TERM LOAN AGREEMENT
DATED as of September 29, 2000
among
FAIRFIELD COMMUNITIES, INC.
(the "Borrower")
and
FLEET NATIONAL BANK and the other Banks
and
FLEET NATIONAL BANK, as Administrative Agent
and
FLEETBOSTON XXXXXXXXX XXXXXXXX INC., as Lead Arranger and Book Manager
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION........................1
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1.1. Definitions..................................................1
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1.2. Rules of Interpretation......................................24
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2. THE LOAN.......................................................25
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2.1. Commitment to Lend...........................................25
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2.2. The Notes....................................................25
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2.3. Mandatory Payments of Principal of Loan......................26
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2.3.1. Amortization......................................26
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2.3.2. Proceeds..........................................26
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2.4. Optional Prepayment of Loan..................................28
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2.5. Interest on Term Loan........................................29
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2.5.1. Interest Rates....................................29
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2.5.2. Notification by Borrower..........................29
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2.5.3. Amounts, etc......................................29
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2.6. Conversion Options...........................................29
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2.6.1. Conversion to Different Type......................29
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2.6.2. Continuation of Type..............................30
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2.6.3. LIBOR Rate Loans..................................30
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3. CERTAIN GENERAL PROVISIONS.....................................31
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3.1. Fees.........................................................31
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3.2. Funds for Payments...........................................31
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3.2.1. Payments to Administrative Agent..................31
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3.2.2. No Offset, etc....................................31
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3.3. Computations.................................................32
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3.4. Inability to Determine LIBOR Rate............................32
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3.5. Illegality...................................................32
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3.6. Additional Costs, etc........................................33
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3.7. Capital Adequacy.............................................34
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3.8. Certificate..................................................35
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3.9. Indemnity....................................................35
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3.10. Interest After Default......................................36
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3.10.1. Overdue Amounts..................................36
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3.10.2. Amounts Not Overdue..............................36
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4. COLLATERAL SECURITY AND GUARANTIES.............................36
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4.1. Security of Borrower.........................................36
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4.2. Guaranties and Security of Guarantors........................36
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4.3. Collateral Notes.............................................38
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5. REPRESENTATIONS AND WARRANTIES.................................38
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5.1. Corporate and Partnership Authority..........................38
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5.1.1. Incorporation; Good Standing......................38
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5.1.2. Authorization.....................................39
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5.1.3. Enforceability....................................39
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5.2. Governmental Approvals.......................................39
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5.3. Title to Properties; Leases..................................40
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5.4. Financial Statements.........................................40
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5.4.1. Fiscal Year.......................................40
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5.4.2. Financial Statements..............................40
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5.5. No Material Changes, etc.....................................41
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5.6. Franchises, Patents, Copyrights, etc.........................41
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5.7. Litigation...................................................41
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5.8. No Materially Adverse Contracts, etc.........................42
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5.9. Compliance with Other Instruments, Laws, etc.................42
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5.10. Tax Status..................................................42
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5.11. No Event of Default.........................................43
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5.12. Holding Company and Investment Company Acts.................43
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5.13. Absence of Financing Statements, etc........................43
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5.14. Perfection of Security Interest.............................43
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5.15. Certain Transactions........................................43
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5.16. Employee Benefit Plans......................................44
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5.16.1. In General.......................................44
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5.16.2. Terminability of Welfare Plans...................44
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5.16.3. Guaranteed Pension Plans.........................44
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5.16.4. Multiemployer Plans..............................45
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5.17. Use of Proceeds.............................................45
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5.17.1. General..........................................45
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5.17.2. Regulations U and X..............................45
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5.17.3. Ineligible Securities............................45
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5.18. Environmental Compliance....................................46
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5.19. Subsidiaries, etc...........................................48
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5.20. Disclosure..................................................48
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6. AFFIRMATIVE COVENANTS OF THE BORROWER..........................48
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6.1. Punctual Payment.............................................48
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6.2. Maintenance of Office........................................48
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6.3. Records and Accounts.........................................49
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6.4. Financial Statements, Certificates and Information...........49
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6.5. Notices......................................................51
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6.5.1. Defaults..........................................51
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6.5.2. Environmental Events..............................51
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6.5.3. Notification of Claim against Collateral..........52
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6.5.4. Notice of Litigation and Judgments................52
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6.6. Corporate Existence; Maintenance of Properties...............52
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6.7. Insurance....................................................53
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6.8. Taxes........................................................54
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6.9. Inspection of Properties and Books, etc......................54
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6.9.1. General...........................................54
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6.9.2. Commercial Finance Examinations...................54
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6.9.3. Communications with Accountants...................55
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6.9.4. Environmental Assessments.........................55
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6.10. Compliance with Laws, Contracts, Licenses, and
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Permits.............................................................55
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6.11. Employee Benefit Plans......................................56
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6.12. Use of Proceeds.............................................56
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6.13. Mortgaged Property; Fleet Concentration Account.............56
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6.14. Further Assurances..........................................57
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7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.....................58
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7.1. Restrictions on Indebtedness.................................58
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7.2. Restrictions on Liens........................................60
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7.3. Restrictions on Investments..................................62
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7.4. Distributions................................................63
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7.5. Merger, Consolidation and Disposition of Assets..............63
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7.5.1. Mergers and Acquisitions..........................63
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7.5.2. Disposition of Assets.............................64
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7.5.3. Disposition of Stock..............................65
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7.6. Sale and Leaseback...........................................65
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7.7. Compliance with Environmental Laws...........................65
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7.8. Subordinated Debt............................................66
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7.9. Employee Benefit Plans.......................................66
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7.10. Business Activities.........................................66
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7.11. Fiscal Year.................................................66
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7.12. Transactions with Affiliates................................66
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7.13. Negative Pledges............................................67
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7.14. RC Agreement................................................67
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7.15. Mortgaged Property...........................................68
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8. FINANCIAL COVENANTS OF THE BORROWER............................68
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8.1. Debt Service Coverage Ratio..................................68
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8.2. Liabilities to Worth Ratio...................................68
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8.3. Consolidated Tangible Net Worth..............................68
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8.4. Consolidated Operating Margin Covenant.......................68
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8.5. Minimum Inventory Covenant...................................68
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8.6. Shadow Borrowing Base........................................68
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9. CLOSING CONDITIONS.............................................69
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9.1. Loan Documents...............................................69
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9.2. Certified Copies of Charter Documents........................69
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9.3. Corporate, Action............................................69
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9.4. Incumbency Certificate.......................................69
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9.5. Validity of Liens............................................69
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9.6. Perfection Certificates and UCC Search Results...............70
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9.7. Certificates of Insurance....................................70
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9.8. Fleet Concentration Account..................................70
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9.9. Opinion of Counsel...........................................70
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9.10. Payment of Fees.............................................70
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9.11. Intercreditor Agreement.....................................70
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9.12. Disbursement Instructions...................................71
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9.13. Interest Rate Protection....................................71
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9.14. Rating Agency Letters.......................................71
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9.15. Regulatory Compliance.......................................71
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10. CONDITIONS TO BORROWING.......................................71
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10.1. Representations True; No Event of Default...................71
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10.2. No Legal Impediment.........................................71
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10.3. Governmental Regulation.....................................72
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10.4. Proceedings and Documents...................................72
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11. EVENTS OF DEFAULT; ACCELERATION; ETC..........................72
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11.1. Events of Default and Acceleration..........................72
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11.2. Termination of Commitments..................................76
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11.3. Remedies....................................................76
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11.4. Distribution of Proceeds....................................77
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12. SETOFF........................................................78
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13. THE ADMINISTRATIVE AGENT......................................79
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13.1. Authorization...............................................79
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13.2. Employees and Agents........................................79
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13.3. No Liability................................................80
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13.4. No Representations..........................................80
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13.4.1. General..........................................80
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13.4.2. Closing Documentation, etc.......................81
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13.5. Payments....................................................81
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13.5.1. Payments to Administrative Agent.................81
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13.5.2. Distribution by Administrative Agent.............81
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13.5.3. Delinquent Banks.................................82
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13.6. Holders of Notes............................................82
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13.7. Indemnity...................................................82
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13.8. Administrative Agent as Bank................................83
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13.9. Resignation.................................................83
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13.10. Notification of Defaults and Events of Default.............83
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13.11. Duties in the Case of Enforcement..........................83
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14. EXPENSES AND INDEMNIFICATION..................................84
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14.1. Expenses....................................................84
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14.2. Indemnification.............................................85
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14.3. Survival....................................................86
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15. TREATMENT OF CERTAIN CONFIDENTIAL
INFORMATION.........................................................86
15.1. Sharing of Information with Section 20 Subsidiary...........86
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15.2. Confidentiality.............................................87
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15.3. Prior Notification..........................................87
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15.4. Other.......................................................87
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16. SURVIVAL OF COVENANTS, ETC....................................88
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17. ASSIGNMENT AND PARTICIPATION; ACCESSION.......................88
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17.1. Conditions to Assignment and Accession by Banks.............88
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17.2. Certain Representations and Warranties; Limitations;
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Covenants...........................................................89
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17.3. Register....................................................91
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17.4. New Notes...................................................91
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17.5. Participations..............................................92
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17.6. Disclosure..................................................92
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17.7. Assignee or Participant Affiliated with the Borrower........92
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17.8. Miscellaneous Assignment Provisions.........................93
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17.9. Assignment by Borrower......................................93
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18. NOTICES, ETC..................................................94
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19. GOVERNING LAW.................................................95
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20. HEADINGS......................................................95
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21. COUNTERPARTS..................................................95
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22. ENTIRE AGREEMENT, ETC.........................................96
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23. WAIVER OF JURY TRIAL..........................................96
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24. CONSENTS, AMENDMENTS, WAIVERS, ETC............................96
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25. SEVERABILITY..................................................97
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26. RELEASE OF SECURITY...........................................97
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27. SUPERIOR RIGHTS OF VOI PURCHASER..............................99
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28. TERMINATION...................................................100
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SCHEDULES AND EXHIBITS
Exhibit A Form of Note
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Exhibit B Form of Compliance Certificate
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Exhibit C Form of Assignment and Acceptance
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Schedule 1 Banks, Commitment Percentages, etc.
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Schedule 5.3 Title to Properties; Leases
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Schedule 5.5 Material Changes
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Schedule 5.7 Litigation
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Schedule 5.18 Environmental Matters
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Schedule 5.19 Subsidiaries
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Schedule 7.1 Permitted Indebtedness
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Schedule 7.2 Permitted Liens
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Schedule 7.3 Permitted Investments
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TERM LOAN AGREEMENT
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This TERM LOAN AGREEMENT is made as of September 29, 2000, by and among
(a) FAIRFIELD COMMUNITIES, INC., a Delaware corporation ("FCI" or the
"Borrower"), having its principal place of business at 0000 Xxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, (b) FLEET NATIONAL BANK, a national banking
association (f/k/a BankBoston, N.A., "Fleet") and the other lending institutions
listed on Schedule 1, and (c) Fleet as administrative agent for itself and such
other lending institutions (the "Administrative Agent"), and FleetBoston
Xxxxxxxxx Xxxxxxxx Inc. as lead arranger and book manager (the "Arranger").
1. DEFINITIONS AND RULES OF INTERPRETATION.
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1.1. Definitions. The following terms shall have the meanings set forth in
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this ss. 1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Acceding Bank. See ss. 17.1(b).
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Administrative Agent. Fleet acting as administrative agent for the Banks.
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Administrative Agent's Loan Office. The Administrative Agent's office
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located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other
location as the Administrative Agent may designate from time to time.
Administrative Agent's Special Counsel. Xxxxxxx Xxxx LLP or such other
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counsel as may be approved by the Administrative Agent.
Affiliate. Any Person that would be considered to be an affiliate of any
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other Person under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if such Person were
issuing securities.
Applicable Base Margin. Three and one-half percent (3.50%) per annum.
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Applicable LIBOR Margin. Five percent (5.00%) per annum.
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Approved Fund. With respect to any Bank that is a fund that invests in bank
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loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Bank or by an
Affiliate of such investment advisor.
Arranger. FleetBoston Xxxxxxxxx Xxxxxxxx Inc. acting as lead arranger and
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book manager for the Banks.
Assessments. Any assessments, including but not limited to, real estate
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taxes, recreation fees, community club or property owners association dues,
water and sewer improvement district assessments or other similar assessments,
made with respect to a VOI or Lot, the nonpayment of which would result in the
imposition of a Lien or other encumbrance upon the VOI or Lot.
Assignment and Acceptance. See ss.17.1(a).
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Average Inventory. For any period, the sum of (a) VOI Inventory as of the
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last day of such period plus (b) VOI Inventory as of the last day of the
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immediately preceding period, divided by two.
Balance Sheet Date. December 31, 1999.
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Banks. Fleet and the other lending institutions listed on Schedule 1 hereto
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and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to ss.17 hereof or which becomes an Acceding Bank pursuant to
ss.17 hereof.
Base Contracts. Lot Contracts and Timeshare Contracts as to which the
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Borrower or any of its Subsidiaries is the obligee thereunder.
Base Rate. The higher of (a) the variable annual rate of interest so
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designated from time to time by Fleet as its "prime rate," such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer or (b) the variable annual rate of interest equal to
one-half of one percent (1/2%) plus the overnight federal funds effective rate,
as published by the Board of Governors of the Federal Reserve System, as in
effect from time to time. Changes in the Base Rate resulting from any changes in
Fleet's "prime rate" shall take place immediately without notice or demand of
any kind on the effective day of such change.
Base Rate Loans. All or any portion of the Loan bearing interest calculated
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by reference to the Base Rate.
Borrower. As defined in the preamble hereto.
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Business Day. Any day on which banking institutions in Boston,
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Massachusetts, are open for the transaction of banking business and, in the case
of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
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fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
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include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the Borrower
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or any of its Subsidiaries in connection with (i) the purchase or lease by the
Borrower or any of its Subsidiaries of Capital Assets that would be required to
be capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles, excluding any such amounts related
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directly to the development and construction of shelter held for sale or lots
(including without limitation acquisition of land for future development) but
including any amounts related to the development of any amenities at any resort
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development, or (ii) the lease of any assets by the Borrower or any of its
Subsidiaries as lessee under any synthetic lease referred to in clause (vi) of
the definition of the term "Indebtedness" to the extent that such assets would
have been Capital Assets had the synthetic lease been treated for accounting
purposes as a Capitalized Lease.
Capitalized Leases. Leases under which the Borrower or any of its
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Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See ss.5.18(a).
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Closing Date. The first date on which the conditions set forth in ss.9 have
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been satisfied and the Loan is to be made hereunder.
Code. The Internal Revenue Code of 1986.
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Collateral. All of the property, rights and interests of the Borrower and
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the Guarantors that are or are intended to be subject to the security interests
and liens created by the Security Documents.
Collateral Assignments of Partnership Interests. The several Collateral
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Assignments of Partnership Interests, each dated or to be dated
on or prior to the Closing Date, by and among Vacation Break at Ocean Ranch,
Inc., Ocean Ranch Development, Inc., Vacation Break Resorts at Palm Aire, Inc.,
Palm Resort Group, Inc. and the Administrative Agent and in form and substance
satisfactory to the Banks and the Administrative Agent.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
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hereto as the amount of such Bank's commitment to make the Loan to the Borrower,
as the same may be modified pursuant to ss.17.1(b) or as reduced from time to
time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
Commitment Letter. The commitment letter dated as of September 28, 2000, by
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and among the Borrower, the Administrative Agent and the Arranger.
Commitment Percentage. With respect to each Bank, the percentage set forth
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on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
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all of the Banks.
Consolidated or consolidated. With reference to any term defined herein,
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shall mean that term as applied to the accounts of FCI and its Subsidiaries,
consolidated in accordance with generally accepted accounting principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
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deficit) of FCI and its Subsidiaries, after deduction of all expenses, taxes,
and other proper charges, determined in accordance with generally accepted
accounting principles.
Consolidated Net Operating Income (or Deficit). Consolidated Net Income (or
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Deficit), after eliminating therefrom all extraordinary nonrecurring items of
income or loss.
Consolidated Operating Cash Flow. For any period, an amount equal to (i)
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the sum of (A) Earnings Before Interest and Taxes for such period, plus (B)
----
depreciation, amortization and all other noncash charges for such period, less
----
(ii) the sum of (A) cash payments for all taxes paid during such period, plus
(B) Capital Expenditures made during such period.
Consolidated Tangible Net Worth. The excess of Consolidated Total Assets
--------------------------------
over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of FCI and its Subsidiaries
(other than Nonconsolidated Subsidiaries) properly classified as intangible
assets under generally accepted accounting principles, including such items
as good will, the purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the foregoing;
plus
(b) all amounts representing any write-up in the book value of any
assets of FCI or its Subsidiaries (other than Nonconsolidated Subsidiaries)
resulting from a revaluation thereof subsequent to the Interim Balance
Sheet Date; plus
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable.
Consolidated Total Assets. The sum of (i) all assets ("consolidated balance
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sheet assets") of FCI and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles, plus (ii) without
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duplication, all assets leased by FCI or any Subsidiary as lessee under any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been consolidated
balance sheet assets had the synthetic lease been treated for accounting
purposes as a Capitalized Lease, plus (iii) without duplication, all sold
----
receivables referred to in clause (vii) of the definition of the term
"Indebtedness" to the extent that such receivables would have been consolidated
balance sheet assets had they not been sold.
Consolidated Total Interest Expense. For any period, the aggregate amount
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of interest required to be paid or accrued by FCI and its Subsidiaries (other
than Nonconsolidated Subsidiaries) during such period on all Indebtedness of FCI
and its Subsidiaries (other than Nonconsolidated Subsidiaries) outstanding
during all or any part of such period, whether such interest was or is required
to be reflected as an item of expense or capitalized, including payments
consisting of interest in respect of any Capitalized Lease, or any synthetic
lease referred to in clause (vi) of the definition of the term "Indebtedness,"
and including commitment fees, agency fees, facility fees, balance deficiency
fees and similar fees or expenses in connection with the borrowing of money.
Consolidated Total Liabilities. All liabilities of FCI and its Subsidiaries
------------------------------
determined on a consolidated basis in accordance with generally accepted
accounting principles and classified as such on the consolidated balance sheet
of FCI and its Subsidiaries and all other
Indebtedness of FCI and its Subsidiaries (other than Nonconsolidated
Subsidiaries), whether or not so classified.
Consolidated Total Revenue. For any period, the consolidated revenue of FCI
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and its Subsidiaries determined in accordance with generally accepted accounting
principles.
Consolidated VOI Revenue. For any period, the consolidated revenue of FCI
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and its Subsidiaries derived from their VOI sales as reported in FCI's
consolidated statement of earnings included in its quarterly reports on Forms
10-Q and annual reports on Forms 10-K as filed with the Securities and Exchange
Commission.
