FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-INVENTORY
Ex.
10.1
FIRST
AMENDMENT TO LOAN
THIS
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-INVENTORY
(this
"First
Amendment"),
dated
as of October 6, 2006, is by and between Silverleaf Resorts, Inc., a Texas
corporation, having an address of 0000 Xxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000 (referred to herein as “Borrower”), Xxxxx Fargo Foothill, Inc., a
corporation established under the laws of the State of California, having an
office and place of business at 00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000
and Xxxxx Fargo Foothill, Inc., as facility agent and collateral agent (Xxxxx
Fargo Foothill in both of its capacities is herein referred to as
“Lender”).
RECITALS
A. WHEREAS,
pursuant to the terms and subject to the conditions of that certain Loan and
Security Agreement-Inventory, dated as of December 16, 2005 by and between
Lender and Borrower (such Loan and Security Agreement-Inventory being
hereinafter referred to as the "Loan
Agreement"),
Lender has agreed to make available to Borrower revolving credit facilities
in a
maximum principal amount of up to $15,000,000.00; and
B. WHEREAS,
Borrower and Lender have discussed certain revisions, modifications, additions
and deletions to the Loan Agreement in an effort to more accurately reflect
the
relationship of Borrower and Lender under the Loan Agreement and the
administrative and operating procedures under the Loan Agreement;
and
C. WHEREAS,
in furtherance of the discussions and agreements between Borrower and Lender,
the parties hereto desire to amend the Loan Agreement and to enter into such
other agreements as are hereinafter provided.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises herein contained and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender, intending to be legally bound, agree as
follows:
Article
1
Definitions
1.01
Capitalized terms used and not otherwise defined in this First Amendment shall
have the meanings assigned to such terms in the Loan Agreement, as amended
hereby.
Article
2
Amendments
to Loan Agreement
The
Loan
Agreement is hereby amended as follows, such amendments to be deemed effective
as of the First Amendment Effective Date (defined below):
2.01 Amendments
to Section 1 Definition of Terms.
As of
the First Amendment Effective Date, the following Definitions are hereby
amended:
(A) The
existing definition of EBITDA shall be deleted and the following new definition
of EDITDA shall be substituted therefor:
EBITDA.
The
term
EBITDA means, with respect to any Person for any period: (a) the sum of (i)
net
income (exclusive of extraordinary gains or losses including gains or losses
from the sale or disposition of assets other than in the ordinary course of
business, it being agreed however that gains from the sale of Notes Receivable
in connection with syndication or conduit transactions shall be included in
net
income as same are in the ordinary course of Borrower’s business, but losses
resulting from such sales shall not be considered extraordinary losses and
not
deducted from net income), (ii) interest expense, (iii) depreciation and
amortization and other non-cash items properly deducted in determining net
income, and (iv) federal, state and local income taxes, in each case for such
Person for such period, computed and calculated in accordance with GAAP minus
(b) non-cash items properly added in determining net income, in each case for
the corresponding period.
(B) The
addition of a new definition:
UBS
Finance Facility.
The
term “UBS Finance Facility” shall mean that certain credit facility provided by
UBS Financial Services to Borrower pursuant to the documents listed on Schedule
1.1(h) hereto (the “UBS Documents).
(C) The
addition of a new definition:
"First
Amendment Effective Date"
shall
mean the date that each of the conditions set forth in Section 3 of the First
Amendment to Loan Agreement by and between Borrower and Lender have been
satisfied (that is, October 6, 2006)."
2.02 Amendments
to Section 7-Covenants.
(A) The
introductory phrases to Section 7.1(h) shall be deleted in its entirety and
replaced with:
So
long
as any portion of the Obligations remains unsatisfied, Borrower shall furnish
in
hard copy or by electronic transmittal, not later than five (5) days after
same
is due (or cause to be furnished, as the case may be) to Agent the
following:
(B) Section
7.1(h)(i)(i) shall be deleted in its entirety and replaced under the monthly
reporting section with:
a
sales
report detailing the sales of all Intervals at the Resorts for the period
covered thereby and a schedule showing any and all changes to Borrower’s sales
price list, both of which shall be certified by Borrower to be true, correct
and
complete and otherwise in a form approved by Agent which shall be required
to be
submitted on a monthly basis within ten (10) days of each month
end,
2
(C) Section
7.1(w) shall be deleted in its entirety and replaced with:
Additional
Loan Facility Documents, TFC Conduit and UBS Finance Facility.
