Exhibit 10.216
CONSTRUCTION LOAN AND SECURITY AGREEMENT
By and Among
TEXTRON FINANCIAL CORPORATION
and
BLUEGREEN VACATIONS UNLIMITED, INC.
and
BLUEGREEN CORPORATION
As of: March 23, 2007
EXECUTION VERSION
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TABLE OF CONTENTS
Page
1. Definitions and
Construction................................................1
1.1
Definitions.......................................................1
1.2
Construction.....................................................11
1.3 Schedules and
Exhibits...........................................11
1.4 Accounting
Principles............................................12
2. The
Loan...................................................................12
2.1
General..........................................................12
2.2 Intentionally
Omitted............................................12
2.3 Construction
Loan................................................12
2.4
Advances.........................................................12
2.5 Intentionally
Omitted............................................13
2.6 Requests for Construction
Advance................................13
2.7 Amounts in Excess of Maximum Loan
Amount.........................13
2.8 Use of
Proceeds..................................................13
2.9
Closing..........................................................14
2.10 Maximum Relationship
Amount.....................................14
3. Loan Documents and
Loan Account...........................................14
3.1 Loan
Documents..................................................14
3.2 Loan
Account....................................................14
4. Interest
Rate..............................................................14
4.1 Primary Interest
Rate............................................14
4.2 Default
Rate.....................................................15
4.3 Calculation of
Interest..........................................15
4.4 Limitation of Interest to Maximum Lawful
Rate....................15
5.
Fees.......................................................................15
5.1 Loan
Fee.........................................................15
5.2 Late
Charge......................................................15
5.3
General.........................................................16
6.
Payments...................................................................16
6.1
General..........................................................16
6.2 Reinstatement of
Obligations.....................................17
6.3
Prepayment.......................................................17
6.4
Indemnity........................................................17
7. Security;
Guaranties.......................................................18
7.1
Security.........................................................18
7.2
Cross-Default....................................................20
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7.3
Guaranty.........................................................20
7.4 Additional Documents and Future
Actions..........................20
7.5 Location of
Collateral...........................................20
7.6 Insurance and Protection of
Collateral...........................20
8. Funding
Procedures.........................................................20
8.1
General..........................................................20
8.2 Disbursement
Agent...............................................21
8.3 Payment of
Bills.................................................21
8.4 Construction Component
Portion...................................21
8.5 Retainage; Conditions Precedent to Final
Disbursements...........21
8.6 Deposit of Funds Advanced/Advances to Disbursement Agent,
Architect, Contractor and
Subcontractors.........................23
8.7 Advances Do Not Constitute a
Waiver..............................23
9. Representations and
Warranties.............................................23
9.1 Organization;
Power..............................................23
9.2 Authorization; No Legal Restrictions; No Breach of
Other
Agreements.................................................24
9.3 Approvals; Licenses,
Etc.........................................25
9.4
Enforceability...................................................25
9.5
Title............................................................25
9.6
Liens............................................................25
9.7 Financial Statements and Financial
Condition.....................25
9.8
Taxes............................................................26
9.9 Subsidiaries; Affiliates and Capital
Structure...................27
9.10
Litigation Proceedings,
Etc.....................................27
9.11 Licenses; Permits;
Etc.........................................27
9.12 Environmental
Matters...........................................27
9.13 Full
Disclosure.................................................28
9.14 Use of Proceeds/Margin
Stock....................................28
9.15 No
Defaults.....................................................28
9.16 Compliance with
Law.............................................28
9.17 Restrictions of Borrower or
Guarantors..........................29
9.18 Broker's
Fees...................................................29
9.19 Deferred Compensation
Plans.....................................29
9.20 Labor
Relations.................................................29
9.21 Tax Identification/Social Security
Numbers......................30
9.22
Insurance.......................................................30
9.23 Names and
Addresses.............................................30
9.24
Solvency.......................................................30
9.25 Common
Enterprise..............................................30
9.26 Intentionally
Omitted...........................................31
9.27 Completeness of
Representations.................................31
9.28 No Violation of
Right of First Refusal.........................31
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10. Representations, Warranties and
Covenants.................................31
10.1 Access and
Utilities............................................31
10.2
Compliance.....................................................31
10.3
Declarations...................................................31
10.4 Zoning Laws,
Building Codes, Etc...............................32
10.5 Units Ready for
Use............................................32
10.6 Mortgaged
Property and Taxes and Fees..........................32
10.7 No
Defaults....................................................32
10.8 Timeshare
Plan.................................................32
10.9 Sale of Timeshare
Interests....................................33
10.10
Brokers.......................................................33
10.11 Tangible
Property.............................................33
10.12 Condition of
Project..........................................34
10.13 Assessments and
Developer Subsidy.............................34
10.14
Amenities....................................................34
10.15 Permits and
Licenses..........................................34
10.16
Wetlands......................................................34
10.17 Mechanics Lien
Claims.........................................34
10.18 Project
Contracts.............................................34
10.19 Certified Survey Map
Approved..................................34
10.20 Site Plan
Approval.............................................34
10.21 Club
Plan......................................................35
10.22 Reservation
System.............................................35
10.23 One to One Ratio
Compliance....................................35
10.24 Club
Documents.................................................35
11. Construction Representations, Warranties and
Covenants....................35
11.1
Construction....................................................36
11.2 Cost
Certificate................................................36
11.3 Construction
Contract...........................................36
11.4 Architect's
Contract............................................37
11.5
Subcontracts....................................................38
11.6
Specifications.................................................38
11.7
Permits.........................................................39
11.8 Commencement of
Construction....................................39
11.9 Zoning and Land
Use.............................................39
11.10 Additional
Equity..............................................39
11.11 No Developer's
Fee.............................................40
11.12 Right of Lender to Inspect Development Parcel and
Review
Specifications..........................................40
11.13 Correction of
Defects..........................................40
11.14 Notification of Mechanics Lien
Claims..........................40
11.15 Construction
Tests.............................................40
11.16 Substantial
Completion.........................................41
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11.17 Occupancy
Permits.............................................41
11.18 Notice of
Completion...........................................41
11.19 Compliance with Inspector's
Standards..........................42
11.20 Bonding
Requirements...........................................42
11.21 Force
Majeure..................................................42
11.22 Lien
Waivers...................................................42
11.23
Specifications.................................................42
12. General Affirmative
Covenants.............................................42
12.1 Payment and Performance of
Obligations..........................43
12.2 Business
Office.................................................43
12.3 Maintenance of Existence, Qualification and
Assets..............43
12.4 Consolidation and
Merger........................................43
12.5 Maintenance of
Insurance........................................43
12.6 Maintenance of
Security.........................................43
12.7 Payment of Taxes and
Claims.....................................44
12.8
Inspections.....................................................44
12.9
Records.........................................................45
12.10
Management.....................................................45
12.11
Maintenance....................................................45
12.12 Local Legal
Compliance.........................................45
12.13 Registration
Compliance........................................45
12.14 Other
Compliance...............................................46
12.15 Further
Assurances.............................................46
12.16 Maintenance and
Amenities......................................46
12.17 Loan
Costs.....................................................46
12.18 Indemnification of
Lender......................................46
12.19 Use of Borrower's
Name.........................................48
12.20 Right to Provide Future
Financing..............................48
12.21
Inspector......................................................48
12.22 Sales and
Marketing...........................................49
12.23 Project
Contracts.............................................49
12.24
Consents.......................................................49
12.25 Engineering
Survey............................................49
12.26 Intentionally
Omitted.........................................49
12.27 Exchange
Company..............................................49
12.28 Intentionally
Omitted.........................................50
12.29 One to One Ratio
Compliance...................................50
13. Reporting
Requirements....................................................50
13.1
Intentionally
Omitted...........................................50
13.2 Quarterly Financial
Reports.....................................50
13.3 Annual Financial Reports of
Guarantors..........................50
13.4 Officer's
Certificate...........................................50
13.5 Audit
Reports...................................................51
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13.6 Sales
Reports...................................................51
13.7 Association
Reports.............................................51
13.8 Notice of Default or Event of
Default...........................51
13.9 Notice of Claimed
Default.......................................51
13.10 Material Adverse
Developments..................................51
13.11 Other
Information..............................................52
14. Negative
Covenants........................................................52
14.1
Organization....................................................52
14.2 Operating
Contracts.............................................52
14.3 Limitation on Other Debt/Further
Encumbrances...................52
14.4. Intentionally
Omitted..........................................52
14.5 Amendment of Declarations,
Etc..................................52
14.6
Ownership.......................................................52
14.7 Other Liens or
Assignments......................................53
14.8 Merger,
Etc.....................................................53
14.9 Use of Lender's
Name............................................53
14.10 Transactions with
Affiliates...................................53
14.11 Name or Address
Change.........................................53
14.12. Intentionally
Omitted........................................53
14.13
Distributions..................................................53
14.14. Intentionally
Omitted........................................54
14.15 Intentionally
Omitted.........................................54
14.16 Restrictions on
Transfers......................................54
14.17 Restrictive
Covenants..........................................54
14.18. Intentionally
Omitted........................................54
14.19. Intentionally
Omitted........................................54
14.20 Intentionally
Omitted.........................................54
14.21
Amenities......................................................54
14.22 Changes in
Accounting.........................................54
14.23 Club Reservation
System.......................................55
15. Affiliate
Indebtedness....................................................55
16. Financial
Covenants.......................................................55
16.1 Minimum Tangible Net
Worth......................................55
16.2 Minimum Debt to
Tangible Net Worth Ratio.......................56
17. Conditions of and Documents to be Delivered at the
Closing................56
17.1 Loan
Documents..................................................56
17.2 Opinions of
Counsel.............................................56
17.3 Project
Documents...............................................56
17.4 Association
Documents...........................................56
17.5 Obligors'
Documents.............................................56
17.6 Good Standing
Certificates......................................57
17.7
Insurance.......................................................57
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17.8 Flood
Insurance.................................................57
17.9 Authorizing
Resolutions.........................................57
17.10 UCC-1 Financing
Statements.....................................57
17.11 UCC-1 Search
Report............................................57
17.12
Releases.......................................................57
17.13 Closing
Certificates...........................................58
17.14
Compliance.....................................................58
17.15 Borrower's Certificate of
Indemnity............................58
17.16 Mortgagee Title Insurance Commitment and
Policy................58
17.17 Taxes and
Assessments..........................................59
17.18 Preclosing
Inspections.........................................59
17.19
Expenses.......................................................59
17.20 14.12.