Conversion Request. A notice given by the Borrower to the Administrative
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Agent of the Borrower's election to convert or continue all or a portion of the
Loan in accordance with ss.2.6.
Credit Agreement. This Term Loan Agreement, including the Schedules and
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Exhibits hereto.
Debt Issuance. The sale or issuance by the Borrower or any of its
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Subsidiaries (other than the Nonconsolidated Subsidiaries) of any Indebtedness,
regardless of whether such Indebtedness is permitted hereunder.
Default. Any of the events specified in ss.11.1, whether or not any
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requirement for the giving of notice or the lapse of time, or both, has been
satisfied.
Delinquent Bank. See ss.13.5.3.
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Distribution. The declaration or payment of any dividend on or in respect
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of any shares of any class of capital stock or share capital of any Person,
other than dividends payable solely in shares of common or ordinary stock of
such Person; the purchase, redemption, or other retirement of any shares of any
class of capital stock or share capital of any Person, directly or indirectly
through a Subsidiary of such Person or otherwise; the return of capital by any
Person to its shareholders as such; or any other distribution on or in respect
of any shares of any class of capital stock or share capital of a Person.
Dollars or $. Dollars in lawful currency of the United States of America.
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Domestic Lending Office. Initially, the office of each Bank designated as
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such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
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located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which the Loan initially is made or is to be
--------------
made, any date on which a portion of the Loan is made or is to be made by an
Acceding Bank, and the date on which all or any portion of the Loan is converted
or continued in accordance with ss.2.6.
Earnings Before Interest and Taxes. The Consolidated Net Operating Income
----------------------------------
(or Deficit) of FCI and its Subsidiaries for any period, after all expenses and
other proper charges but before payment or provision for any income taxes or
interest expense for such period, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income (or loss).
Eligible Assignee. Any of (a) (i) a commercial bank or finance company
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organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
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bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; (v) any other bank,
insurance company, commercial finance company or other financial institution or
mutual or investment fund approved by the Administrative Agent, such approval
not to be unreasonably withheld; and (vi) after the occurrence and during the
continuation of a Default or Event of Default, any other Person approved by the
Agent, which approval shall not be unreasonably withheld; and (b) any Bank and
any Affiliate of any Bank and, any Approved Fund of any Bank (and treating all
such funds so managed as a single Eligible Assignee); provided that no Affiliate
of the Borrower shall be an Eligible Assignee.
Employee Benefit Plan. Any employee benefit plan within the meaning of
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ss.3(3) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer
Plan.
Environmental Laws. See ss.5.18(a).
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EPA. See ss.5.18(b).
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Equity Issuance. The sale or issuance by the Borrower or any of its
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Subsidiaries of any of their Equity Securities or any warrants, rights or
options to acquire their Equity Securities, including the sale or reissuance by
the Borrower or any of its Subsidiaries of any of their capital stock or share
capital held as treasury stock.
Equity Securities. With respect to any business entity, all equity
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securities of such business entity, including any (a) capital stock or share
capital, (b) limited or general partnership interests, (c) options, warrants, or
other rights to purchase or acquire any equity security, or (d) securities
convertible into any equity security.
ERISA. The Employee Retirement Income Security Act of 1974.
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ERISA Affiliate. Any Person which is treated as a single employer with the
---------------
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
------------------------
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate Loan,
--------------------------
the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Event of Default. See ss.11.1.
----------------
Excluded Subsidiaries. The Subsidiaries of the Borrower listed as Excluded
---------------------
Subsidiaries on Schedule 5.19 and any Subsidiaries of the Borrower formed or
-------- ----
acquired after the date hereof, each of which either has (i) assets of less than
$3,000,000 or (ii) annual net income of less than $300,000.
FAC. Fairfield Acceptance Corporation--Nevada, a Delaware corporation and a
---
wholly-owned subsidiary of FCI, having its principal place of business at 0000
Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000.
Fair Share Plus Agreement. See definition of Fair Share Plus Program.
-------------------------
Fair Share Plus Program. The program pursuant to which the occupancy and
------------------------
use of a VOI is assigned to the trust created by the Amended and Restated Fair
Share Vacation Plan Use Management Trust Agreement, effective as of January 1,
1996, among FCI and certain Subsidiaries of FCI and third party developers as
may be named by an amendment or addendum thereto, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement (the "Fair Share Plus Agreement"),
in exchange for annual symbolic points which are used to establish the location,
timing, length of stay and unit type of a vacation; including, without
limitation, systems relating to reservations, accounting and collection,
disbursement and enforcement of assessments in respect of contributed units.
FCC. Fairfield Capital Corporation, a Delaware corporation and a
---
wholly-owned subsidiary of FAC.
FCI. As defined in the preamble hereto.
---
Fee Letter. The fee letter dated as of July 10, 2000, by and among the
-----------
Borrower, the Administrative Agent and the Arranger.
FFC-II. Fairfield Funding Corporation, II, a Delaware corporation and a
------
wholly-owned subsidiary of FAC.
FFC-II Receivables Purchase Agreement. The Receivables Purchase Agreement,
-------------------------------------
dated as of July 31, 1998, among the Borrowers, FMB, the VB Originating
Subsidiaries and FFC-II.
Fleet. Fleet National Bank (f/k/a BankBoston, N.A.), a national banking
-----
association, in its individual capacity.
Fleet Concentration Account. A depository account under the control of the
----------------------------
Administrative Agent for the benefit of the Banks and the Administrative Agent,
in the name of the Borrower.
FMB. Fairfield Myrtle Beach, Inc., a Delaware corporation and a wholly
---
owned subsidiary of FCI.
FRC. Fairfield Receivables Corporation, a Delaware corporation and
---
wholly-owned subsidiary of FAC.
FRC Receivables Purchase Agreement. The Amended and Restated Receivables
-----------------------------------
Purchase Agreement, dated as of July 25, 2000, among the Borrower, FAC, FMB, the
VB Originating Subsidiaries and FRC.
generally accepted accounting principles. (i) When used in ss.8, whether
------------------------------------------
directly or indirectly through reference to a capitalized term used therein,
means (A) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, and (B) to the
extent consistent with such principles, the accounting practice of FCI reflected
in its financial statements for the year ended on the Balance Sheet Date, and
(ii) when used in general, other than as provided above, means principles that
are (A) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time,
and (B) consistently applied with past financial statements of FCI adopting the
same principles, provided that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
-------------------------
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantors. All of FCI's Subsidiaries other than FCC, the Excluded
----------
Subsidiaries and the Nonconsolidated Subsidiaries, including any Subsidiary of
the Borrower which becomes a party to the Guaranty after the Closing Date.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
--------
Date, made by the Guarantors in favor of the Banks and the Administrative Agent,
pursuant to which each of the Guarantors guarantees to the Banks and the
Administrative Agent the payment and
performance of the Obligations and otherwise in form and substance satisfactory
to the Banks and the Administrative Agent.
Hazardous Substances. See ss.5.18(b).
--------------------
Indebtedness. As to any Person and whether recourse is secured by or is
------------
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith),
(v) every obligation of such Person under any Capitalized Lease,
(vi) every obligation of such Person under any lease (a "synthetic
lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes,
(vii) all sales by such Person of (A) accounts or general intangibles
for money due or to become due, (B) chattel paper, instruments or documents
creating or evidencing a right to payment of money or (C) other receivables
(collectively "receivables"), whether pursuant to a purchase facility or
otherwise, other than in connection with the disposition of the business
operations of such Person relating thereto or a disposition of defaulted
receivables for collection and not as a financing arrangement, and together
with any obligation of such Person to pay any discount, interest, fees,
indemnities, penalties, recourse, expenses or other amounts in connection
therewith,
(viii) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
share capital or shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such shares,
or any rights measured by the value of such shares, warrants, options or
other rights,
(ix) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices,
(x) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(i) through (x) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (A) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (B) to purchase property, securities or
services for the purpose of assuring the payment of such primary
obligation, or (C) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be
the amount of unrecovered capital or principal investment of the purchaser
(other than the Borrower or any of its wholly-owned Subsidiaries) thereof,
excluding amounts representative of yield or interest earned on such investment,
(x) any synthetic lease shall be the stipulated loss value, termination value or
other equivalent amount, (y) any derivative contract shall be the maximum amount
of any termination or loss payment required to be paid by such Person if such
derivative contract were, at the time of determination, to be terminated by
reason of any event of default or early termination event thereunder, whether or
not such event of default or early termination event has in fact occurred and
(z) any equity related purchase obligation shall be the maximum fixed redemption
or purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt in
---------------------
by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. ss.24, Seventh), as amended.
Instrument of Accession. See ss.17.1(b).
-----------------------
Intercreditor Agreement. An agreement among FCI, FAC, the Banks, the
------------------------
Administrative Agent, the RC Agent and the XX Xxxxx, in form and substance
satisfactory to the Administrative Agent, setting forth certain intercreditor
arrangements regarding the relative priority of security interests and available
remedies, cross defaults and other related matters.
Interest Payment Date. (i) As to any Base Rate Loan, the last day of the
----------------------
calendar month with respect to interest accrued during such calendar month,
including, without limitation, the calendar month which includes the Drawdown
Date of such Base Rate Loan; and (ii) as to any LIBOR Rate Loan, the last day of
each calendar month included in the Interest Period for such LIBOR Rate Loan
including, without limitation, the calendar month which includes the Drawdown
Date of such LIBOR Rate Loan.
Interest Period. With respect to all or any relevant portion of the Loan,
----------------
(i) initially, the period commencing on the Drawdown Date of the Loan and ending
on the last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request or as otherwise required by the terms of this Credit
Agreement (A) for any Base Rate Loan, the last day of the calendar quarter and
(B) for any LIBOR Rate Loan, 1, 2, 3, 6 or 9 months; and (ii) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to all or such portion of the Loan and ending on the last day of one
of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business Day unless
the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in ss.2.6,
the Borrower shall be deemed to have requested a conversion of the affected
LIBOR Rate Loan to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that begins on
the last LIBOR Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last LIBOR Business Day of a
calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
Interim Balance Sheet Date. June 30, 2000.
--------------------------
Inventory. The value of land (both undeveloped and in the process of
---------
development) including residential housing relating to the development of VOIs
and specifically including developed or undeveloped land attributable to the
sale of homes or lots, as reported in FCI's consolidated balance sheet included
in its quarterly reports on Forms 10-Q and annual reports on Forms 10-K filed
with the Securities and Exchange Commission.
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock, share capital or
Indebtedness of, or for loans, advances, capital contributions or transfers of
property to, or in respect of any guaranties (or other commitments as
described under Indebtedness), or obligations of, any Person. In determining the
aggregate amount of Investments outstanding at any particular time: (i) the
amount of any Investment represented by a guaranty shall be taken at not less
than the principal amount of the obligations guaranteed and still outstanding;
(ii) there shall be included as an Investment all interest accrued with respect
to Indebtedness constituting an Investment unless and until such interest is
paid; (iii) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (iv)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof. Any purchase of assets
acquired primarily for purposes of operating the business of the Borrower and
its Subsidiaries shall not be deemed to be an Investment, nor shall any
prepayment of or advance for fees or expenses for services or goods in FCI's
normal course of business (including prepayments or advances under marketing
agreements).
LIBOR Business Day. Any day on which commercial banks are open for
--------------------
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.
LIBOR Lending Office. Initially, the office of each Bank designated as such
--------------------
in Schedule 1 hereto; thereafter, such other office of such Bank, if any, that
-------- -
shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
----------
annual rate of interest equal to (i) the rate determined by the Administrative
Agent at which Dollar deposits for such Interest Period are offered based on
information presented on Telerate Page 3750 as of 11:00 a.m. London time on the
second LIBOR Business Day prior to the first day of such Interest Period,
divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if
applicable.
LIBOR Rate Loans. All or any portion of the Loan bearing interest
------------------
calculated by reference to the LIBOR Rate.
Lien. (i) With respect to real property, a first priority mortgage or deed
----
of trust lien, and (ii) with respect to personal property, a fully perfected
first priority security interest.
Loan Documents. This Credit Agreement, the Notes, the Intercreditor
---------------
Agreement, the Security Documents and the fee letter agreement described in
ss.3.1.
Loan. The term loan made or to be made by the Banks to the Borrower on the
----
Closing Date in the aggregate principal amount of $75,000,000 pursuant to
ss.2.1, as such amount may be increased pursuant to ss.17.1(b).
Lot. Any lot related to a Base Contract.
---
Lot Contracts. 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 with a purchaser of one or more individual lots or plots or
tracts of land and the improvements thereon.
Majority Banks. As of any date, two or more Banks holding an aggregate of
---------------
more than fifty percent (50%) of the outstanding principal amount of the Notes
on such date.
Material Adverse Effect. With respect to any event or circumstance, a
-------------------------
material adverse effect on:
(a) the business, properties, operations, profits, prospects, or condition
(financial or otherwise) of the Borrower and its Subsidiaries (taken as a
whole);
(b) the ability of any of the Borrower and the Guarantors to perform its
respective obligations under any of the Loan Documents to which it is a party;
(c) the validity or enforceability of, or collectability of amounts payable
under, the Credit Agreement, the Notes or any of the other Loan Documents;
(d) the status, existence, perfection or priority of the Administrative
Agent's liens or security interests in the Collateral; or
(e) the value, validity, enforceability or collectability of the Loans, the
Guaranty, or any of the Collateral (as applicable).
Maturity Date. September 29, 2005.
-------------
Moody's. Xxxxx'x Investors Service, Inc.
-------
Mortgages. The several mortgages and deeds of trust which may be entered
---------
into after the Closing Date pursuant to ss.6.13 from the Borrower and the
Guarantors to the Administrative Agent for the benefit of the Administrative
Agent and the Banks with respect to the fee and leasehold interests of the
Borrower and the Guarantors in the Real Estate and in form and substance
satisfactory to the Administrative Agent.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)of
------------------
ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Cash Proceeds. With respect to any Equity Issuance or Debt Issuance,
------------------
the excess of the gross cash proceeds received by such Person from such Equity
Issuance or Debt Issuance after deduction of reasonable and customary
transaction expenses (including without limitation, underwriting discounts and
commissions) actually incurred in connection with the Equity Issuance.
Net Cash Sale Proceeds. The net cash proceeds received by the Borrower and
----------------------
its Subsidiaries in respect of any asset sale, less (without duplication) the
----
sum of (a) all reasonable out-of-pocket fees, commissions and other expenses
incurred in connection with such asset sale, including the amount (estimated in
good faith by such Person) of income, franchise, sales and other applicable
taxes required to be paid by such Person in connection with such asset sale, (b)
the aggregate amount of cash so received by such Person which is used to retire
(in whole or in part) any Indebtedness (other than under the Loan Documents) of
such Person permitted by this Credit Agreement that was secured by a lien or
security interest (if any) permitted by this Agreement having priority over the
liens and security interests (if any) of the Administrative Agent (for the
benefit of itself and the Banks) with respect to such assets transferred, and
which is required to be repaid in whole or in part (which repayment, in the case
of any revolving credit arrangements or multiple advance arrangements, reduces
the commitment thereunder) in connection with the asset sale, and (c) the
aggregate amount of cash so received by such Person which is used to repay (in
whole or in part) Senior Indebtedness of such Person with respect to Base
Contracts transferred, and which is required to be repaid in whole or in part
pursuant to the RC Agreement in connection with the sale of Base Contracts.
Nonconsolidated Subsidiaries. Collectively, FFC-II, FRC and any other
-----------------------------
Subsidiaries of FCI the accounts of which are not permitted to be consolidated
with FCI under generally accepted accounting principles.
Notes. See ss.2.2.
-----
Obligations. All indebtedness, obligations and liabilities of any of the
-----------
Borrower and its Subsidiaries (other than Nonconsolidated Subsidiaries) to any
of the Banks, the Administrative Agent and the Arranger, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of the Loan
made or other instruments at any time evidencing any thereof or arising or
incurred under any Rate Protection Agreements entered into by the Borrower with
any of the Banks.
Operating Agreement. The Sixth Amended and Restated Operating Agreement,
--------------------
dated as of July 25, 2000, by and among the Borrower, FAC, FMB and the VB
Originating Subsidiaries.
outstanding. With respect to the Loan, the aggregate unpaid principal
-----------
thereof as of any date of determination.
Ownership Regime. An interval ownership regime which is an arrangement,
-----------------
established under applicable state law, whereby all or a designated portion of
real estate is made subject to a declaration permitting the transfer of fixed
week or undivided fee simple interests therein for a period of time each year,
which such interests shall in each case constitute real property under the
applicable local law of each of the jurisdictions in which such regime is
located.
Partial Release Price. See ss.26(a).
---------------------
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
------------------------
Security Agreements.
Permitted Liens. Liens, security interests and other encumbrances permitted
---------------
by ss.7.2.
Person. Any individual, corporation, partnership, trust, unincorporated
------
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
POA. The property owners' association or similar time-share owner body for
---
each VOI Regime or Project or relevant portion of either thereof, in each case
established pursuant to the declarations, articles or similar charter documents
applicable to each such VOI Regime, Project or portion thereof.
Points. With respect to a VOI unit at any VOI Regime, the number of points
------
of symbolic value assigned to such unit pursuant to the FairShare Plus Program.
Project. Any vacation ownership resort and development which is owned
-------
and/or operated by FCI or any of its Subsidiaries and with respect to which Base
Contracts are originated or expected to be originated.
Rate Protection Agreement. Any interest rate swap, cap, collar or similar
--------------------------
arrangement entered into to hedge interest rate risk (and not for speculative
purposes).
RC Agreement. That certain Consolidated, Amended and Restated Revolving
------------
Credit Agreement dated as of July 25, 2000 between FCI, FAC, the XX Xxxxx, the
RC Agent and BankOne, N.A., as documentation agent, certified copies of which
were delivered to the Administrative Agent on or prior to the Closing Date,
together with amendments or modifications thereto permitted pursuant to ss.7.14.
RC Agent. Fleet, in its capacity as administrative agent for the XX Xxxxx
--------
under the RC Agreement, and any successor administrative agent which may be
appointed under the RC Agreement.
XX Xxxxx. Fleet, BankOne, N.A., Bank Atlantic, Sovereign Bank, First
--------
Massachusetts Bank, N.A. and any other Person who becomes a party to the RC
Agreement as a "Bank" thereunder.
RCRA. See ss.5.18(a).
----
Real Estate. All real property at any time owned or leased (as lessee or
------------
sublessee) by the Borrower or any of its Subsidiaries.
Receivables. The aggregate value of accounts receivable, contracts
-----------
receivable (including receivables with respect to Base Contracts) and notes
receivable of the Borrower and its Subsidiaries, as reported in FCI's
consolidated balance sheet included in its quarterly reports on Forms 10-Q and
annual reports on Forms 10-K filed with the Securities and Exchange Commission,
plus the principal balance of contracts receivable owned by the Nonconsolidated
Subsidiaries.
