THIRD AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
and
FIRST AMENDMENT TO AMENDED AND RESTATED UNCONDITIONAL
PAYMENT AND PERFORMANCE GUARANTY
THIS AMENDMENT (this "Amendment") dated as of February 8, 1999, is made
by and among FAIRFIELD ACCEPTANCE CORPORATION-NEVADA (successor by merger to
Fairfield Acceptance Corporation), a Nevada domiciled Delaware corporation (the
"Company", "FAC" or the "Borrower"), BANKBOSTON, N.A., a national banking
association ("BKB"), FIRST MASSACHUSETTS BANK, NATIONAL ASSOCIATION, a national
banking association ("First Massachusetts" and together with BKB and the other
lending institutions that are or may become a party to the Credit Agreement, the
"Banks"), and BANKBOSTON, N.A., as agent for itself and the Banks (the "Agent"),
all parties (or successors in interest to parties) to a certain Amended and
Restated Revolving Credit Agreement dated as of January 15, 1998 (as amended and
in effect as of the date hereof, the "Credit Agreement"), and BKB, as Collateral
Agent (the "Collateral Agent") under that certain Collateral Agency Agreement
dated as of January 15, 1998, as amended by a First Amendment to Collateral
Agency Agreement dated as of July 31, 1998, by and among the parties hereto
other than First Massachusetts (including the Guarantors, as defined below),
BKB, as agent under the FCI Credit Agreement, BancBoston Securities, Inc., Eagle
Funding Capital Corporation and First Security Bank, National Association. This
Amendment is joined in by Fairfield Communities, Inc., a Delaware corporation
("FCI"), Fairfield Myrtle Beach, Inc. ("FMB"), Vacation Break USA, Inc.
("Vacation Break"), Sea Gardens Beach and Tennis Resorts, Inc. ("SGR"), Vacation
Break Resorts, Inc. ("VBR"), Vacation Break Resorts at Star Island, Inc.
("VBRS"), Palm Vacation Group ("PVG") and Ocean Ranch Vacation Group ("ORV")
(FCI, FMB, Vacation Break, SGR, VBR, VBRS, PVG and ORV are hereinafter
collectively referred to as the "Guarantors") by reason of the Amended and
Restated Unconditional Payment and Performance Guaranty, dated as of January 15,
1998, from the Guarantors in favor of the Agent and the Banks (the "FAC
Guaranty"). All capitalized terms used herein and not otherwise defined shall
have the same respective meanings herein as in the Credit Agreement.
WHEREAS, FAC has requested and the Banks and the Agent have agreed to
make certain amendments to the Credit Agreement, in order to provide for, among
other things, elimination of the Tranche B Loans, modification of the Borrowing
Base and the accession from time to time of additional Banks to the Credit
Agreement, all upon the terms and subject to the conditions set forth herein;
and
WHEREAS, the Banks, the Agent and the Guarantors have agreed to make
certain amendments to the Guaranty, in order to provide for, among other things,
the Guarantors to make certain of the covenants set forth in the FCI Credit
Agreement, upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, FAC, the
Banks, the Agent and the Guarantors hereby agree as follows:
ss.1. AMENDMENTS TO CREDIT AGREEMENT. FAC, the Banks and the Agent hereby
------------------------------
agree that upon the effectiveness of this Amendment in accordance with Section 5
below, the Credit Agreement shall be amended as follows:
ss.1.1. The following definitions are hereby inserted into Section 1.1
of the Credit Agreement in the appropriate alphabetical sequence:
"Acceding Bank. See ss.19.1(b)."
-------------
"FCI Banks. BKB and the other lending institutions which are
---------
or may become parties to the FCI Credit Agreement."
"FCI Guaranty. The Amended and Restated Unconditional Payment
------------
and Performance Guaranty dated as of January 15, 1998 made by FAC and
certain of FCI's other Subsidiaries with respect to the obligations of
FCI to the FCI Agent and the FCI Banks under the FCI Credit Agreement."
"Instrument of Accession. See ss.19.1(b)."
