at Patriot Ranch(TM)," "Carolina National(TM)," "Brickshire(TM)," "Golf Club at Brickshire(TM)," and "Preserve at Jordan Lake(TM)" are trademarks or service marks of Bluegreen Corporation in the United States.
The term "Big Cedar(R)" is registered in the U.S. Patent and Trademark Office by Bass Pro Trademarks, LP.
The term "Bass Pro Shops(R)" is registered in the U.S. Patent and Trademark Office by Bass Pro Trademarks, LP.
The term "World Golf Village(R)" is registered in the U.S. Patent and Trademark Office by World Golf Foundation, Inc.
All other marks are registered marks of their respective owners.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
December 31, March 31,
2005 2006
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents (including restricted cash of approximately $18,321
and $23,717 at December 31, 2005 and March 31, 2006, respectively) ............. $ 84,704 $ 71,776
Contracts receivable, net ......................................................... 27,473 37,659
Notes receivable, net ............................................................. 127,783 126,962
Prepaid expenses .................................................................. 6,500 7,540
Other assets ...................................................................... 17,156 20,177
Inventory, net .................................................................... 240,969 277,738
Retained interests in notes receivable sold ....................................... 105,696 104,316
Property and equipment, net ....................................................... 79,634 82,872
Intangible assets and goodwill .................................................... 4,328 4,351
--------- ---------
Total assets ............................................................ $ 694,243 $ 733,391
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable .................................................................. $ 11,071 $ 16,188
Accrued liabilities and other ..................................................... 43,801 42,308
Deferred income ................................................................... 29,354 41,109
Deferred income taxes ............................................................. 75,404 75,648
Receivable-backed notes payable ................................................... 35,731 30,532
Lines-of-credit and notes payable ................................................. 61,428 89,444
10.50% senior secured notes payable ............................................... 55,000 55,000
Junior subordinated debentures .................................................... 59,280 59,280
--------- ---------
Total liabilities .............................................................. 371,069 409,509
Minority interest ................................................................. 9,508 9,366
Commitments and contingencies
Shareholders' Equity
Preferred stock, $.01 par value, 1,000 shares authorized; none issued ............. -- --
Common stock, $.01 par value, 90,000 shares authorized; 33,193 and 33,268
shares issued at December 31, 2005 and March 31, 2006, respectively ............ 333 333
Additional paid-in capital ........................................................ 169,684 170,143
Treasury stock, 2,756 common shares at both December 31, 2005 and
March 31, 2006, at cost ....................................................... (12,885) (12,885)
Accumulated other comprehensive income, net of income taxes ....................... 8,575 9,429
Retained earnings ................................................................. 147,959 147,496
--------- ---------
Total shareholders' equity ................................................... 313,666 314,516
--------- ---------
Total liabilities and shareholders' equity .............................. $ 694,243 $ 733,391
========= =========
|
Note: The condensed consolidated balance sheet at December 31, 2005 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.
See accompanying notes to condensed consolidated financial statements.
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, March 31,
2005 2006
---- ----
Revenues:
Sales of real estate ................................................................. $ 104,021 $ 119,367
Other resort and communities operations revenue ...................................... 18,044 20,334
Interest income ...................................................................... 7,866 8,173
Gain on sales of notes receivable .................................................... 4,720 505
--------- ---------
134,651 148,379
Costs and expenses:
Cost of real estate sales ............................................................ 32,887 45,027
Cost of other resort and communities operations ...................................... 19,636 21,129
Selling, general and administrative expenses ......................................... 61,822 70,705
Interest expense ..................................................................... 3,581 3,306
Provision for loan losses ............................................................ 4,688 --
Other expense ........................................................................ 858 635
--------- ---------
123,472 140,802
--------- ---------
Income before minority interest and provision for income taxes .......................... 11,179 7,577
Minority interest in income of consolidated subsidiary .................................. 773 1,022
--------- ---------
Income before provision for income taxes and change in accounting principle ............. 10,406 6,555
Provision for income taxes .............................................................. 4,006 2,524
--------- ---------
Income before cumulative effect of change in accounting principle ....................... 6,400 4,031
Cumulative effect of change in accounting principle, net of tax ......................... -- (5,678)
Minority interest in income of cumulative effect of change in accounting principle ...... -- 1,184
--------- ---------
Net income (loss) ....................................................................... $ 6,400 $ (463)
========= =========
Income before cumulative effect of change in accounting principle
per common share:
Basic ............................................................................... $ 0.21 $ 0.13
========= =========
Diluted ............................................................................. $ 0.20 $ 0.13
========= =========
Cumulative effect of change in accounting principle, net of tax and net of
minority interest in income of cumulative effect of change in accounting
principle per common share:
Basic ............................................................................... $ -- $ (0.15)
========= =========
Diluted ............................................................................. $ -- $ (0.14)
========= =========
Net Income (loss) per common share:
Basic ............................................................................... $ 0.21 $ (0.02)
========= =========
Diluted ............................................................................. $ 0.20 $ (0.01)
========= =========
Weighted average number of common and common equivalent shares:
Basic ............................................................................... 30,316 30,513
========= =========
Diluted ............................................................................. 31,294 31,179
========= =========
|
See accompanying notes to condensed consolidated financial statements.
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31, March 31,
2005 2006
---- ----
Operating activities:
Net income (loss) ........................................................... $ 6,400 $ (463)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Cumulative effect of change in accounting principle, net ............... -- 5,678
Non-cash stock compensation expense .................................... -- 459
Minority interest in income of consolidated subsidiary ................. 773 (162)
Depreciation and amortization .......................................... 4,458 4,010
Gain on sale of notes receivable ....................................... (4,720) (7,011)
Loss on sale of property and equipment ................................. -- 75
Provision for loan losses .............................................. 4,688 10,630
Provision for deferred income taxes .................................... 4,006 2,524
Interest accretion on retained interests in notes receivable sold ...... (2,008) (2,578)
Proceeds from sales of notes receivable ................................ 38,183 36,805
Proceeds from borrowings collateralized by notes receivable ............ 10,103 --
Payments on borrowings collateralized by notes receivable .............. (16,417) (5,792)
Change in operating assets and liabilities:
Contracts receivable ..................................................... (13,066) (10,186)
Notes receivable ......................................................... (31,168) (47,464)
Inventory ................................................................ 2,219 (7,840)
Prepaid expenses and other assets ........................................ (1,327) (3,438)
Accounts payable, accrued liabilities and other .......................... 10,736 4,555
--------- ---------
Net cash provided by (used in) operating activities ............................ 12,860 (20,198)
--------- ---------
Investing activities:
Purchases of property and equipment ......................................... (3,524) (6,713)
Investment in statutory business trust ...................................... (696) --
Cash received from retained interests in notes receivable sold .............. 1,696 10,064
--------- ---------
Net cash (used in) provided by investing activities ............................ (2,524) 3,351
--------- ---------
Financing activities:
Borrowings under line-of-credit facilities and other notes payable .......... 2,219 11,169
Payments under line-of-credit facilities and other notes payable ............ (20,822) (6,014)
Proceeds from issuance of junior subordinated debentures .................... 23,196 --
Payment of debt issuance costs .............................................. (1,204) (1,236)
Proceeds from exercise of stock options ..................................... 648 --
--------- ---------
Net cash provided by financing activities ...................................... 4,037 3,919
--------- ---------
Net increase (decrease) in cash and cash equivalents ........................... 14,373 (12,928)
Cash and cash equivalents at beginning of period ............................... 100,565 84,704
--------- ---------
Cash and cash equivalents at end of period ..................................... 114,938 71,776
Restricted cash and cash equivalents at end of period .......................... (20,391) (23,717)
--------- ---------
Unrestricted cash and cash equivalents at end of period ........................ $ 94,547 $ 48,059
========= =========
|
See accompanying notes to condensed consolidated financial statements.
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
(In thousands)
(Unaudited)
Three Months Ended
March 31, March 31,
2005 2006
---- ----
Supplemental schedule of non-cash operating, investing
and financing activities:
Inventory acquired through financing ............................... $ 11,710 $ 22,827
======== ========
Inventory acquired through foreclosure or deedback in lieu of
foreclosure ..................................................... $ 3,076 $ 1,979
======== ========
Property and equipment acquired through financing .................. $ 232 $ --
======== ========
Retained interests in notes receivable sold ........................ $ 7,101 $ 4,718
======== ========
Net change in unrealized gains in retained interests in notes
receivable sold ............................................... $ 744 $ 1,388
======== ========
|
See accompanying notes to condensed consolidated financial statements.
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Unaudited)
1. Organization and Significant Accounting Policies
We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.
The financial information furnished herein reflects all adjustments consisting of normal recurring items that, in our opinion, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. The results of operations for the three months ended March 31, 2006, are not necessarily indicative of the results to be expected for the year ending December 31, 2006. For further information, refer to our audited consolidated financial statements for the year ended December 31, 2005, which are included in our 2005 Annual Report on Form 10-K.
Organization
We provide leisure products and lifestyle choices through our resorts and residential communities businesses. Our resorts business ("Bluegreen Resorts") acquires, develops, markets, sells and manages real estate based vacation ownership interests ("VOIs") in resorts generally located in popular, high-volume, "drive-to" vacation destinations. VOIs in many of our resorts entitle the buyer to use resort accommodations through an annual or biennial allotment of "points" which represent their ownership and beneficial rights in perpetuity in our Bluegreen Vacation Club (supported by an underlying deeded vacation ownership interest being held in trust for the buyer). Depending on the extent of their ownership and beneficial rights, members in our Bluegreen Vacation Club may stay in any of our participating resorts or take advantage of other vacation options, including cruises and stays at approximately 3,700 resorts offered by a third-party, worldwide vacation ownership exchange network. We are currently marketing and selling VOIs in 22 resorts located in the United States and Aruba, 20 of which have active sales offices. We also sell VOIs at seven off-site sales offices located in the United States. Our residential communities business ("Bluegreen Communities") acquires, develops and subdivides property and markets residential land homesites, the majority of which are sold directly to retail customers who seek to build a home in a high quality residential setting, in some cases on properties featuring a golf course and other related amenities. During the three months ended March 31, 2006, sales generated by Bluegreen Resorts comprised approximately 60% of our total sales of real estate while sales generated by Bluegreen Communities comprised approximately 40% of our total sales of real estate. Our other resort and communities operations revenues consist primarily of mini-vacation package sales, vacation ownership tour sales, resort property management services, resort title services, resort amenity operations, sales incentives provided to buyers of VOIs, rental brokerage services, realty operations and daily-fee golf course operations. We also generate significant interest income by providing financing to individual purchasers of VOIs.
Principles of Consolidation
Our condensed consolidated financial statements include the accounts of all of our wholly-owned subsidiaries and entities in which we hold a controlling financial interest. The only non-wholly owned subsidiary that we consolidate is Bluegreen/Big Cedar Vacations, LLC (the "Joint Venture"), as we hold a 51% equity interest in the Joint Venture, have an active role as the day-to-day manager of the Joint Venture's activities and have majority voting control of the Joint Venture's management committee. Additionally, we do not consolidate our wholly-owned statutory business trusts formed to issue trust preferred securities as these entities are each variable interest entities in which we are not the primary beneficiary as defined by Financial Accounting Standards Board ("FASB") Interpretation No. 46R. The statutory business trusts are accounted for under the equity method of accounting. We have eliminated all significant intercompany balances and transactions.
Use of Estimates
United States generally accepted accounting principles require us to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications
We have made certain reclassifications of prior period amounts to conform to the current period presentation.
Earnings (Loss) Per Common Share
We compute basic earnings (loss) per common share by dividing net income
(loss) by the weighted-average number of common shares outstanding. Diluted
earnings per common share is computed in the same manner as basic earnings
(loss) per share, but also gives effect to all dilutive stock options using the
treasury stock method. There were approximately 0.8 million stock options not
included in diluted earnings per common share during the three months ended
March 31, 2006, as the effect would be anti-dilutive. There were no
anti-dilutive stock options during the three months ended March 31, 2005.
The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share data):
Three Months Ended
March 31, March 31,
2005 2006
----------------------
Basic earnings per share - numerator:
Net income (loss) ....................................... $ 6,400 $ (463)
======================
Diluted earnings per share - numerator:
Net income (loss) ....................................... $ 6,400 $ (463)
======================
Denominator:
Denominator for basic earnings per share -
weighted-average shares .............................. 30,316 30,513
Effect of dilutive securities:
Stock options ........................................ 978 666
----------------------
Dilutive potential common shares ........................... 978 666
----------------------
Denominator for diluted earnings per share - adjusted
weighted-average shares .............................. 31,294 31,179
======================
Basic earnings (loss) per common share ..................... $ 0.21 $ (0.02)
======================
Diluted earnings (loss) per common share ................... $ 0.20 $ (0.01)
======================
|
Retained Interests in Notes Receivable Sold
When we sell our notes receivable either pursuant to our vacation ownership receivables purchase facilities (more fully described in Note 2) or through term securitizations, we evaluate whether or not such transfers should be accounted for as a sale pursuant to Statement of Financial Accounting Standards ("SFAS") No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, ("SFAS No. 140") and related interpretations. The evaluation of sale treatment under SFAS No. 140 involves legal assessments of the transactions, which include determining whether the transferred assets have been isolated from us (i.e. put presumptively beyond our reach and our creditors, even in bankruptcy or other receivership), determining whether each transferee has the right to pledge or exchange the assets it received, and ensuring that we do not maintain effective control over the transferred assets through either an agreement that (1) both entitles and obligates us to repurchase or redeem the assets before their maturity or (2) provides us with the ability to unilaterally cause the holder to return the assets (other than through a cleanup call).
In connection with such transactions, we retain subordinated tranches, rights to excess interest spread and servicing rights, all of which are retained interests in the notes receivable sold. Gain or loss on the sale of the receivables depends in part on the allocation of the previous carrying amount of the financial assets involved in the transfer between the assets sold and the retained interests based on their relative fair value at the date of transfer.
We consider our retained interests in notes receivable sold as available-for-sale investments and, accordingly, carry them at fair value in accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Accordingly, unrealized holding gains or losses on our retained interests in notes receivable sold are included in our shareholders' equity, net of income taxes. Declines in fair value that are determined to be other than temporary are charged to operations.
We measure the fair value of the retained interests in the notes receivable sold initially and periodically based on the present value of future expected cash flows estimated using our best estimates of the key assumptions - prepayment rates, loss severity rates, default rates and discount rates commensurate with the risks involved. We revalue our retained interests in notes receivable sold on a quarterly basis.
Interest on the retained interests in notes receivable sold is accreted using the effective yield method.
Stock-Based Compensation
Effective January 1, 2006, we adopted the provisions of SFAS No. 123R, Share-Based Payment, ("SFAS No. 123R") for our share-based compensation plans. We previously accounted for these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, ("APB 25") and related interpretations and disclosure requirements established by SFAS No. 123, Accounting for Stock-based Compensation, as amended by SFAS No. 148, Accounting for Stock Based Compensation--Transition and Disclosure. Under APB 25, no compensation expense was recorded in earnings for our stock-based options granted under the Bluegreen Corporation 1995 Stock Incentive Plan, 1998 Non-Employee Director Stock Option Plan or the Bluegreen Corporation 2005 Stock Incentive Plan (collectively, the "Plans"). The pro forma effects on net income and earnings per share for the awards issued under the Plans were instead disclosed in a footnote to the financial statements. Under SFAS No. 123R, all share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense in earnings over the requisite service period.
We adopted SFAS No. 123R using the modified prospective method. Under this transition method, for all share-based awards granted prior to January 1, 2006 that were outstanding as of that date, compensation cost is recognized for the unvested portion over the remaining requisite service period, using the grant-date fair value measured under the original provisions of SFAS No. 123 for proforma disclosure purposes. Compensation costs will also be recognized for any awards issued, modified, repurchased, or canceled after January 1, 2006.
We utilized the Black-Scholes model for calculating the fair value pro forma disclosures under SFAS No. 123 and will continue to use this model, which is an acceptable valuation approach under SFAS No. 123R. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, this model requires the input of subjective assumptions, including the expected price volatility of the underlying stock. Projected data related to the expected volatility and expected life of stock options is based upon historical and other information. Changes in these subjective assumptions can materially affect the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value of our employee stock options.
SFAS No. 123R also requires us to estimate forfeitures in calculating the expense relating to stock-based compensation as opposed to accounting for forfeitures as they occur, which was allowed under SFAS No. 123. We adjusted for this effect with respect to unvested options as of January 1, 2006 in the stock-based compensation expense recognized, which was recorded within selling, general and administrative expense on our condensed consolidated statement of operations. This adjustment was not recorded as a cumulative effect adjustment because no compensation cost was recognized prior to the adoption of SFAS No. 123R. In addition, SFAS No. 123R requires us to reflect the tax savings resulting from tax deductions in excess of expense reflected in its financial statements as a financing cash flow rather than as an operating cash flow as in prior periods.
Total compensation costs related to stock-based compensation charged against income during the three months ended March 31, 2006 was $0.4 million. There were no stock options granted to our employees or non-employee directors during the three months ended March 31, 2005 or 2006.
The following table illustrates the effect on net income (loss) and earnings (loss) per share as if we had applied the fair-value recognition provisions of SFAS No. 123 to all of our share-based compensation awards for periods prior to the adoption of SFAS No. 123R, and the actual effect on net income (loss) and earnings (loss) per share for the period subsequent to the adoption of SFAS No. 123R (in thousands, except per share data):
Three Months Ended
March 31, 2005 March 31, 2006
-------------- --------------
(Proforma)
Net income (loss), as reported ........................................................ $ 6,400 $ (463)
Add: Total stock-based compensation expense included in the determination of
reported net income (loss), net of related tax effects .......................... -- 282
Deduct: Total stock-based compensation expense determined under the fair
value-based method for all awards, net of related tax effects ................... (61) (282)
--------------------------
Pro forma net income (loss) ........................................................... $ 6,339 $ (463)
==========================
Earnings per share, as reported:
--------------------------
Basic .............................................................................. $ 0.21 $ (0.02)
==========================
Diluted ............................................................................ $ 0.20 $ (0.01)
==========================
Pro forma earnings per share:
Basic .............................................................................. $ 0.21 $ (0.02)
==========================
Diluted ............................................................................ $ 0.20 $ (0.01)
==========================
|
Comprehensive Income
Accumulated other comprehensive income on our condensed consolidated balance sheets is comprised of net unrealized gains on retained interests in notes receivable sold, which are held as available-for-sale investments. The following table discloses the components of our comprehensive income for the periods presented (in thousands):
Three Months Ended
March 31, 2005 March 31, 2006
-------------- --------------
Net income (loss) ................................... $ 6,400 $ (463)
Net unrealized gains on retained interests in
notes receivable sold, net of income taxes ....... 458 854
--------- ---------
Total comprehensive income .......................... $ 6,858 $ 391
========= =========
|
Cumulative Effect of Change in Accounting Principle from the Adoption of SFAS No. 152
Effective January 1, 2006, we adopted SFAS No. 152, Accounting for Real Estate Time-Sharing Transactions. This statement amends SFAS No. 66, Accounting for Sales of Real Estate, and SFAS No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, in association with the issuance of American Institute of Certified Public Accountants ("AICPA") Statement of Position ("SOP") 04-2, Accounting for Real Estate Time-Sharing Transactions. SFAS No. 152 was issued to address the diversity in practice resulting from a lack of guidance specific to real estate time-sharing transactions. Among other things, the new standard addresses the treatment of sales incentives provided by a seller to a buyer to consummate a transaction, the calculation of and presentation of uncollectible notes receivable, the recognition of changes in inventory cost estimates, recovery or repossession of VOIs, selling and marketing costs, operations during holding periods, developer subsidies to property owners' associations and upgrade and reload transactions. Restatement of previously reported financial statements is not permitted. Accordingly, as a result of the adoption of SFAS No. 152, our financial statements for periods beginning on or after January 1, 2006 are not comparable, in all respects, with those prepared for periods ending prior to January 1, 2006.
Many sellers of timeshare interests provide incentives to customers as motivation to purchase a VOI. Under SFAS No. 152, the value of such incentives and other similarly treated items is separated from revenue from the sale of VOIs and recorded on a different line item within the statement of operations, in our case other resort and communities operations revenue. Furthermore, SFAS No. 152 requires that incentives and other similarly treated items such as cash credits earned through our Sampler program be considered in calculating the buyer's down payment toward the buyer's commitment, as defined in SFAS No. 152, in purchasing the VOI. Our Sampler Program provides purchasers with an opportunity to utilize our vacation ownership product during a one year trial period. In the event the Sampler purchaser subsequently purchases a vacation ownership interest from us, a portion of the amount paid for their Sampler Package is credited toward the down
payment on the subsequent purchase. Under SFAS No. 152, the credit given is treated similarly to a sales incentive. If after considering the sales incentive the required buyer's commitment is not met, the VOI revenue and related cost of sales and direct selling costs are deferred and recognized under the installment method until the buyer's commitment test is satisfied, generally through the receipt of required mortgage note payments from the buyer. The net deferred VOI revenue and related costs are recorded as a component of deferred income in the accompanying balance sheet as of March 31, 2006. Prior to the adoption of SFAS No. 152, sales incentives were not recorded apart from VOI revenue and were not considered in applying the customer down payment toward the buyer's commitment in purchasing the VOIs.
SFAS No. 152 also amends the relative sales value method of recording VOI cost of sales. Specifically, consideration is now given not only to the costs to build or acquire a project and the total revenue expected to be earned on a project, but also to the sales on recovered vacation ownership interests reacquired on future cancelled or defaulted sales. The cost of VOI sales is calculated by estimating these future costs and recoveries. Prior to the adoption of SFAS No. 152, we did not include the recovery of VOIs in our projected revenues in determining the related cost of the VOIs sold.
SFAS No. 152 changes the treatment of losses on vacation ownership notes and contracts receivable and provides specific guidance on methods to estimate losses. Specifically, SFAS No. 152 requires that the estimated losses on originated mortgages exclude an estimate for the value of recoveries as the recoveries are to be considered in inventory costing, as described above. In addition, the standard requires a change in the classification of our provision for loan losses for vacation ownership receivables that were historically recorded as an expense, requiring that such amount be reflected as a reduction of revenue. Furthermore, if we sell our vacation ownership notes receivables in a transaction that qualifies for off-balance sheet sales treatment under SFAS No. 140, the associated allowance for loan losses related to the sold receivables is reversed and reflected as an increase to VOI sales. Prior to the adoption of SFAS No. 152, the allowance on sold receivables was recorded as a component of the gain on sale.
Under SFAS No.152, rental operations, like our Sampler program, are accounted for as incidental operations whereby incremental costs in excess of incremental revenue are charged to expense as incurred. Conversely, incremental revenue in excess of incremental costs is recorded as a reduction to the cost of any unsold VOIs. Incremental costs include costs that have been incurred by us during the holding period of the unsold VOIs, such as developer subsidy and maintenance fees. During the quarter ended March 31, 2006, all of our rental revenue and Sampler revenue was recorded as an off-set to cost of other resort and communities operations revenue as such amounts were less than the incremental cost. Prior to the adoption of SFAS No. 152, rental revenues were separately presented in the consolidated statements of operations as a component of other resort and communities operations revenue and a portion of Sampler proceeds were deferred until the buyer purchased a VOI or the Sampler usage period expired.
The adoption of SFAS No. 152 on January 1, 2006 resulted in a net charge of $4.5 million, which is presented as a cumulative effect of change in accounting principle, net of the related tax benefit and the charge related to minority interest.
2. Sales of Notes Receivable
On December 28, 2005, BB&T Capital Markets, a division of Scott & Stringfellow, Inc., consummated a $203.8 million private offering and sale of vacation ownership receivable-backed securities (the "2005 Term Securitization"). In addition, the 2005 Term Securitization allowed for us to sell an additional $35.3 million in aggregate principal of our qualifying vacation ownership receivables (the "Pre-funded Receivables"). On December 29, 2005, we sold $16.7 million in Pre-funded Receivables. On March 1, 2006, we sold the $18.6 million balance of Pre-funded Receivables. With this sale we have received the entire amount of proceeds remaining relating to the Pre-funded Receivables.
On March 28, 2006, we sold $22.3 million in vacation ownership receivables pursuant to a new vacation ownership receivables purchase facility (the "2006-A GE Purchase Facility") with General Electric Real Estate ("GE"). Under the 2006-A GE Purchase Facility, a variable purchase price of approximately 90% of the principal balance of the receivables sold, subject to certain terms and conditions, is paid at closing in cash. The balance of the purchase price is deferred until such time as GE has received a specified return, a specified over-collateralization ratio is achieved, a cash reserve account is fully funded and all servicing, custodial, agent and similar fees and expenses have been paid. GE earns a return equal to the applicable Swap Rate (which is essentially a published interest swap arrangement rate as defined in the GE Purchase Facility agreements) plus 2.35%, subject to use of alternate return rates in certain circumstances. Subject to compliance with the terms and conditions of funding, the 2006-A GE Purchase Facility allows for sales of notes receivable for a cumulative purchase price of up to $125.0 million through March 2008. As of March 31, 2006, the remaining availability under the 2006-A GE Purchase Facility was $104.9 million, subject to eligibility requirements and fulfillment of conditions precedent.
Sales of notes receivable under the above mentioned transactions were as follows (in millions):
Aggregate Principal Initial Fair
Balance of Notes Purchase Gain Value of
Sale Facility Receivable Price Recognized Retained Interest
------------- ---------- ----- ---------- -----------------
2005 Term Securitization $ 18.6 $ 16.7 $ 3.6 $ 3.3
GE Purchase Facility 22.3 20.1 3.4 2.6
------ ------ ------ ------
Total $ 40.9 $ 36.8 $ 7.0 $ 5.9
====== ====== ====== ======
|
The following assumptions were used to measure the initial fair value of the retained interest in notes receivable sold for each of the transactions during the three months ended March 31, 2006: prepayment rates ranging from 9.0% to 14.0% per annum as the portfolios mature; a loss severity rate ranging from 35.0% to 71.3%; default rates ranging from 1.0% to 10.0% per annum as the portfolios mature; and a discount rate of 9.0%.
As a result of adopting SFAS No. 152, approximately $6.5 million of the gain was recorded as an increase to VOI sales. The remaining $0.5 million of the gain has been recorded as a gain on the sales of notes receivable on the accompanying statement of operations.
3. Lines-of-Credit and Notes Payable
In February 2006, we increased our revolving acquisition, development and construction credit facility for Bluegreen Resorts with GMAC Residential Funding Corporation ("The GMAC AD&C Facility") from $75.0 million to $150.0 million. The borrowing period expires on February 15, 2008, and outstanding borrowings mature no later than August 15, 2013, although specific draws typically are due four years from the borrowing date. Indebtedness under the $150.0 million facility bears interest at 30-day LIBOR plus 4.50%.
In February 2006, GMAC RFC extended the borrowing period to February 15, 2008 and the maturity date to February 15, 2015 on Bluegreen's existing $75.0 million revolving vacation ownership receivables credit facility ("The GMAC Receivables Facility"). This facility is used to borrow funds collateralized by our eligible vacation ownership receivables.
In March of 2006, we borrowed $18.2 million under an existing acquisition and development credit facility with GMAC RFC ("The GMAC Communities Facility") in connection with the acquisition by Bluegreen Communities of approximately 1,580 acres of land in Grayson County, Texas, for a total purchase price of $25.9 million. In addition to the funds borrowed in connection with the land purchase, we borrowed an additional $9.0 million for general corporate purposes.
4. Senior Secured Notes Payable
On April 1, 1998, we consummated a private placement offering of $110.0 million in aggregate principal amount of 10.5% senior secured notes due April 1, 2008 (the "Notes"). On June 27, 2005, we redeemed $55.0 million in aggregate principal amount of the Notes at a redemption price of 101.75% plus accrued and unpaid interest through June 26, 2005 of approximately $1.4 million. At March 31, 2006, $55.0 million of the Notes remained outstanding.
None of the assets of Bluegreen Corporation secures its obligations under the Notes, and the Notes are effectively subordinated to our secured indebtedness to any third party to the extent of assets serving as security therefor. The Notes are unconditionally guaranteed, jointly and severally, by each of our subsidiaries (the "Subsidiary Guarantors"), with the exception of Bluegreen/Big Cedar Vacations, LLC, Bluegreen Properties N.V., Resort Title Agency, Inc., any special purpose finance subsidiary, any subsidiary which is formed and continues to operate for the limited purpose of holding a real estate license and acting as a broker, and certain other subsidiaries which have individually less than $50,000 of assets (collectively, "Non-Guarantor Subsidiaries"). Each of the note guarantees covers the full amount of the Notes and each of the Subsidiary Guarantors is 100% owned, directly or indirectly by us. Supplemental financial information for Bluegreen Corporation, its combined Non-Guarantor Subsidiaries and its combined Subsidiary Guarantors is presented below:
CONDENSED CONSOLIDATING BALANCE SHEETS
(In thousands)
December 31, 2005
-----------------------------------------------------------------------
Combined Combined
Bluegreen Non-Guarantor Subsidiary
Corporation Subsidiaries Guarantors Eliminations Consolidated
----------- ------------ ---------- ------------ ------------
ASSETS
Cash and cash equivalents .............................. $ 55,708 $ 15,443 $ 13,553 $ -- $ 84,704
Contracts receivable, net .............................. -- 1,801 25,672 -- 27,473
Intercompany receivable ................................ 92,641 -- -- (92,641) --
Notes receivable, net .................................. -- 48,294 79,489 -- 127,783
Other assets ........................................... 4,028 4,666 19,290 -- 27,984
Inventory, net ......................................... -- 17,857 223,112 -- 240,969
Retained interests in notes receivable sold ............ -- 105,696 -- -- 105,696
Investments in subsidiaries ............................ 265,023 -- 3,230 (268,253) --
Property and equipment, net ............................ 14,569 1,330 63,735 -- 79,634
--------- --------- --------- --------- ---------
Total assets .................................... $ 431,969 $ 195,087 $ 428,081 $(360,894) $ 694,243
========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable, accrued liabilities and other ...... $ 20,214 $ 68,397 $ (4,385) $ -- $ 84,226
Intercompany payable ................................. -- (48,757) 141,398 (92,641) --
Deferred income taxes ................................ (21,798) 41,824 55,378 -- 75,404
Lines-of-credit and notes payable .................... 5,607 27,064 64,488 -- 97,159
10.50% senior secured notes payable .................. 55,000 -- -- -- 55,000
Junior subordinated debentures ....................... 59,280 -- -- -- 59,280
--------- --------- --------- --------- ---------
Total liabilities ............................... 118,303 88,528 256,879 (92,641) 371,069
Minority interest .................................... -- -- -- 9,508 9,508
Total shareholders' equity ........................... 313,666 106,559 171,202 (277,761) 313,666
--------- --------- --------- --------- ---------
Total liabilities and shareholders' equity ...... $ 431,969 $ 195,087 $ 428,081 $(360,894) $ 694,243
========= ========= ========= ========= =========
March 31, 2006
(Unaudited)
-----------------------------------------------------------------------
Combined Combined
Bluegreen Non-Guarantor Subsidiary
Corporation Subsidiaries Guarantors Eliminations Consolidated
----------- ------------ ---------- ------------ ------------
ASSETS
Cash and cash equivalents .............................. $ 37,776 $ 14,303 $ 19,697 $ -- $ 71,776
Contracts receivable, net .............................. -- 2,657 35,002 -- 37,659
Intercompany receivable ................................ 120,430 3,003 -- (123,433) --
Notes receivable, net .................................. -- 47,505 79,457 -- 126,962
Other assets ........................................... 4,397 4,698 22,973 -- 32,068
Inventory, net ......................................... -- 17,505 260,233 -- 277,738
Retained interests in notes receivable sold ............ -- 104,316 -- -- 104,316
Investments in subsidiaries ............................ 261,067 -- 4,583 (265,650) --
Property and equipment, net ............................ 15,970 1,235 65,667 -- 82,872
--------- --------- --------- --------- ---------
Total assets .................................... $ 439,786 $ 195,222 $ 487,612 $(389,083) $ 733,391
========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable, accrued liabilities and other ...... $ 26,338 $ 16,729 $ 56,538 $ -- $ 99,605
Intercompany payable ................................. -- -- 123,433 (123,433) --
Deferred income taxes ................................ (20,471) 41,910 54,209 -- 75,648
Lines-of-credit and notes payable .................... 5,123 24,160 90,693 -- 119,976
10.50% senior secured notes payable .................. 55,000 -- -- -- 55,000
Junior subordinated debentures ....................... 59,280 -- -- -- 59,280
--------- --------- --------- --------- ---------
Total liabilities ............................... 125,270 82,799 322,016 (123,433) 409,509
Minority interest .................................... -- -- -- 9,366 9,366
Total shareholders' equity ........................... 314,516 109,420 165,596 (275,016) 314,516
--------- --------- --------- --------- ---------
Total liabilities and shareholders' equity ...... $ 439,786 $ 195,222 $ 487,612 $(389,083) $ 733,391
========= ========= ========= ========= =========
|
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Three Months Ended March 31, 2005
-------------------------------------------------------------------
Combined Combined
Bluegreen Non-Guarantor Subsidiary
Corporation Subsidiaries Guarantors Eliminations Consolidated
----------- ------------ ---------- ------------ ------------
REVENUES
Sales of real estate ........................................ $ -- $ 9,556 $ 94,465 $ -- $ 104,021
Other resort and communities operations revenue ............. -- 3,200 14,844 -- 18,044
Management fees ............................................. 11,538 -- -- (11,538) --
Equity income from subsidiaries ............................. 6,083 -- -- (6,083) --
Interest income ............................................. 206 4,232 3,428 -- 7,866
Gain on sales of notes receivable ........................... -- 4,720 -- -- 4,720
--------- --------- --------- --------- ---------
17,827 21,708 112,737 (17,621) 134,651
COSTS AND EXPENSES
Cost of real estate sales ................................... -- 2,580 30,307 -- 32,887
Cost of other resort and communities operations ............. -- 1,107 18,529 -- 19,636
Management fees ............................................. -- 264 11,274 (11,538) --
Selling, general and administrative expenses ................ 10,102 4,831 46,889 -- 61,822
Interest expense ............................................ 1,174 910 1,497 -- 3,581
Provision for loan losses ................................... -- 4,688 -- -- 4,688
Other (income) expense ...................................... (46) 795 109 -- 858
--------- --------- --------- --------- ---------
11,230 15,175 108,605 (11,538) 123,472
--------- --------- --------- --------- ---------
Income before minority interest and provision
for income taxes ........................................ 6,597 6,533 4,132 (6,083) 11,179
Minority interest in income of consolidated subsidiary ...... -- -- -- 773 773
--------- --------- --------- --------- ---------
Income before provision for income taxes .................... 6,597 6,533 4,132 (6,856) 10,406
Provision for income taxes .................................. 197 2,217 1,592 -- 4,006
--------- --------- --------- --------- ---------
Net income .................................................. $ 6,400 $ 4,316 $ 2,540 $ (6,856) $ 6,400
========= ========= ========= ========= =========
Three Months Ended March 31, 2006
-------------------------------------------------------------------
Combined Combined
Bluegreen Non-Guarantor Subsidiary
Corporation Subsidiaries Guarantors Eliminations Consolidated
----------- ------------ ---------- ------------ ------------
REVENUES
Sales of real estate ........................................ $ -- $ 11,236 $ 108,131 $ -- $ 119,367
Other resort and communities operations revenue ............. -- 3,164 17,170 -- 20,334
Management fees ............................................. 13,095 -- -- (13,095) --
Interest income ............................................. 540 4,391 3,242 -- 8,173
Gain on sales of notes receivable ........................... -- 505 -- -- 505
--------- --------- --------- --------- ---------
13,635 19,296 128,543 (13,095) 148,379
COSTS AND EXPENSES
Cost of real estate sales ................................... -- 3,690 41,337 -- 45,027
Cost of other resort and communities operations ............. -- 1,333 19,796 -- 21,129
Management fees ............................................. -- 241 12,854 (13,095) --
Equity loss from subsidiaries ............................... 2,583 -- -- (2,583) --
Selling, general and administrative expenses ................ 9,330 5,804 55,571 -- 70,705
Interest expense ............................................ 988 770 1,548 -- 3,306
Other (income) expense ...................................... (130) 289 476 -- 635
--------- --------- --------- --------- ---------
12,771 12,127 131,582 (15,678) 140,802
--------- --------- --------- --------- ---------
Income (loss) before minority interest and provision
(benefit) for income taxes ............................... 864 7,169 (3,039) 2,583 7,577
Minority interest in income of consolidated subsidiary ...... -- -- -- 1,022 1,022
--------- --------- --------- --------- ---------
Income (loss) before provision (benefit) for income taxes
and cumulative effect of change in accounting principle .. 864 7,169 (3,039) 1,561 6,555
Provision (benefit) for income taxes ........................ 1,327 2,366 (1,169) -- 2,524
--------- --------- --------- --------- ---------
(Loss) income before cumulative effect of change in
accounting principle ..................................... (463) 4,803 (1,870) 1,561 4,031
Cumulative effect of change in accounting principle,
net of tax ............................................... -- (1,942) (3,736) -- (5,678)
Minority interest in income of cumulative effect
of change in accounting principle ........................ -- -- -- 1,184 1,184
--------- --------- --------- --------- ---------
Net (loss) income ........................................... $ (463) $ 2,861 $ (5,606) $ 2,745 $ (463)
========= ========= ========= ========= =========
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31, 2005
--------------------------------------------------------
Combined Combined
Bluegreen Non-Guarantor Subsidiary
Corporation Subsidiaries Guarantors Consolidated
----------- ------------ ---------- ------------
Operating activities:
Net cash (used) provided by operating activities ...................... $ (13,892) $ 4,532 $ 22,220 $ 12,860
Investing activities:
Purchases of property and equipment ................................. (301) 14 (3,237) (3,524)
Investment in statutory business trust .............................. (696) -- -- (696)
Cash received from retained interests in notes receivable sold ...... -- 1,696 -- 1,696
--------- --------- --------- ---------
Net cash (used) provided by investing activities ...................... (997) 1,710 (3,237) (2,524)
Financing activities:
Borrowings under line-of-credit facilities and notes payable ........ -- -- 2,219 2,219
Payments under line-of-credit facilities and notes payable .......... (23) (431) (20,368) (20,822)
Proceeds from issuance of junior subordinated debentures ............ 23,196 -- -- 23,196
Payment of debt issuance costs ...................................... (738) (1,150) 684 (1,204)
Proceeds from exercise of stock options ............................. 648 -- -- 648
--------- --------- --------- ---------
Net cash provided (used) by financing activities ...................... 23,083 (1,581) (17,465) 4,037
--------- --------- --------- ---------
Net increase in cash and cash equivalents ............................. 8,194 4,661 1,518 14,373
Cash and cash equivalents at beginning of period ...................... 70,256 18,793 11,516 100,565
--------- --------- --------- ---------
Cash and cash equivalents at end of period ............................ 78,450 23,454 13,034 114,938
Restricted cash and cash equivalents at end of period ................. (173) (11,074) (9,144) (20,391)
--------- --------- --------- ---------
Unrestricted cash and cash equivalents at end of period ............... $ 78,277 $ 12,380 $ 3,890 $ 94,547
--------- --------- --------- ---------
Three Months Ended March 31, 2006
--------------------------------------------------------
Combined Combined
Bluegreen Non-Guarantor Subsidiary
Corporation Subsidiaries Guarantors Consolidated
----------- ------------ ---------- ------------
Operating activities:
Net cash (used) provided by operating activities ...................... $ (14,752) $ (10,516) $ 5,070 $ (20,198)
Investing activities:
Purchases of property and equipment ................................ (2,672) (28) (4,013) (6,713)
Cash received from retained interests in notes receivable sold ...... -- 10,064 -- 10,064
--------- --------- --------- ---------
Net cash (used) provided by investing activities ...................... (2,672) 10,036 (4,013) 3,351
Financing activities:
Borrowings under line-of-credit facilities and notes payable ........ -- -- 11,169 11,169
Payments under line-of-credit facilities and notes payable .......... (500) -- (5,514) (6,014)
Payment of debt issuance costs ...................................... (8) (660) (568) (1,236)
--------- --------- --------- ---------
Net cash (used) provided by financing activities ...................... (508) (660) 5,087 3,919
--------- --------- --------- ---------
Net (decrease) increase in cash and cash equivalents .................. (17,932) (1,140) 6,144 (12,928)
Cash and cash equivalents at beginning of period ...................... 55,708 15,443 13,553 84,704
--------- --------- --------- ---------
Cash and cash equivalents at end of period ............................ 37,776 14,303 19,697 71,776
Restricted cash and cash equivalents at end of period ................. (173) (13,248) (10,296) (23,717)
--------- --------- --------- ---------
Unrestricted cash and cash equivalents at end of period ............... $ 37,603 $ 1,055 $ 9,401 $ 48,059
========= ========= ========= =========
|
5. Business Segments
We have two reportable business segments. Bluegreen Resorts develops, markets and sells VOIs in our resorts, through the Bluegreen Vacation Club, and provides resort management services to resort property owners associations. Bluegreen Communities acquires large tracts of real estate, which are subdivided, improved (in some cases to include a golf course on the property) and sold, typically on a retail basis as homesites. Disclosures for our business segments are as follows (in thousands):
Bluegreen Bluegreen
Resorts Communities Totals
------- ----------- ------
For the three months ended March 31, 2005
Sales of real estate ................................. $ 65,644 $ 38,377 $104,021
Other resort and communities operations revenue ...... 16,562 1,482 18,044
Depreciation expense ................................. 1,676 418 2,094
Field operating profit ............................... 10,386 7,733 18,119
For the three months ended March 31, 2006
Sales of real estate ................................. $ 71,742 $ 47,625 $119,367
Other resort and communities operations revenue ...... 17,998 2,336 20,334
Depreciation expense ................................. 1,871 444 2,315
Field operating profit ............................... 3,136 9,779 12,915
|
Net inventory by business segment:
December 31, March 31,
2005 2006
------------ ------------
Bluegreen Resorts ........................ $ 173,338 $ 185,356
Bluegreen Communities .................... 67,631 92,382
--------- ---------
Total $ 240,969 $ 277,738
========= =========
|
Reconciliations to Consolidated Amounts
Field operating profit for our reportable segments reconciled to our consolidated income before provision for income taxes and minority interest is as follows (in thousands):
Three Months Ended
March 31, 2005 March 31, 2006
-------------- --------------
Field operating profit for reportable segments ..... $ 18,119 $ 12,915
Interest income .................................... 7,866 8,173
Gain on sales of notes receivable .................. 4,720 505
Other expense ...................................... (858) (635)
Corporate general and administrative expenses ...... (10,399) (10,075)
Interest expense ................................... (3,581) (3,306)
Provision for loan losses .......................... (4,688) --
--------- ---------
Income before minority interest and
provision for income taxes ...................... $ 11,179 $ 7,577
========= =========
|
6. Contingencies
In March 2006, the Tennessee Audit Division (the "Division") advised us that rather than follow through with its intention to impose a sales tax on sales of VOI's in Tennessee, it intends to seek to impose a sales tax on the use of accommodations in our Tennessee properties by our owners. The Division has not commenced its audit of these transactions and has not yet identified the years that they intend to audit. The Division's previous audits covered the period from December 1, 2001 through December 31, 2004. The Division has not formally assessed this accommodations tax yet, nor have they estimated the amount they are intending to assess. While in the past the timeshare industry has been successful in avoiding the imposition by various states of sales tax on the reservation and use of accommodations by timeshare owners, there is no assurance that such taxes will not be imposed. We intend to vigorously oppose any assessment of accommodations tax by the Division.
Bluegreen Southwest One, L.P., ("Southwest") one of our subsidiaries, is the developer of the Mountain Lakes subdivision in Texas. One of the lakes that is an amenity in the development has not filled to the expected level. This condition has resulted in consumer complaints from property owners. We are investigating the causes for the failure of the lake to fill. We are unable to predict the results of this investigation, the potential cost to correct the condition or the consequences in the event that the condition cannot be corrected.
Also related to the Mountain Lakes subdivision is litigation related to the development of mineral rights within the subdivision. In April 2006, in Lesley, et al v. Bluegreen Southwest One, L.P. acting through its General Partner Bluegreen Southwest Land, Inc., et al, Cause No. 28006 District Court of the 266th Judicial District, Erath County, Texas, plaintiffs filed a First Amended Original Petition (April 2006). Pursuant to this First Amended Original Petition Plaintiffs seek to develop mineral interests in the Mountain Lakes subdivision and to recover damages from Southwest, alleging breach of contract, breach of fiduciary duty, tortious interference with existing and prospective relationships and intentional invasion or interference with property rights by Southwest, for allegedly interfering with the development of mineral rights held by plaintiffs. Plaintiffs' claims against Bluegreen Southwest One, L.P. total in the aggregate $25 million. The Company is still in the process of reviewing plaintiffs' allegations; however, based on the information currently available, the Company believes that the claims lack merit and intends to defend itself vigorously against them.
7. Subsequent Events
We have formed a statutory business trust, Business Statutory Trust IV ("BST IV") for the purpose of issuing trust preferred securities and investing the proceeds thereof in junior subordinated debentures.
On April 24, 2006, BST IV issued $15.0 million of trust preferred securities. BST IV used the proceeds from issuing the trust preferred securities to purchase an identical amount of junior subordinated debentures from us. Interest on the junior subordinated debentures and distributions on the trust preferred securities will be payable quarterly in arrears at a fixed rate of 10.13% through June 30, 2011, and thereafter at a variable rate of interest, per annum, reset quarterly, equal to the 3-month LIBOR plus 4.85% until the scheduled maturity date of June 30, 2036. Distributions on the trust preferred securities will be cumulative and based upon the liquidation value of the trust preferred security. The trust preferred securities will be subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated debentures at maturity or their earlier redemption. The junior subordinated debentures are redeemable five years from the issue date or sooner following certain specified events. In addition, we invested $464,000 to BST IV in exchange for its common securities, all of which are owned by us. Those proceeds were also used to purchase an identical amount of junior subordinated debentures from us. The terms of BST IV's common securities are nearly identical to the trust preferred securities.
The issuances of trust preferred securities was part of a larger pooled trust securities offerings which was not registered under the Securities Act of 1933. Proceeds will be used for general corporate purposes and debt repayment.
In April of 2006, we purchased a 3,200 acre track of land in New Braunfels, Texas, which is located just outside San Antonio, for $27.3 million. We borrowed $19.0 million under the GMAC Communities Facility for this acquisition and an additional $9.0 million for general corporate purposes.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement Regarding Forward-Looking Statements and Risk Factors
We desire to take advantage of the "safe harbor" provisions of the Private Securities Reform Act of 1995 (the "Act") and are making the following statements pursuant to the Act to do so. Certain statements in this Quarterly Report and our other filings with the SEC constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. You may identify these statements by forward-looking words such as "may," "intend," "expect," "anticipate," "believe" "will," "should," "project," "estimate," "plan" or other comparable terminology or by other statements that do not relate to historical facts. All statements, trend analyses and other information relative to the market for our products, remaining life of project sales, our expected future sales, financial position, operating results, liquidity and capital resources, our business strategy, financial plan and expected capital requirements as well as trends in our operations or results are forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which are beyond our control, including changes in economic conditions, generally, in areas where we operate, or in the travel and tourism industry, increases in interest rates, changes in regulations and other factors discussed throughout our SEC filings all of which could cause our actual results, performance or achievements, or industry trends, to differ materially from any future results, performance, or achievements or trends expressed or implied herein. Given these uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements and no assurance can be given that the plans, estimates and expectations reflected herein will be achieved. Factors that could adversely affect our future results can also be considered general risk factors with respect to our business, whether or not they relate to a forward-looking statement. We wish to caution you that the important factors set forth below and elsewhere in this report in some cases have affected, and in the future could affect, our actual results and could cause our actual consolidated results to differ materially from those expressed in any forward-looking statements.
o Our continued liquidity depends on our ability to sell or borrow against our notes receivable.
o We depend on additional funding to finance our operations.
o Our success depends on our ability to market our products efficiently.
o Increased a fuel prices could affect our ability to market VOIs and residential homesite.
o We would incur substantial losses if the customers we finance default on their obligations to pay the balance of the purchase price.
o Our results of operations and financial condition could be adversely impacted if our estimates concerning our notes receivable are incorrect.
o Changes in United States generally accepted accounting principles, especially those related to the sales of notes receivable and accounting for real estate time-sharing transactions, could have a material adverse impact on our results of operations.
o We are subject to the risks of the real estate market and the risks associated with real estate development, including the risk and uncertainties relating to the cost and availability of land, labor and construction materials.
o We may not successfully execute our growth strategy.
o We may face a variety of risks when we expand our operations.
o Claims for development-related defects could adversely affect our financial condition and operating results.
o We may face additional risks as we expand into new markets.
o The limited resale market for VOIs could adversely affect our business.
o Extensive federal, state and local laws and regulations affect the way we conduct our business. In addition, many states where some of the Resorts are located, extensively regulate the creation and management of timeshare resorts, the marketing and sale of timeshare properties, the escrow of purchaser funds prior to the completion of construction and closing, the content and use of advertising materials and promotional offers, the financing of sales, the delivery of an offering memorandum and the creation and operation of exchange programs and multi-site
timeshare plan reservation systems and some are seeking to impose taxes on the sale or use of timeshare interest. Moreover, the South Carolina Supreme Court has, through a series of cases, ruled that the closing of real estate and mortgage loan transactions in the State of South Carolina must be conducted under the supervision of an attorney licensed in that state. In March 2005, a class action lawsuit was brought in the Court of Common Pleas for the 15th Judicial Circuit in South Carolina against an unaffiliated South Carolina timeshare developer alleging, among other things, that such timeshare developer did not comply with the requirements of the South Carolina Supreme Court decisions. While that case reportedly was resolved by means of a stipulated settlement, other cases may be brought against other timeshare developers in South Carolina, including Bluegreen. If such a case were to be brought against Bluegreen and it is determined that Bluegreen is in violation of South Carolina law, Bluegreen may be subject to fines and purchasers of timeshare properties in South Carolina may have the right to rescind their respective transactions and seek the satisfaction of their related timeshare loan, all of which could have a material adverse effect on Bluegreen's results of operations and financial position.
o Environmental liabilities, including claims with respect to mold or hazardous or toxic substances, could have a material adverse impact on our business.
o We could incur costs to comply with laws governing accessibility of facilities by disabled persons.
In addition to the foregoing, reference is also made to other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended December 31, 2005.
Executive Overview
We operate through two business segments. Bluegreen Resorts develops, markets and sells VOIs in our Bluegreen Vacation Club resorts, and provides resort management services to resort property owners associations. Bluegreen Communities acquires large tracts of real estate, which are subdivided, improved (in some cases to include a golf course on the property) and sold, typically on a retail basis, as homesites.
We have historically experienced and expect to continue to experience seasonal fluctuations in our gross revenues and net earnings. This seasonality may cause significant fluctuations in our quarterly operating results, with the majority of our gross revenues and net earnings historically occurring in the quarters ending in June and September each year. However, as a result of the required adoption of SFAS No. 152, Accounting for Real Estate Time-Sharing Transactions, ("SOP 04-2") effective January 1, 2006, we anticipate that prospectively the majority of our gross revenues and net earnings will be recognized in the quarters ending in September and December of each year, primarily due to the deferral and subsequent recognition of VOI sales revenue. (See Note 1 of the Notes to Consolidated Financial Statements for further discussion of SFAS No. 152). Other material fluctuations in operating results may occur due to the timing of development and the requirement that we use the percentage-of-completion method of accounting. Under this method of income recognition, income is recognized as work progresses. Measures of progress are based on the relationship of costs incurred to date to expected total costs. We expect that we will continue to invest in projects that will require substantial development (with significant capital requirements), and as a consequence, our results of operations may fluctuate significantly between quarterly and annual periods as a result of the required use of the percentage-of-completion method of accounting.
We believe that inflation and changing prices have historically materially impacted our revenues and results of operations, specifically due to periodic increases in the sales prices of our VOIs and homesites and continued increases in construction and development costs. We expect construction and development costs to continue to increase for the foreseeable future. There is no assurance that we will be able to continue to increase our sales prices or that increased construction costs will not have a material adverse impact on our gross profit. Also, to the extent inflationary trends affect interest rates, a portion of our debt service costs may be adversely affected.
We recognize revenue on homesite and VOI sales when a minimum of 10% of the sales price has been received in cash, the refund or rescission period has expired, collectibility of the receivable representing the remainder of the sales price is reasonably assured and we have completed substantially all of our obligations with respect to any development of the real estate sold. Effective January 1, 2006, the provisions of SFAS No. 152 require that incentives and other similarly treated items such as customer down payment equity earned through our Sampler program be considered in calculating the required down payment. If, after considering the value of sales incentives provided, the required 10% of sales price down payment threshhold is not met, the VOI sale and related cost of sale and direct selling costs are deferred and not recognized until the buyer's commitment test is satisfied, generally through the receipt of required mortgage note payments from the buyer. In cases where all development has not been completed, we recognize income in accordance with the percentage-of-completion method of accounting.
Costs associated with the acquisition and development of vacation ownership resorts and residential communities, including carrying costs such as interest and taxes, are capitalized as inventory and are allocated to cost of real estate sold as the respective revenues are recognized.
A portion of our revenues historically has been and is expected to continue to be comprised of gains on sales of notes receivable. The gains are recorded on our consolidated statement of operations and the related retained interests in the notes receivable sold are recorded on our consolidated balance sheet at the time of sale. Effective January 1, 2006, the portion of these gains related to the reversal of previously recorded allowances for loan losses on the receivables sold is recorded as a component of revenue on sales of VOIs. The amount of gains recognized and the fair value of the retained interests recorded are based in part on management's best estimates of future prepayment, default rates, loss severity rates, discount rates and other considerations in light of then-current conditions. If actual prepayments with respect to loans occur more quickly than we projected at the time such loans were sold, as can occur when interest rates decline, interest would be less than expected and may cause a decline in the fair value of the retained interests and a charge to operations. If actual defaults or other factors discussed above with respect to loans sold are greater than estimated, charge-offs would exceed previously estimated amounts and the cash flow from the retained interests in notes receivable sold would decrease. Also, to the extent the portfolio of receivables sold fails to satisfy specified performance criteria (as may occur due to, for example, an increase in default rates or loan loss severity) or certain other events occur, the funds received from obligors must be distributed on an accelerated basis to investors. If the accelerated payment formula were to become applicable, the cash flow to us from the retained interests in notes receivable sold would be reduced until the outside investors were paid or the regular payment formula was resumed. If these situations were to occur on a material basis, it could cause a decline in the fair value of the retained interests and a charge to earnings currently. There is no assurance that the carrying value of our retained interests in notes receivable sold will be fully realized or that future loan sales will be consummated or, if consummated, result in gains. See "Vacation Ownership Receivables Purchase Facilities - Off Balance Sheet Arrangements," below.
In addition, we have historically sold vacation ownership receivables to financial institutions through warehouse purchase facilities to monetize the receivables while accumulating receivables for a future term securitization transaction. We currently intend to structure future warehouse purchase facilities so that sales of vacation ownership receivables through these facilities will be accounted for as on-balance sheet borrowings rather than as off-balance sheet sales. Therefore, we will not recognize a gain on the sales of receivables sold to the warehouse purchase facilities until such receivables are subsequently included in a properly structured term securitization transaction. We expect this may impact future quarterly earnings patterns as compared to comparable prior periods.
We are spending a substantial amount of management time and resources to comply with changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new Securities and Exchange Commission regulations and New York Stock Exchange rules. In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requires management's annual review and evaluation of our internal control systems, and attestations as to the effectiveness of these systems by our independent registered accounting firm. We expect to continue to expend significant management time and resources documenting and testing our internal control systems and procedures. If we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be in a position to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Failure to maintain an effective internal control environment could have a material adverse effect on the market price of our stock.
Effective January 1, 2006 the Company adopted the provisions of SFAS No. 152, which changes the rules for many aspects of timeshare accounting, including revenue recognition, inventory costing and incidental operations. (See Note 1 of the Notes to Condensed Consolidated Financial Statements for more information on SFAS No 152 and its impact on our financial statements). The adoption of SFAS No. 152 during the first quarter of 2006 had the following impact on the results of the Resort Division:
o Reduced Resorts sales recognized by a net $6.4 million, which reflected:
- the net deferral of $3.2 million of VOI sales due to treatment of the purchase incentives provided buyers and the treatment of our Sampler program;
- the classification of $2.6 million of Resorts sales to Other Resort Operations Revenue, associated with providing buyers with certain purchase incentives;
- the classification of $6.5 million of the total $7.0 million of gain on sales of notes receivable as Resorts sales;
- the netting of the $10.6 million provision for loan losses against Resorts sales;
o Contributed to higher selling, general, and administrative expenses as a percentage of sales. While SFAS No. 152 requires certain Resorts sales be deferred, it does not allow the deferral of all selling, general or administrative costs associated with those sales;
o Decreased income before cumulative effect of change in accounting principle by $1.5 million, or $0.05 per diluted share; and,
o Resulted in a one-time, non-cash charge reflected as the cumulative effect of change in accounting principle of $4.5 million, or $0.14 per diluted share net of income taxes and minority interest, consisting primarily of deferred Resorts sales, which are the result of providing buyers with certain purchase incentives and the treatment our Sampler program.
Critical Accounting Policies and Estimates
Our discussion and analysis of results of operations and financial condition are based upon our condense consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of commitments and contingencies. On an ongoing basis, management evaluates its estimates, including those that relate to the recognition of revenue, including revenue recognition under the percentage-of-completion method of accounting; our estimated development cost and future sales on recovered VOIs for the purpose of recognizing cost of sales related to VOI sales; our estimate of fair value related to stock-based compensation; our reserve for loan losses; the valuation of retained interests in notes receivable sold and the related gains on sales of notes receivable; the recovery of the carrying value of real estate inventories, golf courses; intangible assets and other assets; and the estimate of contingent liabilities related to litigation and other claims and assessments. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions and conditions. If actual results significantly differ from management's estimates, our results of operations and financial condition could be materially, adversely impacted. For a more detailed discussion of these critical accounting policies see "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2005.
Results of Operations
We review financial information, allocate resources and manage our business as two segments, Bluegreen Resorts and Bluegreen Communities. The information reviewed is based on internal reports and excludes general and administrative expenses attributable to corporate overhead. The information provided is based on a management approach and is used by us for the purpose of tracking trends and changes in results. It does not reflect the actual economic costs, contributions or results of operations of the segments as stand alone businesses. If a different basis of presentation or allocation were utilized, the relative contributions of the segments might differ but the relative trends, in our view, would likely not be materially impacted. The table below sets forth net revenue and income from operations by segment.
Bluegreen Bluegreen
Resorts Communities Total
------- ----------- -----
Percentage Percentage Percentage
Amount of Sales Amount of Sales Amount of Sales
------ -------- ------ -------- ------ --------
(dollars in thousands)
Three Months Ended March 31,
2005
Sales of real estate ................ $ 65,644 100% $ 38,377 100% $ 104,021 100%
Cost of real estate sales ........... (13,195) (20) (19,692) (51) (32,887) (32)
--------- --------- ---------
Gross profit ........................ 52,449 80 18,685 49 71,134 68
Other resort and communities
operations revenues .............. 16,562 25 1,482 4 18,044 17
Cost of other resort and
communities operations ........... (18,099) (28) (1,537) (4) (19,636) (19)
Selling and marketing
expenses ......................... (36,709) (56) (8,037) (21) (44,746) (43)
Field general and
administrative expenses (1) ...... (3,817) (6) (2,860) (7) (6,677) (6)
--------- --------- ---------
Field Operating Profit .............. $ 10,386 16% $ 7,733 20% $ 18,119 17%
========= ========= =========
Three Months Ended March 31,
2006
Sales of real estate ................ $ 71,742 100% $ 47,625 100% $ 119,367 100%
Cost of real estate sales ........... (17,047) (24) (27,980) (59) (45,027) (38)
--------- --------- ---------
Gross profit ........................ 54,695 76 19,645 41 74,340 62
Other resort and communities
operations revenues .............. 17,998 25 2,336 5 20,334 17
Cost of other resort and
communities operations ........... (18,361) (26) (2,768) (6) (21,129) (18)
Selling and marketing
expenses ......................... (44,995) (63) (6,977) (15) (51,972) (44)
Field general and
administrative expenses (1) ...... (6,201) (9) (2,457) (5) (8,658) (7)
--------- --------- ---------
Field Operating Profit .............. $ 3,136 4% $ 9,779 21% $ 12,915 11%
========= ========= =========
|
(1) General and administrative expenses attributable to corporate overhead have been excluded from the tables. Corporate general and administrative expenses totaled $10.4 million for the three months ended March 31, 2005 and $10.1 million for the three months ended March 31, 2006. (See "Corporate General and Administrative Expenses," below, for further discussion).
Sales and Field Operations. Consolidated sales increased $15.3 million or 15% from $104.0 million during the three months ended March 31, 2005 to $119.4 million during the three months ended March 31, 2006. Excluding the impacts of adopting SFAS No. 152, consolidated sales during the three months ended March 31, 2006 would have totaled $125.8 million.
Bluegreen Resorts. As further described above and in Note 1 of the Notes to Condensed Consolidated Financial Statements, on January 1, 2006 the Company adopted the provisions of SFAS No. 152 resulting in a net charge of $4.5 million, which is presented as a cumulative effect of change in accounting principle in the accompanying statement of operations. In addition to the cumulative charge, the new standard changed the treatment of sales incentives provided by a seller to a buyer to consummate a sale of VOI, the calculation and presentation of accounting for uncollectible notes receivable, the recognition of changes in inventory cost estimates, recovery or repossession of VOIs, selling and marketing costs, operations during holding periods, developer subsidies to property owners' associations and upgrade and reload transactions. These changes resulted in the deferral of the recognition of certain VOI sales, changes in the allocation of cost of VOIs sales, as well as changes in the classification of various line items throughout the statement of operations including the classification of sales incentives from sales of real estate to other resort and communities operations revenues. During the quarter ended March 31, 2005, sales incentives were included as a component of sales of real estate. Accordingly, as a result of the adoption of SFAS No. 152, the Company's financial statements for periods beginning on or after January 1, 2006 are not comparable, in all respects, with those prepared for periods ending prior to January 1, 2006. The table below sets forth the pro forma results of operations for Bluegreen Resorts for the three months ended March 31, 2006, excluding the impact of SFAS No. 152.
Three Months Ended
Three Months Ended March 31, 2006 March 31, 2005
-------------------------------------------------- ------------------------
Pro Forma Excluding
Impact of SFAS No. 152
------------------------
Percentage Percentage Percentage
Amount of Sales Amount of Sales Amount of Sales
------ -------- ------ -------- ------ --------
Sales of real estate ................. $ 71,742 100% $ 78,139 100% $ 65,644 100%
Cost of real estate sales ............ (17,047) (24) (17,395) (22) (13,195) (20)
--------- --------- ---------
Gross profit ......................... 54,695 76 60,744 78 52,449 80
Other resort and communities
operations revenues ............... 17,998 25 15,951 20 16,562 25
Cost of other resort and
communities operations ............ (18,361) (26) (17,318) (22) (18,099) (28)
Selling and marketing
expenses .......................... (44,995) (63) (47,408) (61) (36,709) (56)
Field general and administrative
expenses .......................... (6,201) (9) (6,201) (8) (3,817) (6)
--------- --------- ---------
Field Operating Profit ............... $ 3,136 4% $ 5,768 7% $ 10,386 16%
========= ========= =========
|
During the three months ended March 31, 2005 and March 31, 2006, sales of VOIs contributed $65.6 million (63%) and $71.7 million (60%) of our total consolidated sales, respectively. Excluding the impact of SFAS No. 152, sales of VOIs during the three months ended March 31, 2006 contributed $78.1 million (62%) of our total consolidated sales.
The following table sets forth certain information for sales of VOIs for the periods indicated, before giving effect to the percentage-of-completion method of accounting and sales deferred under SFAS No. 152.
Three Months Ended
March 31, 2005 March 31, 2006
--------------- --------------
Number of VOI sale transactions ........ 6,689 7,681
Average sales price per transaction .... $ 10,124 $ 10,664
Gross margin ........................... 80% 76%
|
Bluegreen Resorts' sales increased $6.1 million or 9% during the three months ended March 31, 2006, as compared to the three months ended March 31, 2005. Excluding the impact of SFAS No. 152, sales increased $12.5 million or 19%. The increase was due primarily to same-resort sales increases at most of our sales offices. Same-resort sales increased by approximately $12.9 million or 20% during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. This increase was also due to our continued focus on marketing to our growing Bluegreen Vacation Club owner base. Sales to owners increased by 59% during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. This, combined with a 18% overall increase in the number of sales prospects seen by Bluegreen Resorts from approximately 53,000 prospects during the three months ended March 31, 2005 to approximately 62,000 prospects during the three months ended March 31, 2006 and a consistent sale-to-tour conversion ratio of 14% during these periods significantly contributed to the overall sales increase during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. The increase in the number of prospects seen by Bluegreen Resorts and the associated increase in sales was partially due to our five new sales sites opened subsequent to March 31, 2005: an offsite sales office in Atlanta, Georgia (opened in November 2005), an offsite office in Chicago, Illinois (opened in February 2006), and sales offices located at three of our new resorts, the Carolina Grande in Myrtle Beach, South Carolina (opened in March 2006), Daytona Seabreeze in Daytona Shores, Florida (opened in December 2005), and the Suites at Hershey, in Hershey, Pennsylvania (opened in June 2005). The increase in the average sales price per transaction reflected in the above table also contributed to the increase in sales.
Bluegreen Resorts' gross profit increased $2.2 million or 4% during the three months ended March 31, 2006 compared to the same period in March 31, 2005. Excluding the impact of SFAS No. 152, gross margin would have increased $8.3 million or 16%. However, as a percentage of sales, gross profit decreased during the first quarter of 2006 compared to the same period in 2005 due to the sale of vacation ownership interests in higher cost resorts as a result of rising construction costs partially offset by increased sales of vacation ownership interests in The Fountains resort, which has a relatively low
associated product cost, and a system-wide price increase that went into effect January 1, 2006. We expect that gross margin will remain within the 75-77% range during 2006.
Other resort operations revenues increased $1.4 million or 9% during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. This increase primarily reflects the classification of sales incentives provided to buyers to consummate a sale of VOI as other resort operations revenue, partially off-set by the reclassification of rental proceeds from other resort operations revenue to cost of other resort operations. Prior to the adoption of SFAS No. 152, sales incentives were classified as a component of VOI revenue. Excluding the impact of SFAS No. 152, other resort operations would have revenue decreased $0.6 million or 4% as a result of lower sales of mini-vacation packages on behalf of third parties, as well as slightly lower fees earned by our wholly-owned title company for providing title processing services on all of our VOI sales.
Cost of other resort operations increased $0.3 million or 1% during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. The increase in the cost of other resort operations was due primarily to classification of the cost of sales incentives to cost of other resort operations as well as higher subsidies incurred relative to the property owners' associations that maintain our resorts. These subsidies increased in the aggregate due to the increase in our VOI inventory. These increases were partially off-set by the reclassification of rental proceeds and the net proceeds of the Sampler program as a reduction to cost of other resort operations. Excluding the impact of SFAS No. 152, cost of other resort operations would have decreased $0.8 million or 4%.
Selling and marketing expenses for Bluegreen Resorts increased $8.3 million or 23% during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. This increase was primarily due to the increase in sales of real estate. As a percentage of sales, selling and marketing expenses increased from 56% during the three months ended March 31, 2005 to 63% during the three months ended March 31, 2006 reflecting the marketing expenses associated with the $3.2 million of revenue deferred under SFAS No. 152, a general increase in overall marketing expenses, including start-up costs related to new marketing alliances, and higher marketing expenses as a percentage of sales at our newly opened off-site sales offices. Excluding the impact of SFAS No. 152, selling and marketing expense would have increased $10.7 million or 29% as prior to the first quarter of 2006, selling and marketing expenses included the cost of sales incentives that per the provisions of SFAS No. 152, are now classified as cost of other resort operations. Excluding the impact of SFAS No. 152, selling and marketing expenses were 61% of pro forma sales. We believe that selling and marketing expenses as a percentage of sales is an important indicator of the performance of Bluegreen Resorts and our performance as a whole. No assurance can be given that selling and marketing expenses will not increase as a percentage of sales in future periods.
Field general and administrative expenses for Bluegreen Resorts increased $2.4 million or 62% during the three months ended March 31, 2006, as compared to the three months ended March 31, 2005, due primarily to incremental cost of opening and operating our new sales offices.
As of December 31, 2005 and March 31, 2006, Bluegreen Resorts had no sales or field operating profit deferred under percentage-of-completion accounting. As of March 31, 2006 approximately $24.7 million and $14.2 million of sales and field operating profit, respectively, were deferred under SFAS No. 152.
Bluegreen Communities. During the three months ended March 31, 2005 and March 31, 2006, Bluegreen Communities generated $38.4 million (37%) and $47.6 million (40%) of our total consolidated sales, respectively.
The table below sets forth the number of homesites sold by Bluegreen Communities and the average sales price per homesite for the periods indicated, before giving effect to the percentage-of-completion method of accounting and excluding sales of bulk parcels.
Three Months Ended
March 31, 2005 March 31, 2006
-------------- --------------
Number of homesites sold ................ 635 434
Average sales price per homesite ........ $ 75,498 $ 70,918
Gross margin ............................ 49% 41%
|
Bluegreen Communities' sales increased $9.2 million or 24% during the three months ended March 31, 2006, as compared to the three months ended March 31, 2005, due to the recognition of approximately $4.5 million of sales previously deferred under the percentage-of-completion method of accounting during the three months ended March 31, 2006, compared to a $9.9 million deferral of sales under percentage-of-completion during the comparable prior year period. Sales
in the first quarter of 2006 also benefited from a $7.0 million bulk sale of property near San Diego, California. Sales increases at certain of our existing communities and sales at communities which opened for sales after March 31, 2005 (the "New Communities") off-set sales decreases at substantially sold-out communities. The New Communities were: Saddle Creek Forest, a community located near Houston, Texas, which commenced sales in April 2005 and recognized $5.8 million of sales in the first quarter of 2006; The Settlement at Patriot Ranch, located near San Antonio, which commenced sales in August 2005, and recognized sales of $1.0 million during the first quarter of 2006; and, Havenwood at Hunter's Crossing, located near San Antonio, Texas, which was purchased in July 2005 and recognized sales of $1.3 million in the first quarter of 2006. In addition to the New Communities, we experienced sales increases at Catawba Falls (Black Mountain, NC), Mystic Shores (Canyon Lake, TX), Lake Ridge at Joe Pool Lake (Cedar Hill, TX), and Mountain Springs Ranch (Canyon Lake, TX) of $3.9 million, $2.6 million, $1.3 million, and $1.6 million, respectively. These increases were offset by the substantial sell-out of Traditions of Braselton, our golf course community in Braselton, Georgia, and Brickshire, our golf course community located in New Kent, Virginia. There were no sales at Traditions of Braselton during the three months ended March 31, 2006 as compared to $6.3 million during the three months ended March 31, 2005. Brickshire, which was substantially sold-out prior to the first quarter of 2006, had sales of $3.2 million during the three months ended March 31, 2005. Sales recognized at Sanctuary Cove at St. Andrews Sound, an approximately 500-acre golf course community in Brunswick, Georgia, totaled $4.6 million during the three months ended March 31, 2006 as compared to $14.3 million during the three months ended March 31, 2005, due to the substantial sellout of two phases of the community. The estimated sellout of the last phase of Sanctuary Cove is expected by June 2006. In March 2006 we completed the purchase of an approximately 1,580-acre future golf community in Grayson County, Texas, which is located just outside of Dallas, for $25.9 million. Additionally, in April of 2006, we completed the purchase of a 3,200 acre parcel in New Braunfels, Texas, which is located just outside San Antonio, for $27.3 million. We also completed the acquisition of 130 acres in April 2006 for $0.7 million to expand Saddle Creek Forest by approximately 57 homesites. Based on our assessment of current estimated retail prices and the expected number of homesites to be offered, we currently believe that these recent acquisitions will, in the aggregate, generate estimated life-of-project sales of approximately $318.2 million over an eight year period.
As noted above, certain of our properties substantially sold out earlier in 2005 than previously anticipated as a result of the continued strong demand for our communities. Although there is no assurance that we will be successful, we are continually exploring the acquisition of properties in markets where we currently conduct business and in new regions of the country, in order to maintain appropriate levels of properties in our portfolio.
Bluegreen Communities' gross margin decreased from 49% during the three months ended March 31, 2005 to 41% during the three months ended March 31, 2006, due substantially to the impact of the bulk sale of land near San Diego, California on a non-retail basis. Variations in cost structures and the market pricing of projects available for sale as well as the opening of phases of projects which include premium homesites (e.g., water frontage, preferred views, larger acreage homesites, etc.) impact the gross margin of Bluegreen Communities from period to period. These factors, as well as the impact of percentage-of-completion accounting, will cause variations in gross margin between periods, although Bluegreen Communities' gross margin has historically been between 44% and 51% of sales and is expected to return to historical levels beginning in the second quarter of 2006.
Selling and marketing expenses for Bluegreen Communities decreased $1.1 million or 13.2% for the period ended March 31, 2006 as compared to March 31, 2005. These expenditures decreased as a percentage of sales due to a lower average sales price per homesite resulting in lower commissions on homesite sales, as well as, a relatively lower commission on a bulk sale of property near San Diego, California.
Bluegreen Communities' general and administrative expenses decreased $403,000 or 14.1% during the three months ended March 31, 2006 as compared to the three months ended March, 31, 2005. This decrease in general and administrative expenses was due to the closure of five sales offices in the second half of 2005. The offices at Silver Lakes Ranch, Mountain Lakes, Quail Springs, Brickshire, and Braselton were closed as a result of the substantial sell out of these locations. As a percentage of sales, Bluegreen Communities' general and administrative expenses decreased to 5% from 8% for the three months ended March 31, 2006 as compared to the three months ended March 31, 2005, respectively.
As of December 31, 2005, Bluegreen Communities had $30.7 million of sales and $12.4 million of Field Operating Profit deferred under percentage-of-completion accounting. As of March 31, 2006, Bluegreen Communities had $26.2 million of sales and $10.9 million of Field Operating Profit deferred under percentage-of-completion accounting.
Corporate General and Administrative Expenses. Our corporate general and administrative expenses consist primarily of expenses associated with administering the various support functions at our corporate headquarters, including accounting, human resources, information technology, acquisition and development, mortgage servicing, treasury and legal. Such expenses were $10.4 million and $10.1 million during the three months ended March 31, 2005 and March 31, 2006, respectively. As a percentage of sales of real estate, corporate general and administrative expenses were 10.0% and 8.4% during the three months ended March 31, 2005 and March 31, 2006, respectively.
For a discussion of field selling, general and administrative expenses, see "Sales and Field Operations" above.
Interest Income. Interest income is earned from our notes receivable, retained interests in notes receivable sold and cash and cash equivalents. Interest income earned totaled $7.9 million and $8.2 million during the three months ended March 31, 2005 and March 31, 2006, respectively.
The $300,000 or 4% increase in interest income during the three months ended March 31, 2006 was due to higher interest income earned from retained interest in notes receivable sold commensurate with the increased average balance of retained interest in notes receivable sold during the three months ended March 31, 2006 as compared to the three months ended March 31, 2005.
Gain on Sales of Notes Receivable. During the three months ended March 31, 2005 and March 31, 2006, we sold $44.9 million and $40.9 million of vacation ownership notes receivable, respectively. In connection with these sales, we recognized gains on sales of notes receivable of $4.7 million and $7.0 million during the three months ended March 31, 2005 and March 31, 2006, respectively. As a result of adopting SFAS No. 152, approximately $6.5 million of the gain was recorded as an adjustment of vacation ownership interest revenues during the three months ended March 31, 2006.
The amount of gain recognized on sales of notes receivable during a period depends on several factors, including the amount of availability, if any, under receivables purchase facilities that qualify for off-balance sheet (or "sales") treatment under SFAS No. 140, the amount of eligible receivables available for sale, our cash requirements, the current cost of funds and other relevant variables associated with the facility, the covenants and other provisions of the relevant vacation ownership receivables purchase facility (as described further below) and management's discretion as it relates to the timing and amount of receivables to sell as well as management's selection of which facility to utilize for such sale. The U.S. generally accepted accounting principles governing our sale of receivable transactions is evolving and achieving off-balance sheet accounting treatment is becoming more difficult. Due to the complexity of the accounting rules surrounding such transactions, we have decided to limit the use of off-balance sheet structures in the future. For the foreseeable future, we intend to structure certain of our vacation ownership receivables purchase facilities, specifically those that are used to accumulate receivables pending a term securitization transaction, in a manner so as to account for sales of receivables under such facilities as on-balance sheet borrowings pursuant to SFAS No. 140. Accordingly, no gains will be recognized on the sales of receivables to such facilities until the receivables are included in an appropriately structured term securitization transaction. This accounting treatment is expected to increase the volatility of our quarterly earnings prospectively, but is not anticipated to materially impact annual earnings.
Interest Expense. Interest expense was $3.6 million and $3.3 million during the three months ended March 31, 2005 and March 31, 2006, respectively. The $300,000 or 8% decrease during the three months ended March 31, 2006, as compared to the three months ended March 31, 2005, was primarily as a result of lower average debt outstanding and more interest being capitalized due to increased construction activity.
Provision for Loan Losses. During the three months ended March 31, 2005, we recorded a provision for loan loss of $4.7 million. This provision was based on the Company's estimate of the expected performance of our vacation ownership notes receivable generated during the first quarter of 2005, reduced by the value of the underlying inventory that will be recovered upon default. Effective January 1, 2006, SFAS No. 152 requires that the estimated losses on originated mortgages exclude an estimate for the value of recoveries and further requires that the provision for loan losses for vacation ownership receivables be reflected as a reduction of revenue. Accordingly, during the three months ended March 31, 2006, we recorded the loan loss provision on vacation ownership notes receivable of $10.6 million as a reduction to revenue from sales of real estate.
The allowance for loan losses by division as of December 31, 2005 and March 31, 2006 was as follows:
Bluegreen Bluegreen
Resorts Communities Other Total
------- ----------- ----- -----
(dollars in thousands)
December 31, 2005:
Notes receivable ...................... $ 131,058 $ 7,408 $ 186 $ 138,652
Allowance for loan losses ............. (10,466) (217) (186) (10,869)
--------- --------- --------- ---------
Notes receivable, net ................. $ 120,592 $ 7,191 $ -- $ 127,783
========= ========= ========= =========
Allowance as a % of gross notes
receivable .......................... 8% 3% 100% 8%
========= ========= ========= =========
March 31, 2006:
Notes receivable ...................... $ 129,117 $ 7,699 $ 186 $ 137,002
Allowance for loan losses ............. (9,652) (202) (186) (10,040)
--------- --------- --------- ---------
Notes receivable, net ................. $ 119,465 $ 7,497 $ -- $ 126,962
========= ========= ========= =========
Allowance as a % of gross notes
receivable .......................... 7% 3% 100% 7%
========= ========= ========= =========
|
The allowance for loan loss for Bluegreen Resorts decreased as a percentage of the notes receivable balance at March 31, 2006 compared to December 31, 2005 as we did not provide an allowance for loan losses on receivables for which the related sale has been deferred under SFAS No. 152.
Minority Interest in Income of Consolidated Subsidiary. We include the results of operations and financial position of Bluegreen/Big Cedar Vacations, LLC (the "Subsidiary"), our 51%-owned subsidiary, in our consolidated financial statements. (See Note 1 of the Notes to Condensed Consolidated Financial Statements). The minority interest in income of consolidated subsidiary is the portion of our consolidated pre-tax income that is earned by Big Cedar, L.L.C., the unaffiliated 49% interest holder in the Subsidiary. Minority interest in income of consolidated subsidiary was $773,000 and $1.0 million during the three months ended March 31, 2005 and March 31, 2006, respectively.
Cumulative Effect of Change in Accounting Principle from the Adoption of SFAS No. 152. The adoption of SFAS No. 152 on January 1, 2006 resulted in a net charge of $4.5 million, which is presented as a cumulative effect of change in accounting principle. The cumulative effect of change in accounting principle primarily consists of the deferral of VOI sales and related costs for sales that were previously recognized but did not meet the required down payment threshhold at January 1, 2006, due to sales incentives provided to buyers and the treatment of our Sampler program, and the related tax benefit, net of the cumulative effect of change in accounting principle charge related to the minority interest in the Subsidiary.
Summary. Based on the factors discussed above, our net income before the cumulative effect of change in accounting principle was $6.4 million and $4.0 million during the three months ended March 31, 2005 and March 31, 2006, respectively. Our net income was $6.4 million for the three months ended March 31, 2005 and was a net loss of $463,000 for the three months ended March 31, 2006.
Changes in Financial Condition
The following table summarizes our cash flows for the three months ended March 31, 2005 and March 31, 2006 (in thousands):
Three months ended
March 31, 2005 March 31, 2006
-------------- --------------
Cash flows provided by (used in) operating activities ..... $ 12,860 $(20,198)
Cash flows (used in) provided by investing activities ..... (2,524) 3,351
Cash flows provided by financing activities ............... 4,037 3,919
-------- --------
Net increase (decrease) in cash ........................... $ 14,373 $(12,928)
======== ========
|
Cash Flows From Operating Activities. Cash flows provided by operating activities decreased $33.1 million or 257% from an inflow of $12.9 million during the three months ended March 31, 2005 to an outflow of $20.2 million during the three months ended March 31, 2006 as compared to. The decrease in cash flows provided by operating activities during the three months ended March 31, 2006 compared to the same period the prior year was primarily driven by higher development spending and an increase in notes receivable due to increased VOI sales. Also contributing to the decrease in cash flows
from operations was lower proceeds from the sale of and borrowings collateralized by notes receivable during the three months ended March 31, 2006 compared to the prior period.
We report cash flows from borrowings collateralized by notes receivable and sales of notes receivable as operating activities in the consolidated statements of cash flows. The majority of Bluegreen Resorts' sales result in the origination of notes receivable from its customers. We believe that accelerating the conversion of such notes receivable into cash, either through the pledge or sale of our notes receivable, on a regular basis is an integral function of our operations, and have therefore classified such activities as operating activities.
Cash Flows From Investing Activities. Cash flows used in investing activities increased $5.9 million or 236% from an outflow of $2.5 million during the three months ended March 31, 2005 to an inflow of $3.4 million during the three months ended March 31, 2006, respectively. This increase was due primarily to higher amounts of cash received from our retained interests in notes receivable sold partially off-set by higher cash expenditures for property and equipment during the three months ended March 31, 2006 as compared to the three months ended March 31, 2006.
Cash Flows From Financing Activities. Cash flows provided by financing activities decreased $118,000 or 3% from cash inflows of $4.0 million during the three months ended March 31, 2005 to cash inflows of $3.9 million during the three months ended March 31, 2006. This decrease was due primarily to the $23.2 million of cash received in connection with our issuance of the junior subordinated debentures during the three months ended March 31, 2005, partially offset by higher payments and lower borrowings on our lines-of-credit and note payable during the three months ended March 31, 2005 as compared to the three months ended March 31, 2006.
Liquidity and Capital Resources
Our capital resources are provided from both internal and external sources. Our primary capital resources from internal operations are: (i) cash sales, (ii) downpayments on homesite and VOI sales which are financed, (iii) proceeds from the sale of, or borrowings collateralized by, notes receivable, including cash received from our retained interests in notes receivable sold, (iv) principal and interest payments on the purchase money mortgage loans and contracts for deed owned arising from sales of VOIs and homesites and (v) net cash generated from other resort services and other communities operations. Historically, external sources of liquidity have included non-recourse sales of notes receivable, borrowings under secured and unsecured lines-of-credit, seller and bank financing of inventory acquisitions and the issuance of debt securities. Our capital resources are used to support our operations, including (i) acquiring and developing inventory, (ii) providing financing for customer purchases, (iii) funding operating expenses and (iv) satisfying our debt and other obligations. As we are continually selling and marketing real estate (VOIs and homesites), it is necessary for us to continually acquire and develop new resorts and communities in order to maintain adequate levels of inventory to support operations. We anticipate that we will continue to require external sources of liquidity to support our operations, satisfy our debt and other obligations and to provide funds for future acquisitions.
Our level of debt and debt service requirements have several important effects on our operations, including the following: (i) we have significant cash requirements to service debt, reducing funds available for operations and future business opportunities and increasing our vulnerability to adverse economic and industry conditions; (ii) our leveraged position increases our vulnerability to economic and competitive pressures; (iii) the financial covenants and other restrictions contained in the indentures, the credit agreements and other agreements relating to our indebtedness require us to meet certain financial tests and restrict our ability to, among other things, borrow additional funds, dispose of assets, make investments or pay cash dividends on, or repurchase, preferred or common stock; and (iv) funds available for working capital, capital expenditures, acquisitions and general corporate purposes may be limited. Certain of our competitors operate on a less leveraged basis and have greater operating and financial flexibility than we do.
We intend to continue to pursue a growth-oriented strategy, particularly with respect to our Bluegreen Resorts business segment. In connection with this strategy, we may from time to time acquire, among other things, additional resort properties and completed but unsold VOIs; land upon which additional resorts may be built; management contracts; loan portfolios of vacation ownership mortgages; portfolios which include properties or assets which may be integrated into our operations; interests in joint ventures; and operating companies providing or possessing management, sales, marketing, development, administration and/or other expertise with respect to our operations in the vacation ownership industry. In addition, we intend to continue to focus Bluegreen Communities' activities on larger, more capital intensive projects particularly in those regions where we believe the market for our products is strongest, such as new golf communities in the Southeast and other areas and continued growth in our successful regions in Texas.
The following is a discussion of our purchase and credit facilities that were important sources of our liquidity as of March 31, 2006. These facilities do not constitute all of our outstanding indebtedness as of March 31, 2006. Our other
indebtedness includes outstanding senior secured notes payable, junior subordinated debentures, borrowings collateralized by real estate inventories that were not incurred pursuant to an ongoing credit facility and capital leases.
Vacation Ownership Receivables Purchase Facilities - Off-Balance Sheet Arrangements
Our ability to sell and/or borrow against our notes receivable from VOI buyers is a critical factor in our continued liquidity. When we sell VOIs, a financed buyer is only required to pay a minimum of 10% of the purchase in cash at the time of sale, however, selling, marketing and administrative expenses are primarily cash expenses and, in our case for the three months ended March 31, 2006, approximated 71% of sales. Accordingly, having facilities available for the hypothecation or sale of these vacation ownership receivables is a critical factor to our ability to meet our short and long-term cash needs.
The GE Purchase Facility. In March 2006, we executed agreements for a vacation ownership receivables purchase facility (the "GE Purchase Facility") with General Electric Capital Corporation ("GE"). The GE Purchase Facility utilizes an owner's trust structure, pursuant to which we sell receivables to Bluegreen Receivables Finance Corporation XI, our wholly-owned, special purpose finance subsidiary ("BRFC XI"), and BRFC XI sells the receivables to an owner's trust (a qualified special purpose entity) without recourse to us or BRFC XI except for breaches of certain customary representations and warranties at the time of sale. We did not enter into any guarantees in connection with the GE Purchase Facility. The GE Purchase Facility has detailed requirements with respect to the eligibility of receivables for purchase, and fundings under the GE Purchase Facility are subject to certain conditions precedent. Under the GE Purchase Facility, a variable purchase price of approximately 90% of the principal balance of the receivables sold, subject to adjustment under certain terms and conditions, is paid at closing in cash. The balance of the purchase price is deferred until such time as GE has received a specified return, a specified overcollateralization ratio is achieved, a cash reserve account is fully funded and all servicing, custodial, agent and similar fees and expenses have been paid. GE is entitled to receive a return equal to the applicable Swap Rate (which is essentially a published interest swap arrangement rate as defined in the GE Purchase Facility agreements) plus 2.35%, subject to use of alternate return rates in certain circumstances. In addition, we paid GE a structuring fee of approximately $437,500 in March 2006. Subject to the terms of the agreements, will act as servicer under the GE Purchase Facility for a fee.
The GE Purchase Facility includes various conditions to purchase, covenants,
trigger events and other provisions customary for a transaction of this type.
GE's obligation to purchase under the GE Purchase Facility may terminate earlier
than the dates noted above upon the occurrence of certain specified events set
forth in the GE Purchase Facility agreements. These specified events, some of
which are subject to materiality qualifiers and cure periods, include, without
limitation, (i) the aggregate amount of all advances under the GE Purchase
Facility equaling $125.0 million; (ii) our breach of the representations or
warranties in the GE Purchase Facility; (iii) our failure to perform our
covenants in the GE Purchase Facility; (iv) our commencement of a bankruptcy or
similar proceedings; (v) the amount of any advance under the GE Purchase
Facility failing to meet a specified overcollateralization amount; (vi)
significant delinquencies or defaults on the receivables sold; (vii) recovery
rates falling below a pre-determined amount; (viii) a default or breach under
any other agreement beyond the applicable grace period if such default or breach
(a) involves the failure to make a payment in excess of 5% of our Tangible Net
Worth (as defined in the GE Purchase Facility agreements to include our
subordinated debentures) or (b) causes, or permits the holder of indebtedness to
cause, an amount in excess of 5% of our Tangible Net Worth to become due; (ix)
our Tangible Net Worth at the end of any calendar quarter not equaling at least
$303.9 million plus 50% of net income following December 31, 2005; (x) the ratio
of our debt (excluding our subordinated debentures) to Tangible Net Worth
exceeding 2.50 to 1; (xi) the ratio of our consolidated earnings before
interest, taxes, depreciation and amortization to our interest expense (net of
interest income) falling below 2.00 to 1; (xii) the number of points available
in the Bluegreen Vacation Club representing unsold real estate timeshare
inventory falling below approximately 930.7 million; (xiii) our ceasing to
conduct the vacation ownership business or to originate vacation ownership
receivables or if certain changes in our ownership or control occur; (xiv) the
failure of certain of our resorts to be part of the Bluegreen Vacation Club or
be managed by us, one of our subsidiaries or another entity acceptable to GE;
(xv) operating budgets and reserve accounts maintained by the property owners'
associations responsible for maintaining certain of our resorts failing to
comply with applicable laws and governing documents; (xvi) our failure to
discharge, stay or bond pending appeal any final judgments for the payment of an
amount in excess of 2.5% of our Tangible Net Worth in a timely manner; (xvii)
our default under or breach of certain resort management or marketing contracts;
or (xviii) our failure to perform our servicing obligations, otherwise have our
servicing rights terminated or if we do not exercise the Servicer Purchase
Option pursuant to the terms of the GE Purchase Facility.
The GE Purchase Facility allows for sales of notes receivable for a cumulative purchase price of up to $125.0 million for a period which ends in March 2008. On March 28, 2006, the Company sold $22.3 million in vacation ownership receivables under the GE Purchase Facility. As of March 31, 2006, the remaining availability under the 2006-A GE Purchase Facility was $104.9 million, subject to eligibility requirements and fulfillment of conditions precedent.
The New BB&T Purchase Facility. We are currently documenting a new, two-year $150 million vacation ownership receivables purchase facility with BB&T. There can be no assurances that this new facility will be obtained on favorable terms or at all. We anticipate accounting for sales of receivables under this facility, if obtained, as on-balance sheet borrowings pursuant to SFAS No. 140. This facility would be used to accumulate receivables in anticipation of future term securitization transactions.
We have chosen to monetize our receivables through the GE Purchase Facility and through periodic term securitization transactions historically, as these off-balance sheet arrangements provide us with cash inflows both currently and in the future at what we believe to be competitive rates without adding leverage to our balance sheet or retaining recourse for losses on the receivables sold. In addition, these sale transactions have generated gains on our income statement on a quarterly basis, which would not be realized under a traditional financing arrangement.
The GE Purchase Facility discussed above is the only ongoing receivables purchase facility under which we currently have the ability to sell receivables. Factors which could adversely impact our ability to obtain new or additional vacation ownership receivable purchase facilities include a downturn in general economic conditions; negative trends in the commercial paper or LIBOR markets; increases in interest rates; a decrease in the number of financial institutions or other entities willing to enter into facilities with vacation ownership companies; a deterioration in the performance of our vacation ownership notes receivable or in the performance of portfolios sold in prior transactions, specifically increased delinquency, default and loss severity rates; and a deterioration in our performance generally. There can be no assurance that we will obtain new purchase facilities or will be in a position to replace the GE Purchase Facility when this facility is fully funded or expires. As indicated above, our inability to sell vacation ownership receivables under a current or future facility could have a material adverse impact on our liquidity. However, management believes that to the extent we could not sell receivables under a purchase facility, we could potentially mitigate the adverse impact on our liquidity by using our receivables as collateral under existing or future credit facilities.
Historically, we have also been a party to a number of securitization-type transactions, all of which in our opinion utilize customary structures and terms for transactions of this type. In each securitization-type transaction, we sold receivables to a wholly-owned special purpose entity which, in turn, sold the receivables either directly to third parties or to a trust established for the transaction. In each transaction, the receivables were sold on a non-recourse basis (except for breaches of certain representations and warranties) and the special purpose entity has a retained interest in the receivables sold. We have acted as servicer of the receivables pools in each transaction for a fee, with the servicing obligations specified under the applicable transaction documents. Under the terms of the applicable securitization transaction, the cash payments received from obligors on the receivables sold are distributed to the investors (which, depending on the transaction, may acquire the receivables directly or purchase an interest in, or make loans secured by the receivables to, a trust that owns the receivables), parties providing services in connection with the facility, and our special purpose subsidiary as the holder of the retained interests in the receivables according to specified formulas. In general, available funds are applied monthly to pay fees to service providers, make interest and principal payments to investors, fund required reserves, if any, and pay distributions in respect of the retained interests in the receivables. Pursuant to the terms of the transaction documents, however, to the extent the portfolio of receivables fails to satisfy specified performance criteria (as may occur due to an increase in default rates or loan loss severity) or other trigger events, the funds received from obligors are distributed on an accelerated basis to investors. In effect, during a period in which the accelerated payment formula is applicable, funds go to outside investors until they receive the full amount owed to them and only then are payments made to our subsidiary in its capacity as the holder of the retained interests. Depending on the circumstances and the transaction, the application of the accelerated payment formula may be permanent or temporary until the trigger event is cured. If the accelerated payment formula were to become applicable, the cash flow on the retained interests in the receivables would be reduced until the outside investors were paid or the regular payment formula was resumed. Such a reduction in cash flow could cause a decline in the fair value of our retained interests in the receivables sold. Declines in fair value that are determined to be other than temporary are charged to operations in the current period. In each facility, the failure of the pool of receivables to comply with specified portfolio covenants can create a trigger event, which results in the use of the accelerated payment formula (in certain circumstances until the trigger event is cured and in other circumstances permanently) and, to the extent there was any remaining commitment to purchase receivables from our special purpose subsidiary, the suspension or termination of that commitment. In addition, each securitization facility provides that upon certain breaches of our obligations as servicer or other events allow the indenture trustee to cause the servicing to be transferred to a substitute third party servicer. In that case, our obligation to service the receivables would terminate and we would cease to receive a servicing fee.
The following is a summary of significant financial information related to the Purchase Facility and prior similar facilities during the periods presented (in thousands):
December 31,2005 March 31, 2006
---------------- --------------
On Balance Sheet:
Retained interests in notes receivable sold ............................ $ 105,696 $ 104,316
Off Balance Sheet:
Notes receivable sold without recourse ................................. 429,403 438,899
Principal balance owed to note receivable purchasers ................... 396,679 408,991
Three Months Ended
March 31, 2005 March 31, 2006
-------------- --------------
(As Restated)
Income Statement:
Gain on sales of notes receivable ...................................... $ 4,720 $ 505
Interest accretion on retained interests in notes receivable sold ...... 2,008 2,578
Servicing fee income ................................................... 1,191 1,645
|
Credit Facilities for Bluegreen's Receivables and Inventories
In addition to the vacation ownership receivables purchase facilities discussed above, we maintain various credit facilities with financial institutions that provide receivable, acquisition and development financing for our operations. We had the following credit facilities, as of March 31, 2006 (see further discussion below):
Outstanding Borrowings
Borrowings During the Advance Period
as of Period Ended Expiration; Borrowing Borrowing Current
Credit Facility March 31, 2006 March 31, 2006 Borrowing Maturity Limit Rate Rate
----------------------------------------------------------------------------------------------------------------------------------
The GMAC $22.4 million -- February 15, 2008; $75.0 30-day 8.83%
Receivables Facility February 15, 2015 million LIBOR +
4.00%
The GMAC AD&C $40.2 million $6.8 million February 15, 2008; $150.0 30-day 9.288
Facility August 15, 2013 million LIBOR +
4.50%
The RFL A&D -- -- January 10, 2007; $50.0 30-day 8.73%
Facility January 10, 2008 million LIBOR +
3.90% (Min.
6.90%)
The Foothill Facility $2.7 million -- December 31, 2006; $30.0 Prime + 8.00%
December 31, 2008 million 0.25% (Min. to
4.00%); 9.00%
to
Prime +
1.25%
The GMAC $24.3 million $27.2 September 30, 2008; $75.0 Prime + 8.75%
Communities million September 30, 2009 million 1.00%
Facility
|
Credit Facilities for Bluegreen Resorts' Receivables and Inventories
The GMAC Receivables Facility. In February 2003, we entered into a revolving vacation ownership receivables credit facility (the "GMAC Receivables Facility") with Residential Funding Corporation ("RFC"), an affiliate of GMAC. The borrowing limit under the GMAC Receivables Facility, as increased by amendment, is $75.0 million. The borrowing period on the GMAC Receivables Facility, as amended, expires on February 15, 2008, and outstanding borrowings mature no later than February 15, 2015. The GMAC Receivables Facility has detailed requirements with respect to the eligibility of receivables for inclusion and other conditions to funding. The borrowing base under the GMAC Receivables Facility is 90% of the outstanding principal balance of eligible notes arising from the sale of VOIs. The GMAC Receivables Facility includes affirmative, negative and financial covenants and events of default. All principal and interest payments received on pledged receivables are applied to principal and interest due under the GMAC Receivables Facility. Indebtedness under the facility bears interest at 30-day LIBOR plus 4.00% (8.83% at March 31, 2006). Interest payments are due monthly. During the period ended March 31, 2006, we did not pledge any vacation ownership receivables under the GMAC Receivables Facility. As of March 31, 2006, $22.4 million was outstanding under the GMAC Receivables Facility.
The GMAC AD&C Facility. In September 2003, RFC also provided us with a $75.0 million acquisition, development and construction revolving credit facility for Bluegreen Resorts, which was increased to $150.0 million in February 2006 (the "GMAC AD&C Facility"). The borrowing period on the GMAC AD&C Facility, as amended, expires on February 15, 2008, and outstanding borrowings mature no later than August 15, 2013, although specific draws typically are due four years from the borrowing date. Principal will be repaid through agreed-upon release prices as VOIs are sold at the financed resorts, subject to minimum required amortization. Indebtedness under the facility bears interest at 30-day LIBOR plus 4.50%, as amended in February 2006. Interest payments are due monthly. During the period ended March 31, 2006, we borrowed $6.8 million under the GMAC AD&C Facility to fund the development of VOIs at The Fountains and the Carolina Grande. As of March 31, 2006, $40.2 million was outstanding under the GMAC AD&C Facility.
The RFL A&D Facility. In January 2005, we entered into a $50.0 million revolving credit facility with Resort Finance, LLC ("RFL") (the "RFL A&D Facility"). We use the proceeds from the RFL A&D Facility to finance the acquisition and development of vacation ownership resorts. The RFL A&D Facility is secured by 1) a first mortgage and lien on all assets purchased with the RFL A&D Facility; 2) a first assignment of all construction contracts, related documents, building permits and completion bond; 3) a negative pledge of our interest in any management, marketing, maintenance or service contracts; and 4) a first assignment of all operating agreements, rents and other revenues at the vacation ownership resorts which serve as collateral for the RFL A&D Facility, subject to any requirements of the respective property owners' associations. Borrowings under the RFL A&D Facility can be made through January 10, 2007. Principal payments will be effected through agreed-upon release prices paid to RFL as vacation ownership interests in the resorts that serve as collateral for the RFL A&D Facility are sold. The outstanding principal balance of any borrowings under the RFL A&D Facility must be repaid by January 10, 2008. Indebtedness under the facility bears interest at 30-day LIBOR plus 3.90%, subject to a 6.90% floor (8.73% at March 31, 2006). Interest payments are due monthly. We are required to pay a commitment fee equal to 1.00% of the $50.0 million facility amount, which is paid at the time of each borrowing under the RFL A&D Facility as 1.00% of each borrowing with the balance being paid on the unutilized facility amount on January 10, 2007. In addition, we are required to pay a program fee equal to 0.125% of the $50.0 million facility amount per annum, payable monthly. The RFL A&D Facility documents include customary conditions to funding, acceleration provisions and certain financial affirmative and negative covenants. There were no outstanding amounts due under this facility as of March 31, 2006.
The Foothill Facility. Under an existing $30.0 million revolving credit facility with Wells Fargo Foothill, Inc. ("Foothill") primarily used for borrowings collateralized by Bluegreen Communities receivables and inventory, we can also borrow up to $10.0 million of the facility collateralized by the pledge of vacation ownership receivables. For further details on this facility, see "Credit Facilities for Bluegreen Communities' Receivables and Inventories" below.
Credit Facilities for Bluegreen Communities' Receivables and Inventories
The Foothill Facility. We have a $30.0 million revolving credit facility with Foothill secured by the pledge of Bluegreen Communities' receivables, with up to $10.0 million of the total facility available for Bluegreen Communities' inventory borrowings and, as indicated above, up to $10.0 million of the total facility available for the pledge of Bluegreen Resorts' receivables (the "Foothill Facility"). The Foothill Facility requires principal payments based on agreed-upon release prices as homesites in the encumbered communities are sold and bears interest at the prime lending rate plus 1.25% (9.0% at March 31, 2006). Interest payments are due monthly. The interest rate charged on outstanding receivable borrowings under the Foothill Facility, as amended, is the prime lending rate plus 0.25% (8.0% at March 31, 2006) when the average monthly outstanding loan balance is greater than or equal to $15.0 million. If the average monthly outstanding loan balance is less than $15.0 million, the interest rate is the greater of 4.00% or the prime lending rate plus 0.50% (8.25% at March 31, 2006). All principal and interest payments received on pledged receivables are applied to principal and interest due under the
Foothill Facility. Borrowings under the Foothill Facility are available through December 31, 2006. Outstanding indebtedness collateralized by receivables is due December 31, 2008. At March 31, 2006, the outstanding principal balance under the facility was $2.7 million, approximately $1.9 million of which relate to Bluegreen Communities' receivables borrowings and approximately $800,000 of which relate to Bluegreen Resorts' receivables borrowings under the Foothill Facility.
The GMAC Communities Facility. In May 2005 and again in March 2006, we amended our existing $75.0 million revolving credit facility with RFC (the "GMAC Communities Facility"). The GMAC Communities Facility is secured by the real property homesites (and personal property related thereto) at the following Bluegreen Communities projects, as well as any Bluegreen Communities projects acquired by us with funds borrowed under the GMAC Communities Facility (the "Secured Projects"): Brickshire (New Kent County, Virginia); Mountain Lakes Ranch (Bluffdale, Texas); Ridge Lake Shores (Magnolia, Texas); Riverwood Forest (Fulshear, Texas); Waterstone (Boerne, Texas); Catawba Falls Preserve (Black Mountain, North Carolina); Lake Ridge at Joe Pool Lake (Cedar Hill and Grand Prairie, Texas); Mystic Shores at Canyon Lake (Spring Branch, Texas); Yellowstone Creek Ranch (Pueblo, Colorado); and Havenwood at Hunters' Crossing (New Braunfels, Texas); an as yet unnamed community purchased in Grayson County, Texas (the "Grayson County Community"); and an as yet unnamed community purchased in New Braunfels, Texas (the "New Braunfels Community"). In addition, the GMAC Communities Facility is secured by our Carolina National and The Preserve at Jordan Lake golf courses in Southport, North Carolina and Chapel Hill, North Carolina, respectively. Borrowings can be drawn in conjunction with these projects through September 30, 2008. Principal payments are effected through agreed-upon release prices paid to Residential Funding Corporation ("RFC"), as homesites in the Secured Projects are sold. The outstanding principal balance of any borrowings under the GMAC Communities Facility must be repaid by September 30, 2009. The interest charged on outstanding borrowings is at the prime lending rate plus 1.00% (8.75% at March 31, 2006). Interest payments are due monthly. The GMAC Communities Facility includes customary conditions to funding, acceleration and event of default provisions and certain financial affirmative and negative covenants. We use the proceeds from the GMAC Communities Facility to repay outstanding indebtedness on Bluegreen Communities projects, finance the acquisition and development of Bluegreen Communities projects and for general corporate purposes. In July 2005, we borrowed $7.5 million under the GMAC Communities Facility in connection with the acquisition of Havenwood at Hunters Crossing and an additional $9.0 million in April 2005 for general corporate purposes. As of March 31, 2006, $24.3 million was outstanding under the GMAC Communities Facility. In March 2006, we borrowed $18.2 million under the GMAC Communities Facility for the acquisition of a new property in Grayson County, Texas and an additional $9.0 million for general corporate purposes. In April of 2006, we borrowed $19.0 million for the purchase of a 3,200 acre track of land in New Braunfels, Texas, and $9.0 million for general corporate purposes.
Over the past several years, substantially all of our homesite sales have been for cash and we have not provided a significant amount of financing to homesite purchasers. Accordingly, in recent years we have reduced the borrowing capacity under credit agreements secured by Bluegreen Communities' receivables. We attribute the significant volume of cash sales to an increased willingness on the part of banks to extend direct customer homesite financing at attractive interest rates. No assurances can be given that local banks will continue to provide such customer financing.
Historically, we have funded development for road and utility construction, amenities, surveys and engineering fees from internal operations and have financed the acquisition of Bluegreen Communities properties through seller, bank or financial institution loans. Terms for repayment under these loans typically call for interest to be paid monthly and principal to be repaid through homesite releases. The release price is usually an amount based on a pre-determined percentage (typically 25% to 55%) of the gross selling price of the homesites in the subdivision. In addition, the agreements generally call for minimum cumulative annual amortization. When we provide financing for our customers (and therefore the release price is not available in cash at closing to repay the lender), we are required to pay the lender with cash derived from other operating activities, principally from cash sales or the pledge of receivables originated from earlier property sales.
Trust Preferred Securities
We have formed statutory business trusts (collectively, the "Trusts") and each issued trust preferred securities and invested the proceeds thereof in our junior subordinated debentures. The Trusts are variable interest entities in which we are not the primary beneficiary as defined by FASB Interpretation No. 46R. Accordingly, we do not consolidate the operations of the Trusts; instead, the Trusts are accounted for under the equity method of accounting. In each of these transactions, the applicable Trust issued trust preferred securities as part of a larger pooled trust securities offering which was not registered under the Securities Act of 1933. The applicable Trust then used the proceeds from issuing the trust preferred securities to purchase an identical amount of junior subordinated debentures from us. Interest on the junior subordinated debentures and distributions on the trust preferred securities are payable quarterly in arrears at the same interest rate. Distributions on the trust preferred securities are cumulative and based upon the liquidation value of the trust preferred security. The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated debentures at maturity or their earlier redemption. The junior subordinated debentures are redeemable in whole or in part at the Company's option at any time after five years from the issue date or sooner following certain specified events. In
addition, we made an initial equity contribution to each Trust in exchange for its common securities, all of which are owned by us, and those proceeds were also used to purchase an identical amount of junior subordinated debentures from us. The terms of each Trust's common securities are nearly identical to the trust preferred securities.
We had the following junior subordinated debentures outstanding at March 31, 2006 (dollars in thousands):
Outstanding
Amount of Initial Beginning
Junior Equity Fixed Variable Optional
Subordinated To Issue Interest Interest Redemption Maturity
Trust Debentures Trust Date Rate(1) Rate(2) Date Date
---------------------------------------------------------------------------------------------------------------------
Bluegreen LIBOR +
Statutory Trust I $ 23,196 $ 696 3/15/05 9.160% 4.90% 3/30/10 3/30/35
Bluegreen
Statutory Trust II LIBOR +
25,774 774 5/4/05 9.158% 4.85% 7/30/10 7/30/35
Bluegreen
Statutory Trust III LIBOR +
10,310 310 5/10/05 9.193% 4.85% 7/30/10 7/30/35
-------- -------
$ 59,280 $ 1,780
======== =======
|
(1) Both the trust preferred securities and junior subordinated debentures bear interest at a fixed interest rate from the issue date through the beginning optional redemption date.
(2) Both the trust preferred securities and junior subordinated debentures bear interest at a variable interest rate from the beginning optional redemption date through the maturity date.
