SECOND AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
between
FAIRFIELD COMMUNITIES, INC.
and
BANKBOSTON, N.A.,
INDIVIDUALLY AND AS AGENT
THIS SECOND AMENDMENT (this "Amendment") dated as of October 20, 1998,
is made by and among FAIRFIELD COMMUNITIES, INC., a Delaware corporation (the
"Company", "FCI" or "Fairfield"), BANKBOSTON, N.A., a national banking
association ("BKB"), and BANKBOSTON, N.A., as agent for itself and the Banks
(the "Agent"), all parties to a certain Amended and Restated Revolving Credit
Agreement dated as of January 15, 1998 (as amended and in effect as of the date
hereof, the "Credit Agreement"), and BKB, as Collateral Agent ("Collateral
Agent") under that certain Collateral Agency Agreement, dated as of January 15,
1998, as amended by a First Amendment to Collateral Agency Agreement dated as of
July 31, 1998, by and among the parties hereto (including the Subsidiary
Guarantors, as defined below), BKB, as agent under the FAC Credit Agreement,
BancBoston Securities, Inc., Eagle Funding Capital Corporation and First
Security Bank, National Association. This Amendment is joined in by Fairfield
Acceptance Corporation-Nevada (successor by merger to Fairfield Acceptance
Corporation), a Nevada domiciled Delaware corporation ("FAC"), Fairfield Myrtle
Beach, Inc. ("FMB"), Vacation Break USA, Inc. ("Vacation Break"), Sea Gardens
Beach and Tennis Resorts, Inc. ("SGR"), Vacation Break Resorts, Inc. ("VBR"),
Vacation Break Resorts at Star Island, Inc. ("VBRS"), Palm Vacation Group
("PVG") and Ocean Ranch Vacation Group ("ORV") (FAC, FMB, Vacation Break, SGR,
VBR, VBRS, PVG and ORV are hereinafter collectively referred to as the
"Subsidiary Guarantors") by reason of the Amended and Restated Unconditional
Payment and Performance Guaranty, dated as of January 15, 1998, from the
Subsidiary Guarantors in favor of the Agent and the Banks (the "FCI Guaranty").
All capitalized terms used herein and not otherwise defined shall have the same
respective meanings herein as in the Credit Agreement.
WHEREAS, FCI has requested and BKB has agreed to (i) decrease FCI's
borrowing availability under the Credit Agreement from $40,000,000 to
$20,000,000, (ii) amend the definitions of "Borrowing Base", "Eligible Base
Contract" and "Eligible Construction Work in Progress", (iii) extend the
Revolving Credit Loan Maturity Date from January 31, 2001 to October 31, 2001,
and (iv) make certain other changes and amendments to the Credit Agreement, all
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, FCI, BKB, the
Agent and the Subsidiary Guarantors hereby agree as follows:
ss.1. Amendments to Credit Agreement. FCI, BKB and the Agent hereby agree
------------------------------
to amend the Credit Agreement as follows:
ss.1.1. The definition of "Borrowing Base" appearing in Section 1.1 of the
Credit Agreement is hereby amended by deleting the dollar figure "$10,000,000"
from the last line of clause (c) of said definition and substituting therefor
the dollar figure "$1,000,000".
ss.1.2. The definition of "Eligible Base Contract" appearing in Section 1.1
of the Credit Agreement is hereby amended by deleting clause (s) of said
definition in its entirety and substituting therefor the following new clause
(s):
"(s) Where the Obligor thereunder is a United States
citizen or has a United States mailing address, or with
respect to Base Contracts constituting not more than 10% of
the aggregate Principal Balances of all Eligible Base
Contracts as of the relevant date of determination, where the
Obligor thereunder is not a United States citizen or does not
have a United States mailing address;"
ss.1.3. The definition of "Eligible Construction Work in Progress"
appearing in Section 1.1 of the Credit Agreement is hereby amended by deleting
clause (b) of said definition in its entirety and substituting therefor the
following new clause (b):
"(b) with respect to any building in excess of five stories in
height, such construction (i) shall be monitored by an
engineer acceptable to the Agent which has experience in
building structures similar to the proposed resort buildings
or, at the discretion of the Agent, the Borrower's in-house
engineer, and (ii) shall be performed by a qualified general
contractor which shall be bonded if requested by the Agent;
and"
ss.1.4. The definition of "Revolving Credit Loan Maturity Date" appearing
in Section 1.1 of the Credit Agreement is hereby amended by deleting said
definition in its entirety and substituting therefor the following new
definition:
"Revolving Credit Loan Maturity Date. October 31, 2001."