Intentionally Omitted.............................59
17.21 Intentionally
Omitted..........................................59
17.22 Permits and
Approvals..........................................59
17.23 Project
Contracts..............................................59
17.24 Compliance with Planning and
Zoning............................59
17.25 Project
Broker.................................................59
17.26
Escrow
Agreements..............................................60
17.27 Credit
References..............................................60
17.28 Acquisition
Equity.............................................60
17.29 Post-Closing
Requirements......................................60
17.30
Other..........................................................60
18. Conditions to Lender's Obligation to Make Construction
Advances...........60
18.1
Documents.......................................................60
18.2 Representations and
Warranties..................................60
18.3
Covenants.......................................................61
18.4 No
Default......................................................61
18.5 Request for Construction
Advance................................61
18.6 Soft
Costs......................................................61
18.7 Other
Agreements................................................62
18.8 Construction
Documents..........................................62
18.9 Contractor's
Insurance..........................................62
18.10 Intentionally
Omitted..........................................62
18.11 Intentionally
Omitted..........................................62
18.12 Certificates of Substantial
Completion.........................62
18.13
Compliance.....................................................62
18.14 Lien Waivers,
etc..............................................62
18.15 Title Policy
Endorsements......................................63
18.16 Fees and
Expenses..............................................63
18.17 Permits and
Approvals..........................................63
18.18 Lender's
Mortgage..............................................63
18.19 Completion of
Work.............................................63
18.20 Additional
Equity.............................................63
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18.21 Advances Do Not Constitute a
Waiver............................63
18.22 No Obligation to Fund After Filed
Liens........................63
18.23 Stored
Goods...................................................64
18.24
Other..........................................................64
19. Default;
Remedies........................................................64
19.1
Payments........................................................64
19.2 Covenant
Defaults...............................................64
19.3 Warranties or
Representations...................................64
19.4 Enforceability of
Liens.........................................65
19.5 Involuntary
Proceedings.........................................65
19.6
Proceedings.....................................................65
19.7 Attachment; Judgment; Tax
Liens.................................65
19.8 Intentionally
Omitted...........................................65
19.9 Removal of
Collateral...........................................65
19.10. Intentionally
Omitted.........................................65
19.11 Default of
Guarantor..........................................66
19.12 Merger or
Dissolution..........................................66
19.13 Default by Borrower or Guarantor Under Other
Agreements........66
19.14 Loss of
License................................................66
19.15 Suspension of
Sales............................................66
19.16 Violation of Negative
Covenants................................66
19.17
Deficiency.....................................................66
19.18 Abandonment or Cessation of
Construction.......................66
19.19 Lien Against Development
Parcel................................66
19.20 Unauthorized
Work..............................................67
19.21
Breach.........................................................67
19.22 Criminal
Proceedings...........................................67
19.23 Intentionally
Omitted..........................................67
19.24 Intentionally
Omitted..........................................67
19.25 Intentionally
Omitted..........................................67
19.26 Bonding
Requirements...........................................67
19.27 Intentionally
Omitted..........................................67
19.28
Fraud..........................................................67
19.29 Intentionally
Omitted..........................................67
19.30
Insolvency.....................................................67
19.31 Encroachments and
Permits......................................67
19.32 Material Adverse
Change........................................68
19.33 Cessation of
Business..........................................68
20. Termination of
Obligation to Advance/Remedies............................68
20.1 Termination of Obligation to
Advance............................68
20.2
Remedies........................................................68
20.3 Notice of Sale of Personal Property
Collateral..................73
20.4 Application of Collateral; Termination of
Agreements............74
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20.5 Suits to Protect the Development
Parcel.........................74
20.6 Rights of Lender Regarding
Collateral...........................74
20.7 Waiver of Appraisement Valuation, Stay, Extension
and Redemption
Laws.............................................75
20.8 Delegation of Duties and
Rights.................................75
20.9 Lender Not in
Control...........................................75
20.10
Waivers........................................................75
20.11 Cumulative
Rights..............................................77
20.12 Expenditures by
Lender.........................................77
20.13 Diminution in Value of
Collateral..............................77
20.14 Discontinuance of
Proceedings..................................77
21. Partial Releases; Other
Releases..........................................77
22. Certain Rights of
Lender..................................................78
22.1 Protection of
Collateral........................................78
22.2 Performance by
Lender...........................................79
22.3 No Liability of
Lender..........................................79
22.4 Right to Defend Action Affecting
Security.......................79
22.5 Indemnities, Loan Costs and
Expenses............................79
22.6 Lender's Right of
Set-Off.......................................79
22.7 No
Waiver.......................................................80
22.8 Right of Lender to Extend Time of Payment, Substitute,
Release Security,
Etc...........................................80
22.9 Assignment of Lender's
Interest.................................80
22.10 Power of
Attorney..............................................81
22.11 Relief from Automatic Stay,
Etc................................81
22.12 Investigations and
Inquiries...................................81
23.
Miscellaneous............................................................82
23.1
Notices.........................................................82
23.2 Term of
Agreement...............................................83
23.3
Survival........................................................83
23.4 Continuation and
Investigation..................................83
23.5 Governing Law; Consent to
Jurisdiction..........................83
23.6 Invalid
Provisions..............................................84
23.7 Successors and
Assigns..........................................84
23.8
Amendment.......................................................85
23.9 Counterparts; Effectiveness;
Facsimile..........................85
23.10 Lender Not
Fiduciary...........................................85
23.11 Total
Agreement................................................85
23.12 Consents, Approvals and
Discretion.............................85
23.13
Litigation.....................................................85
23.14
Submissions....................................................86
23.15 Incorporation of
Exhibits......................................86
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23.16 Consent to Advertising and Publicity of
Documents..............86
23.17 Control of
Association.........................................87
23.18 Directly or
Indirectly.........................................87
23.19 Savings
Clause.................................................87
23.20 Reimbursement for
Taxes........................................87
23.21
Headings.......................................................87
23.22
Gender.........................................................87
23.23 Time of the
Essence............................................88
23.24
Conflict.......................................................88
23.25 Joinder and
Consent............................................88
Schedules
Schedule 9.8
-
Taxes
Schedule 9.9
-
Subsidiaries
Schedule 9.10
-
Litigation
Schedule 9.23
-
Names and Addresses
Schedule 10.18
-
Project Contracts
Schedule 14.7
-
Permitted Liens
Schedule 21
-
Form of Partial Release
ix
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TABLE OF EXHIBITS
EXHIBIT A-1
LEGAL DESCRIPTION OF PHASE 2 LAND
EXHIBIT A-2
LEGAL DESCRIPTION OF EXISTING UNITS
EXHIBIT B
INTENTIONALLY OMITTED
EXHIBIT C
FORM OF REQUEST FOR CONSTRUCTION COMPONENT ADVANCE
EXHIBIT D
APPROVED SITE PLAN
EXHIBIT E
PHASE 2 COST CERTIFICATE
EXHIBIT F
FORM OF
OFFICER'S CERTIFICATE
x
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CONSTRUCTION LOAN AND SECURITY AGREEMENT
THIS
CONSTRUCTION
LOAN AND SECURITY
AGREEMENT is made effective as of
March ____,
2007 by and among TEXTRON FINANCIAL CORPORATION, a Delaware
corporation
("Lender"),
BLUEGREEN VACATIONS
UNLIMITED,
INC.,
a Florida
corporation ("Borrower"), and BLUEGREEN CORPORATION, a
Massachusetts corporation
("Guarantor").
NOW
THEREFORE, in
consideration
of the mutual
covenants and
agreements
contained in this Agreement, and for other good and valuable
consideration, the
receipt and adequacy of which are acknowledged, the parties to this Agreement,
intending to be legally bound, hereby agree as follows:
1.
Definitions and Construction.
1.1. Definitions.
The following words and phrases as used in
capitalized form in
this Agreement,
whether in the
singular or plural,
shall
have the meanings indicated:
Advance or Construction Advance means an advance of the
proceeds of
the Loan by Lender to or on behalf of Borrower in accordance with the terms of
this Agreement.
Affiliate means
any Person: (a) which directly or indirectly
controls, or is
controlled by, or is under common control with such Person; (b)
which directly or
indirectly
beneficially
owns or holds five
percent (5%) or
more of the voting stock of such Person; or (c) for which five percent (5%)
or
more of the voting stock of which is directly or indirectly
beneficially
owned
or held by such Person; provided, however, that under no circumstances
shall
Borrower or Guarantor be deemed an Affiliate of any 5% or greater
shareholder of
Guarantor or any Affiliate of such shareholder who is not a Direct
Affiliate (as
defined herein) of Guarantor, nor shall any such shareholder be
deemed to be an
Affiliate of Borrower or Guarantor. The term "control" means the possession,
directly or
indirectly, of the
power to direct or cause the direction of the
management and
policies of a Person,
whether through the
ownership of
voting
securities, by
contract or otherwise.
For purposes of this definition, any
entity included in the same GAAP consolidated financial statements as
Guarantor
shall be an Affiliate of Guarantor (a "Direct Affiliate").
Affiliate Indebtedness
means all present and future indebtedness or
obligations owed by
Borrower to Guarantor
or to any Affiliate of Borrower or
Guarantor.
Agreement means this
Construction Loan and Security Agreement, as
amended, restated, extended or supplemented from time to time.
Agreement to
Provide Insurance means the Agreement to Provide
Insurance dated as of the date hereof between Borrower and Lender, as amended,
<PAGE>
restated, extended or supplemented from time to time.
Amenities means the recreational, access and utility facilities to
be included as part of or to benefit the Project, including,
without limitation,
the such amenities
may be further
described in the
Declarations,
and Public
Report.
Amenities Agreements
means collectively,
each existing and
future
agreement, including
without limitation, the Ingress and Egress Easement
Agreement and the Declarations, which grant to the Borrower and to
the owners of
Units or Timeshare
Interests at the Project the right to use the Amenities and
which provides for certain easements, access and use rights and for
the delivery
of certain services
at the Project or to
Borrower or if applicable, to the
Owners of Timeshare
Interests, as such
agreements
may be amended,
restated,
extended or supplemented from time to time, and any new amenities
agreements.
Applicable Mechanics Lien Law means any statute, ordinance, rule or
other law of the State or any governmental subdivision thereof, pertaining to
the perfection and/or
priority of the rights
of mechanics',
materialmen's or
other contractors' claimants.
Approved Costs means
the costs disclosed in
the final Phase 2 Cost
Certificate, approved by Lender.
Architect means Forum
Architecture & Interior Design, Inc. and any
replacement architect for the Work approved by Lender.
Architect's Contract has the meaning set forth in Section 11.4.
As-Built Survey has the meaning set forth in Section 8.5(f).
Assignment of Construction Contract means that certain Assignment
of
Construction Contract
from Borrower in favor of Lender pursuant to which
Borrower assigns
its rights
but not its
obligations
under the Construction
Contract to Lender.
Assignment of Property
Rights means that certain first priority
Assignment of Property Rights made by Borrower in favor of Lender
evidencing the
collateral assignment
to Lender of all property rights related to the Mortgaged
Property.
Association means
Grande Villas at World
Golf Village
Condominium
Association, Inc.,
a Florida not-for-profit corporation, together with its
successors or assigns.
Borrower means
Bluegreen Vacations Unlimited, Inc., a Florida
corporation.
Business Day means
each day which is not a Saturday or Sunday or a
legal holiday
under the laws of the
State of Connecticut,
the State of Rhode
Island, the State of Florida or the United States.
Closing means the
closing of the
transactions
contemplated under
2
<PAGE>
this Agreement.
Closing Date means the effective date of this Agreement set forth
in
the heading of this Agreement.
Club means the Bluegreen Vacation Club Multi-Site Timeshare Plan
and
its component site resorts; the Club is not a legal entity or
association of any
kind.
Club Documents means the Bluegreen Vacation Club multi-site
public
offering statement
and its exhibits as amended from time to time as filed in
Florida with the Division.
Code means
the Uniform Commercial Code in force in the State of
Florida, as amended from time to time.
Collateral has the meaning set forth in Section 7.1.
Commencement Date
means on or before
January 1, 2007 for Phase 2
Work.
Commercial Leases has the meaning set forth in Section 7.1(e).
Commitment means the
Letter of Intent
issued by Lender to Borrower
dated July 14, 2006 and accepted on August 7, 2006.