Receivables Purchase Agreements. Collectively, the (i) FRC Receivables
---------------------------------
Purchase Agreement, (ii) FFC-II Receivables Purchase Agreement, and (iii)
Amended and Restated Receivables Purchase Agreement, dated as of July 31, 1996,
among FCC, FAC, FCI and FMB.
Record. The grid attached to a Note, or the continuation of such grid, or
------
any other similar record, including computer records, maintained by any Bank
with respect to the Loan.
Register. See ss.17.3.
--------
Relevant Percentage. With respect to a particular Project, the greater of
--------------------
(a) twenty-six percent (26%), and (b) the percentage equal to (i) the inventory
cost of such Project determined in accordance with generally accepted accounting
principles divided by (ii) the aggregate amount of FCI's published sales prices
for all Lots and/or VOIs relating to or arising from such Project.
XXXX. See ss.5.18(a).
----
Section 20 Subsidiary. A Subsidiary of the bank holding company controlling
---------------------
any Bank, which Subsidiary has been granted authority by the Federal Reserve
Board to underwrite and deal in certain Ineligible Securities.
Securitization. Any transaction in which one or more pools of Base
--------------
Contracts and related assets are sold to a single-purpose bankruptcy-remote
entity and then pledged to secure the equity raised or debt incurred by such
entity to purchase such Base Contracts, which equity or underlying debt is
marketed (either publicly or privately) to third party investors.
Security Agreement. The Security Agreement, dated or to be dated on or
-------------------
prior to the Closing Date, between FAC and the Administrative Agent and in form
and substance satisfactory to the Banks and the Administrative Agent.
Security Documents. The Guaranty, the Security Agreement, the Stock Pledge
------------------
Agreement, Collateral Assignments of Partnership Interests, the Mortgages, if
applicable, and all other agreements, instruments and documents now or hereafter
securing the Obligations, including, without limitation, Uniform Commercial Code
and other financing statements required to be executed or delivered pursuant to
any Security Document.
Senior Indebtedness. Revolving credit indebtedness of FCI, FAC and certain
-------------------
of its Subsidiaries initially provided by Fleet and other institutional lenders
or investors pursuant to the terms of the RC Agreement, as amended or otherwise
modified from time to time in accordance with ss.7.14.
Standard & Poor's. Standard & Poor's Ratings Services, a division of The
-----------------
XxXxxx-Xxxx Companies, Inc.
Stock Pledge Agreement. The Stock Pledge Agreement, dated or to be dated on
----------------------
or prior to the Closing Date, by and among FCI, FAC, Vacation Break and the
Administrative Agent and in form and substance satisfactory to the Banks and the
Administrative Agent.
Subordinated Debt. Unsecured Indebtedness of the Borrower or any of its
------------------
Subsidiaries which may be outstanding from time to time with the express written
consent of the Banks, that is expressly subordinated and made junior to the
payment and performance in full of the Obligations, and evidenced as such by a
subordination and intercreditor agreement or by another written instrument
containing subordination provisions in form and substance approved by the Banks
in writing (it being understood that the Banks shall have no obligation to
consent to the incurrence of any such Subordinated Debt, and may refuse to
consent for any reason or no reason).
Subsidiary. Any corporation, association, trust, partnership or other
----------
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
Partnership Subsidiaries with respect to FCI.
Timeshare Contract. 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 with a purchaser or lessee of one or more VOIs.
Title Clearing Agreements. Collectively, (a) the Ninth Amended and Restated
----- -------- ----------
Title Clearing Agreement (Lawyers), dated as of July 25, 2000, as further
amended, restated, supplemented or otherwise modified from time to time, among
FCI, FAC, FCC, FFC-II, FRC, Lawyers Title Insurance Corporation, as Nominee,
Capital Markets Assurance Corporation, and the Administrative Agent; (b) the
Sixth Amended and Restated Supplementary Trust Agreement (Arizona), dated as of
July 25, 2000, as further amended, restated, supplemented or otherwise modified
from time to time, among FCI, FAC, FCC, FFC-II, FRC, First American
Title Insurance Company, as Trustee and Nominee, Capital Markets Assurance
Corporation, and the Administrative Agent; (c) the Seventh Amended and Restated
Title Clearing Agreement (Colorado), dated as of July 25, 2000, as amended ,
restated, supplemented or otherwise modified, restated, supplemented or
otherwise modified from time to time, among FCI, FAC, FCC, FFC-II, FRC, Capital
Markets Assurance Corporation, Colorado Land Title Company, as Nominee and the
Administrative Agent; (d) the Westwinds Fifth Amended and Restated Title
Clearing Agreement, dated as of July 25, 2000, as amended, restated,
supplemented or otherwise modified from time to time, among FCI, FMB, FAC, FCC,
FFC-II, FRC, Lawyers Title Insurance Corporation, as Nominee, Capital Markets
Assurance Corporation, Resort Funding, Inc. and the Administrative Agent; (e)
the Fourth Amended and Restated Nashville Title Clearing Agreement, dated as of
July 25, 2000, as further amended, restated, supplemented or otherwise modified
from time to time, among FAC, FCI, FCC, FFC-II, FRC, Lawyers Title Insurance
Corporation, as Nominee, Capital Markets Assurance Corporation and the
Administrative Agent; (f) the Fourth Amended and Restated Seawatch Plantation
Title Clearing Agreement, dated as of July 25, 2000, as further amended,
restated, supplemented or otherwise modified from time to time, among FCI, FAC,
FCC, FFC-II, FRC, FMB, Lawyers Title Insurance Corporation, as Nominee, Capital
Markets Assurance Corporation and the Administrative Agent; and (g) any similar
agreement governing the obligations of any new or successor nominee holding
title to any VOIs or Lots at Projects.
Total Commitment. The sum of the Commitments of the Banks, as in effect
-----------------
from time to time.
Triggering Event. Any time when the ratio of Consolidated Total Liabilities
----------------
to Consolidated Tangible Net Worth exceeds 2.15 to 1.
Triple-A Credit Agreement. The Amended and Restated Credit Agreement, dated
-------------------------
as of July 31, 1996, as amended by a First Amendment to Amended and Restated
Credit Agreement and Waiver Agreement, dated as of March 5, 1997, a Letter
Agreement dated as of September 8, 1997, and a Second Amendment to Amended and
Restated Credit Agreement dated as of February 27, 1998, by and among FAC, as
servicer, FCI, FCC, as borrower, Capital Markets Assistance Corporation, as
collateral agent, Triple-A One Funding Corporation and Fleet.
Type. As to all or any portion of the Loan, its nature as a Base Rate Loan
----
or a LIBOR Rate Loan.
Vacation Break. Vacation Break USA, Inc., a Florida corporation and a
---------------
wholly-owned Subsidiary of FCI.
Vacation Club Agreement. The Membership Agreement for Fairfield
---------------------------
Destinations Vacation Club entered into by FCI, Fairfield Destinations Vacation
Club, Inc., FairShare Vacation Owners Association, as trustee of FairShare
Vacation Plan Use Management Trust and each person that subsequently purchase a
membership in Fairfield's Destination Vacation Club.
Vacation Club Membership. A Membership, as defined in the Vacation Club
-------------------------
Agreement.
VB Originating Subsidiaries. Collectively, Sea Garden Beach and Tennis
-----------------------------
Resort, Inc., a Florida corporation, Vacation Break Resorts, Inc., a Florida
corporation, Vacation Break Resorts at Star Island, Inc., a Florida corporation,
Palm Vacation Group, a Florida general partnership, and Ocean Ranch Vacation
Group, a Florida general partnership.
VB Partnership Subsidiaries. Collectively, Palm Vacation Group, a Florida
---------------------------
general partnership, and Ocean Ranch Vacation Group, a Florida general
partnership.
Ventura Contracts. Timeshare Contracts with respect to the development in
------- ---------
Ventura County, California known as the "Harbortown Marina Resort Hotel".
VOI. The underlying ownership interest which is the subject of a Timeshare
---
Contract, which ownership interest shall consist of either (i) a fixed week or
undivided fee simple interest (or, in the case of Ventura Contracts or those
Timeshare Contracts for the Pagosa Mountain Xxxxxxx VOI Regime at Fairfield
Pagosa, undivided leasehold interest in real property) for a period of time each
year (whether pursuant to the FairShare Plus Program or otherwise) in a lodging
unit or group of lodging units located at a vacation resort or development owned
and/or operated by FCI or any of its Subsidiaries or (ii) a Vacation Club
Membership, and shall include in either case any and all Points assigned
thereto.
VOI Inventory. The value of land (both undeveloped and in the process of
-------------
development) and residential housing relating exclusively to the development of
VOIs (and specifically excluding developed or undeveloped land attributable to
the sale of homes or lots), as reported in FCI's consolidated balance sheet
included in its quarterly reports on Forms 10-
Q and annual reports on Forms 10-K filed with the Securities and Exchange
Commission.
VOI Regime. Any of the various interval ownership regimes located at
-----------
Projects, each of which is an arrangement, established under applicable state
law, whereby all or a designated portion of a Project is made subject to a
declaration permitting the transfer of VOIs therein, which VOIs shall in each
case constitute real property under the applicable local law of each of the
jurisdictions in which such regime is located.
Voting Stock. Equity Securities, of any class or classes (however
-------------
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. RULES OF INTERPRETATION.
-----------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, have the meanings
assigned to them therein,
with the term "instrument" being that defined under Article 9 of the
Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including," the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are, however,
cumulative and are to be performed in accordance with the terms thereof.
(l) This Credit Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others,
the Administrative Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this Credit
Agreement and the other Loan Documents are not intended to be construed
against the Administrative Agent or any of the Banks merely on account of
the Administrative Agent's or any Bank's involvement in the preparation of
such documents.
2. THE LOAN.
--------
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
------------------
this Credit Agreement, each Bank agrees to lend to the Borrower on the Closing
Date the amount of its Commitment Percentage of the principal amount of
$75,000,000.
2.2. THE NOTES. The Loan shall be evidenced by separate promissory notes of
---------
the Borrower in substantially the form of Exhibit A hereto (each a "Note" and
------- -
collectively, the "Notes"), dated the Closing Date and completed with
appropriate insertions. One Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or,
if less, the outstanding amount of such Bank's Commitment Percentage of the
Loan, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made a notation on such
Bank's Note Record reflecting the original principal amount of such Bank's
Commitment Percentage of the Loan and, at or about the time of such Bank's
receipt of any principal payment on such Bank's Note, an appropriate notation on
such Bank's Note Record reflecting such payment. The aggregate unpaid amount set
forth on such Bank's Note Record shall be prima facie evidence of the principal
----- -----
amount thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Bank's Note Record shall not
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of and interest on any Note when due.
2.3. MANDATORY PAYMENTS OF PRINCIPAL OF LOAN.
---------------------------------------
2.3.1. AMORTIZATION. The Borrower promises to pay to the
------------
Administrative Agent for the account of the Banks the principal amount of
the Loan in twenty (20) consecutive quarterly payments, such installments
to be due and payable on the last day of each calendar quarter for the
calendar quarter then ending within any period set forth below in an amount
determined in accordance with the percentage set forth in the following
table opposite such period, commencing on December 31, 2000, with a final
payment on the Maturity Date in an amount equal to the unpaid balance of
the Loan.
Quarters Ending: Each Payment
--------------- ------------
Closing Date -September 30, 2003 .5% of the Total Commitment
December 31, 2003 -September 30, 2004 1.25% of the Total Commitment
December 31, 2004 - June 30, 2005 2.5% of the Total Commitment
Maturity Date Unpaid balance of
the Loan
2.3.2. PROCEEDS. In the event the Borrower or any of its Subsidiaries
--------
(other than Nonconsolidated Subsidiaries) receives any (a) Net Cash Sale
Proceeds from the sale or other disposition of
assets permitted by ss.7.5, which Net Cash Sale Proceeds are required by
ss.7.5 to be repaid to the Administrative Agent hereunder; (b) proceeds of
insurance claims which have not been reinvested by the Borrower or such
Subsidiary in replacement assets or to repair the asset so damaged, as the
case may be, within 120 days of receipt by such Person of such proceeds;
(c) Net Cash Proceeds from any Equity Issuances by the Borrower or its
Subsidiaries after the Closing Date; or (d) Net Cash Proceeds from any Debt
Issuances by the Borrower or its Subsidiaries after the Closing Date, the
Borrower shall, within thirty (30) days of receipt thereof and subject to
ss.3.9, repay the outstanding portion of the Loan in an amount equal to
100% of such Net Cash Sale Proceeds or Net Cash Proceeds, as the case may
be, to be applied as set forth in ss.11.4. To the extent that aggregate
amount of the Notes repaid by the Borrower pursuant to clauses (a) and (b)
above exceeds $10,000,000 in any fiscal year of the Borrower, the Borrower
shall pay a premium with respect to each such excess prepayment in an
amount determined in accordance with the percentages set forth in the
following table opposite the period during which each such excess
prepayment is made:
Period Prepayment Premium
------ ------------------
Closing Date through
first anniversary thereof 3% of amount prepaid
First anniversary of
Closing Date through second
anniversary of Closing Date 2% of amount prepaid
Second anniversary of
Closing Date through third
anniversary of Closing Date 1% of amount prepaid
Thereafter -0-
Any prepayment of the principal of the Loan shall be allocated among the Banks,
in proportion, as nearly as practicable, to the respective outstanding amount of
each Bank's Note, with adjustments to the extent practicable, to equalize any
prior prepayments not exactly in proportion. The Banks shall apply principal
amounts prepaid to the then last
maturing installments of principal of the Loan in the inverse order of maturity.
No amount repaid with respect to the Loan may be reborrowed.
2.4. OPTIONAL PREPAYMENT OF LOAN. The Borrower shall have the right at any
----------------------------
time to prepay the Notes on or before the Maturity Date, as a whole, or in part,
upon not less than five (5) Business Days prior written notice to the
Administrative Agent; provided that (a) each partial prepayment shall be in the
--------
principal amount of $1,000,000 or an integral multiple thereof, (b) no portion
of the Loan bearing interest at the LIBOR Rate may be prepaid pursuant to this
ss.2.4 except on the last day of the Interest Period relating thereto, and (c)
each partial prepayment shall be allocated among the Banks, in proportion, as
nearly as practicable, to the respective outstanding amount of each Bank's Note,
with adjustments, to the extent practicable, to equalize any prior prepayments
not exactly in proportion. If the Borrower prepays the Notes in whole or in
part, the Borrower shall pay a premium with respect to each such prepayment in
an amount determined in accordance with the percentages set forth in the
following table opposite the period during which such prepayment is made:
Period Prepayment Premium
------ ------------------
Closing Date through
first anniversary thereof 3% of amount prepaid
First anniversary of
Closing Date through second
anniversary of Closing Date 2% of amount prepaid
Second anniversary of
Closing Date through third
anniversary of Closing Date 1% of amount prepaid
Thereafter -0-
The Banks shall apply principal amounts prepaid to the then last maturing
installments of principal of the Loan in the inverse order of maturity. No
amount repaid with respect to the Loan may be reborrowed.
2.5. INTEREST ON TERM LOAN.
---------------------
2.5.1. INTEREST RATES. Except as otherwise provided in ss.3.10, the
--------------
Loan shall bear interest during each Interest Period relating to all or any
portion of the Loan at the following rates:
(a) To the extent that all or any portion of the Loan bears
interest during such Interest Period at the Base Rate, the Loan or
such portion shall bear interest during such Interest Period at the
rate per annum equal to the sum of (i) the Applicable Base Margin,
plus (ii) the Base Rate determined for such Interest Period.
----
(b) To the extent that all or any portion of the Loan bears
interest during such Interest Period at the LIBOR Rate, the Loan or
such portion shall bear interest during such Interest Period at the
rate per annum equal to the sum of (i) the Applicable LIBOR Margin,
plus (ii) the LIBOR Rate determined for such Interest Period.
----
The Borrower promises to pay interest on the Loan or any portion
thereof outstanding during each Interest Period in arrears on each Interest
Payment Date applicable to such Interest Period.
2.5.2. NOTIFICATION BY BORROWER. The Borrower shall notify the
--------------------------
Administrative Agent, such notice to be irrevocable, at least three (3)
LIBOR Business Days prior to the Drawdown Date of the Loan if all or any
portion of the Loan is to bear interest at the LIBOR Rate.
2.5.3. AMOUNTS, ETC. Any portion of the Loan bearing interest at the
-------------
LIBOR Rate relating to any Interest Period shall be in the amount of
$1,000,000 or a whole multiple of $100,000 in excess thereof. No Interest
Period relating to the Loan or any portion thereof bearing interest at the
LIBOR Rate shall extend beyond the date on which a regularly scheduled
installment payment of the principal of the Loan is to be made unless a
portion of the Loan at least equal to such installment payment has an
Interest Period ending on such date.
2.6. CONVERSION OPTIONS.
------------------
2.6.1. CONVERSION TO DIFFERENT TYPE. The Borrower may elect from time
----------------------------
to time to convert any Base Rate Loan into a LIBOR Rate Loan or any LIBOR
Rate Loan into a Base Rate Loan, provided that (a) with respect to any such
--------
conversion of a LIBOR Rate Loan to a
Base Rate Loan, the Borrower shall give the Administrative Agent at least
three (3) Business Days prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan,
the Borrower shall give the Administrative Agent at least three (3) LIBOR
Business Days prior written notice of such election; (c) with respect to
any such conversion of a LIBOR Rate Loan into a Base Rate Loan, such
conversion shall only be made on the last day of the Interest Period with
respect thereto and (d) no Loan may be converted into a LIBOR Rate Loan
when any Default or Event of Default has occurred and is continuing.
Promptly upon receipt of any such notice, the Administrative Agent shall
notify each of the Banks thereof. On the date on which such conversion is
being made each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Base Rate Loan or LIBOR Rate Loan, as
applicable, to its Domestic Lending Office or its LIBOR Lending Office, as
the case may be. All or any part of the Loan of any Type may be converted
into a another Type as provided herein, provided that any partial
--------
conversion shall be in an aggregate principal amount of $1,000,000 or a
whole multiple thereof. Each Conversion Request relating to the conversion
of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the
Borrower.
2.6.2. CONTINUATION OF TYPE. Any Base Rate Loan or LIBOR Rate Loan may
--------------------
be continued as the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in ss.2.6.1; provided that no LIBOR Rate Loan may be
--------
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Administrative Agent active upon the Borrower's account have actual
knowledge. In the event that the Borrower fails to provide any such notice
with respect to the continuation of any LIBOR Rate Loan as such, then such
LIBOR Rate Loan shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto. The Administrative
Agent shall notify the Banks promptly when any such automatic conversion
contemplated by this ss.2.6 is scheduled to occur.
