SEVENTH AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
among
FAIRFIELD COMMUNITIES, INC.
FAIRFIELD MYRTLE BEACH, INC.
and
BANKBOSTON, N.A.,
INDIVIDUALLY AND AS AGENT
THIS AMENDMENT (this "Amendment") dated as of December 19, 1997, is
made by and among FAIRFIELD COMMUNITIES, INC., a Delaware corporation (the
"Company", "FCI" or "Fairfield"), FAIRFIELD MYRTLE BEACH, INC., a Delaware
corporation ("Myrtle Beach" or "FMB"), BANKBOSTON, N.A. (formerly The First
National Bank of Boston), a national banking association ("BKB"), and
BANKBOSTON, N.A., as agent for itself and the Lenders (the "Agent"), all parties
to a certain Amended and Restated Revolving Credit Agreement dated as of
September 28, 1993 (as amended and in effect as of at the date hereof, the
"Credit Agreement"). This Amendment is joined in by Fairfield Acceptance
Corporation, a Delaware corporation ("FAC"), by reason of the Unconditional
Guaranty of Payment and Performance, dated as of September 28, 1993, from FAC in
favor of the Agent (the "Fairfield Guaranty"). All capitalized terms used herein
and not otherwise defined shall have the same respective meanings herein as in
the Credit Agreement.
WHEREAS, BKB has agreed to establish for Borrowers additional borrowing
availability in the amount of up to and including $100,000,000 during the VB
Override Period, upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, FCI, FMB,
FAC, BKB and the Agent hereby agree as follows:
ss.1. Amendments to Credit Agreement. FCI, FMB, BKB and the Agent hereby
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agree to amend the Credit Agreement as follows:
ss.1.1 The definitions of "Borrowing Base", "Commitment" and
"Commitment Amount" appearing in Section 1.1 of the Credit Agreement are hereby
amended by
deleting said definitions in their entirety and substituting therefor the
following new definitions:
"Borrowing Base. At any time of determination, an amount determined by
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the Agent by reference to the most recent Borrowing Base Report
delivered to the Lenders and the Agent pursuant to ss.8.4(f), which is
equal to the following: the sum of (i) 65% of Eligible Receivables,
plus (ii) 30% of Completed Inventory (borrowing availability under this
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subclause (ii) not to exceed the Maximum Inventory Amount), plus (iii)
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during the VB Override Period, an amount equal to 80% of VB
Receivables. During the VB Override Period, the borrowing availability
under subclause (iii) above shall be determined no later than 35 days
prior to the date of the most recent Borrowing Base Certificate
delivered to the Agent and the Lenders pursuant to ss.8.4(f), and each
Borrowing Base Report shall indicate the actual date of determination
of 80% of VB Receivables."
"Commitment. With respect to each Lender, the amount set forth on
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Schedule 1 hereto as the amount of such Lender's commitment to make
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Revolving Credit Loans to the Borrowers; provided, that during the VB
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Override Period, the amount of FNBB's Commitment shall be
$125,000,000."
"Commitment Amount. $25,000,000; provided, that during the VB Override
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Period, the Commitment Amount shall be $125,000,000."
"Subsidiary." Any corporation, association, trust, partnership or other
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business entity of which the designated parent shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes) of the outstanding Voting Stock,
including, without limitation, the VB Partnerships with respect to the
Company or Vacation Break, provided that for purposes of this Agreement
the Arizona Subsidiaries shall not be considered Subsidiaries of the
Company or any other Borrower.
ss.1.2 Section 1.1 of the Credit Agreement is hereby further amended by
inserting the following definitions in alphabetical order therein:
"Ocean Ranch Vacation Group. Ocean Ranch Vacation Group, a Florida
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general partnership, of which Vacation Break at Ocean Ranch, Inc. owns
a 55% partnership interest and Ocean Ranch Development, Inc. owns a
45% partnership interest."
"Palm Vacation Group. Palm Vacation Group, a Florida general
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partnership, of which Vacation Break Resorts at Palm Aire, Inc. owns a
55% partnership interest and Palm Resort Group, Inc. owns a 45%
interest."
"Vacation Break. Vacation Break USA, Inc., a Florida corporation and a
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wholly-owned Subsidiary of FCI."
"VB Lenders. The lenders listed and described on Schedule 8.12
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hereto."
"VB Originating Subsidiaries. Collectively, Sea Gardens Beach and
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Tennis Resort, Inc., Vacation Break Resorts, Inc., Palm Vacation
Group, Vacation Break Resorts at Star Island, Inc. and Ocean Ranch
Vacation Group."
