AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
-----------------------------------------------
DATED as of January 15, 1998
between
FAIRFIELD ACCEPTANCE CORPORATION
and
BANKBOSTON, N.A.
and
BANKBOSTON, N.A., as Agent
TABLE OF CONTENTS
-----------------
1. DEFINITIONS AND RULES OF INTERPRETATION....................................1
1.1. Definitions. ...................................................1
1.2. Rules of Interpretation. ......................................29
2. THE REVOLVING CREDIT FACILITY. .........................................30
2.1. Commitment to Lend. ...........................................30
2.2. Reduction of Total Commitment. ................................31
2.3. The Revolving Credit Notes. ...................................32
2.4. Interest on Revolving Credit Loans. ...........................32
2.5. Requests for Revolving Credit Loans. ..........................33
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. ......34
2.6.3. Eurodollar Rate Loans. ..............................34
2.7. Funds for Revolving Credit Loan. ..............................35
2.7.1. Funding Procedures. .................................35
2.7.2. Advances by Agent. ..................................35
2.8. Change in Borrowing Base. .....................................36
2.9. Settlements. ..................................................36
2.9.1. General. ............................................36
2.9.2. Failure to Make Funds Available.......................37
2.9.3. No Effect on Other Banks. ...........................38
2.10. Repayments of Revolving Credit Loans Prior to Event of Default..38
2.10.1. Credit for Funds Received in Concentration Account...38
2.10.2. Application of Payments Prior to Event of Default....39
2.11. Repayments of Revolving Credit Loans After Event of Default....40
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. ...............................40
3.1. Maturity. .....................................................40
3.2. Mandatory Repayments of Revolving Credit Loans. ................41
3.3. Optional Repayments of Revolving Credit Loans. ................41
4. LETTERS OF CREDIT. .....................................................42
4.1. Letter of Credit Commitments....................................42
4.1.1. Commitment to Issue Letters of Credit.................42
4.1.2. Letter of Credit Applications. ......................42
4.1.3. Terms of Letters of Credit. .........................42
4.1.4. Reimbursement Obligations of Banks. .................43
4.1.5. Participations of Banks. ............................43
4.2. Reimbursement Obligation of the Borrower. .....................43
4.3. Letter of Credit Payments. ....................................44
4.4. Obligations Absolute. .........................................45
4.5. Reliance by Issuer. ...........................................45
4.6. Letter of Credit Fee. .........................................46
5. CERTAIN GENERAL PROVISIONS. ............................................46
5.1. Administrative Fee. ...........................................46
5.2. Funds for Payments. ...........................................46
5.2.1. Payments to Agent. ..................................46
5.2.2. No Offset, etc. .....................................46
5.3. Computations. .................................................47
5.4. Inability to Determine Eurodollar Rate..........................47
5.5. Illegality. ...................................................48
5.6. Additional Costs, etc. ........................................48
5.7. Capital Adequacy. .............................................50
5.8. Certificate. ..................................................50
5.9. Indemnity. ....................................................50
5.10. Interest After Default. ......................................51
5.10.1. Overdue Amounts......................................51
5.10.2. Amounts Not Overdue..................................51
5.11. HLT Classification. ..........................................51
6. COLLATERAL SECURITY AND GUARANTIES. ....................................52
6.1. Security of Borrower. .........................................52
6.2. Guaranties and Security of Guarantors...........................52
7. REPRESENTATIONS AND WARRANTIES. ........................................53
7.1. Corporate Authority. ..........................................53
7.1.1. Incorporation; Good Standing..........................53
7.1.2. Authorization. ......................................53
7.1.3. Enforceability. .....................................54
7.2. Governmental Approvals. .......................................54
7.3. Title to Properties; Leases. ..................................54
7.4. Financial Statements. .........................................54
7.4.1. Fiscal Year. ........................................54
7.4.2. Financial Statements..................................54
7.5. No Material Changes, etc. .....................................55
7.6. Franchises, Patents, Copyrights, etc............................55
7.7. Litigation. ...................................................55
7.8. No Materially Adverse Contracts, etc............................56
7.9. Compliance with Other Instruments, Laws, etc....................56
7.10. Tax Status. ..................................................56
7.11. No Event of Default............................................57
7.12. Holding Company and Investment Company Acts....................57
7.13. Absence of Financing Statements, etc. ........................57
7.14. Perfection of Security Interest. .............................57
7.15. Certain Transactions. ........................................57
7.16. Employee Benefit Plans. ......................................58
7.16.1. In General. ........................................58
7.16.2. Terminability of Welfare Plans.......................58
7.16.3. Guaranteed Pension Plans. ..........................58
7.16.4. Multiemployer Plans. ...............................59
7.17. Use of Proceeds. .............................................59
7.17.1. General. ...........................................59
7.17.2. Regulations U and X..................................59
7.17.3. Ineligible Securities................................59
7.18. Environmental Compliance.......................................60
7.19. Subsidiaries, etc. ...........................................62
7.20. Bank Accounts. ...............................................62
7.21. Disclosure. ..................................................62
7.22. FairShare Program. ...........................................62
8. AFFIRMATIVE COVENANTS OF THE BORROWER....................................63
8.1. Punctual Payment. .............................................63
8.2. Maintenance of Office...........................................63
8.3. Records and Accounts............................................63
8.4. Financial Statements, Certificates and Information..............63
8.5. Notices. ......................................................66
8.5.1. Defaults. ...........................................66
8.5.2. Environmental Events. ...............................66
8.5.3. Notification of Claim against Collateral..............67
8.5.4. Notice of Litigation and Judgments. .................67
8.6. Corporate Existence; Maintenance of Properties. ...............67
8.7. Insurance. ....................................................68
8.8. Taxes. ........................................................69
8.9. Inspection of Properties and Books, etc. ......................70
8.9.1. General. ............................................70
8.9.2. Collateral Reports. .................................70
8.9.3. Commercial Finance Examinations. ....................70
8.9.4. Environmental Assessments. ...........................71