Completion of the Work
means one hundred
percent (100%)
finished
construction of the Work (not Substantial Completion) for Phase 2 in
accordance
with the
Specifications for
such Phase, certified
to Lender by the Inspector,
Borrower and Contractor.
Condominium Act
means the "Florida
Condominium Act",
Chapter 718,
Florida Statutes, as it is amended from time to time.
Condominium Plan means the Condominium Plan for the Project.
Construction Contract has the meaning set forth in Section
11.3.
Construction Advance
Period means the period of time commencing on
the Closing
Date and ending on August 31, 2007, unless sooner terminated
hereunder.
Contractor means the general contractor(s) selected by Borrower and
approved by Lender for any of the applicable Work, and any replacement
general
contractor approved by Lender.
Debtor
Relief
Laws means
all applicable
liquidation,
conservatorship, bankruptcy,
moratorium, rearrangement,
insolvency,
reorganization or similar law, proceeding or device providing for
the relief of
debtors from time to
time in effect
and generally affecting the rights of
creditors.
Declarations
means,
collectively,
the Northwest
Commercial
Declaration, the Northwest Master Declaration and the Timeshare
Declaration.
3
<PAGE>
Default Rate has the meaning set forth in Section 4.2.
Disbursement Agent has the meaning set forth in Section 8.2.
Division means the Division of Land Sales, Condominiums and Mobile
Homes of the Department of Business and Professional Regulation for
the State of
Florida.
Environmental
Agreement means that certain Environmental Agreement
of even date herewith between Borrower and Lender as amended,
restated, extended
or supplemented from time to time, and any new environmental
agreement executed
in its place.
Environmental Laws has
the meaning set forth
in the
Environmental
Agreement.
Event of Default means any Event of Default described in Section
19.
Existing Units means
the presently
constructed
seventy-two
(72)
condominium units and
land upon which they have been constructed and related
common elements and amenities, subject to the Declarations, as more
particularly
described on Exhibit "A-2" attached hereto.
GAAP means generally acceptable accounting principles in the
United
States, applied
on a consistent basis, as described in Opinions of the
Accounting Principles
Board of the
American Institute of Certified Public
Accountants and/or in
statements of the Financial Accounting Standards Board
which are applicable in the circumstances as of the date in
question.
Governing
Documents means
the certificate or articles of
incorporation or
formation,
by-laws, partnership agreement, joint venture
agreement, trust
agreement,
operating agreement or other organizational or
governing documents of any Person.
Governmental Agency
shall have the meaning set forth in Section
12.18.
Guarantor means Bluegreen Corporation, a Massachusetts corporation,
its successors and assigns.
Guaranty means
each guaranty, surety agreement, guaranty and
suretyship agreement and/or other similar agreement executed by the
Guarantor in
favor of Lender pursuant to which the Guarantor agrees to act as a
guarantor for
the Obligations and any amendment, restatement, extension or supplement
thereto
and any new guaranty or similar agreement given in substitution or
replacement
therefor and any new
guaranty or surety agreement by any other Person with
respect to all or any part of the Obligations.
Hazardous Materials
has the meaning set forth in the Environmental
Agreement.
4
<PAGE>
Incipient Default
means any condition or event which, after notice
or lapse of time or both, would constitute an Event of Default under this
Agreement.
Ingress and Egress Easement Agreement means that certain Ingress
and
Egress Easement
Agreement between World Golf Village, Inc. and Vistana WGV,
Ltd., as recorded in the Public Records of St. Johns County, Florida, as
amended, restated, extended or supplemented from time to time.
Inspector has the meaning set forth in Section 12.21.
Lease Income has the meaning set forth in Section 7.1(f).
Legal Requirements
means all federal,
state and local
ordinances,
laws, regulations,
orders, judgments,
decrees,
determinations and other legal
restrictions governing
the Project, the Borrower, the Guarantor or their
business or operations.
Lender means Textron Financial Corporation, a Delaware corporation,
its successors and assigns.
Lender's Mortgage or
Mortgage means that
certain first priority
Mortgage, Assignment
of Rents and Security
Agreement executed as of the date
hereof from the Borrower, as mortgagor, in favor of the Lender,
as mortgagee,
encumbering the
Mortgaged Property, as amended, restated, extended or
supplemented from time to time.
Loan means the revolving construction loan facility in an
amount up
to $12,500,000 to be extended by Lender to Borrower pursuant to
this Agreement.
Loan Account has the meaning set forth in Section 3.2.
Loan Costs means all reasonable costs, expenses and fees incurred
by
Lender in connection with the Loan, including without limitation,
those related
to negotiating, preparing, documenting, closing and enforcing this
Agreement and
all other Loan Documents including, but not limited to:
(a) the
cost of preparing,
reproducing and
binding this
Agreement, the
other Loan Documents and all exhibits and schedules thereto;
(b) the
legal fees, expenses and disbursements of Lender's counsel;
(c)
Lender's out-of-pocket
expenses (including fees and expenses of
the
Lender's counsel) relating to any Advances, amendments, waivers or
consents;
(d) all
other fees and expenses (including fees and expenses of the
Lender's counsel) relating to any Advances, amendments, waivers or
consents;
(e) all
costs, outlays, legal fees and expenses of every kind and
character had or incurred in (1) the interpretation or enforcement
of any of the
provisions of, or the creation, preservation or exercise of rights
and remedies
under, any of the
Loan Documents including the costs of appeal (2) the
preparation for,
5
<PAGE>
negotiations regarding, consultations concerning, or the
defense or prosecution
of legal proceedings
involving any claim or
claims made or threatened against
the Lender arising out
of this transaction or
the protection of the Collateral
securing the Loan or
Advances made
hereunder,
expressly including, without
limitation, the
defense by Lender of any legal proceedings instituted or
threatened by any
Person to seek to recover or set aside any payment or setoff
theretofore, received
or applied by the Lender with respect to the Obligations,
and any and all
appeals thereof;
and (3) the advancement of any expenses
provided for under any of the Loan Documents;
(f) all
fees and expenses
relating to any escrow by the Title Company or
any other escrow agent;
(g) all
costs and expenses
incurred by Lender under the Loan and all late
charges under the Loan;
(h) all
real and personal
property taxes and assessments, documentary
stamp and intangible
taxes, sales taxes, recording fees, title insurance
premiums and other title charges, document copying, transmittal and binding
costs, appraisal
fees, lien, judgment and litigation
search costs,
fees of
architects, engineers,
environmental
consultants,
surveyors and any special
consultants,
construction
inspection fees,
brokers fees,
escrow fees,
wire
transfer fees, and all out-of-pocket expenses of Lender to conduct
inspections
or audits. Without limitation of the foregoing, Borrower shall pay the costs
of
UCC and other searches, UCC and other Loan Document recording fees and
applicable taxes,
and premiums on each title
insurance policy delivered to
Lender pursuant to this Agreement; and
(i) all
reasonable
costs and expenses of
Lender related to any
meetings
with Obligors
or other Persons related to the transactions contemplated
hereunder, audits or
inspections of Obligors or the Project including without
limitation travel expenses.
Loan Documents means the Commitment, this Agreement, the Note, the
Guaranty, the
Lender's Mortgage, the Assignment of Property Rights, the
Assignment of Construction Contract, any document evidencing any
assignment or
security interest described in Section 7.1, the Environmental
Agreement, and all
documents now or hereafter executed in connection with the Loans or
securing the
Obligations
Loan Maturity Date means September 30, 2009.
Management Agreement
means the Management Agreement between the
Association and the
Manager for the
management
of the Project, as amended,
restated, extended or
supplemented
from time to time,
and any new
management
agreement
executed in
its place, all of which agreements (other than
non-material
revisions) must be in
form and content
reasonably
approved by
6
<PAGE>
Lender.
Manager means
Bluegreen Resorts Management, Inc., a Delaware
corporation, and any replacement manager for the Project approved
by Lender.
Master
Declaration
means that certain Master Declaration of
Covenants, Conditions
and Restrictions dated as of August 25, 1998 and recorded
in the Public Records of St. Johns County, Florida, in Book 1345, Page 1586,
on
September 3, 1998, as amended, restated, extended or supplemented from time
to
time.
Master Property
means the real
property and existing or future
improvements and
amenities more
particularly
described in Exhibit
"A" to the
Master Declaration.
Maximum Loan Amount
means $12,500,000, as further described in
Section 2.3 and subject to the restrictions set forth in Section
2.4.
Mortgaged Property has the meaning set forth in Section 7.1(a).
Northwest Commercial
Declaration means that
certain Declaration of
Covenants and
Restrictions for Saint
Johns Northwest
Commercial, dated as
of
July 24, 1996, and recorded in the Public Records of St. Johns
County, Florida,
in Book 1185, Page 649, as amended, restated, extended or
supplemented from time
to time.
Northwest Master
Declaration
means that
certain Declaration of
Covenants and Restrictions for Saint Johns - Northwest Master,
dated as of July
24, 1996, and recorded
in the Public Records of St. Johns County, Florida, in
Book 1185, Page 598, as amended, restated, extended or supplemented
from time to
time.
Note means that certain Secured Promissory Note dated as the date
hereof, payable
to the order of Lender further evidencing the Borrower's
obligation to repay
the Loan and all
interest thereon as
amended, restated,
extended or supplemented from time to time.
Obligations means
all payment and performance obligations and
liabilities of each Obligor to Lender as evidenced by the Note or
otherwise owed
pursuant to the Loan Documents of every kind, nature and
description, direct
or
indirect, absolute or contingent, due or to become due, contractual
or tortious,
liquidated or
unliquidated,
regardless of how such
obligations or liabilities
arise, including
without limitation,
the obligation of Borrower to pay (a) the
principal of, premium,
if any, on and
interest on the Loan;
and (b) all fees,
costs, expenses, indemnities, obligations and liabilities of
each Obligor owing
at any time to Lender
under or in respect
of this Agreement and each of the
other Loan Documents.
7
<PAGE>
Obligor means Borrower and Guarantor, individually.
Obligors
means Borrower and Guarantor, collectively.
One to One Ratio shall have the meaning set forth in Section
10.23.
Owner or Owners means
a Purchaser
or Purchasers of a Timeshare
Interest, the successive owner or owners of each Timeshare Interest
so conveyed,
and the Borrower with respect to Timeshare Interests not so
conveyed.
Permitted Liens or Permitted Exceptions shall have the meanings
set
forth in Section 14.7 and Section 9.5, respectively.
Person means
an individual, a government or any agency or
subdivision
thereof, a
corporation,
partnership,
trust,
unincorporated
organization,
association, joint
stock company, limited
liability company
or
other legal entity.
Phase 1 means the Existing Units within the two buildings
(numbered
3 and 4) and related
facilities
which make up a portion of Phase 1 of the
Project.
Phase 2 means the contemplated sixty (60) purpose-built Units in
two
buildings (numbered 5 and 6) and related facilities to be
constructed as part of
Phase 2 of the Project.
Phase 2 Completion
Date with respect to
the Work means the earlier
to occur of (a) the date of Completion of the Work for Phase 2 or
(b) August 31,
2007 with respect to Phase 2.
Phase 2 Cost Certificate shall have the meaning set forth in
Section
11.2.
Phase 2 Land means the land upon which the improvements to Phase 2
are being constructed,
as more particularly described in Exhibit "A-1" attached
hereto.
Phase 2 Total Budget
shall have the
meaning set forth in Section
11.10.