On April 24, 2006, another of our wholly-owned statutory business trusts, BST IV, issued $15.0 million of trust preferred securities. BST IV used the proceeds from issuing the trust preferred securities to purchase an identical amount of junior subordinated debentures from us. Interest on the junior subordinated debentures and distributions on the Trust Preferred Securities will be payable quarterly in arrears at a fixed rate of 10.13% through June 30, 2011 and thereafter at a floating rate of 4.85% over the 3-month LIBOR until the scheduled maturity date of June 30, 2036. Distributions on the trust preferred securities will be cumulative and based upon the liquidation value of the trust preferred security. The trust preferred securities will be subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated debentures at maturity or their earlier redemption. The junior subordinated debentures are redeemable five years from the issue date or sooner following certain specified events. In addition, we contributed $464,000 to BST IV in exchange for its common securities, all of which are owned by us, and those proceeds were also used to purchase an identical amount of junior subordinated debentures from us. The terms of BST IV's common securities are nearly identical to the trust preferred securities
The issuances of trust preferred securities were part of larger pooled trust securities offerings which were not registered under the Securities Act of 1933. Proceeds will be used for general corporate purposes and debt repayment.
We currently intend to seek to create similar trusts and to participate in other pooled trust preferred securities transactions in the future as a source of additional financing, subject to market conditions and other considerations.
Unsecured Credit Facility
We have a $15.0 million unsecured line-of-credit with Wachovia Bank; N.A. Amounts borrowed under the line bear interest at LIBOR plus 2.00% (6.83% at March 31, 2006). Interest is due monthly and all outstanding amounts are due on June 30, 2006. We can only borrow an amount under the line-of-credit which is less than the remaining availability under our current, active vacation ownership receivables purchase facilities plus availability under certain receivables warehouse facilities, less any outstanding letters of credit. The line-of-credit agreement contains certain covenants and conditions typical of arrangements of this type. As of March 31, 2006, no borrowings were outstanding under the line. However, an aggregate of $530,000 of irrevocable letters of credit were provided under this line-of-credit which were required in connection with the obtaining of plats for one of our Bluegreen Communities projects. These letters of credit expire on December 31, 2006. This line-of-credit is an available source of short-term liquidity for us, although we have not drawn any borrowings under this facility recently.
Commitments
Our material commitments as of March 31, 2006 included the required payments due on our receivable-backed debt, lines of credit and other notes and debentures payable, commitments to complete our vacation ownership and communities projects based on our sales contracts with customers and commitments under noncancelable operating leases.
The following tables summarize the contractual minimum principal payments and interest obligations required on all of our outstanding debt (including our receivable-backed debt, lines-of-credit and other notes and debentures payable) and our noncancelable operating leases as of March 31, 2006, by period due (in thousands):
Payments Due by Period
-------------------------------------------------------------
Less than 1 -- 3 4 -- 5 After 5
Contractual Obligations 1 year Years Years Years Total
---------------------------- --------- --------- --------- --------- ---------
Receivable-backed notes payable ........ $ 21 $ 8,160 $ -- $ 22,351 $ 30,532
Lines-of-credit and notes payable ...... 22,752 34,815 31,877 -- 89,444
10.5% senior secured notes ............. -- 55,000 -- -- 55,000
Junior subordinated debentures ......... -- -- -- 59,280 59,280
Noncancelable operating leases ......... 7,616 13,353 8,356 5,142 34,467
--------- --------- --------- --------- ---------
Total contractual obligations .......... $ 30,389 $ 111,328 $ 40,233 $ 86,773 $ 268,723
========= ========= ========= ========= =========
Payments Due by Period
-------------------------------------------------------------
Less than 1 -- 3 4 -- 5 After 5
Interest Obligations (1) 1 year Years Years Years Total
---------------------------- --------- --------- --------- --------- ---------
Receivable-backed notes payable ........ $ 2,634 $ 4,956 $ 3,947 $ 4,770 $ 16,307
Lines-of-credit and notes payable ...... 7,719 10,934 1,569 -- 20,222
10.5% senior secured notes ............. 5,775 8,662 -- -- 14,437
Junior subordinated debentures ......... 5,433 10,866 10,866 131,493 158,658
--------- --------- --------- --------- ---------
Total contractual obligations .......... $ 21,561 $ 35,418 $ 16,382 $ 136,263 $ 209,624
========= ========= ========= ========= =========
|
(1) Interest on variable rate debt has assumed the weighted average interest rate remains the same as the rate at March 31, 2006.
We intend to use cash flow from operations, including cash received from the sale of vacation ownership notes receivable, and cash received from new borrowings under existing or future debt facilities in order to satisfy the principal payments in the Contractual Obligations. While we believe that we will be able to meet all required debt payments when due, there can be no assurance that this will be the case.
As noted above, we have $530,000 in letters-of-credit outstanding at March 31, 2006, all of which were issued under the unsecured line-of-credit with Wachovia Bank, N.A. These letters-of-credit, which expire December 31, 2006, were required in connection with obtaining governmental approval of plats for one of our Bluegreen Communities projects.
We estimate that the total cash required to complete resort buildings in which sales have occurred and resort amenities and other common costs in projects in which sales have occurred to be approximately $17.6 million as of March 31, 2006. We estimate that the total cash required to complete our Bluegreen Communities projects in which sales have occurred to be approximately $52.3 million as of March 31, 2006. These amounts assume that we are not obligated to develop any building, project or amenity in which a commitment has not been made through a sales contract to a customer; however, we anticipate that we will incur such obligations in the future. We plan to fund these expenditures over the next five years primarily with available capacity on existing or proposed credit facilities and cash generated from operations. There can be no assurance that we will be able to obtain the financing or generate the cash from operations necessary to complete the foregoing plans or that actual costs will not exceed those estimated.
We believe that our existing cash, anticipated cash generated from operations, anticipated future permitted borrowings under existing or proposed credit facilities and anticipated future sales of notes receivable under the purchase facility and one or more replacement facilities we will seek to put in place will be sufficient to meet our anticipated working capital, capital expenditures and debt service requirements for the foreseeable future. We will be required to renew or replace credit and receivables purchase facilities that have expired or that will expire in the near term. We will, in the future, also require additional credit facilities or will be required to issue corporate debt or equity securities in connection with acquisitions or otherwise. Any debt incurred or issued by us may be secured or unsecured, bear fixed or variable rate interest and may be
subject to such terms as the lender may require and management deems prudent. There can be no assurance that the credit facilities or receivables purchase facilities which have expired or which are scheduled to, however, expire in the near term will be renewed or replaced or that sufficient funds will be available from operations or under existing, proposed or future revolving credit or other borrowing arrangements or receivables purchase facilities to meet our cash needs, including, our debt service obligations. To the extent we are not able to sell notes receivable or borrow under such facilities, our ability to satisfy our obligations would be materially adversely affected.
Our credit facilities, indentures, and other outstanding debt instruments, and receivables purchase facilities which include customary conditions to funding, eligibility requirements for collateral, cross-default and other acceleration provisions, certain financial and other affirmative and negative covenants, including, among others, limits on the incurrence of indebtedness, limits on the repurchase of securities, payment of dividends, investments in joint ventures and other restricted payments, the incurrence of liens, transactions with affiliates, covenants concerning net worth, fixed charge coverage requirements, debt-to-equity ratios, portfolio performance requirements and events of default or termination. No assurance can be given that we will not be required to seek waivers of such covenants or that such covenants will not limit our ability to raise funds, sell receivables, satisfy or refinance our obligations or otherwise adversely affect our operations. In addition, our future operating performance and ability to meet our financial obligations will be subject to future economic conditions and to financial, business and other factors, many of which will be beyond our control.
Item 4. Controls and Procedures.
a) As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our principal executive officer and principal financial officer of the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of March 31, 2005. Based on such evaluation, such officers have concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings.
b) There has been no change in our internal control over financial reporting during the quarter ended March 31, 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
In April 2006, in Lesley, et al v. Bluegreen Southwest One, L.P. acting through its General Partner Bluegreen Southwest Land, Inc., et al, Cause No. 28006 District Court of the 266th Judicial District, Erath County, Texas, plaintiffs filed a First Amended Original Petition (April 2006). Pursuant to this First Amended Original Petition Plaintiffs seek to develop mineral interests in the Mountain Lakes subdivision and to recover damages from Southwest, alleging breach of contract, breach of fiduciary duty, tortious interference with existing and prospective relationships and intentional invasion or interference with property rights by Southwest, for allegedly interfering with the development of mineral rights held by plaintiffs. Plaintiffs' claims against Bluegreen Southwest One, L.P. total in the aggregate $25 million. The Company is still in the process of reviewing plaintiffs' allegations; however, based on the information currently available, the Company believes that the claims lack merit and intends to defend itself vigorously against them.
Item 1A. Risk Factors.
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
We did not purchase any of our equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. From time to time, our Board of Directors has adopted and publicly announced a share repurchase program. Repurchases under such programs are subject to the price of our stock, prevailing market conditions, our financial condition and available resources, other investment alternatives and other factors. We are not required to seek shareholder approval of share repurchase programs, have not done so in the past, and do not anticipate doing so in the future, except to the extent we may be required to do so under applicable law. We have not repurchased any shares since the fiscal year ended April 1, 2001. As of March 31, 2006, there were 694,500 shares remaining for purchase under our current repurchase program, however we have no present intention of acquiring these remaining shares.
Item 6. Exhibits.
Exhibits:
10.61 Amended and Restated Trust Agreement among Bluegreen
Corporation as depositor, Wilmington Trust Company as Property
Trustee and Delaware Trustee and various Administrative
Trustees, dated April 24, 2006 (Bluegreen Statutory Trust IV).
10.62 Junior Subordinated Indenture between Bluegreen Corporation
and Wilmington Trust Company as Trustee dated as of April 24,
2006.
10.82 Mandatory Distribution Amendment to Registrants' Retirement
Savings Plan dated as March 28, 2005.
10.160 Third Amendment to Loan Agreement and Other Loan Documents,
dated October 21, 2005 between Bluegreen Corporation of the
Rockies, Bluegreen Golf Clubs, Inc., Bluegreen Properties of
Virginia, Inc., Bluegreen Southwest One, L.P., Catawba Falls,
LLC, and RFC Construction Funding Corp., as successor in
interest to and assignee of Residential Funding Corporation.
10.175 Third Modification Agreement (AD&C Loan Agreement) dated
February 15th, 2006, between Bluegreen Vacations Unlimited,
Inc. and Residential Funding Corporation.
10.176 Third Modification Agreement (Receivables Loan and Security
Agreement dated February 15th, 2006 between Bluegreen
Vacations Unlimited, Inc. and Residential Funding Corporation.
10.180 BXG Receivables Owner Trust 2006-A Definition Annex,
Definitions and Interpretations, dated as of March 13, 2006.
10.181 Trust Agreement by and among Bluegreen Receivables Corporation
XI, GSS Holdings, Inc. and Wilmington Trust Company, dated as
of March 13, 2006.
10.182 Indenture between BXG Receivables Owner Trust 2006-A and U.S.
Bank National Association, dated as of March 13, 2006.
|
10.183 Sale and Servicing Agreement among BXG Receivables Owner Trust
2006-A, Bluegreen Receivables Finance Corporation XI, the
Trust Depositor, Concord Servicing Corporation, Vacation
Trust, Inc., U.S. Bank National Association and General
Electric Capital Corporation dated March 13, 2006.
10.184 Sale and Contribution Agreement among the Registrant and
Bluegreen Receivables Finance Corporation XI, dated March 13,
2006.
31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BLUEGREEN CORPORATION
(Registrant)
Date: May 10, 2006 By: /S/ GEORGE F. DONOVAN
-------------------------------------
George F. Donovan
President and
Chief Executive Officer
Date: May 10, 2006 By: /S/ ANTHONY M. PULEO
-------------------------------------
Anthony M. Puleo
Senior Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: May 10, 2006 By: /S/ RAYMOND S. LOPEZ
-------------------------------------
Raymond S. Lopez
Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
|
Exhibit 10.61
AMENDED AND RESTATED TRUST AGREEMENT
among
BLUEGREEN CORPORATION,
as Depositor
WILMINGTON TRUST COMPANY,
as Property Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
as Administrative Trustees
Dated as of April 24, 2006
BLUEGREEN STATUTORY TRUST IV
TABLE OF CONTENTS
Page
----
ARTICLE I. Defined Terms................................................................................1
SECTION 1.1. Definitions........................................................................1
ARTICLE II. The Trust...................................................................................10
SECTION 2.1. Name..............................................................................10
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.......................10
SECTION 2.3. Initial Contribution of Trust Property; Fees, Costs and Expenses..................10
SECTION 2.4. Purposes of Trust.................................................................11
SECTION 2.5. Authorization to Enter into Certain Transactions..................................11
SECTION 2.6. Assets of Trust...................................................................14
SECTION 2.7. Title to Trust Property...........................................................14
ARTICLE III. Payment Account; Paying Agents..............................................................14
SECTION 3.1. Payment Account...................................................................14
SECTION 3.2. Appointment of Paying Agents......................................................15
ARTICLE IV. Distributions; Redemption...................................................................15
SECTION 4.1. Distributions.....................................................................15
SECTION 4.2. Redemption........................................................................16
SECTION 4.3. Subordination of Common Securities................................................19
SECTION 4.4. Payment Procedures................................................................19
SECTION 4.5. Withholding Tax...................................................................20
SECTION 4.6. Tax Returns and Other Reports.....................................................20
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust.......................................20
SECTION 4.8. Payments under Indenture or Pursuant to Direct Actions............................20
SECTION 4.9. Exchanges.........................................................................21
SECTION 4.10. Calculation Agent.................................................................21
SECTION 4.11. Certain Accounting Matters........................................................22
ARTICLE V. Securities..................................................................................23
SECTION 5.1. Initial Ownership.................................................................23
SECTION 5.2. Authorized Trust Securities.......................................................23
SECTION 5.3. Issuance of the Common Securities; Subscription and Purchase of Notes.............23
SECTION 5.4. The Securities Certificates.......................................................23
SECTION 5.5. Rights of Holders.................................................................24
SECTION 5.6. Book-Entry Preferred Securities...................................................25
SECTION 5.7. Registration of Transfer and Exchange of Preferred Securities Certificates........26
SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities Certificates......................28
SECTION 5.9. Persons Deemed Holders............................................................28
SECTION 5.10. Cancellation......................................................................29
SECTION 5.11. Ownership of Common Securities by Depositor.......................................29
SECTION 5.12. Restricted Legends................................................................30
SECTION 5.13. Form of Certificate of Authentication.............................................32
|
ARTICLE VI. Meetings; Voting; Acts of Holders...........................................................33
SECTION 6.1. Notice of Meetings................................................................33
SECTION 6.2. Meetings of Holders of the Preferred Securities...................................33
SECTION 6.3. Voting Rights.....................................................................33
SECTION 6.4. Proxies, Etc......................................................................33
SECTION 6.5. Holder Action by Written Consent..................................................34
SECTION 6.6. Record Date for Voting and Other Purposes.........................................34
SECTION 6.7. Acts of Holders...................................................................34
SECTION 6.8. Inspection of Records.............................................................35
SECTION 6.9. Limitations on Voting Rights......................................................35
SECTION 6.10. Acceleration of Maturity; Rescission of Annulment; Waivers of Past Defaults.......36
ARTICLE VII. Representations and Warranties..............................................................38
SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee...38
SECTION 7.2. Representations and Warranties of Depositor.......................................39
ARTICLE VIII. The Trustees................................................................................40
SECTION 8.1. Number of Trustees................................................................40
SECTION 8.2. Property Trustee Required.........................................................41
SECTION 8.3. Delaware Trustee Required.........................................................41
SECTION 8.4. Appointment of Administrative Trustees............................................41
SECTION 8.5. Duties and Responsibilities of the Trustees.......................................42
SECTION 8.6. Notices of Defaults and Extensions................................................43
SECTION 8.7. Certain Rights of Property Trustee................................................44
SECTION 8.8. Delegation of Power...............................................................46
SECTION 8.9. May Hold Securities...............................................................46
SECTION 8.10. Compensation; Reimbursement; Indemnity............................................46
SECTION 8.11. Resignation and Removal; Appointment of Successor.................................47
SECTION 8.12. Acceptance of Appointment by Successor............................................48
SECTION 8.13. Merger, Conversion, Consolidation or Succession to Business.......................49
SECTION 8.14. Not Responsible for Recitals or Issuance of Securities............................49
SECTION 8.15. Property Trustee May File Proofs of Claim.........................................50
SECTION 8.16. Reports to and from the Property Trustee..........................................50
ARTICLE IX. Termination, Liquidation and Merger.........................................................51
SECTION 9.1. Dissolution Upon Expiration Date..................................................51
SECTION 9.2. Early Termination.................................................................51
SECTION 9.3. Termination.......................................................................52
SECTION 9.4. Liquidation.......................................................................52
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of Trust...................53
ARTICLE X. Information to Purchaser....................................................................54
SECTION 10.1. Depositor Obligations to Purchaser................................................54
SECTION 10.2. Property Trustee's Obligations to Purchaser.......................................55
ARTICLE XI. Miscellaneous Provisions....................................................................55
SECTION 11.1. Limitation of Rights of Holders...................................................55
SECTION 11.2. Agreed Tax Treatment of Trust and Trust Securities................................55
SECTION 11.3. Amendment.........................................................................55
SECTION 11.4. Separability......................................................................57
|
SECTION 11.5. Governing Law.....................................................................57
SECTION 11.6. Successors........................................................................57
SECTION 11.7. Headings..........................................................................57
SECTION 11.8. Reports, Notices and Demands......................................................57
SECTION 11.9. Agreement Not to Petition.........................................................58
Exhibit A. Certificate of Trust of Bluegreen Statutory Trust IV
Exhibit B. Form of Common Securities Certificate
Exhibit C. Form of Preferred Securities Certificate
Exhibit D. Junior Subordinated Indenture
Exhibit E. Form of Transferee Certificate to be Executed by Transferees other than QIBs
Exhibit F. Form of Transferor Certificate to be Executed by QIBs
Exhibit G. Form of Officer's Certificate
Exhibit H. Form of Officers' Certificate pursuant to Section 8.16(a)
Schedule A Calculation of LIBOR
|
AMENDED AND RESTATED TRUST AGREEMENT, dated as of April 24, 2006, among
(i) Bluegreen Corporation, a Massachusetts corporation (including any successors
or permitted assigns, the "Depositor"), (ii) Wilmington Trust Company, a
Delaware banking corporation, as property trustee (in such capacity, the
"Property Trustee"), (iii) Wilmington Trust Company, a Delaware banking
corporation, as Delaware trustee (in such capacity, the "Delaware Trustee"),
(iv) George F. Donovan, an individual, Anthony M. Puleo, an individual, and John
M. Maloney, Jr., an individual, each of whose address is c/o Bluegreen
Corporation, 4960 Conference Way North, Boca Raton, Florida 33431, as
administrative trustees (in such capacities, each an "Administrative Trustee"
and, collectively, the "Administrative Trustees" and, together with the Property
Trustee and the Delaware Trustee, the "Trustees") and (v) the several Holders,
as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee have heretofore created a Delaware statutory trust pursuant to the Delaware Statutory Trust Act by entering into a Trust Agreement, dated as of April 19, 2006 (the "Original Trust Agreement"), and by executing and filing with the Secretary of State of the State of Delaware the Certificate of Trust, substantially in the form attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Securities by the Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities by the Trust pursuant to the Subscription Agreement and (iii) the acquisition by the Trust from the Depositor of all of the right, title and interest in and to the Notes;
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Holders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings assigned to them in this Article I;
(b) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation";
(c) all accounting terms used but not defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles;
(d) unless the context otherwise requires, any reference to an "Article", a "Section", a "Schedule" or an "Exhibit" refers to an Article, a Section, a Schedule or an Exhibit, as the case may be, of or to this Trust Agreement;
(e) the words "hereby", "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders.
"Act" has the meaning specified in Section 6.7.
"Additional Interest" has the meaning specified in Section 1.1 of the Indenture.
"Additional Interest Amount" means, with respect to Trust Securities of a given Liquidation Amount and/or a given period, the amount of Additional Interest paid by the Depositor on a Like Amount of Notes for such period.
"Additional Taxes" has the meaning specified in Section 1.1 of the
Indenture.
"Additional Tax Sums" has the meaning specified in Section 10.5 of the
Indenture.
|
"Administrative Trustee" means each of the Persons identified as an "Administrative Trustee" in the preamble to this Trust Agreement, solely in each such Person's capacity as Administrative Trustee of the Trust and not in such Person's individual capacity, or any successor Administrative Trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Depositary Procedures" means, with respect to any transfer or transaction involving a Book-Entry Preferred Security, the rules and procedures of the Depositary for such Book-Entry Preferred Security, in each case to the extent applicable to such transaction and as in effect from time to time.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises (i) judging such Person a bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization,
arrangement, adjudication or composition of or in respect of such Person
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law, (iii) appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of such Person or of any substantial part of its property or (iv)
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of sixty
(60) consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Bankruptcy Law, or the consent by it to the filing of any such petition or to the appointment of a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt or insolvent, or the taking of corporate action by such Person in furtherance of any such action.
"Bankruptcy Laws" means all Federal and state bankruptcy, insolvency, reorganization and other similar laws, including the United States Bankruptcy Code.
"Book-Entry Preferred Security" means a Preferred Security, the ownership and transfers of which shall be made through book entries by a Depositary.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or (c) a day on which the Corporate Trust Office is closed for business.
"Calculation Agent" has the meaning specified in Section 10.4 of the Indenture.
"Closing Date" has the meaning specified in the Placement Agreement.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this Trust Agreement such Commission is not existing and performing the duties assigned to it, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of Common Securities, substantially in the form attached as Exhibit B.
"Common Security" means a common security of the Trust, denominated as such and representing an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having the terms provided therefor in this Trust Agreement.
"Corporate Trust Office" means the principal office of the Property Trustee at which any particular time its corporate trust business shall be administered, which office at the date of this Trust Agreement is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets.
"Definitive Preferred Securities Certificates" means Preferred Securities issued in certificated, fully registered form that are not Global Preferred Securities.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code ss. 3801 et seq., or any successor statute thereto, in each case as amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in the preamble to this Trust Agreement, solely in its capacity as Delaware Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware Trustee appointed as herein provided.
"Depositary" means an organization registered as a clearing agency under the Exchange Act that is designated as Depositary by the Depositor or any successor thereto. DTC will be the initial Depositary.
"Depository Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book-entry transfers and pledges of securities deposited with the Depositary.
"Depositor" has the meaning specified in the preamble to this Trust Agreement and any successors and permitted assigns.
"Depositor Affiliate" has the meaning specified in Section 4.9.
"Distribution Date" has the meaning specified in Section 4.1(a)(i).
"Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company or any successor thereto.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(a) the occurrence of a Note Event of Default; or
(b) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of thirty (30) days; or
(c) default by the Trust in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect of any covenant or warranty of the Trustees in this Trust Agreement (other than those specified in clause (b) or (c) above) and continuation of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to the Trustees and to the Depositor by the Holders of at least twenty five percent (25%) in aggregate Liquidation Amount of the Outstanding Preferred Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property Trustee if a successor Property Trustee has not been appointed within ninety (90) days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, and any successor statute thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Fiscal Year" shall be the fiscal year of the Trust, which shall be the calendar year, or such other period as is required by the Code.
"Global Preferred Security" means a Preferred Securities Certificate evidencing ownership of Book-Entry Preferred Securities.
"Holder" means a Person in whose name a Trust Security or Trust Securities are registered in the Securities Register; any such Person shall be a beneficial owner within the meaning of the Delaware Statutory Trust Act.
"Indemnified Person" has the meaning specified in Section 8.10(c).
"Indenture" means the Junior Subordinated Indenture executed and delivered by the Depositor and the Note Trustee contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the holders of the Notes, a copy of which is attached hereto as Exhibit D, as amended or supplemented from time to time.
"Indenture Redemption Price" has the meaning specified in Section 4.2(c).
"Interest Payment Date" has the meaning specified in Section 1.1 of the Indenture.
"Investment Company Act" means the Investment Company Act of 1940, or any successor statute thereto, in each case as amended from time to time.
"Investment Company Event" has the meaning specified in Section 1.1 of the Indenture.
"LIBOR" has the meaning specified in Schedule A.
"LIBOR Business Day" has the meaning specified in Schedule A.
"LIBOR Determination Date" has the meaning specified in Schedule A.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of any Trust Securities, Trust Securities having a Liquidation Amount equal to the principal amount of Notes to be contemporaneously redeemed or paid at maturity in accordance with the Indenture, the proceeds of which will be used to pay the Redemption Price of such Trust Securities, (b) with respect to a distribution of Notes to Holders of Trust Securities in connection with a dissolution of the Trust, Notes having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Notes are distributed and (c) with respect to any distribution of Additional Interest Amounts to Holders of Trust Securities, Notes having a principal amount equal to the Liquidation Amount of the Trust Securities in respect of which such distribution is made.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which assets are to be distributed to Holders in accordance with Section 9.4(a) hereunder following dissolution of the Trust.
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"Majority in Liquidation Amount of the Preferred Securities" means Preferred Securities representing more than fifty percent (50%) of the aggregate Liquidation Amount of all (or a specified group of) then Outstanding Preferred Securities.
"Note Event of Default" means any "Event of Default" specified in Section 5.1 of the Indenture.
"Note Redemption Date" means, with respect to any Notes to be redeemed under the Indenture, the date fixed for redemption of such Notes under the Indenture.
"Note Trustee" means the Person identified as the "Trustee" in the Indenture, solely in its capacity as Trustee pursuant to the Indenture and not in its individual capacity, or its successor in interest in such capacity, or any successor Trustee appointed as provided in the Indenture.
"Notes" means the Depositor's Junior Subordinated Notes issued pursuant to the Indenture.
"Officers' Certificate" means a certificate signed by the Chief Executive Officer, the President or an Executive Vice President, and by the Chief Financial Officer, Treasurer or an Assistant Treasurer, of the Depositor, and delivered to the Trustees. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement (other than the certificate provided pursuant to Section 8.16(a)) shall include:
(a) a statement by each officer signing the Officers' Certificate that such officer has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with.
"Operative Documents" means the Placement Agreement, the Indenture, the Trust Agreement, the Subscription Agreement, the Notes and the Trust Securities.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for, or an employee of, the Depositor or any Affiliate of the Depositor.
"Original Issue Date" means the date of original issuance of the Trust Securities.
"Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement.
"Outstanding," when used with respect to any Trust Securities, means, as of the date of determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or delivered to the Property Trustee for cancellation;
(b) Trust Securities for which payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent in trust for the Holders of such Trust Securities; provided, that if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and
(c) Trust Securities that have been paid or in exchange for or in lieu of which other Trust Securities have been executed and delivered pursuant to the provisions of this Trust Agreement, unless proof satisfactory to the Property Trustee is presented that any such Trust Securities are held by Holders in whose hands such Trust Securities are valid, legal and binding obligations of the Trust;
provided, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee shall be disregarded and deemed not to be Outstanding, except that (i) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities that such Trustee knows to be so owned shall be so disregarded and (ii) the foregoing shall not apply at any time when all of the Outstanding Preferred Securities are owned by the Depositor, one or more of the Trustees and/or any such Affiliate. Preferred Securities so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Securities and that the pledgee is not the Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee.
"Owner" means each Person who is the beneficial owner of Book-Entry Preferred Securities as reflected in the records of the Depositary or, if a Depositary Participant is not the beneficial owner, then the beneficial owner as reflected in the records of the Depositary Participant.
"Paying Agent" means any Person authorized by the Administrative Trustees to pay Distributions or other amounts in respect of any Trust Securities on behalf of the Trust.
"Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee for the benefit of the Holders in which all amounts paid in respect of the Notes will be held and from which the Property Trustee, through the Paying Agent, shall make payments to the Holders in accordance with Sections 3.1, 4.1 and 4.2.
"Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, company, limited liability company, trust, unincorporated association or government, or any agency or political subdivision thereof, or any other entity of whatever nature.
"Placement Agent" means J.P. Morgan Securities Inc., as Placement Agent pursuant to the Placement Agreement, whose address is 270 Park Avenue, New York, New York 10017.
"Placement Agreement" means the Placement Agreement, dated as of April 24, 2006, executed and delivered by the Trust, the Depositor and J.P. Morgan Securities Inc., as placement agent.
"Preferred Security" means a preferred security of the Trust, denominated as such and representing an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having the terms provided therefor in this Trust Agreement.
"Preferred Securities Certificate" means a certificate evidencing ownership of Preferred Securities, substantially in the form attached as Exhibit C.
"Property Trustee" means the Person identified as the "Property Trustee" in the preamble to this Trust Agreement, solely in its capacity as Property Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor Property Trustee appointed as herein provided.
"Purchaser" means TWE, Ltd., as purchaser of the Preferred Securities pursuant to the Subscription Agreement, whose address is c/o Maples Finance Limited, P.O. Box 1093 GT,
Queensgate House, South Church Street, George Town, Grand Cayman, Cayman Islands, Attention: The Directors.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A under the Securities Act.
"Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided, that each Note Redemption Date and the stated maturity (or any date of principal repayment upon early maturity) of the Notes shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to the Redemption Date, plus the related amount of the premium, if any, paid by the Depositor upon the concurrent redemption or payment at maturity of a Like Amount of Notes.
"Reference Banks" has the meaning specified in Schedule A.
"Responsible Officer" means, with respect to the Property Trustee, any Senior Vice President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other officer in the Corporate Trust Office of the Property Trustee with direct responsibility for the administration of this Trust Agreement and also means, with respect to a particular corporate trust matter, any other officer of the Property Trustee to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, and any successor statute thereto, in each case as amended from time to time.
"Securities Certificate" means any one of the Common Securities Certificates or the Preferred Securities Certificates.
"Securities Register" and "Securities Registrar" have the respective meanings specified in Section 5.7.
"Special Event Redemption Price" has the meaning specified in Section 11.2 of the Indenture.
"Subscription Agreement" means the Preferred Securities Subscription Agreement, dated as of April 24, 2006, by and among the Company, the Trust, the Purchaser and J.P. Morgan Securities Inc. (as to certain provisions thereof).
"Successor Securities" has the meaning specified in Section 9.5(a).
"Tax Event" has the meaning specified in Section 1.1 of the Indenture.
"Trust" means the Delaware statutory trust known as "Bluegreen Statutory Trust IV," which was created on April 19, 2006, under the Delaware Statutory Trust Act pursuant to the
Original Trust Agreement and the filing of the Certificate of Trust, and continued pursuant to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, including all Schedules and Exhibits (other than Exhibit D), as the same may be modified, amended or supplemented from time to time in accordance with the applicable provisions hereof.
"Trustees" means the Administrative Trustees, the Property Trustee and the Delaware Trustee, each as defined in this Article I.
"Trust Property" means (a) the Notes, (b) any cash on deposit in, or owing to, the Payment Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred Securities.
ARTICLE II.
THE TRUST
SECTION 2.1. Name.
The trust continued hereby shall be known as "Bluegreen Statutory Trust IV," as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Trust Securities and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets, or such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Holders, the Depositor, the Property Trustee and the Administrative Trustees. The principal executive office of the Trust is c/o Bluegreen Corporation, 4960 Conference Way North, Boca Raton, Florida 33431, Attention: Chief Financial Officer, as such address may be changed from time to time by the Administrative Trustees following written notice to the Holders and the other Trustees.
SECTION 2.3. Initial Contribution of Trust Property; Fees, Costs and Expenses.
The Property Trustee acknowledges receipt from the Depositor in connection with the Original Trust Agreement of the sum of ten dollars ($10), which constituted the initial Trust Property. The Depositor shall pay all fees, costs and expenses of the Trust (except with respect to the Trust Securities) as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such fees, costs and expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such fees, costs or expenses.
SECTION 2.4. Purposes of Trust.
(a) The exclusive purposes and functions of the Trust are to (i) issue and sell Trust Securities and use the proceeds from such sale to acquire the Notes and (ii) engage in only those activities necessary or incidental thereto. The Delaware Trustee, the Property Trustee and the Administrative Trustees are trustees of the Trust, and have all the rights, powers and duties to the extent set forth herein. The Trustees hereby acknowledge that they are trustees of the Trust.
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trust (or the Trustees acting on behalf of the Trust)
shall not (i) acquire any investments or engage in any activities not authorized
by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage,
pledge, set-off or otherwise dispose of any of the Trust Property or interests
therein, including to Holders, except as expressly provided herein, (iii) incur
any indebtedness for borrowed money or issue any other debt, (iv) take or
consent to any action that would result in the placement of a Lien on any of the
Trust Property, (v) take or consent to any action that would reasonably be
expected to cause (or, in the case of the Property Trustee, to the actual
knowledge of a Responsible Officer would cause) the Trust to become taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes, (vi) take or consent to any action that would cause
(or, in the case of the Property Trustee, to the actual knowledge of a
Responsible Officer would cause) the Notes to be treated as other than
indebtedness of the Depositor for United States federal income tax purposes or
(vii) take or consent to any action that would cause (or, in the case of the
Property Trustee, to the actual knowledge of a Responsible Officer would cause)
the Trust to be deemed to be an "investment company" required to be registered
under the Investment Company Act.
SECTION 2.5. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with and subject to the terms of this Trust Agreement. In accordance with the following provisions (i) and (ii), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees, under this Trust Agreement, and to perform all acts in furtherance thereof, including the following:
(i) As among the Trustees, each Administrative Trustee shall severally have the power, authority and authorization to act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, such agreements, documents, instruments, certificates and other writings as may be necessary or desirable in connection with the purposes and function of the Trust, including, without limitation, a common securities subscription agreement and a junior subordinated note subscription agreement and
to cause the Trust to perform the Placement Agreement and the Subscription Agreement;
(C) assisting in the sale of the Preferred Securities in one or more transactions exempt from registration under the Securities Act, and in compliance with applicable state securities or blue sky laws;
(D) assisting in the sending of notices (other than notices of default) and other information regarding the Trust Securities and the Notes to the Holders in accordance with this Trust Agreement;
(E) the appointment of a successor Paying Agent and Calculation Agent in accordance with this Trust Agreement;
(F) execution and delivery of the Trust Securities on behalf of the Trust in accordance with this Trust Agreement;
(G) execution and delivery of closing certificates, if any, pursuant to the Placement Agreement;
(H) preparation and filing of all applicable tax returns and tax information reports that are required to be filed on behalf of the Trust;
(I) establishing a record date with respect to all actions to be taken hereunder that require a record date to be established, except as provided in Section 6.10(a);
(J) unless otherwise required by the Delaware Statutory Trust Act, to execute on behalf of the Trust (either acting alone or together with the other Administrative Trustees) any documents and other writings that such Administrative Trustee has the power to execute pursuant to this Trust Agreement; and
(K) the taking of any action incidental to the foregoing as such Administrative Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement.
(ii) As among the Trustees, the Property Trustee shall have the power, authority and authorization to act on behalf of the Trust with respect to the following matters:
(A) the receipt and holding of legal title of the Notes;
(B) the establishment of the Payment Account;
(C) the receipt of interest, principal and any other payments made in respect of the Notes and the holding of such amounts in the Payment Account;
(D) the distribution through the Paying Agent of amounts distributable to the Holders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of a holder of the Notes in accordance with the terms of this Trust Agreement;
(F) the sending of notices of default and other information regarding the Trust Securities and the Notes to the Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation of the Trust with the Secretary of State of the State of Delaware;
(I) application for a taxpayer identification number for the Trust;
(J) the authentication of the Preferred Securities as provided in this Trust Agreement; and
(K) the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Holders (without consideration of the effect of any such action on any particular Holder).
(b) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the negotiation of the terms of, and the execution and delivery of, the Placement Agreement and the Subscription Agreement providing for the sale of the Preferred Securities in one or more transactions exempt from registration under the Securities Act, and in compliance with applicable state securities or blue sky laws; and
(ii) the taking of any other actions necessary or desirable to carry out any of the foregoing activities.
(c) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes, so that the Notes will be treated as indebtedness of the Depositor for United States federal income tax purposes and so that the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act. In
this connection, each Administrative Trustee is authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that such Administrative Trustee determines in his or her discretion
to be necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the Holders of the
Outstanding Preferred Securities. In no event shall the Administrative Trustees
be liable to the Trust or the Holders for any failure to comply with this
Section 2.5 to the extent that such failure results solely from a change in law
or regulation or in the interpretation thereof.
(d) Any action taken by a Trustee in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with any Trustee acting on behalf of the Trust, no Person shall be required to inquire into the authority of such Trustee to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of any Trustee as set forth in this Trust Agreement.
SECTION 2.6. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.7. Title to Trust Property.
(a) Legal title to all Trust Property shall be vested at all times in the Property Trustee and shall be held and administered by the Property Trustee in trust for the benefit of the Trust and the Holders in accordance with this Trust Agreement.
(b) The Holders shall not have any right or title to the Trust Property other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT; PAYING AGENTS
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and the Paying Agent shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Holders and for Distribution as herein provided.
(b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of or interest on, and any other payments with respect to, the Notes. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof.
SECTION 3.2. Appointment of Paying Agents.
The Property Trustee is appointed as the initial Paying Agent and hereby accepts such appointment. The Paying Agent shall make Distributions to Holders from the Payment Account and shall report the amounts of such Distributions to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account solely for the purpose of making the Distributions referred to above. The Administrative Trustees may revoke such power and remove the Paying Agent in their sole discretion. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days' written notice to the Administrative Trustees and the Property Trustee. If the Property Trustee shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor (which shall be a bank or trust company) to act as Paying Agent. Such successor Paying Agent appointed by the Administrative Trustees shall execute and deliver to the Trustees an instrument in which such successor Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent will hold all sums, if any, held by it for payment to the Holders in trust for the benefit of the Holders entitled thereto until such sums shall be paid to such Holders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Article VIII shall apply to the Property Trustee also in its role as Paying Agent, for so long as the Property Trustee shall act as Paying Agent and, to the extent applicable, to any other Paying Agent appointed hereunder. Any reference in this Trust Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions (including any Additional Interest Amounts) will be made on the Trust Securities at the rate and on the dates that payments of interest (including any Additional Interest) are made on the Notes. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and shall accumulate whether or not there are funds of the Trust available for the payment of Distributions. Distributions shall accumulate from April 24, 2006, and, except as provided in clause (ii) below, shall be payable quarterly in arrears on March 30th, June 30th, September 30th and December 30th of each year, commencing on June 30, 2006. If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after each such date until the next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with this Section 4.1(a)(i), a "Distribution Date");
(ii) Distributions shall accumulate in respect of the Trust Securities at a fixed rate per annum equal to 10.13% of the Liquidation Amount of the Trust Securities through the Distribution Date in June, 2011 and a variable rate per annum, reset quarterly, equal to LIBOR plus 4.85% of the Liquidation Amount of the Trust Securities, thereafter. LIBOR shall be determined by the Calculation Agent in accordance with Schedule A. The amount of Distributions payable for any Distribution period shall be computed and paid on the basis of a 360-day year and the actual number of days elapsed in the relevant Distribution period. The amount of Distributions payable for any period shall include any Additional Interest Amounts in respect of such period; and
(iii) Distributions on the Trust Securities shall be made by the Paying Agent from the Payment Account and shall be payable on each Distribution Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities at the close of business on the relevant record date, which shall be at the close of business on the fifteenth day (whether or not a Business Day) preceding the relevant Distribution Date. Distributions payable on any Trust Securities that are not punctually paid on any Distribution Date as a result of the Depositor having failed to make an interest payment under the Notes will cease to be payable to the Person in whose name such Trust Securities are registered on the relevant record date, and such defaulted Distributions and any Additional Interest Amounts will instead be payable to the Person in whose name such Trust Securities are registered on the special record date, or other specified date for determining Holders entitled to such defaulted Distribution and Additional Interest Amount, established in the same manner, and on the same date, as such is established with respect to the Notes under the Indenture.
SECTION 4.2. Redemption.
(a) On each Note Redemption Date and on the stated maturity (or any date of principal repayment upon early maturity) of the Notes and on each other date on (or in respect of) which any principal on the Notes is repaid, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Securities Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or, if the Redemption Price cannot be calculated prior to the time the notice is required to be sent, the estimate of the Redemption Price provided pursuant to the Indenture, as calculated by the Depositor, together with a
statement that it is an estimate and that the actual Redemption Price will be calculated by the Calculation Agent on the fifth Business Day prior to the Redemption Date (and if an estimate is provided, a further notice shall be sent of the actual Redemption Price on the date that such Redemption Price is calculated);
(iii) if less than all the Outstanding Trust Securities are to be redeemed, the identification (and, in the case of partial redemption, the respective Liquidation Amounts) and Liquidation Amounts of the particular Trust Securities to be redeemed;
(iv) that on the Redemption Date, the Redemption Price will become due and payable upon each such Trust Security, or portion thereof, to be redeemed and that Distributions thereon will cease to accumulate on such Trust Security or such portion, as the case may be, on and after said date, except as provided in Section 4.2(d);
(v) the place or places where the Trust Securities are to be surrendered for the payment of the Redemption Price; and
(vi) such other provisions as the Property Trustee deems relevant.
(c) The Trust Securities (or portion thereof) redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption or payment at maturity of Notes. Redemptions of the Trust Securities (or portion thereof) shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Redemption Price. Under the Indenture, the Notes may be redeemed by the Depositor on any Interest Payment Date, at the Depositor's option, on or after June 30, 2011 in whole or in part, from time to time at a redemption price equal to one hundred (100%) percent of the principal amount thereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, to but excluding the date fixed for redemption (the "Indenture Redemption Price"). The Notes may also be redeemed by the Depositor, at its option prior to June 30, 2011, in whole but not in part, upon the occurrence of an Investment Company Event or a Tax Event at the Special Event Redemption Price (as set forth in the Indenture).
(d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then by 10:00 A.M., New York City time, on the Redemption Date, the Depositor shall deposit sufficient funds with the Property Trustee to pay the Redemption Price. If such deposit has been made by such time, then by 12:00 noon, New York City time, on the Redemption Date, the Property Trustee will, with respect to Book-Entry Preferred Securities, irrevocably deposit with the Depositary for such Book-Entry Preferred Securities, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give such Depositary irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities. With respect to Preferred Securities that are not Book-Entry Preferred Securities, the Property Trustee will irrevocably deposit with the Paying Agent, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities (or portion thereof) called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Holders holding Trust Securities (or portion thereof) so called for redemption will cease, except the right of such Holders to receive the Redemption Price and any Distribution payable in respect of the Trust Securities on or prior to the Redemption Date, but without interest, and, in the case of a partial redemption, the right of such Holders to receive a new Trust Security or Securities of authorized denominations, in aggregate Liquidation Amount equal to the unredeemed portion of such Trust Security or Securities, and such Securities (or portion thereof) called for redemption will cease to be Outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after each such date until the next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities (or portion thereof) called for redemption is improperly withheld or refused and not paid either by the Trust or by the Depositor, pursuant to the Indenture, Distributions on such Trust Securities(or portion thereof) will continue to accumulate, as set forth in Section 4.1, from the Redemption Date originally established by the Trust for such Trust Securities(or portion thereof) to, but excluding, the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price.
(e) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated pro rata to the Common Securities and the Preferred Securities based upon the relative aggregate Liquidation Amounts of the Common Securities and the Preferred Securities. The Preferred Securities to be redeemed shall be selected on a pro rata basis based upon their respective Liquidation Amounts not more than sixty (60) days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption; provided, however, that with respect to Holders that would be required to hold less than one hundred (100) but more than zero (0) Trust Securities as a result of such redemption, the Trust shall redeem Trust Securities of each such Holder so that after such redemption such Holder shall hold either one hundred (100) Trust Securities or such Holder no longer holds any Trust Securities, and shall use such method (including, without limitation, by lot) as the Trust shall deem fair and appropriate; and provided, further, that so long as the Preferred Securities are Book-Entry Preferred Securities, such selection shall be made in accordance with the Applicable Depositary Procedures for the Preferred Securities by such Depositary. The Property Trustee shall promptly notify the Securities Registrar in writing of the Preferred Securities (or portion thereof) selected for redemption and, in the case of any Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of Preferred Securities that has been or is to be redeemed.
(f) The Trust in issuing the Trust Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Property Trustee shall indicate the "CUSIP" numbers of the Trust Securities in notices of redemption and related materials as a convenience to Holders; provided, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Trust Securities or as contained in any notice of redemption and related materials.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Interest Amounts) on, the Redemption Price of and the Liquidation Distribution in respect of, the Trust Securities, as applicable, shall be made, pro rata among the Common Securities and the Preferred Securities based on the Liquidation Amount of the respective Trust Securities; provided, that if on any Distribution Date, Redemption Date or Liquidation Date an Event of Default shall have occurred and be continuing, no payment of any Distribution (including any Additional Interest Amounts) on, Redemption Price of or Liquidation Distribution in respect of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including any Additional Interest Amounts) on all Outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Securities then called for redemption, or in the case of payment of the Liquidation Distribution the full amount of such Liquidation Distribution on all Outstanding Preferred Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including any Additional Interest Amounts) on, or the Redemption Price of or the Liquidation Distribution in respect of, the Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default, the Holders of the Common Securities shall have no right to act with respect to any such Event of Default under this Trust Agreement until all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under this Trust Agreement with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and not on behalf of the Holders of the Common Securities, and only the Holders of all the Preferred Securities will have the right to direct the Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional Interest Amounts), the Redemption Price, Liquidation Amount or any other amounts in respect of the Preferred Securities shall be made by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing at least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Securities Register. If any Preferred Securities are held by a Depositary, such Distributions thereon shall be made to the
Depositary in immediately available funds. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Holder of all the Common Securities.
SECTION 4.5. Withholding Tax.
The Trust and the Administrative Trustees shall comply with all withholding and backup withholding tax requirements under United States federal, state and local law. The Administrative Trustees on behalf of the Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding and backup withholding tax with respect to each Holder and any representations and forms as shall reasonably be requested by the Administrative Trustees on behalf of the Trust to assist it in determining the extent of, and in fulfilling, its withholding and backup withholding tax obligations. The Administrative Trustees shall file required forms with applicable jurisdictions and, unless an exemption from withholding and backup withholding tax is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any jurisdiction with respect to Distributions or allocations to any Holder, the amount withheld shall be deemed to be a Distribution in the amount of the withholding to the Holder. In the event of any claimed overwithholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Administrative Trustees on behalf of the Trust may reduce subsequent Distributions by the amount of such required withholding.
SECTION 4.6. Tax Returns and Other Reports.
(a) The Administrative Trustees shall prepare (or cause to be prepared) at the principal office of the Trust in the United States, as defined for purposes of Treasury regulations section 301.7701-7, at the Depositor's expense, and file, all United States federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. The Administrative Trustees shall prepare at the principal office of the Trust in the United States, as defined for purposes of Treasury regulations section 301.7701-7, and furnish (or cause to be prepared and furnished), by January 31 in each taxable year of the Trust to each Holder all Internal Revenue Service forms and returns required to be provided by the Trust. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing.
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Notes of Additional Tax Sums and upon the written direction of the Administrative Trustees, the Property Trustee shall promptly pay, solely out of monies on deposit pursuant to this Trust Agreement, any Additional Taxes imposed on the Trust by the United States or any other taxing authority.
SECTION 4.8. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities shall be reduced by the amount of any corresponding payment such Holder (or any Owner with respect thereto) has
directly received pursuant to Section 5.8 of the Indenture or Section 6.10(b) of this Trust Agreement.
SECTION 4.9. Exchanges.
(a) If at any time the Depositor or any of its Affiliates (in either case, a "Depositor Affiliate") is the Owner or Holder of any Preferred Securities, such Depositor Affiliate shall have the right to deliver to the Property Trustee all or such portion of its Preferred Securities as it elects and, subject to compliance with Sections 2.2 and 3.5 of the Indenture, receive, in exchange therefor, a Like Amount of Notes. Such election (i) shall be exercisable effective on any Distribution Date by such Depositor Affiliate delivering to the Property Trustee a written notice of such election specifying the Liquidation Amount of Preferred Securities with respect to which such election is being made and the Distribution Date on which such exchange shall occur, which Distribution Date shall be not less than ten (10) Business Days after the date of receipt by the Property Trustee of such election notice and (ii) shall be conditioned upon such Depositor Affiliate having delivered or caused to be delivered to the Property Trustee or its designee the Preferred Securities that are the subject of such election by 10:00 A.M. New York time, on the Distribution Date on which such exchange is to occur. After the exchange, such Preferred Securities will be canceled and will no longer be deemed to be Outstanding and all rights of the Depositor Affiliate with respect to such Preferred Securities will cease.
(b) In the case of an exchange described in Section 4.9(a), the Property Trustee on behalf of the Trust will, on the date of such exchange, exchange Notes having a principal amount equal to a proportional amount of the aggregate Liquidation Amount of the Outstanding Common Securities, based on the ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged pursuant to Section 4.9(a) divided by the aggregate Liquidation Amount of the Preferred Securities Outstanding immediately prior to such exchange, for such proportional amount of Common Securities held by the Depositor (which contemporaneously shall be canceled and no longer be deemed to be Outstanding); provided, that the Depositor delivers or causes to be delivered to the Property Trustee or its designee the required amount of Common Securities to be exchanged by 10:00 A.M. New York time, on the Distribution Date on which such exchange is to occur.
SECTION 4.10. Calculation Agent.
(a) The Property Trustee shall initially, and for so long as it holds any of the Notes, be the Calculation Agent for purposes of determining LIBOR for each Distribution Date; provided that the Calculation Agent may be removed by the Administrative Trustees at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Administrative Trustees, the Administrative Trustees will promptly appoint as a replacement Calculation Agent the London office of a leading bank which is engaged in transactions in three-month U.S. dollar deposits in Europe and which does not control or is not controlled by or under common control with the Administrative Trustee or its Affiliates. The Calculation Agent may not resign its duties without a successor having been duly appointed.
(b) The Calculation Agent shall be required to agree that, as soon as possible after 11:00
a.m. (London time) on each LIBOR Determination Date, but in no event later than 11:00 a.m. (London time) on the Business Day immediately following each LIBOR Determination Date, the Calculation Agent will calculate the interest rate and Distribution amount (rounded to the nearest cent, with half a cent being rounded upwards) for the related Distribution Date, and will communicate such rate and amount to the Depositor, the Property Trustee, each Paying Agent and the Depositary. The Calculation Agent will also specify to the Administrative Trustees the quotations upon which the foregoing rates and amounts are based and, in any event, the Calculation Agent shall notify the Administrative Trustees before 5:00 p.m. (London time) on each LIBOR Determination Date that either: (i) it has determined or is in the process of determining the foregoing rates and amounts or (ii) it has not determined and is not in the process of determining the foregoing rates and amounts, together with its reasons therefor. The Calculation Agent's determination of the foregoing rates and amounts for any Distribution Date will (in the absence of manifest error) be final and binding upon all parties. For the sole purpose of calculating the interest rate for the Trust Securities, "Business Day" shall be defined as any day on which dealings in deposits in Dollars are transacted in the London interbank market.
SECTION 4.11. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Administrative Trustees shall keep, or cause to be kept at the principal office of the Trust in the United States, as defined for purposes of Treasury Regulations section 301.7701-7, full books of account, records and supporting documents, which shall reflect in reasonable detail each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied.
(b) The Administrative Trustees shall either (i) if the Depositor is then
subject to such reporting requirements, cause each Form 10-K and Form 10-Q
prepared by the Depositor and filed with the Commission in accordance with the
Exchange Act to be delivered to each Holder, with a copy to the Property
Trustee, within thirty (30) days after the filing thereof or (ii) cause to be
prepared at the principal office of the Trust in the United States, as defined
for purposes of Treasury Regulations section 301.7701-7, and delivered to each
of the Holders, with a copy to the Property Trustee, within ninety (90) days
after the end of each Fiscal Year, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss. If the Depositor files its annual and
quarterly reports on Forms 10-K and 10-Q, respectively, with the Securities and
Exchange Commission (the "Commission") in electronic form pursuant to Regulation
S -T of the Commission using the Commissioner's Electronic Data Gathering,
Analysis and Retrieval ("EDGAR") system, the Depositor shall notify the Property
Trustee in the manner prescribed herein of each such annual and quarterly
filing. The Property Trustee is hereby authorized and directed to access the
EDGAR system for purposes of retrieving the financial information so filed. The
Property Trustee shall have no duty to search for or obtain any electronic or
other filings that the Depositor makes with the Commission, regardless of
whether such filings are periodic, supplemental or otherwise. Delivery of
reports, information and documents to the Property Trustee pursuant to this
Section 4.11(b) shall be solely for purposes of compliance with this Section
4.11(b) and, if applicable, with Section 314(a) of the Trust Indenture Act.. The
Property Trustee's receipt of such reports, information and documents shall not
constitute notice to it of the content thereof or any matter determinable from
the content thereof, including the
Depositor's compliance with any of its covenants hereunder, as to which the Property Trustee is entitled to rely upon Officers' Certificates.
(c) The Trust shall maintain one or more bank accounts in the United States, as defined for purposes of Treasury Regulations section 301.7701-7, in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Notes held by the Property Trustee shall be made directly to the Payment Account and no other funds of the Trust shall be deposited in the Payment Account. The sole signatories for such accounts (including the Payment Account) shall be designated by the Property Trustee.
ARTICLE V.
SECURITIES
SECTION 5.1. Initial Ownership.
Upon the creation of the Trust and the contribution by the Depositor referred to in Section 2.3 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are Outstanding, the Depositor shall be the sole beneficial owner of the Trust.
SECTION 5.2. Authorized Trust Securities.
The Trust shall be authorized to issue one series of Preferred Securities having an aggregate Liquidation Amount of $15,000,000 and one series of Common Securities having an aggregate Liquidation Amount of $464,000.
SECTION 5.3. Issuance of the Common Securities; Subscription and Purchase of Notes.
On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall execute and deliver to the Depositor Common Securities Certificates, registered in the name of the Depositor, evidencing an aggregate of 464 Common Securities having an aggregate Liquidation Amount of $464,000, against receipt by the Trust of the aggregate purchase price of such Common Securities of $464,000. Contemporaneously therewith and with the sale by the Trust to the Holders of an aggregate of 15,000 Preferred Securities having an aggregate Liquidation Amount of $15,000,000, an Administrative Trustee, on behalf of the Trust, shall subscribe for and purchase from the Depositor Notes, to be registered in the name of the Property Trustee on behalf of the Trust and having an aggregate principal amount equal to $15,464,000, and, in satisfaction of the purchase price for such Notes, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $15,464,000 (being the aggregate amount paid by the Holders for the Preferred Securities and the amount paid by the Depositor for the Common Securities).
SECTION 5.4. The Securities Certificates.
(a) The Preferred Securities Certificates shall be issued in minimum denominations of $100,000 Liquidation Amount and integral multiples of $1,000 in excess thereof, and the Common Securities Certificates shall be issued in minimum denominations of $10,000
Liquidation Amount and integral multiples of $1,000 in excess thereof. The Securities Certificates shall be executed on behalf of the Trust by manual or facsimile signature of at least one Administrative Trustee. Securities Certificates bearing the signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign such Securities Certificates on behalf of the Trust shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Securities Certificates or did not have such authority at the date of delivery of such Securities Certificates.
(b) On the Closing Date, upon the written order of an authorized officer of the Depositor, the Administrative Trustees shall cause Securities Certificates to be executed on behalf of the Trust and delivered, without further corporate action by the Depositor, in authorized denominations.
(c) The Preferred Securities issued to QIBs shall be, except as provided in Section 5.6, Book-Entry Preferred Securities issued in the form of one or more Global Preferred Securities registered in the name of the Depositary, or its nominee and deposited with the Depositary or the Property Trustee as custodian for the Depositary for credit by the Depositary to the respective accounts of the Depositary Participants thereof (or such other accounts as they may direct). The Preferred Securities issued to a Person other than a QIB shall be issued in the form of Definitive Preferred Securities Certificates.
(d) A Preferred Security shall not be valid until authenticated by the manual signature of a Responsible Officer of the Property Trustee. Such signature shall be conclusive evidence that the Preferred Security has been authenticated under this Trust Agreement. Upon written order of the Trust signed by one Administrative Trustee, the Property Trustee shall authenticate and deliver one or more Preferred Security Certificates evidencing the Preferred Securities for original issue. The Property Trustee may appoint an authenticating agent that is a U.S. Person acceptable to the Trust to authenticate the Preferred Securities. A Common Security need not be so authenticated and shall be valid upon execution by one or more Administrative Trustees. The form of this certificate of authentication can be found in Section 5.13.
(e) Upon issuance of the Trust Securities as provided in this Trust Agreement, the Trust Securities so issued shall be deemed to be validly issued, fully paid and nonassessable, and each Holder thereof shall be entitled to the benefits provided by this Trust Agreement.
SECTION 5.5. Rights of Holders.
The Trust Securities shall have no, and the issuance of the Trust Securities is not subject to, preemptive or similar rights and when issued and delivered to Holders against payment of the purchase price therefor will be fully paid and non-assessable by the Trust. Except as provided in Section 5.11(b), the Holders of the Trust Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.
SECTION 5.6. Book-Entry Preferred Securities.
(a) A Global Preferred Security may be exchanged, in whole or in part, for
Definitive Preferred Securities Certificates registered in the names of the
Owners only if such exchange complies with Section 5.7 and (i) the Depositary
advises the Administrative Trustees and the Property Trustee in writing that the
Depositary is no longer willing or able properly to discharge its
responsibilities with respect to the Global Preferred Security, and no qualified
successor is appointed by the Administrative Trustees within ninety (90) days of
receipt of such notice, (ii) the Depositary ceases to be a clearing agency
registered under the Exchange Act and the Administrative Trustees fail to
appoint a qualified successor within ninety (90) days of obtaining knowledge of
such event, (iii) the Administrative Trustees at their option advise the
Property Trustee in writing that the Trust elects to terminate the book-entry
system through the Depositary or (iv) a Note Event of Default has occurred and
is continuing. Upon the occurrence of any event specified in clause (i), (ii),
(iii) or (iv) above, the Administrative Trustees shall notify the Depositary and
instruct the Depositary to notify all Owners of Book-Entry Preferred Securities,
the Delaware Trustee and the Property Trustee of the occurrence of such event
and of the availability of the Definitive Preferred Securities Certificates to
Owners of the Preferred Securities requesting the same. Upon the issuance of
Definitive Preferred Securities Certificates, the Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Holders.
Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global
Preferred Security wishes at any time to transfer an interest in such Global
Preferred Security to a Person other than a QIB, such transfer shall be
effected, subject to the Applicable Depositary Procedures, in accordance with
the provisions of this Section 5.6 and Section 5.7, and the transferee shall
receive a Definitive Preferred Securities Certificate in connection with such
transfer. A holder of a Definitive Preferred Securities Certificate that is a
QIB may, upon request, and in accordance with the provisions of this Section 5.6
and Section 5.7, exchange such Definitive Preferred Securities Certificate for a
beneficial interest in a Global Preferred Security.
(b) If any Global Preferred Security is to be exchanged for Definitive
Preferred Securities Certificates or canceled in part, or if any Definitive
Preferred Securities Certificate is to be exchanged in whole or in part for any
Global Preferred Security, then either (i) such Global Preferred Security shall
be so surrendered for exchange or cancellation as provided in this Article V or
(ii) the aggregate Liquidation Amount represented by such Global Preferred
Security shall be reduced, subject to Section 5.4, or increased by an amount
equal to the Liquidation Amount represented by that portion of the Global
Preferred Security to be so exchanged or canceled, or equal to the Liquidation
Amount represented by such Definitive Preferred Securities Certificates to be so
exchanged for any Global Preferred Security, as the case may be, by means of an
appropriate adjustment made on the records of the Securities Registrar,
whereupon the Property Trustee, in accordance with the Applicable Depositary
Procedures, shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records. Upon any such surrender to the
Administrative Trustees or the Securities Registrar of any Global Preferred
Security or Securities by the Depositary, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Depositary, and the Property Trustee, upon receipt thereof, shall
authenticate and deliver such Definitive Preferred Securities Certificates. None
of the Securities Registrar or the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions.
(c) Every Securities Certificate executed and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Preferred Security or any portion thereof shall be executed and delivered in the form of, and shall be, a Global Preferred Security, unless such Securities Certificate is registered in the name of a Person other than the Depositary for such Global Preferred Security or a nominee thereof.
(d) The Depositary or its nominee, as registered owner of a Global Preferred Security, shall be the Holder of such Global Preferred Security for all purposes under this Trust Agreement and the Global Preferred Security, and Owners with respect to a Global Preferred Security shall hold such interests pursuant to the Applicable Depositary Procedures. The Securities Registrar and the Trustees shall be entitled to deal with the Depositary for all purposes of this Trust Agreement relating to the Global Preferred Securities (including the payment of the Liquidation Amount of and Distributions on the Book-Entry Preferred Securities represented thereby and the giving of instructions or directions by Owners of Book-Entry Preferred Securities represented thereby and the giving of notices) as the sole Holder of the Book-Entry Preferred Securities represented thereby and shall have no obligations to the Owners thereof. None of the Trustees nor the Securities Registrar shall have any liability in respect of any transfers effected by the Depositary.
(e) The rights of the Owners of the Book-Entry Preferred Securities shall be exercised only through the Depositary and shall be limited to those established by law, the Applicable Depositary Procedures and agreements between such Owners and the Depositary and/or the Depositary Participants; provided, that, solely for the purpose of determining whether the Holders of the requisite amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, to the extent that Preferred Securities are represented by a Global Preferred Security, the Trustees may conclusively rely on, and shall be fully protected in relying on, any written instrument (including a proxy) delivered to the Property Trustee by the Depositary setting forth the Owners' votes or assigning the right to vote on any matter to any other Persons either in whole or in part. To the extent that Preferred Securities are represented by a Global Preferred Security, the initial Depositary will make book-entry transfers among the Depositary Participants and receive and transmit payments on the Preferred Securities that are represented by a Global Preferred Security to such Depositary Participants, and none of the Depositor or the Trustees shall have any responsibility or obligation with respect thereto.
(f) To the extent that a notice or other communication to the Holders is required under this Trust Agreement, for so long as Preferred Securities are represented by a Global Preferred Security, the Trustees shall give all such notices and communications to the Depositary, and shall have no obligations to the Owners.
SECTION 5.7. Registration of Transfer and Exchange of Preferred Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at the Corporate Trust Office, a register or registers (the "Securities Register") in which the registrar and transfer agent with
respect to the Trust Securities (the "Securities Registrar"), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Preferred Securities Certificates and Common Securities Certificates and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Property Trustee shall at all times also be the Securities Registrar. The provisions of Article VIII shall apply to the Property Trustee in its role as Securities Registrar.
(b) Subject to Sections 5.7(c) and (d), upon surrender for registration of
transfer of any Preferred Securities Certificate at the office or agency
maintained pursuant to Section 5.7(f), the Administrative Trustees or any one of
them shall execute by manual or facsimile signature and deliver to the Property
Trustee, and upon receipt thereof the Property Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount as may be required by this Trust Agreement dated
the date of execution by such Administrative Trustee or Trustees. At the option
of a Holder, Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations and of a like
aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificate to be exchanged at the office or agency maintained pursuant to
Section 5.7(f). Whenever any Preferred Securities Certificates are so
surrendered for exchange, the Administrative Trustees or any one of them shall
execute by manual or facsimile signature and deliver to the Property Trustee,
and upon receipt thereof the Property Trustee shall authenticate and deliver,
the Preferred Securities Certificates that the Holder making the exchange is
entitled to receive.
(c) The Securities Registrar shall not be required, (i) to issue, register the transfer of or exchange any Preferred Security during a period beginning at the opening of business fifteen (15) days before the day of selection for redemption of such Preferred Securities pursuant to Article IV and ending at the close of business on the day of mailing of the notice of redemption or (ii) to register the transfer of or exchange any Preferred Security so selected for redemption in whole or in part, except, in the case of any such Preferred Security to be redeemed in part, any portion thereof not to be redeemed.
(d) Every Preferred Securities Certificate presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Securities Registrar duly executed by the Holder or such Holder's attorney duly authorized in writing and (i) if such Preferred Securities Certificate is being transferred otherwise than to a QIB, accompanied by a certificate of the transferee substantially in the form set forth as Exhibit E hereto or (ii) if such Preferred Securities Certificate is being transferred to a QIB, accompanied by a certificate of the transferor substantially in the form set forth as Exhibit F hereto.
(e) No service charge shall be made for any registration of transfer or exchange of Preferred Securities Certificates, but the Property Trustee on behalf of the Trust may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Securities Certificates.
(f) The Administrative Trustees shall designate an office or offices or agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or
exchange, and initially designate the Corporate Trust Office as its office and agency for such purposes. The Administrative Trustees shall give prompt written notice to the Depositor, the Property Trustee and to the Holders of any change in the location of any such office or agency.
SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities Certificates.
(a) If any mutilated Securities Certificate shall be surrendered to the Securities Registrar together with such security or indemnity as may be required by the Securities Registrar and the Administrative Trustees to save each of them harmless, the Administrative Trustees, or any one of them, on behalf of the Trust, shall execute and make available for delivery and, with respect to Preferred Securities, the Property Trustee shall authenticate, in exchange therefor a new Securities Certificate of like class, tenor and denomination.
(b) If the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Securities Certificate and there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Securities Certificate shall have been acquired by a protected purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust, shall execute and make available for delivery, and, with respect to Preferred Securities, the Property Trustee shall authenticate, in exchange for or in lieu of any such destroyed, lost or stolen Securities Certificate, a new Securities Certificate of like class, tenor and denomination.
(c) In connection with the issuance of any new Securities Certificate under this Section 5.8, the Administrative Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.
(d) Any duplicate Securities Certificate issued pursuant to this Section 5.8 shall constitute conclusive evidence of an undivided beneficial interest in the assets of the Trust corresponding to that evidenced by the mutilated, lost, stolen or destroyed Securities Certificate, as if originally issued, whether or not the lost, stolen or destroyed Securities Certificate shall be found at any time.
(e) If any such mutilated, destroyed, lost or stolen Securities Certificate has become or is about to become due and payable, the Depositor in its discretion may, instead of issuing a new Trust Security, pay such Trust Security.
(f) The provisions of this Section 5.8 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, destroyed, lost or stolen Securities Certificates.
SECTION 5.9. Persons Deemed Holders.
The Trustees and the Securities Registrar shall each treat the Person in whose name any Securities Certificate shall be registered in the Securities Register as the owner of the Trust Securities evidenced by such Securities Certificate for the purpose of receiving Distributions and
for all other purposes whatsoever, and none of the Trustees and the Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.10. Cancellation.
All Preferred Securities Certificates surrendered for registration of
transfer or exchange or for payment shall, if surrendered to any Person other
than the Property Trustee, be delivered to the Property Trustee, and any such
Preferred Securities Certificates and Preferred Securities Certificates
surrendered directly to the Property Trustee for any such purpose shall be
promptly canceled by it. The Administrative Trustees may at any time deliver to
the Property Trustee for cancellation any Preferred Securities Certificates
previously delivered hereunder that the Administrative Trustees may have
acquired in any manner whatsoever, and all Preferred Securities Certificates so
delivered shall be promptly canceled by the Property Trustee. No Preferred
Securities Certificates shall be executed and delivered in lieu of or in
exchange for any Preferred Securities Certificates canceled as provided in this
Section 5.10, except as expressly permitted by this Trust Agreement. All
canceled Preferred Securities Certificates shall be disposed of by the Property
Trustee in accordance with its customary practices and the Property Trustee
shall deliver to the Administrative Trustees a certificate of such disposition.
SECTION 5.11. Ownership of Common Securities by Depositor.
(a) On the Closing Date, the Depositor shall acquire, and thereafter shall retain, beneficial and record ownership of the Common Securities. Neither the Depositor nor any successor Holder of the Common Securities may transfer less than all the Common Securities, and the Depositor or any such successor Holder may transfer the Common Securities only (i) in connection with a consolidation or merger of the Depositor into another Person, or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person (in which event such Common Securities will be transferred to such surviving entity, transferee or lessee, as the case may be), pursuant to Section 8.1 of the Indenture or (ii) to the Depositor or an Affiliate of the Depositor, in each such case in compliance with applicable law (including the Securities Act, and applicable state securities and blue sky laws). To the fullest extent permitted by law, any attempted transfer of the Common Securities other than as set forth in the immediately preceding sentence shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
(b) Any Holder of the Common Securities shall be liable for the debts and obligations of the Trust in the manner and to the extent set forth with respect to the Depositor and agrees that it shall be subject to all liabilities to which the Depositor may be subject and, prior to becoming such a Holder, shall deliver to the Administrative Trustees an instrument of assumption satisfactory to such Trustees.
SECTION 5.12. Restricted Legends.
(a) Each Preferred Security Certificate shall bear a legend in substantially the following form:
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO BLUEGREEN STATUTORY TRUST IV OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH PREFERRED SECURITIES OR ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE
AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH
PREFERRED SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY
(I) TO THE TRUST, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (III) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3)
OR (7) OF RULE 501, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND, IN THE CASE OF (III), SUBJECT TO THE RIGHT OF THE TRUST
AND THE DEPOSITOR TO REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE
WITH THE U.S. SECURITIES LAWS, AND OTHER INFORMATION SATISFACTORY TO EACH
OF THEM AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED
SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF LIQUIDATION AMOUNT OF OR DISTRIBUTIONS ON SUCH PREFERRED SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES.
THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY
INTEREST THEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER
OR HOLDER OF THE PREFERRED SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER
(i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF
ERISA OR SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER
PERSON OR ENTITY USING THE "PLAN ASSETS" OF ANY SUCH EMPLOYEE BENEFIT PLAN
OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE OR HOLDING WILL
NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE
UNDER AN APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
(b) The above legend shall not be removed from any of the Preferred Securities Certificates unless there is delivered to the Property Trustee and the Depositor satisfactory evidence, which may include an Opinion of Counsel, as may be reasonably required to ensure that any future transfers thereof may be made without restriction under or violation of the provisions of the Securities Act and other applicable law. Upon provision of such satisfactory evidence, one or more of the Administrative Trustees on behalf of the Trust shall execute and deliver to the Property Trustee, and the Property Trustee shall authenticate and deliver, at the written direction of the Administrative Trustees and the Depositor, Preferred Securities Certificates that do not bear the legend.
SECTION 5.13. Form of Certificate of Authentication.
The Property Trustee's certificate of authentication shall be in substantially the following form:
This represents Preferred Securities referred to in the within-mentioned Trust Agreement.
Dated: Wilmington Trust Company, not in its
individual capacity, but solely as
Property Trustee
By: ________________________________
Authorized officer
|
ARTICLE VI.
MEETINGS; VOTING; ACTS OF HOLDERS
SECTION 6.1. Notice of Meetings.
Notice of all meetings of the Holders of the Preferred Securities, stating
the time, place and purpose of the meeting, shall be given by the Property
Trustee pursuant to Section 11.8 to each Holder of Preferred Securities, at such
Holder's registered address, at least fifteen (15) days and not more than ninety
(90) days before the meeting. At any such meeting, any business properly before
the meeting may be so considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.2. Meetings of Holders of the Preferred Securities.
(a) No annual meeting of Holders is required to be held. The Property Trustee, however, shall call a meeting of the Holders of the Preferred Securities to vote on any matter upon the written request of the Holders of at least twenty five percent (25%) in aggregate Liquidation Amount of the Outstanding Preferred Securities and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of the Holders of the Preferred Securities to vote on any matters as to which such Holders are entitled to vote.
(b) The Holders of at least a Majority in Liquidation Amount of the Preferred Securities, present in person or by proxy, shall constitute a quorum at any meeting of the Holders of the Preferred Securities.
(c) If a quorum is present at a meeting, an affirmative vote by the Holders present, in person or by proxy, holding Preferred Securities representing at least a Majority in Liquidation Amount of the Preferred Securities held by the Holders present, either in person or by proxy, at such meeting shall constitute the action of the Holders of the Preferred Securities, unless this Trust Agreement requires a lesser or greater number of affirmative votes.
SECTION 6.3. Voting Rights.
Holders shall be entitled to one vote for each $10,000 of Liquidation Amount represented by their Outstanding Trust Securities in respect of any matter as to which such Holders are entitled to vote.
SECTION 6.4. Proxies, Etc.
At any meeting of Holders, any Holder entitled to vote thereat may vote by proxy, provided, that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Holders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if
more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Holder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution.
SECTION 6.5. Holder Action by Written Consent.
Any action that may be taken by Holders at a meeting may be taken without a meeting and without prior notice if Holders holding at least a Majority in Liquidation Amount of all Preferred Securities entitled to vote in respect of such action (or such lesser or greater proportion thereof as shall be required by any other provision of this Trust Agreement) shall consent to the action in writing; provided, that notice of such action is promptly provided to the Holders of Preferred Securities that did not consent to such action. Any action that may be taken by the Holders of all the Common Securities may be taken without a meeting and without prior notice if such Holders shall consent to the action in writing.
SECTION 6.6. Record Date for Voting and Other Purposes.
Except as provided in Section 6.10(a), for the purposes of determining the Holders who are entitled to notice of and to vote at any meeting or to act by written consent, or to participate in any distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than ninety (90) days prior to the date of any meeting of Holders or the payment of a Distribution or other action, as the case may be, as a record date for the determination of the identity of the Holders of record for such purposes.
SECTION 6.7. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent thereof duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to an Administrative Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and conclusive in favor of the Trustees, if made in the manner provided in this Section 6.7.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute sufficient proof of such signer's authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that any Trustee receiving the same deems sufficient.
(c) The ownership of Trust Securities shall be proved by the Securities Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Trust Security shall bind every future Holder of the same Trust Security and the Holder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees, the Administrative Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount.
(f) If any dispute shall arise among the Holders or the Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, notice, consent, waiver or other Act of such Holder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter.
SECTION 6.8. Inspection of Records.
Upon reasonable written notice to the Administrative Trustees and the Property Trustee, the records of the Trust shall be open to inspection by any Holder during normal business hours for any purpose reasonably related to such Holder's interest as a Holder.
SECTION 6.9. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the Indenture and as otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Securities Certificates, be construed so as to constitute the Holders from time to time as partners or members of an association.
(b) So long as any Notes are held by the Property Trustee on behalf of the Trust, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Note Trustee, or exercise any trust or power conferred on the Property Trustee with respect to the Notes, (ii) waive any past default that may be waived under Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Notes shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture or the Notes, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities; provided, that where a consent under the Indenture would require the consent of each holder of Notes (or each Holder of Preferred Securities) affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Holder of Preferred Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities, except by a subsequent vote of the Holders of the Preferred Securities. In addition to obtaining the foregoing approvals of the Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that such action shall not cause the Trust to be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect in any material respect the powers, preferences or special rights of the Preferred Securities, whether by way of amendment to the Trust Agreement or otherwise or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities. Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, it would cause the Trust to be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes.
SECTION 6.10. Acceleration of Maturity; Rescission of Annulment; Waivers of Past Defaults.
(a) For so long as any Preferred Securities remain Outstanding, if, upon a Note Event of Default, the Note Trustee fails or the holders of not less than twenty five percent (25%) in principal amount of the outstanding Notes fail to declare the principal of all of the Notes to be immediately due and payable, the Holders of at least twenty-five percent (25%) in Liquidation Amount of the Preferred Securities then Outstanding shall have the right to make such declaration by a notice in writing to the Property Trustee, the Depositor and the Note Trustee. At any time after a declaration of acceleration with respect to the Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Note Trustee as provided in the Indenture, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities, by written notice to the Property Trustee, the Depositor and the Note Trustee, may rescind and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Note Trustee a sum sufficient to pay:
(A) all overdue installments of interest on all of the Notes;
(B) any accrued Additional Interest on all of the Notes;
(C) the principal of and premium, if any, on any Notes that have become due otherwise than by such declaration of acceleration and interest and Additional Interest thereon at the rate borne by the Notes; and
(D) all sums paid or advanced by the Note Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Note Trustee, the Property Trustee and their agents and counsel; and
(ii) all Note Events of Default, other than the non-payment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13 of the Indenture.
Upon receipt by the Property Trustee of written notice requesting such an acceleration, or rescission and annulment thereof, by Holders of any part of the Preferred Securities, a record date shall be established for determining Holders of Outstanding Preferred Securities entitled to join in such notice, which record date shall be at the close of business on the day the Property Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day that is ninety (90) days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such ninety (90)-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice that has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 6.10(a).
(b) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Note Event of Default specified in paragraph (a) or
(b) of Section 5.1 of the Indenture, any Holder of Preferred Securities shall
have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.8 of the Indenture, for enforcement of payment to such
Holder of any amounts payable in respect of Notes having an aggregate principal
amount equal to the aggregate Liquidation Amount of the Preferred Securities of
such Holder. Except as set forth in Section 6.10(a) and this Section 6.10(b),
the Holders of Preferred Securities shall have no right to exercise directly any
right or remedy available to the holders of, or in respect of, the Notes.
(c) Notwithstanding paragraphs (a) and (b) of this Section 6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any Note Event of Default, except any Note Event of Default arising from the failure to pay any principal of or premium, if any, or interest on (including any Additional Interest) the Notes (unless such Note Event of Default has been cured and a sum sufficient to pay all matured installments of interest and all principal and premium, if any, on all Notes due otherwise than by acceleration has been deposited with the Note Trustee) or a Note Event of Default in respect of a covenant or provision that under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding Note. Upon any such waiver, such Note Event of Default shall cease to exist and any Note Event of Default arising therefrom shall be deemed to have been cured for every purpose of the Indenture; but no such waiver shall affect any subsequent Note Event of Default or impair any right consequent thereon.
(d) Notwithstanding paragraphs (a) and (b) of this Section 6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Trust Agreement, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.
(e) The Holders of a Majority in Liquidation Amount of the Preferred Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee in respect of this Trust Agreement or the Notes or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; provided, that, subject to Sections 8.5 and 8.7, the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Property Trustee in good faith shall, by an officer or officers of the Property Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders not party to such direction, and provided, further, that nothing in this Trust Agreement shall impair the right of the Property Trustee to take any action deemed proper by the Property Trustee and which is not inconsistent with such direction.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Holders that:
(a) the Property Trustee is a Delaware banking corporation with trust powers, duly organized, validly existing and in good standing under the laws of the State of Delaware;
(b) the Property Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware banking corporation, duly organized with trust powers, validly existing and in good standing under the laws of the State of Delaware and with its principal place of business in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and the Delaware Trustee and constitutes the legal, valid and binding agreement of each of the Property Trustee and the Delaware Trustee enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether considered in a proceeding in equity or at law);
(f) the execution, delivery and performance of this Trust Agreement have been duly authorized by all necessary corporate or other action on the part of the Property Trustee and the Delaware Trustee and do not require any approval of stockholders of the Property Trustee and the Delaware Trustee and such execution, delivery and performance will not (i) violate the Charter or By-laws of the Property Trustee or the Delaware Trustee or (ii) violate any applicable law, governmental rule or regulation of the United States or the State of Delaware, as the case may be, governing the banking and trust powers of the Property Trustee or the Delaware Trustee or any order, judgment or decree applicable to the Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of any of the transactions by the Property Trustee or the Delaware Trustee contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing law of the United States or the State of Delaware governing the banking and trust powers of the Property Trustee or the Delaware Trustee, as the case may be; and
(h) to the best of each of the Property Trustee's and the Delaware Trustee's knowledge, there are no proceedings pending or threatened against or affecting the Property Trustee or the Delaware Trustee in any court or before any governmental authority, agency or arbitration board or tribunal that, individually or in the aggregate, would materially and adversely affect the Trust or would question the right, power and authority of the Property Trustee or the Delaware Trustee, as the case may be, to enter into or perform its obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the Holders that:
(a) the Depositor is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation;
(b) the Depositor has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered by the Depositor and constitutes the legal, valid and binding agreement of the Depositor enforceable against the Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity;
(d) the Securities Certificates issued at the Closing Date on behalf of the Trust have been duly authorized and will have been duly and validly executed, issued and delivered by the applicable Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement and the Holders will be, as of such date, entitled to the benefits of this Trust Agreement;
(e) the execution, delivery and performance of this Trust Agreement have been duly authorized by all necessary corporate or other action on the part of the Depositor and do not require any approval of stockholders of the Depositor and such execution, delivery and performance will not (i) violate the articles or certificate of incorporation or by-laws (or other organizational documents) of the Depositor or (ii) violate any applicable law, governmental rule or regulation governing the Depositor or any material portion of its property or any order, judgment or decree applicable to the Depositor or any material portion of its property;
(f) neither the authorization, execution or delivery by the Depositor of this Trust Agreement nor the consummation of any of the transactions by the Depositor contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing law governing the Depositor or any material portion of its property; and
(g) there are no proceedings pending or, to the best of the Depositor's knowledge, threatened against or affecting the Depositor or any material portion of its property in any court or before any governmental authority, agency or arbitration board or tribunal that, individually or in the aggregate, would materially and adversely affect the Trust or would question the right, power and authority of the Depositor, as the case may be, to enter into or perform its obligations under this Trust Agreement.
ARTICLE VIII.
THE TRUSTEES
SECTION 8.1. Number of Trustees.
The number of Trustees shall be five (5), provided, that the Property Trustee and the Delaware Trustee may be the same Person, in which case the number of Trustees shall be four (4). The number of Trustees may be increased or decreased by Act of the Holder of the Common Securities subject to Sections 8.2, 8.3, and 8.4. The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust.
SECTION 8.2. Property Trustee Required.
There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be an entity organized and doing business under the laws of the United States or of any state thereof, authorized to exercise corporate trust powers, having a combined capital and surplus of at least fifty million dollars ($50,000,000), subject to supervision or examination by federal or state authority and having an office within the United States. If any such Person publishes reports of condition at least annually pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section 8.2, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee shall cease to be eligible in accordance with the provisions of this Section 8.2, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII.
SECTION 8.3. Delaware Trustee Required.
(a) If required by the Delaware Statutory Trust Act, there shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity that has its principal place of business in the State of Delaware, otherwise meets the requirements of applicable Delaware law and shall act through one or more persons authorized to bind such entity. If at any time the Delaware Trustee shall cease to be eligible in accordance with the provisions of this Section 8.3, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII.
(b) The Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities, of the
Property Trustee or the Administrative Trustees set forth herein. The Delaware
Trustee shall be one of the trustees of the Trust for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Delaware Statutory
Trust Act and for taking such actions as are required to be taken by a Delaware
trustee under the Delaware Statutory Trust Act. The duties (including fiduciary
duties), liabilities and obligations of the Delaware Trustee shall be limited to
(a) accepting legal process served on the Trust in the State of Delaware and (b)
the execution of any certificates required to be filed with the Secretary of
State of the State of Delaware that the Delaware Trustee is required to execute
under Section 3811 of the Delaware Statutory Trust Act and there shall be no
other duties (including fiduciary duties) or obligations, express or implied, at
law or in equity, of the Delaware Trustee.
SECTION 8.4. Appointment of Administrative Trustees.
(a) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind that entity. Each of the individuals identified as an "Administrative Trustee" in the preamble of this Trust Agreement hereby accepts his or her appointment as such.
(b) Except where a requirement for action by a specific number of Administrative Trustees is expressly set forth in this Trust Agreement, any act required or permitted to be taken by, and any power of the Administrative Trustees may be exercised by, or with the consent of, any one such Administrative Trustee. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.11, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Trust Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.5. Duties and Responsibilities of the Trustees.
(a) The rights, immunities, duties and responsibilities of the Trustees
shall be as provided by this Trust Agreement and there shall be no other duties
(including fiduciary duties) or obligations, express or implied, at law or in
equity, of the Trustees; provided, however, that if an Event of Default known to
the Property Trustee has occurred and is continuing, the Property Trustee shall,
prior to the receipt of directions, if any, from the Holders of at least a
Majority in Liquidation Amount of the Preferred Securities, exercise such of the
rights and powers vested in it by this Trust Agreement, and use the same degree
of care and skill in its exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
Notwithstanding the foregoing, no provision of this Trust Agreement shall
require any of the Trustees to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its or their rights or powers, if it or they shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not herein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section
8.5. To the extent that, at law or in equity, a Trustee has duties and
liabilities relating to the Trust or to the Holders, such Trustee shall not be
liable to the Trust or to any Holder for such Trustee's good faith reliance on
the provisions of this Trust Agreement. The provisions of this Trust Agreement,
to the extent that they restrict the duties and liabilities of the Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Holders to replace such other duties and liabilities of the Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Holder, by its acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.5(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement.
(c) No provisions of this Trust Agreement shall be construed to relieve the Property Trustee from liability with respect to matters that are within the authority of the Property Trustee
under this Trust Agreement for its own negligent action, negligent failure to act or willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error or judgment made in good faith by an authorized officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee hereunder or under the Indenture, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Notes and the Payment Account shall be to deal with such Property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement;
(iv) the Property Trustee shall not be liable for any interest on any money received by it; and money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of any other Trustee or the Depositor.
SECTION 8.6. Notices of Defaults and Extensions.
(a) Within ninety (90) days after the occurrence of a default actually known to the Property Trustee, the Property Trustee shall transmit notice of such default to the Holders, the Administrative Trustees and the Depositor, unless such default shall have been cured or waived; provided, that, except in the case of a default in the payment of the principal of or any premium or interest (including any Additional Interest) on any Trust Security, the Property Trustee shall be fully protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Trust Securities. For the purpose of this Section 8.6, the term "default" means any event that is, or after notice or lapse of time or both would become, an Event of Default.
(b) RESERVED.
(c) The Property Trustee shall not be deemed to have knowledge of any default or Event of Default unless the Property Trustee shall have received written notice thereof from the
Depositor, any Administrative Trustee or any Holder or unless a Responsible Officer of the Property Trustee shall have obtained actual knowledge of such default or Event of Default.
(d) The Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received with respect to the Notes.
SECTION 8.7. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.5:
(a) the Property Trustee may conclusively rely and shall be protected in acting or refraining from acting in good faith and in accordance with the terms hereof upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds a provision ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Holders of the Preferred Securities are entitled to vote under the terms of
this Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting the Depositor's written instruction as to the course of
action to be taken and the Property Trustee shall take such action, or refrain
from taking such action, as the Property Trustee shall be instructed in writing
to take, or to refrain from taking, by the Depositor; provided, that if the
Property Trustee does not receive such instructions of the Depositor within ten
(10) Business Days after it has delivered such notice or such reasonably shorter
period of time set forth in such notice, the Property Trustee may, but shall be
under no duty to, take such action, or refrain from taking such action, as the
Property Trustee shall deem advisable and in the best interests of the Holders,
in which event the Property Trustee shall have no liability except for its own
negligence, bad faith or willful misconduct;
(c) any direction or act of the Depositor contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate unless otherwise expressly provided herein;
(d) any direction or act of an Administrative Trustee contemplated by this Trust Agreement shall be sufficiently evidenced by a certificate executed by such Administrative Trustee and setting forth such direction or act;
(e) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any re-recording, re-filing or re-registration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be counsel to the Property Trustee, the Depositor or any of its Affiliates, and may include any of its employees) and the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Holders pursuant to this Trust Agreement, unless such Holders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses (including reasonable attorneys' fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction, including reasonable advances as may be requested by the Property Trustee;
(h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Holders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Property Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Depositor as may reasonably relate to such facts or matters, personally or by agent or attorney;
(i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents, attorneys, custodians or nominees and the Property Trustee shall not be responsible for any negligence or misconduct on the part of any such agent, attorney, custodian or nominee appointed with due care by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right hereunder, the Property Trustee (i) may request instructions from the Holders (which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under this Trust Agreement in respect of such remedy, right or action), (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received and (iii) shall be protected in acting in accordance with such instructions;
(k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement;
(l) without prejudice to any other rights available to the Property Trustee under applicable law, when the Property Trustee incurs expenses or renders services in connection with a Bankruptcy Event, such expenses (including legal fees and expenses of its agents and counsel) and the compensation for such services are intended to constitute expenses of administration under any Bankruptcy Law or law relating to creditors rights generally; and
(m) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, request and rely on an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor.
No provision of this Trust Agreement shall be deemed to impose any duty or obligation on any Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which such Person shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation.
SECTION 8.8. Delegation of Power.
Any Trustee may, by power of attorney or otherwise, delegate to any other Person its, his or her power for the purpose of executing any documents contemplated in Section 2.5. The Trustees shall have power to delegate from time to time to such of their number or to the Depositor the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Trustees or otherwise as the Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement.
SECTION 8.9. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and except as provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent.
SECTION 8.10. Compensation; Reimbursement; Indemnity.
The Depositor agrees:
(a) to pay to the Property Trustee and the Delaware Trustee from time to time such reasonable compensation for all services rendered by them hereunder as may be agreed by the Depositor and the Trustees in writing from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(b) to reimburse the Property Trustee and the Delaware Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by such Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their gross negligence, bad faith or willful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify and hold harmless (i) each Trustee (including in its individual capacity), (ii) any Affiliate of any Trustee, (iii) any officer, director, shareholder, employee, representative or agent of any Trustee or any Affiliate of
any Trustee and (iv) any employee or agent of the Trust (referred to herein as
an "Indemnified Person") from and against any loss, damage, liability, tax
(other than income, franchise or other taxes imposed on amounts paid pursuant to
Section 8.10(a) or (b) hereof), penalty, expense or claim of any kind or nature
whatsoever incurred without negligence, bad faith or willful misconduct on its
part, arising out of or in connection with the acceptance or administration of
the Trust hereunder, including the advancement of funds to cover the reasonable
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
The Trust shall have no payment, reimbursement or indemnity obligations to the Trustees under this Section 8.10. The provisions of this Section 8.10 shall survive the termination of this Trust Agreement and the earlier removal or resignation of any Trustee.
No Trustee may claim any Lien on any Trust Property whether before or
after termination of the Trust as a result of any amount due pursuant to this
Section 8.10.
To the fullest extent permitted by law, in no event shall Trustees be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
In no event shall the Trustees be liable for any failure or delay in the performance of their obligations hereunder because of circumstances beyond their control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Trust Agreement.
SECTION 8.11. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of any Trustee and no appointment of a successor Trustee pursuant to this Article VIII shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 8.12.
(b) A Trustee may resign at any time by giving written notice thereof to the Depositor and, in the case of the Property Trustee and the Delaware Trustee, to the Holders.
(c) Unless an Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed (with or without cause) at any time by Act of the Holder of Common Securities. If an Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed (with or without cause) at such time by Act of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities, delivered to the removed Trustee (in its individual capacity and on behalf of the Trust). An Administrative Trustee may be removed (with or without cause) only by Act of the Holder of the Common Securities at any time.
(d) If any Trustee shall resign, be removed or become incapable of acting as Trustee, or if a vacancy shall occur in the office of any Trustee for any reason, at a time when no Event of
Default shall have occurred and be continuing, the Holder of the Common
Securities, by Act of the Holder of the Common Securities, shall promptly
appoint a successor Trustee or Trustees, and such successor Trustee and the
retiring Trustee shall comply with the applicable requirements of Section 8.12.
If the Property Trustee or the Delaware Trustee shall resign, be removed or
become incapable of continuing to act as the Property Trustee or the Delaware
Trustee, as the case may be, at a time when an Event of Default shall have
occurred and be continuing, the Holders of the Preferred Securities, by Act of
the Holders of a Majority in Liquidation Amount of the Preferred Securities,
shall promptly appoint a successor Property Trustee or Delaware Trustee, and
such successor Property Trustee or Delaware Trustee and the retiring Property
Trustee or Delaware Trustee shall comply with the applicable requirements of
Section 8.12. If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, at a time when an Event of
Default shall have occurred and be continuing, the Holder of the Common
Securities by Act of the Holder of Common Securities shall promptly appoint a
successor Administrative Trustee and such successor Administrative Trustee and
the retiring Administrative Trustee shall comply with the applicable
requirements of Section 8.12. If no successor Trustee shall have been so
appointed by the Holder of the Common Securities or Holders of the Preferred
Securities, as the case may be, and accepted appointment in the manner required
by Section 8.12 within thirty (30) days after the giving of a notice of
resignation by a Trustee, the removal of a Trustee, or a Trustee becoming
incapable of acting as such Trustee, any Holder who has been a Holder of
Preferred Securities for at least six (6) months may, on behalf of himself and
all others similarly situated, and any resigning Trustee may, in each case, at
the expense of the Depositor, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(e) The Depositor shall give notice of each resignation and each removal of the Property Trustee or the Delaware Trustee and each appointment of a successor Property Trustee or Delaware Trustee to all Holders in the manner provided in Section 10.8. Each notice shall include the name of the successor Property Trustee or Delaware Trustee and the address of its Corporate Trust Office if it is the Property Trustee.
(f) Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Holder of Common Securities, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (i) the unanimous act of the remaining Administrative Trustees if there are at least two of them or (ii) otherwise by the Holder of the Common Securities (with the successor in each case being a Person who satisfies the eligibility requirement for Administrative Trustees or Delaware Trustee, as the case may be, set forth in Sections 8.3 and 8.4).
(g) Upon the appointment of a successor Delaware Trustee, such successor Delaware Trustee shall file a Certificate of Amendment to the Certificate of Trust in accordance with Section 3810 of the Delaware Statutory Trust Act.
SECTION 8.12. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee, each successor Trustee shall execute and deliver to the Depositor and to the retiring Trustee (if the retiring
Trustee is the Property Trustee or the Delaware Trustee) an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Trust or any successor Trustee such retiring Trustee shall, upon payment of its charges, duly assign, transfer and deliver to such successor Trustee all Trust Property, all proceeds thereof and money held by such retiring Trustee hereunder with respect to the Trust Securities and the Trust.
(b) Upon request of any such successor Trustee, the Trust (or the retiring Trustee if requested by the Depositor) shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the preceding paragraph.
(c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article VIII.
SECTION 8.13. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Trustee, shall be the successor of such Trustee hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided, that such Person shall be otherwise qualified and eligible under this Article VIII.
SECTION 8.14. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities Certificates shall be taken as the statements of the Trust and the Depositor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the title to, or value or condition of, the property of the Trust or any part thereof, nor as to the validity or sufficiency of this Trust Agreement, the Notes or the Trust Securities. The Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Notes. It is expressly understood and agreed by the parties hereto that insofar as any document, agreement or certificate is executed on behalf of the Trust by any Trustee (i) such document, agreement or certificate is executed and delivered by such Trustee, not in its individual capacity but solely as Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by any Trustee in its individual capacity but is made and intended for the purpose of binding only the Trust and (iii) under no circumstance shall any Trustee in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement or any other document, agreement or certificate.
SECTION 8.15. Property Trustee May File Proofs of Claim.
(a) In case of any Bankruptcy Event (or event that with the passage of time would become a Bankruptcy Event) relative to the Trust or any other obligor upon the Trust Securities or the property of the Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Trust Securities shall then be due and payable and irrespective of whether the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Trust Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding; and
(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee first any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee.
(b) Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 8.16. Reports to and from the Property Trustee.
(a) The Depositor and the Administrative Trustees shall deliver to the Property Trustee, not later than one hundred and twenty (120) days after the end of each fiscal year of the Depositor ending after the date hereof, an Officers' Certificate (substantially in the form attached hereto as Exhibit H) covering the preceding fiscal year, stating whether or not to the knowledge of the signers thereof the Depositor, the Administrative Trustees or the Trust are in default in the performance or observance of any of the terms, provisions and conditions of this Trust Agreement (without regard to any period of grace or requirement of notice provided hereunder) and, if the Depositor, the Administrative Trustees or the Trust shall be in default, specifying all such defaults and the nature and status thereof of which they have knowledge.
(b) The Depositor shall furnish to (i) the Property Trustee, (ii) the Purchaser, (iii) any Owner of the Preferred Securities reasonably identified to the Depositor or the Trust (which identification may be made either by such Owner or by the Placement Agent or Purchaser) and
(iv) any designee of (i), (ii) or (iii) above, a duly completed and executed certificate in the form attached hereto as Exhibit G, including the financial statements referenced in such Exhibit, which certificate and financial statements shall be so furnished by the Depositor not later than forty five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Depositor and not later than ninety (90) days after the end of each fiscal year of the Depositor. The delivery requirements under this Section 8.16(b) may be satisfied by compliance with Section 7.3(b) of the Indenture.
(c) The Property Trustee shall receive all reports, certificates and information, which it is entitled to obtain under each of the Operative Documents, and deliver to (i) the Purchaser, (ii) the Placement Agent and (iii) a designee of (i) or (ii) above, as identified in writing to the Property Trustee, copies of all such reports, certificates or information promptly upon receipt thereof.
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on June 30, 2041 (the "Expiration Date"), and the Trust Property shall be liquidated in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination Event", upon the occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the Depositor, in its capacity as the Holder of the Common Securities, unless the Depositor shall have transferred the Common Securities as provided by Section 5.11, in which case this provision shall refer instead to any such successor Holder of the Common Securities;
(b) the written direction to the Property Trustee from the Holder of the Common Securities at any time to dissolve the Trust and, after satisfaction of any liabilities of the Trust as required by applicable law, to distribute the Notes to Holders in exchange for the Preferred Securities (which direction is optional and wholly within the discretion of the Holder of the Common Securities).
(c) the redemption of all of the Preferred Securities in connection with the payment at maturity or redemption of all the Notes; and
(d) the entry of an order for dissolution of the Trust by a court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust shall terminate upon the latest to occur of the following: (a) the
distribution by the Property Trustee to Holders of all amounts required to be
distributed hereunder upon the liquidation of the Trust pursuant to Section 9.4,
or upon the redemption of all of the Trust Securities pursuant to Section 4.2;
(b) the satisfaction of any expenses owed by the Trust; and (c) the discharge of
all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust or the
Holders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in Section 9.2(a), (b) or (d) occurs or upon the Expiration Date, the Trust shall be liquidated by the Property Trustee as expeditiously as the Property Trustee shall determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to each Holder a Like Amount of Notes, subject to Section 9.4(d). Notice of liquidation shall be given by the Property Trustee not less than thirty (30) nor more than sixty (60) days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All such notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and (subject to
Section 9.4(d)) any Securities Certificates not surrendered for exchange
will be deemed to represent a Like Amount of Notes; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Securities Certificates for Notes, or if
Section 9.4(d) applies, receive a Liquidation Distribution, as the
Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Trust and distribution of the Notes to Holders, the Property Trustee, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish a record date for such distribution (which shall not be more than forty-five (45) days prior to the Liquidation Date nor prior to the date on which notice of such liquidation is given to the Holders) and establish such procedures as it shall deem appropriate to effect the distribution of Notes in exchange for the Outstanding Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Notes will be issued to Holders of Securities Certificates, upon surrender of such Certificates to the exchange agent for exchange, (iii) the Depositor shall use its best efforts to have the Notes listed on the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory organization on which the Preferred Securities are then listed, if any, (iv) Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Notes bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Securities Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Securities Certificates with respect to such Notes) and (v) all rights of Holders holding Trust Securities will cease, except the right of such Holders to receive Notes upon surrender of Securities Certificates.
(d) Notwithstanding the other provisions of this Section 9.4, if distribution of the Notes in the manner provided herein is determined by the Property Trustee not to be permitted or practical, the Trust Property shall be liquidated, and the Trust shall be wound up by the Property Trustee in such manner as the Property Trustee determines. In such event, Holders will be entitled to receive out of the assets of the Trust available for distribution to Holders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If, upon any such winding up the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive Liquidation Distributions upon any such winding up pro rata (based upon Liquidation Amounts) with Holders of all Trust Securities, except that, if an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities as provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any Person except pursuant to this Article IX. At the request of the Holders of the Common Securities, without the consent of the Holders of the Preferred Securities, the Trust may merge with or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided, that:
(a) such successor entity either (i) expressly assumes all of the obligations of the Trust under this Trust Agreement with respect to the Preferred Securities or (ii) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (such other Securities, the "Successor Securities") so long as the Successor Securities have the same priority as the Preferred Securities with respect to distributions and payments upon liquidation, redemption and otherwise;
(b) a trustee of such successor entity possessing substantially the same powers and duties as the Property Trustee is appointed to hold the Notes;
(c) if the Preferred Securities or the Notes are rated, such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Securities or the Notes (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization that then assigns a rating to the Preferred Securities or the Notes;
(d) the Preferred Securities are listed, or any Successor Securities will be listed upon notice of issuance, on any national securities exchange or interdealer quotation system on which the Preferred Securities are then listed, if any;
(e) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect;
(f) such successor entity has a purpose substantially identical to that of the Trust;
(g) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor has received an Opinion of Counsel to the effect that (i) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect; (ii) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an "investment company" under the Investment Company Act and (iii) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Trust (or the successor entity) will continue to be classified as a grantor trust for U.S. federal income tax purposes; and
(h) the Depositor or its permitted transferee owns all of the common securities of such successor entity.
Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of all of the Preferred Securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other Person or permit any other entity to consolidate, amalgamate, merge with or into, or replace, the Trust if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes or cause the Notes to be treated as other than indebtedness of the Depositor for United States federal income tax purposes.
ARTICLE X.
INFORMATION TO PURCHASER
SECTION 10.1. Depositor Obligations to Purchaser.
Notwithstanding any other provision herein, the Depositor shall furnish to
(a) the Purchaser, (b) any Owner of the Preferred Securities reasonably
identified to the Depositor or the Trust (which identification may be made
either by such Owner or by the Placement Agent or Purchaser) and (c) any
designee of (a) or (b) above, copies of all correspondence, notices, forms,
filings, reports and other documents required to be provided by the Depositor,
whether acting through an Administrative Trustee or otherwise, to the Property
Trustee or Delaware Trustee under this Trust Agreement. Notwithstanding the
foregoing, the delivery requirements under this Section 10.1 shall be deemed
satisfied to the extent the foregoing recipients otherwise receive any such
copies of correspondence, notices, forms, filings, reports or other documents
pursuant
to any other provision of this Trust Agreement (including without limitation
Section 8.16(c) and Section 10.2) or pursuant to any other Operative Document.
SECTION 10.2. Property Trustee's Obligations to Purchaser.
Notwithstanding any other provision herein, the Property Trustee shall
furnish to (a) the Purchaser, (b) the Placement Agent and (c) a designee of (a)
or (b) above as identified in writing to the Property Trustee, copies of all (i)
correspondence, notices, forms, filings, reports and other documents received by
the Property Trustee or Delaware Trustee from the Depositor, whether acting
through an Administrative Trustee or otherwise, under this Trust Agreement, and
(ii) all correspondence, notices, forms, filings, reports and other documents
required to be provided to the Depositor or a Holder by the Property Trustee or
Delaware Trustee under this Trust Agreement.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
SECTION 11.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death, bankruptcy, termination, dissolution or incapacity of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, nor annul, dissolve or terminate the Trust nor entitle the legal representatives or heirs of such Person or any Holder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.
SECTION 11.2. Agreed Tax Treatment of Trust and Trust Securities.
The parties hereto and, by its acceptance or acquisition of a Trust Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, such Trust Security intend and agree to treat the Trust as a grantor trust for United States federal, state and local tax purposes, and to treat the Trust Securities (including all payments and proceeds with respect to such Trust Securities) as undivided beneficial ownership interests in the Trust Property (and payments and proceeds therefrom, respectively) for United States federal, state and local tax purposes and to treat the Notes as indebtedness of the Depositor for United States federal, state and local tax purposes. The provisions of this Trust Agreement shall be interpreted to further this intention and agreement of the parties.
SECTION 11.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the Property Trustee, the Administrative Trustees and the Holder of all the Common Securities, without the consent of any Holder of the Preferred Securities, (i) to cure any ambiguity, correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein, or to make or amend any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will neither be taxable as a corporation nor be classified as other than a grantor trust for United States federal income tax purposes at all times that any Trust Securities are Outstanding or to ensure that the Notes are treated as indebtedness of the Depositor for United States federal income tax purposes, or to ensure that the Trust will not be required to register as an "investment company" under the Investment Company Act or (iii) to add to the covenants, restrictions or obligations of the Depositor; provided, that in the case of clauses (i), (ii) or (iii), such action shall not adversely affect in any material respect the interests of any Holder.
(b) Except as provided in Section 11.3(c), any provision of this Trust Agreement may be amended by the Property Trustee, the Administrative Trustees and the Holder of all of the Common Securities and with (i) the consent of Holders of at least a Majority in Liquidation Amount of the Preferred Securities and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not cause the Trust to be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes or affect the treatment of the Notes as indebtedness of the Depositor for United States federal income tax purposes or affect the Trust's exemption from status (or from any requirement to register) as an "investment company" under the Investment Company Act.
(c) Notwithstanding any other provision of this Trust Agreement, without the consent of each Holder, this Trust Agreement may not be amended to (i) change the accrual rate, amount, currency or timing of any Distribution on or the redemption price of the Trust Securities or otherwise adversely affect the amount of any Distribution or other payment required to be made in respect of the Trust Securities as of a specified date, (ii) restrict or impair the right of a Holder to institute suit for the enforcement of any such payment on or after such date, (iii) reduce the percentage of aggregate Liquidation Amount of Outstanding Preferred Securities, the consent of whose Holders is required for any such amendment, or the consent of whose Holders is required for any waiver of compliance with any provision of this Trust Agreement or of defaults hereunder and their consequences provided for in this Trust Agreement; (iv) impair or adversely affect the rights and interests of the Holders in the Trust Property, or permit the creation of any Lien on any portion of the Trust Property; or (v) modify the definition of "Outstanding," this Section 11.3(c), Sections 4.1, 4.2, 4.3, 6.10(e) or Article IX.
(d) Notwithstanding any other provision of this Trust Agreement, no Trustee shall enter into or consent to any amendment to this Trust Agreement that would cause the Trust to be taxable as a corporation or to be classified as other than a grantor trust for United States federal income tax purposes or that would cause the Notes to fail or cease to be treated as indebtedness of the Depositor for United States federal income tax purposes or that would cause the Trust to fail or cease to qualify for the exemption from status (or from any requirement to register) as an "investment company" under the Investment Company Act.
(e) If any amendment to this Trust Agreement is made, the Administrative Trustees or the Property Trustee shall promptly provide to the Depositor and the Note Trustee a copy of such amendment.
(f) No Trustee shall be required to enter into any amendment to this Trust Agreement that affects its own rights, duties or immunities under this Trust Agreement. The Trustees shall be entitled to receive an Opinion of Counsel and an Officers' Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement and all conditions precedent herein provided for relating to such action have been met.
(g) No amendment or modification to this Trust Agreement that adversely affects in any material respect the rights, duties, liabilities, indemnities or immunities of the Delaware Trustee hereunder shall be permitted without the prior written consent of the Delaware Trustee.
SECTION 11.4. Separability.
If any provision in this Trust Agreement or in the Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.
SECTION 11.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE TRUST, THE DEPOSITOR AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS.
SECTION 11.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust and any Trustee, including any successor by operation of law. Except in connection with a transaction involving the Depositor that is permitted under Article VIII of the Indenture and pursuant to which the assignee agrees in writing to perform the Depositor's obligations hereunder, the Depositor shall not assign its obligations hereunder.
SECTION 11.7. Headings.
The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement.
SECTION 11.8. Reports, Notices and Demands.
(a) Any report, notice, demand or other communication that by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Holder or the
Depositor may be given or served in writing delivered in person, or by reputable, overnight courier, by telecopy or by deposit thereof, first-class postage prepaid, in the United States mail, addressed, (a) in the case of a Holder of Preferred Securities, to such Holder as such Holder's name and address may appear on the Securities Register; and (b) in the case of the Holder of all the Common Securities or the Depositor, to Bluegreen Corporation, 4960 Conference Way North, Boca Raton, Florida 33431, Attention: Chief Financial Officer, or to such other address as may be specified in a written notice by the Holder of all the Common Securities or the Depositor, as the case may be, to the Property Trustee. Such report, notice, demand or other communication to or upon a Holder or the Depositor shall be deemed to have been given when received in person, within one (1) Business Day following delivery by overnight courier, when telecopied with receipt confirmed, or within three (3) Business Days following delivery by mail, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver.
(b) Any notice, demand or other communication that by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Property Trustee, the Delaware Trustee, the Administrative Trustees or the
Trust shall be given in writing by deposit thereof, first-class postage prepaid,
in the U.S. mail, personal delivery or facsimile transmission, addressed to such
Person as follows: (a) with respect to the Property Trustee and the Delaware
Trustee to Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets,
facsimile no. (302) 636-4140; (b) with respect to the Administrative Trustees,
to them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of Bluegreen Statutory Trust IV," and (c) with respect
to the Trust, to its principal executive office specified in Section 2.2, with a
copy to the Property Trustee. Such notice, demand or other communication to or
upon the Trust, the Property Trustee or the Administrative Trustees shall be
deemed to have been sufficiently given or made only upon actual receipt of the
writing by the Trust, the Property Trustee or the Administrative Trustees.
SECTION 11.9. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the Holders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, they shall not file, or join in the filing of, a petition against the Trust under any Bankruptcy Law or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. If the Depositor takes action in violation of this Section 11.9, the Property Trustee agrees, for the benefit of Holders, that at the expense of the Depositor, it shall file an answer with the applicable bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Property Trustee or the Trust may assert.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but
one and the same instrument. Delivery of an executed signature page of this instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Trust Agreement as of the day and year first above written.
