SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT-RECEIVABLES
Exhibit 10.6
SECOND AMENDMENT TO LOAN
AND SECURITY AGREEMENT-RECEIVABLES
AND SECURITY AGREEMENT-RECEIVABLES
This Second Amendment to Loan and Security Agreement – Receivables (this “Second Amendment”)
is made and entered into this 4th day of June, 2008 by and among SILVERLEAF RESORTS, INC., a Texas
corporation (“Borrower”); the parties, including XXXXX FARGO FOOTHILL, INC., a California
corporation, who have executed the Original Loan Agreement (as hereinafter defined) or a joinder
agreement thereto in their respective capacities as lenders (collectively the “Lenders” and
individually a “Lender”); and XXXXX FARGO FOOTHILL, INC., a California corporation, in its capacity
as facility agent and as collateral agent (“Agent”).
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I T N E S S E
T H
WHEREAS, Borrower, Lenders and Agent have heretofore entered into that certain Loan and
Security Agreement – Receivables dated as of December 16, 2005 (the “Original Loan Agreement”)
pursuant to which Lenders agreed to make a revolving credit loan secured by, among other things,
Pledged Notes Receivables (as defined in the Original Loan Agreement), which Original Loan
Agreement has been heretofore amended pursuant to (a) that certain First Amendment to Loan and
Security Agreement – Receivables dated as of October 6, 2006 and (b) that certain letter
modification agreement dated March 1, 2007 from Borrower to Xxxxx Fargo Foothill, Inc. (the
Original Loan Agreement, as amended by said First Amendment and letter is hereinafter called the
“Loan Agreement” and the loan made pursuant to the Loan Agreement is hereinafter called the
“Loan”); and
WHEREAS, Borrower, Lenders and Agent have heretofore entered into a Loan and Security
Agreement – Inventory dated as of December 16, 2005 (the “Original Inventory LSA”) pursuant to
which Lenders agreed to make a revolving credit loan secured by, among other things, certain
Intervals (as defined in the Original Inventory LSA), which Original Inventory LSA was amended by
that certain First Amendment to Loan and Security Agreement Inventory dated as of October 6, 2006
(the Original Inventory LSA, as amended by said First Amendment is hereinafter called the
“Inventory LSA” and the loan made pursuant to the Inventory LSA is hereinafter called the
“Additional Credit Facility”); and
WHEREAS, although each of the Loan Agreement and the Inventory LSA contemplate that there
could be a number of parties acting as Lender thereunder, Xxxxx Fargo Foothill, Inc. (“WFF”) is the
sole party acting as lender under each such agreement; and
WHEREAS, WFF is considering purchasing from Silverleaf Finance VI, LLC, a Delaware limited
liability company (“SL VI”) and an affiliate of Borrower, a portion of the timeshare loan-backed
notes (the “TLB Notes”) being issued by SL VI in connection with a securitization that SL VI is
planning to undertake (the “Securitization”); and
WHEREAS, in order to induce WFF to purchase the TLB Notes, WFF desires to limit WFF’s
aggregate exposure under the TLB Notes, the Loan and the Additional Credit Facility and
Borrower is willing to amend the Loan Agreement to accomplish that in the manner hereinafter
provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained in the Loan
Agreement and in this Second Amendment and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties to this Second Amendment, intending to
be legally bound, agree as follows:
1. Integration of Second Amendment and Loan Agreement. This Second Amendment and the
Loan Agreement shall, for all purposes, be deemed to be one instrument. In the event of any
conflict between the terms and provisions of this Second Amendment and the terms and provisions of
the Loan Agreement, the terms and provisions of this Second Amendment shall, in all instances,
control and prevail. Except as expressly defined herein, all words and phrases which are defined
in the Loan Agreement shall have the same meaning in this Second Amendment as are ascribed to said
words and phrases in the Loan Agreement.
