CONSTRUCT MORT, SECURITY AGREEMENT AND FINANCING STATEMENT

 

                                                                  Exhibit 10.152

Resort Finance/Bluegreen

Vacations Unlimited, Inc.

01/07/05

 

This Instrument Prepared by

(with the assistance of Florida

counsel and after recording,

please mail to):

Helmut E. Gerlach

Baker & McKenzie LLP

130 East Randolph Drive,

Suite 3600

Chicago, Illinois 60601

 

        CONSTRUCTION MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT

 

      THIS CONSTRUCTION   MORTGAGE,   SECURITY   AGREEMENT AND FINANCING   STATEMENT

("Mortgage"),   dated as of January 10,   2005,   made and   executed   by   BLUEGREEN

VACATIONS   UNLIMITED,   INC.,   a Florida   corporation   ("Borrower"),   in favor of

RESORT FINANCE LLC, a Massachusetts limited liability company ("Mortgagee");

 

                                    WITNESSETH:

 

      WHEREAS   by   reason   of that   certain   loan   (the   "Loan")   being   made by

Mortgagee   pursuant to that   certain   Loan   Agreement   dated even date   herewith

between Borrower and Mortgagee (the "Loan   Agreement"),   the provisions of which

are incorporated herein by reference and made a part hereof,   Borrower is justly

indebted   to   Mortgagee   up to the   principal   sum of Fifty   Million   and No/100

Dollars   ($50,000,000.00),   as   evidenced   by a revolving   promissory   note (the

"Note") executed on behalf of Borrower,   and bearing interest (the rate of which

may change from time to time if, as, and when the LIBOR rate,   as defined in the

Note, changes) and repayable on the terms set forth in the Note, and which shall

be due and payable in full on the Maturity   Date (as that term is defined in the

Note,   as the   same   may   be   accelerated   pursuant   to the   terms   of the   Loan

Agreement,   whereby Borrower promises to pay the aforesaid   principal sum, or so

much   thereof as shall from time to time be   disbursed   to or for the benefit of

Borrower,   pursuant   to the   Loan   Agreement.   Notwithstanding   anything   to the

contrary contained herein, Mortgagee agrees to limit its right of recovery under

this   Mortgage   for   repayment   of   principal   to   Fourteen   Million Six Hundred

Sixty-Two   Thousand Five Hundred Forty-Two and No/100 Dollars   ($14,662,542.00).

Accordingly,   documentary   stamp tax and intangible   taxes are calculated   based

upon the principal   amount of Fourteen   Million Six Hundred   Sixty-Two   Thousand

Five Hundred Forty-Two and No/100 Dollars ($14,662,542.00);

 

 

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      NOW,   THEREFORE,   in order   to   secure   the   payment   of the   indebtedness

evidenced   by the   Note   and   the   payment   of all   amounts   due   under   and the

performance   and   observance of all covenants and   conditions   contained in this

Mortgage,   the Note, the Loan Agreement,   any and all other mortgages,   security

agreements,   assignment of leases and rents,   guaranties,   indemnity agreements,

letters of credit   and any other   documents   and   instruments   now or   hereafter

executed   by Borrower to evidence or secure the payment of all or any portion of

the indebtedness under the Note and any and all renewals, extensions, amendments

and   replacements   of this Mortgage,   the Note and any such other   documents and

instruments   (the Note, this Mortgage,   such other documents and instruments now

or   hereafter   executed and   delivered by Borrower to Mortgagee   pursuant to the

Loan   Agreement in connection   with the loan   evidenced by the Note, and any and

all amendments,   renewals, extensions and replacements hereof and thereof, being

sometimes    herein   referred   to   collectively   as   the   "Loan    Documents"   and

individually as a "Loan Document",   and all indebtedness and liabilities secured

hereby being   hereinafter   sometimes   referred to as "Borrower's   Liabilities"),

Borrower   does   hereby   mortgage,   assign,   pledge   and   collaterally   assign to

Mortgagee all of Borrower's right, title and interest,   if any, in, to and under

the following   described   property,   subject to the terms and conditions   herein

specified:

 

      (A) The land   legally   described   in Exhibit A attached   hereto and made a

part hereof (the "Land");

 

      (B) All and whatever right,   title and interest Borrower has in and to all

buildings   constructed (or being   constructed) on the Land (the "Buildings") and

all other   structures,   improvements and fixtures of every kind or nature now or

hereafter   situated   on the   Land,   and all   machinery,   appliances,   equipment,

furniture and all other personal   property of every kind or nature located in or

on, or attached to, or used or intended to be used in   connection   with, or with

the operation of, the Land, buildings, structures,   improvements or fixtures now

or hereafter   located or to be located on the Land,   or in   connection   with any

construction   being   conducted   or   which   may be   conducted   thereon,   and   all

extensions,   additions,   improvements,   substitutions and replacements to any of

the foregoing (collectively, the "Improvements");

 