8.9.5. Communications with Accountants.......................71
8.10. Compliance with Laws, Contracts, Licenses, and Permits.........71
8.11. Employee Benefit Plans. ......................................72
8.12. Use of Proceeds. .............................................72
8.13. Mortgaged Property. ..........................................72
8.14. Bank Accounts. ...............................................72
8.14.1. General. ...........................................72
8.14.2. Acknowledgment of Application........................73
8.15 .................................................................73
Maintenance and Collection of Base Contracts; Custodian........73
8.16. Borrower's Transactions With FCI .............................74
8.17. Servicing of Base Contracts. .................................75
8.18. Legal Opinions. ..............................................76
8.19. Further Assurances. ..........................................76
8.20. Computer Equipment. ..........................................77
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ............................77
9.1. Restrictions on Indebtedness. ..................................77
9.2. Restrictions on Liens. ........................................78
9.3. Restrictions on Investments. ..................................80
9.4. Distributions. ................................................81
9.5. Merger, Consolidation and Disposition of Assets.................81
9.5.1. Mergers and Acquisitions. ...........................81
9.5.2. Disposition of Assets. ..............................81
9.5.3. Disposition of Stock. ...............................82
9.6. Sale and Leaseback..............................................82
9.7. Compliance with Environmental Laws..............................82
9.8. Subordinated Debt. ............................................83
9.9. Employee Benefit Plans. .......................................83
9.10. Business Activities. .........................................84
9.11. Fiscal Year. .................................................84
9.12. Transactions with Affiliates. ................................84
9.13. Bank Accounts. ...............................................84
9.14. No Termination or Amendments. .................................84
10. FINANCIAL COVENANTS OF THE BORROWER. ..................................85
10.1. Debt Service Coverage Ratio. ..................................85
10.2. Liabilities to Worth Ratio. ...................................85
10.3. Consolidated Tangible Net Worth. ..............................85
11. CLOSING CONDITIONS. ...................................................85
11.1. Loan Documents. ...............................................85
11.2. Certified Copies of Charter Documents. ........................86
11.3. Corporate, Action. ............................................86
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. ....................................87
11.8. Agency Account Agreements. ....................................87
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. ......................88
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. ....................................89
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. ..........................94
14. SETOFF. ...............................................................95
15. THE AGENT. ............................................................96
15.1. Authorization. ................................................96
15.2. Employees and Agents. .........................................96
15.3. No Liability. .................................................97
15.4. No Representations. ...........................................97
15.4.1. General. ...........................................97
15.4.2. Closing Documentation, etc. ........................98
15.5. Payments. .....................................................98
15.5.1. Payments to Agent. .................................98
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. .................................................100
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. ........................................101
16.1. Expenses. ....................................................101
16.2. Indemnification. .............................................102
16.3. Survival. ....................................................103
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. .......................103
17.1. Sharing of Information with Section 20 Subsidiary. ...........103
17.2. Confidentiality. .............................................103
17.3. Prior Notification. ..........................................104
17.4. Other. .......................................................104
18. SURVIVAL OF COVENANTS, ETC. ..........................................104
19. ASSIGNMENT AND PARTICIPATION. ........................................105
19.1. Conditions to Assignment by Banks. ...........................105
19.2. Certain Representations and Warranties; Limitations; Covenants.105
19.3. Register. ....................................................107
19.4. New Notes. ...................................................107
19.5. Participations. ..............................................107
19.6. Disclosure. ..................................................108
19.7. Assignee or Participant Affiliated with the Borrower. ........108
19.8. Miscellaneous Assignment Provisions. .........................109
19.9. Assignment by Borrower. ......................................109
20. NOTICES, ETC. ........................................................110
21. GOVERNING LAW. .......................................................110
22. HEADINGS. ............................................................110
23. COUNTERPARTS. ........................................................111
24. ENTIRE AGREEMENT, ETC. ...............................................111
25. WAIVER OF JURY TRIAL. ................................................111
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. ..................................111
27. SEVERABILITY. ........................................................112
28. RELEASE OF SECURITY. .................................................112
29. SUPERIOR RIGHTS OF BASE CONTRACT PURCHASER.............................113
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
-----------------------------------------------
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
January 15, 1998, by and among FAIRFIELD ACCEPTANCE CORPORATION (the "Borrower"
or "FAC"), 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 and the Borrower entered into a Third 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 Third Amended and Restated Revolving Credit Agreement
dated as of December 9, 1994, (iii) Second Amendment to Third Amended and
Restated Revolving Credit Agreement dated as of December 19, 1994, (iv) Third
Amendment to Third Amended and Restated Revolving Credit Agreement dated as of
December 12, 1996, (v) Fourth Amendment to Third Amended and Restated Revolving
Credit Agreement dated as of December 19, 1997, and (vi) Fifth Amendment to
Third 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 100 Federal
--------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 its Subsidiaries after the date of this Credit Agreement which are (a)
located in any of the Existing Resort Cities, (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 Balance 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) 25% of the FRC Subordinated Interest, so long as the FRC Subordinated
Note is a legal, valid and binding obligation and no default has occurred and is
continuing under any of the FRC Subordinated Note, the FRC Receivables Purchase
Agreement or the FRC Credit Agreement.