-----------------------
ss.1.2. The definition of "Banks" appearing in Section 1.1 of the
Credit Agreement is hereby amended by inserting the words "or which becomes an
Acceding Bank pursuant to ss.19 hereof" immediately before the period at the end
of such definition.
ss.1.3. The definitions of "Borrowing Base" appearing in Section 1.1 of
the Credit Agreement is hereby amended by (i) deleting the figure "85%"
appearing in clause (b) of such definition and replacing it with the figure
"80%", (ii) deleting the word "plus" at the end of clause (c) of such definition
----
and substituting therefor a period, and (iii) deleting clause (d) of such
definition in its entirety.
ss.1.4. The definition of "Commitment" appearing in Section 1.1 of the
Credit Agreement is hereby amended by inserting the words "modified pursuant to
ss.19.1(b) or as" immediately after the words "as the same may be" in the fourth
line of such definition.
ss.1.5. The definition of "Eligible Assignee" appearing in Section 1.1
of the Credit Agreement is hereby amended by inserting the words "; provided
--------
that notwithstanding anything in the foregoing to the contrary, First
----
Massachusetts Bank, National Association, shall be an Eligible Assignee for all
purposes hereunder" immediately before the period at the end of such definition.
ss.1.6. The definition of "Revolving Credit Loans" appearing in
Section 1.1 of the Credit Agreement is hereby amended by deleting such
definition in its entirety and substituting therefor the following new
definition:
"Revolving Credit Loans. Revolving credit loans made or to
-----------------------
be made by the Banks to the Borrower pursuant to ss.2."
ss.1.7. The definitions of "Tranche A Borrowing Base", "Tranche B
Borrowing Base", "Tranche A Loans", and "Tranche B Loans" appearing in Section
1.1 of the Credit Agreement are hereby amended by deleting such definitions in
their entirety.
ss.1.8. Section 2.1 of the Credit Agreement is hereby amended by
deleting such section in its entirety and by substituting therefor the following
new section:
"2.1. COMMITMENT TO LEND. Subject to the terms and
-------------------
conditions set forth in this Credit Agreement, each of the
Banks severally agrees to lend to the Borrower and the
Borrower may borrow, repay, and reborrow from time to time
from the Closing Date up to but not including the Revolving
Credit Loan Maturity Date upon notice by the Borrower to the
Agent given in accordance with ss.2.5, such sums as are
requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank's Commitment minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations; provided that the
sum of the outstanding amount of the Revolving Credit Loans
(after giving effect to all amounts requested) plus the
Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the lesser of (i) the
Total Commitment and (ii) the Borrowing Base. The Revolving
Credit Loans shall be made pro rata in accordance with each
Bank's Commitment Percentage. Each request for a Revolving
Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in
ss.11 and ss.12, in the case of the initial Revolving Credit
Loans to be made on the Closing Date, and ss.12, in the case
of all other Revolving Credit Loans, have been satisfied on
the date of such request."
ss.1.9. Section 2.4 of the Credit Agreement is hereby amended by
deleting such section in its entirety and by substituting therefor the following
new section:
"2.4. INTEREST ON REVOLVING CREDIT LOANS. Except as
--------------------------------------
otherwise provided in ss.5.10,
(a) Each Base Rate Loan that is a Revolving
Credit Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending
on the last day of the Interest Period with
respect thereto at the rate of three-quarters of one
of one percent (3/4%) per annum below the Base Rate.
(b) Each Eurodollar Rate Loan that is a
Revolving Credit Loan shall bear interest for the
period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with
respect thereto at the rate of two percent (2%) per
annum above the Eurodollar Rate determined for such
Interest Period.
(c) The Borrower promises to pay interest on
each Revolving Credit Loan in arrears on each
Interest Payment Date with respect thereto."
ss.1.10. Section 2.5 of the Credit Agreement is hereby amended by
deleting the text of clause (D) of the second sentence thereof in its entirety
and by substituting therefor the words "[Intentionally Omitted]".
ss.1.11. Subsection 2.10.2(a) of the Credit Agreement is hereby amended
by deleting such subsection in its entirety and by substituting therefor the
following new subsection:
"(a) Prior to the occurrence of an Event of Default of which the
account officers of the Agent active on the Borrower's account have
knowledge, all funds transferred to the BKB Concentration Account and for
which the Borrower has received credits shall be applied to the Obligations
as follows:
(i) first, to pay amounts then due and payable under
this Agreement, the Notes and the other Loan Documents;
(ii) second, to reduce Revolving Credit Loans which are
Base Rate Loans;
(iii) third, to reduce Revolving Credit Loans which are
Eurodollar Rate Loans; and
(iv) fourth, except as otherwise required by ss.4.2(b)
and (c), to the Operating Account."