      (C) All building   materials and goods which are procured or to be procured

for   use on or in   connection   with   the   Improvements   or the   construction   of

additional   Improvements,   whether   or not such   materials   and goods   have been

delivered to the Land ("Materials");

 

      (D) To the extent   assignable   without the consent of another party,   all:

(i) unexpired claims, warranties, guaranties and sureties in connection with the

construction,   furnishing and equipping of the Mortgaged   Property   (hereinafter

defined), (ii) all plans,   specifications,   architectural renderings,   drawings,

(iii)   licenses,   permits,   certificates   of occupancy,   (iv) soil test reports,

other   reports of   examinations   or   analyses   of the Land,   Buildings   or other

Improvements, (v) contracts for services to be rendered to Borrower or otherwise

in   connection   with the   Improvements,   (vi)   all   other   property,   contracts,

including,   without   limitation,   general   contracts,   subcontracts and material

supply   contracts   relating   to the   construction   of the   Buildings   and   other

Improvements relating thereto, including tenant improvements, reports, proposals

and other   materials in any way relating to the Land or the   Improvements or the

construction   of   additional   Improvements,   (vii) any and all other   intangible

property used solely in connection with or otherwise related to the acquisition,

development, and marketing of the Mortgaged Property, and

 

 

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(viii)   all trade   styles,   trademarks   and   service   marks   used in   connection

therewith   (other than the name   Bluegreen   or   Bluegreen   Vacation   Club or any

variation thereof);

 

      (E) All easements,   including, but not limited to, all easements and other

rights for the benefit of, and running with, the Land, tenements, rights-of-way,

vaults,   gores of land, streets,   ways, alleys,   passages,   sewer rights,   water

courses,   water   rights   and   powers   and   appurtenances   in any way   belonging,

relating or appertaining to any of the Land or Improvements,   or which hereafter

shall in any way belong, relate or be appurtenant thereto,   whether now owned or

hereafter acquired ("Appurtenances");

 

      (F) To the extent payable to Mortgagee hereunder, all judgments, insurance

proceeds,   awards of damages and settlements which may result from any damage to

all or any   portion   of the   Land,   Improvements   or   Appurtenances   or any part

thereof or to any rights appurtenant thereto;

 

      (G) To the   extent   payable   to   Mortgagee   hereunder,   all   compensation,

awards,   damages,   claims, rights of action and proceeds of or on account of (i)

any damage or taking,   pursuant   to the power of   eminent   domain,   of the Land,

Improvements,   Appurtenances   or   Materials   or any   part   thereof,   or (ii) the

alteration of the grade of any street or highway   abutting the Land, and, except

as otherwise   provided   herein,   Mortgagee is hereby   authorized   to collect and

receive said awards and proceeds   and to give proper   receipts and   acquittances

therefor and, except as otherwise   provided herein, to apply the same toward the

payment of the indebtedness and other sums secured hereby;

 

      (H) All   contract   rights,   general   intangibles,   actions   and   rights in

action,   including,   without   limitation,   to the extent   payable   to   Mortgagee

hereunder all rights to insurance proceeds and unearned premiums arising from or

relating to damage to the Land, Improvements, Appurtenances or Materials;

 

      (I)   All   proceeds,   products,   replacements,    additions,   substitutions,

renewals   and   accessions   of and to the Land,   Improvements,   Appurtenances   or

Materials;

 

      (J) All rents, issues, profits, income and other benefits now or hereafter

arising   from or in   respect of the Land,   Improvements   or   Appurtenances   (the

"Rents"),   it being   intended   that this   granting   clause shall   constitute   an

absolute and present   assignment   of the Rents pledged on a parity with the Land

and Improvements and not secondarily;

 

      (K) Any and all leases,   licenses and other   occupancy   agreements   now or

hereafter affecting the Land, Improvements, or Appurtenances,   together with all

security therefor and guaranties thereof and all monies payable thereunder,   and

all books and records owned by Borrower which contain   evidence of payments made

under the leases and all security given therefor, (collectively, the "Leases");

 

      (L) Any and all after-acquired right, title or interest of Borrower in and

to any of the property described in the preceding granting clauses; and

 

 

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      (M) To the extent   payable to Mortgagee   hereunder,   the proceeds from the

sale,   transfer,   pledge   or   other   disposition   of any or all of the   property

described in the preceding grant clauses;

 

(All of the property described in the preceding granting clauses (A) through (M)

in this granting   paragraph,   together with all real and personal,   tangible and

intangible   property   pledged   in,   or to   which a   security   interest   attached

pursuant   to, any of the Loan   Documents,   being   sometimes   referred   to herein

collectively as the "Mortgaged Property");

 

      TO HAVE AND TO HOLD the same unto the   Mortgagee   and its   successors   and

assigns forever, for the purposes and uses herein set forth subject, however, to

the Permitted Encumbrances (as hereinafter defined);

 

      PROVIDED,   HOWEVER,   that if the Borrower   shall pay the principal and all

interest as provided in the Note,   and shall pay all other sums herein   provided

for, or secured hereby,   then this Mortgage shall be released   without charge to

the   Borrower,   and Mortgagee   shall   execute any and all   documents   reasonably

requested   by   Mortgagor,   in   recordable   form   to so   evidence   such   release,

otherwise to remain in full force and effect.