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, 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).
------
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
----------
the Guarantors 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 FCI Agent and the banks under the FCI Credit Agreement;
(iv) EagleFunding Capital Corporation; and (v) the Borrower, FCI, 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 hereto 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.
Contract Settlement Date. The 15th day of each calendar month and the last
------------------------
day of each calendar month.
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, FCI and
certain of FCI's Subsidiaries, the Collateral Agent, BKB, the Agent, the FCI
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 between 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, FCI and certain of FCI'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 ss.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 is the
-----------------------
obligee thereunder and which satisifies 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 cancelled or terminated (regardless of whether the obligor thereunder is
legally entitled to do so) or been declared ineligible by the Borrower 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 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);
(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 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 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 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, and (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.
(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, 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 FCI or a Subsidiary of FCI, 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 FCI in the ordinary course of its respective
business;
(q) Which has not been specifically reserved against by the Borrower,
and has not been classified by the Borrower 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;
(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% 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 Borrower,
FCI or any of FCI's 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 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, 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.
----------------
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.
Excluded Subsidiaries. FCC, FRC and FFC.
---------------------
FAC. As defined in the preamble hereto.
---
Fair Share Plus Program. The program pursuant to which the occupancy
-------------------------
and use of a VOI is assigned to the trust created by the Amended and Restated
Fair Share Vacation Plan Use Management Trust Agreement, effective as of January
1, 1996, among FCI and certain Subsidiaries of FCI and third party developers as
may be named by an amendment or addendum thereto, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement (the "Fair Share Plus Agreement"),
in exchange for annual symbolic points which are used to establish the location,
timing, length of stay and unit type of a vacation; including, without
limitation, systems relating to reservations, accounting and collection,
disbursement and enforcement of assessments in respect of contributed units.
FCC. Fairfield Capital Corporation, a Delaware corporation and a
---
wholly-owned subsidiary of FAC.
FFC. Fairfield Funding Corporation, a Delaware corporation and a wholly-
---
owned subsidiary of FAC.
FCI. Fairfield Communities, Inc. a Delaware corporation and the parent of
---
the Borrower.
FCI Agent. BankBoston, N.A., acting as agent for the banks under the FCI
---------
Credit Agreement.
FCI Credit Agreement. The Amended and Restated Revolving Credit Agreement,
--------------------
dated as of January 15, 1998, by and among FCI, BKB and the other banks who may
become parties thereto, and the FCI Agent.
FMB. Fairfield Myrtle Beach, Inc. a Delaware corporation and a wholly-owned
---
subsidiary of FCI.
FRC. Fairfield Receivables Corporation, a Delaware corporation and wholly-
---
owned subisidiary of FCI.
FRC Credit Agreement. The Credit Agreement, dated as of January 15, 1998,
--------------------
by and among FRC, EagleFunding Capital Corporation, FAC, FCI, BankBoston
Securities, Inc., as deal agent, and the Collateral Agent.
FRC Subordinated Interest. The unpaid principal amount of the FRC
----------------------------
Subordinated Note.
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.
Guarantors. Each of FCI, FMB, Vacation Break, the VB Originating
----------
Subsidiaries and any other Subsidiary of FCI which becomes a party to the
Guaranty after the Closing Date.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
--------
Date, made by each Guarantor in favor of the Banks and the Agent pursuant to
which each 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.8.14.1.
-----------------------------
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 Account. See ss.8.14.1.
-------------
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 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 Subsidiaries (other than Excluded Subsidiaries) 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 Subsidiaries 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, FCI, FMB and
the VB Originating Subsidiaries.
outstanding. With respect to the Loans, the aggregate unpaid principal
-----------
thereof as of any date of determination.
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 FRC Receivables
---------------------------------
Purchase Agreement, 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.
Repurchase Default. With respect to any Base Contracts of the Borrower,
------------------
when the obligor thereunder is at the relevant time of determination more than
(90) days delinquent in the payment of any installment or other periodic payment
of principal, interest or amounts due thereunder.
Request Date. See ss.3.4.
------------
Revolving Credit Loan Maturity Date. January 31, 2001.