BLUEGREEN CORPORATION,
as Depositor
By: ___________________________________
Name:
Title:
Wilmington Trust Company, as Property Wilmington Trust Company, as Delaware
Trustee Trustee
By: ____________________________ By: ___________________________________
Name: Name:
Title: Title:
________________________________ _____________________________
Administrative Trustee Administrative Trustee
Name: Name:
________________________________
Administrative Trustee
Name:
|
Exhibit A
|
CERTIFICATE OF TRUST
OF
Bluegreen Statutory Trust IV
This Certificate of Trust of Bluegreen Statutory Trust IV (the "Trust") is being duly executed and filed on behalf of the Trust by the undersigned, as trustees, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. ss.3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed by this Certificate of Trust is: Bluegreen Statutory Trust IV.
2. Delaware Trustee. The name and business address of the trustee of the Trust with its principal place of business in the State of Delaware are Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets.
3. Effective Date. This Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have duly executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Property Trustee
By: ___________________________________________ Name:
Title:
WILMINGTON TRUST COMPANY, not in its individual
capacity, but solely as Delaware Trustee
By: ___________________________________________
Name:
Title:
Exhibit B
[FORM OF COMMON SECURITIES CERTIFICATE]
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE
WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST
AGREEMENT.
Certificate Number _________ Common Securities
C-
Certificate Evidencing Common Securities
of
Bluegreen Statutory Trust IV
Common Securities
(liquidation amount $1,000 per Common Security)
Bluegreen Statutory Trust IV, a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that ____________________ (the "Holder") is the registered owner of ____________common securities of the Trust representing undivided common beneficial interests in the assets of the Trust and designated the Bluegreen Statutory Trust IV Common Securities (liquidation amount $1,000 per Common Security) (the "Common Securities"). Except in accordance with Section 5.11 of the Trust Agreement (as defined below), the Common Securities are not transferable and, to the fullest extent permitted by law, any attempted transfer hereof other than in accordance therewith shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust, dated as of April 24, 2006, as the same may be amended from time to time (the "Trust Agreement"), among Bluegreen Corporation, as Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee, the Administrative Trustees named therein and the Holders, from time to time, of Trust Securities. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.
This Common Securities Certificate shall be governed by and construed in accordance with the laws of the State of Delaware.
Terms used but not defined herein have the meanings set forth in the Trust Agreement.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed on behalf of the Trust this certificate this ____ day of _____________.
BLUEGREEN STATUTORY TRUST IV
By: ________________________________
Name:
Administrative Trustee
Exhibit C
[FORM OF PREFERRED SECURITIES CERTIFICATE]
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO BLUEGREEN STATUTORY TRUST IV OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH PREFERRED SECURITIES OR ANY
INTEREST THEREIN MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF ANY PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE
PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE
AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED
SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
TRUST, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (III) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III), SUBJECT TO THE RIGHT OF THE TRUST AND THE DEPOSITOR TO REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE WITH THE U.S. SECURITIES LAWS, AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES OR ANY INTEREST THEREIN IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF LIQUIDATION AMOUNT OF OR DISTRIBUTIONS ON SUCH PREFERRED SECURITIES OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES.
THE HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY OR ANY INTEREST THEREIN ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER OF THE PREFERRED SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE "PLAN ASSETS" OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
Certificate Number _________ Preferred Securities
________ Aggregate Liquidation Amount
|
CUSIP NO.
Certificate Evidencing Preferred Securities
of
Bluegreen Statutory Trust IV
Preferred Securities
(liquidation amount $1,000 per Preferred Security)
Bluegreen Statutory Trust IV, a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that ___________________ (the "Holder") is the registered owner of ___________ Preferred Securities [if the Preferred Security is a Global Security, then insert--,or such other number of Preferred Securities represented hereby as may be set forth in the records of the Securities Registrar hereinafter referred to in accordance with the Trust Agreement (as defined below),] of the Trust representing an undivided preferred beneficial interest in the assets of the Trust and designated the Bluegreen Statutory Trust IV Preferred Securities (liquidation amount $1,000 per Preferred Security) (the "Preferred Securities"). Subject to the terms of the Trust Agreement (as defined below), the Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.7 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust, dated as of April 24, 2006, as the same may be amended from time to time (the "Trust Agreement"), among Bluegreen Corporation, a Massachusetts corporation, as Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee, the Administrative Trustees named therein and the Holders, from time to time, of Trust Securities. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Property Trustee at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.
This Preferred Securities Certificate shall be governed by and construed in accordance with the laws of the State of Delaware.
All capitalized terms used but not defined in this Preferred Securities Certificate are used with the meanings specified in the Trust Agreement, including the Schedules and Exhibits thereto.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed on behalf of the Trust this certificate this __ day of __________, ____.
BLUEGREEN STATUTORY TRUST IV
By: _________________________________
Name:
Administrative Trustee
This represents Preferred Securities referred to in the within-mentioned Trust Agreement.
Dated:
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as Property
Trustee
By: ______________________________________
Authorized officer
[FORM OF REVERSE OF SECURITY]
The Trust promises to pay Distributions from April 24, 2006, or from the most recent Distribution Date to which Distributions have been paid or duly provided for, quarterly in arrears on March 30th, June 30th, September 30th and December 30th of each year, commencing on June 30, 2006, at a fixed rate per annum equal to 10.13% of the Liquidation Amount of the Preferred Securities represented by this Preferred Securities Certificate through the Distribution Date in June, 2011 and a variable rate per annum, reset quarterly, equal to LIBOR plus 4.85% of the Liquidation Amount of the Preferred Securities represented by this Preferred Securities Certificate, thereafter, together with any Additional Interest Amounts, in respect to such period.
Distributions on the Trust Securities shall be made by the Paying Agent from the Payment Account and shall be payable on each Distribution Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Distributions.
Distributions on the Securities must be paid on the dates payable to the extent that the Trust has funds available for the payment of such Distributions in the Payment Account of the Trust. The Trust's funds available for Distribution to the Holders of the Preferred Securities will be limited to payments received from the Depositor.
On each Note Redemption Date, on the stated maturity (or any date of principal repayment upon early maturity) of the Notes and on each other date on (or in respect of) which any principal on the Notes is repaid, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. Under the Indenture, the Notes may be redeemed by the Depositor on any Interest Payment Date, at the Depositor's option, on or after June 30, 2011 in whole or in part from time to time at a redemption price equal to one hundred percent (100%) of the principal amount thereof or the redeemed portion thereof, as applicable, together, in the case of any such redemption, with accrued interest, including any Additional Interest, to but excluding the date fixed for redemption. The Notes may also be redeemed by the Depositor before June 30, 2011, at its option, at any time, in whole but not in part, upon the occurrence of an Investment Company Event or a Tax Event at the Special Event Redemption Price.
The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption or payment at maturity of Notes. Redemptions of the Trust Securities (or portion thereof) shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Redemption Price.
Payments of Distributions (including any Additional Interest Amounts), the Redemption Price, Liquidation Amount or any other amounts in respect of the Preferred Securities shall be made by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing at least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Security Register. If any
Preferred Securities are held by a Depositary, such Distributions shall be made to the Depositary in immediately available funds.
The indebtedness evidenced by the Notes is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt (as defined in the Indenture), and this Security is issued subject to the provisions of the Indenture with respect thereto.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Securities Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Securities Certificate on the books of the Trust. The agent may substitute another to act for him or her.
Date: _______________________
Signature: ____________________________________________________________________
(Sign exactly as your name appears on the other side of
this Preferred Securities Certificate)
|
The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
Exhibit D
Junior Subordinated Indenture
Exhibit E
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS
April 24, 2006
Bluegreen Corporation
Bluegreen Statutory Trust IV
4960 Conference Way North
Boca Raton, Florida 33431
Re: Purchase of $1,000 stated liquidation amount of Preferred Securities (the "Preferred Securities") of Bluegreen Statutory Trust IV
Ladies and Gentlemen:
In connection with our purchase of the Preferred Securities we confirm that:
1. We understand that the Preferred Securities (the "Preferred
Securities") of Bluegreen Statutory Trust IV (the "Trust") and the Junior
Subordinated Notes due 2036 (the "Subordinated Notes") of Bluegreen Corporation,
a Massachusetts corporation (the "Company"), executed in connection therewith
(the Preferred Securities and the Subordinated Notes together being referred to
herein as the "Offered Securities"), have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold except as permitted in the following sentence. We agree on our
own behalf and on behalf of any investor account for which we are purchasing the
Offered Securities that, if we decide to offer, sell or otherwise transfer any
such Offered Securities, such offer, sale or transfer will be made only (a) to
the Trust, (b) to a person we reasonably believe is a "qualified institutional
buyer" (a "QIB") (as defined in Rule 144 under the Securities Act) in a
transaction meeting the requirements of Rule 144A or (c) to an institutional
"accredited investor" within the meaning of subparagraph (a) (1), (2), (3) or
(7) of Rule 501 under the Securities Act that is acquiring Offered Securities
for its own account, or for the account of such an "accredited investor," for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act, in each case
in accordance with any applicable securities laws of any state of the United
States or any other applicable jurisdiction and, in the case of (c) subject to
the right of the Trust and the depositor to require an opinion of counsel and
other information satisfactory to each of them. If any resale or other transfer
of the Offered Securities is proposed to be made pursuant to clause (c) above,
the transferor shall deliver a letter from the transferee substantially in the
form of this letter to the Property Trustee as Transfer Agent, which shall
provide as applicable, among other things, that the transferee is an "accredited
investor" within the meaning of subparagraph (a) (1), (2), (3) or (7) of Rule
501 under the Securities Act that is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. We
acknowledge on our behalf and on behalf of any investor account for which we are
purchasing Securities that the Trust and the Company reserve the right prior to
any offer, sale or other transfer pursuant to clause (c) to require the delivery
of any opinion of counsel, certifications and/or other information satisfactory
to the Trust and the Company. We
understand that the certificates for any Offered Security that we receive will bear a legend substantially to the effect of the foregoing.
2. We are an "accredited investor" within the meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act purchasing for our own account or for the account of such an "accredited investor," and we are acquiring the Offered Securities for investment purposes and not with view to, or for offer or sale in connection with, any distribution in violation of the Securities Act, and we have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Offered Securities, and we and any account for which we are acting are each able to bear the economic risks of our or its investment.
3. We are acquiring the Offered Securities purchased by us for our own account (or for one or more accounts as to each of which we exercise sole investment discretion and have authority to make, and do make, the statements contained in this letter) and not with a view to any distribution of the Offered Securities, subject, nevertheless, to the understanding that the disposition of our property will at all times be and remain within our control.
4. In the event that we purchase any Preferred Securities or any Subordinated Notes, we will acquire such Preferred Securities having an aggregate stated liquidation amount of not less than $100,000 or such Subordinated Notes having an aggregate principal amount not less than $100,000, for our own account and for each separate account for which we are acting.
5. We acknowledge that either (A) we are not (and are not acting as a fiduciary of or on behalf of) an employee benefit, individual retirement account or other plan or arrangement subject to Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code") (each a "Plan"), or an entity whose underlying assets include "plan assets" by reason of any Plan's investment in the entity, and are not purchasing the Offered Securities on behalf of or with "plan assets" by reason of any Plan's investment in the entity; (B) we are eligible for the exemptive relief available under one or more of the following prohibited transaction class exemptions ("PTCEs") issued by the U.S. Department of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption; or (C) our purchase and holding of this security, or any interest therein, are not prohibited by Section 406 of ERISA or Section 4975 of the Code with respect to such purchase and holding.
6. We acknowledge that the Trust and the Company and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations, warranties and agreements and agree that if any of the acknowledgments, representations, warranties and agreements deemed to have been made by our purchase of the Offered Securities are no longer accurate, we shall promptly notify the Company. If we are acquiring any Offered Securities as a fiduciary or agent for one or more investor accounts, we represent that we have sole discretion with respect to each such investor account and that we have full power to make the foregoing acknowledgments, representations and agreement on behalf of each such investor account.
(Name of Purchaser)
By: _________________________________
Date: _________________________________
Upon transfer, the Offered Securities would be registered in the name of the new beneficial owner as follows.
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
Exhibit F
FORM OF TRANSFEROR CERTIFICATE
TO BE EXECUTED FOR QIBs
April 24, 2006
Bluegreen Corporation
Bluegreen Statutory Trust IV
4960 Conference Way North
Boca Raton, Florida 33431
Re: Purchase of $1,000 stated liquidation amount of Preferred Securities (the "Preferred Securities") of Bluegreen Statutory
Trust IV
Reference is hereby made to the Amended and Restated Trust Agreement of Bluegreen Statutory Trust IV, dated as of April 24, 2006 (the "Trust Agreement"), among George F. Donovan, Anthony M. Puleo and John M. Maloney, Jr., as Administrative Trustees, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee, Bluegreen Corporation, as Depositor, and the holders from time to time of undivided beneficial interests in the assets of Bluegreen Statutory Trust IV. Capitalized terms used but not defined herein shall have the meanings given them in the Trust Agreement.
This letter relates to $________________________ aggregate liquidation amount of Preferred Securities which are held in the name of _____________ (the "Transferor").
In accordance with Article V of the Trust Agreement, the Transferor hereby
certifies that such Preferred Securities are being transferred in accordance
with (i) the transfer restrictions set forth in the Preferred Securities and
(ii) Rule 144A under the Securities Act ("Rule 144A"), to a transferee that the
Transferor reasonably believes is purchasing the Preferred Securities for its
own account or an account with respect to which the transferee exercises sole
investment discretion and the transferee and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with applicable securities laws
of any state of the United States or any other jurisdiction.
You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
(Name of Transferor)
By: ________________________________
Name:
Title:
Date: ___________________
Exhibit G
Form of Officer's Financial Certificate
The undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/ Secretary/ Assistant Secretary, Chairman/ViceChairman/Chief Executive Officer/President/Vice President] hereby certifies, pursuant to Section 8.16(b) of the Amended and Restated Trust Agreement, dated as of April 24, 2006, that:
[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial statements (including the balance sheet, income statement and statement of cash flows, and notes thereto, together with the report of the independent accountants thereon) of the Company and its consolidated subsidiaries for the three years ended _______, 20__.]
[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and consolidating financial statements (including the balance sheet and income statement) of the Company and its consolidated subsidiaries for the fiscal quarter and [six/nine] month period ended _______, 20___.]
The financial statements fairly present in all material respects, in accordance with U.S. generally accepted accounting principles ("GAAP"), the financial position of the Company and its consolidated subsidiaries, and the results of operations and changes in financial condition as of the date, and for the [quarter] [annual] period ended _______, 20__, and such financial statements have been prepared in accordance with GAAP consistently applied throughout the period involved (expect as otherwise noted therein).
IN WITNESS WHEREOF, the undersigned has executed this Officer's Financial Certificate as of this _____ day of _____________, 20__.
By: ______________________________ Name: ____________________________
Bluegreen Corporation 4960 Conference Way North Boca Raton, Florida 33431 (561) 912-8000
Exhibit H
FORM OF
OFFICERS' CERTIFICATE
UNDER
SECTION 8.16(a)
Pursuant to Section 8.16(a) of the Amended and Restated Trust Agreement, dated as of April 24, 2006 (as modified, supplemented or amended from time to time, the "Trust Agreement") of Bluegreen Statutory Trust IV, a Delaware statutory trust (the "Trust"), each of the undersigned hereby certifies that, to the knowledge of the undersigned, none of the Depositor, the Administrative Trustees and the Trust are in default in the performance or observance of any of the terms, provisions and conditions of the Trust Agreement (without regard to any period of grace or requirement of notice provided under the Trust Agreement) for the fiscal period ending on _________, 20__ [, except as follows: specify each such default and the nature and status thereof].
Capitalized terms used herein, and not otherwise defined herein, have the respective meanings assigned thereto in the Trust Agreement.
[signatures appear on the next page]
IN WITNESS WHEREOF, the undersigned have executed this Officers' Certificate as of __________, 20__.
Title: [Must be the Chief Executive Officer, the
President, or an Executive Vice President]
of Bluegreen Corporation
Title: [Must be the Chief Financial Officer, the
Treasurer, or an Assistant Treasurer] of
Bluegreen Corporation
Schedule A
With respect to the Trust Securities, the London interbank offered rate ("LIBOR") shall be determined by the Calculation Agent in accordance with the following provisions (in each case rounded to the nearest .000001%):
(1) On the second LIBOR Business Day (as defined below) prior to June 30, 2011 and each Distribution Date thereafter, beginning in June, 2011 (each such day, a "LIBOR Determination Date"), LIBOR for any given security shall, for the following distribution period, equal the rate, as obtained by the Calculation Agent from Bloomberg Financial Markets Commodities News, for three-month U.S. Dollar deposits in Europe, which appears on Dow Jones Telerate Page 3750 (as defined in the International Swaps and Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange Definitions), or such other page as may replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.
(2) If, on any LIBOR Determination Date, such rate does not appear on Dow Jones Telerate Page 3750 or such other page as may replace such Page 3750, the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading banks in the London interbank market for three-month U.S. Dollar deposits in Europe in an amount determined by the Calculation Agent by reference to requests for quotations as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal such arithmetic mean of such quotations. If, on any LIBOR Determination Date, only one or none of the Reference Banks provide such quotations, LIBOR shall be deemed to be the arithmetic mean of the offered quotations that leading banks in the City of New York selected by the Calculation Agent are quoting on the relevant LIBOR Determination Date for three-month U.S. Dollar deposits in Europe in an amount determined by the Calculation Agent by reference to the principal London offices of leading banks in the London interbank market; provided, that if the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures provided above, LIBOR shall be LIBOR as determined on the previous LIBOR Determination Date.
(3) As used herein: "Reference Banks" means four major banks in the London interbank market selected by the Calculation Agent; and "LIBOR Business Day" means a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London.
Schedule A-1
Exhibit 10.62
JUNIOR SUBORDINATED INDENTURE
between
BLUEGREEN CORPORATION
and
WILMINGTON TRUST COMPANY
as Trustee
Dated as of April 24, 2006
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.1. Definitions...........................................................................1
SECTION 1.2. Compliance Certificate and Opinions..................................................10
SECTION 1.3. Forms of Documents Delivered to Trustee..............................................10
SECTION 1.4. Acts of Holders......................................................................11
SECTION 1.5. Notices, Etc.........................................................................13
SECTION 1.6. Notice to Holders; Waiver............................................................14
SECTION 1.7. Effect of Headings and Table of Contents.............................................14
SECTION 1.8. Successors and Assigns...............................................................14
SECTION 1.9. Separability Clause..................................................................14
SECTION 1.10. Benefits of Indenture................................................................14
SECTION 1.11. Governing Law........................................................................15
SECTION 1.12. Submission to Jurisdiction...........................................................15
SECTION 1.13. Non-Business Days....................................................................15
ARTICLE II
Security Forms
SECTION 2.1. Form of Security.....................................................................15
SECTION 2.2. Restricted Legend....................................................................19
SECTION 2.3. Form of Trustee's Certificate of Authentication......................................22
SECTION 2.4. Temporary Securities.................................................................22
SECTION 2.5. Definitive Securities................................................................23
ARTICLE III
The Securities
SECTION 3.1. Payment of Principal and Interest....................................................23
SECTION 3.2. Denominations........................................................................25
SECTION 3.3. Execution, Authentication, Delivery and Dating.......................................25
SECTION 3.4. Global Securities....................................................................26
SECTION 3.5. Registration, Transfer and Exchange Generally........................................28
|
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.....................................29
SECTION 3.7. Persons Deemed Owners................................................................30
SECTION 3.8. Cancellation.........................................................................30
SECTION 3.9. RESERVED.............................................................................30
SECTION 3.10. Right of Set-Off.....................................................................30
SECTION 3.11. Agreed Tax Treatment.................................................................30
SECTION 3.12. CUSIP Numbers........................................................................31
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture..............................................31
SECTION 4.2. Application of Trust Money...........................................................32
ARTICLE V
Remedies
SECTION 5.1. Events of Default....................................................................32
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment...................................34
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee......................35
SECTION 5.4. Trustee May File Proofs of Claim.....................................................35
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities...........................36
SECTION 5.6. Application of Money Collected.......................................................36
SECTION 5.7. Limitation on Suits..................................................................36
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest;
Direct Action by Holders of Preferred Securities.....................................37
SECTION 5.9. Restoration of Rights and Remedies...................................................37
SECTION 5.10. Rights and Remedies Cumulative.......................................................38
SECTION 5.11. Delay or Omission Not Waiver.........................................................38
SECTION 5.12. Control by Holders...................................................................38
SECTION 5.13. Waiver of Past Defaults..............................................................38
SECTION 5.14. Undertaking for Costs................................................................39
SECTION 5.15. Waiver of Usury, Stay or Extension Laws..............................................39
ARTICLE VI
The Trustee
SECTION 6.1. Corporate Trustee Required...........................................................40
SECTION 6.2. Certain Duties and Responsibilities..................................................40
|
SECTION 6.3. Notice of Defaults...................................................................41
SECTION 6.4. Certain Rights of Trustee............................................................41
SECTION 6.5. May Hold Securities..................................................................43
SECTION 6.6. Compensation; Reimbursement; Indemnity...............................................44
SECTION 6.7. Resignation and Removal; Appointment of Successor....................................45
SECTION 6.8. Acceptance of Appointment by Successor...............................................45
SECTION 6.9. Merger, Conversion, Consolidation or Succession to Business..........................46
SECTION 6.10. Not Responsible for Recitals or Issuance of Securities...............................46
SECTION 6.11. Appointment of Authenticating Agent..................................................46
ARTICLE VII
Holder's Lists and Reports by Trustee and Company
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders............................48
SECTION 7.2. Preservation of Information, Communications to Holders...............................48
SECTION 7.3. Reports by Company and Trustee.......................................................49
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.................................49
SECTION 8.2. Successor Company Substituted........................................................50
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures without Consent of Holders...................................51
SECTION 9.2. Supplemental Indentures with Consent of Holders......................................51
SECTION 9.3. Execution of Supplemental Indentures.................................................52
SECTION 9.4. Effect of Supplemental Indentures....................................................52
SECTION 9.5. Reference in Securities to Supplemental Indentures...................................53
ARTICLE X
Covenants
SECTION 10.1. Payment of Principal, Premium and Interest...........................................53
SECTION 10.2. Money for Security Payments to be Held in Trust......................................53
SECTION 10.3. Statement as to Compliance...........................................................54
SECTION 10.4. Calculation Agent....................................................................54
|
SECTION 10.5. Additional Tax Sums..................................................................55
SECTION 10.6. Additional Covenants.................................................................56
SECTION 10.7. Waiver of Covenants..................................................................57
SECTION 10.8. Treatment of Securities..............................................................57
ARTICLE XI
Redemption of Securities
SECTION 11.1. Optional Redemption..................................................................57
SECTION 11.2. Special Event Redemption.............................................................57
SECTION 11.3. Election to Redeem; Notice to Trustee................................................58
SECTION 11.4. Selection of Securities to be Redeemed...............................................58
SECTION 11.5. Notice of Redemption.................................................................58
SECTION 11.6. Deposit of Redemption Price..........................................................59
SECTION 11.7. Payment of Securities Called for Redemption..........................................59
ARTICLE XII
Subordination of Securities
SECTION 12.1. Securities Subordinate to Senior Debt................................................60
SECTION 12.2. No Payment When Senior Debt in Default; Payment Over of Proceeds Upon
Dissolution, Etc. ...................................................................60
SECTION 12.3. Payment Permitted If No Default......................................................62
SECTION 12.4. Subrogation to Rights of Holders of Senior Debt......................................62
SECTION 12.5. Provisions Solely to Define Relative Rights..........................................62
SECTION 12.6. Trustee to Effectuate Subordination..................................................63
SECTION 12.7. No Waiver of Subordination Provisions................................................63
SECTION 12.8. Notice to Trustee....................................................................63
SECTION 12.9. Reliance on Judicial Order or Certificate of Liquidating Agent.......................64
SECTION 12.10. Trustee Not Fiduciary for Holders of Senior Debt.....................................64
SECTION 12.11. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights.........65
SECTION 12.12. Article Applicable to Paying Agents..................................................65
SCHEDULES
Schedule A Determination of LIBOR
Exhibit A Form of Officer's Certificate
Exhibit B Form of Officers' Certificate pursuant to Section 10.3
|
JUNIOR SUBORDINATED INDENTURE, dated as of April 24, 2006, between Bluegreen Corporation, a Massachusetts corporation (the "Company"), and Wilmington Trust Company, a Delaware banking corporation, as Trustee (in such capacity, the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of its unsecured junior subordinated notes (the "Securities") issued to evidence loans made to the Company of the proceeds from the issuance by Bluegreen Statutory Trust IV, a Delaware statutory trust (the "Trust"), of undivided preferred beneficial interests in the assets of the Trust (the "Preferred Securities") and undivided common beneficial interests in the assets of the Trust (the "Common Securities" and, collectively with the Preferred Securities, the "Trust Securities"), and to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
Now, therefore, this Indenture Witnesseth:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings assigned to them in this Article I;
(b) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation";
(c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
(d) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture;
(e) the words "hereby", "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders.
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Administrative Trustee" means, with respect to the Trust, a Person identified as an "Administrative Trustee" in the Trust Agreement, solely in its capacity as Administrative Trustee of the Trust under the Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor Administrative Trustee appointed as therein provided.
"Additional Interest" means the interest, if any, that shall accrue on any amounts payable on the Securities, the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the rate per annum specified or determined as specified in such Security.
"Additional Tax Sums" has the meaning specified in Section 10.5.
"Additional Taxes" means taxes, duties or other governmental charges imposed on the Trust as a result of a Tax Event (which, for the sake of clarity, does not include amounts required to be deducted or withheld by the Trust from payments made by the Trust to or for the benefit of the Holder of, or any Person that acquires a beneficial interest in, the Securities).
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Depositary Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, in each case to the extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 6.11 to act on behalf of the Trustee to authenticate the Securities.
"Bankruptcy Code" means Title 11 of the United States Code or any successor statute thereto, in each case as amended from time to time.
"Board of Directors" means the board of directors of the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee is closed for business.
"Calculation Agent" has the meaning specified in Section 10.4.
"Common Securities" has the meaning specified in the first recital of this Indenture.
"Common Stock" means the common stock, par value $0.01 per share, of the Company.
"Company" means the Person named as the "Company" in the first paragraph of this Indenture until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the written request or order signed in the name of the Company by its Chairman of the Board of Directors, its Vice Chairman of the Board of Directors, its Chief Executive Officer, President or a Vice President, and by its Chief Financial Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of this Indenture is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets.
"Debt" means, with respect to any Person, whether recourse is to all or a portion of the assets of such Person, whether currently existing or hereafter incurred and whether or not contingent and without duplication, (i) every obligation of such Person for money borrowed; (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or other accrued liabilities arising in the ordinary course of business); (v) every capital lease obligation of such Person; (vi) all indebtedness of such Person, whether incurred on or prior to the date of this Indenture or thereafter incurred, for claims in respect of derivative products, including interest rate, foreign exchange rate and commodity forward contracts, options and swaps and similar arrangements; (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise; and (viii) any renewals, extensions, refundings,
amendments or modifications of any obligation of the type referred to in clauses
(i) through (vii).
"Defaulted Interest" has the meaning specified in Section 3.1.
"Delaware Trustee" means, with respect to the Trust, the Person identified as the "Delaware Trustee" in the Trust Agreement, solely in its capacity as Delaware Trustee of the Trust under the Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware Trustee appointed as therein provided.
"Depositary" means an organization registered as a clearing agency under the Exchange Act that is designated as Depositary by the Company or any successor thereto. DTC will be the initial Depositary.
"Depositary Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Depositary effects book-entry transfers and pledges of securities deposited with the Depositary.
"Distributions" means amounts payable in respect of the Trust Securities as provided in the Trust Agreement and referred to therein as "Distributions."
"Dollar" or "$" means the currency of the United States of America that, as at the time of payment, is legal tender for the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934 or any statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
"GAAP" means United States generally accepted accounting principles, consistently applied, from time to time in effect.
"Global Security" means a Security that evidences all or part of the Securities, the ownership and transfers of which shall be made through book entries by a Depositary.
"Government Obligation" means (a) any security that is (i) a direct obligation of the United States of America of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either
case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (b) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Obligation that is specified in clause (a) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any Government Obligation that is so specified and held, provided, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.
"Holder" means a Person in whose name a Security is registered in the Securities Register.
"Indenture" means this instrument as originally executed or as it may from time to time be amended or supplemented by one or more amendments or indentures supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means March 30th, June 30th, September 30th and December 30th of each year, commencing on June 30, 2006, during the term of this Indenture.
"Investment Company Act" means the Investment Company Act of 1940 or any successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Company of an Opinion of Counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation (including any announced prospective change) or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Trust is or, within ninety (90) days of the date of such opinion will be, considered an "investment company" that is required to be registered under the Investment Company Act, which change or prospective change becomes effective or would become effective, as the case may be, on or after the date of the issuance of the Securities.
"LIBOR" has the meaning specified in Schedule A.
"LIBOR Business Day" has the meaning specified in Schedule A.
"LIBOR Determination Date" has the meaning specified in Schedule A.
"Liquidation Amount" has the meaning specified in the Trust Agreement.
"Maturity," when used with respect to any Security, means the date on which the principal of such Security or any installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(c).
"Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer, President or a Vice President, and by the Chief Financial Officer, Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for or an employee of the Company or any Affiliate of the Company.
"Original Issue Date" means the date of original issuance of each Security.
"Outstanding" means, when used in reference to any Securities, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided, that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities that have been paid, or in substitution for or in lieu of which other Securities have been authenticated and delivered pursuant to the provisions of this Indenture, unless proof satisfactory to the Trustee is presented that any such Securities are held by Holders in whose hands such Securities are valid, binding and legal obligations of the Company;
provided, that, in determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
Notwithstanding anything herein to the contrary, Securities initially issued to
the Trust that are owned by the Trust shall be deemed to be Outstanding
notwithstanding the ownership by the Company or an Affiliate of any beneficial
interest in the Trust.
"Paying Agent" means the Trustee or any Person authorized by the Company to pay the principal of or any premium or interest on, or other amounts in respect of, any Securities on behalf of the Company.
"Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, government or any agency or political subdivision thereof, or any other entity of whatever nature.
"Place of Payment" means, with respect to the Securities, the Corporate Trust Office of the Trustee.
"Placement Agent" has the meaning specified in the Trust Agreement.
"Preferred Securities" has the meaning specified in the first recital of this Indenture.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security. For the purposes of this definition, any security authenticated and delivered under Section 3.6 in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 12.2.
"Property Trustee" means the Person identified as the "Property Trustee" in the Trust Agreement, solely in its capacity as Property Trustee of the Trust under the Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor Property Trustee appointed as therein provided.
"Purchaser" means TWE, Ltd., as purchaser of the Preferred Securities pursuant to the Subscription Agreement.
"Redemption Date" means, when used with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Security to be redeemed, in whole or in part, the price at which such Security or portion thereof is to be redeemed as fixed by or pursuant to this Indenture.
"Reference Banks" has the meaning specified in Schedule A.
"Regular Record Date" for the interest payable on any Interest Payment Date with respect to the Securities means the date that is fifteen (15) days preceding such Interest Payment Date (whether or not a Business Day).
"Responsible Officer" means, with respect to the Trustee, any Senior Vice President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, any Trust Officer or Assistant Trust Officer, or any other officer in the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject.
"Rights Plan" means a plan of the Company providing for the issuance by the Company to all holders of its Common Stock of rights entitling the holders thereof to subscribe for or purchase shares of any class or series of capital stock of the Company which rights (i) are deemed to be transferred with such shares of such Common Stock and (ii) are also issued in respect of future issuances of such Common Stock, in each case until the occurrence of a specified event or events.
"Securities" or "Security" means any debt securities or debt security, as the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 or any successor statute thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective meanings specified in Section 3.5.
"Senior Debt" means the principal of and any premium and interest on (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company, whether or not such claim for post-petition interest is allowed in such proceeding) all Debt of the Company, whether incurred on or prior to the date of this Indenture or thereafter incurred, unless it is provided in the instrument creating or evidencing the same or pursuant to which the same is outstanding, that such obligations are not superior in right of payment to the Securities; provided, however, that Senior Debt shall not include any other debt securities, and guarantees in respect of such debt securities, issued by the Company to any trust other than the Trust (or a trustee of such trust), partnership or other entity affiliated with the Company that is a financing vehicle of the Company (a "financing entity," except that a securitization vehicle or other entity established in connection with the securitization or financing of any assets of the Company shall not be deemed a financing entity), in connection with the issuance by such financing entity of equity securities or other securities that rank pari passu with or junior in right of payment to the Securities, including, without limitation, the debt securities of the Company issued under the Indenture, dated March 15, 2005, between the Company and JPMorgan Chase Bank, National Association, as trustee, and the debt securities of the Company issued under the Indenture, dated May 4, 2005, between the Company and Wilmington Trust Company, as trustee and the debt securities of the Company issued under the Indenture, dated May 10, 2005, between the Company and Wilmington Trust Company, as trustee.
"Special Event" means the occurrence of an Investment Company Event or a Tax Event.
"Special Event Redemption Price" has the meaning specified in Section 11.2.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.1.
"Stated Maturity" means June 30, 2036.
"Subscription Agreement" means the Preferred Securities Subscription Agreement, dated as of April 24, 2006, by and among the Company, the Trust, the Purchaser and J.P. Morgan Securities Inc. (as to certain provisions thereof).
"Subsidiary" means a Person more than fifty percent (50%) of the outstanding voting stock or other voting interests of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For purposes of this definition, "voting stock" means stock that ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
"Tax Event" means the receipt by the Company of an Opinion of Counsel
experienced in such matters to the effect that, as a result of (a) any amendment
to or change (including any announced prospective change) in the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein or (b) any judicial decision or any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum or field service advice) or regulatory procedure, including
any notice or announcement of intent to adopt any such pronouncement or
procedure (an "Administrative Action"), regardless of whether such judicial
decision or Administrative Action is issued to or in connection with a
proceeding involving the Company or the Trust and whether or not subject to
review or appeal, which amendment, change, judicial decision or Administrative
Action is enacted, promulgated or announced, in each case, on or after the date
of issuance of the Securities, there is more than an insubstantial risk that (i)
the Trust is, or will be within ninety (90) days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Securities, (ii) interest payable by the Company on the
Securities is not, or within ninety (90) days of the date of such opinion, will
not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within ninety
(90) days of the date of such opinion, subject to more than a de minimis amount
of other taxes, duties or other governmental charges.
"Trust" has the meaning specified in the first recital of this Indenture.
"Trust Agreement" means the Amended and Restated Trust Agreement executed and delivered by the Company, the Property Trustee, the Delaware Trustee and the Administrative Trustees named therein, contemporaneously with the execution and delivery of this Indenture, for the benefit of the holders of the Trust Securities, as amended or supplemented from time to time.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, solely in its capacity as such and not in its individual capacity, until a successor
Trustee shall have become such pursuant to the applicable provisions of this Indenture, and, thereafter, "Trustee" shall mean or include each Person who is then a Trustee hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended and as in effect on the date as of this Indenture.
"Trust Securities" has the meaning specified in the first recital of this Indenture.
SECTION 1.2. Compliance Certificate and Opinions.
(a) Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent (including covenants compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent (including covenants compliance with which constitutes a condition precedent), if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
(b) Every certificate delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture (other than the certificate provided pursuant to Section 10.3) shall include:
(i) a statement by each individual signing such certificate or opinion that such individual has read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions of such individual contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of such individual, such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
(a) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or after reasonable inquiry should know, that the certificate or opinion or representations with respect to matters upon which his or her certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or after reasonable inquiry should know, that the certificate or opinion or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
(d) Whenever, subsequent to the receipt by the Trustee of any Board Resolution, Officers' Certificate, Opinion of Counsel or other document or instrument, a clerical, typographical or other inadvertent or unintentional error or omission shall be discovered therein, a new document or instrument may be substituted therefor in corrected form with the same force and effect as if originally received in the corrected form and, irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Without limiting the generality of the foregoing, any Securities issued under the authority of such defective document or instrument shall nevertheless be the valid obligations of the Company entitled to the benefits of this Indenture equally and ratably with all other Outstanding Securities.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given to or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent thereof duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments (including any appointment of an agent) is or are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.4.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Where such execution is by a Person acting in other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact
and date of the execution by any Person of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine.
(c) The ownership of Securities shall be proved by the Securities Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
(e) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.
(f) Except as set forth in paragraph (g) of this Section 1.4, the Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date (as defined below) by Holders of the requisite principal amount of Outstanding Securities on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect). Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities in the manner set forth in Section 1.6.
(g) The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration or rescission or annulment thereof referred to in Section 5.2, (iii) any request to institute proceedings referred to in Section 5.7(b) or (iv) any direction referred to in Section 5.12. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect). Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities in the manner set forth in Section 1.6.
(h) With respect to any record date set pursuant to paragraph (f) or (g) of this Section 1.4, the party hereto that sets such record date may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided, that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section 1.4, the party hereto that set such record date shall be deemed to have initially designated the ninetieth (90th) day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the one hundred and eightieth (180th) day after the applicable record date.
SECTION 1.5. Notices, Etc.
Any request, demand, authorization, direction, notice, consent, waiver, Act of Holders, or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder, any holder of Preferred Securities or the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office,
(b) the Company by the Trustee, any Holder or any holder of Preferred Securities shall be sufficient for every purpose hereunder if in writing and mailed, first class, postage prepaid, to the Company addressed to it at Bluegreen Corporation, 4960 Conference Way North, Boca Raton, Florida 33431, Attn: Chief Financial Officer, or at any other address previously furnished in writing to the Trustee by the Company,
(c) the Placement Agent by the Trustee, the Company, any Holder or any holder or beneficial owner of the Preferred Securities, shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid to the Placement Agent at 270 Park Avenue, New York, New York 10017, Attention: The CDO Group, or any other address previously furnished by the Placement Agent, or
(d) the Purchaser by the Trustee, the Company, any Holder or any holder or beneficial owner of the Preferred Securities, shall be sufficient for every purpose hereunder if in writing and mailed first-class postage prepaid to the Purchaser at c/o Maples Finance Limited, P.O. Box 1093 GT, Queensgate House, South Church Street, George Town, Grand Cayman, Cayman Islands, Attention: The Directors, or any other address previously furnished by the Purchaser.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first class, postage prepaid, to each Holder affected by such event to the address of such Holder as it appears in the Securities Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. If, by reason of the suspension of or irregularities in regular mail service or for any other reason, it shall be impossible or impracticable to mail notice of any event to Holders when said notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction of this Indenture.
SECTION 1.8. Successors and Assigns.
This Indenture shall be binding upon and shall inure to the benefit of any successor to the Company and the Trustee, including any successor by operation of law. Except in connection with a transaction involving the Company that is permitted under Article VIII and pursuant to which the assignee agrees in writing to perform the Company's obligations hereunder, the Company shall not assign its obligations hereunder.
SECTION 1.9. Separability Clause.
If any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.
SECTION 1.10. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors and assigns, the holders of Senior Debt, the Holders of the Securities and, to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.2 and 10.7, the holders of Preferred Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.11. Governing Law.
This Indenture and the rights and obligations of each of the Holders, the Company and the Trustee shall be construed and enforced in accordance with and governed by the laws of the State of New York without reference to its conflict of laws provisions (other than Section 5-1401 of the General Obligations Law).
SECTION 1.12. Submission to Jurisdiction.
ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS INDENTURE MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS INDENTURE, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or the Securities) payment of interest, premium, if any, or principal or other amounts in respect of such Security shall not be made on such date, but shall be made on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, until such next succeeding Business Day) except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the Interest Payment Date or Redemption Date or at the Stated Maturity.
ARTICLE II
Security Forms
SECTION 2.1. Form of Security.
Any Security issued hereunder shall be in substantially the following form:
Bluegreen Corporation
Junior Subordinated Note due 2036
No. _____________ $__________
Bluegreen Corporation, a corporation organized and existing under the laws of Massachusetts (hereinafter called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _______________, or registered assigns, the principal sum of $__________ Dollars [if the Security is a Global Security, then insert-- or such other principal amount represented hereby as may be set forth in the records of the Securities Registrar hereinafter referred to in accordance with the Indenture] on June 30, 2036. The Company further promises to pay interest on said principal sum from _______, 200__, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on March 30th, June 30th, September 30th and December 30th of each year, commencing on _______, 200__, or if any such day is not a Business Day, on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after such Interest Payment Date until such next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on the Interest Payment Date, at a fixed rate per annum equal to 10.13% through the Interest Payment Date in June, 2011, and a variable rate per annum, reset quarterly, equal to LIBOR plus 4.85% thereafter, together with Additional Tax Sums, if any, as provided in Section 10.5 of the Indenture, until the principal hereof is paid or duly provided for or made available for payment; provided, that any overdue principal, premium, if any, or Additional Tax Sums and any overdue installment of interest shall bear Additional Interest (to the extent that the payment of such interest shall be legally enforceable) at a fixed rate per annum equal to 10.13% through the Interest Payment Date in June, 2011, and a variable rate per annum, reset quarterly, equal to LIBOR plus 4.85% thereafter, compounded quarterly, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand.
The amount of interest payable for any interest period shall be computed and paid on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Securities may be listed, traded or quoted and upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in the Indenture.
Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the office or agency of the Company maintained for that purpose in the Place of Payment upon surrender of such Securities to the
Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written wire transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Security is the Property Trustee, the payment of the principal of (and premium, if any) and interest (including any overdue installment of interest and Additional Tax Sums, if any) on this Security will be made at such place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
This Security is one of a duly authorized issue of securities of the Company (the "Securities") issued under the Junior Subordinated Indenture, dated as of April 24, 2006 (the "Indenture"), between the Company and Wilmington Trust Company, as Trustee (in such capacity, the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered.
All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of April 24, 2006 (as modified, amended or supplemented from time to time, the "Trust Agreement"), relating to Bluegreen Statutory Trust IV (the "Trust"), among the Company, as Depositor, the trustees named therein and the holders from time to time of the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be.
The Company may, on any Interest Payment Date on or after June 30, 2011, at its option, upon not less than thirty (30) days' nor more than sixty (60) days' written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee) and subject to
the terms and conditions of Article XI of the Indenture, redeem this Security in whole at any time or in part from time to time at a Redemption Price equal to one hundred percent (100%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, to but excluding the date fixed for redemption.
In addition, upon the occurrence and during the continuation of a Special Event, the Company may before June 30, 2011, at its option, upon not less than thirty (30) days' nor more than sixty (60) days' written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee), redeem this Security, in whole but not in part, subject to the terms and conditions of Article XI of the Indenture at the Special Event Redemption Price.
In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the Trustee from the Outstanding Securities not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security.
The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, if any, and interest, including any Additional Interest, on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar and duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, and thereupon one or more new Securities, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Company and, by its acceptance of this Security or a beneficial interest herein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that, for United States federal, state and local tax purposes, it is intended that this Security constitute indebtedness.
This Security shall be construed and enforced in accordance with and governed by the laws of the State of New York, without reference to its conflict of laws provisions (other than Section 5-1401 of the General Obligations Law).
IN WITNESS WHEREOF, the Company has duly executed this certificate this ____ day of ____________, 2006.
BLUEGREEN CORPORATION
By:_________________________________
Name:
Title:
SECTION 2.2. Restricted Legend.
(a) Any Security issued hereunder shall bear a legend in substantially the following form:
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (III) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE WITH THE U.S. SECURITIES LAWS, AND OTHER
INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.
THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY INTEREST THEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE "PLAN ASSETS" OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER AN APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.
(b) The above legends shall not be removed from any Security unless there is delivered to the Company satisfactory evidence, which may include an Opinion of Counsel, as may be reasonably required to ensure that any future transfers thereof may be made without restriction under or violation of the provisions of the Securities Act and other applicable law. Upon provision of such satisfactory evidence, the Company shall execute and deliver to the Trustee, and the Trustee shall deliver, at the written direction of the Company, a Security that does not bear the legend.
SECTION 2.3. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the following form:
This represents Securities referred to in the within-mentioned Indenture.
Dated:
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: _____________________________________
Authorized officer
SECTION 2.4. Temporary Securities.
(a) Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
(b) If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for that purpose without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of any authorized denominations having the same Original Issue Date and Stated Maturity and having the same terms as such temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.5. Definitive Securities.
The Securities issued on the Original Issue Date shall be in definitive form. The definitive Securities shall be printed, lithographed or engraved, or produced by any combination of these methods, if required by any securities exchange on which the Securities may be listed, on a steel engraved border or steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
ARTICLE III
The Securities
SECTION 3.1. Payment of Principal and Interest.
(a) The unpaid principal amount of the Securities shall bear interest at a fixed rate per annum equal to 10.13% through the Interest Payment Date in June, 2011, and a variable rate per annum, reset quarterly, equal to LIBOR plus 4.85% thereafter, such interest to accrue from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, and any overdue principal, premium, if any, or Additional Tax Sums and any overdue installment of interest shall bear Additional Interest (to the extent payment of such interest would be legally enforceable) at a fixed rate per annum equal to 10.13% through the Interest Payment Date in June, 2011, and a variable rate per annum, reset quarterly, equal to LIBOR plus 4.85% thereafter, from the dates such amounts are due until they are paid or funds for the payment thereof are made available for payment.
(b) Interest and Additional Interest on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, except that interest and any Additional Interest payable on the Stated Maturity (or any date of principal repayment upon early maturity) of a Security or on a Redemption Date shall be paid to the Person to whom principal is paid. The initial payment of interest on any Security that is issued between a Regular Record Date and the related Interest Payment Date shall be payable as provided in such Security.
(c) Any interest on any Security that is due and payable, but is not timely paid or duly provided for, on any Interest Payment Date for Securities (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in paragraph (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest (a "Special Record Date"), which shall be fixed in the following
manner. At least thirty (30) days prior to the date of the proposed payment, the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment and not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class, postage prepaid, to each Holder of a Security at the address of such Holder as it appears in the Securities Register not less than ten (10) days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered on such Special Record Date; or
(ii) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Securities may be listed, traded or quoted and, upon such notice as may be required by such exchange or automated quotation system (or by the Trustee if the Securities are not listed), if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such payment shall be deemed practicable by the Trustee.
(d) Payments of interest on the Securities shall include interest accrued to but excluding the respective Interest Payment Dates. The amount of interest payable for any interest period shall be computed and paid on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period.
(e) Payment of principal of, premium, if any, and interest on the Securities shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of such Securities shall be made at the Place of Payment upon surrender of such Securities to the Paying Agent and payments of interest shall be made subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Security Register. Notwithstanding the foregoing, so long as the holder of the Security is the Property Trustee, the payment of the principal of (and premium if any) and
interest (including any overdue installment of interest and Additional Tax Sums, if any) on the Security will be made at such place and to such account as may be designated by the Property Trustee.
(f) Subject to the foregoing provisions of this Section 3.1, each Security delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.
SECTION 3.2. Denominations.
The Securities shall be in registered form without coupons and shall be issuable in minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
(a) At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities in an aggregate principal amount (including all then Outstanding Securities) not in excess of $15,464,000 executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and shall be fully protected in relying upon:
(i) a copy of any Board Resolution relating thereto; and
(ii) an Opinion of Counsel stating that (1) such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (2) the Securities have been duly authorized and executed by the Company and have been delivered to the Trustee for authentication in accordance with this Indenture; and (3) the Securities are not required to be registered under the Securities Act.
(b) The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its President or one of its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
(c) No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by the manual signature of one of its authorized officers, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.8, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
(d) Each Security shall be dated the date of its authentication.
SECTION 3.4. Global Securities.
(a) Upon the election of the Holder after the Original Issue Date, which election need not be in writing, the Securities owned by such Holder shall be issued in the form of one or more Global Securities registered in the name of the Depositary or its nominee. Each Global Security issued under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for registered Securities, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee and the Company in
writing that such Depositary is no longer willing or able to properly discharge
its responsibilities as Depositary with respect to such Global Security, and no
qualified successor is appointed by the Company within ninety (90) days of
receipt by the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no successor is appointed
by the Company within ninety (90) days after obtaining knowledge of such event,
(iii) the Company executes and delivers to the Trustee a Company Order stating
that the Company elects to terminate the book-entry system through the
Depositary or (iv) an Event of Default shall have occurred and be continuing.
Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv)
above, the Trustee shall notify the Depositary and instruct the Depositary to
notify all owners of beneficial interests in such Global Security of the
occurrence of such event and of the availability of Securities to such owners of
beneficial interests requesting the same. Upon the issuance of such Securities
and the registration in the Securities Register of such Securities in the names
of the Holders of the beneficial interests therein, the Trustees shall recognize
such holders of beneficial interests as Holders.
(c) If any Global Security is to be exchanged for other Securities or canceled in part, or if another Security is to be exchanged in whole or in part for a beneficial interest in any Global Security, then either (i) such Global Security shall be so surrendered for exchange or cancellation as provided in this Article III or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Securities Registrar, whereupon the Trustee, in accordance with the Applicable Depositary Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Security by the Depositary, accompanied by registration instructions, the Company shall execute and the Trustee shall authenticate and deliver any Securities issuable in exchange for such Global Security (or any portion thereof) in accordance with the instructions of the Depositary. The Trustee shall not be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions.
(d) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.
(e) Securities distributed to holders of Book-Entry Preferred Securities (as defined in the Trust Agreement) upon the dissolution of the Trust shall be distributed in the form of one or more Global Securities registered in the name of a Depositary or its nominee, and deposited with the Securities Registrar, as custodian for such Depositary, or with such Depositary, for credit by the Depositary to the respective accounts of the beneficial owners of the Securities represented thereby (or such other accounts as they may direct). Securities distributed to holders of Preferred Securities other than Book-Entry Preferred Securities upon the dissolution of the Trust shall not be issued in the form of a Global Security or any other form intended to facilitate book-entry trading in beneficial interests in such Securities.
(f) The Depositary or its nominee, as the registered owner of a Global Security, shall be the Holder of such Global Security for all purposes under this Indenture and the Securities, and owners of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable Depositary Procedures. Accordingly, any such owner's beneficial interest in a Global Security shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Depositary Participants. The Securities Registrar and the Trustee shall be entitled to deal with the Depositary for all purposes of this Indenture relating to a Global Security (including the payment of principal and interest thereon and the giving of instructions or directions by owners of beneficial interests therein and the giving of notices) as the sole Holder of the Security and shall have no obligations to the owners of beneficial interests therein. Neither the Trustee nor the Securities Registrar shall have any liability in respect of any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global Security shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its Depositary Participants.
(h) No holder of any beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and
such Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. None of the Company, the Trustee nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary (or its nominee) as Holder of any Security.
SECTION 3.5. Registration, Transfer and Exchange Generally.
(a) The Trustee shall cause to be kept at the Corporate Trust Office a register (the "Securities Register") in which the registrar and transfer agent with respect to the Securities (the "Securities Registrar"), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Securities and of transfers and exchanges of Securities. The Trustee shall at all times also be the Securities Registrar. The provisions of Article VI shall apply to the Trustee in its role as Securities Registrar.
(b) Subject to compliance with Section 2.2(b), upon surrender for registration of transfer of any Security at the offices or agencies of the Company designated for that purpose the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations of like tenor and aggregate principal amount.
(c) At the option of the Holder, Securities may be exchanged for other Securities of any authorized denominations, of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and upon receipt thereof the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.
(d) All Securities issued upon any transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.
(e) Every Security presented or surrendered for transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing.
(f) No service charge shall be made to a Holder for any transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or exchange of Securities.
(g) Neither the Company nor the Trustee shall be required pursuant to the provisions of this Section 3.5 to (i) issue, register the transfer of or exchange any Security during a period beginning at the opening of business fifteen (15) days before the day of selection for redemption of Securities pursuant to Article XI and ending at the close of business on the day of mailing of the notice of redemption or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except, in the case of any such Security to be redeemed in part, any portion thereof not to be redeemed.
(h) The Company shall designate an office or offices or agency or agencies where Securities may be surrendered for registration of transfer or exchange. The Company initially designates the Corporate Trust Office as its office and agency for such purposes. The Company shall give prompt written notice to the Trustee and to the Holders of any change in the location of any such office or agency.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
(a) If any mutilated Security is surrendered to the Trustee together with such security or indemnity as may be required by the Company or the Trustee to save each of them harmless, the Company shall execute and upon receipt thereof the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and aggregate principal amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and aggregate principal amount as such destroyed, lost or stolen Security, and bearing a number not contemporaneously outstanding.
(c) If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
(d) Upon the issuance of any new Security under this Section 3.6, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
(e) Every new Security issued pursuant to this Section 3.6 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.
(f) The provisions of this Section 3.6 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any interest on such Security and for all other purposes whatsoever, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 3.8. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and Securities surrendered directly to the Trustee for any such purpose shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 3.8, except as expressly permitted by this Indenture. All canceled Securities shall be disposed of by the Trustee in accordance with its customary practices and the Trustee shall deliver to the Company a certificate of such disposition.
SECTION 3.9. RESERVED.
SECTION 3.10. Set Off.
Notwithstanding anything to the contrary herein, the Company shall have the right to set off any payment it is otherwise required to make in respect of any Security to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment to a holder of Preferred Securities pursuant to an action undertaken under Section 5.8 of this Indenture.
SECTION 3.11. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by its acceptance or acquisition of a Security or a beneficial interest therein, the Holder of, and any Person that acquires a direct or indirect beneficial interest in, such Security, intend and agree to treat such Security as indebtedness of the Company for United States Federal, state and local tax purposes and to treat the Preferred Securities (including but not limited to all payments and proceeds with respect to the Preferred Securities) as an undivided beneficial ownership interest in the Securities (and payments and proceeds therefrom, respectively) for United States Federal, state and local
tax purposes. The provisions of this Indenture shall be interpreted to further this intention and agreement of the parties.
SECTION 3.12. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption and other similar or related materials as a convenience to Holders; provided, that any such notice or other materials may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption or other materials and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other than (A) Securities that have been mutilated, destroyed, lost or stolen and that have been replaced or paid as provided in Section 3.6 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust as provided in Section 10.2) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within one year of the date of deposit, or
(C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of subclause (ii)(A), (B) or (C) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose (x) an
amount in the currency or currencies in which the Securities are payable,
(y) Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than the due date of any payment, money in an
amount or (z) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and
any premium, if any, and interest (including any Additional Interest) to
the date of such deposit (in the case of Securities that have become due
and payable) or to the Stated Maturity (or any date of principal repayment
upon early maturity) or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6, the obligations of
the Company to any Authenticating Agent under Section 6.11 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and Section
10.2(e) shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of Section 10.2(e), all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by the Trustee, in accordance with the provisions of the Securities and this Indenture, to the payment in accordance with Section 3.1, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium, if any, and interest (including any Additional Interest) for the payment of which such money or obligations have been deposited with or received by the Trustee. Moneys held by the Trustee under this Section 4.2 shall not be subject to the claims of holders of Senior Debt under Article XII.
ARTICLE V
Remedies
SECTION 5.1. Events of Default.
"Event of Default" means, wherever used herein with respect to the Securities, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Security, including any Additional Interest in respect thereof, when it becomes due and payable, and continuance of such default for a period of thirty (30) days; or
(b) default in the payment of the principal of or any premium, if any, on any Security at its Maturity; or
(c) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture and continuance of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least twenty five percent (25%) in aggregate principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or
(d) the entry by a court having jurisdiction in the premises of a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of sixty (60) consecutive days; or
(e) the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by the Company to the institution of bankruptcy or insolvency proceedings against it, or the filing by the Company of a petition or answer or consent seeking reorganization or relief under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt or insolvent, or the taking of corporate action by the Company in furtherance of any such action; or
(f) the Trust shall have voluntarily or involuntarily liquidated, dissolved, wound-up its business or otherwise terminated its existence, except in connection with (1) the distribution of the Securities to holders of the Preferred Securities in liquidation of their interests in the Trust, (2) the redemption of all of the outstanding Preferred Securities or (3) certain mergers, consolidations or amalgamations, each as and to the extent permitted by the Trust Agreement.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default occurs and is continuing, then and in every such case the Trustee or the Holders of not less than twenty five percent (25%) in principal amount of the Outstanding Securities may declare the principal amount of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided, that if, upon an Event of Default, the Trustee or the Holders of not less than twenty five percent (25%) in principal amount of the Outstanding Securities fail to declare the principal of all the Outstanding Securities to be immediately due and payable, the holders of at least twenty five percent (25%) in aggregate Liquidation Amount of the Preferred Securities then outstanding shall have the right to make such declaration by a notice in writing to the Property Trustee, the Company and the Trustee; and upon any such declaration the principal amount of and the accrued interest (including any Additional Interest) on all the Securities shall become immediately due and payable; provided, however, that upon any such declaration prior to June 30, 2011, there shall become immediately due and payable, in addition to the principal amount of and the accrued interest (including any Additional Interest) on all the Securities, a premium equal to seven and one-half (7.5%) percent of the principal amount of the Securities.
(b) At any time after such a declaration of acceleration with respect to Securities has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article V, the Holders of a majority in principal amount of the Outstanding Securities, by written notice to the Indenture Trustee, or the holders of a majority in aggregate Liquidation Amount of the Preferred Securities, by written notice to the Property Trustee, the Company and the Trustee, may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum sufficient to pay:
(A) all overdue installments of interest on all Securities,
(B) any accrued Additional Interest on all Securities,
(C) the principal of and any premium, if any, on any Securities that have become due otherwise than by such declaration of acceleration and interest (including any Additional Interest) thereon at the rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, the Property Trustee and their agents and counsel; and
(ii) all Events of Default with respect to Securities, other than the non-payment of the principal of Securities that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13;
provided, that if the Holders of such Securities fail to annul such declaration and waive such default, the holders of not less than a majority in aggregate Liquidation Amount of the Preferred Securities then outstanding shall also have the right to rescind and annul such declaration and its consequences by written notice to the Property Trustee, the Company and the Trustee, subject to the satisfaction of the conditions set forth in paragraph (b) of this Section 5.2. No such rescission shall affect any subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that if:
(i) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest
becomes due and payable and such default continues for a period of thirty
(30) days, or
(ii) default is made in the payment of the principal of and any premium on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest (including any Additional Interest) and, in addition thereto, all amounts owing the Trustee under Section 6.6.
(b) If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated.
(c) If an Event of Default with respect to Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or similar judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized hereunder in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to first pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts owing the Trustee, any predecessor Trustee and other Persons under Section 6.6.
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, subject to Article XII and after provision for the payment of all the amounts owing the Trustee, any predecessor Trustee and other Persons under Section 6.6, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with respect to the Securities pursuant to this Article V shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money or property on account of principal or any premium or interest (including any Additional Interest), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee, any predecessor Trustee and other Persons under Section 6.6;
SECOND: To the payment of all Senior Debt of the Company if and to the extent required by Article XII.
THIRD: Subject to Article XII, to the payment of the amounts then due and unpaid upon the Securities for principal and any premium and interest (including any Additional Interest) in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and any premium and interest (including any Additional Interest), respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or for the appointment of a custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official) or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities;
(b) the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding for sixty (60) days; and
(e) no direction inconsistent with such written request has been given to the Trustee during such sixty (60)-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest; Direct Action by Holders of Preferred Securities.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium on such Security at its Maturity and payment of interest (including any Additional Interest) on such Security when due and payable and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. Any registered holder of the Preferred Securities shall have the right, upon the occurrence of an Event of Default described in Section 5.1(a) or Section 5.1(b) to institute a suit directly against the Company for enforcement of payment to such holder of principal of and any premium and interest (including any Additional Interest) on the Securities having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities held by such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preferred Securities has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee, such Holder or such holder of Preferred Securities, then and in every such case the Company, the Trustee, such Holders and such holder of Preferred Securities shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder,
and thereafter all rights and remedies of the Trustee, such Holder and such holder of Preferred Securities shall continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in Section 3.6(f), no right or remedy herein conferred upon or reserved to the Trustee or the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Securities or any holder of any Preferred Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Trustee or to the Holders and the right and remedy given to the holders of Preferred Securities by Section 5.8 may be exercised from time to time, and as often as may be deemed expedient, by the Trustee, the Holders or the holders of Preferred Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities (or, as the case may be, the holders of a majority in aggregate Liquidation Amount of the Preferred Securities) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided, that:
(a) such direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.2, the Trustee shall have the right to decline to follow such direction if a Responsible Officer or Officers of the Trustee shall, in good faith, reasonably determine that the proceeding so directed would be unjustly prejudicial to the Holders not joining in any such direction or would involve the Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
(a) The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities and the holders of not less than a majority in aggregate Liquidation Amount of the Preferred Securities may waive any past Event of Default hereunder and its consequences except an Event of Default:
(i) in the payment of the principal of or any premium or interest (including any Additional Interest) on any Security (unless such Event of Default has been cured and the Company has paid to or deposited with the Trustee a sum sufficient to pay all installments of interest (including any Additional Interest) due and past due and all principal of and any premium on all Securities due otherwise than by acceleration), or
(ii) in respect of a covenant or provision hereof that under Article IX cannot be modified or amended without the consent of each Holder of any Outstanding Security.
(b) Any such waiver shall be deemed to be on behalf of the Holders of all the Securities or, in the case of a waiver by holders of Preferred Securities issued by such Trust, by all holders of Preferred Securities.
(c) Upon any such waiver, such Event of Default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than ten percent (10%) in aggregate principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or any premium on the Security after the Stated Maturity or any interest (including any Additional Interest) on any Security after it is due and payable.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VI
The Trustee
SECTION 6.1. Corporate Trustee Required.
There shall at all times be a Trustee hereunder with respect to the Securities. The Trustee shall be a corporation organized and doing business under the laws of the United States or of any state thereof, authorized to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or state authority and having an office within the United States. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then, for the purposes of this Section 6.1, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.1, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI.
SECTION 6.2. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; provided, that in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they substantially conform on their face to the requirements of this Indenture.
(b) If an Event of Default known to the Trustee has occurred and is continuing, the Trustee shall, prior to the receipt of directions, if any, from the Holders of at least a majority in aggregate principal amount of the Outstanding Securities (or, if applicable, from the holders of a majority in aggregate Liquidation Amount of the Preferred Securities), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.
(c) Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.2. To the extent that, at law or in equity, the Trustee has duties and liabilities relating to the Holders, the Trustee shall not be liable to any Holder for the Trustee's good faith reliance on the provisions of this Indenture. The provisions of this Indenture, to the extent that they restrict the duties and liabilities of the Trustee otherwise existing at law or in equity, are agreed by the Company and the Holders to replace such other duties and liabilities of the Trustee.
(d) No provisions of this Indenture shall be construed to relieve the Trustee from liability with respect to matters that are within the authority of the Trustee under this Indenture for its own negligent action, negligent failure to act or willful misconduct, except that:
(i) the Trustee shall not be liable for any error or judgment made in good faith by an authorized officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of at least a majority in aggregate principal amount of the Outstanding Securities (or, if applicable, from the holders of a majority in aggregate Liquidation Amount of the Preferred Securities), relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee under this Indenture; and
(iii) the Trustee shall be under no liability for interest on any money received by it hereunder and money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law.
SECTION 6.3. Notice of Defaults.
Within ninety (90) days after the occurrence of any default actually known to the Trustee, the Trustee shall give the Holders notice of such default unless such default shall have been cured or waived; provided, that except in the case of a default in the payment of the principal of or any premium or interest on any Securities, the Trustee shall be fully protected in withholding the notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that withholding the notice is in the interest of holders of Securities; and provided further, that in the case of any default of the character specified in Section 5.1(c), no such notice to Holders shall be given until at least thirty (30) days after the occurrence thereof. For the purpose of this Section 6.3, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default.
SECTION 6.4. Certain Rights of Trustee.
Subject to the provisions of Section 6.2:
(a) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in good faith and in accordance with the terms hereof upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Indenture the Trustee is required to decide between alternative courses of action, (ii) in construing any of the provisions of this Indenture the Trustee finds ambiguous or inconsistent with any other provisions contained herein or (iii) the Trustee is unsure of the application of any provision of this Indenture, then, except as to any matter as to which the Holders are entitled to decide under the terms of this Indenture, the Trustee shall deliver a notice to the Company requesting the Company's written instruction as to the course of action to be taken and the Trustee shall take such action, or refrain from taking such action, as the Trustee shall be instructed in writing to take, or to refrain from taking, by the Company; provided, that if the Trustee does not receive such instructions from the Company within ten Business Days after it has delivered such notice or such reasonably shorter period of time set forth in such notice the Trustee may, but shall be under no duty to, take such action, or refrain from taking such action, as the Trustee shall deem advisable and in the best interests of the Holders, in which event the Trustee shall have no liability except for its own negligence, bad faith or willful misconduct;
(c) any request or direction of the Company shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(d) the Trustee may consult with counsel (which counsel may be counsel to the Trustee, the Company or any of its Affiliates, and may include any of its employees) and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders or any holder of Preferred Securities pursuant to this Indenture, unless such Holders (or such holders of Preferred Securities) shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses (including reasonable attorneys' fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction, including reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, indenture, note or other paper or document, but the Trustee in its discretion may make such inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney, custodian or nominee appointed with due care by it hereunder;
(h) whenever in the administration of this Indenture the Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action with respect to enforcing any remedy or right hereunder, the Trustees (i) may request instructions from the Holders (which instructions may only be given by the Holders of the same aggregate principal amount of Outstanding Securities as would be entitled to direct the Trustee under this Indenture in respect of such remedy, right or action), (ii) may refrain from enforcing such remedy or right or taking such action until such instructions are received and (iii) shall be protected in acting in accordance with such instructions;
(i) except as otherwise expressly provided by this Indenture, the Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Indenture;
(j) without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with any bankruptcy, insolvency or other proceeding referred to in clauses (d) or (e) of the definition of Event of Default, such expenses (including legal fees and expenses of its agents and counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy laws or law relating to creditors rights generally;
(k) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers' Certificate addressing such matter, which, upon receipt of such request, shall be promptly delivered by the Company;
(l) the Trustee shall not be charged with knowledge of any default or Event of Default unless either (i) a Responsible Officer of the Trustee shall have actual knowledge or (ii) the Trustee shall have received written notice thereof from the Company or a Holder; and
(m) in the event that the Trustee is also acting as Paying Agent, Authenticating Agent or Securities Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article VI shall also be afforded such Paying Agent, Authenticating Agent, or Securities Registrar.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities Registrar or such other agent.
SECTION 6.6. Compensation; Reimbursement; Indemnity.
(a) The Company agrees
(i) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder in such amounts as the Company and the Trustee shall agree in writing from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(ii) to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, bad faith or willful misconduct; and
(iii) to the fullest extent permitted by applicable law, to indemnify the Trustee (including in its individual capacity) and its Affiliates, and their officers, directors, shareholders, agents, representatives and employees for, and to hold them harmless against, any loss, damage, liability, tax (other than income, franchise or other taxes imposed on amounts paid pursuant to (i) or (ii) hereof), penalty, expense or claim of any kind or nature whatsoever incurred without negligence, bad faith or willful misconduct on its part arising out of or in connection with the acceptance or administration of this trust or the performance of the Trustee's duties hereunder, including the advancement of funds to cover the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.
(b) To secure the Company's payment obligations in this Section 6.6, the Company hereby grants and pledges to the Trustee and the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, other than money or property held in trust to pay principal and interest on particular Securities. Such lien shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee.
(c) The obligations of the Company under this Section 6.6 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee.
(d) In no event shall the Trustee be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(e) In no event shall the Trustee be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not
limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Indenture.
SECTION 6.7. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Trustee under Section 6.8.
(b) The Trustee may resign at any time by giving written notice thereof to the Company.
(c) Unless an Event of Default shall have occurred and be continuing, the Trustee may be removed at any time by the Company by a Board Resolution. If an Event of Default shall have occurred and be continuing, the Trustee may be removed by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities, delivered to the Trustee and to the Company.
(d) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any reason, at a time when no Event of Default shall have occurred and be continuing, the Company, by a Board Resolution, shall promptly appoint a successor Trustee, and such successor Trustee and the retiring Trustee shall comply with the applicable requirements of Section 6.8. If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any reason, at a time when an Event of Default shall have occurred and be continuing, the Holders, by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities, shall promptly appoint a successor Trustee, and such successor Trustee and the retiring Trustee shall comply with the applicable requirements of Section 6.8. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment within sixty (60) days after the giving of a notice of resignation by the Trustee or the removal of the Trustee in the manner required by Section 6.8, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, and any resigning Trustee may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee.
(e) The Company shall give notice to all Holders in the manner provided in
Section 1.6 of each resignation and each removal of the Trustee and each
appointment of a successor Trustee. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 6.8. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee, each successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in paragraph
(a) of this Section 6.8.
(c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article VI.
SECTION 6.9. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all of the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, provided,
that such Person shall be otherwise qualified and eligible under this Article
VI. In case any Securities shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
or as otherwise provided above in this Section 6.9 to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated, and in case any Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor Trustee or in the name of such successor Trustee, and in all
cases the certificate of authentication shall have the full force which it is
provided anywhere in the Securities or in this Indenture that the certificate of
the Trustee shall have.
SECTION 6.10. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof.
SECTION 6.11. Appointment of Authenticating Agent.
(a) The Trustee may appoint an Authenticating Agent or Agents with respect to the Securities, which shall be authorized to act on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 3.6, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, or of any State or Territory thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or state authority. If such Authenticating
Agent publishes reports of condition at least annually pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 6.11 the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 6.11, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.11.
(b) Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to all or substantially all of the corporate
trust business of an Authenticating Agent shall be the successor Authenticating
Agent hereunder, provided such Person shall be otherwise eligible under this
Section 6.11, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
(c) An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.11, the Trustee may appoint a successor Authenticating Agent eligible under the provisions of this Section 6.11, which shall be acceptable to the Company, and shall give notice of such appointment to all Holders. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.
(d) The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.11 in such amounts as the Company and the Authenticating Agent shall agree in writing from time to time.
(e) If an appointment of an Authenticating Agent is made pursuant to this
Section 6.11, the Securities may have endorsed thereon, an alternative
certificate of authentication in the following form:
This represents Securities designated therein and referred to in the within mentioned Indenture.
Dated:
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as Trustee
By:_______________________________________
Authorized Officer
ARTICLE VII
Holder's Lists and Reports by Trustee and Company
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, on or before June 30 and December 31 of each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of a date not more than fifteen (15) days prior to the delivery thereof, and
(b) at such other times as the Trustee may request in writing, within thirty (30) days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than fifteen (15) days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the Company and has not otherwise been received by the Trustee in its capacity as Securities Registrar.
SECTION 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided in the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of information as to the names and addresses of the Holders made pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Company and Trustee.
(a) The Company shall furnish to the Holders and to prospective purchasers of Securities, upon their request, the information required to be furnished pursuant to Rule 144A(d)(4) under the Securities Act.
(b) The Company shall furnish to (i) the Holders and to subsequent holders of Securities, (ii) the Purchaser, (iii) the holders and the subsequent holders of the Preferred Securities (iv) any beneficial owner of the Securities or the Preferred Securities reasonably identified to the Company (which identification may be made either by such beneficial owner or by the Placement Agent or the Purchaser) and (v) any designee of (i), (ii), (iii) or (iv) above, a duly completed and executed certificate substantially and substantively in the form attached hereto as Exhibit A, including the financial statements referenced in such Exhibit, which certificate and financial statements shall be so furnished by the Company not later than forty five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Company and not later than ninety (90) days after the end of each fiscal year of the Company.
(c) The Trustee shall receive all reports, certificates and information, which it is entitled to receive under each of the Operative Documents (as defined in the Trust Agreement), and deliver to (i) the Purchaser, (ii) the Placement Agent and (iii) a designee of (i) or (ii) above, as identified in writing to the Trustee, all such reports, certificates or information promptly upon receipt thereof.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and no Person shall consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless:
(a) if the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the entity formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance or transfer, or that leases, the properties and assets of the Company substantially as an entirety shall be an entity organized and existing under the laws of the United States of America or any State or Territory thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest (including any Additional Interest) on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event of Default, and no event that, after notice or lapse of time, or both, would constitute an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, any such supplemental indenture comply with this Article VIII and that all conditions precedent herein provided for relating to such transaction have been complied with; and the Trustee may rely upon such Officers' Certificate and Opinion of Counsel as conclusive evidence that such transaction complies with this Section 8.1.
SECTION 8.2. Successor Company Substituted.
(a) Upon any consolidation or merger by the Company with or into any other Person, or any conveyance, transfer or lease by the Company of its properties and assets substantially as an entirety to any Person in accordance with Section 8.1 and the execution and delivery to the Trustee of the supplemental indenture described in Section 8.1(a), the successor entity formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; and in the event of any such conveyance or transfer, following the execution and delivery of such supplemental indenture, the Company shall be discharged from all obligations and covenants under the Indenture and the Securities.
(b) Such successor Person to the Company may cause to be executed, and may issue either in its own name or in the name of the Company, any or all of the Securities issuable hereunder that theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor Person instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Securities that such successor Person thereafter shall cause to be executed and delivered to the Trustee on its behalf. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture.
(c) In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and form may be made in the Securities thereafter to be issued as may be appropriate to reflect such occurrence.
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form reasonably satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities; or
(b) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to make or amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the other provisions of this Indenture, provided, that such action pursuant to this clause (b) shall not adversely affect in any material respect the interests of any Holders or the holders of the Preferred Securities; or
(c) to add to the covenants, restrictions or obligations of the Company or to add to the Events of Default, provided, that such action pursuant to this clause (c) shall not adversely affect in any material respect the interests of any Holders or the holders of the Preferred Securities; or
(d) to modify, eliminate or add to any provisions of the Indenture or the Securities to such extent as shall be necessary to ensure that the Securities are treated as indebtedness of the Company for United States Federal income tax purposes, provided, that such action pursuant to this clause (d) shall not adversely affect in any material respect the interests of any Holders or the holders of the Preferred Securities.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
(a) With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities under this Indenture; provided, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security,
(i) change the Stated Maturity of any Security or change the date of payment of any installment of interest (including any Additional Interest) on any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof or change the place of payment where, or the coin
or currency in which, any Security or interest thereon is payable, or restrict or impair the right to institute suit for the enforcement of any such payment on or after such date, or
(ii) reduce the percentage in aggregate principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with any provision of this Indenture or of defaults hereunder and their consequences provided for in this Indenture, or
(iii) modify any of the provisions of this Section 9.2, Section 5.13 or Section 10.7, except to increase any percentage in aggregate principal amount of the Outstanding Securities, the consent of whose Holders is required for any reason, or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security;
provided, further, that, so long as any Preferred Securities remain outstanding, no amendment under this Section 9.2 shall be effective until the holders of a majority in Liquidation Amount of the Trust Securities shall have consented to such amendment; provided, further, that if the consent of the Holder of each Outstanding Security is required for any amendment under this Indenture, such amendment shall not be effective until the holder of each Outstanding Trust Security shall have consented to such amendment.
(b) It shall not be necessary for any Act of Holders under this Section 9.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in conclusively relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that all conditions precedent herein provided for relating to such action have been complied with. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Trustee's own rights, duties, indemnities or immunities under this Indenture or otherwise. Copies of the final form of each supplemental indenture shall be delivered by the Trustee at the expense of the Company to each Holder, and, if the Trustee is the Property Trustee, to each holder of Preferred Securities, promptly after the execution thereof.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article IX, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and shall if required by the Company, bear a notation in form approved by the Company as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.
ARTICLE X
Covenants
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the Holders of the Securities that it will duly and punctually pay the principal of and any premium and interest (including any Additional Interest) on the Securities in accordance with the terms of the Securities and this Indenture.
SECTION 10.2. Money for Security Payments to be Held in Trust.
(a) If the Company shall at any time act as its own Paying Agent with respect to the Securities, it will, on or before each due date of the principal of and any premium or interest (including any Additional Interest) on the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium or interest (including Additional Interest) so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee in writing of its failure so to act.
(b) Whenever the Company shall have one or more Paying Agents, it will, prior to 10:00 a.m., New York City time, on each due date of the principal of or any premium or interest (including any Additional Interest) on any Securities, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided in the Trust Indenture Act and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its failure so to act.
(c) The Company will cause each Paying Agent for the Securities other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 10.2, that such Paying Agent will (i) comply with the provisions of this
Indenture and the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities) in the making of any payment in respect of the Securities,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent for payment in respect of the Securities.
(d) The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
(e) Any money deposited with the Trustee or any Paying Agent, or then held by the Company in trust for the payment of the principal of and any premium or interest (including any Additional Interest) on any Security and remaining unclaimed for two years after such principal and any premium or interest has become due and payable shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be paid on Company Request to the Company, or (if then held by the Company) shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 10.3. Statement as to Compliance.
The Company shall deliver to the Trustee, within one hundred and twenty
(120) days after the end of each fiscal year of the Company ending after the
date hereof, an Officers' Certificate (substantially in the form attached hereto
as Exhibit H) covering the preceding fiscal year, stating whether or not to the
knowledge of the signers thereof the Company is in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder), and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
SECTION 10.4. Calculation Agent.
(a) The Company hereby agrees that for so long as any of the Securities remain Outstanding, there will at all times be an agent appointed to calculate LIBOR in respect of each Interest Payment Date in accordance with the terms of Schedule A (the "Calculation Agent"). The Company has initially appointed the Property Trustee as Calculation Agent for purposes of determining LIBOR for each Interest Payment Date. The Calculation Agent may be removed by the Company at any time; provided, that so long as the Property Trustee holds any of the Securities, the Calculation Agent shall be the Property Trustee. If the Calculation Agent is
unable or unwilling to act as such or is removed by the Company, the Company will promptly appoint as a replacement Calculation Agent the London office of a leading bank which is engaged in transactions in Eurodollar deposits in the international Eurodollar market and which does not control or is not controlled by or under common control with the Company or its Affiliates. The Calculation Agent may not resign its duties without a successor having been duly appointed.
(b) The Calculation Agent shall be required to agree that, as soon as possible after 11:00 a.m. (London time) on each LIBOR Determination Date (as defined in Schedule A), but in no event later than 11:00 a.m. (London time) on the Business Day immediately following each LIBOR Determination Date, the Calculation Agent will calculate the interest rate and interest payment (rounded to the nearest cent, with half a cent being rounded upwards) for the related Interest Payment Date, and will communicate such rate and amount to the Company, the Trustee, each Paying Agent and the Depositary. The Calculation Agent will also specify to the Company the quotations upon which the foregoing rates and amounts are based and, in any event, the Calculation Agent shall notify the Company before 5:00 p.m. (London time) on each LIBOR Determination Date that either: (i) it has determined or is in the process of determining the foregoing rates and amounts or (ii) it has not determined and is not in the process of determining the foregoing rates and amounts, together with its reasons therefor. The Calculation Agent's determination of the foregoing rates and amounts for any Interest Payment Date will (in the absence of manifest error) be final and binding upon all parties. For the sole purpose of calculating the interest rate for the Securities, "Business Day" shall be defined as any day on which dealings in deposits in Dollars are transacted in the London interbank market.
SECTION 10.5. Additional Tax Sums.
So long as no Event of Default has occurred and is continuing, if (a) the
Trust is the Holder of all of the Outstanding Securities and (b) a Tax Event
described in clause (i) or (iii) in the definition of Tax Event in Section 1.1
hereof has occurred and is continuing, the Company shall pay to the Trust (and
its permitted successors or assigns under the related Trust Agreement) for so
long as the Trust (or its permitted successor or assignee) is the registered
holder of the Outstanding Securities, such amounts as may be necessary in order
that the amount of Distributions (including any Additional Interest Amount (as
defined in the Trust Agreement)) then due and payable by the Trust on the
Preferred Securities and Common Securities that at any time remain outstanding
in accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes arising from such Tax Event (additional such amounts payable by
the Company to the Trust, the "Additional Tax Sums"). Whenever in this Indenture
or the Securities there is a reference in any context to the payment of
principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Tax Sums provided for in this
Section 10.5 to the extent that, in such context, Additional Tax Sums are, were
or would be payable in respect thereof pursuant to the provisions of this
Section 10.5 and express mention of the payment of Additional Tax Sums (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Tax Sums in those provisions hereof where such express mention is not
made.
SECTION 10.6. Additional Covenants.
(a) The Company covenants and agrees with each Holder of Securities that if an Event of Default shall have occurred and be continuing, it shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of the Company's capital stock, (ii) vote in favor of or permit or otherwise allow any of its Subsidiaries to declare or pay (other than to the Company or a Subsidiary of the Company) any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to or otherwise retire, any shares of any such Subsidiary's preferred stock or other capital stock (not held by the Company or a Subsidiary of the Company) entitling the holders thereof to a stated rate of return (for the avoidance of doubt, whether such preferred stock or other capital stock are perpetual or otherwise) except where any such dividends, distributions, redemptions, purchases, acquisitions, liquidation payments or retirements are required by the organizational documents of, or other agreements binding on, such Subsidiary or otherwise required in order to make concurrent or future distributions to the Company or a Subsidiary of the Company, or (iii) make any payment of principal of or any interest or premium on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Securities (other than (A) repurchases, redemptions or other acquisitions of shares of capital stock of the Company or any of its Subsidiaries in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Company or any of its Subsidiaries (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Event of Default, (B) as a result of an exchange, conversion, reclassification or combination of any class or series of the Company's capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company's or a Subsidiary's capital stock or of any class or series of the Company's or a Subsidiary's indebtedness for any class or series of the Company's or a Subsidiary's capital stock, (C) the purchase of fractional interests in shares of the Company's or a Subsidiary's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (D) any declaration of a dividend in connection with any Rights Plan, the issuance of rights, stock or other property under any Rights Plan or the redemption or repurchase of rights pursuant thereto, or (E) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock).
(b) The Company also covenants with each Holder of Securities (i) to hold, directly or indirectly, one hundred percent (100%) of the Common Securities of the Trust, provided, that any permitted successor of the Company hereunder may succeed to the Company's ownership of such Common Securities, (ii) as holder of such Common Securities, not to voluntarily dissolve, wind-up or liquidate the Trust other than (A) in connection with a distribution of the Securities to the holders of the Preferred Securities in liquidation of the Trust or (B) in connection with certain mergers, consolidations or amalgamations permitted by the Trust Agreement and (iii) to use its reasonable commercial efforts, consistent with the terms and provisions of the Trust Agreement,
to cause the Trust to continue to be taxable as a grantor trust and not as a corporation for United States Federal income tax purposes.
SECTION 10.7. Waiver of Covenants.
The Company may omit in any particular instance to comply with any covenant or condition contained in Section 10.6 if, before or after the time for such compliance, the Holders of at least a majority in aggregate principal amount of the Outstanding Securities shall, by Act of such Holders, and at least a majority of the aggregate Liquidation Amount of the Preferred Securities then outstanding, by consent of such holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company in respect of any such covenant or condition shall remain in full force and effect.
SECTION 10.8. Treatment of Securities.
The Company will treat the Securities as indebtedness, and the amounts payable in respect of the principal amount of such Securities as interest, for all U.S. federal income tax purposes. All payments in respect of the Securities will be made free and clear of U.S. withholding tax to any beneficial owner thereof that has provided an Internal Revenue Service Form W-9 or W-8BEN (or any substitute or successor form) establishing its U.S. or non-U.S. status for U.S. federal income tax purposes.
ARTICLE XI
Redemption of Securities
SECTION 11.1. Optional Redemption.
The Company may, at its option, on any Interest Payment Date, on or after June 30, 2011, redeem the Securities in whole at any time or in part from time to time, at a Redemption Price equal to one hundred percent (100%) of the principal amount thereof (or of the redeemed portion thereof, as applicable), together, in the case of any such redemption, with accrued interest, including any Additional Interest, to but excluding the date fixed for redemption.
SECTION 11.2. Special Event Redemption.
Upon the occurrence and during the continuation of a Special Event, the Company may, at its option, redeem the Securities, in whole but not in part, at a redemption price equal to one hundred seven and one-half percent (107.5%) of the principal amount thereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, to but excluding the date fixed for redemption (the "Special Event Redemption Price").
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities, in whole or in part, shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company, the Company shall, not less than forty five (45) days and not more than seventy five (75) days prior to the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee and the Property Trustee under the Trust Agreement in writing of such date and of the principal amount of the Securities to be redeemed and provide the additional information required to be included in the notice or notices contemplated by Section 11.5. In the case of any redemption of Securities, in whole or in part, (a) prior to the expiration of any restriction on such redemption provided in this Indenture or the Securities or (b) pursuant to an election of the Company which is subject to a condition specified in this Indenture or the Securities, the Company shall furnish the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing compliance with such restriction or condition.
SECTION 11.4. Selection of Securities to be Redeemed.
(a) If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected on a pro rata basis not more than sixty (60) days prior to the Redemption Date by the Trustee from the Outstanding Securities not previously called for redemption, provided, that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.
(b) The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security that has been or is to be redeemed.
(c) The provisions of paragraphs (a) and (b) of this Section 11.4 shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.
SECTION 11.5. Notice of Redemption.
(a) Notice of redemption shall be given not later than the thirtieth
(30th) day, and not earlier than the sixtieth (60th) day, prior to the
Redemption Date to each Holder of Securities to be redeemed, in whole or in part
(unless a shorter notice shall be satisfactory to the Property Trustee under the
related Trust Agreement).
(b) With respect to Securities to be redeemed, in whole or in part, each notice of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or, if the Redemption Price cannot be calculated prior to the time the notice is required to be sent, the estimate of the Redemption Price, as calculated by the Company, together with a statement that it is an estimate and that the actual Redemption Price will be calculated on the fifth Business Day prior to the Redemption Date (and if an estimate is provided, a further notice shall be sent of the actual Redemption Price on the date that such Redemption Price is calculated);
(iii) if less than all Outstanding Securities are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the particular Securities to be redeemed;
(iv) that on the Redemption Date, the Redemption Price will become due and payable upon each such Security or portion thereof, and that any interest (including any Additional Interest) on such Security or such portion, as the case may be, shall cease to accrue on and after said date; and
(v) the place or places where such Securities are to be surrendered for payment of the Redemption Price.
(c) Notice of redemption of Securities to be redeemed, in whole or in part, at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company and shall be irrevocable. The notice if mailed in the manner provided above shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, a failure to give such notice by mail or any defect in the notice to the Holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security.
SECTION 11.6. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date specified in the notice of redemption given as provided in Section 11.5, the Company will deposit with the Trustee or with one or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company will segregate and hold in trust as provided in Section 10.2) an amount of money sufficient to pay the Redemption Price of, and any accrued interest (including any Additional Interest) on, all the Securities (or portions thereof) that are to be redeemed on that date.
SECTION 11.7. Payment of Securities Called for Redemption.
(a) If any notice of redemption has been given as provided in Section 11.5, the Securities or portion of Securities with respect to which such notice has been given shall become due and payable on the date and at the place or places stated in such notice at the applicable Redemption Price, together with accrued interest (including any Additional Interest) to the Redemption Date. On presentation and surrender of such Securities at a Place of Payment specified in such notice, the Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable Redemption Price, together with accrued interest (including any Additional Interest) to the Redemption Date.
(b) Upon presentation of any Security redeemed in part only, the Company shall execute and upon receipt thereof the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities, of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the Security so presented and having the same Original Issue Date, Stated Maturity and terms.
(c) If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal of and any premium on such Security shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
ARTICLE XII
Subordination of Securities
SECTION 12.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by its acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article XII, the payment of the principal of and any premium and interest (including any Additional Interest) on each and all of the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Debt.
SECTION 12.2. No Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution, Etc.
(a) In the event and during the continuation of any default by the Company in the payment of any principal of or any premium or interest on any Senior Debt (following any grace period, if applicable) when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration of acceleration or otherwise, then, upon written notice of such default to the Company by the holders of such Senior Debt or any trustee therefor, unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of or any premium or interest (including any Additional Interest) on any of the Securities, or in respect of any redemption, repayment, retirement, purchase or other acquisition of any of the Securities.
(b) In the event of a bankruptcy, insolvency or other proceeding described in clause (d) or (e) of the definition of Event of Default (each such event, if any, herein sometimes referred to as a "Proceeding"), all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made to any Holder of any of the Securities on account thereof. Any payment or distribution, whether in cash, securities or other property (other than securities of the Company or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment), which would otherwise (but for these subordination provisions) be payable or deliverable in respect of the Securities shall be paid or delivered directly to the holders of Senior Debt in accordance with the priorities then existing among such holders until all Senior Debt (including any interest thereon accruing after the commencement of any Proceeding) shall have been paid in full.
(c) In the event of any Proceeding, after payment in full of all sums owing with respect to Senior Debt, the Holders of the Securities, together with the holders of any obligations of the Company ranking on a parity with the Securities, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid principal of and any premium and interest (including any Additional Interest) on the Securities and such other obligations before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to the Securities and such other obligations. If, notwithstanding the foregoing, any payment or distribution of any character or any security, whether in cash, securities or other property (other than securities of the Company or any other entity provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment) shall be received by the Trustee or any Holder in contravention of any of the terms hereof and before all Senior Debt shall have been paid in full, such payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred to, the holders of the Senior Debt at the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior Debt (including any interest thereon accruing after the commencement of any Proceeding) in full. In the event of the failure of the Trustee or any Holder to endorse or assign any such payment, distribution or security, each holder of Senior Debt is hereby irrevocably authorized to endorse or assign the same.
(d) The Trustee and the Holders, at the expense of the Company, shall take such reasonable action (including the delivery of this Indenture to an agent for any holders of Senior Debt or consent to the filing of a financing statement with respect hereto) as may, in the opinion of counsel designated by the holders of a majority in principal amount of the Senior Debt at the time outstanding, be necessary or appropriate to assure the effectiveness of the subordination effected by these provisions.
(e) The provisions of this Section 12.2 shall not impair any rights, interests, remedies or powers of any secured creditor of the Company in respect of any security interest the creation of which is not prohibited by the provisions of this Indenture.
(f) The securing of any obligations of the Company, otherwise ranking on a parity with the Securities or ranking junior to the Securities, shall not be deemed to prevent such
obligations from constituting, respectively, obligations ranking on a parity with the Securities or ranking junior to the Securities.
SECTION 12.3. Payment Permitted If No Default.
Nothing contained in this Article XII or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company, at any time, except during the pendency of the conditions described in paragraph (a) of Section 12.2 or of any Proceeding referred to in Section 12.2, from making payments at any time of principal of and any premium or interest (including any Additional Interest) on the Securities or (b) the application by the Trustee of any moneys deposited with it hereunder to the payment of or on account of the principal of and any premium or interest (including any Additional Interest) on the Securities or the retention of such payment by the Holders, if, at the time of such application by the Trustee, it did not have knowledge (in accordance with Section 12.8) that such payment would have been prohibited by the provisions of this Article XII, except as provided in Section 12.8.
SECTION 12.4. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on all Senior Debt, or the provision for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article XII (equally and ratably with the holders of all indebtedness of the Company that by its express terms is subordinated to Senior Debt of the Company to substantially the same extent as the Securities are subordinated to the Senior Debt and is entitled to like rights of subrogation by reason of any payments or distributions made to holders of such Senior Debt) to the rights of the holders of such Senior Debt to receive payments and distributions of cash, property and securities applicable to the Senior Debt until the principal of and any premium and interest (including any Additional Interest) on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article XII, and no payments made pursuant to the provisions of this Article XII to the holders of Senior Debt by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Senior Debt.
SECTION 12.5. Provisions Solely to Define Relative Rights.
The provisions of this Article XII are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Debt on the other hand. Nothing contained in this Article XII or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as between the Company and the Holders of the Securities, the obligations of the Company, which are absolute and unconditional, to pay to the Holders of the Securities the principal of and any premium and interest (including any Additional Interest) on the Securities as and when the same shall become due and payable in accordance
with their terms, (b) affect the relative rights against the Company of the Holders of the Securities and creditors of the Company other than their rights in relation to the holders of Senior Debt or (c) prevent the Trustee or the Holder of any Security (or to the extent expressly provided herein, the holder of any Preferred Security) from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, including filing and voting claims in any Proceeding, subject to the rights, if any, under this Article XII of the holders of Senior Debt to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 12.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination provided in this Article XII and appoints the Trustee his or her attorney-in-fact for any and all such purposes.
SECTION 12.7. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or be otherwise charged with.
(b) Without in any way limiting the generality of paragraph (a) of this
Section 12.7, the holders of Senior Debt may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to such Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of such Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding, (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt, (iii) release any Person
liable in any manner for the payment of Senior Debt and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 12.8. Notice to Trustee.
(a) The Company shall give prompt written notice to a Responsible Officer of the Trustee of any fact known to the Company that would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article XII or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder of Senior Debt or from any trustee, agent or representative therefor; provided, that if the Trustee shall not have received the notice provided for in this Section 12.8 at least two Business Days prior to the date upon which by the terms hereof any monies may become payable for any purpose (including, the payment of the principal of and any premium on or interest (including any Additional Interest) on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date.
(b) The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or herself to be a holder of Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor) to establish that such notice has been given by a holder of Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article XII, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XII, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
SECTION 12.9. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this Article XII, the Trustee and the Holders of the Securities shall be entitled to conclusively rely upon any order or decree entered by any court of competent jurisdiction in which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XII.
SECTION 12.10. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not owe or be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other Person cash, property or securities to which any holders of Senior Debt shall be entitled by virtue of this Article XII or otherwise.
SECTION 12.11. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XII with respect to any Senior Debt that may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. With respect to the holders of Senior Debt of the Company, the Trustee undertakes to perform only such of its obligations as are specifically set forth in this Article XII, and no implied covenants or obligations with respect to the holders of such Senior Debt shall be read into this Indenture against the Trustee. Nothing in this Article XII shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.6.
SECTION 12.12. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article XII shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article XII in addition to or in place of the Trustee; provided, that Sections 12.8 and 12.11 shall not apply to the Company or any Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of an executed signature page of this Indenture by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
BLUEGREEN CORPORATION
By: ___________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as Trustee
By: ___________________________________
Name:
Title:
Schedule A
DETERMINATION OF LIBOR
With respect to the Securities, the London interbank offered rate ("LIBOR") shall be determined by the Calculation Agent in accordance with the following provisions (in each case rounded to the nearest .000001%):
(1) On the second LIBOR Business Day (as defined below) prior to each Interest Payment Date, beginning in June, 2011 (each such day, a "LIBOR Determination Date"), LIBOR for any given security shall, for the following interest payment period, equal the rate, as obtained by the Calculation Agent from Bloomberg Financial Markets Commodities News, for three-month U.S. Dollar deposits in Europe, which appears on Dow Jones Telerate Page 3750 (as defined in the International Swaps and Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange Definitions), or such other page as may replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.
(2) If, on any LIBOR Determination Date, such rate does not appear on Dow Jones Telerate Page 3750 or such other page as may replace such Page 3750, the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading banks in the London interbank market for three-month U.S. Dollar deposits in Europe in an amount determined by the Calculation Agent by reference to requests for quotations as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal such arithmetic mean of such quotations. If, on any LIBOR Determination Date, only one or none of the Reference Banks provide such quotations, LIBOR shall be deemed to be the arithmetic mean of the offered quotations that leading banks in the City of New York selected by the Calculation Agent are quoting on the relevant LIBOR Determination Date for three-month U.S. Dollar deposits in Europe in an amount determined by the Calculation Agent by reference to the principal London offices of leading banks in the London interbank market; provided that, if the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures provided above, LIBOR shall be LIBOR as determined on the previous LIBOR Determination Date.
(3) As used herein: "Reference Banks" means four major banks in the London interbank market selected by the Calculation Agent; and "LIBOR Business Day" means a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London.
Schedule A-1
Exhibit A
Form of Officer's Financial Certificate
The undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/ Secretary/ Assistant Secretary/Chairman/Vice Chairman/Chief Executive Officer/President/Vice President] hereby certifies, pursuant to Section 7.3(b) of the Junior Subordinated Indenture, dated as of April 24, 2006, that:
[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial statements (including the balance sheet, income statement and statement of cash flows, and notes thereto, together with the report of the independent accountants thereon) of the Company and its consolidated subsidiaries for the three years ended ______, 20__.]
[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and consolidating financial statements (including the balance sheet and income statement) of the Company and its consolidated subsidiaries for the fiscal quarter ended and [six/nine] month period ended ______, 20__.]
The financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles ("GAAP"), the financial
position of the Company and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the date, and for the
[quarter] [annual] period ended _______, 20__, and such financial statements
have been prepared in accordance with GAAP consistently applied throughout the
period involved (expect as otherwise noted therein).
Ex. A-1
Exhibit A
IN WITNESS WHEREOF, the undersigned has executed this Officer's Financial Certificate as of this _____ day of _____________, 20__.
By:________________________________________ Name: ________________________________
Bluegreen Corporation 4960 Conference Way North Boca Raton, Florida 33431 (561) 912-8000
Ex. A-2
Exhibit B
FORM OF
OFFICERS' CERTIFICATE
UNDER
SECTION 10.3
Pursuant to Section 10.3 of the Indenture, dated as of April 24, 2006 (as
amended or supplemented from time to time, the "Indenture"), between BLUEGREEN
CORPORATION, as issuer (the "Company"), and Wilmington Trust Company, as
trustee, each of the undersigned hereby certifies that, to the knowledge of the
undersigned, the Company is not in default in the performance or observance of
any of the terms, provisions or conditions contained in the Indenture (without
regard to any period of grace or requirement of notice provided under the
Indenture), for the fiscal year ending on ________, 20__ [, except as follows:
specify each such default and the nature and status thereof].
Capitalized terms used herein, and not otherwise defined herein, have the respective meanings assigned thereto in the Indenture.
IN WITNESS WHEREOF, the undersigned have executed this Officers' Certificate as of ___________, 20__.
Title: [Must be the Chairman of the Board,
a Vice Chairman of the Board, the
Chief Executive Officer, the
President, or a Vice President] of
BLUEGREEN CORPORATION
Title: [Must be the Chief Financial Officer,
the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant
Secretary] of BLUEGREEN CORPORATION
Exhibit 10.82
MADATORY DISTRIBUTION AMENDMENT
(Code Section 401(a)(31)(B))
TO THE
PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST
SPONSORED BY
SUNTRUST BANK
MANDATORY DISTRIBUTION AMENDMENT
(Code Section 401(a)(31)(B))
ARTICLE I
APPLICATION OF AMENDMENT
1.1 Effective Date. Unless a later effective date is specified in Article III of this Amendment, the provisions of the Amendment will apply with respect to distributions made on or after March 28, 2005.
1.2 Precedence. The requirements of this Amendment will take precedence over any Inconsistent provisions of the Plan.
1.3 Adoption by prototype sponsor. Except as otherwise provided herein pursuant to Authority granted by section 5.01 of Revenue Procedure 2000-20, the sponsoring Organization hereby adopts this amendment on behalf of all adopting employers.
ARTICLE II
DEFAULT PROVISION: LOWER MANDATORY CASH-OUT
THRESHOLD TO $1,000
Unless the Employer otherwise elects in Article III of this Amendment, the provisions of the Plan For the mandatory distribution of amounts not exceeding $5,000, are amended as follows:
The dollar threshold in such provisions(i.e., $5,000) is reduced to $1,000 and the value of the Participant's interest in the Plan for such purpose shall include any rollover contributions (and Earnings thereon) within the meaning of Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).
ARTICLE III
ADOPTION AGREEMENT ELECTIONS
3.1 |X| Effective Date of Plan Amendment.
This Amendment applies with respect to distributions made on or
after 3/28/2005 (may be a date later than March 28, 2005, only if
the terms of the Plan already comply with Code Sections 402(c), 403
(a)(31)(B)).
3.2 |_| Election to apply automatic IRA rollover rules.
IRA rollover of amounts over $1,000. Unless otherwise elected in
Article II of this Amendment, the provisions of the Plan
concerning mandatory Distributions of amounts under $5,000 are
amended as follows:
In the event of a mandatory distribution greater than $1,000
in accordance with the provisions of the Plan providing for an
automatic Distribution to a Participant without the
Participant's consent, if the
|
Participant does not elect to have such distribution paid
directly to an "eligible retirement plan" specified by the
Participant in a direct rollover (in accordance with the
direct rollover provisions of the Plan) or to Receive the
distribution directly, then the Administrator shall pay the
Distribution in a direct rollover to an individual retirement
plan Designated by the Administrator.
3.3 |_| Election to modify mandatory distribution threshold.
In lieu of the default provision in Article II of this Amendment (
which reduces the mandatory distribution threshold to $1,000), the
provisions of the Plan that provide for the involuntary distribution
of vested accrued benefits of $5,000 or less, are modified as
follows:
No mandatory distributions. Participant consent to the
distribution shall now be required before the distribution may
be made.
|
Except with respect to any election made by the Employer in Article III, this Amendment is hereby adopted by the protype sponsoring organization on behalf of all adopting employers on March 3, 2005.
Sponsor Name: SunTrust Bank
By:__________________________________
Brent D. Breedon, Vice President
NOTE: The Employer only needs to execute this Amendment if the Employer has made an election in Article III herein.
This amendment is executed as follows:
Name of Plan:________________________________
Name of Employer:
By:_____________________ Date:3/23/05
EMPLOYER
Exhibit 10.160
THIS THIRD AMENDMENT TO LOAN AGREEMENT AND OTHER LOAN DOCUMENTS (this "Amendment Agreement") dated as of October 21, 2005, is entered into by and between BLUEGREEN CORPORATION OF THE ROCKIES, a Delaware corporation, BLUEGREEN GOLF CLUBS, INC., a Delaware corporation, BLUEGREEN PROPERTIES OF VIRGINIA, INC., a Delaware corporation, BLUEGREEN SOUTHWEST ONE, L.P., a Delaware limited partnership, and CATAWBA FALLS, LLC, a North Carolina limited liability company (collectively and jointly and severally, the "Borrower") and RFC CONSTRUCTION FUNDING CORP., a Delaware corporation ("Lender") as successor in interest to and assignee of RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("RFC").
RECITALS
This Amendment Agreement is entered into upon the basis of the following facts and circumstances:
A. Borrower and RFC, whose interest has been assigned to Lender, entered into a Loan Agreement dated as of September 25, 2002 (as the same has been and may be amended, supplemented or otherwise modified from time to time, including any other instruments executed and delivered in renewal, extension, rearrangement or otherwise in replacement of such Loan Agreement, the "Loan Agreement"), whereby RFC made a revolving loan in the principal amount of $75,000,000.00 (the "Loan") to finance various residential acquisition and development projects which the Borrower anticipates undertaking. Capitalized terms used in this Amendment Agreement and not otherwise defined shall have the meanings given those terms in the Loan Agreement.
B. The Loan is evidenced by, among other documents, the Loan Agreement, a Revolving Promissory Note dated September 25, 2002 in the principal amount of $50,000,000 ("Note A"), a Revolving Promissory Note dated May 10, 2005 ("Note B") (as the same may be amended, supplemented or otherwise modified from time to time, including any other instruments executed and delivered in renewal, extension, rearrangement or otherwise in replacement of such promissory note, collectively the "Note") and a Guaranty Agreement dated as of September 25, 2002 ("Guaranty").
C. The Borrower has requested that the Loan Agreement be amended to, among other things, remove the Project Concentration Limitation and modify the ABF Disbursement Amount and the Guaranty be amended to reflect changes to the Subrogation language.
AGREEMENT
2005-00469 1 Final4
Third Amendment to Loan Agreement
Bluegreen
NOW THEREFORE, in consideration of the foregoing Recitals and the covenants and conditions, representations and warranties contained herein, the parties hereto agree as follows:
Section 1 Amendment to Section 1.1 of the Loan Agreement
The following definitions in Section 1.1 of the Loan Agreement are deleted and replaced in their entirety as follows:
"ABF Disbursement Amount" means, on any date of determination, as determined by Lender, the amount of the Loan available to be disbursed with respect to the ABF Collateral, which amount will be equal to the difference of:
(1) the lesser of:
(A) the Loan Amount;
(B) the total for all Projects of, for each Project, the lesser of 70% of the ABF Value and 70% of the Value; and
(C) 70% of the Approved Costs spent by the Borrower
minus
(2) the ABF Outstanding Amount.
"ABF Value" means, on any date of determination by the Lender, the sum total of, for each Project, 100% of the Schedule A Value of the Lots; provided, however, that Golf Parcels will remain as part of the ABF Collateral until released in accordance with the terms of the Loan Documents.
"Value" means 100% of the value which an Appraiser assigns to a Project or any part thereof as to which a value is being determined, as set forth in an Appraisal Report and based upon the following:
(3) the value of the Land or any part thereof which is part of a Project shall be determined based on the as-is value of the Land and the Development Work; and
(1) the value of any Lot or Golf Parcel sold or under contract to be sold pursuant to a sales agreement shall be determined based upon the Gross Selling Price set forth in the applicable sales agreement.
Section 2 Deletion of Defined Terms to Section 1.1 of the Loan Agreement
The following defined term is hereby deleted from Section 1.1 of the Loan Agreement for all purposes:
"Project Concentration Limitation"
2005-00469 2 Final4
Third Amendment to Loan Agreement
Bluegreen
Section 3 Amendment to Section 3.3 of the Loan Agreement
Section 3.3 (b)(2) of the Loan Agreement is deleted and replaced in its entirety as follows:
(2) Upon receipt of a complete and satisfactory request for determination of the ABF Disbursement Amount, the Lender will determine the ABF Value, and make such adjustments thereto as the Lender determines, all in its sole discretion, based upon, (i) Lots and Finished Lots which have been removed as ABF Collateral, (ii) a materially detrimental change, in the Lender's reasonable judgment, in the operations or value of a Project which justifies, in the Lender's judgment, that the Project be disregarded for purposes of determining ABF Value, (iii) a Project that is disregarded by the Lender for purposes of determining ABF Value pursuant to Section 6.16, and (iv) such other information which the Lender deems relevant.
Amendment to Section 3.4(3)(A-C) of the Loan Agreement
Section 3.4(3) (A-C) of the Loan Agreement is deleted and replaced in its entirety as follows:
(3) Following the requested disbursement of proceeds of the Loan, the ABF Outstanding Amount of the Loan shall not exceed the lesser of:
(A) the Loan Amount;
(B) the total for all Projects of, for each Project, the lesser of 70% of the ABF Value and 70% of the Value; and
(C) 70% of the Approved Costs spent by the Borrower on completed Development Work.
Section 4 Amendment to Section 5.5 of the Loan Agreement
Section 5.5 (2) of the Loan Agreement is deleted and replaced in its entirety as follows:
(2) Ratio of Total Liabilities to Net Worth. At all times, the ratio of debt of Bluegreen Corporation determined in accordance with GAAP consistently applied on a consolidated basis, not including non-recourse, receivable-backed debt of up to $500,000,000, and not including, but not limited to contingent liabilities, to its Net Worth, shall not exceed 2.5:1.
Section 5 Amendment to Section 3 of the Guaranty
Section 3 of the Guaranty is deleted and replace in its entirety as follows:
2005-00469 3 Final4
Third Amendment to Loan Agreement
Bluegreen
The Guarantor will not exercise any rights which it may acquire by way of subrogation under this Guaranty, by virtue of any payment made hereunder or otherwise, until all the Indebtedness shall have been paid or performed in full. The Guarantor shall not accept payment from any other party by way of contribution on account of any payment made under this Guaranty by such party to the Lender, and the Guarantor will not take any action to exercise or enforce any rights to such contribution until all the Indebtedness shall have been paid or performed in full. If any amount shall be paid to the Guarantor on account of such subrogation rights at any time when all the Indebtedness shall not have been paid or performed in full, such amount shall be held in trust for the benefit of the Lender and shall forthwith be paid to the Lender to be credited and applied upon the Indebtedness, whether matured or unmatured, in such order as the Lender, in its sole and absolute discretion, shall determine. Any lien or charge on the Property, the personal property located thereon, or the revenue and income to be realized therefrom, and all rights in and to the Property and such personal property, which the Guarantor may have or obtain as security for any loans or advances shall be, and such lien or charge hereby is, subordinated to the Deed of Trust and to the indebtedness of the Borrower to the Lender under the Note.
Section 6 Representations and Warranties of Borrower
The Borrower represents, warrants and agrees that (i) there exists no
Potential Default or Event of Default under the Loan Documents, (ii) the Loan
Documents continue to be the legal, valid and binding agreements and obligations
of the Borrower enforceable in accordance with their terms, as modified herein,
(iii) the Borrower is not in default under any of the Loan Documents, (iv) the
Borrower has no offset or defense to its performance or obligations under any of
the Loan Documents, (v) the representations contained in the Loan Documents
remain true and accurate in all material respects, and (vi) there has been no
Material Adverse Change from the date of the Loan Agreement to the date of this
Amendment Agreement. Lender acknowledges that the financial restatements
publicly disclosed in Guarantor's current report on Form 8-K dated December 19,
2005 will not constitute a breach of Section 4.6 of the Loan Agreement. Lender
acknowledges that Borrower has disclosed to Lender the proceeding filed by the
State of Tennessee as disclosed in Guarantor's September 30, 2005 Form 10-Q.