ss.1.12. Section 3.2 of the Credit Agreement is hereby amended by
deleting such section in its entirety and by substituting therefor the following
new section:
"3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
----------------------------------------------
If at any time the sum of the outstanding amount of the
Revolving Credit Loans, the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the lesser of (i) the
Total Commitment and (ii) the
Borrowing Base, then the Borrower shall immediately pay the
amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit
Loans; and third, to provide to the Agent cash collateral
for Reimbursement Obligations as contemplated by ss.4.2(b)
and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the
case may be) the respective unpaid principal amount of each
Bank's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not
exactly in proportion."
ss.1.13. Section 4.1.1 of the Credit Agreement is hereby amended by
deleting the proviso at the end of such section in its entirety and by
substituting therefor the following new proviso:
"provided, however, that, after giving effect to such request,
-------- -------
(a) the sum of the aggregate Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not exceed $1,000,000
at any one time and (b) the sum of (i) the Maximum Drawing
Amount, (ii) all Unpaid Reimbursement Obligations, and (iii)
the amount of all Revolving Credit Loans outstanding shall not
exceed the lesser of (A) the sum of the Total Commitment and
(B) the Borrowing Base."
ss.1.14. Section 6.2 of the Credit Agreement is hereby amended by
deleting the word "of" appearing after the word "described" in the seventh line
thereof and by substituting therefor the word "in".
ss.1.15. The Credit Agreement is hereby amended by inserting, immediately
after Section 7.22 thereof, the following new section:
"7.23 YEAR 2000 PROBLEM. The Borrower and its Subsidiaries
------------------
have (i) reviewed or caused third parties to review the areas within
their businesses and operations which they reasonably believe could be
adversely affected by failure to become "Year 2000 Compliant" (i.e.
that computer applications, imbedded microchips and other systems used
by the Borrower or any of its Subsidiaries, will be able properly to
recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii)
developed a detailed plan and timetable to become Year 2000 Compliant
in a timely manner, and (iii) committed adequate programming resources
to support the Year 2000 plan of the Borrower and its Subsidiaries.
Based upon such review, the Borrower reasonably believes that the
Borrower and its Subsidiaries will become "Year 2000 Compliant" in a
timely manner except to the extent that failure to do so will not have
any materially adverse effect on the business or financial condition of
the Borrower or any of its Subsidiaries."
ss.1.16. Subsection 8.4(f) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and by substituting therefor the
following new subsection:
"(f) within three Business Days after the
fifteenth and last day of each month, or at such
earlier time as the Agent may reasonably request, a
Borrowing Base Report setting forth the Borrowing
Base as of the 15th day and last day of such month or
other date so requested by the Agent, provided that
immediately prior to the occurrence of a sale or
other disposition of assets permitted by ss.9.5.2
hereof, the Borrower shall deliver to the Banks (A) a
Borrowing Base Report setting forth the Borrowing
Base prior to such permitted sale or disposition, and
(B) a Borrowing Base Report indicating the Borrowing
Base after giving effect to such sale or disposition
(provided, however, that the Borrowing Base Reports
required by the foregoing clauses (A) and (B) need
not be delivered to the Agent in connection with the
sale or disposition of Base Contracts to FCI, FCC,
FRC and FFC, II pursuant to paragraph (i) of ss.9.5.2
until such time as the Agent has given the Borrower a
notice to the effect that such Borrowing Base Reports
shall thereafter be delivered);"
ss.1.17. Subsection 8.4(i) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and by substituting therefor the
following new subsection:
"(i) at least two days prior to any Sales of
Base Contracts by FCI or any of its Subsidiaries to
the Borrower, the list of Base Contracts which the
Borrower proposes to buy from FCI or such Subsidiary
pursuant to the Operating Agreement (provided,
however, that such lists of Base Contracts need not
be delivered to the Agent until such time as the
Agent has given the Borrower a notice to the effect
that such Base Contracts shall thereafter be
delivered); and"
ss.1.18. Subsection 9.1(a) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and by substituting therefor the
following new subsection:
"(a) Indebtedness to the Banks and the Agent
arising under any of the Loan Documents and to the
FCI Banks and the FCI Agent arising under the FCI
Guaranty;"
ss.1.19. Subsection 9.2(g) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and by substituting therefor the
following new subsection:
"(g) liens in favor of the Collateral Agent for the
benefit of the Banks and the Agent under the Loan Documents
and in
favor of the Collateral Agent for the benefit of the FCI
Banks and the FCI Agent under the Security Documents; and"
ss.1.20. Section 15.4.2 of the Credit Agreement is hereby amended by
deleting the words "to be consent" appearing in the seventh line thereof and by
substituting therefor the word "consented."