 

      BORROWER FURTHER COVENANTS and agrees as follows:

 

                                        I

                     COVENANTS, WARRANTIES AND REPRESENTATIONS

 

      1.1 Performance   under Note,   Mortgage and other Loan Documents.   Borrower

shall   perform,   observe and comply with or cause to be performed,   observed and

complied with in a complete and timely manner all   provisions   hereof and of the

Note,   every other Loan   Document,   and will promptly pay or cause to be paid to

Mortgagee   when due the   principal   with   interest   thereon   and all other   sums

required to be paid by Borrower   pursuant to the Note, this Mortgage,   and every

other Loan Document.   For purposes herein project   related   documents shall mean

the Plans and Specifications, Project Commitment and Project Documents ("Project

Related Documents).

 

      1.2   Compliance   with Laws,   Insurance   and Other   Requirements.   Borrower

covenants that the Land and the   Improvements   and the use thereof   shall,   upon

completion thereof, comply with, and will during the full term of this Mortgage,

subject to the right to contest in accordance with the   penultimate   sentence of

this Section 1.2, continue to comply with, all applicable restrictive covenants,

zoning   and   subdivision   ordinances   and   building   codes,   licenses,    health,

Environmental Laws (as hereinafter   defined),   and civil rights laws (including,

but   not   limited   to,   The   Americans   With   Disabilities   Act   of   1990),   and

regulations and all other   applicable laws,   ordinances,   rules and regulations,

and shall observe and comply with all conditions and   requirements   necessary to

maintain in force the   insurance   required   under   Section   1.6   hereof,   and to

preserve and extend any and all rights,   licenses,   permits (including,   but not

limited to, zoning   variances,   special   exceptions,   and   nonconforming   uses),

privileges,   franchises,   and concessions   which are applicable to the Mortgaged

Property and necessary for the operation of the Mortgaged Property as then being

operated   or which   have   been   granted   to or   contracted   for by   Borrower   in

connection   with any existing or   presently   contemplated   use of the   Mortgaged

 

 

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Property.   In the event that any building or other   improvement on the Mortgaged

Property   must be   altered   or removed   to enable   Borrower   to comply   with the

foregoing   provisions of this Section 1.2,   Borrower shall not commence any such

alterations or removals without   Mortgagee's prior approval of the need therefor

and   the   plans   and   specifications   pertaining   thereto   excepting   only   such

alterations   or   removals   as may be required   urgently   in   connection   with an

emergency affecting the Mortgaged Property, with respect to which Borrower shall

do what is reasonably   required   under the   circumstances   and notify   Mortgagee

thereof   promptly     thereafter.    After   such   approval,    which   shall   not   be

unreasonably withheld or delayed,   Borrower, at its sole cost and expense, shall

effect the alterations or removal so required and approved by Mortgagee.   Except

as   otherwise    contemplated   under   the   Project   Related   Documents   and   Loan

Documents,   Borrower   shall not by act or omission   permit any building or other

improvement on land not subject to the lien of this Mortgage to rely on the Land

or any part   thereof   or any   interest   therein   to   fulfill   any   municipal   or

governmental   requirement,   and Borrower hereby assigns to Mortgagee any and all

rights   to give   consent   for all or any   portion   of the   Land or any   interest

therein to be so used.   Similarly,   no Building or other Improvement on the Land

shall rely on any land not subject to the lien of this   Mortgage or any interest

therein   to   fulfill   any   governmental   or   municipal   requirement,   except   as

contemplated   by the Project   Related   Documents   and OE   Agreement.   Any act or

omission by Borrower   which would result in a violation of any of the provisions

of this Section 1.2 shall be void. If any federal,   state or other   governmental

body or any court   issues any notice or order to the effect   that the   Mortgaged

Property   or any part   thereof   is not in   compliance   with   any such   covenant,

ordinance,   code, law or regulation,   Borrower will promptly   provide   Mortgagee

with a copy of such notice or order and will immediately commence and diligently

perform all such   actions as are   necessary   to comply   therewith   or   otherwise

correct   such   non-compliance.   Borrower   may   in   good   faith,   by   appropriate

proceedings   timely   commenced and thereafter   diligently   pursued,   contest the

validity or applicability of any such notice or order of   non-compliance   or the

underlying covenant, ordinance, code, law or regulation; provided, that Borrower

complies with all   applicable   laws with respect to any such   contest.   Borrower

agrees, with respect to the construction,   operation and leasing of the Land and

Improvements, that persons otherwise entitled to any right, benefit, facility or

privilege shall not be denied such right, benefit,   facility or privilege in any

manner or for any   purpose   nor be   discriminated   against on the basis of race,

religion,   marital   status,   age,   color,   sex,   disability,   national origin or

ancestry.

