AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
DATED as of January 15, 1998
between
FAIRFIELD COMMUNITIES, INC.
and
BANKBOSTON, N.A.
and
BANKBOSTON, N.A., as Agent
TABLE OF CONTENTS
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1. DEFINITIONS AND RULES OF INTERPRETATION. ................................1
1.1. Definitions. ....................................................1
1.2. Rules of Interpretation. .......................................29
2. THE REVOLVING CREDIT FACILITY. .........................................31
2.1. Commitment to Lend. ............................................31
2.2. Reduction of Total Commitment. .................................31
2.3. The Revolving Credit Notes. ....................................31
2.4. Interest on Revolving Credit Loans. ............................32
2.5. Requests for Revolving Credit Loans. ...........................32
2.6. Conversion Options. ............................................33
2.6.1. Conversion to Different Type of Revolving Credit Loan..33
2.6.2. Continuation of Type of Revolving Credit Loan. .......33
2.6.3. Eurodollar Rate Loans. ...............................34
2.7. Funds for Revolving Credit Loan. ...............................34
2.7.1. Funding Procedures. ..................................34
2.7.2. Advances by Agent. ...................................35
2.8. Change in Borrowing Base. ......................................35
2.9. Settlements. ...................................................36
2.9.1. General. .............................................36
2.9.2. Failure to Make Funds Available. .....................36
2.9.3. No Effect on Other Banks. ............................37
2.10. Repayments of Revolving Credit Loans Prior to Event of Default..37
2.10.1. Credit for Funds Received in Concentration Account....37
2.10.2. Application of Payments Prior to Event of Default.....38
2.11. Repayments of Revolving Credit Loans After Event of Default.....39
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. ...............................39
3.1. Maturity. ......................................................39
3.2. Mandatory Repayments of Revolving Credit Loans. ................39
3.3. Optional Repayments of Revolving Credit Loans. .................40
4. LETTERS OF CREDIT. .....................................................40
4.1. Letter of Credit Commitments.....................................40
4.1.1. Commitment to Issue Letters of Credit. ...............40
4.1.2. Letter of Credit Applications. .......................41
4.1.3. Terms of Letters of Credit. ..........................41
4.1.4. Reimbursement Obligations of Banks. ..................41
4.1.5. Participations of Banks. .............................41
4.2. Reimbursement Obligation of the Borrower. ......................41
4.3. Letter of Credit Payments. .....................................42
4.4. Obligations Absolute. ..........................................43
4.5. Reliance by Issuer. ............................................43
4.6. Letter of Credit Fee. ..........................................44
5. CERTAIN GENERAL PROVISIONS. ............................................44
5.1. Administrative Fee. ............................................44
5.2. Funds for Payments. ............................................44
5.2.1. Payments to Agent. ...................................44
5.2.2. No Offset, etc. ......................................45
5.3. Computations. ..................................................45
5.4. Inability to Determine Eurodollar Rate. ........................45
5.5. Illegality. ....................................................46
5.6. Additional Costs, etc. .........................................46
5.7. Capital Adequacy. ..............................................48
5.8. Certificate. ...................................................48
5.9. Indemnity. .....................................................49
5.10. Interest After Default. ........................................49
5.10.1. Overdue Amounts. ....................................49
5.10.2. Amounts Not Overdue. ................................49
5.11. HLT Classification. ...........................................49
6. COLLATERAL SECURITY AND GUARANTIES. ....................................50
6.1. Security of Borrower. ..........................................50
6.2. Guaranties and Security of Subsidiary Guarantors. ..............50
7. REPRESENTATIONS AND WARRANTIES. ........................................51
7.1. Corporate; Partnership Authority. ..............................51
7.1.1. Organization; Good Standing. .........................51
7.1.2. Authorization. .......................................52
7.1.3. Enforceability. ......................................52
7.2. Governmental Approvals. ........................................52
7.3. Title to Properties; Leases. ...................................52
7.4. Financial Statements. ..........................................53
7.4.1. Fiscal Year. .........................................53
7.4.2. Financial Statements. ................................53
7.5. No Material Changes, etc. ......................................53
7.6. Franchises, Patents, Copyrights, etc. ..........................54
7.7. Litigation. ....................................................54
7.8. No Materially Adverse Contracts, etc. ..........................55
7.9. Compliance with Other Instruments, Laws, etc. ..................55
7.10. Tax Status. ...................................................55
7.11. No Event of Default. ..........................................55
7.12. Holding Company and Investment Company Acts. ..................55
7.13. Absence of Financing Statements, etc. .........................55
7.14. Perfection of Security Interest. ..............................56
7.15. Certain Transactions. .........................................56
7.16. Employee Benefit Plans. .......................................56
7.16.1. In General. .........................................56
7.16.2. Terminability of Welfare Plans. .....................57
7.16.3. Guaranteed Pension Plans. ...........................57
7.16.4. Multiemployer Plans. ................................57
7.17. Use of Proceeds. ..............................................58
7.17.1. General. ............................................58
7.17.2. Regulations U and X. ................................58
7.17.3. Ineligible Securities. ..............................58
7.18. Environmental Compliance. .....................................58
7.19. Subsidiaries, etc. ............................................60
7.20. Bank Accounts. ................................................60
7.21. Disclosure. ...................................................60
7.22. FairShare Program. ............................................61
8. AFFIRMATIVE COVENANTS OF THE BORROWER. .................................61
8.1. Punctual Payment. ..............................................61
8.2. Maintenance of Office. .........................................61
8.3. Records and Accounts. ..........................................62
8.4. Financial Statements, Certificates and Information. ............62
8.5. Notices. .......................................................65
8.5.1. Defaults. ............................................65
8.5.2. Environmental Events. ................................65
8.5.3. Notification of Claim against Collateral. ............65
8.5.4. Notice of Litigation and Judgments. ..................66
8.6. Corporate Existence; Maintenance of Properties. ................66
8.7. Insurance. .....................................................66
8.8. Taxes. .........................................................68
8.9. Inspection of Properties and Books, etc. .......................68
8.9.1. General. .............................................68
8.9.2. Collateral Reports. ..................................68
8.9.3. Commercial Finance Examinations. .....................69
8.9.4. Environmental Assessments. ...........................69
8.9.5. Communications with Accountants. .....................69
8.9.6. Title Rundowns. ......................................70
8.10. Compliance with Laws, Contracts, Licenses, and Permits. .......70
8.11. Employee Benefit Plans. .......................................70
8.12. Use of Proceeds. ..............................................71
8.13. Mortgaged Property. ...........................................71
8.14. Bank Accounts. ................................................71
8.14.1. General. ............................................71
8.14.2. Acknowledgment of Application. ......................72
8.15. Maintenance and Collection of Base Contracts; Custodian. ......72
8.16. Servicing of Base Contracts. ..................................73
8.17. Legal Opinions. ...............................................74
8.18. Further Assurances. ...........................................74
8.19. Computer Equipment. ...........................................74
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ............................75
9.1. Restrictions on Indebtedness. ..................................75
9.2. Restrictions on Liens. .........................................77
9.3. Restrictions on Investments. ...................................79
9.4. Distributions. .................................................80
9.5. Merger, Consolidation and Disposition of Assets. ...............80
9.5.1. Mergers and Acquisitions. ............................80
9.5.2. Disposition of Assets. ...............................80
9.5.3. Disposition of Stock. ................................82
9.6. Sale and Leaseback. ............................................82
9.7. Compliance with Environmental Laws. ............................82
9.8. Subordinated Debt. .............................................82
9.9. Employee Benefit Plans. ........................................82
9.10. Business Activities. ..........................................83
9.11. Fiscal Year. ..................................................83
9.12. Transactions with Affiliates. .................................83
9.13. Bank Accounts. ................................................84
9.14. No Termination or Amendments. .................................84
10. FINANCIAL COVENANTS OF THE BORROWER. ..................................84
10.1. Consolidated Operating Margin Covenant. .......................84
10.2. Debt Service Coverage Ratio. ..................................85
10.3. Liabilities to Worth Ratio. ...................................85
10.4. Consolidated Tangible Net Worth. ..............................85
11. CLOSING CONDITIONS. ...................................................85
11.1. Loan Documents. ...............................................85
11.2. Certified Copies of Charter Documents. ........................85
11.3. Corporate, Action. ............................................85
11.4. Incumbency Certificate. .......................................86
11.5. Validity of Liens. ............................................86
11.6. Perfection Certificates and UCC Search Results. ...............86
11.7. Certificates of Insurance. ....................................86
11.8. Agency Account Agreements. ....................................86
11.9. Borrowing Base Report. ........................................87
11.10. Base Contracts Aging Report. .................................87
11.11. Opinion of Counsel. ..........................................87
11.12. Payment of Fees. .............................................87
11.13. Other Documents. .............................................87
11.14. Repayment of Existing Credit Agreement. ......................87
12. CONDITIONS TO ALL BORROWINGS. .........................................88
12.1. Representations True; No Event of Default. ....................88
12.2. No Legal Impediment. ..........................................88
12.3. Governmental Regulation. ......................................88
12.4. Proceedings and Documents. ....................................88
12.5. Borrowing Base Report. ........................................89
13. EVENTS OF DEFAULT; ACCELERATION; ETC. .................................89
13.1. Events of Default and Acceleration. ...........................89
13.2. Termination of Commitments. ...................................93
13.3. Remedies. .....................................................93
13.4. Distribution of Collateral Proceeds. ..........................93
14. SETOFF. ...............................................................94
15. THE AGENT. ............................................................95
15.1. Authorization. ................................................95
15.2. Employees and Agents. .........................................96
15.3. No Liability. .................................................96
15.4. No Representations. ...........................................96
15.4.1. General. ............................................96
15.4.2. Closing Documentation, etc. .........................97
15.5. Payments. .....................................................97
15.5.1. Payments to Agent. ..................................97
15.5.2. Distribution by Agent. ..............................98
15.5.3. Delinquent Banks. ...................................98
15.6. Holders of Notes. .............................................99
15.7. Indemnity. ....................................................99
15.8. Agent as Bank. ................................................99
15.9. Resignation. ..................................................99
15.10. Notification of Defaults and Events of Default. .............100
15.11. Authorization of Collateral Agency Agreement. ...............100
15.12. Duties in the Case of Enforcement. ..........................100
16. EXPENSES AND INDEMNIFICATION. ........................................100
16.1. Expenses. ....................................................100
16.2. Indemnification. .............................................101
16.3. Survival. ....................................................102
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. .......................102
17.1. Sharing of Information with Section 20 Subsidiary. ...........102
17.2. Confidentiality. .............................................103
17.3. Prior Notification. ..........................................103
17.4. Other. .......................................................103
18. SURVIVAL OF COVENANTS, ETC. ..........................................103
19. ASSIGNMENT AND PARTICIPATION. ........................................104
19.1. Conditions to Assignment by Banks. ...........................104
19.2. Certain Representations and Warranties; Limitations; Covenants.105
19.3. Register. ....................................................106
19.4. New Notes. ...................................................106
19.5. Participations. ..............................................107
19.6. Disclosure. ..................................................107
19.7. Assignee or Participant Affiliated with the Borrower. ........107
19.8. Miscellaneous Assignment Provisions. .........................108
19.9. Assignment by Borrower. ......................................108
20. NOTICES, ETC. ........................................................108
21. GOVERNING LAW. .......................................................109
22. HEADINGS. ............................................................110
23. COUNTERPARTS. ........................................................110
24. ENTIRE AGREEMENT, ETC. ...............................................110
25. WAIVER OF JURY TRIAL. ................................................110
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. ..................................111
27. SEVERABILITY. ........................................................111
28. RELEASE OF SECURITY. .................................................112
29. SUPERIOR RIGHTS OF BASE CONTRACT PURCHASER. ..........................112
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
-----------------------------------------------
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
January 15, 1998, by and among FAIRFIELD COMMUNITIES, INC. (the "Borrower" or
"FCI"), a Delaware corporation having its principal place of business at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and BANKBOSTON, N.A., a
national banking association, and the other lending institutions listed on
Schedule 1 and BankBoston, N.A. as agent for itself and such other lending
---------
institutions.
WHEREAS, BKB, the Agent, the Borrower and Fairfield Myrtle Beach, Inc.
entered into an Amended and Restated Revolving Credit Agreement dated as of
September 28, 1993, as amended by (i) Consent, Waiver and Agreement dated as of
September 23, 1994, (ii) First Amendment to Amended and Restated Revolving
Credit Agreement dated as of May 13, 1994, (iii) Second Amendment to Amended and
Restated Revolving Credit Agreement dated as of December 9, 1994, (iv) Third
Amendment to Amended and Restated Revolving Credit Agreement dated as of
December 19, 1994, (v) Fourth Amendment to Amended and Restated Revolving Credit
Agreement dated as of November 20, 1995, (vi) Fifth Amendment to Amended and
Restated Revolving Credit Agreement dated as of January 25, 1996, (vii) Sixth
Amendment to Amended and Restated Revolving Credit Agreement dated as of
December 12, 1996, (viii) Seventh Amendment to Amended and Restated Revolving
Credit Agreement dated as of December 19, 1997, and (ix) Eighth Amendment to
Amended and Restated Revolving Credit Agreement dated as of February 13, 1998
(as so amended, the "Existing Credit Agreement");
WHEREAS, BKB and the Agent have agreed with the Borrower subject to the
conditions contained herein, to amend and restate the Existing Credit Agreement;
NOW, THEREFORE, the Borrower, BKB and the Agent agree that the Existing
Credit Agreement is amended and restated in its entirety as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
---------------------------------------
1.1. DEFINITIONS. The following terms shall have the meanings set forth
-----------
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred
to below:
Administrative Fee. See ss.5.1.
------------------
Affiliate. Any Person that would be considered to be an affiliate of
---------
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agency Account Agreement. See ss.8.14.1.
------------------------
Agent's Head Office. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
-------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks.
-----
Agent's Special Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may be
------------------------
approved by the Agent.
Approved Projects. (i) All portions of those vacation ownership resorts and
-----------------
developments identified on Schedule 1-A hereto, and (ii) vacation ownership
resorts and developments acquired, developed, owned and operated by FCI or any
of the Subsidiary Guarantors after the date of this Credit Agreement which are
(a) located in an Existing Resort City, (b) approved by the Agent and the Banks,
or (c) Startup Projects; provided, however, that a Startup Project shall cease
to be an Approved Project at such time as FCI and/or its Subsidiaries have made
expenditures for or with respect to such Startup Project in excess of
$15,000,000.
Assignment and Acceptance. See ss.19.1.
-------------------------
Balance Sheet Date. September 30, 1997.
------------------
Banks. BKB and the other lending institutions listed on Schedule 1 hereto
-----
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to ss.19.
Base Contract Default. With respect to any Base Contract, when the obligor
---------------------
thereunder is at the relevant time of determination ninety (90) or more days
delinquent in the payment of any installment or other periodic payment of
principal, interest or amounts due thereunder.
Base Contracts. Lot Contracts and Timeshare Contracts.
--------------
Base Rate. The higher of (i) the annual rate of interest announced from
---------
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
---------------
reference to the Base Rate.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a national
---
banking association, in its individual capacity.
BKB Concentration Account. See ss.8.14.1.
-------------------------
Borrower. As defined in the preamble hereto.