"VB Override Period. The period commencing on December 19, 1997 and
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ending on the earlier of: (i) March 18, 1998, or (ii) the closing of
the transaction contemplated by the Fairfield Communities, Inc. VOI
Contract-Backed Commercial Paper Program Indicative Proposal, dated
October 16, 1997, issued by BancBoston Securities, Inc."
"VB Partnerships. Collectively, Palm Vacation Group and Ocean Ranch
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Vacation Group."
"VB Projects. Collectively (i) the vacation ownership resort owned and
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operated by Sea Gardens Beach and Tennis Resort, Inc. known as Sea
Gardens Beach and Tennis Resort located at Pompano Beach, Florida; (ii)
the vacation ownership resort owned and operated by Vacation Break
Resorts, Inc. known as Santa Xxxxxxx Resort and Yacht Club located at
Pompano Beach, Florida; (iii) the vacation ownership resort owned and
operated by Palm Vacation Group known as The Fairways of Palm-Aire
located at Pompano Beach, Florida; (iv) the VOIs acquired by Vacation
Break Resorts at Star Island, Inc. in units in the vacation ownership
resort known as Vacation Break at Star Island located at Kissimmee,
Florida; and (v) the vacation ownership resort owned and operated by
Ocean Ranch Vacation Group known as the Royal Vista Resort located at
Pompano Beach, Florida."
"VB Receivables. The principal component of any amount owed to any of
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the VB Originating Subsidiaries arising from any installment contract
or contract for deed, or contracts or notes secured by a mortgage, deed
of trust, vendor's lien or retention of title entered into by such VB
Originating Subsidiary with an unaffiliated purchaser of one or more
VOIs or lots or plots of land which relate only to VB Projects."
ss.1.3. Section 2.5 of the Credit Agreement is hereby amended by inserting
the following language at the end of the first sentence of said section:
"provided, however, that during the VB Override Period, the outstanding
principal amount of the Revolving Credit Loans shall bear interest at
the rate per annum equal to the Base Rate plus one and three-fourths
percent (1 3/4%)."
ss.1.4. Section 8.12 of the Credit Agreement is hereby amended by adding
the following language at the end of the first sentence of said section:
"and to refinance the Indebtedness of Vacation Break and the VB
Originating Subsidiaries which is listed and described on Schedule 8.12
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hereto; provided, however, that in no event shall the Borrowers use
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proceeds of the Revolving Credit Loans to refinance the Indebtedness of
any of Vacation Break and the VB Originating Subsidiaries unless and
until the Agent has received a payoff letter from each of the VB
Lenders to Vacation Break and such VB Originating Subsidiary indicating
the amount required to fully pay off and satisfy the Indebtedness of
Vacation Break and such VB Originating Subsidiary to such Vacation
Break Lender and an acknowledgment by such Vacation Break Lender that
upon receipt of such funds it will forthwith executed and deliver to
the Company for recording or filing all documents and take such other
actions as may be necessary to discharge, release and terminate all
liens or security interests granted by any of Vacation Break, the
Originating VB Subsidiaries, the Company and the Company's Subsidiaries
in favor of such VB Lender to secure such Indebtedness; and further,
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provided, that in no event shall the Borrowers use proceeds of the
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Revolving Credit Loans to refinance the Indebtedness of either of the
VB Partnerships unless and until (a) the Company, either directly or
indirectly through a Subsidiary of the Company, has acquired all of the
partnership interests in such VB Partnership and each of the partners
of such VB Partnership shall have executed and delivered to the Agent
and the Lenders a Guaranty of the Obligations in form and substance
satisfactory to the Agent; (b) the Company and/or the Company's
Subsidiary, as the case may be, shall have executed and delivered to
the Agent a Collateral Assignment of Partnership Interests and a Stock
Pledge Agreement, each in form and substance satisfactory to the Agent,
pledging and granting to the Agent for the benefit of the Lenders a
first priority security interest in all of the partnership interests in
such VB Partnership and all of the issued and outstanding capital stock
of any subsidiary owing a partnership interest in such VB Partnership;
(c) such Collateral Assignment of Partnership Interests and Stock
Pledge Agreement shall be effective to create in favor of the Agent for
the benefit of the Lenders a legal, valid and enforceable first
priority security interest in and to all of the partnership interests
in such VB Partnership and all of the issued and outstanding capital
stock of any subsidiary owning a partnership interest in such VB
Partnership, and all filings, recordings, deliveries
of instruments and other actions necessary or desirable in the opinion
of the Agent to maintain, perfect, protect and preserve such security
interests shall have been duly effected (including, without
limitation, the delivery to the Agent of certificates for all shares
of capital stock pledged pursuant to such Stock Pledge Agreement
together with stock powers duly executed in blank); and (d) BKB and
the Agent shall have received a favorable legal opinion addressed to
BKB and the Agent, in form and substance satisfactory to BKB and the
Agent, from the Rose Law Firm and Greenspoon, Marder, Xxxxxxxxxx and
Xxxxxx, P.A., as to the enforceability of the documents, instrument
and agreements referred to in clauses (a) and (b) of this Section
8.12."
ss.1.5. Section 9.1 of the Credit Agreement is hereby amended by
adding the following clause (m) at the end of said section:
"(m) Indebtedness of Vacation Break and its Subsidiaries listed
and described in Schedule 9.1(m) hereto."