Section 7 No Defenses
The Borrower hereby agrees and stipulates that the Borrower has no defenses, affirmative defenses, rights to offset, or counterclaims against the exercise of any of the rights or remedies of the Lender under the Loan Documents or under applicable law.
Section 8 Release of Claims Against Lender
The Borrower hereby absolutely and unconditionally releases and forever discharges Lender and any and all of its parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns, together with all of its present and former directors, officers, agents and employees from any and all claims, demands or causes of action of
2005-00469 4 Final4
Third Amendment to Loan Agreement
Bluegreen
any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the Borrower has had, now has or has made claim to have against any such party for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Agreement, whether such claims, demands and cause of action are matured or unmatured or known or unknown.
Section 9 Effect on Loan Documents
Except as hereby expressly modified, the Loan Documents shall otherwise be unchanged and shall remain in full force and effect, and the Borrower ratifies and reaffirms all of its obligations thereunder.
Section 10 Execution in Counterpart
This Amendment Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.
2005-00469 5 Final4
Third Amendment to Loan Agreement
Bluegreen
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment Agreement as of the date first written above by and through their duly authorized representatives.
BORROWER:
BLUEGREEN CORPORATION OF THE ROCKIES,
a Delaware corporation
BLUEGREEN GOLF CLUBS, INC.,
a Delaware corporation
BLUEGREEN PROPERTIES OF VIRGINIA, INC.,
a Delaware corporation
BLUEGREEN SOUTHWEST ONE, L.P.,
a Delaware limited partnership
By: Bluegreen Southwest Land, Inc.
a Delaware corporation
2005-00469 6 Final4
Third Amendment to Loan Agreement
Bluegreen
CATAWBA FALLS, LLC,
a North Carolina limited liability company
By: BLUEGREEN CORPORATION,
a Massachusetts corporation,
its sole Member/Manager
LENDER:
RFC CONSTRUCTION FUNDING CORP.,
a Delaware corporation
2005-00469 7 Final4
Third Amendment to Loan Agreement
Bluegreen
CONSENT OF GUARANTOR
The undersigned Guarantor acknowledges and consents to the terms and conditions of the foregoing Amendment Agreement dated as of May 10, 2005, and agrees that the obligations to be incurred by Borrower as set forth in the Amendment Agreement constitute payment and performance obligations to be guaranteed by Guarantor pursuant to the terms of that certain Guaranty dated as of September 25, 2002, executed by Guarantor in favor of Residential Funding Corporation, a Delaware corporation whose interest has been assigned to RFC Construction Funding Corp., a Delaware corporation.
Dated as of October 21, 2005.
BLUEGREEN CORPORATION,
a Massachusetts corporation
2005-00469 8 Final4
Third Amendment to Loan Agreement
Bluegreen
THIRD MODIFICATION AGREEMENT
(AD&C Loan Agreement)
THIS THIRD MODIFICATION AGREEMENT (AD&C Loan Agreement) ("Third Modification Agreement"), dated effective as of the 15th day of February, 2006 ("Effective Date"), is entered into by and between BLUEGREEN VACATIONS UNLIMITED, INC., a Florida corporation ("BVU") and BLUEGREEN/BIG CEDAR VACATIONS, LLC, a Delaware limited liability company ("BCV" and collectively with BVU, "Borrower") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Lender") with respect to the Loan Documents defined below.
R E C I T A L S:
A. BVU and Lender are parties to that certain Loan Agreement dated as of February 10, 2003, as amended by a Modification Agreement dated as of September 10, 2003, as amended by letter agreement dated as of September 10, 2003 and as amended by a Second Modification Agreement dated as of September 15, 2004 (collectively, "Loan Agreement"), pursuant to which Lender agreed to make a revolving acquisition, development and construction loan to Borrower on the terms and conditions set forth therein in a maximum principal amount of $75,000,000 ("Loan"). BCV agreed to become a borrower under and to be bound by the terms of the Loan Agreement and to be jointly and severally liable for the Loan pursuant to that certain Project Commitment (Big Cedar Wilderness Club) dated October 10, 2003 between Borrower and Lender ("Big Cedar Project Commitment"). BCV's monetary liability under the Loan, however, is limited pursuant to the terms of the Big Cedar Project Commitment as provided therein. The documents executed in connection with the Loan are collectively referred to herein as the "Loan Documents." All terms used herein with initial capital letters, unless otherwise defined herein, shall have the same meanings given such terms in the Loan Agreement.
B. Bluegreen Corporation, a Massachusetts corporation, executed a Full Guaranty dated as of February 10, 2003 (as amended, "Guaranty") in favor of Lender Guarantying the payment and performance of the obligations of Borrower under the Loan Documents.
C. The total outstanding balance of the Loan presently owed by Borrower to Lender as of February 10, 2006 is $35,605,695.57 ("Loan Balance"), plus any and all accrued and unpaid interest thereon and certain costs and expenses of Lender to the extent due and owing under the Loan Documents.
D. Borrower has requested that Lender modify the Loan and the other Loan Documents to, among other things: (i) extend the Approval Period during which new projects will be considered for approval for funding from proceeds of the Loan, (ii) extend the Maturity Date applicable to the Loan, (iii) decrease the margin applicable to the LIBOR rate of interest accruing on the Loan from 4.75% to 4.50%, and (iv) increase the Loan Amount under the Loan Agreement from $75,000,000 to $150,000,000. Lender is willing to so modify the Loan, the Loan Agreement and the other Loan Documents, subject to the terms and conditions herein.
E. All of the documents executed in connection with this Third Modification
Agreement, inclusive of the Third Modification Agreement, shall be referred to herein as the "Modification Documents."
A G R E E M E N T:
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter stated, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Acknowledgement of Existing Indebtedness.
1.1 Borrower acknowledges that it is truly and justly indebted to Lender in the amount of the Loan Balance, plus all accrued and unpaid interest on the Loan and all other costs, fees and expenses that are, under the Loan Agreement or the other Loan Documents, properly chargeable to Borrower.
1.2 Borrower acknowledges that, as of the date hereof, it has (i) no defense, counterclaim, offsets, cross-complaint, claim or demand of any nature whatsoever which can be asserted as a basis to seek affirmative relief or damages from Lender or to reduce or eliminate all or any part of its liability to repay the Loan, and (ii) no other claim against Lender with respect to any aspect of the transactions in respect of which the Loan was made.
2. Modification to Loan Documents.
2.1 Modification of Loan Agreement: As material inducements to Lender to enter into this Third Modification Agreement, and acknowledging Lender's reliance upon such inducements, the parties agree that the Loan Agreement is amended in the following respects:
(a) Modification of Definitions within Loan Agreement:
(i) The definition of the term "Approval Period Termination Date" is hereby amended by deleting such definition in its entirety and replacing and substituting in lieu thereof the following:
"Approval Period Termination Date" means the date which is 24 months after the Effective Date of this Third Modification Agreement (i.e. February 15, 2008).
(ii) The definition of the term "Commitment Fee" is hereby amended by deleting such definition in its entirety and replacing and substituting in lieu thereof the following:
"Commitment Fee" means 3/4 of 1% of the Loan Amount, i.e. $1,125,000, of which Borrower has paid $562,500 as of the Effective Date of this Third Modification and the remainder of which is required to be paid by Borrower on the dates set forth in Section 2.4.
(iii) The definition of the term "Interest Rate" is hereby amended to mean the variable interest rate per annum equal to LIBOR plus 4.50%.
(iv) The definition of the term "Loan Amount" is hereby amended to mean $150,000,000 (with the understanding that all references in the Loan Agreement stating the prior acquisition, development and construction loan amount of $75,000,000 is concurrently amended to read $150,000,000).
(v) The definition of the term "Maturity Date" is hereby amended by deleting such definition in its entirety and replacing and substituting in lieu thereof the following:
"Maturity Date" means the first to occur of (i) the Project Loan Repayment Date set forth in the last Project Commitment incorporated into this Loan Agreement, (ii) the date which is 66 months from the Approval Period Termination Date or (iii) any earlier date on which the Loan is accelerated or otherwise required to be repaid pursuant to the terms of the Loan Agreement.
(b) Modification of Loan Agreement Terms:
(i) Section 2.4 of the Loan Agreement is hereby amended by deleting the existing Section 2.4 in its entirety and replacing and substituting in lieu thereof the following Section 2.4:
Section 2.4 Commitment Fee
Lender acknowledges receipt of $562,500.00 of the Commitment Fee as of the Effective Date of this Third Modification Agreement. Borrower will pay to Lender the remaining amount of the Commitment Fee 90 days from the Effective Date of this Third Modification Agreement.
(ii) Section 5.5(2) of the Loan Agreement is hereby amended by deleting the existing Section 5.5(2) in its entirety and replacing and substituting in lieu thereof the following Section 5.5(2):
5.5(2) Ratio of Total Liabilities to Net Worth. At all times, the ratio of the Debt of Bluegreen Corporation determined in accordance with GAAP consistently applied on a consolidated basis, not including non-recourse, receivables-backed debt of up to $500 million and not including, but not limited to, contingent liabilities, to its Net Worth shall not exceed 2.5:1.
2.2 Modification of Other Loan Documents. Without limiting Lender's right to require that all other Loan Documents be expressly amended by a separate instrument in order to effect the intent of this Third Modification Agreement, all of the Loan Documents are hereby deemed to be amended to include this Third Modification Agreement and the other Modification Documents with the additional understanding and agreement that any reference to the Loan
Amount shall be equal to $150,000,000.
3. Fees, Costs and Expenses.
Borrower agrees to pay to Lender all reasonable costs and expenses incurred by Lender in connection with this Third Modification Agreement and the other modification of the Loan Documents, including, without limitation, attorneys' fees and expenses incurred. Such legal fees and expenses shall include, without limitation, the costs associated with this Third Modification Agreement. Borrower agrees to pay such costs and expenses to Lender immediately upon the execution of this Third Modification Agreement.
4. Reaffirmation of Existing Security Interests. Borrower hereby confirms and agrees that Lender's security interest in all of the collateral previously pledged to Lender pursuant to the Loan Documents shall continue to secure the payment and performance of all of Borrower's Obligations to Lender, as modified by this Third Modification Agreement.
5. Representations, Warranties And Agreements Of Borrower. As material inducements to Lender to enter into this Third Modification Agreement, and acknowledging Lender's reliance upon the truth and accuracy thereof, Borrower represents, warrants, acknowledges and agrees that to Borrower's actual, present knowledge:
5.1 The recitals set forth above are true and correct.
5.2 All financial statements and other information delivered to Lender by or on behalf of Borrower or Guarantor in connection with this Third Modification Agreement were true and correct as of the respective dates thereof, and that their has not been a Material Adverse Change in either of Borrower's or Guarantor's financial condition since that presented by the latest financial statements and other information provided to Lender. Lender acknowledges that the financial restatements publicly disclosed in Guarantor's current report on Form 8-K dated December 19, 2005 will not constitute a breach of Section 5.2 or 5.3 herein or Section 4.6 of the Loan Agreement.
5.3 As of the date hereof, no Event of Default or Incipient Default exists with respect to the Loan Documents.
5.4 As of the date hereof, Borrower is not the subject of a pending bankruptcy proceeding and Borrower is not aware of any threatened bankruptcy proceeding against Borrower.
5.5 As of the date hereof, Guarantor is not the subject of a pending bankruptcy proceeding, and Borrower is not aware of any threatened bankruptcy proceeding against Guarantor.
5.6 There are no proceedings pending or threatened against or affecting Borrower (or to the best of Borrower's knowledge, threatened against or affecting Guarantor) in any court, before any governmental authority, or arbitration board or tribunal which may result in a Material Adverse Change. Lender acknowledges that Borrower has disclosed to Lender the proceeding
filed by the State of Tennessee as disclosed in Guarantor's September 30, 2005 Form 10-Q.
5.7 All of the representations and warranties contained in the Loan Agreement and the other Loan Documents are true and correct as of the date hereof and are hereby reaffirmed and ratified.
5.8 This Third Modification Agreement and any documents and instruments executed in connection herewith have been authorized by all necessary action and when executed will be the legal, valid and binding obligations of Borrower.
5.9 Borrower's execution, delivery and performance of this Third Modification Agreement does not and will not (i) violate any law, rule, regulation or court order to which Borrower is subject, (ii) conflict with or result in a breach of the articles of formation, bylaws, operating agreement, partnership agreement or other formation document of Borrower or any agreement or instrument to which Borrower is a party or by which its properties are bound, or (iii) result in the creation or imposition of any lien, security interest or encumbrance on any property of Borrower, whether now owned or hereafter acquired, other than liens in favor of Lender.
5.10 Borrower acknowledges that Borrower has consulted with counsel and with such other experts and advisors as it has deemed necessary in connection with the negotiation, execution and delivery of this Third Modification Agreement. This Third Modification Agreement shall be construed without regard to any presumption or rule requiring that it be construed against the party causing this Third Modification Agreement or any part hereof to be drafted.
5.11 All terms, conditions and provisions of the Loan Agreement, the applicable promissory note and the other Loan Documents are hereby reaffirmed, ratified and continued in full force and effect and shall remain unaffected and unchanged except as specifically amended hereby.
6. Conditions Precedent To Effectiveness. The effectiveness of this Third Modification Agreement is subject to the full and complete satisfaction of each and every one of the following conditions precedent:
6.1 Lender shall have received the following documents duly executed and in form and substance acceptable to Lender:
(a) this Third Modification Agreement;
(b) an Amendment No. 3 to the Note;
(c) a Consent and Agreement of Guarantor;
(d) Resolutions of Borrower and Guarantor authorizing the execution of the Modification Documents;
(e) an opinion from counsel to Borrower and Guarantor as to such matters as Lender may require, which counsel shall be reasonably satisfactory to Lender; and
(f) such other documents that Lender in its discretion may require.
6.2 Lender shall have received from Borrower any amounts due to Lender pursuant to Section 3 of this Third Modification Agreement.
7. Miscellaneous Terms.
7.1 Complete Agreement. Notwithstanding anything to the contrary contained herein or in any other instrument executed by the parties and notwithstanding any other action or conduct undertaken by the parties on or before the date hereof, the agreements, covenants and provisions contained herein shall constitute the only evidence of Lender's agreement to modify the Loan Agreement and the other Loan Documents. Accordingly, no express or implied consent to any further modifications shall be inferred or implied by Lender's execution of this Third Modification Agreement. The Loan Agreement and this Third Modification Agreement, together with the other Loan Documents, constitute the entire agreement and understanding among the parties relating to the subject matter hereof, and supersedes all prior proposals, negotiations, agreements and understandings relating to such subject matter. In entering into this Third Modification Agreement, Borrower acknowledges that it is relying on no statement, representation, warranty, covenant or agreement of any kind made by the Lender or any employee or agent of the Lender, except for the agreements of Lender set forth herein.
7.2 No Waiver. Lender's execution of this Third Modification Agreement shall not constitute a waiver (either express or implied) of the requirement that any further modification of the Loan Agreement or of any other Loan Document shall require the express written approval of Lender. No such approval (either express or implied) has been given as of the date hereof.
7.3 Full Force and Effect; Conflict. Other than as specifically set forth herein, the remaining terms of the Loan Agreement and the other Loan Documents shall remain in full force and effect. Notwithstanding anything to the contrary contained in the Loan Agreement or the other Loan Documents, in the event of a conflict between the terms of this Third Modification Agreement (on the one hand) and the Loan Agreement or other Loan Documents (on the other hand), the terms of this Third Modification Agreement shall control. Nothing contained in this Third Modification Agreement is intended to or shall be construed as relieving any person or entity, whether a party to this Third Modification Agreement or not, of any of such person's or entity's obligations to Lender.
7.4 Successors and Assigns. The Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower and Lender and their successors and assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower, provided, however, Borrower may not assign any of its rights or delegate any of its obligations under the Loan Documents and any purported assignment or delegation shall be void.
7.5 Severability. If any one or more of the provisions of a Modification Document is held to be invalid, illegal or unenforceable in any respect or for any reason (all of which invalidating laws are waived to the fullest extent possible), the validity, legality and enforceability of any
remaining portions of such provision(s) in every other respect and of the remaining provision(s) of such Modification Document shall not be in any respect impaired. In lieu of each such unenforceable provision, there shall be added automatically as a part of such Modification Document a provision that is legal, valid and enforceable and is as similar in terms to such unenforceable provisions as may be possible.
7.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Third Modification Agreement to physically form one document.
7.7 BCV Obligations. Nothing herein shall modify or increase BCV's monetary obligations under the Loan to the extent that such obligations are limited pursuant to Section 4 of the Big Cedar Project Commitment. Furthermore, the parties acknowledge that pursuant to Section 7.4(c) of the Loan Agreement, upon payment in full of the Project Loan issued under the terms of the Big Cedar Project Commitment, the Project Security Instruments corresponding to the Big Cedar Project Commitment shall be released provided that no Event of Default or Potential Default shall exist under the Loan Agreement.
DATED as of the date first above stated.
BORROWER:
BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
BLUEGREEN/BIG CEDAR VACATIONS, LLC,
a Delaware limited liability company
LENDER
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
THIRD MODIFICATION AGREEMENT
(Receivables Loan and Security Agreement)
THIS THIRD MODIFICATION AGREEMENT (Receivables Loan and Security Agreement) ("Third Modification Agreement"), dated to be effective as of the 15th day of February, 2006 ("Effective Date"), is entered into by and between BLUEGREEN CORPORATION, a Massachusetts corporation ("Bluegreen"), BLUEGREEN VACATIONS UNLIMITED, INC., a Florida corporation ("BVI") and BLUEGREEN/BIG CEDAR VACATIONS, LLC, a Delaware limited liability company ("Big Cedar") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Lender") with respect to the Loan Documents defined below.
R E C I T A L S:
A. Bluegreen, BVI and Big Cedar (collectively, "Borrower") and Lender are parties to that certain Loan and Security Agreement dated as of February 10, 2003 as amended by a Modification Agreement dated as of September 10, 2003 and as amended by a Second Modification Agreement dated as of September 15, 2004 (collectively, "Loan Agreement"), pursuant to which Lender agreed to make a revolving receivables loan to Borrower on the terms and conditions set forth therein in a maximum principal amount of $75,000,000 ("Loan"). The documents executed in connection with the Loan are collectively referred to as the "Loan Documents."
B. The total outstanding balance of the Loan presently owed by Borrower to Lender as of February 10, 2006 is $24,365,787.60 ("Loan Balance"), plus any and all accrued and unpaid interest thereon and certain costs and expenses of Lender to the extent due and owing under the Loan Documents.
C. Borrower has requested that Lender modify the Loan and the other Loan Documents to, among other things, extend the Advance Period under the Loan and thereby concurrently extend the Maturity Date of the Loan.
D. All of the documents executed in connection with this Third Modification Agreement, inclusive of the Third Modification Agreement, shall be referred to herein as the "Modification Documents."
A G R E E M E N T:
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter stated, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Acknowledgement of Existing Indebtedness.
1.1 Borrower acknowledges that it is truly and justly indebted to Lender in the amount of the outstanding loan balance, plus all accrued and unpaid interest on the Loan and all other costs, fees and expenses that are, under the Loan Agreement or the other Loan Documents,
properly chargeable to Borrower.
1.2 Borrower acknowledges that, as of the date hereof, it has (i) no defense, counterclaim, offsets, cross-complaint, claim or demand of any nature whatsoever which can be asserted as a basis to seek affirmative relief or damages from Lender or to reduce or eliminate all or any part of its liability to repay the Loan, and (ii) no other claim against Lender with respect to any aspect of the transactions in respect of which the Loan was made.
2. Modification to Loan Documents.
2.1 Modification of Loan Agreement: As material inducements to Lender to enter into this Third Modification Agreement, and acknowledging Lender's reliance upon such inducements, the parties agree that the Loan Agreement is amended in the following respects:
(a) The definition of the term "A&D Loan" is hereby amended by deleting such definition in its entirety and replacing and substituting in lieu thereof the following:
"A&D Loan" means the revolving acquisition, development and construction loan made by Lender to Borrower's Affiliates in the maximum principal amount of $150,000,000 pursuant to the terms and conditions of the A&D Loan Agreement.
(b) The definition of the term "Advance Period" is hereby amended by deleting such definition in its entirety and replacing and substituting in lieu thereof the following:
"Advance Period" means the period commencing on the Effective Date of this Third Modification Agreement and ending on the close of the Business Day (or if not a Business Day, the first Business Day thereafter) on the date following 24 months from the Effective Date of this Third Modification Agreement (i.e. February 15, 2008).
(c) Section 6.5(2) of the Loan Agreement is hereby amended by deleting the existing Section 6.5(2) in its entirety and replacing and substituting in lieu thereof the following Section 6.5(2):
6.5(2) Ratio of Total Liabilities to Net Worth. At all times, the ratio of the Debt of Bluegreen Corporation determined in accordance with GAAP consistently applied on a consolidated basis, not including non-recourse, receivables-backed debt of up to $500 million and not including, but not limited to, contingent liabilities, to its Net Worth shall not exceed 2.5:1.
2.2 Modification of Other Loan Documents. Without limiting Lender's right to require that all other Loan Documents be expressly amended by a separate instrument in order to effect the intent of this Third Modification Agreement, all of the Loan Documents are hereby deemed to be amended to include this Third Modification Agreement and the other Modification Documents.
3. Fees, Costs and Expenses.
Borrower agrees to pay to Lender all reasonable costs and expenses incurred by Lender in connection with this Third Modification Agreement and the other modification of the Loan Documents, including, without limitation, attorneys' fees and expenses incurred. Such legal fees and expenses shall include, without limitation, the costs associated with this Third Modification Agreement. Borrower agrees to pay such costs and expenses to Lender immediately upon the execution of this Third Modification Agreement.
4. Reaffirmation of Existing Security Interests. Borrower hereby confirms and agrees that Lender's security interest in all of the collateral previously pledged to Lender pursuant to the Loan Documents shall continue to secure the payment and performance of all of Borrower's Obligations to Lender, as modified by this Third Modification Agreement.
5. Representations, Warranties And Agreements Of Borrower. As material inducements to Lender to enter into this Third Modification Agreement, and acknowledging Lender's reliance upon the truth and accuracy thereof, Borrower represents, warrants, acknowledges and agrees that to Borrower's actual, present knowledge:
5.1 The recitals set forth above are true and correct.
5.2 All financial statements and other information delivered to Lender by
or on behalf of any Borrower in connection with this Third Modification
Agreement were true and correct as of the respective dates thereof, and that
their has not been a Material Adverse Change in any Borrower's financial
condition since that presented by the latest financial statements and other
information provided to Lender. Lender acknowledges that the financial
restatements publicly disclosed in Bluegreen's current report on Form 8-K dated
December 19, 2005 will not constitute a breach of Section 5.2 or 5.3 herein or
Section 5.6 of the Loan Agreement.
5.3 As of the date hereof, no Event of Default or Incipient Default exists with respect to the Loan Documents.
5.4 As of the date hereof, no Borrower is the subject of a pending bankruptcy proceeding and no Borrower is aware of any threatened bankruptcy proceeding against any Borrower.
5.5 There are no proceedings pending or threatened against or affecting any Borrower in any court, before any governmental authority, or arbitration board or tribunal which may result in a Material Adverse Change. Lender acknowledges that Borrower has disclosed to Lender the proceeding filed by the State of Tennessee as disclosed in Bluegreen's September 30, 2005 Form 10-Q.
5.6 All of the representations and warranties contained in the Loan Agreement and the other Loan Documents are true and correct as of the date hereof and are hereby reaffirmed and ratified.
5.7 This Third Modification Agreement and any documents and instruments executed
in connection herewith have been authorized by all necessary action and when executed will be the legal, valid and binding obligations of each Borrower.
5.8 Each Borrower's execution, delivery and performance of this Third Modification Agreement does not and will not (i) violate any law, rule, regulation or court order to which such Borrower is subject, (ii) conflict with or result in a breach of the articles of formation, bylaws, operating agreement, partnership agreement or other formation document of such Borrower or any agreement or instrument to which such Borrower is a party or by which its properties are bound, or (iii) result in the creation or imposition of any lien, security interest or encumbrance on any property of such Borrower, whether now owned or hereafter acquired, other than liens in favor of Lender.
5.9 Each Borrower acknowledges that such Borrower has consulted with counsel and with such other experts and advisors as it has deemed necessary in connection with the negotiation, execution and delivery of this Third Modification Agreement. This Third Modification Agreement shall be construed without regard to any presumption or rule requiring that it be construed against the party causing this Third Modification Agreement or any part hereof to be drafted.
5.10 All terms, conditions and provisions of the Loan Agreement, the applicable promissory note and the other Loan Documents are hereby reaffirmed, ratified and continued in full force and effect and shall remain unaffected and unchanged except as specifically amended hereby.
6. Conditions Precedent To Effectiveness. The effectiveness of this Third Modification Agreement is subject to the full and complete satisfaction of each and every one of the following conditions precedent:
6.1 Lender shall have received this Third Modification Agreement duly executed and in form and substance acceptable to Lender.
6.2 Lender shall have received from Borrower any amounts due to Lender pursuant to Section 3 of this Third Modification Agreement.
7. Miscellaneous Terms.
7.1 Complete Agreement. Notwithstanding anything to the contrary contained herein or in any other instrument executed by the parties and notwithstanding any other action or conduct undertaken by the parties on or before the date hereof, the agreements, covenants and provisions contained herein shall constitute the only evidence of Lender's agreement to modify the Loan Agreement and the other Loan Documents. Accordingly, no express or implied consent to any further modifications shall be inferred or implied by Lender's execution of this Third Modification Agreement. The Loan Agreement and this Third Modification Agreement, together with the other Loan Documents, constitute the entire agreement and understanding among the parties relating to the subject matter hereof, and supersedes all prior proposals, negotiations, agreements and understandings relating to such subject matter. In entering into this Third Modification Agreement, each Borrower acknowledges that it is relying on no statement, representation, warranty, covenant
or agreement of any kind made by the Lender or any employee or agent of the Lender, except for the agreements of Lender set forth herein.
7.2 No Waiver. Lender's execution of this Third Modification Agreement shall not constitute a waiver (either express or implied) of the requirement that any further modification of the Loan Agreement or of any other Loan Document shall require the express written approval of Lender. No such approval (either express or implied) has been given as of the date hereof.
7.3 Full Force and Effect; Conflict. Other than as specifically set forth herein, the remaining terms of the Loan Agreement and the other Loan Documents shall remain in full force and effect. Notwithstanding anything to the contrary contained in the Loan Agreement or the other Loan Documents, in the event of a conflict between the terms of this Third Modification Agreement (on the one hand) and the Loan Agreement or other Loan Documents (on the other hand), the terms of this Third Modification Agreement shall control. Nothing contained in this Third Modification Agreement is intended to or shall be construed as relieving any person or entity, whether a party to this Third Modification Agreement or not, of any of such person's or entity's obligations to Lender.
7.4 Successors and Assigns. The Loan Documents as modified herein shall be binding upon and shall inure to the benefit of each Borrower and Lender and their successors and assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of each Borrower, provided, however, no Borrower may assign any of its rights or delegate any of its obligations under the Loan Documents and any purported assignment or delegation shall be void.
7.5 Severability. If any one or more of the provisions of a Modification Document is held to be invalid, illegal or unenforceable in any respect or for any reason (all of which invalidating laws are waived to the fullest extent possible), the validity, legality and enforceability of any remaining portions of such provision(s) in every other respect and of the remaining provision(s) of such Modification Document shall not be in any respect impaired. In lieu of each such unenforceable provision, there shall be added automatically as a part of such Modification Document a provision that is legal, valid and enforceable and is as similar in terms to such unenforceable provisions as may be possible.
7.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Third Modification Agreement to physically form one document.
[Signatures on Following Page]
DATED as of the date first above stated.
BORROWER:
BLUEGREEN CORPORATION, a
Massachusetts corporation
BLUEGREEN VACATIONS UNLIMITED, INC.
a Florida corporation
BLUEGREEN/BIG CEDAR VACATIONS, LLC.
a Delaware limited liability company
LENDER
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
Exhibit 10.180
EXECUTION COPY
BXG RECEIVABLES OWNER TRUST 2006-A
DEFINITIONS ANNEX
Definitions and Interpretations
March 13, 2006
DEFINITIONS ANNEX
Accommodation. As defined in the Club Trust Agreement with respect to an Eligible Resort.
Accountant's Report. As assigned such term in Section 9.6 of the Sale and Servicing Agreement.
Administration Agreement. The Administration Agreement, dated as of the date hereof, by and among the Trust, the Trust Depositor, the Indenture Trustee and the Trust Administrator as the same may be amended, modified, supplemented, restated, replaced or renewed in writing from time to time.
Affected Party. Any Noteholder or any permitted assignee of a Noteholder, the holding company of any such Person and any successor holding company thereof; provided that neither General Electric Capital Corporation nor any of its Subsidiaries or Affiliates shall be an Affected Party.
Affiliate. With respect to a Person means any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" or "controlled" have meanings correlative to the foregoing.
Aggregate Outstandings. At any time, an amount equal to the sum of all accrued and unpaid principal, interest, interest on interest, fees and all other amounts owing (whether due or accrued) to the Noteholders under any Transaction Document at such time.
Allonge. As defined in Section 2.2(b) of the Sale and Servicing Agreement; it being understood that an electronic signature shall be acceptable.
Aruba Receivables. A Receivable relating to the Eligible Resort commonly known as La Cabana Beach & Racquet Club.
Assets. All right, title and interest of the transferring party in, to and under the following:
(i) all Receivables (including Receivables in respect of Substitute Assets) conveyed or being conveyed to the Trust Depositor under the Sale and Contribution Agreement and all payments of interest and principal, other Collections thereon and monies received, due or to become due in payment of such Receivables after the applicable Cutoff Date;
(ii) the Mortgages, if applicable, and any other instruments, documents and rights securing such Receivables including, without limitation, all "Owner Beneficiary Rights" under the Club Trust Agreement in respect of such Receivables and all of the transferring party's rights or interest in all other property (personal or other), if any, the sale of which gave rise to the Receivables;
(iii) the related Receivables Files;
(iv) all payments made or to be made after the applicable Cutoff Date with respect to such Receivables or the Obligor thereunder under any guarantee or similar credit enhancement with respect to such Receivables, if any;
(v) all Insurance Proceeds with respect to any such Receivables, if applicable; and
(vi) all income from and proceeds of the foregoing.
Asset Pool. At any time, all then outstanding Trust Assets which have been conveyed to the Trust under the Sale and Servicing Agreement.
Asset Pool Portion. The pool of Trust Assets relating to Eligible Receivables purchased on an applicable Transfer Date (and any Substitute Assets substituted for such Trust Assets) as identified by the Trust Depositor in the related Request Notice.
Asset Pool Portion Required Overcollateralization Amount. For any Asset
Pool Portion, at any Determination Date, the product of (A) the difference of
(x) 1 minus (y) the Overcollateralization Percentage in respect of such Asset
Pool Portion times (B) the Receivable Balance of all Eligible Receivables in
such Asset Pool Portion (as of the end of the immediately preceding Collection
Period).
Assignment. Each Assignment (i) in the form of Exhibit H to the Sale and Servicing Agreement relating to the sale, assignment, transfer and conveyance of Trust Assets to the Trust and (ii) in the form of Exhibit A to the Sale and Contribution Agreement relating to the sale, assignment, transfer and conveyance of the Assets to the Trust Depositor.
Audit Fees. With respect to any Collection Period, the invoiced fees and expenses of independent accountants engaged by the Servicer in connection with the Accountant's Report delivered in accordance with Section 9.6 of the Sale and Servicing Agreement.
Authorized Officer. With respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Trust Administrator who is authorized to act for the Trust Administrator in matters relating to the Issuer and to be acted upon by the Trust Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Trust Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter).
Available Amounts. As of the end of any Collection Period, the sum of
(without duplication) (i) all amounts on deposit in the Collection Account on
such date relating to the Receivables, and Prepayments received on or before,
the last day of such Collection Period, (ii) Recoveries on account of previously
Defaulted Receivables received and on deposit in the Collection Account as of
such date preceding the Payment Date, (iii) Investment Earnings credited to the
Collection Account during such Collection Period, (iv) Late Charges received and
on deposit in the Collection Account on or before the last day of such
Collection Period preceding the Payment Date, and (v) any other amounts on
deposit in the Collection Account (including proceeds of Servicer Advances,
proceeds of Insolvency Proceedings, Insurance Proceeds, amounts transferred from
the Reserve Account and amounts relating to purchases of Receivables pursuant to
Section 2.7 of the Sale and Servicing Agreement) which are expressly required by
the terms of the Sale and Servicing Agreement to be treated as Available Amounts
with respect to the Payment Date related to such Collection Period; provided,
however, any amounts therein which were provided in error shall not be
considered Available Amounts.
Back-up Servicer. Concord Servicing Corporation, together with any permitted successors and assigns.
Back-up Servicer Fee. The fee payable monthly to the Back-up Servicer with respect to each Collection Period pursuant to Section 2.11 of the Sale and Servicing Agreement, as set forth in the Back-up Servicing Agreement.
Back-up Servicing Agreement. The Back-up Servicing Agreement, dated as of the date hereof, among Back-up Servicer, Facility Administrator, Sellers, Trust Depositor, the Issuer and Indenture Trustee.
Bankruptcy Code. Title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended from time to time, or any successor thereto.
Beneficiary. As defined in the Club Trust Agreement.
Benefit Plan. Any employee benefit plan as defined in Section 3(3) of ERISA in respect of which any Seller or any ERISA Affiliate of such Seller is, or at any time during the immediately preceding six years was, an "employer" as defined in Section 3(5) of ERISA.
Bluegreen. Bluegreen Corporation, a Massachusetts corporation.
Business Day. A day of the year other than a Saturday or a Sunday on which banks are not required or authorized to be closed in New York City, New York, Chicago, Illinois, St. Paul, Minnesota or the State of Florida.
Cash Purchase Price. As defined in Section 2.1(b) of the Sale and Servicing Agreement.
Casualty Loss. With respect to any Interval, the loss, theft, damage beyond repair or governmental condemnation or seizure of an Interval.
Change of Control. Bluegreen, directly or through one or more Subsidiaries, (i) ceases to conduct the timeshare business conducted by Bluegreen and its Subsidiaries on the Closing Date and originate receivables in respect thereof or (ii) is acquired by or merges with another Person; provided that a Change of Control shall not include the transfer of the assets and liabilities of the business of Bluegreen and its Subsidiaries conducted on the Closing Date substantially as an entirety to a Person, or an acquisition by or merger with another Person, that (x) is substantially engaged, directly or through one or more Subsidiaries, in the hospitality, vacation ownership or leisure industries reasonably acceptable to the Note Majority and (y) has long-term unsecured and noncredit-enhanced senior indebtedness rated equal to or better than "BBB-" by S&P (or its equivalent rating by Moody's), and such transferee expressly assumes in writing the obligations of Bluegreen and the other Seller Parties under the Transaction Documents (including, but not limited to, the obligations of Bluegreen as the Servicer); provided further, that a transfer of the assets and/or liabilities of the business of Bluegreen and its Subsidiaries to, or any acquisition by or merger with, BankAtlantic Bancorp, Inc., BFC Financial Corp., Levitt Corporation or any successor or Affiliate of any of the foregoing shall be deemed to satisfy the conditions set forth in clauses (x) and (y) above.
Closing Date. The date on which the conditions precedent to the initial Purchase have been satisfied and the initial Purchase has been made under the Sale and Servicing Agreement.
Club. The club formed pursuant to the Club Trust Agreement.
Club Management Agreement. The Amended and Restated Management Agreement between Bluegreen Resorts Management, Inc. and Vacation Trust, Inc. dated as of May 18, 1994.
Club Managing Entity. Bluegreen Resorts Management, Inc., a Delaware corporation, in its capacity as manager of the Club and owner of the Club's reservation system and its permitted successors and assigns.
Club Trust Agreement. Collectively, that certain Bluegreen Vacation Club Amended and Restated Trust Agreement, dated as of May 18, 1994, among Bluegreen Vacations Unlimited, Inc., the Club Trustee, Bluegreen Resorts Management, Inc. and Bluegreen Vacation Club, Inc., as amended, restated or otherwise modified from time to time, set forth on Exhibit E to the Sale and Servicing Agreement together with all other agreements, documents and instruments governing the operation of the Club.
Club Trustee. Vacation Trust, Inc., a Florida corporation, in its capacity as trustee under the Club Trust Agreement and its permitted successors and assigns.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. As defined in the Granting Clause of the Indenture.
Collection Account. As defined in Section 2.3(b) of the Sale and Servicing Agreement.
Collection Period. With respect to any Payment Date, the period commencing on the sixteenth (16th) day of the second month preceding the month of such Payment Date and ending on the fifteenth (15th) day of the month immediately preceding the month of such Payment Date, provided that the first Collection Period shall be the period beginning on the day after the Initial Cutoff Date and ending on, and including, the fifteenth (15th) day of the month immediately succeeding the Initial Cutoff Date.
Collection Policies. The Collection Policies attached to the Sale and Servicing Agreement as Exhibit J, as amended or supplemented from time to time in accordance with Section 6.3(o)(ii) of the Sale and Servicing Agreement.
Collections. With respect to any Receivable and related Trust Assets, all cash collections and other cash proceeds of such Trust Assets received after the Cutoff Date.
Contract. With respect to any Receivable, any and all instruments, agreements or other writings pursuant to which such Receivable arises or which evidences such Receivable.
Compliance Documents. With respect to sales of Units and Resort Interests in any province or other jurisdiction: (i) an opinion letter in substance satisfactory to Facility Administrator from an attorney or local equivalent thereof, licensed in such province or jurisdiction addressing the compliance of Sellers' offering materials, sales and financing documents and sales practices with the applicable law of such province or jurisdiction, (ii) evidence satisfactory to Facility Administrator that the governmental authority of such province or jurisdiction having jurisdiction over sales and/or exchanging of Units or Resort Interests has issued all required approvals of Sellers' offering materials, sales and financing documents and sales practices, (iii) copies of Sellers' offering materials, sales and financing documents as approved by such province or jurisdiction (to the extent such approval is required) or as otherwise finalized (to the extent such approval is not required), and (iv) evidence that the Sellers are authorized to do business in such province or jurisdiction if required by such province's or jurisdiction's laws to be so authorized.
Completed Units. A Unit at an Eligible Resort which has been fully constructed and furnished, has received a valid permanent certificate of occupancy, is ready for occupancy and is subject to a time share declaration.
Computer Disk. The computer disk generated by the Servicer which provides information relating to the Trust Assets and which was used by the Sellers in selecting the Receivables conveyed to the Trust Depositor pursuant to the Sale and Contribution Agreement, in an Excel file format as described on Exhibit A of the Custodial Agreement.
Confidentiality Agreement. The Confidentiality Agreement dated the date hereof between General Electric Capital Corporation, the Trust and Bluegreen relating to confidential information.
Consolidated EBITDA. For any period, Consolidated Net Income for such period plus without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (i) income tax expense, (ii) Consolidated Interest Expense, (iii) depreciation and amortization expense, and (iv) amortization of intangibles (including, but not limited to, goodwill).
Consolidated Interest Expense. On a consolidated basis for Bluegreen and its Subsidiaries, for any period, the consolidated interest expense (net of interest income) of Bluegreen and its Subsidiaries, determined in accordance with GAAP.
Consolidated Net Income. On a consolidated basis for Bluegreen and its Subsidiaries, for any period, the consolidated net income (or loss) of Bluegreen and its Subsidiaries, determined in accordance with GAAP.
Consolidated Net Worth. On a consolidated basis for Bluegreen and its Subsidiaries, at any date, (i) the sum of (a) capital stock taken at par or stated value plus (b) capital of Bluegreen Corporation in excess of par or stated value relating to capital stock plus (c) retained earnings (or minus any retained earning deficit) of Bluegreen Corporation plus (d) other comprehensive income, minus (ii) the sum of treasury stock, capital stock subscribed for and unissued and other contra-equity accounts, all determined in accordance with GAAP.
Consumer Laws. The applicable portions of any federal, state, and local laws and regulations, including Aruban laws, relating to interest, usury, consumer credit, equal credit opportunity, fair credit reporting, privacy, consumer protection, false or deceptive trade practices and disclosure, and the sales and marketing of timeshare units, including to the extent applicable, but not limited to, the Truth In Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Federal Trade Commission Act, the Fair Debt Collection Practices Act, the Gramm-Leach-Bliley Act, the Patriot Act, the Servicemembers' Civil Relief Act and the Telephone Consumer Protection Act (and the "Do Not Call Registry" promulgated thereunder).
Corporate Trust Office. The principal office of the Indenture Trustee or the Owner Trustee, as applicable, at which at any particular time its respective corporate trust business shall be administered or such other address as the Indenture Trustee or the Owner Trustee, as the case may be, may designate from time to time by notice to the Noteholders, the Facility Administrator and the Servicer.
Cost of Funds. With respect to any Asset Pool Portion and for any period and with respect to any Note (or incremental funding in respect thereof) purchased by General Electric Capital Corporation, the Swap Rate established at the time of purchase of such Note (or incremental funding in respect thereof)
and having a principal amortization schedule mutually agreeable to Bluegreen and General Electric Capital Corporation.
Costs. All reasonable expenditures and expenses which may be paid or
incurred by or on behalf of the Noteholders and the Facility Administrator in
connection with the documentation, modification, workout, collection or
enforcement of the Transaction Documents. During the term of the Transaction
Documents, Costs shall include reasonable expenditures and expenses as follows:
payments to remove or protect against liens; reasonable fees, costs and expenses
of outside counsel actually incurred; receivers' fees; engineers' fees;
accountants' fees; independent consultants' fees (including environmental
consultants); fees of the Indenture Trustee, the Custodian and the Servicer (if
other than Bluegreen or one of its Affiliates); all costs and expenses incurred
in connection with any of the foregoing; outlays for documentary and expert
evidence; stenographers' charges; stamp taxes; publication costs; and costs
(which may be estimates as to items to be expended after entry of an order or
judgment) for procuring all such abstracts of title, title and UCC searches, and
examination, title insurance policies, and similar data and assurances with
respect to title as the Facility Administrator may deem reasonably necessary
either to prosecute any action or to evidence to bidders at any foreclosure sale
a true condition of the title to, or the value of, the Trust Assets.
Credit Card Fees. Fees paid by the Servicer to credit card processors in respect of any Receivable as to which payments of principal and/or interest is made by debit to the related Obligor's credit card account.
Credit Concentration Limit. At any Transfer Date, the weighted average FICO Score of the aggregate Receivable Balance of all Eligible Receivables transferred to the Trust on such Transfer Date (not including for any Obligor that is not a resident of the United States) shall be no less than 645.
Credit Enhancement Factor. At any Transfer Date, the applicable percentage for Eligible Receivables comprising an Asset Pool Portion set forth below based on the applicable Credit Enhancement Spread:
Credit Enhancement Spread Credit Enhancement Factor
------------------------- -------------------------
> 7.25% 90.0%
-
< 7.25% but > 7.00% 89.5%
-
< 7.00% but > 6.75% 89.0%
-
< 6.75% but > 6.50% 88.5%
-
< 6.50% but > 6.25% 88.0%
-
< 6.25% but > 6.00% 87.5%
-
< 6.00% but > 5.75% 87.0%
-
< 5.75% but > 5.50% 86.5%
-
< 5.50% but > 5.25% 86.0%
-
< 5.25% but > 5.00% 85.5%
-
< 5.00% but > 4.75% 85.0%
-
< 4.75% but > 4.50% 84.5%
-
< 4.50% but > 4.25% 84.0%
-
< 4.25% but > 4.00% 83.5%
-
< 4.00% but > 3.75% 83.0%
-
< 3.75% but > 3.50% 82.5%
-
< 3.50% but > 3.25% 82.0%
-
< 3.25% but > 3.00% 81.5%
-
< 3.00% No Purchase
|
; provided further that upon the cure of a Trigger Event as provided for in the definition of Termination Event, the then applicable Credit Enhancement Factor in respect of such Eligible Receivables shall be decreased (i) three (3) percentage points upon the first such cure and (ii) five (5) percentage points upon the second such cure. Except as provided in the immediately preceding proviso, the Credit Enhancement Factor for each Asset Pool Portion shall remain fixed on and after the Transfer Date for each Asset Pool Portion.
Credit Enhancement Spread. As at any Transfer Date and with respect to any Asset Pool Portion, the difference between (a) the weighted average interest rate of all Receivables with respect to an Asset Pool Portion and (b) the Note Rate for such Asset Pool Portion as of such Transfer Date.
Custodial Agreement. An agency and custodial agreement; in such form as shall be reasonably satisfactory to the Noteholders and the Trust Depositor and which Agreement shall be by and among Trust Depositor, the Trust, the Servicer, the Back-Up Servicer, the Facility Administrator, the Indenture Trustee and the Custodian, providing for the custody and maintenance of the Receivables Files relating to the Receivables as the same may be amended, modified, supplemented, restated, replaced or renewed in writing from time to time.
Custodian. U.S. Bank National Association or such other Person designated by the Noteholders and approved by Trust Depositor to maintain physical possession of the Receivables Files.
Custodian Fee. The fee payable monthly to the Custodian with respect to each Collection Period pursuant to Section 2.11 of the Sale and Servicing Agreement as specified in a separate fee agreement between the Custodian and the Servicer.
Custodian's Certificate. As defined in the Custodial Agreement.
Cutoff Date. With respect to each Receivable (including Receivables relating to Substitute Assets), the date specified in the related List of Receivables, after which Collections on such Receivable are to constitute part of the Asset Pool. With respect to Replaced Assets, the date agreed to between the Facility Administrator and the Servicer after which such Replaced Assets and related Collections no longer constitute part of the Asset Pool.
Declaration. With respect to each Eligible Resort, the condominium declaration or similar instrument related thereto pursuant to which such Eligible Resort is encumbered and the property regime established thereat is created as all of the foregoing may be lawfully amended and/or supplemented from time to time in accordance with the provisions thereof.
Deeds. The writing evidencing title in the Club Trustee on behalf of the Owner Beneficiaries referred to in, and subject to the other provisions of, the Club Trust Agreement, with respect to Intervals relating to Receivables.
Default. An event but for the lapse of time or the giving of notice, or both, would constitute an Event of Default under the Indenture.
Defaulted Receivable. A Receivable in the Asset Pool as to which the earlier of the following shall have occurred (i) the Servicer has determined in its sole discretion, in accordance with its customary and usual practices, that such Receivable is not collectible; provided that amounts in respect of such Receivable are at least one (1) day past due or (ii) all or part of any payment due thereunder is more than 120 days past due pursuant to the terms of the Contract governing such Receivable.
Definitions Annex. This Definitions Annex.
Delinquent Receivable. A Receivable in the Asset Pool as to which all or part of a payment installment due thereunder is more than 30 days delinquent.
Determination Date. With respect to any Payment Date, the sixth Business Day prior to such Payment Date relating to the previous Collection Period.
Document Conventions. With respect to any Transaction Document, each of the rules of construction and interpretation set forth as follows.
(i) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(ii) The words "hereof", "herein", "hereunder" and similar words refer to applicable Transaction Document as a whole and not to any particular provision of such Transaction Document; and subsection, Section, Schedule and Exhibit references are to those of the applicable Transaction Document unless otherwise specified.
(iii) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.
(iv) The term "including" is not limiting and means "including without limitation."
(v) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding", and the word "through" means "to and including."
(vi) The term "property" includes any kind of property or asset, real, personal or mixed, tangible or intangible.
(vii) Unless otherwise expressly provided herein, (i) references to agreements (including the applicable Transaction Document) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Transaction Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.
(viii) The captions and headings of the applicable Transaction Document are for convenience of reference only and shall not affect the interpretation of such Transaction Document.
(ix) The Transaction Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.
(x) Unless otherwise expressly provided, any reference to any action of the Noteholders by way of consent, approval or waiver shall be deemed modified by the phrase "in their sole discretion."
(xi) The Transaction Documents are the result of negotiations among and have been reviewed by counsel to the Noteholders, the Trust Depositor, Bluegreen, and the other parties thereto, if any, and are the products of all parties. Accordingly, they shall not be construed against any party merely because of such party's involvement in their preparation.
(xii) Unless the context otherwise clearly requires, all accounting terms used in the applicable Transaction Document and not expressly defined in the applicable Transaction Document or in this Definitions Annex, shall be construed, and all financial computations required thereunder shall be made, in accordance with GAAP, consistently applied.
Dollar and $. Lawful currency of the United States of America.
Eligible Deposit Account. A segregated trust or direct deposit account with a Qualified Institution.
Eligible Receivable. A Receivable under which:
(a) other than with respect to a Program Receivable, payments due under the Receivable shall be self-amortizing and payable in monthly installments;
(b) the weighted average remaining term to maturity of all Receivables with respect to an Asset Pool Portion purchased under the Sale and Servicing Agreement from the date when such Receivable is sold to the Trust pursuant to the Sale and Servicing Agreement is at least thirty-six (36) months at the time the Receivable is sold under the Sale and Servicing Agreement;
(c) the Obligor thereunder has made a cash down payment of at least 10% of the actual purchase price (including closing costs) of the Interval (which cash down payment may, in the case of Upgrades or conversions under a Sampler Program Agreement, be represented in part or in whole by the principal payments on, as applicable, such receivable or the related Sampler Loan since its date of origination) and no part of such payment has been made or loaned to Obligor by any Seller Party or any Affiliate thereof;
(d) the weighted average interest rate of all Receivables with respect to an Asset Pool Portion sold under the Sale and Servicing Agreement is not less than 15.0% per annum at the time of the addition of such Receivable to the Asset Pool;
(e) no principal or interest due with respect to the Receivable is more than thirty (30) days past due on a contractual basis on the Cutoff Date for such Receivable ;
(f) the Obligor is not an Affiliate of Bluegreen or any Subsidiary; provided that solely for the purposes of this clause (f), a relative of an employee of Bluegreen or any Subsidiary (or any of its Affiliates) shall not be deemed to be an "Affiliate";
(g) the Receivable is free and clear of adverse claims and Liens (other than Permitted Liens) and is not subject to claims of rescission, invalidity, unenforceability, illegality, offset, counterclaim or any other defense (including defenses arising out of violations of Consumer Laws);
(h) the Receivable (other than an Aruba Receivable) is secured directly by a first priority Mortgage on the purchased Interval;
(i) if a Mortgage secures a Receivable, the title to the related Interval is insured (or a commitment for title insurance has been issued) under a mortgagee title insurance policy in form and substance acceptable to the Facility Administrator (a pro forma mortgagee title insurance policy in the form of one policy with a schedule attached listing borrowers, unit(s) and week(s), is deemed acceptable);
(j) the Receivable shall not be in an outstanding principal amount at the time of its initial purchase in excess of $35,000 and no Obligor shall be the payor of aggregate Receivables herein in an original principal amount in excess of $50,000;
(k) payments with respect to the Receivable are to be in legal tender of the United States;
(l) if the Obligor on such Receivable is not a resident of the United States or Canada, as of the Transfer Date for such Receivable, after taking into account the Purchase of such Receivable, at least 90% of the aggregate outstanding principal balance of all Receivables arise from Obligors who are either residents of the United States or Canada at the time the Receivable is originated; provided that, with respect to Aruba Receivables, at least 60% of the aggregate outstanding principal balance of all Aruba Receivables arise from Obligors who are residents of either the United States or Canada at the time such Receivable is originated;
(m) all monthly payments on the Receivable have been made by the Obligor and not by any Seller Party or any Affiliate of any Seller Party on the Obligor's behalf;
(n) no less than 97.5% of all Receivables shall relate to an Eligible Resort;
(o) the Receivable constitutes either "chattel paper", a "general intangible" or an "instrument" as defined in the UCC as in effect in all applicable jurisdictions;
(p) the sale, transfer and assignment of the Receivable and the related Trust Assets does not contravene or conflict with any Requirement of Law or any contractual or other restriction, limitation or encumbrance, and the sale, transfer and assignment of the Receivable and related Trust Assets does not require the consent of the Obligor;
(q) the Receivable (i) arises under a Contract in substantially one of the forms set forth on Exhibit L-1 to the Sale and Servicing Agreement which does not contain a confidentiality provision that purports to restrict the ability of the Trust or the Indenture Trustee to exercise its rights under the Transaction Documents, (ii) is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor thereof enforceable against such Obligor in accordance with its terms subject to the effect of bankruptcy, fraudulent conveyance or transfer, insolvency, reorganization, assignment, liquidation, conservatorship or moratorium, and (iii) is not subject to any dispute, offset, counterclaim or defense whatsoever;
(r) (i) the Receivable relates to a Completed Unit and (ii) the Receivable and related Trust Assets were originated and serviced in compliance with, and do not contravene any Requirement of Law and with respect to which no party thereto is in violation of any such Requirement of Law, except to the
extent that any failure to so comply or any such violation (other than the failure to comply with or the violation of the Patriot Act) could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(s) as of the Transfer Date for such Receivable, the Receivable Balance of such Receivable, when aggregated with the Receivable Balance of all other Eligible Receivables in the Asset Pool Portion for such Receivable, satisfies the Credit Concentration Limit;
(t) the Receivable has not been modified in any respect due to the deteriorative credit quality of the Obligor;
(u) as of the Cutoff Date for such Receivable, (i) no bankruptcy is existing with respect to the Obligor and (ii) the Obligor is not insolvent as determined by a court of competent jurisdiction;
(v) the Receivable shall not have an initial term to maturity of more than 120 months;
(w) other than with respect to a Program Receivable, as of the Transfer Date for such Receivable, the Receivable shall not have a contractual interest rate less than 12.00% per annum;
(x) except with respect to an Upgrade Receivable or a Program Receivable, the Obligor has made at least one (1) required payment with respect to the Receivable;
(y) if an Eligible Resort is subject to a construction loan, the construction lender shall have signed and delivered a non-disturbance agreement (which may be contained in such lender's mortgage) pursuant to which such construction lender agrees not to foreclose on any Intervals relating to Receivables or the terms of the construction loan shall provide a mechanism for release of the Interval from the lien created thereby, and such release shall have been effectuated, which have been sold pursuant to the Sale and Servicing Agreement;
(z) if the Receivable is an Aruba Receivable, no more than the greater of
(i) $3,000,000 or (ii) 5.0% of the Receivable Balance of all Eligible
Receivables in Asset Pool (after giving effect to such Purchase) shall arise
from Aruba Receivables;
(aa) no condemnation proceedings have been instituted and are continuing or are threatened with respect to an Eligible Resort relating to such Receivable;
(bb) no foreclosure or similar proceedings have been instituted and are continuing with respect to such Receivable or the related Interval;
(cc) with respect to Aruba Receivables only, Bluegreen shall own, directly or indirectly, at least 51% of the economic and voting interests of Bluegreen Properties, N.V.;
(dd) the Receivable Balance of such Receivable, when aggregated with the Receivable Balance of all other Eligible Receivables relating to a particular Eligible Resort, shall not exceed the applicable Resort Concentration Limit;
(ee) as of the Transfer Date for such Receivable, none of the Obligors under the Receivables has its rights under the Club Trust Agreement suspended;
(ff) the Receivable is not a Defaulted Receivable;
(gg) (i) as of the Transfer Date for such Receivable, the original terms and conditions of any agreement relating to the Receivable shall not have been modified, supplemented, amended or otherwise altered, and (ii) subsequent to the Transfer Date, such terms and conditions shall not be modified, supplemented, amended or otherwise altered without the prior consent of the Note Majority (other than as expressly permitted by Section 6.3(i) of the Sale and Servicing Agreement), except in the case of clauses (i) and (ii) above, for a reduction or increase in the interest rate not in excess of 1.0% in respect of an Obligor's election to begin or cease making payments via pre-authorized checking or as may be required pursuant to the Servicemembers Civil Relief Act;
(hh) except with respect to Aruba Receivables (i) the Receivable is secured by a first priority Mortgage in substantially one of the forms of Exhibit L-2 to the Sale and Servicing Agreement on the related Interval and the title to the Interval is insured under a mortgagee title insurance policy in form and substance acceptable to the Facility Administrator (a pro forma mortgagee title insurance policy in the form of one policy with a schedule attached listing borrowers, unit(s) and week(s), is deemed acceptable); (ii) the related Mortgage Assignments executed and delivered in favor of the Trust Depositor, the Trust and the Indenture Trustee are in recordable form and constitute a legal, valid and binding assignment, sufficient to convey to the assignee named therein all of the assignor's right, title and interest in, to and under such Mortgage; and (iii) such Mortgage has not been satisfied, canceled, released or rescinded and the related Interval has not been released from the lien of such Mortgage, in whole or in material part, nor has any instrument been executed that would effect any such satisfaction, cancellation, release or rescission;
(ii) as of the Transfer Date for such Receivable, no more than 3% of all Receivables shall be Program Receivables;
(jj) except (i) as may be required pursuant to the Servicemembers Civil Relief Act or (ii) for a reduction or increase in the interest rate not in excess of 1.0% in respect of an Obligor's election to begin or cease making payments via pre-authorized checking, or (iii) as permitted by Section 6.3(i) of the Sale and Servicing Agreement, the terms of the Receivable and related Mortgage have not been impaired, waived, altered or modified in any respect, except to correct typographical errors in the Mortgage or Contract related to the Receivable, if any, or as otherwise approved by the Note Majority in writing, all of which are included in the related Receivable File;
(kk) the loan evidenced by the Receivable has been fully disbursed and there is no obligation for future advances with respect thereto;
(ll) if the related Mortgage is a deed of trust, (i) a trustee, duly qualified under applicable law to serve as such, has either been properly designated and currently so serves or may be substituted in accordance with such Mortgage and applicable law and (ii) no fees or expenses are payable to such trustee by any Seller Party, or any transferee thereof, except in connection with a trustee's sale after default by the related Obligor or in connection with any full or partial release of the related Interval or related security for such Receivable;
(mm) as to which to any Seller Party's knowledge, the improvements located on or forming part of the Eligible Resort to which such Receivable relates comply with applicable zoning laws and ordinances, or constitutes a legal non-conforming use or structure or, if any such improvement does not so comply, such non-compliance does not materially and adversely affect the value of the related Interval as of the date of origination;
(nn) to any Seller Party's knowledge, the related Interval is not encumbered by any Lien junior to the Lien of the Mortgage encumbering such Interval, other than Permitted Liens;
(oo) [omitted];
(pp) as of the Transfer Date, there are no actions, suits or proceedings pending or, to any Seller Party's knowledge, threatened before any Governmental Authority concerning such Receivable, the related Obligor or the related Interval that would adversely affect title to the Receivable or the validity or enforceability of the related Mortgage or that would materially and adversely affect the value of such Interval as security for the Receivable or the use for which such Interval was intended;
(qq) as to which to any Seller Party's knowledge, as of the Transfer Date, the Unit in respect of the related Interval is free and clear of any damage that would materially and adversely affect its value as security for the Receivable (normal wear and tear excepted); and
(rr) the Obligor or any individual that owns a direct interest in such Obligor is not listed in the "Annex" to the Executive Order on terrorist financing issued by George W. Bush, President of the United States, on September 24, 2001 (as amended, supplemented or otherwise modified from time to time).
(ss) if the Obligor of the Receivable is not a resident of the United States or Canada, such Obligor's payments shall be made pursuant to United States Bank PAC, a deposit account in Dollars, or a credit card arrangement;
Eligible Resorts. Those certain timeshare vacation resorts listed on Exhibit C to the Sale and Servicing Agreement and any additional timeshare vacation resorts which the Note Majority may approve in the future and with respect to which Receivables may be purchased under the Sale and Servicing Agreement and which approval shall be in the Note Majority's reasonable discretion.
Environmental Claim. Any administrative, regulatory or judicial action, fee, cause of action, obligation, suit, liability, loss, damage, proceeding, decree, judgment, penalty, fine, demand, demand letter, order, directive, claim (including any claim involving liability in tort, strict, absolute or otherwise), lien, sanction, notice of non-compliance or violation, citation, warning, complaint, investigation, legal or consultant fee or expense (excluding cost of dispute between any parties to the Transaction Documents), or cost of investigation or proceeding, following from the application of any Environmental Law, or arising from the actual or alleged presence or release of any Hazardous Material (hereinafter "Liabilities") including and regardless of the merit of such Liability, any and all Liabilities for (i) investigation, assessment, abatement, correction, enforcement, mitigation, cleanup, removal, response, re-mediation or other activities related to the actual or alleged presence or release of Hazardous Materials, (ii) damages, contribution, indemnification, cost recovery, compensation or injunctive or declaratory relief related to violations of Environmental Law or the actual or alleged presence or release of Hazardous Materials, or (iii) any alleged or actual injury or threat of injury to human health, safety, natural resources or the environment in connection with a violation of Environmental Law or the actual or alleged presence or release of Hazardous Materials.
Environmental Laws. Means and includes the following as now in effect or hereafter amended: the Comprehensive Environmental Response Compensation and Liability Act, ("CERCLA"), 42 U.S.C. ss.9601 et. seq; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss.6901, et. seq.; the Toxic Substances Control Act ("TSCA"), 15 U.S.C. ss.2601, et. seq.; the Clean Air Act, 42 U.S.C. ss.7401 et. seq.; the Federal Water Pollution Control Act ("Clean Water
Act"), 33 U.S.C. ss.1251 et. seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. ss.11001 et. seq.; the Hazardous Materials Transportation Act, 49 U.S.C. ss.1801 et. seq.; the Atomic Energy Act, 42 U.S.C. ss.2011 et. seq.; the Safe Drinking Water Act, 42 U.S.C. ss.300f et. seq.; any so-called "Superfund" or "Superlien" law; and together with any similar federal, state or local law (whether imposed by statute, or administrative or judicial order, or common law), now or hereafter enacted, governing human health and safety, industrial hygiene, the environment or natural resources, or Hazardous Materials, including, such laws governing or regulating the use, generation, storage, removal, recovery, treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous Materials.
ERISA. The U.S. Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
ERISA Affiliate. (a) Any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Internal Revenue Code) as any Seller; (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Internal Revenue Code) with any Seller; or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Internal Revenue Code) as any Seller, any corporation described in clause (a) above or any trade or business described in clause (b) above.
Event of Default. As defined in Section 5.1 of the Indenture.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Excluded Claims. Any litigation, claim or proceeding that relates solely to a material breach of a representation, warranty, covenant or undertaking (or an allegation of such a material breach) by any Noteholder, the Lockbox Bank, the Back-Up Servicer, the Indenture Trustee, the Custodian, the Facility Administrator or any Affiliate or assignee of the foregoing in connection with the transactions contemplated by the Transaction Documents which is solely within the control of such Person; provided that such litigation, claim or proceeding (i) does not arise out of or relate to the Trust Assets, (ii) does not involve or relate to any Seller Party, the Club, the Club Trustee or any of their respective Affiliates (collectively "Related Parties") or any Person claiming through any of the foregoing, (iii) does not arise out of or relate to any Eligible Resort, the Contracts or the Obligors and (iv) is not the subject of any representation, warranty, covenant or undertaking by any Related Party under the Transaction Documents.
Facility Administrator. General Electric Capital Corporation, a Delaware corporation, and its successors and assigns.
Facility Termination Date. The earlier of (i) the Note Final Scheduled Maturity Date or (ii) any date upon which an Event of Default or a Termination Event (subject to rights of cure set forth in the applicable Transaction Document) has occurred and not been waived by the Noteholders.
Facilities. As defined in the Club Trust Agreement and includes, unless the context otherwise requires, the Eligible Resorts and the Accommodations.
FDIC. The Federal Deposit Insurance Corporation, or any successor thereto.
Federal Reserve Board. The Board of Governors of the Federal Reserve System.
Fee Letter. The Fee Letter, dated as of the date hereof, between Bluegreen and General Electric Capital Corporation, as initial Noteholder, as the same may be modified, amended or restated from time to time.
Force Majeure Delay. With respect to the Servicer, any cause or event which is beyond the control and not due to the negligence of the Servicer, which delays, prevents or prohibits such Person's delivery of the Reports required to be delivered pursuant to the Sale and Servicing Agreement or the performance of any other duty or obligation of the Servicer thereunder as the case may be, including, without limitation, computer, electrical and mechanical failures, acts of God or the elements and fire; provided, that no such cause or event shall be deemed to be a Force Majeure Delay unless the Servicer shall have given the Facility Administrator written notice thereof as soon as possible after the beginning of such delay.
Funding Date Overcollateralization. At any Transfer Date, the sum of (i) the sum of the product calculated for each Asset Pool Portion in the Asset Pool of (a) the Receivable Balance of all Eligible Receivables in each Asset Pool Portion as of the end of the most recent Collection Period multiplied by (b) the Credit Enhancement Factor applicable to each such Asset Pool Portion determined as of the applicable Transfer Date for each Asset Pool Portion plus (ii) at any time after the end of a Collection Period and prior to the next succeeding Payment Date, an amount equal to the Note Principal Distributable Amount to be made on the next succeeding Payment Date provided that the corresponding funds are in the Collection Account as certified in writing by the Servicer.
GAAP. Generally accepted accounting principles as in effect from time to time in the United States.
Governmental Authority/Authorities. The United States of America, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government.
Grant. Mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.
Hazardous Materials. Means (a) petroleum or chemical products, whether in
liquid, solid, or gaseous form, or any fraction or by product thereof, (b)
asbestos or asbestos containing materials in any form or condition, (c)
polychlorinated biphenyls (pcbs), or any substance or compound containing PCB's,
(d) radon gas, (e) underground storage tanks, (f) any explosive or radioactive
substances, including any source, special nuclear or by-product material, (g)
lead or lead-based paint, or (h) any other substance, material, waste or mixture
which is or shall be listed, defined, or otherwise determined by any
governmental authority to be hazardous, toxic, dangerous or otherwise regulated,
controlled or giving rise to liability as all such terms are used in their
broadest sense under any Environmental Laws.
Holder. The Person in whose name a Note is registered on the Note Register.
Increased Costs Event. With respect to any Affected Party any change in Regulation D of the Board occurring after the date hereof which:
(A) shall impose, modify or deem applicable any material reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System), but excluding any reserve included in the determination of interest rates, special deposit or similar requirements against assets of, deposits with or for the account of, or credit extended by, any Affected Party; or
(B) shall materially change the amount of capital maintained or required or requested or directed to be maintained by any Affected Party;
and the result of any of the foregoing is or would be to impose a material additional cost on an Affected Party acquiring, funding, making or maintaining any assignment, interest or participation, to materially reduce the amount of any sum received by an Affected Party under the Sale and Servicing Agreement with respect thereto, or in the good faith determination of such Affected Party, to materially reduce the rate of return on the capital of an Affected Party as a consequence of its obligations in connection with such assignment or participation interest or arising in connection therewith to a level below that which such Affected Party would otherwise have achieved.
Incremental Purchase. Any Purchase that increases the Outstanding Amount of the Notes, as described in Section 2.1 of the Sale and Servicing Agreement.
Incremental Transfer Date. Any date a Purchase is made, other than the Initial Transfer Date.
Indebtedness. With respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current liabilities incurred in the ordinary course of business and payable in accordance with customary trade practices) or which is evidenced by a note, bond, debenture or similar instrument, (b) all obligations of such Person under capital leases, (c) all obligations of such Person in respect of acceptances issued or created for the account of such Person and (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof.
Indemnified Party. As defined in Section 13.9(b) of the Sale and Servicing Agreement.
Indenture. The Indenture, dated as of the date hereof, between the Issuer and the Indenture Trustee, as the same may be amended or supplemented from time to time.
Indenture Trustee. U.S. Bank National Association, a national banking association, not in its individual capacity but solely as Indenture Trustee under the Indenture, or any successor Indenture Trustee under the Indenture.
Indenture Trustee Fees. The fee payable monthly to the Indenture Trustee with respect to each Collection Period pursuant to Section 2.11 of the Sale and Servicing Agreement, which fee shall not exceed 1/12th of $8500.
Independent. When used with respect to any specified Person, means such a
Person who (i) is in fact independent of the Issuer, the Trust Depositor or the
Servicer, or any Seller (ii) is not a director, officer or employee of any
Affiliate of the Issuer, the Trust Depositor or the Servicer, or any Seller
(iii) is not a person related to any officer or director of the Issuer, the
Trust Depositor or the Servicer or any
Seller or any of their respective Affiliates, (iv) is not a holder (directly or indirectly) of more than 10% of any voting securities of Issuer, the Trust Depositor or the Servicer or any Seller or any of their respective Affiliates, and (v) is not connected with the Issuer, the Trust Depositor or the Servicer or any Seller as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.
Ineligible Asset. As defined in Section 2.7(b) of the Sale and Servicing Agreement.
Initial Cutoff Date. The Cutoff Date specified in the Request Notice delivered in respect of the Initial Purchase.
Initial Purchase. As defined in Section 2.1(a) of the Sale and Servicing Agreement.
Initial Transfer Date. As defined in Section 2.1(a) of the Sale and Servicing Agreement.
Insolvency Laws. The Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.
Insolvency Proceeding. With respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.
Instruments. As defined in the UCC.
Insurance Policy. With respect to any Receivable, an insurance policy covering physical damage to or loss of the Eligible Resort or other resort in the Club where the related Interval is located.
Insurance Proceeds. Depending on the context, any amounts payable or any payments made, to the Servicer, any Seller or the Trust Depositor under any Insurance Policy.
Intangible Asset. A nonphysical, noncurrent right that gives Bluegreen or any of its subsidiaries an exclusive or preferred position in the marketplace including but not limited to a copyright, patent, trademark, goodwill, organization costs, capitalized advertising cost, computer programs, licenses for any of the preceding, government licenses (e.g., broadcasting or the right to sell liquor), leases, franchises, mailing lists, exploration permits, import and export permits, construction permits, and marketing quotas.
Interest Coverage Ratio. For the twelve month period ending on the last day of each calendar quarter, the ratio of (i) Consolidated EBITDA of Bluegreen to (ii) Consolidated Interest Expense.
Interest Shortfall. With respect to any Payment Date, the excess of the Note Interest Distributable Amount for the preceding Collection Period over the amount in respect of interest on the Notes that was actually disbursed from the Collection Account on such preceding Payment Date, plus interest on such excess, to the extent permitted by law, at a rate per annum equal to the Note Rate for the related Interest Period, from such preceding Payment Date to but excluding the related Payment Date.
Interest Period means (i) with respect to the first Payment Date, the period from and including the Closing Date to but excluding the fifteenth (15th) day of the month next preceding the month of such Payment Date and (ii) with respect to any subsequent Payment Date, the period from and including the sixteenth (16th) day of the second month preceding the month of such Payment Date and ending on the fifteenth (15th) day of the month next preceding the month of such Payment Date.
Internal Revenue Code. The Internal Revenue Code of 1986, as amended from time to time.
Interval. With respect to any Eligible Resort, (i) (x) an undivided fee simple ownership interest as a tenant in common or (y) a Resort Interest that is an ownership interest in real property substantially similar to an ownership interest described in clause (x) above (including Owner Beneficiary Rights), in either case with respect to any Unit in such Eligible Resort, with a right to use such Unit, or a Unit of such type, generally for one week or a portion of one week annually or biennially, together with all appurtenant rights and interests as more particularly described in the Time Share Documents (ii) with respect to Aruba Receivables originated prior to January 26, 2004, shares in the related Time Share Association at the La Cabana Beach Resort & Racquet Club entitling the related Obligor to the use and occupancy of a fixed Unit at such Resort for a fixed period of time each year or every other year for the duration of the long-term lease of such Eligible Resort, or (iii) with respect to Aruba Receivables originated on or after January 26, 2004, each secured by shares of the Time Share Association at the La Cabana Beach Resort & Racquet Club which entitle the owner thereof to use and occupy a fixed Unit at such Resort for a fixed period of time.
Investment Earnings. The investment earnings (net of losses and investment expenses) on amounts on deposit in the Trust Accounts, to be credited to the Collection Account on each Payment Date pursuant to Section 2.8 of the Sale and Servicing Agreement.
Issuer. BXG Receivables Owner Trust 2006-A.
Issuer Order or Issuer Request. A written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.
Late Charges. Any late payment fees paid by Obligors on Receivables after all sums received have been allocated first to regular installments due or overdue and only to the extent in excess of the full amount of the related installment.
Leverage Ratio. For the twelve month period ending on the last day of each calendar quarter prior to the Purchase Period Termination Date, the ratio of (i) the sum of Indebtedness of Bluegreen minus Subordinated Indebtedness to (ii) Tangible Net Worth.
Lien. Any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, claim, equity interest, participation interest, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement or any financing lease having substantially the same economic effect as any of the foregoing and the filing of, or
agreement to give, any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction.
Lifetime Cumulative Default Rate. With respect to each Tranche, a fraction
(expressed as a percentage) determined by dividing (a) (i) the aggregate
Receivable Balance of all Receivables in the Tranche which became Defaulted
Receivables over the course of all preceding Collection Periods (as measured at
the end of the respective Collection Periods), less (ii) the Receivable Balance
of all Defaulted Receivables that subsequently became current with all payments
(excluding Recoveries) over the course of all preceding Collection Periods by
(b) the aggregate Receivable Balance of all Receivables (determined as of the
Transfer Date for such Receivables) in the Tranche.
Lifetime Servicer Cumulative Default Threshold. With respect to each Tranche, the percentage below corresponding to the period below which, in turn, corresponds to the Weighted Average Tranche Age of the Tranche.
Weighted Average Tranche Age
(Months) Percentage
1 < 12 12.0%
> 12 < 18 14.0%
-
> 18 < 24 17.0%
-
> 24 < 30 19.5%
-
> 30 < 36 22.0%
-
> 36 < 42 24.5%
-
> 42 < 48 26.5%
-
> 48 < 54 28.5%
-
> 54 30.0%
-
|
Lifetime Termination Cumulative Default Threshold. With respect to each Tranche, the percentage below corresponding to the period below which, in turn, corresponds to the Weighted Average Tranche Age of the Tranche.
Weighted Average Tranche Age
(Months) Percentage
1 < 12 11.0%
> 12 < 18 12.0%
-
> 18 < 24 14.5%
-
> 24 < 30 17.0%
-
> 30 < 36 19.0%
-
> 36 < 42 21.0%
-
> 42 < 48 22.5%
-
> 48 < 54 24.0%
-
> 54 25.0%
-
|
List of Receivables. The list identifying each Receivable constituting part of the Trust Assets, which list shall consist of the initial List of Receivables reflecting the Receivables purchased on the Initial Transfer Date, together with any List of Substitute Receivables amending the most current List of Receivables reflecting (a) any Receivables purchased in an Incremental Purchase, and (b) Receivables in respect of Substitute Assets transferred to the Trust on the related Substitute Asset Transfer Date (together with a deletion from such list of the related Replaced Asset or Receivables identified on the
corresponding Substitution Notice), and which list in each case (a) identifies each Receivable included in the Asset Pool, and (b) sets forth as to each such Receivable (i) the Receivable Balance as of the applicable Cutoff Date (and, for a List of Substitute Receivables, as to Receivables previously in the Asset Pool, the Receivable Balance for such Receivables as of the date of delivery of the List of Substitute Receivables), and (ii) the maturity date for each listed Receivable.
List of Substitute Receivables. A list, in the form of the initial List of Receivables delivered on the Initial Transfer Date, but which list includes and separately identifies each Substitute Asset or Upgrade Receivable transferred to the Trust pursuant to the Sale and Servicing Agreement.
Lockbox means that certain post office lockbox through which cash, checks, money orders and other items of value from Obligors are received and processed by the Lockbox Bank for deposit into the Lockbox Account.
Lockbox Account. The Eligible Deposit Account established with the Lockbox Bank pursuant to Section 2.3(a) of the Sale and Servicing Agreement into which Collections in respect of Purchased Receivables are to be deposited as the same may be amended or supplemented.
Lockbox Agreement. The Lockbox Agreement among the Servicer, the Indenture Trustee, the Facility Administrator, the Trust and the Lockbox Bank, with respect to the Lockbox Account, as the same may be amended, supplemented or restated from time to time.
Lockbox Bank. Bank of America, a national banking association, or any successors and assigns thereto as Lockbox Bank permitted in accordance with the Lockbox Agreement.
Lockbox Bank Fees. The fee payable monthly with respect to the immediately preceding calendar month pursuant to Section 2.11 of the Sale and Servicing Agreement, which fee shall be set forth in the Lockbox Agreement.
Margin Stock. Has the meaning assigned to that term under Regulation U of the Federal Reserve Board from time to time in effect.
Material Adverse Effect. A material adverse effect on (i) the financial condition or operations of any Seller Party or the Club Trustee, (ii) the ability of any Seller Party, the Club Trustee or the Trust to perform its obligations under the Transaction Documents to which it is a party, (iii) the legality, validity or enforceability of any Transaction Document, (iv) the Trust's or the Indenture Trustee's interest in the Trust Assets generally or in any significant portion of the Assets or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.
Monthly Report. A report, in substantially the form of Exhibit D to the Sale and Servicing Agreement, furnished by the Servicer to the Facility Administrator pursuant to Section 9.4 of the Sale and Servicing Agreement.
Moody's. Moody's Investors Service, Inc., and any successor thereto.
Mortgage. Any mortgage, deed of trust, purchase money deed of trust or deed to secure debt granted by an Obligor or by the Club Trustee on behalf of such Obligor to the originator of the Receivable with respect to the purchase of an Interval and/or the contribution of the same to the Club and otherwise encumbering the related Interval to secure payments or other obligations under such Receivable.
Mortgage Assignments. Means those certain assignments executed by the Sellers in favor of the Trust Depositor, by the Trust Depositor in favor of the Trust and by the Trust in favor of the Indenture Trustee, in each case pursuant to which the transferor conveys all of its right, title and interest in and to the Mortgages identified therein, each in recordable form, duly authorized and executed, including the originals or copies of any intervening assignments of such Mortgage showing a complete chain of assignment from a Seller of the related Receivable to the most recent assignee of record in each case with evidence of recording indicating thereon.
Multiemployer Plan. A "multiemployer plan" as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by any Seller or any ERISA Affiliate on behalf of its employees.
Nonutilization Fee. Has the meaning set forth in the Fee Letter.
Note. Any of the Issuer's Notes issued pursuant to the Indenture.
Note Final Scheduled Maturity Date. The Payment Date occurring in the month which is the eight year anniversary of the Closing Date; provided that if no Servicer Termination Event or Termination Event exists on the eight year anniversary of the Closing Date, the Note Final Scheduled Maturity Date shall be automatically extended at such time to the earliest to occur of (i) the earliest Payment Date on which the Trust Depositor is permitted to repurchase all outstanding Trust Assets pursuant to Section 11.2 of the Sale and Servicing Agreement and (ii) the eleventh anniversary of the Purchase Period Termination Date; provided, however that in the event that the date set forth in the foregoing clause (i) is the earliest to occur, the failure of the Trust Depositor to repurchase all outstanding Trust Assets pursuant to Section 11.2 shall not constitute an Event of Default.
Noteholder. Any holder of record of a Note.
Note Interest Distributable Amount. With respect to any Payment Date, an
amount equal to the sum, for each Asset Pool Portion, of (i) the product of (A)
the Note Rate for such Asset Pool Portion for the related Interest Period times
(B) the actual number of days in such Interest Period divided by 360 times (C)
the daily weighted average Outstanding Amount applicable to such Asset Pool
Portion plus (ii) the Interest Shortfall for such Payment Date.
Note Majority. The holders of the Notes evidencing more than 50% of the Outstanding Amount of all Notes.
Note Principal Distributable Amount. (i) With respect to any Payment Date
prior to the occurrence of an Event of Default or a Termination Event (or after
a "cure" of a Trigger Event solely to the extent a particular Trigger Event is
cured pursuant to the definition thereof), an amount equal to the sum of the
positive difference (calculated for each Asset Pool Portion), if any, of (1) the
Asset Pool Portion Required Overcollateralization Amount minus (2) the
Overcollateralization Amount for such Payment Date or (ii) with respect to any
Payment Date following the occurrence and during the continuance of an Event of
Default or a Termination Event, the Note Principal Distributable Amount shall
equal the amount necessary to reduce the Outstanding Amount to zero; provided
that the failure to reduce the Outstanding Amount to zero in accordance with
Section 2.11(b) of the Sale and Servicing Agreement shall not constitute an
Event of Default until the Note Final Scheduled Maturity Date; provided,
further, that in no event shall the Note Principal Distributable Amount exceed
the Outstanding Amount of the Notes and on the Note Final Scheduled Maturity
Date, the Note Principal Distributable Amount will equal the amount necessary to
reduce the Outstanding Amount to zero.
Note Purchase Agreement. The Note Purchase Agreement, dated as of the date hereof, among the Issuer, the Trust Depositor, the Servicer, and the Noteholders, as the same may be modified, amended or restated from time to time.
Note Purchase Limit. $125,000,000.
Note Rate. Means, with respect to any Asset Pool Portion, for any Interest Period the Cost of Funds for such Interest Period plus 2.35% (or, after the occurrence and during the continuance of an Event of Default or Termination Event, plus 3.85%) per annum. Unless the context requires otherwise, the Note Rate shall be deemed to be a reference to the Note Rate for each Asset Pool Portion.
Note Register. As defined in Section 2.4 of the Indenture.
Note Registrar. As defined in Section 2.4 of the Indenture.
Obligor. A Person obligated to make payments with respect to a Receivable including any guarantor thereof.
Officer's Certificate. A certificate signed by any officer of the Trust Depositor or the Servicer and delivered to the Indenture Trustee.
Operating Contracts. Any resort or club management or marketing contracts, if any, entered into by any Seller or its Affiliates with respect to any Eligible Resort or the Club.
Opinion of Counsel. A written opinion of counsel, who may be counsel for the Trust Depositor or the Servicer and who shall be reasonably acceptable to the Noteholders.
Outstanding. As of any date of determination, with respect to the Notes, all of such Notes theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes that have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Transaction Document, Notes owned by the Issuer, any other obligor upon the Notes, the Sellers, the Trust Depositor or any Affiliate or agent (as "agent" is defined under GAAP) of any or the foregoing Persons, or any Person whose financial information is consolidated with that of any Seller or any of its Affiliates, shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee actually knows to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Sellers, the Trust Depositor or any Affiliate or agent (as "agent" is defined under GAAP) of any of the foregoing Persons or any Person whose financial information is consolidated with that of any Seller or any of its Affiliates.
Outstanding Amount. At any date of determination, the aggregate of the Cash Purchase Prices less the aggregate amount of Note Principal Distributable Amounts applied thereto pursuant to Section 2.11 of the Sale and Servicing Agreement (or such other amounts properly applied to reduce the Cash Purchase Prices). The Facility Administrator's determination of Outstanding Amount from time to time shall be binding on all parties, absent manifest errors. The Facility Administrator shall use reasonable efforts to advise the Servicer of any discrepancy relating to the Outstanding Amount within 30 days of receipt of the applicable Monthly Report.
Overcollateralization Amount. At any Determination Date, with respect to each Asset Pool Portion, (i) the Receivable Balance of all Eligible Receivables in such Asset Pool Portion (as of the end of the immediately preceding Collection Period) minus (ii) the Outstanding Amount related to such Asset Pool Portion (as of the end of the immediately preceding Collection Period).
Overcollateralization Percentage. For any Asset Pool Portion at any Determination Date, the sum of (i) the Credit Enhancement Factor for such Asset Pool Portion minus (ii) 3.00%.
Owner or Trust Owner. GSS Holdings, Inc., a Delaware corporation, in its capacity as owner under the Trust Agreement.
Owner Beneficiary Rights. As defined in the Club Trust Agreement.
Owner Trustee. Wilmington Trust Company, a Delaware banking corporation, in its capacity as owner trustee under the Trust Agreement.
Owner Trustee Fees. The fee payable monthly to the Owner Trustee with respect to each Collection Period pursuant to Section 2.11 of the Sale and Servicing Agreement, which fee is $500 per month.
Patriot Act. The USA Patriot Act of 2001, Pub. L. No. 107-56, as amended from time to time.
Paying Agent. The Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make the payments to and distributions from the Collection Account, including payment of principal of or interest on the Notes on behalf of the Issuer.
Payment Date. With respect to each Collection Period, the second Business Day of the calendar month following the end of such Collection Period.
Permitted Investments. Negotiable instruments or securities or other investments (a) which, except in the case of demand or time deposits, investments in money market funds and Permitted Repurchase Obligations, are represented by instruments in bearer or registered form or ownership of which is represented by book entries by a Clearing Agency or by a Federal Reserve Bank in favor of depository institutions eligible to have an account with such Federal Reserve Bank who hold such investments on behalf of their customers, (b) which, as of any date of determination, mature by their
terms on or prior to the Payment Date immediately following such date of determination, and (c) which evidence:
(i) marketable obligations of the United States of America, the full and timely payment of which are backed by the full faith and credit of the United States of America;
(ii) marketable obligations, the full and timely payment of which are directly and fully guaranteed by the full faith and credit of the United States of America;
(iii) bankers' acceptances and certificates of deposit and other interest-bearing obligations denominated in U.S. dollars and issued by any bank with capital, surplus and undivided profits aggregating at least U.S. $100,000,000, the short-term securities of which are rated at least A-1+ by S&P and P-1 by Moody's;
(iv) Permitted Repurchase Obligations;
(v) commercial paper rated at least A-1+ by S&P and P-1 by Moody's;
(vi) demand deposits, time deposits or certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof (or domestic branches of any foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time such investment, or the commitment to make such investment, is entered into, the short-term debt rating of such depository institution or trust company shall be at least A-1+ by S&P and P-1 by Moody's; and
(vii) investments in money market funds having, at the time of the investment or contractual commitment to invest therein, a rating of the highest category from Moody's or S&P or whose portfolio is limited to the investments described in clauses (i) or (ii) of this definition.
It is understood that Permitted Investments may include, without limitation, those investments for which the Indenture Trustee or an Affiliate of the Indenture Trustee is the obligor or depository institution or provides services.
Permitted Liens:
(a) with respect to Receivables in the Asset Pool:
(i) Liens for state, municipal or other local taxes if such taxes shall not at the time be due and payable, (ii) Liens in favor of the Trust Depositor created pursuant to the Sale and Contribution Agreement, and (iii) Liens in favor of the Trust and the Indenture Trustee created pursuant to the Indenture and the Sale and Servicing Agreement;
(b) with respect to the related Interval:
(i) materialmen's, warehousemen's, mechanics' and other Liens
arising by operation of law in the ordinary course of business
for sums not due, (ii) Liens for state, municipal or other
local taxes if such taxes shall not at the time be due and
payable, (iii) Liens in favor of the Trust Depositor created
pursuant to the Sale and Contribution Agreement, (iv) Liens in
favor of the Trust and the Indenture Trustee created pursuant
to the Indenture and the Sale and Servicing Agreement, (v) the
Obligor's interest in the Interval under the Receivable
whether pursuant to the Club Trust Agreement or otherwise, and
(vi) any other liens not considered a Lien; and
(c) with respect to Receivables and related Trust Assets in the Asset Pool, any Owner Beneficiary Rights.
Permitted Repurchase Obligations. Repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (iii) of the definition of Permitted Investments. Permitted Repurchase Obligations must qualify to be accounted for by the Trust as a loan to the repurchase counterparty for purposes of Statement of Financial Accounting Standards No. 140.
Person. An individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, government (or any agency or political subdivision thereof) or other entity.
Pool Asset. On any day, any Trust Asset in the Asset Pool. If any Trust Asset is a Pool Asset on the day immediately preceding the Facility Termination Date, such Trust Asset shall continue to be a Pool Asset at all times thereafter, until the balance in respect of such Trust Asset has been reduced to zero.
Predecessor Note of any Note, means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note.
Predecessor Servicer. As defined in Section 8.2 of the Sale and Servicing Agreement.
Prepaid Receivable. Any Receivable that has terminated or been prepaid in full prior to its scheduled expiration date (including because of a Casualty Loss), other than a Defaulted Receivable.
Prepayments. Any and all partial and full prepayments on a Receivable.
Pre Tax Income to Total Revenues Ratio. The ratio of (i) income before provision for income taxes and minority interest to (ii) total revenues, in each case as such amounts are reported in Bluegreen's annual or quarterly consolidated financial statements prepared in accordance with GAAP.
Proceeding means any suit in equity, action at law or other judicial or administrative proceeding.
Program Receivable. A Receivable in respect to which the Obligor has elected to make a down payment equal to at least 50% of the total purchase price of the related Interval or Intervals with the remaining balance (together with interest) due within one year of the origination date, such balance to be paid either in 12 monthly amortizing installments of principal and interest or all principal and interest due in a lump sum payment on the one year anniversary of the origination of such Receivable.
Protective Advances. At any time, payments made by the Servicer and reimbursed (or to be reimbursed) in accordance with Section 2.11 of the Sale and Servicing Agreement relating to the payment by the Servicer of any delinquent Time Share Association dues, as to which the Servicer has not been reimbursed as of such time pursuant to Section 2.11 of the Sale and Servicing Agreement, and with respect to which the Servicer has given a written certification of the same to the Indenture Trustee and the Facility Administrator.
Purchase. A purchase by the Trust of Receivables and related Trust Assets from the Trust Depositor pursuant to Article II of the Sale and Servicing Agreement, as described in Section 2.1(a) thereof. A Purchase shall also be deemed to have occurred upon a substitution of Replaced Assets with Substitute Assets and in connection with an Upgrade; provided that no such substitution or Upgrade shall be deemed usage of the Note Purchase Limit.
Purchase Documents. Any purchase agreement and related sale and escrow documents executed and delivered, and any Consumer Laws disclosures, delivered by an Obligor to a Seller or the Eligible Resort owners with respect to the purchase of an Interval which is the subject of a Receivable.
Purchase Period. The period beginning on the Closing Date and ending on the Purchase Period Termination Date.
Purchase Period Termination Date. The earliest to occur of (i) the second anniversary of the earlier of (A) sixty (60) days after the date hereof or (B) the Closing Date, (ii) the last day of any calendar quarter on which the Pre-Tax Income to Total Revenues Ratio for the twelve month period then ended is less than 2.0% as of the last day of any calendar quarter, (iii) the last day of any calendar quarter on which the Pre-Tax Income to Total Revenues Ratio for the eighteen month period then ended is less than 3.0%, (iv) the date on which the Servicer shall not have exercised the Servicer Purchase Option pursuant to the terms of the Sale and Servicing Agreement, provided that the Servicer has not exercised the Servicer Purchase Option within 10 days of such failure (v) the date on which the aggregate amount of all advances made by the Noteholders equals the Note Purchase Limit, and (vi) the Facility Termination Date.
Purchased Receivable. Any Receivable purchased pursuant to Article II of the Sale and Contribution Agreement or Article II of the Sale and Servicing Agreement.
Quarterly Minimum Purchase Amount. For each calendar quarter, an amount
equal to the amount by which (a) the lesser of (i) the Note Purchase Limit and
(ii) the product of (x) $15,000,000 times (y) the number of calendar quarters
that have elapsed from and after March 31, 2006 through the end of such calendar
quarter exceeds (b) the aggregate amount of Purchases made through the end of
the calendar quarter immediately preceding such calendar quarter.
Qualified Institution. Either (a) the corporate trust department of the Indenture Trustee, or (b) a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), (i)(A) which has either (1) a long-term unsecured debt rating of BBB or better by S&P and Baa2 or better by Moody's or (2) a short-term unsecured debt rating or certificate of deposit rating of A-2 or better by S&P or P-2 or better by Moody's or (B) the parent corporation of which has either (1) a long-term unsecured debt rating of BBB or better by S&P and Baa2 or better by Moody's or (2) a short-term unsecured debt rating or certificate deposit rating of A-2 or better by S&P and P-2 or better by Moody's and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.
Receivable Balance. The actual unpaid principal balance of a Receivable.
Receivables. All indebtedness and other obligations owed by an Obligor to a Seller, the Trust Depositor or the Trust, as the case may be, (including, without limitation, any obligation to pay any Late Charges, interest, finance charges or similar amounts arising under a Contract) and including an original promissory note, if applicable, endorsed by the applicable Seller without recourse, either in blank or to the order of the Trust Depositor, and by the Trust Depositor to the order of the Trust, and by the Trust to the order of the Indenture Trustee and showing an applicable complete chain of title from such Seller to the Indenture Trustee, or other contract and its related security, if any, including but not limited to any Mortgage or other security interest in the related Interval (any accessions thereto) and any and all rights to payments thereunder.
Receivables Documents. With respect to a Receivable, the Receivable and all documents related to such Receivable, including the original of all applicable promissory notes with the related allonge or other assignment attached as required by the Sale and Servicing Agreement or the Custodial Agreement, the original of any related recorded or unrecorded Mortgage (or a copy of such recorded Mortgage if the original of the recorded Mortgage is not available) and a copy of any applicable recorded or unrecorded warranty deed transferring legal title to the related Interval to the Obligor or to the Club Trustee for the benefit of the Obligor, payment records, the original of any applicable related assignment, modification or assumption agreement or, if such original is unavailable, a copy thereof, current and historical computerized data files (including any information with respect to an Obligor's election to use pre-authorized checking for payment (which information shall be included in the monthly data distributions to the Back-up Servicer)), any applicable Consumer Laws disclosures and all other papers and records of whatever kind or description, whether developed or originated by any Seller Party or another Person, required to document, service or enforce a Receivable.
Receivables File. With respect to a Receivable, such Receivable; the Assignment of such Receivable as applicable; the Mortgage or UCC financing statement as applicable, if any, evidencing that the security interest granted under such Receivable, if any, has been perfected under applicable state law; the original of any assumption agreement or any modification extension or refinancing agreement; the application of the related Obligor to obtain the financing extended by such Receivable; the Purchase Documents; the Receivables Documents pertaining to a particular Receivable and any additional amendments, supplements, extensions, modifications or waiver agreements required to be added to the Receivables File pursuant to the Sale and Servicing Agreement, the Collection Policy and/or the other Transaction Documents.
Record Date. With respect to a Payment Date or Redemption Date, the close of business on the last Business Day of the immediately preceding month.
Records. All Receivables and other documents, books, records and other electronic media information (including without limitation, computer programs, tapes, disks (including Computer Disks), punch cards, data processing software, licenses, sublicenses, contracts, warranties and guarantees and related property and rights all to the extent assignable pursuant to any third party arrangement with the provider of any such computer programs, tapes, disks (including Computer Disks), punch cards, data processing software, licenses, sublicenses, contracts, warranties and guarantees and related property and rights) maintained with respect to Trust Assets and the related Obligors which the Sellers, Servicer, Successor Servicer or the Trust Depositor have themselves generated (or in which the Trust Depositor has acquired an interest).
Recoveries. Any and all recoveries on account of a Defaulted Receivable, including, without limitation, any and all cash proceeds from the sale of any repossessed or foreclosed Interval or other property, Insurance Proceeds, and amounts related to overdue interest, if any, but in each case net of Remarketing Fees (to the extent applicable) as well as any amounts received from the Servicer Purchase Option.
Redemption Date. As defined in Section 10.1 of the Indenture.
Remarketing Fees. With respect to the Servicer's activities of remarketing
an Interval relating to a Defaulted Receivable an amount equal to the lesser of
(i) the Servicer's actual average costs of remarketing or (ii) 58% of the gross
resale proceeds of such Interval.
Replaced Asset. As defined in Section 2.7(a) of the Sale and Servicing Agreement.
Request Notice. A written notice, substantially in the form of Exhibit A to the Sale and Servicing Agreement, to be delivered in accordance with Article II thereof in connection with a Purchase.
Required Overcollateralization Amount. At any Determination Date, the sum of all Asset Pool Portion Required Overcollateralization Amounts at such Determination Date.
Required Reports. Collectively, the Monthly Report, the Servicer's Certificate, the Accountant's Report, the annual statement of compliance from Servicer, the sales and inventory reports, the quarterly financial statements of Bluegreen, the Time Share Association reports, the audit reports, the other reports and the SEC reports required to be delivered to the Noteholders pursuant to Article IX of the Sale and Servicing Agreement.
Requirements of Law. When used with respect to any Person, shall mean the certificate of incorporation or formation or articles of association and by-laws or operating agreement or other organizational or governing documents of such Person, and, when used with respect to any Person or any Asset (to the extent applicable or subject thereto or binding thereupon), any law, treaty, rule or regulation, or order or determination of an arbitrator or Governmental Authority, whether Federal, state or local (including, without limitation, usury and privacy laws, fair credit billing, fair credit reporting, consumer protection, equal credit opportunity, fair housing, real estate settlement and procedures, fair debt collection practices, truth-in-lending, and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System).
Reservation System. The reservation system utilized by the Club and owned and managed by the Club Managing Entity or the services contracted by the Club Managing Entity with a third party.
Reserve Account. The Reserve Account established and maintained pursuant to Section 2.3 of the Sale and Servicing Agreement.
Reserve Account Required Amount. For any Determination Date, an amount equal to 3.00% of the Receivable Balance of all Eligible Receivables in the Asset Pool as of the end of the most recent Collection Period; provided that prior to the occurrence of an Event of Default or a Termination Event, if the amount in the Reserve Account exceeds such amount as of such date, such excess amount shall be released directly to the Trust Depositor; provided, that in no event shall the Reserve Account Required Amount be less than the lesser of (i) 2.00% of the Receivable Balance of all Eligible Receivables (determined as of the applicable Cutoff Date therefor) in the Asset Pool or (ii) the Outstanding Amount;
provided further that the Reserve Account Required Amount on the date of the Initial Purchase shall be $0.
Resort Concentration Limit. At any Transfer Date, the percentage of the aggregate Receivable Balances of all Eligible Receivables in the Asset Pool relating to an Eligible Resort set forth below:
Resort Classification Resort Concentration Limit
--------------------- --------------------------
any single Eligible Resort 40.0%
any other Eligible Resort (other 20.0%
than La Cabana Beach & Racquet Club)
|
Resort Interest. As defined in the Club Trust Agreement.
Responsible Officer. As to any Person and any Transaction Document in which such term is used with respect to such Person, any officer of such Person with direct responsibility for the administration of the subject matter at issue in such Transaction Document and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.
Sale and Contribution Agreement. The Sale and Contribution Agreement, dated as of the date hereof, by and among the Sellers and the Trust Depositor, as the same may be amended, modified, supplemented, restated, replaced or renewed in writing from time to time.
Sale and Servicing Agreement. The Sale and Servicing Agreement, dated as of the date hereof, among the Trust Depositor, the Servicer, the Trust, the Club Trustee, the Back-up Servicer, the Facility Administrator, the Noteholders, the Custodian and the Indenture Trustee, as the same may be amended, modified, supplemented, restated, replaced or renewed in writing from time to time.
Sampler Loan. A loan made to a purchaser by a Seller pursuant to the terms of a Sampler Program Agreement.
Sampler Program Agreement. A Bluegreen Vacation Club Sampler Program Agreement, pursuant to which a purchaser thereunder obtains those certain benefits set forth therein which comprise the "Sampler Membership" and, subject to the terms and conditions thereof, has the opportunity to convert such Sampler Membership into full ownership in the Bluegreen Vacation Club multi-site timeshare plan.
SEC. The Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.
Securities Act. The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Seller Party. Any Seller, the Trust Depositor and/or the Servicer.
Sellers. As defined in the preamble to the Sale and Contribution Agreement.
Servicer. Collectively, unless the context otherwise requires, Bluegreen and its permitted successors and assigns, and following a Servicer Transfer, any Person becoming a Successor Servicer as provided in the Sale and Servicing Agreement pursuant to a Servicer Transfer.
Servicer Advance. An advance of any scheduled principal or interest due under a Receivable made by the Servicer pursuant to Section 6.3 of the Sale and Servicing Agreement.
Servicer Purchase Option. The Servicer's (so long as the Servicer is Bluegreen or an Affiliate thereof) right (but not the obligation) to repurchase a Defaulted Receivable for an amount equal to twenty-four percent (24%) of the Obligor's initial purchase price for the Interval in respect of such Defaulted Receivable.
Servicer Termination Event. As defined in Section 8.1 of the Sale and Servicing Agreement.
Servicer Transfer. Has the meaning assigned in Section 8.2 of the Sale and Servicing Agreement.
Servicing Fee. The fee payable monthly to the Servicer with respect to each Collection Period pursuant to Section 2.11 of the Sale and Servicing Agreement, equal to one-twelfth of the product of (a) the Servicing Fee Rate, and (b) the Receivable Balance of all Receivables in the Asset Pool as of the first day of such Collection Period; provided that in the event the Back-up Servicer becomes the Servicer pursuant to the Sale and Servicing Agreement, the Servicing Fee shall be as specified in the Back-Up Servicing Agreement.
Servicing Fee Rate. 1.50% per annum.
Servicing Officer. Any officer of the Servicer or any Successor Servicer involved in, or responsible for, the administration and servicing of Purchased Receivables whose name appears on a list of servicing officers appearing in an Officer's Certificate furnished to the Indenture Trustee by the Servicer, as the same may be amended or supplemented from time to time by delivery of a similar Officer's Certificate to such parties.
Site Assessment. Means an environmental engineering report for the Facilities prepared by an engineer engaged by Facility Administrator and in a manner satisfactory to Facility Administrator, based upon an investigation relating to and making appropriate inquiries concerning the existence of Hazardous Materials on or about the Facilities, and the past or present discharge, disposal, release or escape of any such substances, all consistent with good customary and commercial practice.
S&P. Standard & Poor's Ratings Service, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
Successor Servicer. The successor servicer appointed pursuant to Section 8.2 of the Sale and Servicing Agreement.
Solvent. As to any Person at any time, that (a) the fair value of the
property of such Person is greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (b) the present fair salable value of the property of such
Person in an orderly liquidation of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in a business or a transaction, for which such Person's property would constitute unreasonably small capital.
Stale Intervals. An Interval which has not been remarketed by the Servicer which relates to a Receivable which is 330 days delinquent.
Subordinated Indebtedness. Indebtedness represented by Bluegreen's junior subordinated debentures or such other Indebtedness incurred by Bluegreen which is treated as subordinated indebtedness in accordance with GAAP.
Subsidiary. Means, with respect to any Person, (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, joint venture, limited liability company or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of Bluegreen Corporation but in no event will the term "Subsidiary" include the Trust.
Substitute Asset. Any Asset conveyed, assigned and transferred by the Trust Depositor to the Trust pursuant to Section 2.7 of the Sale and Servicing Agreement or in connection with an Upgrade (and has been acquired by the Trust Depositor from a Seller pursuant to the Sale and Contribution Agreement).
Substitute Asset Qualification Conditions. With respect to any Substitute Asset being transferred to the Trust pursuant to the Sale and Servicing Agreement, the accuracy of each of the following statements as of the related Substitute Asset Transfer Date with respect to the related Receivable:
(a) the sum of (x) the aggregate Receivable Balance of the Eligible Receivable related to such Substitute Asset(s) plus (y) cash deposited into the Collection Account by the Trust Depositor is not less than that of the related Replaced Asset or Receivables identified on the related Substitution Notice; provided that in no event shall the amount of cash so deposited exceed 10% of the Receivable Balance of all Eligible Receivables transferred to the Trust on the related Substitute Asset Transfer Date; and
(b) the weighted average interest rate on such Receivables is no more than twenty (20) basis points less than the weighted average interest rate on the Receivables being replaced, and the weighted average remaining term on such Receivables is equal to or greater than the weighted average remaining term on the Receivables being replaced; and
(c) the addition of such Receivable to the Asset Pool (and corresponding removal of the Receivable relating to the Replaced Assets) will not cause the Outstanding Amount to exceed the Note Purchase Limit; and
(d) no selection procedure adverse to the Noteholders or their assigns shall have been employed in the selection of the Substitute Assets from any Seller's portfolio and the FICO score of the Obligor in respect of the Receivable relating to such
Substitute Assets shall conform to the requirements of the Credit Concentration Limit; and
(e) all actions or additional actions (if any) necessary, in the reasonable judgment of the Facility Administrator, to perfect the ownership and/or security interest of the Trust Depositor, the Trust and the Indenture Trustee, as applicable, in such Substitute Asset shall have been taken as of or prior to the Substitute Asset Transfer Date; and
(f) the maturity date for the last installment due under such Receivable is not earlier than the maturity date of the Receivable being replaced; and
(g) the conditions set forth in Section 4.2 of the Sale and Servicing Agreement shall be satisfied as of such Substitute Asset Transfer Date.
Substitute Asset Transfer Condition. With respect to any Substitute Asset (other than in respect of Upgrade Receivables) being conveyed to the Trust, the condition that after giving effect to such transfer, the Receivable Balance (determined as of the related Substitute Cutoff Date) relating to all Substitute Assets, transferred to the Trust since the Closing Date does not exceed 20% of the Receivable Balance (determined as of the related Cutoff Date) of all Receivables theretofore purchased by the Trust.
Substitute Asset Transfer Date. Any date on which Substitute Assets are transferred to the Trust pursuant to the Sale and Servicing Agreement and a related Substitution Notice.
Substitute Cutoff Date. The date specified as such for Substitute Assets in the related Substitution Notice.
Substitution Notice. With respect to any conveyance of Substitute Assets to the Trust pursuant to the Sale and Servicing Agreement (and the Trust Depositor's corresponding prior purchase of such Substitute Assets from the Sellers), a notice in the form attached as Exhibit B to the Sale and Servicing Agreement, which shall be given at least three (3) Business Days prior to the related Substitute Asset Transfer Date, identifying the Receivables relating to the Substitute Assets to be conveyed, the Receivable Balance of such Substitute Assets, the Receivable Balance related to the Replaced Asset or Receivables then in the Asset Pool to which such Substitute Asset relates, the Substitute Cutoff Date, and the intended Substitute Asset Transfer Date, with such notice to be signed by the Trust Depositor.
Successor Servicer. As defined in Section 8.2 of the Sale and Servicing Agreement.
Swap Rate. The "ask" swap rate (rounded upward to the nearest 1/1000 of 1%) as quoted on Bloomberg's applicable IRSB page (or as this page may be subsequently replaced by Bloomberg), using linear interpolation if necessary to match the principal amortization schedule mutually agreeable to Bluegreen and General Electric Capital Corporation, decompounded to reflect the payment frequency and day count convention under the Sale and Servicing Agreement, at 3:00 p.m. Eastern Time one Business Day prior to the date on which the corresponding rate will apply. If Bloomberg or any successor of Bloomberg no longer exists, or if it ceases to quote such rate, the rate shall be determined using the methodology set forth above from such substitute financial reporting service or source, as General Electric Capital Corporation in its sole discretion shall determine, provided such substitute service or source is the same substitute service or source generally selected by General Electric Capital Corporation for its commercial mortgage loans. If a Swap Rate with the applicable maturity is not specifically published in Bloomberg, or any other source acceptable to General Electric Capital Corporation, then the
rate shall be calculated by adding (1) the amount obtained by (a) first,
subtracting (i) the most recently issued 5-year swap rate from (ii) the most
recently issued 10-year swap rate, (b) then, dividing the difference obtained in
clause (a) by the number of months between the maturities of each one of the
above mentioned rates, and (c) then, multiplying the result obtained in clause
(b) by the number of months between the maturity of the most recently issued
5-year swap rate and the Note Final Scheduled Maturity Date, to (2) the most
recently issued 5-year swap rate.
Tangible Net Worth. Consolidated Net Worth minus Intangible Assets plus Subordinated Indebtedness plus an amount not in excess of $600,000,000 of "Receivables-backed notes payable" as reported on the consolidated balance sheet of Bluegreen.