 

      1.3 Taxes, Assessments and Other Charges.   Borrower shall pay, or cause to

be paid by the party responsible therefor under any Lease, promptly when due all

taxes,   assessments,   rates, dues, charges,   fees, levies,   fines,   impositions,

liabilities,   obligations,   liens   and   encumbrances   of every   kind and   nature

whatsoever   now or   hereafter   imposed,   levied or assessed   upon or against the

Mortgaged   Property or any part   thereof,   or upon or against   this   Mortgage or

Borrower's   Liabilities   or upon or against   the   interest of   Mortgagee   in the

Mortgaged   Property,   as well as all taxes,   assessments and other   governmental

charges levied and imposed by the United States of America or any state, county,

municipality   or other   taxing   authority   upon or in respect   of the   Mortgaged

Property or any part thereof.   Upon Mortgagee's request,   Borrower will promptly

file, if it has not   theretofore   filed,   such   petition,   application   or other

instrument as is necessary to cause the Land and   Improvements   to be taxed as a

separate parcel or parcels which include no property not a part of the Mortgaged

Property.   Subject to the   provisions   of Section   1.4   hereof,   nothing in this

Section 1.3 shall   require   Borrower to pay any income,   franchise or excise tax

imposed upon Mortgagee. Borrower shall pay when due all charges incurred for the

 

 

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benefit of the Mortgaged   Property   (and not charged   directly to tenants of the

Mortgaged   Property) for utilities,   such as, but not limited to, energy,   fuel,

gas, electricity, water, sewer, and garbage removal, whether or not such charges

are liens against the Mortgaged Property.

 

      1.4 Taxes Affecting Mortgagee's   Interest. If any state, federal,   county,

municipal or other   governmental law, order,   rule or regulation,   which becomes

effective   subsequent   to the date   hereof,   in any manner   changes or   modifies

existing laws governing the taxation of mortgages or debts secured by mortgages,

or the manner of collecting   taxes, so as to impose on Mortgagee a tax by reason

of   its   ownership   of any or all of   the   Loan   Documents   or   measured   by the

principal   amount of the Note, or which requires or has the practical   effect of

requiring   Mortgagee   to pay any   portion   of the real   estate   taxes   levied in

respect of the   Mortgaged   Property or to pay any tax levied in whole or in part

in substitution for real estate taxes,   Borrower's   Liabilities and all interest

accrued   thereon shall,   upon one hundred eighty (180) days' notice,   become due

and payable   forthwith   at the option of   Mortgagee,   whether or not there shall

have   occurred   an Event of   Default,   but   without   any   prepayment   premium or

penalty, provided,   however, that, if Borrower may, without violating or causing

a violation of such law, order, rule or regulation, pay such taxes or other sums

as are necessary to eliminate   such adverse   effect upon the rights of Mortgagee

and does pay such   taxes or other   sums when due,   Mortgagee   shall not elect to

declare due   Borrower's   Liabilities by reason of the provisions of this Section

1.4.

 

      1.5   Mechanics'   and Other Liens.   Borrower shall not permit or suffer any

mechanic's, laborer's, materialman's, commercial real estate broker's, statutory

or other lien or encumbrance   (other than any lien for taxes and assessments not

yet due) to be   perfected   upon or against the   Mortgaged   Property,   except for

matters approved in writing by Mortgagee.

 

      1.6 Insurance   Required.   Borrower shall,   at its sole expense,   obtain or

cause to be obtained and maintain for the benefit of Mortgagee, until Borrower's

Liabilities are paid in full, the insurance specified in the Loan Agreement.   In

the event of the   foreclosure of this Mortgage or any other transfer of title to

the   Mortgaged    Property   in   full   or   partial    satisfaction    of   Borrower's

Liabilities,   all right,   title and interest of Borrower in and to all insurance

policies   and   renewals   thereof   then in force shall pass to the   purchaser   or

grantee.

 

      1.7 Claims under Casualty Insurance.   In the event of loss to or affecting

the   Mortgaged   Property   in an amount   likely to   exceed   Twenty-Five   Thousand

Dollars ($25,000.00),   Borrower will give immediate notice thereof to Mortgagee,

and Mortgagee may make proof of loss if not made promptly by Borrower (for which

purpose Borrower hereby irrevocably appoints Mortgagee as its attorney-in-fact).

Except as   otherwise   provided in the Project   Related   Documents,   Mortgagee is

hereby authorized, if, at the time of such occurrence an Event of Default exists

and Mortgagee so elects by giving   Borrower   notice   thereof   within thirty (30)

days   after   being   notified   of such   loss,   to   process,   enforce,   adjust   or

compromise   claims of any loss under any insurance   policies covering or related

to the Mortgaged Property,   and if Mortgagee is not so authorized or does not so

elect,   Borrower shall do so,   subject to   Mortgagee's   right of approval of any

proposed   settlement of any such claim which shall not be unreasonably   withheld

or delayed.   Each   insurance   company is hereby   authorized and directed to make

payment   of   all   such   loss   proceeds   in   excess   of   Fifty   Thousand   Dollars

($50,000.00)   directly to Mortgagee   alone.   After deducting from such insurance

proceeds any expenses   incurred by Mortgagee in the   collection   and   settlement

thereof,   including without limitation reasonable attorneys' and

 

 

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adjusters' fees and charges, Mortgagee shall apply the net proceeds as specified

in Section 1.9 hereof.   Mortgagee   shall not be   responsible   for any failure to

collect any insurance   proceeds due under the terms of any policy   regardless of

the   cause of such   failure   except in the event of   Mortgagee's   negligence   or

willful misconduct.