--------
Borrowing Base. At the relevant time of reference thereto, an amount
---------------
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.8.4(f) which is equal to the
sum of:
(a) 75% of the aggregate Principal Balances of all Eligible Base Contracts;
plus
----
(b) 85% of the aggregate Principal Balances of all Eligible Prime Base
Contracts; plus
----
(c) 65% of the aggregate Principal Balances of all Eligible Green Base
Contracts; provided, that in no event shall the weighted average rate of
--------
interest accruing on the aggregate Principal Balances of all Eligible Base
Contracts, Eligible Prime Base Contracts and Eligible Green Base Contracts
included in the Borrowing Base under clauses (a), (b) and (c) be less than
twelve percent (12%) per annum, and if such weighted average rate of interest is
less than twelve percent (12%) at any time of determination, Eligible Base
Contracts, Eligible Prime Base Contracts and Eligible Green Base Contracts
having an interest rate of less than twelve percent (12%) shall be excluded from
the Borrowing Base in an amount sufficient to cause such weighted average rate
of interest to equal or exceed twelve percent (12%), and further provided, that
------- --------
in no event shall the portion of the Borrowing Base under clauses (a), (b) and
(c) attributable to Base Contracts for Vacation Club Memberships exceed
$10,000,000; plus
(d) 100% of the net book value of Eligible Construction Work in Progress;
provided, that the portion of the Borrowing Base attributable to any phase of
--------
Eligible Construction Work in Progress under this clause (d) shall be (i)
reduced for each calculation of the Borrowing Base by an amount equal to 18 3/4%
of the total sales of VOIs generated by such phase to such date of calculation
and (ii) reduced to zero (0) from and after the third anniversary of the first
day of the month in which such phase of such Eligible Construction Work in
Progress was granted a certificate of occupancy.
Borrowing Base Report. A Borrowing Base Report signed by the senior vice
----------------------
president, treasurer or chief financial officer of the Borrower and in
substantially the form of Exhibit A hereto.
------- -
Business Day. Any day on which banking institutions in Boston,
--------------
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
---------------
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
--------
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
--------------------
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
---------
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
---------
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
-------------------
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.7.18(a).
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Closing Date. The first date on which the conditions set forth in ss.11
-------------
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
----
Collateral. All of the property, rights and interests of the Borrower and
----------
its Subsidiaries that are or are intended to be subject to the security
interests and liens created by the Security Documents.
Collateral Agency Agreement. The Collateral Agency Agreement, dated as of
---------------------------
January 15, 1998, by and among (i) the Collateral Agent; (ii) the Agent and the
Banks; (iii) the FAC Agent and the banks under the FAC Credit Agreement; (iv)
EagleFunding Capital Corporation; and (v) the Borrower, FAC, FMB, FRC and the VB
Originating Subsidiaries.
Collateral Agent. BankBoston, N.A., acting as Collateral Agent for the
-----------------
Agent and the Banks under the Collateral Agency Agreement.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
---------- -------- -
thereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set forth
---------------------
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
-------- -
all of the Banks.
Consolidated or consolidated. With reference to any term defined herein,
------------------------------
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
---------------------------------------
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles.
Consolidated Operating Cash Flow. For any period, an amount equal to (i)
---------------------------------
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 the Borrower and its
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 the Borrower or its Subsidiaries resulting from a
revaluation thereof subsequent to the 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
-------------------------
sheet assets") of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles, plus (ii)
----
without duplication, all assets leased by the Borrower 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
------------------------------------
of interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its 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 the Borrower 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 the Borrower and its Subsidiaries and all other Indebtedness of
the Borrower and its Subsidiaries, whether or not so classified.
Consolidated Total Revenue. For any period, the consolidated revenue of the
--------------------------
Borrower and its Subsidiaries determined in accordance with generally accepted
accounting principles.
Conversion Request. A notice given by the Borrower to the Agent of the
-------------------
Borrower's election to convert or continue a Loan in accordance with ss.2.6.
Credit Agreement. This Amended and Restated Revolving Credit Agreement,
-----------------
including the Schedules and Exhibits hereto.
Custodial Agreements. Collectively, (i) the Sixth Amended and Restated
---------------------
Custodial Agreement, dated as of December 2, 1996, among the Borrower, certain
of the Borrower's Subsidiaries, the Collateral Agent, BKB, the Agent, FAC Agent,
Capital Markets Assurance Corporation and First Commercial Trust Company, N.A.,
as "Custodian", and the Amended and Restated Bailment Agreement, dated as of
December 2, 1996, by and among FCI, FAC and First Commercial Trust Company,
N.A., as "Custodian", and (ii) the Custodial Agreement, dated as of January 15,
1998, among the Borrower, certain of the Borrower's Subsidiaries, the Collateral
Agent, BKB, the Agent, FAC Agent, EagleFunding Capital Corporation and First
Security Trust Company of Nevada, N.A., as "Custodian", and the Bailment
Agreement, dated as of January 15, 1998, among FCI, FAC and First Security Trust
Company of Nevada, N.A.
Custodian. Each Custodian under the Custodial Agreements..
---------
Default. Any of the events specified in Section 13.1, whether or not any
-------
requirement for the giving of notice or the lapse of time, or both, has been
satisfied.
Delinquent Bank. See ss.15.5.3.
---------------
Determination Date. The last date of each calendar month.
-------------------
Distribution. The declaration or payment of any dividend on or in respect
------------
of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of America.
------- -
Domestic Lending Office. Initially, the office of each Bank designated as
-----------------------
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
-------- -
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or is to
-------------
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.6.
Earnings Before Interest and Taxes. The Consolidated Net Operating Income
----------------------------------
(or Deficit) of the Borrower 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 (i) a commercial bank or finance company
------------------
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
--------
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; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance or other Person company, commercial finance company or other financial
institution approved by the Agent, such approval not to be unreasonably
withheld.
Eligible Base Contract. Any Base Contract as to which the Borrower or any
-----------------------
of the Subsidiary Guarantors (other than FAC) is the obligee thereunder and
which satisfies each of the following requirements:
(a) Which is subject to a valid and perfected Lien in favor of the Agent
for the benefit of the Banks; provided, however, that with respect to any Base
Contract originated prior to February 13, 1998 by any VB Originating Subsidiary,
the failure to deliver the original copy of such Base Contract (or in the case
of a Base Contract consisting of a sales contract and a separate promissory
note, a copy of such sales contract and the original of such promissory note) to
the Custodian prior to any relevant date of determination occurring prior to
April 15, 1998 shall not disqualify such Base Contract as an Eligible Base
Contract by reason of this clause (a) so long as the original copy of such Base
Contract (or in the case of a Base Contract consisting of a sales contract and a
separate promissory note, a copy of such sales contract and the original of such
promissory note) is delivered to the Custodian as soon as possible and in any
event on or before April 15, 1998, and any such Base Contact not so delivered by
April 15, 1998 shall cease to be an Eligible Base Contract;
(b) (i) Which is a legal, valid and binding obligation that has not been
canceled or terminated (regardless of whether the obligor thereunder is legally
entitled to do so) or been declared ineligible by the Borrower or any of its
Subsidiaries, and (ii) as to which all periods of time during which the obligor
thereunder may rescind, cancel or terminate such Base Contract have expired
without the obligor having exercised any such right;
(c) Which is not in Base Contract Default;
(d) As to which the obligor thereunder has paid a downpayment in an amount
equal to at least 10% of the total principal amount due thereunder (including in
such total any cash downpayments made under such Base Contract at origination,
principal payments made under any other Base Contract which has been "traded in"
in connection with the origination of the subject Base Contract, and
downpayments under such Base Contract made over a period not exceeding six (6)
months from the date of origination of such Base Contract);
(e) Which arises from transactions in a jurisdiction where the Borrower or
any Subsidiary of the Borrower which originates Base Contracts maintains its
right to do business, unless the Borrower has
demonstrated to the satisfaction of the Majority Lenders in their sole
discretion that the legality, validity, binding effect and enforceability of
such Base Contract has not been impaired by any failure to maintain the right to
do business in such jurisdiction;
(f) Which is substantially in the form of Exhibit D attached hereto or in a
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form containing material variations from the attached form which has been
approved in writing by the Agent;
(g) With respect to a Timeshare Contract as to which the underlying unit is
(i) complete and ready for occupancy, and (ii) free of all liens and
encumbrances (except with respect to the underlying units in the vacation
ownership resort known as Vacation Break at Star Island located at Kissimmee,
Florida, which may not be free of all liens and encumbrances);
(h) That requires the obligor thereunder to pay the unpaid principal
balance over an original term of not greater than one hundred twenty (120)
months;
(i) Which is related to an Approved Project, provided that a Base Contract
which has previously been an Eligible Base Contract and is related to a vacation
ownership resort or development which subsequently loses its status as an
Approved Project shall remain an Eligible Base Contract (as long as such Base
Contract would otherwise qualify as an Eligible Base Contract hereunder);
(j) As to which any installment payable thereunder has not been deferred
subsequent to January 31, 1998 other than pursuant to a Permitted Deferral;
(k) As to which the Borrower or such Subsidiary Guarantor has a valid
ownership interest in an underlying VOI or Lot subject only to Permitted Liens,
except as otherwise provided in clause (1) below;
(l) Where (i) if the related VOI or Lot has been deeded to the obligor of
the related Base Contract, on the date on which such Base Contract was granted
as security to the Collateral Agent for the benefit of the Agent and the Banks
(except as otherwise provided in clause (C) below): (A) the Borrower or such
Subsidiary Guarantor has a valid and enforceable first lien mortgage, deed of
trust, vendor's lien or retention of title of record on such VOI or Lot, (B)
such mortgage, deed of trust, vendor's lien or retention of title shall be
assigned to the Collateral Agent for the benefit of the Agent and the Banks, (C)
the original of such recorded or unrecorded mortgage, deed of trust, vendor's
lien or
retention of title (or a copy of such recorded mortgage, deed of trust, vendor's
lien or retention of title if the original recorded copy is not available) shall
be delivered to the custody of the Custodian as soon as possible, but in any
event within one hundred and eighty (180) days, after the deeding of such VOI or
Lot, and (D) if any mortgage, deed of trust, vendor's lien or retention of title
relating to such Base Contract is a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has been properly designated in
accordance with applicable law and currently so serves; (ii) if the related VOI
or Lot has not been deeded to the obligor of the related Base Contract, is not
located in Florida and is not related, and has not been related within the past
one hundred and eighty (180) days, to an Eligible Green Base Contract, on the
date on which such contract was granted as security to the Collateral Agent for
the benefit of the Agent and the Banks, a nominee under the Title Clearing
Agreements has legal title to such VOI or Lot and the Borrower or such
Subsidiary Guarantor has an equitable interest in such VOI or Lot underlying the
related Base Contract, which equitable interest shall be assigned to the
Collateral Agent for the benefit of the Agent and the Banks, (iii) if the
related VOI or Lot was the subject of an Eligible Green Base Contract, the
Borrower shall have caused the VOI or Lot to comply with the requirements of
clause (i) or (ii) immediately above, as applicable, as soon as possible, but in
any event within one hundred and eighty (180) days, after the date upon which
such Base Contract ceased to be an Eligible Green Base Contract and (iv) if the
obligor's interest in the VOI is represented by a Vacation Club Membership, the
Collateral Agent shall have a perfected security interest in the Borrower's
rights under the Vacation Club Agreement.
(m) Which was issued in a transaction which complied, and is in compliance
in all material respects, with all requirements of applicable federal, state and
local laws, including those relating to usury, truth-in-lending, land sales,
vacation time share sales, consumer credit and disclosure laws;
(n) Where payments to be made thereunder are denominated and payable in
United States dollars;
(o) The underlying ownership interest which is the subject of such Base
Contract (A) either (i) consists of a fixed week, or (ii) is an undivided
interest in a fee simple (or, in the case of Harbortown Marina Resort Hotel
Development in Ventura County, California or the Pagosa Mountain ▇▇▇▇▇▇▇
timeshare regime at the Fairfield Pagosa resort in ▇▇▇▇▇▇▇▇▇ County, Colorado,
an undivided leasehold interest) in a lodging unit or group of lodging units at
an Approved Project, or (iii) is a lot at an Approved Project, or (iv) is a
Vacation Club Membership and (B) in the case of a fixed week which has been
converted into an undivided interest
in a fee simple or a leasehold interest, or which has become subject to the Fair
Share Plus Program, which conversion or other modification does not give rise to
the extension of the maturity of any payments under such Base Contract;
(p) Which was originated by the Borrower or such Subsidiary Guarantor, and
has been (or in the case of Base Contracts originated prior to January 31, 1998
by the VB Originating Subsidiaries, from and after January 31, 1998 will be)
consistently serviced by the Borrower or FAC in the ordinary course of its
respective business;
(q) Which has not been specifically reserved against by the Borrower or
such Subsidiary Guarantor , and has not been classified by the Borrower or such
Subsidiary Guarantor as uncollectable or charged off;
(r) As to which the payment obligation of the obligor thereunder is not
subject to any material dispute between such obligor and the Borrower or such
Subsidiary Guarantor;
(s) Where the obligor thereunder is a United States citizen and has a
United States mailing address, or with respect to Base Contracts constituting
not more than 5% 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;
(t) Where the obligor thereunder is not an Affiliate of the Borrowers or
any of its Subsidiaries;
(u) That is fully amortizing pursuant to a required set of regular monthly
payments of principal and interest;
(v) That is not an obligation of an obligor that is bankrupt or otherwise
involved, whether voluntary or involuntary, in any case or proceeding under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction; and
(w) Which is not an Eligible Prime Base Contract.
Eligible Construction Work in Progress. Any ongoing construction of a
-----------------------------------------
vacation ownership resort or development acquired, developed, owned and operated
by the Borrower or any Subsidiary Guarantor (other than FAC) intended to create
improvements that will be occupied by owners of VOI's and that otherwise
satisfies the following requirements:
(a) Prior to commencement of such construction, all required permits for
such construction shall have been obtained;
(b) With respect to any building in excess of three 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
(c) The Borrower shall have submitted to the Agent evidence satisfactory to
the Agent that it has contributed equity to such project under construction
equal to twenty-five percent (25%) of the budget for acquisition and
construction of such project, or, if less than the full project is under
imminent construction at the relevant date of calculation, such phases as are to
be included in Eligible Construction Work in Progress, which budget shall have
been submitted to the Agent and shall be in form and substance satisfactory to
the Agent; and
(d) If requested by the Agent pursuant to ss.8.9.6, the Agent shall have
received an updated report from a title insurance company or other evidence
satisfactory to the Agent which confirms that there are no liens of mechanics or
materialmen with respect to obligations more than thirty (30) days overdue or
other material impairments of title to such resort or development.
Eligible Green Base Contract. Any Timeshare Contract which would be an
------------------------------
Eligible Base Contract hereunder but for the qualification contained in clause
(g) of the definition of "Eligible Base Contract" and with respect to which the
underlying unit is anticipated to be completed and ready for occupancy within
one (1) year following the origination of such Timeshare Contract; provided that
--------
any such Timeshare Contract shall cease to be an Eligible Green Base Contract
one (1) year following the origination of such Timeshare Contract; and provided
-------
further that an Eligible Green Base Contract need not comply with the
-------
requirements contained in clause (b)(ii) of the definition of "Eligible Base
Contract".