Termination Event. Means any one of the following events:
(a) as of any Determination Date, with respect to any Tranche, the Lifetime Cumulative Default Rate for such Tranche shall exceed the Lifetime Termination Cumulative Default Threshold for such Tranche and the excess with respect to such Tranche shall continue to exist on the immediately succeeding Determination Date;
(b) as of any Determination Date, the Trailing Six Month Default Rate exceeds 6.00% (or, solely during the Purchase Period, 7.0%) and such excess shall continue to exist on the immediately succeeding Determination Date;
(c) at the time of any sale of a Resort Interest to a customer, the Vacation Points related thereto shall be greater than the Vacation Points required for a customer to utilize the Accommodations appurtenant to such Vacation Points;
(d) as of any Determination Date, the Trailing Three Month (60 to 120) Day Delinquency Rate exceeds 6.0% and such excess shall continue to exist on the immediately succeeding Determination Date;
(e) as of any Determination Date, the Trailing Three Month Gross Recoveries are less than 85% and such deficiency shall continue to exist on the immediately succeeding Determination Date;
(f) Bluegreen shall cease to legally and beneficially own (whether directly or indirectly) 100% of the issued and outstanding stock of the Trust Depositor and the Club Managing Entity;
(g) a Servicer Termination Event or an Event of Default shall have occurred and be continuing;
(h) (x) failure on the part of any Seller Party to make or cause to be made any payment or deposit (or, in the alternative, replace or remove any Trust Asset from the Asset Pool) required by the terms of the Sale and Servicing Agreement or any other Transaction Document on the day such payment or deposit (or replacement or removal) was required to be made by such Seller Party and such failure shall continue for one (1) Business Day, provided, however that in the event of a Force Majeure Delay, the Seller Party shall have up to ten (10) additional Business Days to make such payment or deposit as appropriate, (y) failure on the part of the Trust Depositor to observe or perform the covenants or agreements set forth in the Sale and Servicing Agreement or (z) failure on the part of the Club Trustee to observe or perform its covenants or agreements set forth in Section 6.2 of the Sale and Servicing Agreement;
(i) failure on the part of any Seller Party or the Club Trustee to observe or perform any of its covenants or agreements set forth in any Transaction Document (other than as expressly provided for in another clause of this definition), which failure continues unremedied for a period of 30 days after the earlier of (i) such Seller Party or the Club Trustee obtains actual knowledge of such failure after due inquiry or (ii) the Facility Administrator, the Indenture Trustee or the Custodian provides the Servicer with written notice of such failure;
(j) any representation, warranty, certification or statement made by any
Seller Party or the Club Trustee in any Transaction Document or any information
required to be given by any Seller Party or the Club Trustee to the Facility
Administrator, the Indenture Trustee or the Custodian pursuant to any
Transaction Document, shall prove to have been incorrect in any material respect
when made or when delivered, which continues to be incorrect in any material
respect for a period of 30 days after the earlier of (i) such Seller Party or
the Club Trustee obtains actual knowledge of such failure after due inquiry or
(ii) the Facility Administrator, the Indenture Trustee or the Custodian provides
the Servicer with written notice of such failure; provided, that this clause (j)
shall not apply to any representation, warranty, certification or statement
which relates solely to the condition of a Receivable on the date of Purchase or
transfer and/or for which either a substitution or repurchase right under the
Transaction Documents applies and for which such remedies are being pursued by
the Trust Depositor and the Sellers consistent therewith;
(k) any Seller Party or the Club Trustee shall become an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Act") or the arrangements contemplated by the Transaction Documents shall require registration as an "investment company" within the meaning of the Act;
(l) (i) one or more final judgments for the payment of money shall be entered against the Trust Depositor or the Club Trustee, and such judgment shall not have been discharged, stayed or bonded pending appeal within thirty (30) consecutive days after the entry thereof or (ii) one or more final judgments for the payment of money shall be entered against Bluegreen or any of its Subsidiaries (other than the Trust Depositor) in an amount in excess of an amount equal to 2.5% of Bluegreen's Tangible Net Worth, individually or in the aggregate, and such judgment shall not have been discharged, stayed or bonded pending appeal within thirty (30) consecutive days after the entry thereof;
(m) (i) failure of the Trust Depositor or the Club Trustee to pay any Indebtedness when due, (ii) any event or condition shall occur with respect to such Indebtedness which results in the acceleration, or permits the acceleration, of the maturity with respect to such Indebtedness, (iii) or any such Indebtedness is declared to be due and payable, or is required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof;
(n) as of any Determination Date (in respect of any Asset Pool Portion) after the first date on which the Overcollateralization Amount for such Asset Pool Portion equals or exceeds the Required Overcollateralization Amount for such Asset Pool Portion, the Overcollateralization Amount for each Asset Pool Portion is less than the Required Overcollateralization Amount (after giving effect to the Note Principal Distributable Amount on the immediately succeeding Payment Date) for such Asset Pool Portion and such deficiency shall continue to exist on the immediately succeeding Determination Date; or
(o) any material default or breach by Seller or its Affiliates by any Seller Party or any of its Affiliates occurs and is continuing under any Operating Contract;
provided that, and in any such event but subject to the following proviso, the Indenture Trustee shall, at the direction of the Note Majority, by written notice to the Trust Depositor, declare the Facility
Termination Date to have occurred; provided further, that, subject to the last sentence of this paragraph, a Termination Event which is a Trigger Event shall no longer be deemed to be continuing as of a particular Determination Date (a "cure") if the Trust Depositor shall have delivered to the Facility Administrator and the Indenture Trustee written notice that (i) no Trigger Event shall have occurred or been continuing for three (3) consecutive Determination Dates as evidenced by the Reports delivered to the Facility Administrator pursuant to Article IX of the Sale and Servicing Agreement in respect of such Determination Dates and (ii) it has elected to "cure" such Trigger Event. The right of the Trust Depositor to "cure" a Trigger Event pursuant to the immediately preceding proviso may only be exercised two (2) times and written notice thereof, if any, shall be delivered within thirty (30) days after the date on which the Trust Depositor is permitted to effect such "cure".
Time Share Association. A not-for-profit corporation or entity or cooperative association under applicable state or other law which is responsible for operating and maintaining an Eligible Resort pursuant to the terms of a declaration and/or time share declaration or other applicable governing documents.
Time Share Documents. With respect to any Eligible Resort, the Purchase Documents, any and all documents evidencing or relating to the sale of Intervals, the Declaration, the articles of incorporation and bylaws of the Time Share Association, any management agreement between the Time Share Association and a manager of the Eligible Resort, and any rules and regulations of the Time Share Association.
Trailing Six Month Default Rate. The fraction (expressed as a percentage) determined by dividing (a) (i) the aggregate Receivable Balance of all Receivables in the Asset Pool which became Defaulted Receivables during the previous six (6) Collection Periods (as measured at the end of the respective Collection Periods) less (ii) the Receivable Balance of all Defaulted Receivables that subsequently became current with all payments (including Recoveries) during the previous six (6) Collection Periods by (b) the average beginning Receivable Balance of the Asset Pool over the previous six (6) Collections Periods; the percentage shall be calculated monthly as of each Determination Date
Trailing Three Month (60 to 120) Day Delinquency Rate. The average during the previous three (3) Collection Periods of the fraction (expressed as a percentage) determined by dividing (a) the aggregate Receivable Balance of all Receivables in the Asset Pool which were 60 to 120 days delinquent at the end of such Collection Period by (b) the aggregate Receivable Balance of all Receivables in the Asset Pool at the end of such Collection Period; the percentage shall be calculated monthly as of each Determination Date.
Trailing Three Month Gross Recoveries. A fraction (expressed as a percentage) determined by dividing (a) the aggregate gross proceeds derived from remarketing Intervals relating to Defaulted Receivables during the preceding three (3) Collection Periods by (b) the sum of (i) the aggregate original sales price for such remarketed Intervals plus (ii) the amount (positive or negative) by which the aggregate original sales prices of Stale Intervals as of the last day of the preceding Collection Period exceeds the aggregate original sales price of Stale Intervals as of the last day of the fourth preceding Collection Period. Any Receivable which is subject to the Servicer Purchase Option shall be excluded from the calculation of this definition.
Tranche. Means, as applicable, (i) Asset Pool Portions purchased over the first twelve month period after the Initial Transfer Date and (ii) thereafter, Asset Pool Portions purchased over the immediately succeeding twelve month period.
Transaction Documents. The Sale and Servicing Agreement, the Lockbox Agreement, the Custodial Agreement, the Sale and Contribution Agreement, the Trust Agreement, the Indenture, the Note Purchase Agreement, the Notes, the Fee Letter, the Back-Up Servicing Agreement, each Assignment, each Mortgage Assignment, any Lockbox Agreement and all other agreements, indemnities, instruments, documents and certificates executed and delivered to, or in favor of, the Trust Depositor, the Trust, the Indenture Trustee, the Facility Administrator or the Noteholders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Seller Party or any of its Affiliates, the Club Trustee or the Trust in connection with the transactions contemplated hereby and thereby. Any reference in any Transaction Document to a Transaction Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to such Transaction Document as the same may be in effect at any and all times such reference becomes operative.
Transfer Date. The Initial Transfer Date, any Incremental Transfer Date thereafter, any Substitute Asset Transfer Date or any date on which an Upgrade Receivable is added to the Asset Pool, as applicable.
Transfer Deposit Amount. With respect to each Receivable that is an Ineligible Asset (other than a Defaulted Receivable), on any date of determination, the Receivable Balance of such Receivable less the principal portion of any Unreimbursed Servicer Advance made in respect of such Receivable.
Trigger Event. A Termination Event under any of paragraphs (a), (b), (d),
(e) or (n) of the definition thereof.
Trust. BXG Receivables Owner Trust 2006-A.
Trust Account(s). Collectively, the Collection Account, the Lockbox Account and the Reserve Account, or any of them individually.
Trust Account Property. The Trust Accounts, all amounts and investments held from time to time in any Trust Account (whether in the form of deposit accounts, physical property, book-entry securities or otherwise), and all proceeds of the foregoing.
Trust Administrator. Bluegreen Corporation, in its capacity as owner trust administrator pursuant to the Administration Agreement.
Trust Administrator Fee. The fee payable monthly to the Trust Administrator with respect to each Collection Period pursuant to Section 2.11 of the Sale and Servicing Agreement as specified in the Administration Agreement.
Trust Assets. All right, title and interest of the transferring party in, to and under the following:
(i) all Receivables (including Receivables in respect of Substitute Assets) conveyed or being conveyed to the Trust under the Sale and Servicing Agreement and all payments of interest and principal, other Collections thereon and monies received, due or to become due in payment of such Receivables after the applicable Cutoff Date;
(ii) the Mortgages, if applicable, and any other instruments, documents and rights securing such Receivables, including, without limitation, all "Owner Beneficiary Rights" under the Club
Trust Agreement in respect of such Receivables and all of the transferring party's rights or interest in all other property (personal or other), if any, the sale of which gave rise to the Receivables;
(iii) the Receivables Files;
(iv) all payments made or to be made after the applicable Cutoff Date with respect to such Receivables or the Obligor thereunder under any guarantee or similar credit enhancement with respect to such Receivables, if any;
(v) all Insurance Proceeds with respect to any such Receivables, if applicable;
(vi) all rights of the Trust Depositor under the Sale and Contribution Agreement including but not limited to all rights with respect to the Receivables, including, without limitation, in respect of the obligation of the Sellers to repurchase or replace Receivables under certain circumstances as specified therein;
(vii) the Trust Accounts and all Trust Account Property;
(viii) each Assignment; and
(ix) all income from and proceeds of the foregoing.
Trust Depositor. As defined in the preamble to the Sale and Servicing Agreement.
Trust Owner Fee. The annual fee payable to the Owner for acting as Owner under the Trust Agreement, which fee shall not exceed $5,000.
UCC. The Uniform Commercial Code as in effect on the date hereof and from time to time in effect in Illinois; provided, however, in the event that, by reason of mandatory provisions of law, any and all of the attachment, perfection or priority of the Lien of the Trust Depositor, the Trust or the Indenture Trustee in and to the Pool Assets is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Illinois, the term UCC shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.
Uncollectible Advance. With respect to any Determination Date and any Purchased Receivable, the amount, if any, advanced by the Servicer as a Servicer Advance with respect to such Receivable which the Servicer has as of such Determination Date determined in good faith will not be ultimately recoverable by the Servicer or any Servicer Advance related to a Defaulted Receivable.
Unit(s). One individual air-space condominium unit, cabin, villa, cottage or townhome within an Eligible Resort, together with all furniture, fixtures and furnishings therein, and together with any and all interests in common elements appurtenant thereto, as provided in the related Declaration; provided that the definition of "Unit" shall not include or apply to those units relating a campground/tent site, recreational vehicle site or other non-permanent building or structure.
United States. The United States of America.
Unreimbursed Servicer Advances. At any time, the amount of all previous Servicer Advances (or portions thereof) as to which the Servicer has not been reimbursed as of such time pursuant to Section 2.11 of the Sale and Servicing Agreement and which the Servicer has determined in its sole discretion are
Uncollectible Advances, and with respect to which the Servicer has given a written certification to such effect to the Indenture Trustee and the Facility Administrator.
Upgrade. An event whereby a Receivable for which (i) the related Obligor has elected to terminate its interest in an existing Interval and all related Owner Beneficiary Rights and Vacation Points (if any) in exchange for purchasing an upgraded Interval of higher value than the existing Interval and related Owner Beneficiary Rights and Vacation Points and (ii) the applicable Seller of the existing Interval releases the existing Interval and all related Owner Beneficiary Rights and Vacation Points (if any) in exchange for receiving (in substantially all cases) a new Receivable from the Obligor secured by the upgraded Interval and related Owner Beneficiary Rights and Vacation Points.
Upgrade Receivable. As defined in Section 2.13 of the Sale and Servicing Agreement.
Vacation Points. As defined in the Club Trust Agreement.
Weighted Average Note Rate. At any date of determination, a fraction (expressed as a percentage) determined by dividing (a) the sum of the products of (i) the Note Rate applicable to each Asset Pool Portion multiplied by (ii) the aggregate outstanding principal balance of the Notes applicable to such Asset Pool Portion divided by (b) the Outstanding Amount.
Weighted Average Tranche Age. With respect to each Tranche, the number
determined by dividing (a) the sum, for each Asset Pool Portion comprising the
Tranche, of the product of (i) the aggregate Receivable Balance (as of the
related Cutoff Date) of the Receivables in such Asset Pool Portion multiplied by
(ii) the number of months that have elapsed since the Cutoff Date for such Asset
Pool Portion by (b) the aggregate Receivable Balance of the Receivables in such
Tranche (as of the related Cutoff Date).
Workout Receivable. A Receivable in the Asset Pool as to which all or part of a payment installment due thereunder is one or more days past due pursuant to the Contract governing such Receivable.
Exhibit 10.181
EXECUTION COPY
TRUST AGREEMENT
by and among
BLUEGREEN RECEIVABLES FINANCE CORPORATION XI,
as Trust Depositor and Residual Interest Owner,
GSS HOLDINGS, INC.
as Owner
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of March 13, 2006
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS..................................................................................1
Section 1.01. Capitalized Terms..........................................................1
Section 1.02. Other Definitional Provisions..............................................3
Section 1.03. Usage of Terms.............................................................3
Section 1.04. Section References.........................................................3
Section 1.05. Accounting Terms...........................................................3
ARTICLE II.
ORGANIZATION.................................................................................3
Section 2.01. Name.......................................................................3
Section 2.02. Office.....................................................................3
Section 2.03. Purposes and Powers........................................................3
Section 2.04. Appointment of Owner Trustee...............................................4
Section 2.05. Capital Contribution of Owner Trust Estate.................................4
Section 2.06. Declaration of Trust.......................................................4
Section 2.07. Liability of Trust Depositor...............................................5
Section 2.08. Title to Trust Property....................................................5
Section 2.09. Situs of Trust.............................................................5
Section 2.10. Representations and Warranties.............................................5
Section 2.11. Federal Income Tax Treatment...............................................8
Section 2.12. Covenants of the Trust Depositor and Owner.................................8
ARTICLE III.
CERTIFICATES AND TRANSFER OF INTERESTS.......................................................9
Section 3.01. Ownership (Trust Certificate)..............................................9
Section 3.02. The Trust Certificate......................................................9
Section 3.03. Authentication and Delivery of Trust Certificate..........................10
Section 3.04. Registration of Transfer and Exchange of Trust Certificate................10
Section 3.05. Ownership (Residual Interest Certificate).................................10
Section 3.06. The Residual Interest Certificate.........................................11
Section 3.07. Authentication and Delivery of Residual Interest Certificate..............11
Section 3.08. Registration of Transfer and Exchange of Residual Interest Certificate....11
Section 3.09. Mutilated, Destroyed, Lost or Stolen Certificates.........................12
Section 3.10. Persons Deemed Owners.....................................................12
|
Section 3.11. Access to List of Certificateholder's Name and Addresses..................12
Section 3.12. Maintenance of Office or Agency...........................................13
Section 3.13. Appointment of Paying Agent...............................................13
Section 3.14. Ownership by Owner of Trust Certificate...................................13
Section 3.15. Ownership by Trust Depositor of Residual Interest Certificate.............13
ARTICLE IV.
ACTIONS BY OWNER TRUSTEE....................................................................13
Section 4.01. Prior Notice to Residual Interest Certificateholder
with Respect to Certain Matters...........................................13
Section 4.02. Action by Residual Interest Owner with Respect to Certain Matters.........14
Section 4.03. Action by Residual Interest Owner with Respect to Bankruptcy..............14
Section 4.04. Restrictions on Residual Interest Owner's Power...........................15
ARTICLE V.
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES..................................................15
Section 5.01. Reserved..................................................................15
Section 5.02. Application of Trust Funds................................................15
Section 5.03. Method of Payment.........................................................15
Section 5.04. No Segregation of Moneys; No Interest.....................................15
Section 5.05. Accounting and Reports to the Certificateholder, the Internal
Revenue Service and Others................................................16
Section 5.06. Signature on Returns; Tax Matters Partner.................................16
ARTICLE VI.
AUTHORITY AND DUTIES OF OWNER TRUSTEE.......................................................16
Section 6.01. General Authority.........................................................16
Section 6.02. General Duties............................................................16
Section 6.03. Action Upon Instruction...................................................17
Section 6.04. No Duties Except as Specified in this Agreement or in Instructions........18
Section 6.05. No Action Except Under Specified Documents or Instructions................18
Section 6.06. Restrictions..............................................................18
ARTICLE VII.
CONCERNING THE OWNER TRUSTEE................................................................18
Section 7.01. Acceptance of Trusts and Duties...........................................18
Section 7.02. Furnishing of Documents...................................................19
Section 7.03. Representations and Warranties of the Owner Trustee.......................19
Section 7.04. Reliance; Advice of Counsel...............................................20
Section 7.05. Not Acting in Individual Capacity.........................................20
|
Section 7.06. Owner Trustee Not Liable for Trust Certificate, Residual Interest
Certificate Notes or Receivables..........................................20
Section 7.07. Owner Trustee May Own Certificates and Notes..............................21
ARTICLE VIII.
COMPENSATION OF OWNER TRUSTEE.............................................................21
Section 8.01. Owner Trustee's Fees and Expenses.........................................21
Section 8.02. Indemnification...........................................................21
Section 8.03. Payments to the Owner Trustee.............................................22
ARTICLE IX.
TERMINATION OF TRUST AGREEMENT............................................................22
Section 9.01. Termination of Trust Agreement..............................................22
Section 9.02. Dissolution upon Bankruptcy of Trust Depositor or Withdrawal or
Removal of Trust Depositor................................................................23
ARTICLE X.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES......................................23
Section 10.01. Eligibility Requirements for Owner Trustee................................23
Section 10.02. Resignation or Removal of Owner Trustee...................................23
Section 10.03. Successor Owner Trustee...................................................24
Section 10.04. Merger or Consolidation of Owner Trustee..................................24
Section 10.05. Appointment of Co-Trustee or Separate Trustee.............................25
ARTICLE XI.
MISCELLANEOUS.............................................................................26
Section 11.01. Supplements and Amendments................................................26
Section 11.02. No Legal Title to Trust Estate in Owner...................................27
Section 11.03. Limitations on Rights of Others...........................................27
Section 11.04. Notices...................................................................27
GSS Holdings, Inc.........................................................................27
114 West 47th Street......................................................................27
Suite 1715................................................................................27
New York, New York 10036..................................................................27
Attn: Kevin Burns........................................................................27
Telecopier No.: (212) 302-8767...........................................................27
Section 11.05. Severability of Provisions................................................27
Section 11.06. Counterparts..............................................................28
Section 11.07. Successors and Assigns....................................................28
Section 11.08. No Petition...............................................................28
|
Section 11.09. No Recourse...............................................................28
Section 11.10. Headings..................................................................28
Section 11.11. Governing Law.............................................................28
Section 11.12. Trust Certificate Transfer Restrictions...................................28
Section 11.13. Trust Depositor Payment Obligation........................................29
EXHIBITS
Exhibit A - Form of Certificate of Trust........................................A-1
Exhibit B -1 - Form of Trust Certificate...........................................B-1
Exhibit B -2 - Form of Residual Interest Certificate...............................B-2
|
This TRUST AGREEMENT dated as of March 13, 2006, is between BLUEGREEN RECEIVABLES FINANCE CORPORATION XI, a Delaware corporation, as Trust Depositor (the "Trust Depositor" or the "Residual Interest Owner"), GSS HOLDINGS, INC., as owner (the "Owner" or "Trust Owner"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as owner trustee (the "Owner Trustee").
WHEREAS, in connection herewith and with the provisions of the Sale and Servicing Agreement, the Trust Depositor is willing to convey the Trust Assets to the Trust;
WHEREAS, in connection herewith and with the provisions of the Sale and Servicing Agreement, the Trust Depositor is willing to purchase the Residual Interest Certificate (as defined herein) to be issued pursuant to this Agreement and to assume certain rights and obligations pursuant hereto; and
WHEREAS, the Owner is willing to purchase the Trust Certificate and assume certain rights and obligations pursuant hereto:
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Capitalized Terms. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed thereto in the Sale and Servicing Agreement (as defined below) and the Definitions Annex made a part thereof. Except as otherwise provided in this Agreement, whenever used in this Agreement the following words and phrases, unless the context otherwise requires, shall have the following meanings:
"Agreement" means this Trust Agreement, as the same may be amended and supplemented from time to time.
"Benefit Plan" means (i) an employee benefit plan (as such term is defined
in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Code or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity.
"Certificate" or "Certificates" means, the Residual Interest Certificate and the Trust Certificate.
"Certificate of Trust" means the Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute, substantially in the form of Exhibit A hereto.
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar (or any successor thereto) appointed pursuant to
Section 3.04.
"Certificateholder" or "Holder" means with respect to the Trust Certificate the Person in whose name the Trust Certificate is registered in the Certificate Register, and with respect to the Residual Interest Certificate, the person in whose name the Residual Interest Certificate is registered in the Certificate Register.
"Expenses" shall have the meaning assigned to such term in Section 8.02.
"Foreign Person" means any Person other than (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity organized in
or under the laws of the United States or any political subdivision thereof,
(iii) an estate the income of which is subject to U.S. federal income taxation
regardless of its source, or (iv) a trust whose administration is subject to the
primary supervision of a court within the United States and which has one or
more U.S. fiduciaries who have authority to control all substantial decisions of
the Trust.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02.
"Owner" or "Trust Owner" means the holder of the Trust Certificate.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking corporation, not in its individual capacity but solely as owner trustee under this Agreement, and any successor Owner Trustee hereunder.
"Owner Trustee Corporate Trust Office" means the office of the Owner
Trustee at which its corporate trust business shall be administered, which
initially shall be 1100 North Market Street, Wilmington, Delaware 19890, Attn:
Corporate Trust Administration, or such other office at such other address as
the Owner Trustee may designate from time to time by notice to the
Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor and
the Facility Administrator.
"Residual Interest Owner" means the holder of the Residual Interest Certificate.
"Residual Interest Certificate" means the residual interest certificate substantially in the form of Exhibit B-2 hereto, evidencing the economic, but not equity interest in the Trust which economic interest shall be subordinate to the rights of the Holders of the Notes in accordance with the terms of the Transaction Documents.
"Secretary of State" means the Secretary of State of the State of Delaware.
"Statutory Trust Statute" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be amended from time to time.
"Tax Matters Partner" shall have the meaning provided in Section 5.06(b) hereof.
"Treasury Regulations" means regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.
"Trust Certificate" means the trust certificate evidencing the beneficial equity interest of an Owner in the Trust, substantially in the form of Exhibit B-1 hereto.
"Trust Estate" means all right, title and interest of the Trust in and to the property and rights assigned to the Trust pursuant to Article II of the Sale and Servicing Agreement, all funds on deposit from time to time in the Trust Accounts and all other property of the Trust from time to time, including any
rights of the Owner Trustee and the Trust all pursuant to the terms and conditions of the Sale and Servicing Agreement and the Administration Agreement.
Section 1.02. Other Definitional Provisions. Capitalized terms used that are not otherwise defined herein shall have the meanings ascribed thereto in Definitions Annex to the Sale and Servicing Agreement.
Section 1.03. Usage of Terms. With respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to "writing" include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all amendments, modifications and supplements thereto or any changes therein entered into in accordance with their respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; and the term "including" means "including without limitation".
Section 1.04. Section References. All section references, unless otherwise indicated, shall be to Sections in this Agreement.
Section 1.05. Accounting Terms. All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States.
ARTICLE II.
ORGANIZATION
Section 2.01. Name. The Trust created hereby shall be known as "BXG Receivables Owner Trust 2006-A", in which name the Owner Trustee shall have the power and authority and is hereby authorized and empowered to and may conduct the business and activities of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.
Section 2.02. Office. The office of the Trust shall be in care of the Owner Trustee at the Owner Trustee Corporate Trust Office or at such other address in Delaware as the Owner Trustee may designate by written notice to the Owner and the Trust Depositor.
Section 2.03. Purposes and Powers.
(a) The sole purpose of the Trust is, and the Trust shall have the power and authority, to manage the Trust Estate and collect and disburse the periodic income therefrom for the use and benefit of the Residual Interest Owner, and in furtherance of such purpose to engage in the following ministerial activities:
(i) to issue the Notes pursuant to the Indenture and the Trust Certificate and Residual Interest Certificate pursuant to this Agreement and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to acquire the Receivables and other Trust Assets, and to pay the organizational, start-up and transactional expenses of the Trust and to pay the balance to the Trust Depositor pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Residual Interest Owner pursuant to the Sale and Servicing Agreement any portion of the Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture and the Sale and Servicing Agreement;
(iv) to enter into and perform its obligations under the Transaction Documents to which it is to be a party;
(v) to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Transaction Documents, to engage in such other activities as may be required in connection with conservation of the Trust Estate and the making of distributions to the Residual Interest Owner and the Noteholders.
The Trust shall not engage in any activities other than in connection with the
foregoing. Nothing contained herein shall be deemed to authorize the Owner
Trustee to engage in any business operations or any activities other than those
set forth in the introductory sentence of this Section. Specifically, the Owner
Trustee shall have no authority to engage in any business operations, or acquire
any assets other than those specifically included in the Trust Estate under
Section 1.01, or otherwise vary the assets held by the Trust. Similarly, the
Owner Trustee shall have no discretionary duties other than performing those
ministerial acts set forth above necessary to accomplish the purpose of this
Trust as set forth in the introductory sentence of this Section.
Section 2.04. Appointment of Owner Trustee. The Trust Depositor hereby appoints the Owner Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein, and the Owner Trustee hereby accepts such appointment.
Section 2.05. Capital Contribution of Owner Trust Estate. The Trust Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt in trust from the Trust Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the initial Trust Estate (prior to giving effect to the conveyances described in the Sale and Servicing Agreement). The Trust Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the sole purpose of conserving the Trust Estate and collecting and disbursing the periodic income therefrom for the use and benefit of the Residual Interest Owner, subject to the obligations of the Trust under the Transaction Documents. It is the intention of the parties that the Owner, as holder of the Trust Certificate, be the sole equity owner of the Trust but have no economic interest in the Trust. It is the intention of the parties hereto that the Residual Interest Owner have solely an economic, but not an equity interest in the Trust, and that the Trust not constitute a Subsidiary or Affiliate of the Residual Interest Owner (or of any of its Affiliates) for any purpose. It is the intention of the parties hereto that the Trust constitutes a statutory trust under the
Statutory Trust Statute and that this Agreement constitutes the governing instrument of such statutory trust. It is the intention of the parties hereto that the Trust be disregarded as a separate entity for federal income tax purposes pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997. The parties agree not to take any action inconsistent with such intended federal income tax treatment. Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute for the sole purpose and to the extent necessary to accomplish the purpose of this Trust as set forth in the introductory sentence of Section 2.03.
Section 2.07. Liability of Trust Depositor.
(a) Pursuant to Section 3803(a) of the Statutory Trust Statute, the Trust Depositor shall be liable directly to and will indemnify any injured party or any other creditor of the Trust for all losses, claims, damages, liabilities and expenses of the Trust to the extent that the Trust Depositor would be liable if the Trust were a partnership under the Delaware Revised Uniform Limited Partnership Act in which Trust Depositor were a general partner; provided, however, that neither Trust Depositor nor Owner shall under any circumstances be liable for any losses incurred by a Noteholder in the capacity of an investor in the Notes or for any losses in respect of the payment performance of the Receivables. In addition, any third party creditors of the Trust (other than in connection with the obligations described in the immediately preceding sentence for which the Trust Depositor and Owner shall not be liable) shall be deemed third party beneficiaries of the Trust Depositor's obligations under this paragraph. The obligations of the Trust Depositor under this paragraph shall be evidenced by the Residual Interest Certificate described in Section 3.12.
(b) The Owner, solely by virtue of its being the Holder of the Trust Certificate, shall not have any personal liability for any liability or obligation of the Trust.
Section 2.08. Title to Trust Property. Legal title to the Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Trust Estate to be vested in an Owner Trustee or Owner Trustees, in which case title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
Section 2.09. Situs of Trust. The Trust will be located and administered in the State of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Florida or the State of Delaware. The Trust shall not have any employees in any state other than Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware. Payments will be received by the Trust only in Delaware and payments will be made by the Trust only from Delaware. The only office of the Trust will be at the Owner Trustee Corporate Trust Office.
Section 2.10. Representations and Warranties
(a) Representations and Warranties of the Trust Depositor. The Trust Depositor hereby represents and warrants to the Owner Trustee that:
(i) The Trust Depositor is duly organized and validly existing as a corporation organized and existing and in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its
business and had at all relevant times, and has, power, authority and legal right to acquire and own the Trust Assets.
(ii) The Trust Depositor is duly qualified to do business as a foreign corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications except where the failure to be so qualified or obtain such licenses or approvals could not reasonably be expected to have a Material Adverse Effect.
(iii) The Trust Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Trust Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Owner Trustee on behalf of the Trust as part of the Trust Estate and has duly authorized such sale and assignment and deposit with the Owner Trustee on behalf of the Trust by all necessary corporate action; and the execution, delivery and performance of this Agreement have been duly authorized by the Trust Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or bylaws of the Trust Depositor, or any indenture, agreement or other instrument to which the Trust Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of the properties of the Trust Depositor pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Transaction Documents); nor violate any law or any order, rule or regulation applicable to the Trust Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Trust Depositor or its properties.
(v) All approvals, authorizations, consents, orders or other actions of any person or any governmental entity required in connection with the execution and delivery of this Agreement and the fulfillment of the terms hereof have been obtained.
(vi) There are no proceedings or investigations pending, or to the Trust Depositor's best knowledge threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Trust Depositor or its properties: (A) asserting the invalidity of this Agreement, any of the other Transaction Documents or the Residual Interest Certificate, (B) seeking to prevent the issuance of the Residual Interest Certificate or the consummation of any of the transactions contemplated by this Agreement or any of the other Transaction Documents, (C) seeking any determination or ruling that might materially and adversely affect the performance by the Trust Depositor of its obligations under, or the validity or enforceability of, this Agreement, any of the other Transaction Documents or the Residual Interest Certificate or (D) involving
the Trust Depositor and which might adversely affect the federal income tax or other federal, state or local tax attributes of the Residual Interest Certificate.
(b) Representations and Warranties of Owner. The Owner hereby represents and warrants to the Owner Trustee that:
(i) The Owner is duly organized and validly existing as a corporation organized and existing and in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business.
(ii) The Owner is duly qualified to do business as a foreign corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications.
(iii) The Owner has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement have been duly authorized by the Owner by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or bylaws of the Owner, or any indenture, agreement or other instrument to which the Owner is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of the properties of the Owner pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Transaction Documents); nor violate any law or any order, rule or regulation applicable to the Owner of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Owner or its properties.
(v) All approvals, authorizations, consents, orders or other actions of any person or any governmental entity required in connection with the execution and delivery of this Agreement and the fulfillment of the terms hereof have been obtained.
(vi) There are no proceedings or investigations pending, or to the Owner's best knowledge threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Owner or its properties: (A) asserting the invalidity of this Agreement, any of the other Transaction Documents or the Trust Certificate, (B) seeking to prevent the issuance of the Trust Certificate or the consummation of any of the transactions contemplated by this Agreement or any of the other Transaction Documents, (C) seeking any determination or ruling that might materially and adversely affect the performance by the Owner of its obligations under, or the validity or enforceability of, this Agreement, any of the other Transaction Documents or the
Trust Certificate or (D) involving the Owner and which might adversely affect the federal income tax or other federal, state or local tax attributes of the Trust Certificate.
Section 2.11. Federal Income Tax Treatment.
(a) It is the intention of the Trust Depositor and the Owner that the Trust be disregarded as a separate entity for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997. The Trust Certificate constitutes the sole equity interest in the Trust and must at all times be held by either the Owner or its transferee as sole owner. The Residual Interest Certificate constitutes the entire residual economic interest in the Trust (after payments to the Noteholders in accordance with the terms of the Transaction Documents) and must at all times be held by the Trust Depositor or its transferee. The Trust Depositor and the Owner agree not to take any action inconsistent with such intended federal income tax treatment. Because for federal income tax purposes the Trust will be disregarded as a separate entity, Trust items of income, gain, loss and deduction for any month as determined for federal income tax purposes shall be allocated entirely to the Trust Depositor (or subsequent purchaser of the Residual Interest Certificate) as the sole owner of the residual economic interest in the Trust.
Section 2.12. Covenants of the Trust Depositor and Owner. The Trust Depositor and the Owner agree and covenant (severally, as applicable) that during the term of this Agreement, and to the fullest extent permitted by applicable law, that:
(a) in the event that any litigation with claims in excess of $50,000 to which the Trust Depositor is a party which shall be reasonably likely to result in a material judgment against the Trust Depositor that the Trust Depositor will not be able to satisfy shall be commenced, during the period beginning immediately following the commencement of such litigation and continuing until such litigation is dismissed or otherwise terminated (and, if such litigation has resulted in a final judgment against the Trust Depositor, such judgment has been satisfied), the Trust Depositor shall not pay any dividend to its Affiliates, or make any distribution on or in respect of its capital stock to its Affiliates, or repay the principal amount of any indebtedness of the Trust Depositor held by its Affiliates, unless after giving effect to such payment, distribution or repayment, the Trust Depositor's liquid assets shall not be less than the amount of actual damages claimed in such litigation;
(b) neither the Trust Depositor nor the Owner shall, for any reason, institute proceedings for the Trust to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Trust, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to the bankruptcy of the Trust, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Trust or a substantial part of the property of the Trust or cause or permit the Trust to make any assignment for the benefit of creditors, or admit in writing the inability of the Trust to pay its debts generally as they become due, or declare or effect a moratorium on the debt of the Trust or take any action in furtherance of any such action;
(c) neither the Trust Depositor nor the Owner shall create, incur or suffer to exist any indebtedness or engage in any business, except, in each case, as permitted by its certificate of incorporation, by-laws and the Transaction Documents;
(d) it shall obtain from each other party to each Transaction Document to which it or the Trust is a party and each other agreement entered into on or after the date hereof to which it or the Trust is a party, an agreement by each such counterparty that prior to the occurrence of the event specified in Section 9.01(e) such counterparty shall not institute against, or join any other Person in instituting against, it or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any state of the United States;
(e) it shall not, for any reason, withdraw or attempt to withdraw from this Agreement, dissolve, institute proceedings for it to be adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of it or a substantial part of its property, or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or declare or effect a moratorium on its debt or take any action in furtherance of any such action; and
(f) it shall not transfer the Trust Certificate (in the case of the Owner) or the Residual Interest Certificate (in the case of the Trust Depositor) unless the transferee agrees that it shall comply with the provisions of paragraph (b) above.
ARTICLE III.
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Ownership (Trust Certificate).
(a) Upon the formation of the Trust by the contribution by the Trust Depositor pursuant to Section 2.05 and until the issuance of the Trust Certificate, the Owner shall be the sole equity owner of the Trust. The Trust Certificate must at all times be held by either the Owner or its transferee as sole owner.
(b) No transfer of the Trust Certificate shall be made unless such transfer is made in a transaction which does not require registration or qualification under the Securities Act of 1933 or qualification under any state securities or "Blue Sky" laws. Neither the Owner Trustee nor the Certificate Registrar shall effect the registration of any transfer of the Trust Certificate unless, (i) prior to such transfer the Owner Trustee shall have received a Tax Opinion, and (ii) following such transfer, there would be no more than one holder of the Trust Certificate and the holder of the Trust Certificate would not be a Foreign Person, a partnership, Subchapter S corporation or grantor trust.
Section 3.02. The Trust Certificate. The Trust Certificate shall be substantially in the form of Exhibit B-2 hereto. The Trust Certificate shall be executed by the Owner Trustee on behalf of the Trust by manual or facsimile signature of an authorized officer of the Owner Trustee and shall be deemed to have been validly issued when so executed. The Trust Certificate bearing the manual or facsimile signature of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Owner Trustee shall be a valid and binding obligation of the Trust, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the authentication and delivery of such Trust Certificate or did not hold such offices at the date of such Trust Certificate. The Trust Certificate shall be dated the date of its authentication.
Section 3.03. Authentication and Delivery of Trust Certificate. The Owner Trustee shall cause to be authenticated and delivered upon the order of the Trust Depositor, in exchange for the Receivables and the other Trust Assets, simultaneously with the sale, assignment and transfer to the Trust of the Receivables and other Trust Assets, and the constructive delivery to the Owner Trustee of the Receivable Files and the other Trust Assets, a Trust Certificate duly authenticated by the Owner Trustee, evidencing the entire ownership of the Trust, and Notes issued by the Trust and authenticated by the Indenture Trustee in aggregate principal amounts not to exceed, $125,000,000. No Trust Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless there appears on such Trust Certificate a certificate of authentication substantially in the form set forth in the form of Trust Certificate attached hereto as Exhibit B-2, executed by the Owner Trustee or its authenticating agent, by manual signature, and such certificate upon any Trust Certificate shall be conclusive evidence, and the only evidence, that such Trust Certificate has been duly authenticated and delivered hereunder. Upon issuance, authorization and delivery pursuant to the terms hereof, the Trust Certificate will be entitled to the benefits of this Agreement.
Section 3.04. Registration of Transfer and Exchange of Trust Certificate.
(a) The Certificate Registrar shall keep or cause to be kept, a Certificate Register, subject to such reasonable regulations as it may prescribe. The Certificate Register shall provide for the registration of Trust Certificate and transfers and exchanges of the Trust Certificate as provided herein. The Owner Trustee is hereby initially appointed Certificate Registrar for the purpose of registering the Trust Certificate and transfers and exchanges of the Trust Certificate as herein provided. In the event that, subsequent to the Closing Date, the Owner Trustee notifies the Servicer that it is unable to act as Certificate Registrar, the Servicer shall appoint another bank or trust company, having an office or agency located in the State of Delaware, agreeing to act in accordance with the provisions of this Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to act as successor Certificate Registrar hereunder.
(b) Upon surrender for registration of transfer of any Trust Certificate at the Owner Trustee Corporate Trust Office, the Owner Trustee shall execute, authenticate and deliver (or shall cause its authenticating agent to authenticate and deliver), in the name of the designated transferee, one new Trust Certificate having the same undivided beneficial equity interests.
(c) Every Trust Certificate presented or surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer or exchange of the Trust Certificate, but the Owner Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer of the Trust Certificate.
(e) All Trust Certificates surrendered for registration of transfer shall be canceled and subsequently destroyed by the Owner Trustee.
Section 3.05. Ownership (Residual Interest Certificate).
(a) Upon the formation of the Trust by the contribution by the Trust Depositor pursuant to Section 2.05 the Owner shall be the sole equity owner of the Trust. The Residual Interest Certificate must at all times be held by either the Residual Interest Owner or its transferee.
(b) No transfer of the Residual Interest Certificate shall be made unless such transfer is made in a transaction which does not require registration or qualification under the Securities Act of 1933 or qualification under any state securities or "Blue Sky" laws. Neither the Owner Trustee nor the Certificate Registrar shall effect the registration of any transfer of the Residual Interest Certificate unless, (i) prior to such transfer the Owner Trustee shall have received a Tax Opinion, and (ii) following such transfer, there would be no more than one holder of the Residual Interest Certificate and the holder of the Residual Interest Certificate would not be a Foreign Person, a partnership, Subchapter S corporation or grantor trust.
Section 3.06. The Residual Interest Certificate. The Residual Interest Certificate shall be substantially in the form of Exhibit B-2 hereto. The Residual Interest Certificate shall be executed by the Owner Trustee on behalf of the Trust by manual or facsimile signature of an authorized officer of the Owner Trustee and shall be deemed to have been validly issued when so executed. The Trust Certificate bearing the manual or facsimile signature of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Owner Trustee shall be a valid and binding obligation of the Trust, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the authentication and delivery of such Residual Interest Certificate or did not hold such offices at the date of such Residual Interest Certificate. The Residual Interest Certificate shall be dated the date of its authentication.
Section 3.07. Authentication and Delivery of Residual Interest Certificate. The Owner Trustee shall cause to be authenticated and delivered to the Residual Interest Owner upon the order of the Trust Depositor, simultaneously with the sale, assignment and transfer to the Trust of the Receivables and other Trust Assets, and the constructive delivery to the Owner Trustee of the Receivable Files and the other Trust Assets, a Residual Interest Certificate duly authenticated by the Owner Trustee, evidencing the entire residual economic (but no equity ownership) of the Trust, and Notes issued by the Trust and authenticated by the Indenture Trustee in aggregate principal amounts not to exceed, $125,000,000. No Residual Interest Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless there appears on such Residual Interest Certificate a certificate of authentication substantially in the form set forth in the form of Residual Interest Certificate attached hereto as Exhibit B-2, executed by the Owner Trustee or its authenticating agent, by manual signature, and such certificate upon any Residual Interest Certificate shall be conclusive evidence, and the only evidence, that such Residual Interest Certificate has been duly authenticated and delivered hereunder. Upon issuance, authorization and delivery pursuant to the terms hereof, the Residual Interest Certificate will be entitled to the benefits of this Agreement.
Section 3.08. Registration of Transfer and Exchange of Residual Interest Certificate.
(a) The Certificate Registrar shall keep or cause to be kept, a Certificate Register, subject to such reasonable regulations as it may prescribe. The Certificate Register shall provide for the registration of Residual Interest Certificate and transfers and exchanges of the Residual Interest Certificate as provided herein. The Owner Trustee is hereby initially appointed Certificate Registrar for the purpose of registering the Residual Interest Certificate and transfers and exchanges of the Residual Interest Certificate as herein provided. In the event that, subsequent to the Closing Date, the Owner Trustee
notifies the Servicer that it is unable to act as Certificate Registrar, the Servicer shall appoint another bank or trust company, having an office or agency located in the State of Delaware, agreeing to act in accordance with the provisions of this Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to act as successor Certificate Registrar hereunder.
(b) Upon surrender for registration of transfer of any Residual Interest Certificate at the Owner Trustee Corporate Trust Office, the Owner Trustee shall execute, authenticate and deliver (or shall cause its authenticating agent to authenticate and deliver), in the name of the designated transferee, one new Residual Interest Certificate having the same residual interest.
(c) Every Residual Interest Certificate presented or surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer or exchange of the Residual Interest Certificate, but the Owner Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer of the Residual Interest Certificate.
(e) All Residual Interest Certificates surrendered for registration of transfer shall be canceled and subsequently destroyed by the Owner Trustee.
Section 3.09. Mutilated, Destroyed, Lost or Stolen Certificates. If (i) any mutilated Certificate is surrendered to the Certificate Registrar, or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate, and (ii) there is delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice that such Certificate has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the shall execute and the Owner Trustee or its authenticating agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and fractional undivided interest. In connection with the issuance of any new Certificate under this Section, the Owner Trustee may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. Any duplicate Certificate issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.10. Persons Deemed Owners. Prior to due presentation of a Certificate for registration of transfer, the Owner Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 5.02 and for all other purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar, any Paying Agent or any of their respective agents shall be affected by any notice of the contrary.
Section 3.11. Access to List of Certificateholder's Name and Addresses. The Owner Trustee shall furnish or cause to be furnished to the Servicer and the Trust Depositor, within 15 days after receipt by the Certificate Registrar of a written request therefor from the Servicer or the Trust Depositor, the name and address of the Certificateholder as of the most recent Record Date in such form as the Servicer or the Trust Depositor may reasonably require. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Servicer, the Trust Depositor and the Owner Trustee that none of the Servicer, the Trust Depositor or the Owner Trustee shall be held accountable by reason of the disclosure of any such information as to the name and address of the Certificateholder hereunder, regardless of the source from which such information was derived.
Section 3.12. Maintenance of Office or Agency. The Owner Trustee shall maintain in Delaware, an office or offices or agency or agencies where the Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Owner Trustee in respect of the Certificates and this Agreement may be served. The Owner Trustee hereby designates the Owner Trustee Corporate Trust Office as its office for such purposes. The Owner Trustee shall give prompt written notice to the Trust Depositor, the Servicer and to the Certificateholder of any change in the location of the Certificate Register or any such office or agency.
Section 3.13. Appointment of Paying Agent. The Paying Agent shall make distributions to the Residual Interest Certificateholder pursuant to Section 5.02(a) and shall report the amounts of such distributions to the Owner Trustee. The Owner Trustee may revoke such power and remove the Paying Agent if the Owner Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect. The Paying Agent initially shall be U.S. Bank National Association, and any co-paying agent chosen by the Paying Agent that is acceptable to the Owner Trustee. Each Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Owner Trustee. In the event that U.S. Bank National Association shall no longer be the Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company). The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that, as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholder in trust for the benefit of the Certificateholder entitled thereto until such sums shall be paid to such Certificateholder. The Paying Agent shall return all unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Owner Trustee. The provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.
Section 3.14. Ownership by Owner of Trust Certificate. Owner shall on the Closing Date purchase from the Trust a Trust Certificate.
Section 3.15. Ownership by Trust Depositor of Residual Interest Certificate. Trust Depositor shall on the Closing Date purchase from the Trust a Residual Interest Certificate.
ARTICLE IV.
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Residual Interest Certificateholder with Respect to Certain Matters. Subject to the provisions and limitations of Section 4.04 with respect to the following matters, the Owner Trustee shall not take action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Residual Interest Certificateholder in writing of the proposed action, the Indenture Trustee shall have consented to such action in the event any Notes are outstanding and the Residual Interest Certificateholder shall not have notified the Owner Trustee in writing prior to the 30th day after such notice is given that such Certificateholder has withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of the Receivables) and the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of the Receivables);
(b) the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Statutory Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required and such amendment materially and adversely affects the interest of the Residual Interest Owner;
(e) amendment, change or modification of the Administration Agreement, except to cure any ambiguity or to amend or supplement any provision in a manner or add any provision that would not materially and adversely affect the interests of the Residual Interest Owner; or
(f) the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a successor Certificate Registrar, or the consent to the assignment by the Note Registrar, Paying Agent, Indenture Trustee or Certificate Registrar of its obligations under the Indenture or the Agreement, as applicable.
Section 4.02. Action by Residual Interest Owner with Respect to Certain
Matters. Subject to the provisions and limitations of Section 4.04, the Owner
Trustee shall not have the power, except upon the written direction of the
Residual Interest Owner, to (a) remove the Trust Administrator pursuant to
Section 8 of the Administration Agreement, (b) appoint a successor Trust
Administrator pursuant to Section 8 of the Administration Agreement, (c) remove
the Servicer pursuant to Section 8.01 of the Sale and Servicing Agreement, (d)
except as expressly provided in the Transaction Documents, sell the Receivables
or other Trust Assets after the termination of the Indenture, (e) initiate any
claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, (f) authorize the merger or
consolidation of the Trust with or into any other business trust or entity
(other than in accordance with Section 3.10 of the Indenture) or (g) amend the
Certificate of Trust. The Owner Trustee shall take the actions referred to in
the preceding sentence only upon written instructions signed by the Residual
Interest Owner.
Section 4.03. Action by Residual Interest Owner with Respect to Bankruptcy. Subject to Sections 2.12(b) and (f), the Owner Trustee shall not have the power to commence a voluntary proceeding in a bankruptcy relating to the Trust without the prior approval of the Residual Interest Owner and the delivery to the Owner Trustee by such Residual Interest Owner of a certificate certifying that such Residual Interest Owner reasonably believes that the Trust is insolvent.
Section 4.04. Restrictions on Residual Interest Owner's Power. The Residual Interest Owner shall not direct the Owner Trustee to take or to refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Transaction Documents or would be contrary to the purpose of this Trust as set forth in Section 2.03, nor shall the Owner Trustee be obligated to follow any such direction, if given.
ARTICLE V.
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01. Reserved.
Section 5.02. Application of Trust Funds.
(a) On each Payment Date, the Paying Agent will distribute to the Residual Interest Certificateholder amounts received pursuant to Section 2.11 of the Sale and Servicing Agreement with respect to such Payment Date.
(b) On each Payment Date, the Paying Agent shall send to the Residual Interest Certificateholder the statement or statements provided to the Owner Trustee by the Servicer pursuant to Section 9.4 of the Sale and Servicing Agreement with respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's payment (or allocation of income) to the Residual Interest Certificateholder, such tax shall reduce the amount otherwise distributable to the Residual Interest Certificateholder in accordance with this Section. The Paying Agent is hereby authorized and directed to retain from amounts otherwise distributable to the Residual Interest Owner sufficient funds for the payment of any tax that is legally owed by the Trust (but such authorization shall not prevent the Owner Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). The amount of any withholding tax imposed with respect to the Residual Interest Certificateholder shall be treated as cash distributed to such Residual Interest Certificateholder at the time it is withheld by the Trust and remitted to the appropriate taxing authority. If there is a reasonable possibility that withholding tax is payable with respect to a distribution, the Paying Agent may in its sole discretion withhold such amounts in accordance with this paragraph (c).
Section 5.03. Method of Payment. Subject to Section 9.01(c) respecting the final payment upon retirement of the Residual Interest Certificate, distributions required to be made to the Residual Interest Certificateholder of record on the related Record Date shall be made by check mailed to such Residual Interest Certificateholder at the address of such Residual Interest Certificateholder appearing in the Certificate Register or, if the Residual Interest Certificateholder so elects, via wire transfer to an account specified by the Residual Interest Certificateholder.
Section 5.04. No Segregation of Moneys; No Interest. Subject to Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need not be segregated in any manner except to the extent required by law or the Sale and Servicing Agreement and may be deposited under such general conditions as may be prescribed by law, and the Owner Trustee shall not be liable for any interest thereon.
Section 5.05. Accounting and Reports to the Certificateholder, the
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis and the
accrual method of accounting, (b) deliver to the Residual Interest Owner, as may
be required by the Code and applicable Treasury Regulations, such information as
may be required to enable the Residual Interest Owner to prepare its federal and
state income tax returns, (c) file such tax returns relating to the Trust and
make such elections as from time to time may be required or appropriate under
any applicable state or federal statute or any rule or regulation thereunder so
as to maintain the federal income tax treatment for the Trust as set forth in
Section 2.11, (d) cause such tax returns to be signed in the manner required by
law and (e) collect or cause to be collected any withholding tax as described in
and in accordance with Section 5.02(c) with respect to income or distributions
to Residual Interest Owner. The Owner Trustee shall elect under Section 1278 of
the Code to include in income currently any market discount that accrues with
respect to the Receivables. If applicable, the Owner Trustee shall not make the
election provided under Section 754 or Section 761 of the Code.
Section 5.06. Signature on Returns; Tax Matters Partner.
(a) The Trust Depositor shall sign on behalf of the Trust the tax returns of the Trust.
(b) If Subchapter K of the Code should be applicable to the Trust, the Residual Interest Certificateholder shall be designated the "tax matters partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations.
ARTICLE VI.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority. Subject to the provisions and limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and directed to execute and deliver the Transaction Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Transaction Documents to which the Trust is to be a party and any amendment or other agreement, as evidenced conclusively by the Owner Trustee's execution thereof. In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust pursuant to the Transaction Documents. The Owner Trustee is further authorized from time to time to take such action as the Trust Administrator recommends with respect to the Transaction Documents.
Section 6.02. General Duties. Subject to the provisions and limitations of Sections 2.03 and 2.06, it shall be the duty of the Owner Trustee to discharge (or cause to be discharged through the Trust Administrator) all of its responsibilities pursuant to the terms of this Agreement and the Transaction Documents to which the Trust is a party and to administer the Trust in the interest of the Owner and the Residual Interest Owner, subject to the Transaction Documents and in accordance with the provisions of this Agreement. Without limiting the foregoing, the Owner Trustee shall on behalf of the Trust file and prove any claim or claims that may exist against the Seller in connection with any claims paying procedure as part of an insolvency or receivership proceeding involving the Seller. Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Transaction Documents to the extent the Trust Administrator has agreed in the Administration Agreement to perform any act or to discharge any duty of the Owner Trustee hereunder or under any Transaction Document, and the Owner Trustee shall not be held liable for the default or failure of the Trust Administrator to carry out its obligations under the Administration Agreement.
Section 6.03. Action Upon Instruction.
(a) Subject to Article Four, in accordance with the terms of the Transaction Documents the Owner may by written instruction direct the Owner Trustee in the management of the Trust.
(b) Owner Trustee shall not be required to take any action hereunder or under any other Transaction Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any other Transaction Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or under any other Transaction Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Owner and the Residual Interest Owner requesting instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Owner and the Residual Interest Owner received, the Owner Trustee shall not be liable on account of such action to any Person. If the Owner Trustee shall not have received appropriate instruction within ten days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Agreement and the other Transaction Documents, as it shall deem to be in the best interests of the Owner and the Residual Interest Owner, and shall have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the applicability of any provision of this Agreement or any other Transaction Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Owner and the Residual Interest Owner requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person. If the Owner Trustee shall not have received appropriate instruction within ten days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Agreement or the other Transaction Documents, as it shall deem to be in the best interests of the Owner and the Residual Interest Owner, and shall have no liability to any Person for such action or inaction.
(e) Notwithstanding anything contained herein to the contrary, the Owner Trustee shall not be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will (i) require the registration with, licensing by or the taking of any other similar action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware by or with respect to the Owner Trustee; (ii) result in any fee, tax or other governmental charge under the laws of any jurisdiction or any political subdivisions thereof in existence on the date hereof other than the State of Delaware being payable by the Owner Trustee; or (iii) subject the Owner Trustee to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by the Owner Trustee contemplated in this Agreement. In the event that the Owner Trustee has determined that any action set forth in clauses (i)-
(iii) will result in the consequences stated therein, the Trust Administrator and the Owner Trustee shall appoint one or more Persons to act as co-trustee pursuant to Section 10.05.
Section 6.04. No Duties Except as Specified in this Agreement or in Instructions. The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of or otherwise deal with the Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee is a party, except as expressly provided by the terms of this Agreement or any document or written instruction received by the Owner Trustee pursuant to Section 6.03; and no implied duties or obligations shall be read into this Agreement or any other Transaction Document against the Owner Trustee. The Owner Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Commission filing for the Trust or to record this Agreement or any other Transaction Document. The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any Liens on any part of the Trust Estate that result from actions by, or claims against, the Owner Trustee that are not related to the ownership or the administration of the Trust Estate.
Section 6.05. No Action Except Under Specified Documents or Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with the other Transaction Documents and (iii) in accordance with any document or instruction delivered to the Owner Trustee pursuant to Section 6.03.
Section 6.06. Restrictions. The Owner Trustee shall not take any action
(i) that is inconsistent with the purposes of the Trust set forth in Section
2.03 or (ii) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would result in the Trust's becoming taxable as a corporation for
federal or state income tax purposes. Neither the Owner nor the Residual
Interest Owner shall direct the Owner Trustee to take actions that would violate
the provisions of this Section.
ARTICLE VII.
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement. The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Trust Estate upon the terms of the Transaction Documents and this Agreement. The Owner Trustee shall not be answerable or accountable hereunder or under any other Transaction Document under any circumstances, except (i) for its own willful misconduct or negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.03 expressly made by the Owner Trustee. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment made by a responsible officer of the Owner Trustee which did not result from gross negligence on the part of such responsible officer;
(b) the Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Trust Administrator or the Owner and the Residual Interest Owner;
(c) no provision of this Agreement or any other Transaction Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Transaction Document if the Owner Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or arising under any of the Transaction Documents, including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Trust Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate, or for or in respect of the validity or sufficiency of the Transaction Documents, other than the certificate of authentication on the Trust Certificate and the Residual Interest Certificate, and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder or to the Owner or the Residual Interest Owner, other than as expressly provided for herein or expressly agreed to in the Transaction Documents;
(f) Neither the Owner Trustee nor the Owner shall be liable for the default or misconduct of the Trust Administrator, the Trust Depositor, the Residual Interest Owner, the Indenture Trustee or the Servicer under any of the Transaction Documents or otherwise and the Owner Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the other Transaction Documents that are required to be performed by the Trust Administrator under the Administration Agreement, the Indenture Trustee under the Indenture or the Servicer or the Trust Depositor under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any other Transaction Document, at the request, order or direction of the Owner or the Residual Interest Owner unless such Owner or the Residual Interest Owner has offered to the Owner Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any other Transaction Document shall not be construed as a duty, and the Owner Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of any such act.
Section 7.02. Furnishing of Documents. The Owner Trustee shall furnish to the Owner and the Residual Interest Owner promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee under the Transaction Documents.
Section 7.03. Representations and Warranties of the Owner Trustee. The Owner Trustee hereby represents and warrants to the Trust Depositor and the Owner and the Residual Interest Owner that:
(a) It is a banking corporation duly organized and validly existing in good standing under the laws of the State of Delaware. It has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any applicable Requirements of Law, including, without limitation, federal or Delaware law, governmental rule or regulation governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or bylaws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound or result in the creation or imposition of any Lien, charge or encumbrance on the Trust Estate resulting from actions by or claims against the Owner Trustee individually which are unrelated to this Agreement or the other Transaction Documents.
Section 7.04. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the method of determination of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the other Transaction Documents, the Owner Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into by any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of such agents or attorneys as shall have been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it. The Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such persons.
Section 7.05. Not Acting in Individual Capacity. Except as provided in this Article Seven, in accepting the trusts hereby created, Wilmington Trust Company acts solely as Owner Trustee hereunder and not in its individual capacity, and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or any other Transaction Document shall look only to the Trust Estate for payment or satisfaction thereof.
Section 7.06. Owner Trustee Not Liable for Trust Certificate, Residual Interest Certificate Notes or Receivables. The recitals contained herein and in the Trust Certificate and the Residual Interest
Certificate (other than the signature and countersignature of the Owner Trustee and the certificate of authentication on such Certificates) shall be taken as the statements of the Trust Depositor, and neither the Owner Trustee nor the Owner assumes responsibility for the correctness thereof. The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, any other Transaction Document or the Certificates (other than the signature and countersignature of the Owner Trustee and the certificate of authentication on the Certificates) or the Notes, or of any Receivable or related documents. The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Receivable, or the perfection and priority of any security interest in any security relating to a Receivable or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to the Residual Interest Certificateholder under this Agreement or the Noteholders under the Indenture, including, without limitation, the existence, condition and ownership of any Receivable; the existence and enforceability of any insurance thereon; the existence and contents of any Receivable on any computer or other record thereof; the validity of the assignment of any Receivable to the Trust or of any intervening assignment; the completeness of any Receivable; the performance or enforcement of any Receivable; the compliance by the Trust Depositor or the Servicer with any warranty or representation made under any Transaction Document or in any related document or the accuracy of any such warranty or representation; or any action of the Trust Administrator, the Indenture Trustee or the Servicer or any subservicer taken in the name of the Owner Trustee.
Section 7.07. Owner Trustee May Own Certificates and Notes. The Owner Trustee in its individual or any other capacity may become the owner or pledgee of the Certificates or Notes and may deal with the Trust Depositor, the Owner, the Residual Interest Owner, the Trust Administrator, the Indenture Trustee and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee.
ARTICLE VIII.
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall receive as compensation for its services hereunder such fees as are provided for and paid pursuant to Section 2.11 of the Sale and Servicing Agreement. Additionally, the Owner Trustee shall be entitled to be reimbursed by the Trust Depositor or Servicer for its other reasonable out-of-pocket expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ in connection with the exercise and performance of its rights and its duties hereunder.
Section 8.02. Indemnification. The Trust Depositor shall be liable as primary obligor for, and shall indemnify the Owner Trustee and its successors, assigns and servants (collectively, the "Indemnified Parties") from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, "Expenses") which may at any time be imposed on, incurred by or asserted against the Owner Trustee or any Indemnified Party in any way relating to or arising out of this Agreement, the other Transaction Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of the Owner Trustee hereunder, except only that the Trust Depositor shall not be liable for or required to indemnify an Indemnified Party from and against Expenses arising or resulting from any of the matters described in the third sentence of Section
7.01 or in respect of the payment performance of the Receivables. The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Owner Trustee's choice of legal counsel shall be subject to the approval of the Trust Depositor, which approval shall not be unreasonably withheld.
Section 8.03. Payments to the Owner Trustee. Any amounts paid to the Owner Trustee pursuant to this Article shall be deemed not to be a part of the Trust Estate immediately after such payment.
ARTICLE IX.
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement.
(a) This Trust shall dissolve upon written notice, which shall be provided by the Trust Depositor to the Owner Trustee, only after the earlier of (i) the date after the Facility Termination Date on which all Aggregate Outstandings have been paid in full and final distribution of payments to the Residual Interest Certificates as required hereunder (the "Trust Termination Date"), (ii) dissolution of the Trust in accordance with applicable law and (iii) the time provided in Section 9.02. The bankruptcy, liquidation, dissolution, death or incapacity of any Owner, other than the Trust Depositor as described in Section 9.02, shall not (i) operate to terminate this Agreement or the Trust, (ii) entitle such Owner's legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Trust Estate or (iii) otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Trust Depositor nor any Holder shall be entitled to revoke or terminate the Trust.
(c) Notice of any dissolution of the Trust, specifying the Payment Date upon which the Residual Interest Certificateholder shall surrender its Residual Interest Certificate to the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to the Certificateholder mailed within five Business Days of receipt of notice of termination from the Servicer, stating (i) the Payment Date upon or with respect to which final payment of the Residual Interest Certificate shall be made upon presentation and surrender of the Residual Interest Certificate at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the Residual Interest Certificate at the office of the Paying Agent therein specified. The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at the time such notice is given to the Residual Interest Certificateholder. Upon presentation and surrender of the Residual Interest Certificates, the Paying Agent shall cause to be distributed to the Residual Interest Certificateholder amounts distributable on such Payment Date pursuant to Section 5.02.
(d) In the event that the Residual Interest Certificateholder shall not surrender its Residual Interest Certificate for cancellation within six months after the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to such Residual Interest
Certificateholder to surrender its Residual Interest Certificate for cancellation and receive the final distribution with respect thereto. If within one year after the second notice the Residual Interest Certificate shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the Residual Interest Certificateholder concerning surrender of its Residual Interest Certificate, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement. Any funds remaining in the Trust after exhaustion of such remedies shall be distributed by the Owner Trustee to the Trust Depositor.
(e) Upon the winding up of the Trust and payment of all liabilities in
accordance with Section 3808 of the Statutory Trust Statute, the Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Statutory Trust Statute at which time the Trust shall
terminate. The Trust Administrator shall be the liquidator of the Trust.
Section 9.02. Dissolution upon Bankruptcy of Trust Depositor or Withdrawal or Removal of Trust Depositor. In the event that an Insolvency Proceeding shall occur with respect to the Trust Depositor or the Trust Depositor shall withdraw, liquidate or be removed from the Trust, this Agreement shall be terminated in accordance with Section 9.01 ninety (90) days after the date of such event. The Trust Depositor shall not voluntarily withdraw, liquidate or be removed from the Trust. Promptly after the occurrence of any Insolvency Proceeding with respect to the Trust Depositor, the Trust Depositor shall give the Indenture Trustee, Owner Trustee and Facility Administrator written notice thereof, and the Indenture Trustee shall give prompt written notice to the Noteholders thereof. Upon a termination pursuant to this Section, the Owner Trustee shall direct the Indenture Trustee promptly to sell the Trust Assets in a commercially reasonable manner and on commercially reasonable terms. The proceeds of such a sale of the Trust Assets shall be treated as Available Amounts under the Sale and Servicing Agreement.
ARTICLE X.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee. The Owner Trustee shall at all times be a corporation satisfying the provisions of Section 3807(a) of the Statutory Trust Statute; authorized to exercise corporate trust powers; and having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities; and having (or having a parent that has) a rating of at least Baa3 by Moody's. If such corporation shall publish reports of condition at least annually pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any Person meeting the requirements for an owner trustee under this Section 10.01 is referred to herein as "Eligible Owner Trustee". In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 10.02.
Section 10.02. Resignation or Removal of Owner Trustee. The Owner Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof 30 days prior to the Trust Administrator. Upon receiving such notice of resignation, the Trust Administrator shall promptly appoint a successor Owner Trustee, which successor shall be an Eligible Owner Trustee, by
written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee. If no successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee which shall be an Eligible Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 10.01 and shall fail to resign after written request therefor by the Trust Administrator, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Trust Administrator, may remove the Owner Trustee. If the Trust Administrator shall remove the Owner Trustee under the authority of the immediately preceding sentence, the Trust Administrator shall promptly appoint a successor Owner Trustee which shall be an Eligible Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to the outgoing Owner Trustee.
Section 10.03. Successor Owner Trustee. Any successor Owner Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to the Trust Administrator, and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective, and such successor Owner Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements and monies held by it under this Agreement; and the Trust Administrator and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be an Eligible Owner Trustee pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Trust Administrator shall mail notice thereof to the Certificateholders, the Indenture Trustee, the Facility Administrator and the Noteholders. If the Trust Administrator shall fail to mail such notice within ten Business Days after acceptance of such appointment by the successor Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed at the expense of the Trust Administrator.
Section 10.04. Merger or Consolidation of Owner Trustee. Any corporation into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01.
Section 10.05. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Estate may at the time be located, the Trust Administrator and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trust Administrator and Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person, in such capacity, such title to the Trust or any part thereof and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Trust Administrator and the Owner Trustee may consider necessary or desirable. If the Trust Administrator shall not have joined in such appointment within 15 Business Days after the receipt by it of a request so to do, the Owner Trustee alone shall have the power to make such appointment. No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor Owner Trustee pursuant to Section 10.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Owner Trustee;
(b) no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and
(c) the Trust Administrator and the Owner Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of or affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Trust Administrator and the Facility Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor co-trustee or separate trustee.
ARTICLE XI.
MISCELLANEOUS
Section 11.01. Supplements and Amendments.
(a) The Agreement may be amended by the Trust Depositor, and the Owner Trustee, without the consent of any of the Noteholders or the Certificateholders, to cure any ambiguity, to correct or supplement any provisions in this Agreement or to add any other provisions with respect to matters or questions arising under this Agreement that shall not be inconsistent with the provisions of this Agreement; provided, however, that any such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder or the Certificateholders.
(b) This Agreement may also be amended from time to time by the Trust Depositor, and the Owner Trustee, with the consent of the Note Majority, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement, or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall increase or reduce in any manner the amount of, or accelerate or delay the timing of, (i) collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholder, or (ii) eliminate the Certificateholders consent or reduce the aforesaid percentage of the Outstanding Amount of the Notes required to consent to any such amendment, without the consent of the Holders of all outstanding Notes and the Residual Interest Certificate.
(c) Prior to the execution of any such amendment or consent, the Trust Depositor shall furnish written notification of the substance of such amendment or consent, together with a copy thereof, to the Indenture Trustee, the Trust Administrator and the Facility Administrator.
(d) Promptly after the execution of any such amendment or consent, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to each Certificateholder. It shall not be necessary for the consent of the Certificateholders, Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents (and any other consents of the Certificateholders provided for in this Agreement or in any other Transaction Document) and of evidencing the authorization of the execution thereof by the Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.
(f) Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement. The Owner Trustee may, but shall not be obligated to, enter into any such amendment that affects the Owner Trustee's own rights, duties or immunities under this Agreement or otherwise.
Section 11.02. No Legal Title to Trust Estate in Owner. The Owner shall not have legal title to any part of the Trust Estate. The Residual Interest Owner shall be entitled to receive distributions with respect to its undivided residual economic interest herein only in accordance with Articles V and IX. No transfer, by operation of law or otherwise, of any right, title or interest of the Owner or the Residual Interest Owner to and in their respective interests in the Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Trust Estate.
Section 11.03. Limitations on Rights of Others. Except for Section 2.07, the provisions of this Agreement are solely for the benefit of the Owner Trustee, the Trust Depositor, the Owner, the Residual Interest Owner, the Trust Administrator and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement (other than Section 2.07), whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.
Section 11.04. Notices. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted by
legible telecopier transmission with a confirmation of receipt, in all cases
addressed to the recipient as set forth in the Sale and Servicing Agreement for
such party; provided that any notices to the Owner shall be addressed as
follows:
GSS Holdings, Inc.
114 West 47th Street
Suite 1715
New York, New York 10036
Attn: Kevin Burns
Telecopier No.: (212) 302-8767
Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.
Section 11.05. Severability of Provisions. If any one or more of the covenants, agreements, provisions, or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.06. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 11.07. Successors and Assigns. All Owner covenants and agreements contained herein shall be binding upon, and inure to the benefit of, each of the Trust Depositor, and the Owner Trustee and their respective successors and permitted assigns and the Owner and the Residual Interest Owner and their respective successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by the Owner or the Residual Interest Owner shall bind the successors and assigns of the Owner or the Residual Interest Owner, as the case may be.
Section 11.08. No Petition. The Owner Trustee, by entering into this Agreement, each Certificateholder, by accepting a Certificate, and the Indenture Trustee and each Noteholder, by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Trust Depositor or the Trust, or join in any institution against the Trust Depositor, or the Trust of, any bankruptcy proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Certificates, the Notes, this Agreement or any of the other Transaction Documents.
Section 11.09. No Recourse. Each Certificateholder by accepting a Certificate acknowledges that such Certificateholder's Certificate represents equity (in the case of the Trust Certificate) or residual economic (in the case of the Residual Interest Certificate) interests in the Trust only and do not represent interests in or obligations of the Trust Depositor, the Servicer, the Seller, the Trust Administrator, the Facility Administrator, the Owner Trustee, the Indenture Trustee or any of their respective Affiliates and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Certificates or the other Transaction Documents. The Owner by accepting the Trust Certificate (i) acknowledges that such Trust Certificate represents an equity (but not economic) interest in the Trust and Trust Assets only and does not represent an economic interest in the Trust or Trust Assets or an interest in or an obligation of the Trust Depositor, the Servicer, the Trust Administrator, the Owner Trustee or any Affiliate of the foregoing, and no recourse may be had against any such party or their assets, except as may be expressly set forth or contemplated in the Transaction Documents and (ii) enters into the undertakings and agreements provided for such Certificateholder set forth in Section 13.10 of the Sale and Servicing Agreement.
Section 11.10. Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 11.11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.12. Trust Certificate Transfer Restrictions. The Trust Certificate may not be acquired by or for the account of a Benefit Plan. By accepting and holding a Trust Certificate, the Holder thereof shall be deemed to have represented and warranted that it is not a Benefit Plan nor will it hold such Trust Certificate for the account of a Benefit Plan. By accepting and holding a Trust Certificate, the Holder thereof shall be deemed to have represented and warranted that it is not a Benefit Plan.
Section 11.13. Trust Depositor Payment Obligation. The Trust Depositor shall be responsible for payment of the Trust Administrator's compensation pursuant to Section 3 of the Administration Agreement and shall reimburse the Trust Administrator for all expenses and liabilities of the Trust Administrator incurred thereunder.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written.
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI, as Trust Depositor and
Owner of the Residual Interest Certificate
WILMINGTON TRUST COMPANY,
as Owner Trustee
GSS HOLDINGS, INC.,
as Owner of the Trust Certificate
Signature Page to Trust Agreement
EXHIBIT A
FORM OF CERTIFICATE OF TRUST OF
BXG RECEIVABLES OWNER TRUST 2006-A
This Certificate of Trust of BXG Receivables Owner Trust 2006-A (the "Trust"), dated __________, 2006, is being duly executed and filed by Wilmington Trust Company, a Delaware banking corporation, as Owner Trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the statutory trust formed hereby is BXG Receivables Owner Trust 2006-A.
2. Delaware Trustee. The name and business address of the Owner Trustee of the Trust in the State of Delaware is [name], [street], Wilmington, Delaware 19890.
IN WITNESS WHEREOF, the undersigned, being the sole Owner Trustee of the Trust, has executed this Certificate of Trust as of the date first above written.
Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
EXHIBIT B-1
FORM OF TRUST CERTIFICATE
THIS TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES TO THE EXTENT DESCRIBED IN THE SALE AND SERVICING AGREEMENT AND INDENTURE REFERRED TO HEREIN.
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN BLUEGREEN RECEIVABLES FINANCE CORPORATION XI, BLUEGREEN CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH IN THE TRUST AGREEMENT. THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED UNLESS THE CONDITIONS SET FORTH IN SECTION 3.04 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH.
THIS CERTIFICATE IS TRANSFERRABLE ONLY IN WHOLE AND NOT IN PART.
THIS TRUST CERTIFICATE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS TRUST CERTIFICATE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
BXG RECEIVABLES OWNER TRUST 2006-A TRUST CERTIFICATE
NO. 1
THIS CERTIFIES THAT GSS Holdings, Inc. is the registered owner of 100% of the nonassessable, fully-paid, undivided equity interests in the BXG Receivables Owner Trust 2006-A (the "Trust") formed by Bluegreen Receivables Finance Corporation XI, a Delaware corporation (the "Trust Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of [ ], 2006 (as amended, restated and/or supplemented from time to time, the "Trust Agreement"), among GSS Holdings, Inc., as owner (the "Owner"), Bluegreen Receivables Finance Corporation XI, as Trust Depositor (the "Trust Depositor"), and Wilmington Trust Company, as owner trustee (the "Owner Trustee"), a summary of certain of the pertinent provisions of which is set forth below. To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in (i) the Trust Agreement, (ii) the Sale and Servicing Agreement, dated as of [ ], 2006 (the "Sale and Servicing Agreement"), among the Trust, Bluegreen Receivables Finance Corporation XI, as depositor (the "Trust Depositor"), Bluegreen Corporation, as Servicer (in such capacity, the "Servicer"), Concord Servicing Corporation, as Back-Up Servicer, Vacation Trust, Inc., as Club Trustee, the Noteholders, General Electric Capital Corporation, as Facility Administrator, and U.S. Bank National Association, as Indenture Trustee (the "Indenture Trustee") and Custodian (the "Custodian") or (iii) the Indenture, dated as of [ ], 2006 (the "Indenture"), between the Trust and the Indenture Trustee.
This Trust Certificate is the duly authorized Trust Certificate designated as "BXG Receivables Owner Trust 2006-A Trust Certificate" (the "Trust Certificate"). Also issued under the Indenture are a class of notes (the "Notes"). This Trust Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the Holder of this Trust Certificate by virtue of its acceptance hereof assents and by which such Holder is bound. The holder of this Trust Certificate acknowledges and agrees that it has no rights to receive distributions in respect of this Trust Certificate.
It is the intent of the Servicer, the Trust Depositor, Owner Trustee, Indenture Trustee and the Certificateholder that, for purposes of federal income, state and local income and single business tax and any other income taxes, the Trust will be disregarded as a separate entity for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) and that all items of income, deduction, gain, loss or credit of the Trust will be treated as such items of the Certificateholder. The Trust Depositor and any other Certificateholder, by acceptance of a Trust Certificate, agrees to treat, and to take no action inconsistent with such treatment of, the Trust for federal income tax purposes.
Each Certificateholder, by its acceptance of a Trust Certificate or beneficial interest in a Trust Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Trust or the Trust Depositor, or join in any institution against the Trust or the Trust Depositor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificate, the Notes, the Trust Agreement or any of the other Transaction Documents.
Reference is hereby made to the further provisions of this Trust Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee, by manual signature, this Trust Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or any other Transaction Document or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[REVERSE OF CERTIFICATE]
The Trust Certificate does not represent an obligation of, or an interest in the Trust Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or any of their respective Affiliates and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated herein or in the Trust Agreement or the other Transaction Documents. In addition, this Trust Certificate has no right of payment to collections and recoveries with respect to the Receivables. A copy of each of the Sale and Servicing Agreement and the Trust Agreement may be examined by any Certificateholder upon written request during normal business hours at the principal office of the Trust Depositor and at such other places, if any, designated by the Trust Depositor.
The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Trust Depositor and the rights of the Certificateholder under the Trust Agreement at any time by the Trust Depositor and the Owner Trustee with the consent of the majority of the outstanding principal balance of the Notes. Any such consent shall be conclusive and binding on the Holder and on all future Holders of this Trust Certificate and of any Trust Certificate issued upon the transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent is made upon this Trust Certificate. The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holder of the Trust Certificate or any Noteholder.
As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Trust Certificate is registerable in the Certificate Register upon surrender of this Trust Certificate for registration of transfer at the offices or agencies of the Certificate Registrar maintained by the Owner Trustee in Wilmington, Delaware, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar in [ ], [ ] executed by the Holder hereof or such Holder's attorney duly authorized in writing, and thereupon a new Trust Certificate evidencing the same aggregate interest in the Trust will be issued to the designated transferee. The initial Certificate Registrar appointed under the Trust Agreement is the Owner Trustee.
Except as provided in the Trust Agreement, the Trust Certificate is issuable only as a registered Trust Certificate without coupons. No service charge will be made for any registration of transfer of such Trust Certificate, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name this Trust Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to Certificateholder of all amounts required to be paid to such holder pursuant to the Trust Agreement and the Sale and Servicing Agreement and the deposition of all property held as part of the Trust Estate. The Trust Depositor may at its option purchase the Trust Estate at the times and at the prices specified in the Sale and Servicing Agreement.
The Trust Certificate may not be acquired by a Benefit Plan. By accepting and holding this Trust Certificate, the Holder hereof, shall be deemed to have represented and warranted that it is not a Benefit Plan and is not acquiring this Trust Certificate or an interest therein for the account of such an entity.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual capacity, has caused this Trust Certificate to be duly executed.
Dated: , 2006
BXG RECEIVABLES OWNER TRUST 2006-A
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee
By:
--------------------------------------------
Authorized Signatory
|
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This the Trust Certificate referred to in the within-mentioned Trust Agreement.
By: Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
Signature Guaranteed:
---------------------------------- ---------------------------------------
NOTICE: Signature(s) must be NOTICE: The signature to this
guaranteed by an eligible assignment must correspond with
guarantor institution. the name of the registered owner
as it appears on the face of the
within Trust Certificate in every
particular, without alteration or
enlargement or any change
whatever.
|
EXHIBIT B-2
FORM OF RESIDUAL INTEREST CERTIFICATE
THIS RESIDUAL INTEREST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES TO THE EXTENT DESCRIBED IN THE SALE AND SERVICING AGREEMENT AND INDENTURE REFERRED TO HEREIN.
THIS RESIDUAL INTEREST CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN BLUEGREEN RECEIVABLES FINANCE CORPORATION XI, BLUEGREEN CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH IN THE TRUST AGREEMENT. THIS RESIDUAL INTEREST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED UNLESS THE CONDITIONS SET FORTH IN SECTION 3.04 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH.
THIS CERTIFICATE IS TRANSFERRABLE ONLY IN WHOLE AND NOT IN PART.
THIS RESIDUAL INTEREST CERTIFICATE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS RESIDUAL INTEREST CERTIFICATE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
BXG RECEIVABLES OWNER TRUST 2006-A RESIDUAL INTEREST CERTIFICATE
NO. 1
THIS CERTIFIES THAT Bluegreen Receivables Finance Corporation XI is the registered owner of 100% of the residual interest in the BXG Receivables Owner Trust 2006-A (the "Trust") formed by Bluegreen Receivables Finance Corporation XI, a Delaware corporation (the "Trust Depositor").
The Trust was created pursuant to a Trust Agreement, dated as of [ ], 2006 (as amended, restated and/or supplemented from time to time, the "Trust Agreement"), among GSS Holdings, Inc., as owner (the "Owner"), Bluegreen Receivables Finance Corporation XI, as Trust Depositor (the "Trust Depositor"), and Wilmington Trust Company, as owner trustee (the "Owner Trustee"), a summary of certain of the pertinent provisions of which is set forth below. To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in (i) the Trust Agreement, (ii) the Sale and Servicing Agreement, dated as of [ ], 2006 (the "Sale and Servicing Agreement"), among the Trust, Bluegreen Receivables Finance Corporation XI, as depositor (the "Trust Depositor"), Bluegreen Corporation, as Servicer (in such capacity, the "Servicer"), Concord Servicing Corporation, as Back-Up Servicer, Vacation Trust, Inc., as Club Trustee, the Noteholders, General Electric Capital Corporation, as Facility Administrator, and U.S. Bank National Association, as Indenture Trustee (the "Indenture
Trustee") and Custodian (the "Custodian") or (iii) the Indenture, dated as of [ ], 2006 (the "Indenture"), between the Trust and the Indenture Trustee.
This Residual Interest Certificate is the duly authorized Residual Interest Certificate designated as "BXG Receivables Owner Trust 2006-A Residual Interest Certificate" (the "Residual Interest Certificate"). Also issued under the Indenture are a class of notes (the "Notes"). This Residual Interest Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the Holder of this Residual Interest Certificate by virtue of its acceptance hereof assents and by which such Holder is bound. The holder of this Residual Interest Certificate acknowledges and agrees that its rights to receive distributions in respect of this Residual Interest Certificate are subordinated to the rights of the Noteholders to the extent described in the Sale and Servicing Agreement and the Indenture.
It is the intent of the Servicer, the Trust Depositor, Owner Trustee, Indenture Trustee and the Certificateholder that, for purposes of federal income, state and local income and single business tax and any other income taxes, the Trust will be disregarded as a separate entity for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) and that all items of income, deduction, gain, loss or credit of the Trust will be treated as such items of the Certificateholder. The Trust Depositor and any other Certificateholder, by acceptance of a Residual Interest Certificate, agrees to treat, and to take no action inconsistent with such treatment of, the Trust for federal income tax purposes.
Each Certificateholder, by its acceptance of a Residual Interest Certificate or beneficial interest in a Residual Interest Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Trust or the Trust Depositor, or join in any institution against the Trust or the Trust Depositor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Residual Interest Certificate, the Notes, the Trust Agreement or any of the other Transaction Documents.
Distributions on this Residual Interest Certificate will be made as provided in the Trust Agreement by the Owner Trustee or its Agent by wire transfer or check mailed to the Certificateholder of record in the Certificate Register without the presentation or surrender of this Residual Interest Certificate or the making of any notation hereon. Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Residual Interest Certificate will be made after due notice by the Owner Trustee of the pendency of such distribution and only upon presentation and surrender of this Residual Interest Certificate at the office or agency maintained for that purpose by the Owner Trustee in the City of Wilmington, State of Delaware.
Reference is hereby made to the further provisions of this Residual Interest Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee, by manual signature, this Residual Interest Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or any other Transaction Document or be valid for any purpose.
THIS RESIDUAL INTEREST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[REVERSE OF CERTIFICATE]
The Residual Interest Certificate does not represent an obligation of, or an interest in the Trust Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or any of their respective Affiliates and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated herein or in the Trust Agreement or the other Transaction Documents. In addition, this Residual Interest Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections and recoveries with respect to the Receivables and certain other amounts, in each case as more specifically set forth herein and in the Sale and Servicing Agreement. A copy of each of the Sale and Servicing Agreement and the Trust Agreement may be examined by any Certificateholder upon written request during normal business hours at the principal office of the Trust Depositor and at such other places, if any, designated by the Trust Depositor.
The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Trust Depositor and the rights of the Certificateholder under the Trust Agreement at any time by the Trust Depositor and the Owner Trustee with the consent of the majority of the outstanding principal balance of the Notes. Any such consent shall be conclusive and binding on the Holder and on all future Holders of this Residual Interest Certificate and of any Residual Interest Certificate issued upon the transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent is made upon this Residual Interest Certificate. The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holder of the Residual Interest Certificate or any Noteholder.
As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Residual Interest Certificate is registerable in the Certificate Register upon surrender of this Residual Interest Certificate for registration of transfer at the offices or agencies of the Certificate Registrar maintained by the Owner Trustee in Wilmington, Delaware, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar in [ ], [ ] executed by the Holder hereof or such Holder's attorney duly authorized in writing, and thereupon a new Residual Interest Certificate evidencing the same aggregate interest in the Trust will be issued to the designated transferee. The initial Certificate Registrar appointed under the Trust Agreement is the Owner Trustee.
Except as provided in the Trust Agreement, the Residual Interest Certificate is issuable only as a registered Residual Interest Certificate without coupons. No service charge will be made for any registration of transfer of such Residual Interest Certificate, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name this Residual Interest Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to Certificateholder of all amounts required to be paid to such holder pursuant to the Trust Agreement and the Sale and Servicing Agreement and the
deposition of all property held as part of the Trust Estate. The Trust Depositor may at its option purchase the Trust Estate at the times and at the prices specified in the Sale and Servicing Agreement.
The Residual Interest Certificate may not be acquired by a Benefit Plan. By accepting and holding this Residual Interest Certificate, the Holder hereof, shall be deemed to have represented and warranted that it is not a Benefit Plan and is not acquiring this Residual Interest Certificate or an interest therein for the account of such an entity.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual capacity, has caused this Residual Interest Certificate to be duly executed.
Dated: , 2006
BXG RECEIVABLES OWNER TRUST 2006-A
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee
By:
-----------------------------------------------
Authorized Signatory
|
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This the Residual Interest Certificate referred to in the within-mentioned Trust Agreement.
By: Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
Signature Guaranteed:
---------------------------------- ---------------------------------------
NOTICE: Signature(s) must be NOTICE: The signature to this
guaranteed by an eligible assignment must correspond with
guarantor institution. the name of the registered owner
as it appears on the face of the
within Trust Certificate in every
particular, without alteration or
enlargement or any change
whatever.
|
Exhibit 10.182
EXECUTION COPY
INDENTURE
between
BXG RECEIVABLES OWNER TRUST 2006-A,
as Issuer
and
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
Dated as of March 13, 2006
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.................1
SECTION 1.1. Definitions................................................1
SECTION 1.2. Rules of Construction......................................1
ARTICLE II THE NOTES..................................................2
SECTION 2.1. Form.......................................................2 SECTION 2.2. Execution, Authentication and Delivery.....................2 SECTION 2.3. Temporary Notes............................................2 SECTION 2.4. Registration: Registration of Transfer and Exchange........3 SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes.................4 SECTION 2.6. Persons Deemed Owner.......................................4 SECTION 2.7. Payment of Principal and Interest - Defaulted Interest.....4 SECTION 2.8. Cancellation...............................................5 SECTION 2.9. Release of Collateral......................................5 SECTION 2.10. Definitive Notes...........................................5 SECTION 2.11. Transfer Restrictions......................................5 SECTION 2.12. CUSIP Numbers..............................................8 ARTICLE III COVENANTS; REPRESENTATIONS AND WARRANTIES..................8 SECTION 3.1. Payment of Principal and Interest..........................8 SECTION 3.2. Maintenance of Office or Agency............................9 SECTION 3.3. Money for Payments To Be Held in Trust.....................9 SECTION 3.4. Existence.................................................10 SECTION 3.5. Protection of the Collateral..............................10 SECTION 3.6. Intentionally Omitted.....................................11 SECTION 3.7. Performance of Obligations; Servicing of Receivables......11 SECTION 3.8. Negative Covenants........................................12 SECTION 3.9. Issuer May Consolidate, etc., Only on Certain Terms.......13 SECTION 3.10. Successor or Transferee...................................14 SECTION 3.11. No Other Business.........................................15 SECTION 3.12. No Borrowing..............................................15 SECTION 3.13. Servicer's Obligations....................................15 SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities.........15 SECTION 3.15. Capital Expenditures......................................15 SECTION 3.16. Notice of Defaults and Events of Default..................15 SECTION 3.17. Further Instruments and Acts..............................15 SECTION 3.18. Compliance with Laws......................................15 SECTION 3.19. Tax Treatment.............................................15 SECTION 3.20. Investment Company Act....................................16 SECTION 3.21. Conduct of Business.......................................16 SECTION 3.22. Annual Statement as to Compliance.........................16 SECTION 3.23. Representations and Warranties of the Issuer..............16 |
ARTICLE IV SATISFACTION AND DISCHARGE................................17
SECTION 4.1. Satisfaction and Discharge of Indenture...................17
SECTION 4.2. Application of Trust Money................................18
SECTION 4.3. Repayment of Moneys Held by Paying Agent..................18
ARTICLE V EVENTS OF DEFAULT; REMEDIES...............................18
SECTION 5.1. Events of Default.........................................18
SECTION 5.2. Acceleration of Maturity..................................19
SECTION 5.3. Rescission and Annulment..................................20
SECTION 5.4. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee......................................20
SECTION 5.5. Remedies; Priorities......................................22
SECTION 5.6. Optional Preservation of the Receivables..................23
SECTION 5.7. Limitation of Suits.......................................23
SECTION 5.8. Unconditional Rights of Noteholders To Receive Principal
and Interest..............................................23
SECTION 5.9. Restoration of Rights and Remedies........................24
SECTION 5.10. Rights and Remedies Cumulative............................24
SECTION 5.11. Delay or Omission Not a Waiver............................24
SECTION 5.12. Control by Noteholders....................................24
SECTION 5.13. Waiver of Past Defaults...................................25
SECTION 5.14. Undertaking for Costs.....................................25
SECTION 5.15. Waiver of Stay or Extension Laws..........................25
SECTION 5.16. Action on Notes...........................................25
SECTION 5.17. Performance and Enforcement of Certain Obligations........25
ARTICLE VI THE INDENTURE TRUSTEE.....................................26
SECTION 6.1. Duties of the Indenture Trustee...........................26
SECTION 6.2. Rights of Indenture Trustee...............................27
SECTION 6.3. Individual Rights of the Indenture Trustee................28
SECTION 6.4. Indenture Trustee's Disclaimer............................28
SECTION 6.5. Notice of Defaults........................................28
SECTION 6.6. Reports by Indenture Trustee to the Holders...............28
SECTION 6.7. Compensation and Indemnity................................29
SECTION 6.8. Replacement of the Indenture Trustee......................29
SECTION 6.9. Successor Indenture Trustee by Merger.....................30
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.............30
SECTION 6.11. Eligibility; Disqualification.............................31
SECTION 6.12. Representations and Warranties of Indenture Trustee.......31
|
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS............................32
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders............................................32
SECTION 7.2. Preservation of Information: Communications to
Noteholders...............................................32
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES......................33
SECTION 8.1. Collection of Money.......................................33 SECTION 8.2. Trust Accounts............................................33 SECTION 8.3. General Provisions Regarding Accounts.....................33 SECTION 8.4. Release of Collateral.....................................33 |
ARTICLE IX SUPPLEMENTAL INDENTURES...................................34
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders....34
SECTION 9.2. Supplemental Indentures With Consent of Noteholders.......34
SECTION 9.3. Execution of Supplemental Indentures......................36
SECTION 9.4. Effect of Supplemental Indenture..........................36
SECTION 9.5. Reference in Notes to Supplemental Indentures.............36
ARTICLE X REDEMPTION OF NOTES.......................................36
SECTION 10.1. Redemption................................................36
SECTION 10.2. Form of Redemption Notice.................................36
SECTION 10.3. Notes Payable on Redemption Date..........................37
ARTICLE XI MISCELLANEOUS.............................................37
SECTION 11.1. Compliance Certificates and Opinions, etc.................37
SECTION 11.2. Form of Documents Delivered to Indenture Trustee..........37
SECTION 11.3. Acts of Noteholders.......................................38
SECTION 11.4. Notices, etc., to the Indenture Trustee, Issuer,
the Facility Administrator................................39
SECTION 11.5. Notices to Noteholders; Waiver............................39
SECTION 11.6. Alternate Payment and Notice Provisions...................39
SECTION 11.7. Effect of Headings and Table of Contents..................40
SECTION 11.8. Successors and Assigns....................................40
SECTION 11.9. Severability..............................................40
SECTION 11.10. Benefits of Indenture.....................................40
SECTION 11.11. Legal Holiday.............................................40
SECTION 11.12. Governing Law; Waiver of Jury Trial.......................40
SECTION 11.13. Counterparts..............................................40
SECTION 11.14. Recording of Indenture....................................40
SECTION 11.15. Trust Obligation..........................................41
SECTION 11.16. No Petition...............................................41
SECTION 11.17. Inspection................................................41
SECTION 11.18. Confidentiality...........................................41
|
EXHIBITS
EXHIBIT A Form of Notes EXHIBIT B Form of Section 3.22 Officer's Certificate EXHIBIT C Form of Purchaser Representation Letter EXHIBIT D Form of Seller Representation Letter |
INDENTURE, dated as of March 13, 2006, between BXG Receivables Owner Trust 2006-A, a Delaware statutory trust (the "Issuer"), and U.S. Bank National Association, a national banking association, as indenture trustee and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer's Notes (each, a "Note" and collectively, the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, on behalf of and for the benefit of the Noteholders, all of the Issuer's right, title and interest in, to and under the following, whether now existing or hereafter arising or acquired (collectively, the "Collateral"):
(a) the Trust Assets;
(b) all rights of the Issuer under the Sale and Servicing Agreement and the other Transaction Documents;
(c) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property that at any time constitute all or part of or are included in the proceeds of any and all of the foregoing.
The foregoing Grant is made in trust to secure (x) the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, as provided herein and all other obligations of the Issuer hereunder and
(y) to secure compliance with this Indenture.
The Indenture Trustee, on behalf of the Noteholders, (1) acknowledges such Grant, and (2) accepts the trusts and the Grant of the Collateral under this Indenture in accordance with this Indenture and agrees to perform its duties required in this Indenture to the best of its ability to the end that the interests of the Noteholders may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions. Capitalized terms used but not otherwise defined herein are defined in the Definitions Annex to the Sale and Servicing Agreement.
SECTION 1.2. Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it; (ii) an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP as in effect on
the date hereof, (iii) "or" is not exclusive; (iv) "including" means "including,
without limitation"; and (v) words in the singular include the plural and words
in the plural include the singular.
ARTICLE II
THE NOTES
SECTION 2.1. Form. The Notes, together with the Indenture Trustee's certificate of authentication, shall be in substantially the form set forth in Exhibit A, in an aggregate face amount not to exceed $125,000,000 with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the Notes set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.2. Execution, Authentication and Delivery. The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at the time of signature Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.
The Indenture Trustee shall upon an Issuer Order authenticate and deliver the Notes for original issue in an aggregate principal amount of up to $125,000,000. The Outstanding Amount of Notes at any time may not exceed the aggregate of such amounts except as provided in Section 2.5.
The Notes shall be issuable as registered Notes in the minimum denomination of $100,000 and in greater whole-dollar denominations in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate of authentication shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.3. Temporary Notes. Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order, the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as if they were Definitive Notes.
SECTION 2.4. Registration: Registration of Transfer and Exchange. The Issuer shall cause to be kept a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Indenture Trustee shall be the "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of the Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as the Note Registrar, the Issuer will give the Indenture Trustee and the Facility Administrator prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee and the Facility Administrator shall have the right to inspect the Note Register at all reasonable times, to obtain copies thereof and to rely upon a certificate executed on behalf of the Note Registrar by a Responsible Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes.
Subject to the terms and conditions of this Indenture, upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.2, if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes in any authorized denominations of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other new Notes in any authorized denominations of a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Subject to the terms and conditions of this Indenture, whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee and the Issuer and duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the "Securities Transfer Agent's Medallion Program" ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP.
No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.3 or 2.5 not involving any transfer.
Notwithstanding anything else to the contrary contained herein, the obligation of the Issuer to pay the principal of and interest on the Notes is not a general obligation of the Issuer or any other Person, but is limited solely to the Collateral pledged hereunder.
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by the Indenture Trustee and the Issuer to hold the Indenture Trustee and the Issuer, respectively, harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon its written request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become, or within fifteen days shall be, due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof. If, after the delivery of such replacement Note (or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence), a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered (or payment made) or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense (including reasonable attorneys' fees and costs) incurred by the Issuer or the Indenture Trustee in connection therewith.
Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any of their respective agents may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Issuer, the Indenture Trustee nor any agent thereof shall be affected by notice to the contrary.
SECTION 2.7. Payment of Principal and Interest - Defaulted Interest. (a) The Notes shall accrue interest at the Note Rate, and such interest shall be payable on each Payment Date, subject to Section 3.1. Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for by or on behalf of the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date, by wire transfer of immediately available funds, or (if such Person has not delivered to the Indenture Trustee in writing instructions with respect to effecting a wire transfer to such Person) by check mailed first-class, postage prepaid, to such Person's address as it appears on the Note Register on such Record Date.
Notwithstanding the above, the final installment of principal payable with
respect to the Notes (and except for the Redemption Price for any Note called
for redemption pursuant to Section 10.1) shall be payable as provided in Section
2.7(b)(ii). The funds represented by any such checks returned undelivered shall
be held in accordance with Section 3.3.
(b) (i) The principal of each Note shall be payable on each Payment Date as and to the extent provided in this Indenture and Section 2.11 of the Sale and Servicing Agreement. Not in limitation of the foregoing, (A) the entire Outstanding Amount of the Notes shall be due and payable on the date following the occurrence and during the continuance of an Event of Default on which the Notes have been declared due and payable in the manner provided in Section 5.2; and (B) the entire Outstanding Amount of the Notes, if any, shall be due and payable on and after the Note Final Scheduled Maturity Date. All principal payments on the Notes shall be made in accordance with Section 2.11 of the Sale and Servicing Agreement.
(ii) The Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay, in any lawful manner, defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable interest rate from the Payment Date for which such payment is in default. The Issuer may pay such defaulted interest to the Persons who are Noteholders on a subsequent Payment Date. The Indenture Trustee is not personally liable for any amounts payable by the Issuer under this Indenture.
SECTION 2.8. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section except as expressly permitted by this Indenture. All canceled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.9. Release of Collateral. Subject to Section 11.1 and the Transaction Documents, the Indenture Trustee shall release property from the Lien of this Indenture only (i) upon receipt of an Issuer Request accompanied by an Officer's Certificate and (ii) with the consent of the Note Majority.
SECTION 2.10. Definitive Notes. The Notes, upon original issuance, shall be issued in definitive, fully registered form ("Definitive Notes").
SECTION 2.11. Transfer Restrictions. (a) Each Noteholder, by its acceptance of the Notes (or the obligations evidenced thereby), will be deemed to have acknowledged, represented to and agreed with the Issuer, Bluegreen, the Trust Depositor and their respective Affiliates as follows:
(i) Its Note is being acquired for investment purposes and without any view to, or for resale in connection with, the distribution thereof (or any interest therein) in violation of the Securities Act or any applicable blue sky laws (as defined below). Such Noteholder is either (i) a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) or (ii) an "accredited investor" (as defined in Regulation D under the Securities Act). It understands and acknowledges that the Notes have not been registered under the Securities Act or any other applicable securities law of any state or other jurisdiction ("blue sky laws"), and may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable blue sky laws, pursuant to an exemption therefrom or in a transaction not subject thereto. Further, it understands and acknowledges that the Issuer in connection with the initial sale of the Notes, is relying on the exemption from registration provided in Section 4(2) of the Securities Act, the availability of which depends on the investment intent of the purchaser.
(ii) It is a sophisticated investor and has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite period of time. It acknowledges that neither the Issuer nor the Indenture Trustee nor any person representing or affiliated with any of the foregoing has made any representation to it with respect to the Issuer or any affiliate thereof or the offering or sale of any Notes; it acknowledges that it has had access to financial and other information concerning the Issuer or any affiliate thereof, the Collateral and the Notes, including an opportunity to ask questions of and request information from the Issuer, the Servicer and the Indenture Trustee.
(iii) In the case of resale transactions:
(A) (i) The prospective purchaser is a "qualified institutional buyer" as defined in Rule 144A under the Securities Act (a "QIB"), and is purchasing for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are QIBs) and has executed a certificate substantially in the form attached as Exhibit C. Due to the restrictions on transfer, it is aware that it (or any account for which it is purchasing) may be required to bear the economic risk of an investment in the Notes for an indefinite period, and it (or such account) is able to bear such risk for an indefinite period. It acknowledges that it has received the information specified in paragraph (d)(4) of Rule 144A under the Securities Act; or (ii) the prospective purchaser is an "accredited investor" within the meaning of Regulation D under the Securities Act, and is purchasing the Note for investment purposes and without any view to, or for resale in connection with, the distribution thereof in violation of the Securities Act and has executed a certificate substantially in the form attached as Exhibit C.
(B) If such transaction is not made in reliance on Rule 144A, the transferor has delivered a certificate substantially in the form attached as Exhibit D.
(iv) No resale, pledge or other transfer of any Note may be made by any person unless either (i) so long as the Notes are eligible for resale pursuant to Rule 144A under the Securities Act, such resale, pledge or other transfer is made to a Person whom the seller reasonably believes after due inquiry is a QIB acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are QIBs) to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A under the Securities Act and the transaction is in compliance with and exempt from registration under Rule 144A or (ii) such resale, pledge or other transfer is made in a transaction exempt from the
registration requirements of the Securities Act and all applicable blue sky laws in which case the Indenture Trustee will require (a) that both the prospective transferor and the prospective transferee represent and warrant to the Issuer and the Indenture Trustee in writing the facts surrounding such transfer, which representations and warranties shall be in form and substance satisfactory to the Issuer, and (b) a written opinion of counsel (which shall not be at the expense of the Issuer, the Servicer or the Indenture Trustee) satisfactory to the Indenture Trustee and the Issuer to the effect that such transfer will not violate the Securities Act or any applicable blue sky laws.
The foregoing representations shall also be applicable to any sale, pledge or other transfer of a beneficial or other interest in any Note.
(b) Each Noteholder by its acquisition of any Notes (or a beneficial or other interest therein) shall be deemed to have represented and warranted for the benefit of the Issuer, the Trust Depositor, the Servicer, the Indenture Trustee and the Noteholders, that the Notes (or a beneficial or other interest therein) are not being acquired by or for the account of (i) an "employee benefit plan" (as defined in Section 3(3) of ERISA), that is subject to Title I of ERISA, (ii) a "plan" as defined in Section 4975(e)(1) of the Internal Revenue Code or (iii) any entity whose underlying assets include plan assets by reason of a plan's investment in the entity (each, a "Benefit Plan") unless the purchase and holding of the Notes will not give rise to a nonexempt prohibited transaction under ERISA or the Internal Revenue Code.
(c) The Notes will bear the following legends:
"THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION ("BLUE SKY LAWS") OF THE UNITED
STATES. BY ITS ACCEPTANCE OF THIS NOTE THE HOLDER OF THIS NOTE IS DEEMED
TO REPRESENT TO THE INDENTURE TRUSTEE, THE ISSUER AND THE SERVICER THAT IT
(i) IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT (A "QIB") AND IS ACQUIRING SUCH NOTE FOR ITS OWN
ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR
OTHERS (WHICH OTHERS ALSO ARE QIBS) TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (ii) IS OTHERWISE
ACQUIRING THIS NOTE IN A TRANSACTION EXEMPT FROM THE SECURITIES ACT AND
APPLICABLE BLUE SKY LAWS.
NO RESALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE (OR ANY INTEREST THEREIN) MAY BE MADE BY ANY PERSON UNLESS (i) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH RESALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A QIB ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBs) TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND, IN ANY CASE, IN TRANSACTIONS UNDER AND IN COMPLIANCE WITH RULE 144A OR (ii) SUCH RESALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
BLUE SKY LAWS, IN WHICH CASE THE INDENTURE TRUSTEE SHALL REQUIRE (A) THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE REPRESENTS AND WARRANTS TO THE ISSUER IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH REPRESENTATIONS AND WARRANTIES SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, AND (B) A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE ISSUER, THE SERVICER OR THE INDENTURE TRUSTEE) SATISFACTORY TO THE INDENTURE TRUSTEE AND THE ISSUER TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR APPLICABLE BLUE SKY LAWS. ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE NOTES FOR ALL PURPOSES. THE PROSPECTIVE TRANSFEROR AND PROSPECTIVE TRANSFEREE, JOINTLY AND SEVERALLY, AGREE TO INDEMNIFY THE ISSUER, THE INDENTURE TRUSTEE, BLUEGREEN CORPORATION, THE TRUST DEPOSITOR AND THEIR RESPECTIVE AFFILIATES AGAINST ANY LIABILITY SUCH PERSON MAY SUFFER AS A RESULT OF A TRANSFER OF A NOTE NOT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.
THIS NOTE (AND ANY INTEREST HEREIN) MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF (i) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
("ERISA")), THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (ii) A
PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE CODE OR (iii) ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY UNLESS THE PURCHASE AND HOLDING OF THE NOTE WILL NOT GIVE RISE
TO A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE. BY
ACCEPTING AND HOLDING THIS NOTE (OR ANY INTEREST HEREIN), THE HOLDER
HEREOF SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (A)
IT IS NOT A BENEFIT PLAN OR (B) SUCH PURCHASE AND HOLDING WILL NOT RESULT
IN A NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(A) OF ERISA OR
SECTION 4975 OF THE CODE."
SECTION 2.12. CUSIP Numbers. The Issuer in issuing the Notes may use "CUSIP" or "private placement" numbers (if then generally in use), and, if so, the Indenture Trustee shall indicate the "CUSIP" or "private placement" numbers of the Notes in notices of redemption and related materials as a convenience to Holders of Notes; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and related materials.
ARTICLE III
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Payment of Principal and Interest. The Indenture Trustee will duly and punctually pay the principal and interest, if any, on the Notes in accordance with the terms of Section 2.11 of the Sale and Servicing Agreement and this Indenture. Without limiting the foregoing, the Issuer will cause to be distributed all Available Amounts on deposit in the Collection Account on a Payment Date
deposited therein in accordance with the terms of the Sale and Servicing Agreement. Amounts properly withheld under the Code or any applicable state law by the Issuer, the Indenture Trustee or any other Paying Agent from a payment to any Noteholder of interest and/or principal shall be paid over to the applicable Governmental Authority and shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer will maintain an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served which shall initially be located in St. Paul, Minnesota. The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes and the Indenture Trustee accepts such appointment. The Issuer will give prompt written notice to the Indenture Trustee and the Facility Administrator of the location, and of any change in the location, of any such office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee and the Facility Administrator with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands and the Indenture Trustee accepts such appointment.
SECTION 3.3. Money for Payments To Be Held in Trust. As provided in
Section 8.2, all payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 8.2 shall be made on behalf of the Issuer by the Indenture Trustee or
by another Paying Agent, and no amounts so withdrawn from the Collection Account
for payments of Notes shall be paid over to the Issuer except as provided in
this Section and Section 2.11 of the Sale and Servicing Agreement.
On or before each Payment Date and Redemption Date, the Issuer shall deposit, or cause the Servicer to deposit, in the Collection Account to the extent of Available Amounts, an aggregate sum sufficient to pay the amounts then becoming due under the Notes as and to the extent required by Section 2.11 of the Sale and Servicing Agreement, such sum to be held in trust for the benefit of the Persons entitled thereto, and shall promptly notify in writing the Facility Administrator and the Indenture Trustee (unless the Paying Agent is the Indenture Trustee) of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee, if any, to execute and deliver to the Facility Administrator and the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee and the Facility Administrator notice of any default by the Issuer of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent; and
(v) comply with all requirements of the Code and any applicable state law with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable payment and reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order, direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same terms as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Holder of such Note shall thereafter, as an unsecured general creditor and subject to all defenses available to the Issuer under all applicable laws, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease.
SECTION 3.4. Existence. The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the jurisdiction of its organization and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and the Collateral.
SECTION 3.5. Protection of the Collateral. The Issuer intends the security interest granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders to be prior to all other Liens (other than Permitted Liens) in respect of the Collateral and the Issuer shall take all action necessary to obtain and maintain for the benefit of the Indenture Trustee on behalf of the Noteholders the first Lien on and a first priority perfected security interest (other than Permitted Liens) in the Collateral. The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Collateral;
(ii) maintain or preserve the Lien and security interest (and the first priority thereof, except with respect to Permitted Liens) of this Indenture or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;
(iv) enforce any rights under or with respect to the Collateral;
(v) preserve and defend title to the Collateral and the rights of the Indenture Trustee and the Noteholders in such Collateral against the claims of all Persons; or
(vi) pay all taxes or assessment levied or assessed upon the Collateral when due.
The Issuer hereby designates the Indenture Trustee as its agent and attorney-in-fact to execute any financing statement, continuation statement, instrument of further assurance or other instrument required to be executed to accomplish the foregoing. In no event shall the Indenture Trustee be responsible for filing or maintaining such financing statements, continuation statements, instruments of further assurance or other instruments.
SECTION 3.6. Intentionally Omitted.
SECTION 3.7. Performance of Obligations; Servicing of Receivables. (a) The Issuer will not take any action and will use commercially reasonable efforts not to permit any action to be taken by others that would release any Person from any material covenants or obligations under any instrument or agreement included in the Collateral or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Sale and Servicing Agreement or any other Transaction Document.
(b) The Issuer may contract with other Persons (acceptable to the Facility Administrator) to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee and the Facility Administrator in an Officer's Certificate of the Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Servicer and the Trust Administrator to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Transaction Documents and in the instruments and agreements included in the Collateral, including filing or causing to be filed all UCC financing statements and continuation statements required to be filed by this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer Termination Event or Termination Event, the Issuer shall promptly notify the Indenture Trustee and the Facility Administrator in writing thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default.