2.6.3. LIBOR Rate Loans. Any conversion to or from LIBOR Rate Loans
----------------
shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal
amount of all LIBOR Rate Loans having the same Interest Period shall not be
less than $1,000,000 or a whole multiple of $100,000 in excess thereof. The
Borrower may not request or elect a LIBOR Rate Loan pursuant to ss.2.5,
elect to convert a Base Rate Loan to a LIBOR Rate Loan pursuant to
ss.2.6.1, or elect to continue a LIBOR Rate Loan pursuant to ss.2.6.2 if,
after giving effect thereto, there would be greater than four (4) LIBOR
Rate Loans then outstanding. Any Loan Request for a LIBOR Rate Loan that
would create greater than four (4) LIBOR Rate Loans outstanding shall be
deemed to be a Loan Request for a Base Rate Loan.
3. CERTAIN GENERAL PROVISIONS.
--------------------------
3.1. FEES. The Borrower agrees to pay to the Administrative Agent and the
----
Arranger, for the respective accounts of the Administrative Agent and the
Arranger, certain fees as set forth in the Fee Letter.
3.2. FUNDS FOR PAYMENTS.
------------------
3.2.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of principal,
----------------------------------
interest, fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Administrative Agent, for the
respective accounts of the Banks and the Administrative Agent, at the
Administrative Agent's Loan Office or at such other location in the Boston,
Massachusetts, area that the Administrative Agent may from time to time
designate, in each case in immediately available funds.
3.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
---------------
under any of the other Loan Documents shall be made without recoupment,
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay
to the Administrative Agent, for the account of the Banks or (as the case
may be) the Administrative Agent, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the
Administrative Agent to receive the same net amount which the
Banks or the Administrative Agent would have received on such due date had
no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Administrative Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect
to payments made by the Borrower hereunder or under such other Loan
Document.
3.3. COMPUTATIONS. All computations of interest on Base Rate Loans and fees
------------
shall, unless otherwise expressly provided herein, be based on a 365-day year
and paid for the actual number of days elapsed. All computations of interest on
LIBOR Rate Loans shall be based on a 360-day year and paid for the actual number
of days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to LIBOR Rate Loans, whenever a payment hereunder
or under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loan as reflected on the Note Records from time to
time shall be considered correct and binding on the Borrower unless within five
(5) Business Days after receipt of any notice by the Administrative Agent or any
of the Banks of such outstanding amount, the Administrative Agent or such Bank
shall notify the Borrower to the contrary.
3.4. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
-------------------------------------
commencement of any Interest Period relating to any LIBOR Rate Loan, the
Administrative Agent shall determine that adequate and reasonable methods do not
exist for ascertaining the LIBOR Rate that would otherwise determine the rate of
interest to be applicable to any LIBOR Rate Loan during any Interest Period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Banks) to the Borrower
and the Banks. In such event (i) any Loan Request or Conversion Request with
respect to LIBOR Rate Loans shall be automatically withdrawn and shall be deemed
a request for Base Rate Loans, (ii) each LIBOR Rate Loan will automatically, on
the last day of the then current Interest Period relating thereto, become a Base
Rate Loan, and (iii) the obligations of the Banks to make LIBOR Rate Loans shall
be suspended until the Administrative Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Administrative
Agent shall so notify the Borrower and the Banks.
3.5. ILLEGALITY. Notwithstanding any other provisions herein, if any
----------
present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain LIBOR Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make LIBOR Rate Loans or convert Loans of another
Type to LIBOR Rate Loans shall forthwith be suspended and (ii) such Bank's
Revolving Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such LIBOR Rate Loans or within such earlier period as may
be required by law. The Borrower hereby agrees promptly to pay the
Administrative Agent for the account of such Bank, upon demand by such Bank, any
additional amounts necessary to compensate such Bank for any costs incurred by
such Bank in making any conversion in accordance with this ss.3.5, including any
interest or fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder.
3.6. ADDITIONAL COSTS, ETC. If any present or future applicable law, which
---------------------
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Administrative Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:
(a) subject any Bank or the Administrative Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Credit Agreement, the other Loan Documents, such Bank's
Commitment or the Loan (other than taxes based upon or measured by the
income or profits of such Bank or the Administrative Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on all or any portion of the Loan or any other amounts payable
to any Bank or the Administrative Agent under this Credit Agreement or any
of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans by,
or commitments of an office of any Bank, or
(d) impose on any Bank or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the other
Loan Documents, the Loan, such Bank's Commitment, or any class of loans,
letters of credit or commitments of which all or any portion of the Loan or
such Bank's Commitment forms a part, and the result of any of the foregoing
is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining the Loan or such Bank's Commitment,
or
(ii) to reduce the amount of principal, interest or other amount
payable to such Bank or the Administrative Agent hereunder on account
of such Bank's Commitment or the Loan, or
(iii) to require such Bank or the Administrative Agent to make
any payment or to forego any interest or other sum payable hereunder,
the amount of which payment or foregone interest or other sum is
calculated by reference to the gross amount of any sum receivable or
deemed received by such Bank or the Administrative Agent from the
Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Administrative Agent at any time and from time to time
and as often as the occasion therefor may arise, pay to such Bank or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Bank or the Administrative Agent for such additional cost, reduction,
payment or foregone interest or other sum; provided, that with respect to
--------
payments required pursuant to ss.3.6(c), the Borrower shall not be required to
pay such additional amounts if the Obligations are repaid in full within 180
days following such demand.
3.7. CAPITAL ADEQUACY. If after the date hereof any Bank or the
-----------------
Administrative Agent determines that (i) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
a court or governmental authority with appropriate jurisdiction, or (ii)
compliance by such Bank or the Administrative Agent
or any corporation controlling such Bank or the Administrative Agent with any
law, governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) of any such entity regarding capital adequacy, has
the effect of reducing the return on such Bank's or the Administrative Agent's
commitment with respect to any Loans to a level below that which such Bank or
the Administrative Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's or the Administrative Agent's
then existing policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by such Bank or (as
the case may be) the Administrative Agent to be material, then such Bank or the
Administrative Agent may notify the Borrower of such fact. To the extent that
the amount of such reduction in the return on capital is not reflected in the
Base Rate, the Borrower and such Bank shall thereafter attempt to negotiate in
good faith, within thirty (30) days of the day on which the Borrower receives
such notice, an adjustment payable hereunder that will adequately compensate
such Bank in light of these circumstances. If the Borrower and such Bank are
unable to agree to such adjustment within thirty (30) days of the date on which
the Borrower receives such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such increased capital
requirement), the fees payable hereunder shall increase by an amount that will,
in such Bank's reasonable determination, provide adequate compensation. Each
Bank shall allocate such cost increases among its customers in good faith and on
an equitable basis.
3.8. CERTIFICATE. A certificate setting forth any additional amounts
-----------
payable pursuant to ss.ss.3.6 or 3.7 and a brief explanation of such amounts
which are due, submitted by any Bank or the Administrative Agent to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.
3.9. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold each
---------
Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its LIBOR Rate Loans, (ii) default by the
Borrower in making a borrowing or conversion after the Borrower has given (or
are deemed to have given) notice pursuant to ss.2.5.2, a Conversion Request
relating thereto in accordance with ss.2.6 or (iii) the making of any payment of
a LIBOR Rate Loan or the making of any conversion of any LIBOR Rate
Loan to a Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain any such LIBOR Rate
Loans.
3.10. INTEREST AFTER DEFAULT.
----------------------
3.10.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
----------------
permitted by applicable law) interest on the Loan and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall
bear interest compounded monthly and payable on demand at a rate per annum
equal to four percent (4%) above (a) the Base Rate plus the Applicable Base
----
Margin, or (b) the Applicable LIBOR Margin plus the LIBOR Rate, as
----
applicable, until such amount shall be paid in full (after as well as
before judgment).
3.10.2. AMOUNTS NOT OVERDUE. During the continuance of a Default or an
-------------------
Event of Default the principal of the Loan not overdue shall, until such
Default or Event of Default has been cured or remedied or such Default or
Event of Default has been waived by the Majority Banks pursuant to ss.24,
bear interest at a rate per annum equal to the greater of (i) four percent
(4%) above the rate of interest otherwise applicable to the Loan pursuant
to ss.2.5 and (ii) the rate of interest applicable to overdue principal
pursuant to ss.3.10.1.
4. COLLATERAL SECURITY AND GUARANTIES.
----------------------------------
4.1. SECURITY OF BORROWER. The Obligations shall be secured by a perfected
--------------------
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the property, rights and interests of
the Borrower, whether now owned or hereafter acquired, described in the Security
Documents to which the Borrower is party.
4.2. GUARANTIES AND SECURITY OF GUARANTORS.
-------------------------------------
(a) The Obligations shall also be guaranteed pursuant to the terms of
the Guaranty. The obligations of the Guarantors under the Guaranty shall be
in turn secured by a perfected first priority security interest (subject
only to Permitted Liens entitled to priority under applicable law) in all
of the property, rights and interests of each such Guarantor, whether now
owned or hereafter acquired, described in the Security Documents to which
such Guarantor is a party.
(b) Promptly and in any event within thirty (30) days after FCI or any
of its Subsidiaries (each an "OpCo Parent") acquires the Equity Securities
of, or creates, any new Subsidiary which is neither a Nonconsolidated
Subsidiary nor an Excluded Subsidiary (and, in the case of an Excluded
Subsidiary, FCI anticipates such Subsidiary remaining an Excluded
Subsidiary), the Borrower will cause such new Subsidiary to become a party
to the Guaranty, as a Guarantor thereunder, and will cause such OpCo Parent
to grant to the Administrative Agent, for the benefit of the Banks and the
Administrative Agent, a perfected first priority security interest (subject
only to Permitted Liens entitled to priority under applicable law) in such
Equity Securities pursuant to a stock pledge agreement (or other equivalent
security agreement) and Uniform Commercial Code financing statements
substantially the same as the Security Documents delivered at the Closing.
(c) Promptly and in any event within thirty (30) days after FCI or any
of its Subsidiaries (each a "QSPE Parent") acquires the Equity Securities
of, or creates, any new Subsidiary which is a Nonconsolidated Subsidiary,
the Borrower will cause such QSPE Parent to grant to the Administrative
Agent, for the benefit of the Banks and the Administrative Agent, a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in:
(i) such Equity Securities pursuant to a stock pledge agreement
(or other equivalent agreement) and Uniform Commercial Code financing
statements (or the equivalent thereof in any foreign jurisdiction)
substantially the same as the Security Documents delivered at the
Closing; and
(ii) such QSPE Parent's economic interest in such Subsidiary
pursuant to a security agreement and Uniform Commercial Code financing
statements substantially the same as the Security Documents delivered
at the Closing.
(d) Promptly and in any event within thirty (30) days after any
Subsidiary ceases to be an Excluded Subsidiary, the Borrower will cause
such Subsidiary to become a party to the Guaranty, as a Guarantor
thereunder, and will cause the parent company of such Subsidiary to grant
to the Administrative Agent, for the benefit of the Banks and the
Administrative Agent, a perfected first priority security interest (subject
only to Permitted Liens entitled to priority under applicable law) in the
Equity Securities of such Subsidiary
pursuant to a stock pledge agreement (or other equivalent security
agreement) and Uniform Commercial Code financing statements substantially
the same as the Security Documents delivered at the Closing.
4.3. COLLATERAL NOTES. In addition to the Notes, the Borrower agrees that
-----------------
with respect to any of the Real Estate to be mortgaged by it or any of its
Subsidiaries hereunder, it will execute and deliver or cause such Subsidiary to
execute and deliver to the Administrative Agent such collateral notes (the
"Collateral Notes") in such form as the Administrative Agent and the Borrower
may from time to time agree. The parties hereto hereby agree that (a) the
aggregate amount of the Obligations shall not be increased by the issuance of
the Collateral Notes and (b) any payment or recovery on the Collateral Notes
shall be applied to the Obligations pursuant to ss.11.4. All Collateral Notes
shall be payable to the order of the Administrative Agent, on demand; provided
--------
that the Administrative Agent hereby agrees that it shall not demand payment on
any Collateral Note unless the Obligations shall have become immediately due and
payable pursuant to ss.11.1.
5. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Borrower represents and warrants to the Banks and the Administrative
Agent as follows:
5.1. CORPORATE AND PARTNERSHIP AUTHORITY.
-----------------------------------
5.1.1. INCORPORATION; GOOD STANDING. (a) Each of the Borrower and its
-----------------------------
Subsidiaries (other than the VB Partnership Subsidiaries) (i) is a
corporation (or similar business entity in any foreign jurisdiction) duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, (ii) has all requisite
corporate or other legal power to own its property and conduct its business
as now conducted and as presently contemplated, and (iii) is in good
standing as a foreign corporation (or similar business entity in any
foreign jurisdiction) and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of the Borrower or such Subsidiary.
(b) Each VB Partnership Subsidiary (i) is a general partnership duly
organized and validly existing under the laws of its state of organization,
(ii) has all requisite partnership power to own its property and conduct
its business as now conducted and as
presently contemplated, and (iii) is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a material adverse effect on the
business, assets or financial condition of such VB Partnership Subsidiary.
5.1.2. AUTHORIZATION. The execution, delivery and performance of this
-------------
Credit Agreement and the other Loan Documents to which the Borrower or any
of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (i) are within the corporate authority (or
the equivalent thereof in any foreign jurisdiction) (and, in the case of
the VB Partnership Subsidiaries, partnership authority) of such Person,
(ii) have been duly authorized by all necessary corporate proceedings (or
the equivalent thereof in any foreign jurisdiction), (iii) do not conflict
with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower or any of its
Subsidiaries is subject or any judgment, order, writ, injunction, license
or permit applicable to the Borrower or any of its Subsidiaries, except
where such conflict, breach or contravention would not have a Material
Adverse Effect, and (iv) do not conflict with any provision of the
corporate charter or bylaws (or the equivalents thereof in any foreign
jurisdiction) of , or any material agreement or other instrument binding
upon, the Borrower or any of its Subsidiaries.
5.1.3. ENFORCEABILITY. The execution and delivery of this Credit
--------------
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement
of creditors' rights and except to the extent that availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.
5.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
-----------------------
each of the Borrower and its Subsidiaries of this Credit Agreement and the other
Loan Documents to which such Person is or is to become a party and the
transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained, except where the
failure to obtain such consent or approval would not have a Material Adverse
Effect.
5.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 5.3
----------------------------- -------- ---
hereto, FCI and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of FCI and its Subsidiaries as at the Interim Balance
Sheet Date or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
5.4. FINANCIAL STATEMENTS.
--------------------
5.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries has a
fiscal year (or the equivalent thereof in any foreign jurisdiction) which
is the twelve months ending on December 31 of each calendar year.
5.4.2. FINANCIAL STATEMENTS.
(a) There has been furnished to each of the Banks a consolidated
balance sheet of FCI and its Subsidiaries as at December 31, 1999 and as at
the Interim Balance Sheet Date and consolidated statements of income of FCI
and its Subsidiaries for the fiscal periods then ended, certified by Ernst
& Young LLP in the case of the annual financial statements and satisfactory
to the Administrative Agent. Such balance sheets and statements of income
have been prepared in accordance with generally accepted accounting
principles and fairly present the financial condition of the Borrower as at
the close of business on the dates thereof and the results of operations
for the fiscal periods then ended. There are no contingent liabilities of
the Borrower or any of its Subsidiaries as of such dates involving material
amounts, known to the officers of the Borrower, which were not disclosed in
such balance sheets and the notes related thereto or pursuant to ss.5.7
hereof.
(b) There has been furnished to each of the Banks five year financial
projections of FCI and its Subsidiaries, satisfactory to the Administrative
Agent. Such projections represent the Borrower's reasonable and good faith
estimate of FCI's and its Subsidiaries' future financial performance for
the periods set forth therein and have been prepared on the basis of
assumptions stated therein which the Borrower believes are fair and
reasonable in light of current business conditions.
5.5. NO MATERIAL CHANGES, ETC. Except as disclosed on Schedule 5.5 hereto,
-------------------------
since the Interim Balance Sheet Date there has occurred no materially adverse
change in the financial condition, operations, assets, income, prospects or
business of the Borrower and its Subsidiaries taken as a whole as shown on or
reflected in the consolidated balance sheet of FCI and its Subsidiaries as at
the Interim Balance Sheet Date, or the consolidated statement of income for the
fiscal period then ended, other than changes in the ordinary course of business
that have not had any Material Adverse Effect. Since the Interim Balance Sheet
Date, the Borrower has not made any Distribution except for stock repurchases
made by FCI prior to the date hereof.
5.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
---------------------------------------
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
5.7. LITIGATION. Except as otherwise disclosed on FCI's annual report on
----------
Form 10-K for the year ended December 31, 1999 and quarterly report on Form
10-Q's for the quarter ended June 30, 2000 filed with the Securities and
Exchange Commission (collectively the "Base Report"), which Base Report shall
have been delivered to the Administrative Agent prior to the Closing Date, or as
otherwise set forth on Schedule 5.7, there are no actions, suits, proceedings or
------------
investigations of any kind pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries or any of the
Guarantors before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Credit Agreement or any of the other Loan Documents, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Credit Agreement or
any of the other Loan Documents, (iii) seeking any determination or ruling that
would adversely affect the performance by the Borrower or any of its
Subsidiaries or any of the Guarantors of its respective obligations under this
Credit Agreement or any of the other Loan Documents, (iv) seeking any
determination or ruling that would adversely affect the validity or
enforceability of this Credit Agreement or any of the other Loan Documents or
any action taken or to be taken pursuant thereto, or (v) seeking any
determination or ruling that would, if adversely determined, be reasonably
likely to have a Material Adverse Effect or result in any substantial liability
not covered by insurance or for which adequate reserves are not maintained on
the consolidated balance sheet of FCI and its Subsidiaries; provided, however,
-------- -------
that in the event the
Administrative Agent shall receive a report dated subsequent to the date of the
Base Report, which report shall disclose the existence of, and accurately
describe, one or more proceedings or investigations which are not disclosed in
the Base Report, and the Administrative Agent shall not identify in writing to
the Borrower, within 90 days of the receipt of such report, one or more of the
proceedings or investigations described in such report as constituting a
proceeding or investigation of a type described in one or more of clauses (i)
through (v) above, the existence of each such proceeding or investigation not so
identified to the Borrower shall be deemed not to constitute a breach of the
representation and warranty of this ss.5.7.
5.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrower or its
----------------------------------------
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation that has or is expected in the
future, in the judgment of such Borrower's or Subsidiary's officers, to have a
Material Adverse Effect. None of the Borrower or its Subsidiaries is a party to
any contract or agreement that has or is expected, in the judgment of the
Borrower's or such Subsidiary's officers, to have any Material Adverse Effect.