Borrower will comply with the terms and conditions of the CapitalSource Finance
Facility, the Resort Finance Facility, the Textron Facility, the TFC Conduit
Loan and the UBS Finance Facility. Nothing contained herein shall prohibit
or
limit Borrower’s ability to amend or modify any of the CSF Documents or any of
the RFC Documents or any of the TFC Documents or any document in connection
with
the TFC Conduit Loan or any UBS Documents or documents evidencing any other
indebtedness of Borrower, provided Borrower provides Agent with a copy of the
fully executed loan or facility documents promptly within ten (10) days after
execution.
(E) Section
7.1(x)(ii) shall be deleted in its entirety and replaced with:
As
of the
last day of each fiscal quarter, commencing with the fiscal quarter ending
December 31, 2005, Borrower will not permit the four quarter cumulative ratio
of
Marketing and Sales Expenses to Vacation Interval Sales as recorded on the
Borrower’s financial statements for the immediately preceding four (4)
consecutive fiscal quarters of the Borrower to equal or exceed a ratio of .570
to 1. The calculation used in this covenant for compliance purposes shall be
without the impact of the new GAAP requirements of SFAS 152.
(F) Section
7.2(k) shall be deleted in its entirety and replaced with:
Nothing
contained herein shall prohibit or limit Borrower’s ability to amend or modify
any of the CSF Documents or any of the RFC Documents or any of the TFC Documents
or any of the UBS Documents or any document in connection with the TFC Conduit
Loan or documents evidencing any other indebtedness of Borrower, provided
Borrower provides Agent with a copy of the fully executed loan documents
promptly within ten (10) days after execution.
2.03
|
Amendments
to Section 8-Events of Default.
|
(A) Section 8.1(b) shall
be
deleted and replaced in its entirety with:
3
If
Borrower shall fail to perform or observe any covenant, agreement or warranty
contained in this Agreement or in any of the Loan Documents, (other than with
respect to: (i) the failure to make timely payments in respect of the Loan
as
provided in Section 8.1(a); or (ii) the violation of: (y) the financial
covenants in Section 7.1(x); or (z) any negative covenants in Section 7.2)
and,
such failure shall continue for fifteen (15) days after notice of such failure
is provided by Agent, provided however, that if Borrower commences to cure
such
failure within such 15 day period, but, because of the nature of such failure,
cure cannot be completed within 15 days notwithstanding diligent effort to
do
so, then, provided Borrower diligently seeks to complete such cure, an Event
of
Default shall not result unless such failure continues for a total of thirty
(30) days).
(B) Section 8.1(l) shall
be
deleted and replaced in its entirety with:
Any
default as defined in the applicable loan agreement, by Borrower (i) in the
payment of any indebtedness to any lender, including any indebtedness owed
under
the Capital Source Finance Facility, the Resort Finance Facility, the Textron
Financial Facility, the UBS Finance Facility or the Additional Credit Facility;
(ii) in the payment or performance of other indebtedness for borrowed money
or
obligations secured by any part of the Resort; (iii) in the payment or
performance of other material indebtedness or obligations (material indebtedness
or obligations being defined for purposes of this provision as any indebtedness
or obligation in excess of $200,000) where such default accelerates or permits
the acceleration (after the giving of notice or passage of time or both) of
the
maturity of such indebtedness, or permits the holders of such indebtedness
to
elect a majority of the board of directors of Borrower (whether or not such
default[s] have been waived by such holder) or (iv) the acceleration by
CapitalSource Finance, LLC under the CSF Documents, Resort Funding, LLC under
the RFC Documents, Textron Financial Corporation under the TFC Documents, UBS
Finance under the UBS Documents or the bondholders of their respective credit
facilities.
2.04 Amendments
to Section 12-Miscellaneous.
Section 12.11 shall
be
deleted in its entirety
and the existing Total Agreement Section which is presently un-numbered shall
become Section 12.11.
2.05 Amendment,
Addition and Substitution of Schedules.
As of
the First Amendment Effective Date, the form of the following Schedules shall
be
as stated:
(A)
|
Schedule
1.0 to the Loan Agreement shall be deleted and the form attached
hereto as
Schedule 1.0 shall be utilized in lieu thereof.
|
(B)
|
A
new Schedule 1.1(d)(iv) shall be added to the Loan Agreement in the
form
attached hereto as Schedule 1.1(d) and shall be completed by Borrower
prior to its addition.
|
4
2.06 Amendment
and Substitution of Exhibits.