ss.1.21. Section 15.10 of the Credit Agreement is hereby amended by
inserting, immediately after the words "under this ss.15.10" appearing in the
fourth line thereof, the words "or upon learning of a Default or an Event of
Default in its capacity as Agent".
ss.1.22. Section 19 of the Credit Agreement is hereby amended by
deleting such section in its entirety and by substituting therefor the following
new section:
"19. ASSIGNMENT AND PARTICIPATION; ACCESSION.
----------------------------------------
19.1. CONDITIONS TO ASSIGNMENT AND ACCESSION BY BANKS.
------------------------------------------------
(a) Except as provided herein, each Bank may assign
to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement
(including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing
to it, the Notes held by it and its participating interest in
the risk relating to any Letters of Credit); provided that (i)
--------
the Agent shall have given its prior written consent to such
assignment, (ii) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Bank's
rights and obligations under this Credit Agreement, (iii) each
assignment shall be in the amount of $10,000,000 or a greater
whole multiple of $1,000,000, and (iv) the parties to such
assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of
Exhibit F hereto (an "Assignment and Acceptance"), together
---------
with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, (x) the assignee
thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (y) the assigning Bank
shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in
ss.19.3, be released from its obligations under this Credit
Agreement.
(b) Except as otherwise provided herein, Eligible
Assignees (each such Eligible Assignee, an "Acceding Bank")
may become party to this Credit Agreement by entering into an
Instrument of Accession in substantially the form of Exhibit G
------- -
hereto (an "Instrument of Accession")
with the Borrower and the Agent and assuming thereunder a
Commitment to make Revolving Credit Loans and participate in
the risk relating to the Letters of Credit pursuant to the
terms hereof, and the Total Commitment shall thereupon be
increased by the amount of such Acceding Bank's Commitment;
provided, however, that (a) the Agent shall have given its
prior written consent to such accession, and (b) in no event
shall the Total Commitment be increased under any one or
more of such Instruments of Accession so as to exceed, in
the aggregate, $80,000,000. On the effective date specified
in any Instrument of Accession, Schedule 1 hereto shall be
-------- -
amended by the Agent (each of the Borrower and the Banks
hereby consenting to such amendment) to reflect (a) the
name, address, Commitment and Commitment Percentage of such
Acceding Bank, (b) the Total Commitment as increased by such
Acceding Bank's Commitment, and (c) the changes to the other
Banks' respective Commitment Percentages and any changes to
the other Banks' respective Commitments (in the event such
Bank is also the Acceding Bank) resulting from such
assumption and such increased Total Commitment.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
------------------------------------------------------
COVENANTS. By executing and delivering an Assignment and Acceptance or
---------
Instrument of Accession, as the case may be, the parties to the
assignment thereunder (or such Instrument or Accession, as the case may
be) confirm to and agree with each other and the other parties hereto
as follows:
(a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being
assigned (in the case of an Assignment and Acceptance) thereby
free and clear of any adverse claim, the assigning Bank makes
no representation or warranty, express or implied, and assumes
no responsibility with respect to any statements, warranties
or representations made in or in connection with this Credit
Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrower and its Subsidiaries or
any of the Guarantors or any other Person primarily or
secondarily liable in respect of any of the Obligations, or
the performance or observance by the Borrower and its
Subsidiaries or any of the Guarantors or any other Person
primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit
Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee or Acceding Bank, as the case may
be, confirms that it has received a copy of this Credit
Agreement, together with copies
of the most recent financial statements referred to in
ss.7.4 and ss.8.4 and such other documents and information
as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance or
Instrument of Accession, as the case may be;
(d) such assignee or Acceding Bank, as the case may
be, will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement;
(e) such assignee or Acceding Bank, as the case may
be, represents and warrants that it is an Eligible Assignee;
(f) such assignee or Acceding Bank, as the case may
be, appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto;
(g) such assignee or Acceding Bank, as the case may
be, agrees that it will perform in accordance with their terms
all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee or Acceding Bank, as the case may
be, represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance or Instrument of
Accession, as the case may be; and
(i) such assignee or Acceding Bank, as the case may
be, acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of
--- ----
outstanding Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each
--------
Assignment and Acceptance and Instrument of Accession delivered to it
and a register or similar list (the "Register") for the recordation of
the names and addresses of the Banks and the Commitment Percentage of,
and principal amount of the Revolving Credit Loans owing to and Letter
of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and
from time to time upon reasonable prior notice. Upon each such
recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $3,000.