-----------------------------------
Revolving Credit Loans. The Tranche A Loans and Tranche B Loans.
----------------------
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 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 the other 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 the
Subordination and Intercreditor Agreement or by another written instrument
containing subordination provisions in form and substance approved by the Banks
in writing (it being understood that the Banks shall have no obligation to
consent to the incurrence of any such Subordinated Debt, and may refuse to
consent for any reason or no reason).
Subsidiary. Any corporation, association, trust, partnership or other
----------
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock, including, without limitation, the VB
Partnership Subsidiaries with respect to FCI.
Tax Sharing Agreement. The Amended and Restated Tax Sharing Agreement,
---------------------
dated September 28, 1993, between FCI and the Borrower.
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 FCI 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 FCI Agent; (c) the Fifth Amended and
Restated Title Clearing Agreement (Colorado), dated as of January 15, 1998, as
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 FCI 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 FCI 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 FCI 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 FCI 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.
Tranche A Borrowing Base. That portion of the Borrowing Base
----------------------------
attributable to clauses (a), (b) and (c) of the definition of Borrowing Base set
forth herein.
Tranche B Borrowing Base. That portion of the Borrowing Base
----------------------------
attributable to clause (d) of the definition of Borrowing Base set forth herein.
Tranche A Loans. The revolving credit loans made or to be made by the
---------------
Banks to the Borrower pursuant to ss2.1(a).
Tranche B Loans. The revolving credit loans made or to be made by the
---------------
Banks to the Borrower pursuant to ss 2.1(b).
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 FCI.
VB Originating Subsidiaries. Collectively, Sea Garden Beach and Tennis
---------------------------
Resort, Inc., a Florida corporation, Vacation Break Resorts, Inc., a Florida
corporation, Vacation Break Resorts at Star Island, Inc., a Florida corporation,
Palm Vacation Group, a Florida general partnership, and Ocean Ranch Vacation
Group, a Florida general partnership.
VB Partnership Subsidiaries. Collectively, Palm Vacation Group, a
-----------------------------
Florida general partnership, and Ocean Ranch Vacation Group, a Florida general
partnership.
Ventura Contracts. Timeshare Contracts with respect to the development
-----------------
in Ventura County, California known as the "Harbortown Marina Resort Hotel".
VOI. The underlying ownership interest which is the subject of a
Timeshare Contract, which ownership interest shall consist of either 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 FairShare Plus Program or otherwise) in
a lodging unit or group of lodging units located at a vacation resort or
development owned and/or operated by the Borrower or any of its Subsidiaries.
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.
------------------
(a) 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, Tranche A Loans in
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 Tranche A 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 sum of the Total Commitment
minus the outstanding amount of Tranche B Loans and (ii) the Tranche A Borrowing
-----
Base. The Tranche A Loans shall be made pro rata in accordance with each Bank's
--- ----
Commitment Percentage. Each request for a Tranche A 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 Tranche A Loans to be made
on the Closing Date, and ss.12, in the case of all other Tranche A Loans, have
been satisfied on the date of such request.
(b) 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, Tranche B Loans in
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; provided that the sum of the outstanding amount of
--------
the Tranche B Loans (after giving effect to all amounts requested) shall not at
any time exceed the least of (i) $7,968,750, (ii) the sum of (A) the Total
Commitment minus (B) the sum of the outstanding amount of Tranche A Loans plus
----- ----
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations and (iii)
the Tranche B Borrowing Base. The Tranche B Loans shall be made pro rata in
--- ----
accordance with each Bank's Commitment Percentage. Each request for a Tranche B
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
Tranche B Loans to be made on the Closing Date, and ss.12, in the case of all
other Tranche B 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 for such Revolving Credit
Note 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 for such Revolving
Credit Note 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 for such
Revolving Credit Note 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 that is a Tranche A Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at
the rate of three-quarters of one of one percent (3/4%) per annum below
the Base Rate.
(b) Each Base Rate Loan that is a Tranche B Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at
the rate of three-quarters of one percent (3/4%) per annum above the
Base Rate.
(c) Each Eurodollar Rate Loan that is a Tranche A Loan shall
bear interest for the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with respect thereto
at the rate of two percent (2%) per annum above the Eurodollar Rate
determined for such Interest Period.
(d) Each Eurodollar Rate Loan that is a Tranche B Loan shall
bear interest for the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with respect thereto
at the rate of three and one-half percent (3 1/2%) per annum above the
Eurodollar Rate determined for such Interest Period.
(e) 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") (i) prior to 1:00 p.m. (Boston
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 (D)
whether such Loan is to be a Tranche A Loan or a Tranche B Loan, and
(E) 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 REVOLVING 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 in
ss.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 to ss.2.5, elect to convert a Base Rate Loan
to a Eurodollar Rate Loan pursuant to ss.2.6.1, or elect to continue a
Eurodollar Rate Loan pursuant to ss.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.