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ss.1.6. Section 9.2 of the Credit Agreement is hereby amended by
adding the following clause (xi) at the end of said section:
"(xi) liens securing the Indebtedness permitted by Section 9.1(m)
and listed on Schedule 9.1(m) hereto."
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ss.1.7. The Credit Agreement is hereby amended by adding thereto
Schedules 8.12 and 9.1(m) attached hereto.
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ss.2. FAC Consent. FAC hereby consents to the amendments to the Credit
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Agreement set forth in this Amendment, and confirms its obligations to the Agent
and the Lenders under the Fairfield Guaranty and the Fairfield Guaranty shall
extend to and include the obligations of FCI and FMB under the Credit Agreement
as amended by this Amendment. FAC agrees that all of its obligations to the
Agent and the Lenders evidenced by or otherwise arising under the Fairfield
Guaranty are in full force and effect and are hereby ratified and confirmed in
all respects.
ss.3. Conditions to Effectiveness. The effectiveness of this Amendment
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is subject to satisfaction of all of the following conditions:
(a) Vacation Break Merger. The merger and other
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transactions contemplated by that certain Merger
Agreement (the "Vacation Break Merger Agreement"),
dated as of August 8, 1997, by and among FCI,
Vacation Break, and FCVB Corporation shall have
occurred, and Vacation Break shall be a wholly-owned
Subsidiary of FCI.
(b) Loan Documents. FCI and FMB shall have executed and
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delivered to BKB an amended and restated promissory note
payable to the order of BKB (the "Amended Note") in the
principal amount of $125,000,000, substantially in the form
of Exhibit B to the Credit Agreement, completed with
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appropriate insertions. From and after the effectiveness of
this Amendment, the parties agree that all references to the
term "Notes" and "Revolving Credit Notes" in the Credit
Agreement and the other Loan Document shall mean the Amended
Note. FCI shall have executed and delivered to the Agent a
Stock Pledge Agreement in form and substance satisfactory to
the Agent, granting a first priority security interest to
the Agent in and to all of the issued and outstanding
capital stock of Vacation Break. Vacation Break shall have
executed and delivered to the Agent a guaranty of the
obligations of FCI and FMB under the Credit Agreement and
the other Loan Documents, in form and substance satisfactory
to the Agent. Vacation Break shall have executed and
delivered to the Agent a Stock Pledge Agreement, in form and
substance satisfactory to the Agent, granting a first
priority security interest to the Agent in and to all of the
issued and outstanding capital stock of Sea Gardens Beach
and Tennis Resort, Inc., Vacation Break Resorts, Inc.,
Vacation Break Resorts at Palm Aire, Inc., Vacation Break
Resorts at Star Island, Inc. and Vacation Break at Ocean
Ranch, Inc. From and after the effectiveness of this
Amendment, the parties agree that all references to the term
"Security Documents" in the Credit Agreement and the other
Loan Documents shall include the Guaranties, Stock Pledge
Agreements and Collateral Assignments of Partnership
Interests executed and delivered pursuant to this Amendment,
and that all references to the term "Loan Documents" in the
Credit Agreement and other Loan Documents shall include the
Amended Note, Guaranties, Stock Pledge Agreements and
Collateral Assignments of Partnership Interests executed and
delivered pursuant to this Amendment.
(c) Validity of Liens. The Stock Pledge Agreements executed
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and delivered pursuant to this Amendment shall be effective
to create in favor of the Agent for the benefit of the
Lenders a legal, valid and enforceable first priority
security interest in and to all of the issued and
outstanding capital stock of each of Vacation Break and the
VB Originating Subsidiaries. All filings, recordings,
deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to maintain, perfect,
protect and preserve such security interests shall have been
duly effected and each of FCI and Vacation Break, pursuant
to such Stock Pledge Agreements, shall
have delivered share certificates for all shares of capital
stock of Vacation Break and the Originating VB Subsidiaries
together with stock powers duly executed in blank. The Agent
shall have received evidence of the foregoing in form and
substance satisfactory to the Agent.