19.4. NEW NOTES. Upon its receipt of an Assignment and
----------
Acceptance (together with each Note subject to such assignment) or
Instrument of Accession, as the case may be, executed by the parties
thereto the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to the Borrower and
the Banks (other than the assigning Bank). Within five (5) Business
Days after receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee or
Acceding Bank, as the case may be, in an amount equal to the amount
assumed by such Eligible Assignee or Acceding Bank, as the case may be,
pursuant to such Assignment and Acceptance or Instrument of Accession,
as the case may be, and, in the event of an assignment, if the
assigning Bank has retained some portion of its obligations hereunder,
a new Note to the order of the assigning Bank in an amount equal to the
amount retained by it hereunder. Such new Notes shall provide that they
are replacements for the surrendered Notes, shall be in an aggregate
principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such in
Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new
Notes pursuant to this ss.20.4, the Borrower shall deliver an opinion
of counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Notes and the
legality, validity and binding effect thereof, in form and substance
satisfactory to the Banks. The surrendered Notes shall be cancelled and
returned to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one
--------------
or more banks or other entities in all or a portion of such Bank's
rights and obligations under this Credit Agreement and the other Loan
Documents; provided that (i) any such sale or participation shall not
--------
affect the rights and duties of the selling Bank hereunder to the
Borrower and (ii) the only rights granted to the participant pursuant
to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of
or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such
participant, reduce the amount of any commitment fees or Letter of
Credit Fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to
----------
disclosures made in accordance with standard and customary banking
practices any Bank may disclose information obtained by such Bank
pursuant to this Credit Agreement to assignees or participants and
potential assignees or participants hereunder; provided that such
--------
assignees or participants or potential assignees or participants shall
agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose
such information to a third party, except as required by law or legal
process and (iii) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or
participation.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If
----------------------------------------------------
any assignee Bank or Acceding Bank is an Affiliate of the Borrower,
then any such assignee Bank or Acceding Bank shall have no right to
vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to ss.13.1 or
ss.13.2, and the determination of the Majority Banks shall for all
purposes of this Credit Agreement and the other Loan Documents be made
without regard to such assignee Bank's or Acceding Bank's interest in
any of the Loans or Reimbursement Obligations. If any Bank sells a
participating interest in any of the Loans or Reimbursement Obligations
to a participant, and such participant is the Borrower or an Affiliate
of the Borrower, then such transferor Bank shall promptly notify the
Agent of the sale of such participation. A transferor Bank shall have
no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes
of agreeing to amendments or modifications to any of the Loan Documents
or for purposes of making requests to the Agent pursuant to ss.13.1 or
ss.13.2 to the extent that such participation is beneficially owned by
the Borrower or any Affiliate of the Borrower, and the determination of
the Majority Banks shall for all purposes of this Credit Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Loans or Reimbursement Obligations to the extent
of such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank
-----------------------------------
shall retain its rights to be indemnified pursuant to ss.16 with
respect to any claims or actions arising prior to the date of such
assignment. If any assignee Bank or Acceding Bank is not incorporated
under the laws of the United States of America or any state thereof, it
shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption
from deduction or withholding of any United States federal income
taxes. If any Reference Bank transfers all of its interest, rights and
obligations under this Credit Agreement, the Agent shall, in
consultation with the Borrower and with the consent of the Borrower and
the Majority Banks, appoint another Bank to act as a Reference Bank
hereunder. Anything contained in this ss.19 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or
any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No
such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan
Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or
----------------------
transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Banks."
ss.1.23. Section 26 of the Credit agreement is hereby amended by
inserting the words "(other than changes which are contemplated and permitted by
ss.19.1(b))" immediately after the words "the amounts of the Commitments of the
Banks" in the fourteenth line of such section.
ss.1.24. The Credit Agreement is hereby amended by deleting Exhibit C
------- -
thereto in its entirety and substituting therefore Exhibit C attached hereto.
------- -
ss.1.25. The Credit Agreement is hereby amended by attaching as Exhibit
-------
G thereto Exhibit G attached hereto.
