Ex. 10.6
FIRST AMENDMENT TO AMENDED AND
RESTATED
LOAN AND SECURITY AGREEMENT
(Inventory Loan)
THIS FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
, dated as of February 28,
2005, (the “First Amendment”) entered into by
SILVERLEAF RESORTS, INC. , a Texas corporation, (as
“Borrower”), and TEXTRON FINANCIAL CORPORATION ,
a Delaware corporation as (“Lender”).
WITNESSETH:
WHEREAS, Borrower is engaged in
the business of acquiring, constructing, developing, owning,
managing, selling and otherwise dealing with Intervals at the
Resorts (as each such term is hereafter defined);
WHEREAS, Lender and Borrower are
parties to that certain Loan and Security Agreement, dated as of
December 16, 1999, as amended by that certain First Amendment
to Loan and Security Agreement, dated as of April 17, 2001, as
further amended by that certain Second Amendment to Loan and
Security Agreement, dated as of April 30, 2002, as further
amended by that certain Letter Amendment, dated as of
March 27, 2003, and as further amended by that certain Third
Amendment to Loan and Security Agreement (Inventory Loan), dated as
of December 19, 2003 (collectively, the “ Original
Loan Agreement ”).
WHEREAS, pursuant to the Original
Loan Agreement, Lender agreed, subject to the terms and conditions
of the Original Loan Agreement, to provide to Borrower, for the
purpose of providing liquidity in connection with Borrower’s
ownership, purchase and warehousing of Intervals (as such term is
hereinafter defined), a loan in the maximum amount of $10,000,000
(the “ Existing Inventory Loan ”), which
loan is evidenced by Borrower’s Amended and Restated Secured
Promissory Note, dated as of April 30, 2002 (the “
Existing Note ”);
WHEREAS, Lender and Borrower
further amended and restated the Original Loan Agreement in its
entirety pursuant to an Amended and Restated Loan, Security and
Agency Agreement dated as of March 5, 2004, as amended by that
certain Letter Amendment, dated as of April 16, 2004, and as
further amended by that certain Letter Amendment, dated as of
July 30, 2004 (the “ Restated Loan Agreement
” and as amended hereby the “ Loan Agreement
”)
WHEREAS, pursuant to the Restated
Loan Agreement, Lender agreed, subject to the terms and conditions
of the Restated Loan Agreement, to provide to Borrower, for the
purpose of providing liquidity in connection with Borrower’s
ownership, purchase and warehousing of Intervals (as such term is
hereinafter defined), to make an additional inventory loan to the
borrower in the maximum amount of $8,000,000 (the “ New
Inventory Loan ”). The Existing Inventory
Loan
and the New Inventory Loan are
evidenced by the Existing Note, in the original principal amount of
Ten Million Dollars ($10,000,000) and the Borrower’s Secured
Promissory Note, dated March 5, 2004, in the original
principal amount of Eight Million Dollars ($8,000,000);
WHEREAS, Borrower has requested
and Lender has agreed, subject to the terms and conditions herein,
that Lender provide an additional inventory loan to Borrower to the
maximum amount of $5,000,000 (the “ Inventory Term
Loan ”) for the purpose of repaying the Term Loan
Components of the Additional Credit Facility and Existing Credit
Facilities.
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 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 .
Provided that 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, Section 1.1(ll) will be
amended in its entirety and replaced with the following new Section
1.1(ll), on the date that the Term Loan Component has been paid in
full:
“(ll) Final Maturity
Date . March 31,
2009 with respect to the Existing Inventory Loan and the New
Inventory Loan, and March 31, 2007 with respect to the
Inventory Term Loan.”
4.
Definitions .
Section 1.1(tt) is hereby amended in its entirety and replaced
with the following new Section 1.1(tt):
“(tt) Interest Rate
. The Interest Rate on: (i) the
Existing Inventory Loan Note shall be a variable rate, adjusted as
of each LIBOR Determination Date, equal to the sum of LIBOR,
determined as of each LIBOR Determination Date, plus three and
one-quarter percent (3.25%) per annum and (ii) the New Inventory
Loan Note and the Inventory Term Loan Note shall be a variable
rate, adjusted as of each Prime Rate Determination Date, equal to
the sum of the Prime Rate, determined
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as of
each Prime Rate Determination Date, plus three percent (3.0%) per
annum, provided, however, that at no time shall the Interest Rate
on the New Inventory Loan Note or the Inventory Term Loan Note be
less than six percent (6.0%) per annum.”
5.
Definitions .
Section 1.1(ccc) is hereby amended in its entirety and
replaced with the following new paragraph:
“(ccc) Loan or Loans
. The terms “Loan” and
“Loans” mean the Existing Inventory Loan, the New
Inventory Loan, and the Inventory Term Loan, singly and
collectively, as the context requires.”
6.
Definitions .
Section 1.1(fff) is hereby amended in its entirety and
replaced with the following new Section 1.1(fff):
“(fff) Loan to Retail Value
Ratio . The term
“Loan to Retail Value Ratio” shall mean the ratio of
the outstanding principal balance of the Loan, from time to time,
to the Retail Value of the Inventory. The Loan to Retail Value
Ratio shall be 15% for the Existing Inventory Loan and the
Inventory Term Loan and 11% for the New Inventory
Loan.”
7.
Definitions .
Section 1.1(ooo) is hereby amended in its entirety and
replaced with the following new Section 1.1(ooo):
“(ooo) Note . Singly and collectively, the Existing
Inventory Loan Note, the New Inventory Loan Note, and the Inventory
Term Loan Note.”
8.
Definitions .