Phase 2 Work means the
construction
of sixty (60) purpose-built
timeshare Units
within Phase 2 of the
Project and related
facilities and the
installation of the site development, landscaping, infrastructure, fixtures,
furnishings and soft
costs related thereto as shown as costs on the Phase
2
Total Budget and being performed by the Contractor, as further described in the
applicable Specifications for Phase 2.
Phase means individually, Phase 1 or Phase 2.
Phases mean collectively, Phase 1 or Phase 2.
Project means
collectively, the
Existing Units, the
Phase 2 Land,
and all associated
Amenities owned by Borrower. The Project presently consists
of Phase 1, and it is
contemplated that
Phase 2, will be
constructed
on the
Phase
8
<PAGE>
2 Land.
Project Contracts
means each of the
agreements listed on
Schedule
10.18 and all other existing and future agreements relating to the development,
operation, common
areas, management,
marketing,
sales and maintenance
of the
Mortgaged Property,
to the extent the
amount to be
performed after the date
hereof exceeds $50,000 per contract or agreement.
Project Documents has the meaning set forth in Section 17.3.
Public Records means
the public records of
St. Johns County in and
for the State of Florida.
Public Report means collectively, the public offering statement
for
the Project
and the approvals or registrations for the Project, in the
jurisdiction in which
the Project is located and in each other jurisdiction in
which sales of Timeshare Interests are made or the Project is
otherwise required
to be registered.
Purchaser means a bona fide third-party purchaser for value
(whether
one or more persons)
who has purchased one
or more Timeshare
Interests from
Borrower.
Release Payment
means each
Release Payment as defined in Section
6.1(b)(ii).
Release Payments
mean all Release Payments as defined in Section
6.1(b)(ii).
Released Property has the meaning set forth in Section 21.
Request for
Construction Advance
means a Request or
Requests for
Construction Advance as described in Section 2.6.
Retainage Disbursement Requirements shall have the meaning set
forth
in Section 8.5.
Reservation System means collectively, the method, arrangement or
procedure including
any computer network and software employed for the purpose
of enabling or
facilitating the
operation of the system which enables each
Purchaser or Club
member to utilize his or her right to reserve a use period in
a Club resort
including the Project in accordance with the provisions and
conditions set
forth in the Club Documents and a Unit at the Project in
accordance with the Project Documents in the event the
Reservation
System for
the Club is not operational at any time for whatever reason.
Site Plan has the meaning set forth in Section 10.20.
Special Assessment
Agreement means that
certain Special Assessment
Agreement that provides for construction of a convention center to
be located in
the World Golf Village
development, dated as
of July 24, 2006, and recorded in
the Public Records of St. Johns County, Florida, in Book 1185
9
<PAGE>
Page 1907 on July 24, 2006, as amended, restated, extended or supplemented from
time to time.
Specifications means collectively, the final plans and
specifications for the
Work to be
performed on Phase 2 of the Project as
submitted to and
approved by Lender,
and all amendments, modifications and
supplements thereto
and all new plans and specifications with respect thereto,
all of which are subject to the prior approval of Lender. The Work for Phase 2
shall require separate
Specifications which
are applicable only to Phase 2, as
distinguished from the other Phases, and which are approved by
Lender.
State means the State of Florida.
Subordination
Agreement means
any agreement subordinating the
obligations owed by an
Obligor to a creditor,
to the Obligations
owed by such
Obligor to Lender as required pursuant to Section 15.
Substantial Completion shall occur when Lender obtains a
certificate
of completion executed
by the Contractor and approved by the Inspector stating
that the applicable Work for Phase 2 is substantially complete,
subject only to
a "punch list"
designating
any minor incomplete Work or other performance
remaining to be done under the Construction Contract to accomplish
Completion of
the Work and stating the sums necessary to accomplish Completion of
the Work.
Survey has the meaning set forth in Section 10.19.
Tenant Leases has the meaning set forth in Section 7.1(d).
Timeshare Act means the "Florida Vacation Plan and Timeshare Act"
Chapter 721, Florida Statutes (2006, as amended).
Timeshare Declaration
means that certain Declaration of Condominium
for Grande Villas at World Golf Village, a Condominium, a Bluegreen Vacation
Club Resort, dated as
of January 7, 2004, and recorded at Book 2126, Page 1051,
on January 23, 2004, in the Public Records of St. Johns County,
Florida, as it
may be amended, restated or supplemented from time to time.
Timeshare Interest
means a real property interest established
pursuant to F.S.
Chapter 721; TO WIT: a right to occupy a timeshare unit,
coupled with a freehold estate or an estate for years with
a future interest in
a timeshare
property or a specified portion thereof; more specifically,
Timeshare Interest
means a timeshare concept whereby Units and the share of the
common elements
assigned to the Units
are conveyed for a
period of time,
the
purchaser receiving a
stated time period for a period of years; together with,
at 12:00 noon on the first Saturday in the year 2073,
a remainder
over in fee
simple as tenant in common with all other Purchasers of Timeshare Interest in
such Units, in that
percentage
interest determined and established by the
Timeshare Declaration.
The term shall also
mean an interest in a Unit pursuant
to section
718.103(22),
10
<PAGE>
Florida Statutes.
Reference to a Timeshare Interest shall include the Timeshare
Interest and its appurtenant timeshare period, which consists of the period
or
periods of
time when a Purchaser is afforded the opportunity to use
accommodations or facilities of the timeshare plan.
Timeshare Loans means the loans granted by Borrower to Purchasers
of
Timeshare Interests
to finance the acquisition thereof by Purchasers of
Timeshare Interests.
Title Company
means an American Land Title Association company
selected by
Borrower and approved by Lender which is authorized and duly
licensed to carry
on a title
insurance business in the State in which the
Project is located.
The Title Company currently used by Borrower is First
American Title Insurance Company.
Title Policy ALTA extended coverage mortgagee's loan policy of
title
insurance issued by
the Title Company and
complying with the provisions of
Section 17.16.
Trust Agreement means that certain Bluegreen Vacation Club Amended
and Restated Trust Agreement dated as of May 18, 1994, as it may be
amended from
time to time.
Unit(s) means collectively, the sixty (60) purpose-built Units to
be
constructed as part of
Phase 2, which Units shall be committed to the Vacation
Timesharing Plan in accordance with the provisions of the Timeshare
Declaration.
Vacation Timesharing
Plan means the
vacation timesharing regime
created pursuant to
the Timeshare Act to which Units in Phase 1 are subject and
to which Units in
Phase 2 shall be subject and pursuant to which a Purchaser
receives by deed a Timeshare Interest, subject to the Timeshare
Declaration.
Work means the Phase 2 Work being performed on by the Contractor,
as
more further described in the applicable Specifications for Phase
2.
WSJ Prime Rate
means the rate of
interest published in the Wall
Street Journal
(Eastern Edition) under the designation "Money Rates" and
described as "Prime Rate" or "Base Rate on Corporate Loans at Large U.S. Money
Center Commercial Banks." If the rate so published is shown as a
range of rates,
Lender will use the
highest rate in such
range as the WSJ Prime Rate. If such
rate is no longer
published or
available,
Lender will choose a comparable
substitute rate
based upon a national index, selected by Lender in its
discretion.
1.2. Construction.
Unless the
context of this
Agreement clearly
requires otherwise, references to the plural include the singular,
references to
the singular include the plural, the term "including" is not
limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the
phrase "and/or." The
words "hereof,"
"herein," "hereby,"
"hereunder," and
similar terms in this
Agreement refer to
this Agreement as a
whole and not to any
11
<PAGE>
particular provision of this Agreement. An Event of Default shall
"continue" or
be "continuing" until such Event of Default has been waived in
writing by Lender
or cured and the cure accepted by Lender. Section, Subsection,
clause, schedule,
and exhibit references
are to sections,
subsections,
clauses, schedules and
exhibits in this Agreement unless otherwise specified. Any reference in this
Agreement or in the Loan Documents to this Agreement, any of the Loan Documents
or any other document or agreement shall include all alterations, amendments,
changes, extensions,
modifications,
renewals, replacements, substitutions,
supplements, and restatements thereto and thereof, as
applicable.
1.3. Schedules
and Exhibits. All of the schedules and exhibits
attached to this
Agreement,
as they may from time to time be amended or
restated, shall be deemed incorporated herein by reference.
1.4. Accounting
Principles.
Where the character or amount of any
asset or liability or item of income or expense is required to be
determined or
any consolidation or other accounting computation is required to be
made for the
purposes of this
Agreement, the same
shall be determined or made in accordance
with GAAP consistently
applied at the time in effect, to the extent applicable,
except where such
principles are
inconsistent with the
requirements
of this
Agreement.
2. The
Loan.
2.1. General.
The Loan is a
construction
loan. Subject to other
provisions, conditions
and restrictions set forth in this Agreement, the
outstanding principal
balance of the Loan
shall at no time
exceed the Maximum
Loan Amount.
2.2. Intentionally Omitted .
2.3.
Construction Loan.
Subject to the other provisions and
conditions of this
Agreement,
Lender agrees, from time to time during the
Construction Advance Period, to make Construction Advances to the Borrower on a
revolving basis in an aggregate principal amount not to exceed $12,500,000 at
any one time (the "Maximum Loan Amount"). The Construction Advance proceeds
shall be disbursed to reimburse Borrower for the Approved Costs for
the Work.
2.4. Advances.
(a) Intentionally Omitted.
(b) Revolving Credit Under Construction Loan. This Agreement
contemplates an
extension of credit to Borrower on a
revolving basis for
the
Loan not to exceed the
Maximum Loan
Amount at any time
during the term of the
Loan.
12
<PAGE>
(c) Restrictions on Construction Advances. Lender shall have
no obligation to make an Advance under the Loan: (i) more often
than once during
any calendar month,
(ii) in an amount not
less than $50,000 for each Advance,
(iii) pursuant
to a Request for Construction Advance received after the
expiration of the Construction Advance Period, or (iv) after the occurrence
of
an Incipient Default or an Event of Default.
(d) Additional
Restrictions
on Advances. Notwithstanding
anything to the contrary contained in Section 2, Lender shall have
no obligation
to make any Advance under the Loan which would cause the
aggregate outstanding
balance under the Loan to exceed (i) $12,500,000; or (ii) 85% of the verifiable
costs to acquire Phase 2, costs of the Work performed and pay
related costs, all
as approved by Lender.
2.5. Intentionally Omitted.
2.6. Requests for Construction Advance. Except for Advances to pay
Loan Costs and other
obligations of
Borrower under the
Loan Documents,
each
Construction Advance
shall be made
pursuant to a Request for Construction
Advance submitted to
Lender in the form attached as Exhibit C, with appropriate
insertions
and duly executed, together with all required supporting
documentation. Each Request for Construction Advance must be
submitted to Lender
at least ten (10)
Business Days prior to the date the Construction Advance is
requested to be made.
2.7. Amounts in Excess of Maximum Loan Amount. Lender shall have
the
right, but not the
obligation,
to fund amounts in excess of the Maximum
Loan
Amount from
time to time to pay
accrued and unpaid interest, to complete
construction of the
Work, or to correct or cure any Event of Default. Obligors
agree that the
correcting or curing
by Lender of an Event of Default shall not
cure the Event of Default under this Agreement. Such excess amounts
funded shall
be deemed evidenced by
the Note to the fullest extent possible and then by this
Agreement, shall bear
interest at the applicable Default Rate set forth in
Section 4.2 and shall also be secured by the Collateral,
the Lender's
Mortgage,
the Guaranty,
and all other
security and
collateral
for the Loan.