2. Section 1 Definition of Terms – Commitment. The last sentence of the defined term
“Commitment” is hereby deleted and is hereby replaced with the following:
“From and after the date of this Second Amendment, the maximum aggregate outstanding
Commitment at any time during the Term of the Loan Agreement, as amended hereby,
shall be the lesser of (a) $35,000,000.00 and (b) the amount by which (i)
$75,000,000.00 exceeds (ii) the sum of the aggregate amount outstanding under the
TLB Notes and the Additional Credit Facility. The amount of the Commitment may from
time to time be increased or decreased by Agent and Lenders upon written agreement
setting forth the terms and conditions of any increase or decrease by and among
Agent, Lenders and Borrower.”
3. Section 2.1(a).
(a) The first sentence of the first grammatical paragraph of Section 2.1(a) is hereby
deleted and is hereby replaced with the following:
“Upon the terms and subject to the express conditions set forth in Section 2.1(c)
hereof and the other provisions of the Loan Agreement, as amended hereby, including,
but not limited to, Section 2.7 hereof, each Lender agrees severally, at any time
and from time to time during the Revolving Loan Period, to make Advances to Borrower
and Borrower may borrow, repay and re-borrow during the Revolving Loan Term, in an
aggregate amount not to exceed at any time each Lender’s Pro Rata Percentage of the
lesser of: (i) the Borrowing Base and (ii) the Commitment.”
(b) The first sentence of the second grammatical paragraph of Section 2.1(a) is hereby
deleted and is hereby replaced with the following:
“Borrower acknowledges, agrees and confirms that the obligations of all Lenders to
make Loans to Borrower under the Loan Agreement, as amended hereby are limited to
the lesser of (i) the Borrowing Base and (ii) the Commitment.”
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4. Section 2.1(c). Section 2.1(c) is hereby deleted and is hereby replaced with the
following:
“Notwithstanding anything to the contrary contained herein, no Lender shall have an
obligation to make an Advance or its Pro Rata Percentage thereof hereunder to the
extent that the aggregate of Advances outstanding would cause the Loan to exceed the
lesser of (i) the Borrowing Base and (ii) the Commitment.”
5. Schedule 1.0. The “Lender’s Committed Amount” as set forth on Schedule 1.0
attached to the Loan Agreement is hereby deleted and is hereby replaced with the following:
“The lesser of (a) $35,000,000.00 and (b) the amount by which (i) $75,000,000.00
exceeds (ii) the aggregate amount outstanding under the Additional Credit Facility
and the TLB Notes.”
6. Conditions to Effectiveness. The effectiveness of this Second Amendment and the
agreements of Lender set forth herein, are subject to the satisfaction of the following conditions
precedent, all in form, scope and substance satisfactory to Lender in its sole discretion (the date
on which such conditions shall have been satisfied being referred to herein as the “Second
Amendment Effective Date”):
(a) The Securitization shall have taken place and WFF shall have acquired the TLB
Notes; and
(b) Lender shall have received each of the following, and, where applicable, duly
executed by each party thereto, other than Lender:
(i) This Second Amendment and the Second Amendment to Loan and Security Agreement-Inventory;
and
(ii) a certificate from the principal financial officer of Borrower attesting to no change to
the Articles of Incorporation or By Laws of Borrower since December 16, 2005 and/or providing an
updated copy of any such changes; and
(iii) A resolution from Borrower authorizing the changes to the financing relationship with
Lender as contained in this Second Amendment; and
(iv) a certificate from the principal financial officer of Borrower attesting to no changes to
the TFC Documents or the TFC Conduit Loan since December 16, 2005 and no changes to the CSF
Documents or the UBS Documents since October 6, 2006 or, to the extent there have been changes,
attaching copies of said changes, together with revised versions of Schedules 1.1(b), 1.1(f) and
1.1(h), as applicable; and
(v) All other documents Lender may request with respect to any matter relevant to this Second
Amendment or the transactions contemplated hereby.
(c) The representations and warranties contained herein and in the Loan Agreement and
the other documents executed in connection with the Loan Agreement
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(herein referred to as “Loan Documents”), as each is amended hereby, shall be
true and correct as of the date hereof, as if made on the date hereof, except for such
representations and warranties as are by their express terms limited to a specific date.