5.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the Borrower or
---------------------------------------------
its Subsidiaries is in violation of any provision of its charter documents,
bylaws (or the equivalent thereof in any foreign jurisdiction), or any agreement
or instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could reasonably be
expected to result in the imposition of substantial penalties or have a Material
Adverse Effect.
5.10. TAX STATUS. The Borrower and its Subsidiaries (i) have made or filed
----------
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which any of them is subject, (ii) have paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (iii) have set aside on their
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
Except for taxes being contested as provided in (ii) above, there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrower know of no basis for any such
claim.
5.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
-------------------
is continuing.
5.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the Borrower or
-------------------------------------------
its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company", or an affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is it an "investment
company", or an "affiliated company" or a "principal underwriter" of an
"investment company", as such terms are defined in the Investment Company Act of
1940.
5.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
----------------------------------------
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future fixed or floating charge over,
lien on, or security interest in, any assets or property of the Borrower or any
of its Subsidiaries or any rights relating thereto.
5.14. PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
-------------------------------
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Administrative Agent's security interest in the
Collateral. The Collateral and the Administrative Agent's rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrower or a Guarantor party to one of the Security Documents is
the owner of the Collateral free from any fixed or floating charge, lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
5.15. CERTAIN TRANSACTIONS. Except for arm's length transactions pursuant
---------------------
to which the Borrower or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
5.16. EMPLOYEE BENEFIT PLANS.
----------------------
5.16.1. IN GENERAL. Each Employee Benefit Plan and each Guaranteed
----------
Pension Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the
Code, including but not limited to the provisions thereunder respecting
prohibited transactions and the bonding of fiduciaries and other persons
handling plan funds as required by ss.412 of ERISA. The Borrower has
heretofore delivered to the Administrative Agent the most recently
completed annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under ss.103(d) of ERISA, with
respect to each Guaranteed Pension Plan.
5.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
--------------------------------
which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment, except as required by Title I, Part 6 of ERISA or the
applicable state insurance laws. The applicable Borrower may terminate each
such Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of such Borrower without
liability to any Person other than for claims arising prior to termination.
5.16.3. GUARANTEED PENSION PLANS. Each contribution required to be
-------------------------
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to ss.307 of ERISA or ss.401(a)(29) of the Code. No liability to
the PBGC (other than required insurance premiums, all of which have been
paid) has been incurred by the Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable
Event (other than an ERISA Reportable Event as to which the requirement of
30 days notice has been waived), or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which
in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of ss.4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
5.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
--------------------
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.4204 of ERISA. No Borrower nor
any ERISA Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of ss.4241 or
ss.4245 of ERISA or is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to terminate or has been
terminated under ss.4041A of ERISA.
5.17. USE OF PROCEEDS.
---------------
5.17.1. GENERAL. The proceeds of the Loan shall be used for working
-------
capital and general corporate purposes of FCI and its Subsidiaries.
5.17.2. REGULATIONS U AND X. No portion of the Loan is to be used for
-------------------
the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
5.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of the Loan
---------------------
is to be used for the purpose of (a) knowingly purchasing, or providing
credit support for the purchase of, Ineligible Securities from a Section 20
Subsidiary during any period in which such Section 20 Subsidiary makes a
market in such Ineligible Securities, (b) knowingly purchasing, or
providing credit support for the purchase of, during the underwriting or
placement period, any Ineligible Securities being underwritten or privately
placed by a Section 20 Subsidiary, or (c) making, or providing credit
support for the making of, payments of principal or interest on Ineligible
Securities underwritten or privately placed by a Section 20 Subsidiary and
issued by or for the benefit of the Borrower or any Subsidiary or other
Affiliate of the Borrower.
5.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all necessary steps
------------------------
to investigate the past and present condition and usage of the Real Estate and
the operations conducted thereon and, based upon such diligent investigation,
has determined that:
(a) none of the Borrower, its Subsidiaries or any operator of the Real
Estate or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under
the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state, local or foreign statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation would have a Material
Adverse Effect;
(b) none of the Borrower and its Subsidiaries has received notice from
any third party including, without limitation, any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that any
hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that the Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances;
(c) except as set forth on Schedule 5.18 attached hereto: (i) no
-------- ----
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of
the Real Estate; (ii) in the course of any activities conducted by the
Borrower, its Subsidiaries or operators of its properties, no Hazardous
Substances have been generated or are being used on the Real Estate except
in accordance with applicable Environmental Laws; (iii) there have been no
releases (i.e. any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on, upon, into or
from the properties of the Borrower or its Subsidiaries, which releases
would have a material adverse effect on the value of any of the Real Estate
or adjacent properties or the environment; (iv) to the best of the
Borrower's knowledge, there have been no releases on, upon, from or into
any real property in the vicinity of any of the Real Estate which, through
soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, the Real
Estate; and (v) in addition, any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only by
carriers having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which transporters
and facilities have been and are, to the best of the Borrower's knowledge,
operating in compliance with such permits and applicable Environmental
Laws; and
(d) None of the Borrower and its Subsidiaries or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to
the recording of any Mortgage or to the effectiveness of any other
transactions contemplated hereby.
5.19. SUBSIDIARIES, ETC. The Subsidiaries of the Borrower are listed on
------------------
Schedule 5.19. Each of the Subsidiaries of the Borrower listed on Schedule 5.19
-------- ---- -------- ----
is a wholly-owned Subsidiary of the Borrower. Except as set forth on Schedule
--------
5.19 hereto, neither the Borrower nor any of its Subsidiaries is engaged in any
----
joint venture or partnership with any other Person. Schedule 5.19 sets forth all
-------- ----
of the Subsidiaries of the Borrower that are Excluded Subsidiaries. Each
Excluded Subsidiary set forth on Schedule 5.19 either (i) has assets of less
-------- ----
than $3,000,000 or (ii) annual net income of less than $300,000.
5.20. DISCLOSURE. Except as disclosed to the Administrative Agent and the
----------
Banks in writing as of the Closing Date, neither this Credit Agreement nor any
of the other Loan Documents contains any untrue statement of a material fact or
omits to state a material fact (known to the Borrower or any of its Subsidiaries
in the case of any document or information not furnished by it or any of its
Subsidiaries) necessary in order to make the statements herein or therein not
misleading. Except as disclosed to the Administrative Agent and the Banks in
writing as of the Closing Date, there is no fact known to the Borrower or any of
its Subsidiaries which has a Material Adverse Effect, or which is reasonably
likely in the future to have a Material Adverse Effect, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.
6. AFFIRMATIVE COVENANTS OF THE BORROWER.
-------------------------------------
The Borrower covenants and agrees that, so long as all or any portion of
the Loan or any of the Notes is outstanding or any Bank has any obligation to
make all or any portion of the Loan:
6.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
-----------------
to be paid the principal and interest on the Loan, all fees and all other
amounts provided for in this Credit Agreement and the other Loan Documents to
which the Borrower or any of its Subsidiaries is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.
6.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief executive
---------------------
office at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, or at such
other place in the United States of America as FCI shall designate upon written
notice to the Administrative Agent, where notices, presentations and demands to
or upon FCI in respect of the Loan Documents to which FCI is a party may be
given or made.
6.3. RECORDS AND ACCOUNTS. The Borrower will (i) keep, and cause each of
--------------------
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (ii) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (iii) at all times engage Ernst & Young
LLP or other independent certified public accountants satisfactory to the
Administrative Agent as the independent certified public accountants of the
Borrower and its Subsidiaries and will not permit more than thirty (30) days to
elapse between the cessation of such firm's (or any successor firm's) engagement
as the independent certified public accountants of the Borrower and its
Subsidiaries and the appointment in such capacity of a successor firm as shall
be satisfactory to the Administrative Agent.
6.4. Financial Statements, Certificates and Information. The Borrower will
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deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than one
hundred twenty (120) days after the end of each fiscal year of the
Borrower, the consolidated balance sheet of FCI and its Subsidiaries as at
the end of such year, and the related consolidated statement of income and
consolidated statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated statements to be in reasonable detail, prepared in accordance
with generally accepted accounting principles, and certified without
qualification by Ernst & Young LLP or by other independent certified public
accountants satisfactory to the Administrative Agent, together with a
written statement from such accountants to the effect (i) that they have
read a copy of this Credit Agreement, and (ii) that, in making the
examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default under ss.ss.7 or 8 hereof, or,
if such accountants shall have obtained knowledge of any then existing
Default or Event of Default they shall disclose in such statement any such
Default or Event of Default; provided that such accountants shall not be
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liable to the Banks for failure to obtain knowledge of any Default or Event
of Default;
(b) as soon as practicable, but in any event not later than sixty (60)
days after the end of each fiscal quarter (other than the fourth fiscal
quarter) of the Borrower (i) copies of the unaudited consolidated balance
sheet of FCI and its Subsidiaries as at the end
of such fiscal quarter, and the related consolidated statement of income
and consolidated statement of cash flow for the portion of Borrower's
fiscal year then elapsed, each setting forth in comparative form (A) the
figures from the previous fiscal year and (B) the Borrower's annual budget
delivered pursuant to ss.6.4(f) hereof, broken down by resort and all in
reasonable detail, together with a certification by the principal financial
or accounting officer of FCI that the information contained in such
financial statements fairly presents the financial position of FCI and its
Subsidiaries on the date thereof and for the period then elapsed (subject
to year-end adjustments);
(c) as soon as practicable, but in any event not later than
twenty-five (25) days after the end of each fiscal month, (i) copies of
FCI's internal monthly management report which shall include the unaudited
consolidated balance sheet of FCI and its Subsidiaries and the unaudited
consolidating balance sheet of FCI and its Subsidiaries (done by resort),
each as at the end of such fiscal month, and the related consolidated
statement of income and consolidating statement of income (done by resort)
for the portion of the Borrower's fiscal year then elapsed, each (except
for the consolidating statements) setting forth in comparative form (A) the
figures from the previous fiscal year and (B) FCI's annual budget delivered
pursuant to ss.6.4(h) hereof, broken down by resort and all in reasonable
detail and prepared in accordance with generally accepted accounting
principles;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, (i) a statement certified by
the principal financial or accounting officer of the Borrower in
substantially the form of Exhibit B hereto and setting forth in reasonable
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detail computations evidencing compliance with each of the covenants set
forth in ss.8 hereof), and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since the Interim
Balance Sheet Date, and certifying that no Default or Event of Default
exists as of the date of such certificate, or if a Default or Event of
Default does exist specifying the nature and proposed remedy thereof;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of FCI;
(f) not later than December 31 of each fiscal year of the Borrower, a
draft annual consolidated budget for FCI and its Subsidiaries as well as
draft annual budgets for each resort, prepared on a monthly basis, for the
next following fiscal year, and not later than February 15 of each fiscal
year of the Borrower, a final annual consolidated budget for FCI and its
Subsidiaries as well as final annual budgets for each resort, prepared on a
monthly basis, for such fiscal year; and
(g) from time to time such other financial data and information
(including accountants' management letters) as the Administrative Agent or
any Bank may reasonably request.
6.5. NOTICES.
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6.5.1. DEFAULTS. The Borrower will promptly notify the Administrative
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Agent and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note, evidence
of indebtedness, indenture or other obligation to which or with respect to
which the Borrower or any of its Subsidiaries is a party or obligor,
whether as principal, guarantor, surety or otherwise, the Borrower shall
forthwith give written notice thereof to the Administrative Agent and each
of the Banks, describing the notice or action and the nature of the claimed
default.
6.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice to
--------------------
the Administrative Agent and each of the Banks (i) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (ii) upon becoming aware thereof,
of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any
federal, state, local or foreign environmental agency or board, that has
the potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower or any of its Subsidiaries, or the
Administrative Agent's security interests pursuant to the Security
Documents.
6.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower will,
-----------------------------------------
immediately upon becoming aware thereof, notify the Administrative Agent
and each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or other
defenses to which any of the Collateral, or the Administrative Agent's
rights with respect to the Collateral, are subject in an amount equal to or
greater than $500,000.
6.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and will
----------------------------------
cause each of its Subsidiaries to, give notice to the Administrative Agent
and each of the Banks in writing within fifteen (15) days of becoming aware
of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the Borrower or any of
its Subsidiaries that could reasonably be expected to have a materially
adverse effect on the Borrower or any of its Subsidiaries and stating the
nature and status of such litigation or proceedings. The Borrower will, and
will cause each of its Subsidiaries to, give notice to the Administrative
Agent and each of the Banks, in writing, in form and detail satisfactory to
the Administrative Agent, within ten (10) days of any judgment not covered
by insurance, final or otherwise, against the Borrower or any of its
Subsidiaries in an amount in excess of $1,000,000.
6.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will do
-----------------------------------------------
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company or limited liability partnership. It
(i) will cause all of its properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment, (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (iii) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this ss.6.6 shall prevent the Borrower from
--------
discontinuing the operation and maintenance of any of its properties or any of
those of
its Subsidiaries if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and that do not have a
Material Adverse Effect.
6.7. INSURANCE. The Borrower will, and will cause each of its Subsidiaries
---------
to, maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent, all
of which insurance shall be reasonably satisfactory to the Administrative Agent.
Without limiting the generality of the foregoing, the Borrower will, and will
cause each of its Subsidiaries to, maintain insurance on the Mortgaged
Properties for which the Borrower or any such Subsidiary is the fee owner in
accordance with the terms of the Mortgages. The Borrower shall, and shall cause
its Subsidiaries (1) to use its best efforts, in the case of Projects where the
Borrower or any of its Subsidiaries maintains primary or substantial
responsibility for management, administration or other services of a similar
nature, and (2) to do or cause to be done all things which it may accomplish
with a reasonable amount of cost or effort, in the case of Projects where the
Borrower or any of its Subsidiaries does not maintain primary or substantial
responsibility for management, administration or other services of a similar
nature, to cause each of the POAs for each Projects, to (A) maintain one or more
policies of "all-risk" property and general liability insurance with financially
sound and reputable insurers, providing coverage in scope and amount which (x)
satisfies the requirements of the declarations (or any similar charter document)
governing the POA for the maintenance of such insurance policies, and (y) is at
least consistent with the scope and amount of such insurance coverage obtained
by prudent POAs and/or management of other similar developments in the same
jurisdiction; and (B) apply the proceeds of any such insurance policies in the
manner specified in the relevant declarations (or any similar charter document)
governing the POA and/or any similar charter documents of such POA (which
efforts shall include, in any case, voting as a member of the POA or as a proxy
or attorney-in-fact for the nominee under the applicable Title Clearing
Agreement). For the avoidance of doubt, the parties hereto acknowledge that the
ultimate discretion and control relating to the maintenance of any such
insurance policies is vested in the POAs in accordance with the respective
declaration (or any similar charter document) relating to each VOI Regime.
6.8. TAXES. The Borrower will, and will cause each of its Subsidiaries to,
-----
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
--------
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
-------- -------
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
6.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
---------------------------------------
6.9.1. GENERAL. The Borrower shall permit the Banks, through the
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Administrative Agent or any of the Banks' other designated representatives,
to visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and to
discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Administrative
Agent or any Bank may reasonably request. All visits and inspections by the
Administrative Agent shall be conducted at the expense of the Borrower.
6.9.2. COMMERCIAL FINANCE EXAMINATIONS. No more frequently than once
-------------------------------
each calendar year, or more frequently as determined by the Administrative
Agent if an Event of Default shall have occurred and be continuing, upon
the request of the Administrative Agent, the Borrower will permit the
Banks, through the Administrative Agent or any of the Bank's other
designated representatives, to conduct a commercial finance examination of
the Borrower and its Subsidiaries, at such reasonable times and intervals
as the Administrative Agent will request. All such commercial finance
examinations shall be conducted and made at the expense of the Borrower.
6.9.3. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower authorizes the
--------------------------------
Administrative Agent and, if accompanied by the Administrative Agent, the
Banks to communicate directly with the Borrower's independent certified
public accountants and authorizes such accountants to disclose to the
Administrative Agent and the Banks any and all financial statements and
other supporting financial documents and schedules including copies of any
management letter with respect to the business, financial condition and
other affairs of the Borrower or any of its Subsidiaries. At the request of
the Administrative Agent, the Borrower shall deliver a letter addressed to
such accountants instructing them to comply with the provisions of this
ss.6.9.3.
6.9.4. ENVIRONMENTAL ASSESSMENTS. Whether or not an Event of Default
--------------------------
shall have occurred, the Administrative Agent may, from time to time, in
its discretion for the purpose of assessing and ensuring the value of any
Mortgaged Property, obtain one or more environmental assessments or audits
of such Mortgaged Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the
Administrative Agent to evaluate or confirm (a) whether any Hazardous
Materials are present in the soil or water at such Mortgaged Property and
(b) whether the use and operation of such Mortgaged Property complies with
all Environmental Laws. Environmental assessments may include without
limitation detailed visual inspections of such Mortgaged Property including
any and all storage areas, storage tanks, drains, dry xxxxx and leaching
areas, and the taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or analyses as the
Administrative Agent deems appropriate. All such environmental assessments
shall be conducted and made at the expense of the Borrower.
6.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The Borrower
-------------------------------------------------------
will, and will cause each of its Subsidiaries to, comply in all material
respects with (i) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws, (ii) the provisions of its charter
documents and by-laws, (iii) all agreements and instruments by which it or any
of its properties may be bound and (iv) all applicable decrees, orders, and
judgments. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any of its Subsidiaries may fulfill any
of its obligations hereunder or any of the other Loan Documents to which the
Borrower or such Subsidiary is a party, the
Borrower will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
the Borrower or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Administrative Agent and the Banks with
evidence thereof.
6.11. EMPLOYEE BENEFIT PLANS. The Borrower will (i) promptly upon filing
-----------------------
the same with the Department of Labor or Internal Revenue Service, furnish to
the Administrative Agent a copy of the most recent actuarial statement required
to be submitted under ss.103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (ii)
promptly upon receipt or dispatch, furnish to the Administrative Agent any
notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245
of ERISA.