(e) As promptly as possible after the giving of notice of termination to the Servicer of the Servicer's rights and powers pursuant to Article VIII of the Sale and Servicing Agreement, the Back-Up Servicer shall be appointed in accordance with Article VIII of the Sale and Servicing Agreement. In the event that the Back-Up Servicer is unable to act as the Successor Servicer at the time when the previous Servicer ceases to act as Servicer, the Indenture Trustee without further action shall automatically be appointed the Successor Servicer under the Sale and Servicing Agreement. The Indenture Trustee may resign as the Servicer by giving written notice of such resignation to the Issuer and the Facility Administrator and in such event will be released from such duties and obligations, such release not to be effective until the date a Successor Servicer enters into a servicing agreement with the Issuer as provided below. Upon delivery of any such notice to the Issuer and the Facility Administrator, the Issuer shall obtain a new Servicer acceptable to Holders holding at least a majority of the Outstanding Amount of the Notes as the Successor Servicer. Any Successor Servicer other than the Indenture Trustee shall: (i) be an established financial institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of receivables and (ii) enter into a servicing agreement with the Issuer having substantially the same provisions as the provisions of the Sale and Servicing Agreement applicable to the Servicer. If within 30 days after the delivery of the notice referred to above, the Issuer shall not have obtained such a Successor Servicer, Holders holding at least a majority of the Outstanding Amount of the Notes may appoint, or may petition a court of competent jurisdiction to appoint, a Successor Servicer. In connection with any such appointment, Holders holding at least a majority of the Outstanding Amount of the Notes may make such arrangements for the compensation of such Successor Servicer as they and such Successor Servicer shall agree, subject to the limitations set forth below and in the Sale and Servicing Agreement, and in accordance with Article VIII of the Sale and Servicing Agreement, the Issuer shall enter into an agreement with such Successor Servicer for the servicing of the Receivables (such agreement to be in form and substance satisfactory to the Issuer and the Facility Administrator). If the Indenture Trustee shall succeed to the previous Servicer's duties as Servicer of the Receivables as provided herein, it shall do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, the provisions of Article VI hereof shall be inapplicable to the Indenture Trustee in its duties as the Successor Servicer and the servicing of the Receivables. In case the Indenture Trustee shall become the Successor Servicer under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled to appoint as Servicer any one of its Affiliates, provided, that it shall be fully liable for the actions and omissions of any such Affiliate in its capacity as Successor Servicer unless the Issuer and the Facility Administrator shall have consented in writing to the appointment of such Affiliate, which consent shall not be unreasonably withheld.
(f) Upon any termination of the Servicer's rights and powers pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee and the Facility Administrator in writing. As soon as a Successor Servicer is appointed, the Issuer shall notify the Indenture Trustee and the Facility Administrator of such appointment, specifying in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the Grant of Collateral under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees that it will not, without the prior written consent of the Holders holding at least a majority of the Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Collateral (except to the extent otherwise provided in the Sale and Servicing Agreement) or the Transaction Documents, or waive timely performance or observance by the Servicer, the Trust Depositor or the Sellers under the Sale and Servicing Agreement; provided, however, that no such amendment shall: (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders, or (ii) reduce the aforesaid percentage of the Notes that are required to consent to any such amendment, in either case without the consent of the Holders of all the Outstanding Notes. If any such amendment, modification, supplement or waiver shall be so consented to by such Holders, the Issuer agrees, promptly following a request by the Facility Administrator to do so, to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as the Facility Administrator may deem necessary or appropriate in the circumstances.
SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Sale and Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Collateral; it being understood that the Collection Policies do not provide for the sale of the Collateral;
(ii) claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code or applicable State law) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Collateral; or
(iii) (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, or by the Sale and Servicing Agreement or any other Transaction Document, (B) permit any Lien (other than the Lien of this Indenture or Permitted Liens) to be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof or any interest therein or the proceeds thereof or (C) permit the Lien of this Indenture not to constitute a valid first priority (other than with respect to any Permitted Lien) security interest in the Collateral.
SECTION 3.9. Issuer May Consolidate, etc., Only on Certain Terms. (a) The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume, by an indenture supplemental hereto (in form satisfactory to the Facility Administrator), executed and delivered to the Indenture Trustee and the Facility Administrator, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
(iii) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee and the Facility Administrator) to the effect that such transaction will not have any material adverse consequence (tax or otherwise) to the Issuer or any Noteholder;
(iv) any action that is necessary to maintain the Lien and security interest created by this Indenture (including the first ranking priority thereof, except with respect to Permitted Liens) shall have been taken;
(v) the Issuer shall have delivered to the Indenture Trustee and the Facility Administrator an Officer's Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including, if applicable, any filing required under the Exchange Act);
(vi) the Person (if other than the Issuer) formed by or surviving such consolidation or merger has a net worth, immediately after such consolidation or merger, that is (A) greater than zero and (b) not less than the net worth of the Issuer immediately prior to giving effect to such consolidation or merger; and
(vii) the Noteholders shall have consented thereto in writing.
(b) Except as specifically contemplated by or permitted under the Transaction Documents, the Issuer shall not convey or transfer any of its properties including those included in the Collateral, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted shall: (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee and the Facility Administrator, in form satisfactory to the Facility Administrator, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes and the Facility Administrator as set forth herein, (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) if applicable, expressly agrees by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
(iii) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee and the Facility Administrator) to the effect that such transaction will not have any material adverse consequence (tax or otherwise) to the Issuer or any Noteholder;
(iv) any action that is necessary to maintain the Lien and security interest created by this Indenture (including the first ranking priority thereof, except with respect to Permitted Liens) shall have been taken;
(v) the Issuer shall have delivered to the Indenture Trustee and the Facility Administrator an Officer's Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with (including, if applicable, any filing required under the Exchange Act);
(vi) the Issuer has a net worth, immediately after such conveyance or transfer, that is (A) greater than zero and (B) not less than the net worth of the Issuer immediately prior to giving effect to such conveyance or transfer; and
(vii) the Noteholders shall have consented thereto in writing.
SECTION 3.10. Successor or Transferee. (a) Upon any consolidation or merger of the Issuer in accordance with Section 3.9(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.9(b), the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee, the Noteholders and the Facility Administrator stating that the Issuer is to be so released.
SECTION 3.11. No Other Business. The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing of the Receivables in the manner contemplated by this Indenture and the Transaction Documents and activities incidental thereto.
SECTION 3.12. No Borrowing. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness secured by the Collateral, except for the Notes.
SECTION 3.13. Servicer's Obligations. The Issuer shall use commercially reasonable efforts to cause the Servicer to comply with its obligations under the Sale and Servicing Agreement.
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities. Except as contemplated by this Indenture and the other Transaction Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.
SECTION 3.15. Capital Expenditures. The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).
SECTION 3.16. Notice of Defaults and Events of Default. The Issuer shall give the Indenture Trustee and the Facility Administrator prompt written notice of each Default and Event of Default (of which it has actual knowledge) hereunder and each default of which it has actual knowledge on the part of the Servicer or the Seller of its obligations under the Sale and Servicing Agreement.
SECTION 3.17. Further Instruments and Acts. Upon request of the Indenture Trustee or the Facility Administrator, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 3.18. Compliance with Laws. The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any other Transaction Document.
SECTION 3.19. Tax Treatment. The Issuer has structured this Indenture and the Notes with the intention that the Notes will qualify under applicable federal, state and local tax law as indebtedness. The Issuer and each Holder agrees to treat, and take no action inconsistent with the treatment of, the Notes (or any beneficial interest therein) as indebtedness for purposes of federal, state and local income or franchise taxes and any other tax imposed on or measured by income. Each Holder, by acquisition of a beneficial interest in a Note, agrees to be bound by the provisions of this Section 3.19.
SECTION 3.20. Investment Company Act. The Issuer shall conduct its operations in a manner that will not subject it to registration as an "investment company" under the Investment Company Act of 1940, as amended.
SECTION 3.21. Conduct of Business. The Issuer shall (a) conduct its
business solely in its own name through its duly authorized officers or agents
so as not to mislead others as to the identity of the Issuer with which those
others are concerned, and particularly shall use its best efforts to avoid the
appearance of conducting business on behalf of the Sellers or any Affiliate
thereof or that the assets of the Issuer are available to pay the creditors of
the Sellers or any Affiliate thereof or any other entity; (b) maintain records
and books of account separate from those of the Sellers or any Affiliate thereof
or any other entity; (c) use its best efforts to maintain an arm's-length
relationship with the Sellers or any Affiliate thereof and shall not hold itself
out as being liable for the debts of the Sellers or any Affiliate thereof or any
other entity; (d) use its best efforts to keep its assets and its liabilities
wholly separate from those of all other entities, including the Sellers or any
Affiliate thereof, except as otherwise anticipated by the Transaction Documents;
(e) not maintain bank accounts or other depository accounts to which any
Affiliate is an account party, into which any Affiliate makes deposits or from
which any Affiliate has the power to make withdrawals, except as otherwise
permitted by the Sale and Servicing Agreement; (f) shall obtain proper
authorization for all the Issuer's actions requiring such authorization; (g)
shall obtain proper authorization from the Sellers for all action requiring
approval of the Sellers; (h) shall pay operating expenses and liabilities from
the Issuer's own funds; (i) shall disclose in its annual financial statements
the effects of the Issuer's transactions under the Transaction Documents in
accordance with GAAP and shall disclose that the assets of the Issuer are not
available to pay creditors of the Sellers; and (j) shall continuously maintain
the resolutions, agreements and other instruments underlying the transactions
described in the Transaction Documents as official records.
SECTION 3.22. Annual Statement as to Compliance. The Issuer will deliver to the Indenture Trustee and the Facility Administrator, within 120 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ended December 31, 2006), an Officer's Certificate, substantially in the form of Exhibit B, stating that:
(i) a review of the activities of the Issuer during such year and of performance under this Indenture has been made under such Authorized Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Authorized Officers and the nature and status thereof.
SECTION 3.23. Representations and Warranties of the Issuer. The Issuer represents and warrants as follows:
(a) Power and Authority. It has full power, authority and legal right to execute, deliver and perform its obligations as Issuer under this Indenture and the Notes and the other Transaction Documents to which it is a party (the foregoing documents, the "Issuer Documents").
(b) Due Authorization. The execution and delivery of the Issuer Documents and the consummation of the transactions provided for therein have been duly authorized by all necessary action on its part.
(c) No Conflict. The execution and delivery of the Issuer Documents, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof will not conflict with, result in
any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Issuer is a party or by which it or any of its property is bound.
(d) No Violation. The execution and delivery of the Issuer Documents, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof will not conflict with or violate, in any material respect, any Requirements of Law applicable to the Issuer.
(e) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or any Governmental Authority required to be obtained by the Issuer in connection with the execution and delivery of the Issuer Documents, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof have been obtained.
(f) Location. The Issuer has its chief executive office and place of business (as such terms are used in Article 9 of the UCC) in Wilmington, Delaware. The Issuer agrees that it will not change the location of such office to a location outside of Wilmington, Delaware, without at least 30 days prior written notice to the Facility Administrator, the Servicer and the Indenture Trustee, and then only within the United States.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect with respect to the Notes except as to: (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee under Section 4.2) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated and delivered (other than Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5) have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trust for cancellation have become due and payable in full;
(B) the Issuer has paid or caused to be paid (solely through Available Amounts or pursuant to Section 11.2 of the Sale and Servicing Agreement) all other sums payable hereunder by the Issuer in accordance with the provisions of the Transaction Documents; and
(C) the Issuer has delivered to the Indenture Trustee and the Facility Administrator an Officer's Certificate and an Opinion of Counsel, each meeting the applicable requirements of Section 11.1(a) and, subject to Section 11.2, each stating that
all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
SECTION 4.2. Application of Trust Money. All moneys deposited with the Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Notes, this Indenture and the Sale and Servicing Agreement, to the payment, either directly or through any Paying Agent, as the Facility Administrator shall determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or as required by law.
SECTION 4.3. Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.3, and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.1. Events of Default. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any principal, interest or any other amounts in respect of any Note when the same becomes due and payable, and such default shall continue for a period of three (3) Business Days; provided, however, in the event of a Force Majeure Delay, the grace period shall be extended up to ten (10) additional Business Days as appropriate and provided further that no grace period shall apply to the payment due on the Note Final Scheduled Maturity Date other than in the event of a Force Majeure Delay;
(ii) default in the observance or performance of any covenant or agreement of the Issuer made in any Transaction Document (other than a covenant or agreement a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect which adversely affects the Noteholders as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or the Facility Administrator, or to the Issuer, the Facility Administrator, and the Indenture Trustee by the Holders of more than 50% of the Outstanding Amount of the Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder;
(iii) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of any of the Issuer, any Seller, the Servicer or the Club Trustee or any substantial part of such Person's property in an involuntary case under any applicable Federal or
State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days;
(iv) the commencement by any of the Issuer, any Seller, the Servicer or the Club Trustee of a voluntary case under any applicable Federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing;
(v) (A) failure on the part of the Club Trustee, the Servicer or any Seller to make or cause to be made any payment or deposit (or in the alternative, Receivable substitution) required by the terms of any Transaction Document on the day such payment or deposit (or substitution) is required to be made by such Person (giving effect to any applicable grace period), provided that in the event of a Force Majeure Delay, the period within which the Club Trustee, the Servicer or any Seller shall make such payment or deposit as described in this subsection (A) shall be extended to such longer period as is appropriate, not to exceed 10 Business Days; or (B) failure on the part of the Club Trustee, the Club Managing Entity or any Seller to observe or perform any of its other covenants or agreements set forth in any Transaction Document, which failure continues unremedied for a period of 30 days after written notice from the Indenture Trustee, provided, that only a 10 day cure period shall apply to this subsection (B) in the case of a failure by any Seller to observe its covenant not to grant a security interest or otherwise intentionally create a Lien on the Receivables
(vi) the Issuer shall become an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Act"), or the arrangements contemplated by the Transaction Documents shall require registration as an "investment company" within the meaning of the Act; or
(vii) the occurrence of a Termination Event; provided that the occurrence of a Termination Event which is a Trigger Event shall not constitute an Event of Default hereunder until after the Trust Depositor has exercised its "cure" rights of any Trigger Event pursuant to the definition of Termination Event (to the extent permitted) or has failed to do so within the time period set forth in the definition of Termination Event.
The Issuer shall deliver to the Indenture Trustee and the Facility Administrator, within five Business Days after the Issuer obtains actual knowledge thereof, written notice in the form of an Officer's Certificate of any event that, with the giving of notice or the lapse of time or both, would become an Event of Default under clause (ii), its status and what action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2. Acceleration of Maturity. If an Event of Default (other than pursuant to clauses (iii) or (iv) of the definition thereof) shall have occurred and be continuing, the Indenture Trustee shall, if so requested in writing by the Note Majority, declare by written notice to the Issuer that the Facility Termination Date has occurred, whereupon the Notes shall become due and payable, together
with accrued and unpaid interest thereon, and be paid in accordance with Section 2.11(b) of the Sale and Servicing Agreement. If an Event of Default pursuant to clauses (iii) or (iv) of the definition thereof shall have occurred and be continuing, the Facility Termination Date shall have occurred automatically, whereupon the Notes shall become due and payable, together with accrued and unpaid interest thereon, and be paid in accordance with Section 2.11(b) of the Sale and Servicing Agreement.
SECTION 5.3. Rescission and Annulment.
At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Note Majority by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited (solely through Available Amounts or pursuant to Section 11.2 of the Sale and Servicing Agreement) with the Indenture Trustee amounts sufficient to pay:
(A) all payments of principal of and interest on all Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee and the reasonable out-of-pocket expenses, disbursements and advances of the Indenture Trustee and its agents (including reasonable fees and disbursements of counsel); and
(ii) all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any consequence thereof.
SECTION 5.4. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. (a) The Issuer covenants that if the Notes are accelerated in accordance with Section 5.2, the Notes, together with accrued and unpaid interest thereon, shall be paid together with interest upon the overdue principal at the applicable interest rate, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the applicable interest rate, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable fees, out-of-pocket expenses, disbursements and advances of the Indenture Trustee, the Facility Administrator and their respective agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts under
Section 5.4(a) upon such demand, the Indenture Trustee, in its own name and as
trustee of an express trust, may (or shall, at the written direction of the Note
Majority) (i) institute a Proceeding for the collection of the sums so due and
unpaid, (ii) prosecute such Proceeding to judgment or final decree, and (iii)
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) In case an Event of Default occurs and is continuing, the Indenture Trustee may (or shall at the written direction of the Note Majority), as more particularly provided in Section 5.5, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Collateral, Proceedings under Title 11 of the United States Code or any other applicable Federal or State bankruptcy, insolvency or other similar law, or in case a receiver, assignee, trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all out-of-pocket expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of the gross negligence or bad faith), the Facility Administrator and the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law or regulations, to vote on behalf of the Holders of the Notes in any election of a trustee, a standby trustee or any Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders, the Facility Administrator and the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee, the Facility Administrator or the Holders of Notes allowed in any judicial Proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, assignee, custodian, sequestrator or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other out-of-pocket expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.5. Remedies; Priorities. (a) If an Event of Default shall have occurred and be continuing, the Indenture Trustee may (with the consent of the Note Majority) (and shall at the written direction of the Note Majority) do one or more of the following (subject to Section 5.6):
(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Collateral;
(iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Collateral, or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Collateral following an Event of Default unless: (A) all
Noteholders consent in writing thereto, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon such Notes for principal and interest and
any amounts set forth under Section 2.11 of the Sale and Servicing Agreement or
(C) the Indenture Trustee determines that the Collateral will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, and, in the case of clause (B) or (C) above, the Indenture Trustee
obtains the written consent of Holders of 66-2/3% of the Outstanding Amount of
the Notes. In determining such sufficiency or insufficiency with respect to
clauses (B) and (C), the Indenture Trustee may, but need not, obtain (the cost
of which shall be entitled to be reimbursed in accordance with Section 2.11 of
the Sale and Servicing Agreement) and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose. The Indenture Trustee shall not be liable for
acting in reliance on such an opinion.
(b) If the Indenture Trustee collects any money or property pursuant to this Article V, it shall pay out such money or property according to the priorities set forth in Section 2.11 of the Sale and Servicing Agreement.
The Indenture Trustee may fix a special record date and special payment date for any payment to Noteholders pursuant to this Section. At least 15 days before such special record date, the Issuer shall mail to each Noteholder, the Facility Administrator and the Indenture Trustee a notice that states the special record date, the special payment date and the amount to be paid.
SECTION 5.6. Optional Preservation of the Receivables. If the Notes have been declared to be due and payable under Section 5.2 following an Event of Default, and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee shall, at the written direction of the Facility Administrator and the Note Majority, maintain possession of the Collateral, unless otherwise directed in accordance with the provisions of the Transaction Documents. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Collateral. In determining whether to maintain possession of the Collateral, the Indenture Trustee may, but need not, obtain (the cost of which shall be entitled to reimbursement in accordance with Section 2.11 of the Sale and Servicing Agreement) and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose. The Indenture Trustee shall not be liable for acting in reliance on such an opinion.
SECTION 5.7. Limitation of Suits. No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default and such Event of Default continues to exist as of the date of the proposed Proceeding;
(b) the Note Majority has made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Holder(s) have offered to the Indenture Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in complying with such request;
(d) the Indenture Trustee for sixty (60) days after receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60) day period by the Note Majority.
It being understood and intended that no one or more Holder(s) of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder(s) of Notes or to obtain or to seek to obtain priority or preference over any other Holder(s) or to enforce any right under this Indenture, except in the manner herein provided.
SECTION 5.8. Unconditional Rights of Noteholders To Receive Principal and Interest. Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee, the Facility Administrator and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Facility Administrator and the Noteholders shall continue as though no such Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee, the Facility Administrator or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. To the extent permitted by law, the assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee, the Facility Administrator or any Holder of Notes to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Indenture Trustee, the Facility Administrator or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, the Facility Administrator or by the Noteholders, as the case may be.
SECTION 5.12. Control by Noteholders. Holders holding at least a majority of the Outstanding Amount of the Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided, that:
(a) such direction shall not be in conflict with any rule of law or with this Indenture;
(b) subject to the express terms of Section 5.5, any direction to the Indenture Trustee to sell or liquidate the Collateral shall be by all the Noteholders;
(c) if the conditions set forth in Section 5.6 have been satisfied and the Indenture Trustee elects to retain the Collateral pursuant to such Section, then any direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Collateral shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed prudent by the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholder(s) not consenting to such action.
SECTION 5.13. Waiver of Past Defaults. Prior to the time a judgment or decree for payment of money due has been obtained as described in Section 5.4, Holders holding at least a majority of the Outstanding Amount of the Notes may waive any Event of Default and its consequences except an Event of Default: (a) in payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Note. In the case of any such waiver, the Issuer, the Indenture Trustee, the Facility Administrator and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, such Event of Default shall cease to exist and be deemed to have been cured and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Note by such Holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney's fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to: (a) any suit instituted by the Indenture Trustee or the Facility Administrator, (b) any suit instituted by any Noteholder(s) holding in the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee or the Facility Administrator, but will suffer and permit the execution of every such power as though no such law had been enacted.
SECTION 5.16. Action on Notes. The Indenture Trustee's right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee, the Facility Administrator or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.5(b).
SECTION 5.17. Performance and Enforcement of Certain Obligations. (a) Promptly following a request from the Indenture Trustee to do so and at the Issuer's expense, the Issuer shall take all such lawful action within its control as the Indenture Trustee, the Note Majority or the Facility Administrator may request to compel or secure the performance and observance by the Trust Depositor and the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, the Note Majority or the Facility Administrator, including the transmission of notices of breach on the part of the Trust Depositor or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Trust Depositor or the Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of not less than 66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Trust Depositor or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Trust Depositor or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of the Indenture Trustee. (a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default actually known to a Responsible Officer of the Indenture Trustee:
(i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b) of this Section;
(ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the Indenture;
(iv) the Indenture Trustee shall not be charged with knowledge of an Event of Default unless a Responsible Officer obtains actual knowledge of such event or the Indenture Trustee receives written notice of such event from the Seller, Servicer, the Facility Administrator or Holders owning Notes aggregating not less than 10% of the Outstanding Amount of the Notes (as used herein "actual knowledge" means the actual fact or state of knowing, without any duty to investigate); and
(v) the Indenture Trustee shall have no duty to monitor the performance of the Issuer, the Seller or the Servicer, nor shall it have any liability in connection with malfeasance or nonfeasance by the Issuer, the Seller or the Servicer. The Indenture Trustee shall have no liability in connection with compliance of the Issuer, the Seller or the Servicer with statutory or regulatory requirements related to the Collateral. The Indenture Trustee shall not make or be deemed to have made any representations or warranties with respect to the Collateral or the validity or sufficiency of any assignment of the Collateral.
(d) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to clauses (a), (b), (c) and (f) of this Section 6.1.
(e) The Indenture Trustee shall not be liable for interest on any money received except as the Indenture Trustee may agree in writing with the Issuer.
(f) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds to believe that repayments of such funds or indemnity satisfactory to it against any loss, liability or expense is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to this Section.
(h) The Indenture Trustee shall, upon two Business Days' prior notice to the Indenture Trustee, permit any representative of the Facility Administrator or the Issuer, during the Indenture Trustee's normal business hours, to examine all books of account and official records required to be maintained in accordance with this Indenture by the Indenture Trustee relating to the Notes, to make copies and extracts therefrom and to discuss the Indenture Trustee's affairs and actions, as such affairs and actions relate to the Indenture Trustee's duties with respect to the Notes, with the Indenture Trustee's officers and employees responsible for carrying out the Indenture Trustee's duties with respect to the Notes. All expenses incurred by the Indenture Trustee in connection with such examination shall be borne by the Issuer.
SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture Trustee may conclusively rely and shall be fully protected in acting on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Indenture Trustee need not and shall not be bound to investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting at the request of the Issuer, the Servicer, the Facility Administrator or any Holder, it may require an Officer's Certificate or an Opinion of Counsel (the cost and expense of which shall be entitled to be reimbursed in accordance with Section 2.11 of the Sale and Servicing Agreement). The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, a custodian or a nominee; provided, however, that the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, and for the supervision of any such agent, attorney, custodian or nominee appointed with due care by it.
(d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee's conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may (the cost and expense of which shall be entitled to be reimbursed in accordance with Section 2.11 of the Sale and Servicing Agreement), consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall not be required to make any initial or periodic examination of any files or records related to the Receivables for the purpose of establishing the presence or absence of defects, the compliance by the Issuer with its representations and warranties or for any other purpose.
(g) In the event that the Indenture Trustee is also acting as transfer agent, Paying Agent or Note Registrar hereunder, the rights and protections afforded to the Indenture Trustee pursuant to this Article VI shall also be afforded to the Indenture Trustee in its capacity as such transfer agent, Paying Agent or Note Registrar.
SECTION 6.3. Individual Rights of the Indenture Trustee. The Indenture Trustee shall not, in its individual capacity, but may in a fiduciary capacity, become the owner of Notes. The Indenture Trustee may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not the Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Section 6.11.
SECTION 6.4. Indenture Trustee's Disclaimer. Except as set forth in
Section 6.12, the Indenture Trustee shall not be responsible for, and makes no
representation as to the validity or adequacy of, this Indenture, the Collateral
or the Notes; shall not be accountable for the Issuer's use of the proceeds from
the Notes; and shall not be responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Default or an Event of Default occurs and is continuing and is actually known to a Responsible Officer, the Indenture Trustee shall fax, if such fax number is known, (followed by a notice sent by mail) to each Noteholder and the Facility Administrator notice of the Default or Event of Default within 5 Business Days after obtaining knowledge of the occurrence thereof.
SECTION 6.6. Reports by Indenture Trustee to the Holders. The Indenture Trustee shall deliver to each Noteholder such information as may be required to enable such Holder to prepare its Federal, State and other income tax returns; provided the Servicer has provided the Indenture Trustee with any such required information in a timely manner.
SECTION 6.7. Compensation and Indemnity. The Issuer shall (pursuant to
Section 2.11 of the Sale and Servicing Agreement) pay to the Indenture Trustee
from time to time reasonable compensation for its services and any other
reasonable fees incurred by the Indenture Trustee in accordance with this
Indenture. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. Subject to the last sentence
of this paragraph, the Issuer shall indemnify the Indenture Trustee and its
officers, directors, employees and agents against any and all loss, claims,
actions, liability or expense (including reasonable attorneys' fees) incurred by
them in connection with the administration of this trust and the performance of
its duties hereunder, the Transaction Documents and any transaction or document
contemplated herewith or therewith. The Indenture Trustee shall notify the
Issuer, the Facility Administrator and the Servicer promptly of any claim for
which it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer, the Facility Administrator and the Servicer shall not relieve the
Servicer or the Issuer of its obligations. The Issuer shall defend any such
claim and the Indenture Trustee may have separate counsel and the Issuer shall
pay the fees and expenses of such counsel. The Issuer need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
Section 5.1(iii) or (iv), the expenses are intended to constitute expenses of
administration under Title II of the United States Code or any other applicable
Federal or State bankruptcy, insolvency or similar law.
SECTION 6.8. Replacement of the Indenture Trustee. No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by a successor Indenture Trustee pursuant to this Section 6.8. The Indenture Trustee may resign at any time by so notifying the Issuer, the Servicer and the Facility Administrator in writing. Holders constituting not less than a majority of the Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee in writing and may appoint a successor Indenture Trustee. The Issuer may, with the consent of the Facility Administrator, remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged as bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee which is reasonably acceptable to the Facility Administrator and the Trust Depositor.
A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, the Facility Administrator, the Servicer and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to Noteholders, the Servicer and the Facility
Administrator. The retiring Indenture Trustee shall promptly transfer, at the expense of the Issuer, all property held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer, the Facility Administrator or Holders constituting not less than a majority of the Outstanding Amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder or the Facility Administrator may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer's obligations under Section 6.7 shall continue for the benefit of the retiring Indenture Trustee. The retiring Indenture Trustee shall have no liability for any act or omission by any successor Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall provide the Facility Administrator and the Issuer prior written notice of any such transaction.
In case at the time such successor(s) by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates of authentication shall have the full force and effect to the same extent given to the certificate of authentication of the Indenture Trustee anywhere in the Notes or in this Indenture.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Collateral may at the time be located, the Indenture Trustee (with the
consent of the Facility Administrator (which consent shall not be unreasonably
withheld)) shall have the power and may execute and deliver all instruments to
appoint one or more Person(s) to act as co-trustee(s), or separate trustee(s),
of all or any part of the Collateral, and to vest in such Person(s), in such
capacity and for the benefit of the Noteholders, such title to the Collateral,
or any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent permitted, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act(s) are to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act(s), in which event such rights, powers, duties and obligations (including the holding of title to the Collateral or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove, in its sole discretion, any separate trustee or co-trustee (it being understood that the Indenture Trustee shall provide notice of such resignation or removal to the Facility Administrator).
(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, cease to exist, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.
(e) The Indenture Trustee shall have no obligation to determine whether a co-trustee or separate trustee is legally required in any jurisdiction in which any part of the Collateral may be located.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee and any Paying Agent shall have, or be a member of a bank holding company having, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term senior, unsecured debt rating of "Baa3" or better by Moody's (or, if not rated by Moody's, a comparable rating by another statistical rating agency) and "BBB-" or better by Standard & Poor's.
SECTION 6.12. Representations and Warranties of Indenture Trustee. Indenture Trustee in its individual capacity and as Indenture Trustee represents and warrants as follows:
(a) Organization and Corporate Power. It is a duly organized and validly existing national banking association in good standing under the laws of each jurisdiction where its business so requires. It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Indenture Trustee under this Indenture and the Sale and Servicing Agreement (the foregoing documents, the "Indenture Trustee Documents") and to authenticate the Notes.
(b) Due Authorization. The execution and delivery of the Indenture Trustee Documents, the consummation of the transactions provided for therein and the authentication of the Notes have been duly authorized by all necessary corporate action on its part, either in its individual capacity or as Indenture Trustee, as the case may be.
(c) No Conflict. The execution and delivery of the Indenture Trustee Documents, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof (including the authentication of the Notes) will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Indenture Trustee is a party or by which it or any of its property is bound.
(d) No Violation. The execution and delivery of the Indenture Trustee Documents, the performance of the transactions contemplated thereby and the fulfillment of the terms thereof (including the authentication of the Notes) will not conflict with or violate, in any material respect, any Applicable Law.
(e) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or Governmental Entity applicable to the Indenture Trustee, required in connection with the execution and delivery of the Indenture Trustee Documents, the performance by the Indenture Trustee of the transactions contemplated thereby and the fulfillment by the Indenture Trustee of the terms thereof (including the authentication of the Notes) have been obtained.
(f) Validity, Etc. Each Indenture Trustee Document constitutes a legal, valid and binding obligation of the Indenture Trustee, enforceable against the Indenture Trustee in accordance with its terms, except as such enforceability may be limited by applicable insolvency laws and except as such enforceability may be limited by general principles of equity, concepts of materiality and reasonableness (whether considered in a suit at law or in equity) or by an implied covenant of good faith and fair dealing.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders. The Issuer will furnish or cause to be furnished to the Indenture Trustee: (a) not more than five days after the earlier of: (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.
SECTION 7.2. Preservation of Information: Communications to Noteholders. The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.1 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.
ARTICLE VIII.
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture and the Sale and Servicing Agreement. The Indenture Trustee shall apply all such money received by it as provided in this Indenture and the Sale and Servicing Agreement. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Collateral, the Indenture Trustee may cause the Servicer to take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim an Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2. Trust Accounts. On or prior to the Closing Date, the Issuer
shall cause the Servicer to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders, the Trust Accounts as provided in
Section 2.3 of the Sale and Servicing Agreement. Not in limitation of the
foregoing, on each Payment Date and Redemption Date, the Indenture Trustee shall
distribute amounts on deposit in the Collection Account to Noteholders to the
extent of amounts due and unpaid on the Notes in the amounts and in the order of
priority set forth in Section 2.11 of the Sale and Servicing Agreement.
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as no Event of Default shall have occurred and be continuing, all or a portion of the funds in the Trust Accounts (other than the Lockbox Account) shall be invested in Permitted Investments and reinvested by the Indenture Trustee pursuant to the provisions of Section 2.5 of the Sale and Servicing Agreement. All income or other gain from investments of moneys deposited in the Trust Accounts shall be deposited by the Indenture Trustee in the Collection Account or the Reserve Account, and any loss or expenses resulting from such investments shall be charged to such account.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way be held liable for the selection of Permitted Investments or by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Permitted Investment included therein, except for losses attributable to the Indenture Trustee's failure to make payments on such Permitted Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.
(c) In the absence of timely and specific written investment direction from the Servicer and Issuer, the Indenture Trustee shall invest any cash held in Permitted Investments of a type described in clause (c)(i) of the definition thereof. In no event shall the Indenture Trustee be liable for investment losses incurred thereon. The Indenture Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of the Servicer and Issuer to provide timely written investment direction.
SECTION 8.4. Release of Collateral. (a) Subject to the payment of its fees and expenses pursuant to Section 6.7, the Indenture Trustee may, and when required by this Indenture, the Sale and Servicing Agreement or any other Transaction Document shall, execute instruments to release property from the Lien of this Indenture, or convey the Indenture Trustee's interest in the same, in a manner and under circumstances that are not inconsistent with this Indenture. No party relying upon an instrument executed by the Indenture Trustee as provided in this Article shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Aggregate Outstandings and all sums due to the Indenture Trustee, the Facility Administrator and the Noteholders pursuant to Section 6.7 or the other Transaction Documents have been paid, release any remaining portion of the Collateral without representation, warranty or recourse that secured the Notes from the Lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts. The Indenture Trustee shall release property from the Lien of this Indenture pursuant to this paragraph only upon receipt of an Issuer Request accompanied by an Officer's Certificate and an Opinion of Counsel.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders. Without the consent of the Holders of Notes, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto in form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture, or to subject to the Lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes;
(iii) to add to the covenants of the Issuer, for the benefit of the Holders of Notes, or to surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee; or
(v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not materially adversely affect the interests of the Holders of Notes.
The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained. No supplemental indenture pursuant to this Section 9.1 shall be entered into which is inconsistent with the Issuer being a Qualified Special Purpose Entity (within the meaning of Financial Accounting Standards Board Statement No. 140).
SECTION 9.2. Supplemental Indentures With Consent of Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, with the written consent of Holders holding at least a majority of the Outstanding Amount of the Notes affected thereby, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture affecting such Notes or of modifying in any manner the rights of the Holders of Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Collateral to the payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any Such amount due on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition of "Outstanding";
(iv) reduce the percentage of the Outstanding Amount required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Collateral pursuant to Section 5.4;
(v) modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Transaction Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation); or
(vii) permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Collateral or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive any Holder of Notes of the security provided by the Lien of this Indenture.
Notwithstanding the foregoing, the Issuer and the Indenture Trustee shall not enter into an indenture or indenture supplemental thereto without the consent of the Servicer (so long as the Servicer is Bluegreen or an Affiliate thereof), if the effect of such supplemental indenture is to materially increase the obligations of the Servicer (in its capacity as Trust Administrator) under the Administration Agreement.
It shall not be necessary for any Act (as defined in Section 11.3) of the Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. The manner of obtaining such consents (and any other consents of Noteholders provided for in this Indenture or in any other Transaction Document) and of evidencing the authorization of the execution thereof by Noteholders shall be subject to such reasonable requirements as the Indenture Trustee may provide.
Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive (with a copy to the Facility Administrator) and, subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized and permitted by this Indenture and all conditions precedent to the execution of such supplemental indenture have been met. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer, the Facility Administrator and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. Redemption. The Notes are subject to redemption in whole,
but not in part, at the direction of the Trust Depositor pursuant to Section
11.2 of the Sale and Servicing Agreement, on any Payment Date on which the Trust
Depositor exercises its option to purchase the Collateral pursuant to said
Section 11.2 (the "Redemption Date"), for a purchase price equal to the
Aggregate Outstandings (the "Redemption Price"). If such Notes are to be
redeemed pursuant to this Section 10.1, the Servicer or the Issuer shall furnish
notice of such election to the Indenture Trustee and the Facility Administrator
not later than 20 days prior to the Redemption Date and the Issuer shall deposit
with the Indenture Trustee in the Collection Account the Redemption Price one
(1) Business Day prior to the Redemption Date.
SECTION 10.2. Form of Redemption Notice. Notice of redemption under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.2); and
(iv) CUSIP numbers, if any.
Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note.
SECTION 10.3. Notes Payable on Redemption Date. The Notes to be redeemed shall, following notice of redemption pursuant to this Article, become due and payable on the Redemption Date at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.
If there are not sufficient funds in the Collection Account on the Payment Date on which the Notes are to be redeemed available to pay the Redemption Price, the notice of redemption shall be deemed to have been revoked and the Notes shall not be redeemed on the Redemption Date. Payments will be made on such Payment Date in accordance with Section 5.5 of the Sale and Servicing Agreement as though no notice of redemption had been given and the Notes shall continue to bear interest at the Note Rate.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc. (a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under this Indenture, the Indenture Trustee shall be entitled to request that the Issuer furnish, at Issuer's expense and which shall be entitled to be reimbursed in accordance with Section 2.11 of the Sale and Servicing Agreement, to the Indenture Trustee and the Facility Administrator: (i) an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by this Indenture, no additional certificate or opinion need be furnished.
(b) Notwithstanding Section 2.9 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section: (A) collect, liquidate, sell or otherwise dispose of Receivables or otherwise take action as and to the extent permitted or required by the Transaction Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Transaction Documents.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be represented or warranted by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be represented or warranted by, or covered by the opinion of, only one such Person, or that they be so represented, warranted or covered by only one document, but
one such Person may represent, warrant or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may represent, warrant or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate, opinion or representations with respect to the matters upon which his certificate or opinion is based is/are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Seller, or the Issuer stating that the information with respect to such factual matters is in the possession of the Servicer, the Seller or the Issuer, as applicable, unless such Authorized Officer or counsel knows, or in the exercise of reasonable care should know, that the certificate, opinion or representations with respect to such matters is/are erroneous.
Where any Person is required or permitted to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Whenever in this Indenture, in connection with any application, certificate or report to the Indenture Trustee and/or the Facility Administrator, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer's compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee's or the Facility Administrator's right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instrument(s) of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument(s) are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer. Such instrument(s) (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Noteholders signing such instrument(s). Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Indenture Trustee, the Facility Administrator and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee and/or the Facility Administrator, as applicable, deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or Act by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof, in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture
Trustee, the Facility Administrator or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.
SECTION 11.4. Notices, etc., to the Indenture Trustee, Issuer, the Facility Administrator. Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders, or other documents provided or permitted by this Indenture, shall be in writing and, if such request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer, shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office (with a copy to the Facility Administrator); or
(b) the Issuer by the Indenture Trustee or by any Noteholder, shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the Issuer addressed to: c/o Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration or at any other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Facility Administrator by the Issuer or the Indenture Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to their respective addresses set forth in Section 13.3 of the Sale and Servicing Agreement. So long as Bluegreen or an Affiliate thereof is the Servicer, copies of all notices delivered to the Issuer shall be delivered by the sender of such notice to the Servicer at its address set forth in the Sale and Servicing Agreement.
SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given. Any notice sent to the Noteholders shall also be sent to the Facility Administrator.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 11.6. Alternate Payment and Notice Provisions. Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture or the Notes for
such payments or notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.
SECTION 11.7. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.8. Successors and Assigns. All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents of the Indenture Trustee.
SECTION 11.9. Severability. Any provision of this Indenture or the Notes that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or of the Notes, as applicable, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 11.10. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Servicer, the Trust Depositor, the Noteholders, the Facility Administrator, any other party secured hereunder and any other Person with an ownership interest in any part of the Collateral, any benefit or any legal or equitable right, remedy or claim under this Indenture; provided, however, that the Facility Administrator shall be considered an express third-party beneficiary of this Indenture and capable of bringing an action with respect to this Indenture in the same manner as a party hereto.
SECTION 11.11. Legal Holiday. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.
SECTION 11.12. Governing Law; Waiver of Jury Trial. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE ISSUER, THE INDENTURE TRUSTEE AND EACH NOTEHOLDER (BY ACCEPTING A NOTE) WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS INDENTURE OR THE NOTES. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
SECTION 11.13. Counterparts. This Indenture may be executed in any number of counterparts (including by facsimile), each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
SECTION 11.14. Recording of Indenture. If this Indenture is subject to recording in any public recording offices, such recording is to be effected by the Issuer and, at its expense, accompanied by
an Opinion of Counsel (which may be counsel to the Servicer or any other counsel reasonably acceptable to the Facility Administrator) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.15. Trust Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against: (i) the Indenture Trustee in its individual capacity, (ii) any owner or a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, officer, director, employee or agent of: (a) the Indenture Trustee in its individual capacity, (b) any owner of a beneficial interest in the Issuer or the Indenture Trustee or (c) of any successor or assign of the Indenture Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee has no such obligations in its individual capacity).
SECTION 11.16. No Petition. The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Transaction Documents. The foregoing shall not limit the rights of the Indenture Trustee to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted against the Issuer by any Person other than the Indenture Trustee.
SECTION 11.17. Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee or of the Facility Administrator, during the Issuer's normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer's affairs, finances and accounts with the Issuer's officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested.
SECTION 11.18. Confidentiality. The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information; provided, however, that the foregoing shall not be construed to prohibit: (i) disclosure of any and all information that is or becomes publicly known, or information obtained by the Indenture Trustee from sources other than the Issuer or Servicer, (ii) disclosure of any and all information: (A) if required to do so by any applicable statute, law, rule or regulation, (B) to any government agency or regulatory or self-regulatory body having or claiming authority to regulate or oversee any aspects of the Indenture Trustee's business or that of its Affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Indenture Trustee, or an Affiliate or any officer, director, employee or shareholder of either is subject or is a party, (D) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by the Indenture and approved in advance by the Issuer or (E) to any Affiliate, independent or internal auditor, agent, employee or attorney of the Indenture Trustee having a need to know the same; provided, that the Indenture Trustee advises such recipient of the confidential nature of the information being disclosed and such recipient agrees to keep such information confidential, (iii) any other disclosure authorized by the Issuer or the Servicer or (iv) disclosure to the other parties to the transactions contemplated by the Transaction Documents.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers duly authorized as of the day and year first above written.
BXG RECEIVABLES OWNER TRUST 2006-A
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Indenture Trustee
Signature Page to Indenture
EXHIBIT A
to Indenture
FORM OF NOTE
REGISTERED $__________(1)
No. R-_____
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION ("BLUE SKY LAWS") OF THE UNITED STATES. BY ITS
ACCEPTANCE OF THIS NOTE THE HOLDER OF THIS NOTE IS DEEMED TO REPRESENT TO THE
INDENTURE TRUSTEE, THE ISSUER AND THE SERVICER THAT IT (i) IS A "QUALIFIED
INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A
"QIB") AND IS ACQUIRING SUCH NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT
OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS) TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR
(ii) IS OTHERWISE ACQUIRING THIS NOTE IN A TRANSACTION EXEMPT FROM THE
SECURITIES ACT AND APPLICABLE BLUE SKY LAWS.
NO RESALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE (OR ANY INTEREST HEREIN) MAY BE MADE BY ANY PERSON UNLESS (i) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH RESALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A QIB ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBs) TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND, IN ANY CASE, IN TRANSACTIONS UNDER AND IN COMPLIANCE WITH RULE 144A OR (ii) SUCH RESALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS, IN WHICH CASE THE INDENTURE TRUSTEE SHALL REQUIRE (A) THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE REPRESENT AND WARRANT TO THE ISSUER IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH REPRESENTATIONS AND WARRANTIES SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, AND (B) A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE ISSUER, THE SERVICER OR THE INDENTURE TRUSTEE) SATISFACTORY TO THE INDENTURE TRUSTEE AND THE ISSUER TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OR APPLICABLE BLUE SKY LAWS. ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE NOTES FOR ALL PURPOSES. THE PROSPECTIVE TRANSFEROR AND PROSPECTIVE TRANSFEREE, JOINTLY AND SEVERALLY, AGREE TO INDEMNIFY THE ISSUER, THE
INDENTURE TRUSTEE, THE TRUST DEPOSITOR, BLUEGREEN CORPORATION AND THEIR RESPECTIVE AFFILIATES AGAINST ANY LIABILITY SUCH PERSON MAY SUFFER AS A RESULT OF A TRANSFER OF A NOTE NOT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.
THIS NOTE (AND ANY INTEREST HEREIN) MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
(i) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA")), THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OF ERISA, (ii) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE CODE OR (iii) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY UNLESS THE PURCHASE AND
HOLDING OF THE NOTE WILL NOT GIVE RISE TO A NONEXEMPT PROHIBITED TRANSACTION
UNDER ERISA OR THE CODE. BY ACCEPTING AND HOLDING THIS NOTE (OR ANY INTEREST
HEREIN), THE HOLDER HEREOF SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED
THAT EITHER (A) IT IS NOT A BENEFIT PLAN OR (B) SUCH PURCHASE AND HOLDING WILL
NOT RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(A) OF ERISA
OR SECTION 4975 OF THE CODE.
THIS NOTE HAS BEEN ISSUED PURSUANT TO THE TERMS OF THE INDENTURE (AS DEFINED BELOW). BY ITS ACCEPTANCE OF THIS NOTE OR ANY INTEREST HEREIN, THE HOLDER AGREES TO COMPLY WITH THE TERMS OF THE INDENTURE AND THE OTHER TRANSACTION DOCUMENTS APPLICABLE TO HOLDERS. COPIES OF SUCH DOCUMENTS MAY BE OBTAINED FREE OF CHARGE UPON WRITTEN REQUEST OF THE ISSUER.
BXG RECEIVABLES OWNER TRUST 2006-A
NOTE
BXG Receivables Owner Trust 2006-A, a Delaware statutory trust (including
any successor, the "Issuer"), for value received, hereby promises to pay to U.S.
Bank National Association (as Paying Agent on behalf of _______________________
(the "Noteholder") and its successors and assigns), or registered assigns, the
principal sum of [ ] DOLLARS or, if less, the aggregate unpaid Outstanding
Amount of this Note partially payable on each Payment Date in an amount equal to
the aggregate amount, if any, payable from the Collection Account in respect of
principal on the Notes pursuant to Section 3.1) of the Indenture; provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the earliest to occur of the Facility Termination Date and the Note
Final Scheduled Maturity Date. The Issuer will pay interest on this Note at the
rates, at the times and in the manner provided in the Indenture and the other
Transaction Documents, on each Payment Date until the principal of this Note is
paid or made available for payment, subject to certain limitations contained in
Section 3.1 of the Indenture. Principal and interest on this Note shall be paid
in the manner specified in the Indenture and the Sale and Servicing Agreement.
The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be manually facsimile, by its Authorized Officer.
Dated: [_______________]
BXG RECEIVABLES OWNER TRUST 2006-A
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:_________________________________
Name:_______________________________
Title:______________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the mentioned Indenture.
Dated: [_______________]
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee
By:_____________________________________________ Authorized Signatory
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Notes (herein called the Notes"), all issued under an Indenture dated as of March 13, 2006 (such Indenture, as supplemented or amended, is herein called the "Indenture"), between the Issuer and U.S. Bank National Association, not in its individual capacity but solely as trustee (the "Indenture Trustee", which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are subject to all terms of the Indenture. All terms used in this Note that are not otherwise defined herein and that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.
The Notes are and will be equally and ratably secured by the Collateral as security therefor as provided in the Indenture.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.1 of the Indenture, in whole, but not in part, if the Trust Depositor
exercises its option to purchase the Receivables and the other Collateral on any
Payment Date if the Receivables Balance of all Receivables in the Asset Pool is
then less than 10% of the Receivables Balance of the Receivables purchased under
the Sale and Servicing Agreement when so purchased.
Each Noteholder, by acceptance of a Note (or an interest therein), covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against: (i) the Indenture Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of: (a) the Indenture Trustee in its individual capacity, (b) any holder of a beneficial interest in the Issuer, or the Indenture Trustee or of (c) any successor or assign of the Indenture Trustee in its individual capacity, except as any such Person may have expressly agreed.
It is the intent of the Issuer and the Noteholders that, for purposes of Federal and State income tax and any other tax measured in whole or in part by income, the Notes will qualify as indebtedness of the Issuer. Each Noteholder, by acceptance of a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as indebtedness of the Issuer.
Each Noteholder, by acceptance of a Note (or an interest therein), covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy, reorganization or arrangement, insolvency or liquidation proceedings under any United States Federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Transaction Documents and will comply with the terms of the Transaction Documents applicable to Noteholders.
This Note and the Indenture shall be construed in accordance with the laws of the State of Illinois, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. To the extent permitted by applicable law, each of the Issuer, the Indenture Trustee and the Noteholder waives any right to have a jury participate in resolving any dispute sounding in contract, tort or otherwise between the parties arising out of, connected with, related to, or incidental to the relationship between any of them in connection with this Note or the Indenture. Instead, any such dispute resolved in court will be resolved in a bench trial without a jury.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rates, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly provided in the Transaction Documents, neither the Indenture Trustee, in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Indenture Trustee for the sole purposes of binding the interests of the Indenture Trustee in the assets of the Issuer. The Holder of this Note by the acceptance hereof, each agrees that, except as expressly provided in the Transaction Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints _______________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.
Dated:__________ *
---------------------------------
Signature Guaranteed:
---------------------------------------
|
Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
to Indenture
FORM OF SECTION 3.22 OFFICER'S CERTIFICATE
[____________________, _____]
[____________________, _____]
Pursuant to Section 3.22 of the Indenture, dated as of between March 13, 2006 (the "Indenture"), between BXG Receivables Owner Trust 2006-A (the "Issuer") and U.S. Bank National Association, as Indenture Trustee, the undersigned hereby certifies that:
(a) a review of the activities of the Issuer during the previous fiscal year end of performance under the Indenture has been made under the supervision of the undersigned; and
(b) to the best knowledge of the undersigned, based on such review, the Issuer has complied with all conditions and covenants under the Indenture throughout such year. [or, if there has been a default in the compliance of any such condition or covenant, this certificate is to specify each such default known to the undersigned and the nature and status thereof]
BXG RECEIVABLES OWNER TRUST 2006-A
By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner
Trustee
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT C
to Indenture
PURCHASER REPRESENTATION LETTER
BXG Receivables Owner Trust 2006-A
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
U.S. Bank National Association
60 Livingston Avenue
St. Paul, Minnesota 55107
EP-MN-WS3D
Attn: Structured Finance/BXG Owner Trust 2006-A
Re: Notes (such Notes or, for purposes hereof, any interest therein, the "Notes") issued by BXG Receivables Owner Trust 2006-A
Ladies and Gentlemen:
_______________ (the "Purchaser") is today purchasing in a private resale from ____________________ (the "Seller") $_________ aggregate principal amount of the above-captioned Note, issued pursuant to the Indenture, dated as of March 13, 2006 (the "Indenture"), between BXG Receivables Owner Trust 2006-A (the "Issuer") and U.S. Bank National Association, as trustee (the "Indenture Trustee"). Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Indenture.
In connection with the purchase of the Note, the Purchaser hereby represents and warrants to each of you as follows:
1. The Purchaser's Note is being acquired for investment purposes and without any view to, or for resale in connection with, the distribution thereof in violation of the Securities Act. The Purchaser is [a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act)] [an "accredited investor" (as defined in Regulation D under the Securities Act)]. The Purchaser understands that the Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction ("blue sky laws"), and may not be sold, resold, pledged or otherwise transferred except as permitted in the following two sentences. The Purchaser agrees, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that such Notes may be resold, pledged or transferred only (i) so long as such Notes are eligible for resale pursuant to Rule 144A under the Securities Act ("Rule 144A"), to a person whom we reasonably believe after due inquiry is a "qualified institutional buyer" as defined in Rule 144A acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are "qualified institutional buyers") to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A and in each case only in compliance with Rule 144A or (ii) in a resale, pledge or other transfer made in a transaction otherwise exempt from the registration requirements of the Securities Act and applicable blue sky laws, in which case the Indenture Trustee shall require (except with respect to a sale, assignment, transfer or pledge to a Liquidity Bank) (a) both the prospective transferor and the
prospective transferee to represent and warrant to the Issuer in writing the facts surrounding such transfer, which representations and warranties shall be in form and substance reasonably satisfactory to the Indenture Trustee and (b) a written opinion of counsel (which shall not be at the expense of the Indenture Trustee) satisfactory to the Indenture Trustee to the effect that such transfer will not violate the Securities Act. The Purchaser will notify any purchaser of the Notes from us of the above resale restrictions, if then applicable.
2. [The Purchaser is a "qualified institutional buyer" as defined under Rule 144A under the Securities Act and is acquiring the Notes for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are "qualified institutional buyers"). The Purchaser is familiar with Rule 144A under the Securities Act and is aware that the Seller of the Notes and the addressees of this letter intend to rely on the statements made herein and the exemption from the registration requirements of the Securities Act provided by Rule 144A. The Purchaser acknowledges that it has received the information specified in paragraph (d)(4) of Rule 144A under the Securities Act. The Purchaser is aware that it (or any account for which it is purchasing) may be required to bear the economic risk of an investment in the Notes
[The Purchaser is an "accredited investor" within the meaning of
Regulation D under the Securities Act. The Purchaser is aware that it (or any
account for which it is purchasing) may be required to bear the economic risk of
an investment in the Notes for an indefinite period, and it (or such account) is
able to bear such risk for an indefinite period.] The Purchaser is purchasing
the Notes for investment for its own account (or for accounts as to which the
Purchaser exercises sole investment discretion) and not with a view to, or any
intention of sale in connection with, any distribution thereof in violation of
the Act; the Purchaser is not acting as an underwriter within the meaning of
Section 2(11) of the Securities Act. The Purchaser agrees that it will not make
a distribution of the Notes unless they are registered under the Act and that it
will not resell, assign or transfer the Notes unless they are registered under
the Act and all applicable securities laws or an exemption from the Act and such
laws is available with respect to such sale or transfer and it complies fully
therewith.]
3. The Purchaser agrees that if at some time it wishes to dispose of or exchange any of the Notes, it will not transfer or exchange any of the Notes unless such transfer or exchange is in accordance with the provisions of Section 2.11 of the Indenture and exempt from the registration requirements of the Securities Act and all applicable securities laws.
4. The Purchaser represents either (i) the Purchaser will not acquire the Notes with the assets of any "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") which is subject to Title I of ERISA or any "plan" as defined in Section 4975 of the Code or (ii) no nonexempt "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Code will occur in connection with our acquisition or holding of the Notes.
5. The Purchaser has consulted with its own legal counsel, independent accountants and financial advisors to the extent it deems necessary regarding the tax consequences to it of ownership of the Notes, is aware that its taxable income with respect to the Notes in any accounting period may not correspond to the cash flow (if any) from the Notes for such period, and is not purchasing the Notes in reliance on any representations of the Seller, the Servicer, the Issuer, the Indenture Trustee, or their counsel with respect to tax matters.
6. The Purchaser understands that the Notes will bear legends substantially as set forth in the form of Note included as Exhibit A to the Indenture.
7. The Purchaser hereby further agrees to be bound by all the terms and conditions of the Notes as provided in the Indenture.
8. If the Purchaser sells any of the Notes, the Purchaser will obtain from any subsequent purchaser substantially the same representations contained in this Representation Letter.
9. The representations, warranties and agreements set forth herein are for the benefit of the addresses of this letter and the other Noteholders. The Purchaser hereby agrees to indemnify each of you against any liability that may result if the transfer of the Note to the Purchaser (and any subsequent transfer or assignment by us) (a) is not, by reason of our actions or omissions, exempt from registration under all applicable securities laws or is not, by reason of our actions or omissions, made in accordance with all such laws or (b) is not, by reason of our actions or omissions made in accordance with the Indenture.
You are entitled to rely upon this letter and you are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
The representations and warranties contained herein shall be binding upon successors of the undersigned.
Executed at _______________, this _____ day of _______________, ____.
[Purchaser's Name]
Address of Purchaser
Purchaser's Taxpayer Identification Number
EXHIBIT D
to Indenture
SELLER REPRESENTATION LETTER
BXG Receivables Owner Trust 2006-A
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
U.S. Bank National Association
60 Livingston Avenue St.
Paul, Minnesota 55107
EP-MN-WS3D
Attn: Structured Finance/BXG Owner Trust 2006-A
Re: Notes (such Notes or, for purposes hereof, any interest therein, the "Notes") issued by BXG Receivables Owner Trust 2006-A
Ladies and Gentlemen:
_______________ (the "Seller") is today selling in a private resale to ____________________ (the "Purchaser") $_________ aggregate principal amount of the above-captioned Note, issued pursuant to the Indenture, dated as of March 13, 2006 (the "Indenture"), between BXG Receivables Owner Trust 2006-A (the "Issuer") and U.S. Bank National Association, as trustee (the "Indenture Trustee"). Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Indenture.
In connection with the sale of the Note, the Seller hereby represents and warrants to each of you as follows:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of or otherwise transferred any Note or any interest in any Note, (b) solicited any offer to buy or to accept a pledge, disposition or other transfer of any Note or any interest in any Note, (c) made any general solicitation by means of general advertising or in any other manner, or (d) taken any other action that would constitute a "distribution" of the Note under the Securities Act or any applicable state securities laws or that would require registration or qualification pursuant thereto. The Seller has not and will not sell or otherwise transfer the Note except in compliance with the Indenture.
The representations and warranties contained herein shall be binding upon successors of the undersigned.
Executed at _______________, this _____ day of _______________, ____.
[Seller's Name]
Exhibit 10.183
EXECUTION COPY
SALE AND SERVICING AGREEMENT
among
BXG RECEIVABLES OWNER TRUST 2006-A,
as Issuer,
BLUEGREEN RECEIVABLES FINANCE CORPORATION XI,
as Trust Depositor,
BLUEGREEN CORPORATION,
individually and as Servicer,
CONCORD SERVICING CORPORATION,
as Back-Up Servicer,
VACATION TRUST, INC.,
as Club Trustee,
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee and Custodian,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Facility Administrator,
and
AND THE PERSONS FROM TIME TO TIME SIGNATORY
HERETO AS NOTEHOLDERS
Dated as of March 13, 2006
Page
----
Table of Contents
ARTICLE I DEFINITIONS...........................................................................2
Section 1.1. Definitions...................................................................2
Section 1.2. Usage of Terms................................................................2
Section 1.3. Section References............................................................2
Section 1.4. Other Interpretive Provisions.................................................2
Section 1.5. Accounting Terms..............................................................2
ARTICLE II TRANSFER OF RECEIVABLES...............................................................2
Section 2.1. Sales.........................................................................2
Section 2.2. Procedures for Purchases......................................................4
Section 2.3. Establishment of Accounts; Reserve Account....................................5
Section 2.4. Deposits to Accounts..........................................................6
Section 2.5. Investment of Accounts........................................................6
Section 2.6. Payments and Computations; Funding Indemnity for Failed Purchase..............6
Section 2.7. Addition/Substitution of Receivables..........................................7
Section 2.8. [Reserved]...................................................................10
Section 2.9. Acceptance by Trust..........................................................10
Section 2.10. Monthly Distributions........................................................10
Section 2.11. Distributions................................................................11
Section 2.12. Servicer Purchase Option.....................................................13
Section 2.13. Upgrades.....................................................................14
Section 2.14. Release of Interest..........................................................14
ARTICLE III SERVICING OF RECEIVABLES.............................................................15
Section 3.1. Responsibility for Receivable Administration.................................15
Section 3.2. Standard of Care.............................................................15
Section 3.3. Filing.......................................................................15
Section 3.4. Records......................................................................16
Section 3.5. Inspection...................................................................16
Section 3.6. Duties and Responsibilities of Servicer......................................16
Section 3.7. Consideration................................................................17
ARTICLE IV CONDITIONS OF PURCHASES AND TRANSFERS................................................18
Section 4.1. Conditions Precedent to Initial Purchase.....................................18
Section 4.2. Conditions Precedent to All Transfers........................................18
ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................................19
Section 5.1. Representations and Warranties of the Trust Depositor........................19
Section 5.2. Representations and Warranties of Trust Depositor Relating to the
Receivables..................................................................23
Section 5.3. Survival; Knowledge; Notice of Breach........................................25
Section 5.4. Representations and Warranties of the Club and the Club Trustee..............25
Section 5.5. Representations and Warranties of the Servicer...............................27
|
ARTICLE VI COVENANTS............................................................................29
Section 6.1. Covenants of the Trust Depositor...........................................29
Section 6.2. General Covenants of the Club Trustee......................................33
Section 6.3. General Covenants of the Servicer and Bluegreen............................35
ARTICLE VII SUBJECT TO CLUB TRUST AGREEMENT.....................................................42
Section 7.1. Rights Subject to Club Trust Agreement...............................42
ARTICLE VIII SERVICER TERMINATION EVENTS.........................................................42
Section 8.1. Servicer Termination Events.................................................42
Section 8.2. Service Transfer............................................................44
Section 8.3. Successor Servicer to Act; Appointment of Successor Servicer................45
Section 8.4. Effect of Transfer..........................................................45
Section 8.5. Successor Servicer Indemnification..........................................46
Section 8.6. Responsibilities of the Successor Servicer..................................46
Section 8.7. Waiver of Servicer Termination Event........................................46
ARTICLE IX PERFORMANCE AND DUTIES OF SERVICER.................................................47
Section 9.1. General Requirements of Servicer...........................................47
Section 9.2. Servicer as Independent Contractor.........................................47
Section 9.3. [Omitted]..................................................................47
Section 9.4. Description of Reports.....................................................47
Section 9.5. Officer's Certificate......................................................49
Section 9.6. Annual Report of Accountants...............................................49
Section 9.7. Annual Statement of Compliance from Servicer...............................49
Section 9.8. Sales and Inventory Reports................................................50
Section 9.9. Financial Reports..........................................................50
Section 9.10. Time Share Association Reports; Club Reports...............................50
Section 9.11. Audit Reports..............................................................51
Section 9.12. Other Reports..............................................................51
Section 9.13. SEC Reports................................................................51
ARTICLE X FACILITY ADMINISTRATOR.............................................................51
Section 10.1. Appointment; Nature of Relationship........................................51
Section 10.2. Powers.....................................................................51
Section 10.3. General Immunity...........................................................52
Section 10.4. No Responsibility for Advances, Recitals, etc..............................52
Section 10.5. Action on Instructions of Noteholders......................................52
Section 10.6. Employment of Agents and Counsel...........................................52
Section 10.7. Reliance on Documents; Counsel.............................................52
Section 10.8. Facility Administrator's Reimbursement and Indemnification.................53
Section 10.9. Notice of Default..........................................................53
Section 10.10. Rights as a Noteholder.....................................................53
Section 10.11. Noteholder Credit Decision.................................................53
Section 10.12. Successor Facility Administrator...........................................54
ARTICLE XI ASSIGNMENTS; REPURCHASE OPTION.....................................................55
Section 11.1. Assignments; Participations................................................55
Section 11.2. Trust Depositor's Repurchase Option........................................55
|
ARTICLE XII TERMINATION........................................................................55
Section 12.1. Sale of Trust Assets.......................................................55
ARTICLE XIII MISCELLANEOUS......................................................................56
Section 13.1. Amendments and Waivers.....................................................56
Section 13.2. Protection of Title to Trust...............................................57
Section 13.3. Notices, Etc...............................................................58
Section 13.4. No Waiver; Remedies........................................................60
Section 13.5. Binding Effect.............................................................60
Section 13.6. Term of this Agreement.....................................................60
Section 13.7. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.......60
Section 13.8. WAIVER OF JURY TRIAL.......................................................61
Section 13.9. Costs, Expenses and Taxes..................................................61
Section 13.10. No Bankruptcy Covenant.....................................................62
Section 13.11. Protection of Ownership Interests of the Trust; Intent of Parties;
Back-up Security Interest..................................................62
Section 13.12. Back-up Security Interest..................................................63
Section 13.13. Execution in Counterparts; Severability; Integration.......................63
Section 13.14. Further Assurances.........................................................64
Section 13.15. Savings Clause.............................................................64
Section 13.16. Limitation of Liability of Owner Trustee and Indenture Trustee.............64
|
SCHEDULES
SCHEDULE IA/IB Condition Precedent Documents/List of Deliveries
SCHEDULE II Servicer Reports
SCHEDULE III Locations and State of Organization
SCHEDULE IV Location of Receivables Files
EXHIBITS
EXHIBIT A Form of Request Notice For Initial and Incremental Purchases EXHIBIT B Form of Substitution Notice EXHIBIT C List of Eligible Resorts EXHIBIT D Form of Notice of Waiver EXHIBIT E Club Trust Agreement EXHIBIT F Provisions of the Trust Depositor's Certificate of Incorporation EXHIBIT G Form of Servicing Officer's Certificate EXHIBIT H Form of Assignment EXHIBIT I Form of Mortgage Assignment EXHIBIT J Collection Policies EXHIBIT K Reserved EXHIBIT L-1 Forms of Contracts EXHIBIT L-2 Forms of Mortgages EXHIBIT M Form of Allonge EXHIBIT N Form of Notice (Aruba Receivables) |
ANNEXES
Definitions Annex
SALE AND SERVICING AGREEMENT
SALE AND SERVICING AGREEMENT, dated as of March 13, 2006, among BXG Receivables Owner Trust 2006-A (together with its successors and assigns, the "Issuer" or the "Trust"), Bluegreen Receivables Finance Corporation XI (together with its successor and assigns, the "Trust Depositor"), U.S. Bank National Association (in its capacity as Indenture Trustee, together with its successors and assigns, the "Indenture Trustee" and in its capacity as Custodian, together with its successors and assigns, the "Custodian"), Vacation Trust, Inc., as club trustee under the Club Trust Agreement (in such capacity, the "Club Trustee"); Concord Servicing Corporation ("Back-Up Servicer"), Bluegreen Corporation (individually to the extent set forth herein, together with its successor and assigns, "Bluegreen", as a Seller or, in its capacity as Servicer, together with its successors and assigns, the "Servicer"), General Electric Capital Corporation, in its capacity as facility administrator ("Facility Administrator"), and the Person from time to time signatory hereto as Noteholders ("Noteholders").
WHEREAS, the Trust desires to purchase from time to time from the Trust Depositor the Trust Assets including, but not limited to, the Receivables related to the financing of certain timeshare interests by the Sellers and subsequently sold by the Sellers to the Trust Depositor;
WHEREAS, the Trust Depositor is willing to sell the Trust Assets to the Trust pursuant to the terms hereof;
WHEREAS, General Electric Capital Corporation is willing to act as Facility Administrator under the Transaction Documents;
WHEREAS, Bluegreen is willing to act as owner trust administrator under the Administration Agreement;
WHEREAS, U.S. Bank National Association is willing to act as Indenture Trustee under the Indenture and as Custodian under the Custodial Agreement;
WHEREAS, Concord Servicing Corporation is willing to act as Back-Up Servicer under the Back-Up Servicing Agreement;
WHEREAS, the Club Trustee is a limited purpose entity which, on behalf of the Beneficiaries, holds title to certain Intervals and Deeds relating to Receivables sold pursuant to this Agreement;
WHEREAS, Bluegreen is willing and has agreed pursuant hereto to act as Servicer for the Trust Assets and to service the Receivables pursuant to the terms hereof;
WHEREAS, the Noteholders have agreed to purchase notes issued by the Trust to facilitate the Trust's purchase of the Trust Assets;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Definitions Annex.
Section 1.2. Usage of Terms. With respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other gender; references to "writing" include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all amendments, modifications and supplements thereto or any changes therein entered into in accordance with their respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; and the term "including" means "including without limitation."
Section 1.3. Section References. All section references, unless otherwise indicated, shall be to Sections in this Agreement.
Section 1.4. Other Interpretive Provisions. Except to the extent otherwise specified in the particular term or provision at issue, this Agreement (including the Definitions Annex hereto) shall be interpreted and construed in accordance with the Document Conventions.
Section 1.5. Accounting Terms. All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States.
ARTICLE II
TRANSFER OF RECEIVABLES
Section 2.1. Sales.
(a) Subject to the terms and conditions of this Agreement, the Trust Depositor shall sell, transfer, set-over, convey and absolutely assign to the Trust the Trust Assets from time to time designated and identified for purchase in accordance with Section 2.2 hereof, and the Trust agrees to make such purchases from time to time (the first such date, the "Initial Transfer Date") during the period from the Closing Date to but not including the Purchase Period Termination Date (the first such sale and purchase to be effected hereunder, the "Initial Purchase"; each subsequent sale and purchase, an "Incremental Purchase"; and any such sale and purchase, a "Purchase"). Under no circumstances, however, shall the Trust be obligated to make any Purchase if, after giving effect to such Purchase, the aggregate Outstanding Amount would exceed the lesser of (i) the Note Purchase Limit or (ii) the Funding Date Overcollateralization. Upon the payment of the related Cash Purchase Price (as defined below) for the Initial Purchase or any Incremental Purchase and on each Substitute Asset Transfer Date, the Trust Depositor shall have, and shall be deemed hereunder to have, irrevocably and absolutely sold, assigned, transferred, set-over and conveyed to the Trust, without recourse, representation or warranty, express or implied, except as provided in the Transaction Documents, all right, title and interest of the Trust Depositor in and to the Trust Assets relating to such Initial Purchase or Incremental Purchase, as the case
may be. The aggregate amount of all advances made by the Noteholders during the Purchase Period shall not exceed the Note Purchase Limit.
Although the Trust Depositor and the Trust agree that such transfer
is intended to be a sale of ownership of the Trust Assets, rather than the
granting of a security interest to secure a borrowing, and that the Trust
Assets shall not be property of the Trust Depositor, in the event,
notwithstanding such intent, such transfer is deemed to be a grant of a
security interest to secure a borrowing, the Trust Depositor shall be
deemed to have granted (and hereby grants to) the Trust a perfected first
priority security interest in such Trust Assets (subject to Permitted
Liens) and this Agreement shall constitute a security agreement under
Requirements of Law securing the repayment of the purchase price paid
hereunder and the obligations and/or interests provided for in this
Agreement and the other Transaction Documents and in the order and
priorities, and subject to the other terms and conditions of this
Agreement. Upon the addition or substitution of an Asset pursuant to
Section 2.7, the Trust Depositor shall have, and shall be deemed hereunder
to have, irrevocably and absolutely sold, assigned, transferred, set-over
and conveyed to the Trust, without recourse, representation or warranty,
except as provided in the Transaction Documents, all right, title and
interest of the Trust Depositor in and to the Trust Assets relating to
such addition or substitution, as the case may be.
(b) The purchase price for the Purchased Receivables in each Asset Pool Portion shall be the applicable Cash Purchase Price. The "Cash Purchase Price" for any Asset Pool Portion shall be an amount equal to the product of (i) the Receivable Balance as of the applicable Cutoff Date of the Eligible Receivables to be purchased, multiplied by (ii) the applicable Credit Enhancement Factor in effect on such Transfer Date. Subject to the satisfaction of the conditions and on the terms set forth herein, the Trust shall pay to the Trust Depositor the Cash Purchase Price for the Purchased Receivable on the related Transfer Date.
(c) Upon payment of the Cash Purchase Price by the Trust in the amount determined in accordance with Section 2.1(b) with respect to all Trust Assets purchased on a Transfer Date, the ownership of all such Trust Assets will be solely vested in the Trust. None of the Sellers, Servicer, Trust Depositor nor Club Trustee shall take any action inconsistent with such ownership and shall not claim any ownership interest in any Trust Asset. The Trust Depositor, the Sellers, Servicer and Club Trustee shall each indicate in their respective books and records that ownership of each Purchased Receivable and related Trust Assets is held by the Trust, but subject to the Lien created under the Indenture. In addition, each of the Trust Depositor, the Sellers and the Servicer shall respond to any inquiries with respect to ownership of the Trust Assets by stating that it is no longer the owner of the Trust Assets and that ownership of the Trust Assets is held by the Trust. Any documents relating to the Purchased Receivables or related Trust Assets retained by the Trust Depositor, the Sellers, the Servicer, or Club Trustee shall be held in trust by the Trust Depositor, the Sellers, the Servicer and the Club Trustee, for the benefit of the Trust, and possession of any incident of ownership relating to the Purchased Receivables so retained is for the sole purpose of facilitating the servicing of the Purchased Receivables or otherwise at the direction and in the discretion of the Facility Administrator. Such retention and possession (other than retention by the Club Trustee of Deeds relating to Receivables as to which the rights of the Trust, as an Interest Holder Beneficiary (as defined in the Club Trust Agreement) shall be as set forth in the Club Trust Agreement) is at the will of the Trust and in a custodial capacity for the benefit of the Trust and its assignees only. Subject to the rights of the Beneficiaries and the other provisions of the Club Trust
Agreement, the Facility Administrator may direct the Club Trustee at any time to transfer any Deed(s) relating to any Receivable purchased hereunder to the Trust or its nominee; provided that any such transfer will be made subject to the Mortgage relating thereto, if any.
Section 2.2. Procedures for Purchases.
(a) During the Purchase Period, no later than five (5) days prior to each Transfer Date, the Trust Depositor shall notify the Indenture Trustee and the Facility Administrator of the intent to effect a Purchase and the proposed Transfer Date thereof. During the Purchase Period, no later than 10:00 a.m. (Chicago, Illinois time) on a date which is at least two (2) Business Days before any intended Transfer Date, the Trust Depositor will deliver or cause to be delivered to the Indenture Trustee and the Facility Administrator a Request Notice substantially in the form of Exhibit A hereto. In the event that the Trust Depositor does not provide a properly completed Request Notice (and subject to all other terms and conditions to such Purchase hereunder), the Trust will not be obligated to purchase Eligible Receivables on such intended Transfer Date until such time as such terms and conditions are met. Each such Request Notice shall specify, among other things, (i) the aggregate amount of such Purchase, which shall be in a minimum amount equal to $10,000,000, or such lesser amount as may be equal to the then unused portion of the Note Purchase Limit, (ii) the intended Transfer Date for such Purchase, and (iii) the aggregate Outstanding Amount, Funding Date Overcollateralization and the Note Purchase Limit, both immediately preceding and after giving effect to such Purchase. During the Purchase Period, beginning with the quarter ending June 30, 2006, the aggregate amount of Purchases made in each calendar quarter shall be in a minimum amount equal to the Quarterly Minimum Purchase Amount, or such lesser amount as may be equal to the unused portion of the Note Purchase Limit. In the event that the Quarterly Minimum Purchase Amount for any calendar quarter is a negative number or equal to zero, no Purchases are required by this Section 2.2(a) to be made in such calendar quarter.
(b) On each Transfer Date, and subject to the satisfaction of the conditions of Article IV hereof and Articles IV and V of the Note Purchase Agreement, the Servicer will prepare and deliver an Assignment to the Trust Depositor and the Trust in the form of Exhibit H hereto, Mortgage Assignments, as applicable, and an Allonge in the form attached hereto as Exhibit M (an "Allonge"), as applicable, which has been stapled to the original notes, if any, evidencing each Receivable with respect to each of the Trust Assets being transferred on such Transfer Date by the Trust. The Trust Depositor and the Trust shall thereupon execute such Assignment and deliver executed unrecorded, originals thereof to the Servicer who will in turn cause executed copies of such Assignment, Allonges and Mortgage Assignments, as applicable, to be delivered to the Indenture Trustee, the Custodian and the Facility Administrator, as applicable, and recorded in accordance with the provisions of this Agreement. Upon the Facility Administrator's receipt of a certification from the Custodian that it has received the Receivables Files as set forth in the Custodial Agreement, an Assignment for the related Trust Assets, an Allonge and a Mortgage Assignment, as applicable, and for each Receivable listed on the List of Receivables delivered in connection with the Request Notice, the Trust shall thereupon pay to the Trust Depositor the Cash Purchase Price for such Trust Assets, by wire transfer in same day funds in accordance with the wire transfer instructions specified in the related Request Notice. The Trust Depositor shall be solely responsible for obtaining ownership of the Trust Assets (including the perfection of such ownership interest pursuant to the UCC) from the Sellers pursuant to the Sale and Contribution
Agreement or otherwise, prior to transfer of ownership of such Trust Assets to the Trust under this Agreement.
(c) The Facility Administrator will promptly notify the Noteholders of the receipt of a Request Notice.
Section 2.3. Establishment of Accounts; Reserve Account.
(a) On or prior to the Closing Date, the Servicer shall (i) establish a non-interest bearing Eligible Deposit Account in the name of the Trust, titled "BXG Receivables Owner Trust 2006-A Lockbox Account re Bluegreen Receivables Sale and Servicing Agreement" (the "Lockbox Account"), and (ii) enter into the Lockbox Agreement which shall direct that all monies deposited in the Lockbox Account shall be forwarded in accordance with Section 2.4. The Trust Depositor and the Servicer shall send to the Lockbox Bank for deposit into the Lockbox Account all Collections they may receive in respect of Purchased Receivables no later than the next Business Day following the date of receipt thereof. Any Collections in respect of Purchased Receivables held by the Trust Depositor or the Servicer pending transfer to the Lockbox Account shall be held in trust for the benefit of the Indenture Trustee and the Noteholders until such amounts are deposited into the Lockbox Account as set forth above. The Servicer shall receive evidence of all deposits made to the Lockbox Account and shall post them, on a daily basis, to the respective Receivables upon receipt.
(b) On or prior to the Closing Date, the Servicer shall establish an Eligible Deposit Account with and in the name of the Indenture Trustee for the benefit of the Noteholders titled "BXG Receivables Owner Trust 2006-A Collection Account re Bluegreen Receivables Sale and Servicing Agreement" (the "Collection Account").
(c) On or prior to the Closing Date, the Trust Depositor and the Indenture Trustee shall establish an Eligible Deposit Account in the name of the Indenture Trustee for the benefit of the Noteholders titled "BXG Receivables Owner Trust 2006-A Bluegreen Facility Reserve Account" (the "Reserve Account").
(d) Prior to the Facility Termination Date, on or prior to each
Payment Date (and in anticipation of allocations and distributions to be
made on such Payment Date pursuant to Section 2.6), the Servicer, in
consultation with the Facility Administrator and based upon information
provided in the Monthly Report delivered by the Servicer to the Facility
Administrator and the Indenture Trustee two (2) Business Days prior to the
related Payment Date, shall determine the extent to which Available
Amounts in the Collection Account (including proceeds of any Servicer
Advance deposited therein in accordance with Section 2.4) are insufficient
to pay Indenture Trustee Fees, Owner Trustee Fees, Lockbox Fees, Trust
Owner Fees, Protective Advances, Back-Up Servicer Fees, Custodian Fees,
Trust Administrator Fees, Unreimbursed Servicer Advances, Servicing Fees
(if the Servicer is not Bluegreen or an Affiliate of Bluegreen) as well as
the Note Interest Distributable Amount and Note Principal Distributable
Amount required on such Payment Date. To the extent of insufficiencies
with respect to the payments to be made pursuant to Sections 2.11(a)(vii),
(a)(viii) and (a)(ix), on or prior to each Payment Date amounts held in
the Reserve Account shall be transferred to the Collection Account,
treated as Available Amounts for such Payment Date and thereafter applied
to cover such insufficiencies in order for any of such
payments or allocations to be made. After the occurrence and during the
continuance of an Event of Default or Termination Event all amounts held
in the Reserve Account shall be transferred to the Collection Account and
applied and allocated as Available Amounts on the Payment Date with
respect to the related Collection Period to the extent of insufficiencies
with respect to the payments to be made pursuant to Sections 2.11(b)(vii),
(b)(viii) and (b)(x).
(e) Each Seller Party shall deposit all Collections it may receive in respect of Receivables into the Lockbox Account upon the earlier to occur of the second Business Day following any date on which any Seller Party shall have received such Collections; provided, that if an Event of Termination has occurred and is continuing, all Collections received by any Seller Party shall be deposited within one Business Day of receipt thereof. Each of the Trust Depositor and the Servicer agree that any Collections in respect of Receivables held by any Seller Party pending transfer to the Lockbox Account are held in trust for the benefit of the Trust and the Indenture Trustee until such amounts are deposited into the Lockbox Account.
(f) The Trust Depositor and the Servicer shall, and the Servicer shall cause the Sellers to, instruct all Obligors, as applicable, to make all payments with respect to the Receivables to the Lockbox Account.
Section 2.4. Deposits to Accounts.
On each Business Day, all Collections in the Lockbox Account shall be transferred by automated wire by the Lockbox Bank to the Collection Account. In addition, the proceeds of Servicer Advances made pursuant to Section 6.3(s), transfers from the Reserve Account made pursuant to Section 2.3(d), and payments of any Transfer Deposit Amount received from the Sellers or Trust Depositor shall be deposited to the Collection Account.
Section 2.5. Investment of Accounts.
Subject to the provisions of this Section 2.5 and the Indenture, amounts on deposit in any Trust Account (other than the Lockbox Account) shall be invested in Permitted Investments. Until the Facility Termination Date, the Indenture Trustee, at the written direction of the Servicer, shall invest all such amounts in Permitted Investments selected by the Servicer that mature no later than the immediately succeeding Payment Date and shall hold such Permitted Investments until the earlier of (i) such succeeding Payment Date or (ii) the Facility Termination Date. The Indenture Trustee shall not be permitted to vote any Permitted Investments unless it has been advised that such vote is for "protective" (as defined by GAAP) purposes. On and after the Facility Termination Date, any investment of such amounts in Permitted Investments shall be solely at the discretion of the Facility Administrator. All Investment Earnings shall be deposited into the Collection Account or the Reserve Account, as the case may be, as and when received and shall be applied and disbursed in the same manner and priority as all other amounts in the Collection Account. The Servicer acknowledges that to the extent that regulations of the Comptroller of the Currency or other applicable regulatory agency grant the Servicer the right to receive brokerage confirmations or security transactions as they occur, the Servicer specifically waives receipt of such confirmations.
Section 2.6. Payments and Computations; Funding Indemnity for Failed Purchase.
(a) All amounts to be paid or deposited by the Sellers, Trust Depositor, Servicer or any other applicable payor referred to hereunder shall be paid or deposited in accordance with the terms hereof no later than 1:00 p.m. (Chicago, Illinois time) on the day when due in lawful money of the United States in immediately available funds, and if not so timely deposited, shall be deemed to have been received on the following Business Day.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, interest on interest or any fee payable hereunder, as the case may be.
(c) If any Purchase requested by the Trust Depositor pursuant to
Section 2.2 is not for any reason whatsoever made or effectuated, as the
case may be, on the date specified therefor, the Trust Depositor and
Bluegreen, jointly and severally, shall be obligated to indemnify the
Noteholders against any loss, cost or expense actually incurred by any
Noteholder, including, without limitation, any out-of-pocket loss, cost or
expense incurred by such Noteholder (as reasonably determined by such
Noteholder) as a result of the liquidation or redeployment of deposits or
other funds acquired by such Noteholder to fund or maintain such Purchase,
as the case may be; provided, that no such indemnification shall be
required if any Purchase is not made or effectuated as a result of any
action or inaction by any Noteholder or any provider of liquidity support
for any Noteholder, other than a failure by such Noteholder to make an
advance to allow the Trust to make any Purchase due to a failure of any
condition precedent to such Purchase set forth herein.
(d) Unless otherwise expressly permitted herein, all payments and remittances to be made hereunder by any Seller, the Trust Depositor or the Servicer shall be made without set-off, deduction or withholding. If any Seller, the Trust Depositor or the Servicer is pursuant to Requirements of Law required to make any deduction or withholding on account of taxes or otherwise from any payment or remittance to be made by it hereunder, it shall make such deduction or withholding and forthwith remit such amount to the appropriate Governmental Authority and thereafter the sum due from it in respect of such payment or remittance shall be increased to the extent necessary to ensure that after the making of such deduction or withholding, the applicable payee receives a net sum equal to the sum that it would have received had no deduction or withholding been made.
Section 2.7. Addition/Substitution of Receivables.
(a) On any day prior to the Facility Termination Date provided it is done no more than once each Collection Period, and subject to the terms and conditions hereof, the Trust Depositor may at its option replace a Defaulted Receivable and related Trust Assets currently in the Asset Pool (a "Replaced Asset") with one or more Substitute Assets; provided, however, that if such option is not exercised prior to the expiration of the Trust Depositor's fiscal quarter during which the related Receivable became a Defaulted Receivable, then the Trust Depositor's right to exercise such option with respect to such Defaulted Receivable shall be irrevocably waived, unless, prior to the expiration of such fiscal quarter of the Trust Depositor, the Trust Depositor gives notice to the Trust and the Facility Administrator of its intention to exercise such option with respect to such Defaulted Receivable and does so prior to the expiration of the Trust Depositor's
next succeeding fiscal quarter. If, however, the Trust Depositor fails to exercise such option with respect to such Defaulted Receivable prior to the expiration of the Trust Depositor's next succeeding fiscal quarter, then the Trust Depositor's right to exercise such option with respect to such Defaulted Receivable shall be irrevocably waived. Subject to the conditions set forth in paragraph (c) below and Section 4.2 hereof, the Trust Depositor if exercising such substitution option, shall sell, transfer, assign, set over and otherwise absolutely convey to the Trust, without recourse, representation or warranty other than as expressly provided in the Transaction Documents, all the Trust Depositor's right, title and interest in and to the Substitute Assets related to the Receivables listed on the List of Substitute Receivables (including, without limitation, all Collections and rights to receive Collections with respect thereto after the related Cutoff Date, but excluding any collections or rights to receive payments which were collected pursuant thereto on or prior to such Cutoff Date), such Substitute Assets becoming Trust Assets and part of the Asset Pool. Within ten Business Days after the Facility Administrator's receipt of a certification from the Custodian that it has received all of the Receivables Files, an Assignment for such Substitute Assets and a Mortgage Assignment, as applicable, (which may be unrecorded subject to the Servicer's obligation to deliver a recorded version thereof pursuant to this Agreement) and an Allonge, as applicable, for each Receivable relating thereto, the Indenture Trustee and the Trust shall thereupon endorse back and deliver to the Trust Depositor any necessary releases or assignments relating to the Replaced Assets. Without limiting the foregoing, all Collections and rights to receive Collections with respect to any Replaced Asset after the Cutoff Date for the Substitute Asset that replaces such Replaced Asset, but excluding any Collections or rights to receive payments which were collected with respect to such Replaced Asset on or prior to such Cutoff Date, shall be assigned to the Trust Depositor. Such assignment of the Replaced Assets to the Trust Depositor shall be without recourse to the Indenture Trustee and the Trust and free and clear of any Lien created pursuant to this Agreement, and neither the Indenture Trustee nor the Trust shall be deemed to make any representation or warranty, express or implied.
(b) Upon discovery by the Servicer, any Seller, the Trust Depositor,
the Trust, the Indenture Trustee or the Facility Administrator (a
"Notifying Party") of (i) a misrepresentation on the related Transfer Date
of any matters, or a breach on the related Transfer Date of a warranty,
set forth in Section 5.2 or Section 3.2 of the Sale and Contribution
Agreement with respect to a Trust Asset, or (ii) if an exception to a
Receivable File is not rectified in accordance with Section 6.3(q) or
(iii) if a Lien (other than a Permitted Lien) exists or arises with
respect to any Interval at any time prior to the time at which the related
Mortgage Assignments are recorded and regardless of when such Lien may be
discovered (any of the foregoing, an "Ineligible Asset"), the party
discovering such breach shall give prompt written notice to the other
parties. Not later than the Determination Date which is at most thirty
(30) days after the earlier to occur of the discovery of such
misrepresentation or breach by the Trust Depositor or receipt by the Trust
Depositor of written notice of such misrepresentation or breach given by a
Notifying Party, the Trust Depositor shall, at its option, either cure the
misrepresentation or breach within the above described time period or
repurchase such Ineligible Asset, unless such Ineligible Asset is replaced
with a Substitute Asset prior to such date; provided, however, if such
misrepresentation or breach relates solely to paragraph (r)(ii) of the
definition of "Eligible Receivable" or the representations or warranties
set forth in Section 5.2(h) of this Agreement or the representations and
warranties set forth in Section 3.2(h) of the Sale and Contribution
Agreement, the Trust Depositor shall not have the option of curing the
breach; provided further that if the Ineligible Asset relates to a
defective Receivable File described in clause (ii) above, no cure period
shall be permitted. Upon the deposit
by the Trust Depositor of the Transfer Deposit Amount for such Ineligible
Asset in the Collection Account (for allocation pursuant to Section
2.11(a) or (b), as applicable) in immediately available funds, the Trust
Depositor shall be deemed to have repurchased such Ineligible Asset and
there shall be deducted from the Receivable Balance of the Asset Pool, the
Receivable Balance of the Receivable relating to such Ineligible Asset. On
and after the date of such retransfer, each Ineligible Asset so
retransferred shall not be included in the Asset Pool. Without limiting
the foregoing, all Collections and rights to receive Collections with
respect to such Ineligible Asset on or after the date of such retransfer,
but excluding any Collections or rights to receive payments which were
collected with respect to such Ineligible Asset prior to such date of
retransfer shall be assigned to the Trust Depositor. Notwithstanding the
foregoing, in lieu of repurchasing an Ineligible Asset described in clause
(i) of the definition thereof as set forth above, the Trust Depositor may,
subject to the conditions and requirements of Section 2.7(c) (other than
the Substitute Asset Transfer Condition), effect a replacement of such
Asset with a Substitute Asset.
Upon the deposit of the Transfer Deposit Amount in the Collection Account and the Custodian's receipt of a Request for Release as set forth in the Custodial Agreement and the Facility Administrator's receipt of a certification from the Custodian that it has received all of the Receivables Files, an Assignment for the related Assets and a Mortgage Assignment and an Allonge for each Receivable relating to a Substitute Asset, as applicable, the Indenture Trustee and the Trust shall endorse back and deliver to the Trust Depositor any necessary releases or assignments for the Ineligible Asset relating thereto. Such release or assignment of the Ineligible Asset shall be without recourse to the Indenture Trustee and the Trust and free and clear of any Lien created pursuant to this Agreement, and neither the Indenture Trustee nor the Trust shall be deemed to make any other representation or warranty, express or implied, other than that the Trust and Indenture Trustee have the trust or corporate authority and have taken all necessary trust or corporate action to accomplish such release or assignment. The Indenture Trustee and the Trust shall, at the sole expense of the Servicer, execute such documents and instruments of transfer as may be prepared by the Servicer on behalf of the Trust Depositor and take such other actions as shall reasonably be requested by the Trust Depositor to effect the transfer of such Ineligible Asset pursuant to this Section 2.7(b).
The obligation of the Trust Depositor to repurchase and accept retransfer of any Ineligible Asset (or in the alternative, effect a valid replacement of such Asset as described above) shall constitute the sole remedy available to the Trust respecting any misrepresentation of any matters or any breach of the warranties set forth in Section 5.2 with respect to such Asset and is not intended to and does not constitute "credit recourse" to the Trust Depositor. Notwithstanding anything to the contrary contained herein, in the event the Trust Depositor, prior to the applicable Determination Date, remedies the condition which rendered the Asset an "Ineligible Asset" (other than clause (ii) of the definition thereof) during the previously described 30 day period, the Trust Depositor is not obligated to repurchase or replace such Asset. It is understood and agreed by the parties hereto that the payment obligations of the Obligors' in respect of the Receivables transferred hereunder shall not be the obligation of any Seller, the Trust Depositor or the Servicer, except with respect to Servicer Advances and remedies associated with misrepresentations and breaches of warranties.
(c) The Trust Depositor may transfer to the Trust the Substitute
Assets and the other property and rights related thereto described in
Section 2.7(a) or (b) only upon timely delivery of a Substitution Notice
to the Indenture Trustee, the Custodian and the Facility Administrator
complying with the definition thereof and the satisfaction of each of the
following conditions on or
prior to the related Substitute Asset Transfer Date (and the delivery of a related Substitution Notice by the Trust Depositor shall be deemed a representation and warranty by the Trust Depositor that such conditions have been or will be, as of the related Substitute Transfer Date, satisfied):
(i) the Substitute Assets being conveyed to the Trust satisfy the Substitute Asset Qualification Conditions and the related Receivables are Eligible Receivables;
(ii) in the case of Section 2.7(a) and after giving effect to any conveyance pursuant thereto, the Substitute Asset Transfer Condition shall remain satisfied;
(iii) the Trust Depositor shall have delivered to the Facility Administrator and the Indenture Trustee a duly executed written assignment, substantially in the form of Exhibit H hereto, which shall include a List of Substitute Receivables listing the Receivables relating to the Substitute Assets;
(iv) the Trust Depositor shall have deposited or caused to be deposited in the Collection Account all Collections received with respect to the Substitute Assets after the related Cutoff Date;
(v) as of each Substitute Asset Transfer Date, both the Sellers and the Trust Depositor were Solvent and the conveyance would not have the effect of rendering either no longer Solvent;
(vi) with respect to Receivables transferred on such Substitute Asset Transfer Date, no selection procedures believed by the Sellers or the Trust Depositor to be adverse to the interests of the Trust shall have been utilized in selecting the Substitute Assets;
(vii) each of the representations and warranties made by the Sellers pursuant to Article III of the Sale and Contribution Agreement applicable to the Substitute Assets shall be true and correct as of the related Substitute Asset Transfer Date, and the Sellers shall have performed in all material respects all obligations to be performed by them hereunder or thereunder on or prior to such Substitute Asset Transfer Date;
(viii) the Sellers shall, at their own expense, on the Substitute Asset Transfer Date, have indicated in their Computer Disk and Records that the Receivables identified on the List of Substitute Receivables in the related Substitution Notice have been sold to the Trust through the Trust Depositor pursuant to this Agreement and the Sale and Contribution Agreement.
Section 2.8. [Reserved].
Section 2.9. Acceptance by Trust. On the Closing Date, if the conditions set forth in Article IV have been satisfied, the Trust shall execute and issue, and the Indenture Trustee shall authenticate and deliver to, or upon the order of, the Trust Depositor, the Notes secured by the Collateral.
Section 2.10. Monthly Distributions. Each Noteholder as of the related Record Date shall be paid on the next succeeding Payment Date by check mailed to such Noteholder at the address for such
Noteholder appearing on the Note Register or by wire transfer if such Noteholder provides written instructions to the Paying Agent at least ten days prior to such Payment Date.
Section 2.11. Distributions.
(a) On each Payment Date (other than after the occurrence and during the continuance of an Event of Default or a Termination Event, or after the Note Final Scheduled Maturity Date, in which event Section 2.11(b) shall apply), the Servicer will allocate Available Amounts and instruct the Indenture Trustee to make payments from the Collection Account in the following order of priority:
(i) pro rata, to the extent of Available Amounts, to the Indenture Trustee, the Indenture Trustee Fee including any unpaid Indenture Trustee Fees with respect to one or more prior Collection Periods and any extraordinary out-of-pocket costs and expenses of the Indenture Trustee not in excess of $2,500 per Payment Date; to the Custodian, the Custodian Fee including any unpaid Custodian Fees with respect to one or more prior Collection Periods; to the Lockbox Bank, the Lockbox Bank Fee including any unpaid Lockbox Bank Fees with respect to one or more prior Collection Periods; to the Owner Trustee, the Owner Trustee Fee including any unpaid Owner Trustee Fees with respect to one or more prior Collection Periods; to the Sellers and/or the Servicer, any Credit Card Fees and Audit Fees including any unpaid Credit Card Fees and Audit Fees with respect to one or more prior Collection Periods; to the Owner, the Trust Owner Fee including any unpaid Trust Owner Fees with respect to one or more prior Collection Periods; to the Trust Administrator, the Trust Administrator Fee including any unpaid Trust Administrator Fees with respect to one or more prior Collection Periods;
(ii) to the Back-Up Servicer, the Back-Up Servicing Fee, including any unpaid Back-Up Servicing Fees with respect to one or more prior Collection Periods;
(iii) to the Servicer, if the Servicer is not Bluegreen or an Affiliate of Bluegreen, the Servicing Fee, including any unpaid Servicing Fee with respect to one or more prior Collection Periods;
(iv) to Bluegreen or an Affiliate thereof, but only to the extent the Servicer Purchase Option has been declined by the Servicer, any accrued and unpaid Remarketing Fees;
(v) first, to any Predecessor Servicer and second, to the Servicer, as applicable, any Unreimbursed Servicer Advances (which reimbursement shall be applicable to any Unreimbursed Servicer Advances previously made by any Predecessor Servicer);
(vi) first, to any Predecessor Servicer and second, to the Servicer, as applicable, any Protective Advances to the extent not previously reimbursed;
(vii) to the Noteholders, the Note Interest Distributable Amount;
(viii) to the Noteholders, the Note Principal Distributable Amount;
(ix) to any Affected Party, costs relating to an Increased Costs Event in respect of such Affected Party;
(x) to the Servicer, if the Servicer is Bluegreen or an Affiliate of Bluegreen, the Servicing Fee, including any unpaid Servicing Fee with respect to one or more prior Collection Periods;
(xi) to the Reserve Account, the amount necessary to increase the amount in the Reserve Account to the Reserve Account Required Amount;
(xii) to the Indenture Trustee, any extraordinary out-of-pocket costs and expenses of the Indenture Trustee not paid due to the limitations contained in clause (i) above; and
(xiii) any remaining amounts to the Trust Depositor.
(b) On each Payment Date after the occurrence and during the continuance of an Event of Default or a Termination Event, or after the Note Final Scheduled Maturity Date, the Servicer will allocate Available Amounts and instruct the Indenture Trustee to make payments from the Collection Account in the following order of priority:
(i) pro rata, to the extent of Available Amounts, to the Indenture Trustee, the Indenture Trustee Fee including any unpaid Indenture Trustee Fees with respect to one or more prior Collection Periods and any extraordinary out-of-pocket costs and expenses of the Indenture Trustee not in excess of $2,500 per Payment Date; to the Custodian, the Custodian Fee including any unpaid Custodian Fees with respect to one or more prior Collection Periods; to the Lockbox Bank, the Lockbox Bank Fee including any unpaid Lockbox Bank Fees with respect to one or more prior Collection Periods; to the Owner Trustee, the Owner Trustee Fee including any unpaid Owner Trustee Fees with respect to one or more prior Collection Periods; to the Sellers and/or the Servicer, any Credit Card Fees and Audit Fees including any unpaid Credit Card Fees and Audit Fees with respect to one or more prior Collection Periods; to the Owner, the Trust Owner Fee including any unpaid Trust Owner Fees with respect to one or more prior Collection Periods; to the Trust Administrator, the Trust Administrator Fee including any unpaid Trust Administrator Fees with respect to one or more prior Collection Periods;
(ii) to the Back-Up Servicer, the Back-Up Servicing Fee, including any unpaid Back-Up Servicing Fee with respect to one or more prior Collection Periods;
(iii) to the Servicer, if the Servicer is not Bluegreen or an Affiliate of Bluegreen, the Servicing Fee, including any unpaid Servicing Fee with respect to one or more prior Collection Periods;
(iv) to Bluegreen or an Affiliate thereof, but only to the extent the Servicer Purchase Option has been declined by the Servicer, any accrued and unpaid Remarketing Fees;
(v) first, to any Predecessor Servicer and second, to the Servicer, as applicable, any Unreimbursed Servicer Advances (which reimbursement shall be applicable to any Unreimbursed Servicer Advances previously made by any Predecessor Servicer);
(vi) first, to any Predecessor Servicer and second, to the Servicer, as applicable, any Protective Advances to the extent not previously reimbursed;
(vii) to the Noteholders, the Note Interest Distributable Amount;
(viii) to the Noteholders, the Note Principal Distributable Amount (determined in accordance with clause (i) of the definition thereof);
(ix) to the Servicer, if the Servicer is Bluegreen or an Affiliate of Bluegreen, the Servicing Fee, including any unpaid Servicing Fee with respect to one or more prior Collection Periods;
(x) to the Noteholders, any remaining amounts until such time as the Notes are paid in full (including amounts owing to any Affected Party in respect of an Increased Costs Event);
(xi) to the Indenture Trustee, any extraordinary out-of-pocket costs and expenses of the Indenture Trustee not paid due to the limitations contained in clause (i) above; and
(xii) any remaining amounts to the Trust Depositor.
No recourse may be had to Bluegreen, the Issuer, Trust Depositor, Indenture Trustee, Club Trustee, Servicer, Back-Up Servicer or any of their respective Affiliates in the event that amounts distributed under this Section 2.11 are insufficient for payment of any amounts due under Section 2.11 except to the extent such insufficiency results from a breach by any such party of its obligations under any Transaction Document.
Section 2.12. Servicer Purchase Option. Upon written notice to the Indenture Trustee and the Facility Administrator delivered at least five (5) days before the date of purchase, the Servicer (so long as the Servicer is Bluegreen or an Affiliate thereof) shall have the right (but not the obligation) to purchase from the Trust a Defaulted Receivable and related Assets for an amount (which amount shall be deposited into the Collection Account) equal to 24% of the Obligor's initial purchase price for the Interval in respect of such Defaulted Receivable (the "Servicer Purchase Option"). The transfer of title to such Defaulted Receivable to the Servicer shall be without recourse to the Trust or the Indenture Trustee and free and clear of any Lien created pursuant to this Agreement, and neither the Trust nor the Indenture Trustee shall be deemed to make any representation or warranty, express or implied. In order to perfect, protect and more fully evidence the Servicer's ownership of the Defaulted Receivable and related Assets purchased pursuant to the exercise of the Servicer Purchase Option, the Indenture Trustee and the Trust shall execute or cause to be executed such instruments, releases or notices as may be necessary or appropriate, to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in such Trust Assets. The Servicer Purchase Option is exercisable with respect to a Defaulted Receivable only before the expiration of the 60 day period following the date on which the related Receivable became a Defaulted Receivable unless the Servicer gives written notice of its irrevocable waiver of the Servicer Purchase Option with respect to such Defaulted Receivable to the Indenture Trustee and the Facility Administrator prior to the expiration of such 60 day period in the form attached hereto as Exhibit D. Notwithstanding the foregoing, the Servicer may only exercise the Servicer Purchase Option to the extent that, after giving effect to such purchase, the Receivable Balance of Receivables previously purchased pursuant to the Servicer Purchase Option does not exceed 20% of the Receivable Balance of all Eligible Receivables (determined as of the applicable Cutoff Date therefor) theretofore purchased by the Trust.
The right of the Trust Depositor to replace a Replaced Asset in accordance with Section 2.7 or the right of the Servicer to exercise the Servicer Purchase Option shall be subject and subordinate to the rights of the Indenture Trustee to sell, dispose or otherwise liquidate the applicable Receivable and related Trust Assets following the occurrence of a Termination Event or an Event of Default. Such rights of the Trust Depositor or the Servicer shall not apply to any Trust Asset or Interval which the Indenture Trustee has sold or caused to be sold, nor shall such rights apply to any Trust Asset or Interval as to which the Indenture Trustee has provided at least five (5) Business Days prior notice to the Servicer of its intention so to sell (unless, prior to the expiration of such five (5) Business Days, the Trust Depositor has irrevocably committed to replace such Replaced Asset or the Servicer has irrevocably committed to exercise the Servicer Purchase Option, as the case may be, in each case during the next succeeding Collection Period).
Section 2.13. Upgrades. Receivables which are the subject of an Upgrade
shall become part of the Asset Pool in accordance with the terms and conditions
of this Section 2.13, subject to timely delivery of a Substitution Notice to the
Indenture Trustee and the Facility Administrator and satisfying the conditions
set forth in Section 2.7(c) (other than (c)(ii) and with respect to Upgrade
Receivables in respect of the same Obligor, other than paragraphs (b), (d), and
(f) of the definition of Substitute Asset Qualification Conditions). In
connection with an Upgrade by an Obligor, the Trust Depositor shall acquire from
the applicable Seller pursuant to the Sale and Contribution Agreement, a new
Eligible Receivable arising in connection with such Upgrade or otherwise
(together with, if necessary, one or more other Eligible Receivables which were
the subject of an Upgrade or otherwise) (an "Upgrade Receivable") having a
Receivable Balance (or Receivable Balances) approximately equal to the
Receivable Balance of the Pre-Upgrade Receivable (as defined below). Subject to
the definition of Eligible Receivable, the Trust Depositor shall use its best
efforts to cause a Pre-Upgrade Receivable to be replaced with an Upgrade
Receivable in respect of the same Obligor and then, to the extent not possible,
to be replaced with another Upgrade Receivable. To the extent the Receivable
Balance (or Receivable Balances) of the Upgrade Receivable(s) is less than the
Receivable Balance of the Pre-Upgrade Receivable, the Trust Depositor shall
deposit cash into the Collection Account in the amount of such deficiency. To
the extent the aggregate Receivable Balance of the Upgrade Receivable(s) on such
date is greater than the aggregate Receivable Balance of the Pre-Upgrade
Receivable(s) on such date, the aggregate Receivable Balance of the Upgrade
Receivable(s) on such date shall be deemed to be equal to the aggregate
Receivable Balance of the Pre-Upgrade Receivable(s) on such date. Upon such
acquisition by the Trust Depositor and compliance by the Trust Depositor with
Section 2.2 including delivery to the Indenture Trustee and the Facility
Administrator of a Substitution Notice indicating such Upgrade and identifying
the existing Receivable subject to the Upgrade (each, a "Pre-Upgrade
Receivable"), the related Upgrade Receivable(s) and related Trust Assets
(including, but not limited to, any Collections thereon after the Cutoff Date)
shall be deemed to be Substitute Assets for all purposes of this Agreement
purchased by the Trust on the Transfer Date of the related Pre-Upgrade
Receivable and shall be deemed to be part of the Asset Pool. In connection
therewith, the Indenture Trustee and the Trust shall release or re-convey, as
applicable, to the Trust Depositor all of its interests in the related
Pre-Upgrade Receivable in accordance with Section 2.14. In no event shall the
Trust Depositor be permitted to repurchase for cash any Pre-Upgrade Receivable.
Upon each conveyance of Upgrade Receivables hereunder, the Trust Depositor shall
be deemed to have represented and warranted that the conditions set forth in
Section 4.2 have been satisfied.
Section 2.14. Release of Interest.
At the same time as (i) any Receivable becomes a Prepaid Receivable, (ii) any Receivable matures, (iii) any Receivable is the subject of an Upgrade and the conditions set forth in Section 2.13 have been satisfied, (iv) the Trust Depositor through the Servicer, substitutes or replaces any Receivable as contemplated in Section 2.7 hereof, or (v) the Servicer exercises the Servicer Purchase Option, the Indenture Trustee and the Trust will release their interest in the Interval relating to such Receivable and related Trust Assets; provided, that such release will not constitute a release of the respective interests of the Indenture Trustee and the Trust in the proceeds of Trust Assets except with respect to any proceeds received by the Servicer with respect to a Receivable and related Trust Assets which were subject to the Servicer Purchase Option. In connection with any of the events described in the preceding sentence, the Indenture Trustee and the Trust will execute and deliver (at the expense of the Trust Depositor) to the Servicer any assignments, bills of sale, termination statements and any other releases and instruments as the Servicer may reasonably request in order to effect such release and transfer, and the Indenture Trustee and the Trust shall be deemed to have transferred to the Trust Depositor or the Servicer, as the case may be, all of the Indenture Trustee's and the Trust's right, title and interest in such Trust Assets in respect of such Receivable free and clear of any interest created by the Indenture Trustee or the Trust hereunder and under the other Transaction Documents, but without any recourse or other representation or warranty, express or implied. Nothing in this Section shall diminish the Servicer's obligations pursuant to Section 2.11 of this Agreement with respect to the proceeds of any sale of such Trust Assets.
ARTICLE III
SERVICING OF RECEIVABLES
Section 3.1. Responsibility for Receivable Administration. The Servicer is hereby appointed the servicer hereunder until such time as any Service Transfer may be effected under Section 8.2. The Servicer will have the sole right and obligation to manage, administer, service and make collections on the Receivables and the Trust Assets and perform or cause to be performed all contractual and customary undertakings of the holder of the Receivables to the Obligor.
Section 3.2. Standard of Care. In managing, administering, servicing and making collections on the Receivables and the related Trust Assets pursuant to this Agreement, the Servicer will exercise that degree of skill and care consistent with the skill and care that the Servicer exercises with respect to similar contracts serviced by the Servicer, and, in any event no less degree of skill and care than would be exercised by a prudent servicer of timeshare receivables. The Servicer shall at all times act in good faith and in the best interests of the Trust, with respect to the Trust Assets and the proceeds thereof, and use commercially reasonable efforts and exercise sound business judgment in performing its duties under this Agreement.
Section 3.3. Filing. On or prior to the date of the first Purchase hereunder, the Servicer shall cause the UCC financing statement(s) to be filed and from time to time the Servicer shall take and cause to be taken such actions and execute such documents as are necessary or desirable or as the Owner Trustee or Indenture Trustee may reasonably request to perfect and protect the Trust's and the Indenture Trustee's interests in the Trust Assets (subject to Permitted Liens) against all other persons, including, without limitation, the filing of financing statements, amendments thereto and continuation statements, the execution of transfer instruments and the making of notations on or taking possession of all records or documents of title.