- ------- -
ss.1.26. The Credit Agreement is hereby amended by deleting Schedule 1
-------- -
thereto in its entirety and substituting therefore Schedule 1 attached hereto.
-------- -
ss.2. CONFORMED COPY OF CREDIT AGREEMENT. FAC, the Banks and the Agent
----------------------------------
hereby agree that upon the effectiveness of this Amendment in accordance with
Section 5 below, for purposes of reference only the Credit Agreement (without
Schedules and Exhibits) as amended prior to and on the date of this Amendment
shall be deemed to have been restated in the form of the conformed copy thereof
attached hereto as Annex A.
----- -
ss.3. AMENDMENT TO THE FAC GUARANTY. The Banks, the Agent and the
-------------------------------
Guarantors hereby agree that upon the effectiveness of this Amendment in
accordance with Section 5 below, the FAC Guaranty shall be amended by inserting,
immediately following Section 16 thereof, the following new section:
"17. COVENANTS OF THE GUARANTORS. In consideration of the
----------------------------
financial accommodations provided by the Banks under the Credit
Agreement, each Guarantor hereby jointly and severally covenants and
agrees with the Banks and the Agent that so long as this Guaranty shall
remain in effect it shall comply with each of the covenants set forth
in Sections 8, 9 and 10 of the FCI Credit Agreement as in effect as of
February ___, 1999, in each case without giving effect to any
amendment, modification, supplement, restatement or termination of the
same occurring after such date. The provisions of each of such sections
of the FCI Credit Agreement, together with any definitions referred to
therein or otherwise applicable thereto, are hereby incorporated into
this Guaranty by reference as if set forth herein in full."
ss.4. RELEASE OF PLEDGE OF FRC SUBORDINATED NOTE. Upon the
--------------------------------------------------
effectiveness of this Amendment in accordance with Section 5 below, the
Collateral Agent's security interest on behalf of the Banks in the FRC
Subordinated Note shall be released and the Collateral Agent shall, within a
reasonable time thereafter, return the FRC Subordinated Note to FAC endorsed to
FAC without recourse.
ss.5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
---------------------------
is subject to satisfaction of all of the following conditions:
(a) Assignment and Acceptance. BKB, First
---------- --- ----------
Massachusetts and FAC shall have executed
and delivered an Assignment and Acceptance
substantially in the form of Exhibit F to
------- -
the Credit Agreement (the "First
Massachusetts Assignment and Acceptance")
pursuant to which BKB shall assign to First
Massachusetts a portion of its interests,
rights and obligations under the Credit
Agreement equal to $10,000,000. All
conditions to the effectiveness of the First
Massachusetts Assignment and Acceptance
shall have been satisfied in all respects.
(b) Replacement Notes. FAC shall have executed
----------- -----
and delivered to BKB and First Massachusetts
replacement promissory notes in the
principal amounts of $50,000,000, and
$10,000,000, respectively, payable to the
order of BKB and First Massachusetts,
respectively, which such notes shall be
substantially in the form of Exhibit B
------- -
to the Credit Agreement, completed with
appropriate insertions (the "Replacement
Notes"). 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 Documents shall
refer to the Replacement Notes. Upon the
execution and delivery of the Replacement
Notes and satisfaction of the other
conditions set forth in this section, BKB
shall return the original of its former Note
to FAC for cancellation.
(c) Opinion of Counsel. BKB, First
------- -- -------
Massachusetts, the Agent and the Collateral
Agent shall have received a favorable legal
opinion addressed to BKB, First
Massachusetts, the Agent and the Collateral
Agent, in form and substance satisfactory to
BKB, First Massachusetts, the Agent and the
Collateral Agent, from Xxxxx Xxxx, as to the
enforceability of this Amendment, the First
Massachusetts Assignment and Acceptance, the
Replacement Notes, and the other documents,
instruments and agreements executed in
connection herewith.