6.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
----------------
solely for working capital and general corporate purposes of FCI and its
Subsidiaries
6.13. MORTGAGED PROPERTY; FLEET CONCENTRATION ACCOUNT. The Borrower shall,
------------------------------------------------
and shall cause each of its Subsidiaries to, (1) at the request of the Majority
Banks at any time following the occurrence of a Triggering Event or (2) at the
request of the Administrative Agent and any time following the occurrence of an
Event of Default:
(a) as soon as reasonably practicable, but in any event within thirty
(30) days after such request, deliver forthwith to the Administrative Agent
a fully executed valid and enforceable first priority mortgage or deed of
trust over any or all real property (including, without limitation, land,
both undeveloped and in the process of development, and residential housing
relating to the development of VOIs or Lots) then owned by the Borrower or
any of its Subsidiaries (other than Nonconsolidated Subsidiaries), but
excluding any VOIs or Lots which are the subject of any Base Contracts
originated by FCI or any of its Subsidiaries prior to the recording of such
mortgage or deed of trust. Such mortgage or deed of trust shall be in form
and substance satisfactory to the Administrative Agent, and the Borrower or
such Subsidiary shall also deliver title insurance policies, surveys,
evidences of insurances with the Administrative Agent named as loss payee
and additional insured, legal opinions and other documents and certificates
with respect to such real estate as may be requested by the
Administrative Agent. The Borrower further agrees that, following the
taking of such actions with respect to such real estate, the Administrative
Agent shall have for the benefit of the Banks and the Administrative Agent
and valid and enforceable first priority mortgage or deed of trust over
such real estate, free and clear of all defects and encumbrances except for
Permitted Liens. In order to permit the Borrower or any Subsidiary to
register all or a portion of the real property subject to such mortgage or
deed of trust as a VOI Regime under applicable law, such mortgages and
deeds of trust shall contain language substantially similar to that
appearing in ss.26 and ss.27 hereof requiring the Administrative Agent to
release its lien or security interest in any Lot entered into by the
Borrower or any Subsidiary in the ordinary course of business or VOI which
is the subject of a purchase contract or Base Contract with a bona-fide,
third party purchaser (such person being a natural person) and for which
the purchaser of such Lot or VOI pursuant to such purchase contract or Base
Contract has paid in full the purchase price or the requisite percentage of
the purchase price for deeding pursuant to such purchase contract or Base
Contract and has otherwise fully discharged all of such purchaser's
obligations and responsibilities required to be discharged as a condition
to deeding.
(b) (i) subject to ss.7.5.2 of the RC Agreement, cause all cash
proceeds received by the Borrower or any of the Guarantors from the
Nonconsolidated Subsidiaries to be deposited only into the Fleet
Concentration Account, and (ii) at all times ensure that immediately upon
the Borrower's or any of the Guarantors' receipt of any funds constituting
cash proceeds of any Collateral, all such amounts shall have been deposited
in the Fleet Concentration Account. The Borrower hereby agrees that all
amounts received by the Administrative Agent in the Fleet Concentration
Account will be the sole and exclusive property of the Administrative
Agent, for the accounts of the Banks and the Administrative Agent, to be
applied in accordance with the terms of this Credit Agreement.
6.14. FURTHER ASSURANCES. The Borrower will, and will cause each of its
-------------------
Subsidiaries to, cooperate with the Banks and the Administrative Agent and
execute such further instruments and documents as the Majority Banks or the
Administrative Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Credit Agreement and the other Loan
Documents.
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
------------------------------------------
The Borrower covenants and agrees that, so long as all or any portion of
the Loan or any of the Notes is outstanding or any Bank has any obligation to
make all or any portion of the Loan:
7.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
------------------------------
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Administrative Agent arising
under any of the Loan Documents;
(b) current liabilities of the Borrower or such Subsidiary incurred in
the ordinary course of business not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies and
liabilities under employee benefit plans, including, without limitation,
pension plans, to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of ss.6.8;
(d) Indebtedness in an aggregate amount not to exceed $1,000,000 in
respect of judgments or awards that have been in force for less than the
applicable period for taking an appeal so long as execution is not levied
thereunder or in respect of which the Borrower or such Subsidiary shall at
the time in good faith be prosecuting an appeal or proceedings for review
and in respect of which a stay of execution shall have been obtained
pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(f) Securitizations with respect to which the obligor is a
special-purpose, bankruptcy-remote Subsidiary of FAC, neither FCI, FAC nor
any of FCI's other Subsidiaries is directly or indirectly liable for any
indebtedness or obligations incurred by such special-
purpose bankruptcy remote Subsidiary, and neither FAC, FCI nor any of FCI's
other Subsidiaries is obligated to repurchase defaulted Base Contracts sold
to such special-purpose, bankruptcy-remote Subsidiary as part of such
Securitization;
(g) purchase-money Indebtedness (exclusive of any Indebtedness
permitted pursuant to (k) below) incurred in connection with the
acquisition of any real or tangible personal property by FCI or its
Subsidiaries (other than FCC and Nonconsolidated Subsidiaries) or the
construction of improvements on any real property owned by FCI or its
Subsidiaries (other than FCC and Nonconsolidated Subsidiaries), provided
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that (A) such Indebtedness is non-recourse to FCI or such Subsidiary and
----
(B) such Indebtedness does not exceed in the aggregate at any time ten
percent (10%) of Consolidated Tangible Net Worth;
(h) unsecured Indebtedness of a Guarantor to FCI or of FCI to a
Guarantor which is expressly subordinated and made junior to the payment
and performance of the Obligations;
(i) Indebtedness existing on the date hereof and listed and described
on Schedule 7.1 hereto and renewals which do not increase the amount
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thereof, in each case satisfactory to the Administrative Agent;
(j) obligations of FRC, FCC and FFC-II to FAC under the Receivables
Purchase Agreements;
(k) Indebtedness of the Borrower and FAC under Capitalized Leases in
an amount not to exceed $30,000,000 in the aggregate at any time
outstanding;
(l) Senior Indebtedness; and
(m) Indebtedness of the Borrower not described in the foregoing
clauses (a)-(l) which is incurred to develop one or more Projects for which
the Administrative Agent and Majority Banks have declined to provide
financing, provided that (A) such Indebtedness does not at anytime exceed
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$25,000,000 in the aggregate, (B) the collateral securing such Indebtedness
shall be limited to the Project for which such Indebtedness is used and the
Base Contracts originated for VOIs or Lots located in such Project, and (C)
the total cost of such Project is less than the Total Commitment as of the
date such Indebtedness is incurred.
7.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit any
---------------------
of its Subsidiaries to, (i) create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (ii) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (iii) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (iv) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (v) sell, assign, pledge or otherwise transfer any "receivables"
as defined in clause (vii) of the definition of the term "Indebtedness," with or
without recourse; provided that the Borrower or such Subsidiary may create or
--------
incur or suffer to be created or incurred or to exist:
(a) liens on assets other than the Collateral to secure taxes,
assessments and other government charges in respect of obligations not
overdue or liens on assets other than the collateral to secure claims for
labor, material or supplies in respect of obligations not overdue;
(b) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations;
(c) liens on assets other than the Collateral in respect of judgments
or awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in
respect of which the Borrower or such Subsidiary shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal or
review;
(d) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties other than the Collateral in respect of
obligations (i) not more than thirty (30) days overdue or (ii) or which are
being contested in good faith and for
which a surety bond has been obtained in an amount sufficient to effect
satisfaction and discharge thereof;
(e) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or such Subsidiary is a party, and
other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its Subsidiaries,
which defects do not individually or in the aggregate have a materially
adverse effect on the business of the Borrower individually or of the
Borrower and its Subsidiaries on a consolidated basis;
(f) purchase money security interests in or purchase money mortgages
on real or personal property acquired after the date hereof to secure
purchase money Indebtedness of the type and amount permitted by ss.7.1(g),
incurred in connection with the acquisition of such real or personal
property or construction of improvements on such real property, which
security interests or mortgages cover only the real or personal property so
acquired or to be improved, provided that such real or personal property
does not constitute Collateral;
(g) liens on the collateral described in ss.7.1(m) hereof to secure
the Indebtedness permitted by ss.7.1(m);
(h) liens existing on the date hereof and listed on Schedule 7.2
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hereto;
(i) liens in favor of the Administrative Agent for the benefit of the
Banks and the Administrative Agent under the Loan Documents;
(j) liens on those Base Contracts and other assets transferred to a
special-purpose bankruptcy-remote Subsidiary of FAC to secure the
Indebtedness of such Subsidiary described in ss.7.1(f);
(k) liens on property or assets which do not constitute Collateral to
secure the Senior Indebtedness; and
(l) liens on Real Estate consisting of Assessments not yet due or
payable.
7.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
-----------------------------
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by the
Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Xxxxx'x
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments listed on Schedule 7.3 hereto;
-------- ---
(e) Investments existing on the date hereof consisting of Investments
by the Borrower in Subsidiaries of the Borrower;
(f) Investments with respect to Indebtedness permitted by ss.7.1(h) so
long as such entities remain Subsidiaries of FCI;
(g) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business;
(h) Investments consisting of promissory notes received as proceeds of
asset dispositions permitted by ss.7.5.2(ii);
(i) Investments consisting of capital contributions (whether in cash
or by forgiveness of intercompany indebtedness) by FCI to a Guarantor;
(j) Investments consisting of capital contributions to or promissory
notes received as proceeds from a special-purpose bankruptcy-remote
Subsidiary of FAC by reason of a disposition of Base Contracts pursuant to
a Securitization so long as such Securitization is permitted by ss.7.1(f)
and such disposition of Base Contracts is permitted by ss.7.5.2(iii); and
(k) Investments consisting of Distributions permitted under Section
7.4 hereof.
7.4. DISTRIBUTIONS. The Borrower will not make any Distributions, except
-------------
that FCI may make:
(i) Distributions to its stockholders consisting of the declaration
and payment of dividends; and
(ii) Distributions consisting of the repurchase by FCI of shares of
its common stock issued to or owned by employees under employment benefit
plans or arrangements, the consideration for which involves the payment by
FCI of a corresponding value in withholding taxes to federal and state
taxing authorities, provided that such repurchases shall not exceed an
aggregate of $350,000 in any calendar year.
in each case, so long as (a) such Distributions in the aggregate do not exceed
forty percent (40%) of the Consolidated Net Income of FCI and its Subsidiaries
for the fiscal year immediately preceding the fiscal year in which such
Distributions are to be made, (b) in the case of Distributions described in
clause (i) above, such Distributions are made no more frequently than quarterly
during each fiscal year, (c) any such Distributions are reconciled in the
audited year end financial statements of FCI and its Subsidiaries delivered to
the Administrative Agent pursuant to ss.6.4, and (d) no Default or Event of
Default has occurred and is continuing, or would occur after giving effect to
such Distributions. Any Subsidiary of the Borrower may make Distributions to the
Borrower. Any shares of repurchased FCI common stock may be held by FCI as
treasury stock, reissued or cancelled.
7.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
-----------------------------------------------
7.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and will not
------------------------
permit any of its Subsidiaries to, become a party to any amalgamation,
merger or consolidation, or agree to or effect any asset acquisition or
stock or share acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices) except the
merger or consolidation of any Subsidiary of FCI (other than FCC and
Nonconsolidated Subsidiaries) with and into FCI, or the merger or
consolidation of two or more Subsidiaries (other than FCC and
Nonconsolidated Subsidiaries) of the Borrower.
7.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will not
----------------------
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than the sale of lots, homes and VOIs, in
each case in the ordinary course of business consistent with past
practices, without the prior written approval of the Majority Banks, except
as set forth below:
(i) The Borrower or such Subsidiary may sell or substitute assets so
long as (a) such sales are for cash to unrelated third parties in an arms
length transaction, (b) such assets are not, and are not intended to be,
Collateral, (c) the Net Cash Sale Proceeds of each such sale are used to
repay the Loan in accordance with ss.2.3.2 and are applied as set forth in
ss.2.3.2 or ss.11.4, as applicable, and (d) no Default or Event of Default
has occurred and is continuing, or would occur after giving effect to such
disposition.
(ii) The Borrower or its Subsidiaries may sell Base Contracts and
beneficial interests in VOIs and Lots underlying such Base Contracts to
unrelated third parties provided that (a) each such sale is for cash, (b)
-------- ----
the purchase price of the Base Contracts sold shall not be less than 80% of
the principal components of such Base Contracts plus all accrued and unpaid
interest on such Base Contracts, (c) the Net Cash Sale Proceeds of each
such sale are used to repay the Loan in accordance with ss.2.3.2 and are
applied as set forth in ss.2.3.2 or ss.11.4, as applicable, and (d) no
Default or Event of Default has occurred and is continuing, or would occur
after giving effect to such disposition.
(iii) The Borrower or its Subsidiaries may sell Base Contracts and
beneficial interests in VOIs and Lots underlying such Base Contracts to
special-purpose bankruptcy-remote Subsidiaries of FAC (other than FCC, FRC
and FFC-II) pursuant to Securitizations permitted by ss.7.1(f), provided
--------
that (a) the cash portion of the purchase price of the Base Contracts sold
----
shall not be less than 80% of the principal components of such Base
Contracts plus all accrued and unpaid interest on such Base Contracts, (b)
the Net Cash Sale Proceeds of each such sale are used to repay the Loan in
accordance with ss.2.3.2 and are applied as set forth in ss.2.3.2 or
ss.11.4, as applicable, and (c) no Default or Event of Default has occurred
and is continuing, or would occur after giving effect to such disposition.
(iv) FMB and the VB Originating Subsidiaries may sell or substitute
Base Contracts and beneficial interests in VOIs and Lots underlying such
Base Contracts to FCI, and FCI may sell or
substitute Base Contracts and beneficial interests in VOIs and Lots
underlying such Base Contracts to FAC, and FAC may sell or substitute Base
Contracts and beneficial interests in VOIs and Lots underlying such Base
Contracts to FCC, FRC and FFC-II, provided that (a) the terms of each such
sale are no less favorable than those contained in the Operating Agreement
(with respect to sales from FMB and the VB Originating Subsidiaries to FCI
and sales from FCI to FAC) or the Receivables Purchase Agreements (with
respect to sales from FAC to FCC, FRC and FFC), and (b) the Net Cash Sale
Proceeds of each such sale are used to repay the Loan in accordance with
ss.2.3.2 and are applied as set forth in ss.2.3.2 or ss.11.4, as
applicable, and (c) no Default or Event of Default has occurred or is
continuing, or would occur after giving effect to such disposition.
7.5.3. DISPOSITION OF STOCK. The Borrower will not, and will not
---------------------
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition or issuance of any stock or share capital of a Subsidiary
to any Person other than the Borrower.
7.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any of
------------------
its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby
the Borrower or such Subsidiary shall sell or transfer any property owned by it
in order then or thereafter to lease such property or lease other property that
the Borrower or such Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred.
7.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on Schedule
------------------------------------ --------
5.18 hereto, the Borrower will not, and will not permit any of its Subsidiaries
----
to, (i) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, (ii) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances, (iii) generate any Hazardous
Substances on any of the Real Estate, (iv) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (v) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law in any material respect or bring such Real Estate
in violation of any Environmental Law in any material respect.
7.8. SUBORDINATED DEBT. The Borrower will not, and will not permit any of
------------------
its Subsidiaries to, amend, supplement or otherwise modify the terms of any of
the Subordinated Debt or prepay, redeem or repurchase any of the Subordinated
Debt.
7.9. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA Affiliate
----------------------
will
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to ss.302(f) or ss.4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of the
Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
7.10. BUSINESS ACTIVITIES. The Borrower will not, and will not permit any
--------------------
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
7.11. FISCAL YEAR. The Borrower will not, and will not permit any of its
-----------
Subsidiaries to, change the date of the end of its fiscal year (or the
equivalent thereof in any foreign jurisdiction) from that set forth in ss.5.4.1.
7.12. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
------------------------------
permit any of its Subsidiaries to, engage in any transaction with
any Affiliate (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of the Borrower, any corporation, partnership,
trust or other entity in which any such Affiliate has a substantial interest or
is an officer, director, trustee or partner, unless such transaction (a) is on
terms no more favorable to such Person than would have been obtainable on an
arm's-length basis in the ordinary course of business and (b) has been disclosed
to and approved by the Majority Banks.
7.13. NEGATIVE PLEDGES. The Borrower will not, and will not permit its
-----------------
Subsidiaries to, enter into or permit to exist any arrangement or agreement,
enforceable under applicable law, which directly or indirectly prohibits the
Borrower or any of its Subsidiaries from creating or incurring any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest on
any assets owned by the Borrower or such Subsidiary in favor of the
Administrative Agent for the benefit of the Banks and the Administrative Agent
under the Loan Documents, other than with respect to assets which are subject to
Permitted Liens.
7.14. RC AGREEMENT. Without the prior written consent of the Majority
-------------
Banks, the Borrower will not, and will not permit any of its Subsidiaries to,
(a) amend, supplement or otherwise modify (pursuant to a waiver or otherwise)
the terms of any of the Senior Indebtedness, the RC Agreement or any of the
"Loan Documents" as defined therein in order to (i) make any covenants contained
in the RC Agreement or any of the "Loan Documents" as defined therein more
restrictive on the Borrower and its Subsidiaries or (ii) change any of the
advance rates set forth in the definition of "Borrowing Base" in the RC
Agreement, or (b) prepay, redeem or repurchase any of the Senior Indebtedness
except as expressly provided in the RC Agreement. The Borrower hereby agrees to
promptly deliver to the Administrative Agent a certified copy of any amendment,
restatement, modification or waiver to the RC Agreement or any of the "Loan
Documents" as defined therein.
7.15. MORTGAGED PROPERTY. At any time following the occurrence of a
-------------------
Triggering Event or an Event of Default, the Borrower will not, and will not
permit any of its Subsidiaries to, create a subdivision, condominium or
Ownership Regime with respect to any real property (including, without
limitation, land (both undeveloped and in the process of development) and
residential housing) owned by the Borrower or any of its Subsidiaries over
which the Administrative Agent has a Mortgage without the prior written consent
of the Majority Banks.
8. FINANCIAL COVENANTS OF THE BORROWER.
-----------------------------------
The Borrower covenants and agrees that, so long as all or any portion of
the Loan or any of the Notes is outstanding or any Bank has any obligation to
make all or any portion of the Loan:
8.1. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit the ratio of
---------------------------
(i) Consolidated Operating Cash Flow for any period of four (4) consecutive
fiscal quarters to (ii) the sum of (A) Consolidated Total Interest Expense for
such period, plus (B) any mandatory scheduled repayments of principal on all
----
Indebtedness (excluding Indebtedness under the Triple-A Credit Agreement) of the
Borrower and its Subsidiaries (excluding the Nonconsolidated Subsidiaries) paid
or due and payable during such period, to be less than 1.8 to 1 at any time.
8.2. LIABILITIES TO WORTH RATIO. The Borrower will not permit the ratio of
--------------------------
Consolidated Total Liabilities to Consolidated Tangible Net Worth to exceed
2.475 to 1 at any time.
8.3. CONSOLIDATED TANGIBLE NET WORTH. The Borrower will not permit
--------------------------------
Consolidated Tangible Net Worth at any time to be less than the sum of (i)
$207,000,000 plus (ii) on a cumulative basis, 60% of positive Consolidated Net
----
Income for each fiscal quarter beginning with the fiscal quarter ended June 30,
2000, plus (iii) 100% of the proceeds of any sale by FCI of (A) equity
----
securities issued by FCI, or (B) warrants or subscription rights for equity
securities issued by FCI.