Section 3.4. Records. The Servicer shall, during the period it is servicer hereunder, maintain such books of account and other records as will enable the Owner Trustee and the Indenture Trustee to determine the payment status of each Receivable.
Section 3.5. Inspection.
(a) At all times during the term hereof, the Servicer shall afford
the Facility Administrator and the Indenture Trustee and their respective
authorized agents reasonable access during normal business hours to the
Servicer's records relating to the Trust Assets and will cause its
personnel to assist in any examination of such records by the Facility
Administrator or the Indenture Trustee, or such authorized agents and
allow copies of the same to be made. The examination referred to in this
Section will be conducted in a manner which does not unreasonably
interfere with the Servicer's normal operations or customer or employee
relations. Without otherwise limiting the scope of the examination the
Facility Administrator or the Indenture Trustee or their respective
authorized agents may, using generally accepted audit procedures, verify
the status of each Receivable and review the Computer Disk and records
relating thereto for conformity to Monthly Reports prepared pursuant to
Section 9.4 and compliance with the standards represented to exist as to
each Receivable in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep available a copy of the List of Receivables at its principal executive office for inspection by the Facility Administrator and the Noteholders.
Section 3.6. Duties and Responsibilities of Servicer.
(a) In addition to any other customary services which the Servicer may perform or may be required to perform hereunder, the Servicer shall perform or cause to be performed through sub-servicers, as applicable, the following servicing and collection activities in accordance with the terms of this Agreement:
(i) perform standard accounting services and general record keeping services with respect to the Receivables;
(ii) respond to telephone or written inquiries of Obligors concerning the Receivables;
(iii) keep Obligors informed of the proper place and method for making payment with respect to the Receivables;
(iv) contact Obligors to effect collections and to discourage delinquencies in the payment of amounts owed under the Receivables and doing so by any lawful means;
(v) report tax information to Obligors and taxing authorities to the extent required by Requirements of Law;
(vi) take such other action as may be necessary or appropriate in the discretion of the Servicer for the purpose of collecting and transferring to the Indenture Trustee for deposit into the Collection Account all payments received by the Servicer or remitted to the Lockbox Account in
respect of the Receivables (except as otherwise expressly provided herein), and to carry out the duties and obligations imposed upon the Servicer pursuant to the terms of this Agreement;
(vii) arrange for liquidations of Intervals related to Defaulted Receivables, as applicable, and the remarketing of such Intervals as provided herein; it being understood that except as expressly set forth herein or in the Indenture, the Servicer shall not sell Defaulted Receivables;
(viii) use reasonable best efforts to enforce the purchase and substitution obligations of the Sellers under the Sale and Contribution Agreement;
(ix) to the extent that the Custodian Fees or the Lockbox Fees are, in the Servicer's reasonable business judgment, no longer commercially reasonable, use commercially reasonable efforts to (i) obtain reasonable fees from the existing Custodian or Lockbox Bank, as applicable, or (ii) exercise its rights under the Custodial Agreement or the Lockbox Agreement to replace the Custodian or Lockbox Bank, as applicable, in accordance with the Custodial Agreement or Lockbox Agreement, as the case may be. Any such successor shall be reasonably acceptable to the Facility Administrator;
(x) diligently pursue all exceptions to the Receivables Files delivered to the Custodian;
(xi) delivery of such information and data to the Backup Servicer as is required under the Backup Servicing Agreement;
(xii) provide the required annual Gramm-Leach-Bliley notices to Obligors in accordance with and to the extent required by the Gramm-Leach-Bliley Act, as amended or modified from time to time;
(xiii) to the extent applicable, deliver any new or amended information contained in any new or amended ACH Forms executed by an Obligor to the Back-up Servicer in computer file or files stored on diskette, magnetic tape or provided electronically to the Back-up Servicer;
(xiv) provide documents related to the Receivables to the Indenture Trustee and Custodian as provided in Section 2.2(b);
(xv) process all optional release activities pursuant to the Servicer Purchase Option;
(xvi) bill, collect and remit moneys payable hereunder and under the other Transaction Documents; and
(xvii) maintain the same file identifier for each Receivable as is used in connection with the Purchase related thereto.
Section 3.7. Consideration. As consideration for Servicer's performance of the Receivables servicing as described herein, Servicer shall be paid the Servicing Fee in accordance with Section 2.11.
ARTICLE IV
CONDITIONS OF PURCHASES AND TRANSFERS
Section 4.1. Conditions Precedent to Initial Purchase.
The Initial Purchase hereunder is subject to the condition precedent that the Facility Administrator shall have received on or before the date of such purchase the items listed in Schedule IA, each (unless otherwise indicated) dated such date, in form and substance reasonably satisfactory to the Facility Administrator.
Section 4.2. Conditions Precedent to All Transfers.
The Initial Purchase, each Incremental Purchase and each other Transfer from the Trust Depositor by the Trust shall be subject to the further conditions precedent that:
(a) the Servicer shall have delivered to the Facility Administrator and the Custodian those items listed on Schedule IB on or before the dates listed therein and such additional information as may be reasonably requested by the Facility Administrator;
(b) all actions or additional actions necessary, in the reasonable judgment of the Facility Administrator, to obtain an absolute ownership interest in favor of the Trust in the Trust Assets being transferred shall have been taken (and the Facility Administrator may in its discretion require, as a condition to such determination, the delivery of an Opinion of Counsel to such effect);
(c) on each Transfer Date, the following statements shall be true and correct:
(i) the representations and warranties contained in Sections 5.1, 5.4, 5.5 and, solely with respect to the Assets being transferred on such Transfer Date, Section 5.2 of this Agreement and Section 3.2 of the Sale and Contribution Agreement, are true and correct on and as of such day as though made on and as of such date;
(ii) all other representations and warranties of any Seller Party in any Transaction Document (other than this Agreement) are true and correct on and as of such day as though made on and as of such date;
(iii) no event has occurred and is continuing, or would result from such Purchase which constitutes a Servicer Event of Termination, Termination Event or an Event of Default;
(iv) after giving effect to such Purchase, the Outstanding Amount
will not exceed the lesser of (i) Funding Date Overcollateralization and
(ii) the Note Purchase Limit;
(v) on and as of such day, the Sellers, the Trust Depositor, the Servicer and the Club Trustee each has performed in all material respects all of the agreements, paid all fees, costs and expenses and satisfied all conditions contained in this Agreement and the other Transaction Documents to be performed by such Person at or prior to such day;
(d) no law, rule or regulation shall prohibit, and no order, judgment or decree of any federal, state or local court or government body, agency or instrumentality shall prohibit or enjoin any of the activities contemplated by the Transaction Documents;
(e) in addition to the other documents set forth on Schedule 1B, the Custodian shall have received an original note/instrument and related Allonge with respect to each such Receivable (other than with respect to an Aruba Receivable);
(f) the Facility Administrator shall have received such other approvals, opinions or documents as the Facility Administrator may reasonably request;
(g) the Custodian shall have issued its Custodian's Certificate with no exceptions related to the applicable Receivables Files, except any exceptions indicated on Schedule 1 attached to such Custodian's Certificate that are expressly permitted pursuant to the Custodial Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Seller under the Sale and Contribution Agreement has made, and upon the transfer of Substitute Assets is deemed to remake, each of the representations and warranties set forth therein and has consented to the assignment by the Trust Depositor to the Trust of the Trust Depositor's rights with respect thereto. Such representations speak as of the execution and delivery of the Sale and Contribution Agreement and this Agreement and as of the Initial Transfer Date in the case of the initial Receivables, and as of the applicable Substitute Asset Transfer Date in the case of the Substitute Assets, but shall survive the sale, transfer and assignment of the Receivables to the Trust. Pursuant to Section 2.1 of this Agreement, the Trust Depositor has sold, assigned, transferred, set-over and conveyed to the Trust as part of the Trust Assets its rights under the Sale and Contribution Agreement, including without limitation, its rights with respect to the representations and warranties of the Sellers therein, together with all rights of the Trust Depositor with respect to any breach thereof including any right to require the Sellers to repurchase any Receivables in accordance with and subject to the terms of the Sale and Contribution Agreement. It is understood and agreed that the representations and warranties set forth or referred to in this Section shall survive transfer of the Trust Assets to the Trust hereunder and the delivery of the Receivables Files to the Custodian.
The Trust Depositor hereby represents and warrants to the Trust, the Owner Trustee, the Indenture Trustee, the Facility Administrator and the Noteholders that it has entered into the Sale and Contribution Agreement with the Sellers, that each Seller has made the representations and warranties in the Sale and Contribution Agreement as set forth therein, that such representations and warranties run to and are for the benefit of the Trust Depositor, the Owner Trustee, the Facility Administrator, the Indenture Trustee and the Noteholders, and that pursuant to Section 2.1 of this Agreement the Trust Depositor has sold, transferred, set-over, conveyed and assigned to the Trust all rights of the Trust Depositor to cause the Sellers to repurchase Receivables in the event of a breach of such representations and warranties in accordance with and subject to the terms of the Sale and Contribution Agreement.
Section 5.1. Representations and Warranties of the Trust Depositor.
The Trust Depositor represents and warrants, as of the Closing Date and each Transfer Date, as follows:
(a) Organization and Good Standing. The Trust Depositor is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware, and has full power (corporate or otherwise), authority and legal right to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party.
(b) Due Qualification. The Trust Depositor is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a Material Adverse Effect.
(c) Due Authorization. The execution and delivery of this Agreement and each other Transaction Document to which it is a party, and the consummation of the transactions provided for herein and therein have been duly authorized by the Trust Depositor by all necessary action on the part of the Trust Depositor.
(d) No Conflict. The execution and delivery of this Agreement and each other Transaction Document to which it is a party, the performance of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof do not contravene or violate (i) its articles or certificate of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Lien on the assets of the Trust Depositor, except where any such contravention or violation would not have a Material Adverse Effect.
(e) No Violation. The execution and delivery of this Agreement and each other Transaction Document to which it is a party, the performance of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof (including, without limitation, the sale of the Trust Assets by the Trust Depositor or remittance of Collections in accordance with the provisions of this Agreement) will not conflict with or violate, in any material respect, any Requirements of Law applicable to the Trust Depositor or to the Trust Assets.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Trust Depositor, threatened
against the Trust Depositor, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality
(i) asserting the invalidity of this Agreement or any other Transaction
Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction
Document or (iii) seeking any determination or ruling that could
reasonably be expected to be adversely determined, and if adversely
determined, would have a Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or of any Governmental Authority required in connection with the Trust Depositor's execution and delivery of this Agreement and the other Transaction Documents to which it is a party, the performance of the transactions contemplated hereby and thereby, and the fulfillment of the terms hereof and thereof, have been obtained.
(h) Bulk Sales. The execution, delivery and performance of this Agreement do not require compliance with any applicable "bulk sales" law by the Trust Depositor.
(i) Solvency. Both before and after giving effect to the transactions under this Agreement, the Trust Depositor will be Solvent.
(j) Selection Procedures. No selection procedures adverse to the interests of the Trust were utilized by the Trust Depositor in selecting the Receivables in the Asset Pool.
(k) Taxes. The Trust Depositor has filed or caused to be filed all tax returns which, to its knowledge, are required to be filed and has paid when due all taxes shown to be due and payable on such returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any amount of tax due the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with generally accepted accounting principles have been provided on the books of the Trust Depositor); no tax lien has been filed and, to the Trust Depositor's knowledge, no claim is being asserted, with respect to any such tax, fee or other charge.
(l) Agreements Enforceable. This Agreement and the other Transaction Documents to which the Trust Depositor is a party constitute the legal, valid and binding obligation of the Trust Depositor enforceable against the Trust Depositor in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
(m) Margin Regulation. The Trust Depositor is not engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of "purchasing" or "carrying" any Margin Stock. The Trust Depositor does not own any Margin Stock, and none of the proceeds of any Purchase will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any portion of such proceeds to be a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. The Trust Depositor will not take or permit to be taken any action which might cause any Transaction Document to violate any regulation of the Federal Reserve Board.
(n) No Liens. Each Trust Asset, together with the Receivable related thereto, shall, immediately prior to its sale hereunder, be owned by the Trust Depositor free and clear of any Lien (except Permitted Liens), and upon each Purchase, the Trust shall acquire an undivided ownership interest in each Trust Asset and in the Collections with respect thereto, free and clear of any Lien
(except Permitted Liens). No effective financing statement or other instrument similar in effect covering any Trust Asset or the Collections with respect thereto shall at any time be on file in any recording office except such as may be filed in favor of the Trust or the Indenture Trustee relating to this Agreement and the other Transaction Documents, or in favor of the Trust Depositor as assignee of the Sellers.
(o) Note Purchase Limit and Funding Date Overcollateralization.
After giving effect to any current Purchase or conveyance of Receivables,
(i) the aggregate Outstanding Amount does not exceed the lesser of (x)
Funding Date Overcollateralization and (y) the Note Purchase Limit and
(ii) the aggregate amount of all advances made by the Noteholders under
the Note Purchase Agreement does not exceed the Note Purchase Limit.
(p) Reports Accurate. No Asset Report, exhibit, financial statement, document, book, record or report furnished or to be furnished by the Trust Depositor pursuant to this Agreement is or will be, when considered as a whole, inaccurate in any material respect as of the date it is or shall be dated or (except as otherwise disclosed to the Noteholders, as the case may be, at such time) as of the date so furnished, and no such document contains or will contain any material misstatement of fact or omits or shall omit to state a material fact or any fact necessary in light of the circumstances under which made, to make the statements contained therein not misleading.
(q) Location of Offices. The principal place of business and chief executive office of the Trust Depositor and the Seller, and the office where the Trust Depositor and Seller keep all the Records, are located at the addresses of the Trust Depositor and Seller, respectively, referred to on Schedule III hereof (or at such other locations as to which the notice and other requirements specified herein shall have been satisfied). The state of incorporation and organizational identification number, if any, of the Trust Depositor and the Seller are set forth on Schedule III hereto.
(r) Tradenames. The Trust Depositor has no trade names, fictitious names, assumed names or "doing business as" names or other names under which it has done or is doing business.
(s) Sale and Contribution Agreement. The Sale and Contribution Agreement, including the other Transaction Documents contemplated thereby, is the only agreement pursuant to which the Trust Depositor acquires ownership of the Trust Assets. To the knowledge of the Trust Depositor, the representation and warranties of Sellers under the Sale and Contribution Agreement are true and correct.
(t) Value Given. The Trust Depositor shall have given reasonably equivalent value to the Sellers in consideration for the transfer to the Trust Depositor of the Assets under the Sale and Contribution Agreement, no such transfer shall have been made for or on account of an antecedent debt owed by any Seller to the Trust Depositor, and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.
(u) Special Purpose Entity. The Certificate of Incorporation of the Trust Depositor includes substantially the provisions set forth on Exhibit F hereto, and each Seller has confirmed in writing to the Trust Depositor and has covenanted in the Sale and Contribution Agreement that it
will not cause the Trust Depositor to file a voluntary petition under the Bankruptcy Code or any other bankruptcy or insolvency laws.
(v) Accounting. The Trust Depositor accounts for the transfer from the Sellers of interests in Assets and Collections under the Sale and Contribution Agreement and will account for transfers under this Agreement as sales of such Assets in its books, records and financial statements, in each case consistent with GAAP and with the requirements set forth herein.
(w) Separate Entity. The Trust Depositor is operated as an entity with assets and liabilities distinct from those of the Sellers and any Affiliates thereof (other than the Trust Depositor), and the Trust Depositor hereby acknowledges that the Trust is entering into the transactions contemplated by this Agreement and the other Transaction Documents in reliance upon the Trust Depositor's identity as a separate legal entity from the Sellers and from each such other Affiliate of the Sellers.
(x) Investment Company and Public Utility Holding Company. The Trust Depositor is not an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended, or a "holding company" or a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended.
(y) Accuracy of Representations and Warranties. Each representation or warranty by the Trust Depositor contained herein or in any certificate or other document furnished by the Trust Depositor pursuant hereto or in connection herewith is when furnished true and correct in all material respects; provided, however, the Trust and the Noteholders acknowledge that with respect to the condition of a Receivable as an "Eligible Receivable" as of its date of Purchase or transfer hereunder, the Trust's remedy for a breach of a representation or warranty relating to a Receivable's status as an Eligible Receivable is provided by and limited to Section 2.7 hereof.
The representations and warranties set forth in this section shall survive the transfer of the Trust Assets to the Trust, and termination of the rights and obligations of the Servicer hereunder. Upon discovery by the Trust Depositor, the Servicer or the Trust of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the others.
Section 5.2. Representations and Warranties of Trust Depositor Relating to the Receivables.
The Trust Depositor hereby represents and warrants that, solely with respect to the Receivables then being sold or transferred as of the applicable Transfer Date:
(a) Valid Sale and Transfer of Ownership. The Trust Depositor (i)
has good and marketable title to each Trust Asset free and clear of any
Lien (other than Permitted Liens) of any Person , (ii) is the sole owner
thereof and has full right to transfer the Trust Assets to the Trust, and
(iii) upon transfer of such Trust Asset to the Trust pursuant to the terms
of this Agreement, has validly and effectively conveyed to the Trust all
of the Trust Depositor's right, title and interest in and to the Trust
Assets free and clear of any Lien (other than Permitted Liens).
(b) Eligibility of Receivables. Each Receivable relating to each Trust Asset is an Eligible Receivable.
(c) List of Receivables. As of the related Transfer Date, the List of Receivables and the information delivered in connection therewith is an accurate and complete listing in all material respects of all the Receivables in and to become part of the Asset Pool on such date and the information contained therein (including with respect to the identity of such Receivables, Obligors thereon, and the amounts owing thereunder) is true and correct in all material respects.
(d) No Liens. Upon transfer of such Trust Asset to the Trust pursuant to the terms of this Agreement, each Trust Asset has been transferred to the Trust in compliance, in all material respects, with all Requirements of Law and each Trust Asset was, immediately prior to its sale hereunder, legally and beneficially owned by the Trust Depositor free and clear of any Lien (except Permitted Liens), and upon each Purchase, the Trust shall acquire an ownership interest in each Trust Asset and in the Collections with respect thereto, free and clear of any Lien (except Permitted Liens).
(e) Consents. With respect to each Purchased Asset, all material consents, licenses, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Sellers or the Trust Depositor in connection with the transfer of such Assets to the Trust have been duly obtained, effected or given and are in full force and effect.
(f) Environmental Conditions. To the knowledge of the Trust Depositor, the operations of the Seller Parties and the Eligible Resorts are in compliance with all Requirements of Law and none of the Eligible Resorts are the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous wastes or substances into the environment.
(g) Servicing. To the knowledge of the Trust Depositor, the servicing and collection practices used by the Seller Parties and their Affiliates have complied in all material respects with all Requirements of Law and have met customary industry standards for the servicing of receivables substantially similar to the Receivables.
(h) Compliance with Laws. To the knowledge of the Trust Depositor, the Trust Assets were originated and have been serviced in compliance with, and do not contravene any Requirements of Law, including, without limitation, all Consumer Laws. To the knowledge of the Trust Depositor, each Seller Party has complied in all material respects with all applicable federal, state and local laws and regulations in the marketing and sales of the related Intervals, including without limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, state securities and blue sky laws, the Interstate Land Sales Full Disclosure Act, the mail fraud statutes, land use, land sales, timeshare sales and zoning laws.
(i) Patriot Act Matters. The Trust Depositor (a) is and at all times shall be in compliance with applicable OFAC regulations promulgated under the authority granted by the Trading with the Enemy Act ("TWEA"), 50 U.S.C. App. Section 1 et seq., and the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. Section 1701 et seq., as the TWEA and
the IEEPA may apply to Trust Depositor's activities; (b) is and at all times shall be in compliance with the Patriot Act and all rules and regulations promulgated under the Patriot Act as such act and the rules and regulations promulgated thereunder may be applicable to the Trust Depositor; and (c) (i) is not, to its actual current knowledge, now, nor, to its actual current knowledge, has ever been under investigation by any governmental authority for, nor has been charged with or convicted for a crime under, 18 U.S.C. Sections 1956 or 1957 or any predicate offense thereunder, or a violation of the Bank Secrecy Act; (ii) has never been assessed a civil penalty under any anti money laundering laws or predicate offenses thereunder; (iii) has not had any of its funds seized, frozen or forfeited in any action relating to any anti money laundering laws or predicate offenses thereunder; (iv) has taken such steps and is implementing, either directly or indirectly through third parties, such policies as are reasonably necessary to ensure that the Trust Depositor is not promoting, facilitating or otherwise intentionally furthering, the transfer, deposit or withdrawal of criminally derived property, or of money or monetary instruments which are (or which Trust Depositor suspects or has reason to believe are) the proceeds of any illegal activity or which are intended to be used to promote or further any illegal activity; and (v) is taking such steps and implementing, either directly or indirectly through third parties, such policies as are reasonably necessary to ensure that the Trust Depositor is in compliance with all laws and regulations applicable to its business for the prevention of money laundering and with anti terrorism laws and regulations, including with respect to the source of funds from its operations and that such steps include the development and implementation of an anti money laundering compliance program within the meaning of Section 352 of the Patriot Act, to the extent the Trust Depositor is required to develop such a program under the rules and regulations promulgated pursuant to Section 352 of the Patriot Act.. Nothing in this Section 5.2(i) shall be construed to imply that the provisions of the laws and regulations set forth herein are, in fact, applicable to the Trust Depositor.
(j) FTC Holder Rule Language. None of the related Receivables include language from the Federal Trade Commission's trade regulation rule titled "Preservation of Consumers' Claims and Defenses" (16 C.F.R. Part 433), including any language similar to the following: "Any holder of this consumer contract is subject to all claims and defenses which the debtor could assert against the seller of goods and services obtained [pursuant hereto or] with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder."
Section 5.3. Survival; Knowledge; Notice of Breach. The representations and warranties set forth in this Article V shall survive the transfer of the Trust Assets to the Trust and termination of the rights and obligations of the Servicer under the Transaction Documents. Neither the survival or the liability of the Trust Depositor with respect to the Trust Depositor's representations and warranties set forth in this Article V shall be reduced by any due diligence or other investigation made by the Facility Administrator, the Trust, the Indenture Trustee or any Noteholder at any time or by the disclosure of any facts or circumstances to the Facility Administrator, the Trust, the Indenture Trustee or any Noteholder (whether prior to or after the date of this Agreement). Upon discovery by any Seller Party or the Facility Administrator of a breach of any of the representations and warranties in this Article V, the party discovering such breach shall give prompt written notice to the others.
Section 5.4. Representations and Warranties of the Club and the Club Trustee.
The Club Trustee represents and warrants, as of the Closing Date and each Transfer Date, as follows:
(a) The Bluegreen Vacation Club Trust is a trust duly established in accordance with the Club Trust Agreement under the laws of the State of Florida for the purpose of holding and preserving certain property for the benefit of the beneficiaries referred to in the Club Trust Agreement. The Club Trustee has all necessary trust and other authorizations and powers required to carry out its obligations under the Club Trust Agreement in the State of Florida and in all other states in which it owns Resort Interests. The Bluegreen Vacation Club Trust is not a corporation or business trust under the laws of the State of Florida. The Bluegreen Vacation Club Trust is not taxable as an association, corporation or business trust under federal law or the laws of the State of Florida.
(b) 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 date of this Agreement, the Club Trustee is authorized to transact business in no other state. The Club Trustee is not an affiliate of the Servicer and is in compliance with the requirements of Chapter 721, Florida Statutes, that it be independent of the Servicer.
(c) The Club Trustee had all necessary corporate power to execute and deliver, and has all necessary corporate power to perform its obligations under this Agreement, the other 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.
(d) A certified copy of the Club Trust Agreement has been delivered to the Facility Administrator together with all amendments and supplements in respect thereof.
(e) The Club Trustee holds all right, title and interest in and to all of the Resort Interests related to the Receivables solely for the benefit of the Beneficiaries referred to in, and subject in each case to the provisions of, the Club Trust Agreement and the other documents and agreements related thereto. Except with respect to the Mortgages, the Club Trustee has permitted none of such Resort Interests to be made subject to any lien or encumbrance during the time it has been a part of the trust estate under the Club Trust Agreement.
(f) There are no actions, suits, proceedings, orders or injunctions pending against the Bluegreen Vacation Club Trust or the Club Trustee, at law or in equity, or before or by any Governmental Authority which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.
(g) Neither the Bluegreen Vacation Club Trust 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 Bluegreen Vacation Club Trust and/or its trust estate have been paid and neither the Servicer nor the Club Trustee knows of any basis for any additional taxes or assessments against any such property. The Bluegreen Vacation Club Trust has filed all required tax returns and has paid all taxes shown to be
due and payable on such returns, including all taxes in respect of sales of Owner Beneficiary Rights (as defined in the Club Trust Agreement) and Vacation Points.
(i) The Bluegreen Vacation Club Trust and the Club Trustee are in compliance in all material respects with all Requirements of Law 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 Trustee has maintained the One-to-One Beneficiary to Accommodation Ratio (as such terms are defined in the Club Trust Agreement).
(k) Upon purchase of the Receivables and related Trust Assets hereunder, the Trust is an "Interest Holder Beneficiary" under the Club Trust Agreement and each of the Receivables constitutes "Lien Debt", "Purchase Money Lien Debt" and "Owner Beneficiary Obligations" under the Club Trust Agreement.
(l) Except as disclosed to the Facility Administrator in writing, each Mortgage associated with a Receivable and granted by the Club Trustee or the Obligor on the related Receivable, as applicable, has been duly executed, delivered and recorded by or pursuant to the instructions of the Club Trustee under the Club Trust Agreement and such Mortgage is valid and binding and effective to create the lien and security interests it purports to create. Each of such Mortgages was granted in connection with the financing of a sale of a Resort Interest.
Section 5.5. Representations and Warranties of the Servicer.
The Servicer represents and warrants, as of the Closing Date and each Transfer Date, as follows:
(a) Organization and Good Standing. The Servicer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the corporate power to own its assets and to transact the business in which it is currently engaged. The Servicer is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure so to qualify would have a Material Adverse Effect. The Servicer is properly licensed in each jurisdiction to the extent required by the laws of such jurisdiction to service the Trust Assets in accordance with the terms hereof except where the failure to be so licensed could not reasonably be expected to have a Material Adverse Effect.
(b) Authorization; Binding Obligations. The Servicer has the power and authority to make, execute, deliver and perform this Agreement and the other Transaction Documents to which the Servicer is a party and all of the transactions contemplated under this Agreement and the other Transaction Documents to which the Servicer is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents to which the Servicer is a party. This Agreement and the other Transaction Documents to which the Servicer is a party constitute the legal, valid and binding obligation of the Servicer enforceable in accordance with their terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
(c) No Consent Required. The Servicer is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any Governmental Authority in connection with the execution, delivery, performance, validity or enforceability of this Agreement and the other Transaction Documents to which the Servicer is a party.
(d) No Violations. The execution, delivery and performance of this Agreement and the other Transaction Documents to which the Servicer is a party by the Servicer will not violate any provisions of any existing law or regulation or any order or decree of any court or of any Federal or state regulatory body or administrative agency having jurisdiction over the Servicer or any of its properties or the Articles of Organization or Bylaws of the Servicer, or constitute a material breach of any mortgage, indenture, contract or other agreement to which the Servicer is a party or by which the Servicer or any of the Servicer's properties may be bound, or result in the creation of or imposition of any security interest, lien, pledge, preference, equity or encumbrance of any kind upon any of its properties pursuant to the terms of any such mortgage, indenture, contract or other agreement, other than this Agreement the result of which could reasonably be expect to have a Material Adverse Effect.
(e) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of the Servicer, threatened against the Servicer, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement or any other Transaction Document, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document or (iii) seeking any determination or ruling that could reasonably be expected to be adversely determined, and if adversely determined, would in the opinion of the Servicer have a Material Adverse Effect.
(f) Margin Regulation. The Servicer is not engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of "purchasing" or "carrying" any Margin Stock. The Servicer does not own any Margin Stock, and none of the proceeds of any Purchase will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any portion of such proceeds to be a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. The Servicer will not take or permit to be taken any action which might cause any Transaction Document to violate any regulation of the Federal Reserve Board. Notwithstanding the foregoing, this Agreement shall not limit the Servicer's (so long as Bluegreen or any Affiliate thereof is the Servicer) ability to repurchase shares of its common stock so long as it is otherwise done in compliance with the terms hereof.
(g) Collection Policy. The Servicer has complied in all material respects with the Collection Policy with regard to each Receivable and the related Contract, has notified the Facility Administrator and the Noteholders, in accordance with Section 6.3(o)(ii) hereunder, of any change
to the Collection Policy, and has not made any change to the Collection Policy that would materially and adversely affect or impair the collectibility of any Receivable or that is a material change, except for such changes as to which the Facility Administrator and the Noteholders have been notified and as to which the Noteholders have consented. For purposes of this section, any change that would cause the Issuer to not be a qualifying special purpose entity, as "qualifying special purpose entity" is defined under GAAP, shall be material.
(h) Compliance with Laws. The Servicer has complied with all Requirements of Law relating to or in connection with the servicing of the Receivables, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.
(i) Insurance. The Servicer and each Eligible Resort which is managed by the Club Managing Entity maintain such insurance coverage as may be required by any applicable Requirements of Law or pursuant to the Declarations for such Eligible Resort.
(j) Club Ownership. Bluegreen Vacations Unlimited, Inc. is the sole Class B member of Bluegreen Vacation Club, Inc. and has the right to elect, and has elected, at least a majority of the board of directors of Bluegreen Vacation Club, Inc. Bluegreen Vacations Unlimited, Inc. has not pledged or encumbered or granted a security interest in respect of such interest.
(k) Reservation System. Other than with respect to the services contracted for by the Club Managing Entity or any Affiliate thereof with a third party which rights under such contracts shall be licensed (on a non-exclusive basis) to the Indenture Trustee for the benefit of the Noteholders (which may include customary hardware or software leases, licenses or maintenance fees), the Reservation System is owned by the Club Managing Entity free and clear of any Liens, but subject to the provisions of the Club Management Agreement and the Club Trust Agreement, and the Club has the right to utilize such system under and pursuant to the Club Management Agreement. The Club Management Agreement is in full force and effect and no default on the part of the Club Trustee or the Club Managing Entity exists thereunder. The Servicer owns 100% of the equity capital of the Club Managing Entity.
(l) Club Trust Agreement. A true and correct copy of the Club Trust Agreement is attached hereto as Exhibit E and is in full force and effect.
(m) Bluegreen Vacation Club, Inc. Bluegreen Vacation Club, Inc. is a non-stock corporation duly formed, validly existing and in good standing under the laws of the State of Florida.
ARTICLE VI
COVENANTS
Section 6.1. Covenants of the Trust Depositor.
Until the date following the Facility Termination Date on which all Aggregate Outstandings have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, the Trust Depositor hereby covenants and agrees that:
(a) Compliance with Laws; Preservation of Corporate Existence. The Trust Depositor will comply in all material respects with all Requirements of Law applicable to the Trust Depositor, the Receivables and the Intervals and preserve and maintain its corporate existence, rights, franchises, qualifications and privileges except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(b) Security Interests. Except as specifically contemplated by this
Agreement, the Trust Depositor will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Receivable in the Asset Pool or related Interval, whether
now existing or hereafter transferred hereunder, or any interest therein,
and the Trust Depositor will not sell, pledge, assign or suffer to exist
any Lien on its interest, if any, hereunder. The Trust Depositor will
immediately notify the Trust of the existence of any such Lien on any
Receivable in the Asset Pool or related Interval; and the Trust Depositor
shall defend the right, title and interest of the Trust in, to and under
the Receivables in the Asset Pool and the related Interval, against all
claims of third parties; provided, however, that nothing in this Section
6.l(b) shall prevent or be deemed to prohibit the Trust Depositor from
suffering to exist Permitted Liens upon any of the Trust Assets or any
related Interval.
(c) Activities of Trust Depositor. The Trust Depositor shall not engage in any business or activity of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, receivable, lease or other undertaking, which is not directly related to the transactions contemplated and authorized by this Agreement, the other Transaction Documents and its Certificate of Incorporation.
(d) Agreements. Except as contemplated by the Transaction Documents, the Trust Depositor shall not amend or modify the provisions of its Certificate of Incorporation, or issue any power of attorney except to the Trust or the Servicer.
(e) Separate Corporate Existence. The Trust Depositor shall:
(i) Maintain its own deposit account or accounts, separate from those of any Affiliate, with commercial banking institutions. Except for payments to its equity holders in the form of a dividend and for payments for the Trust Assets purchased from the Sellers under the Sale and Contribution Agreement, the funds of the Trust Depositor will not be diverted to any other Person or used other than for corporate uses of the Trust Depositor.
(ii) Ensure that, to the extent that it shares the same officers or other employees as any of its stockholders or Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees.
(iii) Ensure that, to the extent that it and any Seller (together with their respective stockholders or Affiliates) jointly do business with vendors or service providers or share overhead
expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that it and any Seller (together with their respective stockholders or Affiliates) do business with vendors or service providers when the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs. All material transactions between Trust Depositor and any of its Affiliates shall be only on an arms' length basis.
(iv) To the extent that Trust Depositor and any of its stockholders or Affiliates have offices at the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its Certificate of Incorporation and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special stockholders' and directors' meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts.
(vi) Otherwise operate as an entity with assets and liabilities distinct from those of the Sellers and any Affiliates thereof.
(f) Location of Trust Depositor, Records; Instruments. The Trust Depositor (x) shall not change its name or state of incorporation or move the location of its chief executive office outside the State of Florida without 30 days' prior written notice to the Facility Administrator and the Indenture Trustee and (y) shall not move or permit the Servicer to move the location of the Receivable Files, other than to the Custodian, from the locations thereof on the Initial Transfer Date, without 30 days' prior written notice to the Facility Administrator and the Trustee and (z) will promptly take all actions required (including, but not limited to, all filings and other acts necessary or advisable under the UCC of each relevant jurisdiction in order to evidence the Trust's ownership interest (and back-up grant of a first priority perfected security interest to the Trust (subject to Permitted Liens)) in all Trust Assets in the Asset Pool. The Trust Depositor will give the Facility Administrator and the Indenture Trustee prompt notice of a change within the State of Florida of the location of its chief executive office.
(g) Accounting for Purchases. The Trust Depositor will not account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby or by the Sale and Contribution Agreement in any manner other than the sale or contribution of the Assets by the Sellers to the Trust Depositor in accordance with GAAP.
(h) ERISA Matters. The Trust Depositor will not (a) engage in any prohibited transaction for which an exemption is not available or has not previously been obtained from the United States Department of Labor; (b) permit to exist any accumulated funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (c) fail to make any payments to a
Multiemployer Plan that the Trust Depositor may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (d) terminate any Benefit Plan so as to result in any liability; or (e) permit to exist any occurrence of any reportable event described in Title IV of ERISA which represents a material risk of a liability of the Trust Depositor under ERISA or the Code.
(i) Nature of Business. The Trust Depositor will engage in no business other than the purchase of Assets from the Sellers, the sale of Trust Assets to the Trust and the other transactions permitted or contemplated by this Agreement and the other Transaction Documents.
(j) Seller Assets. With respect to each Asset acquired by the Trust Depositor from the Sellers, the Trust Depositor will (i) acquire such Asset pursuant to and in accordance with the terms of the Sale and Contribution Agreement, (ii) take all action necessary to perfect, protect and more fully evidence the Trust Depositor's ownership of such Asset, including, without limitation, (A) filing and maintaining effective financing statements (Form UCC-1) against the Sellers in all necessary or appropriate filing offices, and filing continuation statements, amendments or assignments with respect thereto in such filing offices, and (B) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, and (iii) take all additional action that the Trust may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Trust Assets.
(k) Transactions with Affiliates. The Trust Depositor will not enter
into, or be a party to, any transaction with any of its Affiliates, except
(i) the transactions permitted or contemplated by this Agreement and the
other Transaction Documents, and (ii) other transactions (including,
without limitation, the lease of office space or computer hardware or
software by the Trust Depositor to or from an Affiliate) (A) in the
ordinary course of business, (B) pursuant to the reasonable requirements
of the Trust Depositor's business, and (C) upon fair and reasonable terms
that are no less favorable to the Trust Depositor than could be obtained
in a comparable arms'-length transaction with a Person not an Affiliate of
the Trust Depositor. It is understood that any compensation arrangement
for officers shall be permitted under clause (ii)(A) through (C) above if
such arrangement has been expressly approved by the board of directors of
the Trust Depositor.
(l) Indebtedness; Investments. The Trust Depositor will not incur any Indebtedness other than Indebtedness arising hereunder or under the other Transaction Documents. Except for its residual interest in the Trust, the Trust Depositor will not make any Investments other than Permitted Investments.
(m) Change in the Sale and Contribution Agreement. The Trust Depositor will not amend, modify, waive or terminate any terms or conditions of the Sale and Contribution Agreement except as permitted hereby.
(n) Amendment to Bylaws and Certificate of Incorporation. The Trust Depositor will not amend, modify or otherwise make any change to its Bylaws or its Certificate of Incorporation to delete or otherwise nullify or circumvent the provisions set forth on Exhibit F hereto.
(o) Authorized Signatory. Any person signing a Request Notice on behalf of Trust Depositor, as provided in Exhibit A hereto shall have the requisite power and authority to sign the same on behalf of the Trust Depositor.
(p) Merger or Consolidation. The Trust Depositor shall not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions and except as otherwise contemplated herein) all or any material part of its assets (whether now owned or hereafter acquired) to, or acquire all or any material part of the assets of, any Person.
(q) Limited Activities. Notwithstanding any other provision in this
Section and any provision of law, the Trust Depositor shall not do any of
the following:
(i) engage in any business or activity other than as set forth in or permitted by its Certificate of Incorporation or Bylaws; or
(ii) without the affirmative vote of a majority of the members of the Board of Directors of the Trust Depositor (which must include the affirmative vote of at least one duly appointed Independent director) (A) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (B) consent to the institution of bankruptcy or insolvency proceedings against it, (C) file a petition seeking or consent to reorganization or seek to obtain relief under any applicable federal or state law relating to bankruptcy, (D) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the corporation or a substantial part of its property, (E) make a general assignment for the benefit of creditors, (F) admit in writing its inability to pay its debts generally as they become due, or (G) take any corporate action in furtherance of the actions set forth in clauses (A) through (F) above; provided, however, that no director may be required by any shareholder of the Trust Depositor to consent to the institution of bankruptcy or insolvency proceedings against the Trust Depositor so long as it is solvent.
Section 6.2. General Covenants of the Club Trustee.
Until the date following the Facility Termination Date on which all Aggregate Outstandings have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, the Club Trustee hereby covenants and agrees that:
(a) No Conveyance. The Club Trustee agrees not to convey or grant any Lien upon any Owner Beneficiary Rights (or any Vacation Points appurtenant thereto) or Resort Interest in the Club relating to a Receivable which has been sold and assigned to the Trust unless the Indenture Trustee shall have issued an instruction to the Club Trustee pursuant to Section 8.07(c) of the Club Trust Agreement in connection with its exercise of its rights as an Interest Holder Beneficiary (as defined in the Club Trust Agreement) under Section 7.02 of the Club Trust Agreement.
(b) Separate Corporate Existence. The Club Trustee shall:
(i) Maintain its own deposit account or accounts, separate from those of any Affiliate, with commercial banking institutions. The funds of the Club Trustee will not be
diverted to any other Person or for other than trust or corporate uses of the Club Trustee, as applicable.
(ii) Ensure that, to the extent that it shares the same officers or other employees as any of its stockholders, beneficiaries or Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees.
(iii) Ensure that, to the extent that the Club Trustee and the Servicer (together with their respective stockholders or Affiliates) jointly do business with vendors or service providers or share overhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that the Club Trustee and the Servicer (together with their respective stockholders or Affiliates) do business with vendors or service providers when the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs. All material transactions between Club Trustee and any of its Affiliates shall be only on an arms' length basis.
(iv) To the extent that the Club Trustee and any of its stockholders, beneficiaries or Affiliates have offices in the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with the Club Trust Agreement, its Amended and Restated Articles of Incorporation and its Bylaws, as applicable, and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special stockholders', trustees' and directors' meetings appropriate to authorize all trust and corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts.
(c) Merger or Consolidation. The Club Trustee shall not consolidate with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any Person unless the corporation formed by such consolidation or into which the Club Trustee, as the case may be, has merged or the Person which acquires by conveyance, transfer or lease substantially all the assets of the Club Trustee, as the case may be, as an entirety, can lawfully perform the obligations of the Club Trustee hereunder and executes and delivers to the Indenture Trustee an agreement in form and substance reasonably satisfactory to the Indenture Trustee which contains an assumption by such successor entity of the due and punctual performance and observance of each covenant and condition to be performed or observed by the Club Trustee under this Agreement.
(d) Corporate Matters. Notwithstanding any other provision of this
Section and any provision of law, the Club Trustee shall not do any of the
following:
(i) engage in any business or activity other than as set forth herein or in or as contemplated by the Club Trust Agreement, its Amended and Restated Articles of Incorporation or its Bylaws, as applicable;
(ii) without the affirmative vote of a majority of the members of the board of directors (or Persons performing similar functions) of the Club Trustee (which must include the affirmative vote of at least one duly appointed Independent Director (as defined in the Club Trust Agreement)), (A) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (B) consent to the institution of bankruptcy or insolvency proceedings against it, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy, (D) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the corporation or a substantial part of its property, (E) make a general assignment for the benefit of creditors, (F) admit in writing its inability to pay its debts generally as they become due, (G) terminate the Club Managing Entity as manager under the Club Management Agreement or (H) take any corporate action in furtherance of the actions set forth in clauses (A) through (G) above; provided, however, that no director may be required by any shareholder or beneficiary of the Club Trustee to consent to the institution of bankruptcy or insolvency proceedings against the Club Trustee so long as it is solvent;
(iii) merge or consolidate with any other corporation, company or entity or sell all or substantially all of its assets or acquire all or substantially all of the assets or capital stock or other ownership interest of any other corporation, company or entity; or
(iv) with respect to the Club Trustee, amend or otherwise modify its Amended and Restated Articles of Incorporation or Bylaws or any definitions contained therein in a manner adverse to the Indenture Trustee or any Noteholder without the prior written consent of the Facility Administrator.
(e) Indebtedness. The Club Trustee shall not incur any Indebtedness other than (i) trade payables and operating expenses (including taxes) incurred in the ordinary course of business or (ii) in connection with servicing Resort Interests included in the Club's trust estate in the ordinary course of business consistent with past practices; provided, that in no event shall the Club Trustee incur Indebtedness for borrowed money.
(f) Amendments. The Club Trustee agrees not to amend or otherwise modify the Club Trust Agreement in a manner which could reasonably be expected to have an adverse effect on the Trust Assets, the Trust, the Indenture Trustee or the Noteholders, without the prior written consent of the Facility Administrator.
Section 6.3. General Covenants of the Servicer and Bluegreen.
Until the date following the Facility Termination Date on which all Aggregate Outstandings have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, so long as the Servicer is Bluegreen, the Servicer (and, Bluegreen, as applicable) covenants and agrees that:
(a) Financial Covenants
(i) Net Worth. Servicer agrees to maintain a Tangible Net Worth as of the last day of each calendar quarter equal to or greater than the sum of (i) 75% of Tangible Net Worth as of the end of the calendar quarter immediately prior to the date hereof plus (ii) 50% of Consolidated Net Income for each calendar quarter ending since such date.
(ii) Leverage Ratio. The Servicer shall not permit its Leverage Ratio as of the last day of any calendar quarter to exceed 2.50:1.
(iii) Interest Coverage Ratio. The Servicer shall not permit its Interest Coverage Ratio as of the last day of any calendar quarter to be less than 2.00:1. For the avoidance of doubt, a negative Consolidated Interest Expense number shall be deemed to be zero.
(iv) Bluegreen Points. The Servicer shall not permit the total number of Vacation Points available at any time to be less than 930,661,200, which number represented at least 90% of all Vacation Points as of December 31, 2005.
(v) Resorts. The Servicer shall not permit the total number of resorts included in the Club to be less than thirty-nine (39), which number represented approximately 90% of all resorts included in the Club as of December 31, 2005; provided that for purposes of this clause (v), a resort shall include all phases, subdivisions and/or developments at the same or substantially the same geographic location.
(b) Inspections and Audits. Servicer shall, at such reasonable times during normal business hours and as often as may be reasonably requested, permit any agents or representatives of the Facility Administrator to inspect the Eligible Resorts and any of Servicer's assets (including financial and accounting books and records) relating thereto, to examine and make copies of and abstracts from the records and books of account of the Servicer or the Time Share Association (to the extent controlled by the Servicer) or serviced under the Servicing Agreement and to discuss its affairs, finances and accounts with any of its officers, employees or independent public accountants. Servicer acknowledges that the Facility Administrator intends to conduct such audits and inspections on at least an annual basis. Servicer shall make available to the Facility Administrator all credit information in Servicer's possession or under Servicer's control with respect to Obligors as the Facility Administrator may reasonably request. Upon the Facility Administrator's request, Servicer shall furnish to Facility Administrator evidence of payment of all real estate taxes relating to the Eligible Resorts. Servicer (to the extent Bluegreen or an Affiliate thereof is the Servicer hereunder) shall be required to pay all reasonable fees, costs and expenses incurred by the Facility Administrator for any and all Eligible Resorts inspections, audits and any other diligence relating to Servicer's finances or books or records.
(c) Maintenance. For so long as the Time Share Association for the Eligible Resorts is managed by the Club Managing Entity, the Servicer shall use commercially reasonable best efforts to maintain the Eligible Resorts in good repair, working order and condition (ordinary wear and tear excepted).
(d) Management Contract. For so long as the Time Share Association for the Eligible Resorts is managed by the Club Managing Entity, the manager, related management contract and master marketing and sale contract (if applicable) for each Eligible Resort shall at all
times be reasonably satisfactory to the Facility Administrator. For so long as the Time Share Association for the Eligible Resorts is managed by the Club Managing Entity, the related management contract and master marketing and sale contract (if applicable) may not be amended or modified in a manner which could reasonably be expected to have a Material Adverse Effect, without the prior written consent of the Facility Administrator.
(e) Release and Bonding of Liens. In the event any Lien (other than a Permitted Lien) attaches to any Receivable or related Trust Asset from any Person claiming from and through the Servicer or one of its Affiliates, the Servicer shall, within the earlier to occur of ten (10) days after such attachment or the respective lienholders action to foreclose on such lien, either (a) cause such lien to be released of record, or (b) provide the Indenture Trustee with a bond in accordance with the applicable laws of the state in which the Receivable or related Trust Asset is located, issued by a corporate surety acceptable to the Indenture Trustee, in an amount and in form reasonably acceptable to the Indenture Trustee, or (c) provide the Indenture Trustee with such other security as the Indenture Trustee may reasonably require.
(f) Claims. Servicer shall: (a) promptly notify the Indenture Trustee and the Facility Administrator of (i) any claim, action or proceeding which may be reasonably expected to have a Material Adverse Effect, and (ii) any action, suit, proceeding, order or injunction of which Servicer becomes aware after the date hereof pending or threatened against or affecting Servicer or any Affiliate which may be reasonably expected to have a Material Adverse Effect; (b) at the request of Trust with respect to a claim or action or proceeding which arises from or through the Servicer or one of its Affiliates, appear in and defend, at Servicer's expense, any such claim, action or proceeding which would have a Material Adverse Effect; and (c) comply in all respects, and shall cause all Affiliates to comply in all respects, with the terms of any orders imposed on such Person by any Governmental Authority the failure to comply with which would have a Material Adverse Effect.
(g) Negative Pledge. Except as contemplated by the Transaction Documents, the Servicer (i) shall not, and shall not permit the Club Managing Entity or any other Seller Party to, encumber, pledge or otherwise grant a Lien on the Reservation System (including, without limitation, all hardware, software and data in respect thereof), any Operating Contract or the Club Management Agreement, (ii) shall, and shall cause the Club Managing Entity, to use commercially reasonable efforts to keep the Reservation System operational, not to dispose of the same and to allow the Club the use of, and access to, the Reservation System in accordance with the terms of Club Management Agreement and (iii) shall not permit Bluegreen Vacations Unlimited, Inc. or any other Seller Party to encumber, pledge or otherwise grant a Lien in respect of its interest as a Class B member in Bluegreen Vacation Club, Inc.
(h) Negative Pledge on Amenities and Common Areas. The Servicer shall (i) not, and shall not permit any other Seller Party or any Time Share Association managed by the Club Managing Entity to, and (ii) use its best efforts to not permit any other Time Share Association to, encumber, pledge or otherwise grant a Lien on any amenities or common areas or furnishings in respect of the Eligible Resorts.
(i) Modifications of Receivables. Except in connection with a reduction or increase in the interest rate not in excess of 1.0% in respect of an Obligor's election to begin or cease
making payments via pre-authorized checking, in connection with Upgrades or in connection with modifications to comply with the Servicemembers Civil Relief Act, the Servicer shall not reschedule, revise downward or defer payments on a Receivable or modify the terms or conditions of the related Contract or Mortgage in a manner adverse to the Trust unless the Note Majority shall have consented in writing to the same; provided that the Servicer shall, without the consent of the Note Majority, be permitted to modify, waive or amend the terms or conditions of the related Contract with respect to Receivables representing not more than 1.00% of the aggregate advances made under the Notes in connection only with Workout Receivables.
(j) General. At all times during the term of this Agreement to the extent not required to be retained by the Custodian, Servicer shall maintain complete and accurate files and records pertaining to each Receivable and related Trust Assets and of all business activities and operations conducted by Servicer in connection with its performance under this Agreement. All such files and records shall, upon the Indenture Trustee's request, be delivered to the Indenture Trustee or its designee upon early termination of this Agreement.
(k) Notices to Obligors.
(i) Promptly after the Closing Date or applicable Transfer Dates, as the case may be, and, in any event, not later than five (5) Business Days thereafter, the Servicer will direct or otherwise cause all Obligors of Receivables, and shall instruct or cause all future Obligors of such Receivables with respect to such Receivables, to remit all payments with respect to such Receivables only (x) by check, money order, phone payment, or Western Union Quick Collect mailed to, or generated by, an office of the Servicer, (y) by check, wire transfer, money order or moneygram to the Lockbox or Lockbox Account or (z) by pre-authorized checking or credit card payment for deposit into the Lockbox Account.
(ii) Within 30 days of the related Transfer Date for an Aruba Receivable, the Servicer shall confirm to the Custodian that notices have been mailed out to each Obligor under an Aruba Receivable that such Aruba Receivable has been transferred and assigned to the Trust and that the Trust has in turn, pledged such Aruba Receivable to the Indenture Trustee, in trust, for the benefit of the Noteholders. Such notice may include any notice or notices that the Bluegreen Properties, N.V.'s predecessors in title to the Aruba Receivable may give to the same Obligor with respect to any transfers and assignments of the Receivable by such predecessors. Such notice shall be in the form attached hereto as Exhibit N, as the same may be amended, revised or substituted by the Facility Administrator and the Servicer from time to time.
(l) Compliance with Agreements and Requirements of Laws. The Servicer will comply, and cause its Affiliates to comply, in all respects with all applicable Requirements of Law, including, without limitation, all Requirements of Law that require the provision by the Trust, the Indenture Trustee, any Noteholder or Servicer of notices, disclosures or other communications to Obligors or to any other Person that has an interest in any property securing a Receivable, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. The Servicer will preserve and maintain its corporate existence, rights, licenses, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain or qualify could not reasonably be expected to have a Material Adverse Effect.
(m) Real Estate Taxes. Servicer will pay, or cause to be paid (to the extent funds are available from the Time Share Association), when due all of Servicer's and its Affiliates' liabilities in respect of real estate taxes relating to the Eligible Resorts. Servicer will pay, or cause to be paid, when due all of Servicer's and its Affiliates' liabilities in respect of real estate taxes relating to any shortfall pursuant to keepwell arrangements with the Timeshare Associations or otherwise in respect of unsold Intervals. Servicer shall notify the Facility Administrator promptly of the non-payment of real estate taxes relating to the Eligible Resorts.
(n) Taxes. The Servicer will file or cause to be filed all United States federal tax returns and all other material tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing by it except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.
(o) Collection Policies.
(i) The Servicer will (and will cause the Sellers to) (A) perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (B) comply in all material respects with the Collection Policies in regard to each Receivable and the related Contract.
(ii) At least thirty (30) days prior to the effectiveness of any change in or amendment to any Collection Policy that would materially and adversely affect or impair the collectibility of any Receivable or that is a material change, the Servicer shall provide to the Facility Administrator a copy of the Collection Policies then in effect and a notice indicating such change or amendment, requesting the Noteholders' consent thereto. The Servicer shall provide a copy of any change or amendment to any Collection Policy within thirty (30) days after the effectiveness of such change in or amendment to any Collection Policy. For purposes of this section, any change that would cause the Issuer to not be a qualifying special purpose entity, as "qualifying special purpose entity" is defined under GAAP, shall be material.
(p) Insurance.
(i) The Servicer shall maintain, or cause to be maintained, with financially sound and reputable insurance companies, such insurance coverage as may be required by any Requirements of Law or pursuant to any Declarations. The Servicer shall use its best efforts to cooperate with and assist the Trust and the Indenture Trustee to enable the Trust and the Indenture Trustee to (x) obtain an endorsement showing the Indenture Trustee as mortgage loss payee with respect to each policy of property and casualty insurance with respect to each Eligible Resort, to the extent of its interest thereunder and to the extent that it is entitled thereto under the Declarations, (y) obtain the benefits of a mortgagee under the Declarations with respect to such insurance and (z) exercise the rights and remedies of a mortgagee under the Declarations. On or before March 31 of each year commencing in 2007 or at any time upon request of the Facility
Administrator, the Servicer shall deliver to the Facility Administrator, certifications evidencing coverage under all insurance policies described above.
(ii) If (A) the deductible with respect to any all-risk property casualty insurance policy (excluding in respect of earthquake, flood and windstorm damage risk) or any third-party liability insurance policy exceeds $100,000 per occurrence and (B) after the occurrence of a loss, the applicable Time Share Association (x) must pay such deductible to obtain the benefits of such insurance and (y) is unable to pay such deductible, from the proceeds of assessments to owners of an Interval or cash reserves or otherwise, the Servicer shall be obligated to advance (for the purpose of satisfying such deductible) to the Time Share Association the amount of such deductible that is in excess of $100,000 in order to obtain the benefits of such insurance policies.
(q) Exceptions; Recordation. The Servicer shall cause all exceptions to a Receivable File to be rectified within sixty (60) days of the related Transfer Date for such Receivable File. As soon as practicable after the related Transfer Date (but in no event later than ten (10) Business Days after such date (or as soon as practicable with respect to Receivables for which the original Mortgages are still at the related recording office)), the Servicer shall deliver in proper form for recording all Mortgage Assignments in respect of the Trust Assets to be recorded in the appropriate offices. Notwithstanding the foregoing sentence, the Servicer shall cause all evidences of recordation and all title insurance policies for which title commitments were delivered on the related Transfer Date to be delivered to the Custodian to be held as part of the Receivables File promptly after the Servicer's receipt of the same and in any event within 180 days of the related Transfer Date.
(r) Remarketing. Bluegreen shall be obligated to use commercially reasonable efforts to remarket the Intervals related to Defaulted Receivables. Bluegreen shall not, with respect to the remarketing of the Intervals associated with the Defaulted Receivables and related Trust Assets, make any "adverse selection" with respect to such Trust Assets vis-a-vis other receivables serviced by Bluegreen. Bluegreen, on behalf of the Trust and at the discretion of the Facility Administrator, shall take all necessary steps to have the record title of the applicable Resort Interests subject to such Defaulted Receivables continue to be held by the Club Trustee. In such event, Bluegreen shall direct the Club Trustee, directly or through its agents, (i) to exercise the remedies provided for in the Club Trust Agreement, in the Receivables themselves or in the other Club documents with respect to such Defaulted Receivables and the Obligors thereunder and (ii) to remarket the "Owner Beneficiary Rights" (as defined in the Club Trust Agreement) of the Obligors under such Defaulted Receivables with the purpose of effecting a recovery of the maximum proceeds in respect of such Defaulted Receivables or finding replacements therefor. Bluegreen, at the request of the Facility Administrator, shall reserve its rights under the Club Trust Agreement and/or the applicable Mortgages to obtain, at any time, record title and all beneficial interests in respect of the Intervals related to Defaulted Receivables. All actions taken by Bluegreen in respect of any Defaulted Receivable shall, at all times, be carried out in a manner such that none of the Trust, the Facility Administrator, the Owner Trustee or the Indenture Trustee shall, under Requirements of Law, be deemed to be the developer or declarant of any Eligible Resort or the Club. Bluegreen shall deposit the proceeds associated with the remarketing of the Interval related to a Defaulted Receivable into the Collection Account and shall be paid the "Remarketing Fee" associated with such Interval from the proceeds of the remarketing thereof pursuant to Section 2.11 or pursuant to the Servicer Purchase Option. Bluegreen (in the event the
Servicer is Bluegreen or an Affiliate thereof other than the Trust Depositor) shall at all times have the right (but not the obligation) to utilize the Servicer Purchase Option as set forth in Section 2.12 in lieu of performing the remarketing functions set forth in this Section. In connection with Bluegreen's performance of its remarketing duties hereunder Bluegreen (i) will undertake such duties in the ordinary course in a manner similar and consistent with (or better than) the manner in which Bluegreen sells or markets other timeshare properties it or its Affiliates owns and (ii) may not sell any Defaulted Receivables that are Trust Assets except for or as specifically permitted by this Agreement. Any proceeds from remarketing deposited into the Collection Account shall be in the form of cash. In no event shall the Trust originate any loan in connection with such remarketing.
(s) Servicer Advances. The Servicer is obligated to make on the Business Day preceding a Payment Date advances of regularly scheduled principal and interest payments relating to any Receivable the subject of a delinquent payment (other than a Defaulted Receivable with respect to which there shall be no Servicer Advances) if it determines in its sole discretion that such advances will be recoverable in future periods (each a "Servicer Advance" and collectively the "Servicer Advances"). Such Servicer Advances are reimbursable from Collections pursuant to Section 2.11.
(t) Termination of Club Managing Entity. The Servicer shall not permit the Club Managing Entity to terminate the Club Management Agreement without the prior written consent of the Facility Administrator, such consent not to be unreasonably withheld or delayed.
(u) Modifications to Collection Policy. Without the prior written consent of the Note Majority, the Servicer will not, and will not permit any Seller Party to, make any change that would materially and adversely affect or impair the collectibility of any Receivable or that is a material change, to any Collection Policy. For purposes of this section, any change that would cause the Issuer to not be a qualifying special purpose entity, as "qualifying special purpose entity" is defined under GAAP, shall be material.
(v) Fidelity Bond and Errors and Omissions Insurance. On or prior to
the Closing Date, the Servicer shall maintain or cause to be maintained
fidelity bond and errors and omissions insurance with respect to the
Servicer in a minimum amount of $1,000,000 per policy and shall name the
Indenture Trustee as an additional insured. No provision of this clause
(v) requiring such fidelity bond or errors and omissions insurance shall
diminish or relieve the Servicer from its duties and obligations as set
forth in this Indenture. The Servicer shall be deemed to have complied
with this provision if one of its respective Affiliates has such fidelity
bond or errors and omissions insurance coverage and, by the terms of such
fidelity bond or errors and omissions insurance policy, the coverage
afforded thereunder extends to the Servicer. On or before March 31 of each
year commencing in 2007 or at any time upon request of the Facility
Administrator, the Servicer shall deliver to the Facility Administrator, a
certification evidencing coverage under such fidelity bond and the errors
and omissions insurance. Any such fidelity bond or errors and omissions
insurance policy (or endorsement thereto) shall contain a provision that
such policy shall not be canceled or modified without ten (10) Business
Days prior written notice to the Facility Administrator or such other
amendment or cancellation provisions as may be acceptable to the Facility
Administrator; provided that Servicer agrees to use commercially
reasonable efforts to
require the applicable insurer to provide 30 days prior written notice of any cancellation or modification.
ARTICLE VII
SUBJECT TO CLUB TRUST AGREEMENT
Section 7.1. Rights Subject to Club Trust Agreement. Notwithstanding anything to the contrary set forth herein or in any other Transaction Documents or otherwise, all references to the rights of the Trust and the Indenture Trustee with respect to Receivables shall be subject at all times to the provisions of the Club Trust Agreement and the other agreements executed by the Beneficiaries in connection therewith.
ARTICLE VIII
SERVICER TERMINATION EVENTS
Section 8.1. Servicer Termination Events.
Each of the following events shall constitute a "Servicer Termination Event":
(a) any failure by the Servicer to make any payment or deposit required to be made by the Servicer hereunder, under the Lockbox Agreement or any other Transaction Document and the continuance of such failure for a period of one (1) Business Day after the date on which such payment or deposit was due and not made provided, however, that in the event of a Force Majeure Delay, the period within which the Servicer shall make such payment or deposit shall be extended to such longer period as is appropriate, not to exceed 10 Business Days;
(b) failure on the Servicer's part to observe or perform in any material respect any covenant or agreement in this Agreement, the Lockbox Agreement or any other Transaction Document (other than a covenant or agreement, the breach of which is specifically addressed elsewhere in this Section) which continues unremedied for 30 days after the earlier of (i) the date on which notice of such failure is delivered to Servicer or (ii) Servicer otherwise has actual knowledge of such fact;
(c) any assignment by the Servicer of its duties or rights hereunder, under the Lockbox Agreement, or any other Transaction Document, except as specifically permitted hereunder or thereunder, or any attempt to make such an assignment;
(d) an involuntary case under any applicable bankruptcy, insolvency or other similar law shall have been commenced in respect of the Servicer and shall not have been dismissed within 30 days, or a court having jurisdiction in the premises shall have entered a decree or order for relief in respect of the Servicer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Servicer or for any substantial liquidation or winding up of its affairs;
(e) the Servicer shall have commenced a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall have consented to the entry of an order for relief in an involuntary case under any such law, or shall have consented to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of the Servicer or for any substantial part of its property, or shall have made any general assignment for the benefit of its creditors, or shall have failed to, or admitted in writing its inability to, pay its debts as they become due, or shall have taken any corporate action in furtherance of the foregoing;
(f) (i) any failure by the Servicer to comply with the covenants
contained in Section 6.3(a) which remains uncured for 30 days after the
date on which such failure commences, (ii) any failure by the Servicer or
Bluegreen to comply with the covenants contained in Section 6.3 (b), (g),
(h), (i), (k), (l), (n), (p), (q) or (v); (iii) any failure by the
Servicer to deliver the reports described in Article IX of this Agreement
which remains uncured for five (5) Business Days after the date on which
such failure commences; provided, however that the period within which
Servicer shall deliver such reports shall be extended to such longer
period up to 10 Business Days as is appropriate in the event of a Force
Majeure Delay; or (iv) any failure on the part of the Servicer or
Bluegreen to observe or perform any of its covenants or agreements set
forth in any Transaction Document (other than as expressly provided for in
another clause of this Section 8.1), which failure continues unremedied
for a period of 30 days after the earlier of (i) the Servicer or Bluegreen
obtains actual knowledge of such failure after due inquiry or (ii) the
Facility Administrator, the Indenture Trustee or the Custodian provides
the Servicer or Bluegreen with written notice of such failure.
(g) any representation, warranty or statement of the Servicer made in this Agreement or any certificate, report or other writing delivered pursuant hereto shall prove to be incorrect in any material respect as of the time when the same shall have been made and, within 30 days after the earlier of (i) written notice thereof shall have been given to the Servicer by the Trust, the Indenture Trustee or the Facility Administrator or (ii) the Servicer otherwise has actual knowledge thereof, the circumstances or condition in respect of which such representation, warranty or statement was incorrect shall not have been eliminated or otherwise cured;
(h) a default or breach shall occur under any other agreement, document or instrument to which the Servicer is a party or by which the Servicer or its property is bound that is not cured within any applicable grace period therefor, and such default or breach (i) involves the failure to make any payment when due in respect of any Indebtedness of the Servicer in excess of five percent (5%) of the Servicer's Tangible Net Worth, (ii) causes, or permits any holder of such Indebtedness or a trustee or agent to cause, Indebtedness or a portion thereof in excess of five percent (5%) of the Servicer's Tangible Net Worth to become due prior to its stated maturity or prior to its regularly scheduled dates of payment, regardless of whether such default is waived, or such right is exercised, by such holder, trustee or agent; provided that it shall not be a Servicer Termination Event solely under this clause (ii) if such default or breach is cured or waived within 60 days after the occurrence thereof so long as such cure or waiver is being diligently pursued, or (iii) results in such Indebtedness becoming due prior to its stated maturity or prior to its regularly scheduled dates of payment;
(i) as of any Determination Date, the Trailing Three Month (60 to 120) Day Delinquency Rate exceeds 7.0% and such excess shall exist for 30 days;
(j) as of any Determination Date, the Trailing Six Month Default Rate exceeds 8.0% and such excess shall exist for 30 days;
(k) as of any Determination Date, with respect to any Tranche, the Lifetime Cumulative Default Rate for such Tranche shall exceed the Lifetime Servicer Cumulative Default Threshold for such Tranche and such excess with respect to such Tranche shall continue for 30 days;
(l) any Eligible Resort (except for La Cabana Beach & Racquet Club and Casa del Mar Beach Resort or other resort approved by the Noteholders) shall fail to be a Bluegreen Vacation Club Component Site Resort or otherwise fail to maintain all rights and privileges with respect to the Club, and such failure shall exist for 30 days;
(m) any Eligible Resort (except for La Cabana Beach & Racquet Club and Casa del Mar Beach Resort or other resort approved by the Noteholders) shall cease to be managed and operated by Bluegreen or one of its Subsidiaries and such condition shall continue for 30 days; provided that it shall not be a Servicer Termination Event under this clause (m) if any successor manager or operator of any Eligible Resort (other than Bluegreen or one of its Subsidiaries) is reasonably acceptable to the Facility Administrator; provided further that this clause (m) shall not be a Servicer Termination Event so long as none of General Electric Capital Corporation or any of its Affiliates is the Facility Administrator or a Noteholder;
(n) the operating budgets and reserve accounts for the Time Share Associations at each Eligible Resort (except for La Cabana Beach & Racquet Club and Casa del Mar Beach Resort) shall fail to be maintained in compliance with all applicable Requirements of Law and the applicable Time Share Documents and such failure shall continue for 30 days; or
(o) a Change of Control shall occur.
In the event that any party hereto becomes aware of a Servicer Termination Event
(or an event which with the passage of time or giving of notice would become a
Servicer Termination Event) such party shall promptly notify the other parties
hereto. Additionally, upon the occurrence of a Servicer Termination Event and
the Facility Administrator's giving of notice of a Service Transfer pursuant to
Section 8.2(a) hereof, such Servicer Termination Event shall be irrevocably
deemed to have "occurred and be continuing" unless otherwise waived by more than
50% of the Outstanding Amount; provided, further, that so long as Bluegreen or
an Affiliate of Bluegreen is not the Servicer, clauses (h) through (o) of this
Section 8.1 shall not constitute a Servicer Termination Event.
Section 8.2. Service Transfer.
(a) If a Servicer Termination Event has occurred and is continuing, the Facility Administrator, at the direction of the Noteholders shall, by written notice delivered to the Servicer, terminate all (but not less than all) of the Servicer's management, administrative, servicing, custodial and collection functions (such termination being herein called a "Service Transfer" and such terminated Servicer, being called a "Predecessor Servicer"); provided that notwithstanding
anything in this Agreement to the contrary, in the event the Back-up Servicer shall become the Servicer hereunder, at any time thereafter the Back-up Servicer may resign from its duties as Servicer upon ninety (90) days written notice to the Indenture Trustee and the Facility Administrator.
(b) Upon receipt of the notice required by Section 8.2(a) (or, if
later, on a date designated therein), all rights, benefits, fees,
indemnities, authority and power of the Servicer under this Agreement,
whether with respect to the Trust Assets or otherwise shall pass to and be
vested in the Back-up Servicer (the "Successor Servicer") pursuant to and
under this Section 8.2; and, without limitation, the Successor Servicer is
authorized and empowered to execute and deliver on behalf of the Servicer,
as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do any and all acts or things necessary or appropriate
to effect the purposes of such notice of termination. In the event that
the Back-up Servicer is unable to act as the Successor Servicer, subject
to Section 3.7(e) of the Indenture, the Indenture Trustee without further
action shall be appointed as Successor Servicer pursuant to and under this
Section 8.2. The Servicer agrees to cooperate with the Successor Servicer
in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the transfer to the
Successor Servicer for administration by it of all cash amounts which
shall at the time be held by the Servicer for deposit, or have been
deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received
with respect to the Receivables and the related Trust Assets. The Servicer
shall transfer to the Successor Servicer (i) all records held by the
Servicer relating to the Receivables and the related Trust Assets in such
electronic form as the Successor Servicer may reasonably request and (ii)
any Receivables Files in the Servicer's possession relating to the
Receivables and the related Trust Assets. In addition, the Servicer shall
permit access to its premises during normal business hours provided
reasonable notice has been provided to the Servicer (including all
computer records and programs to the extent permitted under any related
licensing agreements) to the Successor Servicer or its designee, and shall
pay the reasonable out-of-pocket transition expenses of the Successor
Servicer.
Section 8.3. Successor Servicer to Act; Appointment of Successor Servicer. On or after a Service Transfer pursuant to Section 8.2, the Successor Servicer shall be the successor in all respects to the Servicer in its capacity as Servicer under this Agreement and the other Transaction Documents and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and the terminated Servicer shall be relieved of such responsibilities, duties and liabilities arising after such Service Transfer; provided, however, that the Successor Servicer shall not be liable for any acts or omissions of the Servicer occurring prior to such Service Transfer or for any breach by the Servicer of any of its representations and warranties or covenants contained herein or in any related document or agreement. On or after a Service Transfer pursuant to Section 8.2, the Successor Servicer shall be the successor in all respects to the Trust Administrator in its capacity as Trust Administrator under the Administration Agreement and the transactions set forth or provided for therein.
Section 8.4. Effect of Transfer.
(a) After a Service Transfer, the terminated Servicer shall have no further obligations with respect to the management, administration, servicing, custody or collection of the Receivables and the related Trust Assets and the Successor Servicer appointed pursuant to Section 8.2 shall have all of such obligations, except that the terminated Servicer will transmit or cause to
be transmitted directly to the Successor Servicer for its own account, promptly on receipt and in the same form in which received, any amounts (properly endorsed where required for the Successor Servicer to collect them) received as payments upon or otherwise in connection with the Receivables and the related Trust Assets.
(b) A Service Transfer shall not affect the rights and duties of the parties hereunder (including but not limited to the indemnities of the Servicer) other than those relating to the management, administration, servicing, custody or collection of the Receivables and the related Trust Assets.
Section 8.5. Successor Servicer Indemnification. The Servicer shall defend, indemnify and hold the Successor Servicer and any officers, directors, employees or agents of the Successor Servicer harmless against any and all claims, losses, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments and any other costs, fees, and expenses that the Successor Servicer may sustain in connection with the claims asserted at any time by third parties against the Successor Servicer which result from (i) any illegal, willful or grossly negligent act taken or omission by the Servicer or (ii) a breach of any representations or covenants of the Servicer in Sections 5.5 and 6.3 hereof. The indemnification provided by this Section 8.5 shall survive the termination of this Agreement.
Section 8.6. Responsibilities of the Successor Servicer. The Successor Servicer will not be responsible for delays attributable to the Predecessor Servicer's failure to deliver information, defects in the information supplied by the Predecessor Servicer or other circumstances beyond the control of the Successor Servicer.
The Successor Servicer will make arrangements with the Servicer for the
prompt and safe transfer of, and the Predecessor Servicer shall provide to the
Successor Servicer, all necessary servicing files and records, including (as
deemed necessary by the Successor Servicer at such time): (i) microfiche loan
documentation, (ii) servicing system tapes, (iii) Receivable payment history,
(iv) collections history and (v) the trial balances, as of the close of business
on the day immediately preceding conversion to the Successor Servicer,
reflecting all applicable loan information.
The Successor Servicer shall have no responsibility and shall not be in default hereunder nor incur any liability for any failure, error, malfunction or any delay in carrying out any of its duties under this Agreement if any such failure or delay results from the Successor Servicer acting in accordance with information prepared or supplied by a Person other than the Successor Servicer or from the failure of any such Person to prepare or provide such information. The Successor Servicer shall have no responsibility, shall not be in default and shall incur no liability (i) for any act or failure to act by any third party, including the Servicer or for any inaccuracy or omission in a notice or communication received by the Successor Servicer from any third party or (ii) which is due to or results from the invalidity, unenforceability of any Receivable with Requirements of Law or the breach or the inaccuracy of any representation or warrant made with respect to any Receivable.
Section 8.7. Waiver of Servicer Termination Event. Noteholders representing more than 50% of the Outstanding Amount, may, by written notice delivered to the parties, waive any Servicer Termination Event.
ARTICLE IX
PERFORMANCE AND DUTIES OF SERVICER
Section 9.1. General Requirements of Servicer. Servicer will maintain a loan processing database and will service the Receivables and the other Trust Assets in accordance with generally accepted receivables servicing practices for similar types of receivables. In the performance of its duties, unless otherwise specifically provided herein, Servicer shall comply with the terms of the Receivables signed by the Obligor. Servicer shall use commercially reasonable efforts (consistent with the preceding sentence) to collect and shall process all payments in accordance with its present practice. Servicer shall also provide the Facility Administrator with monthly reports of all cash flow (including any delinquencies), together with such other information reasonably requested by the Facility Administrator all in the form attached hereto as Schedule II as well as the reports described in this Article IX; provided, however, in the event of a Service Transfer, the Back-up Servicer shall provide the Facility Administrator with monthly reports of all cash flow (including any delinquencies), together with such other information reasonably requested by the Facility Administrator in the form attached hereto as Schedule II as well as the reports described in Sections 9.4 and 9.6 hereof only. Bluegreen will remarket Intervals related to Defaulted Receivables pursuant to Section 6.3(r) hereof and make Servicer Advances pursuant to Section 6.3(s) hereof. Notwithstanding anything to the contrary contained herein, upon a Service Transfer, the Back-up Servicer shall be under no obligation to remarket Intervals related to Defaulted Receivables pursuant to Section 6.3(r) hereof, make Servicer Advances pursuant to Section 6.3(s) hereof or provide the information set forth in Section 9.4(h) or Section 9.12 hereof.
Section 9.2. Servicer as Independent Contractor. Servicer shall have the status of an independent contractor. Nothing herein contained shall be considered to create a partnership or joint venture between the Trust, the Facility Administrator, the Servicer or any Noteholder. Servicer is not to be considered an agent or employee of the Trust or the Facility Administrator for any purpose, and the employees of Servicer are not entitled to any of the benefits that the Trust, the Facility Administrator or any Noteholder provides its employees.
Section 9.3. [Omitted]
Section 9.4. Description of Reports. For each Collection Period during the term of this Agreement, Servicer will prepare the following standard industry reports and submit them to the Facility Administrator and the Indenture Trustee no later than the second Business Day prior to the related Payment Date (collectively, the "Monthly Report"):
(a) Title: Trial/Aging Balance Report Purpose: A listing of all Receivables indicating the outstanding principal balance of each Receivable and the aggregate outstanding balance of all Receivables.
(b) Title: New Receivables Report Purpose: A listing of all Receivables added to the Receivables Pool during such month.
(c) Title: Cash Receipts Report Purpose: A listing of all Receivables showing the following with
respect to each Receivable and totals with respect to all Receivables: payments received, showing a breakdown into principal, interest and other amounts paid.
(d) Title: Delinquency/Default/Aging Report Purpose: A listing of all Receivables showing delinquencies, broken down into columns indicating the length of such delinquencies at 30 days, 60 days, 90 days, and 120 days or more, a listing of all Defaulted Receivables and a computer diskette or magnetic tape prepared in the form of Schedule II hereto which provides the aging history of the Receivables.
(e) Title: Cancellation, Prepayment, Upgrades, Aging, Remarketing, Payoff and Servicer Purchase Option Report Purpose: A listing of all Receivables which were: canceled, paid off in their entirety, the subject of a prepayment or Upgrade or subject to the Servicer Purchase Option. An aging report of all repossessed Intervals. A listing of all Receivables subject to remarketing with the sales price of all remarketed Intervals compared against the original sales price.
(f) Title: Summary Report Purpose: A report in the form of Schedule II attached hereto or such other form as approved by the Facility Administrator summarizing changes from the prior month's report. The Facility Administrator may from time to time in its reasonable discretion modify the reporting requirements and add reports on an as-needed basis, which Servicer shall complete in a timely fashion. Servicer and the Facility Administrator shall agree upon the timing of preparation and delivery of additional reports and the additional cost, if any, of the modification.
(g) Title: Cash Flow Report Purpose: A report which delineates total Collections received for a Collection Period, Servicer Advances made with respect to the related Payment Date as well as fees to third party service providers (i.e. Indenture Trustee Fees, Lockbox Fees, etc.).
(h) Title: Vacation Points Purpose: A report which lists all outstanding Vacation Points and the total amount of available Accommodations relating thereto.
Section 9.5. Officer's Certificate. The Reports delivered pursuant to
Section 9.4 hereof shall be accompanied by a certificate of an Officer of the
Servicer substantially in the form of Exhibit G, certifying the accuracy of the
Reports and that no Servicer Termination Event or event that with notice or
lapse of time or both would become a Servicer Termination Event has occurred, or
if such event has occurred and is continuing, specifying the event and its
status; provided, however, that this Section 9.5 shall not apply after the
occurrence of a Service Transfer.
Section 9.6. Annual Report of Accountants.
(a) The Servicer shall cause a firm of nationally recognized independent certified public accountants (the "Independent Accountants") (provided that if the Back-up Servicer becomes the Servicer hereunder, such accountants shall not be required to be "nationally recognized"), to deliver to the Facility Administrator and the Indenture Trustee beginning on April 30, 2007, with respect to the twelve months ended the immediately preceding December 31 (or other applicable date), a statement (the "Accountant's Report") addressed to the Board of Directors of the Servicer and Servicer will promptly provide a copy to the Facility Administrator and the Indenture Trustee to the effect that such firm has audited the financial statements of Servicer and issued its report thereon and that such audit:
(i) was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as such firm considered necessary in the circumstances; and
(ii) so long as Bluegreen or one of its Affiliates is the Servicer, included an examination of documents and records relating to the servicing of the Receivables and the related Trust Assets under this Agreement.
The Accountant's Report shall further state that (so long as Bluegreen or one of its Affiliates is the Servicer):
(1) a review in accordance with agreed upon procedures was made of one randomly selected Monthly Report; and
(2) except as disclosed in the Report, no exceptions or errors in the Monthly Report so examined were found.
(b) The Accountant's Report shall also indicate that the firm is independent of the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants.
Section 9.7. Annual Statement of Compliance from Servicer. The Servicer (in the event the Servicer is Bluegreen or an Affiliate thereof) will deliver to the Facility Administrator and the Indenture Trustee, on or before March 31 of each year commencing March 31, 2007, an Officer's Certificate stating that (a) a review of the activities of the Servicer during the prior calendar year and of its performance under this Agreement was made under the supervision of the officer signing such certificate, (b) to such officer's knowledge, based on such review, the Servicer has fully performed all its obligations under this
Agreement, or, if there has been a default in the performance of any such obligation, specifying each such default known to such officer and the nature and status thereof, and (c) to such officer's knowledge, based on such review, the Servicer has provided all required privacy notices to Obligors in accordance with and to the extent required by the Gramm-Leach-Bliley Act, as amended or modified from time to time.
Section 9.8. Sales and Inventory Reports. A quarterly report showing all sales and cancellations of sales of Intervals on Eligible Resorts on a resort by resort basis, in form and content reasonably satisfactory to the Facility Administrator; and within thirty (30) Business Days after the end of each fiscal year (provided the Servicer is Bluegreen or an Affiliate thereof), an annual sales and inventory report for the Eligible Resorts detailing the sales of all Intervals on a resort by resort basis during such fiscal year and the available inventory of Units and Intervals, certified by the Servicer (provided the Servicer is Bluegreen or an Affiliate thereof) to be true, correct and complete and otherwise in the form approved by the Trust.
Section 9.9. Financial Reports.
(a) Not later than the earlier of (A) 120 days after the end of each fiscal year of the Servicer and (B) the public filing with the SEC of the Servicer's Form 10-K for such fiscal year, the Servicer shall deliver to the Facility Administrator the audited consolidated financial statements of the Servicer (provided the Servicer is Bluegreen or an Affiliate thereof).
(b) Not later than the earlier of (A) 60 days after the end of each of the first three fiscal quarterly periods of each fiscal year of the Servicer and (B) the public filing with the SEC of the Servicer's Form 10-Q for each such fiscal quarter, the Servicer shall deliver to the Facility Administrator unaudited financial statements of Servicer (provided the Servicer is Bluegreen or an Affiliate thereof) certified by its chief financial officer as fairly presenting the financial position of Bluegreen and its Subsidiaries, as well as, to the extent requested by the Facility Administrator and available to Servicer (provided the Servicer is Bluegreen or an Affiliate thereof), unaudited bi-annual financial statements of the Time Share Association.
(c) Each delivery of financial statements under this Section 9.9
shall be accompanied by a certificate of the Servicer's chief financial
officer certifying as to its compliance with the covenants contained in
Section 6.3(a).
Section 9.10. Time Share Association Reports; Club Reports.
(a) To the extent the Servicer is Bluegreen and Bluegreen or its Affiliates control the Eligible Resort, the Servicer shall deliver to the Facility Administrator the annual unaudited financial statements of each Time Share Association not later than 90 days, and the annual audited financial statements of each Time Share Association not later than 180 days, after the end of each fiscal year of the Time Share Association, and, to the extent the Eligible Resort is not in the Servicer's or one of its Subsidiaries control, the Servicer shall make a good faith effort to obtain the same from the respective Time Share Association within such time periods.
(b) Not later than 180 days after the end of each fiscal year of the Club, the Servicer shall deliver to the Facility Administrator the annual financial statements of the Club.
Section 9.11. Audit Reports. Promptly upon receipt thereof, one (1) copy of each other report submitted to Servicer by its independent public accountants in connection with any annual, interim or special audit made by them of the books of the Servicer.
Section 9.12. Other Reports. Such other reports, statements, notices or written communications relating to the Servicer, the Time Share Associations or the Eligible Resorts as are available to Servicer and as the Facility Administrator may reasonably require.
Section 9.13. SEC Reports. Promptly upon their becoming publicly available one (1) copy of each financial statement, report, notice or proxy statement sent by the Servicer to security holders generally, and of each regular or periodic report and any registration statement, prospectus or written communication (other than transmittal letters) in respect thereof filed by Servicer with, or received by Servicer in connection therewith from, any securities exchange or the Securities and Exchange Commission or any successor agency. The parties agree that current reports filed on Form 8-K are not regular or periodic reports required to be delivered hereunder.
ARTICLE X
FACILITY ADMINISTRATOR
Section 10.1. Appointment; Nature of Relationship. General Electric Capital Corporation is hereby appointed by each Noteholder as its contractual representative (herein referred to as the "Facility Administrator") hereunder and under each other Transaction Document, and each of the Noteholders irrevocably authorizes the Facility Administrator to act as the contractual representative of such Noteholder with the rights and duties expressly set forth herein and in the other Transaction Documents. The Facility Administrator agrees to act as such contractual representative upon the express conditions contained in this Article X. Notwithstanding the use of the defined term "Facility Administrator," it is expressly understood and agreed that the Facility Administrator shall not have any fiduciary responsibilities to any Noteholder by reason of this Agreement or any other Transaction Document and that the Facility Administrator is merely acting as the contractual representative of the Noteholders with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Noteholders' contractual representative, the Facility Administrator (i) does not hereby assume any fiduciary duties to any of the Noteholders and (ii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Noteholders hereby agrees to assert no claim against the Facility Administrator on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Noteholder hereby waives.
Section 10.2. Powers. The Facility Administrator shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Facility Administrator by the terms thereof, together with such powers as are reasonably incidental thereto. The Facility Administrator shall have no implied duties to the Noteholders, or any obligation to the Noteholders to take any action thereunder except any action specifically provided by the Transaction Documents to be taken by the Facility Administrator.
Section 10.3. General Immunity. Neither the Facility Administrator nor any of its directors, officers, agents or employees shall be liable to any Noteholder for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person.
Section 10.4. No Responsibility for Advances, Recitals, etc. Neither the
Facility Administrator nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any
Transaction Document or any advances hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor under any
Transaction Document, including, without limitation, any agreement by an obligor
to furnish information directly to each Noteholder; (c) the satisfaction of any
condition specified in Article IV, except receipt of items required to be
delivered solely to the Facility Administrator; (d) the existence or possible
existence of any Event of Default, Servicer Termination Event or Termination
Event; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Transaction Document or any other instrument or writing
furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Servicer or its Subsidiaries. The Facility
Administrator shall have no duty to disclose to the Noteholders information that
is not required to be furnished by the Servicer to the Facility Administrator at
such time, but is voluntarily furnished by the Servicer to the Facility
Administrator (either in its capacity as Facility Administrator or in its
individual capacity); provided that if any such information is provided to any
Noteholder by the Facility Administrator, the Facility Administrator shall
provide such information to all Noteholders.
Section 10.5. Action on Instructions of Noteholders. The Facility Administrator shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Noteholders holding the required percentage of the Outstanding Amount, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Noteholders. The Noteholders hereby acknowledge that the Facility Administrator shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Transaction Document unless it shall be requested in writing to do so by the Noteholders. The Facility Administrator shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Noteholders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 10.6. Employment of Agents and Counsel. The Facility Administrator may execute any of its duties as Facility Administrator hereunder and under any other Transaction Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Noteholders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Facility Administrator shall be entitled to advice of counsel concerning the contractual arrangement between the Facility Administrator and the Noteholders and all matters pertaining to the Facility Administrator's duties hereunder and under any other Transaction Document.
Section 10.7. Reliance on Documents; Counsel. The Facility Administrator shall be entitled to rely upon any notice, consent, certificate, affidavit, letter, telegram, statement, paper, data or document
believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Facility Administrator, which counsel may be employees of the Facility Administrator.
Section 10.8. Facility Administrator's Reimbursement and Indemnification. Each Noteholder agrees to reimburse and indemnify the Facility Administrator ratably in proportion to the aggregate Outstanding Amount held by such Noteholder (i) for any amounts not reimbursed by the Servicer, any Seller, the Trust or the Trust Depositor for which the Facility Administrator is entitled to reimbursement by the Servicer, any Seller, the Trust or the Trust Depositor under the Transaction Documents, (ii) for any other expenses incurred by the Facility Administrator on behalf of the Noteholders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents (including, without limitation, for any expenses incurred by the Facility Administrator in connection with any dispute between the Facility Administrator and any Noteholder or between two or more of the Noteholders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Facility Administrator in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Facility Administrator in connection with any dispute between the Facility Administrator and any Noteholder or between two or more of the Noteholders), or the enforcement of any of the terms of the Transaction Documents or of any such other documents, provided that no Noteholder shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Facility Administrator. The obligations of the Noteholders under this Section 10.8 shall survive payment of all amounts hereunder and termination of this Agreement.
Section 10.9. Notice of Default. The Facility Administrator shall not be deemed to have knowledge or notice of the occurrence of any Event of Default, Servicer Termination Event or Termination Event unless the Facility Administrator has received written notice from a Noteholder, the Trust, the Trust Depositor, the Indenture Trustee or the Servicer referring to this Agreement describing such Event of Default, Servicer Termination Event or Termination Event and stating that such notice is a "notice of default" or words of similar import. In the event that the Facility Administrator receives such a notice, the Facility Administrator shall give prompt notice thereof to the Indenture Trustee and the Noteholders.
Section 10.10. Rights as a Noteholder. In the event the Facility Administrator is a Noteholder, the Facility Administrator shall have the same rights and powers hereunder and under any other Transaction Document as any Noteholder and may exercise the same as though it were not the Facility Administrator, and the term "Noteholder" or "Noteholders" shall, at any time when the Facility Administrator is a Noteholder, unless the context otherwise indicates, include the Facility Administrator in its individual capacity. The Facility Administrator and its Affiliates may lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Servicer or any of its Subsidiaries in which the Servicer or such Subsidiary is not restricted hereby from engaging with any other Person.
Section 10.11. Noteholder Credit Decision. Except as expressly set forth in this Section 10.11, each Noteholder acknowledges that it has, independently and without reliance upon the Facility
Administrator or any other Noteholder and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Noteholder also acknowledges that it will, independently and without reliance upon the Facility Administrator or any other Noteholder and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Transaction Documents. Notwithstanding the foregoing, the Noteholders acknowledge and the Facility Administrator agrees that the Facility Administrator will perform certain due diligence including tests resulting in FICO scores with respect to the Obligors of certain Receivables and various file review procedures as selected by the Facility Administrator (collectively, the "Specified Procedures"). The Facility Administrator shall be under no duty to inquire as to the accuracy or genuineness of the information provided to it in conducting the Specified Procedures nor shall it have any duty to review any information other than such files, reports and other information provided to it by Bluegreen.
Section 10.12. Successor Facility Administrator. The Facility Administrator, with the written consent of the Servicer (so long as Bluegreen or an Affiliate thereof is the Servicer), which consent shall not be unreasonably withheld or delayed, may resign at any time by giving written notice thereof to the Noteholders and the Servicer, such resignation to be effective upon the appointment of a successor Facility Administrator or, if no successor Facility Administrator has been appointed, forty-five days after the retiring Facility Administrator gives notice of its intention to resign. The Facility Administrator may be removed at any time with or without cause by written notice received by the Facility Administrator from all of the Noteholders, such removal to be effective on the date specified by such Noteholders. Upon any such resignation or removal, the Noteholders shall have the right to appoint, on behalf of the Noteholders, a successor Facility Administrator with the written consent of the Servicer (so long as the Servicer is Bluegreen or an Affiliate thereof), which such consent shall not be unreasonably withheld or delayed. If no successor Facility Administrator shall have been so appointed by the Noteholders within thirty days after the resigning Facility Administrator's giving notice of its intention to resign, then the resigning Facility Administrator may appoint, on behalf of the Noteholders, a successor Facility Administrator. Notwithstanding the previous sentence, the Facility Administrator may at any time without the consent of the Servicer or any Noteholder, appoint any of its Affiliates which is a commercial bank or other financial institution as a successor Facility Administrator hereunder. If the Facility Administrator has resigned or been removed and no successor Facility Administrator has been appointed, the Noteholders may perform all the duties of the Facility Administrator hereunder and for all other purposes shall deal directly with the parties hereto. No successor Facility Administrator shall be deemed to be appointed hereunder until such successor Facility Administrator has accepted the appointment. Upon the acceptance of any appointment as Facility Administrator hereunder by a successor Facility Administrator, such successor Facility Administrator shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning or removed Facility Administrator. Upon the effectiveness of the resignation or removal of the Facility Administrator, the resigning or removed Facility Administrator shall be discharged from its duties and obligations hereunder and under the Transaction Documents. After the effectiveness of the resignation or removal of a Facility Administrator, the provisions of this Article X shall continue in effect for the benefit of such Facility Administrator in respect of any actions taken or omitted to be taken by it while it was acting as the Facility Administrator hereunder and under the other Transaction Documents.
ARTICLE XI
ASSIGNMENTS; REPURCHASE OPTION
Section 11.1. Assignments; Participations.
(a) Except as otherwise contemplated by or permitted under this Agreement, neither the Trust, the Trust Depositor nor the Servicer may assign its rights under this Agreement without the prior written consent of more than 66 2/3% of the Outstanding Amount.
(b) Any Noteholder may, in the ordinary course of its business and in accordance with Requirements of Law, at any time sell to one or more banks or other entities ("Participants") participating interests in the Notes. In the event of any such sale by a Noteholder of participating interests to a Participant, such Noteholder's obligations under the Transaction Documents shall remain unchanged, such Noteholder shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable under this Agreement or the other Transaction Documents shall be determined as if such Noteholder had not sold such participating interests, and all parties shall continue to deal solely and directly with such Noteholder in connection with such Noteholder's rights and obligations under the Transaction Documents.
(c) Except as provided in the applicable Note Purchase Agreement, any Noteholder may, in the ordinary course of its business and in accordance with Requirements of Law, at any time assign to one or more banks or other entities all or any part of its rights and obligations under the Transaction Documents.
Section 11.2. Trust Depositor's Repurchase Option.
Following Trust Depositor's written notice to the Indenture Trustee and
the Facility Administrator at least twenty (20) days prior to a Payment Date, if
(i) the Receivable Balance of all Receivables in the Asset Pool is then less
than 10.00% of the aggregate Receivable Balances of the Receivables purchased
hereunder when so purchased and (ii) Bluegreen or an Affiliate of Bluegreen is
the Servicer, then the Trust Depositor may (but is not required to) repurchase
from the Trust on that Payment Date all outstanding Trust Assets at a price
equal to the Aggregate Outstandings. Such price is to be deposited in the
Collection Account one Business Day before such Payment Date, against the
Indenture Trustee's retransfer and release of the Receivables and related Trust
Assets to the Trust Depositor.
ARTICLE XII
TERMINATION
Section 12.1. Sale of Trust Assets.
(a) Upon any sale of the assets of the Trust pursuant to Section 9.02 of the Trust Agreement, the Servicer shall instruct the Indenture Trustee to deposit the proceeds from such sale after all payments and reserves therefrom have been made (the "Insolvency Proceeds") in the Collection Account. On the Payment Date on which the Insolvency Proceeds are deposited in the Collection Account (or, if such proceeds are not so deposited on a Payment Date, on the Payment Date immediately following such deposit), the Servicer shall instruct the Indenture Trustee to allocate such Insolvency Proceeds and any
funds remaining on deposit in the Reserve Account (including the proceeds of any sale of investments therein) in accordance with Section 2.11.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Amendments and Waivers.
(a) This Agreement may be amended from time to time by the Trust Depositor, the Servicer, the Facility Administrator, the Indenture Trustee and the Owner Trustee on behalf of the Trust, collectively, but without the consent of the Noteholders, to correct manifest error, to cure any ambiguity, to correct or supplement any provisions in this Agreement which are inconsistent with the provisions herein which may be ambiguous or inconsistent with any other provisions herein or in any other Transaction Document, as the case may be, or to add any other provisions with respect to matters or questions arising under this Agreement that shall not be inconsistent with the provisions of this Agreement.
(b) Without limiting Section 13.1(a) above, this Agreement may also be
amended from time to time by the Trust Depositor, the Servicer, the Facility
Administrator, the Indenture Trustee and the Owner Trustee on behalf of the
Trust, with the consent of the Note Majority, provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Receivables or
distributions which are required to be made on any Note, (ii) amend the Reserve
Account Required Amount or the manner in which the Reserve Account is funded,
(iii) change the interest rate on any Notes or adversely affect the priority of
payment of principal or interest made to the Noteholders or (iv) reduce the
aforesaid percentage required to consent to any such amendment, in each case
without the consent of all of the Noteholders. Unless otherwise expressly stated
in any Transaction Document, any provisions requiring the consent of the
Noteholders under the Transaction Documents shall require the consent of the
Note Majority.
(c) Promptly after the execution of any such amendment or consent not requiring Noteholder consent, the Indenture Trustee, as the case may be, shall furnish written notification of the substance of such amendment or consent to each Noteholder. It shall not be necessary for the consent of Noteholders pursuant to Section 13.1(b) to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization by Noteholders of the execution thereof shall be subject to such reasonable requirements the Indenture Trustee may prescribe.
(d) Prior to the execution of any amendment to this Agreement, pursuant to
Section 13.1(a) the Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement. The Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Indenture
Trustee's own rights, duties or immunities under this Agreement or otherwise.
(e) Upon the execution of any amendment or consent pursuant to this
Section 13.1, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part
of this Agreement for all purposes, and every holder of Notes and Certificates theretofore or thereafter issued hereunder shall be bound thereby.
Section 13.2. Protection of Title to Trust.
(a) The Servicer shall file such financing statements and cause to be filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Trust, the Noteholders, the Indenture Trustee and the Owner Trustee in the Trust Assets and in the proceeds thereof. The Servicer shall deliver (or cause to be delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.
(b) Neither the Trust, the Trust Depositor nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed seriously misleading within the meaning of ss. 9-506 of the UCC, unless it shall have given the Trust, the Owner Trustee, the Facility Administrator and the Indenture Trustee at least 30 days' prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements.
(c) The Trust, the Trust Depositor and the Servicer shall give the Facility Administrator, the Owner Trustee and the Indenture Trustee at least 30 days' prior written notice of any relocation of the principal executive office of the Trust Depositor and the Servicer (in the case of notice provided by the Servicer) if, as a result of such relocation, the applicable provisions of the UCC would require filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment or new financing statement. The Servicer shall at all times maintain each office from which it shall service Receivables, and its principal executive office, within the United States.
(d) The Servicer shall maintain or cause to be maintained accounts and
records as to each Receivable accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in or credited to the
Collection Account in respect of each Receivable.
(e) The Servicer shall maintain or cause to be maintained its computer systems so that, from and after the time of sale under this Agreement of the Receivables, the Servicer's master computer records (including any backup archives) that shall refer to a Receivable indicate clearly the interest of the Trust and the Indenture Trustee in such Receivable and that such Receivable is owned by the Trust and has been pledged to the Indenture Trustee. Indication of the Trust's ownership of and the Indenture Trustee's interest in a Receivable shall be deleted from or modified on the Servicer's computer systems when, and only when, the Indenture Trustee's Lien on the related Receivable shall have been released in accordance with the applicable provisions of the Transaction Documents.
(f) If at any time the Trust Depositor or the Servicer shall propose to sell, grant a security interest in, or otherwise transfer any interest in vacation timeshare contracts to any prospective purchaser, lender or other transferee, the Servicer shall give or cause to be given to such prospective purchaser,
lender or other transferee computer tapes, records or print-outs (including any restored from back-up archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by the Trust and has been pledged to the Indenture Trustee.
(g) Upon request, the Servicer shall furnish to the Facility Administrator and the Indenture Trustee, within five Business Days, a list of all Receivables then held as part of the Trust Assets, together with a reconciliation of such list to the Schedule of Receivables and to each of the Monthly Reports furnished before such request indicating removal of Receivables from the Trust.
(h) The Servicer shall deliver to the Owner Trustee, the Facility Administrator and the Indenture Trustee promptly after the execution and delivery of this Agreement and of each amendment hereto, an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Owner Trustee and the Indenture Trustee and reciting the details of each filings or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest.
Section 13.3. Notices, Etc.
All notices, demands, certificates, requests and communications hereunder ("notices") shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, or (b) one Business Day after delivery to an overnight courier, or (c) on the date personally delivered to an Authorized Officer of the party to which sent, or (d) on the date transmitted by legible telefax transmission with a verbal confirmation of receipt (except that notices and communications pursuant to Article II shall not be effective until received with respect to any notice sent by mail or telex), in all cases addressed to the recipient as follows:
If to Bluegreen or the Servicer: Bluegreen Corporation
4960 Conference Way North,
Suite 100
Boca Raton, Florida 33431
Attn: Anthony Puleo
Telephone No.: (561) 912-8270
Telecopier No.: (561) 912-8123
If to the Trust Depositor: Bluegreen Receivables Finance
Corporation XI
4950 Communication Avenue,
Suite 900
Boca Raton, Florida 33431
Attn: Allan Herz
Telephone No.: (561) 912-8210
Telecopier No.: (561) 443-8743
If to the Trust or the Owner Trustee: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust
Administration
Telephone No.: (302) 636-6000
Telecopier No.: (302) 636-4141
|
with a copy (for so long as Bluegreen or an Affiliate thereof is the Servicer) to:
Bluegreen Corporation 4960 Conference Way North, Suite 100 Boca Raton, Florida 33431 Attn: Anthony Puleo Telephone No.: (561) 912-8270 Telecopier No.: (561) 912-8123
If to the Facility Administrator: General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attention: Bluegreen Asset Manager
Telecopier No.: (312) 441-7924
with a copy to:
General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attention: In-House Counsel
Telecopier No.: (312) 441-7872
If to the Back-Up Servicer: Concord Servicing Corporation
6560 North Scottsdale Road
Suite G-100
Scottsdale, Arizona 85253
Attn: Frederick G. Pink, Esq.
Telecopier No.: (480) 281-3141
If to the Indenture Trustee
or the Custodian: U.S. Bank National Association
1133 Rankin Street, Suite 100
Attn: Private Certifications/
Bluegreen 2006-A
St. Paul, Minnesota 55116
Telecopier No.: 651-695-6102
Telephone No.: 651-695-5896
If to the Club Trustee: 4950 Communication Avenue, Suite 900
Boca Raton, Florida 33431
Attn: Anthony Puleo
Telephone No.: (561) 912-8270
Telecopier No.: (561) 912-8123
|
If to the Noteholders: General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attention: Bluegreen Asset Manager
Telecopier No.: (312) 441-7924
with a copy to:
General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attention: In-House Counsel
Telecopier No.: (312) 441-7872
|
Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.
Section 13.4. No Waiver; Remedies.
No failure on the part of the Facility Administrator or the Indenture Trustee to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. To the extent permitted by law, the remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 13.5. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Section 13.6. Term of this Agreement.
This Agreement, including, without limitation, the Servicer's, the Club
Trustee's and the Trust Depositor's obligation to observe their respective
covenants set forth in Article VI, shall remain in full force and effect until
all Aggregate Outstandings have been indefeasibly paid in full and all
commitments of the Noteholders to make any advances in respect of any Purchases
hereunder shall have terminated; provided, however, that the provisions of
Section 13.9 and 13.10 shall be continuing and shall survive any termination of
this Agreement.
Section 13.7. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS. EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 13.8. WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 13.9. Costs, Expenses and Taxes.
(a) Bluegreen and the Trust Depositor agree to pay or cause to be paid on demand all reasonable out-of-pocket costs and expenses of the Trust, the Indenture Trustee, the Facility Administrator or any Noteholder actually incurred in connection with the preparation, execution, delivery, administration (including periodic auditing), amendment or modification of, or any waiver or consent issued in connection with, this Agreement and the other documents to be delivered hereunder or in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Trust, the Indenture Trustee, the Facility Administrator or any Noteholder with respect thereto and with respect to advising the Trust, the Indenture Trustee, the Facility Administrator or any Noteholder as to its respective rights and remedies under this Agreement and the other documents to be delivered hereunder or in connection herewith, and all costs and out-of-pocket expenses, if any (including reasonable counsel fees and expenses), incurred by the Trust, the Indenture Trustee, the Facility Administrator or any Noteholder in connection with the enforcement of this Agreement and the other documents to be delivered hereunder or in connection herewith.
(b) Bluegreen and the Trust Depositor, jointly and severally, agree to indemnify and hold the Trust, the Indenture Trustee, the Custodian, the Owner Trustee, the Facility Administrator, each Noteholder and each of their Affiliates, officers, directors, agents and employees (each an "Indemnified Party") harmless against any and all damages, claims, losses, penalties, fines, liabilities, fees, forfeitures, amounts paid in settlement, judgments, reasonable attorneys' fees and related litigation costs, fees and expenses (collectively, "Losses") which relate to or result from this Agreement and the other Transaction Documents including, without limitation: (a) any action taken by or on behalf of Bluegreen or the Trust Depositor relating to any Receivable or related Trust Asset which is not permitted by or pursuant to the terms of this Agreement or any other Transaction Document, (b) any illegal act or omission by Bluegreen or the Trust Depositor or any officer, director, agent or employee of Bluegreen or the Trust Depositor, (c) any act or omission constituting negligence or willful misconduct, or breach of fiduciary duty by Bluegreen, the Club Trustee or the Trust Depositor or any officer, director, agent or employee of Bluegreen or the Trust Depositor in connection with Bluegreen's, the Club Trustee's or the Trust Depositor's performance under this Agreement or the other Transaction Documents or any breach by Bluegreen, the Club Trustee or the Trust Depositor of any of its obligations under this Agreement or the other Transaction Documents, (d) any representation or warranty made by
Bluegreen, the Club Trustee or the Trust Depositor under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by or on behalf of the Bluegreen or the Trust Depositor pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made, (e) any failure of Bluegreen or the Trust Depositor or any officer, director, agent or employee thereof to comply with any applicable Requirement of Law with respect to any Receivable or Contract related thereto or the nonconformity of any Receivable or Contract with any such Requirement of Law or any failure of any Seller to keep or perform any of its obligations with respect to any Contract, (f) the commingling by the Servicer or any of its Affiliates of Collections of Receivables at any time with other funds of the Servicer or its Affiliates, (g) any investigation, litigation or proceeding arising out of or relating to this Agreement, the other Transaction Documents and the transactions contemplated hereby or thereby or (h) any environmental or products liability or similar claim arising out of or in connection with the rights or services that are the subject of any Receivable, the related Trust Assets or any Contract; provided, however that neither Bluegreen nor the Trust Depositor shall be required to indemnify an Indemnified Party for or be liable for the payment of any Losses resulting from the gross negligence or willful misconduct of such Indemnified Party; provided further, however, that nothing contained in this paragraph shall be construed to obligate Bluegreen or the Trust Depositor to indemnify an Indemnified Party with respect to Losses incurred as a result of the payment performance of the Receivables and related Trust Assets, any credit problems of any Obligors or in respect of Excluded Claims.
(c) The Servicer agrees to indemnify and hold the Trust, the Owner Trustee, the Indenture Trustee, the Noteholders and the Facility Administrator and all of their officers, directors and employees harmless against any and all Losses which result from: (a) any action taken by or on behalf of Bluegreen or its Affiliates as the Servicer relating to any Receivable or related Trust Asset which is not permitted by or pursuant to the terms of this Agreement, (b) any illegal act or omission by Bluegreen or its Affiliates as Servicer, or (c) any act or omission constituting gross negligence or willful misconduct by any officer, director, agent or employee of Bluegreen or its Affiliates as Servicer in connection with such party's performance under this Agreement.
Section 13.10. No Bankruptcy Covenant.
The parties hereto hereby covenant and agree that they will not institute against, or join any other Person in instituting against, the Trust, the Trust Depositor or the Club Trustee any involuntary Insolvency Proceedings or take any action in contemplation or furtherance thereof.
Section 13.11. Protection of Ownership Interests of the Trust; Intent of Parties; Back-up Security Interest.
(a) The Trust Depositor agrees that from time to time, at its expense, it will or will cause the Servicer to promptly execute and deliver all instruments and documents, and take all actions, that may reasonably be necessary or desirable, or that the Trust may reasonably request, to perfect, protect or more fully evidence its ownership of and interest in the Trust Assets, or to enable the Trust to exercise and enforce its rights and remedies hereunder.
(b) If the Trust Depositor or the Servicer fails to perform any of its obligations hereunder after ten (10) days' notice from the Trust, the Trust may (but shall not be required to)
perform, or cause performance of, such obligation; and the Trust's costs and expenses incurred in connection therewith shall be payable by the Trust Depositor (if the Servicer that fails to so perform is the Trust Depositor or an Affiliate thereof) as provided in Section 12.9, as applicable. The Trust Depositor irrevocably authorizes the Trust and appoints the Trust as its attorney-in-fact to act on behalf of the Trust Depositor (i) to execute on behalf of the Trust Depositor as debtor and to file financing statements necessary or desirable in the Trust's sole discretion to perfect and to maintain the perfection and priority of the interest of the Trust in the Trust Assets and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Trust Assets as a financing statement in such offices as the Trust in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Trust in the Trust Assets.
Section 13.12. Back-up Security Interest. It is the intention of the Sellers, the Trust Depositor and the Trust that the transactions contemplated by the Sale and Contribution Agreement and this Agreement constitute an irrevocable sale, assignment, conveyance, set-off and transfer of ownership of the Assets transferred thereunder and the Trust Assets transferred hereunder. Nevertheless, in the event a court of competent jurisdiction were to ever determine that the transactions contemplated by the Sale and Contribution Agreement and this Agreement were secured financings rather than "true sales", each Seller has granted the Trust Depositor in the Sale and Contribution Agreement and the Trust Depositor has granted (and hereby grants to) the Trust a "security interest" (the term security interest, as used throughout this Agreement, is used as defined in the UCC) in the Trust Assets being conveyed hereunder, which is enforceable in accordance with the UCC upon execution and delivery of this Agreement securing the repayment of the purchase price paid hereunder and the obligations and/or interests provided for in this Agreement and in the order and priorities, and subject to the other terms and conditions of this Agreement and the other Transaction Documents, together with such other obligations or interests as may arise hereunder and thereunder in favor of the parties hereto and thereto. Upon (i) the filing of UCC-1 financing statements naming the Trust as secured party/buyer, the Trust Depositor, as debtor/seller, and the Indenture Trustee, as assignee, and (ii) the Custodian, for the benefit of the Trust, taking possession of the Receivables and Receivables Files, the Trust shall have a first priority perfected security interest in the Trust Assets and Collections, subject only to Permitted Liens. All filings (including, without limitation, such UCC filings) as are necessary in any jurisdiction to perfect the interest of the Trust in the Trust Assets and Collections have been (or prior to the applicable Transfer Date will be) made. Upon (i) the filing of UCC-1 financing statements naming the Indenture Trustee as secured party and the Trust as debtor with respect to the Trust Assets and (ii) the Custodian, for the benefit of the Indenture Trustee, taking possession of the Receivables and Receivables Files and, in the case of Incremental Purchases or Substitute Assets on the applicable Incremental Transfer Date or Substitute Asset Transfer Date, as applicable, the Indenture Trustee shall have a first priority perfected security interest in the Trust Assets, subject only to Permitted Liens. Neither the Trust Depositor nor any Person claiming through or under Trust Depositor shall have any claim to or interest in any of the Trust Assets, except to the extent set forth in Sections 2.11(a) and (b), as applicable, and if, notwithstanding the expressed intention of the parties hereto, this Agreement constitutes the grant of a security interest (for collateral purposes) in such property, except for the interest of Trust Depositor in such property as a debtor for purposes of the UCC.