---------------------------------
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 by ss.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 in 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 to ss.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 this ss.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, to or
in respect of the Obligations or, as the case may be, to the Operating
Account 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), to or in respect of the Obligations or, as the case may be,
to the Operating Account 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), to or in
respect of the
Obligations or, as the case may be, to the Operating Account 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;
(ii) second, to reduce Tranche B Loans which are Base
Rate Loans;
(iii) third, to reduce Tranche B Loans which are
Eurodollar Rate Loans;
(iv) fourth, to reduce Tranche A Loans which are Base
Rate Loans;
(v) fifth, to reduce Tranche A Loans which are
Eurodollar Rate Loans; and
(vi) sixth, except as otherwise required by ss.4.2(b)
and (c), to the Operating Account.
(b) All prepayments of Eurodollar Rate Loans prior to the
end of an Interest Period shall obligate the Borrower to pay any
breakage costs associated with such Eurodollar Rate
Loans in accordance with ss.5.10. Prior to the occurrence of an
Event of Default, the Borrower may elect to avoid such breakage
costs by providing to the Agent cash in an amount sufficient to
cash collateralize such Eurodollar Rate Loans, but in no event
shall the Borrower be deemed to have paid such Eurodollar Rate
Loans until such cash has been paid to the Agent for application
to such Eurodollar Rate Loans. The Agent may elect to cause such
cash collateral to be deposited into either (i) a cash collateral
account pursuant to the terms of a cash collateral agreement
executed by the Borrower and the Agent and in form and substance
satisfactory to the Agent, or (ii) the Borrower's Operating
Account with appropriate instructions prohibiting the Borrower's
withdrawal of such funds so long as they remain cash collateral.
In each case, the Borrower agrees to execute and deliver to the
Agent such instruments and documents, including Uniform
Commercial Code financing statements and agreements with any
third party depository banks, as the Agent may request.
(c) 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 (A) 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, or (B) the sum of the outstanding
amount of the Tranche A Loans, the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the lesser of (i) the sum of the Total
Commitment minus the outstanding amount of Tranche B Loans, or (ii) the Tranche
A Borrowing Base, or (C) the outstanding amount of the Tranche B Loans exceeds
the least of (i) $7,968,750, (ii) the sum of (x) the Total Commitment minus (y)
-----
the sum of the outstanding amount of Tranche A Loans plus the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations, or (iii) the Tranche B
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 (in the case of (A) or (B) only);
second, to the Tranche A Loans (in the case of (A) or (B) only) and/or the
Tranche B Loans (in the case of (A) or (B) only), as the case may be; 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 in ss.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 $1,000,000 at any one time
and (b) the sum of (i) the Maximum Drawing Amount, (ii) all Unpaid
Reimbursement Obligations, and (iii) the amount of all Tranche A Loans
outstanding shall not exceed the lesser of (A) the sum of the Total
Commitment minus the outstanding amount of Tranche B Loans and (B) the
-----
Tranche A 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 (1.50%) 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 AGENTS. 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 toss.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
to ss.2.5 and (ii) the rate of interest applicable to overdue
principal pursuant toss.5.10.1.
5.11 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 GUARANTORS. The Obligations shall also be
-------------------------------------
guaranteed pursuant to the terms of the Guaranty. The obligations of the
Guarantors under the Guaranty shall be in turn secured by a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of the property, rights and interests of each such
Guarantor, whether now owned or hereafter acquired, described of the Security
Documents to which such Guarantor is a party, including, without limitation, all
Base Contracts. Promptly and in any event within thirty (30) days after FCI 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
FCI determines that any Subsidiary of FCI who is not a 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 created by the Security Documents in Collateral
owned by any of the Guarantors shall be released by the Collateral Agent when
the Collateral Agent releases security interests granted in the same Collateral
by such Guarantor under the FCI Credit Agreement, except when such release
occurs by reason of the payment and satisfaction in full of FCI's obligations
under the FCI Credit Agreement and termination of the obligations of BKB and
other banks who are parties thereto to make any loans to FCI or to issue, extend
or renew any letters of credit for the account of FCI.
7. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
-------------------
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and its
----------------------------
Subsidiaries (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 or such 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 of such Person, (ii) have been duly authorized by
all necessary corporate 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 or bylaws 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 a consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1996 and as at the Balance Sheet Date
and consolidated statements of income of the Borrower and its
Subsidiaries for the fiscal periods then ended, certified by Ernst &
Young LLP 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
dates thereof and the results of operations for the fiscal periods
then ended. There are no contingent liabilities of the Borrower or any
of its Subsidiaries as of such dates involving material amounts, known
to the officers of the Borrower, which were not disclosed in such
balance sheets and the notes related thereto or pursuant to ss.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 sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal period then ended, other
than changes in the ordinary course of business that have not had any Material
Adverse Effect. Since the 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 or any of the Guarantors before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Credit Agreement or any of the other Loan
Documents, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Credit Agreement or any of the other Loan Documents, (iii)
seeking any determination or ruling that would adversely affect the performance
by the Borrower or any of its Subsidiaries or any of the Guarantors of its
respective obligations under this Credit Agreement or any of the other Loan
Documents, (iv) seeking any determination or ruling that would adversely affect
the validity or enforceability of this Credit Agreement or any of the other Loan
Documents or any action taken or to be taken pursuant thereto, or (v) seeking
any determination or ruling that would, if adversely determined, be reasonably
likely to have a Material Adverse Effect or result in any substantial liability
not covered by insurance or for which adequate reserves are not maintained on
the consolidated balance sheet of 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 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 ofss.4241 orss.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 to
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finance the Borrower's purchase of Base Contracts. The Borrower will
obtain Letters of Credit solely for general corporate purposes.