Provided that 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, Section 1.1(uuu) will be
amended in its entirety and replaced with the following new Section
1.1(uuu), on the date that the Term Loan Component has been paid in
full:
“(uuuu) Term
. The term for the Existing
Inventory Loan and New Inventory Loan, shall be the period ending
March 31, 2009, and for the Inventory Term Loan shall be the
period ending March 31, 2007.”
9.
Definitions .
Section 1.1 is hereby amended in part to add the following new
paragraphs:
“(ddddd) 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.”
“(eeeee) Declarant
Rights . Shall mean
the rights of the declarant described on Schedule 1.1(c)
attached hereto.”
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“ (fffff) Inventory Term Loan
. The term “Inventory Term Loan” shall mean that
certain $5,000,000.00 credit facility provided by Lender to
Borrower pursuant to Borrower pursuant to this Agreement and
evidenced by the Inventory Term Loan Note.”
“ (ggggg) Inventory Term Loan
Note . The term “Inventory Term Loan Note”
shall mean that certain Secured Promissory Note in the form
attached as Exhibit A dated as of February 28, 2005, made
by Borrower to Lender to evidence the Inventory Term Loan in the
maximum principal amount of $5,000,000.00, as it may hereafter be
amended from time to time.”
“(hhhhh) 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.”
“(iiiii) 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.”
“(jjjjj) 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.”
10. Revolving Loan and
Lending Limits .
Provided that 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, Section 2.1 will be amended
in its entirety and replaced with the following new
Section 2.1, on the date that the Term Loan Component has been
paid in full:
“(2.1) Revolving Loan and Lending
Limits . Upon the
terms and subject to the conditions set forth in this Agreement,
including but not limited to Section 2.8 hereof, the Lender
shall make Advances to the Borrower, of up to
$16,000,000 million under the Existing Inventory Loan and the
New Inventory Loan and on the Closing Date up to $5,000,0000 under
the Inventory Term Loan. Borrower may borrow, repay and reborrow
during the Revolving Loan Period, as such term is hereafter
defined, principal under the Existing Inventory Loan and the New
Inventory Loan in an amount not to exceed at any time in the
aggregate the lesser of: (i) the Loan to Retail Value Ratio of
the Required Retail Value of the Inventory or (ii) $16,000,000.00
(such amount being the aggregate principal amount of the Existing
Inventory Loan and the New Inventory Loan), as reduced as set forth
in Section 2.4(b)(ii) hereof. Under no conditions may the Borrower
repay and reborrow principal under the Inventory Term Loan.
Borrower acknowledges and agrees that Lender may make Advances from
the Existing Inventory Loan, the New Inventory Loan and/or the
Inventory Term Loan in such manner and amount as Lender may
determine in its sole discretion. The
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Revolving Loan Period shall be the period during
the Term in which the Borrower may borrower, repay and reborrow
Advances and shall terminate in all respects on March 31, 2007.
Borrower’s right to receive Advances hereunder shall also be
subject to the terms and conditions set forth in that certain
Second Amended and Restated Intercreditor Agreement between Lender,
Heller, Borrower and Sovereign dated of even date herewith, as may
be amended hereafter (the “ Intercreditor
Agreement ”), but only so long as the Intercreditor
Agreement remains in full force and effect. Notwithstanding
anything herein to the contrary, Borrower acknowledges, confirms
and agrees that it shall not be entitled to receive, nor shall
Lender be required to make, any Advance if and to the extent that
Borrower has failed to substantially adhere to the Business Plan,
including the Senior Lender Advance Schedule, as determined by
Lender in its sole and absolute discretion, so long as Borrower is
required to maintain and adhere to the Business Plan under this
Agreement. ”
11. Monthly
Payments .
Section 2.3(a) is hereby amended in its entirety and replaced
with the following new Section 2.3(a):
“(a) Monthly Payments
. The Borrower shall pay to the
Lender, on the first day of each month and until the respective
Loan is paid in full: (1) commencing on March 1, 2005,
interest on the outstanding principal balance of the Existing
Inventory Loan and New Inventory Loan, from time to time, at the
applicable Interest Rate; and (2) commencing on May 1,
2005, an amount equal to $185,000 plus interest on the outstanding
principal balance of the Inventory Term Loan, from time to time, at
the applicable Interest Rate. Lender shall apply each such payment
in the following order: (i) to the payment of all costs or
expenses incurred by the Lender pursuant to this Agreement in
creating, maintaining, protecting or enforcing the Liens in and to
the Collateral and in collecting any amount due to Lender in
connection with the Loan; (ii) to any interest accrued at the
Default Rate; (iii) to the payment of accrued and unpaid
interest at the applicable Interest Rate; (iv) to the
reduction of principal of the Inventory Term Loan in an amount up
to $185,000; and (v) to the reduction of the principal balance
of the Existing Inventory Loan, the New Inventory Loan, and the
Inventory Term Loan in such order and manner as Lender may
determine in its sole discretion. If the amount of the funds
received by Lender with respect to any month is insufficient to pay
in full all amounts due from Borrower to Lender under this
Agreement, Borrower shall pay the difference to Lender on or before
the fifth (5th) day after notice from Lender to Borrower advising
Borrower of such insufficiency. ”
12. Payments
. Section 2.3 is hereby amended
in part by adding the following new Section 2.3(d):
“(d) Final Term Payment
. The entire outstanding principal
amount of the Inventory Term Loan together with all accrued
interest shall be due and payable, without notice or demand, on
March 31, 2007. ”
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13. Loan
Term . Provided that
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, Section 2.7 will be amended in its
entirety and replaced with the following new Section 2.7, on
the date that the Term Loan Component has been paid in
full:
“2.7 Loan Term
. The term of the Loan shall
terminate on March 31, 2009, except for the Inventory Term Loan,
which shall terminate on March 31, 2007. ”
14. 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 su
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