Ex. 10.3
SECOND AMENDMENT TO AMENDED AND
RESTATED
LOAN, SECURITY AND AGENCY AGREEMENT (TRANCHE
A)
THIS SECOND
AMENDMENT TO AMENDED AND RESTATED LOAN, SECURITY AND AGENCY
AGREEMENT (TRANCHE A) dated as of February 28, 2005 (the
“ Second Amendment ”), is entered into by
and among SILVERLEAF RESORTS, INC ., a Texas corporation
(the “ Borrower ”), the parties,
including TEXTRON FINANCIAL CORPORATION (“TFC”)
, a Delaware corporation, which execute and deliver this Agreement
in their respective capacities as lenders hereunder (collectively,
the “ Lenders ” and each, individually, a
“ Lender ”), and TEXTRON FINANCIAL
CORPORATION as facility agent and collateral agent (the “
Agent ”).
W I T N E S S E T H:
WHEREAS, Borrower
was formerly known as ASCENSION CAPITAL CORPORATION (the
“Guarantor”), the successor to ASCENSION RESORTS, LTD.,
a Texas limited partnership (the “Original Borrower”),
by merger of EQUAL INVESTMENT COMPANY, a Texas corporation,
ASCENSION RESORTS, LTD. and ASCENSION CAPITAL
CORPORATION;
WHEREAS, TFC,
Original Borrower and Guarantor were parties to that certain Loan
and Security Agreement dated as of August 15, 1995 (the
“Original Agreement”), pursuant to which the Original
Borrower executed its Secured Promissory Note in favor of Lender in
the amount of $5,000,000.00, as amended to date (the
“Original Note”);
WHEREAS, on
December 28, 1995 Ascension Resorts, Ltd. was merged into the
Guarantor and Guarantor was thereafter renamed Silverleaf Vacation
Club, Inc.;
WHEREAS, on
December 28, 1995, TFC, Borrower and Guarantor amended the
Original Agreement pursuant to a First Amendment to Loan and
Security Agreement dated as of December 28, 1995 (the
“First Amendment to Original Agreement”) to, among
other things, evidence TFC’s approval of the merger of
Ascension Resorts, Ltd. into Ascension Capital Corporation and to
reflect the above-mentioned merger and name change;
WHEREAS, on
October 31, 1996, TFC and Borrower further amended the
Original Agreement pursuant to a Second Amendment to Loan and
Security Agreement dated as of October 31, 1996 (the
“Second Amendment to Original Agreement”) to, among
other things, increase the amount of the Loan, decrease the
interest rate, and extend the maturity date of the Loan;
WHEREAS, pursuant
to a commitment letter dated January 26, 1999, TFC and
Borrower agreed to further modify the terms of the Original
Agreement to, among other things, increase the amount of the Loan,
decrease the interest rate, extend the maturity date of the Loan
and to reflect the change in Borrower’s name to Silverleaf
Resorts, Inc.;
WHEREAS, TFC and
Borrower further amended the Original Agreement pursuant to a Third
Amendment to Loan and Security Agreement dated as of March 31,
1999 (the “Third Amendment”) to amend the Agreement as
provided in the January 26, 1999 commitment letter;
WHEREAS, TFC and
Borrower further amended the Original Agreement pursuant to a
Fourth Amendment to Loan and Security Agreement dated as of
December 16, 1999 (the “Fourth Amendment”) to,
among other things, modify the definitions of Borrowing Base and
Eligible Notes Receivable;
WHEREAS, TFC and
Borrower, as a result of certain Events of Default under the
Original Agreement, entered into that certain Forbearance Agreement
dated as of April 6, 2001 (the “Forbearance
Agreement”);
WHEREAS, TFC and
Borrower further amended the Original Agreement pursuant to a Fifth
Amendment to Loan and Security Agreement dated as of April 17,
2001 (the “Fifth Amendment”) to, among other things,
extend the Revolving Credit Period and to incorporate the terms of
the Forbearance Agreement;
WHEREAS, TFC and
Borrower further amended and restated the Original Agreement in its
entirety pursuant to an Amended and Restated Loan, Security and
Agency Agreement (Tranche A) (as amended and as amended hereby, the
“Loan Agreement”) to, among other things, restructure
and modify the Loan, including separating the Loan into two
separate components – the Revolving Loan Component in the
original principal amount of up to $56,894,400.00 and the Term Loan
Component in the original principal amount of up to $15,105,600.00;
to reduce the Commitment, as defined in the Loan Agreement, to