7.17.2. REGULATIONS 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 a wholly-owned Subsidiary of the Borrower. 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 Administative 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 Borowing Base Report and calculation 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 of each calendar month, or at such earlier time as the Agent may
reasonably request, (i) 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 FCI 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 FCI pursuant to ss.8.16 and
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 FCI Credit Agreement cease to be identical, at
least two days prior to any sales of Base Contracts by FCI or any of
its Subsidiaries to the Borrower, the list of Base Contracts which the
Borrower proposes to buy from FCI or such Subsidiary pursuant to the
Operating Agreement; and
(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 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 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 by the Agent shall be conducted 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.
8.10. 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 to finance the Borrower's purchase of Base Contracts and to fund the
Borrower's operations. 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
Subsidiaries 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 of the Borrower (other than Excluded Subsidiaries),
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 Subsidiaries (other than Excluded
Subsidiaries) 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 its Subsidiaries'
(other than Excluded Subsidiaries) 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. ACKNOWLEDGE 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 acquisition of Base Contracts by the Borrower or the origination
of Base Contracts by any of the Guarantors, the Borrower will 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 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 contracts and
papers 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 will be responsible
for collection on all of its 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 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 of the Guarantors 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. BORROWER'S TRANSACTIONS WITH FCI
--------------------------------
(a) Operating Agreement. The Operating Agreement shall set forth
-------------------
the following:
(1) the obligations of FCI to purchase Base Contracts from the
Borrower,
(2) the purchase price (100% of the outstanding principal
balance) to be paid by FCI for Eligible Base Contracts, Eligible Green
Base Contracts and Eligible Prime Base Contracts in Repurchase
Default,
(3) the terms of substituting a performing Base Contract of
equivalent outstanding principal amount for a Base Contract in
Repurchase Default (on the basis of 100% of the outstanding principal
balance of the Base Contract in Repurchase Default to 100% of the
performing Base Contract), and
(4) the purchase price (100% of the outstanding principal balance
plus all accrued but unpaid interest) to be paid to FCI by the
Borrower for an Eligible Base Contract, Eligible Green Base Contracts
and Eligible Prime Base Contract.
(b) Purchase of Base Contracts from FCI. From and after the
---------------------------------------
Closing Date, the Borrower may only purchase Base Contracts from FCI
in accordance with the Operating Agreement.
(c) Procedure for Purchasing Base Contracts from FCI. On or immediately
------------------------------------------------
following each Contract Settlement Date, the Borrower shall deliver to the
Collateral Agent and to each nominee under each Title Clearing Agreement a list
of the Base Contracts (if any) that it has purchased from FCI on the such
Contract Settlement Date, together with all documentation relating thereto.
(d) Sale of Base Contracts to FCI. The Borrower may at any time sell a
------------------------------
Base Contract to FCI for a purchase price equal to or greater than 100% of such
Base Contract's outstanding principal balance. Proceeds of such sales shall be
applied as set forth in ss.2.10 or ss.2.11, as applicable.
(e) Tax Sharing. The Borrower may effect all transactions and make all
-----------
payments required by the Tax Sharing Agreement.
8.17. 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
collection 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. Pursuant to and in accordance with the Operating Agreement, the Borrower
may appoint FCI to perform one or more of its obligations under this ss.8.17.
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 (other
then FCI as permitted above) as its agent to perform the servicing obligations
and duties described in this Section 8.16 without the prior written consent of
the Banks. 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 and any
agent 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.
8.18. LEGAL OPINIONS. In the event that any 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 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 interests. In addition, neither the Borrower nor any 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 was 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.
8.19. 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.
8.20. 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 INDEBTEDNESS. The Borrower will not, and will not
----------------------------
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the 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 an aggregate amount not to exceed $1,000,000 at
any time 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 respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal
so long as execution is not levied thereunder or in respect of which the
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(f) Securitizations with respect to which the obligor is a
special-purpose, bankruptcy-remote Subsidiary of the Borrower, neither the
Borrower, FCI 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 the Borrower, FCI nor any of
FCI's other Subsidiaries is obligated to repurchase defaulted Base
Contracts sold to such special-purpose, bankruptcy-remote Subsidiary as
part of such Securitization;
(g) 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;
(h) Subordinated Debt;
(i) Indebtedness of FRC, FCC and FFC to FAC under the Receivables
Purchase Agreements; and
(j) unsecured Indebtedness of the Borrower to a Guarantor which is
expressly subordinated and made junior to the payment and performance of
the Obligations.
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) or which are
being contested in good faith and for which a surety bond has been obtained
in an amount sufficient to effect satisfaction and discharge thereof;
(e) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or 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) liens in favor of the Collateral Agent for the benefit of the
Banks and the Agent under the Loan Documents; and
(h) liens on those Base Contracts and other assets transferred to a
special-purpose bankruptcy-remote Subsidiary of the Borrower to secure the
Indebtedness of such Subsidiary described in ss.9.1(f).