-----------------------------------
ss.1.5. Subsection 8.4(f) of the Credit Agreement is hereby amended by
deleting said subsection in its entirety and substituting therefor the following
new subsection:
"(f) within three Business Days after the fifteenth and
last day of each month, or at such earlier time as the Agent
may reasonably request, a Borrowing Base Report setting
forth the Borrowing Base as of the 15th day and last day of
such month or other date so requested by the Agent,
provided that immediately prior to the occurrence of a sale
or other disposition of assets permitted by ss.9.5.2 hereof,
the Borrower shall deliver to the Banks (A) a Borrowing Base
Report setting forth the Borrowing Base prior to such
permitted sale or disposition, and (B) a Borrowing Base
Report indicating the Borrowing Base after giving effect to
such sale or disposition (provided, however, that for so
long as the Banks hereunder and the banks under the FAC
Credit Agreement are identical, the Borrowing Base Reports
required by the foregoing clauses (A) and (B) need not be
delivered to the Agent in connection with the sale or
disposition of Base Contracts to FAC pursuant to paragraph
(ii) of ss.9.5.2);"
ss.1.6. The Credit Agreement is hereby amended by deleting Schedule 1
----------
thereto in its entirety and substituting therefore Schedule 1 attached hereto.
----------
ss.2. Conditions to Effectiveness. The effectiveness of this Amendment is
---------------------------
subject to satisfaction of all of the following conditions:
(a) Amended Note. FCI shall have executed and delivered
-------------
to BKB an amended and restated promissory note
payable to the order of BKB (the "Amended Note") in
the principal amount of $20,000,000, substantially in
the form of Exhibit B to the Credit Agreement,
----------
completed with appropriate insertions. From and after
the effectiveness of this Amendment, the parties
agree that all references to the term "Notes" and
"Revolving Credit Notes" in the Credit Agreement and
the other Loan Documents shall mean the Amended Note.
Upon the execution and delivery of the Amended Note
and satisfaction of the other conditions set forth in
this section, BKB shall return the original of the
former Note to FCI for cancellation.
(b) Opinion of Counsel. BKB, the Agent and the Collateral
------------------
Agent shall have received a favorable legal opinion
addressed to BKB, the Agent and the Collateral Agent,
in form and substance satisfactory to BKB, the Agent
and the Collateral Agent, from Xxxxx Xxxx, as to the
enforceability of this Amendment, the Amended Note,
and the documents, instruments and agreements
executed in connection herewith.
(c) Corporate Action. All corporate action necessary for
----------------
the valid execution, delivery and performance by each
of FCI and the Subsidiary Guarantors of this
Amendment, the Amended Note and the instruments
executed in connection herewith shall have been duly
and effectively taken and otherwise be duly
authorized, and satisfactory evidence thereof shall
have been provided to the Agent and BKB.
(d) Borrowing Base Report. The Agent shall have received
---------------------
a proforma Borrowing Base Report dated as of a date
within three (3) Business Days prior to the date
hereof indicating the Borrowing Base (calculated as
of October 15, 1998) after giving effect to the
transactions contemplated by this Amendment.
(e) Mandatory Repayments of Revolving Credit Loans. If
------------------------------------------------
the sum of the outstanding amount of the Revolving
Credit Loans, the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceed the lesser of
(i) $20,000,000 and (ii) the Borrowing Base as
reflected in the Borrowing Base Report delivered
pursuant to subsection (d) above, then the Borrower
shall have paid the amount of such excess to the
Agent for the account of BKB.
(f) FAC Amendment. BKB and the Agent shall have received
-------------
evidence satisfactory to it of the occurrence of all
conditions precedent to the effectiveness of that
certain Second Amendment to the FAC Credit Agreement
among FAC, BKB, the Agent and the Collateral Agent
dated of even date herewith.
(g) Engagement and Fee Letter. FCI and FAC shall have
----------------------------
executed and delivered to BKB that certain engagement
and fee letter, dated September 28, 1998, from
BancBoston Xxxxxxxxx Xxxxxxxx Inc. and BKB to FCI and
FAC (the "Engagement and Fee Letter"), and shall
have paid to the Agent or BKB, as the case may be,
the underwriting fee, renewal fee, and Agent's Fee
due at the "closing." From and after the effective
date of this Amendment, the parties agree that the
Engagement and Fee Letter shall constitute a "Loan
Document" under the Credit Agreement, and failure to
pay the annual Agent's Fee due thereunder shall
constitute an Event of Default under the Credit
Agreement pursuant Section 13.1(b) thereof. The
parties further agree that FCI's obligation to pay
such fees shall be "Obligations" under and as defined
in the Credit Agreement and shall at all times be
guaranteed and secured as required by Section 6 of
the Credit Agreement.
ss.3. Subsidiary Guarantors' Consent. The Subsidiary Guarantors hereby
-------------------------------
consent to the amendments to the Credit Agreement set forth in this Amendment
and the execution and delivery of the Amended Note by FCI to BKB and each
confirms its obligation to the Agent and the Banks under the FCI Guaranty and
agrees that the FCI Guaranty shall extend to and include the obligations of FCI
under the Amended Note and the Credit Agreement as amended by this Amendment.
