SECOND AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
between
FAIRFIELD ACCEPTANCE CORPORATION-NEVADA
and
BANKBOSTON, N.A.,
INDIVIDUALLY AND AS AGENT
THIS SECOND AMENDMENT (this "Amendment") dated as of October 20, 1998,
is made by and among FAIRFIELD ACCEPTANCE CORPORATION-NEVADA (successor by
merger to Fairfield Acceptance Corporation), a Nevada domiciled Delaware
corporation (the "Company", "FAC" or the "Borrower"), BANKBOSTON, N.A., a
national banking association ("BKB"), and BANKBOSTON, N.A., as agent for itself
and the Banks (the "Agent"), all parties to a certain Amended and Restated
Revolving Credit Agreement dated as of January 15, 1998 (as amended and in
effect as of the date hereof, the "Credit Agreement"), and BKB, as Collateral
Agent ("Collateral Agent") under that certain Collateral Agency Agreement dated
as of January 15, 1998, as amended by a First Amendment to Collateral Agency
Agreement dated as of July 31, 1998, by and among the parties hereto (including
the Guarantors, as defined below), BKB, as agent under the FCI Credit Agreement,
BancBoston Securities, Inc., Eagle Funding Capital Corporation and First
Security Bank, National Association. This Amendment is joined in by Fairfield
Communities, Inc., a Delaware corporation ("FCI"), Fairfield Myrtle Beach, Inc.
("FMB"), Vacation Break USA, Inc. ("Vacation Break"), Sea Gardens Beach and
Tennis Resorts, Inc. ("SGR"), Vacation Break Resorts, Inc. ("VBR"), Vacation
Break Resorts at Star Island, Inc. ("VBRS"), Palm Vacation Group ("PVG") and
Ocean Ranch Vacation Group ("ORV") (FCI, FMB, Vacation Break, SGR, VBR, VBRS,
PVG and ORV are hereinafter collectively referred to as the "Guarantors") by
reason of the Amended and Restated Unconditional Payment and Performance
Guaranty, dated as of January 15, 1998, from the Guarantors in favor of the
Agent and the Banks (the "FAC Guaranty"). All capitalized terms used herein and
not otherwise defined shall have the same respective meanings herein as in the
Credit Agreement.
WHEREAS, FAC has requested and BKB has agreed to (i) increase FAC's
borrowing availability under the Credit Agreement from $20,000,000 to
$60,000,000, (ii) amend the definitions of "Borrowing Base", "Eligible Base
Contract", "Receivables Purchase Agreements" and "VOI", (iii) add new
definitions to the Credit Agreement, (iv) extend the Revolving Credit Loan
Maturity Date from January 31, 2001 to October 31, 2001, and (v) make certain
other changes and
amendments to the Credit Agreement, all upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, FAC, BKB,
the Agent and the Guarantors hereby agree as follows:
ss.1. Amendments to Credit Agreement. FAC, BKB and the Agent hereby agree
------------------------------
to amend the Credit Agreement as follows:
ss.1.1. The definition of "Borrowing Base" appearing in Section 1.1 of the
Credit Agreement is hereby amended by inserting the following provision at the
end of clause (c) of said definition immediately following the words "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 $9,000,000".
ss.1.2. The definition of "Eligible Base Contract" appearing in Section 1.1
of the Credit Agreement is hereby amended by deleting clause (s) of said
definition in its entirety and substituting therefor the following new clause
(s):
"(s) Where the Obligor thereunder is a United States
citizen or has a United States mailing address, or with
respect to Base Contracts constituting not more than 10% of
the aggregate Principal Balances of all Eligible Base
Contracts as of the relevant date of determination, where the
Obligor thereunder is not a United States citizen or does not
have a United States mailing address;"
ss.1.3. The definitions of "Receivables Purchase Agreements", "Revolving
Credit Loan Maturity Date" and "VOI" appearing in Section 1.1 of the Credit
Agreement are hereby amended by deleting said definitions in their entirety and
substituting therefor the following new definitions:
"Receivables Purchase Agreements. Collectively, the (i) FRC
--------------------------------
Receivables Purchase Agreement, (ii) FFC, II Receivables
Purchase Agreement, and (iii) Amended and Restated Receivables
Purchase Agreement, dated as of July 31, 1996, among FCC, FAC,
FCI and FMB."