As of
the First Amendment Effective Date, the form of the following Exhibits to the
Loan Agreement shall be as stated.
(A)
|
The
form of Mortgages set forth as Exhibit B to the Loan Agreement shall
be
amended to reflect that the total obligations secured have been reduced
from $65,000,000 to $50,000,000. By Lender and Borrower’s signature to
this First Amendment to Loan and Security Agreement-Inventory, Lender
and
Borrower agree in connection with the next amendment adding or deleting
Intervals to each Mortgage to include a provision in the form of
an
amendment or other appropriate document to indicate that the total
obligations secured have been reduced from $65,000,000 to
$50,000,000.
|
(B)
|
The
form of Officer’s Certificate set forth as Exhibit D to the Loan Agreement
shall be deleted and the form attached hereto as Exhibit D shall
be
utilized in lieu thereof. By Borrower’s signature to this First Amendment,
Borrower agrees to utilize the attached Exhibit D form of the Officer’s
Certificate from and after the First Amendment Effective
Date.
|
Article
3
Conditions
3.01 Conditions
to Effectiveness.
The
effectiveness of this First 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 "First
Amendment Effective Date"):
(a) Lender
shall have received each of the following, and, where applicable, duly executed
by each party thereto, other than Lender:
(i) | This First Amendment; and |
(ii) | The First Amendment to Loan and Security Agreement-Receivables; and |
(iii) | 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 |
(vi) | A resolution from Borrower authorizing the changes to the financing relationship with Lender as contained in this First Amendment; and |
(v)
|
a
certificate from the principal financial officer of Borrower transmitting
to Lender as attachments thereto a true and correct copy of all amendments
to the CSF Documents since December 16, 2005 and also transmitting
a revised and updated copy of Schedule 1.1(b) to the Loan Agreement;
and
|
5
(vi)
|
a
certificate from the principal financial officer of Borrower transmitting
to Lender as attachments thereto a true and correct copy of all documents
between Borrower and UBS Financial Services entered into since December
16, 2005 and also transmitting a completed Schedule 1.1(h) for attachment
to and inclusion with the Loan Agreement;
and
|
(vii)
|
a
certificate from the principal financial officer of Borrower transmitting
to Lender a certificate attesting to the full payment of all quarterly
FICA and other federal and state taxes due on or prior to June 30,
2006
and attaching thereto such documentary information as Borrower deems
appropriate to support the statements contained in such certificate;
and
|
(viii) | a certificate from the principal financial officer of Borrower which acknowledges that the fee paid and referenced in the Fee Letter of December 16, 2005 was as of the date of execution of such letter fully earned and non-refundable and that no refund, rebate or credit of any portion of such fee paid or deducted by you shall be returnable or credited to Borrower’s obligations as a result or consequence of Borrower’s agreement to reduce the Commitment as herein referenced; and |
(ix) | Borrower shall have delivered hard copy or electronic copies of the following Form 8-k as filed with the Securities and Exchange Commission: |
Form 8-k dated 2/3/06, 3/7/06, 3/8/06, 3/23/06, 3/29/06, 4/7/06, 4/10/06, 5/2/06, 5/4/06 and 5/26/06; and |
(x) | All other documents Lender may request with respect to any matter relevant to this First Amendment or the transactions contemplated hereby. |
(b) The
representations and warranties contained herein and in the Loan Agreement and
the other documents executed in connection with the Loan Agreement (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.
(c) No
Default or Event of Default shall have occurred and be continuing,.
(d) All
corporate proceedings taken in connection with the transactions contemplated
by
this First Amendment and all documents, instruments and other legal matters
incident thereto shall be satisfactory to Lender.
(e) Borrower
shall have paid Lender all fees, costs and expenses incurred by Lender in
preparation and execution of this First Amendment and in connection with all
matters referred to herein.
6
Article
4
Ratifications,
Representations and Warranties
4.01 Ratifications.
The
terms
and provisions set forth in this First 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 First
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 First 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.
4.02 Representations
and Warranties.
Borrower
hereby represents and warrants to Lender that (a) the execution, delivery and
performance of this First 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 First
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 First Amendment and the Loan Documents executed in
connection herewith by Borrower are within its powers, have been duly
authorized, and do not contravene (A) its articles of incorporation or other
organization documents, or (B) 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 First
Amendment or the Loan Documents executed in connection herewith, as applicable,
by or against Borrower.