Eligible Prime Base Contract. Any Timeshare Contract which would qualify as
----------------------------
an Eligible Base Contract hereunder but for the qualification contained in
clause (w) of the definition of "Eligible Base Contract" and which meets the
following additional qualifications:
(a) the obligor thereunder is not in Prime Contract Default;
(b) (i) the obligor thereunder has paid a downpayment in an amount equal to
at least 15% of the total principal amount due thereunder
(including in such total any cash downpayments made under such Base Contract at
origination, principal payments made under any other Base Contract which has
been "traded in" in connection with the origination of the subject Base
Contract, and downpayments under such Base Contract made over a period not
exceeding six (6) months from the date of origination of such Base Contract), or
(ii) the Obligor thereunder (A) has paid a downpayment in an amount equal to at
least 10% of the total principal amount due thereunder (including in such total
any cash downpayments made under such Base Contract at origination and principal
payments made under any Base Contract which has been "traded in" in connection
with the origination of the subject Base Contract) and (B) has made a minimum of
---
six (6) consecutive, regular monthly payments of principal and interest;
provided that until July 31, 1998, those Base Contracts originated prior to
--------
January 31, 1998 by the VB Originating Subsidiaries shall be deemed to have
satisfied the requirements of this clause (b)(ii)(B).
Employee Benefit Plan. Any employee benefit plan within the meaning of
------------------------
ss.3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.7.18(a).
------------------
EPA. See ss.7.18(b).
---
ERISA. The Employee Retirement Income Security Act of 1974.
-----
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 Eurodollar 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.
Eurodollar 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 Agent in its sole
discretion acting in good faith.
Eurodollar 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 Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
----------------
Loan, the rate of interest equal to (i) the rate per annum (rounded upwards to
the nearest 1/16 of one percent) at which the Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such Eurodollar
Lending Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of the Reference Bank to
which such Interest Period applies, divided by (ii) a number equal to 1.00 minus
the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest calculated
---------------------
by reference to the Eurodollar Rate.
Event of Default. See ss.13.1.
----------------
Excluded Subsidiaries. FCC, FRC and FFC.
---------------------
Existing Resort Cities. Any of Flagstaff, Arizona; Fairfield Bay, Arkansas;
----------------------
Ventura, California; Kissimmee, Florida; Orlando, Florida; Pompano Beach,
Florida; Villa Rica, Georgia; Branson, Missouri; ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; Saphire, North Carolina; ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; Fairfield Glade, Tennessee; Pagosa Springs,
Colorado; Nashville, Tennessee; Broward County, Florida; Alexandria, Virginia
and Williamsburg, Virginia. In addition, any city in which a Startup Project
exists and has generated positive net income for each of four (4) consecutive
months shall be deemed an Existing Resort City.
Extension Request. See ss.3.4.
-----------------
FAC. Fairfield Acceptance Corporation, a Delaware corporation and a
---
wholly-owned subsidiary of the Borrower.
FAC Agent. BankBoston, N.A., acting as agent for the banks under the FAC
---------
Credit Agreement.
FAC Credit Agreement. The Amended and Restated Revolving Credit Agreement,
--------------------
dated as of January 15, 1998, by and among FAC, BKB and the other banks who may
become parties thereto, and the FAC Agent.
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 the Borrower and certain Subsidiaries of the Borrower 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.
---
FFC. Fairfield Funding Corporation, a Delaware corporation and a
---
wholly-owned subsidiary of FAC.
FMB. Fairfield Myrtle Beach, Inc., a Delaware corporation and a
---
wholly-owned subsidiary of the Borrower.
FRC. Fairfield Receivables Corporation, a Delaware corporation and a
---
wholly-owned Subsidiary of FAC.
generally accepted accounting principles. (i) When used in ss.10, 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 the Borrower
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 the Borrower 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.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
--------
Date, made by each Subsidiary Guarantor in favor of the Banks and the Agent
pursuant to which each Subsidiary Guarantor guarantees to the Banks and the
Agent the payment and performance of the Obligations and otherwise in form and
substance satisfactory to the Banks and the Agent.
Hazardous Substances. See ss.7.18(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
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 (v) 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, (w) 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, (x) 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, (y) any synthetic lease shall be the
stipulated loss value, termination value or other equivalent amount 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.
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 Eurodollar Rate Loan, the last
day of each calendar month included in the Interest Period for such Eurodollar
Rate Loan and, in addition, the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (i) initially,
---------------
the period commencing on the Drawdown Date of such 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 month and (B) for any Eurodollar Rate Loan, 1, 2, or 3 months; and (ii)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit 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 Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
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 Eurodollar 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
Eurodollar 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 Eurodollar Rate Loan that
begins on the last Eurodollar 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 Eurodollar
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan
Maturity Date.
Interim Concentration Account. See ss.8.14.
-----------------------------
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock 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 the Borrower's normal
course of business (including prepayments or advances under marketing
agreements).
Letter of Credit. See ss.4.1.1.
----------------
Letter of Credit Application. See ss.4.1.1.
----------------------------
Letter of Credit Fee. See ss.4.6.
--------------------
Letter of Credit Participation. See ss.4.1.4.
------------------------------
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 Letter of Credit
--------------
Applications, the Letters of Credit, the Collateral Agency Agreement, the
Security Documents and the fee letter agreement described in ss.5.1.
Loan Request. See ss.2.5.
------------
Loans. The Revolving Credit Loans.
-----
Local Accounts. See ss.8.14.
--------------
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, the Banks holding at least fifty-one
---------------
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitutes at least fifty-one percent (51%) of the Total Commitment.
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 Subsidiary 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 collectibility 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 Collateral Agent's
liens or security interests in the Collateral; or
(e) the value, validity, enforceability or collectibility of the Loans, the
Guaranty, or any of the Collateral (as applicable).
Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries
----------------------
may at any time draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.
Mortgaged Property. Any Real Estate which is subject to any Mortgage.
------------------
Mortgages. The several mortgages and deeds of trust granted by the Borrower
---------
and its Subsidiary Guarantors to the Agent pursuant to and in accordance with
the provisions of ss.8.13 hereof with respect to the fee and leasehold interests
of the Borrower and such Subsidiary Guarantors in the Real Estate and in form
and substance satisfactory to the Banks and the 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.
Notes. The Revolving Credit Notes.
-----
Obligations. All indebtedness, obligations and liabilities of any of the
-----------
Borrower and its Subsidiaries to any of the Banks and the Agent, 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 any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time evidencing
any thereof.
Operating Account. One or more of the Borrower's operating accounts with
------------------
the Agent.
Operating Agreement. The Fourth Amended and Restated Operating Agreement,
--------------------
dated as of January 15, 1998, by and among the Borrower, FAC, FMB and the VB
Originating Subsidiaries.
outstanding. With respect to the Loans, the aggregate unpaid principal
-----------
thereof as of any date of determination.
Partnership Subsidiaries. Palm Vacation Group, a Florida general
--------------------------
partnership, and Ocean Break Vacation Group, a Florida general partnership.
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 Deferral. With respect to any Base Contract, deferrals of not
-------------------
more than three installments payable thereunder from and after January 31, 1998.
Permitted Liens. Liens, security interests and other encumbrances permitted
---------------
by ss.9.2.
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.
Prime Contract Default. With respect to any Base Contract, when the obligor
----------------------
thereunder is at the relevant time of determination sixty-one (61) or more days
delinquent in the payment of any installment or other periodic payment of
principal, interest or amounts due thereunder.
Principal Balance. With respect to a Base Contract, and as of a date of
------------------
determination, the unpaid principal balance of such Base Contract on such date;
provided that the amount of any such principal balance shall in all cases be
--------
determined without duplication of amounts outstanding under (x) the relevant
Base Contract and (y) any related installment note which together constitute one
and the same Base Contract.
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.
RCRA. See ss.7.18(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 Purchase Agreements. Collectively, the Receivables Purchase
---------------------------------
Agreement, dated as of January 15, 1998, among FRC, FAC, FCI, FMB and the VB
Originating Subsidiaries, the Amended and Restated Receivables Purchase
Agreement, dated as of July 31, 1996, among FCC, FAC, FCI and FMB, and the
Receivables Purchase Agreement, dated as of September 28, 1993, among FFC, 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 any Loan referred to in such Note.
Reference Bank. BKB.
--------------
Register. See ss.19.3.
--------
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
------------------------
and the Banks on account of any drawing under any Letter of Credit as provided
in ss.4.2.
Request Date. See ss.3.4.
------------
Revolving Credit Loan Maturity Date. January 31, 2001.
-----------------------------------
Revolving Credit Loans. Revolving credit loans made or to be made by the
-----------------------
Banks to the Borrower pursuant to ss.2.
Revolving Credit Note Record. A Record with respect to a Revolving Credit
-----------------------------
Note.
Revolving Credit Notes. See ss.2.3.
----------------------
▇▇▇▇. See ss.7.18(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 Agreements. The several Security Agreements, dated or to be dated
-------------------
on or prior to the Closing Date, between the Borrower and the Subsidiary
Guarantors and the Collateral Agent and in form and substance satisfactory to
the Banks and the Agent.
Security Documents. The Guaranty, the Security Agreements, the Mortgages,
------------------
if applicable, and all other agreements, instruments and documents now or
hereafter securing the Obligations, including, without limitation, Uniform
Commercial Code financing statements required to be executed or delivered
pursuant to any Security Document.
Settlement. The making or receiving of payments, in immediately available
----------
funds, by the Banks, to the extent necessary to cause each Bank's actual share
of the outstanding amount of Revolving Credit Loans
(after giving effect to any Loan Request) to be equal to such Bank's Commitment
Percentage of the outstanding amount of such Revolving Credit Loans (after
giving effect to any Loan Request), in any case where, prior to such event or
action, the actual share is not so equal. Settlement Amount. See ss.2.9.1.
Settlement Date. (a) The Drawdown Date relating to any Loan Request, (b)
----------------
Friday of each week, or if a Friday is not a Business Day, the Business Day
immediately following such Friday, (c) at the option of the Agent, on any
Business Day following a day on which the account officers of the Agent active
upon the Borrower's account become aware of the existence of an Event of
Default, (d) any Business Day on which the amount of Revolving Credit Loans
outstanding from BKB plus BKB's Commitment Percentage of the sum of the Maximum
Drawing Amount and any Unpaid Reimbursement Obligations is equal to or greater
than BKB's Commitment Percentage of the Total Commitment, (e) the Business Day
immediately following any Business Day on which the amount of Revolving Credit
Loans outstanding increases or decreases by more than $500,000 as compared to
the previous Settlement Date, (f) any day on which any conversion of a Base Rate
Loan to a Eurodollar Rate Loan occurs, or (g) any Business Day on which (i) the
amount of outstanding Revolving Credit Loans decreases and (ii) the amount of
the Agent's Revolving Credit Loans outstanding equals zero Dollars ($0).
Settling Bank. See ss.2.9.1.
-------------
Startup Project. Any vacation ownership resort and development acquired,
---------------
developed, owned and operated by FCI or any of its Subsidiary Guarantors which
is not located in an Existing Resort City and which has never generated positive
net income for each of four (4) consecutive months.
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
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 Partnership Subsidiaries with respect to the Borrower.
Subsidiary Guarantors. Each of FMB, FAC, Vacation Break, the VB Originating
---------------------
Subsidiaries, and any other Subsidiary of FCI which becomes a part to the
Guaranty after the Closing Date.
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. (a) The Seventh Amended and Restated Title
---------------------------
Clearing Agreement (Lawyers), dated as of January 15, 1998, as further amended
from time to time, among FCI, FAC, Lawyers Title Insurance Corporation, Capital
Markets Assurance Corporation, First Commercial Trust Company, N.A., the
Collateral Agent, BKB, the Agent and the FAC Agent; (b) the Fourth Amended and
Restated Supplementary Trust Agreement (Arizona), dated as of January 15, 1998,
as further amended from time to time, among FCI, FAC, First American Title
Insurance Company, First Commercial Trust Company, N.A., Capital Markets
Assurance Corporation, the Collateral Agent, BKB, the Agent and the FAC Agent,;
(c) the Fifth Amended and Restated Title Clearing Agreement (Colorado), dated as
of January 15, 1998, as further amended from time to time, among FCI, FAC,
Capital Markets Assurance Corporation, Colorado Land Title Company, First
Commercial Trust Company, N.A., the Collateral Agent, BKB, the Agent and the FAC
Agent; (d) the Westwinds Fourth Amended and Restated Title Clearing Agreement,
dated as of January 15, 1998, as further amended from time to time, among FCI,
FMB, FAC, Lawyers Title Insurance Corporation, Capital Markets Assurance
Corporation, First Commercial Trust Company, N.A., Resort Funding, Inc., the
Collateral Agent, BKB, the Agent and the FAC Agent; (e) the Second Amended and
Restated Nashville Title Clearing Agreement, dated as of January 15, 1998, as
further amended from time to time, among FAC, FCI, Lawyers Title Insurance
Corporation, Capital Markets Assurance Corporation, the Collateral Agent, BKB,
the Agent and the FAC Agent; (f) the Second Amended and Restated Seawatch
Plantation Title Clearing Agreement dated as of January 15, 1998, as further
amended from time to time, among FCI, FAC, FMB, Lawyers Title Insurance
Corporation, Capital Markets Assurance Corporation, the Collateral Agent, BKB,
the Agent and the FAC 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.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan, or a
----
Eurodollar Rate Loan.
UDI. A VOI consisting of either (a) an undivided interest in fee simple (as
---
tenants in common with all other undivided interest owners) in a lodging unit or
group of lodging units at a Project, or (b) an undivided leasehold interest (as
tenants in common with all other undivided interest owners) in any lodging unit
located at the Harbortown Marina Resort Hotel Project in Ventura County,
California or Pagosa Mountain ▇▇▇▇▇▇▇ VOI Regime at the Pagosa Project in
▇▇▇▇▇▇▇▇▇ County, Colorado.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
---------------
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which the
-------------------------------
Borrower does not reimburse the Agent and the Banks on the date specified in,
and in accordance with, ss.4.2.
Vacation Break. Vacation Break USA, Inc., a Florida corporation and a
---------------
wholly-owned subsidiary of the Borrower.
VB Originating Subsidiaries. Collectively, Sea Gardens 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.
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 purchases a
membership in Fairfield's Destination Vacation Club.
Vacation Club Membership. A Membership, as defined in the Vacation Club
-------------------------
Agreement.
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 ▇▇▇▇▇▇▇ timeshare regime at
Fairfield Pagosa, undivided leasehold interest in real property) for a period of
time each year (whether pursuant to the Fair Share 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 the Borrower or any of its Subsidiaries, or
(ii) a Vacation Club Membership.
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. Stock or similar interests, 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 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 Agent or
any of the Banks merely on account of the Agent's or any Bank's involvement
in the preparation of such documents.
2. THE REVOLVING CREDIT FACILITY.
-----------------------------
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
------------------
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with ss.2.5, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment minus such Bank's Commitment Percentage of the sum of
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the lesser of (i)
the Total Commitment and (ii) the Borrowing Base. The Revolving Credit Loans
shall be made pro rata in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrower that the conditions set forth in
ss.11 and ss.12, in the case of the initial Revolving Credit Loans to be made on
the Closing Date, and ss.12, in the case of all other Revolving Credit Loans,
have been satisfied on the date of such request.
