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 to Lender in the land records
for each Resort that neither Declarant Rights nor the Management
Agreement will be assigned, transferred, or encumbered; and
(iv) the
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