"Revolving Credit Loan Maturity Date. October 31, 2001."
-----------------------------------
"VOI. The underlying ownership interest which is the subject
---
of a Timeshare Contract, which ownership interest shall
consist of either (i) a fixed week or undivided fee simple
interest (or, in the case of Ventura Contracts or those
Timeshare Contracts for the Pagosa Mountain Xxxxxxx timeshare
regime at Fairfield Pagosa, undivided leasehold interest in
real property) for a period of time each year (whether
pursuant
to the Fair Share Plus Program or otherwise) in a lodging unit
or group of lodging units located at a vacation resort or
development owned and/or operated by FCI or any of its
Subsidiaries, or (ii) a Vacation Club Membership."
ss.1.4. Section 1.1 of the Credit Agreement is hereby further amended by
inserting the following definitions in alphabetical order therein:
"FFC, II. Fairfield Funding Corporation, II, a Delaware
-------
corporation and wholly-owned subsidiary of FAC."
"FFC, II Receivables Purchase Agreement. The
----------------------------------------------
Receivables Purchase Agreement, dated as of July 31, 1998,
among the Borrower, FCI, FMB, the VB Originating
Subsidiaries and FFC, II."
"Vacation Club Agreement. The Membership Agreement for
-----------------------
Fairfield Destinations Vacation Club entered into by FCI,
Fairfield Destinations Vacation Club, Inc., FairShare
Vacation Owners Association, as trustee of Fairshare
Vacation Plan Use Management Trust and each person that
subsequently purchase a membership in Fairfield's
Destination Vacation Club."
"Vacation Club Membership. A Membership, as defined in
------------------------
the Vacation Club Agreement."
ss.1.5. Subsection 8.4(f) of the Credit Agreement is hereby amended by
deleting said subsection in its entirety and substituting therefor the following
new subsection:
"(f) within three Business Days after the fifteenth
and last day of each month, or at such earlier time as the
Agent may reasonably request, a Borrowing Base Report setting
forth the Borrowing Base as of the 15th day and last day of
such month or other date so requested by the Agent, provided
that immediately prior to the occurrence of a sale or other
disposition of assets permitted by ss.9.5.2 hereof, the
Borrower shall deliver to the Banks (A) a Borrowing Base
Report setting forth the Borrowing Base prior to such
permitted sale or disposition, and (B) a Borrowing Base Report
indicating the Borrowing Base after giving effect to such sale
or disposition (provided, however, that for so long as the
Banks hereunder and the banks under the FCI Credit Agreement
are identical, the Borrowing Base Reports required by the
foregoing clauses (A) and (B) need not be delivered to the
Agent in connection with the sale or disposition of Base
Contracts to FCI, FCC, FRC and FFC, II pursuant to paragraph
(i) of ss.9.5.2);"
ss.1.6. Section 8.12 of the Credit Agreement is hereby amended by
deleting said section in its entirety and substituting therefore the following
new section:
"8.12. Use of Proceeds. The Borrower will use the proceeds of the
----------------
Loans solely (i) to finance the Borrower's purchase of Base Contracts and
to fund Borrower's operations, (ii) to repay intercompany Indebtedness owed
by FAC to FCI, (iii) to effect cash dividends to FCI; provided, however,
that in the case of clauses (ii) and (iii) above, that FAC causes FCI to
utilize such proceeds only in accordance with the terms of the FCI Credit
Agreement, including, but not limited to, the provisions of Section 8.12 of
the FCI Credit Agreement; and (iv) to effect the redemption of those
certain Vacation Ownership Interval and Lot Contract Pay-Through Notes,
Series 1993-A, in the principal amount outstanding, as of August 20, 1998,
of $8,338,481.14 (the "1993-A Notes"), issued by FFC pursuant to that
certain Pledge and Servicing Agreement, dated as of September 28, 1993,
among FFC, FCI, the Borrower, First Commercial Trust Company, N.A. and
others. The Borrower will obtain Letters of Credit solely for general
corporate purposes."
ss.1.7. Clause (i) of Section 9. 5.2 of the Credit Agreement is hereby
amended by replacing the term "and FFC" in each instance where it appears in
said clause with the term "and FFC, II."
ss.1.8. The Credit Agreement is hereby amended by deleting Schedule 1
----------
thereto in its entirety and substituting therefore Schedule 1 attached hereto.