2.2. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right at any
-----------------------------
time and from time to time upon five (5) Business Days prior written notice to
the Agent to reduce by $1,000,000 or an integral multiple thereof or terminate
entirely the Total Commitment, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages of
the amount specified in such notice or, as the case may be, terminated. Promptly
after receiving any notice of the Borrower delivered pursuant to this ss.2.2,
the Agent will notify the Banks of the substance thereof. No reduction or
termination of the Commitments may be reinstated.
2.3. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
-----------------------------
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit B hereto (each a "Revolving Credit Note"), dated as of the Closing
------- -
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about
the time of the Drawdown Date of any Revolving Credit Loan or at the time of
receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit 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 Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.4. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided in
------------------------------------
ss.5.10,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day
of the Interest Period with respect thereto at the rate of one-quarter
of one percent (1/4%) per annum below the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day
of the Interest Period with respect thereto at the rate of two and
one-half percent (2 1/2%) per annum above the Eurodollar Rate
determined for such Interest Period.
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
2.5. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to the
------------------------------------
Agent written notice in the form of Exhibit C hereto (or telephonic notice
confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") prior to (i) 1:00 p.m. (Boston,
Massachusetts time) on the proposed Drawdown Date of any Base Rate Loan and (ii)
no less than four (4) Eurodollar Business Days prior to the proposed Drawdown
Date of any Eurodollar Rate Loan. Each such notice shall specify (A) the
principal amount of the Revolving Credit Loan requested, (B) the proposed
Drawdown Date of such Revolving Credit Loan, (C) the Interest Period for such
Revolving Credit Loan and (D) the Type of such Revolving Credit Loan. Promptly
upon receipt of any such notice, the Agent shall notify each of the Banks
thereof. Each Loan Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Revolving Credit
Loan requested from the Banks on the proposed Drawdown Date. Each Loan Request
shall be accompanied by a notice setting forth the borrowing availability of the
Borrower taking into account the most recent Borrowing Base Report delivered to
the Agent pursuant to ss.8.4(f) hereof and reflecting (i) usage of the credit
facilities hereunder since the date of such Borrowing Base Report and (ii)
drawdown and repayments of the Revolving Credit Loans. Each Loan Request for a
Eurodollar Rate Loan shall be in a minimum aggregate amount of $1,000,000 or an
integral multiple thereof.
2.6. CONVERSION OPTIONS.
------------------
2.6.1. CONVERSION TO DIFFERENT TYPE OF REVOLING CREDIT LOAN. The Borrower
-----------------------------------------------------
may elect from time to time to convert any outstanding Revolving Credit Loan to
a Revolving Credit Loan of another Type, provided that (i) with respect to any
such conversion of a Revolving Credit Loan to a Base Rate Loan, the Borrower
shall give the Agent at least three (3) Business Days prior written notice of
such election; (ii) with respect to any such conversion of a Base Rate Loan to a
Eurodollar Rate Loan, the Borrower shall give the Agent at least four (4)
Eurodollar Business Days prior written notice of such election; (iii) with
respect to any such conversion of a Eurodollar 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 (iv) no Loan may be converted into a Eurodollar Rate Loan
when any Default or Event of Default has occurred and is continuing. 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 Revolving Credit Loans
to its Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of outstanding Revolving Credit Loans of any Type may be
converted into a Revolving Credit Loan of 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 Revolving Credit Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrower.
2.6.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Revolving Credit
---------------------------------------------
Loan of any Type may be continued as a Revolving Credit Loan of the same Type
upon the expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained inss.2.6.1; provided that no
--------
Eurodollar 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 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 Eurodollar Rate Loan as such,
then such Eurodollar Rate Loan shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto. The Agent
shall notify the Banks promptly when any such automatic conversion contemplated
by this ss.2.6 is scheduled to occur.
2.6.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar 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 Eurodollar
Rate Loans having the same Interest Period shall not be less than $1,000,000 or
a whole multiple of $1,000,000 in excess thereof. The Borrower may not request
or elect a Eurodollar Rate Loan pursuant toss.2.5, elect to convert a Base Rate
Loan to a Eurodollar Rate Loan pursuant toss.2.6.1, or elect to continue a
Eurodollar Rate Loan pursuant toss.2.6.2 if, after giving effect thereto, there
would be greater than four (4) Eurodollar Rate Loans then outstanding. Any Loan
Request for a Eurodollar Rate Loan that would create greater than four (4)
Eurodollar Rate Loans outstanding shall be deemed to be a Loan Request for a
Base Rate Loan.
2.7. FUNDS FOR REVOLVING CREDIT LOAN. Funds for Revolving Credit Loan.
-------------------------------
2.7.1. FUNDING PROCEDURES. Not later than 2:00 p.m. (Boston time) on the
-------------------
proposed Drawdown Date of any Revolving Credit Loans, each of the Banks will
make available to the Agent, at the Agent's Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Revolving Credit Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required byss.ss.11 and 12 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank's
Commitment Percentage of any requested Revolving Credit Loans. The Agent may
also, without conferring with the Banks, make Revolving Credit Loans which are
Base Rate Loans in the amount requested on such Drawdown Date not later than
3:00 p.m. (Boston time) by depositing such amount into the Borrower's account
with the Agent.
2.7.2. ADVANCES BY AGENT. The Agent may, unless notified to the contrary by
-----------------
any Bank prior to a Drawdown Date, assume that such Bank has made available to
the Agent on such Drawdown Date the amount of such Bank's Commitment Percentage
of the Revolving Credit Loans to be made on such Drawdown Date, and the Agent
may (but it shall not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any Bank makes available to
the Agent such amount on a date after such Drawdown Date, such Bank shall pay to
the Agent on demand an amount equal to the product of (i) the average computed
for the period referred to in clause (iii) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, times (ii) the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans, times (iii) a fraction,
the numerator of which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans shall become immediately available to
the Agent, and the denominator of which is 365. A statement of the Agent
submitted to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent by such
Bank. If the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans is not made available to the Agent by such Bank within three (3)
Business Days following such Drawdown Date, the Agent shall be entitled to
recover such amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Revolving Credit Loans made on such Drawdown
Date.
2.8. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
-------------------------
monthly (or at such other interval as may be specified pursuant to ss.8.4(f)) by
the Agent by reference to the Borrowing Base Report, commercial finance and
collateral audit reports, and other information obtained by or provided to the
Agent. The Agent shall give to the Borrower written notice of any change in the
Borrowing Base determined by the Agent.
2.9. SETTLEMENTS.
-----------
2.9.1. GENERAL. On each Settlement Date, the Agent shall, not later
-------
than 11:00 a.m. (Boston time), give telephonic or facsimile notice (i) to
the Banks and the Borrower of the respective outstanding amount of
Revolving Credit Loans made by the Agent on behalf of the Banks from the
immediately preceding Settlement Date through the close of business on the
prior day and the amount of any Eurodollar Rate Loans to be made (following
the giving of notice pursuant toss.2.5) on such date pursuant to a Loan
Request and (ii) to the Banks of the amount (a "Settlement Amount") that
each Bank (a "Settling Bank") shall pay to effect a Settlement of any
Revolving Credit Loan. A statement of the Agent submitted to the Banks and
the Borrower or to the Banks with respect to any amounts owing under this
ss.2.9 shall be prima facie evidence of the amount due and owing. Each
----- -----
Settling Bank shall, not later than 3:00 p.m. (Boston time) on such
Settlement Date, effect a wire transfer of immediately available funds to
the Agent in the amount of the Settlement Amount for such Settling Bank.
All funds advanced by any Bank as a Settling Bank pursuant to this ss.2.9
shall for all purposes be treated as a Revolving Credit Loan made by such
Settling Bank to the Borrower and all funds received by any Bank pursuant
to this ss.2.9 shall for all purposes be treated as repayment of amounts
owed with respect to Revolving Credit Loans made by such Bank. In the event
that any bankruptcy, reorganization, liquidation, receivership or similar
cases or proceedings in which the Borrower is a debtor prevent a Settling
Bank from making any Revolving Credit Loan to effect a Settlement as
contemplated hereby, such Settling Bank will make such dispositions and
arrangements with the other Banks with respect to such Revolving Credit
Loans, either by way of purchase of participations, distribution, pro tanto
--- -----
assignment of claims, subrogation or otherwise as shall result in each
Bank's share of the outstanding Revolving Credit Loans being equal, as
nearly as may be, to such Bank's Commitment Percentage of the outstanding
amount of the Revolving Credit Loans.
2.9.2. FAILURE TO MAKE FUNDS AVAILABLE. The Agent may, unless notified
-------------------------------
to the contrary by any Settling Bank prior to a Settlement Date, assume
that such Settling Bank has made or will make available to the Agent on
such Settlement Date the amount of such Settling Bank's Settlement Amount,
and the Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If any
Settling Bank makes available to the Agent such amount on a date after
such Settlement Date, such Settling Bank shall pay to the Agent on demand
an amount equal to the product of (i) the average computed for the period
referred to in clause (iii) below, of the weighted average interest rate
paid by the Agent for federal funds acquired by the Agent during each day
included in such period, times (ii) the amount of such Settlement Amount,
times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Settlement Date to the date on which the
amount of such Settlement Amount shall become immediately available to the
Agent, and the denominator of which is 360. A statement of the Agent
submitted to such Settling Bank with respect to any amounts owing under
thisss.2.9.2 shall be prima facie evidence of the amount due and owing to
the Agent by such Settling Bank. If such Settling Bank's Settlement Amount
is not made available to the Agent by such Settling Bank within three (3)
Business Days following such Settlement Date, the Agent shall be entitled
to recover such amount from the Borrower on demand, with interest thereon
at the rate per annum applicable to the Revolving Credit Loans as of such
Settlement Date.
2.9.3. NO EFFECT ON OTHER BANKS. The failure or refusal of any
--------------------------
Settling Bank to make available to the Agent at the aforesaid time and
place on any Settlement Date the amount of such Settling Bank's Settlement
Amount shall not (i) relieve any other Settling Bank from its several
obligations hereunder to make available to the Agent the amount of such
other Settling Bank's Settlement Amount or (ii) impose upon any Bank, other
than the Settling Bank so failing or refusing, any liability with respect
to such failure or refusal or otherwise increase the Commitment of such
other Bank.
2.10. REPAYMENTS OF REVOLVING CREDIT LOANS PRIOR TO EVENT OF DEFAULT.
2.10.1. CREDIT FOR FUNDS RECEIVED IN CONCENTRATION ACCOUNT. Prior to
---------------------------------------------------
the occurrence of an Event of Default as to which the account officers of
the Agent active upon the Borrower's account have actual knowledge, (i) all
funds and cash proceeds in the form of money, checks and like items
received in the BKB Concentration Account as contemplated by ss.8.14 shall
be credited, on the same Business Day on which the Agent determines that
good collected funds have been received, and, prior to the receipt of good
collected funds, on a provisional basis until final receipt of good
collected funds, and applied as contemplated by ss.2.10.2, (ii) all funds
and cash proceeds in the form of a wire transfer received in the BKB
Concentration Account as contemplated by ss.8.14 shall be
credited on the same Business Day as the Agent's receipt of such amounts
(or up to such later date as the Agent determines that good collected funds
have been received), and applied as contemplated by ss.2.10.2, and (iii)
all funds and cash proceeds in the form of an automated clearing house
transfer received in the BKB Concentration Account as contemplated by
ss.8.14 shall be credited, on the next Business Day following the Agent's
receipt of such amounts (or up to such later date as the Agent determines
that good collected funds have been received), and applied as contemplated
by ss.2.10.2. For purposes of the foregoing provisions of this ss.2.10.1,
the Agent shall not be deemed to have received any such funds or cash
proceeds on any day unless received by the Agent before 2:30 p.m. (Boston
time) on such day. The Borrower further acknowledges and agrees that any
such provisional credits or credits in respect of wire or automatic
clearing house funds transfers shall be subject to reversal if final
collection in good funds of the related item is not received by, or final
settlement of the funds transfer is not made in favor of, the Agent in
accordance with the Agent's customary procedures and practices for
collecting provisional items or receiving settlement of funds transfers.
2.10.2. APPLICATION OF PAYMENTS PRIOR TO EVENT OF DEFAULT.
(a) Prior to the occurrence of an Event of Default of which
the account officers of the Agent active on the Borrower's
account have knowledge, all funds transferred to the BKB
Concentration Account and for which the Borrower has received
credits shall be applied to the Obligations as follows:
(i) first, to pay amounts then due and payable under
this Agreement, the Notes and the other Loan Documents,
including any mandatory repayment of the Revolving Credit
Loans under ss.3.2;
(ii) second, if and to the extent requested by the
Borrower pursuant to and in accordance with the provisions
of ss.3.3, to the optional repayment of the Revolving Credit
Loans; and
(iii) third, except as otherwise required by ss.4.2(b)
and (c), to the Operating Account.
(b) All repayments of the Revolving Credit Loans
pursuant to this ss.2.10.2 shall be allocated among the
Banks making such Revolving Credit Loans, in proportion, as
nearly as practicable, to the respective unpaid principal
amount of such Revolving Credit Loans outstanding, with
adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion. Prior to
any Settlement Date, however, all repayments of the
Revolving Credit Loans shall be applied in accordance with
this ss.2.10.2, first to outstanding Revolving Credit Loans
of the Agent.