$63,920,000.00 less the outstanding principal balance of the Term
Loan Component from time to time and to reduce the aggregate
Commitment hereunder, under the Additional Credit Facility and the
Tranche C Facility, as such terms are defined in the Loan
Agreement, to $136,000,000.00 less the outstanding principal
balance of the Term Loan Component and the aggregate term loan
component of the Additional Credit Facility and the Tranche C
Facility from time to time; and to replace the Amended Note with:
(i) an Amended and Restated Secured Promissory Note or Notes
in the aggregate original principal amount of $56,894,400.00 in
favor of Agent, as agent for each of the Lenders (singly and
collectively the “Revolving Loan Component Note”) and
(ii) a Secured Promissory Note or Notes in the aggregate
original principal amount of $15,105,600.00 in favor of Agent, as
agent for each of the Lenders (singly and collectively the
“Term Loan Component Note”, and together with the
Revolving Loan Component Note, sometimes referred to herein singly
and collectively as the “Amended Note”);
WHEREAS, TFC and
Borrower amended the Loan Agreement pursuant to a Letter Amendment
dated June 12, 2002 to establish a definition for
“modified Eligible Note Receivable”;
WHEREAS, TFC and
Borrower amended the Loan Agreement pursuant to a Letter Amendment
dated March 27, 2003 to reinstate the maximum allowable ratio
of Marketing and Sales Expenses to the Borrower’s net
proceeds from the sale of Intervals to a ratio of .550 to
1;
WHEREAS, TFC and
Borrower amended the Loan Agreement pursuant to a Letter Agreement
dated September 25, 2003 to exclude the $28,711,000 increase
in Borrower’s allowance
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for doubtful accounts during the
quarter ended March 31, 2003 from the calculations of EBITDA,
the Interest Coverage Ratio and Consolidated Net Income under the
Loan Agreement and to approve the retirement of certain
subordinated notes with a face value of $7,620,000;
WHEREAS, Borrower
entered into: (i) a Letter Agreement with TFC dated
November 17, 2003 (the “November Letter
Agreement”); (ii) an amendment to the Heller Documents
dated November 21, 2003; and (iii) an amendment to the
Sovereign Documents dated October 1, 2003; each for the
purpose of, among other things, waiving certain Events of Default
that may have arisen under the Loan Agreement, the Heller Documents
and the Sovereign Documents described therein,
respectively;
WHEREAS, Agent and
Borrower entered into a First Amendment to the Amended and Restated
Loan, Security and Agency Agreement dated as of December 19,
2003 (the “First Amendment”) to, among other things,
restructure and modify the Loan, including reducing the Commitment,
as defined in the First Amendment, to (i) $44,650,000.00 for the
Revolving Loan Component; and (ii) $11,280,000.00 for the Term Loan
Component, for a total Commitment under this Agreement of
$55,930,000.00 and to reduce the aggregate Commitment under the
Loan Agreement, the Additional Credit Facility and the Tranche C
Facility, as such terms are defined in the First Amendment, to
$95,000,000.00 for the Revolving Loan Component and $24,000,000.00
for the Term Loan Component;
WHEREAS, TFC and
Borrower amended the Loan Agreement pursuant to a Letter Amendment
dated March 5, 2004 to clarify the definition of
“Inventory Loan” and the Maximum Obligation of TFC
under the Loan Agreement, the Additional Credit Facility, the
Tranche C Credit Facility and the Inventory Loan;
WHEREAS, TFC and
Borrower amended the Loan Agreement pursuant to a Letter Amendment
dated July 30, 2004 to modify the definition of Collateral in
connection with the amendments to the Sovereign Facility dated as
of July 30, 2004; and
WHEREAS, in
connection with the Loans to be made by Lenders pursuant to the
Loan Agreement, Textron Financial Corporation has agreed to act as
facility agent and collateral agent for the other Lenders and to
perform such duties with respect to the Loans as are expressly set
forth herein;
NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Terms
. All capitalized terms not
otherwise defined herein shall have the meaning ascribed to such
term in the Loan Agreement.