(d) No Default or Event of Default shall have occurred and be continuing.
(e) All corporate proceedings taken in connection with the transactions contemplated by
this Second Amendment and all documents, instruments and other legal matters incident
thereto shall be satisfactory to Lender.
(f) Borrower shall have paid Lender all fees, costs and expenses incurred by Lender in
preparation and execution of this Second Amendment and in connection with all matters
referred to herein.
7. Ratifications. The terms and provisions set forth in this Second Amendment shall
modify and supersede all inconsistent terms and provisions set forth in the Loan Agreement and the
other Loan Documents, and, except as expressly modified and superseded by this Second Amendment the
terms and provisions of the Loan Agreement and the other Loan Documents are ratified and confirmed
and shall continue in full force and effect. Borrower and Lender agree that the Loan Agreement and
the other Loan Documents, as amended hereby, shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms. This Second Amendment is not intended to be
or to create, nor shall it be construed as or constitute, a novation or an accord and satisfaction
but shall constitute an amendment of the Loan Agreement.
8. Representations and Warranties. Borrower hereby represents and warrants to Lender
that (a) the execution, delivery and performance of this Second Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and will not violate the Articles of
Incorporation or Bylaws of Borrower; (b) Borrower’s Board of Directors has authorized the
execution, delivery and performance of this Second Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith; (c) the representations and warranties contained
in the Loan Agreement, as amended hereby, and any other Loan Document are true and correct on and
as of the date hereof and on and as of the date of execution hereof as though made on and as of
each such date; (d) no Default or Event of Default under the Loan Agreement, as amended hereby, has
occurred and is continuing or exists which with the lapse or passage of time would be or become a
Default or Event of Default; (e) Borrower is in full compliance with all covenants and agreements
contained in the Loan Agreement and the other Loan Documents, as amended hereby, (f) Borrower has
not amended its Articles of Incorporation or Bylaws since December 16, 2005; (g) the execution,
delivery and performance of this Second Amendment and the Loan Documents executed in connection
herewith by Borrower are within its powers, have been duly authorized, and do not contravene (i)
its articles of incorporation or other organization documents, or (ii) any applicable law; and (h)
no consent, license, permit, approval or authorization of, or registration, filing or declaration
with, any governmental authority or other Person, is required in connection with the execution,
delivery, performance, validity or enforceability of this Second Amendment or the Loan Documents
executed in connection herewith, as applicable, by or against Borrower.
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9. Survival of Representations and Warranties. All representations and warranties
made herein and in the Loan Agreement or any other Loan Document, including, without limitation,
any document furnished in connection with this Second Amendment, shall survive the execution and
delivery of this Second Amendment and the other Loan Documents, and no investigation by Lender or
any closing shall affect the representations and warranties or the right of Lender to rely upon
them.
10. Reference to Loan Agreement. Each of the Loan Agreement and the other Loan
Documents, and any and all other documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are
hereby amended so that any reference in the Loan Agreement and such other Loan Documents to the
Loan Agreement shall mean a reference to the Loan Agreement, as amended hereby.
11. Severability. If any term or provision of this Second Amendment is adjudicated to
be invalid under applicable laws or regulations, such provision shall be inapplicable to the extent
of such invalidity without affecting the validity or enforceability of the remainder of this Second
Amendment which shall be given effect so far as possible.
12. Successors and Assigns. This Second Amendment is binding upon and shall inure to
the benefit of Lender, all future holders of any Note and all assignees and transferees, and each
of their respective successors and permitted assigns. Borrower may not assign or transfer any of
its rights or obligations hereunder or under any of the other Loan Documents without the prior
written consent of Lender.
13. Counterparts. This Second Amendment may be executed in one or more counterparts,
all of which taken together shall constitute but one and the same instrument. This Second
Amendment may be executed by facsimile transmission, which facsimile signatures shall be considered
original executed counterparts for purposes of this Section 13, and each party to this Second
Amendment agrees that it will be bound by its own facsimile signature and that it accepts the
facsimile signature of each other part to this Second Amendment.