2.11. REPAYMENTS OF REVOLVING CREDIT LOANS AFTER EVENT OF DEFAULT.
-------------------------------------------------------------------
Following the occurrence and during the continuance of an Event of Default of
which the account officers of the Agent active on the Borrower's account have
knowledge, the Agent in its sole and absolute discretion, may apply all funds
transferred to the BKB Concentration Account and for which the Borrower has
received credits to the Obligations in accordance with ss.13.4.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
---------------------------------------
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit Loan
--------
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the sum
----------------------------------------------
of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (i) the
Total Commitment and (ii) the Borrowing Base, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans; and third, to provide to the
Agent cash collateral for Reimbursement Obligations as contemplated by ss.4.2(b)
and (c). Each payment of any Unpaid Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be allocated among the Banks, in proportion, as
nearly as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall have
---------------------------------------------
the right, at its election, to repay the outstanding amount of the Revolving
Credit Loans, as a whole or in part, at any time without penalty or premium,
provided that any full or partial prepayment of the outstanding amount of any
--------
Eurodollar Rate Loans pursuant to this ss.3.3 may be made only on the last day
of the Interest Period relating thereto. The Borrower shall give the Agent, no
later than 12:00 noon, Boston time, at least one (1) Business Day prior written
notice of any proposed prepayment pursuant to this ss.3.3 of Base Rate Loans,
and four (4) Eurodollar Business Days notice of any proposed prepayment pursuant
to this ss.3.3 of Eurodollar Rate Loans, in each case specifying the proposed
date of prepayment of Revolving Credit Loans and the principal amount to be
prepaid. Each such partial prepayment of the Revolving Credit Loans shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment, shall be applied, in the absence of instruction by the
Borrower, first to the principal of Base Rate Loans and then to the principal of
Eurodollar Rate Loans, at the Agent's option, and shall be in an integral
multiple of $500,000 in the case of a partial prepayment of Eurodollar Rate
Loans. Each partial prepayment shall be allocated among the Banks, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Bank's Revolving Credit Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
-----------------
4.1. LETTER OF CREDIT COMMITMENTS.
----------------------------
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms and
-------------------------------------
conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon
the agreement of the Banks set forth inss.4.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees, in
its individual capacity, to issue, extend and renew for the account of the
Borrower one or more standby letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after giving
-------- -------
effect to such request, (a) the sum of the aggregate Maximum Drawing Amount
and all Unpaid Reimbursement Obligations shall not exceed $10,000,000 at
any one time and (b) the sum of (i) the Maximum Drawing Amount, (ii) all
Unpaid Reimbursement Obligations, and (iii) the amount of all Revolving
Credit Loans outstanding shall not
exceed the lesser of (A) the Total Commitment and (B) the Borrowing Base.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
---------------------------------
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
----------------------------
extended or renewed hereunder shall, among other things, (i) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (ii) have an expiry date no later than the date
which is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally agrees
----------------------------------
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage, to reimburse the Agent on
demand for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to ss.4.2 (such agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a Bank shall
-----------------------
be treated as the purchase by such Bank of a participating interest in the
Borrower's Reimbursement Obligation under ss.4.2 in an amount equal to such
payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the Agent
----------------------------------------
to issue, extend and renew each Letter of Credit and the Banks to participate
therein, the Borrower hereby agrees to reimburse or pay to the Agent, for the
account of the Agent or (as the case may be) the Banks, with respect to each
Letter of Credit issued, extended or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in ss.4.2(b) and (c),
on each date that any draft presented under such Letter of Credit is
honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Agent under or with
respect to such Letter of Credit, and (ii) the amount of any taxes,
fees, charges or other costs and expenses whatsoever incurred by the
Agent or any Bank in connection with any payment made by the Agent or
any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an
amount equal to such difference, which amount shall be held by the
Agent for the benefit of the Banks and the Agent as cash collateral
for all Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.13, an amount equal to the
then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the Banks and the Agent
as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.5.10 for overdue principal on the
Revolving Credit Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
--------------------------
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the Agent as provided in
ss.4.2 on or before the date that such draft is paid or other payment is made by
the Agent, the Agent may at any time thereafter notify the Banks of the amount
of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such period,
times (ii) the amount equal to such Bank's Commitment Percentage of such Unpaid
-----
Reimbursement Obligation, times (iii) a fraction, the numerator of which is the
-----
number of days that elapse from and including the date the Agent paid the draft
presented for honor or otherwise made payment to the date on which such Bank's
Commitment Percentage of such Unpaid Reimbursement obligation shall become
immediately available to the Agent, and the denominator of which is 360. The
responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4 shall
--------------------
be absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had against the Agent, any Bank or any beneficiary of a Letter
of Credit. The Borrower further agrees with the Agent and the Banks that the
Agent and the Banks shall not be responsible for, and the Borrower's
Reimbursement Obligations under ss.4.2 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee. The Agent and the Banks shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit.
The Borrower agrees that any action taken or omitted by the Agent or any Bank
under or in connection with each Letter of Credit and the related drafts and
documents, if done in good faith, shall be binding upon the Borrower and shall
not result in any liability on the part of the Agent or any Bank to the
Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4, the
------------------
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. The
Agent shall not be required to take any discretionary action under this Credit
Agreement (and shall be fully protected in acting or refraining from acting)
unless it shall first have received such advice or concurrence of the Majority
Banks as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action; provided that nothing in this ss.4.5 shall require the Agent to obtain
the consent of the Majority Banks before taking any action with respect to a
Letter of Credit. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Credit Agreement in accordance with a
request of the Majority Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon the Banks and all future holders
of the Revolving Credit Notes or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEE. The Borrower shall, on the date of issuance or
--------------------
any extension or renewal of any Letter of Credit pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (i) in respect of each standby Letter of
Credit an amount equal to one and one-half percent (1 1/2%) per annum of the
face amount of such standby Letter of Credit, of which an amount equal to
one-fourth of one percent (1/4%) per annum of the face amount of such standby
Letter of Credit shall be for the account of the Agent, as a fronting fee, and
the balance of which Letter of Credit Fee shall be for the accounts of the Banks
in accordance with their respective Commitment Percentages. In respect of each
Letter of Credit, the Borrower shall also pay to the Agent for the Agent's own
account, at such other time or times as such charges are customarily made by the
Agent, the Agent's customary issuance, amendment, negotiation or document
examination and other administrative fees as in effect from time to time.
5. CERTAIN GENERAL PROVISIONS.
--------------------------
5.1. ADMINISTRATIVE FEE. The Borrower agrees to pay to the Agent an
-------------- ---
administrative fee (the "Administrative Fee") as set forth in that certain fee
letter agreement of even date herewith between the Agent and the Borrower.
5.2. FUNDS FOR PAYMENTS.
------------------
5.2.1. PAYMENTS TO AGENT. All payments of principal, interest,
-------------------
Reimbursement Obligations, Administrative Fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan Documents
shall be made to the Agent, for the respective accounts of the Banks and
the Agent, at the Agent's Head
Office or at such other location in the Boston, Massachusetts, area that
the Agent may from time to time designate, in each case in immediately
available funds.
5.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
---------------
under any of the other Loan Documents shall be made without 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 Agent, for the account of the Banks or (as the case may be) the
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 Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the 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.
5.3. COMPUTATIONS. All computations of interest on the Loans and Letter of
------------
Credit Fees 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 Eurodollar 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 Loans as reflected on the Revolving Credit 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
Agent or any of the Banks of such outstanding amount, the Agent or such Bank
shall notify the Borrower to the contrary.
5.4. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that
would otherwise determine the rate of interest to be applicable to any
Eurodollar Rate Loan during any Interest Period, the 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 Eurodollar Rate Loans shall
be automatically withdrawn and shall be deemed a request for Base Rate Loans,
(ii) each Eurodollar 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 Eurodollar Rate Loans shall be suspended until
the Agent determines that the circumstances giving rise to such suspension no
longer exist, whereupon the Agent shall so notify the Borrower and the Banks.
5.5. 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
Eurodollar 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 Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrower hereby agrees promptly to pay the
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.5.5, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
5.6. 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 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 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, any Letters of
Credit, such Bank's Commitment or the Loans (other than taxes based upon or
measured by the income or profits of such Bank or the 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 any Loans or any other amounts payable to any Bank or the
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 letters of credit
issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or any
class of loans, letters of credit or commitments of which any of the Loans
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 any of
the Loans or such Bank's Commitment or any Letter of Credit,
or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such
Bank or the Agent hereunder on account of such Bank's
Commitment, any Letter of Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of
which payment or foregone interest or Reimbursement
Obligation or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by
such Bank or the 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 Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or
the Agent such additional amounts as will be sufficient to compensate such Bank
or the Agent for such additional cost, reduction, payment or foregone interest
or Reimbursement Obligation or other sum; provided, that with respect to
payments required pursuant to ss.5.6(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, and from and after such time, no Letters of Credit
are outstanding, the Banks have no further obligations to make Loans hereunder
and the Agent has no further obligations to issue, extend or renew any Letters
of Credit hereunder.
5.7. CAPITAL ADEQUACY. If after the date hereof any Bank or the 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
Agent or any corporation controlling such Bank or the 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 Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the 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 Agent to be material,
then such Bank or the 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.
5.8. CERTIFICATE. A certificate setting forth any additional amounts
-----------
payable pursuant to ss.ss.5.6 or 5.7 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.
5.9. 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 Eurodollar 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 Eurodollar Rate Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request or a Conversion Request
relating thereto in accordance with ss.2.5 or ss.2.6 or (iii) the making of any
payment of a Eurodollar Rate Loan or the making of any conversion of any such
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 Loans.
5.10. INTEREST AFTER DEFAULT.
----------------------
5.10.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
----------------
permitted by applicable law) interest on the Loans 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 the Base Rate until such amount shall be
paid in full (after as well as before judgment).
5.10.2. AMOUNTS NOT OVERDUE. During the continuance of a Default or an
-------------------
Event of Default the principal of the Revolving Credit Loans 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.26, bear interest at a rate per annum equal to the greater
of (i) four percent (4%) above the rate of interest otherwise applicable to
such Revolving Credit Loans pursuant toss.2.5 and (ii) the rate of interest
applicable to overdue principal pursuant toss.5.10.1.
5.11.1. HLT CLASSIFICATION. If, after the date hereof, the Agent determines
------------------
or is advised by any Bank that such Bank has determined, or the Agent receives
notice from or is advised by any Bank that such Bank has received notice from
any governmental authority, central bank or comparable agency having
jurisdiction over such Bank, that any of the
Commitments, Loans, Letters of Credit or Letter of Credit Participations are
classified as a "highly leveraged transaction" (an "HLT Classification")
pursuant to any existing regulations regarding "highly leveraged transactions"
or any modification, amendment or interpretation thereof, or the adoption of new
regulations regarding "highly leveraged transactions" after the date hereof by
any governmental authority, central bank or comparable agency, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the Banks.
The Agent, the Banks and the Borrower shall thereupon commence negotiations in
good faith to agree on the extent to which fees, interest rates and/or margins
hereunder should be increased so as to reflect such HLT Classification. If the
Borrower and the Majority Banks agree on the amount of such increase or
increases, this Credit Agreement shall be promptly amended to give effect to
such increase or increases. If the Borrower and the Majority Banks fail to so
agree and the Borrower has failed to refinance the Obligations within ninety
(90) days after notice is given by the Agent as provided above, then the Agent
shall, if so requested by the Majority Banks, by notice to the Borrower
terminate the Commitments, and the Commitments shall thereupon terminate, with
the provisions of ss.ss.3.2 and 4.2(c) then becoming applicable. The Agent and
the Banks acknowledge that an HLT Classification is not a Default or an Event of
Default.
6. COLLATERAL SECURITY AND GUARANTIES.
----------------------------------
6.1. 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 a party, including, without limitation, all
Base Contracts.
6.2. GUARANTIES AND SECURITY OF SUBSIDIARY GUARANTORS. The Obligations
--------------------------------------------------
shall also be guaranteed pursuant to the terms of the Guaranty. The obligations
of the Subsidiary 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 Subsidiary Guarantor, whether now owned or hereafter
acquired, described of the Security Documents to which such Subsidiary Guarantor
is a party, including, without limitation, all Base Contracts. Promptly and in
any event within thirty (30) days after the Borrower or any of its Subsidiaries
acquires the capital stock of, or creates, any new Subsidiary which has
originated or is expected to originate Base Contracts, or the Borrower
determines that any Subsidiary of the Borrower who is not a Subsidiary Guarantor
hereunder will acquire or originate Base Contracts
in the future, the Borrower will cause such new originating Subsidiary to become
a party to the Guaranty, as a guarantor thereunder, and to grant to the
Collateral Agent, for the benefit of the Banks and the Agent, a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in the Collateral, including, without limitation, all Base
Contracts, pursuant to a security agreement and Uniform Commercial Code
financing statements substantially the same as the Security Documents delivered
at the Closing.
The security interests in Collateral owned by FAC shall be released by the
Collateral Agent when the Collateral Agent releases security interests granted
in the same Collateral by FAC under the FAC Credit Agreement, except when such
release occurs by reason of the payment and satisfaction in full of FAC's
obligations under the FAC Credit Agreement and termination of the obligations of
BKB and other banks who are parties thereto to make any loans to FAC or to
issue, extend or renew any letters of credit for the account of FAC.
7. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Borrower represents and warrants to the Banks and the Agent as follows:
7.1. CORPORATE; PARTNERSHIP AUTHORITY.
--------------------------------
7.1.1. ORGANIZATION; GOOD STANDING. (a) Each of the Borrower and
----------------------------
its Subsidiaries (other than the Partnership Subsidiaries) and each
general partner of each Partnership Subsidiary (i) is a corporation
duly organized, validly existing and in good standing under the laws
of its state of incorporation, (ii) has all requisite corporate 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 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, such Subsidiary or such
general partner.
(b) Each 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
Partnership Subsidiary.
7.1.2. 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 (and in the case of the Partnership Subsidiaries,
partnership authority) of such Person, (ii) have been duly authorized
by all necessary corporate proceedings (and, in the case of the
Partnership Subsidiaries, partnership proceedings), (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, bylaws or partnership
agreement, as the case may be, of, or any material agreement or other
instrument binding upon, the Borrower or any of its Subsidiaries.
7.1.3. 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.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance
----------------------
by the Borrower and any of its Subsidiaries 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 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.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 7.3
-------- ---
hereto, the Borrower and its Subsidiaries own all of the
assets reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries as at the 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.
7.4. FINANCIAL STATEMENTS.
--------------------
7.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries has
-----------
a fiscal year which is the twelve months ending on December 31 of each
calendar year.
7.4.2. FINANCIAL STATEMENTS. There has been furnished to each of
--------------------
the Banks (i) a consolidated balance sheet of the Borrower and its
Subsidiaries (other than Vacation Break and its Subsidiaries) as at
December 31, 1996 and as at the Balance Sheet Date, (ii) consolidated
statements of income of the Borrower and its Subsidiaries (other than
Vacation Break and its Subsidiaries) for the fiscal periods then
ended, certified by Ernst & Young LLP in the case of the annual
financial statements, (iii) a consolidated balance sheet of Vacation
Break and its Subsidiaries as at December 31, 1996 and as at the
Balance Sheet Date, and (iv) consolidated statements of income of
Vacation Break and its Subsidiaries for the fiscal periods then ended,
certified by Coopers & ▇▇▇▇▇▇▇ L.L.P in the case of the annual
financial statements. 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 date 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 sheet and the notes
related thereto or pursuant toss.7.7 hereof.
7.5. NO MATERIAL CHANGES, ETC. Except as disclosed on Schedule 7.5
--------------------------
hereto, since the Balance Sheet Date there has occurred no materially
adverse change in the financial condition or business of the Borrower and
its Subsidiaries taken as a whole as shown on or reflected in the
consolidated balance sheets of the Borrower and its Subsidiaries and
Vacation Break and its Subsidiaries as at the Balance Sheet Date, or the
consolidated statements 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 Balance Sheet Date, the Borrower has not
made any Distribution.
7.6. 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.
7.7. LITIGATION. Except as otherwise disclosed on FCI's report on Form
----------
10-K for the year ended December 31, 1996 and Form 10-Q's for the quarters
ended March 31, 1997, June 30, 1997, and September 30, 1997 (collectively
the "Base Report"), which Base Report shall have been delivered to the
Agent prior to the Closing Date, or as otherwise set forth on Schedule 7.7,
------------
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 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 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 the Borrower and its Subsidiaries; provided, however, that in the
-------- -------
event the 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 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. 7.7.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor
---------------------------------------
any of 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 to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's
officers, to have any Material Adverse Effect.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the
-------------------------------------------------
Borrower nor any of its Subsidiaries is in violation of any provision of
its charter documents, bylaws, 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 result in the imposition of
substantial penalties or have a Material Adverse Effect.
7.10. 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.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
-------------------
and is continuing.
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
------------------------------------------------
Borrower nor any of 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.
7.13. 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
lien on, or security interest in, any assets or property of the Borrower or
any of its Subsidiaries or any rights relating thereto.
7.14. 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 Collateral Agent's security
interest in the Collateral. The Collateral and the Collateral Agent's
rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower or a Subsidiary
Guarantor party to one of the Security Agreements is the owner of the
Collateral free from any lien, security interest, encumbrance and any other
claim or demand, except for Permitted Liens.
7.15. 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.
7.16. EMPLOYEE BENEFIT PLANS.
----------------------
7.16.1. 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 byss.412 of ERISA. The Borrower has heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted underss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
------------------------------
which is an employee welfare benefit plan within the meaning ofss.3(1)
orss.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 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 the Borrower without liability to any Person other than for claims
arising prior to termination.