 

      1.8   Condemnation   Awards.   Except as   otherwise   provided   in the Project

Related   Documents,   Mortgagee   shall be entitled to all   compensation,   awards,

damages,   claims,   rights of action and   proceeds   of, or on account of, (i) any

damage or taking,   pursuant   to the power of eminent   domain,   of the   Mortgaged

Property or any part thereof, (ii) damage to the Mortgaged Property by reason of

the taking, pursuant to the power of eminent domain, of other property, or (iii)

the   alteration   of the grade of any street or highway on or about the Mortgaged

Property.   Mortgagee is hereby authorized,   if at the time of such occurrence an

Event of Default   exists and   Mortgagee so elects,   to   commence,   appear in and

prosecute in its own or Borrower's name any action or proceeding relating to any

such compensation, awards, damages, claims, rights of action and proceeds and to

settle or compromise   any claim in connection   therewith,   and if Mortgagee does

not so elect,   Borrower shall do so, subject to Mortgagee's right of approval of

any proposed settlement of any such claim.   Borrower hereby irrevocably appoints

Mortgagee as its   attorney-in-fact   for the purposes set forth in the   preceding

sentence.   Mortgagee after deducting from such   compensation,   awards,   damages,

claims,   rights of action and proceeds all its   expenses,   including   reasonable

attorneys'   fees,   shall   apply such net   proceeds as   specified   in Section 1.9

hereof.   Borrower agrees to execute such further assignments of any compensation

awards,   damages,   claims,   rights of   action   and   proceeds   as   Mortgagee   may

reasonably require.

 

      1.9   Proceeds   of   Insurance   and   Eminent   Domain.   Except   as   otherwise

specified in the Project Related Documents,   and at Mortgagee's   election, to be

exercised   by   written   notice   to   Borrower   within   ten   (10)   days   following

Mortgagee's   receipt   in   cash   or the   equivalent   thereof   of   such   insurance

proceeds,   awards or other   compensation   as   described   in Sections 1.7 and 1.8

hereof (hereinafter generically referred to as "Proceeds"), the entire amount of

said   Proceeds   shall either (i) be applied to   Borrower's   Liabilities   in such

order and manner as   Mortgagee   may elect,   except that this option shall not be

exercised (A) with respect to any restoration   reasonably estimated to cost less

than   one   hundred   thousand   dollars   ($100,000.00),   or (B) if the   conditions

specified in the next sentence are satisfied, or (C) if such Proceeds pertain to

damage to   Improvements   subject to or governed   by any of the   Project   Related

Documents   or the Loan   Document,   or any other   Lease and   Borrower   is legally

obligated   under   the   applicable   agreement   pertaining   thereto   to make   such

Proceeds   available for restoration of the subject   Improvements or (ii) be made

available to Borrower on the terms and   conditions set forth in this Section 1.9

to finance the cost of restoration or repair of the Mortgaged   Property with any

excess to be applied to Borrower's   Liabilities.   The conditions   referred to in

clause (B) in the   preceding   sentence are as follows:   (i) Borrower   shall have

submitted to   Mortgagee   evidence   reasonably   satisfactory   to   Mortgagee   that

complete restoration of the Mortgaged Property (or the portion thereof remaining

in the event the Proceeds result from a condemnation) (A) can be completed on or

before the Maturity Date, and (B) at a total cost not in excess of the amount of

Proceeds   available   for such   restoration,   or, if a   deficiency   shall   exist,

Borrower   shall have   deposited   the amount of such   deficiency   with   Mortgagee

(which   evidence   shall   include   a   certificate   of   an   architect    reasonably

acceptable    to   Mortgagee    pertaining   to   time   and   cost   to   complete   such

restoration),   (ii)   none of the   Project   Related   Documents   shall   have   been

terminated as a result of such casualty or taking, or be terminable by any party

thereto so long as Borrower is in the process of restoring the

 

 

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Mortgaged   Property,   and (iii) if the   Proceeds   result   from a taking   through

condemnation of a portion of the Mortgaged Property,   the portion remaining,   if

any, shall, in Mortgagee's   reasonable judgment, be capable of being restored to

an   economically   viable   property   having the same use as existed prior to such

taking.   If Mortgagee elects,   or is obligated,   to make Proceeds   available for

restoration,   the amount   thereof   which is to be made so available to Borrower,

together   with   any   deposits   made   by   Borrower   hereunder,   shall   be held by