14. Effect of Waiver. No consent or waiver, express or implied, by Lender to or for
any breach of or deviation from any covenant or condition by Borrower shall be deemed a consent to
or waiver of any other breach of the same or any other covenant, condition or duty.
15. Headings. The headings, captions, and arrangements used in this Second Amendment
are for convenience only and shall not affect the interpretation of this Second Amendment.
16. Applicable Law. THIS SECOND AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE LOAN
AGREEMENT AND SHALL BE SUBJECT TO NOTICE PROVISIONS OF THE LOAN AGREEMENT.
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17. Final Agreement. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS AMENDED
HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON
THE DATE THIS SECOND AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS SECOND AMENDMENT
SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND LENDER.
18. Release by Borrower. By execution of this Second Amendment, Borrower acknowledges
and confirms that Borrower does not have any offsets, defenses or claims against Lender, or any of
its present or former subsidiaries, affiliates, officers, directors, shareholders, employees,
agents, representatives, attorneys, predecessors, successors or assigns whether asserted or
unasserted. To the extent that Borrower may have such offsets, defenses or claims, Borrower and
each of its successors, assigns, parents, subsidiaries, affiliates, predecessors, employees,
agents, heirs, executors, as applicable, jointly and severally, knowingly, voluntarily and
intentionally waive, release and forever discharge Lender, its subsidiaries, affiliates, officers,
directors, shareholders, employees, agents, attorneys, predecessors, successors and assigns, both
present and former (collectively the “Lender Affiliates”) of and from any and all actual or
potential claims, demands, damages, actions, requests for sanctions and causes of action, torts,
obligations, suits, debts, controversies, damages, judgments, executions, claims and demands
whatsoever, all other liabilities whether known or unknown, matured or unmatured, contingent or
absolute, of any kind or description whatsoever, either in law or in equity or otherwise, asserted
or unasserted against Lender and/or Lender Affiliates, Lender as Agent or Lender in any other
capacity, which they ever had, now have, claim to have or may later have or which any of any
Borrower’s successors, assigns, parents, subsidiaries, affiliates, predecessors, employees, agents,
heirs, and/or executors, as applicable, both present and former, ever had, now has, claim to have
or may later have, upon or by reason of any manner, cause, causes or thing whatsoever, including,
without limitation, any presently existing claim or defense whether or not presently suspected,
contemplated or anticipated, and Borrower hereby agrees that Borrower is collaterally estopped from
asserting any claims against Lender or any of the Lender Affiliates relating to the foregoing.
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IN WITNESS WHEREOF, this Second Amendment to Loan and Security Agreement – Receivables has
been executed and is effective as of the date first above written.
| BORROWER:
SILVERLEAF RESORTS, INC., a Texas corporation |
||||
| By: | /S/ XXXXXX X. XXXXXXX | |||
| Xxxxxx X. Xxxxxxx | ||||
| Chief Financial Officer | ||||
STATE OF TEXAS
|
) | |
| ) ss. | ||
COUNTY OF DALLAS
|
) |
The foregoing instrument was acknowledged before me this 4th day of June, 2008 by Xxxxxx X.
Xxxxxxx, Chief Financial Officer of Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
Corporation.
| /S/ XXXXX XXXXXXX | ||||
| Notary Public | ||||
| My Commission Expires: July 22, 2008 | ||||
| LENDER:
XXXXX FARGO FOOTHILL, INC., a California corporation |
||||
| By: | /S/ XXXXXXXX X. XXXXXXXXXX | |||
| Name: | Xxxxxxxx X. Xxxxxxxxxx | |||
| Title: | Vice President | |||
STATE OF TEXAS
|
) | |
| ) | ||
COUNTY OF DALLAS
|
) |
The foregoing instrument was acknowledged before me this 6th day of June 2008 by Xxxxxxxx X.
Xxxxxxxxxx, Vice President of XXXXX FARGO FOOTHILL, INC., a California corporation, on behalf of
the corporation.
| /S/ XXXXXX X. XXXXXX | ||||
| Notary Public: | ||||
| My Commission Expires: May 23, 2010 | ||||
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