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 existing on the date hereof consisting of
Investments by the Borrower in Subsidiaries of the Borrower;
(f) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.9.5.2(ii);
(g) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the
ordinary course of business; and
(h) Investments consisting of capital contributions to or
promissory notes received as proceeds from a special-purpose
bankruptcy-remote Subsidiary of the Borrower by reason of a
disposition of Base Contracts pursuant to a Securitization so long as
such Securitization is permitted by ss.9.1(f) and such disposition of
Base Contracts is permitted by ss.9.5.2(iii).
9.4. DISTRIBUTIONS. The Borrower will not make any Distributions, except
-------------
that the Borrower may make Distributions to FCI consisting of the declaration
and payment of dividends 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 froth in ss.10 hereof, (b) such Distributions are made no more
frequently than quarterly during each calendar year, (c) the Borrower is a
Subsidiary of FCI and FCI is a Guarantor, and (d) no Default or Event of Default
has occurred and is continuing, or would occur after giving effect to such
Distributions.
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 the Borrower with and into FCI, or the merger or consolidation of two or
more 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 without the prior written approval of the
Majority Banks, except as set forth below:
(i) The Borrower may sell or substitute Base Contracts and
beneficial interests in VOIs and Lots underlying such Base Contracts
to FCI (pursuant to ss.8.16 hereto), FCC, FRC and FFC provided that
-------- ----
(a) the terms of each such sale are no less favorable than those
contained the Operating Agreement (with respect to sales from the
Borrower to FCI) or in the Receivables Purchase Agreements (with
respect to sales from the Borrower to FCC, FRC and FFC), (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, and (c) no Default or Event of Default has
occurred and is continuing, or would occur after giving effect to such
disposition.
(ii) The Borrower or its Subsidiaries may sell Base Contracts and
beneficial interests in VOIs and Lots underlying such Base Contracts
to unrelated third parties provided that (a) each such sale is for
-------- ----
cash, (b) the purchase price of the Base Contracts sold shall not be
less than 80% of the principal components of such Base Contracts plus
all accrued and unpaid interest on such Base Contracts, (c) the
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, and (d) no Default or Event of Default has
occurred and is continuing, or would occur after giving effect to such
disposition.
(iii) The Borrower may sell Base Contracts and beneficial
interests in VOIs and Lots underlying such Base Contracts to
special-purpose bankruptcy-remote Subsidiaries of the Borrower (other
than FCC, FRC and FFC) pursuant to Securitizations permitted by
ss.9.1(f), provided that (a) the cash portion of the purchase price of
-------- ----
the Base Contracts sold shall not be less than 80% of the principal
components of such Base Contracts plus all accrued and unpaid interest
on such Base Contracts, (b) the 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, 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. SUBORNIDATED 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.
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss4001 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) has been disclosed to and
approved by the Majority Banks.
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 Tax Sharing Agreement, the Fair Share
Plus Agreement, the Operating Agreement, the Custodial Agreements, or any of the
Title Clearing Agreements, or amend or modify the Receivables Purchase
Agreements; provided, however, (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 and 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. 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.
10.2. LIABILITIES TO WORTH RATIO. The Borrower will not permit the ratio of
--------------------------
Consolidated Total Liabilities to Consolidated Tangible Net Worth to exceed 4.0
to 1 at any time.
10.3. CONSOLIDATED TANGIBLE NET WORTH. The Borrower will not permit
-------------------------------
Consolidated Tangible Net Worth at any time to be less than the sum of (i)
$47,600,000 plus (ii) on a cumulative basis, 100% of positive Consolidated Net
----
Income for each fiscal quarter beginning with the fiscal quarter ended September
30, 1997, plus (iii) 100% of the paid-in capital from FCI less any Distributions
----
made by the Borrower to FCI.