Mortgagee,   or such other party as designated   by Mortgagee,   to be disbursed to

pay the cost of repair or restoration either, at Mortgagee's option, to Borrower

or   directly   to   contractors   and other   persons   entitled   to   payment   all in

accordance    with   and   subject   to   such   conditions   to   disbursement   as   are

substantially   the same as those specified in the Loan Agreement with respect to

disbursement of Loan proceeds.   Mortgagee or such other depository may commingle

any such   Proceeds   held by it with   its   other   general   funds.   Mortgagee,   at

Borrower's   written request,   shall invest or authorize such other depository to

invest such   Proceeds in a money market (or then   comparable)   interest   bearing

account, or at Mortgagee's   election,   short term obligations of, or insured by,

the   United   States of   America,   the income   from   which,   less any   reasonable

investment   charges,   shall be added to such   Proceeds and reported as income to

Borrower,   and otherwise   neither   Mortgagee nor such other   depository shall be

obligated to pay interest in respect of any such   Proceeds held by it, and in no

event   shall   Borrower   be   entitled   to a   credit   against   any   of   Borrower's

Liabilities   except and to the extent the funds are applied thereto   pursuant to

this Section 1.9. The net proceeds of business interruption and rental insurance

shall be paid to   Mortgagee   for   interest   payments   as and when due and   shall

otherwise   be paid to   Mortgagor.   Notwithstanding   any other   provision of this

Section   1.9,   if an Event of   Default   shall   be   existing   at the time of such

casualty,   taking or other   event or if an Event of Default   occurs   thereafter,

Mortgagee   shall have the right to apply   immediately   all   insurance   proceeds,

awards or   compensation   to the payment of Borrower's   Liabilities in such order

and manner as Mortgagee   may   determine.   Mortgagee   shall have the right at all

times to apply   such net   proceeds   to the cure of any Event of   Default   or the

performance of any obligations of Borrower under the Loan Documents.

 

      1.10 Tax and Insurance   Deposits.   Borrower   shall, in order to secure the

performance and discharge of Borrower's   obligations   under Sections 1.3 and 1.6

hereof, but not in lieu of such performance, deposit with Mortgagee on the first

day of each calendar month   throughout the term of this Mortgage,   deposits,   in

amounts set by Mortgagee   from time to time by written   notice to   Borrower,   in

order to accumulate   funds   sufficient to permit   Mortgagee to pay all annual ad

valorem taxes,   assessments and charges of the nature described in said Sections

1.3 and 1.6 hereof at least thirty (30) days prior to the date or dates on which

they shall become delinquent,   or due and payable,   as the case may be. Borrower

shall procure and deliver to Mortgagee   when issued all   statements or bills for

such obligations.   Upon demand by Mortgagee, Borrower shall deliver to Mortgagee

such   additional   monies as are   required   to satisfy   any   deficiencies   in the

amounts   necessary   to   enable   Mortgagee   to pay such   taxes,   assessments   and

insurance charges thirty (30) days prior to the date they become delinquent,   or

due and payable, as the case may be. Mortgagee shall pay such taxes, assessments

and   insurance   charges as they become due to the extent of the funds on deposit

with   Mortgagee   from   time to time   and   provided   Borrower   has   delivered   to

Mortgagee   the   statements   or bills   therefor.   In   making   any such   payments,

Mortgagee   shall be   entitled   to rely on any bill issued in respect of any such

taxes,   assessments or charges without   inquiry into the validity,   propriety or

amount   thereof and whether   delivered   to   Mortgagee   by Borrower or   otherwise

obtained by Mortgagee. Any deposits received pursuant to this Section 1.10 shall

not be, nor be deemed to be, trust funds, but may be commingled with the

 

 

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general   funds of   Mortgagee   and   Mortgagee   shall   have no   obligation   to pay

interest on amounts   deposited with Mortgagee   pursuant to this Section 1.10. If

any Event of Default   occurs any part or all of the   amounts   then on deposit or

thereafter   deposited with Mortgagee   under this Section 1.10 may at Mortgagee's

option   be   applied   to   payment   of   Borrower's   Liabilities   in such   order as

Mortgagee may determine.   Upon   assignment of this   Mortgage,   any funds on hand

with   Mortgagee,   pursuant   to this   Section   1.10,   shall be turned over to the

assignee and,   provided the assignee shall assume   Mortgagee's   responsibilities

with respect to such funds, any responsibility of Mortgagee with respect to such

funds shall   terminate.   As of the date   hereof,   Mortgagee   has   suspended   the

application   of this Section 1.10,   however,   Mortgagee may later   reinstate and

suspend, the application of this Section 1.10 as often as it may determine,   and

unless and until   Mortgagee   notifies   Borrower that   Mortgagee has   determined,

based on what Mortgagee   considers,   in good faith,   to be a materially   adverse

change in the   financial   condition of Borrower or the   Mortgaged   Property,   to

reinstate said   requirement,   the same shall be deemed so suspended by Mortgagee

as aforesaid.