7.16.3. 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 ofss.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 toss.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 ofss.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.
7.16.4. 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 underss.4201 of ERISA
or as a result of a sale of assets described inss.4204 of ERISA.
Neither the 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 underss.4041A of ERISA.
7.17. USE OF PROCEEDS.
---------------
7.17.1. GENERAL. The proceeds of the Loans shall be used for
-------
working capital and general corporate purposes of the Borrower and its
Subsidiaries. The Borrower will obtain Letters of Credit solely for
general corporate purposes.
7.17.2. REGULATION U AND X. No portion of any Loan is to be used,
------------------
and no portion of any Letter of Credit is to be obtained, 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.
7.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of any
---------------------
Loans is to be used, and no portion of any Letter of Credit is to be
obtained, 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.
7.18. 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
("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air Act, the
Toxic Substances Control Act, or any state or local 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) neither the Borrower nor any of 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 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (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 any 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 7.18 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.
7.19. SUBSIDIARIES, ETC. The Subsidiaries of the Borrower are listed
------------------
on Schedule 7.19. Each of the Subsidiaries of the Borrower listed on
-------- ----
Schedule 7.19 is, either directly or indirectly, a wholly-owned Subsidiary
-------- ----
of the Borrower. Except as set forth on Schedule 7.19 hereto, neither the
-------- ----
Borrower nor any Subsidiary of the Borrower is engaged in any joint venture
or partnership with any other Person.
7.20. BANK ACCOUNTS. Schedule 7.20 sets forth the account numbers and
------------- -------- ----
location of all Local Accounts, Interim Concentration Accounts and other
bank accounts of the Borrower or any of its Subsidiaries.
7.21. DISCLOSURE. None of this Credit Agreement or 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. 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.
7.22. FAIRSHARE PROGRAM.
-----------------
(a) On any date of determination, for each VOI Regime for which
the constituent VOIs are comprised primarily of UDIs, the ratio of (i)
the total number of Points actually allocated to a VOI Regime pursuant
to the Fair Share Plus Program at such time for the next succeeding
twelve month period, divided by (ii) the total number of Points which
----------
are allocable to available occupiable space in such VOI Regime over
such twelve month period does not exceed a ratio of 1.0 to 1.0.
(b) On any date of determination, for each owner of a UDI who is
a member of the FairShare Plus Program, the ratio of (i) the number of
Points allocated to such owner in a VOI Regime in return for assigning
his VOI to the FairShare Plus Program trust divided by (ii) the total
----------
number of Points assigned to all UDI owners in such VOI Regime does
not exceed the percentage of such owner's undivided interest in such
VOI Regime as described in such owner's Base Contract (and related
deed).
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
-------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Bank has any obligation to make any Loans or the Agent has any obligation
to issue, extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
-----------------
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the Administrative Fee 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.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
----------------------
executive office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other place in the United States of America as the
Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.
8.3. 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 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 Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower will
--------------------------------------------------
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 the Borrower 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 Agent,
together with a written statement from such accountants to the effect (i)
that they have read a copy of this Credit Agreement, (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.9 or 10 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 and (iii) that, based upon certain agreed upon
procedures, they have reviewed the most recent Borrowing Base Report of the
Borrower and the calculations of the Borrowing Base made by the Borrower in
preparing such Borrowing Base Report and have determined that such
Borrowing Base Report and calculations are accurate in all material
respects, or if such accountants have obtained knowledge of any inaccuracy,
they shall disclose in such statement any such inaccuracy; provided that
--------
such accountants shall not be 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 the Borrower 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.8.4(h) hereof, broken down by resort and all in reasonable
detail and prepared in accordance with generally accepted accounting
principles, together with a certification by the principal financial or
accounting officer of the Borrower that the information contained in such
financial statements fairly presents the financial position of the Borrower
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 the
Borrower's internal monthly management report which shall include unaudited
consolidated balance sheet of the Borrower and its Subsidiaries and the
unaudited consolidating balance sheet of the Borrower 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) the
Borrower's annual budget delivered pursuant to ss.8.4(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 E hereto and setting forth in reasonable
detail computations evidencing compliance with each of the covenants set
forth in ss.10 hereof), and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since the 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 the Borrower;
(f) within three Business Days after the fifteenth (15th) day of each
calendar month, or at such earlier time as the Agent may reasonably
request, a Borrowing Base Report setting forth the Borrowing Base as at the
end of such calendar 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 prior to the sale or disposition of Base
Contracts to FAC pursuant to paragraph (ii) of ss.9.5.2);
(g) at the same time as the Borrowing Base Report are delivered in
accordance with paragraph (f) above, a Base Contracts aging report;
(h) not later than December 31 of each fiscal year of the Borrower, a
draft annual consolidated budget for the Borrower 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 the
Borrower and its Subsidiaries as well as final annual budgets for each
resort, prepared on a monthly basis, for such fiscal year;
(i) from and after the date on which the Banks hereunder and the banks
under the FAC Credit Agreement cease to be identical, at least two days
prior to any sales of Base Contracts by the Borrower or any of its
Subsidiaries to FAC, the list of Base Contracts which the Borrower or such
Subsidiary proposes to sell to FAC pursuant to the Operating Agreement (and
a copy of such list
shall be sent to each nominee under each Title Clearing Agreement);
(j) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Lender may
reasonably request.
8.5. NOTICES.
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8.5.1. DEFAULTS. The Borrower will promptly notify the 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 Agent and each of the Banks,
describing the notice or action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice to
--------------------
the 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 or local
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 Collateral Agent's security interests
pursuant to the Security Documents.
8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower will,
-----------------------------------------
immediately upon becoming aware thereof, notify the 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 Collateral Agent's rights with respect to the
Collateral, are subject in an amount equal to or greater than $500,000.
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and will
----------------------------------
cause each of its Subsidiaries to, give notice to the 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 Agent and each of the
Banks, in writing, in form and detail satisfactory to the 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.
8.6. 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.8.6 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.
8.7. 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 Agent.
Without limiting the generality of the foregoing:
(a) 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.
(b) The Borrower shall maintain separate errors and omissions coverage
insuring the Collateral Agent's, the Agent's and the Banks' respective risks
against loss through errors of the Borrower's or the Servicer's officers and
employees involved in the servicing of Base Contracts covering such actions and
in an amount no less than $2,000,000 per occurrence and naming the Collateral
Agent and the Agent, as a loss payee. The Borrower shall also maintain a
separate fidelity bond coverage insuring the Collateral Agent's, the Agent's and
the Banks' respective risks against losses through wrongdoing of the Borrower's
or the Servicer's officers and employees involved in the servicing of Contracts
covering such actions and in an amount no less than $2,000,000 per
occurrence and naming the Collateral Agent and the Agent, as an additional loss
payee. Each such insurance policy required pursuant to this ss.8.7(b) shall
provide for written notice to the Agent by the insurer at least 30 days prior to
the cancellation of such insurance. Evidence reasonably satisfactory to the
Agent of all renewals or replacements necessary to maintain such insurance from
time to time in force shall be delivered by the Borrower to the Agent prior to
the expiration date of the then current insurance policy.
8.8. 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.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
----------------------------------------
8.9.1. GENERAL. The Borrower shall permit the Banks, through the
-------
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 Agent or
any Bank may reasonably request. All visits and inspections conducted
by the Agent shall be at the expense of the Borrower.
8.9.2. COLLATERAL REPORTS. No more frequently than once during
-------------------
each calendar year, or more frequently as determined by the Agent if
an Event of Default shall have occurred and be continuing, upon the
request of the Agent, the Borrower will obtain and deliver to the
Agent, or, if the Agent so elects, will cooperate with the Agent in
the Agent's obtaining, a report of an independent collateral
auditor satisfactory to the Agent (which may be affiliated with one of
the Banks) with respect to the Base Contracts included in the
Borrowing Base, which report shall indicate whether or not the
information set forth in the Borrowing Base Report most recently
delivered is accurate and complete in all material respects based upon
a review by such auditors of the Base Contracts (including
verification with respect to the amount, aging, identity and credit of
the respective account debtors and the billing practices of the
Borrower or its applicable Subsidiary). All such collateral value
reports shall be conducted and made at the expense of the Borrower.
8.9.3. COMMERCIAL FINANCE EXAMINATIONS. No more frequently than
-------------------------------
once each calendar year, or more frequently as determined by the Agent
if an Event of Default shall have occurred and be continuing, upon the
request of the Agent, the Borrower will permit the Banks, through the
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 Agent will
request. All such commercial finance examinations shall be conducted
and made at the expense of the Borrower.
8.9.4. ENVIRONMENTAL ASSESSMENTS. Whether or not an Event of
--------------------------
Default shall have occurred, the 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 Agent to evaluate or confirm (i) whether any Hazardous
Materials are present in the soil or water at such Mortgaged Property
and (ii) 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 ▇▇▇▇▇ 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 Agent deems appropriate. All such
environmental assessments shall be conducted and made at the expense
of the Borrower.
8.9.5. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower authorizes
-------------------------------
the Agent and, if accompanied by the Agent, the Banks to communicate
directly with the Borrower's independent certified public accountants
and authorizes such accountants to disclose to
the 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 Agent, the Borrower shall deliver a letter addressed to
such accountants instructing them to comply with the provisions of
this ss.8.9.5.
8.9.6. TITLE RUNDOWNS. For each Eligible Construction Work in
--------------
Progress included in the Borrowing Base, the Borrower shall notify the
Agent as to the identity of the nationally-recognized title insurance
company that is providing title insurance to the Borrower for such
resort or development, and the Borrower authorizes the Agent to obtain
a report from such title insurance company or other evidence
satisfactory to the Agent, at the expense of the Borrower, not more
frequently than monthly, as to the status of title for the real
property of such project.
8.10. 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 Agent and the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (i) promptly upon
------------------------
filing the same with the Department of Labor or Internal Revenue Service,
furnish to the 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 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.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
---------------
solely for working capital and general corporate purposes. The Borrower
will obtain Letters of Credit solely for general corporate purposes.
8.13. MORTGAGED PROPERTY. If an Event of Default shall occur and be
-------------------
continuing, upon the request of the Agent from time to time during the
continuance of such Event of Default, the Borrower shall, and shall cause
its Subsidiary Guarantors to, forthwith deliver to the Collateral Agent a
fully executed mortgage or deed of trust over any or all real property then
owned by the Borrower or any Subsidiary Guarantor, including, without
limitation, all VOI's and Lots, such mortgage or deed of trust to be in
form and substance satisfactory to the Agent, together with title insurance
policies, surveys, evidences of insurances with the Agent named as loss
payee and additional insured, legal opinions and other documents and
certificates with respect to such real estate may be requested by the
Agent. The Borrower further agrees that, following the taking of such
actions with respect to such real estate, the Collateral Agent shall have
for the benefit of the Banks and the Agent a 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.
8.14. BANK ACCOUNTS.
-------------
8.14.1. GENERAL. On or prior to the Closing Date, the Borrower
-------
will, and will cause each of its Subsidiary Guarantors to, (i)
establish one or more depository accounts (collectively, the "BKB
Concentration Account") under the control of the Agent for the benefit
of the Banks and the Agent, in the name of the Borrower, (ii) instruct
all account debtors and other obligors, pursuant to notices of
assignment and instruction letters in form and substance satisfactory
to the Agent, to remit all cash proceeds of Base Contracts directly to
the BKB Concentration Account or to local depository accounts ("Local
Accounts") or concentration depository accounts ("Interim
Concentration Accounts") with financial institutions which have
entered into agency account agreements and, if applicable, lock box
agreements (collectively, "Agency Account Agreements") in form and
substance satisfactory to the Agent, or the BKB Concentration Account,
(iii) direct all depository institutions with Local Accounts to cause
all funds held in each such Local Account to be transferred no less
frequently than once each day to, and only to, an Interim
Concentration Account or the BKB
Concentration Account, (iv) direct all depository institutions with
Interim Concentration Accounts to cause all funds of the Borrower and
its Subsidiaries held in such Interim Concentration Accounts to be
transferred daily to, and only to, the BKB Concentration Account, and
(v) at all times ensure that immediately upon the Borrower's or any of
the Subsidiary Guarantors' receipt of any funds constituting or cash
proceeds of any Collateral, all such amounts shall have been deposited
in a Local Account, an Interim Concentration Account or the BKB
Concentration Account.
8.14.2. ACKNOWLEDGMENT OF APPLICATION. The Borrower hereby agrees
-----------------------------
that all amounts received by the Agent in the BKB Concentration
Account will be the sole and exclusive property of the Agent, for the
accounts of the Banks and the Agent, to be applied in accordance
ss.2.10 or ss.2.11 as applicable.
8.15. MAINTENANCE AND COLLECTION OF BASE CONTRACTS; CUSTODIAN.
-------------------------------------------------------
(a) On or before the Closing Date, and thereafter promptly upon
the origination of Base Contracts by the Borrower and the Subsidiary
Guarantors, the Borrower will, and will cause each such Subsidiary
Guarantor to, deliver or cause to be delivered directly to the
Custodian for the benefit of the Collateral Agent pursuant to the
Custodial Agreements all original copies of the Base Contracts of the
Borrower and such Subsidiary Guarantor (or in the case of Base
Contracts consisting of a sales contract and a separate promissory
note, a copy of such sales contract and the original of such
promissory note), together with all papers and contracts related to
such Base Contract. The Custodian will hold, maintain and keep custody
of all such Base Contracts for the benefit of the Collateral Agent as
set forth in the Custodial Agreements. The Borrower and the Subsidiary
Guarantors will be responsible for collection on all of their Base
Contracts.
(b) The Custodian shall at all times maintain control of the Base
Contracts for the benefit of the Collateral Agent pursuant to the
Custodial Agreements. The Borrower and the Subsidiary Guarantors may
access the Base Contracts at Custodian's storage facility (as
described in the Custodial Agreements) only for the purposes and upon
the terms and conditions set forth herein and in the Custodial
Agreements.
(c) The Borrower will, and will cause each Subsidiary Guarantor
to, at all times comply with the terms of and their
obligations under the Custodian Agreements, and shall not enter into
any modification, amendment or supplement of or to, and shall not
terminate, any of the Custodial Agreements without the prior written
consent of the Majority Banks.