Borrower
hereby agrees to execute additional notes, mortgages, and other additional Loan
Documents, and modifications thereto, promptly upon request by Lender,
in favor
of Lender, evidencing
and securing amounts funded in excess of the Maximum Loan
Amount.
2.8. Use of
Proceeds. Advances under the Loan will be used by
Borrower solely for the purposes described in Section 2.3.
13
<PAGE>
2.9. Closing.
The Closing
under this
Agreement shall take place
effective as of the Closing Date at such place as Lender may
require, provided
that all conditions for Closing have been satisfied.
2.10. Maximum
Relationship
Amount. The maximum
amount outstanding
under this Loan combined with the maximum amount outstanding under all loans to
Borrower, Guarantor
and Affiliates of
Borrower and Guarantor from Lender shall
not exceed $30,000,000.
3. Loan
Documents and Loan Account.
3.1. Loan Documents.
All Loan Documents
shall be satisfactory in
form and substance to
Lender and Lender's
counsel. Borrower's
obligation
to
repay the Loan shall
be evidenced
by the Note,
and the Note shall be
payable
with interest as provided herein. The Lender's Mortgage shall be a
lien upon the
Mortgaged Property, subject only to the Permitted Liens.
3.2. Loan Account. Lender will open and maintain on its books a
loan
account (the "Loan
Account") with respect
to Advances made,
repayments,
the
computation and
payment of
interest and fees and the computation and final
payment of all other
amounts due and sums paid to Lender under this Agreement
and the Loan. Lender shall deliver monthly statements regarding the
Loan Account
to Borrower.
Except in the case of
manifest error in computation, the Loan
Account will be conclusive and binding on Borrower as to the
amount at any time
due to Lender from
Borrower under this Agreement and the Note as an account
stated, except to the extent that Lender receives a written notice
from Borrower
of any specific exceptions of Borrower thereto within thirty (30)
days after the
date the applicable Loan Account statement has been received by
Obligor.
4.
Interest Rate.
4.1. Primary
Interest Rate. Until the occurrence of an Event of
Default and after same is cured (if applicable) and the cure
accepted by Lender,
interest shall
accrue and be payable on the average monthly outstanding
principal balance of the Loan as follows:
(a) From the Closing
Date until the first day of the month
following the month during which the Closing Date occurs, at a
yearly rate which
is equal to one and
one-quarter percent
(1.25%) per annum in excess of the WSJ
Prime Rate in effect on the Closing Date, and
(b) On the first day of the second month following the month
during which
the Closing Date occurs and on the first day of each month
thereafter, the yearly
rate at which
interest shall be payable on the unpaid
principal balance of the Loan shall be increased or decreased to a
rate which is
equal to one and
one-
14
<PAGE>
quarter percent
(1.25%) per annum in
excess of the WSJ Prime Rate in effect on
such date.
(c) Notwithstanding
anything herein or elsewhere to the
contrary the interest
rate accruing and payable on the Loan
shall not be less
than one and
one-quarter percent
(1.25%) per annum in
excess of the WSJ Prime
Rate in effect at such time.
4.2. Default
Rate. From and after the occurrence of an Event of
Default until cured (if applicable) and the cure accepted by Lender,
interest
shall accrue and be payable on the unpaid principal balance of the Loan and all
other Obligations
under the Loan Documents at a rate (the "Default Rate") which
is four (4) percentage
points higher than the rate provided in Section 4.1. Any
judgment obtained
for sums due under the
Note or other
Obligations under
the
Loan Documents
will accrue
interest at the
Default Rate until paid. Obligors
acknowledge and
agree that the Default Rate is reasonable in light of the
increased risk of collection after occurrence of an Event of
Default.
4.3. Calculation
of Interest.
Interest will accrue
as of Lender's
wiring of funds
through Lender's
receipt of
repayment of the Loan. Payment
received by Lender after noon Eastern Time shall not be credited
until the next
succeeding Business
Day. Interest will be
calculated on the basis of a year of
three hundred
sixty (360) days and charged upon the actual number of days
elapsed.
4.4. Limitation of Interest to Maximum Lawful Rate. Lender
expressly
disclaims any intent
to contract for,
charge or receive
interest in an amount
which exceeds the
highest lawful
rate. All sums paid or agreed to be paid
to
Lender for the use,
forbearance or
detention of the
indebtedness incurred
by
Borrower hereunder
shall, to the extent permitted by applicable law, be
amortized,
prorated,
allocated and
spread throughout the term of such
indebtedness until
payment in full,
so that the rate or
amount of interest on
account of such indebtedness does not exceed the usury ceiling from
time to time
in effect and applicable to the Loan.
5.
Fees.
5.1. Loan Fee.
Borrower agrees to pay to Lender a loan fee equal to
$12,500,000 which is
fully earned by Lender and is due and payable in full upon
execution of this
Agreement. Such fee
shall not be
refundable in whole or
in
part, even if the full Maximum Loan Amount is not advanced.
Lender
acknowledges
receipt of a $10,000
deposit from Borrower
which will be applied
by Lender to
pay a portion of the loan fee.
5.2. Late Charge. In
the event that any payment required under the
Loan (other than the sum due upon maturity or earlier acceleration of the Loan)
is not received
by Lender within ten (10) days after the due date, Obligors
shall pay a
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<PAGE>
late charge equal to
five percent
(5%) of the total
amount of such payment to
defray the expenses
incident to handling such delinquent payments, and to
compensate Lender
for the harm and
damages related to such late payments.
Obligors hereby
acknowledge and agree
that such late charges are reasonable in
light of the
anticipated and the
actual harm caused by the late payments, the
difficulties of proof
of loss, harm and
damages, and the inconvenience and
non-feasibility of Lender otherwise obtaining an adequate
remedy.
5.3. General. All of
the fees described above are not refundable in
whole or in part even if the full amount of the Loan is not
advanced. Lender
is
irrevocably authorized
to advance the sums
necessary to pay all or any portion
of such fees when due and payable to itself from the proceeds of an Advance or
as an Advance under the Loan.
6.
Payments.
6.1. General. Borrower
agrees punctually to pay or cause to be paid
to the Lender all principal and interest due under the Note or in
respect of the
Loan. Borrower shall make the following payments on the Loan:
(a) Interest.
Interest only on the outstanding principal
balance of the Loan
owed during
the prior calendar month shall be payable
monthly on the twentieth (20th) day of each calendar month,
commencing on
April
20, 2007. The April
20, 2007 interest
payment shall include
interest accrued
between the Closing Date and March 31, 2007.
(b) Principal.
(i) The entire outstanding principal balance of the Loan,
all accrued and unpaid
interest thereon and all other sums due in
connection
therewith shall be payable in full, if not earlier paid pursuant to
the terms of
this Agreement and of the Loan Documents, on the Loan Maturity
Date.
(ii) In addition to all other payments required, upon the
sale (and expiration
of any applicable
rescission
period) of each
Timeshare
Interest, Borrower
shall make a principal
reduction payment on
the Loan in an
amount equal to 25% of the sales price per sale of each Timeshare
Interest sold
(each, a "Release
Payment," and
collectively, the
"Release Payments").
Each
Release Payment shall
be made by the 20th day of the calendar month following
the month of the sale (and expiration of any applicable
rescission
period) of
the applicable Timeshare Interest. The Release Payment shall be
redetermined and
adjusted either to
increase or decrease the amount of the Release Payment, as
appropriate, no more
often than once at the end of each consecutive three (3)
month period following the execution of this Agreement, as
reasonably determined
by Lender so that upon the sale of 85% of the Timeshare Interests in Phase 2,
the Loan will be repaid in full.
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<PAGE>
(iii) Notwithstanding
anything herein or elsewhere to the
contrary, the
aggregate principal reduction payments from all sources made
with
respect to the Loan must equal the following amounts as of the
following dates:
Aggregate Principal
Date
Payments
----
--------
March 31, 2008
$2,000,000
September 30, 2008
$4,000,000
March 31, 2009
$8,000,000
Loan Maturity Date
Remaining Outstanding Balance
To the
extent such payments have not been made as a result of
Release
Payments, Borrower
shall make such
payments from other funds on the applicable
date set forth above.
6.2. Reinstatement
of Obligations. Obligors agree that, to the
extent any payment or payments are made on any Obligations and such payment or
payments, or any part
thereof, are
subsequently
invalidated,
declared to be
fraudulent or preferential, set aside or are required to be repaid
to a trustee,
receiver, or any other
Person under any
bankruptcy act, state
or federal law,
common law or equitable cause, then to the extent of such payment
or payments,
the Obligations
or part thereof
hereunder intended to be satisfied
shall be
revived and continued
in full force and
effect as if said
payment or payments
had not been made.
6.3. Prepayment. The Loan may be prepaid without penalty or
premium.
6.4. Indemnity.
Obligors agree to indemnify Lender against any loss
or expense which
Lender sustains or incurs as a consequence of an Event of
Default, including,
without limitation, any failure of Obligors to pay when due
(at maturity, by acceleration or otherwise) any principal,
interest, fee or
any
other amount due under
this Agreement or the
other Loan Documents.
If Lender
sustains or incurs any such loss or expense it will notify Obligors in writing
of the amount determined in good faith by Lender to be necessary to
indemnify it
for the loss or
expense. Such
amount will be due and payable by Obligors to
Lender within five (5)
Business Days after receipt by Obligor of a
statement
setting forth a brief
explanation of and its calculation of such amount, which
statement shall be conclusively deemed correct absent manifest
error. Any amount
payable by
17
<PAGE>
Obligors under this
Section will bear interest at the Default Rate from the due
date until paid, both before and after judgment.
7.
Security; Guaranty.
7.1. Security.
The Obligations shall be secured by, and
Borrower
hereby grants to
Lender a security
interest in, all of
the following
to the
extent of Borrower's
right, title and interest therein (collectively, the
"Collateral"):
(a) The Phase 2 Land, the Units and the Timeshare Interests
thereon,
together with all improvements, amenities, fixtures, leases, rents,
common areas
and common elements, all easements, rights-of-way, privileges and appurtenances
belonging or in any way appertaining thereto or which are
encumbered by Lender's
Mortgage (collectively, the "Mortgaged Property").
(b)
All existing
and future equipment, furnishings, inventory,
supplies,
appliances,
machinery,
plumbing,
heating,
ventilation,
air
conditioning system,
and fixtures,
accounts, chattel
paper, contract
rights,
documents,
instruments, and general intangibles at any time located at,
arising
out of the use of, and/or used in connection with the operation of
the Mortgaged
Property, with
appropriate
non-disturbance
language relating to common area
equipment, fixtures and furniture.
(c) All existing and future payment and performance bonds (if any)
of the Contractor with respect to the Work.
(d) All existing and future leases, subleases, licenses,
concessions, entry
fees, or other agreements which grant a possessory interest
in and to, or the right to use the Mortgaged Property, or any portion thereof
(collectively, the "Tenant Leases").
(e) All existing and future leases, subleases, licenses,
concessions, entry fees or other agreements which grant a
possessory interest in
and to, or the
right to use,
the commercial space, or any portion of the
Mortgaged Property thereof (the "Commercial Leases").