Article
5
Miscellaneous
Provisions
5.01 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 First Amendment, shall survive the execution and delivery
of this First 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.
7
5.02 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.
5.03 Severability.
If
any
term or provision of this First 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 First Amendment which shall be given effect so far as
possible.
5.04 Successors
and Assigns.
This
First 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. No Borrower may 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.
5.05 Counterparts.
This
First Amendment may be executed in one or more counterparts, all of which taken
together shall constitute but one and the same instrument. This First Amendment
may be executed by facsimile transmission, which facsimile signatures shall
be
considered original executed counterparts for purposes of this Section
5.05,
and
each party to this First Amendment agrees that it will be bound by its own
facsimile signature and that it accepts the facsimile signature of each other
party to this First Amendment.
5.06 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.
5.07 Headings.
The
headings, captions, and arrangements used in this First Amendment are for
convenience only and shall not affect the interpretation of this First
Amendment.
5.08 Applicable
Law.
THIS
FIRST 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.
5.09 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 FIRST 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 FIRST AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT
SIGNED BY BORROWER AND LENDER.
8
5.10 Release
by Borrower.
By
execution of this First 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 which against Lender and/or Lender Affiliates, Lender as Agent or
Lender in any other capacity, 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, 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.
9
IN
WITNESS WHEREOF, this First Amendment has been executed and is effective as
of
the date first above written.
BORROWER: | ||
SILVERLEAF
RESORTS, INC., a Texas corporation
|
||
|
|
|
/S/ XXXXXXXX X. XXXXX | By: | /s/ XXXXX X. XXXXX, XX. |
Name:
Xxxxx X. Xxxxx, Xx.
|
||
Title:
Chief Financial Officer
|
STATE OF TEXAS | ) |
) ss: | |
COUNTY OF DALLAS | ) |
The
foregoing instrument was acknowledged before me this 20th day of
September, 2006 by Xxxxx X. Xxxxx, Xx., Chief Financial Officer of
Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
Corporation.
|
|
|
/s/ XXX X. XXXXXXX | ||
Notary
Public
My
Commission Expires:
|
||
LENDER:
XXXXX
FARGO FOOTHILL, INC.,
a
California corporation
|
|
|
|
________________________________ | By: | /s/ XXXXX X. XXXXX |
Name:
Xxxxx X. Xxxxx
Title:
Vice President
|
||
STATE OF TEXAS | ) |
) ss: | |
COUNTY OF DALLAS | ) |
The
foregoing instrument was acknowledged before me this 6th day of
October, 2006 by Xxxxx X. Xxxxx, VP of XXXXX FARGO FOOTHILL, INC., a
California corporation, on behalf of the corporation.
|
|
|
By: | /s/ XXXXXX X. XXXXXX | |
Commissioner of the Superior Court
Notary
Public
My
Commission Expires:
|
||
10
AGENT:
XXXXX
FARGO FOOTHILL, INC.,
a
California corporation, as Agent
|
||
|
|
|
________________________________ | By: | /s/ XXXXX X. XXXXX |
Name: Xxxxx X. Xxxxx |
||
Title: |
STATE OF TEXAS | ) |
) ss: | |
COUNTY OF DALLAS |
)
|
The
foregoing instrument was acknowledged before me this 6th day of
October, 2006 by Xxxxx X. Xxxxx, VP of XXXXX FARGO FOOTHILL, INC., a
California corporation, on behalf of the corporation.
|
|
|
By: | /s/ XXXXXX X. XXXXXX | |
Commissioner
of the Superior Court
Notary
Public
My
Commission Expires:
|
||
11
List
of
Schedules and Exhibits to Agreement not Filed Herewith:
Schedule
1.0 Identification of Lenders and Their Respective Pro Rata
Percentage
Schedule
1.1(d)(iv) UBS Documents
Exhibit
D
Officer’s Certificate for Financial Statements
Certificate
Pursuant to Section 3.01(a)(iii)
Certificate
Pursuant to Section 3.01(a)(iv)
Certificate
Pursuant to Section 3.01(a)(v)
Certificate
Pursuant to Section 3.01(a)(vi)
Certificate
Pursuant to Section 3.01(a)(vii)
Certificate
Pursuant to Section 3.01(a)(viii)
12