 

      1.11   Preservation,   Restoration and Use of Mortgaged   Property.   Borrower

shall   complete,   within a   reasonable   time but in all   events   not later   than

twenty-four (24) months from the date hereof, any building or buildings or other

improvements now or at any time in the process of being   constructed by Borrower

upon the Land.   No building or other   improvement   on the Land shall   (except as

required by law) be altered   (except as otherwise   required or   permitted   under

Leases made in accordance   with Section 1.16 hereof and except for   alterations,

the   aggregate   cost of which   does not   exceed   One   Hundred   Thousand   Dollars

($100,000.00)),   removed, or demolished nor shall any fixtures or appliances on,

in or   about   said   buildings   or   Improvements   be   severed,   removed,   sold or

mortgaged,   without the prior written consent of Mortgagee,   and in the event of

the   demolition   or   destruction   in   whole   or in part of any of the   fixtures,

chattels,   or articles of personal   property   covered   hereby or by any separate

security   agreement   given in conjunction   herewith,   the same shall be replaced

promptly by similar   fixtures,   chattels,   and articles of personal   property at

least equal in quality and condition to those   replaced,   free from any security

interest in or   encumbrances   thereon or   reservation of title thereto except to

the extent otherwise authorized under the Loan Agreement.   If all or any part of

the Mortgaged   Property   shall be damaged or destroyed by fire or other casualty

or shall be damaged or taken through the exercise of the power of eminent domain

or other cause described in Section 1.8 hereof, Borrower shall promptly and with

all due diligence   restore and repair the Mortgaged   Property whether or not the

proceeds,   award or other   compensation   are   sufficient to pay the cost of such

restoration   or repair,   provided   that   Mortgagee   makes   proceeds of insurance

available for such restoration pursuant to Section 1.9 hereof. The buildings and

Improvements shall be so restored or rebuilt so as to be of at least equal value

as prior to such damage or destruction,   Borrower shall not permit,   commit,   or

suffer   any   waste   or   impairment   of the   Mortgaged   Property   or any   part or

improvement   thereof,   reasonable   wear and tear excepted,   without   Mortgagee's

prior   consent   which   shall not be   unreasonably   withheld   and shall   keep and

maintain   the   Mortgaged   Property   and every part   thereof   in good   repair and

condition and effect such repairs as Mortgagee may reasonably require, and, from

time to time, make all needful and proper   replacements and additions thereto so

that said buildings,   fixtures, machinery, and appurtenances will, at all times,

be in good condition,   fit and proper for the respective purposes for which they

were originally erected or installed. Borrower shall not, after the date hereof,

subject the Mortgaged   Property to any use covenants or   restrictions   and shall

not   initiate,   join   in or   consent   to   any   change   in any   existing   private

restrictive covenant,   zoning ordinance,   or other public or

 

 

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private   restriction   limiting or defining   the uses which may be made of or the

kind of improvements   which can be constructed or placed on the Land or any part

thereof (including,   but not limited to, the Project Related   Documents),   which

would   materially   adversely   effect its current use and shall   promptly   notify

Mortgagee of, and appear in and defend, at Borrower's sole cost and expense, any

such   proceedings   seeking to effect any of the   foregoing.   Borrower   shall not

subdivide   the   portion of the Land   owned by it,   except as first   approved   by

Mortgagee,   which shall not be unreasonably withheld, shall not subject the Land

and   Improvements   to the   provisions   of the   condominium   laws of the State of

Florida   provided   Mortgagee   acknowledges   that it is the intent of the parties

that the   Mortgaged   Property   shall be subject   to   condominium   and   timeshare

regimes and the Property made a part of Mortgagor's   "Vacation   Clubs" timeshare

interests   may be sold to third parties in the ordinary   course of business.   No

improvement   on the   Land or on land   adjoining   the   Land   which   is   owned   or

controlled   by Borrower   shall be   constructed   unless plans and   specifications

therefor   have been first   submitted   to   Mortgagee   and   approved by it, in the

exercise   of   its   reasonable   judgment,    as   entailing   no   prejudice   to   the

indebtedness secured hereby or the security therefor.

 

      1.12   Transfer   or   Encumbrance   of   the   Mortgaged   Property.   Except   as

otherwise   expressly   permitted   under the Loan   Agreement,   Borrower   shall not

permit or suffer to occur any sale, assignment,   conveyance, transfer, mortgage,

lease   (other   than   Leases   made in   accordance   with   the   provisions   of this

Mortgage)   or   encumbrance   of or any   contract   for any of the   foregoing on an

installment basis pertaining to the Mortgaged   Property,   any part thereof,   any

interest therein, or in any trust holding title to the Mortgaged Property or any

direct   or   indirect   interest   in a   corporation,   limited   liability   company,

partnership or other entity which owns all or part of the Mortgaged   Property or

any such beneficial interest,   whether by operation of law (excluding,   however,

transfers   which   occur by   reason   of death)   or   otherwise   (each   hereinafter

referred to as a "Transfer or Encumbrance") without the prior written consent of

Mortgagee   having been obtained (i) to any such Transfer or Encumbrance and (ii)

to the form and substance of any instrument   evidencing or   contracting   for any

such   Transfer or   Encumbrance.   Borrower   shall not,   without the prior written

consent of Mortgagee, further assign or permit to be assigned the Rents from the

Mortgaged   Property,   except to further secure Borrower's   Liabilities,   and any

such assignment   without the prior express written consent of Mortgagee shall be

null and   void.   Borrower   shall not   permit   any   interest   in any Lease of the