8.4. CONSOLIDATED OPERATING MARGIN COVENANT. The Borrower will not permit,
---------------------------------------
as of the last day of any fiscal quarter, the ratio of Consolidated Earnings
before Interest and Taxes to Consolidated Total Revenue for the period of four
(4) consecutive fiscal quarters ended on such date to be less than eleven and
four-tenths percent (11.4%).
8.5. MINIMUM INVENTORY COVENANT. The Borrower will not permit, as of the
----------------------------
last day of any fiscal quarter, the ratio of Consolidated VOI Revenue to Average
Inventory for the period of four (4) consecutive fiscal quarters ended on such
date to be less than (a) 1.8 to 1 for any fiscal quarter ending prior to or on
December 31, 2000, and (b) 1.64 to 1 for any fiscal quarter ending thereafter.
8.6. SHADOW BORROWING BASE. The Borrower will not permit the aggregate
-----------------------
amount of Indebtedness of the Borrower and its Subsidiaries
(including the Nonconsolidated Subsidiaries) at any time to exceed the sum of
(i) 50% of Inventory plus (ii) 75% of Receivables.
----
9. CLOSING CONDITIONS.
------------------
The obligations of the Banks to make the Loan shall be subject to the
satisfaction of the following conditions precedent on or prior to October 20,
2000:
9.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
---------------
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
9.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall have
--------------------------------------
received from the Borrower and each of the Guarantors a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (i) its charter or certificate of partnership, as applicable,
or other incorporation or constituent documents as in effect on such date of
certification, and (ii) its by-laws, or partnership agreement, as applicable, as
in effect on such date.
9.3. CORPORATE, ACTION. All corporate and partnership action necessary for
------------------
the valid execution, delivery and performance by the Borrower and each of the
Guarantors of this Credit Agreement and the other Loan Documents to which it is
or is to become a party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Banks shall have been provided to each of the Banks.
9.4. INCUMBENCY CERTIFICATE. The Administrative Agent shall have received
-----------------------
from the Borrower and each of the Guarantors an incumbency certificate, dated as
of the Closing Date, signed by a duly authorized officer of the Borrower or such
Guarantor, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (i) to sign, in the name and on behalf of
each of the Borrower or such Guarantor, each of the Loan Documents and
Subordination Documents to which the Borrower or such Guarantor is or is to
become a party; (ii) in the case of the Borrower, to make Conversion Requests;
and (iii) to give notices and to take other action on its behalf under the Loan
Documents.
9.5. VALIDITY OF LIENS. The Security Documents shall be effective to create
-----------------
in favor of the Administrative Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under
applicable law) security interest in and lien upon the Collateral. All filings,
recordings, deliveries of instruments and other actions necessary or desirable
in the opinion of the Administrative Agent to protect and preserve such security
interests shall have been duly effected. The Administrative Agent shall have
received evidence thereof in form and substance satisfactory to the
Administrative Agent.
9.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Administrative
-----------------------------------------------
Agent shall have received from the Borrower and its Subsidiaries a completed and
fully executed Perfection Certificate and the results of UCC searches with
respect to the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Administrative Agent.
9.7. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
---------------------------
received (i) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Security Agreements and (ii)
certified copies of all policies evidencing such insurance (or certificates
therefore signed by the insurer or an agent authorized to bind the insurer).
9.8. FLEET CONCENTRATION ACCOUNT. The Borrower shall have established the
----------------------------
Fleet Concentration Account.
9.9. OPINION OF COUNSEL. Each of the Banks and the Administrative Agent
------------------
shall have received a favorable legal opinion addressed to the Banks and the
Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Banks and the Administrative Agent from (a) Xxxxx Xxxx LLP,
counsel to the Borrower and its Subsidiaries, (b) Xxxxxxx Xxxxxx, Florida
counsel to the Borrower and its Subsidiaries, and (c) such local counsel to the
Borrower and its Subsidiaries as may be required by the Administrative Agent.
9.10. PAYMENT OF FEES. The Borrower shall have paid to the Administrative
---------------
Agent and the Arranger all fees due to the Administrative Agent and the Arranger
under the Fee Letter.
9.11. INTERCREDITOR AGREEMENT. The Borrower, FAC, the Administrative Agent
-----------------------
and the Banks shall have entered into an Intercreditor Agreement with the RC
Agent and the XX Xxxxx.
9.12. DISBURSEMENT INSTRUCTIONS. The Administrative Agent shall have
--------------------------
received disbursement instructions from the Borrower with respect to the
proceeds of the Loan to be made on the Closing Date.
9.13. INTEREST RATE PROTECTION. The Borrower shall have obtained interest
------------------------
rate protection pursuant to a Rate Protection Agreement on a notional amount not
less than 50% of the amount of the Loan and at a rate and tenor satisfactory to
the Administrative Agent.
9.14. RATING AGENCY LETTERS. The Administrative Agent shall have received
---------------------
evidence with respect to the ratings of FCI's secured long-term senior debt
issued by Moody's and Standard & Poor's.
9.15. REGULATORY COMPLIANCE. The Administrative Agent shall have received
----------------------
all documents, opinions and instruments (including a completed Form U-1)
reasonably requested by the Administrative Agent relating to compliance with
applicable rules and regulations promulgated by the Federal Reserve Board and
other governmental and regulatory authorities all in form and substance
satisfactory to the Administrative Agent.
10. CONDITIONS TO BORROWING.
-----------------------
The obligations of the Banks to make the Loan, whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
10.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
--------------------------------------------------
representations and warranties of the Borrower and its Subsidiaries and the
Guarantors contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of the Loan, with the
same effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate do not have a Material Adverse Effect,
and to the extent that such representations and warranties relate expressly to
an earlier date).
10.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
--------------------
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make the Loan.
10.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
-------------------------
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
10.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
--------------------------
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Administrative Agent and the Administrative Agent's
Special Counsel, and the Banks, the Administrative Agent and such counsel shall
have received all information and such counterpart originals or certified or
other copies of such documents as the Administrative Agent may reasonably
request.
11. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
11.1. Events of Default and Acceleration. If any of the following events
-----------------------------------
("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of the Loan when the
same shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower or any of the Guarantors shall fail to pay any
interest on the Loan or other sums due hereunder or under any of the other
Loan Documents, when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(c) the Borrower shall fail to comply with any of its covenants
contained in ss.ss.6.1, 6.2, 6.5, 6.6, 6.7, 6.9, 6.12, 6.13, 6.14, 7 or 8
hereof;
(d) the Borrower or any of its Subsidiaries or any of the Guarantors
shall fail to perform any term, covenant or agreement contained herein or
in any of the other Loan Documents (other than those specified elsewhere in
this ss.11.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Administrative Agent;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries or any of the Guarantors in this Credit Agreement
or any of the other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Credit Agreement, as such
representation and warranty may be updated in writing from time to time by
the Borrower or any of its Subsidiaries or any of the Guarantors, shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries or any of the Guarantors
shall fail to pay at maturity, or within any applicable period of grace,
any obligation for borrowed money or credit received or in respect of any
Capitalized Leases in an aggregate amount in excess of $1,000,000, or fail
to observe or perform any material term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing borrowed money
or credit received (including, without limitation, Senior Indebtedness) or
in respect of any Capitalized Leases in an aggregate amount in excess of
$1,000,000 for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries or any of the Guarantors
shall make an assignment for the benefit of creditors, or admit in writing
its inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of the Borrower or any of its
Subsidiaries or any of the Guarantors or of any substantial part of the
assets of the Borrower or any of its Subsidiaries or any of the Guarantors
or shall commence any case or other proceeding relating to the Borrower or
any of its Subsidiaries or any of the Guarantors under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law of any jurisdiction, now or hereafter in
effect, or shall take any action to authorize or in furtherance of any of
the foregoing, or if any such petition or application shall be filed or any
such case or other proceeding shall be commenced against the Borrower or
any of its Subsidiaries or any of the Guarantors and the Borrower or any of
its Subsidiaries or any of the Guarantors shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries or any of the Guarantors bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of the Borrower or any Subsidiary of
the Borrower or any of the Guarantors in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries or any of the
Guarantors that, with other outstanding final judgments, undischarged,
against the Borrower or any of its Subsidiaries or any of the Guarantors
exceeds in the aggregate $1,000,000;
(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in
part;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Administrative Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall cease
to be perfected, or shall cease to have the priority contemplated by the
Security Documents, in each case otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or any of the Guarantors
party thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents
is illegal, invalid or unenforceable in accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $500,000, or the Borrower or any ERISA Affiliate
is assessed withdrawal liability pursuant to Title IV of ERISA by a
Multiemployer Plan requiring aggregate
annual payments exceeding $500,000, or any of the following occurs with
respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a
failure to make a required installment or other payment (within the meaning
of ss.302(f)(1) of ERISA), provided that the Administrative Agent
--------
determines in its reasonable discretion that such event (A) could be
expected to result in liability of the Borrower or any of its Subsidiaries
to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $500,000 and (B) could constitute grounds for the termination of
such Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United States
District Court of a trustee to administer such Guaranteed Pension Plan; or
(iii) the institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;
(m) the Borrower or any of its Subsidiaries or any of the Guarantors
shall be enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any
material part of its business and such order shall continue in effect for
more than thirty (30) days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower or any of its
Subsidiaries or any of the Guarantors if such event or circumstance is not
covered by business interruption insurance and would have a Material
Adverse Effect or a materially adverse effect on the business or financial
condition of such Guarantor;
(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries or any of the Guarantors if such
loss, suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Borrower or
such Subsidiary or such Guarantor;
(p) the Borrower or any of its Subsidiaries or any of the Guarantors
shall be indicted for a state or federal crime, or any civil or criminal
action shall otherwise have been brought against the Borrower or any of its
Subsidiaries or any of the Guarantors, a punishment for which in any such
case could include the forfeiture of any assets having a fair market value
in excess of $500,000; or
(q) (i) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 20% or more of
the outstanding shares of common stock of FCI; or, during any period of
twelve consecutive calendar months, individuals who were directors of FCI
on the first day of such period shall cease to constitute a majority of the
board of directors of FCI, or (ii) FCI shall at any time legally or
beneficially, cease to own all of the issued and outstanding capital stock
of FAC;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Banks shall, by
notice in writing to the Borrower declare all amounts owing with respect to this
Credit Agreement, the Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any Event of Default
--------
specified in ss.ss.11.1(g), 11.1(h) or 11.1(j), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Administrative Agent or any Bank.
11.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
----------------------------
Default specified in ss.11.1(g), ss.11.1(h) or ss.11.1(j) shall occur, each of
the Banks shall be relieved of all obligations to make the Loan to the Borrower.
If any other Event of Default shall have occurred and be continuing, the
Administrative Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrower, terminate the obligation of the Banks to make the Loan
to the Borrower, and upon such notice being given each of the Banks shall be
relieved of all obligations to make the Loan. No termination hereunder shall
relieve the Borrower or any of its Subsidiaries or any of the Guarantors of any
of the Obligations.
11.3. REMEDIES. In case any one or more of the Events of Default shall have
--------
occurred and be continuing, and whether or not the Banks shall
have accelerated the maturity of the Loan pursuant to ss.11.1, each Bank, if
owed any amount with respect to the Loan, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law the obtaining
of the ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Administrative Agent or the holder of any Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision of law.
11.4. DISTRIBUTION OF PROCEEDS. In the event that the Administrative Agent
------------------------
receives proceeds or in the event that, following the occurrence or during the
continuance of any Default or Event of Default, the Administrative Agent or any
Bank, as the case may be, receives any monies in connection with the enforcement
of any of the Security Documents, or otherwise with respect to the realization
upon any of the Collateral, such monies shall be distributed for application as
follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of all
reasonable costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Administrative Agent in connection with the
collection of such monies by the Administrative Agent, for the exercise,
protection or enforcement by the Administrative Agent of all or any of the
rights, remedies, powers and privileges of the Administrative Agent under
this Credit Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Administrative Agent against any taxes or liens which by law shall have, or
may have, priority over the rights of the Administrative Agent to such
monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; provided, however, that (i) distributions
-------- -------
shall be made (A) pari passu among Obligations with respect to the fees
---- -----
payable pursuant to ss.3.1 and all other Obligations and (B) with respect
to each type of Obligation
owing to the Banks, such as interest, principal, fees and expenses, among
the Banks pro rata, and (ii) the Administrative Agent may in its discretion
--- ----
make proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Administrative Agent
of all of the Obligations, to the payment of any obligations required to be
paid pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
12. SETOFF.
------
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to the Borrower and any securities or other property of the Borrower in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (i) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by all such Notes held by such
Bank, and (ii) if such Bank shall receive from any of the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Bank by proceedings
against the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes held by such Bank
any amount in excess of its ratable portion of the payments received by all of
the Banks with respect to the Notes held by all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
--- -----
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by it its proportionate payment as contemplated by this Credit
Agreement; provided that if all or any part of such excess payment is thereafter
--------
recovered from such Bank, such disposition and arrangements
shall be rescinded and the amount restored to the extent of such recovery, but
without interest.
13. THE ADMINISTRATIVE AGENT.
------------------------
13.1. AUTHORIZATION.
-------------
(a) The Administrative Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such powers
as are reasonably incident thereto, provided that no duties or
--------
responsibilities not expressly assumed herein or therein shall be implied
to have been assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each of the
Banks is that of an independent contractor. The use of the term
"Administrative Agent" is for convenience only and is used to describe, as
a form of convention, the independent contractual relationship between the
Administrative Agent and each of the Banks. Nothing contained in this
Credit Agreement nor the other Loan Documents shall be construed to create
an agency, trust or other fiduciary relationship between the Administrative
Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Administrative Agent is
nevertheless a "representative" of the Banks, as that term is defined in
Article 1 of the Uniform Commercial Code, for purposes of actions for the
benefit of the Banks and the Administrative Agent with respect to all
collateral security and guaranties contemplated by the Loan Documents. Such
actions include the designation of the Administrative Agent as "secured
party", "mortgagee" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise, relating to the
attachment, perfection, priority or enforcement of any security interests,
mortgages or deeds of trust in collateral security intended to secure the
payment or performance of any of the Obligations, all for the benefit of
the Banks and the Administrative Agent.
13.2. EMPLOYEES AND AGENTS. The Administrative Agent may exercise its
---------------------
powers and execute its duties by or through employees or
agents and shall be entitled to take, and to rely on, advice of counsel
concerning all matters pertaining to its rights and duties under this Credit
Agreement and the other Loan Documents. The Administrative Agent may utilize the
services of such Persons as the Administrative Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
13.3. NO LIABILITY. Neither the Administrative Agent nor any of its
-------------
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
13.4. NO REPRESENTATIONS.
------------------
13.4.1. GENERAL. The Administrative Agent shall be responsible for the
-------
execution or validity or enforceability of this Credit Agreement, the
Notes, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes,
or for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to
the Notes, or for any recitals or statements, warranties or representations
made herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of the Borrower or any
of its Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect any
of the properties, books or records of the Borrower or any of its
Subsidiaries. The Administrative Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the
Borrower or any holder of any of the Notes shall have been duly authorized
or is true, accurate and complete. The Administrative Agent has not made
nor does it now make any representations or warranties, express or implied,
nor does it assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Bank, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
13.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
----------------------------
compliance with the conditions set forth in ss.9, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Administrative Agent or the Arranger
to such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory
to such Bank, unless an officer of the Administrative Agent or the Arranger
active upon the Borrower's account shall have received notice from such
Bank prior to the Closing Date specifying such Bank's objection thereto and
such objection shall not have been withdrawn by notice to the
Administrative Agent or the Arranger to such effect on or prior to the
Closing Date.
13.5. PAYMENTS.
--------
13.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by the Borrower to
--------------------------------
the Administrative Agent hereunder or any of the other Loan Documents for
the account of any Bank shall constitute a payment to such Bank. The
Administrative Agent agrees promptly to distribute to each Bank such Bank's
pro rata share of payments received by the Administrative Agent for the
--- ----
account of the Banks except as otherwise expressly provided herein or in
any of the other Loan Documents.
13.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the opinion of the
------------------------------------
Administrative Agent the distribution of any amount received by it in such
capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Administrative Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Administrative
Agent its proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as shall be
determined by such court.
13.5.3. Delinquent Banks. Notwithstanding anything to the contrary
-----------------
contained in this Credit Agreement or any of the other Loan Documents, any
Bank (including any Acceding Bank) that fails (i) to make available to the
Administrative Agent its pro rata share of the Loan or (ii) to comply with
--- ----
the provisions of ss.12 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata
--- ----
share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied.
A Delinquent Bank shall be deemed to have assigned any and all payments due
to it from the Borrower, whether on account of the outstanding portion of
the Loan, interest, fees or otherwise, to the remaining nondelinquent Banks
for application to, and reduction of, their respective pro rata shares of
--- ----
the outstanding portion of the Loan. The Delinquent Bank hereby authorizes
the Administrative Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective pro rata shares of the outstanding
--- ----
portion of the Loan. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the assigned
payments to the outstanding portion of the Loan of the nondelinquent Banks,
the Banks' respective pro rata shares of the outstanding portion of the
--- ----
Loan have returned to those in effect immediately prior to such delinquency
and without giving effect to the nonpayment causing such delinquency.
13.6. HOLDERS OF NOTES. The Administrative Agent may deem and treat the
----------------
payee of any Note as the absolute owner or purchaser thereof for all purposes
hereof until the Administrative Agent shall have been furnished in writing with
a different name by such payee or by a subsequent holder, assignee or
transferee.
13.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
---------
harmless the Administrative Agent and its affiliates from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Administrative
Agent or such affiliate has not been reimbursed by the Borrower as required by
ss.14), and liabilities of every nature and character arising out of or related
to this Credit Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Administrative
Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Administrative Agent's willful misconduct or gross
negligence.
13.8. ADMINISTRATIVE AGENT AS BANK. In its individual capacity, Fleet shall
----------------------------
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the portion of the Loan made by it, and as the holder of
any of the Notes, as it would have were it not also the Administrative Agent.
13.9. RESIGNATION. The Administrative Agent may resign at any time by
-----------
giving sixty (60) days prior written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Majority Banks shall have the right to
appoint a successor Administrative Agent. Unless a Default or Event of Default
shall have occurred and be continuing, such successor Administrative Agent shall
be reasonably acceptable to the Borrower. If no successor Administrative Agent
shall have been so appointed by the Majority Banks and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
13.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
------------------------------------------------
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this ss.13.10 or upon
learning of a Default or an Event of Default in its capacity as Administrative
Agent it shall promptly notify the other Banks of the existence of such Default
or Event of Default.