Each of the Subsidiary Guarantors agrees that all of its obligations to the
Agent and the Banks evidenced by or
otherwise arising under the FCI Guaranty are in full force and effect and are
hereby ratified and confirmed in all respects.
ss.4. Representations and Warranties. Each of FCI and the Subsidiary
--------------------------------
Guarantors hereby represents and warrants to BKB, the Agent and the Collateral
Agent as follows:
(a) Representations and Warranties in Credit Agreement. The
--------------- --- ---------- -- ------ ---------
representations and warranties of FCI and the Subsidiary
Guarantors, as the case may be, contained in the Loan
Documents were true and correct in all material respects
when made and continue to be true and correct in all
material respects on the date hereof, with the same effect
as if made at or as of the date hereof (except to the extent
of changes resulting from transactions contemplated or
permitted by the Credit Agreement and the other Loan
Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and
warranties relate expressly to an earlier date) and no
Default or Event of Default has occurred or is continuing
under the Credit Agreement.
(b) Authority, No Conflicts, Etc. The execution, delivery and
--------- -- --------- ---
performance by each of FCI and the Subsidiary Guarantors, as
the case may be, of this Amendment and the Amended Note, and
the consummation of the transactions contemplated hereby and
thereby, (i) are within the corporate power of each
respective party and have been duly authorized by all
necessary corporate action on the part of each respective
party, (ii) do not require any approval or consent of, or
filing with, any governmental authority or other third
party, and (iii) do not conflict with, constitute a breach
or default under or result in the imposition of any lien or
encumbrance pursuant to any agreement, instrument or other
document to which any of such entity is a party or by which
any such party or any of its properties are bound or
affected.
(c) Enforceability of Obligations. This Amendment, the Amended
-----------------------------
Note, the Credit Agreement as amended hereby, the FCI
Guaranty and the other Loan Documents constitute the legal,
valid and binding obligations of each of FCI and the
Subsidiary Guarantors parties thereto, enforceable against
such party in accordance with their respective terms,
provided that (i) enforcement may be limited by applicable
--------
bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the rights and
remedies of creditors, and (ii) enforcement may be subject
to general principles of equity, and the availability of the
remedies of specific performance and injunctive relief may
be
subject to the discretion of the court before which any
proceedings for such remedies may be brought.
ss.5. Other Amendments. Except as expressly provided in this Amendment,
----------------
all of the terms and conditions of the Credit Agreement and the other Loan
Documents remain in full force and effect. FCI and each Subsidiary Guarantor
confirm and agree that the Obligations of FCI to the Banks and the Agent under
the Credit Agreement, as amended hereby, and the Amended Note, and all of the
other obligations of any of such parties under the other Loan Documents, are
secured by and entitled to the benefits of the Security Documents.
ss.6. Execution in Counterparts. This Amendment may be executed in any
-------------------------
number of counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
ss.7. Headings. The captions in this Amendment are for convenience
--------
of reference only and shall not define or limit the provisions hereof.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties have executed this Amendment as an
instrument under seal to be governed by the laws of the Commonwealth of
Massachusetts, as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
By:/s/Xxxxxx X.Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Senior Vice President
---------------------------
FAIRFIELD ACCEPTANCE
CORPORATION-NEVADA
By:/s/Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
----------------------------
Title: President
----------------------------
FAIRFIELD MYRTLE BEACH, INC.
By: /s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
VACATION BREAK USA, INC.
By:/s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
----------------------------
SEA GARDENS BEACH AND TENNIS
RESORTS, INC.
By:/s/Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President
------------------------------
VACATION BREAK REORTS, INC.
By:/s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
VACATION BREAK RESORTS AT
STAR ISLAND, INC.
By:/s/Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President
------------------------------
PALM VACATION GROUP, by its
General Partners:
VACATION BREAK RESORTS
AT PALM AIRE, INC.
By:/s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
PALM RESORT GROUP, INC.
By:/s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
OCEAN RANCH VACATION GROUP,
by its General Partners:
VACATION BREAK AT OCEAN
RANCH, INC.
By:/s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
----------------------------
OCEAN RANCH
DEVELOPMENT, INC.
By:/s/Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President
------------------------------
BANKBOSTON, N.A.,
Individually, as Agent and as
Collateral Agent
By:/s/Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
-------------------------------
Title: Vice President
-------------------------------
SCHEDULE 1
Banks and Commitment
Name and Address Commitment
of Banks Percentage Commitment
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 100% $20,000,000
-----------
TOTAL $20,000,000
===========