Section 13.13. Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 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 in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement and the other Transaction Documents contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.
Section 13.14. Further Assurances. The Trust agrees that it will cooperate with Bluegreen to facilitate the remarketing of Intervals and Vacation Points relating to a Defaulted Receivable pursuant to Section 6.3(r). Additionally, in the event Bluegreen is the "Servicer" hereunder, Bluegreen or the Club will be the exclusive "broker" of the Intervals or Vacation Points, as the case may be.
Section 13.15. Savings Clause. Notwithstanding anything to the contrary stated herein, in the event Bluegreen is not acting as servicer hereunder, the covenants in Section 6.3 shall remain in full force and effect with respect to Bluegreen, and Bluegreen shall remain obligated to provide those Reports described in Article IX hereof which it is able to continue to provide.
Section 13.16. Limitation of Liability of Owner Trustee and Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this instrument has been countersigned by Wilmington Trust Company, not in its individual capacity but solely in its capacity as Owner Trustee of the Trust, and in no event shall Wilmington Trust Company in its individual capacity or any beneficial owner of the Trust have any liability for the representations, warranties, covenants, agreements or other obligations of the Trust hereunder, as to all of which recourse shall be had solely to the assets of the Trust. For all purposes of this Agreement, in the performance of any duties or obligations of the Trust hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by U.S. Bank National Association, not in its individual capacity but solely as Indenture Trustee, and in no event shall U.S. Bank National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Trust hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the Trust Assets.
[signature pages follow]
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.
THE TRUST DEPOSITOR: BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI
By: ____________________________________
Printed Name: Allan J. Herz
Title: President and Assistant Treasurer
THE SERVICER
AND BLUEGREEN: BLUEGREEN CORPORATION
By: ___________________________________
Printed Name: Anthony M. Puleo
Title: Senior Vice President, Chief
Financial Officer and Treasurer
THE BACK-UP SERVICER: CONCORD SERVICING CORPORATION
By: ___________________________________
Printed Name:__________________________
Title: ________________________________
|
Signature Page to Sale and Servicing Agreement
THE TRUST: BXG RECEIVABLES OWNER TRUST 2006-A
By: Wilmington Trust Company, not individually
but solely as Owner Trustee
By: _________________________________
Printed Name:________________________
Title: ______________________________
THE INDENTURE TRUSTEE
AND THE CUSTODIAN: U.S. BANK NATIONAL
ASSOCIATION
By: _________________________________
Printed Name: Tamara Schultz-Fugh
Title: Vice President
THE CLUB TRUSTEE: VACATION TRUST, INC., for itself and as Club
Trustee under the Club Trust Agreement
By: _________________________________
Printed Name:________________________
Title: ______________________________
THE FACILITY ADMINISTRATOR: GENERAL ELECTRIC CAPITAL
CORPORATION
By: _________________________________
Printed Name:________________________
Title: ______________________________
THE NOTEHOLDER: GENERAL ELECTRIC CAPITAL
CORPORATION
By: _________________________________
Printed Name:________________________
Title: ______________________________
|
Signature Page to Sale and Servicing Agreement
SCHEDULE IA
CONDITION PRECEDENT DOCUMENTS
See attached closing list
CLOSING LIST
[see attached]
SCHEDULE IB
LIST OF DELIVERIES FOR ALL PURCHASES/TRANSFERS
To the Indenture Trustee, the Custodian and the Facility Administrator at least two (2) Business Days prior to the requested Transfer Date:
1. A Request Notice (in the form of Exhibit A to the Sale and Servicing Agreement) listing all Receivables and related Trust Assets to be purchased.
2. A computer diskette or magnetic tape which shall include, but not be limited to, the aging report relating to the Receivables and the related Trust Assets to be purchased in connection with the requested purchase and the FICO scores of the related Obligors from the applicable credit bureau.
3. Title Report/Commitment and Mortgage Assignment (other than in respect of Aruba Receivables) (the form of Assignment attached as Exhibit I to the Sale and Servicing Agreement (with only such modifications to such form as are necessary to properly identify the collateral and to cause the document to be properly recorded)).
4. Such additional information as the Facility Administrator may reasonably require.
To the Custodian at least five (5) Business Days prior to the requested Transfer Date:
1. Originals of all Receivables and related Trust Assets and the Receivables File relating to each Receivable proposed to be purchased.
To the Custodian at least two (2) Business Days prior to the requested Transfer Date:
1. The Receivables Schedule (in the form of Exhibit A to the Custodial Agreement) listing all Receivables and related Trust Assets to be purchased.
2. The form of Assignment attached as Exhibit H to the Sale and Servicing Agreement (with only such modifications to such form as are necessary to properly identify the collateral and to cause the document to be properly recorded), covering all of the Trust Assets to be sold in relation with such purchase except that copies of the recordable Mortgages and Assignments, to extent applicable, shall be satisfactory provided that recorded originals are delivered to the Custodian within sixty (60) days after the Transfer Date or as soon as practicable after received, all in forms approved by the Facility Administrator, with each Receivable endorsed with (i) an allonge in the form attached hereto as Exhibit M in respect of Receivables evidenced by notes and mortgages, or (ii) other appropriate form acceptable to the Facility Administrator.
All documents to be delivered to the Facility Administrator should be sent to:
Dawn Sparr
Associate, VOF
General Electric Capital Corporation
500 West Monroe, Suite 1500
Chicago, Illinois 60661
Telephone No.: (312) 441-7188
Telecopy No.: (312) 441-7924
All documents to be delivered to the Custodian should be sent to:
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attn: Jade Gardner
Telephone No.: (651) 244-0162
Telecopy No.: (651) 244-3747
SCHEDULE II
SERVICER REPORTS
SCHEDULE III
LOCATIONS AND STATE OF ORGANIZATION
Bluegreen Corporation
State of Incorporation: Massachusetts
Chief Executive Office: 4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
Organizational ID No.: 030300793
|
Bluegreen Receivables Finance Corporation XI
State of Incorporation: Delaware
Chief Executive Office: 4950 Communication Avenue, Suite 900
Boca Raton, Florida 33431
Organizational ID No.: 4100459
|
SCHEDULE IV
LOCATION OF RECEIVABLE FILES
St. Paul, Minnesota
EXHIBIT A
FORM OF REQUEST NOTICE
I, ______________________, _______________ of Bluegreen Receivables Finance Corporation XI (the "Trust Depositor"), hereby certify that, with respect to that certain Sale and Servicing Agreement among the Trust Depositor, the Trust, Bluegreen Corporation, the Club Trustee, the Back-up Servicer, the Facility Administrator, the Noteholders and the Indenture Trustee (the "Sale and Servicing Agreement"; all defined terms referenced in the Sale and Servicing Agreement to have the same meaning herein):
The Trust Depositor hereby requests that an [Initial Purchase]
[Incremental Purchase] be made in accordance with the following terms:
(a) The aggregate Cash Purchase Price of such Purchase shall be _________________.
(b) The Transfer Date shall be __________________.
(c) The Cutoff Date shall be __________________.
The representations and warranties contained in Section 5.1 and, with respect to the Receivables to be purchased in this Asset Pool Portion, Section 5.2 of the Sale and Servicing Agreement, are true and correct as though made on the date hereof. The Trust Depositor represents and warrants that the conditions set forth in Sections 2.7 and 4.2 have been satisfied. The Trust Depositor has delivered or caused to be delivered to the Facility Administrator and the Indenture Trustee and the Custodian, as applicable, an updated List of Receivables, separately identifying thereon the Receivables in the Asset Pool Portion requested to be Purchased by virtue of this Request Notice, the Receivables Files, the original Notes and such other documents as may be required by and in accordance with the requirements of the Sale and Servicing Agreement.
No event has occurred and is continuing, or would result from any Purchase occurring on the date hereof, which constitutes a Termination Event or Event of Default.
Prior to giving effect to the Purchase:
(A) the aggregate Outstanding Amount is $_______; and
(B) Funding Date Overcollateralization is $________ (consisting of the sum of (i) the sum of the product calculated for each Asset Pool Portion in the Asset Pool of (a) the Receivable Balance of all Eligible Receivables in each Asset Pool Portion as of the end of the most recent Collection Period multiplied by (b) the Credit Enhancement Factor applicable to each such Asset Pool Portion determined as of the applicable Transfer Date for each Asset Pool Portion plus (ii) at any time after the end of a Collection Period and prior to the next succeeding Payment Date, an amount equal to the Note Principal Distributable Amount to be made on the next succeeding Payment Date provided that the corresponding funds are in the Collection Account as certified in writing by the Servicer.)
After giving effect to the Purchase:
(C) the Outstanding Amount will be $_______;
(D) Funding Date Overcollateralization is $______________ (determined in paragraph B above plus the sum of the product of $____________, representing the Receivable Balance of all Eligible Receivables in this Purchase multiplied by _______________, representing the applicable Credit Enhancement Factor for this Purchase);
(E) the Outstanding Amount will not exceed the Note Purchase Limit; and
(F) the Outstanding Amount will not exceed Funding Date Overcollateralization.
The Cash Purchase Price for the Purchase should be delivered by wire transfer to [insert appropriate identifying account and reference number information].
The Trust Depositor and the Servicer have each performed in all material respects all of their agreements and obligations contained in the Transaction Documents to be performed by such Person at or prior to the date hereof.
No law, rule or regulation applicable to the Trust Depositor prohibits, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality applicable to the Trust Depositor prohibits or enjoins, the making of any Purchase to occur on the Transfer Date specified above.
This is the _____ day of ______________.
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI
By: _______________________________
Printed Name: _____________________
Title: ____________________________
EXHIBIT B
FORM OF SUBSTITUTION NOTICE
I, ______________________, _______________ of Bluegreen Receivables Finance Corporation XI (the "Trust Depositor"), hereby certify that, with respect to that certain Sale and Servicing Agreement among the Trust Depositor, the Trust, Bluegreen Corporation, the Club Trustee, the Back-up Servicer, the Facility Administrator, the Noteholders and the Indenture Trustee (the "Sale and Servicing Agreement"; all defined terms referenced in the Sale and Servicing Agreement to have the same meaning herein):
The Trust Depositor hereby provides notice of [the substitution of Trust Assets][and][the Upgrade of Receivables] as follows:
[Substitution
(a) The aggregate Receivable Balance of Receivables being substituted shall be $_________________.
(b) The aggregate Receivable Balance of Eligible Receivables being transferred to the Trust shall be $_________________.
(c) The Transfer Date shall be __________________.
(d) The Cutoff Date shall be __________________.
(e) Transfer Deposit Amount shall be $______________.]
[Upgrade
(a) The aggregate Receivable Balance of Pre-Upgrade Receivables shall be $_________________.
(b) The aggregate Receivable Balance of Eligible Receivables which are Upgrade Receivables being transferred to the Trust shall be $_________________.
(c) The aggregate Receivable Balance of Eligible Receivables which are not Upgrade Receivables being transferred to the Trust shall be $_________________.
(d) The Transfer Date shall be __________________.
(e) The Cutoff Date shall be __________________.
(f) Excess of Receivable Balance of Pre-Upgrade Receivables over Receivable Balance of Eligible Receivables transferred in respect thereof $_________________, which excess shall be deposited into the Collection Account on the Transfer Date.]
The representations and warranties contained in Section 5.1 and, with respect to the Receivables to be transferred on the Transfer Date, Section 5.2 of the Sale and Servicing Agreement, are true and correct as though made on the date hereof. The Trust Depositor represents and warrants that the conditions set forth in Sections 2.7, 2.13 and 4.2 of the Sale and Servicing Agreement, as applicable, have
been satisfied. The Trust Depositor has delivered or caused to be delivered to the Facility Administrator and the Indenture Trustee and the Custodian, as applicable, an updated List of Receivables, the Receivables File, the original Note and such other documents as may be required by and in accordance with the requirements of the Sale and Servicing Agreement.
No event has occurred and is continuing, or would result from any Transfer occurring on the date hereof or on the Transfer Date, which constitutes a Termination Event or Event of Default. [The Trust Depositor hereby certifies that the Transfer Deposit Amount in connection with such Substitute Assets will be deposited into the Collection Account in accordance with Section 2.7 of the Sale and Servicing Agreement on the Transfer Date.] [The Trust Depositor hereby certifies that cash will be deposited into the Collection Account on the Transfer Date in accordance with Section 2.13 of the Sale and Servicing Agreement to the extent the Receivable Balance(s) of Upgrade Receivables transferred on the Transfer Date are less than the Receivable Balance(s) of Pre-Upgrade Receivables.] With respect to Upgrade Receivables, the Trust Depositor represents and warrants that it has used its best efforts to cause each Pre-Upgrade Receivable to be replaced with an Upgrade Receivable in respect of the same Obligor and then, to the extent not possible, to be replaced with another Upgrade Receivable.
The Trust Depositor and the Servicer have each performed in all material respects all of their agreements and obligations contained in the Transaction Documents to be performed by such Person at or prior to the date hereof.
No law, rule or regulation applicable to the Trust Depositor prohibits, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality applicable to the Trust Depositor prohibits or enjoins, the making of any Transfer to occur on the Transfer Date specified above.
This is the _____ day of ______________.
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI
By: ________________________________
Printed Name: ______________________
Title: _____________________________
EXHIBIT C
LIST OF ELIGIBLE RESORTS
1. Orlando's Sunshine Resort Condominium
2. Orlando's Sunshine Resort II Condominium
3. Shenandoah Crossing Farm & Country Club
4. The Timbers at Christmas Mountain
5. The Villas at Christmas Mountain
6. Christmas Mountain Campground
7. The Resort at World Golf Village Condominium
8. Shore Crest Vacation Villas II Horizontal Property Regime
9. Harbour Lights Resort Horizontal Property Regime
10. Lodge Alley Inn Horizontal Property Regime
11. The Falls Village Resort , a Condominium
12. MountainLoft Resort, a Condominium
13. Laurel Crest Resort, a Condominium
14. Solara Surfside Condominium
15. Mountain Run at Boyne
16. La Cabana Beach & Racquet Club
17. Grande Villas at World Golf Village Condominium
18. Casa del Mar Beach Resort, a Condominium
19. BG Fountains Condominium
20. BG Daytona Seabreeze Condominium
21. Hammocks at Marathon Condominium
22. The Suites at Hershey Condominium
EXHIBIT D
FORM OF NOTICE OF WAIVER
Bluegreen Corporation hereby irrevocably waives its right to exercise the Servicer Purchaser Option with respect to those certain Defaulted Receivables identified on the list attached hereto and incorporated herein by this reference. The capitalized terms used herein shall have the meanings ascribed thereto in the Definitions Annex to that certain Sale and Servicing Agreement dated as of March 13, 2006 by and among the Trust Depositor, the Trust, Bluegreen Corporation, the Club Trustee, the Back-up Servicer, the Facility Administrator, the Noteholders and the Indenture Trustee.
IN WITNESS WHEREOF, this Notice of Waiver has been executed by the undersigned and is effective as of the _____ day of __________, 20__.
BLUEGREEN CORPORATION
By: _______________________________
Printed Name: _____________________
Title: ____________________________
LIST OF DEFAULTED RECEIVABLES
[Insert list of Defaulted Receivables]
EXHIBIT E
CLUB TRUST AGREEMENT
See attached.
EXHIBIT F
TRUST DEPOSITOR'S CERTIFICATE OF INCORPORATION
See attached.
EXHIBIT G
FORM OF SERVICING OFFICER'S CERTIFICATE
I, ______________________, the duly elected and acting _______________ of Bluegreen Corporation (the "Servicer"), hereby certify that, with respect to that certain Sale and Servicing Agreement among the Trust Depositor, the Trust, Bluegreen Corporation, the Club Trustee, the Back-up Servicer, the Facility Administrator, the Noteholders and the Indenture Trustee (the "Sale and Servicing Agreement"; all defined terms referenced in the Sale and Servicing Agreement to have the same meaning herein):
(i) Attached hereto are the Reports required to be delivered pursuant to Article IX of the Sale and Servicing Agreement and such Reports are true and accurate copies thereof
_________________________________________].
BLUEGREEN CORPORATION
By: _________________________
Name:________________________
Title:_______________________
EXHIBIT H
FORM OF SALE ASSIGNMENT
In accordance with the Sale and Servicing Agreement (the "Agreement") dated as of March 13, 2006 made by and among the undersigned, as seller thereunder ("Trust Depositor"), BXG Receivables Owner Trust 2006-A ("Trust"), and others, the undersigned does hereby sell, transfer, assign, set over and otherwise absolutely convey to Trust all its right, title and interest in and to:
(i) all Receivables (including Substitute Receivables) conveyed or being conveyed to the Trust hereunder and specified on the List of Receivables (or List of Substitute Receivables) delivered to the Facility Administrator and the Custodian, and all payments of interest and principal, other Collections thereon and monies received, due or to become due in payment of such Receivables after the Cutoff Date;
(ii) the Mortgages and any other instruments, documents and rights securing such Receivables, if applicable, including, without limitation, all "Owner Beneficiary Rights" under the Club Trust Agreement in respect of such Receivables and all of the undersigned's rights or interest in all other property (personal or other), if any, the sale of which gave rise to the Receivables;
(iii) the Receivables Files;
(iv) all payments made or to be made after the Cutoff Date with respect to such Receivables or the Obligor thereunder under any guarantee or similar credit enhancement with respect to such Receivables, if any;
(v) all Insurance Proceeds with respect to any such Receivables, if applicable;
(vi) all rights of the Trust Depositor under the Sale and Contribution Agreement including but not limited to all rights with respect to the Receivables, including, without limitation, in respect of the obligation of the Sellers to repurchase or replace Receivables under certain circumstances as specified therein;
(vii) the Trust Accounts and all Trust Account Property;
(viii) each Assignment; and
(ix) all income from and proceeds of the foregoing (the property in clauses (i)-(viii), being the "Trust Assets").
This Assignment is made pursuant to and in reliance upon the representation and warranties on the part of the undersigned specified in Article V of the Agreement and no others. Capitalized terms used in this Assignment and not defined shall have the same meanings as such terms would have if used in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed this _____ day of ______, ____.
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI
By:____________________________________
Printed Name:_____________________
Title:____________________________
Accepted:
BXG RECEIVABLES OWNER TRUST 2006-A
By:____________________________________
Printed Name:_____________________
Title:____________________________
EXHIBIT I
FORM OF MORTGAGE ASSIGNMENTS
EXHIBIT J
COLLECTION POLICIES
See attached.
EXHIBIT K
RESERVED
EXHIBIT L-1
FORMS OF CONTRACTS
EXHIBIT L-2
FORMS OF MORTGAGES
EXHIBIT M
FORM OF ALLONGE
[If purchase and finance agreements are "instruments"] [The foregoing note or instrument shall be and is hereby endorsed as follows with respect to Aruba Receivables:
This Allonge is attached to and made a part of the following note or instrument:
"Pay to the order of Bluegreen Corporation, without recourse, representation or warranty."
Bluegreen Properties N.V.
By:___________________________
Name:_________________________
Its:__________________________
The foregoing endorsement shall have the same effect as though it were written directly on the note or instrument identified above.]
The foregoing note or instrument shall be and is hereby endorsed as follows with respect to the Sale and Contribution Agreement:
This Allonge is attached to and made a part of the following note or instrument:
"Pay to the order of Bluegreen Receivables Finance Corporation XI, without recourse, representation or warranty except as provided in the Sale and Contribution Agreement."
Bluegreen Corporation
By:___________________________
Name:_________________________
Its:__________________________
The foregoing endorsement shall have the same effect as though it were written directly on the note or instrument identified above.
The foregoing note or instrument shall be and is hereby endorsed as follows with respect to the Sale and Servicing Agreement:
"Pay to the order of BXG Receivables Owner Trust 2006-A, without recourse, representation or warranty except as provided in the Sale and Servicing Agreement."
Bluegreen Receivables Finance Corporation XI
By:___________________________
Name:_________________________
Its:__________________________
The foregoing endorsement shall have the same effect as though it were written directly on the note or instrument identified above.
The foregoing note or instrument shall be and is hereby endorsed as follows with respect to the Indenture:
"Pay to the order of ____________________, without recourse, representation or warranty except as provided in the Indenture."
BXG Receivables Owner Trust 2006-A
By:___________________________
Name:_________________________
Its:__________________________
The foregoing endorsement shall have the same effect as though it were written directly on the note or instrument identified above.
EXHIBIT N
FORM OF NOTICE (ARUBA RECEIVABLES)
Exhibit 10.184
EXECUTION COPY
SALE AND CONTRIBUTION AGREEMENT
among
THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS SELLERS
as Sellers
and
BLUEGREEN RECEIVABLES FINANCE CORPORATION XI,
as the Trust Depositor
Dated as of March 13, 2006
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS..................................................................................1
Section 1.1. General......................................................................................1
Section 1.2. Other Interpretive Provisions................................................................1
ARTICLE II
AGREEMENT TO TRANSFER; ASSIGNMENT OF AGREEMENT...............................................2
Section 2.1. Closing of Purchases.........................................................................2
Section 2.2. Assignment of Rights Under Agreement.........................................................2
Section 2.3. Conveyance of Substitute Receivables.........................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES...............................................................3
Section 3.1. Representations and Warranties of Sellers....................................................4
Section 3.2. Representations and Warranties of Sellers Relating to the Agreement and the Assets..........11
Section 3.3. Survival; Knowledge of Trust Depositor; Notice of Breach....................................13
ARTICLE IV
SELLERS' AFFIRMATIVE AND NEGATIVE COVENANTS.................................................14
Section 4.1. Records.....................................................................................14
Section 4.2. Use of Noteholders' Names...................................................................14
Section 4.3. Other Documents.............................................................................14
Section 4.4. Sellers' Dues Requirement...................................................................14
Section 4.5. Consolidation and Merger....................................................................14
Section 4.6. Receivables.................................................................................15
Section 4.7. Compliance with Laws; Preservation of Existence; Conduct of Business........................15
Section 4.8. Environmental...............................................................................15
Section 4.9. Notices to Obligors; Collections............................................................17
Section 4.10. Notices.....................................................................................17
Section 4.11. Assets......................................................................................18
Section 4.12. Compliance with Contracts; Modifications to Contracts, Mortgages and Collection Policy......18
Section 4.13. Release and Bonding of Liens................................................................18
Section 4.14. Real Estate Taxes...........................................................................18
Section 4.15. Accounting for Purchases....................................................................19
Section 4.16. Compliance With Collection Policies.........................................................19
Section 4.17. Compliance with Agreements and Applicable Laws..............................................19
Section 4.18. Security Interests..........................................................................19
Section 4.19. Name Changes; Location of Sellers, Records; Instruments.....................................19
Section 4.20. ERISA Matters...............................................................................19
Section 4.21. Restrictions on Transfers...................................................................20
Section 4.22. Maintenance.................................................................................20
|
Section 4.23. Condemnation................................................................................20
Section 4.24. Inspections and Audits......................................................................20
Section 4.25. Organizational Status.......................................................................21
Section 4.26. Amendment of Time Share Documents...........................................................21
Section 4.27. Insurance...................................................................................21
Section 4.28. Operating Contracts.........................................................................21
Section 4.29. Further Assurances..........................................................................22
ARTICLE V
PERFECTION OF TRANSFER AND PROTECTION OF BACK-UP SECURITY INTERESTS.........................22
Section 5.1. Custody of Receivables......................................................................22
Section 5.2. Filing......................................................................................22
Section 5.3. Costs and Expenses..........................................................................23
ARTICLE VI
REMEDIES UPON MISREPRESENTATION; RIGHT TO SUBSTITUTE; UPGRADES..............................23
Section 6.1. Sellers' Option to Substitute...............................................................23
Section 6.2. Repurchases and Substitutions of Receivables for Breach of Representations and Warranties...23
Section 6.3. Upgrades....................................................................................24
Section 6.4. Reassignment of Repurchased or Substituted Receivables......................................24
ARTICLE VII
INDEMNIFICATION.............................................................................24
Section 7.1. Sellers Indemnification.....................................................................24
Section 7.2. Liabilities to Obligors.....................................................................25
ARTICLE VIII
MISCELLANEOUS...............................................................................25
Section 8.1. Termination.................................................................................25
Section 8.2. Assignment or Delegation by the Sellers.....................................................25
Section 8.3. Amendment...................................................................................26
Section 8.4. Notices.....................................................................................26
Section 8.5. Merger and Integration......................................................................26
Section 8.6. Headings....................................................................................26
Section 8.7. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE........................27
Section 8.8. WAIVER OF JURY TRIAL........................................................................27
Section 8.9. No Bankruptcy Petition......................................................................27
Section 8.10. Severability of Provisions..................................................................27
Section 8.11. No Waiver; Cumulative Remedies..............................................................27
Section 8.12. Counterparts................................................................................27
Section 8.13. Intended Characterization...................................................................27
Section 8.14. Sellers.....................................................................................28
|
SCHEDULES
Schedule I. Location of Offices Schedule 3.1(ff) Insurance Schedule 3.1(jj) Organizational Structure; Intercompany Debt |
EXHIBITS
Exhibit A Form of Sale Assignment
SALE AND CONTRIBUTION AGREEMENT
This Sale and Contribution Agreement, dated as of March 13, 2006, is made by and among the Persons identified on the signature pages hereto as Sellers, (together with their permitted successors and assigns, each a "Seller" and collectively, the "Sellers") and Bluegreen Receivables Finance Corporation XI, a Delaware corporation (together with its permitted successors and assigns, the "Trust Depositor").
WHEREAS, in the regular course of its business, the Sellers originate Receivables;
WHEREAS, the Trust Depositor has been established as a bankruptcy-remote entity for the purpose of acquiring from Sellers from time to time Receivables and related Assets owned by the Sellers in accordance with the terms of this Agreement;
WHEREAS, the Sellers and Trust Depositor wish to set forth the terms and conditions pursuant to which Trust Depositor will acquire such Receivables and related Assets (including Substitute Assets); and
WHEREAS, Trust Depositor intends concurrently with each transfer of Assets hereunder to sell, transfer and otherwise absolutely convey all right, title and interest in and to the Assets to the Trust pursuant to the Sale and Servicing Agreement dated as of the date hereof by and among Trust Depositor, the Trust, Bluegreen Corporation, individually and in its capacity as Servicer, Concord Servicing Corporation, as Back-up Servicer, Vacation Trust, Inc., as Club Trustee, General Electric Capital Corporation, as Facility Administrator, the Noteholders and U.S. Bank National Association, as Indenture Trustee and Custodian (as amended, supplemented or otherwise modified from time to time, the "Sale and Servicing Agreement"), executed concurrently herewith;
WHEREAS, the Sellers and Trust Depositor wish to set forth the terms and conditions pursuant to which (i) the Sellers will sell, transfer, assign and otherwise absolutely convey the Assets to Trust Depositor, and (ii) the Receivables Files, deeds and other instruments, certificates, books, records and information of any kind relating to the Assets referred to in the foregoing clause (i) and from time to time sold and purchased hereunder and under the Sale and Servicing Agreement and transferred to the Custodian (as custodian and agent for the Indenture Trustee) under the Custodian Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the Sellers and Trust Depositor agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. General. Unless otherwise defined in this Agreement, capitalized terms used herein (including in the preamble above) have the meanings assigned to them in the Definitions Annex to the Sale and Servicing Agreement.
Section 1.2. Other Interpretive Provisions. Except to the extent otherwise specified in the particular term or provision at issue, this Agreement shall be interpreted and construed in accordance with the Document Conventions.
ARTICLE II
AGREEMENT TO TRANSFER; ASSIGNMENT OF AGREEMENT
Section 2.1. Closing of Purchases. During the Purchase Period, no later than five (5) days prior to each Transfer Date (or such shorter period to which Trust Depositor shall agree), the Sellers shall notify the Trust Depositor of the intent to effect a Purchase and the proposed Transfer Date thereof. During the Purchase Period, no later than two (2) Business Days prior to each Transfer Date (or such shorter period to which Trust Depositor shall agree), the Sellers will deliver or cause to be delivered to Trust Depositor a notice specifying all outstanding Eligible Receivables currently owned by the Sellers which the Sellers wish to sell, transfer, set-over, convey and absolutely assign pursuant to this Agreement, together with the items set forth on Schedule IB to the Sale and Servicing Agreement with respect thereto. On or prior to the Transfer Date, Trust Depositor will notify the Sellers of the Eligible Receivables it will purchase (the "Purchased Receivables") on such date and the cash purchase price (the "Sale Price") it will pay for such purchase. To the extent that there is no Sale Price or the cash portion of the Sale Price for the Purchased Receivables is less than the fair market value thereof, the difference shall be deemed a capital contribution by the Sellers to the Trust Depositor. On each Transfer Date, the applicable Seller shall execute an assignment (the "Sale Assignment"), dated as of such Transfer Date, substantially in the form of Exhibit A hereto, Allonges (or other assignment in the case of Aruba Receivables) which have been stapled to the original notes, if any, evidencing, as applicable, the Receivables and Mortgage Assignments with respect to each of the Receivables and related Assets being purchased on such Transfer Date by the Trust Depositor. The Sale Price shall be payable by Trust Depositor in full by wire transfer on the Transfer Date to an account designated by the applicable Seller to Trust Depositor on or before the Transfer Date.
Concurrent with the payment of the Sale Price, if any, for Purchased Receivables and execution and delivery of the Sale Assignment, the Allonges and the Mortgage Assignments, as applicable, in respect thereof, the Sellers shall have, and shall be deemed for all purposes to have sold, transferred, assigned, set over and otherwise conveyed to Trust Depositor, in consideration therefor without recourse, representation or warranty other than as expressly provided in the Transaction Documents, all the Sellers' right, title and interest in and to the Purchased Receivables and related Assets specified on the List of Receivables and conveyed to the Trust Depositor pursuant to this Agreement.
The foregoing sale, transfer, assignment, set-over and conveyance does not constitute and is not intended to result in the creation or an assumption by Trust Depositor (or any assignee thereof) of any obligation of the Sellers in connection with the Receivables and related Assets, or any agreement or instrument relating thereto, including any obligation to any Obligor or any other Person, or (i) any taxes, fees, or other charges imposed by any Governmental Authority and (ii) any insurance premiums which remain owing with respect to any Receivable at the time such Receivable is sold hereunder. Upon the consummation of the foregoing sale, transfer, assignment, set-over and conveyance no Seller shall claim any ownership interest in the Purchased Receivables and related Assets or take any action inconsistent with the Trust Depositor's ownership of such Purchased Receivables and related Assets.
Section 2.2. Assignment of Rights Under Agreement. Trust Depositor has the right to assign its interest under this Agreement to the Trust, which shall in turn assign its interest under this Agreement to the Indenture Trustee for the benefit of the Noteholders as may be required to effect the purposes of the Sale and Servicing Agreement and the Indenture, without further notice to, or consent of, the Sellers, and the Trust and the Indenture Trustee for the benefit of the Noteholders shall succeed to all of the rights of Trust Depositor hereunder. The Sellers acknowledge that, pursuant to the Sale and Servicing Agreement, Trust Depositor will assign all of its right, title and interest in and to the Receivables and related Assets conveyed hereunder and all other rights of the Trust Depositor hereunder to the Trust, including but not
limited to, its right to exercise the remedies created by Section 6.2 hereof for breaches of representations and warranties of the Sellers contained in Article III hereof, which shall in turn assign such right, title and interest to the Indenture Trustee for the benefit of the Noteholders as well as any other covenants or representations or warranties made by the Sellers hereunder. The Sellers agree that, upon such assignment to the Trust and the Indenture Trustee for the benefit of the Noteholders, such remedies, covenants and representations, including the repurchase obligations of Sellers with respect to breaches of such representations set forth herein and in Section 2.7 of the Sale and Servicing Agreement, will run to and be for the benefit of the Trust and the Indenture Trustee for the benefit of the Noteholders and their respective assignees and the Trust, the Indenture Trustee or such assignee may enforce the same directly without joinder of Trust Depositor.
Section 2.3. Conveyance of Substitute Receivables. Subject to the satisfaction of the conditions set forth in Section 2.7 of the Sale and Servicing Agreement in respect of Replaced Assets, the Sellers may at their option (but shall not be obligated to) sell, transfer, assign, set over and otherwise convey to Trust Depositor, without recourse, representation or warranty other than as expressly provided in the Transaction Documents (and in consideration of Trust Depositor's concurrent transfer of property, by exchange of one or more related Receivables re-transferred by the Trust to Trust Depositor on the Substitute Asset Transfer Date) all the right, title and interest of such Seller in and to the Substitute Assets identified in the related Substitution Notice and specified on the List of Receivables and such Substitute Assets shall become part of the Assets upon such transfer. Upon the consummation of each foregoing sale, assignment, transfer and conveyance, no Seller shall claim any ownership interest in the relevant Receivables and related Assets or any proceeds thereof or take any action inconsistent with the Trust Depositor's ownership of such Receivables and related Assets. Notwithstanding the foregoing, if such option is not exercised prior to the expiration of a respective Seller's fiscal quarter, during which the related Receivable became a Defaulted Receivable, then such Seller's right to exercise such option with respect to such Defaulted Receivable shall be irrevocably waived, unless, prior to the expiration of such Seller's fiscal quarter, such Seller gives notice to the Trust Depositor of its intention to exercise such option with respect to such Defaulted Receivable and does so prior to the expiration of such Seller's next succeeding fiscal quarter. If, however, such Seller fails to exercise such option with respect to such Defaulted Receivable prior to the expiration of such Seller's next succeeding fiscal quarter, then such Seller's right to exercise such option with respect to such Defaulted Receivable shall be irrevocably waived. The waiver described in this Section 2.3 shall have no effect on and shall not constitute a waiver of the Servicer Purchase Option.
To the extent that the property delivered by Trust Depositor to the Sellers in exchange for the Substitute Assets being conveyed has a value less than the fair market value of such Substitute Assets, the difference, shall be deemed a capital contribution by the Sellers to Trust Depositor in respect of such Substitute Assets.
Any such sale, transfer, assignment, set-over and conveyance shall not constitute and is not intended to result in a creation or an assumption by Trust Depositor (or any assignee thereof) of any obligation of the Sellers in connection with such Receivables and related Assets, or any agreement or instrument relating thereto, including any obligation to any Obligor or any other Person, or (i) any taxes, fees, or other charges imposed by any Governmental Authority and (ii) any insurance premiums which remain owing with respect to any such Receivable at the time such Receivable is conveyed hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Sellers will make, jointly and severally, and upon the transfer of Substitute Assets will be deemed to remake, the representations and warranties set forth herein for the benefit of Trust Depositor,
the Indenture Trustee and the Noteholders; provided, however, with respect to the representations and warranties relating to the Receivables, such representations and warranties shall be made only on their date of purchase or transfer hereunder. It is understood and agreed that the representations and warranties in this Article III shall survive the conveyance of the Assets to Trust Depositor, any conveyance of the Assets by Trust Depositor to the Trust and any conveyance of any interest therein to the Indenture Trustee for the benefit of the Noteholders and shall continue so long as any Asset shall remain outstanding. The repurchase (or, in the alternative, substitution) obligation of the Sellers set forth in Section 6.2 below constitutes the sole remedy available for a breach of a representation or warranty of the Sellers in respect of the Assets. The Sellers are not responsible for and shall have no obligation with respect to the Obligors' payment obligations under the Receivables, except with respect to Servicer Advances as and to the extent provided in the Transaction Documents and obligations under Section 6.2 hereof with respect to breaches of representations and warranties, when made, relating to the Receivables; provided, however, this sentence shall not be construed to limit, in any manner, any Seller's other obligations under the Transaction Documents.
Section 3.1. Representations and Warranties of Sellers. On the Closing Date, Sellers, jointly and severally, make, and on each Transfer Date, Sellers, jointly and severally, will be deemed to remake, the following representations and warranties:
(a) Organization and Good Standing. Each Seller is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has full power (corporate or otherwise), authority and legal right to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party.
(b) Due Qualification. Each Seller is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a Material Adverse Effect.
(c) Due Authorization. The execution and delivery of this Agreement and each other Transaction Document to which it is a party, and the consummation of the transactions provided for herein and therein, have been duly authorized by each Seller by all necessary corporate action on the part of such Seller.
(d) No Conflict. The execution and delivery of this Agreement and each other Transaction Document to which such Seller is a party, the performance of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof do not contravene or violate (i) its articles or certificate of incorporation or by-laws or operating agreement, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any indenture, contract, agreement, mortgage, deed of trust, o other instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Lien on the assets of such Seller, except where any such contravention or violation would not have a Material Adverse Effect.
(e) No Violation. The execution and delivery by the Sellers of this Agreement and each other Transaction Document to which it is a party, the performance of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof (including the sale of the Assets by the Sellers in accordance with the provisions of this Agreement) will not conflict with or violate any Requirements of Law applicable to any Seller or to the Assets and do not require the consent or approval
of any Governmental Authority or any other Person, except those which have been duly obtained, made or complied with prior to the Closing Date and are in full force and effect.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Sellers, threatened against any Seller
Party, any of its Affiliates or any Time Share Association, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document or
(iii) seeking any determination or ruling that could reasonably be expected to
be adversely determined, and if adversely determined, would have a Material
Adverse Effect except for the potential assessment by the Tennessee Department
of Revenue as disclosed in the Seller's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2005. No Seller nor, to the best knowledge
of Sellers, any Time Share Association has received any notice from any court or
Governmental Authority alleging that such party or any Affiliate thereof, has
violated any Requirements of Law or that the Eligible Resorts or the Facilities
are in violation of any Requirements of Law except for the potential assessment
by the Tennessee Department of Revenue as disclosed in the Seller's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2005.
(g) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or of any Governmental Authority required in connection with the Sellers' execution and delivery of this Agreement and the other Transaction Documents to which it is a party, the performance of the transactions contemplated hereby and thereby, and the fulfillment of the terms hereof and thereof, have been obtained.
(h) Bulk Sales. The execution, delivery and performance of this Agreement do not require compliance with any "bulk sales" law by the Sellers.
(i) Solvency. Both before and after giving effect to the transactions under this Agreement, each Seller will be Solvent.
(j) Selection Procedures. No selection procedures believed by the Sellers to be adverse to the interests of Trust Depositor, the Trust or the Noteholders were utilized by the Sellers in selecting the Receivables constituting part of the Assets being sold hereunder.
(k) Taxes.
(i) All ad valorem taxes and other taxes and assessments against the Eligible Resorts and the Assets, and all sales and rental taxes respecting the sale or rental of any Accommodations or Intervals, have been paid when due or except as may be reserved against in accordance with GAAP and Sellers know of no basis for any additional taxes or assessments against the Eligible Resorts or the Assets other than to the extent of potential assessment by the Tennessee Department of Revenue as disclosed in the Seller's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. Sellers shall cause each Time Share Association managed by the Club Managing Entity and use their best efforts to cause each other Time Share Association to collect and pay any applicable sales or rental tax respecting the sale or rental of any Accommodations or Intervals by such Time Share Association.
(ii) The Sellers have filed or caused to be filed all tax returns which, to their knowledge, are required to be filed and have paid all taxes shown to be
due and payable on such returns or on any assessments made against them or any of their or their Subsidiaries' property and all other taxes, fees or other charges imposed on them or any of their property by any Governmental Authority (other than any amount of tax due the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with generally accepted accounting principles have been provided on the books of the Sellers); no tax lien has been filed and, to the Sellers' knowledge, no claim is being asserted, with respect to any such tax, fee or other charge, except for such liens, fees or other charges which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect except for the potential assessment by the Tennessee Department of Revenue as disclosed in the Seller's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. Subject to the information provided by its respective employees, proper and accurate amounts have been withheld by each Seller from its respective employees for all periods in full and complete compliance with all applicable federal, state, local and foreign laws and such withholdings have been paid when due to the applicable Governmental Authorities. Each Time Share Association managed by the Club Managing Entity and, to the best knowledge of Sellers upon due inquiry, each other Time Share Association, has filed all required tax returns and has paid all taxes shown to be due and payable on such returns, including interest and penalties, and all other taxes which are payable by it, to the extent the same have become due and payable.
(l) Margin Stock. No Seller is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of "purchasing" or "carrying" any Margin Stock. No Seller owns any Margin Stock, and none of the proceeds of any Purchase will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any portion of such proceeds to be a "purpose credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. No Seller will take or permit to be taken any action which might cause any Transaction Document to violate any regulation of the Federal Reserve Board. Notwithstanding the foregoing, this Agreement shall not limit Bluegreen's ability to repurchase shares of its common stock so long as it is otherwise done in compliance with the terms hereof.
(m) Agreements Enforceable. This Agreement and the other Transaction Documents to which such Seller is a party constitute the legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with their respective terms, except as such enforceability may be limited by applicable Insolvency Laws and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
(n) Title; Prior liens with respect to the Resorts and Additional Resorts. Sellers and their Subsidiaries have good and marketable title to the Eligible Resorts (excluding sold Intervals and any equitable rights of Obligors under applicable state law to the Units under any conditional land sales contracts which are the subject of any Receivables and related Assets).
(o) Access. Subject to applicable state and/or county jurisdiction, the Eligible Resorts relating to the Assets, have direct access to a public road.
(p) Utilities. Electric, gas, sewer, water facilities and other necessary utilities are lawfully available in sufficient capacity to service the Units relating to the Intervals in the Eligible Resorts
relating to the Receivables and any easements necessary to the furnishing of such utility service have been obtained and duly recorded. Sellers or the applicable Time Share Association managed by the Club Managing Entity have timely paid water charges and utility taxes relating to the Eligible Resorts.
(q) Amenities. All amenities described in the sales prospectus and the "Public Reports" for the Eligible Resorts relating to the Receivables are completed, or will be completed in all material respects, in the time periods described in the "Public Reports", or a bond insuring their completion has been posted. Each Obligor has or will have in the time period described in the applicable "Public Reports" access to and the use of all of the amenities and public utilities of the Eligible Resorts relating to the Receivables as and to the extent provided in the Declaration and the "Public Reports". Each Obligor has access to and the use of all of the amenities of the Eligible Resorts as and to the extent provided in the Club Trust Agreement and the Time Share Documents in respect of the respective Eligible Resorts.
(r) Flood Insurance. With respect to any Eligible Resort that is managed by the Club Managing Entity and that is located in a flood zone as defined in the Flood Disaster Protection Act of 1973, as amended, or located within wetlands, as defined by any Governmental Authority, such Eligible Resort is covered by flood insurance in form and amounts and with reputable insurers which are customary for the industry.
(s) Time Share Documents. The Time Share Documents are legal, valid, binding and enforceable against the Sellers or their Affiliates, as applicable, and, to the knowledge of the Sellers, the applicable Time Share Associations, in each case in accordance with their respective terms.
(t) Compliance with Time Share Documents. No Seller nor any Time Share Association managed by the Club Managing Entity or, to the knowledge of any Seller, any other Time Share Association is in default under the Time Share Documents and no event has occurred which, with the passage of time or the giving of notice would become a default by any Seller, any Time Share Association managed by the Club Managing Entity or, to the knowledge of any Seller, any other Time Share Association under the Time Share Documents.
(u) Location of Offices. The principal place of business and chief executive office of each Seller, and the office where each Seller keeps all the Records, are located at the addresses of such Seller referred to on Schedule I hereto (or at such other locations as to which the notice and other requirements specified herein shall have been satisfied). The state of incorporation or formation and organizational identification number, if any, of each Seller is set forth on Schedule I hereto. Each Seller's name, as set forth in its organizational documents, is completely and correctly identified in Schedule I of this Agreement.
(v) Reports Accurate. No report, exhibit, financial statement, document, book, record or report furnished or to be furnished by any Seller pursuant to this Agreement or any other Transaction Document is or will be, when considered as a whole, inaccurate in any material respect as of the date it is or shall be dated or (except as otherwise disclosed to the Noteholders at such time) as of the date so furnished, and no such document contains or will contain any material misstatement of fact or omits or shall omit to state a material fact or any fact necessary in light of the circumstances under which made, to make the statements contained therein not misleading; provided, however, the Trust Depositor acknowledges that the Trust Depositor's remedy for a misrepresentation of matters set forth in Section 3.2 or a breach of a warranty set forth in Section 3.2 hereof is provided by and limited to Section 6.2 hereof.
(w) Full Disclosure. Since September 30, 2005, no event has occurred, that alone or together with other events, could reasonably be expected to have a Material Adverse Effect and there is
no fact of which Sellers have knowledge after due inquiry that could reasonably be expected to have a Material Adverse Effect, except the financial statement restatement as disclosed in the Seller's Current Report on Form 8-K filed with the SEC on December 19, 2005. The Sellers know of no fact or condition which could prevent or restrict the offering or sale of Intervals to Obligors in accordance with applicable Requirements of Law.
(x) Tradenames. No Seller has any trade names, fictitious names, assumed names or "doing business as" names or other names under which it has done or is doing business within the past five (5) years other than "Bluegreen Patten Corporation" and "Bluegreen Corporation of Massachusetts".
(y) Compliance with Collection Policy. Each Seller has complied in all material respects with the Collection Policy with regard to each Receivable and the related Contract, has notified or will notify the Facility Administrator and the Noteholders, in accordance with Section 6.3(o)(ii) of the Sale and Servicing Agreement of any change to the Collection Policy, and has not made any change to the Collection Policy that could materially and adversely affect or impair the collectibility of any Receivable or that is a material change except for such changes as to which the Facility Administrator and the Noteholders have been notified and as to which the Noteholders have consented. For purposes of this section, any change that would cause the Issuer to not be a qualifying special purpose entity, as "qualifying special purpose entity" is defined under GAAP, shall be material.
(z) Value Given. Each Seller has received reasonably equivalent value from the Trust Depositor in consideration for the transfer to the Trust Depositor of the Receivables and related Assets hereunder, no such transfer shall have been made for or on account of an antecedent debt owed by any Seller to the Trust Depositor, and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.
(aa) Accounting. Each Seller accounts for the transfer from such Seller of interests in the Assets hereunder as sales of such Assets in its books, records and financial statements, in each case consistent with GAAP and with the requirements set forth herein.
(bb) Separate Entity. Each Seller is operated as an entity with assets and liabilities distinct from those of the Trust Depositor and each Seller hereby acknowledges that the Noteholders are entering into the transactions contemplated by the Sale and Servicing Agreement and the other Transaction Documents in reliance upon such Seller's identity as a separate legal entity from the Trust Depositor.
(cc) Investment Company and Public Utility Holding Company. No Seller is an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended, or a "holding company" or a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended.
(dd) Accuracy of Representations and Warranties. Each representation or warranty by any Seller contained herein or in any certificate or other document furnished by any Seller pursuant hereto or in connection herewith is when furnished true and correct in all material respects; provided, however, Trust Depositor acknowledges that Trust Depositor's remedy for a misrepresentation of matters set forth in Section 3.2 or a breach of a warranty set forth in Section 3.2 hereof is provided by and limited to Section 6.2 hereof.
(ee) Reservation System. Other than with respect to the services contracted for by the Club Managing Entity or an Affiliate thereof with a third party, if any, which rights under such contracts shall be licensed (on a non-exclusive basis) to the Indenture Trustee for the benefit of the Noteholders, the
Reservation System is owned by the Club Managing Entity free and clear of any Liens, but subject to the provisions of the Club Management Agreement and the Club Trust Agreement, and the Club has the right to utilize such system under and pursuant to the Club Management Agreement. The Club Management Agreement is in full force and effect and no default on the part of the Club Trustee or the Club Managing Entity exists thereunder. Bluegreen owns 100% of the equity capital of the Club Managing Entity.
(ff) Insurance. Each Seller and each Time Share Association managed by the Club Managing Entity with respect to each Eligible Resort maintain such insurance coverage as may be required by any applicable Requirement of Law or pursuant to the Declarations for such Eligible Resort. Schedule 3.1(ff) lists all insurance policies of any nature maintained, as of the Closing Date, for current occurrences by each Seller Party and each Time Share Association managed by the Club Managing Entity.
(gg) Compliance with Law. Subject to specific representations regarding ERISA, Environmental Laws, Consumer Laws, the Patriot Act, tax and other laws, each Seller has all material licenses, permits, consents or approvals from or by, and has made all material filings with, and has given all material notices to, all Governmental Authorities having jurisdiction, to the extent required for the operation and conduct of the Sellers' businesses in material compliance with all Requirements of Law.
(hh) Financial Statements. The financial statements of each Seller Party and of each Time Share Association fairly present the respective financial conditions and (if applicable) results of operations of such party as of the date or dates thereof and for the periods covered thereby. All such financial statements, other than those prepared on behalf of a natural person, if any, were prepared in accordance with GAAP consistently applied throughout the periods covered (except, with respect to unaudited financial statements, for the absence of footnotes and normal year-end audit adjustments). Except for any such changes heretofore expressly disclosed in writing to Facility Administrator, there has been no change in the respective financial condition of Sellers and each Time Share Association which is managed by the Club Managing Entity from the financial condition shown in their respective financial statements that could reasonably be expected to have a Material Adverse Effect. The Facility Administrator acknowledges that the financial statement restatement as disclosed in the Seller's Current Report on Form 8-K filed with the SEC on December 19, 2005 will not constitute a violation of this subsection (hh).
(ii) Employee Benefit Plans. Sellers are in compliance with all applicable provisions of ERISA, the Code and all other Requirements of Law with respect to all employee benefit plans adopted by Sellers for the benefit of its employees. No liability has been incurred by Sellers which remains unsatisfied for any funding obligation, taxes or penalties with respect to any such employee benefit plan.
(jj) Affiliates.
(i) Attached hereto as Schedule 3.1(jj) is a true and complete organizational chart disclosing the ownership and relationship of Sellers and the other Seller Parties, including any Subsidiaries of Sellers and any Affiliates of Sellers that have any involvement or interest in any Time Share Association and the Eligible Resorts.
(ii) The intercompany indebtedness described on Schedule 3.1(jj) constitutes all Sellers' debts, liabilities and obligations to any Affiliates of Sellers as of the date of this Agreement. Sellers have provided copies of all instruments, agreements and other writings, if any, evidencing and/or securing any of the foregoing intercompany debt to the Trust Depositor and the Facility Administrator.
(kk) Sales, Licenses and Permits.
(i) Sales of Intervals are made in compliance in all material
respects with all applicable Requirements of Law. The Sellers, the
Accommodations with respect to which Intervals are being sold, the
Eligible Resorts, the Time Share Documents, and the Facilities
comply with, conform to and obey, in all material respects, all
Requirements of Law (including the applicable Declarations)
applicable to the Sellers, such Accommodations, the Eligible
Resorts, the Time Share Documents and the Facilities, and, to the
extent applicable, each indenture, order, instrument, agreement or
document to which Sellers are a party or by which it is bound.
(ii)Each Time Share Association managed by the Club Managing Entity
possesses all requisite franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents,
authorizations, exemptions, orders and approvals as are necessary to
carry on its business as now being conducted including without
limitation to manage, maintain and operate the Eligible Resorts
related to such Time Share Association in material compliance with
all applicable Requirements of Law.
(ll) Intellectual Property. As of the Closing Date, each Seller owns or has rights to use all intellectual property necessary to continue to conduct its business as now or heretofore conducted by it or proposed to be conducted by it. Each Seller conducts its business and affairs without infringement of or interference with any intellectual property of any other Person in any material respect. No Seller is aware of any infringement claim by any other Person with respect to any Seller's intellectual property.
(mm) Representations as to the Time Share Association. No Seller nor any Time Share Association which is managed by the Club Managing Entity is in default in any material respect under any of the Time Share Documents or under any other document evidencing or securing any indebtedness which is secured, wholly or in part, by the Accommodations, and no event has occurred which with the giving of notice, the passage of time or both, would constitute such a default under any of the applicable Time Share Documents or under any of the documents evidencing or securing any such indebtedness.
(nn) Brokers. No broker or finder brought about the obtaining, making or closing of this Agreement or any other Transaction Document or any transaction contemplated thereby, and no Seller Party or Affiliate thereof has any obligation to any Person in respect of any finder's or brokerage fees in connection therewith.
(oo) Environmental Matters.
(i) The operations of each Seller comply in all material respects with all applicable Environmental Laws.
(ii) There are no claims, investigations, litigation, administrative proceedings, whether pending or, to such Seller's best knowledge, threatened, or judgments or orders, relating to any Hazardous Materials or alleging the violation of any Environmental Laws (collectively "Environmental Matters") relating in any way to any operations of such Seller on any real property leased or owned by such Seller or to the operations of such Seller the result of which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.
(iii) No Seller has filed any notice under any international, federal, state, regional, provincial or local law indicating past or present treatment, storage or disposal of a Hazardous Material or reporting a spill or release of a Hazardous Material into the environment the result of which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.
(iv) No Seller has any known material liability, contingent or otherwise, in connection with any release of any Hazardous Material into the environment.
(v) (i) No Hazardous Material is now or was formerly used, stored, generated, manufactured, installed, disposed of or otherwise present at or about the Facilities or, to the best knowledge of any Seller, any property adjacent to the Facilities, including the groundwater located thereon except in material compliance with applicable Environmental Laws and (ii) all material permits, licenses, approvals and filings required by Environmental Laws in respect of the Facilities have been obtained, and the use, operation and condition of the Facilities does not violate any applicable Environmental Laws in any material respect. All water intended to be drinking water originating from any well located at any Eligible Resort is potable.
(pp) Operating Contracts. Sellers have delivered to Trust Depositor and Facility Administrator true, correct and complete copies of the Operating Contracts, including all exhibits, schedules and attachments. Each of the Operating Contracts is in full force and effect. Sellers are not in any default in any material respect under any of the Operating Contracts, and Sellers know of no default on the part of any other party to any of the Operating Contracts.
(qq) Litigation. There are no actions, demands, lawsuits, investigations, proceedings, orders or injunctions (collectively "Litigation") pending or, to the best of any Seller's knowledge, threatened against or affecting any Seller or any of its Affiliates, at law or in equity, or before or by any Governmental Authority which could reasonably be expected to have a Material Adverse Effect. To the best of any Seller's knowledge, there is no Litigation pending or threatened against or affecting any Time Share Association, at law or in equity, or before or by any Governmental Authority which could reasonably be expected to have a Material Adverse Effect, except as disclosed in the Seller's periodic reports filed with the SEC as of the date hereof. No Seller nor, to the knowledge of any Seller, any Time Share Association has received any notice from any court or Governmental Authority alleging that such party or any Affiliate thereof, has violated any Requirements of Law or that the Eligible Resorts or the Facilities are in violation of any Requirements of Law, except as disclosed in the Seller's periodic reports filed with the SEC as of the date hereof.
Section 3.2. Representations and Warranties of Sellers Relating to the Agreement and the Assets. Sellers, jointly and severally, hereby represent and warrant to Trust Depositor that, as of each Transfer Date, with respect to the Assets transferred to the Trust Depositor on such date:
(a) Valid Sale and Transfer of Ownership. Such Seller: (i) has good and marketable title to each Asset free and clear of any Lien (other than Permitted Liens) of any Person; (ii) is the sole owner thereof and has full right to transfer the Assets to Trust Depositor; and (iii) has validly and effectively conveyed to Trust Depositor all of such Seller's right, title and interest in and to the Assets free and clear of any Lien (other than Permitted Liens). There are no facts, circumstances or conditions known to any Seller that may result in any Liens upon any Asset (including Liens arising under Environmental Laws) other than Permitted Liens. No financing statement or other instrument similar in
effect covering all or any part of the Assets is on file in any recording office, except such as may have been filed in favor of Sellers (and being assigned to the Trust Depositor) or the Trust Depositor, the Trust or the Indenture Trustee.
(b) Eligibility of Receivables. Each Receivable relating to each Asset is an Eligible Receivable.
(c) List of Receivables. As of the related Transfer Date, the List of Receivables and other reports delivered in connection therewith is an accurate and complete listing in all material respects of all the Receivables in and to become part of the Asset Pool on such date and the information contained therein (including with respect to the identity of such Receivables, Obligors thereon, and the amounts owing thereunder) is true and correct in all material respects.
(d) No Liens. Each Asset shall, immediately prior to its sale hereunder, be legally and beneficially owned by the applicable Seller free and clear of any Lien (except Permitted Liens), and upon each Purchase, Trust Depositor shall acquire ownership of each Asset and in the Collections with respect thereto, free and clear of any Lien (except Permitted Liens).
(e) Consents. With respect to each Asset, all material consents, licenses, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by any Seller in connection with the transfer of such Assets to the Trust Depositor have been duly obtained, effected or given and are in full force and effect.
(f) Environmental Conditions. To each Seller's knowledge, such Seller's operations and the Eligible Resorts are in compliance with all Requirements of Law and none of the Eligible Resorts are the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous wastes or substances into the environment.
(g) Servicing. The servicing and collection practices used by the Sellers and their Affiliates have complied in all material respects with all applicable Requirements of Law and have met customary industry standards known to Sellers for the servicing of receivables substantially similar to the Receivables.
(h) Consumer Law Matters. The Assets were originated and have been serviced in compliance with, and do not contravene any applicable Requirements of Law, including all applicable Consumer Laws and applicable provisions of the Patriot Act. All applicable federal, state and local laws and regulations in the marketing and sales of the related Intervals, including the Securities Act of 1933, the Securities Exchange Act of 1934, state securities and blue sky laws, the Interstate Land Sales Full Disclosure Act, the mail fraud statutes, land use, land sales, timeshare sales and zoning laws, have been complied with.
(i) Patriot Act Matters. Sellers represent, warrant, covenant and agree, as of the Closing Date and continuing throughout the term of this Agreement, that:
(i) it is and at all times shall be in compliance with applicable OFAC regulations promulgated under the authority granted by the Trading with the Enemy Act ("TWEA"), 50 U.S.C. App. Section 1 et seq., and the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. Section 1701 et seq., as the TWEA and the IEEPA may apply to Sellers' activities;
(ii) it is and at all times shall be in compliance with the Patriot Act and all rules and regulations promulgated under the Patriot Act as such act and the rules and regulations promulgated thereunder may be applicable to Sellers; and
(iii) it (i) is not, to its actual current knowledge, now,
nor, to its actual current knowledge, has ever been under
investigation by any governmental authority for, nor has been
charged with or convicted for a crime under, 18 U.S.C. Sections 1956
or 1957 or any predicate offense thereunder, or a violation of the
Bank Secrecy Act; (ii) has never been assessed a civil penalty under
any anti money laundering laws or predicate offenses thereunder;
(iii) has not had any of its funds seized, frozen or forfeited in
any action relating to any anti money laundering laws or predicate
offenses thereunder; (iv) has taken such steps and is implementing
such policies as are reasonably necessary to ensure that Sellers are
not promoting, facilitating or otherwise intentionally furthering,
the transfer, deposit or withdrawal of criminally derived property,
or of money or monetary instruments which are (or which Sellers
suspects or has reason to believe are) the proceeds of any illegal
activity or which are intended to be used to promote or further any
illegal activity; and (v) is taking such steps and implementing such
policies as are reasonably necessary to ensure that Sellers are in
compliance with all laws and regulations applicable to its business
for the prevention of money laundering and with anti terrorism laws
and regulations, including with respect to the source of funds from
its operations and that such steps include the development and
implementation of an anti money laundering compliance program within
the meaning of Section 352 of the Patriot Act, to the extent Sellers
are required to develop such a program under the rules and
regulations promulgated pursuant to Section 352 of the Patriot Act.
Nothing in this Section 3.2(i) shall be construed to imply that the provisions of the laws and regulations set forth herein are, in fact, applicable to Sellers.
(j) FTC Holder Rule Language. None of the related Receivables include language from the Federal Trade Commission's trade regulation rule titled "Preservation of Consumers' Claims and Defenses" (16 C.F.R. Part 433), including any language similar to the following: "Any holder of this consumer contract is subject to all claims and defenses which the debtor could assert against the seller of goods and services obtained [pursuant hereto or] with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder."
(k) Property. To any Seller's knowledge, as of the date of the origination of any Receivable, all of the material improvements on the related Eligible Resort lay wholly within the boundaries and building restriction lines of such Eligible Resort, except for encroachments that are insured against by the applicable title policy or that do not materially and adversely affect the value or marketability of such Interval, and no improvements on adjoining properties encroached upon such Eligible Resort so as to materially and adversely affect the value or marketability of such Interval, except those encroachments that are insured against by such title policy.
Section 3.3. Survival; Knowledge of Trust Depositor; Notice of Breach. The representations and warranties set forth in this Article III shall survive the transfer of the Assets to Trust Depositor and termination of the rights and obligations of the Servicer under the Transaction Documents. Neither the survival nor the liability of any Seller with respect to such Seller's representations and warranties set forth in this Article III shall be reduced by any due diligence or other investigation made by Trust Depositor,
the Trust, the Facility Administrator, the Indenture Trustee or any Noteholder at any time or by the disclosure of any facts or circumstances to Trust Depositor, the Trust, the Facility Administrator, the Indenture Trustee or any Noteholder (whether prior to or after the date of this Agreement). Upon discovery by any Seller or the Trust Depositor of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the other, the Indenture Trustee and the Facility Administrator.
ARTICLE IV
SELLERS' AFFIRMATIVE AND NEGATIVE COVENANTS
Until the date on which this Agreement terminates in accordance with its
terms, Sellers, jointly and severally, hereby covenant and agree that: Section
4.1. Records. Sellers shall keep adequate records and books of account
reflecting all financial transactions of Sellers relating to the Assets and (to
the extent available to the Sellers) the Time Share Associations, including
sales of Intervals, all in accordance with GAAP.
Section 4.2. Use of Noteholders' Names. Sellers will not, and will not permit any Affiliate to, without the prior written consent of any Noteholder, use the name of any Noteholder or the name of any Affiliates of any Noteholder in connection with any of their respective businesses or activities, except in connection with internal business matters, administration of the Transaction Documents and as required in dealing with governmental agencies or any applicable stock exchange including any reports required to be filed with the Securities and Exchange Commission.
Section 4.3. Other Documents. To the extent not maintained by the Custodian or Servicer, Sellers will maintain accurate and complete files relating to the Receivables and the related Assets to the satisfaction of Trust Depositor and the Trust, and such files (to the extent not computerized) will contain copies of each Receivable and the related assets together with the purchase agreements, any disclosure or notice required by applicable Requirements of Law including truth-in-lending statements and the HUD-1 Settlement Statement and the consumer's credit application, all relevant credit memoranda and all collection information and correspondence relating to such Receivables.
Section 4.4. Sellers' Dues Requirement. Each Seller shall either (i) pay the Time Share Association dues relating to Intervals which are owned by such Seller or one of its Affiliates and do not relate to Receivables or (ii) for as long as such Seller or one of its Subsidiaries controls the Eligible Resorts, shall provide such monies as are necessary when combined with the revenue of such Time Share Association, to maintain services for an Eligible Resort which are equal to or greater than one hundred percent (100%) of such Eligible Resorts' total operating expenses, taxes, utilities and associated reserve fund requirements.
Section 4.5. Consolidation and Merger. No Seller will consolidate with or merge into any other Person or permit any other Person to consolidate with or merge into them or convey all or substantially all of their respective assets to any Person, unless (i) either (x) (a) such Seller shall be the surviving entity or (b) the successor entity or the Person which is the surviving or successor entity or which acquires by sale or conveyance substantially all the assets of such Seller shall be an entity organized under the laws of the United States of America or any State thereof (including, if applicable, BankAtlantic Bancorp, Inc., Levitt Corporation, BFC Financial Corp. or any successor or Affiliate of any of the foregoing) and (y) shall expressly assume the due and punctual performance and observance of all of the covenants and conditions of this Agreement to be performed or observed by such Seller, by an amendment hereto in form and substance reasonably satisfactory to the Indenture Trustee and the Facility Administrator, and (ii) such Seller or such successor corporation or entity, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be in breach in the performance of any such covenant or condition of this Agreement.
Section 4.6. Receivables. The Sellers shall not take any action (nor permit or consent to the taking of any action) which might reasonably be anticipated to impair the value of the Receivables or related Assets or any of the rights of the Trust in the Receivables or related Assets; provided, however, nothing contained in this Section 4.6 shall be construed as requiring the Sellers to guarantee or otherwise become liable for the payment of the Obligors' payments under the Receivables.
Section 4.7. Compliance with Laws; Preservation of Existence; Conduct of Business. Sellers and, to the extent within the control of Bluegreen or an Affiliate thereof, each of the Units in which Intervals are being sold, shall comply with, conform to and obey each and every Requirement of Law applicable to it and each indenture, order, instrument, agreement or document to which it is a party or by which it is bound except where the failure to comply would not have a Material Adverse Effect. Except as permitted by Section 4.5, each Seller shall preserve and maintain its corporate existence, rights, franchises, qualifications and privileges. Each Seller shall timely respond to or comply with and for so long as any Time Share Association is managed by the Club Managing Entity shall cause such Time Share Association to respond to or comply with, and Sellers shall promptly furnish to the Trust Depositor and the Facility Administrator and for so long as any Time Share Association is managed by the Club Managing Entity shall cause such Time Share Association to promptly furnish to the Trust Depositor and the Facility Administrator true and complete copies of any notice or claim by any Governmental Authority, or by any other party to any indenture, order, instrument, agreement or Time Share Document, pertaining to the Sellers, the Accommodations, the Time Share Associations, the Eligible Resorts and the Facilities to the extent any adverse determination in respect thereof could reasonably be expected to have a Material Adverse Effect. Each Seller shall at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with such Seller's past practices.
Section 4.8. Environmental.
(a) Sellers shall (A) comply in all material respects with applicable Environmental Laws; (B) notify Trust Depositor and its assigns and the Facility Administrator, as the case may be, immediately upon Sellers' discovery of any spill, discharge, release or presence of any Hazardous Material in violation of applicable Environmental Laws at, upon, under, within, contiguous to or otherwise affecting the Facilities which would be material in respect of any affected Eligible Resort; (C) promptly remove all Hazardous Materials which violate Environmental Laws and remediate the Eligible Resorts which are managed by the Club Managing Entity (and use their best efforts to cause each other Eligible Resort to be so remediated) in full compliance with applicable Environmental Laws and in accordance with the recommendations and specifications of an independent environmental consultant reasonably acceptable to Trust Depositor and its assigns and the Facility Administrator and (D) promptly forward to Trust Depositor and its assigns and the Facility Administrator, as the case may be, copies of all Environmental Claims made against or in respect of any Seller or any of its Affiliates and relating to the Eligible Resorts or the Sellers, and copies of all orders, notices, permits, applications or other communications and reports in connection with any spill, discharge, release or the presence of any Hazardous Material or any other matters relating to the Environmental Laws or any similar laws or regulations, as they may affect the Eligible Resorts which would be material in respect of any affected Eligible Resort. Sellers shall not cause, and shall use prudent, commercially reasonable efforts to prohibit any other Person within the control of Sellers from causing any spill, discharge or release, or the use, storage, generation, manufacture, installation, or disposal, of any Hazardous Materials at, upon, under,
within or about the Eligible Resorts or the transportation of any Hazardous Materials to or from the Eligible Resorts (except in material compliance with Environmental Laws).
(b) Sellers shall provide to Trust Depositor and its assigns and the
Facility Administrator, as the case may be, promptly upon the written request of
Trust Depositor or its assigns or the Facility Administrator, as the case may
be, from time to time, a Site Assessment or, if required by Trust Depositor or
its assigns or the Facility Administrator, as the case may be, an update to any
existing Site Assessment, to assess the presence or absence of any Hazardous
Materials and the potential costs in connection with abatement, cleanup or
removal of any Hazardous Materials found on, under, at or within the Eligible
Resorts; provided, however, that Sellers shall not be required to pay for the
cost of any such Site Assessment or update unless (x) the Trust Depositor's or
its assigns' or the Facility Administrator's, as the case may be, request for a
Site Assessment is based on (1) information provided under this Section 4.8, (2)
a reasonable suspicion of Hazardous Materials at (or, to the extent the Facility
Administrator reasonably believes Hazardous Materials may migrate or affect an
Eligible Resort, near) an Eligible Resort, (3) a breach of covenants under this
Section 4.8, or (y) a Termination Event or an Event of Default has occurred and
is continuing, in which case any such Site Assessment or update shall be at
Sellers' expense.
(c) As between Sellers, on the one hand, and Trust Depositor, the Trust, the Indenture Trustee, the Custodian, the Facility Administrator and the Noteholders, on the other hand, all risk of loss associated with non-compliance with Environmental Laws, or with the presence of any Hazardous Material at, upon, within, contiguous to or otherwise affecting the Eligible Resorts, shall lie solely with Sellers. Accordingly, Sellers shall bear all risks and costs associated with any such loss (including any loss in value attributable to Hazardous Materials), damage or liability therefrom, including all costs of removal of Hazardous Materials or other remediation required by applicable Requirements of Law.
(d) Sellers, jointly and severally, shall indemnify the Trust
Depositor (and its assignees) and agree to hold Trust Depositor (and its
assignees) harmless from and against any and all losses, liabilities, damages,
injuries, costs, expenses and claims of any and every kind whatsoever (including
court costs and reasonable attorneys' fees and legal expenses) arising out of or
associated, in any way, with the non-compliance with applicable Environmental
Laws with respect to any Eligible Resort, or the existence of Hazardous
Materials in, on, or about the Facilities, or a breach of any representation,
warranty or covenant contained in this Section 4.8, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute
or common law, including those arising from the joint, concurrent, or
comparative negligence of the Trust Depositor, the Trust, the Indenture Trustee,
the Facility Administrator or any Noteholder; provided, further, that this
Section 4.8 shall not apply with respect to any liability, release, violation or
other matter that arises solely from the Trust Depositor's (or its assignees')
gross negligence or willful misconduct or after any Seller loses possession of
any property due to foreclosure or other exercises of remedies by Trust
Depositor or its assignees. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in this Section 4.8 may be unenforceable because it
is violative of any law or public policy, Sellers shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all indemnifications set forth in this Section 4.8.
Sellers' obligations under this Section 4.8 shall arise upon the discovery of
the presence of any Hazardous Material which violates applicable Environmental
Law, whether or not any Governmental Authority has taken or threatened any
action in connection with the presence of any such Hazardous Material, and
whether or not the existence of any such Hazardous Material or potential
liability on account thereof is disclosed in any Site Assessment and shall
continue notwithstanding the termination of this Agreement or any transfer or
sale of any right, title and interest in the Trust Assets (by foreclosure, deed
in lieu of foreclosure or otherwise).
(e) Notwithstanding any provision in this Section 4.8 or elsewhere in any Transaction Document, or any rights or remedies granted by any Transaction Document, none of the Trust Depositor, the Trust, the Indenture Trustee, the Facility Administrator or any Noteholder waives and such parties do expressly reserve all rights and benefits now or hereafter accruing to such parties under the "security interest" or "secured creditor" exception under applicable Environmental Laws, as the same may be amended. No action taken by any such party pursuant to the Transaction Documents shall be deemed or construed to be a waiver or relinquishment of any such rights or benefits under the "security interest exception.
Section 4.9. Notices to Obligors; Collections. Each Seller will direct, or
otherwise cause, its related Obligors, and shall instruct, or otherwise cause,
all future Obligors, to remit all payments with respect to such Receivables only
(i) by check, money order, phone payment, or Western Union Quick Collect mailed
to, or generated by, an office of the Servicer, (ii) by check, money order, wire
transfer or moneygram to the Lockbox or Lockbox Account or (iii) by
pre-authorized checking or credit card payment for deposit into the Lockbox
Account. In the event such notice has not been made, each Seller hereby
authorizes and instructs the Facility Administrator to make the corresponding
notification to the obligors under each Receivable. Electronic images of each
notification shall be placed in Sellers' files pertaining to the Receivable.
Each Seller shall send to the Lockbox Bank for deposit into the Lockbox Account
all Collections it may receive in respect of Purchased Receivables no later than
the next Business Day following the date of receipt thereof. Any Collections in
respect of Purchased Receivables held by any Seller pending transfer to the
Lockbox Account shall be held in trust for the benefit of the Indenture Trustee
and the Noteholders until such amounts are deposited into the Lockbox Account as
set forth above.
Section 4.10. Notices. Each Seller will notify the Trust Depositor (or its assigns) and the Facility Administrator in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:
(a) Event of Termination. The occurrence of any Termination Event or Event of Default by a statement of an authorized officer of such Seller.
(b) Judgment and Proceedings. The entry of any judgment or decree or the institution of any litigation, arbitration proceeding or governmental proceeding against any Seller that has had, or would reasonably be expected to have, a Material Adverse Effect.
(c) Material Adverse Effect. The occurrence of any event or condition that has had, or would reasonably be expected to have, a Material Adverse Effect.
(d) Claims. Any claim, action or proceeding adversely affecting in any material respect any Time Share Association, any Eligible Resort, the Facilities or the Assets, or any part thereof, or any of the interests conveyed or granted to the Trust Depositor hereunder, and any action, suit, proceeding, order or injunction of which Sellers become aware after the date hereof pending or threatened against or affecting any Seller Party or any Affiliate thereof which could reasonably be expected to have a Material Adverse Effect.
(e) Notice of Litigation, Potential Defaults, Claims, and Financial Change. Sellers shall promptly inform the Trust Depositor and the Facility Administrator of (a) any litigation against Sellers or affecting the Facilities, the Time Share Association or the Sellers' ability to sell Intervals, which, if determined adversely, could reasonably be expected to have a Material Adverse Effect or could otherwise reasonably be expected to cause a Termination Event or an Event of Default, (b) any default under any Indebtedness for borrowed money which could give rise to a Termination Event or Servicer
Termination Event and (c) any material adverse change in the financial condition of Sellers or any other Seller Party. The Trust Depositor and Facility Administrator agree that prompt disclosure of such matters in Sellers' periodic reports filed with the SEC shall constitute notice under this Section 4.10(e).
Section 4.11. Assets. With respect to each Asset, each Seller will (i) take all action necessary to perfect, protect and more fully evidence the Trust Depositor's (and its assignee's) ownership of such Asset, including (A) filing and maintaining effective financing statements (Form UCC-1) against each Seller in all necessary or appropriate filing offices, and filing continuation statements, amendments or assignments with respect thereto in such filing offices, and (B) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, and (ii) take all additional action that the Trust Depositor (or its assigns) may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Assets. Each Seller hereby authorizes the Trust Depositor (and its assignees) to file financing statements and continuation statements and amendments thereto with respect to the Assets without authentication by any Seller to the extent permitted by law and each Seller consents to and ratifies all such filings, if any, made by the Trust Depositor or the Facility Administrator prior to the date hereof.
Section 4.12. Compliance with Contracts; Modifications to Contracts, Mortgages and Collection Policy. Each Seller will timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the Collection Policy in regard to each Receivable and the related Contract. Without the prior written consent of the Servicer and the Noteholders, or as otherwise permitted by the Transaction Documents, no Seller will make any change to the Collection Policy. Except as expressly permitted by the Transaction Documents, no Seller will extend, amend or otherwise modify the terms of any Receivable, any Mortgage or any Contract related thereto other than in accordance with the Collection Policy. No Seller shall take any action (nor permit or consent to the taking of any action) which could reasonably be anticipated to impair the value of any Asset or any of the rights of the Trust Depositor in the Receivables or related Assets.
Section 4.13. Release and Bonding of Liens. In the event any Lien (other than a Permitted Lien) attaches to any Receivable or related Asset from any Person claiming from and through Sellers or their Affiliates, Sellers shall, within the earlier to occur of ten (10) days after such attachment or the respective lienholders action to foreclose on such Lien, either (a) cause such Lien to be released of record, or (b) provide the Trust Depositor, or its assigns, as the case may be, with a bond in accordance with the applicable laws of the state in which the Receivable or related Asset is located, issued by a corporate surety acceptable to the Trust Depositor or its assigns, as the case may be, and the Facility Administrator in an amount and in form reasonably acceptable to the Trust Depositor or its assigns, as the case may be, and the Facility Administrator or (c) provide the Trust Depositor or its assigns, as the case may be, and the Facility Administrator with such other security as the Trust Depositor or its assigns, as the case may be, and the Facility Administrator may reasonably require.
Section 4.14. Real Estate Taxes. Each Seller will pay, or cause to be paid (to the extent funds are available from the Time Share Association), when due all of such Seller's and its Affiliates' liabilities in respect of real estate taxes relating to the Eligible Resorts. Each Seller will pay, or cause to be paid, when due all of such Seller's and its Affiliates' liabilities in respect of real estate taxes relating to any shortfall pursuant to keepwell arrangements with the applicable Time Share Association or otherwise in respect of unsold Intervals. Each Seller shall notify the Trust Depositor and its assignees and the Facility Administrator promptly of the non-payment of real estate taxes relating to the Eligible Resorts managed by the Club Managing Entity or such other Eligible Resorts as such Seller may have actual knowledge.
Section 4.15. Accounting for Purchases. Each Seller will account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby as a sale of the Receivables and related Assets by such Seller to the Trust Depositor in accordance with GAAP.
Section 4.16. Compliance With Collection Policy. Each Seller shall comply in all material respects with the terms of the Purchased Receivables and the Collection Policy, and has notified or will notify the Facility Administrator and the Noteholders, in accordance with Section 6.3(o)(ii) of the Sale and Servicing Agreement of any change to the Collection Policy and has not made any change to the Collection Policy that would materially and adversely affect or impair the collectibility of any Receivable or that is a material change except for such changes as to which the Facility Administrator and the Noteholders have been notified and as to which of the Noteholders have consented. For purposes of this section, any change that would cause the Issuer to not be a qualifying special purpose entity, as "qualifying special purpose entity" is defined under GAAP, shall be material.
Section 4.17. Compliance with Agreements and Applicable Laws. Each Seller shall perform each of its obligations under this Agreement and the other Transaction Documents and comply with all applicable Requirements of Law, including those relating to Consumer Laws, time share, real estate, retail installment sales, privacy, licensing, taxation, ERISA and labor matters and Environmental Laws, except to the extent that the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
Section 4.18. Security Interests. Except for the transfers hereunder, no Seller will sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any Asset, whether now existing or hereafter transferred hereunder, or any interest therein, and no Seller will sell, pledge, assign or suffer to exist any Lien (other than Permitted Liens) on its interest, if any, hereunder. Each Seller will immediately notify the Trust Depositor, the Indenture Trustee and the Facility Administrator of the existence of any such Lien on any Asset; and each Seller shall defend the right, title and interest of the Trust Depositor in, to and under the Receivables in the Asset Pool and the related Interval, against all claims of third parties.
Section 4.19. Name Changes; Location of Sellers, Records; Instruments. No
Seller shall (x) change its name or state of organization as set forth on
Schedule III to the Sale and Servicing Agreement without 30 days' prior written
notice to the Trust Depositor, the Indenture Trustee and the Facility
Administrator, or (y) move or permit Servicer to move the location of the
Receivable Files, other than to the Custodian, from the locations thereof on the
Closing Date, in either case without 30 days' prior written notice to the Trust
Depositor, the Indenture Trustee and the Facility Administrator. No Seller shall
(a) change its corporate name, (b) change its chief executive office, principal
place of business, corporate offices or the location of its records concerning
the Assets, or (c) take any other action that might make any financing or
continuation statement filed in connection herewith seriously misleading within
the meaning of Section 9-507 of the UCC or any other then applicable provision
of the UCC, in each case without at least 30 days prior written notice to the
Trust Depositor and its assigns, including the Indenture Trustee and the
Facility Administrator and after Facility Administrator's written acknowledgment
that any reasonable action requested by the Indenture Trustee or the Facility
Administrator in connection therewith, including to continue the perfection of
the ownership interests and any Liens, as applicable, in favor of the Trust
Depositor, the Trust and the Indenture Trustee in any Assets, has been completed
or taken, and provided that any such new location shall be in the continental
United States. No Seller shall change its fiscal year without prior written
notice to the Trust Depositor and the Facility Administrator.
Section 4.20. ERISA Matters. No Seller will (a) engage in any prohibited transaction for which an exemption is not available or has not previously been obtained from the United States Department of Labor; (b) permit to exist any accumulated funding deficiency, as defined in Section 302(a) of ERISA and
Section 412(a) of the Code, or funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (c) fail to make any payments to a Multiemployer Plan that such Seller may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (d) terminate any Benefit Plan so as to result in any liability; or (e) permit to exist any occurrence of any reportable event described in Title IV of ERISA which represents a material risk of a liability of such Seller under ERISA or the Code.
Section 4.21. Restrictions on Transfers. Sellers shall not enter into any agreement or perform any act which may make difficult or impede the exercise of the Trust Depositor's, the Trust's or the Indenture Trustee's rights under any Transaction Document.
Section 4.22. Maintenance. To the extent that the applicable Time Share Association controls all or any portion of the Eligible Resorts and, further, such Time Share Association is managed by the Club Managing Entity, Sellers shall cause such Time Share Association to maintain each portion of the Eligible Resorts under its responsibility in good repair, working order and condition and shall make or cause to be made all necessary replacements to such Eligible Resorts. To the extent that any amenities are provided by a third party pursuant to an agreement between a Time Share Association which is managed by the Club Managing Entity and such third party, Sellers shall cause such Time Share Association to, and shall use its best efforts to cause such third parties to, maintain such agreement in full force and effect.
Section 4.23. Condemnation. Notwithstanding anything to the contrary contained herein, for so long as any condemned portion of the Facilities are to be replaced by the applicable Time Share Association in accordance with the applicable Timeshare Declaration, any and all awards and payments arising from any condemnation or conveyances in lieu thereof relating to such portion of the Facilities shall be distributed and used in accordance with the provisions of the applicable Timeshare Declaration.
Section 4.24. Inspections and Audits. Sellers, for so long as any Time Share Association is managed by the Club Managing Entity, shall use their best efforts to cause such Time Share Association to, at reasonable times during normal business hours and with reasonable prior notice and as often as may be requested, and subject to any applicable Time Share Documents or Requirements of Law, permit any agents or representatives of the Trust Depositor and its assigns, and the Facility Administrator, to inspect the Eligible Resorts and the other Facilities and any of Sellers' (including in its capacity as Servicer) assets pertaining to such Eligible Resorts and Facilities (including financial and accounting books and records), to examine and make copies of and abstracts from such books and records of Sellers (including in its capacity as Servicer), such related Time Share Association, and any servicer under any servicing agreement pertaining to the Assets, such Eligible Resorts and the Facilities, and to discuss any such party's affairs, finances and accounts with any of its officers, employees or independent public accountants. If a Termination Event or an Event Default has occurred and is continuing or if access is reasonably necessary to preserve or protect the Assets as determined by Trust Depositor or its assigns or the Facility Administrator, Sellers shall use its best efforts to provide such access at all times and without advance notice, subject to any applicable Time Share Documents or Requirements of Law. Sellers acknowledge that Trust Depositor and its assigns, and the Facility Administrator, intend to conduct such audits on at least an annual basis and inspections on at least a quarterly basis. Sellers shall make available to Trust Depositor and its assigns, including Facility Administrator all credit information in Sellers' possession or under Sellers' control with respect to Obligors as such party may request. All inspections and audits shall be at Sellers' expense; provided, however, that the Sellers shall not be required to pay for such inspections and audits more than one (1) time per calendar year, unless a Termination Event or Event of Default has occurred and is continuing or unless the Trust Depositor or its assigns or the Facility Administrator reasonably believes that the quality or maintenance of an Eligible Resort is or could be impaired.
Section 4.25. Organizational Status. No Seller shall terminate, modify, amend or revoke its organizational documents in a manner which would have an adverse effect on the Trust Depositor and its assignees without the prior written consent of Facility Administrator.
Section 4.26. Amendment of Time Share Documents. Without the prior written consent of the Note Majority, Sellers shall not amend, modify or terminate the Time Share Documents in a manner that would have a material adverse effect on the Trust Depositor and its assigns.
Section 4.27. Insurance.
(a) Generally. The Sellers shall use their best efforts to cause the respective Time Share Associations which are managed by the Club Managing Entity, at their sole cost and expense, to maintain the policies of insurance described on Schedule 3.1(ff) as in effect on the date hereof or otherwise in substantially similar form and amounts and with insurers having an AM Best rating of at least A-(IX); provided that if market conditions in the insurance industry limit the Sellers' ability to obtain such insurance on commercially reasonably terms, the Facility Administrator and the Sellers shall in good faith cooperate to select insurers and coverages reasonably acceptable to the Facility Administrator and the Sellers. All such policies of insurance (or the loss payable and additional insured endorsements delivered to the Trust Depositor or its assigns) shall contain provisions pursuant to which the insurer agrees to provide (or endeavors to provide) at least 10 days prior written notice to Trust Depositor or its assigns and the Facility Administrator in the event of any cancellation of any such insurance policy; provided that Sellers agree to use commercially reasonable efforts to require the applicable insurer to provide 30 days prior written notice of cancellation. If any Seller fails to cause to be obtained or maintained, any of the policies of insurance required above, Trust Depositor or its assigns, including Facility Administrator, may at any time or times thereafter obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto that such party deems advisable. Such party shall have no obligation to obtain any such insurance or pay any premiums therefor. By doing so, no Termination Event arising from any Seller's failure to maintain such insurance or pay any premiums therefor shall be deemed to have been waived. All sums so disbursed, including Costs related thereto, shall be payable on demand by Sellers to Trust Depositor or its assigns or the Facility Administrator, as the case may be. Notwithstanding the foregoing, required insurance may be maintained by the Time Share Association as required by the Declaration in respect of the applicable Time Share Association, provided that in the event any Time Share Association fails to maintain any insurance required under this Section 4.27 then Sellers shall be required to obtain and maintain such insurance in respect of any Time Share Association which is managed by the Club Managing Entity.
(b) Changes in Circumstances. If requested by Trust Depositor or Facility Administrator, Sellers shall deliver to such requesting party from time to time a report of a reputable insurance broker, satisfactory to such party, with respect to its insurance policies. Such party's review and acceptance of the Sellers' and/or Time Share Associations' program and policies of insurance shall in no event be deemed an approval or statement of the adequacy of the same.
(c) Proofs of Claim Regarding Any Facilities. In case of loss or damage or other casualty to any of the Facilities in excess of $1,000,000, Sellers shall give prompt written notice thereof to the insurance carrier(s) and to Trust Depositor and its assigns and the Facility Administrator.
Section 4.28. Operating Contracts. Sellers or their respective Affiliates, at their sole cost and expense, shall perform and discharge their respective obligations, covenants and agreements contained in the Operating Contracts and give prompt notice to Trust Depositor and the Facility Administrator of any notice of default or termination (whether oral or written) either given or received by Sellers or their respective Affiliates, as the case may be, with respect thereto, together with a complete copy of all written
notices if such default or termination could reasonably be expected to have a Material Adverse Effect or, in the case of a default, result in a termination of such Operating Contract. Sellers will not (i) amend or modify any of the Operating Contracts or surrender or cancel any such contract to the extent such amendment or modification could reasonably be expected to have a Material Adverse Effect, (ii) further encumber any Seller's or its Affiliate's rights under such contract without the prior written consent of Facility Administrator; or (iii) consent to any assignment thereof by the other contract parties.
Section 4.29. Further Assurances. Sellers agree that they shall and shall cause each other Seller Party to, at Sellers' expense and upon request of Trust Depositor or the Facility Administrator, duly execute and deliver, or cause to be duly executed and delivered, to such party such further instruments and do and cause to be done such further acts as may be necessary or proper in the reasonable opinion of such party to carry out more effectively the provisions and purposes of this Agreement or any other Transaction Document. From time to time as may be reasonably requested by such party (which request will not be made more frequently than once each year absent the occurrence and continuance of a Termination Event or an Event of Default), the Sellers shall supplement each disclosure schedule hereto, or any representation herein or in any other Transaction Document, with respect to any matter hereafter arising that, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in such disclosure schedule or as an exception to such representation or that is necessary to correct any information in such disclosure schedule or representation which has been rendered inaccurate thereby (and, in the case of any supplements to any disclosure schedule, such disclosure schedule shall be appropriately marked to show the changes made therein); provided that (i) no such supplement to any such disclosure schedule or representation shall amend, supplement or otherwise modify any disclosure schedule or representation, or be deemed a waiver of any Termination Event or Event of Default resulting from the matters disclosed therein, except as consented to by Trust Depositor and the Noteholders in writing; and (ii) no supplement shall be required as to representations and warranties that relate solely to the Closing Date or the applicable Transfer Date for a Receivable.
ARTICLE V
PERFECTION OF TRANSFER AND PROTECTION
OF BACK-UP SECURITY INTERESTS
Section 5.1. Custody of Receivables. Subject to the terms and conditions of this Section 5.1, and except as provided in the Custodial Agreement, the contents of each Receivable File shall be held in the custody of Bluegreen in its capacity as Servicer under the Sale and Servicing Agreement for the benefit of the owner thereof. The Sellers agree to cooperate with the Servicer in its efforts to comply with their obligations under the Sale and Servicing Agreement in respect of the Assets, and acknowledges and consents to the transactions contemplated therein.
Section 5.2. Filing.
(a) The Sellers shall take and cause to be taken such actions and execute such documents as are necessary or desirable or as Trust Depositor may reasonably request to perfect and protect the Trust Depositor's, the Trust's and the Indenture Trustee's interests in the Assets against all other persons, including the filing of financing statements, amendments thereto and continuation statements, the execution of transfer instruments and the making of notations on or taking possession of all records or documents of title.
(b) In accordance with the Sale and Servicing Agreement, the Sellers will deliver or cause to be delivered to the Custodian the Receivables File relating to the Assets transferred on any Transfer Date.
Section 5.3. Costs and Expenses. The Sellers jointly and severally agree to pay all reasonable costs and disbursements in connection with the perfection and the maintenance of perfection, as against all third parties, of Trust Depositor's, the Trust's and the Indenture Trustee's right, title and interest in and to the Assets (including the interest in the Interval related thereto).
ARTICLE VI
REMEDIES UPON MISREPRESENTATION; RIGHT TO SUBSTITUTE; UPGRADES
Section 6.1. Sellers' Option to Substitute. Subject to the satisfaction of the terms and conditions and the limitations set forth in Section 2.7 of the Sale and Servicing Agreement, any Seller may at its option replace an Asset that is an Ineligible Asset with a Substitute Asset by selling, transferring, assigning, setting over and otherwise conveying to the Trust Depositor, without recourse other than as expressly provided in the Transaction Documents, all such Seller's right, title and interest in and to the Substitute Assets listed on the related List of Substitute Assets (including all Collections and rights to receive Collections with respect to the related Receivables after the related Cutoff Date, but excluding any collections or rights to receive payments which were collected pursuant thereto on or prior to such Cutoff Date). In connection with any replacement of existing Ineligible Assets in the Asset Pool with Substitute Assets effected in accordance with the terms hereof, the Trust Depositor shall, automatically and without further action, be deemed to transfer to such Seller, without recourse to the Trust Depositor and free and clear of any Lien created pursuant to this Agreement, all of the right, title and interest of the Trust Depositor in, to and under the related replaced Asset (including any Collections received with respect thereto after the Cutoff Date for the related Receivable(s)), and the Trust Depositor shall be deemed to represent and warrant that it has the corporate authority and has taken all necessary corporate action to accomplish such transfer, but the Trust Depositor shall not be deemed to make any other representation or warranty, express or implied.
Section 6.2. Repurchases and Substitutions of Receivables for Breach of Representations and Warranties. In accordance with and subject to Section 2.7 of the Sale and Servicing Agreement, the Sellers hereby jointly and severally agree, for the benefit of Trust Depositor and its assignees including the Trust, the Indenture Trustee and the Noteholders, that they shall repurchase (or substitute in accordance with the next sentence) any Purchased Receivable that was an Ineligible Asset on the Transfer Date thereof or if an exception to a Receivable File is not rectified in accordance with Section 6.3(q) of the Sale and Servicing Agreement at a repurchase price equal to the Transfer Deposit Amount, not later than the next Determination Date which is at most thirty (30) days after the earliest to occur of the discovery of such breach by such Seller or receipt by such Seller of written notice from the Indenture Trustee, the Facility Administrator, the Servicer or Trust Depositor of the related breach or inaccuracy of the representation or warranty. If any Seller is able to effect a substitution for any such Ineligible Asset in compliance with Section 6.1, such Seller may, in lieu of repurchasing such Receivable and subject to the terms, conditions and limitations of the Sale and Servicing Agreement, effect a substitution for such Ineligible Asset with a Substitute Asset not later than the date a repurchase of such Ineligible Asset would be required hereunder; provided further, in the event such Seller can or is permitted to cure, and in fact cures, the condition which created the "Ineligible Asset" in the above described 30 day period, such Seller shall not be obligated to substitute or repurchase such Receivable; provided that if the Ineligible Asset relates to a defective Receivable File described in clause (ii) of the definition of Ineligible Asset, no cure period shall be permitted unless waived in writing by the Noteholders. It is understood and agreed by the parties hereto that the payment obligations of the Obligors' in respect of the Receivables purchased hereunder shall not be the obligation of the Sellers or the Trust Depositor, except with respect to Servicer Advances as and to the extent provided in the Sale and Servicing Agreement and remedies associated with breaches of representations and warranties set forth above. The Issuer and the Noteholders shall bear the economic risk of the Obligors' failure to make payments on the Receivables.
Section 6.3. Upgrades. In connection with an Upgrade, each Seller may at its option, subject to the provisions of Section 2.13 of the Sale and Servicing Agreement, transfer to the Trust Depositor an Upgrade Receivable (together with, if necessary, one or more other Upgrade Receivables) having a Receivable Balance (or Receivable Balances) approximately equal to the Receivable Balance of the Pre-Upgrade Receivable corresponding to such Upgrade Receivable(s) (and upon such transfer the Pre-Upgrade Receivable shall no longer be an Eligible Receivable or included in any report delivered by the Servicer and shall be re-transferred to the applicable Seller). To the extent the Receivable Balance (or Receivable Balances) of the Upgrade Receivable(s) is less than the Receivable Balance of the Pre-Upgrade Receivable, the Sellers shall deposit cash into the Collection Account in the amount of such deficiency. Any excess of the Receivable Balance (or Receivable Balances) of the Upgrade Receivable(s) over the Receivable Balance of the corresponding Pre-Upgrade Receivable, if any, shall be deemed to be a capital contribution by such Seller to the Trust Depositor.
Section 6.4. Reassignment of Repurchased or Substituted Receivables. Upon deposit in the Collection Account of the repurchase price or substitution as described in Section 6.2, on the Substitute Asset Transfer Date related to a Substitute Asset described in Section 6.1, or in connection with an Upgrade described in Section 6.3, the Trust Depositor shall assign to the applicable Seller all of Trust Depositor's right, title and interest in the repurchased or substituted Ineligible Asset or Pre-Upgrade Receivable, as the case may be, in each case received by release from the Trust in accordance with Section 2.7 or 2.13 of the Sale and Servicing Agreement, without recourse, representation or warranty.
ARTICLE VI
INDEMNIFICATION
Section 7.1. Sellers Indemnification.
(a) Sellers, jointly and severally, agree to pay all costs and out-of-pocket expenses, if any (including reasonable counsel fees and expenses) incurred by the Trust Depositor (and its assigns, including the Noteholders) in connection with the enforcement by the Trust Depositor (and its assigns, including the Noteholders) of its rights and remedies under this Agreement and the other Transaction Documents to be delivered hereunder or in connection herewith.
(b) Sellers, jointly and severally, agree to indemnify and hold the Trust Depositor (and its assignees, including the Noteholders) and each of its Affiliates, officers, directors, agents and employees (each an "Indemnified Party") harmless against any and all damages, claims, costs, losses, penalties, fines, liabilities, fees, forfeitures, amounts paid in settlement, judgments, reasonable attorneys' fees and related litigation costs, fees and expenses (collectively, "Losses") which relate to or result from this Agreement and the other Transaction Documents including, without limitation: (a) any action taken by or on behalf of such Seller relating to any Receivable or related Asset which is not permitted by or pursuant to the terms of this Agreement or any other Transaction Document or the use, ownership or operation of any Interval by any Seller or the Servicer, to the extent the Servicer is Bluegreen or any Affiliate thereof, or any Affiliates of the foregoing, (b) any illegal act or omission by such Seller or any Affiliate, officer, director, agent or employee thereof, (c) any act or omission constituting negligence or willful misconduct, or breach of fiduciary duty by such Seller or any officer, director, agent or employee thereof in connection with such Seller's performance under this Agreement or the other Transaction Documents, or any breach by such Seller of any of its obligations under this Agreement or the other Transaction Documents, (d) any claim by any Person with respect to the Assets, (e) sales of Assets having been made, suspended or terminated under this Agreement and the other Transaction Documents, and in connection with or arising out of the transactions contemplated hereunder and thereunder and any actions or failures to act in connection therewith, including any and all Environmental Liabilities and legal costs
and expenses arising out of or incurred in connection with disputes between or
among any Indemnified Party and any parties to any of the Transaction Documents,
(f) subject to the preamble to Article III and to Section 6.2 of this Agreement,
any representation or warranty made by such Seller under or in connection with
this Agreement, any other Transaction Document or any other information or
report delivered by or on behalf of such Seller pursuant hereto or thereto,
which shall have been false or incorrect when made or deemed made, (g) any
failure of any Seller or any officer, director, agent or employee thereof to
comply with any applicable Requirement of Law (including the Environmental Laws,
Consumer Laws, Interstate Land Sales Act, the Patriot Act or any applicable
timeshare laws and regulations), with respect to any Receivable or Contract
related thereto or the nonconformity of any Receivable or Contract with any such
Requirement of Law or any failure of any such Seller to keep or perform any of
its obligations with respect to any Contract, (h) the commingling by the
Servicer or any of its Affiliates of Collections of Receivables at any time with
other funds of the Servicer or any of its Affiliates, (i) any investigation,
litigation or proceeding arising out of or relating to this Agreement, the other
Transaction Documents and the transactions contemplated hereby or thereby, and
(j) any environmental or products liability or similar claim arising out of or
in connection with the rights or services that are the subject of any
Receivable, the related Assets or any Contract; provided that such Seller shall
not be required to so indemnify any such Indemnified Person for any Losses
resulting from the gross negligence or willful misconduct of an Indemnified
Party or in respect of Excluded Claims; provided, however, that nothing
contained in this Article VII or otherwise shall be construed to obligate such
Seller to indemnify an Indemnified Party with respect to any Losses incurred as
a result of credit problems of the Obligors or the payment performance of the
Receivables and related Assets. Notwithstanding any other provision of this
Agreement, the obligations of the Sellers under this Section 7.1 shall not
terminate upon a Service Transfer pursuant to Section 8.2 of the Sale and
Servicing Agreement and shall survive any termination of the Sale and Servicing
Agreement or this Agreement. Upon receiving knowledge of any suit, claim or
demand asserted by a third party that such Indemnified Party believes is covered
by this indemnity, such Indemnified Party shall give Sellers prompt notice of
the matter and an opportunity to defend it, at Sellers' sole cost and expense.
Notwithstanding any defense by Sellers of any such suit, claim or demand, such
Indemnified Party shall have the right to participate in any material decision
affecting the conduct or settlement of any dispute or proceeding for which
indemnification may be claimed. NO INDEMNIFIED PARTY SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY TRANSACTION DOCUMENT, ANY SUCCESSOR, ASSIGNEE
OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION
CONTEMPLATED HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT.
Section 7.2. Liabilities to Obligors. No obligation or liability to any Obligor under any of the Receivables is intended to be assumed by the Trust Depositor, the Indenture Trustee, the Noteholders or the Trust under or as a result of this Agreement and the transactions contemplated hereby.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Termination. This Agreement shall terminate on the date on which the Sale and Servicing Agreement terminates; provided, that the provisions of Sections 7.1, 8.7, 8.8 and 8.9 hereof shall survive the termination hereof.
Section 8.2. Assignment or Delegation by the Sellers. Except as specifically authorized hereunder, no Seller may convey and assign or delegate any of its rights or obligations hereunder absent
the prior written consent of the Trust Depositor, Facility Administrator and the Noteholders, and any attempt to do so without such consent shall be void. The Trust Depositor will assign all of its rights (but not its obligations) under this Agreement to the Trust (which will be further assigned to the Indenture Trustee for the benefit of the Noteholders) and each Seller consents thereto and expressly acknowledges that all representations, warranties, covenants, indemnities and other provisions hereunder (including the right to enforce remedies) are for the express benefit of the Trust, as assignee of the Trust Depositor, and the Indenture Trustee for the benefit of the Noteholders.
Section 8.3. Amendment. This Agreement may not be amended by the parties
hereto without the prior written consent of the Note Majority. Any such
amendment shall be in writing and executed by the parties hereto (including in
counterparts). Upon the execution of any amendment in compliance with this
Section 8.3, this Agreement shall be modified in accordance therewith, and such
amendment shall form a part of this Agreement for all purposes.
Section 8.4. Notices. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date (which shall
be a Business Day) transmitted by legible telefax transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
If to any Seller: c/o Bluegreen Corporation
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
Attn: Anthony Puleo
Telephone No.: (561) 912-8270
Telecopier No.: (561) 912-8123
If to Trust Depositor: Bluegreen Receivables Finance Corporation XI
4950 Communication Avenue, Suite 900
Boca Raton, Florida 33431
Attn: Allan Herz
Telephone No.: (561) 912-8210
Telecopier No.: (561) 443-8743
If to the Trust, the
Indenture Trustee or the
Facility Administrator: At the address for such Person set forth in
the Sale and Servicing Agreement
|
Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.
Section 8.5. Merger and Integration. Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement. This Agreement may not be modified, amended, waived, or supplemented except as provided herein.
Section 8.6. Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.
Section 8.7. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS. EACH PARTY HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY ILLINOIS STATE OR FEDERAL COURT LOCATED IN THE CITY OF CHICAGO. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 8.8. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 8.9. No Bankruptcy Petition. Each Seller covenants and agrees that, prior to the date that is one year and one day after the payment in full of all Aggregate Outstandings, it will not institute against Trust Depositor, or join any other Person in instituting against the Trust Depositor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any state of the United States, or take any action in contemplation or furtherance of any of the foregoing. This Section 8.9 will survive the termination of this Agreement.
Section 8.10. Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreement, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.
Section 8.11. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Trust Depositor (or any assignee thereof) or the Sellers, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. To the extent permitted by law, the rights, remedies, powers and privileges herein provided are cumulative and not exhaustive (except to the extent specifically provided herein) of any other rights, remedies, powers or privileges provided by law.
Section 8.12. Counterparts. This Agreement may be executed in two or more counterparts including by telefax transmission thereof (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.
Section 8.13. Intended Characterization. The Sellers and the Trust Depositor agree that any conveyance hereunder or under the Sale and Servicing Agreement is intended to be a sale and absolute conveyance of ownership of the Assets, rather than the mere granting of a security interest to secure a borrowing. If, notwithstanding such expressed interest, any such transfer is deemed to be of a mere security interest to secure indebtedness, each Seller shall be deemed to have granted (and hereby grants to) the Trust Depositor and the Custodian, as agent for the Trust Depositor, a perfected first priority
security interest in such Assets and this Agreement shall constitute a security agreement under applicable law, securing the repayment of the purchase price paid hereunder and the obligations and/or interests provided for in this Agreement and in the order and priorities, and subject to the other terms and conditions of, the Sale and Servicing Agreement, together with such other obligations or interests as may arise hereunder and thereunder in favor of the parties hereto and thereto. If such transfer is deemed to be the mere granting of a security interest to secure a borrowing, the Trust Depositor may, to secure Trust Depositor's own obtainment of funds under the Sale and Servicing Agreement (to the extent that the conveyance of the Assets thereunder is deemed to be a mere granting of a security interest to secure a borrowing) repledge and reassign (i) all or a portion of the Assets pledged to Trust Depositor and not released from the security interest of this Agreement at the time of such pledge and assignment, and (ii) all proceeds thereof. Such repledge and reassignment may be made by Trust Depositor with or without a repledge and reassignment by Trust Depositor of its rights under this Agreement, and without further notice to or acknowledgment from any Seller. Each Seller waives, to the extent permitted by applicable law, all claims, causes of action and remedies, whether legal or equitable (including any right of setoff), against Trust Depositor or any assignee of Trust Depositor relating to such action by Trust Depositor in connection with the transactions contemplated by the Sale and Servicing Agreement.
Section 8.14. Sellers. Notwithstanding anything contained in this Agreement or any other Transaction Document to the contrary, as of the Closing Date, Bluegreen Corporation is the only "Seller" hereunder.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI
By: __________________________________
Printed Name: Allan J. Herz
Title: President and Assistant Treasurer
BLUEGREEN CORPORATION
By: __________________________________
Printed Name: Anthony M. Puleo
Title: Senior Vice President, Chief Financial
Officer and Treasurer
Signature Page to Sale and Contribution Agreement
SCHEDULE I
Bluegreen Corporation
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
State of Incorporation: Massachusetts
Organizational I.D. #: 030300793
EXHIBIT A
FORM OF SALE ASSIGNMENT
In accordance with the Sale and Contribution Agreement (the "Agreement") dated as of March 13, 2006 made by and between the undersigned and Bluegreen Receivables Finance Corporation XI, a Delaware corporation ("Trust Depositor"), the undersigned does hereby sell, transfer, assign, set over and otherwise absolutely convey to Trust Depositor all its right, title and interest in and to:
(i) all Receivables specified on the List of Receivables delivered to the Facility Administrator and the Custodian, and all payments of interest and principal, other Collections thereon and monies received, due or to become due in payment of such Receivables after the related Cutoff Date;
(ii) the Mortgages, if applicable, and any other instruments, documents and rights securing such Receivables, including all "Owner Beneficiary Rights" under the Club Trust Agreement in respect of such Receivables, if applicable, and all of the undersigned's rights or interest in all other property (personal or other), if any, the sale of which gave rise to the Receivables;
(iii)the Receivables Files with respect to such Receivables;
(iv) all payments made or to be made after the Cutoff Date with respect to such Receivables or the Obligor thereunder under any guarantee or similar credit enhancement with respect to such Receivables, if any, whether pursuant to the Contract related to such Receivable or otherwise made or to be made in respect of such Receivables after the related Cutoff Date;
(v) all Insurance Proceeds with respect to any such Receivables, if applicable;
(vi) the Trust Accounts and all Trust Account Property; and
(viii) all income from and proceeds of the foregoing.
This Assignment is made pursuant to and in reliance upon the representations and warranties on the part of the undersigned specified in Article III of the Agreement without recourse, representation or warranty except as provided in the Agreement. Capitalized terms used in this Assignment and not defined shall have the same meanings as such terms would have if used in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed this ____ day of ___________, 2006.
BLUEGREEN CORPORATION
By:___________________________________
Printed Name:___________________
Title:__________________________
Accepted:
BLUEGREEN RECEIVABLES FINANCE
CORPORATION XI
By:___________________________________
Printed Name:___________________
Title:__________________________
EXHIBIT 31.1
CERTIFICATION
I, George F. Donovan, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Bluegreen Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
d) Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/S/ GEORGE F. DONOVAN
---------------------
George F. Donovan
Chief Executive Officer
Date: May 10, 2006
|
EXHIBIT 31.2
CERTIFICATION
I, Anthony M. Puleo, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Bluegreen Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
c) Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/S/ ANTHONY M. PULEO
--------------------
Anthony M. Puleo
Chief Financial Officer
Date: May 10, 2006
|
EXHIBIT 32.1
Certification Required by 18 U.S.C. Section 1350
(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
I, George F. Donovan, as Chief Executive Officer of Bluegreen Corporation (the
"Company"), certify, pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002), that:
(1) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2006 (the "Report"), filed with the U.S. Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
By: /S/ GEORGE F. DONOVAN
---------------------
George F. Donovan
President and
Chief Executive Officer
Date: May 10, 2006
|
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.
A signed original of this written statement required by Section 906 has been provided to Bluegreen Corporation and will be retained by Bluegreen Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
Certification Required by 18 U.S.C. Section 1350
(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
I, Anthony M. Puleo, as Chief Financial Officer of Bluegreen Corporation (the
"Company"), certify, pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002), that:
(1) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2006 (the "Report"), filed with the U.S. Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
By: /S/ ANTHONY M. PULEO
--------------------
Anthony M. Puleo
Senior Vice President,
Chief Financial Officer and Treasurer
Date: May 10, 2006
|
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.
A signed original of this written statement required by Section 906 has been provided to Bluegreen Corporation and will be retained by Bluegreen Corporation and furnished to the Securities and Exchange Commission or its staff upon request.