8.16. SERVICING OF BASE CONTRACTS. The Borrower will manage, administer,
---------------------------
service and make collections on the Base Contracts included in the Collateral
and perform all contractual and customary undertakings of the holder of the Base
Contracts to the obligors thereunder. In managing, administering, servicing and
making collections on the Base Contracts, the Borrower will exercise that degree
of skill and care consistent with the practices employed by prudent lending
institutions which originate and service instruments and agreements similar to
the Base Contracts or other time share loans in the jurisdictions where the
Approved Projects are located and the Borrower's written credit standards and
collections policies, so long as such practices and policies are in the best
interests of the Banks. The Borrower shall maintain such books of account,
computer data files and other records as will enable the Agent and the
Collateral Agent to determine the status of each Base Contract included in the
Collateral and will enable each such Base Contract to be serviced by another
Person. The Borrower will, consistent with the foregoing provisions, act in such
a manner as will maximize the receipt of scheduled collections in respect of the
Base Contracts. The Borrower shall not appoint any other Person as its agent to
perform the servicing obligations and duties described in this Section 8.16
without the prior written consent of the Banks; provided that the Borrower may
appoint FAC as its agent under this ss.8.16 so long as the Borrower remains
primarily liable to the Agent and the Banks for the performance of such duties
and obligations. If an Event of Default shall have occurred and be continuing,
the Agent may, and at the request of the Majority Banks shall, in addition to
its other rights and remedies available to it under this Credit Agreement and
the other Loan Documents, by written notice given to the Borrower, require the
Borrower to promptly transfer all servicing obligations and duties described in
this Section 8.16 to a successor servicer which is (i) a financial institution
having a net worth of not less than $100,000,000 and whose regular business
includes the servicing of consumer finance receivables (similar to the Base
Contracts, if possible) and (ii) satisfactory to the Agent and the Banks. Any
such successor servicer shall be appointed pursuant to a written agreement
satisfactory to the Agent and the Banks, which agreement shall set forth in
greater detail the responsibilities and duties of such successor servicer. Upon
appointment of such successor servicer, all of the rights and obligations of the
Borrower with respect to the servicing of Base Contracts shall terminate and
pass to and be vested in the successor servicer, all as set forth in the
agreement by which such successor servicer is appointed.
8.17. LEGAL OPINIONS. In the event that the Borrower or any Subsidiary
---------------
Guarantor originates or expects to originate Base Contracts for VOIs or Lots at
an Approved Project which is not located in a state included in the Existing
Resort Cities on the Closing Date, the Borrower shall furnish to the Agent and
the Banks an opinion of local counsel to the Borrower and the Subsidiary
Guarantors for the jurisdiction in which such Approved Project is located
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Credit
Agreement and with respect to the execution and filing of any financing
statements and continuation statements as is necessary to maintain the first
priority lien and security interest of the Collateral Agent in the Collateral
and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
In addition, neither the Borrower nor any Subsidiary Guarantor will change its
chief executive office and principal place of business or remove any portion of
the Collateral that consists of money or is evidenced by an instrument,
certificate or other writing (including any Base Contract) from the jurisdiction
in which it is held on the Closing Date unless the Agent and the Banks shall
have first received an opinion of counsel to the effect that the lien and
security interests granted to the Collateral Agent with respect to such property
will continue to be maintained after giving effect to such action or actions.
8.18. FURTHER ASSURANCES. The Borrower will, and will cause each of its
-------------------
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
8.19. COMPUTER EQUIPMENT. The Borrower represents and warrants to the Agent
------------------
and the Banks that as of the date hereof all computer software, tapes, disks and
other electronic media relating to the Base Contracts, any VOI Regime, the Fair
Share Plus Program, the Reservation System and the Fairfield Destinations
Vacation Club operate on computer hardware that is available to the general
public without significant modification. If at any time after the date hereof,
the foregoing representation shall cease to be accurate, the Borrower shall
promptly, and in any event within thirty (30) days thereafter, grant to the
Collateral Agent under the Security Agreements a security interest in and lien
on any specialized or modified computer hardware required to run such computer
software.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
------------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
9.1. RESTRICTIONS ON IDEBTEDNESS. 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 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.8.8;
(d) Indebtedness in an aggregate amount not to exceed $1,000,000 at
any time 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) Indebtedness of the Borrower in respect of its obligation to
repurchase defaulted Base Contracts previously sold to FAC in accordance
with the terms of ss.4 of the Operating Agreement (as in effect on the
Closing Date);
(g) 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 FCI, FAC nor any of FCI's other
Subsidiaries is obligated to repurchase defaulted contracts sold to such
special-purpose, bankruptcy-remote Subsidiary as part of such
Securitization;
(h) purchase-money Indebtedness (exclusive of any Indebtedness
permitted pursuant to (j) below) incurred in connection with the
acquisition of any real or tangible personal property by the Borrower or
its Subsidiaries (other than FAC and Excluded Subsidiaries) or the
construction of improvements on any real property owned by the Borrower or
its Subsidiaries (other than FAC and Excluded Subsidiaries), provided that
(A) such Indebtedness is non-recourse to the Borrower or such Subsidiary
and (B) such Indebtedness does not exceed in the aggregate at any time ten
percent (10%) of Consolidated Tangible Net Worth;
(i) Indebtedness existing on the date hereof and listed and described
on Schedule 9.1 hereto and renewals which do not increase the amount
-------------
thereof, in each case satisfactory to the Agent;
(j) Indebtedness of the Borrower under Capitalized Leases in an amount
not to exceed $15,000,000 in the aggregate at any time outstanding; and
(k) Indebtedness or obligations of FAC or its Subsidiaries permitted
under ss.9.1 of the FAC Credit Agreement;
(l) unsecured Indebtedness of a Subsidiary Guarantor to the Borrower
or of the Borrower to a Subsidiary Guarantor which is expressly
subordinated and made junior to the payment and performance of the
Obligations;
(m) Subordinated Debt; and
(n) Indebtedness of the Borrower not described in the foregoing
clauses (a)-(m) which is incurred to develop one or more Projects for which
the Agent and the Majority Banks have refused to provide financing,
provided that (A) such Indebtedness does not at anytime exceed $25,000,000
-------------
in the aggregate, and (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.
9.2. 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 any
of its Subsidiaries 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) 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 a Subsidiary of
the Borrower 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) liens existing on the date hereof and listed on Schedule 9.2
-----------
hereto;
(g) 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.9.1(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;
(h) liens in favor of the Agent or the Collateral Agent for the
benefit of the Banks and the Agent under the Loan Documents;
(i) 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.9.1(g);
(j) liens on the collateral described in ss.9.1(n) hereof to
secure the Indebtedness permitted by ss.9.1(n); and
(k) liens of FAC and its Subsidiaries permitted under ss.9.2 of
the FAC Credit Agreement.
Without limiting this ss.9.2, in no event shall the Borrower or any of its
Subsidiaries 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 on any Base Contracts or other receivables arising in
connection with (i) any real estate or related improvement at any time included
in the definition of Eligible Construction Work in Progress hereunder, or (ii)
any real estate or related improvements with
respect to which Eligible Base Contracts, Eligible Prime Base Contracts or
Eligible Green Base Contracts have been generated and included in the Borrowing
Base hereunder.
9.3. 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 ▇▇▇▇▇'▇
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments existing on the date hereof and listed on Schedule
--------
10.3 hereto;
----
(e) Investments with respect to Indebtedness permitted by ss.9.1(l) so
long as such entities remain Subsidiaries of the Borrower;
(f) Investments existing on the date hereof consisting of Investments
by the Borrower in Subsidiaries of the Borrower;
(g) Investments consisting of promissory notes received as proceeds of
asset dispositions permitted by ss.9.5.2(ii);
(h) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business;
(i) 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 assets pursuant to a
Securitization so long as such Securitization is permitted by ss.9.1(g) and
such disposition of assets is permitted by ss.9.5.2(iv); and
(j) repurchases by the Borrower of up to and including 60,000 shares
of restricted common stock issued to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in exchange for the
payment by the Borrower of a corresponding value in withholding taxes to
federal and state taxing authorities pursuant to and in accordance with
that certain Restricted Stock Agreement dated ____________, 1996 (the "Tax
Payment Surrender") if and to the extent that such repurchases are
permitted under ss.9.4.
9.4. DISTRIBUTIONS. The Borrower will not make any Distributions except
-------------
that the Borrower may make Distributions to its stockholders consisting of the
declaration and payment of dividends and the Tax Payment Surrender so long as
(a) after giving effect to such Distributions on a pro forma basis, the Borrower
is in compliance with each of the covenants set forth in ss.10 hereof, (b) such
Distributions are made no more frequently than quarterly during each calendar
year, and (c) 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.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and will not
------------------------
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course of
business consistent with past practices) except the merger or consolidation
of one or more of the Subsidiaries of the Borrower with and into the
Borrower, or the merger or consolidation of two or more Subsidiaries (other
than Excluded Subsidiaries) of the Borrower.
9.5.2. 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 VOI's, 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 proceeds of each such sale are deposited in the BKB
Concentration Account, and applied in accordance with the provisions of
ss.2.10, and (d) no Default or Event
of Default has occurred and is continuing, or would occur after giving
effect to such disposition.
(ii) FMB and the VB Originating Subsidiaries may sell or substitute
Base Contracts and beneficial interests in VOIs and Lots underlying such
Base Contracts to the Borrower, and the Borrower 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, 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 the Borrower and
sales from the Borrower to FAC) or the Receivables Purchase Agreements
(with respect to sales from FAC to FCC, FRC and FFC), and (b) the proceeds
of each such sale are deposited in the BKB Concentration Account and
applied in accordance with the provisions of ss.2.10 or ss.2.11, as
applicable, or, if such sale is by FAC and the FAC Credit Agreement is
still in force and effect, as required by the FAC Credit Agreement, and (c)
no Default or Event of Default has occurred or 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
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 proceeds of each such sale are
deposited in the BKB Concentration Account and applied in accordance with
the provisions of ss.2.10 or ss.2.11, as applicable, or, if such sale is by
FAC and the FAC Credit Agreement is still in force and effect, as required
by the FAC Credit Agreement, and (d) no Default or Event of Default has
occurred or is continuing, or would occur after giving effect to such
disposition.
(iv) 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) pursuant to Securitizations permitted by ss.9.1(g), 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 cash
proceeds of
such sale are deposited in the BKB Concentration Account and applied in
accordance with the provisions of ss.2.10 or ss.2.11, as applicable, or, if
such sale is by FAC and the FAC Credit Agreement is still in force and
effect, as required by the FAC Credit Agreement, and (c) no Default or
Event of Default has occurred and is continuing, or would occur after
giving effect to such disposition.
9.5.3. 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 of a Subsidiary to any Person
other than the Borrower.
9.6. 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 any Subsidiary of the Borrower 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 any
Subsidiary of the Borrower intends to use for substantially the same
purpose as the property being sold or transferred.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on
Schedule 7.18 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.
9.8. 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.
9.9. 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.
9.10. 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.
9.11. FISCAL YEAR. The Borrower will not, and will not permit any of
-----------
it Subsidiaries to, change the date of the end of its fiscal year from that
set forth in ss.7.4.1.
9.12. 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) if such transaction has a value of equal to or
greater than $100,000, it has been disclosed to and approved by the
Majority Banks unless such transaction is for the fees, expenses and
disbursements of counsel to the Borrower and its Subsidiaries.
9.13. BANK ACCOUNTS. The Borrower will not, and will not permit any of
-------------
its Subsidiaries to, (i) establish any bank accounts other than those Local
Accounts, Interim Concentration Accounts and other accounts, all listed on
Schedule 7.20, without giving ten (10) days prior written notice to the
--------------
Agent, (ii) violate directly or indirectly any Agency Account Agreement or
other bank agency or lock box agreement in favor of the Agent for the
benefit of the Banks and the Agent with respect to such account, or (iii)
deposit into any of the payroll accounts listed on Schedule 7.20 any
--------------
amounts in excess of amounts necessary to pay current payroll obligations
from such accounts.
9.14. NO TERMINATION OR AMENDMENTS. Unless the Majority Banks give
-------------------------------
their prior written consent, the Borrower will keep in full force in
effect, and will not waive, amend, modify or terminate, the Fair Share Plus
Agreement, the Vacation Club Agreement, the Operating Agreement, the
Custodial Agreements, or any of the Title Clearing Agreements, or amend or
modify the Receivables Purchase Agreements; provided, that (A) the Title
--------
Clearing Agreements may be amended for the purposes of (1) making
additional properties subject thereto, (2) making an Affiliate of FCI a
party thereto having the same rights and obligations thereunder as FCI, or
(3) identifying a separate pool of Base Contracts to be sold or pledged to
secure debt under a Securitization, and (B) the FairShare Plus Agreement
may be amended from time to time (1) to substitute or add additional
parties thereto, (2) to comply with state and federal laws or regulations,
or (3) for any other purpose, provided that with respect to this clause
(3), the Borrower furnishes to the Agent an opinion of counsel in form and
substance acceptable to the Agent to the effect that such amendment or
modification will not adversely affect in any material respect the
respective interests of the Agent or the Banks.
10. FINANCIAL COVENANTS OF THE BORROWER.
-----------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Bank has any obligation to make any Loans or the Agent has any obligation
to issue, extend or renew any Letters of Credit:
10.1. 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 twelve and one-half percent (12.5%).
10.2. 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 any Indebtedness of the Borrower or any of its
Subsidiaries paid or due and payable during such period, to be less than
2.0 to 1 at any time.
10.3. LIABILITIES TO WORTH RATIO. The Borrower will not permit the
---------------------------
ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth
to exceed 2.25 to 1 at any time.
10.4. CONSOLIDATED TANGIBLE NET WORTH. The Borrower will not permit
--------------------------------
Consolidated Tangible Net Worth at any time to be less than the sum of (i)
$160,000,000 plus (ii) on a cumulative basis, 60% of positive Consolidated
----
Net Income for each fiscal quarter beginning with the fiscal quarter ended
December 31, 1997, plus (iii) 100% of the proceeds of any sale by the
----
Borrower of (A) equity securities issued by the Borrower, or (B) warrants
or subscription rights for equity securities issued by the Borrower.
11. CLOSING CONDITIONS.
------------------
The obligations of the Banks to make the initial Revolving Credit
Loans and the Term Loan and of the Agent to issue any initial Letters of
Credit shall be subject to the satisfaction of the following conditions
precedent on or prior to March 18, 1998:
11.1. 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.
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
-------------------------------------
have received from the Borrower and each of its Subsidiaries 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 other
incorporation documents as in effect on such date of certification, and
(ii) its by-laws as in effect on such date.
11.3. CORPORATE, ACTION. All corporate action necessary for the valid
------------------
execution, delivery and performance by the Borrower and each of its
Subsidiaries 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.
11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
-----------------------
from the Borrower and each of its Subsidiaries an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of the
Borrower or such Subsidiary, 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 of such Subsidiary, each of the
Loan Documents and Subordination Documents to which the Borrower or such
Subsidiary is or is to become a party; (ii) in the case of the Borrower, to
make Loan Requests and Conversion Requests and to apply for Letters of
Credit; and (iii) to give notices and to take other action on its behalf
under the Loan Documents.
11.5. VALIDITY OF LIENS. The Security Documents shall be effective to
-----------------
create in favor of the 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 Agent to protect and preserve such security interests shall
have been duly effected. The Agent shall have received evidence thereof in
form and substance satisfactory to the Agent.
11.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall
-----------------------------------------------
have received from each of 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 Agent.
11.7. CERTIFICATES OF INSURANCE. The 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).
11.8. AGENCY ACCOUNT AGREEMENTS. The Borrower shall have established
--------------------------
the BKB Concentration Account, and the Agent shall have
received an Agency Account Agreement executed by each depository
institution with a Local Account or an Interim Concentration Account.
11.9. BORROWING BASE REPORT. The Agent shall have received from the
----------------------
Borrower the initial Borrowing Base Report dated as of the Closing Date.
11.10. BASE CONTRACTS AGING REPORT. The Agent shall have received from
---------------------------
the Borrower the most recent Base Contracts aging report of the Borrower
and its Subsidiaries dated as of a date which shall be no more than fifteen
(15) days prior to the Closing Date and the Borrower shall have notified
the Agent in writing on the Closing Date of any material deviation from the
Base Contracts values reflected in such Base Contracts aging report and
shall have provided the Agent with such supplementary documentation as the
Agent may reasonably request.