----------
ss.1.9. FAC is authorized to fund the redemption of the 1993-A Notes,
notwithstanding the fact that the Base Contracts securing such notes will not be
in the possession of the Collateral Agent pursuant to the Custodial Agreement,
it being understood that such Base Contracts will be transferred to FRC or FFC,
II pursuant to the Receivables Purchase Agreements among FAC and such entities,
provided, however, that FAC's use of any Revolving Credit Loans to fund such
redemption shall be subject to the provisions of Sections 2 and 12 of the Credit
Agreement.
ss.2. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment is
---------------------------
subject to satisfaction of all of the following conditions:
(a) Amended Note. FAC shall have executed and delivered
------- ----
to BKB an amended and restated promissory note
payable to the order of BKB (the "Amended Note") in
the principal amount of $60,000,000, substantially in
the form of Exhibit B to the Credit Agreement,
------- -
completed with appropriate insertions. From and after
the effectiveness of this Amendment, the parties
agree that all references to the term "Notes" and
"Revolving Credit Notes" in the Credit Agreement and
the other Loan Documents shall mean the Amended Note.
Upon the execution and delivery of the Amended Note
and satisfaction of the other conditions set forth in
this
section, BKB shall return the original of the former
Note to FAC for cancellation.
(b) Opinion of Counsel. BKB, the Agent and the Collateral
------------------
Agent shall have received a favorable legal opinion
addressed to BKB, the Agent and the Collateral Agent,
in form and substance satisfactory to BKB, the Agent
and the Collateral Agent, from Xxxxx Xxxx, as to the
enforceability of this Amendment, the Amended Note,
and the documents, instruments and agreements
executed in connection herewith.
(c) Corporate Action. All corporate action necessary for
----------------
the valid execution, delivery and performance by each
of FAC and the Guarantors of this Amendment, the
Amended Note and the instruments executed in
connection herewith shall have been duly and
effectively taken and otherwise be duly authorized,
and satisfactory evidence thereof shall have been
provided to the Agent and BKB.
(d) Borrowing Base Report. The Agent shall have received
---------------------
a proforma Borrowing Base Report dated as of a date
within three (3) Business Days prior to the date
hereof indicating the Borrowing Base (calculated as
of October 15, 1998) after giving effect to the
transactions contemplated by this Amendment.
(e) FCI Amendment. BKB and the Agent shall have received
-------------
evidence satisfactory to it of the occurrence of all
conditions precedent to the effectiveness of that
certain Second Amendment to the FCI Credit Agreement
among FCI, BKB, the Agent and the Collateral Agent
dated of even date herewith.
(f) Engagement and Fee Letter. FCI and FAC shall have
--------------------------
executed and delivered to BKB that certain engagement
and fee letter, dated September 28, 1998, from
BancBoston Xxxxxxxxx Xxxxxxxx Inc. and BKB to FCI and
FAC (the "Engagement and Fee Letter"), and shall
have paid to the Agent or BKB, as the case may be,
the underwriting fee, renewal fee, and Agent's
Fee due at the "closing."From and after the effective
date of this Amendment, the parties agree that the
Engagement and Fee Letter shall constitute a "Loan
Document" under the Credit Agreement, and failure
to pay the annual Agent's Fee due thereunder shall
constitute an Event of Default under the Credit
Agreement pursuant Section 13.1(b) thereof. The
parties further agree that FAC's obligation to pay
such fees shall be "Obligations" under and as defined
in the Credit Agreement and shall at all times be
guaranteed and secured as required by Section 6 of
the Credit Agreement.
(g) Administrative Fee. FAC shall have paid to the Agent
-------------------
the annual Administrative Fee due with respect to the
$20,000,000 increase in the Total Commitments under
the Credit Agreement and FCI Credit Agreement.
ss.3. GUARANTORS' CONSENT. The Guarantors hereby consent to the
-------------------
amendments to the Credit Agreement set forth in this Amendment and the execution
and delivery of the Amended Note by FAC to BKB, and each confirms its obligation
to the Agent and the Banks under the FAC Guaranty and agrees that the FAC
Guaranty shall extend to and include the obligations of FAC under the Amended
Note and the Credit Agreement as amended by this Amendment. Each of the
Guarantors agrees that all of its obligations to the Agent and the Banks
evidenced by or otherwise arising under the FAC Guaranty are in full force and
effect and are hereby ratified and confirmed in all respects.