Mortgaged   Property   to be   subordinated   to any   encumbrance   on the   Mortgaged

Property other than the Loan Documents and any such subordination   shall be null

and void.   Borrower   agrees   that in the event the   ownership   of the   Mortgaged

Property,   any interest   therein or any part thereof   becomes vested in a person

other than Borrower,   Mortgagee may, without notice to Borrower, deal in any way

with such   successor or successors in interest with   reference to this Mortgage,

the Note,   the Loan   Documents   and   Borrower's   Liabilities   without in any way

vitiating   or    discharging    Borrower's    liability    hereunder   or   Borrower's

Liabilities.   No sale of the Mortgaged   Property,   no   forbearance to any person

with   respect to this   Mortgage,   and no extension to any person of the time for

payment of the Note or any other Borrower's Liabilities given by Mortgagee shall

operate to release,   discharge,   modify, change or affect the original liability

of   Borrower,   either   in whole or in part,   except to the   extent   specifically

agreed in writing by Mortgagee.

 

      1.13   Further   Assurances.   At any   time   and   from   time   to   time,   upon

Mortgagee's   request,   and provided that Borrower's   Liabilities are not thereby

increased and Borrower   incurs no cost in connection   therewith,   Borrower shall

make,   execute and   deliver,   or cause to be made,

 

 

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<PAGE>

 

executed and delivered,   to Mortgagee,   and where   appropriate shall cause to be

recorded,   registered   or   filed,   and   from   time   to   time   thereafter   to   be

re-recorded,   re-registered   and   refiled at such time and in such   offices   and

places as shall be deemed   reasonably   necessary by Mortgagee,   any and all such

further mortgages,   security agreements,   financing   statements,   instruments of

further   assurance,   certificates   and   other   documents   as may   be   reasonably

necessary   in order to   effectuate   or perfect,   or to continue and preserve the

obligations   under,   the Note,   this   Mortgage,   any other Loan Document and any

instrument evidencing or securing Borrower's   Liabilities,   and the lien of this

Mortgage   as a lien upon all of the   Mortgaged   Property,   whether   now owned or

hereafter acquired by Borrower. Upon any failure by Borrower to do so, Mortgagee

may if Borrower   has failed to execute the same   within ten (10)   business   days

after request, make, execute, record, register, file, re-record,   re-register or

re-file any and all such mortgages, instruments,   certificates and documents for

and in the name of Borrower,   and Borrower hereby irrevocably appoints Mortgagee

the agent and attorney-in-fact of Borrower to do so.

 

      1.14 Security   Agreement and Fixture   Filing.   Borrower (as debtor) hereby

grants to Mortgagee (as creditor and secured   party) a security   interest   under

the   Florida   Uniform   Commercial   Code   ("UCC")   in   all   fixtures,   machinery,

appliances,    equipment,    furniture   and   personal   property   of   every   nature

whatsoever   constituting part of the Mortgaged Property.   Borrower shall execute

any and all documents,   or shall permit the filing of such documents,   including

without limitation   financing   statements   pursuant to the UCC, as Mortgagee may

request to   evidence,   establish,   protect,   preserve,   maintain and perfect the

priority   of the first lien and   security   interest   created   hereby on property

which may be deemed personal property or fixtures, and shall pay to Mortgagee on

demand any   reasonable   expenses   incurred by Mortgagee in   connection   with the

preparation,   execution   and   filing   of any   such   documents.   Borrower   hereby

authorizes and empowers   Mortgagee and irrevocably   appoints Mortgagee the agent

and   attorney-in-fact of Borrower to execute and file, on Borrower's behalf, all

financing statements and refilings and continuations   thereof as Mortgagee deems

necessary or advisable to create,   preserve and protect such lien. To the extent

permitted by applicable   law,   Borrower   covenants and agrees that the filing of

this   Mortgage in the real estate   records of the county in which the   Mortgaged

Property   is   locates   shall also   operate   from the time of filing as a fixture

filing with respect to all goods   constituting   part of the   Mortgaged   Property

which are or are to become fixtures related to the real estate described herein.

For such purpose, the following information is set forth:

 

            (a)    Name and Address of debtor:

 

                  Bluegreen Vacations Unlimited, Inc.

                  c/o Bluegreen Corporation

                  4960 Conference Way North, Suite 100

                  Boca Raton, Florida 33431

                  Attention: John F. Chiste

 

 

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            (b)    Name and Address of secured party:

 

                  Resort Finance LLC

                  160 Benmont Avenu