2. Elimination of
Requirement for Business Plan . The Loan Agreement is modified in part to add
the following provision:
“ Elimination of Requirement for
Business Plan . Provided no Event of Default or condition,
omission or act which, with the passage of time, notice or both,
would constitute an Event of Default, has occurred, the requirement
for Borrower to
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maintain and adhere to the Business Plan is
eliminated in all respects from and after the date that:
(i) the Term Loan Component has been paid in full; and (ii)
Borrower has achieved the net income projection for the six months
ending December 31, 2004 and exceeded by 10% the net income
projection for the fiscal year ending December 31, 2004, as
those net income projections appear in the Business Model dated
November 13, 2003, such net income results to be evidenced by
audited Financial Statements delivered by Borrower to
Lender.”
3.
Definitions .
Section 1.1 is hereby amended in part to add the following new
paragraphs:
“(sssss) Backup Servicing
Agreement . Shall
mean that certain Backup Servicing Agreement dated as of
April 10, 2001, as amended by the First Amendment to the
Backup Servicing Agreement dated as of April 30,
2002.”
“(ttttt) Declarant
Rights . Shall mean
the rights of the declarant described on Schedule 1.1(c)
attached hereto.”
“(uuuuu) Management
Agreement . Shall
mean that certain Management Agreement by and between Silverleaf
Club and Silverleaf Resorts, Inc. dated as of March 28, 1990
as amended to date.”
“(vvvvv) Utility Purchase
Agreement . Shall
mean that certain Asset Purchase Agreement between Silverleaf
Resorts, Inc. and Algonquin Water Resources of Texas, Inc. and
Algonquin Water Resources of Missouri, Inc. and Algonquin Water
Resources of Illinois, Inc. and Algonquin Water Resources of
America, Inc. and Algonquin Power Income Fund dated as of
August 29, 2004.”
“(wwwww) Utility Rights
. Shall mean the Facilities, Real
Property and Utilities, as those terms are defined in the Utility
Purchase Agreement, that are part of the Additional Resort
Collateral.”
4. Release of Utility
Rights, Additional Resort Collateral and Sovereign
Collateral .
Section 3 is hereby amended in part to add the following new
Section 3.15:
“ 3.15 Release of Liens .
Notwithstanding anything contrary in the Loan Agreement, and
provided no Event of Default or condition, omission or act which,
with the passage of time, notice or both, would constitute an Event
of Default, has occurred:
(a) the Utility Rights shall be released
from the Lien of the security interest granted to Lender hereunder
on the date that: (i) the sale of the Utility Rights is closed
pursuant to the Utility Purchase Agreement; and (ii) the net
proceeds of such sale in an amount not less than thirteen million
dollars ($13,000,000) is paid to Lender;
(b) the Additional Resort Collateral,
except for the Declarant Rights and the Management Agreement, shall
be released from the Lien of the security interest
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granted to Lender hereunder on the date that the
Term Loan Component has been paid in full;
(c) all collateral securing the Sovereign
Facility, which shall mean the Notes Receivable and related
Mortgages exclusively assigned to Sovereign in connection with an
advance under its loan documents, shall be released from the Lien
of the security interest granted to Lender hereunder on the date
that: (i) the Term Loan Component has been paid in full;
(ii) Borrower has achieved the net income projection for the
six months ending December 31, 2004 and exceeded by 10% the
net income projection for the fiscal year ending December 31,
2004, as those net income projections appear in the Business Model
dated November 13, 2003, such net income results to be
evidenced by audited Financial Statements delivered by Borrower to
Lender; and (iii) all Collateral is released from any lien
granted to Sovereign pursuant to the Sovereign Documents;
and
(d) the Declarant Rights and the Management
Agreement shall be released from the Liens of the security interest
granted to Lender hereunder on the date that: (i) the Term
Loan Component has been paid in full; (ii) Borrower has
achieved the net income projection for the six months ending
December 31, 2004 and exceeded by 10% the net income
projection for the fiscal year ending December 31, 2004, as
those net income projections appear in the Business Model dated
November 13, 2003, such net income results to be evidenced by
audited Financial Statements delivered by Borrower to Lender;
(iii) Borrower files a negative pledge in a form
acceptable
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