ss.4. REPRESENTATIONS AND WARRANTIES. Each of FAC and the Guarantors hereby
------------------------------
represents and warrants to BKB, the Agent and the Collateral Agent as follows:
(a) Representations and Warranties in Credit Agreement. The
------------------------------------------------------
representations and warranties of FAC and the Guarantors, as
the case may be, contained in the Loan Documents were true
and correct in all material respects when made and continue
to be true and correct in all material respects on the date
hereof, with the same effect as if made at or as of the date
hereof (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit
Agreement and the other Loan Documents and changes occurring
in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an
earlier date) and no Default or Event of Default has
occurred or is continuing under the Credit Agreement.
(b) Authority, No Conflicts, Etc. The execution, delivery and
------------------------------
performance by each of FAC and the Guarantors, as the case
may be, of this Amendment and the Amended Note, and the
consummation of the transactions contemplated hereby and
thereby, (i) are within the corporate power of each
respective party and have been duly authorized by all
necessary corporate action on the part of each respective
party, (ii) do not require any approval or consent of, or
filing with, any governmental authority or other third
party, and (iii) do not conflict with, constitute a breach
or default under or result in the imposition of any lien or
encumbrance pursuant to any agreement, instrument or other
document to which
any of such entity is a party or by which any such party or
any of its properties are bound or affected.
(c) Enforceability of Obligations. This Amendment, the Amended
-----------------------------
Note, the Credit Agreement as amended hereby, the FAC
Guaranty and the other Loan Documents constitute the legal,
valid and binding obligations of each of FAC and the
Guarantors parties thereto, enforceable against such party
in accordance with their respective terms, provided that (i)
--------
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of
creditors, and (ii) enforcement may be subject to general
principles of equity, and the availability of the remedies
of specific performance and injunctive relief may be subject
to the discretion of the court before which any proceedings
for such remedies may be brought.
ss.5. OTHER AMENDMENTS. Except as expressly provided in this Amendment, all
----------------
of the terms and conditions of the Credit Agreement and the other Loan Documents
remain in full force and effect. FAC and each Guarantor confirm and agree that
the Obligations of FAC to the Banks and the Agent under the Credit Agreement, as
amended hereby, and the Amended Note, and all of the other obligations of any of
such parties under the other Loan Documents, are secured by and entitled to the
benefits of the Security Documents.
ss.6. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
--------------------------
number of counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
ss.7. HEADINGS. The captions in this Amendment are for convenience of
--------
reference only and shall not define or limit the provisions hereof.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties have executed this Amendment as an
instrument under seal to be governed by the laws of the Commonwealth of
Massachusetts, as of the date first above written.
FAIRFIELD ACCEPTANCE
CORPORATION-NEVADA
By: /s/Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------
Title: President
---------------------------
FAIRFIELD COMMUNITIES, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Senior Vice President
---------------------------
FAIRFIELD MYRTLE BEACH, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
---------------------------
VACATION BREAK USA, INC.
By:/s/Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President
---------------------------
SEA GARDENS BEACH AND TENNIS
RESORTS, INC.
By: /s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President
---------------------------
VACATION BREAK REORTS, INC.
By:/s/Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President
---------------------------
VACATION BREAK RESORTS AT
STAR ISLAND, INC.
By:/s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President
---------------------------
PALM VACATION GROUP, by its
General Partners:
VACATION BREAK RESORTS
AT PALM AIRE, INC.
By:/s/Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------
Title: Vice President
-------------------------
PALM RESORT GROUP, INC.
By:/s/Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President
--------------------------
OCEAN RANCH VACATION GROUP,
by its General Partners:
VACATION BREAK AT OCEAN
RANCH, INC.
By: /s/Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
OCEAN RANCH
DEVELOPMENT, INC.
By:/s/Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Vice President
---------------------------
BANKBOSTON, N.A.,
Individually, as Agent and as
Collateral Agent
By: /s/Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
---------------------------
Title: Vice President
---------------------------
SCHEDULE 1
----------
Banks and Commitment
--------------------
Name and Address Commitment
---------------- ----------
of Banks Percentage Commitment
---------------- ---------- ----------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 100% $60,000,000
-----------
TOTAL $60,000,000
===========