(f) All of the existing and future rents, revenues, income,
proceeds, royalties,
profits and other
benefits payable for using, leasing,
licensing, possessing, operating from or in, or otherwise enjoying
the Mortgaged
Property pursuant to
the Tenant Leases and the Commercial Leases, including,
without limitation,
damages received upon the occurrence of a default under any
of the Tenant Leases and the Commercial Leases and all proceeds
payable under
any policy
of insurance covering loss of rents with respect thereto
(collectively, the
"Lease Income").
Borrower shall be entitled to all Lease
Income for working capital purposes unless an Event of Default has
occurred.
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<PAGE>
(g) All other existing and future agreements to which Borrower is
or
becomes a party or holds any interest therein and which in any way
relate to the
use, occupancy,
maintenance or enjoyment of the Mortgaged Property, including,
but not limited
to, all Project Contracts, utility contracts, maintenance
agreements, management
agreements and service contracts, the Ingress and Egress
Easement Agreement,
Special Assessment
Agreement,
the Declarations,
and any
agreement guaranteeing
the performance of the
obligations contained
in any of
the foregoing agreements, all as they relate to the Mortgaged
Property.
(h) All books, records, ledger cards, files, correspondence,
computer tapes and
disks, as all of the
foregoing pertain to the Mortgaged
Property.
(i) All hardware used in the management, sales, construction,
servicing or operation of the Mortgaged Property.
(j) All intellectual property, software and other personal
property
related to the Mortgaged Property solely owned by Borrower
including,
without
limitation to the
extent assignable,
the naming
rights to "Grande
Villas at
World Golf
Village, a Condominium", and specifically excluding, without
limitation, any such intellectual property, software and personal
property owned
by Guarantor or any Affiliate.
(k) To the extent
permissible
by law, any existing or future
development agreements for the Project.
(l) All existing and future development or construction contracts
between Borrower,
Guarantor,
and any architect, planner, contractor or
sub-contractor together with payment and performance bonds related
to the Work.
(m) Any and all proceeds of the foregoing.
All
liens and security interests shall be first priority liens and
security interests.
Borrower and Lender
hereby agree that this Agreement shall
be deemed to be a security agreement under the Uniform
Commercial Codes of
the
States of Rhode Island and Florida. Accordingly, in addition to any
other rights
and remedies available to the Lender hereunder, Lender shall have
all the rights
of a secured party under the Rhode Island and Florida Uniform
Commercial Codes.
The
above-described
liens and security
interests shall not be rendered
void by the fact that no Obligations exist as of any particular date,
but shall
continue in full force
and effect
until all Obligations have been fully and
finally paid,
performed and
satisfied,
Lender has no
agreement or commitment
outstanding pursuant
to which Lender may extend credit to or on behalf of
Borrower and Lender has executed termination statements or releases
with respect
thereto.
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<PAGE>
Notwithstanding the
foregoing the Mortgaged Property and Collateral shall
not include the Released Property, the Reservation System or any
rights to the
name Bluegreen or Bluegreen Vacation Club or any variation
thereof.
7.2. Cross-Default. An Event of Default hereunder shall constitute
a
default under any other loan documents between Borrower or Guarantor and
Lender
and vice versa.
7.3. Guaranty.
The lien free
Completion of the Work and the prompt
payment and
performance
of all Obligations shall be unconditionally and
irrevocably guaranteed by Guarantor.
7.4. Additional Documents and Future Actions. Borrower will, at its
sole cost, take such
actions and provide Lender from time to time with
such
agreements, financing
statements
and additional instruments, documents or
information as Lender
may in its discretion
deem necessary or advisable to
perfect, protect,
maintain or enforce the security interests in the Collateral,
to permit Lender to
protect or enforce its
interest in the
Collateral, or to
carry out the
terms of the Loan
Documents.
Borrower hereby authorizes and
appoints Lender and
any officer of Lender
as its
attorney-in-fact, with
full
power of substitution,
to take such
actions as Lender may
deem advisable
to
protect the Collateral and its interests thereon and its rights
hereunder,
to
execute on
Borrower's
behalf
and file at Borrower's expense financing
statements, and
amendments thereto, in those public offices deemed necessary or
appropriate by
Lender to establish, maintain and protect a continuously
perfected security
interest in the
Collateral,
and to execute on
Borrower's
behalf such other
documents and notices as Lender may deem advisable to protect
the Collateral and its interests therein and its rights
hereunder.
Such power
being coupled with an interest is irrevocable.
7.5. Location of
Collateral.
Borrower agrees that all tangible
Collateral which is
not delivered to
Lender pursuant to
this Agreement
will
remain, at all times,
at Borrower's business location at the Project, and
Borrower may not
transfer such
Collateral
from such premises other than in
connection with the
ordinary course of business without the prior written
approval of Lender.
7.6. Insurance and
Protection of
Collateral.
Borrower agrees to
maintain and pay for insurance upon the Mortgaged Property as contemplated by
the Timeshare
Declaration as
evidenced by the
Agreement to Provide
Insurance
during the construction of Work at Phase 2.
8. Funding
Procedures.
8.1. General.
The funding of
Advances shall be in accordance with
such procedures
as Lender may require, including without limitation,
disbursement through
the Title Company or an escrow agent acceptable to Lender
if Lender so requires.
20
<PAGE>
8.2.
Disbursement
Agent. A disbursement agent for the Loan
acceptable to Lender (the "Disbursement Agent") shall be retained by
Lender at
Borrower's reasonable
cost and expense. The Disbursement Agent shall review and
verify all Requests for Construction Advance and all other information
required
under Section 18 for
Construction
Advances and all other
information
deemed
necessary by Lender
related to the
progress of the Work.
Lender and
Borrower
agree that the Disbursement Agent at Lender's request shall disburse
Advances
directly to Title Company, Contractor or Subcontractors.
The Disbursement
Agent
may be the Title
Company or other
person or entity acceptable to Lender or
Lender's personnel. If
Lender's personnel act as Disbursement Agent, Borrower
shall still be
responsible
for all reasonable costs and expenses related
thereto.
8.3. Payment of Bills.
Lender shall be under
no duty or obligation
to ascertain whether Borrower or the Disbursement Agent has used or
will use the
Loan proceeds for the payment of bills incurred by Borrower in connection
with
the Work. Payment of
all bills for labor and materials in connection with the
Work shall be Borrower's responsibility, and Lender's sole obligation shall
be
to advance the
proceeds of the Loan
subject to, and in
accordance
with this
Agreement. At no time
shall Lender be obligated to disburse funds in excess of
amounts recommended
by the Inspector. Borrower is solely responsible for
obtaining any permanent financing, bridge financing, or other financing which
may be necessary to repay the Loan on or prior to the Loan Maturity
Date.
8.4. Construction Loan
Portion. Loan proceeds
for the items and in
the maximum
amounts listed on the Phase 2 Cost Certificate shall only be
disbursed at such time as Lender (or the Disbursement Agent, as applicable) has
received a Request for Construction Advance and documents required pursuant to
Section 18 and Borrower has provided Lender (or the Disbursement Agent, as
applicable) with such other information that Lender (or the
Disbursement
Agent,
as applicable)
shall require to evidence that all Work covered by each such
Request for Construction Advance has been completed.
8.5. Retainage;
Conditions Precedent to Final Disbursements. Funds
held by Lender as retainage shall be disbursed by Lender upon
compliance
with
the requirements
set forth in this
Subsection 8.5 and the requirements for all
other
disbursements as
set forth above (collectively, the "Retainage
Disbursement
Requirements"). The
Retainage Disbursement
Requirements for
the
Work shall include:
(a) Occupancy
Permits. Receipt by Lender of a copy of the
final permits and approvals necessary or required from all authorities whose
approval is required for the lawful use, occupancy and operation of Phase 2 of
the Project after completion of the Work.
21
<PAGE>
(b) Final Releases of Lien: Contractor's Affidavit. Receipt by
Lender of a "Conditional Waiver and Release Upon Final
Payment" executed by the
Contractor and all
Subcontractors
performing work or
supplying materials
and
paid for by such retainage Advance in form and content acceptable to Lender and
in conformance with the Applicable Mechanics Lien Law, together
with any and all
additional affidavits
of all such parties sufficient in the opinion of Lender's
counsel to comply with the Applicable Mechanics Lien Law, and to remove
any and
all mechanics' and materialmen's liens (inchoate or otherwise)
affecting title
to the Project, which might arise related to such work or
materials.
(c) Certificates
of Completion.
Certificates of
Substantial
Completion for the Work utilizing customary AIA forms or the
equivalent thereof
signed by the Architect, Contractor and Borrower.
(d) Other Evidence.
Such other evidence as Lender may require
to establish
that the Work to be
paid with such
retainage Advance has been
completed in compliance with all applicable zoning and other
requirements of the
public authorities having jurisdiction, including but not limited
to, compliance
with all applicable Legal Requirements.
(e) As-Built Plans.
Two (2) sets of
detailed as-built
plans
related to the Work
must be submitted
to Lender promptly after such Work is
completed, but in no
event later than two (2) months from the issuance of the
Certificates of
Substantial
Completion
for the Work, which plans must be
approved and identified as such in writing by Borrower,
the Architect,
and the
Contractor, and must
include plans for architectural, structural, mechanical,
plumbing, electrical and all site development (including storm
drainage, utility
lines and landscaping)
work.
(f) As-Built Survey.
As to the final Advance under the of the
Loan, receipt by Lender of two (2) originals of a satisfactory
"As-Built" Survey
prepared by a licensed surveyor satisfactory to Lender and the
Title Company, in
accordance with the
plans and showing all of the applicable Units and each
applicable building in place, including, without limitation,
striping of parking
areas, a statement as
to the number of parking spaces and such other matters as
Lender shall
require ("As-Built Survey"). The survey shall be prepared in
accordance with the
Standards set forth by ALTA/ACSM 1988 Minimum Survey
Requirements, shall be
certified to Lender and the Title Company and shall
include a narrative metes and bounds or platted description of the
boundaries of
the Mortgaged
Property, the area of
the Mortgaged Property
and of each of the
applicable Phase 2 Units and buildings 5 and 6 (then completed) and
the location
and dimensions of all easements and improvements. The surveyor must include on
the As-Built Survey a signed statement certifying the existence or a
narrative
statement certifying
the existence or nonexistence of any encroachment from or
onto the Mortgaged Property and must include the date of the
As-Built Survey and
the surveyor's
registration
22
<PAGE>
number and seal and such other matters as the Title Company may
require, in form
and substance satisfactory to Lender and the Title Company.
(g) Insurance. Insurance coverage shall have been broadened to
include all
forms of insurance related to the Mortgaged Property, and as
reasonably required by
Lender in form
satisfactory to
Lender, subject to
the
terms of the Timeshare Declaration and the Agreement to Provide
Insurance.
(h) Exception.
Notwithstanding
the foregoing
restrictions,
Lender may at its
discretion release the
specific 10%
retainage amounts for
individual line
items set forth in the
Phase 2 Cost
Certificate prior to
the
satisfaction of all of the Retainage Disbursement Requirements, provided that,
(i) no Incipient
Default or Event of
Default has
occurred, (ii) each of the
Subcontractors being paid such retainage amounts executes and
delivers to Lender
a "Conditional Waiver
and Release Upon Final Payment" and (iii) all of the Work
described in such
line item has been completed and Lender has received
certifications from Borrower, Contractor, Inspector (or Lender's
Construction
Consultant) and Architect confirming such completion, all in form and content
acceptable to Lender.