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 the Guarantors a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (i) its charter or 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 the Guarantors
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
----------------------
the Borrower and each of the Guarantors an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of the Borrower or such
Guarantor, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (i) to sign, in the name and on behalf of
each of the Borrower of such Guarantor, each of the Loan Documents and
Subordination Documents to which the Borrower or such Guarantor is or is to
become a party; (ii) in the case of the Borrower, to make 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 and each of the
Guarantors 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. CERTIFICATE 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, the Agent and the Collateral
------------------
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 the Guarantors, and (b) local counsel to the Borrowers and the 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 Tax Sharing Agreement, the Custodial Agreements, the Title
Clearing Agreements, the Operating Agreement, the Fair Share Plus Agreement, the
FRC Subordinated Note, the FRC Receivables Purchase Agreement and each 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 and
the Guarantors contained in this Credit Agreement, the other Loan Documents or
in any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of 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 the Guarantors 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 or any of the
Guarantors shall fail to perform any term, covenant or agreement
contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this ss.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 or any of the Guarantors in this Credit Agreement or any
of the other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Credit Agreement, as
such representation and warranty may be updated in writing from time
to time by the Borrower or any of its Subsidiaries, shall prove to
have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries or any of the
Guarantors shall fail to pay at maturity, or within any applicable
period of grace, any obligation for borrowed money or credit received
or in respect of any Capitalized Leases, 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 or any of the
Guarantors shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of
the Borrower or any of its Subsidiaries or any of the Guarantors or of
any substantial part of the assets of the Borrower or any of its
Subsidiaries or any of the Guarantors or shall commence any case or
other proceeding relating to the Borrower or any of its Subsidiaries
or any of the Guarantors under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in
effect, or shall take any action to authorize or in furtherance of any
of the foregoing, or if any such petition or application shall be
filed or any such case or other proceeding shall be commenced against
the Borrower or any of its Subsidiaries or any of the Guarantors and
the Borrower or any of its Subsidiaries or any of the Guarantors shall
indicate its approval thereof, consent thereto or acquiescence therein
or such petition or application shall not have been dismissed within
forty-five (45) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries or any of the Guarantors bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of the Borrower or any
Subsidiary of the Borrower or any of the Guarantors in an involuntary
case under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against the Borrower or any of its Subsidiaries or any
of the Guarantors that, with other outstanding final judgments,
undischarged, against the Borrower or any of its Subsidiaries or any
of the Guarantors exceeds in the aggregate $1,000,000;
(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or
the Subordinated Debt shall be prepaid, redeemed or repurchased in
whole or in part;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or
liens in a substantial portion of the Collateral shall cease to be
perfected, or shall cease to have the priority contemplated by the
Security Documents, in each case otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of the Borrower or any of
the Guarantors party thereto or any of their respective stockholders,
or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or
issue a judgment, order, decree or ruling to the effect that, any one
or more of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to
the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in
an aggregate amount exceeding $500,000, or the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate
annual payments exceeding $500,000, or any of the following occurs
with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable
Event, or a failure to make a required installment or other payment
(within the meaning of ss.302(f)(1) of ERISA), provided that the Agent
--------
determines in its reasonable discretion that such event (A) could be
expected to result in liability of the Borrower or any of its
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $500,000 and (B) could constitute grounds
for the termination of such Guaranteed Pension Plan by the PBGC, for
the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan or for the
imposition of a lien in favor of such Guaranteed Pension Plan; or (ii)
the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by
the PBGC of proceedings to terminate such Guaranteed Pension Plan;
(m) the Borrower or any of its Subsidiaries or any of the
Guarantors shall be enjoined, restrained or in any way prevented by
the order of any court or any administrative or regulatory agency from
conducting any material part of its business and such order shall
continue in effect for more than thirty (30) days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than
fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of the
Borrower or any of its Subsidiaries or any of the Guarantors if such
event or circumstance is not covered by business interruption
insurance and would have a Material Adverse Effect or a materially
adverse effect on the business or financial condition of such
Guarantor;
(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired
by the Borrower or any of its Subsidiaries or any of the Guarantors if
such loss, suspension, revocation or failure to renew would have a
material adverse effect on the business or financial condition of the
Borrower or such Subsidiary or such Guarantor;
(p) the Borrower or any of its Subsidiaries or any of the
Guarantors shall be indicted for a state or federal crime, or any
civil
or criminal action shall otherwise have been brought against the
Borrower or any of its Subsidiaries or any of the Guarantors, a
punishment for which in any such case could include the forfeiture of
any assets of the Borrower or such Subsidiary or such Guarantor
included in the Borrowing Base or any assets of the Borrower or such
Subsidiary or such Guarantor not included in the Borrowing Base but
having a fair market value in excess of $200,000; or
(q) FCI shall at any time legally or beneficially, cease to own
all of the issued and outstanding capital stock of the Borrower; or
(r) if there shall exist an "Event of Default" under (and as
defined in) the FCI 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 or any of
the Guarantors of any of the Obligations.
13.3. REMEDITES. 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. EMPLOYEES 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 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 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.
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
------------------------------------------------
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the 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, (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 any of the Guarantors or the
administration thereof after the occurrence of a Default or Event of Default and
(B) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrower or any of its Subsidiaries or any of the Guarantors and (vii) all
reasonable fees, expenses and disbursements of any Bank or the 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 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 or any of the Guarantors comprised in the Collateral,
(iv) the Borrower or any of its Subsidiaries or any of the Guarantors entering
into or performing this Credit Agreement or any of the other Loan Documents or
(v) with respect to the Borrower and its Subsidiaries and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding. 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.
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 documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries or
any of the Guarantors pursuant hereto shall be deemed to have been relied upon
by the Banks and the 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 or any of the Guarantors
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary or
such Guarantor hereunder.
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 of the Guarantors or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any of
the Guarantors or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under this
Credit Agreement or any of the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto;
(c) such assignee 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 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 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 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 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
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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.
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THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.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.
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The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
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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 Letter of Credit Fees 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 sells or otherwise transfers any 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.9.5.2 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 ACCEPTANCE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: President
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BANKBOSTON, N.A., individually and as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
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Title: Managing Director
-----------------------------------