d) Opinion of Counsel. BKB and the Agent shall have
-------------------- received a favorable legal opinion
addressed to BKB and the Agent, in form and substance
satisfactory to BKB and the Agent, from the Rose Law Firm
and Greenspoon, Marder, Xxxxxxxxxx and Xxxxxx, P.A., counsel
to FCI, FMB, FAC and Vacation Break, as to the
enforceability of this Amendment and the documents,
instruments and agreements executed in connection herewith.
e) Corporate Action. All corporate action necessary for the
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valid execution, delivery and performance by each of the
FCI, FMB, FAC and Vacation Break of this Amendment and the
documents, instruments and agreements executed in connection
herewith shall have been duly and effectively taken and
otherwise be duly authorized, and satisfactory evidence
thereof shall have been provided to the Agent and BKB.
(f) FAC Amendment. BKB and the Agent shall have received
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evidence satisfactory to it of the occurrence of all
conditions precedent to the effectiveness of that certain
Fourth Amendment to Third Amended and Restated Revolving
Credit Agreement among FAC, BKB and the Agent dated of even
date herewith.
ss.4. REPRESENTATIONS AND WARRANTIES. Each of FCI, FMB and FAC hereby
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represents and warrants to BKB and the Agent as follows:
(a) Representations and Warranties in Credit Agreement.
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Except as disclosed in the Vacation Break Merger
Agreement and in the Officer's Certificate of Vacation Break
delivered to BKB and the Agent on the date hereof, the
representations and warranties of FCI, FMB and FAC contained
in the Loan Documents were true and correct in all material
respects when made and continue to be true and correct in
all material respects on the date hereof, with the same
effect as if made at and as of the date hereof (except to
the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and the
other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not
materially adverse, and to the
extent that such representations and warranties relate
expressly to an earlier date).
(b) Authority, No Conflicts, Etc. The execution, delivery and
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performance by each of FCI, FMB, FAC and Vacation Break of
this Amendment and the consummation of the transactions
contemplated hereby, (i) are within the corporate power of
each of such parties and have been duly authorized by all
necessary corporate action on the part of each of such
parties, (ii) do not require any approval or consent of, or
filing with, any governmental authority or other third party
and (iii) do not conflict with, constitute a breach or
default under or result in the imposition of any lien or
encumbrance pursuant to any agreement, instrument or other
document to which any of such entity is a party or by which
any of them or any of their properties are bound or
affected.
(c) Enforceability of Obligations. This Amendment, the
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documents, instruments and agreements executed in
connection herewith, the Credit Agreement as amended hereby,
and the Fairfield Guaranty constitute, the legal, valid and
binding obligations of each of FCI, FMB, Vacation Break and
FAC, as the case may be, enforceable against such party in
accordance with their respective terms, provided that (i)
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enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of
creditors, and (ii) enforcement may be subject to general
principles of equity, and the availability of the remedies
of specific performance and injunctive relief may be subject
to the discretion of the court before which any proceedings
for such remedies may be brought.
ss.5. RELEASE OF COLLATERAL. Following the expiration of the Override
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Period the Agent shall, upon the request of the Borrowers, execute and deliver
to the Borrowers for recording or filing all documents and take such other
actions as may be necessary to discharge, release and terminate the security
interests granted to the Agent pursuant to the Stock Pledge Agreements and
Collateral Assignments of Partnership Interests executed and delivered pursuant
to this Amendment, provided that (a) the sum of the outstanding amount of the
Revolving Credit Loans, the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations does not exceed the lesser of (i) $25,000,000 and (ii) the Borrowing
Base, and (b) no Default of Event of Default has occurred and is continuing.
ss.6. OTHER AMENDMENTS. Except as expressly provided in this Amendment,
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all of the terms and conditions of the Credit Agreement and the other Loan
Documents
remain in full force and effect. Each of FCI, FMB and FAC confirm and agree that
the Obligations of FCI and FMB to the Lenders and the Agent under the Credit
Agreement, as amended hereby, and the Amended Note, and all of the other
obligations of any of such parties under the other Loan Documents, are secured
by and entitled to the benefits of the Security Documents.
ss.7. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
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number of counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
ss.8. HEADINGS. The captions in this Amendment are for convenience of
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reference only and shall not define or limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Amendment as an
instrument under seal to be governed by the laws of the Commonwealth of
Massachusetts, as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Senior Vice President
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FAIRFIELD MYRTLE BEACH, INC.
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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FAIRFIELD ACCEPTANCE
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: President
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BANKBOSTON, N.A.,
Individually and as Agent
By: /s/ Xxxx X. XxXxxx
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Name: Xxxx X. XxXxxx
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Title: Managing Director
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