8.6. Deposit
of Funds Advanced/Advances to Disbursement Agent,
Architect, Contractor and Subcontractors. Lender, at its option,
may make any or
all Construction
Advances directly to the Disbursement Agent (for disbursement
to Borrower,
Contractor, Architect
or any Subcontractor)
or to the Contractor
and any Subcontractor.
The execution of this
Agreement by Borrower
shall and
hereby does constitute an irrevocable direction and authorization to Lender to
so advance the funds. No further direction or authorization
from Borrower
shall
be necessary to
warrant such direct
advances to the
Disbursement Agent,
the
Contractor, the
Architect or any Subcontractor and all such Construction
Advances shall satisfy completely Lender's obligations hereunder and shall be
secured by the
Collateral as fully as
if made to Borrower,
regardless of the
disposition thereof by the Disbursement Agent, the Contractor,
the Architect or
any Subcontractor.
Lender shall assume no liability under the Architect's
Contract, Construction
Contract or any Subcontract by virtue of directly paying
the Architect, Contractor or any Subcontractor.
8.7. Advances Do Not
Constitute a Waiver.
No Construction
Advance
shall constitute
a waiver of any
condition of Lender's obligation to make
further Construction Advances.
9.
Representations and
Warranties. As an
inducement to Lender to advance
funds to Borrower,
Borrower and Guarantor hereby, jointly and severally,
represent and warrant to Lender as follows:
9.1. Organization; Power.
23
<PAGE>
(a) Borrower. Borrower (i) is a corporation duly incorporated,
validly existing in
good standing under the laws of the State of Florida; (ii)
is duly qualified to do business as a foreign corporation and in good standing
under the laws of each
jurisdiction where the
character of its
property, the
nature of its business or the performance of its obligations under this
Agreement makes such qualification necessary, except where the failure to be
so
qualified will not have a material adverse effect on its business
or its ability
to perform its
obligations under this
Agreement or any other
Loan Document to
which it is a
party or under the transactions contemplated hereunder or
thereunder; and (iii) has all requisite corporate power and
authority to own its
properties, to conduct
its business, to
execute and deliver this Agreement and
all documents and transactions contemplated hereunder and to
perform all of its
obligations under this
Agreement and any other Loan Document to
which it is a
party or under the transactions contemplated hereunder or
thereunder.
(b) Guarantor.
Guarantor
(i) is a corporation duly
incorporated, validly
existing and in good standing under the laws of the
Commonwealth of
Massachusetts;
(ii) is duly
qualified to do business as a
foreign corporation
and in good standing
under the laws of each
jurisdiction
where the character of its property, the nature of its business or the
performance of its
obligations under this
Agreement makes such
qualification
necessary except where
the failure to be so qualified will not have a material
adverse effect on its business or its ability to perform its
obligations
under
this Agreement or the Guaranty; and (iii) has all requisite
corporate power and
authority to own its properties, to conduct its business, to
execute and deliver
this Agreement and the Guaranty and to perform all of its
obligations under this
Agreement and the Guaranty.
(c) Association. The
Association is a non-profit corporation
duly organized,
validly existing and in good standing under the laws of the
State of Florida,
having full power and lawful authority to perform its
obligations under
the Declarations and carry on its business as now being
conducted or as proposed to be conducted.
(d) Manager.
Manager is a
corporation,
duly incorporated,
validly existing and
in good standing under
the laws of the State of Delaware,
duly licensed in Florida as required, and having full power and
lawful authority
to act as the Manager
of the Project,
to perform
its obligations under the
Management Agreement
and to carry on its business as now being conducted and as
proposed to be conducted.
9.2. Authorization;
No Legal Restrictions; No Breach of Other
Agreements. The
execution,
delivery and
performance
by Borrower of the
Loan
Documents has been duly authorized by all necessary corporate
action by Borrower
and does not and will not: (i) violate any provision of the organizational or
governing documents of Borrower, or any agreement, law, rule,
regulation, order,
24
<PAGE>
writ, judgment,
injunction, decree,
determination or award presently in effect
to which Borrower
is a party or is
subject; (ii) result in, or require the
creation or imposition of any Lien upon or with respect to any
asset of Borrower
other than
Liens in favor of Lender; or (iii) result in a breach of or
constitute a default by Borrower under, any indenture, loan or credit agreement
or any other agreement, document, instrument or certificate to
which Borrower is
a party or by which it or any of its assets are bound or
affected.
9.3. Approvals;
Licenses, Etc. No approval, authorization, order,
license, permit,
franchise
or consent of or registration, declaration,
qualification or
filing with,
any governmental authority or other Person,
including without
limitation,
the Division or Association is required in
connection with the
execution and delivery by Borrower of any of the Loan
Documents.
9.4. Enforceability.
The Loan Documents constitute legal, valid and
binding obligations of Borrower, enforceable against Borrower in
accordance with
their respective terms.
9.5. Title. Borrower
has and will have good and marketable title to
the Collateral,
free and clear of any Lien, security interest, charge or
encumbrance except for
the security interests
created by this Agreement or any
Loan Document or
otherwise created in
favor of Lender and the exceptions set
forth in the Title Policy provided Lender (collectively, "Permitted
Exceptions"). Borrower
has good and marketable title to the Timeshare Interests
comprising a portion of the Mortgaged Property, and all rights, properties and
benefits appurtenant
to or benefiting them, subject to the Permitted Exceptions
and the condominium timeshare and development documents established
by Borrower,
subject to Lender's approval.
9.6. Liens. The
execution and delivery of the Loan Documents, the
filing of the UCC-l Financing Statement's with the Florida
Secured Transactions
Registry and the recording of the Mortgage, the Assignment of Property
Rights
and a UCC-1 Financing
Statement in the Public Records of St. Johns County,
Florida will
constitute
in favor of Lender a
valid and perfected
continuing
first priority security interest in the Collateral. Lender is not and shall not
be required
to take, and Borrower has taken any and all required steps to
protect Lender's
security interests in the Collateral and Lender is not and
shall not be
required to collect or realize upon the Collateral or any
distribution of
interest or principal, nor shall loss of or damage to, the
Collateral release Borrower or Guarantor from any of the
Obligations.
9.7. Financial
Statements and
Financial Condition.
The financial
statements of Obligors
fairly present the respective financial conditions and
results of operations
of Borrower and Guarantor as of the date or dates thereof
and for the periods covered thereby. There were no material
liabilities,
direct
or indirect, fixed
25
<PAGE>
or contingent,
of Borrower or Guarantor as of the dates of such
financial
statements which were not reflected therein or in the notes
thereto, which
have
not otherwise
been disclosed to Lender in writing or
otherwise set forth in
Guarantor's SEC
filings. Except for any such changes heretofore expressly
disclosed in writing to Lender, there has been no material adverse
change in the
respective financial
conditions
of Borrower or
Guarantor from the
financial
conditions shown in their respective financial statements, nor has Borrower or
Guarantor incurred
any material liabilities, direct or indirect, fixed or
contingent, which are
not shown in their
respective financial
statements
or
reflected in the notes thereto.
Borrower
is able to pay all of
its debts as they
become due. Borrower
shall maintain
such solvent financial condition, giving effect to the
Obligations, as long as Borrower is obligated to Lender under this
Agreement, or
in any other manner whatsoever. Borrower's obligations under this
Agreement and
under the Loan
Documents will not
render Borrower
unable to pay its
debts as
they become due. The present fair market value of Borrower's assets is greater
than the amount required to pay its respective total
liabilities.
9.8. Taxes.
Except as set forth on
Schedule 9.8: (a)
Borrower has
paid and will pay in full all real property, personal property, income, sales,
ad valorem and other taxes and assessments against the Mortgaged Property and
the Collateral or otherwise payable by Borrower, (b) Borrower knows of no basis
for any additional
taxes or assessments
against the Mortgaged
Property, the
Collateral or Borrower; (c) Borrower has filed all tax
returns required to have
been filed by then and has caused Association to file all tax
returns required
to have been filed by then, and (d) has paid or caused
Association
to pay all
taxes shown to be due
and payable
on such returns, including interest and
penalties, and all
other taxes which are payable by it or Association, as the
case may be, to the extent the same have become due and
payable.
With
respect to real estate taxes against the Mortgaged Property, each
Unit will have a separate tax lot number and each Unit is
separately
billed by
the applicable
governmental
entity for real estate taxes. Such bills are
received by the
Association.
The Association sends bills to each Owner of a
Timeshare Interest
or Vacation Trust, Inc., a Florida corporation in its
capacity as trustee under the Club's Trust Agreement for such Owner's
pro-rata
share of the real estate taxes assessed and billed to the
applicable Unit.
To the
extent that the
Association holds
insufficient
funds to pay any
real estate taxes for the Mortgaged Property then due and payable, Borrower
(during the
time it is maintaining direct or indirect control of the
Association) will pay the amount of such deficiency to the
Association to enable
the Association to pay
all real estate taxes related to the Mortgaged Property
when due and prior to the incurrence of any penalties. Borrower
will comply with
the
above-described
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procedures and will not amend, modify or terminate such
procedures without
the
prior written consent of Lender.
9.9. Subsidiaries;
Affiliates and Capital Structure. Except as set
forth on Schedule 9.9, Borrower has no subsidiaries or Affiliates
which have any
involvement or
interest in the
Mortgaged Property in any way. Borrower is a
wholly-owned
subsidiary of
Guarantor.
None of the owners of
any interests in
Borrower are parties to any proxies, voting trusts, shareholders agreements or
similar arrangements
pursuant to which
voting authority,
rights or discretion
with respect to Borrower is vested in any other Person.
9.10. Litigation
Proceedings, Etc.
Except as described on Schedule
9.10, there are no actions, suits, proceedings, orders or
injunctions pending or
threatened against or affecting Borrower, the Guarantor, the
Mortgaged Property,
the Collateral
or the Association at law or in equity, or before or by any
governmental authority
or other tribunal
which if adversely
determined would
have a material
adverse effect on their ability to perform hereunder with
respect to the
Project. Borrower
has not received any notice from any
court,
governmental authority
or other tribunal
alleging that Borrower or the Project
has violated
the Timeshare Act, the Condominium Act, any of the rules or
regulations
thereunder, the
Project Contracts,
or any other
applicable Legal
Requirements, agreements or arrangements.
9.11. Licenses;
Permits; Etc. Borrower, the Mortgaged Property, the
Association,
Borrower's Affiliates
involved in the
operations of the Project,
and, to the best of
Borrower's knowledge
after diligent inquiry, all other
Persons involved in
the operations
of the portion of the
Mortgaged Property
owned by Borrower,
possess and will at all times continue to possess, all
requisite material
franchises,
certificates
of convenience and necessity,
operating rights,
approvals,
licenses, permits, consents, authorizations,
exemptions and
orders as are necessary to carry on its or their business
including without limitation, operation of the Mortgaged
Property, without
any
known conflict
with the rights of
others and, with
respect to Borrower,
the
Mortgaged Property
and the Association, in each case subject to no
mortgage,
pledge, Lien, lease,
encumbrance, charge,
security interest,
title retention
agreement or option other than Liens in favor of Lender and the
Permitted Liens.
9.12. Environmental
Matters. The Project does not and will not
contain any Hazardous Materials, except for certain Hazardous
Materials used in
the operation of Borrower's business which are properly
stored and
maintained.
No Hazardous Materials
are or will be used or
stored at or
transported to or
from the Development
Parcel or the Project, except for certain Hazardous
Materials used in the operation of Borrower's business which are
properly stored
and maintained.