11.11. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
------------------
received a favorable legal opinion addressed to the Banks and the Agent,
dated as of the Closing Date, in form and substance satisfactory to the
Banks and the Agent, from: (a) the Rose Law Firm, counsel to the Borrower
and its Subsidiaries, and (b) local counsel to the Borrower and the
Subsidiary Guarantors for the jurisdictions in which each Existing Resort
City is located (other than California).
11.12. PAYMENT OF FEES. The Borrower shall have paid to the Agent the
---------------
Administrative Fee pursuant to ss.5.1.
11.13. OTHER DOCUMENTS. The Agent shall have received evidence
----------------
satisfactory to it that the Custodial Agreements, the Title Clearing
Agreements, the Operating Agreement, the Fair Share Plus Agreement, the
Vacation Club Agreement and each other document, agreement or instrument
evidencing Subordinated Debt are in full force and effect as of the Closing
Date and that no party thereto is in default under any of the
aforementioned agreements, and all such documents shall be in form and
substance satisfactory to the Lenders in all respects. The Agent shall have
also received an executed copy of each of the above-listed agreements
together with all amendments, supplements and waivers with respect thereto.
11.14. REPAYMENT OF EXISTING CREDIT AGREEMENT. The Borrower shall have
--------------------------------------
repaid the Loans outstanding under the Existing Credit Agreement in an
amount sufficient to cause compliance with the terms and conditions of this
Credit Agreement.
12. CONDITIONS TO ALL BORROWINGS.
----------------------------
The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, and of the Agent to issue, extend or renew
any Letter of Credit, in each case whether on or after the Closing Date,
shall also be subject to the satisfaction of the following conditions
precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
----------------------------------------------
representations and warranties of any of the Borrower and its Subsidiaries
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 such Loan or
the issuance, extension or renewal of such Letter of Credit, 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).
12.2. 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 such Loan
or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for
the Agent to issue, extend or renew such Letter of Credit.
12.3. 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.
12.4. 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 Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of
such documents as the Agent may reasonably request.
12.5. BORROWING BASE REPORT. The Agent shall have received the most
----------------------
recent Borrowing Base Report required to be delivered to the Agent in
accordance with ss.8.4(f) and, if requested by the Agent, a Borrowing Base
Report dated within five (5) days of the Drawdown Date of such Loan or of
the date of issuance, extension or renewal of such Letter of Credit.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
13.1. 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 Loans or
any Reimbursement Obligation 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 its Subsidiaries shall fail to pay any
interest on the Loans, the Administrative Fee, any Letter of Credit
Fee, 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.8.1, 8.2, 8.4(f), 8.5, 8.6, 8.7, 8.9, 8.12, 8.14,
8.15, 9 or 10 hereof;
(d) the Borrower or any of its Subsidiaries 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.13.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries 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 or
warranty may be updated in writing from time to time by the Borrower
or any of its Subsidiaries, 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 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, 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 or in respect
of any Capitalized Leases 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 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 of any substantial part of the assets of
the Borrower or any of its Subsidiaries or shall commence any case or
other proceeding relating to the Borrower or any of its Subsidiaries
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 and the Borrower or any of its Subsidiaries 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 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
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 that,
with other outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries 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 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
its Subsidiaries 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 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 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 if such event or circumstance is
not covered by business interruption insurance and would have a
Material Adverse Effect;
(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 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;
(p) the Borrower or any of its Subsidiaries 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, a punishment for which in any such case could include
the forfeiture of any assets of the Borrower or such Subsidiary
included in the Borrowing Base or any assets of the Borrower or such
Subsidiary not included in the Borrowing Base but having a fair market
value in excess of $200,000; or
(q) 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 the
Borrower; or, during any period of twelve consecutive calendar months,
individuals who were directors of the Borrower on the first day of
such period shall cease to constitute a majority of the board of
directors of the Borrower; or
(r) if there shall exist an "Event of Default" under (and as
defined in) the FAC Credit Agreement;
then, and in any such event, so long as the same may be continuing, the 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 and all Reimbursement Obligations 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.13.1(g), 13.1(h) or 13.1(j), all such amounts shall become immediately due
and payable automatically and without any requirement of notice from the Agent
or any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
-----------------------------
Default specified in ss.13.1(g), ss.13.1(h) or ss.13.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. If any other Event of Default shall have occurred and
be continuing, the Agent may and, upon the request of the Majority Banks, shall,
by notice to the Borrower, terminate the unused portion of the credit hereunder,
and upon such notice being given such unused portion of the credit hereunder
shall terminate immediately and each of the Banks shall be relieved of all
further obligations to make Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of
the Obligations.
13.3. 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 Loans pursuant to ss.13.1, each Bank, if owed any amount
with respect to the Loans or the Reimbursement Obligations, 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 Agent or the holder of any Note
or purchaser of any Letter of Credit Participation 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.
13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that the Agent
--------------------------------------
receives proceeds as contemplated by ss.2.11 or in the event that, following the
occurrence or during the continuance of any Default or
Event of Default, the 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 Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the 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
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the 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
---- -----
Administrative Fee payable pursuant to ss.5.1 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 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 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.
14. 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 or constituting
Reimbursement Obligations owed to 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 or constituting Reimbursement Obligations owed to such
Bank, and (ii) if such Bank shall receive from 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, or constituting
Reimbursement Obligations owed to, 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, or Reimbursement
Obligations owed to, 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, and
Reimbursement Obligations owed to, 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 or Reimbursement obligations owed 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.
15. THE AGENT.
---------
15.1. AUTHORIZATION.
-------------
(a) The 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 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 Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the 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 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 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 Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of
the 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 Agent.
15.2. EMPLOYEE AND AGENTS. The 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 Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the 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 Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS.
------------------
15.4.1. GENERAL. The Agent shall not be responsible for the execution
-------
or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, 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 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 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 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.
15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
----------------------------
compliance with the conditions set forth inss.11, 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 Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be to be
consent to or approved by or acceptable or satisfactory to such Bank,
unless an officer of the Agent 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 Agent to such effect on or prior to the Closing
Date.
15.5. PAYMENTS.
--------
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the Agent
------------------
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by
--- ----
the Agent for the account of the
Banks except as otherwise expressly provided herein or in any of the other
Loan Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the 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 Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the 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.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
-----------------
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (i) to make available to the Agent its pro rata share of
--- ----
any Loan or to purchase any Letter of Credit Participation or (ii) to
comply with the provisions ofss.14 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 outstanding Loans, Unpaid
Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
--- ----
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
Obligations. 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 all outstanding Loans and Unpaid Reimbursement Obligations of
the nondelinquent Banks, the Banks' respective pro rata shares of all
--- ----
outstanding Loans and Unpaid Reimbursement Obligations have returned to
those in effect
1
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any Note
----------------
or the purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
---------
harmless the 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 Agent or such affiliate has not
been reimbursed by the Borrower as required by ss.16), 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 Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
15.8. AGENT AS BANK. In its individual capacity, BKB shall have the same
-------------
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
15.9 RESIGNATION. The 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
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor 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 Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan
2
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 Agent.
15.1O 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 Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
15.11. AUTHORIZATION OF COLLATERAL AGENCY AGREEMENT. Each Bank hereby
------------------------------------------------
authorizes the Agent to execute and deliver the Collateral Agency Agreement on
behalf of the Banks. Each Bank further authorizes the Agent and the Collateral
Agent to perform their respective duties under the Collateral Agency Agreement
in accordance with the terms and provisions thereof.
15.12. 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 Agent shall, if (i) so requested by
the Majority Banks and (ii) the Banks have provided to the Agent and/or the
Collateral Agent such additional indemnities and assurances against expenses and
liabilities as the Agent and the Collateral Agent may reasonably request, direct
the Collateral 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 Agent direct the Collateral Agent as to
the method and the extent of any such sale or other disposition, the Banks
hereby agreeing to indemnify and hold the Agent and/or the Collateral Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such requests and directions, provided that the Agent
need not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
16. EXPENSES AND INDEMNIFICATION.
----------------------------
16.1. EXPENSES. 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,
3
(ii) any taxes (including any interest and penalties in respect thereto) payable
by the Agent or any of the Banks (other than taxes based upon the 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 Agent and each
Bank with respect thereto), (iii) the reasonable fees, expenses and
disbursements of the Agent's Special Counsel or any local counsel to the Agent
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 Agent or any of its affiliates incurred by the Agent or
such affiliate in connection with 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, (v) any fees, costs, expenses and bank charges, including bank charges
for returned checks, incurred by the 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 Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Bank or the 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 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 Agent's relationship with the Borrower or any of its Subsidiaries
and (vii) all reasonable fees, expenses and disbursements of any Bank or the
Agent incurred in connection with UCC searches, UCC filings or mortgage
recordings.
16.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
---------------
the Agent, its affiliates and the Banks 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
any of the Loans or Letters of Credit, (ii) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of funds from lock
box, bank
4
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 ▇▇▇▇ or similar right of the Borrower or
any of its Subsidiaries comprised in the Collateral, (iv) the Borrower or any of
its Subsidiaries 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. In litigation, or the preparation
therefor, the Banks and the Agent and its 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.16.2 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.
16.3. SURVIVAL. The covenants contained in this ss.16 shall survive payment
--------
or satisfaction in full of all other Obligations.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
---------------------------------------------
17.1. 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 Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the 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.
5
17.2. CONFIDENTIALITY. Each of the Banks and the 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 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.17, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction over any
Bank or the Agent, or to auditors or accountants, (e) to the Agent, any Bank or
any Section 20 Subsidiary, (f) in connection with any litigation to which any
one or more of the Banks, the 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.17.1 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.19.6.
17.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable law
------------------
or court order, each of the Banks and the 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.
17.4. OTHER. In no event shall any Bank or the 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.17 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.
18. 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
6
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Loans and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or 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 Loans or the Agent has any obligation to issue, extend or renew any
Letter of Credit, 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 Agent at any time by or on behalf of
the Borrower or any of its Subsidiaries pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
----------------------------
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
---------------------------------
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (i) the
--------
Agent shall have given its prior written consent to such assignment, (ii) each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (iii) each
assignment shall be in an amount that is a whole multiple of $1,000,000, and
(iv) the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit F hereto (an "Assignment and
------- -
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (x) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (y) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in ss.19.3, be
released from its obligations under this Credit Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
-----------------------------------------------------------------
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder 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 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 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 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 confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial statements
referred to in ss.7.4 and ss.8.4 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
8
this Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
--- ----
Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,000.
19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed
---------
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (i) record the information contained therein in the
Register, and (ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, 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
9
be dated the effective date of such in Assignment and Acceptance and shall
otherwise be substantially the form of the assigned Notes. Within five (5) days
of issuance of any new Notes pursuant to this ss.20.4, the Borrower shall
deliver an opinion of counsel, addressed to the Banks and the Agent, relating to
the due authorization, execution and delivery of such new Notes and the
legality, validity and binding effect thereof, in form and substance
satisfactory to the Banks. The surrendered Notes shall be cancelled and returned
to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
--------------
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
-------
that (i) each such participation shall be in an amount of not less than
$1,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures made
----------
in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
--------
participants shall agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any assignee
----------------------------------------------------
Bank is an Affiliate of the Borrower, then any such assignee Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Agent pursuant to ss.13.1 or ss.13.2, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the
10
other Loan Documents be made without regard to such assignee Bank's interest in
any of the Loans or Reimbursement Obligations. If any Bank sells a participating
interest in any of the Loans or Reimbursement Obligations to a participant, and
such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
ss.13.1 or ss.13.2 to the extent that such participation is beneficially owned
by the Borrower or any Affiliate of the Borrower, and the determination of the
Majority Banks shall for all purposes of this Credit Agreement and the other
Loan Documents be made without regard to the interest of such transferor Bank in
the Loans or Reimbursement Obligations to the extent of such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
-----------------------------------
its rights to be indemnified pursuant to ss.17 with respect to any claims or
actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this ss.19 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents.
19.9 ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer any
----------------------
of its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
20. NOTICES, ETC.
------------
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given
11
pursuant to this Credit Agreement or the Notes or any Letter of Credit
Applications 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 the Borrower, at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, or at such other address for notice
as the Borrower shall last have furnished in writing to the Person giving
the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇, Vice President, with a copy
to the Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Real Estate Department, or such other address for notice as the Agent shall
last have furnished in writing to the Person giving the notice; and
(c) if to any Bank, 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.
21. 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
12
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.20. 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.
22. HEADINGS.
--------
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
23. 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.
24. 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.26.
25. 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 Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that the 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.
26. 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.5.10.2 following the effective date of any waiver by the Majority Banks of
the Default or Event of Default relating thereto), the amount of the Commitments
of the Banks, and the amount of Administrative Fee or Letter of Credit Fees
payable to such Bank hereunder may not be changed without the written consent of
the Borrower and the written consent of each Bank affected thereby; the
Revolving Credit Loan Maturity Date may not be postponed without the written
consent of each Bank affected thereby; this ss.26 and the definition of Majority
Banks may not be amended, without the written consent of all of the Banks; and
the amount of the Administrative Fee or any Letter of Credit Fees payable for
the Agent's account and ss.15 may not be amended without the written consent of
the 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 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.
27. 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.
28. RELEASE OF SECURITY.
-------------------
(a) At such time as a purchaser of a Lot or VOI pursuant to a Base Contract
has paid in full the purchase price or the requisite percentage of the purchase
price for deeding pursuant to a 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 Agent, acting on behalf of the Banks,
will cause the Collateral Agent (or its duly appointed attorney-in-fact
authorized to act on its behalf), on request and appropriate certification by
the Borrower or its authorized representative, to execute and deliver, at the
Borrower's expense, such termination statements or mortgage releases, as the
case may be, and to take such other actions as may be reasonably necessary to
terminate and remove the Collateral Agent's underlying mortgage lien or security
interest in the real estate and in the case where a purchaser has fully
performed the obligations under a Base Contract, such action as may be
reasonably necessary to terminate and remove the Collateral Agent's security
interest in such Base Contract.
(b) If the Borrower or any of the Subsidiary Guarantors sell or otherwise
transfer any of their assets in accordance with ss.9.5 hereof, the Agent, acting
on behalf of the Banks, will cause the Collateral Agent (or its duly appointed
attorney-in-fact authorized to act on its behalf) on the date that all payments
made by the purchaser or transferee are deposited with the Agent at the time the
receipt and application of the net cash proceeds of such sale in accordance with
ss.2.10 hereof, to execute and deliver, at the Borrower's expense, such
termination statements, mortgage releases or subordination agreements, as the
case may be, and to take such other actions, as may be reasonably necessary to
subordinate or terminate and remove the Collateral Agent's mortgage or security
interest in the assets being sold.
29. SUPERIOR RIGHTS OF BASE CONTRACT PURCHASER.
------------------------------------------
(a) Notwithstanding any other provision contained in this
Agreement, the rights of any purchaser of any Lot or VOI subject to a
Base Contract shall, so long as such purchaser is not in default
thereunder, be superior to those of the Agent and the Banks hereunder,
and neither the Agent nor the Banks shall, so long as such purchaser
is not in default thereunder, 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 Agent
or the Banks shall acquire any Lot or VOI subject to a Base Contract,
the 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 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.
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/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice President
BANKBOSTON, N.A., individually and as Agent
By: /s/▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director