(d) Corporate Action. All corporate action
--------- ------
necessary for the valid execution, delivery
and performance by each of FAC and the
Guarantors of this Amendment, the First
Massachusetts Assignment and Acceptance, the
Replacement Notes and the other 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, BKB and First Massachusetts.
ss.6. GUARANTORS' CONSENT. The Guarantors hereby consent to the
---------- -------
amendments to the Credit Agreement set forth in this Amendment and the execution
and delivery of the Replacement Notes by FAC to BKB and First Massachusetts, and
each confirms its obligation to the Agent and the Banks under the FAC Guaranty
as amended by this Amendment and agrees that the FAC Guaranty as amended by this
Amendment shall extend to and include the obligations of FAC under the
Replacement Notes and the Credit Agreement as amended by this Amendment. Each of
the Guarantors agrees that all of its obligations to the Agent and the Banks
evidenced by or otherwise arising under the FAC Guaranty as amended by this
Amendment are in full force and effect and are hereby ratified and confirmed in
all respects.
ss.7. REPRESENTATIONS AND WARRANTIES. Each of FAC and the Guarantors
--------------- --- ----------
hereby represents and warrants to the Banks, the Agent and the Collateral Agent
as follows:
(a) Representations and Warranties in Credit Agreement.
--------------- --- ---------- -- ------ ---------
The representations and warranties of FAC and the
Guarantors, as the case may be, 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 or 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 expressly relate solely to an earlier
date) and no Default or Event of Default has occurred
or is continuing under the Credit Agreement.
(b) Authority, No Conflicts, Etc. The execution, delivery
--------- -- --------- ---
and performance by each FAC and the Guarantors, as
the case may be, of this Amendment, the First
Massachusetts Assignment and Acceptance and the
Replacement Notes, and the consummation of the
transactions contemplated hereby and thereby, (i) are
within the corporate power of each respective party
and have been duly authorized by all necessary
corporate action on the part of each respective
party, (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
such party or any of its properties are bound or
affected.
(c) Enforceability of Obligations. This Amendment, the
-----------------------------
First Massachusetts Assignment and Acceptance, the
Replacement Notes, the Credit Agreement as amended
hereby, the FAC Guaranty as amended hereby and the
other Loan Documents constitute the legal, valid
and binding obligations of each of FAC and the
Guarantors parties thereto, enforceable against such
party in accordance with their respective terms,
provided that (i) 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.8. OTHER AMENDMENTS. Except as expressly provided in this Amendment,
----- ----------
all of the terms and conditions of the Credit Agreement, the FAC Guaranty and
the other Loan Documents remain in full force and effect. FAC and each Guarantor
confirm and agree that the Obligations of FAC to the Banks and the Agent under
the Credit Agreement, as amended hereby, the FAC Guaranty, as amended hereby,
and the Replacement Notes, 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.9. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
--------- -- ------------
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.10. HEADINGS. The captions in this Amendment are for convenience
--------
of reference only and shall not define or limit the provisions hereof.
[Remainder of page intentionally left blank.]
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 ACCEPTANCE
CORPORATION-NEVADA
By:/s/Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
-------------------------
Title: President
------------------------
FAIRFIELD COMMUNITIES, INC.
By:/s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Senior Vice President
-------------------------
FAIRFIELD MYRTLE BEACH, INC.
By:/s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------
VACATION BREAK USA, INC.
By:/s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------
SEA GARDENS BEACH AND TENNIS
RESORTS, INC.
By:/s/Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------
Title: Vice President
------------------------
VACATION BREAK RESORTS, INC.
By: /s/Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
----------------------------
VACATION BREAK RESORTS AT
STAR ISLAND, INC.
By:/s/Xxxxxx X. Xxxxxx
------------------------------
Name:Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
PALM VACATION GROUP, by its
General Partners:
VACATION BREAK RESORTS
AT PALM AIRE, INC.
By:/s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------
PALM RESORT GROUP, INC.
By: /s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------
OCEAN RANCH VACATION GROUP,
by its General Partners:
VACATION BREAK AT OCEAN
RANCH, INC.
By:/s/Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------
Title: Vice President
------------------------
OCEAN RANCH
DEVELOPMENT, INC.
By:/s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------
BANKBOSTON, N.A.,
Individually, as Agent and as
Collateral Agent
By:/s/Xxxx Xxxxx
----------------------------
Name: Xxxx Xxxxx
--------------------------
Title: Vice President
------------------------
FIRST MASSACHUSETTS BANK,
NATIONAL ASSOCIATION
By: /s/Xxxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxxx
--------------------------
Title: Senior Vice President
-------------------------
SCHEDULE 1
----------
Banks and Commitment
--------------------
Name and Address Commitment
---------------- ----------
of Banks Percentage Commitment
---------------- ---------- ----------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 83-1/3% $50,000,000
First Massachusetts Bank,
National Association
00 Xxxx Xxxxxx 16-2/3% $10,000,000
Xxxxxxxxxx, XX 00000 ------- -----------
TOTAL 100% $60,000,000