Neither Borrower, Manager nor the Association has ever used the
Project as a facility for the storage, treatment or disposition of
any Hazardous
Materials or has received notice from any governmental agency, entity or other
Person with regard to Hazardous Materials on, under or affecting
the Project.
Neither Borrower nor the
27
<PAGE>
Project, nor any portion thereof, nor the Association, are in violation of any
Environmental Laws.
9.13. Full Disclosure. No information, exhibit or written report or
the content of any
schedule furnished by
or on behalf of Borrower to Lender in
connection with the
Loan, the Collateral or the Mortgaged Property, and no
representation or
statement made by Borrower in any Loan Document contains any
material misstatement
of fact or omits the statement of a material fact
necessary to make the
statement contained herein or therein not misleading,
subject to obtaining
the permits and
approvals to construct
the Work and the
creating of the condominium and timeshare documents which have not
been prepared
at this time. Borrower does not know of any fact or condition which
will prevent
the sale of Timeshare
Interests to
Purchasers or prevent
the operation of the
Project in accordance with the Declarations and related Public Report,
and in
accordance with all Legal Requirements, or prevent Borrower's
performance of its
Obligations pursuant to the Loan Documents.
9.14. Use of Proceeds/Margin Stock. None of the proceeds of the
Loan
will be used to
purchase or carry any "margin stock" (as defined under
Regulation U of the
Board of Governors of
the Federal Reserve
System, as in
effect from time to
time), and no portion
of the proceeds of the
Loan will be
extended to others for the purpose of purchasing or carrying margin
stock. None
of the transactions contemplated in this Agreement (including, without
limitation, the use of the proceeds from the Loan) will violate or
result in the
violation of Section 7 of the Securities Exchange Act of 1934, as amended,
or
any regulations
issued pursuant thereto, including, without limitation,
Regulations G, T, U
and X of the Board of
Governors of the Federal Reserve
System, 12 C.F.R.,
Chapter 11. Borrower is not an investment company as defined
by the Investment Company Act of 1940, as amended, and Borrower is not required
to register under said Act.
9.15. No Defaults. No
Incipient Default or Event of Default exists,
and there is no violation in any material respect of any term of any
agreement,
bylaw or other
instrument to which
Borrower is a party or by which it may
be
bound which violation materially and adversely affects
Borrower.
9.16. Compliance with Law.
(a) Borrower
is not in violation, nor is the Mortgaged
Property, or the business operations in respect of the Mortgaged
Property, or to
Borrower's knowledge
after diligent inquiry, the Association, in violation of
the Condominium
Act or Timeshare
Act or any other Legal
Requirements,
which
violation materially and adversely affects the Borrower, the
Mortgaged Property,
the business operations of the Mortgaged Property or the
Association; and
28
<PAGE>
(b) As to the Existing
Units and the Phase 2
Land, Borrower
has not failed,
nor has the
Project or Association failed, to obtain any
consents or joinders, or any approvals, licenses, permits, franchises or other
governmental
authorizations, or to
make or cause to be made any filings,
submissions,
registrations or
declarations
with any government or agency or
department thereof necessary to the establishment, ownership or
operation of the
Mortgaged Property
or any of Borrower's other assets, or to the conduct of
Borrower's business, which violation or failure to obtain or
register materially
and adversely
affects Borrower, the Mortgaged Property or the business,
prospects, profits, properties or condition (financial or
otherwise) of Borrower
or the Mortgaged Property.
(c) The Timeshare
Declaration was duly
adopted in compliance
with applicable
Legal Requirements and governs the condominium and
timeshare
regimes established pursuant to the Timeshare Declaration.
9.17. Restrictions
of Borrower
or Guarantor. None of Borrower,
Guarantor, or, to
Borrower's
knowledge,
the Association, is a party to any
contract or agreement with respect to the Mortgaged Property,
or subject to any
Lien, charge or
corporate restriction
with respect to the Mortgaged Property,
which materially
and adversely
affects its or their
business other than the
Permitted Exceptions.
Borrower and Guarantor will not be, on or after the
Closing Date, a party to any contract or agreement which prohibits
Borrower's or
Guarantor's execution
of, or compliance with the terms of this Agreement or the
other Loan Documents. Borrower has not agreed or consented to cause
or permit in
the future
(upon the happening of a contingency or otherwise) any of the
Collateral, whether
now owned or hereafter
acquired, to be
subject to a Lien,
except the
Liens in favor of
Lender as provided hereunder and except for
Permitted Liens.
9.18. Broker's Fees.
Borrower has not made
any commitment or taken
any action which will
result in a claim for
any brokers',
finders' or other
similar fees or commitments with respect to the transactions described in this
Agreement.
9.19. Deferred Compensation Plans. Borrower has no pension,
profit
sharing or other
compensatory
or similar plan providing for a program of
deferred compensation for any employee or officer.
9.20. Labor Relations.
The employees of Borrower are not a party to
any collective bargaining agreement with Borrower, and, to the best
knowledge of
Borrower, there are no
material grievances,
disputes or controversies with any
union or any other organization of Borrower's employees,
or threats of
strikes,
work stoppages or any asserted pending demands for collective
bargaining by any
union or organization.
29
<PAGE>
9.21. Tax
Identification
Numbers. Borrower's
federal taxpayer's
identification number and State organization numbers are as
follows:
Tax I.D.
State Organization Number
--------
-------------------------
65-0433722
P9300051653
9.22. Insurance.
All the insurance required by the Timeshare
Declaration, and the
Agreement to Provide Insurance has been obtained, is
presently in full force and effect and all premiums thereon have
been fully paid
to date. To the best of Borrower's knowledge, none of the policies for
property
insurance may be canceled or materially modified, except after at least thirty
(30) days written
notice by the
insurance carrier to Lender and none of the
policies for liability insurance may be canceled or materially
modified, except
after endeavoring
to provide at least ten (10) days written notice by the
insurance carrier to
Lender. Lender has
been named as an
additional
insured,
insured mortgagee (with a standard mortgagee's endorsement) and
loss payee (with
a lender's loss payable endorsement) on such policies.
9.23. Names and Addresses. During the past five (5) years,
Borrower
has not been known by any names (including trade names) and has not
been located
at any addresses,
other than those set
forth on Schedule 9.23. The portions of
the Collateral which are tangible property and have not been
delivered to Lender
(or a custodian for Lender) and the books and records pertaining
thereto will at
all times be located at the address for Borrower set forth on
Schedule 9.23, at
the Project or at such other location determined by Borrower after prior
notice
to Lender and delivery
to Lender of any items
requested by Lender to
maintain
perfection and priority of Lender's security interests and access to such
books
and records. Schedule
9.23 identifies the chief executive office and principal
place of business of Borrower.
9.24. Solvency.
Borrower is solvent. No transfer of property is
being made by Borrower
and no obligation is being incurred by Borrower in
connection with the
transactions
contemplated
by this Agreement or
the other
Loan Documents with
the intent to hinder,
delay, or defraud
either present or
future creditors of Borrower.
9.25. Common Enterprise. The successful operation and condition of
Obligors are dependent on the continued successful performance of the functions
of the Obligors
as a whole and the
successful
operation of each Obligor is
dependent on the successful performance and operation of the other
Obligor. Each
Obligor expects
to derive benefit (and the boards of directors or other
governing body of each
such Obligor has
determined that it may
reasonably be
expected to derive benefit), directly and indirectly,
from the credit
extended
by Lender hereunder,
both in its
separate capacity and as a member with the
other Obligor of an interrelated group of companies. Each Obligor
has determined
that execution,
delivery and
30
<PAGE>
performance of this
Agreement and any other Loan Documents to be executed by
such Obligor is within its corporate or company purpose, will be of direct and
indirect benefit to such Obligor and is in its best interest.
9.26. Intentionally Omitted.
9.27. Completeness of
Representations.
Neither this Agreement
nor
any exhibit
attached
hereto nor any certificate, financial statement,
correspondence or
other document
delivered or furnished to Lender hereunder or
in connection with the transactions contemplated hereby contains or
will contain
any untrue
statement of a material fact or omits or will omit to state a
material fact
necessary in order to make the statements contained herein and
therein not misleading. Except as set forth on Schedule
9.10, there is no
fact
(a) which materially
and adversely affects
or in the future may, so far as any
Obligor can now foresee, materially and adversely affect
any Obligor's
ability
to perform its obligations under the Loan Documents, or the
condition, financial
or otherwise,
business or
prospects of any
Obligor, the
Association
or the
Project, (b)
which may result in any liability on the part of any Obligor
reflected on the
financial statements described in Section 9.7, (c) which
questions or denies
the right of any Obligor to conduct its business or operate
the Project,
or (d) which
prevents or restricts the granting of security
interests to Lender in the Collateral.
9.28. No Violation of Right of First Refusal. The execution of this
Agreement and any Advances made hereunder shall not violate any right of
first
refusal of any Person to provide such financing.
10.
Representations, Warranties and Covenants With Respect to the
Project.
Obligors, jointly and
severally,
represent and warrant to and covenant
with
Lender as follows,
with respect to the
Mortgaged Property and
each Unit to be
included in the Mortgaged Property:
10.1. Access and Utilities. Each Unit will have adequate access
from
a publicly dedicated street over easement areas when constructed,
will be served
by adequate utilities and will have adequate parking
facilities.
10.2. Compliance.
Obligors and the Mortgaged Property are in
compliance with
and will comply in all material respects with all Legal
Requirements.
10.3. Timeshare Declaration. On or before the first sale and
closing
of a Timeshare
Interest by Borrower
in Phase 2, all Units,
all improvements
thereon, all
equipment,
furnishings
and appliances intended for use in
connection therewith
pertaining to such
Timeshare Interest
will have been and
thereafter will continue to be duly submitted to the provisions of
the Timeshare
Declaration, as
amended to include
Phase 2 as part of the
timeshare regime,
which Timeshare
Declaration
and any amendment
will have been
recorded in the
Public Records of St. Johns County,
31
<PAGE>
Florida. The Timeshare
Declaration
will not be amended in
any way which would
materially alter the
Project, the rights of
Purchasers, the rights
of lenders
foreclosing on a
Timeshare Interest or any priority of past due assessment
claims over the lien of any mortgage encumbering a Timeshare
Interest without
the prior written consent of Lender.
10.4. Zoning Laws, Building Codes, Etc. The Mortgaged Property,
all
the buildings
and other improvements in which the Units are situated
and all
Amenities will when
constructed
be completed in all material respects in
compliance with all applicable zoning codes, building codes, health codes,
fire
and safety codes, and other Legal Requirements. All inspections, licenses and
permits required to be made or issued in respect of such buildings
and Amenities
will be made or issued by the appropriate authorities as are
required to approve
such development
at the time same is
developed. The use and
occupancy of such
buildings for their intended purposes is and will be lawful under
all applicable
laws and regulations. On or before the Phase 2 Completion Date, final
certificates of occupancy will be issued and in effect for all
Units in Phase 2.
The timeshare
use and occupancy of Units does not and will not
violate any
private covenant or restriction or any zoning, use or similar law, ordinance
or
regulation affecting the use or occupancy of the Mortgaged
Property.
10.5. Units
Ready for Use.
All of the Phase 2
Units will be fully
furnished and ready for use by Owners on or before the Phase 2
Completion Date.
On or before the Phase 2 Completion Date, all common furnishings (including
appliances) within
such Phase 2