13.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
----------------------------------
Default have occurred and shall be continuing, and whether or
not acceleration of the Obligations shall have occurred, the Administrative
Agent shall, if (i) so requested by the Majority Banks and (ii) the Banks have
provided to the Administrative Agent and/or the Administrative Agent such
additional indemnities and assurances against expenses and liabilities as the
Administrative Agent may reasonably request, direct the Administrative Agent to
proceed to enforce the provisions of the Security Documents authorizing the sale
or other disposition of all or any part of the Collateral and exercise all or
any such other legal and equitable and other rights or remedies as it may have
in respect of such Collateral. The Majority Banks may request in writing that
the Administrative Agent direct the Administrative Agent as to the method and
the extent of any such sale or other disposition, the Banks hereby agreeing to
indemnify and hold the Administrative Agent and/or the Administrative Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such requests and directions, provided that the
--------
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes the Administrative Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.
14. EXPENSES AND INDEMNIFICATION.
----------------------------
14.1. EXPENSES. Except as provided in the Commitment Letter with respect to
--------
fees and expenses incurred prior to the Closing Date, the Borrower agrees to pay
(i) the reasonable costs of producing and reproducing this Credit Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(ii) any taxes (including any interest and penalties in respect thereto) payable
by the Administrative Agent or any of the Banks (other than taxes based upon the
Administrative Agent's or any Bank's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby agreeing
to indemnify the Administrative Agent and each Bank with respect thereto), (iii)
the reasonable fees, expenses and disbursements of the Administrative Agent's
Special Counsel or any local counsel to the Administrative Agent or the Arranger
incurred in connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, any amendments, modifications, approvals, consents or
waivers hereto or hereunder, or the cancellation of any Loan Document upon
payment in full in cash of all of the Obligations or pursuant to any terms of
such Loan Document for providing for such cancellation, (iv) the fees, expenses
and disbursements of the Administrative Agent, the Arranger or any of their
affiliates incurred by the Administrative Agent, the Arranger or such affiliate
in connection
with (A) the preparation, syndication, administration or interpretation of the
Loan Documents and other instruments mentioned herein, including all title
insurance premiums and surveyor, engineering and appraisal charges and (B) the
issuance by Xxxxx'x and Standard & Poor's of ratings of FCI's secured long-term
senior debt, (v) any fees, costs, expenses and bank charges, including bank
charges for returned checks, incurred by the Administrative Agent in
establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral; (vi) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Administrative
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the
Administrative Agent in connection with (A) the enforcement of or preservation
of rights under any of the Loan Documents against the Borrower or any of its
Subsidiaries or any of the Guarantors or the administration thereof after the
occurrence of a Default or Event of Default and (B) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's or the Administrative Agent's relationship with the Borrower or any of
its Subsidiaries or any of the Guarantors and (vii) all reasonable fees,
expenses and disbursements of any Bank or the Administrative Agent incurred in
connection with UCC searches, UCC filings or mortgage recordings.
14.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
---------------
the Administrative Agent, the Arranger, the Banks and their respective
shareholders, directors, agents, officers, subsidiaries and affiliates from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby including, without
limitation, (i) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of the Loan, (ii) the reversal or withdrawal of any
provisional credits granted by the Administrative Agent upon the transfer of
funds from lock box, bank agency or concentration accounts or in connection with
the provisional honoring of checks or other items, (iii) any actual or alleged
infringement of any patent, copyright, trademark, service xxxx or similar right
of the Borrower or any of its Subsidiaries or any of the Guarantors comprised in
the Collateral, (iv) the Borrower or any of its Subsidiaries or any of the
Guarantors entering into or performing this Credit Agreement or any of the other
Loan Documents or (v) with respect to the Borrower and its Subsidiaries and
their respective properties and
assets, the violation of any Environmental Law, the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or threatened release
of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but
not limited to, claims with respect to wrongful death, personal injury or damage
to property), in each case including, without limitation, the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding, except
that the indemnified Person will not be entitled to indemnification for losses
due to its willful misconduct or gross negligence. In litigation, or the
preparation therefor, the Banks, the Arranger and the Administrative Agent and
their affiliates shall be entitled to select their own counsel and, in addition
to the foregoing indemnity, the Borrower agrees to pay promptly the reasonable
fees and expenses of such counsel. If, and to the extent that the obligations of
the Borrower under this ss.14.2 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law.
14.3. SURVIVAL. The covenants contained in this ss.14 shall survive payment
--------
or satisfaction in full of all other Obligations.
15. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
---------------------------------------------
15.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrower
-----------------------------------------------------
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the
Administrative Agent and each Bank any information delivered to such Section 20
Subsidiary by the Borrower or any of its Subsidiaries, and (b) the
Administrative Agent and each Bank to share with such Section 20 Subsidiary any
information delivered to the Administrative Agent or such Bank by the Borrower
or any of its Subsidiaries pursuant to this Credit Agreement, or in connection
with the decision of such Bank to enter into this Credit Agreement; it being
understood, in each case, that any such Section 20 Subsidiary receiving such
information shall be bound by the confidentiality provisions of this Credit
Agreement. Such authorization shall survive the payment and satisfaction in full
of all of Obligations.
15.2. CONFIDENTIALITY. Each of the Banks and the Administrative Agent
---------------
agrees, on behalf of itself and each of its affiliates, directors, officers,
employees and representatives, to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower or any of its Subsidiaries pursuant to this Credit Agreement that is
identified by such Person as being confidential at the time the same is
delivered to the Banks or the Administrative Agent, provided that nothing herein
shall limit the disclosure of any such information (a) after such information
shall have become public other than through a violation of this ss.15, (b) to
the extent required by statute, rule, regulation or judicial process, (c) to
counsel for any of the Banks or the Administrative Agent, (d) to bank examiners
or any other regulatory authority having jurisdiction over any Bank or the
Administrative Agent, or to auditors or accountants, (e) to the Administrative
Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Administrative Agent or
any Section 20 Subsidiary is a party, or in connection with the enforcement of
rights or remedies hereunder or under any other Loan Document, (g) to a
Subsidiary or affiliate of such Bank as provided in ss.15.1 or (h) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant agrees to be bound by the provisions of ss.17.6.
15.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable law
------------------
or court order, each of the Banks and the Administrative Agent shall, prior to
disclosure thereof, notify the Borrower of any request for disclosure of any
such non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
15.4. OTHER. In no event shall any Bank or the Administrative Agent be
-----
obligated or required to return any materials furnished to it or any Section 20
Subsidiary by the Borrower or any of its Subsidiaries. The obligations of each
Bank under this ss.15 shall supersede and replace the obligations of such Bank
under any confidentiality letter in respect of this financing signed and
delivered by such Bank to the Borrower prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any interest
in any of the Loans or Reimbursement Obligations from any Bank.
16. SURVIVAL OF COVENANTS, ETC.
--------------------------
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries or
any of the Guarantors pursuant hereto shall be deemed to have been relied upon
by the Banks and the Administrative Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Banks of the Loan, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Credit Agreement or the Notes or any
of the other Loan Documents remains outstanding or any Bank has any obligation
to make any portion of the Loan, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate or other paper delivered to any Bank or the Administrative Agent at
any time by or on behalf of the Borrower or any of its Subsidiaries or any of
the Guarantors pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary or such Guarantor hereunder.
17. ASSIGNMENT AND PARTICIPATION; ACCESSION.
---------------------------------------
17.1. 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 Loan at
the time owing to it and the Notes held by it); provided that (i) except in
--------
the case of an assignment to another Bank, an Affiliate of any Bank or an
Approved Fund of any Bank, each of the Administrative Agent, and, provided
that no Event of Default has occurred or is continuing, the Borrower shall
have given its prior written consent to such assignment, all such consents
not to be unreasonably withheld, (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 minimum amount of $5,000,000 (or, if less, the assigning Bank's
entire Commitment), and (iv) the parties to such assignment shall execute
and deliver to the Administrative Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit C 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 Administrative Agent of the registration
fee referred to in ss.17.3, 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 (an "Instrument of
Accession") in form and substance reasonably satisfactory to the Acceding
Bank, and the Administrative Agent and assuming thereunder a Commitment to
make a portion of the Loan pursuant to the terms hereof, and the amount of
the Loan shall thereupon be increased by the amount of such Acceding Bank's
Commitment; provided, however, that (i) the Administrative Agent shall have
given its prior written consent to such accession, and (ii) 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, $100,000,000.
On the effective date specified in any Instrument of Accession, Schedule 1
hereto shall be amended by the Administrative Agent (each of the Borrower
and the Banks hereby consenting to such amendment) to reflect (1) the name,
address, Commitment and Commitment Percentage of such Acceding Bank, (2)
the Total Commitment as increased by such Acceding Bank's Commitment, and
(3) 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.
17.2. 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 of 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.5.4 and ss.6.4 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;
(d) such assignee or Acceding Bank, as the case may be, will,
independently and without reliance upon the assigning Bank, the
Administrative 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 Administrative 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
Administrative 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; and
(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.
17.3. REGISTER. The Administrative 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 Loan owing to the Banks from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the
Administrative 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 Administrative
Agent a registration fee in the sum of $3,500.
17.4. 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 Administrative 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
their own expense, shall execute and deliver to the Administrative 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 Adherence, 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.17.4, the
Borrower shall deliver an opinion of counsel, addressed to the Banks and the
Administrative 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.
17.5. 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 fees to which such participant is entitled or extend any regularly
scheduled payment date for principal or interest.
17.6. 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.
17.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any assignee
----------------------------------------------------
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 Administrative Agent pursuant to ss.11.1 or ss.11.2, 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 the Loan. If any Bank sells a
participating interest in the Loan to a participant, and such participant is the
Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Administrative 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 Administrative Agent pursuant to
ss.11.1 or ss.11.2 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 Loan to the extent of such participation.
17.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
-----------------------------------
its rights to be indemnified pursuant to ss.14 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 Administrative Agent certification as to its
exemption from deduction or withholding of any United States federal income
taxes. Anything contained in this ss.17 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. Notwithstanding any other provision in this Credit Agreement, any
Bank that is a fund that invests in bank loans may, without the consent of the
Administrative Agent or the Borrower, pledge all or any portion of the Loan or
any Note held by it to any trustee for, or any other representative of,
investors in, or holders of equity securities issued, by such fund, as security
for such investment or securities; provided that any foreclosure or similar
--------
action by such trustee shall be subject to the provisions of this ss.17
concerning assignments. No pledge or the enforcement thereof shall release the
pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.
17.9. 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; provided that the Borrower may, with the
--------
prior unanimous written consent of all of the Banks (which such consent may be
withheld by any of the Banks in its sole, absolute and unfettered discretion for
any or no reason), assign and transfer all of its rights and obligations under
the Loan and the Loan Documents to another person (with such person assuming all
of such rights and obligations) to which a portion or substantially all of the
Borrower's real estate assets are conveyed or transferred (a "Permitted
Assignment"). In connection with a Permitted Assignment, none of the Banks and
the Administrative Agent shall be paid any prepayment premium under ss.2.3.2 or
ss.2.4 hereof. The Administrative Agent and the Banks shall be entitled to
out-of-pocket fees, costs and expenses (including legal fees) incurred by the
Banks and/or the Administrative Agent in connection with such Permitted
Assignment.
18. NOTICES, ETC.
------------
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, facsimile or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to FCI, at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000, Attention: President, Facsimile: 000-000-0000 or at such other
address for notice as FCI shall last have furnished in writing to the
Person giving the notice;
(b) if to Fleet or the Administrative Agent, at 000 Xxxxxxxxx Xxxxxx
Xxxxx, X.X., Xxxxx 000, Xxxxxxx, XX 00000, Attention: Xxxx XxXxxx, Managing
Director, Facsimile: 000-000-0000 with a copy to the Fleet National Bank,
Fleet Agency Services, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxxx, Facsimile: 000-000-0000, or such other address
for notice as Fleet or the Administrative Agent shall last have furnished
in writing to the Person giving the notice; and
(c) if to any Bank other than Fleet, at such Bank's address set forth
on Schedule 1 hereto, or such other address for notice as
-------- -
such Bank shall have last furnished in writing to the Person giving the
notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
19. GOVERNING LAW.
-------------
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.18. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
20. HEADINGS.
--------
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
21. COUNTERPARTS.
------------
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is sought.
22. ENTIRE AGREEMENT, ETC.
---------------------
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
ss.24.
23. WAIVER OF JURY TRIAL.
--------------------
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (i)
certifies that no representative, agent or attorney of any Bank or the
Administrative Agent has represented, expressly or otherwise, that such Bank or
the Administrative Agent would not, in the event of litigation, seek to enforce
the foregoing waivers and (ii) acknowledges that the Administrative Agent and
the Banks have been induced to enter into this Credit Agreement, the other Loan
Documents to which it is a party by, among other things, the waivers and
certifications contained herein.
24. CONSENTS, AMENDMENTS, WAIVERS, ETC.
----------------------------------
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Notes (other than interest accruing pursuant to
ss.3.10.2 following the effective date of any waiver by the Majority Banks of
the Default or Event of Default
relating thereto) may not be reduced, the amount of the Commitments of the Banks
(other than changes which are contemplated by ss.17.1(b)) may not be increased,
and the amount of principal or fees due hereunder may not be reduced without the
written consent of the Borrower and the written consent of each Bank affected
thereby; the Maturity Date, any Interest Payment Date or any other due date for
the payment of interest, fees or principal hereunder may not be postponed
without the written consent of each Bank affected thereby; this ss.24 and the
definition of Majority Banks may not be amended, ss.6.13, ss.8.7 or ss.11.1(q)
may not be waived or amended, neither ss.7.3 nor ss.7.4 may be waived or amended
to permit FCI to purchase shares of its capital stock, without the written
consent of all of the Banks; and the amount of any fees payable to for the
Administrative Agent's account and ss.13 may not be amended without the written
consent of the Administrative Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Administrative Agent
or any Bank in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Borrower shall
entitle the Borrower to other or further notice or demand in similar or other
circumstances.
25. SEVERABILITY.
------------
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
26. RELEASE OF SECURITY.
-------------------
(a) If the Administrative Agent shall have obtained Mortgages pursuant
to ss.6.13 hereof, at such time as a bona fide, third-party purchaser (such
purchaser being a natural person) of a Lot or VOI pursuant to a purchase
contract or Base Contract has paid in full the purchase price or the
requisite percentage of the purchase price for deeding pursuant to such
purchase contract or Base Contract and has otherwise fully discharged all
of such purchaser's obligations and responsibilities required to be
discharged as a condition to deeding, the Administrative Agent (or its duly
appointed attorney-in-fact authorized to act on its behalf), acting on
behalf of the Banks, will, on request and appropriate
certification by the Borrower or its authorized representative, execute and
deliver, at the Borrower's expense, such termination statements or mortgage
releases, as the case may be, and take such other actions as may be
reasonably necessary to terminate and remove the Administrative Agent's
underlying mortgage lien or security interest in such Lot or VOI
constituting collateral under such Mortgages.
(b) With respect to each Lot or VOI in which the Administrative Agent
has terminated and removed its underlying mortgage lien or security
interest, the Borrower will promptly deliver to the Administrative Agent
cash in an amount equal to the Relevant Percentage of FCI's published sales
price for such Lot or VOI (the "Partial Release Price"). Subject to ss.3.9,
the Partial Release Price shall be applied to repay the outstanding portion
of the Loan in an amount equal to 100% of the Partial Release Price, to be
applied as set forth in ss.11.4. The Borrower shall pay a premium with
respect to each such prepayment in an amount determined in accordance with
the percentages set forth in the following table opposite the period during
which each such prepayment is made:
Period Prepayment Premium
------ ------------------
Closing Date through
first anniversary thereof 3% of amount prepaid
First anniversary of
Closing Date through second
anniversary of Closing Date 2% of amount prepaid
Second anniversary of
Closing Date through third
anniversary of Closing Date 1% of amount prepaid
Thereafter -0-
(c) If the Borrower or any of the Guarantors sell or otherwise
transfer any assets in accordance with ss.7.5 hereof, the Administrative
Agent (or its duly appointed attorney-in-fact authorized to act on its
behalf), acting on behalf of the Banks, will, on the date that all payments
made by the purchaser or transferee are deposited with the Administrative
Agent at the time the receipt and application of the Net Cash Sale Proceeds
of such sale in accordance with ss.7.5.2 hereof, execute and deliver, at
the Borrower's expense, such termination statements, mortgage releases or
subordination agreements, as the case may be, and take such other actions,
as may be reasonably necessary to subordinate or terminate and remove the
Administrative Agent's mortgage or security interest in the assets being
sold.
27. SUPERIOR RIGHTS OF VOI PURCHASER.
--------------------------------
In order to permit the Borrower or any Subsidiary to register all or a
portion of the real property subject to the terms of the Security Documents as a
VOI Regime under applicable law, the Administrative Agent and the Banks agree as
follows:
(a) Notwithstanding any other provision contained in this Agreement, the
rights of any bona-fide, third party purchaser (such purchaser being a natural
person) of any Lot or VOI under a contract for purchase (including a Base
Contract) entered into by the Borrower or any Subsidiary in the ordinary course
of business shall, so long as such purchaser is not in default in its
obligations under its contract for
purchase (including a Base Contract), be superior to those of the Administrative
Agent and the Banks hereunder, and neither the Administrative Agent nor the
Banks shall, so long as such purchaser is not in default, interfere with such
purchaser's use and enjoyment of the Lot or VOI subject thereto.
(b) If pursuant to the terms of the Security Documents, the Administrative
Agent or the Banks shall acquire any Lot or VOI subject to a Base Contract with
a bona-fide, third party purchaser (such purchaser being a natural person)
entered into by the Borrower or any Subsidiary in the ordinary course of
business, the Administrative Agent and the Banks hereby specifically agree to
release, cause to be released or convey, as the case may be, any Lot or VOI from
any lien or title of the Administrative Agent or the Banks upon the request of
the party purchaser (including such party's heirs, successors and assigns) to
the Base Contract and upon completion of all payments and the performance of all
the terms and conditions required to be made and performed by such purchaser
under such Base Contract.
28. TERMINATION.
-----------
(a) This Credit Agreement may, by written notice from FCI to the
Administrative Agent, be terminated at any time prior to the initial
Drawdown Date.
(b) Unless otherwise extended by the Administrative Agent in its
discretion, this Credit Agreement shall automatically terminate on October
20, 2000 if the conditions precedent set forth in xx.xx. 9 and 10 have not
been satisfied as of such date or the Loan has not been made on such date.
(c) In the event of termination of this Credit Agreement and the
abandonment of the transactions contemplated hereby pursuant to this ss.28,
the Borrower will pay to the Arranger the termination fee provided for in
the Fee Letter, no party hereto shall have any further liability or further
obligations to any other party to this Agreement, except for the
obligations of FCI under ss.3.9, ss.14(iii), any Rate Protection Agreement,
the Fee Letter and the Commitment Letter.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice
President & C.F.O.
FLEET NATIONAL BANK,
individually and as Administrative
Agent
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
